<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>
ZEBRA TECHNOLOGIES CORPORATION
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 5, 1998
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 Tuesday, May 5, 1998,
at Harris Trust and Savings Bank, 111 West Monroe Street, Chicago, Illinois,
for the following purposes:
1) To elect five directors;
2) 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, 1998; and
3) 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 6, 1998 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 3, 1998
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 Tuesday, May 5, 1998, 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 3, 1998.
VOTING SECURITIES; PROXIES; REQUIRED VOTE
VOTING SECURITIES -- The Board of Directors has fixed the close of
business on March 6, 1998, 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 19,421,019 shares of Class A Common Stock, par value
$.01 per share (the "Class A Common Stock"), and 4,890,609 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 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, 1998. 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
proposal to ratify the appointment of KPMG Peat Marwick LLP, abstentions and
broker non-votes will have the same effect as votes against such proposal.
Neither abstentions nor broker non-votes will have any effect on the voting
on the proposal to elect directors.
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 and
(ii) 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."
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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 20, 1997. 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 1999
annual meeting of the Company's stockholders or until their successors are
duly elected and qualified.
<TABLE>
<CAPTION>
SERVED AS
DIRECTOR
NAME AGE POSITION WITH COMPANY SINCE
- - -------------------------- ----- ------------------------------------------------- ----------
<S> <C> <C> <C>
Gerhard Cless 58 Executive Vice President, Secretary and Director 1969
Edward L. Kaplan 55 Chief Executive Officer, Chairman and Director 1969
Christopher G. Knowles (1) 55 Director 1991
David P. Riley 51 Director 1991
Michael A. Smith (1) 43 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. He is a member of the Board of Directors of Insurance Auto Auctions,
Inc. (since June 1994) and of Metal Management, Inc. (since November 1997).
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
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distribution with several of its 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 Managing Director and co-head of the Mergers & Acquisitions Department
of BancAmerica Robertson and previously was co-founder head of the investment
banking group BA Partners and its predecessor entities since 1989. Previous
positions include 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 was 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 Director 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 reported 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, 1997, 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 1997.
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 1997. The Board of Directors does
not have a compensation or nominating committee.
4
<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."
<TABLE>
<CAPTION>
NAME AGE POSITION
- - -------------------------- ----- ---------------------------------------------
<S> <C> <C>
Jack A. LeVan 43 Senior Vice President, Business Development
Thomas C. Beusch 45 Vice President, Sales and International
John H. Kindsvater, Jr. 56 Vice President, Marketing
Clive P. Hohberger 55 Vice President, Technology Development
James A. Goffee, Jr. 47 Vice President, Manufacturing
Charles R. Whitchurch 51 Chief Financial Officer and Treasurer
</TABLE>
JACK A. LEVAN is Senior Vice President of Business Development. He joined
the Company in January 1995 as Senior Vice President of Marketing. From 1993
until joining the Company, Mr. LeVan was President of the Carolina Enterprise
Association. From 1989 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. joined the Company in December 1980 as Director of
Sales. Subsequently he was elected Vice President and in April 1991 became
Vice President of Marketing and Sales. In May 1995 he became Vice President
of Corporate Development and during the next year closed two acquisitions of
software companies. In May 1996 he was appointed President of Zebra
Technologies VTI, Inc. In August 1997 he resumed marketing responsibilities
and became Vice President of Marketing. Prior to joining the Company, Mr.
Kindsvater held management posts 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 served two terms on the Board of
Directors of Automatic Identification Manufacturers (AIM), the industry's
trade association as well as one term on the Board of Automatic
Identification Manufacturers International (AIMI).
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 positions with
several firms including Weber Marking Systems, Abbott Laboratories, The
Brookhaven National Laboratory, the Montreal Neurological Institute and
Bunker-Ramo Corporation. Dr. Hohberger received his BS and MS from Case
Institute of Technology in Physics and Engineering, respectively, a PhD from
Case
5
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Western Reserve University in Computer Engineering and an MBA from the Lake
Forest Graduate School of Management.
JAMES A. GOFFEE, JR. joined Zebra Technologies in August, 1985 as Manager
of Quality Assurance/Standard Products Engineering. He has held various
management positions in Manufacturing since 1987, serving as Director of
Manufacturing from 1991 until his promotion to Vice President in 1996. Mr.
Goffee previously held positions in quality management and project management
at Corcom Inc., Firex, Victor Business Products, and N.C.R. Mr. Goffee holds
a degree in B.A.A.B.S. from National Louis University and completed the
AEA/Stanford Executive Institute Program for Management of Technology Based
Companies in 1996.
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 earned a BA in Economics (Phi Betas Kappa) from Beloit College in
1968 and an MBA from Stanford University in 1973.
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 more 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, 1997 all Section 16(a) filing
requirements applicable to its officers, directors and 10% beneficial owners
were complied with by such persons.
Mr. Beusch inadvertently failed to timely file a Form 4 with respect to
the fiscal year ended December 31, 1997 by the date prescribed under Section
16(a). Mr. Goffee inadvertently failed to timely file a Form 3 upon becoming
a reporting person and a Form 5 with respect to the fiscal year ended
December 31, 1996. All such reports have since been filed. Mr. Clements, a
former executive of the Company, inadvertently failed to file a Form 5 with
respect to the fiscal year ended December 31, 1996.
6
<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, 1997, and the two prior fiscal years, for (i)
the chief executive officer and (ii) the four other executive officers of the
Company who received the highest compensation (combined salary and bonus) for
fiscal 1997 (collectively, the "Named Officers").
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
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 1997 $309,355 $139,210 -- $10,055(2)
Chief Executive Officer 1996 281,731 64,347 -- 17,972
and Chairman 1995 256,289 159,893 -- 15,992
Thomas C. Beusch 1997 $156,970 $ 43,781 -- $35,700(3)
Vice President, Sales and 1996 148,246 10,507 -- 30,262
International 1995 140,000 48,500 -- 31,564
Jeffrey K. Clements(4) 1997 $194,376 $ 51,833 -- $10,055(5)
Executive Vice President 1996 194,376 35,668 -- 12,164
1995 175,503 87,497 --
Jack A. LeVan 1997 $168,940 $ 45,614 -- $10,055(6)
Senior Vice President, 1996 141,617 33,361 -- 9,875
Business Development 1995 121,735 -- -- 10,841
Charles R. Whitchurch 1997 $169,028 $ 46,637 -- $10,055(7)
Chief Financial Officer and 1996 144,463 23,462 -- 10,628
Treasurer 1995 131,405 53,940 -- 9,249
</TABLE>
___________________
(1) None of the Named Officers had any restricted stock holdings as of
December 31, 1997.
(2) Includes 401(k) contributions of $4,750, and profit sharing plan
payments of $5,305.
(3) Includes commissions of $25,645, 401(k) contributions of $4,750, and
profit sharing plan payments of $5,305.
(4) Jeffrey K. Clements resigned from the Company on January 8, 1998.
(5) Includes 401(k) contributions of $4,750, and profit sharing plan
payments of $5,305.
(6) Includes 401(k) contributions of $4,750, and profit sharing plan
payments of $5,305.
(7) Includes 401(k) contributions of $4,750, and profit sharing plan
payments of $5,305.
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AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION
VALUES -- The following table provides information on option exercises by the
Named Officers in fiscal 1997 and on the Named Officers' unexercised options
at December 31, 1997.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING VALUE OF UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS AT FISCAL OPTIONS AT FISCAL
YEAR-END (#) YEAR-END($)(1)
----------------------- ---------------------
SHARES ACQUIRED ON VALUE EXERCISABLE/ EXERCISABLE/
NAME EXERCISE(#) REALIZED($) UNEXERCISABLE UNEXERCISABLE
- - ------------------------------- --------------------- -------------- ----------------------- ---------------------
<S> <C> <C> <C> <C>
Edward Kaplan -- -- -- --
Thomas C. Beusch 3,000 42,375 7,500/24,500 94,688/198,688
Jeffrey K. Clements (2) 6,500 71,500 5,500/18,000 55,750/134,875
John H. Kindsvater, Jr. -- -- -- /25,000 -- /131,250
Charles R. Whitchurch -- -- 4,500/30,000 78,188/280,000
</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 31, 1997 of $29.75.
(2) Jeffrey K. Clements resigned from the Company on January 8, 1998.
OPTION GRANTS IN LAST FISCAL YEAR -- The following table provides
information on grants of stock options to the Named Officers in fiscal 1997.
No stock appreciation rights were granted to the Named Officers' during 1997.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
NUMBER OF PERCENT OF VALUE AT ASSUMED ANNUAL
SECURITIES TOTAL RATE OF STOCK PRICE
UNDERLYING OPTIONS EXERCISE APPRECIATION FOR OPTION
OPTIONS GRANTED TO OR BASE TERM($) (3)
GRANTED (#) EMPLOYEES PRICE EXPIRATION ----------------------
NAME (1) (%)(2) ($/SH) DATE 5% 10%
- - ----------------------- ------------- ------------ ---------- ----------- --------- ----------
<S> <C> <C> <C> <C> <C> <C>
Edward Kaplan -- -- -- -- -- --
Thomas C. Beusch 15,000 5.15% 24.50 2/11/07 231,119 585,700
Jeffrey K. Clements (4) -- -- -- -- -- --
John H. Kindsvater, Jr. 25,000 8.58% 24.50 2/11/07 385,198 976,167
Charles R. Whitchurch 25,000 8.58% 24.50 2/11/07 385,198 976,167
</TABLE>
_______________________
(1) Each of these options was granted pursuant to either the Zebra
Technologies 1997 Stock Option Plan or the Zebra Technologies 1991 Stock
Option Plan and is subject to the terms of such plan. All options were
granted at an exercise price equal to the fair market value of the
Company's common stock on the date of grant.
8
<PAGE>
(2) Does not include the grant of option to purchase 45,000 shares of common
stock to non-employee Directors under the 1997 Director Plan.
(3) In accordance with the rules of the Security and Exchange Commission
("Commission"), shown are hypothetical gains or "option spreads" that
would exist for the respective options. These gains are based on
assumed rates of annual compounded stock price appreciation of 5% and
10% from the date the option was granted over the full option term.
The 5% and 10% assumed rates of appreciation are mandated by the rules
of the Commission and do not represent the Company's estimate or
projection for future increases in the price of its common stock.
(4) Jeffrey K. Clements resigned from the Company on January 8, 1998.
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 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 $99,328 in 1997 and will increase to $106,272 from April 1, 1998 through
August 31, 1999, $115,355 from September 1, 1999 through March 31, 2003, and
$127,570 from April 1, 2003 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.
9
<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, 1997, 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 Directors for its
consideration a proposal for his own compensation package, which was reviewed
and approved by the Board.
COMPENSATION ELEMENTS -- For 1997, 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 the Named Officers
other than himself, 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 1997 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 1997 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 1997 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 1997.
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 1997. 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, on occasion, awards 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.
Option grants to Messrs. Beusch, Kindsvater, and Whitchurch in 1997 were
granted under the provisions of the Company's stock option grant policy. The
size of the individual option grant is dependant upon individual performance,
job function, and competitive market conditions. All option grants are
approved by the Company's Board of Directors.
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
10
<PAGE>
the Named Officers in excess of $1,000,000 cannot be deducted by the Company
for Federal income tax 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, 1997. 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.
11
<PAGE>
PERFORMANCE GRAPH
The graph set forth below compares the cumulative total stockholder return
on the Class A Common Stock of the Company since December 31, 1992 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 $12.000 per share (post-split) on December 31, 1992 and in each
index on such date, and the reinvestment of all dividends, if any).
COMPARISON OF CUMULATIVE RETURNS SINCE IPO
<TABLE>
<CAPTION>
DECEMBER 31,
----------------------------------------------------------------------------
1992 1993 1994 1995 1996 1997
- - -------------------- ---------- ---------- ---------- -------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Zebra Technologies
Corporation $100.00 $235.94 $162.76 $283.33 $194.79 $247.92
MG Group Index 100.00 144.08 159.92 220.41 302.01 324.09
Nasdaq Market Index 100.00 119.95 125.94 163.35 202.99 248.30
</TABLE>
12
<PAGE>
SECURITY OWNERSHIP OF MANAGEMENT AND
CERTAIN BENEFICIAL OWNERS
The following table sets forth, as of March 6, 1998, 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
VOTING
NAME AND ADDRESS NUMBER % OF CLASS NUMBER % OF CLASS POWER(1)
- - -------------------------- ------------- ------------- ----------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Edward L. Kaplan(2) -- -- 1,409,737(3) 28.8% 20.6%
Carol K. Kaplan(2) -- -- 290,448(4) 5.9% 4.3%
Gerhard Cless(2) 140,000(5) * 2,368,312(6) 48.4% 34.7%
Ruth I. Cless(2) -- (7) * 783,804(8) 16.0% 11.5%
Christopher G. Knowles 28,000(9) * -- -- *
David Riley 18,000(10) * -- -- *
Michael A. Smith 26,000(9) * -- -- *
Thomas C. Beusch 15,614(11) * -- -- *
Jeffrey K. Clements 6,206(12) * -- -- *
John H. Kindsvater, Jr. 15,830(13) * -- -- *
Charles R. Whitchurch 21,413(14) * -- -- *
William Blair & Co., L.L.C. 1,935,664(15) 10.0% -- -- 2.8%
Jurika & Voyles, L.P. 1,688,287(16) 8.7% -- -- 2.5%
Fifth Third Bancorp 1,167,885(17) 6.0% -- -- 1.7%
All Executive Officers and
Directors as a
group (12 persons) 291,652(18) 1.5% 4,852,301 99.2% 71.3%
</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 6, 1998.
(2) The address of this stockholder is c/o Zebra Technologies Corporation,
333 Corporate Woods Parkway, Vernon Hills, Illinois 60061.
(3) Excludes 290,448 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 1,409,737 shares held of record or beneficially by Mr. Kaplan,
which may be deemed to be beneficially owned by Mrs. Kaplan.
(5) Includes 140,000 shares held by a foundation of which Mr. Cless is
director.
13
<PAGE>
(6) Excludes 783,804 shares held of record or beneficially by Mr. Cless'
wife, Ruth, , which may be deemed to be beneficially owned by Mr. Cless.
(7) Excludes 140,000 shares held of record or beneficially by Mr. Cless, which
may be deemed to be beneficially owned by Mrs. Cless.
(8) Excludes 2,368,312 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 Directors Plan and
6,000 of Class A Common Stock currently issuable upon exercise of
options granted pursuant to the 1997 Directors Plan.
(10) Includes 12,000 shares of Class A Common Stock currently issuable upon
exercise of options granted pursuant to the Outside Directors Plan and
6,000 of Class A Common Stock currently issuable upon exercise of
options granted pursuant to the 1997 Directors Plan.
(11) Includes 9,750 shares of Class A Common Stock currently issuable upon
exercise of outstanding options.
(12) Mr. Clements' employment with the Company ended on January 8, 1998. His
share ownership is reported as of December 31, 1997. Includes 5,500
shares of Class A Common Stock currently issuable as of such date upon
exercise of options.
(13) Includes 500 shares held of record or beneficially by Mr. Kindsvater's
son, which may be deemed to be beneficially owned by Mr. Kindsvater, and
also includes 3,750 shares of Class A Common Stock currently issuable
upon exercise of options.
(14) Includes 14,250 shares of Class A Common Stock issuable within 60 days
upon exercise of options.
(15) As reported on a Schedule 13G filed by William Blair & Co., L.L.C. on
February 17, 1998. According to such 13G, William Blair & Co., L.L.C.
has sole voting power with respect to 721,922 of these shares, and sole
dispositive power with respect to all 1,935,554 of these shares. The
address of this stockholder is 222 West Adams Street, Chicago, IL 60606.
(16) As reported on a Schedule 13G filed by Jurika & Voyles, L.P. on February
10, 1998. According to such 13G, Jurika & Voyles, L.P. have shared
voting power with respect to 1,532,297 of these shares, and shared
dispositive power with respect to 1,688,297 of the shares. Jurika &
Voyles, L.P. does not have sole voting of dispositive power with respect
to any share. The address of this stockholder is 1999 Harrison Street,
Suite 700, Oakland, CA 94612.
(17) As reported on a Schedule 13G filed by Fifth Third Bancorp on February
17, 1998. According to such 13G, banking subsidiaries of Fifth Third
Bancorp have sole voting power with respect to 1,139,685 of these
shares, shared voting power with respect to 24,400 of these shares, sole
dispositive power with respect to 1,139,685 of these shares and shared
dispositive power with respect to 28,200 of these shares. The address of
this stockholder is 38 Fountain Square Plaza, Cincinnati, Ohio 45263.
(18) Includes 115,600 shares of Class A Common Stock issuable within 60 days
upon exercise of options.
14
<PAGE>
PROPOSAL 2
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, 1998. 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 voting power of the Common
Stock 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,
1998.
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 1999 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 3, 1999.
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 for the fiscal year ended December 31, 1997, 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, 1997, 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
15
<PAGE>
PROXY ZEBRA TECHNOLOGIES CORPORATION PROXY
PROXY FOR THE ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 5, 1998
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 6,
1998 which the undersigned is entitled to vote at the Annual Meeting of
Stockholders of Zebra Technologies Corporation to be held on May 5, 1998 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 /X/
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 RATIFY THE APPOINTMENT OF KPMG PEAT / / / / / /
MARWICK LLP AS THE INDEPENDENT PUBLIC ACCOUNTANTS
OF THE COMPANY.
3. 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:___________________, 1998
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 PROPOSAL 2.
