ZEBRA TECHNOLOGIES CORP/DE, DEF 14A, 1997-04-28

ZEBRA TECHNOLOGIES CORP/DE
DEF 14A, 1997-04-28
GENERAL INDUSTRIAL MACHINERY & EQUIPMENT

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<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSSION
WASHINGTON, D.C. 20549

SCHEDULE 14A INFORMATION

INFORMATION REQUIRED IN PROXY STATEMENT

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934.

Filed by the Registrant /X/
Filed by a party other than the Registrant / /

Check the appropriate box:

/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
Zebra Technologies Corporation
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)

- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

/X/ No fee required.

/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11.

1) Title of each class of securities to which transaction applies:

------------------------------------------------------------------------
2) Aggregate number of securities to which transaction applies:

------------------------------------------------------------------------
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):

------------------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:

------------------------------------------------------------------------
5) Total fee paid:

------------------------------------------------------------------------

<PAGE>

/ / Fee paid previously with preliminary materials.

/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.

1) Amount Previously Paid:

------------------------------------------------------------------------
2) Form, Schedule or Registration Statement No.:

------------------------------------------------------------------------
3) Filing Party:

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4) Date Filed:

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<PAGE>

[LOGO]

ZEBRA TECHNOLOGIES CORPORATION

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 20, 1997

To the Stockholders of
Zebra Technologies Corporation:

The Annual Meeting of Stockholders of Zebra Technologies Corporation (the
"Company") will be held at 10:30 a.m., Chicago time, on Wednesday, May 20, 1997,
at Harris Trust and Savings Bank, 111 West Monroe Street, Chicago, Illinois, for
the following purposes:

(1) To elect five directors;

(2) to amend the Company's Certificate of Incorporation to provide for an
increase in the total authorized shares of the Company's Class A
Common Stock from 35,000,000 shares to 50,000,000 shares;

(3) To approve the adoption of the Zebra Technologies Corporation 1997
Stock Option Plan;

(4) To approve the adoption of the Zebra Technologies Corporation 1997
Non-Employee Directors' Stock Option Plan;

(5) To ratify the selection by the Board of Directors of KPMG Peat Marwick
LLP as the independent auditors of the Company's financial statements
for the fiscal year ending December 31, 1997; and

(6) To transact such other business as may properly come before the Annual
Meeting or any adjournments thereof.

The Board of Directors has fixed the close of business on March 21, 1997 as
the record date for determining stockholders entitled to notice of, and to vote
at, the Annual Meeting.

By order of the Board of Directors,

Gerhard Cless
SECRETARY

Vernon Hills, Illinois
April 28, 1997

ALL STOCKHOLDERS ARE URGED TO ATTEND THE MEETING IN PERSON OR BY PROXY. WHETHER
OR NOT YOU EXPECT TO BE PRESENT AT THE MEETING, PLEASE MARK, SIGN AND DATE THE
ENCLOSED PROXY CARD AND RETURN IT PROMPTLY IN THE ENCLOSED POSTAGE PAID ENVELOPE
FURNISHED FOR THAT PURPOSE.

<PAGE>

ZEBRA TECHNOLOGIES CORPORATION
333 Corporate Woods Parkway
Vernon Hills, Illinois 60061
(847) 634-6700
----------------------
PROXY STATEMENT
----------------------

The accompanying Proxy is solicited by the Board of Directors of Zebra
Technologies Corporation, a Delaware corporation ("Zebra," or the "Company"),
for use at the Annual Meeting of Stockholders (the "Annual Meeting") to be held
at 10:30 a.m., Chicago time, on Wednesday, May 20, 1997, at Harris Trust and
Savings Bank, 111 West Monroe Street, Chicago, Illinois, and any adjournments
thereof. This Proxy Statement and the accompanying form of proxy are intended to
be released to stockholders on or about April 28, 1997.

VOTING SECURITIES; PROXIES; REQUIRED VOTE

VOTING SECURITIES -- The Board of Directors has fixed the close of business
on March 21, 1997, as the record date (the "Record Date") for the determination
of stockholders entitled to notice of, and to vote at, the Annual Meeting or any
adjournments thereof. As of the Record Date, the Company had outstanding
16,924,973 shares of Class A Common Stock, par value $.01 per share (the "Class
A Common Stock"), and 7,315,404 shares of Class B Common Stock, par value $.01
per share (the "Class B Common Stock"). The holders of the Class A Common Stock
and the Class B Common Stock vote together as a single class on all matters to
be submitted to the vote of stockholders at the Annual Meeting. Holders of Class
A Common Stock are entitled to one vote per share. Holders of Class B Common
Stock are entitled to ten votes per share.

PROXIES -- Edward L. Kaplan and Gerhard Cless, the persons named as proxies
on the proxy card accompanying this Proxy Statement, were selected by the Board
of Directors of the Company to serve in such capacity. Messrs. Kaplan and Cless
are directors of the Company. Each executed and returned proxy will be voted in
accordance with the directions indicated thereon, or if no direction is
indicated, such proxy will be voted in accordance with the recommendations of
the Board of Directors contained in this Proxy Statement. Each stockholder
giving a proxy has the power to revoke it at any time before the shares it
represents are voted. Revocation of a proxy is effective upon receipt by the
Secretary of the Company of either (i) an instrument revoking the proxy or (ii)
a duly executed proxy bearing a later date. Additionally, a stockholder may
change or revoke a previously executed proxy by voting in person at the Annual
Meeting.

REQUIRED VOTE -- At the Annual Meeting, (i) a plurality of the votes cast
in person or by proxy is required to elect directors; and (ii) the
affirmative vote of holders of a majority of the voting power of the Common
Stock is required to approve the amendment to the Company's Certificate of
Incorporation, to approve the 1997 Stock Option Plan and the 1997
Non-Employee Directors' Stock Option Plan, and to ratify the appointment of
KPMG Peat Marwick LLP as the independent auditors of the Company's financial
statements for the fiscal year ending December 31, 1997. Stockholders will
not be allowed to cumulate their votes in the election of directors.

The required quorum for the transaction of business at the Annual
Meeting will be a majority of the voting power of shares of Common Stock
issued and outstanding on the Record Date. Abstentions and broker non-votes
will be included in determining the presence of a quorum. With respect to
the proposals to approve the amendment to the Certificate of Incorporation,
to approve the 1997 Stock Option Plan and the 1997 Non-Employee Directors'
Stock Option Plan, and to ratify the appointment of KPMG Peat Marwick LLP,
abstentions and broker non-votes will have the same effect as votes against
such proposals. Neither abstentions nor broker non-votes will have any
effect on the voting on the proposal to elect directors.

<PAGE>

Due to their beneficial ownership of a majority of the outstanding shares of
Class B Common Stock, Messrs. Kaplan and Cless have voting power sufficient (i)
to elect the five nominees named to serve as directors; (ii) approve the
amendment to the Certificate of Incorporation; (iii) approve the 1997 Stock
Option Plan; (iv) approve the 1997 Non-Employee Directors' Stock Option Plan and
(v) ratify the appointment of KPMG Peat Marwick LLP. Messrs. Kaplan and Cless
have advised the Board of Directors that all shares beneficially owned by them
will be voted in favor of such proposals. See "Security Ownership of Certain
Beneficial Owners and Management."

<PAGE>

PROPOSAL 1
ELECTION OF DIRECTORS

The Board of Directors has set the number of directors to be elected at the
Annual Meeting at five. Each nominee for election as director currently serves
as a director of the Company. All nominees were elected to serve as directors by
the stockholders of the Company at the last Annual Meeting of stockholders, held
on May 22, 1996. The Board of Directors recommends that the stockholders vote in
favor of the election of the five nominees named in this Proxy Statement to
serve as directors of the Company.

If at the time of the Annual Meeting any of the nominees is unable or
declines to serve, the persons named in the proxy will at the direction of the
Board of Directors either vote for such substitute nominee or nominees as the
Board of Directors recommends or vote to allow the vacancy created thereby to
remain open until filled by the Board. The Board of Directors has no reason to
believe that any nominee will be unable or will decline to serve as a director
if elected.

NOMINEES FOR ELECTION AS DIRECTORS -- The following persons, if elected at
the Annual Meeting, will serve as directors until the earlier of the 1998 annual
meeting of the Company's stockholders or until their successors are duly elected
and qualified.

SERVED AS
DIRECTOR
NAME AGE POSITION WITH COMPANY SINCE
- --------------------------- ------------- ----------------------------------------------- ----------------
<S> <C> <C> <C>
Gerhard Cless 57 Executive Vice President, Secretary and 1969
Director

Edward L. Kaplan 54 Chief Executive Officer, Chairman and 1969
Director

Christopher G. Knowles (1) 54 Director 1991

David P. Riley 50 Director 1991

Michael A. Smith (1) 42 Director 1991
- ---------------------

</TABLE>
(1) Member of Audit Committee.

GERHARD CLESS became Executive Vice President for Engineering and Technology
in February 1995, after having served as Senior Vice President since 1969. He is
also Secretary, as well as a co-founder of the Company, and has served as a
director since 1969. Mr. Cless served as Treasurer of the Company until October
1991. Since 1969, he has been active with the Company, where he has directed the
development of numerous label printers and maintained worldwide
technology/vendor relationships. Prior to founding the Company, Mr. Cless was a
research and development engineer at Teletype Corporation's printer division.
Mr. Cless received an MSME degree from Esslingen, Germany and has done graduate
work at the Illinois Institute of Technology.

EDWARD L. KAPLAN is Chief Executive Officer and Chairman, as well as a
co-founder of the Company, and has served as a director since 1969. He also
served as President of the Company until February 1995 and Chief Financial
Officer of the Company until October 1991. Mr. Kaplan began his career as a
project engineer for Seeburg Corporation, later joining Teletype Corporation as
a mechanical engineer performing research and development in the Printer
Division. In 1969, he and partner Gerhard Cless founded the Company, then known
as Data Specialties, Inc. Mr. Kaplan received a BS in Mechanical Engineering
from the Illinois Institute of Technology (graduating Tau Beta Pi) and an MBA
from the University of Chicago and is an NDEA Fellow of Northwestern University.

CHRISTOPHER G. KNOWLES has served as a director of the Company since July
1991. Since March 1996, he has been a consultant to, and member of the Board of
Directors of, Insurance Auto Auctions, Inc. In 1966, Mr. Knowles joined North
America Van Lines, which was acquired by PepsiCo, Inc. two years later. He
continued his career with PepsiCo, Inc., working in human relations and
distribution with several of its

<PAGE>

subsidiary companies, including North American Van Lines, PepsiCo Service
Industries and Wilson Sporting Goods, as well as holding positions on the
corporate staff of PepsiCo. In 1976, he became a Vice President of Allied Van
Lines and later became Division Vice President in charge of Allied's Household
Goods Division, the largest division of that company. Mr. Knowles joined
Underwriters Salvage Company in 1980 as its Chairman of the Board and Chief
Executive Officer and subsequently acquired that company with other members of
its management staff. Underwriters Salvage Company was acquired by Insurance
Auto Auctions, Inc. in January 1994. Mr. Knowles became President and Chief
Operating Officer of Insurance Auto Auctions, Inc. in April 1994 and held such
positions until March 1996. Mr. Knowles received his BA degree from Indiana
University in 1966.

DAVID P. RILEY has served as a director of the Company since July 1991. Since
1984, he has been President and Chief Executive Officer of The Middleby
Corporation, a public company which manufactures commercial food equipment and
provides complete kitchens to various institutional customers, as well as to
restaurants such as Pizza Hut and Domino's Pizza. He also serves as a director
of The Middleby Corporation. Mr. Riley was previously employed in various
management positions with a subsidiary of The Middleby Corporation and, before
that, with Hobart Corporation, a food equipment manufacturer. Mr. Riley holds a
Bachelor's Degree in Engineering from Ohio State University.

MICHAEL A. SMITH has served as a director of the Company since July 1991. He
is co-founder, Senior Managing Director and Manager of BA Partners, an
investment banking affiliate of Bank America Corp., positions he has held since
1989. Previous positions included Managing Director, Corporate Finance
Department, for Bear, Stearns and Company, Inc. (1982 to 1989) and Vice
President and Manager of the Eastern States and Chicago Group Investment Banking
Division of Continental Bank (1977 to 1982). He was a director of Graphic
Technology from 1983 to 1989. Mr. Smith graduated Phi Beta Kappa from the
University of Wisconsin and received an MBA from the University of Chicago.

DIRECTOR COMPENSATION -- For their services as directors, the members of the
Board of Directors who are not employees of Zebra are paid $2,000 quarterly,
$2,000 for each Board meeting attended and $500 for each Board committee meeting
attended. In addition to cash compensation, each of Messrs. Knowles, Riley and
Smith has been granted, over a five-year period, options to acquire 20,000
shares of Class A Common Stock pursuant to Zebra's Stock Option Plan for Outside
Directors (the "Outside Director Plan"), which expired in 1996. Options granted
under the Outside Director Plan have an exercise price equal to the fair market
value on the date of grant and have a term ending seven years after the date of
grant or two years after the date on which the director ceases being a director
of the Company, whichever is earlier. Pursuant to Zebra's 1997 Non-Employee
Directors' Stock Option Plan (the "1997 Director Plan"), on February 11, 1997
each of Messrs. Knowles, Riley and Smith was granted options to purchase 15,000
shares of Class A Common Stock at an exercise price of $24.50 per share (the
closing price of the Class A Common Stock on the grant date, as report by
Nasdaq). Options granted under the 1997 Director Plan vest in five equal
increments on the grant date and each of the first four anniversaries thereof
(so long as the optionee is still an active member of the Board of Directors)
and remain exercisable until the tenth anniversary of the grant date. See
"Security Ownership of Certain Beneficial Owners and Management."

MEETINGS -- The Board of Directors meets quarterly and may schedule
additional special meetings upon request of the Chairman of the Board, the
President of the Company or one-half of the whole Board of Directors. During the
year ended December 31, 1996, the Board of Directors met four times. Each
director attended all of the board meetings and meetings of board committees on
which he served that were held during 1996.

COMMITTEES OF THE BOARD OF DIRECTORS -- The Audit Committee generally has
responsibility for recommending independent auditors to the Board for selection,
reviewing the plan and scope of the audit, reviewing the Company's audit and
control functions and reporting to the full Board regarding all of the
foregoing. The Audit Committee conferred by telephone on a number of occasions
and held four formal meetings in 1996. The Board of Directors does not have a
compensation or nominating committee.

<PAGE>

EXECUTIVE OFFICERS

Set forth below is a table identifying the executive officers of the Company
other than Messrs. Cless and Kaplan, who are identified in the section entitled
"Election of Directors -- Nominees for Election as Directors."

NAME AGE POSITION
- ------------------------ ------- ---------------------------------------------
Jeffrey K. Clements 50 Executive Vice President

Jack A. LeVan 42 Senior Vice President, Business Development

Thomas C. Beusch 44 Vice President, Sales and International

John H. Kindsvater, Jr. 55 President, Zebra Technologies VTI, Inc.

Clive P. Hohberger 54 Vice President, Technology Development

Charles R. Whitchurch 50 Chief Financial Officer and Treasurer

JEFFREY K. CLEMENTS became Executive Vice President of the Company in April
1997. He began his career with the Company in July 1994 and served as President
of the Company's Labeling Solutions Division from February 1995 until April
1997. From 1992 until joining the Company, Mr. Clements held the position of
Vice President, Sales for Alexander Proudfoot plc. Mr. Clements' background also
includes management positions in marketing and sales with various
technology-based companies. From 1990 to 1992, Mr. Clements owned and operated
Clemco, Inc. a Chicago-area franchisee of Discovery Zone, an indoor playground
and entertainment center. He spent seven years with Templeton, Kenley and
Company, progressing from Senior Vice President to President of their Miller
Fluid Power Corporation from 1985 to 1988. Mr. Clements received a BS degree
from Northwestern University, an MBA from Keller Graduate School of Management
and an MAT from the National College of Education.

JACK A. LEVAN is Senior Vice President of Business Development. He joined the
Company in January 1995 as Senior Vice President of Marketing. From 1994 until
joining the Company, Mr. LeVan was President of the Carolina Enterprise
Association. From 1990 to 1993, he served in various senior management positions
with Groupe Legris Industries, progressing to President and CEO of PPM Cranes,
Inc., a company acquired by Groupe Legris Industries in 1992. Mr. LeVan held
various management positions with Miller Fluid Power from 1981 to 1989. In
addition, Mr. LeVan spent three years in consulting with a specialization in
industrial marketing strategy. Mr. LeVan received a BA and an MBA from the
University of Chicago.

THOMAS C. BEUSCH is Vice President of Sales and International. He joined the
Company in April 1991 as Director of Sales, was promoted to Director of Sales
Worldwide in December 1991, and became Vice President of Sales and International
in January 1995. Prior to joining the Company, Mr. Beusch spent five years with
American Telephone and Telegraph, where he held various management positions.
Previously, he spent twelve years with International Business Machines in
various sales and regional marketing positions. Mr. Beusch received a BS with a
double major in marketing and management from Eastern Illinois University.

JOHN H. KINDSVATER, JR. became President of Zebra Technologies VTI, Inc. in
February 1996. He joined the Company in 1980 as Vice President of Marketing and
Sales, a position he held until February 1995, and was responsible for
developing and implementing marketing and sales strategies. He was promoted to
Vice President of Corporate Development in February 1995. Prior to joining the
Company, Mr. Kindsvater held management positions in corporate development,
international operations, marketing and sales with various technology-based
companies, including Quixote Corporation, A. B. Dick Company, Marsh Instrument
Company and Jeppesen & Co. Mr. Kindsvater attended Purdue University and
received his BS and MBA from the University of Denver. He currently serves on
the Board of Directors of Automatic Identification Manufacturers (AIM), the
industry's trade association.

<PAGE>

CLIVE P. HOHBERGER became Vice President of Technology Development in 1994.
He joined the Company in 1984 as a consultant and became Vice President of
Corporate Development in 1986. He served as Vice President of Marketing from
1988 to 1991 and became Vice President of Market Development in 1991. He became
Vice President of Technology Development in 1994 and is presently responsible
for the development of new market opportunities and liaisons with key customers,
vendors, government standards and regulatory agencies, competitors and
technology developers. Dr. Hohberger has held engineering positions with several
firms including Weber Marking Systems, Abbott Laboratories, The Brookhaven
National Laboratory, the Montreal Neurological Institute and Bunker-Ramo
Corporation (now Allen-Bradley). Dr. Hohberger received his BS and MS from Case
Institute of Technology in Physics and Engineering, respectively, a PhD from
Case Western Reserve University in Computer Engineering and an MBA from the Lake
Forest Graduate School of Management. He is an Adjunct Professor at the Lake
Forest Graduate School of Management, where he has also served as a member of
the Board of Directors.

CHARLES R. WHITCHURCH joined Zebra as Chief Financial Officer and Treasurer
in September 1991. From 1981 until he joined the Company, he served as Vice
President, Finance of Corcom, Inc., a technology company specializing in the
control of radio frequency interference. Mr. Whitchurch previously held
positions as Chief Financial Officer of Resinoid Engineering Corporation and as
Corporate Services Officer with the Harris Bank in Chicago. Mr. Whitchurch holds
a degree in Economics from Beloit College and an MBA from Stanford University.

The Board of Directors elects officers to serve at the discretion of the
Board. There are no family relationships among any of the directors or officers
of the Company.

SECTION 16(a) COMPLIANCE -- Section 16(a) of the Securities Exchange Act of
1934, as amended, requires the Company's officers and directors and persons who
own greater than ten percent of a registered class of the Company's equity
securities to file reports of ownership and changes in ownership with the
Securities and Exchange Commission and The Nasdaq Stock Market. Based solely on
a review of the forms it has received and on written representations from
certain reporting persons that no such forms were required for them, the Company
believes that, except as set forth below, during the fiscal year ended December
31, 1996 all Section 16(a) filing requirements applicable to its officers,
directors and 10% beneficial owners were complied with by such persons.

Each of Messrs. Knowles, Riley, Smith and Whitchurch filed his Form 5 with
respect to the fiscal year ended December 31, 1996 after the date prescribed
under Section 16(a).

<PAGE>

EXECUTIVE COMPENSATION AND CERTAIN TRANSACTIONS

The following table provides information concerning the annual and
long-term compensation for services in all capacities to the Company for the
fiscal year ended December 31, 1996, and the two prior fiscal years, of those
persons who were at December 31, 1996 (i) the chief executive officer and
(ii) the four other most highly compensated (combined salary and bonus)
executive officers of the Company (collectively, the "Named Officers").

Summary Compensation Table

LONG TERM
COMPENSATION (1)
---------------
ANNUAL COMPENSATION AWARDS
------------------------- --------------- ALL
SECURITIES OTHER
UNDERLYING COMPENSATION
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS ($) OPTIONS (#) ($)
- ------------------------------- ------- ------------- ---------- --------------- ------------
<S> <C> <C> <C> <C> <C>
Edward Kaplan, Chief 1996 $281,731 $64,347 -- $17,972(2)
Executive Officer and 1995 256,289 159,893 -- 15,992
Chairman 1994 241,770 73,498 -- 19,526

Gerhard Cless, Executive 1996 $142,552 $34,212 -- $11,202(3)
Vice President,Engineering 1995 200,034 70,574 -- 13,120
and Technology and 1994 188,684 45,284 -- 15,148
Secretary

Jeffrey K. Clements 1996 $194,376 $35,668 -- $12,164(4)
President 1995 175,503 87,497 -- --
1994 69,540 20,520 -- --

Jack A. LeVan 1996 $141,617 $33,361 -- $9,875(5)
Senior Vice President 1995 121,735 -- -- 10,841
Marketing 1994 -- -- -- 10,454

Charles R. Whitchurch, 1996 $144,463 $23,462 -- $10,628(6)
Chief Financial Officer and 1995 131,405 53,940 -- 9,249
Treasurer 1994 123,387 24,677 -- 10,177

- -------------------

</TABLE>
(1) None of the Named Officers had any restricted stock holdings as of
December 31, 1996.

(2) Includes 401(k) contributions of $4,750, and profit sharing plan
payments of $13,222.

(3) Includes 401(k) contributions of $4,750, and profit sharing plan
payments of $6,452.

(4) Includes 401(k) contributions of $4,750, and profit sharing plan
payments of $7,414.

(5) Includes commissions of $1,117, 401(k) contributions of $4,750, and
profit sharing plan payments of $5,152.

(6) Includes 401(k) contributions of $4,750, and profit sharing plan
payments of $5,878.

<PAGE>

AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION
VALUES -- The following table provides information on option exercises in fiscal
1996 by the Named Officers and on the Named Officers' unexercised options at
December 31, 1996. Included are options granted under the Company's Stock Option
Plan. No options were granted to the Named Officers in 1996.
(6)

AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>

NUMBER OF SECURITIES
UNDERLYING VALUE OF UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS AT FISCAL OPTIONS AT FISCAL
YEAR-END (#) YEAR-END ($)(1)
--------------------- --------------------
SHARES ACQUIRED ON VALUE EXERCISABLE/ EXERCISABLE/
NAME EXERCISE (#) REALIZED ($) UNEXERCISABLE UNEXERCISABLE
- ----------------------- -------------------- ------------ --------------------- --------------------
<S> <C> <C> <C> <C>
Edward Kaplan -- -- -- --
Gerhard Cless -- -- -- --
Jeffrey K. Clements -- -- 6,500/13,500 47,937/99,562
John H. Kindsvater, Jr. 28,000 $222,000 -- --
Charles R. Whitchurch 10,500 -- 0/9,500 0/104,500

</TABLE>

- -----------------------
(1) The value per option is calculated by subtracting the exercise price
from the closing price of the Company's Common Stock on the Nasdaq
National Market on December 29, 1996 of $23.375.

CERTAIN TRANSACTIONS -- In May 1989, the Company entered into a lease
agreement for its facility and certain machinery, equipment, furniture and
fixtures with Unique Building Corporation ("Unique"), a corporation owned by
Messrs. Kaplan and Cless and Stewart Shiman (a former executive officer of the
Company). The lease was amended effective as of April 1, 1993, as the facility
was expanded by approximately 36,700 square feet (25,200 square feet of
manufacturing space and 11,500 square feet of office space) and amended again in
1994, as the facility was expanded by an additional 50,400 square feet, and
amended again in June 1996 to include an additional 13,325 square feet. The
facility portion of the lease is treated as an operating lease and has a term
ending on March 31, 2008. Base monthly rental payments were $36,833 through
September 1, 1991, increased to $38,433 through March 31, 1993, $53,133 through
August 14, 1993, $59,833 through August 14, 1994, $69,964 through November 30,
1994, $84,960 through March 31, 1995, $87,849 through February 29, 1996, $90,774
through May 31, 1996, $99,328 through March 31, 1998, $106,272 through August
31, 1999, $115,355 through March 31, 2003, and $127,570 through March 31, 2008.
The lease agreement includes a modification to the base monthly rental which
goes into effect if the prescribed rent payment is less than the aggregate
principal and interest payments required to be made by Unique under certain
Industrial Revenue Bonds. Under the portion of the lease agreement with Unique
which is accounted for as a capital lease, the Company leases machinery,
equipment, furniture, and fixtures at a monthly rental of $5,725 over the lease
term. The Industrial Revenue Bonds are supported by a Letter of Credit issued by
American National Bank. The Company guaranteed $700,000 of Unique's obligation
to such bank under the agreement relating to the Letter of Credit.

<PAGE>

REPORT ON EXECUTIVE COMPENSATION

Traditionally, compensation for the Company's executive officers has been
determined by the Company's chief executive officer, Edward L. Kaplan, due to
the relatively small number of executive officers and Mr. Kaplan's personal
knowledge of the relative performance and responsibilities of each executive
officer. For the fiscal year ended December 31, 1996, compensation for the
Company's executive officers, other than Mr. Kaplan himself, was established in
this manner. Mr. Kaplan also submitted to the Board of Director for its
consideration a proposal for his own compensation package, which was reviewed
and approved by the Board.

COMPENSATION ELEMENTS -- For 1996, the primary components of the Company's
executive officer compensation program were base salaries and cash bonuses based
on Company and departmental performance.

BASE SALARIES -- In determining the base salaries of Messrs. Cless, Clements,
Kindsvater and Whitchurch, Mr. Kaplan reviewed various technology industry
salary surveys, and he targeted salaries at levels competitive to those provided
to executives with similar responsibilities in businesses which he viewed as
comparable to the Company. Mr. Kaplan also attempted to maintain a salary
structure for the executive group which vis-a-vis each executive gives credit
for relative seniority and scope of assigned responsibilities. The Board's
approval of Mr. Kaplan's salary was based upon its subjective evaluation of Mr.
Kaplan's contributions to the Company and his importance to the Company's
continued growth. The Board reviewed the American Electronics Association
Executive Compensation Survey (the "Survey") to confirm Mr. Kaplan's salary
level was within the ranges represented by the Survey, but did not target Mr.
Kaplan's salary at a particular point within the Survey's compensation ranges.

BONUS -- Executive bonuses for fiscal 1996 were performance-related. Bonuses
were designed to reward management for achieving and exceeding goals for Company
performance as well as performance goals for particular departments.

Mr. Kaplan and each of the other Named Officers participated in the Company's
1996 Executive Bonus Plan (the "Bonus Plan"). The Bonus Plan was established by
Mr. Kaplan after meetings with the other executive officers to discuss the
Company's targeted performance goals, and Mr. Kaplan's participation in the
Bonus Plan was approved by the Board. Under the Bonus Plan, cash bonuses paid to
each of the Named Officers for 1996 were directly related to the Company's
overall financial performance. Bonuses were determined by multiplying the
particular officer's base salary by (1) his designated bonus percentage and (2)
a performance factor based upon the Company's achievement of targeted levels of
after-tax profit for 1996. Designated bonus percentages were based upon
seniority and relative positions within the Company's organizational structure.

Mr. Kaplan awarded bonuses in addition to those provided in the Bonus Plan to
certain of the Company's executive officers based upon the performance of the
departments over which they exercise direct supervisory authority. For these
bonuses, the performance criteria varied depending upon the department and the
particular goals set for the department for 1996. For example, an executive
responsible for sales functions of the Company received an additional bonus
based upon the Company's gross sales levels, while an executive in charge of
manufacturing functions received a bonus based upon targeted levels of
manufacturing efficiency, quality and on-time deliveries.

STOCK OPTIONS -- The Company has, on limited occasions, awarded stock options
to executive officers, to provide competitive compensation packages and because
the Company believes it is important that all of the Company's key executive
officers have a meaningful equity stake in the Company so that they have an
incentive to create shareholder value over a long-term investment horizon. The
Company did not grant any of the Named Officers any options in 1996, because
each of them already has meaningful stock or stock options in the Company.

COMPLIANCE WITH SECTION 162(m) -- The Board of Directors currently intends
for all compensation paid to the Named Officers to be tax deductible to the
Company pursuant to Section 162(m) of the Internal Revenue Code of 1986, as
amended ("Section 162(m)"). Section 162(m) provides that compensation paid to
the Named Officers in excess of $1,000,000 cannot be deducted by the Company for
Federal income tax

<PAGE>

purposes unless, in general, such compensation is performance based, is
established by an independent committee of directors, is objective and the plan
or agreement providing for such performance based compensation has been approved
in advance by stockholders. In the future, however, if, in the judgment of the
Board, the benefits to the Company of a compensation program that does not
satisfy the arbitrary and inflexible conditions of Section 162(m) outweigh the
costs to the Company of the failure to satisfy these conditions, the Board may
adopt such a program.

BOARD OF DIRECTORS

Gerhard Cless David P. Riley

Edward L. Kaplan Michael A. Smith

Christopher Knowles

COMPENSATION COMMITTEE INTERLOCKS
AND INSIDER PARTICIPATION

The Company's Chief Executive Officer, Mr. Kaplan, determined the
compensation to be paid the Company's executive officers, other than himself,
for the fiscal year ended December 31, 1996. The Board of Directors, consisting
of Messrs. Cless, Kaplan, Knowles, Riley, and Smith, approved the compensation
to be paid to Mr. Kaplan. Mr. Cless, the Company's Executive Vice President and
Secretary, and Mr. Kaplan participated in the deliberations of the Board
concerning Mr. Kaplan's compensation.

<PAGE>

PERFORMANCE GRAPH

The graph set forth below compares the cumulative total stockholder return on
the Class A Common Stock of the Company since its initial public offering on
August 15, 1991 with the cumulative total return on the Nasdaq Market Index and
the MG Industry Group 171 -- Electronic Equipment Manufacturers Index -- over
the same period (assuming the investment of $100 in the Class A Common Stock at
its closing price of $9.125 per share (post-split) on August 15, 1991 and in
each index on such date, and the reinvestment of all dividends, if any).

COMPARISON OF CUMULATIVE RETURNS SINCE IPO

[GRAPH]

DECEMBER 31,
---------------------------------------------------------
1991 1992 1993 1994 1995 1996
------- ------- ------- ------- ------- -------
Zebra Technologies
Corporation $100.00 $143.28 $338.06 $233.21 $405.97 $279.10
MG Group Index 100.00 132.49 190.89 211.88 292.02 400.13
Nasdaq Market Index 100.00 100.98 121.13 127.17 164.96 204.98

<PAGE>

SECURITY OWNERSHIP OF MANAGEMENT AND
CERTAIN BENEFICIAL OWNERS

The following table sets forth, as of March 21, 1997, certain information
with respect to the beneficial ownership of the Company's Common Stock by (i)
each person known by the Company to own beneficially more than 5% of the
outstanding shares of any class of Common Stock, (ii) each director of the
Company, (iii) each of the Named Officers and (iv) all directors and executive
officers of the Company as a group.

<TABLE>
<CAPTION>
CLASS A COMMON STOCK CLASS B COMMON STOCK
---------------------------- --------------------------- % OF TOTAL
NAME AND ADDRESS NUMBER % OF CLASS NUMBER % OF CLASS VOTING
POWER(1)
- -------------------------- --------------- ----------- --------------- ----------- -------------
<S> <C> <C> <C> <C> <C>
Edward L. Kaplan(2) -- -- 2,736,504 (3) 37.4% 30.4%

Carol K. Kaplan(2) -- -- 563,800 (4) 7.7 6.3

Gerhard Cless(2) 80,000 (5) * 2,872,052 (6) 39.3 31.9

Ruth I. Cless(2) -- (7) -- 1,104,740 (8) 15.1 12.3

Christopher G. Knowles 25,000 (9) * -- -- *

David Riley 23,000 (9) * -- -- *

Michael A. Smith 23,000 (9) * -- -- *

John H. Kindsvater, Jr. 43,624 (10) * -- -- *

Charles R. Whitchurch 20,814 (11) * -- -- *

Jeffrey K. Clements 7,366 (12) * -- -- *

William Blair & Co., L.L.C. 2,075,149 (13) 12.3% -- -- 2.3

FMR Corporation 1,090,600 (14) 6.4 -- -- 1.2

Fifth Third Bancorp 866,735 (15) 5.1 -- -- *

All Executive Officers and
Directors as a group 239,552 (16) 1.4% 5,608,556 76.7% 62.5%

</TABLE>

- --------------------
* Less than one percent.

(1) Each share of the Class A Common Stock has one vote and each share
of the Class B Common Stock has ten votes. This column shows the
combined voting power of all Class A Common Stock and Class B Common
Stock beneficially owned by each of the listed persons. The
percentages are based on the outstanding number of Class A Common
Stock and Class B Common Stock as of March 21, 1997.

(2) The address of this stockholder is c/o Zebra Technologies
Corporation, 333 Corporate Woods Parkway, Vernon Hills, Illinois
60061.

(3) Excludes 563,800 shares which may be deemed held of record or
beneficially by Mr. Kaplan's wife, Carol, which may be deemed to be
beneficially owned by Mr. Kaplan.

(4) Excludes 2,736,504 shares held of record or beneficially by Mr.
Kaplan, which may be deemed to be beneficially owned by Mrs. Kaplan.

(5) Includes 80,000 shares held by a foundation of which Mr. Cless is
director.

(6) Includes 344,000 shares held by Jerry I. Rudman as Trustee under the
Gerhard Cless 1990 Income Trust. Excludes 1,104,740 shares held of
record or beneficially by Mr. Cless' wife, Ruth, which may be deemed
to be beneficially owned by Mr. Cless.

<PAGE>

(7) Excludes 80,000 shares held of record or beneficially by Mr. Cless,
which may be deemed to be beneficially owned by Mrs. Cless.

(8) Includes 320,936 shares held by Jerry I. Rudman, as Trustee under
the Ruth I. Cless 1990 Income Trust. Excludes 2,872,052 shares held
of record or beneficially by Mr. Cless, which may be deemed to be
beneficially owned by Mrs. Cless.

(9) Includes 20,000 shares of Class A Common Stock currently issuable
upon exercise of options granted pursuant to the Outside Director
Plan and 3,000 shares of Class A Common Stock currently issuable
upon exercise of options granted pursuant to the 1997 Directors
Plan.

(10) Includes 770 shares held of record or beneficially by Mr.
Kindsvater's children, which may be deemed to be beneficially owned
by Mr. Kindsvater.

(11) Includes 4,500 shares of Class A Common Stock currently issuable
upon exercise of options

(12) Includes 6,500 shares of Class A Common Stock currently issuable
upon exercise of options. Includes 100 shares held of record or
beneficially by Mr. Clements' wife, which may be deemed to be
beneficially owned by Mr. Clements.

(13) As reported on a Schedule 13G filed by William Blair & Co., L.L.C.
on February 18, 1997. According to such 13G, William Blair & Co.,
L.L.C. has sole voting power with respect to 609,772 of these
shares, and sole dispositive power with respect to all 2,075,149 of
these shares. The address of this stockholder is 222 West Adams
Street, Chicago, IL 60606.

(14) As reported on a Schedule 13G filed by FMR Corporation and certain
affiliates on February 18, 1997. According to such 13G, affiliates
of FMR Corporation have sole voting power with respect to 31,700 of
these shares, and sole dispositive power with respect to all
1,090,600 of these shares. The address of this stockholder is 82
Devonshire Street, Boston, Massachusetts 02109.

(15) As reported on a Schedule 13G filed by Fifth Third Bancorp on
February 18, 1997. According to such 13G, banking subsidiaries of
Fifth Third Bancorp have sole voting power with respect to 820,160
of these shares, shared voting power with respect to 328,300 of
these shares, sole dispositive power with respect to 837,635 of
these shares and shared dispositive power with respect to 29,100 of
these shares. The address of this stockholder is 38 Fountain Square
Plaza, Cincinnati, Ohio 45263.

(16) Includes 90,075 shares of Class A Common Stock issuable within 60
days upon exercise of options.

<PAGE>

PROPOSAL 2

AMENDMENT OF COMPANY'S CERTIFICATE OF
INCORPORATION TO INCREASE NUMBER OF
AUTHORIZED SHARES OF CLASS A COMMON STOCK

In February 1997, the Board of Directors proposed and recommended for
adoption by the Company's stockholders an amendment to the Company's Certificate
of Incorporation that would increase the total authorized Class A Common Stock
of the Company from 35,000,000 shares to 50,000,000 shares. Following the
proposed amendment, the number of authorized shares of Class B Common Stock and
Preferred Stock would remain unchanged at 35,000,000 and 10,000,000 shares,
respectively.

REASONS FOR THE PROPOSAL -- As of March 21, 1997, there were 16,924,973
shares of Class A Common Stock issued and outstanding, 7,315,404 shares
reserved for issuance upon conversion of outstanding shares of Class B Common
Stock and approximately 850,000 shares reserved for issuance under the
Company's stock option plans. Accordingly, approximately 9,900,000 authorized
shares of Class A Common Stock were available for future issuance as of March
21, 1997.

The Board of Directors believes that it is desirable for the Company to
have available additional authorized but unissued shares of Class A Common
Stock to be used for general corporate purposes, future acquisitions and
equity financings. The Company currently has no understandings, commitments
or agreements with respect to any acquisition or any other transaction that
would result in the issuance of Class A Common Stock. However, approval of
the proposed amendment now will eliminate the delays and expense which
otherwise would be incurred if stockholder approval were required to increase
the authorized number of shares of Class A Common Stock for possible future
transactions involving the issuance of additional shares.

EFFECT OF INCREASE -- The additional shares of Class A Common Stock may be
issued, subject to certain exceptions, by the Board of Directors at such times,
in such amounts and upon such terms as the Board may determine without further
approval of the stockholders. The Company's current stockholders could suffer a
dilution of voting rights, net income and net tangible book value per share of
the Class A Common Stock or Class B Common Stock as the result of any such
issuance, depending on the number of shares issued and the purpose, terms and
conditions of the issuance.

PROPOSAL 3

APPROVAL OF THE 1997 STOCK OPTION PLAN

The stockholders are asked to consider and vote to approve the 1997 Stock
Option Plan. The Company's Board of Directors adopted the 1997 Stock Option
Plan, effective February 11, 1997. The Company has reserved 531,500 shares of
Common Stock for issuance under the 1997 Stock Option Plan.

Stockholder approval of the 1997 Stock Option Plan is sought to (i) meet
the requirements of the Nasdaq National Market, (ii) qualify certain
compensation under the 1997 Stock Option Plan as performance based
compensation that is tax deductible under Section 162(m) of the Internal
Revenue Code of 1986, as amended (the "Code"), and (iii) to qualify certain
stock option awards granted under the 1997 Stock Option Plan as incentive
stock options. To date, the Company has granted options to purchase 274,000
shares of Class A Common Stock under the 1997 Stock Option Plan.

The following is a brief summary of certain provisions of the 1997 Stock
Option Plan.

<PAGE>

GENERAL
The 1997 Stock Option Plan is a flexible plan that provides the Option
Committee broad discretion to fashion the terms of the awards to provide
eligible participants with stock-based incentives, including: (i)
non-qualified and incentive stock options for the purchase of the Company's
Class A Common Stock and (ii) dividend equivalents. The persons eligible to
participate in the 1997 Stock Option Plan are directors, officers, and
employees of the Company or any subsidiary of the Company who, in the opinion
of the Option Committee, are in a position to make contributions to the
growth, management, protection and success of the Company or its
subsidiaries. The 1997 Stock Option Plan is administered by the Option
Committee, which is currently comprised of Mr. Kaplan and Mr. Cless. To the
extent required by Section 162(m) of the Code, grants under the 1997 Stock
Option Plan will be approved by at least two non-employee directors of the
Company.

The purpose of the 1997 Stock Option Plan is to promote the overall financial
objectives of the Company and its stockholders by motivating eligible
participants to achieve long-term growth in stockholder equity in the Company
and by retaining the association of these individuals.

The 1997 Stock Option Plan provides for the grant of options and other awards
of up to 531,500 shares of Class A Common Stock. In the discretion of the
Option Committee, shares of Class A Common Stock subject to an award under the
1997 Stock Option Plan that remain unissued upon termination of such award, are
forfeited or are received by the Company as consideration for the exercise or
payment of an award shall become available for additional awards under the 1997
Stock Option Plan.

In the event of a stock dividend, stock split, recapitalization, sale of
substantially all of the assets of the Company, reorganization or similar event,
the Option Committee will adjust the aggregate number of shares of Class A
Common Stock subject to the 1997 Stock Option Plan, the number of shares
available for awards and subject to outstanding awards and the exercise price
per share, and other terms of outstanding awards.

The Board of Directors or Option Committee may amend, modify or discontinue
the 1997 Stock Option Plan at any time, except if such amendment (i) impairs the
rights of a participant without the participant's consent, or (ii) would
disqualify the 1997 Stock Option Plan from the exemption provided by Rule 16b-3
under the Exchange Act. Amendments may be subject to stockholder approval under
applicable law. Any amendment by the Option Committee is subject to approval of
the Board of Directors. The Option Committee may amend the terms of any award
granted under the 1997 Stock Option Plan (other than to decrease the option
price), subject to the consent of a participant if such amendment impairs the
rights of such participant unless such amendment is necessary for the option or
the 1997 Stock Option Plan to qualify for the exemption provided by Rule 16b-3
under the Exchange Act.

AWARDS UNDER THE 1997 STOCK OPTION PLAN
STOCK OPTIONS. Options to purchase no more than 100,000 shares of Class A
Common Stock may be granted to any one participant in any fiscal year. Subject
to such limitation, the Option Committee shall determine the number of shares of
Class A Common Stock subject to the options to be granted to each participant.
The Option Committee may grant non-qualified stock options, incentive stock
options or a combination thereof to a participant. Only persons who on the date
of the grant are employees of the Company or any parent or a subsidiary of the
Company may be granted options which qualify as incentive stock options.
Options granted under the 1997 Stock Option Plan will provide for the purchase
of Class A Common Stock at prices determined by the Option Committee, but in no
event will an option intended as an incentive stock option be granted at less
than fair market value on the date of grant. When incentive stock options are
granted to an individual who owns stock possessing more than 10% of the combined
voting power of all classes of stock of the Company, the option price shall not
be less than 110% of fair market value. No non-qualified stock option or
incentive stock option shall be exercisable later than the tenth anniversary
date of its grant. In the case of an incentive stock option granted to a
participant who owns more than 10% of the combined voting power of all classes
of stock of the Company or any parent or subsidiary of the Company, such option
shall not be exercisable later than the fifth anniversary date of its

<PAGE>

grant. No incentive stock option shall be granted later than the tenth
anniversary date of the adoption of the 1997 Stock Option Plan or its approval
by the stockholders of the Company, whichever is earlier.

Options granted under the 1997 Stock Option Plan shall be exercisable at such
times and subject to such terms and conditions set forth in the 1997 Stock
Option Plan and as the Option Committee shall determine or provide in an option
agreement. Except as provided in any option agreement, options may only be
transferred under the laws of descent and distribution or if such transfer is
permitted by Rule 16b-3 without liability under applicable law and is consistent
with the use of Commission Form S-8. Otherwise, options shall be exercisable
only by the participant during such participant's lifetime. The option exercise
price shall be payable by the participant (i) in cash, (ii) in shares of Common
Stock having a fair market value equal to the exercise price, (iii) by delivery
of a note or other evidence of indebtedness, (iv) by authorizing the Company to
retain shares of Common Stock having a fair market value equal to the exercise
price, (v) by "cashless exercise" as permitted under the Federal Reserve Board's
Regulation T, or (vi) by any combination of the foregoing. Upon termination of
a participant's employment with the Company due to death or Disability (as
defined in the 1997 Stock Option Plan), all of such participant's unexpired and
unexercised options shall be exercisable for the shorter of (a) their remaining
term or (b) 90 days after either (i) in the case of a participant's Disability,
termination of employment or (ii) in the case of a participant's death, the date
of the appointment of a Representative (as defined in the 1997 Stock Option
Plan) or such other period as the Option Committee may determine. If a
particpant retires or if a participant involuntarily ceases to be an employee of
the Company (other than due to death, Disability or as a result of termination
for Cause), all of such participant's options shall terminate, except that, to
the extent such options are then exercisable, such options may be exercised for
the shorter of their remaining terms or 90 days (or such shorter period as the
Option Committee may specify) after termination of employment. If a participant
voluntarily ceases to be an employee of the Company (other than due to
retirement) or is terminated as a result of Cause (as defined in the Plan), all
of such participant's outstanding options shall terminate 30 days (or such
shorter period as the Option Committee may specify) after termination of
employment.

Upon receipt of a notice from a participant to exercise an option, the Option
Committee may elect to cash out all or part of any such option by paying the
participant, in cash or shares of Class A Common Stock, the following amount:
(i) the excess of the fair market value of the Class A Common Stock subject to
the unexercised option over the option price, multiplied by (ii) the number of
shares of Class A Common Stock for which the option is to be exercised.

DIVIDEND EQUIVALENTS. The Option Committee is authorized to grant dividend
equivalents conferring on participants the right to receive cash, shares of
Class A Common Stock, or other property equal in value to dividends paid on a
specified number of shares of Class A Common Stock under an option. Dividend
equivalents may be paid currently or on a deferred basis and, if deferred, may
be deemed to have been reinvested in additional shares of Class A Common Stock
or other investment vehicles as specified by the Option Committee.

CHANGES IN CONTROL
Upon the occurrence of a Change in Control (as hereinafter defined), all
unexercised stock options shall become immediately exercisable, to the extent
provided by the Option Committee in an award agreement or otherwise. In
addition, unless the Option Committee provides otherwise in an option agreement,
after the Change in Control a participant shall have the right, by giving notice
during the 60-day period from and after a Change in Control to the Company, to
surrender all or part of the outstanding awards and receive in cash from the
Company the following amount for each award: (i) the excess of the Change in
Control Price over the exercise price of the award, multiplied by (ii) the
number of shares of Class A Common Stock subject to the award. The "Change in
Control Price" is the higher of (i) the highest reported sales price of a share
of Class A Common Stock in any transaction reported on the principal exchange on
which such shares are listed or on the Nasdaq National Market during the 60-day
period prior to the Change of Control, or (ii)

<PAGE>

if the Change in Control event is a tender offer, merger or other
reorganization, the highest price to be paid per share of Class A Common Stock
in such transaction.

For purposes of the 1997 Stock Option Plan, a "Change in Control" shall be
deemed to have occurred if (i) any corporation, person or other entity (other
than the Company, a "Permitted Transferee" (as defined in the Certificate of
Incorporation), a majority-owned subsidiary of the Company or any of its
subsidiaries, or an employee benefit plan (or related trust) sponsored or
maintained by the Company), including a "group" as defined in Section 13(d)(3)
of the Exchange Act, becomes the beneficial owner of stock representing more
than the greater of (a) 25% of the combined voting power of the Company's then
outstanding securities or (b) the percentage of the combined voting power of the
Company's then outstanding securities which equals (1) 10% plus (2) the
percentage of the combined voting power of the Company's outstanding securities
held by such corporation, person or entity on the effective date of the 1997
Stock Option Plan; (ii)(a) the stockholders of the Company approve a definitive
agreement to merge or consolidate the Company with or into another corporation
other than a majority-owned subsidiary of the Company, or to sell or otherwise
dispose of all or substantially all of the Company's assets, and (b) the persons
who were the members of the Board of Directors of the Company prior to such
approval do not represent a majority of the directors of the surviving,
resulting or acquiring entity or the parent thereof; (iii) the stockholders of
the Company approve a plan of liquidation of the Company; or (iv) within any
period of 24 consecutive months, persons who were members of the Board of
Directors of the Company immediately prior to such 24-month period, together
with any persons who were first elected as directors (other than as a result of
any settlement of a proxy or consent solicitation contest or any action taken to
avoid such a contest) during such 24-month period by or upon the recommendation
of persons who were members of the Board of Directors of the Company immediately
prior to such 24-month period and who constituted a majority of the Board of
Directors of the Company at the time of such election, cease to constitute a
majority of the Board.

DISCUSSION OF FEDERAL INCOME TAX CONSEQUENCES
The following summary of tax consequences with respect to the awards granted
under the 1997 Stock Option Plan is not comprehensive and is based upon laws and
regulations currently in effect. Such laws and regulations are subject to
change.

NON-QUALIFIED STOCK OPTIONS
PARTICIPANT. Generally, a Participant receiving a non-qualified stock option
does not realize any taxable income for Federal income tax purposes at the time
of grant. Upon exercise of such Option, the excess of the fair market value of
the shares of Class A Common Stock subject to the non-qualified stock option on
the date of exercise over the exercise price will be taxable to the Participant
as ordinary income. The Participant will have a capital gain (or loss) upon the
subsequent sale of the shares of Class A Common Stock received upon exercise of
the option in an amount equal to the sale price reduced by the fair market value
of the shares of Class A Common Stock on the date the option was exercised. The
holding period for purposes of determining whether the capital gain (or loss) is
a long-term or short-term capital gain (or loss) will commence on the date the
non-qualified stock option is exercised.

TAX WITHHOLDING. The amount of income that is taxable to a Participant upon
the exercise of a non-qualified stock option will be treated as compensation
income. Accordingly, such amount will be subject to applicable withholding of
Federal, state and local income taxes and Social Security taxes.

IF THE PARTICIPANT USES COMPANY STOCK TO PAY THE OPTION EXERCISE PRICE. If
the Participant who exercises a non-qualified stock option pays the exercise
price by tendering shares of Class A Common Stock and receives back a larger
number of shares of Class A Common Stock, the Participant will realize taxable
income in an amount equal to the fair market value of the additional shares of
Class A Common Stock received on the date of exercise, less any cash paid in
addition to the shares of Class A Common Stock tendered. Upon a subsequent sale
of the Class A Common Stock received, the number of shares of

<PAGE>

Class A Common Stock equal to the number delivered as payment of the exercise
price will have a tax basis equal to that of the shares of Class A Common Stock
originally tendered. The additional newly-acquired shares of Class A Common
Stock obtained upon exercise of the non-qualified stock option will have a tax
basis equal to the fair market value of such shares on the date of exercise.

THE COMPANY. The Company generally will be entitled to a tax deduction in
the same amount and in the same year in which the participant recognizes
ordinary income resulting from the exercise of a non-qualified stock option.

INCENTIVE STOCK OPTIONS
PARTICIPANT. Generally, a participant will not realize any taxable income
for Federal income tax purposes at the time an incentive stock option is
granted. Upon exercise of the incentive stock option, the participant will
incur no income tax liability (other than pursuant to the alternative minimum
tax, if applicable). If the participant transfers shares of Class A Common
Stock received upon the exercise of an incentive stock option within a period of
two years from the date of grant of such incentive stock option or one year from
the date of receipt of the shares of Class A Common Stock (the "Holding
Period"), then, in general, the participant will have taxable ordinary income in
the year in which the transfer occurs in an amount equal to the excess of the
fair market value on the date of exercise over the exercise price, and will have
long-term or short-term capital gain (or loss) in an amount equal to the
difference between the sale price of the shares of Class A Common Stock and the
fair market value of such shares on the date of exercise. However, if the sale
price is less than the fair market value of such shares on the date of exercise,
the ordinary income will be not more than the difference between the sale price
and the exercise price. If the participant transfers the shares of Class A
Common Stock after the expiration of the Holding Period, he or she will
recognize income taxable at the capital gains tax rate on the difference between
the sale price and the exercise price.

TAX WITHHOLDING. If the participant makes any disqualifying disposition
prior to the completion of the Holding Period with respect to shares of Class A
Common Stock acquired upon the exercise of an Incentive Stock Option granted
under the Plan, then such participant must remit to the Company an amount
sufficient to satisfy all Federal, state, and local withholding taxes thereby
incurred.

IF THE PARTICIPANT USES CLASS A COMMON STOCK TO PAY THE OPTION EXERCISE
PRICE. If a participant who exercises an incentive stock option pays the option
exercise price by tendering shares of Class A Common Stock, such participant
will generally incur no income tax liability (other than pursuant to the
alternative minimum tax, if applicable), provided any Holding Period requirement
for the tendered shares is met. If the tendered stock was subject to the
Holding Period requirement when tendered, payment of the exercise price with
such stock constitutes a disqualifying disposition. If the participant pays the
exercise price by tendering shares of Class A Common Stock and the participant
receives back a larger number of shares, under proposed Treasury Regulations,
the participant's basis in the number of shares of newly acquired stock equal to
the number of the shares delivered as payment of the exercise price will have a
tax basis equal to that of the shares originally tendered, increased, if
applicable, by any amount included in the participant's gross income as
compensation. The additional newly acquired shares obtained upon exercise of
the option will have a tax basis of zero. All Class A Common Stock acquired
upon exercise will be subject to the Holding Period requirement, including the
number of shares equal to the number tendered to pay the exercise price. Any
disqualifying disposition will be deemed to be a disposition of Class A Common
Stock with the lowest basis.

THE COMPANY. The Company is not entitled to a tax deduction upon grant,
exercise or subsequent transfer of shares of Class A Common Stock acquired
upon exercise of an incentive stock option, provided that the participant
holds the shares received upon the exercise of such option for the Holding
Period. If the participant transfers the Class A Common Stock acquired upon
the exercise of an incentive stock option

<PAGE>

prior to the end of the Holding Period, the Company generally is entitled to
a deduction at the time the participant recognizes ordinary income in an
amount equal to the amount of ordinary income recognized by such participant
as a result of such transfer.

PARACHUTE PAYMENTS
In the event any payments or rights accruing to a participant upon a Change
in Control, or any other payments awarded under the 1997 Stock Option Plan,
constitute "parachute payments" under Section 280G of the Internal Revenue Code,
depending upon the amount of such payments accruing and the other income of the
participant from the Company, the participant may be subject to an excise tax
(in addition to ordinary income tax) and the Company may be disallowed a
deduction for the amount of the actual payment.

PROPOSAL 4

APPROVAL OF THE 1997 NON-EMPLOYEE DIRECTORS' STOCK OPTION PLAN

The stockholders are asked to consider and vote to approve the 1997
Director Plan. The Company's Board of Directors adopted the 1997 Director
Plan, effective February 11, 1997. The Company has reserved 77,000 shares of
Class A Common Stock for issuance under the 1997 Director Plan.

The following is a brief summary of certain provisions of the 1997
Director Plan.

GENERAL
The 1997 Director Plan provides for the issuance of options to
purchase up to 77,000 shares of Class A Common Stock, which shares are reserved
and available for purchase upon the exercise of options granted under the
1997 Director Plan. Only directors who are not employees or officers
of the Company are eligible to participate in the 1997 Director Plan.
The 1997 Director Plan is administered by the Option Committee.

Under the 1997 Director Plan, each non-employee director was granted, on
the effective date of the plan, an option to purchase 15,000 shares of Class
A Common Stock, and each non-employee director subsequently elected to the
Board will be granted an option to purchase 15,000 shares of Class A Common
Stock on the date of his or her election. Options granted under the 1997
Director Plan provide for the purchase of Class A Common Stock at a price
equal to the fair market value on the date of the grant. If there are not
sufficient shares remaining and available to all non-employee directors
eligible for an automatic grant at the time at which an automatic grant would
otherwise be made, then each eligible non-employee director shall receive an
option to purchase a pro rata number of shares.

Unless otherwise provided in an option agreement, options granted under
the 1997 Director Plan shall become exercisable in five equal increments on
the date of the grant and on each of the first four anniversaries thereof. If
any options under the 1997 Director Plan are surrendered before exercise or
lapse without exercise, in whole or in part, the shares reserved for grant
will revert to the status of available shares. All options expire on the
earlier to occur of (a) ten years following the grant date or (b) the second
anniversary of the termination of the non-employee director's directorship
for any reason other than due to death or Disability (as defined in the 1997
Director Plan). Upon termination of a participant's employment with the
Company due to death or Disability, all of such participant's unexpired and
unexercised options shall be

<PAGE>

exercisable for the shorter of (a) their remaining term or (b) 90 days
following either (i) in the case of a participant's Disability, the date the
participant ceases to be a non-employee director or (ii) in the case of a
participant's death, the date of the appointment of a Representative (as
defined in the 1997 Director Plan) or such other period as the Option
Committee may determine. Except as provided in any option agreement, options
may only be transferred under the laws of descent and distribution or if such
transfer is permitted by Rule 16b-3 without liability under applicable law
and is consistent with the use of Commission Form S-8. Otherwise, options
shall be exercisable only by the director during such director's lifetime.

The option exercise price is payable by the director (i) in cash, (ii) in
shares of Class A Common Stock having a fair market value equal to the exercise
price, (iii) by delivery of a note or other evidence of indebtedness, (iv) by
authorizing the Company to retain shares of Common Stock having a fair market
value equal to the exercise price, (v) by "cashless exercise" as permitted under
the Federal Reserve Board's Regulation T, (vi) by certifying ownership of shares
of Class A Common Stock to the satisfaction of the Option Committee for later
delivery to the Company as specified by the Option Committee, or (vii) by any
combination of the foregoing.

In the event of a stock dividend, stock split, recapitalization, sale of
substantially all of the assets of the Company, reorganization or similar
event, the Option Committee will adjust the aggregate number of shares of
Class A Common Stock subject to the 1997 Director Plan, the number of shares
available for awards and subject to outstanding awards and the exercise price
per share, and other terms of outstanding awards.

The Board of Directors or the Option Committee may amend the 1997 Director
Plan, subject to stockholder approval if required by applicable law. No
amendment may impair the rights of a holder of an outstanding option without
the consent of such holder, nor may an amendment be made in any manner which
fails to comply with Rule 16b-3(c)(2)(ii) under the Exchange Act. In
addition, any amendment by the Option Committee is subject to approval by the
Board of Directors.

DISCUSSION OF FEDERAL INCOME TAX CONSEQUENCES
The following summary of tax consequences with respect to options under
the 1997 Director Plan is not comprehensive and is based upon laws and
regulations currently in effect. Such laws and regulations are subject to
change.

A director granted an option under the 1997 Director Plan does not
recognize taxable income upon grant, and the Company is not entitled to a
deduction for Federal income tax purposes upon such grant. Upon exercise of
an option, participants generally will be taxed at ordinary income tax rates
on the difference between the exercise price of the option and the fair
market value of the Class A Common Stock issued thereunder. In determining
the amount of the difference, the fair market value will be determined on the
date of exercise. The Company will receive a corresponding deduction for the
amount of income recognized by a participant upon exercise of an option. Any
gain or loss realized upon the subsequent sale of the Class A Common Stock
issued upon exercise of the option (measured by the difference between the
fair market value, determined or utilized by the optionee as described above,
and the sale price) will be taxed at either long-term or short-term capital
gain (or loss) rates, depending on the selling stockholder's holding period.
Such subsequent sale would have no tax consequences for the Company.

<PAGE>

PROPOSAL 5

RATIFICATION OF APPOINTMENT OF AUDITORS

The Company's Board of Directors has appointed KPMG Peat Marwick LLP,
independent certified public accountants, as auditors of the Company's financial
statements for the fiscal year ending December 31, 1997. KPMG Peat Marwick LLP
has acted as auditors for the Company since July 1991.

The Board has determined to afford stockholders the opportunity to express
their opinions on the matter of auditors for the Company, and, accordingly, is
submitting to the stockholders at the Annual Meeting a proposal to ratify the
Board's appointment of KPMG Peat Marwick LLP. If this proposal does not receive
the affirmative vote of a majority of the votes cast affirmatively or negatively
at the Annual Meeting, in person or by proxy, the Board of Directors will
interpret this as an instruction to seek other auditors. The Board of Directors
recommends that the stockholders vote to ratify the appointment of KPMG Peat
Marwick LLP as auditors for the fiscal year ending December 31, 1997.

It is expected that representatives of KPMG Peat Marwick LLP will be present
at the Annual Meeting and available to respond to questions. Such
representatives will be given an opportunity to make a statement if they desire
to do so.

OTHER MATTERS

SOLICITATION -- The cost of this proxy solicitation will be borne by the
Company. The Company will also request banks, brokers, fiduciaries, custodians,
nominees and certain other record holders to send proxies, proxy statements and
other materials to their principals at the Company's expense. Such banks,
brokers, fiduciaries, custodians, nominees and other record holders will be
reimbursed by the Company for their reasonable out-of-pocket expenses of
solicitation. The Company does not anticipate that costs and expenses incurred
in connection with this proxy solicitation will exceed those normally expended
for a proxy solicitation for an election of directors in the absence of a
contest.

PROPOSALS OF STOCKHOLDERS -- To be considered at the 1998 Annual Meeting,
stockholder proposals must be received by the Secretary of the Company not less
than 120 days nor more than 150 days prior to April 28, 1998.

OTHER BUSINESS -- The Board of Directors is not aware of any matters to be
presented at the Annual Meeting other than those enumerated in the Company's
Notice of Annual Meeting of Stockholders enclosed herewith. If any other matters
are properly brought before the meeting, however, it is intended that the
persons named in the proxy will vote as directed by the Board of Directors.

ANNUAL REPORT TO STOCKHOLDERS -- The Company's Annual Report to Stockholders,
together with the Annual Report on Form 10-K for the fiscal year ended December
31, 1996, as filed with the Securities and Exchange Commission, containing
financial and other information pertaining to the Company, is being furnished to
stockholders simultaneously with this Proxy Statement.

ANNUAL REPORT ON FORM 10-K -- The Company will furnish without charge a copy
of the Company's Annual Report on Form 10-K for its fiscal year ended December
31, 1996, as filed with the Securities and Exchange Commission, upon the written
request of any person who is a stockholder as of the record date. Requests for
such materials should be directed to Zebra Technologies Corporation, 333
Corporate Woods Parkway, Vernon Hills, Illinois 60061, Attention: Charles R.
Whitchurch.

By Order of the Board of Directors

Gerhard Cless
SECRETARY

<PAGE>

ZEBRA TECHNOLOGIES CORPORATION
333 CORPORATE WOODS PARKWAY, VERNON HILLS, ILLINOIS 60061
PROXY FOR THE ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 20, 1997
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS

The undersigned stockholder(s) hereby appoints Edward L. Kaplan and
Gerhard Cless, and each of them, with power of substitution, as attorneys and
proxies for and in the name and place of the undersigned, and hereby
authorizes them to represent and to vote all of the shares of Class A Common
Stock and Class B Common Stock of Zebra Technologies Corporation held of
record as of March 21, 1997 which the undersigned is entitled to vote at the
Annual Meeting of Stockholders of Zebra Technologies Corporation to be held
on May 20, 1997 at the Harris Trust and Savings Bank, 111 West Monroe Street,
Chicago, Illinois 60690, at 10:30 a.m. local time, and at any adjournment
thereof.

(continued, and to be signed, on reverse side)

<PAGE>

ZEBRA TECHNOLOGIES CORPORATION
PLEASE MARK VOTE IN OVAL IN THE FOLLOWING MANNER USING DARK INK ONLY / /

For ALL Withhold For ALL nominees
nominees authority except as marked
1. ELECTION OF DIRECTORS
Gerhard Cless, Edward Kaplan, / / / / / /
Christopher Knowles, David Riley
and Michael Smith

(Instructions: To withhold authority to
vote for any individual nominee, strike
a line through the nominee's name above)

For Against Abstain
2. PROPOSAL TO INCREASE AUTHORIZED
SHARES OF THE COMPANY'S CLASS A / / / / / /
COMMON STOCK FROM 35,000,000 SHARES
TO 50,000,000 SHARES.

For Against Abstain
3. PROPOSAL TO APPROVE THE ADOPTION OF
THE ZEBRA TECHNOLOGIES CORPORATION / / / / / /
1997 STOCK OPTION PLAN.

For Against Abstain
4. PROPOSAL TO APPROVE THE ADOPTION
OF THE ZEBRA TECHNOLOGIES / / / / / /
CORPORATION 1997 NON-EMPLOYEE DIRECTORS'
STOCK OPTION PLAN.

For Against Abstain
5. PROPOSAL TO RATIFY THE APPOINTMENT
OF KPMG PEAT MARWICK LLP AS THE / / / / / /
INDEPENDENT PUBLIC ACCOUNTANTS
OF THE COMPANY.

6. In their discretion, the Proxies are authorized to vote upon such other
matters as may properly come before the meeting.

Please sign exactly as the name appears on your stock certificate. When
shares are held by joint tenants, both should sign. When signing as attorney,
executor, administrator, trustee or guardian, please give title as such. When
signing as a corporation, please sign in full corporate name by President or
other authorized officer. When signing as a partnership, please sign in
partnership name by an authorized person.

PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.

Signature ______________________________________DATE: __________________, 1997

Signature (if held jointly) __________________________________________________

THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE ABOVE SIGNED STOCKHOLDER.

IF NO DIRECTION IS MADE, THE PROXY WILL BE VOTED FOR ALL NOMINEES LISTED IN
PROPOSAL 1 AND FOR PROPOSALS 2 THROUGH 5.