<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF
THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. )
Filed by the Registrant [ ]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
RAYCHEM CORPORATION
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
RAYCHEM CORPORATION
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(4) Date Filed:
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<PAGE> 2
LOGO
RAYCHEM CORPORATION
300 CONSTITUTION DRIVE
MENLO PARK, CALIFORNIA 94025-1164
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD NOVEMBER 7, 1997
10:00 A.M.
TO THE STOCKHOLDERS:
NOTICE IS HEREBY GIVEN that the annual meeting of stockholders of Raychem
Corporation, a Delaware corporation (the "Company"), will be held at the
Company's principal office, 300 Constitution Drive, Menlo Park, California
94025-1164, on Friday, November 7, 1997, at 10:00 a.m. local time, for the
following purposes:
1. To elect directors;
2. To approve an amendment to the Company's Amended and Restated
Certificate of Incorporation to effect a two-for-one split of the
Company's Common Stock and to increase the number of shares of Common
Stock authorized for issuance to 150,000,000;
3. To ratify the appointment by the Company's Board of Directors of Price
Waterhouse LLP to audit the accounts of the Company and its subsidiaries
for the 1998 fiscal year; and
4. To consider and transact such other business as may properly come before
the meeting.
The Board of Directors has fixed the close of business on September 15,
1997, as the record date for the determination of stockholders entitled to
notice of, and to vote at, the meeting and at any adjournment or postponement of
the meeting.
By Order of the Board of Directors
RICHARD A. KASHNOW
Chairman of the Board,
President and Chief Executive Officer
Menlo Park, California
September 23, 1997
YOU ARE CORDIALLY INVITED TO ATTEND THE MEETING IN PERSON. WHETHER OR NOT
YOU PLAN TO ATTEND THE MEETING, PLEASE PROMPTLY SIGN THE ACCOMPANYING PROXY AND
MAIL IT IN THE ENCLOSED POSTAGE PRE-PAID ENVELOPE.
<PAGE> 3
RAYCHEM CORPORATION
------------------------
PROXY STATEMENT
------------------------
TO THE STOCKHOLDERS:
The enclosed proxy is solicited on behalf of the Board of Directors of
Raychem Corporation, a Delaware corporation (the "Company"), for use at the
annual meeting of stockholders to be held at the Company's principal office on
November 7, 1997, at 10:00 a.m. local time, or any adjournment or postponement,
at which stockholders of record at the close of business on September 15, 1997,
will be entitled to vote. On September 15, 1997, the Company had issued and
outstanding 42,552,313 shares of Common Stock, par value $1.00 per share
("Common Stock").
Holders of Common Stock are entitled to one vote for each share held. A
majority of the outstanding shares of Common Stock is required for a quorum.
Abstentions will be counted towards the tabulation of votes cast on matters
presented to the stockholders and will have the same effect as negative votes.
Broker nonvotes occur when nominee recordholders do not vote on specific issues
because they did not receive specific instructions on such matters from the
beneficial owners of such shares. Broker nonvotes are counted towards a quorum,
but are not counted for any purpose in determining whether a matter has been
approved.
Any person giving a proxy in the form accompanying this proxy statement has
the power to revoke it at any time before its exercise. It may be revoked by
filing with the Secretary of the Company at the Company's principal office, 300
Constitution Drive, Menlo Park, California 94025-1164, an instrument of
revocation or a duly executed proxy bearing a later date, or it may be revoked
by attending the meeting and voting in person.
The Company will bear the entire cost of solicitation, including preparing,
assembling, printing, and mailing of this proxy statement, the proxy, and any
additional material furnished to stockholders. Copies of solicitation material
will be furnished to brokerage houses, fiduciaries, and custodians holding in
their names shares that are beneficially owned by others to forward to such
beneficial owners. Raychem will reimburse brokerage houses, fiduciaries, and
custodians for their expense in forwarding solicitation material to such
beneficial owners. The original solicitation of proxies by mail may be
supplemented by one or more of telephone, telegram, or personal solicitation by
directors, officers, or employees of the Company. No additional compensation
will be paid for any such services.
The Company intends to mail this proxy statement on or about September 23,
1997.
<PAGE> 4
NOMINATION AND ELECTION OF DIRECTORS
GENERAL
Each director to be elected will hold office until the next annual meeting
of stockholders and until his successor is elected and has qualified, or until
his death, resignation, or removal. There are eight nominees for the eight
positions on the Board of Directors. All eight nominees are currently directors
of the Company, having been elected by the stockholders at the 1996 Annual
Meeting of Stockholders.
Each person nominated for election has agreed to serve if elected, and
management has no reason to believe that any nominee will be unavailable to
serve.
NOMINEES
Set forth below is information regarding the nominees, including
information furnished by them as to their principal occupations for the last
five years, certain directorships, and their ages as of June 30, 1997.
<TABLE>
<CAPTION>
DIRECTOR
AGE SINCE
---- --------
<S> <C> <C>
Richard Dulude is a retired Vice Chairman of Corning Incorporated and was a
director of Dow Corning Corporation and Corning Incorporated. He is also a
retired Chairman and Chief Executive Officer of Corning Vitro Corporation
and a former director of Grumman Corporation. He is a director of AMBAC,
Inc., Landec Corporation, and HCIA Inc..................................... 64 1991
James F. Gibbons is Special Counsel to the President, Stanford University. He
is a Professor of Electrical Engineering and served as the Dean of the
School of Engineering at Stanford University from 1984 to 1996. He holds
the professorial title of Reid Weaver Dennis Professor of Electronics,
Stanford University. He is the Chairman of Amati Communications Corporation
and a director of Lockheed-Martin Corporation, Cisco Systems, Inc.,
Centigram Communications Corporation and El Paso Natural Gas............... 65 1987
Richard A. Kashnow is Chairman of the Board, President and Chief Executive
Officer of the Company. From 1991 to 1995, he was President of Schuller
International Group, a wholly owned subsidiary of Manville Corporation. He
is a director of Applied Power, Inc........................................ 55 1995
John P. McTague is the Vice President of Technical Affairs for Ford Motor
Company.................................................................... 58 1994
Dean O. Morton is a retired Executive Vice President, Director and Chief
Operating Officer of Hewlett-Packard Company. He is the Chairman of
Centigram Communications Corporation and is a director of ALZA Corporation,
BEA Systems, Inc., KLA-Tencor Corporation and The Clorox Company. He is
also a trustee of the Metropolitan Series Fund, Inc. and State Street
Research Funds Group and Portfolios Inc.................................... 65 1989
Isaac Stein is the President of Waverley Associates, Inc. He is a director of
ALZA Corporation, the Benham Group of Mutual Funds and CV Therapeutics,
Inc. He is also Chairman of Stanford Health Services, UCSF-Stanford Health
Care and is a Trustee of Stanford University............................... 50 1993
Chang-Lin Tien served as Chancellor of the University of California, Berkeley
from 1990 to June 1997. Currently, he holds the professorial title of NEC
Distinguished Professor of Engineering at the University of California,
Berkeley. He is a director of AirTouch Communications, Chevron Corporation
and Wells Fargo & Co., and also serves on the boards of trustees of the
Asia Foundation and the Carnegie Foundation for the Advancement of
Teaching. He is a Fellow of the American Academy of Arts and Sciences and a
member of the National Academy of Engineering.............................. 62 1996
Cyril J. Yansouni is Chairman and Chief Executive Officer of Read-Rite
Corporation. He is a director of PeopleSoft, Inc., Informix Corporation and
ActivCard.................................................................. 55 1994
</TABLE>
2
<PAGE> 5
STOCK OWNERSHIP
The following table sets forth certain information regarding beneficial
ownership of the Company's Common Stock, as of June 30, 1997, (i) by each person
known by the Company to own beneficially more than 5% of the outstanding Common
Stock, (ii) by each director and nominee for director, (iii) by each executive
officer named in the Summary Compensation Table herein, and (iv) by all
executive officers and directors as a group. Except as indicated below, each
person has sole investment and voting power with respect to the shares
indicated, subject to applicable laws.
<TABLE>
<CAPTION>
SHARES OF PERCENTAGE
COMMON STOCK OF COMMON
BENEFICIALLY STOCK
NAME AND ADDRESS OWNED(a)(b) OUTSTANDING(c)
- ----------------------------------------------------------------- ------------ -------------
<S> <C> <C>
FMR Corporation.................................................. 6,020,700(d) 14.0%
82 Devonshire Street
Boston, Massachusetts 02109-3614
Neuberger & Berman, LLC.......................................... 2,981,437(e) 6.9%
605 Third Avenue
New York, NY 10158-3698
State Farm Insurance Companies................................... 2,824,500(f) 6.6%
One State Farm Plaza
Bloomington, Illinois 61710-0001
Richard Dulude................................................... 7,969
James F. Gibbons................................................. 17,332
Richard A. Kashnow............................................... 78,358
John P. McTague.................................................. 7,504
Dean O. Morton................................................... 14,020
Isaac Stein...................................................... 40,983
Chang-Lin Tien................................................... 750
Cyril J. Yansouni................................................ 7,531
Raymond J. Sims.................................................. 28,044
Ralph H. Harnett................................................. 54,007
John D. McGraw................................................... 50,264(g)
L. Frans Berthels................................................ 13,261
All executive officers and directors as a group (21 persons)..... 539,938 1.2%
</TABLE>
- ---------------
(a) The figures include options to purchase shares of Common Stock exercisable
within 60 days following June 30, 1997, and held by: Mr. Dulude, 7,219
shares; Dr. Gibbons, 15,832 shares; Dr. Kashnow, 53,125 shares; Mr. McTague,
3,504 shares; Mr. Morton, 7,969 shares; Mr. Stein, 36,626 shares; Dr. Tien,
750 shares; Mr. Yansouni, 3,531 shares; Mr. Sims, 19,600 shares; Mr.
Harnett, 39,800 shares; Mr. McGraw, 42,425 shares; Mr. Berthels, 10,375
shares; and all executive officers and directors as a group, 412,591 shares.
(b) The figures include restricted stock awarded on July 17, 1996, and held by:
Mr. Sims, 1,000; Mr. Harnett, 1,000; Mr. McGraw, 1,000; Mr. Berthels, 800;
and all executive officers and directors as a group, 13,200 shares.
(c) Percentages of less than 1.00% are not shown.
(d) This information was obtained from a letter dated August 13, 1997, from FMR
Corporation.
(e) This information was obtained from a letter dated August 8, 1997, from
Neuberger & Berman, LLC ("Neuberger"). Neuberger is an investment adviser
and broker dealer registered with the Securities and Exchange Commission. In
its letter, Neuberger also informed the Company that: 1) it has shared
dispositive power and in certain cases sole voting power over clients'
securities positions; 2) it does not, however, have any economic interest in
the securities of those clients, and its clients are the actual owners of
the securities and have the sole right to receive and the power to direct
the receipt of dividends from or
3
<PAGE> 6
proceeds from the sale of such securities; and 3) of the 2,981,437 shares
held by Neuberger, Neuberger had sole voting power over 743,056 shares;
shared voting power over 870,600 shares; sole power to dispose
of -0- shares; and shared power to dispose with respect
to 2,981,437 shares.
(f) This information was obtained from a letter dated August 7, 1997, from
State Farm Insurance Companies.
(g) Includes shares/options held by the spouse of Mr. McGraw, also an employee
of the Company.
BOARD COMMITTEES AND MEETINGS
The Board of Directors has standing audit, compensation, and organization
committees.
The functions of the audit committee are as follows: to review and report
to the Board with respect to the annual audit by the Company's independent
accountants, including the scope and general extent of their examination, the
audit procedures that will be utilized by the independent accountants, and the
compensation of the independent accountants; to review and report to the Board
on the general policies and procedures utilized by the Company with respect to
internal auditing, accounting, and financial controls; and to review and report
to the Board on the subject of the retention of the Company's independent
accountants. Messrs. Dulude and Stein and Drs. Gibbons and Tien were the members
of the audit committee in fiscal year 1997. In the opinion of the Board of
Directors all members of the audit committee satisfy the independence
requirements of Section 303.00 of the Listed Company Manual of the New York
Stock Exchange.
The functions of the compensation committee are to determine the general
compensation policies of the Company, to establish compensation plans, and to
set specific compensation levels for executive officers. The members of the
compensation committee in fiscal year 1997 were Messrs. Dulude, Morton, Yansouni
and McTague, who replaced Mr. Dulude in August 1996. A Report of the
Compensation Committee on Executive Compensation is included herein.
The organization committee of the Board focuses on board membership and the
general operation and governance of the Board. Messrs. Stein, Dulude, and Morton
and Dr. Gibbons are the members of the organization committee.
Stockholder proposals for Board nominees will be accepted by the
organization committee and will be given due consideration for recommendation to
the Board in light of the nominees' qualifications. Stockholder nominees for
future years should be submitted in writing to the organization committee in
care of the Corporate Secretary by August 1 or 90 days prior to the annual
meeting of stockholders, whichever is earlier.
During the fiscal year ended June 30, 1997, the Board of Directors held
thirteen meetings, the audit committee held three meetings, the compensation
committee held five meetings, and the organization committee held two meetings.
Each director attended at least 75% of the aggregate number of Board meetings
and meetings of committees of which he was a member that were held during the
fiscal year.
4
<PAGE> 7
EXECUTIVE COMPENSATION
EXECUTIVE COMPENSATION
The following table shows compensation paid by the Company for services
rendered in all capacities during the latest three fiscal years ending June 30
by the Chief Executive Officer and each of the other four most highly
compensated executive officers.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM COMPENSATION AWARDS
--------------------------------------------
ANNUAL COMPENSATION(a) RESTRICTED SECURITIES
------------------------------ STOCK UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS AWARDS(b) OPTIONS/SARS(c) COMPENSATION
- ---------------------------- ----- -------- -------- ---------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Richard A. Kashnow.......... 1997 $700,000 $670,000 $ 0 0 $200,000(d)
Chairman, President and 1996 486,000(e) 200,000 $1,650,000 212,500 $865,000(f)
Chief Executive Officer
Raymond J. Sims............. 1997 $320,000 $200,000 $ 61,875 20,000
Senior Vice President and 1996 284,000 75,000 0 31,000
Chief Financial Officer 1995 284,000 110,000 0 12,000
Ralph H. Harnett............ 1997 $320,000 $180,000 $ 61,875 20,000
Senior Vice President 1996 284,000 75,000 0 16,000
1995 284,000 10,000 0 14,795
John D. McGraw.............. 1997 $262,000 $170,000 $ 61,875 16,000(h)
Senior Vice President 1996 215,000 75,000 0 12,000
1995 192,000 50,000 0 8,000
L. Frans Berthels........... 1997 $228,000 $140,000 $ 49,500 10,000 $ 95,000(g)
Senior Vice President 1996 193,000 50,000 0 17,500 51,000(g)
1995 180,000 40,000 0 5,000 79,000(g)
</TABLE>
- ---------------
(a) In accordance with Securities and Exchange Commission regulations,
perquisites less than the lesser of (a) $50,000 or (b) 10% of the total of
annual salary and bonus are not shown.
(b) 37,500 shares of restricted stock were awarded to Dr. Kashnow on October 1,
1995. The fair market value on the date of the award was $45.00 per share. A
par value payment equal to $1.00 per share was paid by Dr. Kashnow in
connection with the award. Restrictions as to 18,750 shares lapsed on
December 8, 1995, and as to the remaining 18,750 shares on February 8, 1996.
Dr. Kashnow received 64 shares of restricted stock in lieu of dividends
payable on the original award; restrictions on these shares lapsed ratably
with the original award. On July 17, 1996, 1,000 shares of restricted stock
were awarded to each of Mr. Sims, Mr. Harnett, Mr. McGraw and 800 shares of
restricted stock were awarded to Mr. Berthels. These restricted stock awards
for Mr. Sims and Mr. Harnett were reported as fiscal year 1996 compensation
in the Company's 1996 Proxy Statement. The fair market value on the date of
the awards was $62.875 per share. Par value payments equal to $1.00 per
share were paid by Messrs. Sims, Harnett, McGraw and Berthels in connection
with the awards. Dividends on these shares are paid in cash. Restrictions
will lapse as to these shares on July 17, 1999, if the recipients are still
employed by the Company on that date. As of June 30, 1997 restricted stock
was held as follows: Dr. Kashnow, 0 shares; Mr. Sims, 1,000 shares; Mr.
Harnett, 1,000 shares; Mr. McGraw, 1,000 shares; Mr. Berthels, 800 shares.
(c) Options/SARs for Mr. Harnett include 795 shares in fiscal year 1995 awarded
to Mr. Harnett in lieu of a bonus payment of $24,000 for fiscal year 1994,
pursuant to the Company's Amended and Restated Bonus Deferral and Stock
Option Plan.
(d) Cash bonus paid pursuant to terms of employment agreement to repay $200,000
of outstanding principal of interest-free $1 million relocation loan.
(e) This amount represents salary for employment commencing October 1, 1995.
(f) This amount represents a transition payment to offset forfeited compensation
and benefits from a prior employer.
(g) This amount represents a special allowance paid to Mr. Berthels, who was a
Belgian-based employee prior to February 1, 1997, to cover additional costs
of living in the United States.
(h) Does not include options granted to Mr. McGraw's spouse, also an employee of
the Company: 3,500 shares in fiscal year 1995; 7,000 shares in fiscal year
1996 and 5,000 shares in fiscal year 1997.
5
<PAGE> 8
STOCK OPTIONS
The following table shows for each executive officer named in the Summary
Compensation Table certain information regarding options granted during fiscal
year 1997.
OPTION/SAR GRANTS IN LAST FISCAL YEAR(a)
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS POTENTIAL
--------------------------------------------------------- REALIZABLE VALUE
PERCENT OF AT ASSUMED ANNUAL
NUMBER OF TOTAL RATES OF STOCK
SECURITIES OPTIONS/SARS EXERCISE PRICE APPRECIATION FOR
UNDERLYING GRANTED TO OR BASE OPTION TERM(c)
OPTION/SARS EMPLOYEES IN PRICE EXPIRATION -----------------------
NAME GRANTED(b) FISCAL YEAR ($/SHARE) DATE 5% ($) 10% ($)
- ------------------------ ----------- ------------ --------- ---------- -------- ----------
<S> <C> <C> <C> <C> <C> <C>
Richard A. Kashnow...... -- -- $ -- -- $ -- $ --
Raymond J. Sims......... 20,000 2.0% 79.125 11/01/06 995,226 2,522,097
Ralph H. Harnett........ 20,000 2.0% 79.125 11/01/06 995,226 2,522,097
John D. McGraw(d)....... 16,000 1.6% 79.125 11/01/06 796,181 2,017,678
L. Frans Berthels....... 10,000 1.0% 79.125 11/01/06 497,613 1,261,049
------ ---- ------- -------- -------- ----------
</TABLE>
- ---------------
(a) No grants of Stock Appreciation Rights were made to any named executive
officer during the fiscal year ended June 30, 1997.
(b) All options granted to executive officers in fiscal year 1997 become
exercisable in four equal annual installments commencing on the first
anniversary of the grant date. Exercisability of options may be accelerated
by the Board of Directors. At the time of exercise, the exercise price may
be paid in cash, by delivery of shares already owned (subject to certain
conditions), by a secured loan from the Company, or by cashless exercise.
The option plan permits withholding of shares to satisfy tax obligations
upon exercise.
(c) Potential Realizable Value is based on the assumed annual share price
appreciation for the ten-year option term. The actual value, if any, that an
executive may realize will depend on the excess of the stock price over the
exercise price on the date the option is exercised.
(d) Does not include options to purchase 5,000 shares granted to Mr. McGraw's
spouse, also an employee of the Company.
OPTION EXERCISES AND VALUATION
The following table shows for each executive officer named in the Summary
Compensation Table certain information regarding option exercises during fiscal
year 1997 and options outstanding as of June 30, 1997.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION/SAR VALUES(a)
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
NUMBER OF UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS
SHARES OPTIONS AT FISCAL YEAR-END AT FISCAL YEAR-END(b)(c)
ACQUIRED ON VALUE --------------------------- ---------------------------
NAME EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ----------------------- ----------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Richard A. Kashnow..... 0 $ 0 53,125 159,375 $1,560,547 $ 4,681,641
Raymond J. Sims........ 11,150 557,625 16,600 52,250 446,531 676,406
Ralph H. Harnett....... 8,000 352,500 36,300 42,000 1,445,563 702,250
John D. McGraw(d)...... 0 0 27,400 31,000 1,077,363 470,463
L. Frans Berthels...... 12,050 602,012 9,125 26,375 247,422 332,266
</TABLE>
- ---------------
(a) No Stock Appreciation Rights were outstanding at June 30, 1997, nor were any
grants of Stock Appreciation Rights made to any named executive officer
during the year ended June 30, 1997.
(b) The market value of the underlying securities at the fiscal year-end minus
the exercise price of in-the-money options. Such market value as of June 30,
1997, was $74.375 per share.
6
<PAGE> 9
(c) The average per-share exercise price of all options outstanding for each
named executive officer is: Dr. Kashnow, $45.00; Mr. Sims, $59.445; Mr.
Harnett, $48.158; Mr. McGraw, $49.173; and Mr. Berthels, $59.384.
(d) Does not include options for 720 shares held and exercised by Mr. McGraw's
spouse, also an employee of the Company, for a realized value of $28,770.
Also does not include 12,150 exercisable and 12,750 unexercisable options
held by Mr. McGraw's spouse with a value as of June 30, 1997, of $444,181
and $178,093, respectively.
EMPLOYMENT/CONSULTING AGREEMENTS
In August 1995, the Company entered into an agreement with Dr. Kashnow, who
became President, Chief Executive Officer, and Chairman of the Board of
Directors on October 1, 1995. Supplemental agreements were entered into on
February 5, 1996 and June 30, 1997. The June 30, 1997, supplemental agreement is
more fully described below in the Report of the Compensation Committee.
DIRECTORS' FEES AND STOCK OPTIONS
During fiscal year 1997, directors not employed by the Company (all
directors except Dr. Kashnow) were paid an annual retainer of $27,500 plus
$1,000 for each Board and committee meeting attended in person and $500 for
participation in each telephone Board meeting. In addition, the chairs of the
audit committee, the compensation committee and the organization committee each
received an annual retainer of $5,000.
The Company entered into a consulting agreement with Mr. Cook, a former
director of the Company, upon his retirement as President and Chief Executive
Officer of the Company on April 1, 1990, providing for an annual retainer of
$100,000, payment of one-half of his office rent, and the assignment of a
Company employee as his secretary. The agreement included a commitment from Mr.
Cook to consult for the Company on an as-needed basis and not to consult or work
for a competitor of the Company during the term of the agreement. This agreement
terminated as of June 30, 1997. Mr. Cook resigned as a director of the Company
as of August 16, 1996.
The Company entered into a consulting agreement with Dr. Gibbons effective
December 12, 1996. In addition to Dr. Gibbons' normal Board responsibilities, he
will from time to time provide consulting services to the Board and the Chief
Executive Officer at the request of the Chairman of the Board/Chief Executive
Officer. Dr. Gibbons will provide such services upon request at a per diem rate
of $3,000. In fiscal year 1997 he earned $7,500 under this agreement.
Effective as of July 1, 1996, the Company's consulting agreement with Mr.
Stein was amended to delete the monthly retainer and monthly expense
contribution paid to Waverley Associates, Inc. Under the amended agreement, Mr.
Stein now provides services upon request at a per diem rate of $3,000 plus
reasonable expenses. In fiscal year 1997 he earned $3,000 under this agreement.
The stockholders approved the 1996 Directors Stock Option Plan at the
Company's 1996 annual meeting. Upon approval of the Plan, the 1987 Directors
Stock Option Plan, which was due to expire in May 1997, was terminated. Under
the 1987 Directors Stock Option Plan, each director who was not an employee of
the Company received an option to purchase 3,000 shares of Common Stock on the
date he or she first served as a non-employee director. Dr. Chang-Lin Tien was
elected to the Board effective August 16, 1996, and received an option under the
1987 Directors Stock Option Plan to purchase 3,000 shares of Common Stock at a
grant price of $68.25 per share.
Under the 1996 Directors Stock Option Plan, each director who is not an
employee of the Company or of any subsidiary or affiliate of the Company
automatically receives an option to purchase 5,000 shares of Common Stock on the
date he or she is first elected to the Board. Thereafter, each eligible director
then in office automatically receives an option to purchase 1,250 shares of
Common Stock upon re-election to the Board at the Company's annual meeting. The
1996 Directors Stock Option Plan also provided for the one-time grant of an
option to purchase 2,000 shares of Common Stock to directors then in office on
the date of the Company's 1996 annual meeting. A total of 200,000 shares of
Common Stock have been reserved for issuance
7
<PAGE> 10
under this Plan. The exercise price of options granted under this plan is the
fair market value of the Common Stock on the grant date. For the fiscal year
ended June 30, 1997, each director (except Dr. Kashnow, who was not eligible)
received an option under this Plan to purchase 3,250 shares of Common Stock at a
grant price of $79.125 per share.
The Board of Directors considers stock ownership in the Company by
directors to be of utmost importance. Such ownership enhances directors'
commitment to the future of the Company and further aligns their interests with
those of the Company's stockholders. In keeping with this philosophy, the Board
has established minimum stock ownership guidelines for directors. These
guidelines state that within a three-year period from the later of August, 1995
or the director's election, each director should own Common Stock having a value
of at least five times the director's annual retainer.
REPORT OF THE COMPENSATION COMMITTEE
OF THE BOARD OF DIRECTORS ON EXECUTIVE COMPENSATION
The compensation committee of the Board of Directors (the "Compensation
Committee") determines the general compensation policies of the Company,
establishes compensation plans, and sets specific compensation levels for
executive officers. During the 1997 fiscal year, the Compensation Committee was
composed of Messrs. Morton (Chairman), Yansouni, and McTague, who replaced Mr.
Dulude in August, 1996. All of the Compensation Committee members are
"non-employee" as that term is defined under the Securities and Exchange
Commission's Rule 16b-3 and "outside directors" as that term is defined under
Section 162(m) of the Internal Revenue Code of 1986, as amended (the "Code").
The Compensation Committee reviews executive compensation matters not less
than annually. At the request of the Compensation Committee, the Company's Human
Resources Department presents analyses and recommendations on executive
compensation for the next fiscal year. The Compensation Committee thereafter
makes specific determinations for the CEO and reviews and approves
recommendations by the CEO for each executive officer.
Executive officer compensation typically consists of three components: base
salary, an annual cash bonus award, and long-term incentives in the form of
stock options and restricted stock awards. Individual salaries, along with
"target" levels for cash bonuses, stock option grants, and restricted stock
awards are established by the Compensation Committee based on competitive market
levels indicated in pay surveys and other information obtained by the Company
regarding select U.S. companies of similar size, complexity, and quality to the
Company.
The Compensation Committee believes that officers' interests should be
closely aligned with those of the Company's stockholders. The Compensation
Committee therefore encourages and expects officers to have a meaningful
ownership stake in the Company, and on April 18, 1996, established officer
ownership guidelines to support this objective. The guidelines state that the
Chief Executive Officer should own shares having a value of at least four times
annual salary, senior vice presidents should own shares having a value of at
least two times annual salary, and vice presidents should own shares having a
value of at least one time annual salary. Each officer has three years to reach
the designated ownership level.
BASE SALARIES. For fiscal year 1997, as for recent prior years, the
Compensation Committee obtained an independent consultant's report summarizing
executive salary levels at over 25 comparison companies. Included were prominent
electronics, telecommunications, computer software and hardware, and industrial
manufacturing companies, representing organizations with whom the Company
competes for talent and/or which have market capitalization or other attributes
similar to the Company. Publicly available surveys and salary data reported in
proxy statements were used to provide supplementary information. In setting
salary levels, competitive data may be adjusted to reflect relative sales volume
and differences in business unit size, as appropriate. Additionally, the
Compensation Committee considers each executive officer's individual experience
and sustained performance, as well as salary levels of others within the
Company. Salary adjustments for fiscal year 1998 were made for officers
effective July 1, 1997.
8
<PAGE> 11
ANNUAL BONUSES. The Compensation Committee has adopted an annual incentive
structure that aligns the interests of executive officers with stockholders by
putting a significant portion of such officers' annual compensation at risk
based on the Company's achievement of predetermined financial performance goals
and on individual performance. Award opportunities are intended to position the
total cash compensation of executive officers between the median and the
seventy-fifth percentile of competitive total cash compensation when superior
results are achieved. For fiscal year 1997, the Compensation Committee
constructed financial performance measures to reflect an after-tax profit
target.
At its August 1996 meeting, the Board adopted, on the recommendation of the
Compensation Committee and subject to stockholder approval, an Officer Variable
Pay Plan (the "Plan"). The Company received stockholder approval for the Plan at
its 1996 annual meeting. Under the Plan, awards relating to the financial
performance of the Company are paid to officers designated by the Compensation
Committee as participants in the Plan. Payments under the Plan qualify as
performance-based under Section 162(m) of the Code. The Plan has a minimum
payout if 80% of the specified target is met and a maximum payout if 120% of the
specified target is met. The maximum bonus that may be paid to any one
participant for any one year is $2,500,000. The bonus may be paid in cash,
stock, restricted stock, or other property as determined in each case by the
Board. Dr. Kashnow was the only officer designated as a participant in the Plan
for fiscal year 1997, although under the annual incentive structure adopted by
the Compensation Committee, other executive officers receive awards under
substantially the same criteria.
For fiscal year 1997, awards for executive officers were generally paid at
targeted levels, reflecting the Company's performance during the year. The
remaining portion of executive officer bonuses was based on individual
performance criteria.
LONG-TERM INCENTIVES. The Compensation Committee believes that stock
options and restricted stock play an important role in attracting, retaining,
and motivating executives. Stock options also provide executives with a means of
increasing Company stock ownership, which is a key objective of the executive
compensation program and serves to align executives' interests with those of
stockholders. The Compensation Committee's general practice is to grant options
annually at an exercise price equal to 100% of the fair market value of the
Company's Common Stock at the date of grant. Options typically vest at a rate of
25% per year over four years. Restricted stock granted to date has typically
vested in full three years from the date of grant.
The Compensation Committee determines option and restricted stock grant
levels for executive officers based on competitive data gathered from relevant
comparison companies by independent consultants, and uses competitive practice
as a guideline for determining appropriate grant levels. The Compensation
Committee also considers the aggregate stock option shares granted throughout
the Company, individual experience and performance of recipients, and past
individual grant amounts in determining individual grant levels.
As previously reported, in fiscal year 1997 restricted stock grants were
made to key individuals, including Messrs. Sims, Harnett and McGraw, who each
received 1,000 shares, and Mr. Berthels, who received 800 shares.
CHIEF EXECUTIVE OFFICER COMPENSATION. The Compensation Committee's goal in
setting the compensation level for the CEO is to reward the CEO for the results
of the Company and its subsidiaries, as well as for individual performance. The
Compensation Committee reviews CEO compensation packages and related financial
performance data at selected comparison companies to determine a reasonable
level and mix for compensation of the Company's CEO.
For fiscal year 1997, Dr. Kashnow's base salary was $700,000. In addition,
the targets specified by the Compensation Committee for fiscal year 1997 under
the annual incentive structure were achieved. Therefore, Dr. Kashnow was awarded
a total bonus of $670,000, of which $446,000 was based on the Company's
achievement of the targeted level of financial performance and was paid under
the Officer Variable Pay Plan. Consistent with the annual incentive structure
approved by the Compensation Committee for the year, Dr. Kashnow was awarded an
additional bonus of $224,000 in recognition of individual performance and the
progress made by the Company during the year. As anticipated in his initial
employment agreement, no stock options or shares of restricted stock were
awarded to Dr. Kashnow in fiscal year 1997.
9
<PAGE> 12
On August 11, 1995, the Company entered into an initial employment
agreement with Dr. Kashnow (the "Agreement") which provides for, among other
things, an interest-free $1 million relocation loan and a $200,000 annual cash
bonus to repay the loan beginning in fiscal year 1997. The loan extends for five
years subject to his continued employment with the Company. Consistent with this
Agreement, Dr. Kashnow received a $200,000 cash bonus in fiscal year 1997, which
was used by Dr. Kashnow to reduce the outstanding principal balance of the loan
to $800,000. On June 30, 1997, the Agreement was amended to provide for the
repayment of the remaining loan balance at the end of the original five year
term, with a cash bonus payable at that time equal to the outstanding principal
balance of the loan, subject to his continued employment with the Company.
OFFICER SEVERANCE BENEFITS. The Company provides severance benefits for all
employees whose employment is terminated due to a reduction in force. Since
fiscal year 1995, there has been a separate program for officers. Each eligible
officer terminated involuntarily for other than cause, is, upon execution of a
release agreement, paid one full year of base salary and given selected benefit
continuation. Up to a second year of base salary and benefit continuation may be
paid, provided the officer is not employed. If, in the second year, the officer
is employed but is paid a lower base salary than the officer received while
employed by the Company, the officer is eligible to receive a salary
differential.
COMPANY POLICY TOWARD DEDUCTIBILITY OF EXECUTIVE OFFICER
COMPENSATION. Section 162(m) of the Code places a $1 million per person limit on
the deduction that a publicly held corporation may take for compensation paid to
certain officers (generally the Chief Executive Officer and its four other
highest-paid executive officers) unless, in general, the compensation is exempt
as "performance-based." Compensation resulting from the exercise of stock
options or upon award of performance shares will be treated as
"performance-based" and excluded from the limit on deductibility if, among other
things, the plan under which the awards are granted specifies limits on the
number of shares issuable to any participant under the plan and these limits are
approved by the issuer's stockholders. In the case of performance shares, the
stockholders must also approve the performance goals for the awards.
In adopting and administering executive compensation plans and
arrangements, the Compensation Committee considers whether the deductibility of
such compensation will be limited under Section 162(m) of the Code and, when
appropriate, strives to structure such compensation so that any such limitation
will not apply.
Compensation Committee Members -- Mr. Morton (Chair), Mr. McTague, and Mr.
Yansouni
10
<PAGE> 13
STOCK PERFORMANCE CHART
The chart below compares the Company's cumulative total stockholder return
(overall market performance with reinvested dividends) during the five-year
period ended June 30, 1997, against the Standard & Poor's 500 Stock Index and
the Standard & Poor's Electrical Equipment Index, both of which are established
and well-known indices.
The Company is a broadly diversified materials science business and is not
easily categorized within any specific industry index.
RAYCHEM CORPORATION
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN(a)
<TABLE>
<CAPTION>
Measurement Period S&P Elec Equip
(Fiscal Year Covered) Raychem S&P 500 Index '
<S> <C> <C> <C>
30-Jun-92 100.00 100.00 100.00
30-Jun-93 124.86 113.55 122.80
30-Jun-94 114.74 115.11 121.82
30-Jun-95 122.95 144.94 151.54
30-Jun-96 232.43 182.36 218.42
30-Jun-97 242.03 245.35 318.02
</TABLE>
- ---------------
(a) Total return assumes reinvestment of dividends. Assumes $100 invested June
30, 1992.
(b) S&P Electrical Equipment Index includes AMP, Emerson Electric, General
Electric, General Signal, Honeywell, Raychem, Rockwell, Thomas & Betts and
Westinghouse Electric.
11
<PAGE> 14
PENSION PLANS
The Company has a defined benefit pension plan (which was modified
effective July 1, 1997) that provides retirement benefits to eligible United
States employees. The Company has also adopted a supplemental executive
retirement plan for all United States employees whose benefits under the
Company's pension plan are limited by United States federal tax laws. The
following aggregate lump sum amounts are payable, from both plans, upon
retirement at age 65.
ESTIMATED LUMP SUM BENEFITS
<TABLE>
<CAPTION>
YEARS OF CREDITED SERVICE
AVERAGE ANNUAL ----------------------------------------------------------------------
COMPENSATION(a) 15 20 25 30 35
- --------------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
$ 200,000 $ 385,348 $ 502,418 $ 579,487 $ 628,022 $ 656,557
300,000 585,348 762,418 879,487 953,022 996,557
400,000 785,348 1,022,418 1,179,487 1,278,022 1,336,557
500,000 985,348 1,282,418 1,479,487 1,603,022 1,676,557
600,000 1,185,348 1,542,418 1,779,487 1,928,022 2,016,557
700,000 1,385,348 1,802,418 2,079,487 2,253,022 2,356,557
</TABLE>
- ---------------
(a) Highest average base salary received over any three consecutive years of
credited service out of the last ten years of vesting service.
The covered compensation for pension benefit calculations is only the base
salary portion of the compensation disclosed in the Summary Compensation Table.
The years of credited service for the individuals listed in the Summary
Compensation Table are: Dr. Kashnow, 2 years; Mr. Sims, 14 years; Mr. Harnett,
24 years; Mr. McGraw, 17 years and Mr. Berthels, 0 years. The benefit amounts
listed in the table are not subject to reductions for Social Security. Pursuant
to the terms of Dr. Kashnow's employment agreement with the Company, Dr. Kashnow
was credited with an additional 6 years of service under the supplemental
executive retirement plan. Under such agreement, the amount of Dr. Kashnow's
increased pension benefit from the Company attributable to such additional years
of service will be reduced by the actuarial equivalent of the pension benefit he
will receive from his former employer. Mr. Berthels became a United States
employee effective February 1, 1997. Prior to that time, Mr. Berthels was
covered by the pension plan of the Company's Belgian subsidiary. Under that
plan, Mr. Berthels has 25 years of credited service and at age 60 will be
entitled to a lump sum pension benefit of approximately $600,000.
COMPANY LOANS TO DIRECTORS AND EXECUTIVE OFFICERS
In connection with option exercises and the purchase of its Common Stock
under equity incentive plans, the Company has made available to employees,
including directors and executive officers, deferred payment arrangements and
advances to cover income tax liabilities. The indebtedness resulting from such
arrangements has a five-year term and bears interest, which accrues at rates
ranging from 5.00% to 7.05% per year, payable in annual installments. The
maximum amounts of such indebtedness outstanding during the fiscal year ended
June 30, 1997, together with the amounts outstanding at June 30, 1997, for each
person who was a director or executive officer during the fiscal year and for
whom the principal amount exceeded $60,000 at any time during such period, are
as follows: $132,347 and $0 for Mr. McGraw.
The Company has also extended to certain executive officers loans on a
secured basis for relocation expense. The loans are interest free and are
generally repayable over five years. As of June 30, 1997, the maximum amount of
such indebtedness outstanding during the 1997 fiscal year, together with the
amount outstanding at June 30, 1997, for each such executive officer for whom
the principal amount exceeded $60,000 at any time during such period was as
follows: Dr. Kashnow, $1,000,000 and $800,000; Mr. Berthels, $500,000 and
$500,000; Mr. Timothy Burch, $400,000 and $400,000; Dr. Arati Prabhakar,
$400,000 and $400,000.
12
<PAGE> 15
STOCK SPLIT AND INCREASE IN
NUMBER OF SHARES OF AUTHORIZED STOCK
The Board of Directors has approved, subject to the approval of the
stockholders, a two-for-one split of the Company's Common Stock. The Board
believes that the proposed split will benefit the Company by increasing the
number of shares of Common Stock available for public trading and should serve
to broaden investor interest in owning Common Stock.
Although the proposed stock split will double the outstanding number of
shares of Common Stock, each stockholder of the Company will hold, immediately
after the effective date of the stock split, the same percentage interest in the
Company as he or she held immediately prior to the effective date of the split.
Each share of Common Stock after the split will continue to have one vote.
The stock split will be effected by amending the Company's Amended and
Restated Certificate of Incorporation. The proposed amendment, as approved by
the Board, will increase the number of shares of Common Stock which the Company
is authorized to issue from 72,150,000 to 150,000,000 and split each outstanding
share of Common Stock, $1.00 par value, into two shares of Common Stock, $1.00
par value.
The proposed amendment to the Company's Amended and Restated Certificate of
Incorporation, if approved by the stockholders, will become effective upon the
effectiveness of a certificate of amendment filed with the Secretary of State of
the State of Delaware. If approved by the Company's stockholders, it is expected
that the proposed amendment will be effective as soon as practicable after the
annual meeting of stockholders. Approval of the proposed amendment to the
Company's Certificate of Incorporation will result in a proportional increase in
the number of shares subject to outstanding options and in the number of shares
subject to each of the Company's employee and director stock option plans and
the Company's employee stock purchase plan.
As soon as practicable after the effective date of the stock split,
stockholders of record at the close of business on the effective date will
receive certificates for a number of shares of Common Stock equal to the number
of shares previously held. Such stockholders will then have two shares of Common
Stock for each share of Common Stock held prior to the effective date of the
stock split.
THE PRESENTLY OUTSTANDING COMMON STOCK CERTIFICATES SHOULD NOT BE SENT IN
TO THE COMPANY FOR EXCHANGE. FOLLOWING THE STOCK SPLIT, THE OUTSTANDING COMMON
STOCK CERTIFICATES WILL REPRESENT THE SAME NUMBER OF SHARES OF COMMON STOCK.
Because the proposed stock split will require the issuance of a greater
number of shares of Common Stock than are presently authorized but unissued, it
is necessary to increase the number of authorized shares of Common Stock. The
Board of Directors believes that an increase in the authorized number of shares
of Common Stock to 150,000,000 is desirable in order that a sufficient number of
additional shares be available for issuance from time to time in connection with
the Company's business activities. The Company has no present plans for any
issuance of the additional shares of Common Stock other than in the stock split
and through its existing employee and director stock option plans and its
employee stock purchase plan.
The Company intends to apply to the New York Stock Exchange to list thereon
the additional shares of Common Stock which will be outstanding as a result of
the proposed stock split.
In the opinion of Company counsel, the proposed split of the Company's
Common Stock will not result in any taxable income or loss to the holders of
Common Stock for federal income tax purposes. The new shares of Common Stock
will each have a basis for computing gain or loss equal to half of the basis of
the old shares of Common Stock.
The Board of Directors believes that the proposed amendment is in the best
interest of the Company, its stockholders, and its employees and recommends a
vote "FOR" approval. Approval of the amendment requires the affirmative vote of
a majority of the Company's outstanding shares of Common Stock.
13
<PAGE> 16
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors and executive officers, and persons who own more than 10% of a
registered class of the Company's equity securities, to file with the Securities
and Exchange Commission ("SEC") and the New York Stock Exchange initial reports
of ownership and reports of changes in ownership of Common Stock and other
equity securities of the Company. Officers, directors, and greater than 10%
stockholders are required by SEC regulation to furnish the Company with copies
of all Section 16(a) forms they file.
To the Company's knowledge, based solely on review of the copies of such
reports furnished to the Company and written representations that no other
reports were required, from July 1, 1996, through the fiscal year ended June 30,
1997, all Section 16(a) filing requirements applicable to its executive
officers, directors, and greater than 10% beneficial owners were complied with.
RATIFICATION OF INDEPENDENT ACCOUNTANTS
The Board of Directors recommends to the stockholders ratification of the
appointment of Price Waterhouse LLP as the Company's independent accountants.
Price Waterhouse LLP has been the Company's independent accountants since fiscal
year 1984.
Representatives of Price Waterhouse LLP will be present at the meeting.
They do not expect to make any statement, but will have the opportunity to make
a statement if they so desire and will be available to respond to questions.
CERTAIN RELATIONSHIPS AND TRANSACTIONS WITH MANAGEMENT
Dr. Gibbons is Chairman of Amati Communications Corporation ("Amati"). The
Company has signed a Letter of Intent with Amati which contemplates that the
Company will establish a business relationship between the two companies under
which Amati will supply to Raychem certain components for asynchronous digital
subscriber line ("ADSL") systems, and under which Raychem may supply complete
ADSL systems to Amati.
ANNUAL REPORT
The Company's annual report for the 1997 fiscal year is being mailed with
this proxy statement to stockholders entitled to notice of the meeting.
OTHER BUSINESS
The Board of Directors knows of no other business that will be presented
for consideration at the meeting. If other matters are properly brought before
the meeting, however, it is the intention of the persons named in the
accompanying proxy to vote the represented shares in their discretion on such
matters.
14
<PAGE> 17
STOCKHOLDER PROPOSALS
Proposals of stockholders that are intended to be presented at the
Company's 1998 annual meeting of stockholders must be received by the Company no
later than May 22, 1998, in order to be considered for inclusion in the proxy
statement and proxy related to the meeting.
Stockholder proposals for nominees to the Board of Directors must be
submitted in writing to the organization committee in care of the Corporate
Secretary by August 1, 1998, or 90 days prior to the annual meeting of
stockholders, whichever is earlier.
By Order of the Board of Directors
RICHARD A. KASHNOW
Chairman of the Board,
President and Chief Executive Officer
15
<PAGE> 18
PROXY PROXY
RAYCHEM CORPORATION
PROXY SOLICITED BY THE BOARD OF DIRECTORS FOR THE
ANNUAL MEETING OF STOCKHOLDERS--NOVEMBER 7, 1997
Richard A. Kashnow and Karen O. Cottle, or either of them, each with
the power of substitution and revocation, are hereby authorized to represent
the undersigned, with all powers which the undersigned would possess if
personally present, to vote the Common Stock of the undersigned at the annual
meeting of stockholders of RAYCHEM CORPORATION to be held at the Company's
principal office, 300 Constitution Drive, Menlo Park, California 94025-1164, at
10:00 a.m. on Friday, November 7, 1997, and at any postponements or adjournments
of that meeting, as set forth below, and in their discretion upon any other
business that may properly come before the meeting.
This proxy will be voted as specified or, if no choice is specified,
will be voted FOR the election of the nominees named and FOR each of the other
proposals specified herein.
[ ] Check here if you plan to attend the
meeting.
[ ] Check here for address change.
New address:____________________________
________________________________________
________________________________________
PLEASE VOTE, SIGN, DATE AND RETURN THIS PROXY CARD
PROMPTLY USING THE ENCLOSED ENVELOPE.
(Continued and to be signed on reverse side.)
<PAGE> 19
RAYCHEM CORPORATION
PLEASE MARK VOTE IN OVAL IN THE FOLLOWING MANNER USING DARK INK ONLY.
1. Nominees:
Richard Dulude, James F. Gibbons, Richard A. Kashnow, John P. McTague, Dean
O. Morton, Isaac Stein, Chang-Lin Tien, Cyril J. Yansouni
For Withheld For All
All All Except nominees written in below.
[ ] [ ] [ ]
Nominee Exceptions
---------------------------------
2. To approve an amendment to the Company's Amended and Restated Certificate of
Incorporation to effect a two-for-one split of the Company's Common Stock and
to increase the number of shares of Common Stock authorized for issuance to
150,000,000.
For Against Abstain
[ ] [ ] [ ]
3. To ratify the appointment by the Company's Board of Directors of Price
Waterhouse LLP to audit the accounts of the Company and its subsidiaries for
the 1998 fiscal year.
For Against Abstain
[ ] [ ] [ ]
Dated: , 1997
--------------------------
--------------------------------------
(Signature)
--------------------------------------
(Signature, if held jointly)
PLEASE SIGN EXACTLY AS YOUR NAME APPEARS. IF ACTING AS ATTORNEY,
EXECUTOR, TRUSTEE, OR IN REPRESENTATIVE CAPACITY, SIGN NAME AND
INDICATE TITLE.
