LANDAUER, INC.
2 SCIENCE ROAD, GLENWOOD, ILLINOIS 60425-1586
TELEPHONE (708) 755-7000
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
Notice is hereby given that the annual meeting of the
stockholders of Landauer, Inc., a Delaware corporation, will be
held at the O'Hare Hilton, at O'Hare International Airport,
Chicago, Illinois, at 4:00 p.m., local time, on Wednesday,
February 7, 1996 for the following purposes:
1. To elect two directors to hold office for a term of three
years.
2. To vote on the proposal to approve the selection of Arthur
Andersen LLP as the auditors of the Company for the fiscal
year ending September 30, 1996.
3. To vote on the proposal to approve the 1996 Equity Plan for
officers and key employees.
4. To transact such other business as may properly come before
the meeting.
Only stockholders of record at the close of business on
December 12, 1995 are entitled to notice of and to vote at the
meeting.
IT IS IMPORTANT THAT YOUR SHARES BE REPRESENTED AT THE MEETING.
THEREFORE, WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE
SIGN AND DATE YOUR PROXY AND RETURN IT IN THE ENCLOSED ENVELOPE,
WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES. IF YOU
ATTEND THE MEETING AND VOTE IN PERSON, YOUR PROXY WILL NOT BE
USED.
James M. O'Connell
Vice President, Treasurer, Secretary
and Chief Financial Officer
Dated January 3, 1996
PROXY STATEMENT
Approximate Date of Mailing: JANUARY 3, 1996
INFORMATION CONCERNING THE PROXY SOLICITATION
The enclosed proxy is solicited by and on behalf of the
Board of Directors of Landauer, Inc. (the "Company") for use at
the annual meeting of stockholders of the Company to be held on
Wednesday, February 7, 1996 at 4:00 p.m., local time, at the
O'Hare Hilton, at O'Hare International Airport, Chicago,
Illinois, or any adjournments or postponements thereof. It is
subject to revocation at any time prior to the exercise thereof
by giving written notice to the Secretary of the Company, by
submission of a later dated proxy or by voting in person at the
meeting. The costs of solicitation, including the preparation,
assembly and mailing of proxy statements, notices and proxies,
will be paid by the Company. Such solicitation will be made by
mail and in addition may be made by the officers and employees of
the Company personally or by telephone or telegram. Forms of
proxies and proxy material may also be distributed, at the
expense of the Company, through brokers, custodians and other
similar parties to the beneficial owners of the Common Stock.
The Company has retained Morrow & Co., 345 Hudson Street, New
York, New York, to assist in the solicitation of proxies for an
estimated fee of $3,500.
On December 12, 1995, the Company had outstanding 8,477,285
shares of Common Stock, $.10 par value, which is its only class
of voting stock, held of record by approximately 600 holders.
Only stockholders of record at the close of business on December
12, 1995 will be entitled to receive notice of and to vote at the
meeting. With respect to all matters which will come before the
meeting, each stockholder may cast one vote for each share
registered in his name on the record date. A stockholder may,
with regard to the election of directors (i) vote for the
election of all named director nominees, (ii) withhold authority
to vote for all named director nominees or (iii) vote for the
election of all named director nominees other than any nominee
with respect to whom the stockholder withholds authority to vote
by so indicating in the appropriate space on the proxy. A
stockholder may, with respect to the proposal to approve the
selection of Arthur Andersen LLP as auditors or the proposal to
approve the 1996 Equity Plan for officers and key employees (1)
vote FOR such proposal, (2) vote AGAINST such proposal or (3)
ABSTAIN from voting on such proposal. The shares represented by
every proxy received will be voted, and where a choice has been
specified, the shares will be voted in accordance with the
specification so made. If no choice has been specified on the
proxy, the shares will be voted FOR the election of the two
nominees as directors, FOR approval of Arthur Andersen LLP as
auditors and FOR approval of the 1996 Equity Plan for officers
and key employees. The proxy also gives authority to the proxies
to vote the shares in their discretion on any other matter
presented at the meeting. If a proxy indicates that all or a
portion of the shares represented by such proxy are not being
voted with respect to a particular proposal, such non-voted
shares will not be considered present and entitled to vote on
such proposal, although such shares may be considered present and
entitled to vote on other proposals and will count for the
purpose of determining the presence of a quorum. An abstention
with respect to the proposal to approve the selection of Arthur
Andersen LLP as auditors or the proposal to approve the 1996
Equity Plan has the effect of a vote against such proposal.
BENEFICIAL OWNERSHIP OF CERTAIN VOTING SECURITIES
The following table provides information as of December 12,
1995 concerning beneficial ownership of Common Stock by each
person known by the Company to own beneficially more than 5% of
the outstanding shares of Common Stock, each director, each
director nominee, each executive officer of the Company named
under the caption "Executive Compensation" and all directors and
executive officers of the Company as a group. Unless otherwise
noted, the listed persons have sole voting and dispositive powers
with respect to shares held in their names, subject to community
property laws if applicable.
<TABLE>
<CAPTION>
Amount
Beneficially Percent
Name of Beneficial Owner Owned of Class
------------------------ ------------ --------
<S> <C> <C>
Safeco Insurance Company 840,200 (1) 9.9%
Dr. Marvin G. Schorr 564,180 6.7%
The Gabelli Group, Inc. 499,000 (2) 5.9%
Putnam Investments, Inc. 449,900 (3) 5.3%
Dimensional Fund Advisors, Inc. 434,100 (4) 5.1%
Janus Venture Fund 428,300 (5) 5.3%
Dr. Gary D. Eppen 275 *
Thomas M. Fulton 272,130 (6) 3.2%
Dr. Richard H. Leet 5,000 *
Paul B. Rosenberg 85,570 (7) 1.0%
Herbert Roth, Jr. 9,000 *
C. Vincent Vappi 8,000 *
Michael D. Winfield 350 *
Brent A. Latta 55,000 (8) *
James M. O'Connell 39,000 (9) *
Dr. R. Craig Yoder 38,428 (10)) *
All directors and executive
officers as a group (11 persons) 1,076,933 12.3%
-------------------
</TABLE>
*Less than one percent.
(1) As reported in Amendment No. 3 to Statement on Schedule
13G filed with the Securities and Exchange Commission on February
13, 1995. The address of this stockholder is Safeco Plaza,
Seattle, WA 98185.
(2) As reported in Amendment No. 8 to Statement on Schedule
13D filed with the Securities and Exchange Commission on November
3, 1993. The address of this stockholder is One Corporate
Center, Rye, NY 10580.
(3) As reported in Amendment No. 1 to Statement on Schedule
13G filed with the Securities and Exchange Commission on February
7, 1995. This ownership by certain Putnam investment managers
(together with their parent corporations, Putnam Investments,
Inc. and Marsh & McLennan Companies, Inc.) is considered
"beneficial ownership" of the Company's voting common stock,
which shares were acquired for investment purposes by such
investment managers for certain of their advisory clients. The
address of this stockholder is One Post Office Square, Boston, MA
02109.
(4) As reported in Statement on Schedule 13G filed with the
Securities and Exchange Commission on February 9, 1995. The
address of this stockholder is 1229 Ocean Avenue, Santa Monica,
CA 90401.
(5) As reported in Statement on Schedule 13G filed with the
Securities and Exchange Commission on February 9, 1995. The
address of this stockholder is 100 Fillmore Street, Suite 300,
Denver, CO 80206.
(6) Includes 142,850 shares subject to options exercisable
within 60 days following the record date for the annual meeting.
(7) Includes 20,000 shares owned by Mr. Rosenberg's wife to
which he disclaims beneficial ownership.
(8) Includes 55,000 shares subject to options exercisable
within 60 days following the record date for the annual meeting.
(9) Includes 35,000 shares subject to options exercisable
within 60 days following the record date for the annual meeting.
(10) Includes 34,000 shares subject to options exercisable
within 60 days following the record date for the annual meeting.
ELECTION OF DIRECTORS
ELECTION OF DIRECTORS
Members of the Company's Board of Directors are divided into
three classes serving staggered three-year terms. The terms of
two of the Company's eight directors (Dr. Richard H. Leet and C.
Vincent Vappi) expire at the annual meeting. They are the
Company's nominees for re-election to a three-year term by the
stockholders at the annual meeting. The Company's by-laws
provide that nominations for directorships by stockholders may be
made only pursuant to written notice received at the Company's
principal office not less than 50 nor more than 75 days prior to
the meeting. No such nominations have been received for the 1996
annual meeting. Directors are elected by a plurality of the
votes present in person or represented by proxy at the meeting
and entitled to vote on the election of directors. Thus,
assuming a quorum is present, the two persons receiving the
greatest number of votes will be elected to serve as directors.
Accordingly, withholding authority to vote for a director and
non-votes with respect to the election of directors will not
affect the outcome of the election of directors. Dr. Leet and
Mr. Vappi have advised the Company that, if elected, they plan to
retire on September 18, 1996 and November 7, 1996, respectively,
in accordance with Company policy. If a nominee should become
unavailable for election, the persons voting the accompanying
proxy may in their discretion vote for a substitute.
The Board of Directors recommends a vote FOR election of the
The Board of Directors recommends a vote FOR election of the
named nominees as directors of the Company.
named nominees as directors of the Company.
The following table contains certain information as to the two
nominees for election at the annual meeting and each other person
whose term of office as a director will continue after the
meeting. The nominees for election at the meeting are indicated
by an asterisk.
<TABLE>
<CAPTION>
Has Been a Di-
rector of the
Business Experience Company or its
During Past Predecessor
Term Five Years Tech/Ops, Inc.
Name Expires and Other Directorships Since
____ _______ _______________________ _____
<S> <C> <C> <C>
Dr. Gary D. Eppen (1) 1998 Professor of Industrial 1992
Age -- 59 Administration since 1970
(1989 - 1994 also Director of
The Executive Program),
Graduate School of Business,
The University of Chicago.
Thomas M. Fulton 1997 President and Chief Executive 1988
Age -- 62 Officer of the Company since
January 1988; previously
General Manager of the
personnel dosimetry division
of Tech/Ops, Inc., the
Company's predecessor. Mr.
Fulton is a Director of Great
Lakes Chemical Corporation, a
diversified producer of
chemicals.
* Dr. Richard H. Leet 1996 Until November 1991, Vice 1990
(2) (3) Chairman and Director of Amoco
Age -- 69 Corporation, Chicago,
Illinois, an energy and
chemical company. Mr. Leet is
a director of Illinois Tool
Works, Chicago, Illinois, a
diversified manufacturing
company; Vulcan Materials
Company, Birmingham, Alabama,
a producer of aggregates and
chemicals; and Great Lakes
Chemical Corporation, a
diversified producer of
chemicals.
Paul B. Rosenberg 1997 Until January 1991, Treasurer 1988
(1) of the Company. Previously
Age -- 63 Vice-President -- Finance and
Administration and Treasurer
of Tech/Ops, Inc., the
Company's predecessor. Mr.
Rosenberg is President and
Chief Executive Officer of
Tech/Ops Corporation, Boston,
Mass., a consulting firm, and
is a director of Panatech
Research & Development
Corporation, Albuquerque, New
Mexico, a diversified
manufacturing and service
company and Tech/Ops Sevcon,
Inc., Boston, Mass., a
manufacturer of electronic
controllers.
Herbert Roth, Jr. (1) 1997 Until June 1985, Chief 1971
(2) (3) Executive Officer of LFE
Age -- 67 Corporation, Waltham, Mass.,
manufacturer of equipment and
systems for traffic and
industrial process control.
Mr. Roth is a director of
Boston Edison Company, Boston,
Mass., a public utility;
Tech/Ops Sevcon, Inc., Boston,
Mass., a manufacturer of
electronic controllers;
Phoenix Life Insurance
Company; Phoenix Total Return
Fund, Inc., a mutual fund; and
Mark IV Industries, Inc., a
diversified manufacturing
concern; and a trustee of
Phoenix Series Fund, Phoenix
Multi-Portfolio Fund and Big
Edge Services Fund, all mutual
funds.
Dr. Marvin G. Schorr 1998 Chairman of the Company's 1951
(3) Board of Directors since
Age -- 70 January 1988. Previously
Chairman of the Board of
Directors and President of
Tech/Ops, Inc., the Company's
predecessor. Dr. Schorr is
Chairman of the Board of
Directors of Tech/Ops
Corporation, Boston, Mass., a
consulting firm, and Chairman
of the Board of Directors of
Tech/Ops Sevcon, Inc., Boston,
Mass., a manufacturer of
electronic controllers. He is
a director of Helix Technology
Corporation, Waltham, Mass.,
manufacturer of cryogenic
equipment.
* C. Vincent Vappi 1996 Until May 1991, Chairman and 1971
(2) Chief Executive Officer of
Age -- 69 Vappi & Company, Inc.,
Cambridge, Mass., a general
building contractor. Mr.
Vappi is a director of John
Hancock Mutual Life Insurance
Company, Boston, Mass.;
Tech/Ops Sevcon, Inc., Boston,
Mass., a manufacturer of
electronic controllers; and
Boston Safe Deposit and Trust
Company, a Massachusetts trust
company, and its parent,
Boston Company, Inc., Boston,
Mass.
Michael D. Winfield 1998 Since February 1992, President 1994
(1) and Chief Executive Officer
Age -- 56 (prior to that date since
1983, a Vice President) of
UOP, a general partnership of
Allied-Signal, Inc. and Union
Carbide Corporation, engaged
in the licensing of
technologies to the oil
refining and petrochemical
industries.
</TABLE>
------------------
(1) Member of the Audit Committee.
(2) Member of the Compensation Committee.
(3) Member of the Nominating Committee.
The Board of Directors has an Audit Committee, a Compensation
Committee, and a Nominating Committee. The Audit Committee
reviews the results and scope of the audit and other services
provided by the Company's independent public accountants and
recommends the appointment of independent public accountants to
the Board of Directors. The Compensation Committee approves all
executive compensation and has responsibility for granting stock
options to eligible members of management and administering the
Company's stock option and incentive plans. The Nominating
Committee selects nominees for the Board of Directors. The
Nominating Committee will consider nominees that have been
properly and timely recommended by stockholders. See "Proposals
of and Nominations by Security Holders for 1997 Annual Meeting."
The membership of each committee consists of non-employee
directors. During the fiscal year ended September 30, 1995, the
Audit Committee met twice and the Compensation Committee met
twice.
During the fiscal year ended September 30, 1995, the Board of
Directors held a total of five meetings. During such year, no
director attended fewer than 75 percent of the aggregate of the
total number of meetings of the Board of Directors and the total
number of meetings held by all committees of the Board on which
such director served.
Mr. Roth, the Chairman of the Audit Committee, Mr. Vappi, the
Chairman of the Compensation Committee, and Dr. Leet, the
Chairman of the Nominating Committee, are paid $21,000 a year
each for their services as directors. The other directors
(except Mr. Fulton) are paid $20,000 each. The Company maintains
a Directors' Retirement Plan under which a director the sum of
whose age and full years of service as a director of the Company
and its predecessor Tech/Ops, Inc., on the date of his retirement
as a director, is not less than 70 is entitled to receive
annually a cash retirement benefit. This benefit is equal to a
percentage of the annual base directors' fee in effect at the
date of his retirement determined by multiplying the number of
his full years of service as a director by 2, but not exceeding
50%. The director's spouse is entitled after his death, if she
survives him, to receive for her life an annual benefit equal to
one-half of that amount.
EXECUTIVE COMPENSATION
EXECUTIVE COMPENSATION
The following summary compensation table sets forth the
compensation for services to the Company for the last three
fiscal years of the Company's executive officers.
Summary Compensation Table
<TABLE>
<CAPTION>
Long-Term
Compensation
Awards
Securities All Other
Name and Fiscal Annual Compensation Underlying Compensa-
Principal Position Year Salary($) Bonus($) Options(#) tion ($)(1)
------------------ ------- -------------------- ---------- -----------
<S> <C> <C> <C> <C> <C>
Thomas M. Fulton 1995 $256,250 $100,000 -- $1,150
President & 1994 243,000 75,000 -- 1,150
Chief Executive 1993 234,900 38,000 -- 1,150
Officer
Brent A. Latta 1995 $168,000 $ 65,000 20,000 $1,150
Vice President- 1994 161,000 34,000 -- 1,150
Marketing 1993 156,000 20,000 -- 1,150
James M. O'Connell 1995 $133,750 $ 60,000 20,000 $1,150
Vice President, 1994 129,000 27,000 -- 1,150
Treasurer, Sec- 1993 124,500 15,000 -- 1,150
retary & Chief
Financial Officer
R. Craig Yoder 1995 $126,250 $ 50,000 20,000 $1,150
Vice President- 1994 113,250 35,000 -- 1,150
Operations
</TABLE>
(1) Represents the Company's contribution to its 401(k) plan
on behalf of each of these employees.
OPTIONS GRANTS IN LAST FISCAL YEAR
OPTIONS GRANTS IN LAST FISCAL YEAR
Shown below is information regarding stock options granted in the
year ended September 30, 1995 to the Company's executive
officers.
Individual Grants
Individual Grants
<TABLE>
<CAPTION>
% Of Potential Realizable
No. Of Total Value at Assumed
Securities Options Annual Rates of
Underlying Granted to Stock Price
Options Employees Exercise Expira- Appreciation for
Granted in Fiscal Price tion Option Term (3)
Name (#)(1) Year ($/sh)(2) Date 5% 10%
----------- ------- ----------- -------- -------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Thomas M.
Fulton -- -- $ -- -- $ -- $ --
Brent A.
Latta 20,000 15.4% 16.50 11/04 207,540 525,940
James M.
O'Connell 20,000 15.4% 16.50 11/04 207,540 525,940
R. Craig
Yoder 20,000 15.4% 16.50 11/04 207,540 525,940
</TABLE>
(1) Each option becomes exercisable over a four-year period,
with 25% of the options becoming exercisable on the first,
second, third, and fourth anniversaries of the date of grant.
Each option may become exercisable earlier that its scheduled
vesting date upon discretion of the Board of Directors.
(2) The exercise price is the fair market value on the date of
grant.
(3) Potential realizable value is calculated based on an
assumption that the price of the Company's common stock
appreciates at the annual rate shown, compounded annually, from
the date of grant of the option until the expiration date of the
option. The value is net of the exercise price but is not
adjusted for the taxes that would be due upon exercise. The 5%
and 10% assumed rates of appreciation are required by the rules
of the Securities and Exchange Commission and do not represent
the Company's estimate of future price. Actual gains, if any,
upon the exercise of these options will depend on the actual
performance of the common stock.
FISCAL YEAR-END OPTION VALUES
FISCAL YEAR-END OPTION VALUES
Shown below is information regarding holdings of unexercised
stock options at September 30, 1995 by the Company's executive
officers.
<TABLE>
<CAPTION>
No. of Securities Underlying Value of Unexercised
Unexercised Options Held at In-the-Money Options
September 30, 1995 at September 30, 1995 ($)(1)
---------------------------- ----------------------------
Name Exercisable Unexercisable Exercisable Unexercisable
------------------ ----------- ------------- ------------ -------------
<S> <C> <C> <C> <C>
Thomas M. Fulton 137,330 62,670 $1,578,243 $532,695
Brent A. Latta 50,000 20,000 508,438 50,000
James M. O'Connell 30,000 20,000 87,188 50,000
R. Craig Yoder 29,000 20,000 297,078 50,000
</TABLE>
(1) Aggregate market value on September 30, 1995 less aggregate
exercise price.
None of the four individuals exercised any stock options during
the last fiscal year.
Employment and Compensation Agreement. The Company has entered
into an Employment and Compensation Agreement with Mr. Fulton
providing for his employment in that capacity through September
30, 1998, renewable thereafter through December 31, 1998 subject
to certain financial performance standards. Under the Agreement,
a non-statutory stock option to purchase 100,000 shares at a
price of $10.50 per share was granted to Mr. Fulton, which may
become exercisable for up to 10,000 shares a year on each
December 1 from 1989 through 1998 under a formula reflecting
average return on stockholders' investment and earnings per share
over successive three-year periods. At December 1, 1995 the
option had become exercisable for a total of 42,850 shares. The
Agreement also provides that, in the event of termination of
employment under certain circumstances, within two years
following a Change in Control in the Company (as defined) not
approved by the Company's Board of Directors, by the Company
other than for cause, disability or retirement, or by Mr. Fulton
for Good Reason (which includes a good faith determination by him
that due to the Change in Control he is not or believes he will
not be able effectively to discharge his duties), Mr. Fulton will
become entitled to two years' base salary and average bonuses
determined in accordance with the Agreement, and certain other
benefits, subject to a limitation on total benefits which
conforms to the limitation on their deductibility imposed by the
federal tax laws. The benefits payable to Mr. Fulton under the
Agreement if his employment had terminated as of September 30,
1995 due to a Change in Control would have had an estimated value
of $695,000.
Retirement Plan and Supplemental Retirement Plan. Messrs.
Fulton, Latta, O'Connell, and Dr. Yoder participate in the
Company's Retirement Plan, a defined benefit plan under which
benefits are based upon the average of the annual rates of base
salary in effect as of October 1 of each year for the period of
five consecutive years which produces the highest such average
and also based on years of service as set forth below. U.S. tax
law places limitations on the aggregate annual amount payable to
an individual under qualified retirement plans.
Messrs. Fulton, Latta, O'Connell, and Dr. Yoder participate in
the Company's Supplemental Key Executive Retirement Plan, under
which a participant is entitled to such payments from the Company
during his life after retirement at age 65 as may be necessary,
when added to his benefits under other Company-funded retirement
or profit sharing plans, to provide a minimum annual benefit
equal to 50% of his highest five-year average or final base
salary, whichever is greater. Such payments continue to a
participant's wife after his death, but at a decreased percentage
of 25%. Benefits are reduced by 2% (1% for wives) for each year
of service less than 25 years.
The following table sets forth information concerning the
combined annual benefits payable pursuant to the Retirement Plan
on a straight-life annuity basis and the Supplemental Retirement
Plan on a 50% joint-and-survivor basis upon retirement at age 65
for specified compensation levels (assuming continuation of 1995
fiscal year base salary) and years of service classifications.
Benefits under the Retirement Plan and the Supplemental
Retirement Plan are computed solely on the base salary of
participants, exclusive of bonuses, incentive and other
compensation. Benefits under the Retirement Plan are reduced on
account of Social Security entitlement on the basis of the
Internal Revenue Service permitted disparity rules.
<TABLE>
Pension Plan Table
Pension Plan Table
<CAPTION>
Earnings Estimated Combined Annual Pension Based
Earnings Estimated Combined Annual Pension Based
on Which on
on Which on
Combined Years of Service Indicated
Combined Years of Service Indicated
__________________________
Retirement
Retirement
Benefits are 20 years 25 years 30 years 35 years
Benefits are 20 years 25 years 30 years 35 years
____________ ________ ________ ________ ________
Based
Based
_____
<S> <C> <C> <C> <C>
$ 125,000 $ 50,000 $ 62,500 $ 62,500 $ 70,200
150,000 60,000 75,000 75,000 85,500
175,000 70,000 87,500 87,500 87,500
200,000 80,000 100,000 100,000 100,000
225,000 90,000 112,500 112,500 112,500
250,000 100,000 125,000 125,000 125,000
275,000 110,000 137,500 137,500 137,500
300,000 120,000 150,000 150,000 150,000
</TABLE>
Credited years of service at September 30, 1995 were 17 for
Mr. Fulton, eight for Mr. Latta, five for Mr. O'Connell, and 13
for Dr. Yoder. Credited years of service at age 65 would be 21
for Mr. Fulton, 21 for Mr. Latta, 22 for Mr. O'Connell and 35 for
Dr. Yoder.
COMPENSATION COMMITTEE REPORT
COMPENSATION COMMITTEE REPORT
The Company's compensation program is designed to motivate and
retain employees by encouraging and rewarding performance. The
program is administered by the Compensation Committee of the
Board of Directors (the "Committee"), consisting of three
independent outside directors who are not employees of the
Company. The Committee regularly reviews and approves generally
all compensation and fringe benefit programs of the Company, and
also reviews and determines the base salary, and incentive
compensation of the executive officers named above, as well as
stock option grants to all employees. All compensation actions
taken by the Committee are reported to the full Board of
Directors, who, excluding employee directors, approve the actions
of the Committee. The Committee also reviews and makes
recommendations to the Board on policies and programs for the
development of management personnel, as well as management
structure and organization. The Committee administers the
Company's Stock Option Plan and Incentive Compensation Plan for
Executive Officers ("Executive Officer Plan").
The Company believes that stock options are an important
incentive to motivate executive officers and other key employees
for improved long-term performance of the Company. The Company
considers stock ownership, options currently held and options
previously granted when granting options although there are no
specific levels of ownership for such grants.
The Company believes that the combination of salary and
incentive compensation is the best tool for compensating its
executive officers and senior managers to promote uniform
excellence, long-term commitment and team performance.
Management salaries are determined as a result of individual
performance, level of responsibility and experience. The Company
reviews these salaries annually and measures them against
compensation data obtained from published compensation surveys
and surveys that the Committee makes of a group of peer
companies. The peer companies are generally of about the same
size as the Company and are in technical, rather than consumer or
distribution fields. The peer companies may include some of the
companies included in the AMEX High Tech Sub-Index used in the
Performance Graph. The Company believes that its competitors for
executive talent are not necessarily companies which engage in
the same business as the Company and, therefore, the companies
used for comparative compensation purposes differ from the
companies included in the AMEX High Tech Sub-Index.
The Executive Officer Plan covers executive officers of the
Company who are elected by the Board of Directors to such offices
and establishes incentive pools which are related to aggregate
executive officer base salary and performance of the Company
relative to (i) budgeted operating income ("Operating Income
Pool"), (ii) growth in earnings per share ("EPS Pool"), and (iii)
the AMEX Market Value Index ("Stockholder Return Pool"). The
target percentages of aggregate executive officer base salary for
the Operating Income, EPS, and Stockholder Return Pools are 15%,
7.5%, and 7.5%, respectively. The actual size of each pool
varies as a result of actual performance compared with the
performance measure for each pool.
Operating Income Pool. At 100% actual-to-budget operating
income, the Operating Income Pool is 15% of aggregate executive
officer base salary; at 80% actual-to-budget, the pool is 7.5% of
base salary; and at 120% actual-to-budget, the pool is 25.5% of
base salary. If actual-to-budget is less than 60%, the Operating
Income Pool is zero.
EPS Pool. At average three-year growth in earnings per share
of 10%, the EPS Pool is 7.5% of aggregate executive officer base
salary; at average growth in earnings per share of 8%, the pool
is 3.75% of base salary; and at average growth in earnings per
share of 12% the pool is 12.75% of base salary. If average
growth in earnings per share is 6% or lower, the EPS Pool is
zero.
Stockholder Return Pool. Where the three-year total return to
stockholders is equal to or exceeds the total return of the AMEX
Market Value Index, the Stockholder Return Pool is 7.5% of
aggregate executive officer base salary. In all other cases, the
Stockholder Return Pool is zero.
One-half of the Operating Income Pool is awarded to executive
officers, as a percentage of their base salaries, if the actual-
to-budget operating income is at least 90%. One-half of the EPS
Pool is awarded to executive officers, as a percentage of their
base salaries, if the average growth in earnings per share is at
least 9%. One-half of the Stockholder Return Pool is awarded to
executive officers, as a percentage of their base salaries, if
the total return to stockholders of the Company exceeds the total
return of the AMEX Market Value Index. With respect to the
balance of each of the pools, The Compensation Committee has the
discretion to award to any participant an amount relating to each
of the Operating Income Pool, EPS Pool, and/or the Stockholder
Return Pool ranging in value from zero to one-half of the award
such participant would otherwise receive. Any amounts not so
awarded may, at the discretion of the Committee, be reallocated
to any other participant based upon the Committee's evaluation of
the participant's individual performance relative to written
objectives and other factors.
If the actual-to-budget operating income is at least 60%, but
less than 90%, the Committee has the discretion to award to any
participant an amount relating to the Operating Income Pool
ranging in value from zero to the full amount of the award such
participant would otherwise receive. If the average growth in
earnings per share is at least 6%, but less than 9%, the
Committee has the discretion to reduce an award to any
participant an amount relating to the EPS Pool ranging in value
from zero to the full amount of the award such participant would
otherwise receive.
The aggregate amount of incentive compensation awards for any
fiscal year under the Executive Officer Plan and other incentive
compensation plans is limited to 5% of the Company's operating
income for such fiscal year.
The recommended base salary and incentive compensation award
for the President is determined each year by the Committee based
upon overall financial performance of the Company and the
performance of the President relative to corporate objectives and
other factors under the terms of the Executive Officer Plan.
Mr. Fulton's base salary and incentive compensation during
fiscal 1995 increased 12% to $356,250 from fiscal 1994. The
increase in Mr. Fulton's base salary related to the level of
responsibility and accountability of the Chief Executive Officer,
as well as external factors such as inflation and base salary
levels in comparable companies. The increase in incentive
compensation awarded to Mr. Fulton was determined based on
performance relative to budgeted operating income, growth in
earnings per share, the total return to shareholders of the
Company relative to the Amex Market Value Index and individual
performance relative to stated objectives under the terms of the
Executive Officer Plan. Each of these financial measurers was
met or exceeded, and Mr. Fulton achieved substantially all of the
personal objectives established by the Board of Directors during
fiscal 1995.
The Compensation Committee and the Board of Directors have
approved the Landauer, Inc. 1996 Equity Plan (the "Equity Plan").
In 1993, the tax laws were amended to limit the deduction a
publicly-held company is allowed for compensation paid in 1994
and thereafter to the chief executive officer and the four most
highly compensated executive officers other than the chief
executive officer. Generally, amounts paid in excess of $1
million to a covered executive, other than performance-based
compensation, cannot be deducted. In order to constitute
performance-based compensation, the performance measures must be
approved by stockholders. Although no executive officer of the
Company has earned over $1 million in any fiscal year of the
Company, the Company has determined to seek stockholder approval
of the Equity Plan. See "Approval of 1996 Equity Plan" for a
discussion of the Equity Plan, which, if approved by
stockholders, will be implemented beginning in 1996 for fiscal
1996. The full text of the plan is reproduced in Exhibit A.
Members of the Compensation Committee:
Richard H. Leet Herbert Roth, Jr. C. Vincent Vappi, Chairman
PERFORMANCE GRAPH
The following graph reflects a comparison of the cumulative
total return (change in stock price plus reinvested dividends)
assuming $100 invested in the Common Stock of the Company, in the
American Stock Exchange ("AMEX") Index, and in the AMEX High Tech
Sub-Index during the period from September 30, 1990 through
September 30, 1995. The comparisons in the following table are
historical and are not intended to forecast or be indicative of
possible future performance of the Common Stock of the Company.
<TABLE>
<CAPTION>
Value of Investment at September 30,
------------------------------------
1990 1991 1992 1993 1994 1995
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Landauer, Inc. $ 100 $ 137 $ 156 $ 162 $ 169 $ 218
AMEX Index 100 122 122 150 149 177
AMEX HiTech Sector 100 159 150 178 186 247
</TABLE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Vappi Company was a wholly-owned subsidiary of the
Company's predecessor Tech/Ops, Inc., ("Tech/Ops") from 1971,
when it was acquired by Tech/Ops from C. Vincent Vappi, a
director of the Company and members of his family, until 1980,
when it was resold to the Vappi family. Pursuant to a commitment
made before the resale, Tech/Ops in 1980 guaranteed a portion of
certain rentals under a lease to the Vappi Company as tenant.
The Company, as a successor to Tech/Ops under a Plan of
Reorganization effective 1988, assumed part of that guarantee
amounting to a maximum of $85,000 per year through April 1995,
payable in equal monthly installments. The Vappi Company ceased
to make rental payments in January 1991, and in May, 1991 filed a
voluntary petition under Chapter 7 of the United States
Bankruptcy Code. Through April, 1995 the Company has paid
$368,000 on the guarantee. Mr. Vappi is not personally a party
to either the lease or the guarantee. No further payments are
due on the guarantee.
The Company has entered into a consulting agreement, which
expires on December 31, 1996, with a company owned by two of its
directors. Under the terms of the agreement, the annual cost of
these services will not exceed $30,000 plus reimbursement for
certain expenses.
In connection with the 1988 transfer of the personnel dosimetry
business, the Company has entered into a Liability Assumption and
Sharing Agreement with Tech/Ops, Inc. (Tech/Ops) providing for,
among other things, (i) assumption by the Company of all
determinable and contingent liabilities and obligations of
Tech/Ops relating to the personnel dosimetry and radon detection
business, (ii) assumption by the other former subsidiary of
Tech/Ops of all determinable and contingent liabilities and
obligations of Tech/Ops relating to its electronic controller
business, (iii) joint and several assumption by the Company and
the other former subsidiary of all contingent liabilities of
Tech/Ops and (iv) the allocation of other liabilities jointly and
severally assumed to the business in which they relate or, if
they relate to neither business, in ratios reflective of relative
profit contributions of the respective businesses for the five
years ended September 30, 1987. Under the terms of this
agreement, $22,000 of expenses were charged to operations of the
Company for the fiscal year ended September 30, 1995.
SELECTION OF AUDITORS
The stockholders of the Company will be asked at the annual
meeting to approve the selection of auditors for the fiscal year
ending September 30, 1996. Arthur Andersen LLP, 33 West Monroe
Street, Chicago, Illinois, has served as auditors for the Company
and its predecessor Tech/Ops, Inc. since the latter was formed,
and it will be recommended to the stockholders that such firm be
selected again. The Audit Committee of the Board of Directors
comprised of Gary D. Eppen, Paul B. Rosenberg, Herbert Roth, Jr.
and Michael D. Winfield, has approved this recommendation.
Representatives of Arthur Andersen LLP are expected to be present
at the meeting with an opportunity to make a statement if they
desire to do so, and are expected to be available to respond to
appropriate questions.
If a quorum is present, in order to approve the selection of
Arthur Andersen LLP as the Company's auditors for the fiscal year
ending September 30, 1996, a majority of the shares present in
person or by proxy at the annual meeting and entitled to vote on
such proposal must vote in favor of it. Accordingly, abstentions
will have the same effect as votes against and non-votes will
reduce the number of shares considered present and entitled to
vote on the proposal.
The Board of Directors recommends a vote FOR the selection of
Arthur Andersen LLP as auditors of the Company for the fiscal
year ended September 30, 1996.
APPROVAL OF
1996 EQUITY PLAN
General
The Board of Directors is proposing for stockholder approval
the 1996 Equity Plan (the "Plan"). The purposes of the Plan are
(i) to align the interests of the Company's stockholders and
recipients of awards under the Plan by increasing the proprietary
interest of such recipients in the Company's growth and success,
(ii) to advance the interests of the Company by attracting and
retaining officers and other key employees and (iii) to motivate
such employees to act in the long-term best interests of the
Company's stockholders. Under the Plan, the Company may grant
non-qualified stock options, "incentive stock options" (within
the meaning of Section 422 of the Internal Revenue Code of 1986,
as amended (the "Code")), stock appreciation rights ("SARs"),
restricted stock, bonus stock, long-range performance awards and
performance shares. Reference is made to Exhibit A to this Proxy
Statement for the complete text of the Plan which is summarized
below. The Company currently maintains the Key Employee Stock
Bonus and Option Plan. As of the date of this Proxy Statement,
only 10,000 shares of Common Stock remained available for future
issuance under the Key Employee Stock Bonus and Option Plan. If
the Plan is approved by stockholders, future awards would be made
under the Plan, in lieu of additional awards under the Key
Employee Stock Bonus and Option Plan.
Unless otherwise instructed, the proxy holders will vote the
proxies received by them FOR approval of the Plan.
Description of the Plan
Administration. The Plan will be administered by a committee
of the Board of Directors (the "Committee") consisting of not
less than two directors who are not eligible to receive
discretionary awards of equity securities of the Company under
the Plan or any other plan of the Company or any affiliate of the
Company and who are "outside directors" within the meaning of
Section 162(m) of the Code. The Compensation Committee of the
Board of Directors is expected to serve as the Committee under
the Plan.
Section 162(m) of the Code generally limits to $1 million the
amount that a publicly held corporation is allowed each year to
deduct for the compensation paid to each of the corporation's
chief executive officer and the corporation's four most highly
compensated executive officers other than the chief executive
officer. However, "qualified performance-based compensation" is
not subject to the $1 million deduction limit. To qualify as
performance-based compensation, the following requirements must
be satisfied: (i) the performance goals are determined by a
committee consisting solely of two or more "outside directors",
(ii) the material terms under which the compensation is to be
paid, including the performance goals, are approved by a majority
of the corporation's stockholders, and (iii) the committee
certifies that the applicable performance goals were satisfied
before payment of any performance-based compensation is made.
The Committee will consist solely of "outside directors" as
defined for purposes of section 162(m) of the Code. As a result,
and based on certain proposed regulations issued by the United
States Department of the Treasury, certain compensation under the
Plan, such as that payable with respect to options and SARs, is
not expected to be subject to the $1 million deduction limit
under Section 162(m) of the Code, but other compensation payable
under the Plan, such as any restricted stock award which is not
subject to a performance condition to vesting, would be subject
to such limit.
Subject to the express provisions of the Plan, the Committee
will have the authority to select eligible officers and other key
employees who will receive awards and determine all of the terms
and conditions of each award. All awards will be evidenced by a
written agreement containing such provisions not inconsistent
with the Plan as the Committee shall approve. The Committee will
also have authority to prescribe rules and regulations for
administering the Plan and to decide questions of interpretation
or application of any provision of the Plan. Except with respect
to grants to executive officers of the Company and persons whose
compensation is likely to be subject to the $1 million deduction
limit under Section 162(m) of the Code, the Committee may
delegate some or all of its power and authority to administer the
Plan to the Chief Executive Officer or other executive officer of
the Company.
Available Shares. Under the Plan, 210,000 shares of Common
Stock are available for awards, subject to adjustment in the
event of a stock split, stock dividend, recapitalization,
reorganization, merger, spin-off or other similar change or
event. The number of available shares will be reduced by the sum
of the aggregate number of shares of Common Stock (i) that are
issued upon the grant of a Stock Award and (ii) which become
subject to outstanding options, Free-Standing SARs and
outstanding Performance Shares. To the extent that shares of
Common Stock subject to an outstanding option (except to the
extent shares of Common Stock are issued or delivered by the
Company in connection with the exercise of a Tandem SAR), Free-
Standing SAR, Stock Award or Performance Share are not issued or
delivered by reason of the expiration, termination, cancellation
or forfeiture of such award or by reason of the delivery or
withholding of shares of Common Stock to pay all or a portion of
the exercise price of an award, if any, or to satisfy all or a
portion of the tax withholding obligations or other taxes
relating to an award, then such shares of Common Stock shall
again be available under the Plan. The maximum number of shares
of Common Stock with respect to which options and SARs may be
granted during any fiscal year to any person is 75,000, subject
to adjustment as described above.
Effective Date, Termination and Amendment. If approved by
stockholders at the annual meeting, the Plan will become
effective as of the date of the annual meeting and will terminate
ten years thereafter, unless terminated earlier by the Board of
Directors. The Board of Directors may amend the Plan at any
time, subject to any requirement of stockholder approval required
by applicable law, rule or regulation and provided that no
amendment may be made without stockholder approval if such
amendment would, among other things, (i) increase the maximum
number of shares of Common Stock available under the Plan, (ii)
reduce the minimum purchase price of a share of Common Stock
subject to an option or base price of an SAR or (iii) extend the
term of the Plan.
Stock Options-General. The Committee will determine the
conditions to the exercisability of an option. Upon exercise of
an option, including an incentive stock option, the purchase
price may be paid in cash, by delivery of previously owned shares
of Common Stock or by authorizing the Company to withhold shares
of Common Stock which would otherwise be delivered upon exercise
of the option. The Committee also has the discretion to permit
payment by a note or in installments under certain circumstances.
Non-Qualified Stock Options and Stock Appreciation Rights. The
period for the exercise of a non-qualified stock option or SAR
will be determined by the Committee. The exercise price of a
non-qualified option and the base price of an SAR will not be
less than 100% of the fair market value of the Common Stock on
the date of grant of such option or SAR, provided that the base
price of an SAR granted in tandem with an option (a "tandem SAR")
will be the exercise price of the related option. The exercise
of an SAR entitles the holder thereof to receive (subject to
withholding taxes) shares of Common Stock (which may be
restricted stock), cash or a combination thereof with a value
equal to the difference between the fair market value of the
Common Stock on the exercise date and the base price of the SAR.
In the event of termination of employment by reason of
retirement on or after age 65 (or prior to age 65 with the
consent of the Committee), each non-qualified stock option and
SAR will become fully exercisable for a period of no more than
one year after the date of such termination of employment (or
such other period as determined by the Committee), but in no
event after the expiration of such option or SAR. In the event
of termination of employment by reason of death or disability,
each non-qualified stock option and SAR will become fully
exercisable for a period of no more than one year after the date
of such termination (or such other period as determined by the
Committee), but in no event after the expiration of such option
or SAR, subject to extension in certain circumstances. In the
event of termination of employment for cause (as defined), each
option or SAR held by the holder whose employment has been so
terminated shall terminate on the date of such termination of
employment. In the event of termination of employment for any
other reason, each nonqualified stock option and SAR will
terminate on a date not later than three months after such
termination of employment (or such other period as determined by
the Committee), but in no event after the expiration of such
option or SAR. If a holder dies during the specified periods
following termination of employment by reason of retirement,
disability or for any other reason, each non-qualified stock
option or SAR will be exercisable only to the extent that such
option or SAR was exercisable on the date of the holder's death,
and may thereafter be exercised for a period of no more than one
year from the date of death, but in no event after the expiration
of such option or SAR, subject to extension in certain
circumstances.
Incentive Stock Options. No incentive stock option will be
exercisable more than ten years after its date of grant, unless
the recipient of the incentive stock option owns greater than ten
percent of the voting power of all shares of capital stock of the
Company (a "ten percent holder"), in which case the option will
be exercisable for no more than five years after its date of
grant. The exercise price of an incentive stock option will not
be less than the fair market value of the Common Stock on the
date of grant of such option, unless the recipient of the
incentive stock option is a ten percent holder, in which case the
option exercise price will be the price required by the Code,
currently 110% of fair market value.
In the event of a termination of employment by reason of death
or permanent and total disability (as defined in Section 22(e)(3)
of the Code), incentive stock options will become fully
exercisable for a period of no more than one year after such
termination (or such shorter period as determined by the
Committee), but in no event after the expiration of the incentive
stock option. In the event of a termination of employment by the
Company of a holder's employment for cause, incentive stock
options held by such holder shall terminate on the date of
termination of employment. In the event of a termination of
employment for any other reason, incentive stock options will be
exercisable to the extent exercisable on the date of termination
for a period of three months after such termination, but in no
event after the expiration of the incentive stock option. If the
holder of an incentive stock option dies during the specified
periods following termination of employment by reason of
permanent and total disability or for any other reason, each
incentive stock option will be exercisable only to the extent
such option was exercisable on the date of the holder's death,
and may thereafter be exercised for a period of no more than one
year, but in no event after expiration of the incentive stock
option.
Bonus Stock and Restricted Stock Awards. The Plan provides for
the grant of (i) bonus stock awards, which are vested upon grant,
and (ii) stock awards which may be subject to a restriction
period ("restricted stock"). An award of restricted stock may be
subject to specified performance measures for the applicable
restriction period. Shares of restricted stock will be non-
transferable and subject to forfeiture if the holder does not
remain continuously in the employment of the Company during the
restriction period or, if the restricted stock is subject to
performance measures, if such performance measures are not
attained during the restriction period; provided, however, that,
unless otherwise determined by the Committee, termination of
employment by reason of retirement on or after age 65 (or prior
to age 65 with the consent of the Committee), disability or
death, will result in the restricted stock becoming fully vested
and any performance measures will be deemed to be satisfied at
the maximum level. In the event of termination of employment for
any other reason, the portion of a restricted stock award which
is then subject to a restriction period will be forfeited and
cancelled by the Company. Unless otherwise determined by the
Committee, the holder of a restricted stock award will have
rights as a stockholder of the Company, including the right to
vote and receive dividends with respect to the shares of
restricted stock.
Performance Share Awards. The Plan also provides for the grant
of performance shares. Each performance share is a right,
contingent upon the attainment of performance measures within a
specified performance period, to receive one share of Common
Stock, which may be restricted stock, or the fair market value of
such performance share in cash. Prior to the settlement of a
performance share award in shares of Common Stock, the holder of
such award will have no rights as a stockholder of the Company
with respect to the shares of Common Stock subject to the award.
Performance shares will be non-transferable and subject to
forfeiture if the specified performance measures are not attained
during the applicable performance period; provided, however, that
termination of employment by reason of retirement on or after age
65 (or prior to age 65 with the consent of the Committee),
disability or death, will result in the performance share award
becoming fully vested (if no performance measures are required to
be satisfied prior to termination of employment) or to a level
proportionate with the actual performance for the portion of the
performance period that has expired prior to termination of
employment (if any performance measures are required to be
satisfied prior to termination of employment). In the event of
termination of employment for any other reason, the portion of a
performance share award which is then subject to a performance
period will be forfeited and cancelled by the Company.
Federal Income Tax Consequences
The following is a brief summary of certain U.S. federal income
tax consequences generally arising with respect to awards under
the Plan.
A participant will not recognize any income upon the grant of
an option. A participant will recognize compensation taxable as
ordinary income (and subject to income tax withholding) upon
exercise of a non-qualified stock option equal to the excess of
the fair market value of the shares purchased over their exercise
price, and the Company will be entitled to a corresponding
deduction. A participant will not recognize income (except for
purposes of the alternative minimum tax) upon exercise of an
incentive stock option. If the shares acquired by exercise of an
incentive stock option are held for the longer of two years from
the date the option was granted and one year from the date it was
exercised, any gain or loss arising from a subsequent disposition
of such shares will be taxed as long-term capital gain or loss,
and the Company will not be entitled to any deduction. If,
however, such shares are disposed of within the above-described
period, then in the year of such disposition the participant will
recognize compensation taxable as ordinary income equal to the
excess of the lesser of (i) the amount realized upon such
disposition and (ii) the fair market value of such shares on the
date of exercise over the exercise price, and the Company will be
entitled to a corresponding deduction.
A participant who is granted SARs will not recognize any
taxable income upon the grant of the SARs. Upon exercise, the
participant recognizes taxable compensation in an amount equal to
the fair market value of any shares delivered and the amount of
cash paid by the Company. This amount is deductible by the
Company as compensation expense.
A participant receiving restricted stock will not recognize
taxable income at the time of the grant, and the Company will not
be entitled to a tax deduction at such time, unless the
participant makes an election to be taxed at the time restricted
stock is granted. If such election is not made, the participant
will recognize taxable income at the time the restrictions lapse
in an amount equal to the excess of the fair market value of the
shares at such time over the amount, if any, paid for such
shares. The amount of ordinary income recognized by a
participant by making the above-described election or upon the
lapse of the restrictions is deductible by the Company as
compensation expense, except to the extent the deduction limits
of Section 162(m) of the Code apply. In addition, a participant
receiving dividends with respect to restricted stock for which
the above-described election has not been made and prior to the
time the restrictions lapse will recognize taxable compensation,
rather then dividend income, in an amount equal to the dividends
paid and the Company will be entitled to a corresponding
deduction, except to the extent the deduction limits of Section
162(m) of the Code apply.
A participant receiving bonus stock will recognize taxable
income at the time the bonus stock is awarded in an amount equal
to the then fair market value of such stock. This amount is
deductible by the Company as compensation expense, except to the
extent the deduction limits of Section 162(m) of the Code apply.
A participant receiving performance shares will not recognize
taxable income upon the grant of such shares and the Company will
not be entitled to a tax deduction at such time. Upon the
settlement of performance shares, the participant will recognize
ordinary income in an amount equal to the fair market value of
any shares delivered and any cash paid by the Company. This
amount is deductible by the Company as compensation expense,
except to the extent the deduction limits of Section 162(m) of
the Code apply.
The affirmative vote of a majority of the shares present at the
meeting in person or by proxy is necessary to approve the Plan.
The Board of Directors recommends a vote FOR approval of the
1996 Equity Plan for officers and key employees.
PROPOSALS OF AND NOMINATIONS BY SECURITY HOLDERS FOR
1997 ANNUAL MEETING
Proposals intended to be presented by security holders at the
annual meeting of the Company's stockholders scheduled for
February 5, 1997 must be received by the Company in order to be
considered for inclusion in its proxy statement and form of proxy
relating to that meeting not later than September 5, 1996. Such
proposals may be included in next year's proxy statement if they
comply with certain rules and regulations of the Securities and
Exchange Commission.
Under the Company's by-laws, nominations for directorships to
be acted on at the 1997 annual meeting may be made only pursuant
to written notice received at the Company's principal office not
less than 50 nor more than 75 days prior to the meeting.
COMPLIANCE WITH SECTION 16 OF THE EXCHANGE ACT
Section 16(a) of the Securities Exchange Act of 1934 requires
the Company's officers and directors and persons who own more
than ten percent of a registered class of the Company's equity
securities ("Reporting Persons") to file reports of ownership and
changes in ownership with the Securities and Exchange Commission
("SEC"). Reporting Persons are required by SEC regulation to
furnish the Company with copies of all Section 16(a) reports they
file.
Based solely on its review of the copies of such forms received
by it and representations from certain Reporting Persons, the
Company believes that during the fiscal year ended September 30,
1995 its Reporting Persons complied with all filing requirements
applicable to them.
MISCELLANEOUS
The Company's 1995 Annual Report to Stockholders (which
includes a copy of Company's Annual Report on Form 10-K for the
fiscal year ended September 30, 1995) accompanies this Proxy
Statement.
The Board of Directors does not know of any business which will
come before the meeting except the matters described in the
notice. If other business is properly presented for
consideration at the meeting, it is intended that the proxies
will be voted by the persons named therein in accordance with
their judgment on such matters.
In the event that a quorum is not present when the meeting is
convened, it is intended to vote the proxies in favor of
adjourning the meeting from time-to-time until a quorum is
obtained.
James M. O'Connell
Vice President, Treasurer, Secretary
and Chief Financial Officer
Dated January 3, 1996
EXHIBIT A
LANDAUER, INC.
1996 EQUITY PLAN
I. INTRODUCTION
1.1 Purposes. The purposes of the 1996 Equity Plan (the
1.1 Purposes.
________
"Plan") of Landauer, Inc. (the "Company") and its subsidiaries
____ _______
from time to time (individually a "Subsidiary" and collectively
__________
the Subsidiaries") are (i) to align the interests of the
____________
Company's stockholders and the recipients of awards under this
Plan by increasing the proprietary interest of such recipients in
the Company's growth and success, (ii) to advance the interests
of the Company by attracting and retaining officers and other key
employees and (iii) to motivate such employees to act in the
long-term best interests of the Company's stockholders. For
purposes of this Plan, references to employment by the Company
shall also mean employment by a Subsidiary.
1.2 Certain Definitions.
1.2 Certain Definitions.
___________________
"Agreement" shall mean the written agreement evidencing an
"Agreement"
_________
award hereunder between the Company and the recipient of such
award.
"Board" shall mean the Board of Directors of the Company.
"Board"
_____
"Bonus Stock" shall mean shares of Common Stock which are
"Bonus Stock"
___________
not subject to a Restriction Period or Performance Measures.
"Bonus Stock Award" shall mean an award of Bonus Stock under
"Bonus Stock Award"
_________________
this Plan.
"Cause" shall mean any willful act of dishonesty, conviction
"Cause"
_____
of a felony, significant activities harmful to the reputation or
business of the Company, refusal to perform or substantial
disregard of duties properly assigned or significant violation of
any statutory or common law duty of loyalty to the Company, in
each case as determined by not less than two-thirds of the
members of the Committee.
"Code" shall mean the Internal Revenue Code of 1986, as
"Code"
____
amended.
"Committee" shall mean the Committee designated by the
"Committee"
_________
Board, consisting of two or more members of the Board, each of
whom shall be (i) a "disinterested person" within the meaning of
Rule 16b-3 under the Exchange Act and (ii) an "outside director"
within the meaning of Section 162(m) of the Code, subject to any
transition rules applicable to the definition of outside
director.
"Common Stock" shall mean the common stock, par value $.10
"Common Stock"
____________
per share, of the Company.
"Company" has the meaning specified in Section 1.1.
"Company"
_______
"Disability" shall mean the inability of the holder of an
"Disability"
__________
award to perform substantially such holder's duties and
responsibilities for a continuous period of at least six months,
as determined solely by the Committee.
"Employment Termination Date" shall mean, in the case of the
"Employment Termination Date"
___________________________
termination by the Company of an employee's employment, the date
that the Company notifies such employee of such termination of
employment and, in the case of the termination by an employee of
employment with the Company, the date on which the Company shall
first receive notification from such employee of such termination
of employment.
"ERISA" shall mean the Employee Retirement Income Security
"ERISA"
_____
Act of 1974, as amended.
"Exchange Act" shall mean the Securities Exchange Act of
"Exchange Act"
____________
1934, as amended.
"Fair Market Value" shall mean the average of the high and
"Fair Market Value"
_________________
low transaction prices of a share of Common Stock as reported on
the American Stock Exchange on the date as of which such value is
being determined, or, if the Common Stock is not listed on the
American Stock Exchange, the average of the high and low
transaction prices of a share of Common Stock on the principal
national stock exchange on which the Common Stock is traded on
the date as of which such value is being determined, or, if there
shall be no reported transactions for such date, on the next
preceding date for which transactions were reported; provided,
however, that if Fair Market Value for any date cannot be so
determined, Fair Market Value shall be determined by the
Committee by whatever means or method as the Committee, in the
good faith exercise of its discretion, shall at such time deem
appropriate.
"Free-Standing SAR" shall mean an SAR which is not issued in
"Free-Standing SAR"
_________________
tandem with, or by reference to, an option, which entitles the
holder thereof to receive, upon exercise, shares of Common Stock
(which may be Restricted Stock), cash or a combination thereof
with an aggregate value equal to the excess of the Fair Market
Value of one share of Common Stock on the date of exercise over
the base price of such SAR, multiplied by the number of such SARs
which are exercised.
"Incentive Stock Option" shall mean an option to purchase
"Incentive Stock Option"
_______________________
shares of Common Stock that meets the requirements of Section 422
of the Code, or any successor provision, which is intended by the
Committee to constitute an Incentive Stock Option.
"Non-Statutory Stock Option" shall mean a stock option which
"Non-Statutory Stock Option"
__________________________
is not an Incentive Stock Option.
"Performance Measures" shall mean the criteria and
"Performance Measures"
______________________
objectives, established by the Committee, which shall be
satisfied or met (i) as a condition to the exercisability of all
or a portion of an option or SAR or (ii) during the applicable
Restriction Period or Performance Period as a condition to the
holder's receipt, in the case of a Restricted Stock Award, of the
shares of Common Stock subject to such award, or, in the case of
a Performance Share Award, of payment with respect to such award.
Such criteria and objectives may include, but are not limited to,
the attainment by a share of Common Stock of a specified Fair
Market Value for a specified period of time, earnings per share,
return on equity, earnings of the Company, revenues, market
share, cash flows or cost reduction goals, or any combination of
the foregoing and any other criteria and objectives established
by the Committee. In the sole discretion of the Committee, the
Committee may amend or adjust the Performance Measures or other
terms and conditions of an outstanding award in recognition of
unusual or nonrecurring events affecting the Company or its
financial statements or changes in law or accounting principles.
"Performance Option" shall mean an Incentive Stock
"Performance Option"
___________________
Option or Non-Statutory Stock Option, the exercisability of all
or a portion of which is contingent upon the attainment of
specified Performance Measures within a specified Performance
Period.
"Performance Period" shall mean any period designated by the
"Performance Period"
__________________
Committee during which the Performance Measures applicable to a
Performance Share Award or Performance Option shall be measured.
"Performance Share" shall mean a right, contingent upon the
"Performance Share"
__________________
attainment of specified Performance Measures within a specified
Performance Period, to receive one share of Common Stock, which
may be Restricted Stock, or in lieu thereof, the Fair Market
Value of such Performance Share in cash.
"Performance Share Award" shall mean an award of Performance
"Performance Share Award"
_______________________
Shares under this Plan.
"Permanent and Total Disability" shall have the meaning set
"Permanent and Total Disability"
_______________________________
forth in Section 22(e)(3) of the Code or any successor thereto.
"Restricted Stock" shall mean shares of Common Stock which
"Restricted Stock"
________________
are subject to a Restriction Period.
"Restricted Stock Award" shall mean an award of Restricted
"Restricted Stock Award"
______________________
Stock under this Plan.
"Restriction Period" shall mean any period designated by the
"Restriction Period"
__________________
Committee during which the Common Stock subject to a Restricted
Stock Award may not be sold, transferred, assigned, pledged,
hypothecated or otherwise encumbered or disposed of, except as
provided in this Plan or the Agreement relating to such award.
"SAR" shall mean a stock appreciation right which may be a
"SAR"
___
Free-Standing SAR or a Tandem SAR.
"Stock Award" shall mean a Restricted Stock Award or a Bonus
"Stock Award"
___________
Stock Award.
"Tandem SAR" shall mean an SAR which is granted in tandem
"Tandem SAR"
__________
with, or by reference to, an option (including a Non-Statutory
Stock Option granted prior to the date of grant of the SAR),
which entitles the holder thereof to receive, upon exercise of
such SAR and surrender for cancellation of all or a portion of
such option, shares of Common Stock (which may be Restricted
Stock), cash or a combination thereof with an aggregate value
equal to the excess of the Fair Market Value of one share of
Common Stock on the date of exercise over the base price of such
SAR, multiplied by the number of shares of Common Stock subject
to such option, or portion thereof, which is surrendered.
"Tax Date" shall have the meaning set forth in Section 5.5.
"Tax Date"
________
"Ten Percent Holder" shall have the meaning set forth in
"Ten Percent Holder"
___________________
Section 2.1(a).
1.3 Administration. This Plan shall be administered by the
1.3 Administration.
______________
Committee. Any one or a combination of the following awards may
be made under this Plan to eligible officers and other key
employees of the Company and its Subsidiaries: (i) options to
purchase shares of Common Stock in the form of Incentive Stock
Options or Non-Statutory Stock Options (which may include
Performance Options), (ii) SARs in the form of Tandem SARs or
Free-Standing SARs, (iii) Stock Awards in the form of Restricted
Stock or Bonus Stock and (iv) Performance Shares. The Committee
shall, subject to the terms of this Plan, select eligible
officers and other key employees for participation in this Plan
and determine the form, amount and timing of each award to such
persons and, if applicable, the number of shares of Common Stock,
the number of SARs and the number of Performance Shares subject
to such an award, the exercise price or base price associated
with the award, the time and conditions of exercise or settlement
of the award and all other terms and conditions of the award,
including, without limitation, the form of the Agreement
evidencing the award. The Committee shall, subject to the terms
of this Plan, interpret this Plan and the application thereof,
establish rules and regulations it deems necessary or desirable
for the administration of this Plan and may impose, incidental to
the grant of an award, conditions with respect to the award, such
as limiting competitive employment or other activities. All such
interpretations, rules, regulations and conditions shall be
conclusive and binding on all parties.
The Committee may delegate some or all of its power and
authority hereunder to the President and Chief Executive Officer
or other executive officer of the Company as the Committee deems
appropriate; provided, however, that the Committee may not
delegate its power and authority with regard to (i) the grant of
an award under this Plan to any person who is a "covered
employee" within the meaning of Section 162(m) of the Code or
who, in the Committee's judgment, is likely to be a covered
employee at any time during the period an award hereunder to such
employee would be outstanding or (ii) the selection for
participation in this Plan of an officer or other person subject
to Section 16 of the Exchange Act or decisions concerning the
timing, pricing or amount of an award to such an officer or other
person.
No member of the Board of Directors or Committee, and
neither the President and Chief Executive Officer nor any other
executive officer to whom the Committee delegates any of its
power and authority hereunder, shall be liable for any act,
omission, interpretation, construction or determination made in
connection with this Plan in good faith, and the members of the
Board of Directors and the Committee and the President and Chief
Executive Officer or other executive officer shall be entitled to
indemnification and reimbursement by the Company in respect of
any claim, loss, damage or expense (including attorneys' fees)
arising therefrom to the full extent permitted by law (except as
otherwise may be provided in the Company's Certificate of
Incorporation and/or By-laws) and under any directors' and
officers' liability insurance that may be in effect from time to
time.
A majority of the Committee shall constitute a quorum.
Except as otherwise required by the definition of the term
"Cause" in Section 1.2, the acts of the Committee shall be either
(i) acts of a majority of the members of the Committee present at
any meeting at which a quorum is present or (ii) acts approved in
writing by a majority of the members of the Committee without a
meeting.
1.4 Eligibility. Participants in this Plan shall consist of
1.4 Eligibility.
___________
such officers or other key employees of the Company and its
Subsidiaries as the Committee in its sole discretion may select
from time to time. The Committee's selection of a person to
participate in this Plan at any time shall not require the
Committee to select such person to participate in this Plan at
any other time.
1.5 Shares Available. Subject to adjustment as provided in
1.5 Shares Available.
_________________
Section 5.7, 210,000 shares of Common Stock shall be available
under this Plan, reduced by the sum of the aggregate number of
shares of Common Stock (i) that are issued upon the grant of a
Stock Award and (ii) which become subject to outstanding options,
outstanding Free-Standing SARs and outstanding Performance
Shares. To the extent that shares of Common Stock subject to an
outstanding option (other than in connection with the exercise of
a Tandem SAR), Free-Standing SAR, Stock Award or Performance
Share are not issued or delivered by reason of the expiration,
termination, cancellation or forfeiture of such award or by
reason of the delivery or withholding of shares of Common Stock
to pay all or a portion of the exercise price of an award, if
any, or to satisfy all or a portion of the tax withholding
obligations and other taxes referred to in Section 5.5 relating
to an award, then such shares of Common Stock shall again be
available under this Plan.
Shares of Common Stock to be delivered under this Plan shall
be made available from authorized and unissued shares of Common
Stock, or authorized and issued shares of Common Stock reacquired
and held as treasury shares or otherwise or a combination
thereof.
To the extent required by Section 162(m) of the Code and the
rules and regulations thereunder, the maximum number of shares of
Common Stock with respect to which options or SARs or a
combination thereof may be granted during any fiscal year of the
Company to any person shall be 75,000, subject to adjustment as
provided in Section 5.7.
II. STOCK OPTIONS AND STOCK APPRECIATION RIGHTS
II. STOCK OPTIONS AND STOCK APPRECIATION RIGHTS
2.1 Stock Options. The Committee may, in its discretion, grant
2.1 Stock Options.
_____________
options to purchase shares of Common Stock to such eligible
persons as may be selected by the Committee. Each option, or
portion thereof, that is not an Incentive Stock Option, shall be
a Non-Statutory Stock Option. Each Incentive Stock Option shall
be granted within ten years of the effective date of this Plan.
To the extent that the aggregate Fair Market Value (determined as
of the date of grant) of shares of Common Stock with respect to
which options designated as Incentive Stock Options are
exercisable for the first time by a participant during any
calendar year (under this Plan or any other plan of the Company,
or any parent or Subsidiary) exceeds the amount (currently
$100,000) established by the Code, such options shall constitute
Non-Statutory Stock Options.
Options shall be subject to the following terms and
conditions and shall contain such additional terms and
conditions, not inconsistent with the terms of this Plan, as the
Committee shall deem advisable:
(a) Number of Shares and Purchase Price. The number of
______________________________________
shares of Common Stock subject to an option and the purchase
price per share of Common Stock purchasable upon exercise of the
option shall be determined by the Committee; provided, however,
that the purchase price per share of Common Stock purchasable
upon exercise of a Non-Statutory Stock Option or an Incentive
Stock Option shall not be less than 100% of the Fair Market Value
of a share of Common Stock on the date of grant of such option;
provided further, that if an Incentive Stock Option shall be
granted to any person who, at the time such option is granted,
owns capital stock possessing more than ten percent of the total
combined voting power of all classes of capital stock of the
Company (or of any parent or Subsidiary) (a "Ten Percent
____________
Holder"), the purchase price per share of Common Stock shall be
______
the price (currently 110% of Fair Market Value) required by the
Code in order to constitute an Incentive Stock Option.
(b) Option Period and Exercisability. The period during
_________________________________
which an option may be exercised shall be determined by the
Committee; provided, however, that no Incentive Stock Option
shall be exercised later than ten years after its date of grant;
provided further, that if an Incentive Stock Option shall be
granted to a Ten Percent Holder, such option shall not be
exercised later than five years after its date of grant. The
Committee may, in its discretion, determine that an option is to
be granted as a Performance Option and may establish an
applicable Performance Period and Performance Measures which
shall be satisfied or met as a condition to the grant of such
option or to the exercisability of all or a portion of such
option. The Committee shall determine whether an option shall
become exercisable in cumulative or non-cumulative installments
and in part or in full at any time. An exercisable option, or
portion thereof, may be exercised only with respect to whole
shares of Common Stock.
(c) Method of Exercise. An option may be exercised (i) by
__________________
giving written notice to the Company specifying the number of
whole shares of Common Stock to be purchased and accompanied by
payment therefor in full (or arrangement made for such payment to
the Company's satisfaction) either (A) in cash, (B) by delivery
of previously owned whole shares of Common Stock (which the
optionee has held for at least six months prior to delivery of
such shares and for which the optionee has good title, free and
clear of all liens and encumbrances) having a Fair Market Value,
determined as of the date of exercise, equal to the aggregate
purchase price payable by reason of such exercise, (C) by
authorizing the Company to withhold whole shares of Common Stock
which would otherwise be delivered upon exercise of the option
having a Fair Market Value, determined as of the date of
exercise, equal to the aggregate purchase price payable by reason
of such exercise, (D) in cash by a broker-dealer acceptable to
the Company to whom the optionee has submitted an irrevocable
notice of exercise or (E) a combination of (A), (B) and (C), in
each case to the extent set forth in the Agreement relating to
the option, (ii) if applicable, by surrendering to the Company
any Tandem SARs which are cancelled by reason of the exercise of
the option and (iii) by executing such documents as the Company
may reasonably request. The Committee shall have sole discretion
to disapprove of an election pursuant to any of clauses (B)-(E)
and in the case of an optionee who is subject to Section 16 of
the Exchange Act, the Company may require that the method of
making such payment be in compliance with Section 16 and the
rules and regulations thereunder. Notwithstanding the foregoing,
the Committee shall also have the discretion to permit payment to
be made, in whole or in part, by a full-recourse note or in
installments at such times and upon such terms as the Committee
may approve; provided, however, that, in the case of payment by
any such note or installments, certificates for any shares of
Common Stock issued in respect thereof shall contain such legend,
if any, as may be required by, and shall otherwise be subject to
the provisions of, the laws of the state of incorporation of the
Company relating to the issuance of shares on such terms. Any
fraction of a share of Common Stock which would be required to
pay such purchase price shall be disregarded and the remaining
amount due shall be paid in cash by the optionee. No certificate
representing Common Stock shall be delivered until the full
purchase price therefor has been paid.
2.2 Stock Appreciation Rights. The Committee may, in its
2.2 Stock Appreciation Rights.
___________________________
discretion, grant SARs to such eligible persons as may be
selected by the Committee. The Agreement relating to an SAR
shall specify whether the SAR is a Tandem SAR or a Free-Standing
SAR.
SARs shall be subject to the following terms and conditions
and shall contain such additional terms and conditions, not
inconsistent with the terms of this Plan, as the Committee shall
deem advisable:
(a) Number of SARs and Base Price. The number of SARs
________________________________
subject to an award shall be determined by the Committee. Any
Tandem SAR related to an Incentive Stock Option shall be granted
at the same time that such Incentive Stock Option is granted.
The base price of a Tandem SAR shall be the purchase price per
share of Common Stock of the related option. The base price of a
Free-Standing SAR shall be determined by the Committee; provided,
however, that such base price shall not be less than 100% of the
Fair Market Value of a share of Common Stock on the date of grant
of such SAR.
(b) Exercise Period and Exercisability. The Agreement
____________________________________
relating to an award of SARs shall specify whether such award may
be settled in shares of Common Stock (including shares of
Restricted Stock) or cash or a combination thereof. The period
for the exercise of an SAR shall be determined by the Committee;
provided, however, that no Tandem SAR shall be exercised later
than the expiration, cancellation, forfeiture or other
termination of the related option. The Committee may, in its
discretion, establish Performance Measures which shall be
satisfied or met as a condition to the exercisability of an SAR.
The Committee shall determine whether an SAR may be exercised in
cumulative or non-cumulative installments and in part or in full
at any time. An exercisable SAR, or portion thereof, may be
exercised, in the case of a Tandem SAR, only with respect to
whole shares of Common Stock and, in the case of a Free-Standing
SAR, only with respect to a whole number of SARs. If an SAR is
exercised for shares of Restricted Stock, a certificate or
certificates representing such Restricted Stock shall be issued
in accordance with Section 3.2(c) and the holder of such
Restricted Stock shall have such rights of a stockholder of the
Company as determined pursuant to Section 3.2(d). Prior to the
exercise of an SAR for shares of Common Stock, including
Restricted Stock, the holder of such SAR shall have no rights as
a stockholder of the Company with respect to the shares of Common
Stock subject to such SAR and shall have rights as a stockholder
of the Company in accordance with Section 5.9.
(c) Method of Exercise. A Tandem SAR may be exercised (i)
__________________
by giving written notice to the Company specifying the number of
whole SARs which are being exercised, (ii) by surrendering to the
Company any options which are cancelled by reason of the exercise
of the Tandem SAR and (iii) by executing such documents as the
Company may reasonably request. A Free-Standing SAR may be
exercised (i) by giving written notice to the Company specifying
the whole number of SARs which are being exercised and (ii) by
executing such documents as the Company may reasonably request.
2.3 Termination of Employment. (a) Disability. Subject to
2.3 Termination of Employment.
_________________________ __________
paragraph (f) below and unless otherwise specified in the
Agreement relating to an option or SAR, as the case may be, if
the employment with the Company of the holder of an option or SAR
terminates by reason of Disability, each option and SAR held by
such holder shall be fully exercisable and may thereafter be
exercised by such holder (or such holder's legal representative
or similar person) until and including the earliest to occur of
(i) the date which is one year (or such other period as set forth
in the Agreement relating to such option or SAR) after such
holder's Employment Termination Date and (ii) the expiration date
of the term of such option or SAR.
(b) Retirement. Subject to paragraph (f) below and unless
__________
otherwise specified in the Agreement relating to an option or
SAR, as the case may be, if the employment with the Company of
the holder of an option or SAR terminates by reason of retirement
on or after age 65 (or prior to age 65 with the consent of the
Committee) each option and SAR held by such holder shall be fully
exercisable and may thereafter be exercised by such holder (or
such holder's legal representative or similar person) until and
including the earliest to occur of (i) the date which is one year
(or such other period as set forth in the Agreement relating to
such option or SAR) after such holder's Employment Termination
Date and (ii) the expiration date of the term of such option or
SAR.
(c) Death. Subject to paragraph (f) below and unless
_____
otherwise specified in the Agreement relating to an option or
SAR, as the case may be, if the employment with the Company of
the holder of an option or SAR terminates by reason of death,
each option and SAR held by such holder shall be fully
exercisable and may thereafter be exercised by such holder's
executor, administrator, legal representative, beneficiary or
similar person, as the case may be, until and including the
earliest to occur of (i) the date which is one year (or such
other period as set forth in the Agreement relating to such
option or SAR) after the date of death and (ii) the expiration
date of the term of such option or SAR; provided, however, that,
in the event that the date of death is less than six months prior
to such expiration date, such holder's executor, administrator,
legal representative, beneficiary or similar person, as the case
may be, shall have not less than six months from the date of
death to so exercise such option or SAR (except that, in the
event that such option is an Incentive Stock Option, such period
of exercise shall not under any circumstance extend beyond the
tenth anniversary of the date of grant of such Incentive Stock
Option).
(d) Other Termination. If the employment with the Company
_________________
of the holder of an option or SAR is terminated by the Company
for Cause, each option and SAR held by such holder shall
terminate automatically on such holder's Employment Termination
Date.
Subject to paragraph (f) below and unless specified in
the Agreement relating to an option or SAR, as the case may be,
if the employment with the Company of the holder of an option or
SAR terminates for any reason other than Disability, retirement
on or after age 65 (or prior to age 65 with the consent of the
Committee) or death, or Cause, each option and SAR held by such
holder shall be exercisable only to the extent that such option
or SAR is exercisable on such holder's Employment Termination
Date and may thereafter be exercised by such holder (or such
holder's legal representative or similar person) until and
including the earliest to occur of (i) the date which is three
months (or such other period as set forth in the Agreement
relating to such option or SAR) after such holder's Employment
Termination Date and (ii) the expiration date of the term of such
option or SAR.
(e) Death Following Termination of Employment. Subject to
__________________________________________
paragraph (f) below and unless otherwise specified in the
Agreement relating to an option or SAR, as the case may be, if
the holder of an option or SAR dies during the period set forth
in Section 2.3(a) following termination of employment by reason
of Disability, or if the holder of an option or SAR dies during
the period set forth in Section 2.3(b) following termination of
employment by reason of retirement on or after age 65 (or prior
to age 65 with the consent of the Committee), or if the holder of
an option or SAR dies during the period set forth in Section
2.3(d) following termination of employment for any reason other
than Disability or retirement on or after age 65 (or prior to age
65 with the consent of the Committee) (or, in each case, such
other period as set forth in the Agreement relating to such
option or SAR), each option and SAR held by such holder shall be
exercisable only to the extent that such option or SAR, as the
case may be, is exercisable on the date of such holder's death
and may thereafter be exercised by the holder's executor,
administrator, legal representative, beneficiary or similar
person, as the case may be, until and including the earliest to
occur of (i) the date which is one year (or such other period as
set forth in the Agreement relating to such option or SAR) after
the date of death and (ii) the expiration date of the term of
such option or SAR; provided, however, that, in the event that
the date of death is less than six months prior to such
expiration date, such holder's executor, administrator, legal
representative, beneficiary or similar person, as the case may
be, shall have not less than six months from the date of death to
so exercise such option or SAR (except that, in the event that
such option is an Incentive Stock Option, such period of exercise
shall not under any circumstance extend beyond the tenth
anniversary of the date of grant of such Incentive Stock Option).
(f) Termination of Employment - Incentive Stock Options.
______________________________________________________
Unless otherwise specified in the Agreement relating to the
option, if the employment with the Company of a holder of an
incentive stock option terminates by reason of Permanent and
Total Disability (as defined in Section 22(e)(3) of the Code),
each incentive stock option held by such optionee shall become
fully exercisable and may thereafter be exercised by such
optionee (or such optionee's legal representative or similar
person) until and including the earliest to occur of (i) the date
which is one year (or such shorter period as set forth in the
Agreement relating to such option) after such optionee's
Employment Termination Date by reason of Permanent and Total
Disability and (ii) the expiration date of the term of such
option.
Unless otherwise specified in the Agreement relating to the
option, if the employment with the Company of a holder of an
incentive stock option terminates by reason of death, each
incentive stock option held by such optionee shall become fully
exercisable and may thereafter be exercised by such optionee's
executor, administrator, legal representative, beneficiary or
similar person until and including the earliest to occur of (i)
the date which is one year (or such shorter period as set forth
in the Agreement relating to such option) after the date of death
and (ii) the expiration date of the term of such option.
If the employment with the Company of the optionee of an
Incentive Stock Option is terminated by the Company for Cause,
each Incentive Stock Option held by such optionee shall terminate
automatically on the effective date of such optionee's
termination of employment. If the employment with the Company of
a holder of an incentive stock option terminates for any reason
other than Permanent and Total Disability or death or Cause, each
incentive stock option held by such optionee shall be exercisable
only to the extent such option is exercisable on the effective
date of such optionee's termination of employment and may
thereafter be exercised by such holder (or such holder's legal
representative or similar person) until and including the
earliest to occur of (i) the date which is three months after
such optionee's Employment Termination Date and (ii) the
expiration date of the term of such option.
If the holder of an incentive stock option dies during the
period set forth in the first paragraph of the Section 2.3(f)
following termination of employment by reason of Permanent and
Total Disability (or such shorter period as set forth in the
Agreement relating to such option), or if the holder of an
incentive stock option dies during the period set forth in the
third paragraph of this Section 2.3(f) following termination of
employment for any reason other than Permanent and Total
Disability or death or Cause, each incentive stock option held by
such optionee shall be exercisable only to the extent such option
is exercisable on the date of the optionee's death and may
thereafter be exercised by the optionee's executor,
administrator, legal representative, beneficiary or similar
person until and including the earliest to occur of (i) the date
which is one year (or such shorter period as set forth in the
Agreement relating to such option) after the date of death and
(ii) the expiration date of the term of such option.
III. STOCK AWARDS
III. STOCK AWARDS
3.1 Stock Awards. The Committee may, in its discretion, grant
3.1 Stock Awards.
_____________
Stock Awards to such eligible persons as may be selected by the
Committee. The Agreement relating to a Stock Award shall specify
whether the Stock Award is a Restricted Stock Award or Bonus
Stock Award.
3.2 Terms of Stock Awards. Stock Awards shall be subject to the
3.2 Terms of Stock Awards.
_____________________
following terms and conditions and shall contain such additional
terms and conditions, not inconsistent with the terms of this
Plan, as the Committee shall deem advisable.
(a) Number of Shares and Other Terms. The number of shares
________________________________
of Common Stock subject to a Restricted Stock Award or Bonus
Stock Award and the Performance Measures (if any) and Restriction
Period applicable to a Restricted Stock Award shall be determined
by the Committee.
(b) Vesting and Forfeiture. The Agreement relating to a
______________________
Restricted Stock Award shall provide, in the manner determined by
the Committee, in its discretion, and subject to the provisions
of this Plan, for the vesting of the shares of Common Stock
subject to such award (i) if specified Performance Measures are
satisfied or met during the specified Restriction Period or (ii)
if the holder of such award remains continuously in the
employment of the Company during the specified Restricted Period
and for the forfeiture of the shares of Common Stock subject to
such award (x) if specified Performance Measures are not
satisfied or met during the specified Restriction Period or (y)
if the holder of such award does not remain continuously in the
employment of the Company during the specified Restriction
Period.
Bonus Stock Awards shall not be subject to any Performance
Measures or Restriction Periods.
(c) Share Certificates. During the Restriction Period, a
___________________
certificate or certificates representing a Restricted Stock Award
shall be registered in the holder's name and may bear a legend,
in addition to any legend which may be required pursuant to
Section 5.6, indicating that the ownership of the shares of
Common Stock represented by such certificate is subject to the
restrictions, terms and conditions of this Plan and the Agreement
relating to the Restricted Stock Award. All such certificates
shall be deposited with the Company, together with stock powers
or other instruments of assignment (including a power of
attorney), each endorsed in blank with a guarantee of signature
if deemed necessary or appropriate, which would permit transfer
to the Company of all or a portion of the shares of Common Stock
subject to the Restricted Stock Award in the event such award is
forfeited in whole or in part. Upon termination of any
applicable Restriction Period (and the satisfaction or attainment
of applicable Performance Measures), or upon the grant of a Bonus
Stock Award, in each case subject to the Company's right to
require payment of any taxes in accordance with Section 5.5, a
certificate or certificates evidencing ownership of the requisite
number of shares of Common Stock shall be delivered to the holder
of such award.
(d) Rights with Respect to Restricted Stock Awards. Unless
______________________________________________
otherwise set forth in the Agreement relating to a Restricted
Stock Award, and subject to the terms and conditions of a
Restricted Stock Award, the holder of such award shall have all
rights as a stockholder of the Company, including, but not
limited to, voting rights, the right to receive dividends and the
right to participate in any capital adjustment applicable to all
holders of Common Stock; provided, however, that a distribution
with respect to shares of Common Stock, other than a regular cash
dividend, shall be deposited with the Company and shall be
subject to the same restrictions as the shares of Common Stock
with respect to which such distribution was made.
3.3 Termination of Employment. (a) Disability, Retirement and
3.3 Termination of Employment.
_________________________ __________________________
Death. Unless otherwise set forth in the Agreement relating to a
_____
Restricted Stock Award, if the employment with the Company of the
holder of such award terminates by reason of Disability,
retirement on or after age 65 (or prior to age 65 with the
consent of the Committee) or death, the Restriction Period shall
terminate as of such holder's Employment Termination Date and all
Performance Measures, if any, applicable to such award shall be
deemed to have been satisfied at the maximum level.
(b) Other Termination. Unless otherwise set forth in the
__________________
Agreement relating to a Restricted Stock Award, if the employment
with the Company of the holder of a Restricted Stock Award
terminates for any reason other than Disability, retirement on or
after age 65 (or prior to age 65 with the consent of the
Committee) or death, the portion of such award which is subject
to a Restriction Period on such holder's Employment Termination
Date shall be forfeited and such portion shall be cancelled by
the Company.
IV. PERFORMANCE SHARE AWARDS
IV. PERFORMANCE SHARE AWARDS
4.1 Performance Share Awards. The Committee may, in its
4.1 Performance Share Awards.
_________________________
discretion, grant Performance Share Awards to such eligible
persons as may be selected by the Committee.
4.2 Terms of Performance Share Awards. Performance Share Awards
4.2 Terms of Performance Share Awards.
_________________________________
shall be subject to the following terms and conditions and shall
contain such additional terms and conditions, not inconsistent
with the terms of this Plan, as the Committee shall deem
advisable.
(a) Number of Performance Shares and Performance Measures.
______________________________________________________
The number of Performance Shares subject to any award and the
Performance Measures and Performance Period applicable to such
award shall be determined by the Committee.
(b) Vesting and Forfeiture. The Agreement relating to a
______________________
Performance Share Award shall provide, in the manner determined
by the Committee, in its discretion, and subject to the
provisions of this Plan, for the vesting of such award, if
specified Performance Measures are satisfied or met during the
specified Performance Period, and for the forfeiture of such
award, if specified Performance Measures are not satisfied or met
during the specified Performance Period.
(c) Settlement of Vested Performance Share Awards. The
_______________________________________________
Agreement relating to a Performance Share Award (i) shall specify
whether such award may be settled in shares of Common Stock
(including shares of Restricted Stock) or cash or a combination
thereof and (ii) may specify whether the holder thereof shall be
entitled to receive, on a current or deferred basis, dividend
equivalents, and, if determined by the Committee, interest on any
deferred dividend equivalents, with respect to the number of
shares of Common Stock subject to such award. If a Performance
Share Award is settled in shares of Restricted Stock, a
certificate or certificates representing such Restricted Stock
shall be issued in accordance with Section 3.2(c) and the holder
of such Restricted Stock shall have such rights of a stockholder
of the Company as determined pursuant to Section 3.2(d). Prior
to the settlement of a Performance Share Award in shares of
Common Stock, including Restricted Stock, the holder of such
award shall have no rights as a stockholder of the Company with
respect to the shares of Common Stock subject to such award.
4.3 Termination of Employment. (a) Disability, Retirement and
4.3 Termination of Employment.
_________________________ __________________________
Death. Unless otherwise set forth in the Agreement relating to a
_____
Performance Share Award, if the employment with the Company of
the holder of such award terminates by reason of Disability,
retirement on or after age 65 (or prior to age 65 with the
consent of the Committee) or death, all Performance Measures
applicable to such award shall be deemed to have been satisfied
at the maximum level (if none of the Performance Measures are
required to be satisfied prior to the date of such termination of
employment) or a level proportionate with the actual performance,
determined on a weighted average basis during the portion of the
Performance Period that shall have expired prior to such
termination of employment (if any of the Performance Measures are
required to be satisfied prior to the date of such termination of
employment), and the Performance Period applicable to such award
shall thereupon terminate.
(b) Other Termination. Unless otherwise set forth in the
__________________
Agreement relating to a Performance Share Award, if the
employment with the Company of the holder of a Performance Share
Award terminates for any reason other than Disability, retirement
on or after age 65 or death, the portion of such award which is
subject to a Performance Period on such holder's Employment
Termination Date shall be forfeited and such portion shall be
cancelled by the Company.
V. GENERAL
V. GENERAL
5.1 Effective Date and Term of Plan. This Plan shall be
5.1 Effective Date and Term of Plan.
___________________________________
submitted to the stockholders of the Company for approval and, if
approved by the affirmative vote of a majority of the shares of
Common Stock present in person or represented by proxy at the
1996 annual meeting of stockholders, shall become effective on
the date of such approval. This Plan shall terminate 10 years
after its effective date unless terminated earlier by the Board.
Termination of this Plan shall not affect the terms or conditions
of any award granted prior to termination.
Awards hereunder may be made at any time prior to the
termination of this Plan, provided that no award may be made
later than 10 years after the effective date of this Plan. In
the event that this Plan is not approved by the stockholders of
the Company, this Plan and any awards hereunder shall be void and
of no force or effect.
5.2 Amendments. The Board may amend this Plan as it shall deem
5.2 Amendments.
__________
advisable, subject to any requirement of stockholder approval
required by applicable law, rule or regulation including Rule
16b-3 under the Exchange Act and Section 162(m) of the Code;
provided, however, that no amendment shall be made without
stockholder approval if such amendment would (a) increase the
maximum number of shares of Common Stock available for issuance
under this Plan (subject to Section 5.7), (b) reduce the minimum
purchase price in the case of an option or the base price in the
case of an SAR, (c) effect any change inconsistent with Section
422 of the Code or (d) extend the term of this Plan. No
amendment may impair the rights of a holder of an outstanding
award without the consent of such holder.
5.3 Agreement. Each award under this Plan shall be evidenced by
5.3 Agreement.
_________
an Agreement setting forth the terms and conditions applicable to
such award. No award shall be valid until an Agreement is
executed by the Company and the recipient of such award and, upon
execution by each party and delivery of the Agreement to the
Company, such award shall be effective as of the effective date
set forth in the Agreement.
5.4 Non-Transferability of Stock Options, SARs and Performance
5.4 Non-Transferability of Stock Options, SARs and Performance
____________________________________________________________
Shares. No option, SAR or Performance Share shall be
Shares.
______
transferable other than (i) by will, the laws of descent and
distribution or pursuant to beneficiary designation procedures
approved by the Company or (ii) as otherwise permitted under Rule
16b-3 under the Exchange Act as set forth in the Agreement
relating to such award. Each option, SAR or Performance Share
may be exercised or settled during the participant's lifetime
only by the holder or the holder's legal representative or
similar person. Except as permitted by the second preceding
sentence, no option, SAR or Performance Share may be sold,
transferred, assigned, pledged, hypothecated, encumbered or
otherwise disposed of (whether by operation of law or otherwise)
or be subject to execution, attachment or similar process. Upon
any attempt to so sell, transfer, assign, pledge, hypothecate,
encumber or otherwise dispose of any option, SAR or Performance
Share, such award and all rights thereunder shall immediately
become null and void.
5.5 Tax Withholding and Other Settlements in Lieu of Taxes. The
5.5 Tax Withholding and Other Settlements in Lieu of Taxes.
______________________________________________________
Company shall have the right to require, prior to the issuance or
delivery of any shares of Common Stock or the payment of any cash
pursuant to an award made hereunder, payment by the holder of
such award of any Federal, state, local or other taxes which may
be required to be withheld or paid in connection with such award.
An Agreement may provide that (i) the Company shall withhold
whole shares of Common Stock which would otherwise be delivered
to a holder, having an aggregate Fair Market Value determined as
of the date the obligation to withhold or pay taxes arises in
connection with an award (the "Tax Date"), or withhold an amount
________
of cash which would otherwise be payable to a holder, in the
amount necessary to satisfy any such obligation or (ii) the
holder may satisfy any such obligation by any of the following
means: (A) a cash payment to the Company, (B) delivery to the
Company of previously owned whole shares of Common Stock (which
the holder has held for at least six months prior to the delivery
of such shares and for which the holder has good title, free and
clear of all liens and encumbrances) having an aggregate Fair
Market Value, determined as of the Tax Date, equal to the amount
necessary to satisfy any such obligation, (C) authorizing the
Company to withhold whole shares of Common Stock which would
otherwise be delivered having an aggregate Fair Market Value,
determined as of the Tax Date, or withhold an amount of cash
which would otherwise be payable to a holder, equal to the amount
necessary to satisfy any such obligation, (D) in the case of the
exercise of an option, a cash payment by a broker-dealer
acceptable to the Company to whom the optionee has submitted an
irrevocable notice of exercise or (E) any combination of (A), (B)
and (C), in each case to the extent set forth in the Agreement
relating to the award; provided, however, that the Committee
shall have sole discretion to disapprove of an election pursuant
to any of clauses (B)-(E) and that in the case of a holder who is
subject to Section 16 of the Exchange Act, the Company may
require that the method of satisfying such an obligation be in
compliance with Section 16 and the rules and regulations
thereunder. An Agreement may provide for shares of Common Stock
to be delivered or withheld having an aggregate Fair Market Value
in excess of the minimum amount required to be withheld, but not
in excess of the amount determined by applying the holder's
maximum marginal tax rate. Any fraction of a share of Common
Stock which would be required to satisfy such an obligation shall
be disregarded and the remaining amount due shall be paid in cash
by the holder.
5.6 Restrictions on Shares. Each award made hereunder shall be
5.6 Restrictions on Shares.
______________________
subject to the requirement that if at any time the Company
determines that the listing, registration or qualification of the
shares of Common Stock subject to such award upon any securities
exchange or under any law, or the consent or approval of any
governmental body, or the taking of any other action is necessary
or desirable as a condition of, or in connection with, the
delivery of shares thereunder, such shares shall not be delivered
unless such listing, registration, qualification, consent,
approval or other action shall have been effected or obtained,
free of any conditions not acceptable to the Company. The
Company may require that certificates evidencing shares of Common
Stock delivered pursuant to any award made hereunder bear a
legend indicating that the sale, transfer or other disposition
thereof by the holder is prohibited except in compliance with the
Securities Act of 1933, as amended, and the rules and regulations
thereunder.
5.7 Adjustment. In the event of any stock split, stock
5.7 Adjustment.
__________
dividend, recapitalization, reorganization, merger,
consolidation, combination, exchange of shares, liquidation,
spin-off or other similar change in capitalization or event, or
any distribution to holders of Common Stock other than a regular
cash dividend, the number and class of securities available under
this Plan, the number and class of securities subject to each
outstanding option and the purchase price per security, the terms
of each outstanding SAR, the number and class of securities
subject to each outstanding Stock Award, and the terms of each
outstanding Performance Share shall be appropriately adjusted by
the Committee, such adjustments to be made in the case of
outstanding options and SARs without an increase in the aggregate
purchase price or base price. The decision of the Committee
regarding any such adjustment shall be final, binding and
conclusive. If any such adjustment would result in a fractional
security being (i) available under this Plan, such fractional
security shall be disregarded, or (ii) subject to an award under
this Plan, the Company shall pay the holder of such award, in
connection with the first vesting, exercise or settlement of such
award, in whole or in part, occurring after such adjustment, an
amount in cash determined by multiplying (i) the fraction of such
security (rounded to the nearest hundredth) by (ii) the excess,
if any, of (A) the Fair Market Value on the vesting, exercise or
settlement date over (B) the exercise or base price, if any, of
such award.
5.8 No Right of Participation or Employment. No person shall
5.8 No Right of Participation or Employment.
_________________________________________
have any right to participate in this Plan. Neither this Plan
nor any award made hereunder shall confer upon any person any
right to continued employment by the Company, any Subsidiary or
any affiliate of the Company or affect in any manner the right of
the Company, any Subsidiary or any affiliate of the Company to
terminate the employment of any person at any time without
liability hereunder.
5.9 Rights as Stockholder. No person shall have any right as a
5.9 Rights as Stockholder.
_____________________
stockholder of the Company with respect to any shares of Common
Stock or other equity security of the Company which is subject to
an award hereunder unless and until such person becomes a
stockholder of record with respect to such shares of Common Stock
or equity security.
5.10 Governing Law. This Plan, each award hereunder and the
5.10 Governing Law.
_____________
related Agreement, and all determinations made and actions taken
pursuant thereto, to the extent not otherwise governed by the
Code or the laws of the United States, shall be governed by the
laws of the State of Delaware and construed in accordance
therewith without giving effect to principles of conflicts of
laws.
