<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the registrant /X/
Filed by a party other than the registrant / /
Check the appropriate box:
/ / Preliminary proxy statement
/X/ Definitive proxy statement
/ / Definitive additional materials
/ / Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
C. R. BARD, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
C. R. BARD, INC.
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of filing fee (Check the appropriate box):
/X/ $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2).
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transactions applies:
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:1
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
/ / 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 registrations statement number, or
the form or schedule and the date of its filing.
(1) Amount previously paid:
- --------------------------------------------------------------------------------
(2) Form, schedule or registration statement no.:
- --------------------------------------------------------------------------------
(3) Filing party:
- --------------------------------------------------------------------------------
(4) Date filed:
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1Set forth the amount on which the filing fee is calculated and state how it
was determined.
<PAGE> 2
[LOGO]
C. R. BARD, INC.
730 CENTRAL AVENUE
MURRAY HILL, NEW JERSEY 07974
March 10, 1994
Dear Shareholder:
Your Board of Directors joins me in extending a cordial invitation to
attend the 1994 Annual Meeting of Shareholders which will be held on Wednesday,
April 20, 1994 at the Somerset Hills Hotel, 200 Liberty Corner Road, Warren, New
Jersey 07059. The meeting will start promptly at 10:00 a.m.
We sincerely hope you will be able to attend and participate in the
meeting. We will report on the Company's progress and respond to questions you
may have about the Company's business. There will also be important items which
are required to be acted upon by shareholders.
Whether or not you plan to attend, it is important that your shares be
represented and voted at the meeting, and, therefore, we urge you to complete,
sign, date and return the enclosed proxy card in the envelope provided for this
purpose.
Sincerely yours,
/s/ William H. Longfield
WILLIAM H. LONGFIELD
President and Chief
Operating Officer
<PAGE> 3
C. R. BARD, INC.
------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
APRIL 20, 1994
------------------------
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of C. R.
Bard, Inc. will be held on Wednesday, April 20, 1994 at the Somerset Hills
Hotel, 200 Liberty Corner Road, Warren, New Jersey 07059 at 10:00 a.m. for the
following purposes:
1. To elect three Class I directors for a term of three years;
2. To approve the 1994 Executive Bonus Plan of C. R. Bard, Inc.;
3. To ratify the appointment of Arthur Andersen & Co. as independent
public accountants for the year 1994; and
4. To transact such other business as may properly come before the
meeting and any adjournments thereof.
Only shareholders of record at the close of business on February 28, 1994
are entitled to notice of and to vote at the meeting.
A copy of the Annual Report of C. R. Bard, Inc. for 1993 is enclosed with
this Notice, the attached Proxy Statement and accompanying proxy.
All shareholders are urged to attend the meeting in person or by proxy.
Shareholders who do not expect to attend the meeting are requested to complete,
sign and date the enclosed proxy and return it promptly in the self-addressed
envelope provided.
By order of the Board of Directors
RICHARD A. FLINK
Secretary
March 10, 1994
NO MATTER HOW MANY SHARES YOU OWNED
ON THE RECORD DATE, YOUR VOTE IS IMPORTANT.
PLEASE INDICATE YOUR VOTING INSTRUCTIONS ON THE ENCLOSED PROXY CARD, SIGN,
DATE AND RETURN IT IN THE ENVELOPE PROVIDED, WHICH IS ADDRESSED FOR YOUR
CONVENIENCE AND NEEDS NO POSTAGE IF MAILED IN THE UNITED STATES. IN ORDER TO
AVOID THE ADDITIONAL EXPENSE TO THE COMPANY OF FURTHER SOLICITATION, WE ASK YOUR
COOPERATION IN MAILING YOUR PROXY PROMPTLY.
<PAGE> 4
C. R. BARD, INC.
730 CENTRAL AVENUE
MURRAY HILL, NEW JERSEY 07974
------------------------
PROXY STATEMENT
------------------------
GENERAL
The accompanying proxy is solicited on behalf of the Board of Directors of
C. R. Bard, Inc. (the "Company") for use at the Annual Meeting of Shareholders
referred to in the foregoing notice and at any adjournment thereof. It is
expected that this Proxy Statement and the accompanying proxy will be mailed
commencing March 14, 1994 to each shareholder entitled to vote.
Shares represented by proxies, if such proxies are properly executed,
received in time and not revoked, will be voted in accordance with the
specifications thereon or, if no specifications are made, will be voted for the
election as directors of all nominees named herein, for Proposals No. 2 and 3
and in accordance with the discretion of the named attorneys and proxies on any
other business. Any proxy may be revoked at any time before it is exercised by
notice in writing delivered to the Secretary of the Company. Under New Jersey
law and the Company's By-Laws, the presence in person or by proxy of the holders
of a majority of the shares of Common Stock issued and outstanding and entitled
to vote at the Annual Meeting of Shareholders constitutes a quorum. Directors
are elected by a plurality of the votes cast at the Annual Meeting of
Shareholders. Adoption of Proposals No. 2 and 3 requires the affirmative vote of
a majority of the votes cast on the proposal. Votes cast at the Annual Meeting
of Shareholders will be tabulated by the Company's transfer agent. Votes
withheld for the election of directors have no impact on the election of
directors, except that votes withheld may result in another individual receiving
a higher number of votes. Abstentions and broker non-votes will not be counted
in tabulating the number of votes cast on Proposals No. 2 and 3.
On February 28, 1994, the record date for the determination of shareholders
entitled to notice of and to vote at the meeting, the outstanding voting
securities of the Company consisted of 52,156,897 shares of Common Stock. Each
share is entitled to one vote.
PROPOSAL NO. 1 -- ELECTION OF DIRECTORS
There are currently nine members of the Board of Directors, divided into
three classes. Class I currently consists of three directors whose terms expire
in 1994. Class II consists of three directors whose terms expire in 1995. Class
III consists of three directors whose terms expire in 1996. In each case,
directors serve for a three-year term and until their successors are elected and
qualified.
Three directors are to be elected at the Annual Meeting of Shareholders.
The three current members of the Board of Directors constituting Class I
directors are nominated for re-election.
Votes pursuant to the accompanying proxy will be cast, unless otherwise
indicated on the proxy, for the re-election of the three nominees named below.
In the event that any such nominee shall be unable to serve as a director, it is
intended that the proxy solicited hereby will be voted for such other person or
persons as may be nominated by management. Management has no reason to believe
that the nominees will be unable to serve.
<PAGE> 5
Set forth below are the names, principal occupations and ages of the three
nominees for re-election as directors and the current directors with unexpired
terms, as well as certain information relating to other positions held by them
with the Company and other companies. Except as otherwise indicated, the
information set forth below as to principal occupation is for at least the last
five years. There are no family relationships among directors and nominees.
NOMINEES FOR RE-ELECTION AS CLASS I DIRECTORS
<TABLE>
<S> <C>
William T. Butler, M.D. .. President and Chief Executive Officer of Baylor College of Medicine
since 1979; age 61. Dr. Butler has been a Director since 1988 and
is a member of the Compensation and Stock Option, Regulatory
Compliance and Policy, Procedures and Organization Committees. He
is Chairman of the Texas Higher Education Coordinating Board Health
Professions Education Advisory Committee. He is also a director of
Browning-Ferris Industries Inc., First City Bancorporation of
Texas, Inc. and Lyondell Petrochemical Company.
Raymond B. Carey, Jr. .... Retired Chairman and Chief Executive Officer of ADT, Inc.
(electronic protection systems); age 67. Mr. Carey has been a
Director since 1991 and is a member of the Audit, Regulatory
Compliance and Finance Committees. He is also a director of Thomas
& Betts Corporation and the Kroger Co.
Daniel A. Cronin, Jr. .... President, Northbridge Management Company (investment management);
General Partner, Ampersand Associates (venture capital fund); age
65. Mr. Cronin had been a Director from 1968 to 1976 when he
resigned to join the staff of the United States Secretary of
Commerce, a position he held until 1977. He was re-elected a
Director in 1979 and is a member of the Audit, Finance and
Executive Committees. He is also a director of Altron Corporation.
</TABLE>
CLASS II DIRECTORS
<TABLE>
<S> <C>
Joseph F. Abely, Jr. ..... Retired Chairman and Chief Executive Officer of Sea-Land
Corporation (international intermodal freight transportation and
related trade services), having been, prior thereto, Vice Chairman
of the Board and a director of RJR Nabisco, Inc. (international
consumer products); age 65. Mr. Abely has been a Director since
December 1985 and is a member of the Audit and Finance Committees.
He is also a director of Perkin-Elmer Corporation, Burlington
Industries, Inc. and Marine Spill Response Corporation.
Robert P. Luciano......... Chairman and Chief Executive Officer of Schering-Plough Corporation
(pharmaceuticals and consumer products) since January 1986; age 60.
Mr. Luciano has been a Director since 1981 and is a member of the
Executive, Compensation and Stock Option and Policy, Procedures and
Organization Committees. He is also a director of Allied Signal
Inc., Borden, Inc. and Merrill Lynch & Co., Inc.
Robert H. McCaffrey....... Retired Chairman of the Board of Directors since February 1991,
having been Chairman of the Board of Directors from January 1989 to
February 1991 and, prior thereto, Chairman of the Board of
Directors and Chief Executive Officer since 1976; age 67. Mr.
McCaffrey has been a Director since 1976 and is a member of the
Executive and Policy, Procedures and Organization Committees. He is
also a director of Thomas & Betts Corporation and KLM Communi-
cations, Inc.
</TABLE>
2
<PAGE> 6
CLASS III DIRECTORS
<TABLE>
<S> <C>
Regina E. Herzlinger.... Nancy R. McPherson Professor of Business Administration, Harvard
Business School since 1971; age 50. Professor Herzlinger has been a
Director since 1991 and is a member of the Regulatory Compliance
and Compensation and Stock Option Committees. She is also a
director of Deere & Company, Manor Care, Inc., Salick Health Care,
Inc. and Schering-Plough Corporation, and is a member of the
Visiting Committee on Sponsored Research of the Massachusetts
Institute of Technology.
William H. Longfield.... President and Chief Operating Officer since September 1991, having
been Executive Vice President and Chief Operating Officer from
February 1989 to September 1991. In addition, in October 1993, the
Board of Directors delegated to Mr. Longfield the additional
responsibilities of Chairman and Chief Executive Officer. Prior to
February 1989 he was Chief Executive Officer of Cambridge Group,
Inc. (nursing home and long-term care facilities); age 55. Mr.
Longfield has been a Director since 1990 and is a member of the
Executive and Policy, Procedures and Organization Committees. He is
also a director of Manor Care, Inc.
Ralph H. O'Brien........ Chairman of Amerinex Artificial Intelligence, Inc. (computer
software) since June 1988, having been Chairman of Amerinex
Corporation (venture capital) from January 1988 to June 1988 and
President and Chief Executive Officer from 1985 to June 1988; age
64. Mr. O'Brien has been a Director since 1980 and is a member of
the Finance and Compensation and Stock Option Committees. He is
also a director of Midlantic Corp. and the Midlantic National Bank.
</TABLE>
SECURITIES OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
Brinson Holdings, Inc., together with its wholly-owned subsidiary, Brinson
Partners, Inc., a registered investment advisor, and Brinson Partners, Inc.'s
wholly-owned subsidiary, Brinson Trust Company, a bank, each located at 209
South LaSalle, Chicago, Illinois, have reported that as of December 31, 1993,
Brinson Partners, Inc. held sole voting power and sole dispositive power over
2,537,850 shares of Common Stock of the Company, or 4.9% of the outstanding
shares, and Brinson Trust Company held sole voting power and sole dispositive
power over 752,100 shares of Common Stock of the Company, or 1.4% of the
outstanding shares.
As of the record date, management knows of no other person who owned
beneficially more than 5% of the Company's outstanding stock.
SECURITIES OWNERSHIP OF MANAGEMENT
The table below contains information as of January 7, 1994 with respect to
the beneficial ownership of Common Stock of the Company by each director of the
Company, the person delegated the responsibility of the Company's Chief
Executive Officer, the Company's other four most highly compensated executive
officers and the Company's former Chief Executive Officer (collectively, the
"Named Executive Officers") and all directors and executive officers as a group
(including the Named Executive Officers). No director or executive officer owns
more than 1% of the outstanding stock. All directors and executive officers as a
group (22 persons) own beneficially 1.7% of the outstanding stock. Unless
otherwise noted in the footnotes following the
3
<PAGE> 7
table, the persons as to whom the information is given had sole voting and
investment power over the shares of Common Stock shown as beneficially owned.
<TABLE>
<CAPTION>
SHARES OF COMMON STOCK
BENEFICIALLY OWNED
---------------------------------
RIGHT TO
ACQUIRE
BEFORE
HELD AS OF MARCH 8, 1994
NAME JANUARY 7, 1994 UNDER OPTIONS
--------------------------------------------------------- --------------- -------------
<S> <C> <C>
Joseph F. Abely, Jr...................................... 3,200 -0-
William C. Bopp.......................................... 5,443 21,675
William T. Butler, M.D................................... 5,500 -0-
Raymond B. Carey, Jr..................................... 1,600 -0-
Daniel A. Cronin, Jr..................................... 15,800 -0-
Regina E. Herzlinger..................................... 1,100 -0-
William H. Longfield..................................... 18,950 62,950
Robert P. Luciano........................................ 5,200 -0-
Robert H. McCaffrey(1)................................... 424,518 34,900
Ralph H. O'Brien......................................... 7,200 -0-
Benson F. Smith.......................................... 12,006 39,601
Richard J. Thomas........................................ 6,717 16,475
William T. Tumber........................................ 11,041 18,786
George T. Maloney(2)..................................... 263,681 135,585
All Directors and Executive Officers as a group (22
persons)............................................... 911,257 489,615
</TABLE>
- ---------------
(1) Includes 10,279 shares owned by his wife as to which he disclaims beneficial
ownership. Includes 35,538 shares held by trusts for his children. Includes
9,240 shares owned by a foundation of which he is President. Includes
146,724 shares owned by two foundations of which he is a co-trustee and as
to all of which investment or voting power is shared.
(2) Includes 20,000 shares owned by his wife as to which he disclaims beneficial
ownership. Includes 15,000 shares held by him as custodian for their minor
children. Includes 155,964 shares owned by three foundations of which he is
co-trustee and as to all of which investment or voting power is shared.
BOARD MEETINGS AND COMMITTEES
The Board of Directors met eleven times in 1993. The Company's current
directors attended as a group an average of 96% of the aggregate of (i) the
total number of meetings of the Board of Directors and (ii) the total number of
meetings held by all committees of the Board on which they served.
The Board of Directors has several standing committees, including, among
others, an Audit Committee, a Compensation and Stock Option Committee and a
Policy, Procedures and Organization Committee.
The Audit Committee, currently composed of Directors Abely, Carey and
Cronin, met five times during 1993. The principal functions of the Audit
Committee are to (i) make recommendations to the full Board concerning the
appointment of independent auditors, (ii) review the scope of the audit and
related fees, (iii) review the Company's accounting principles, policies and
reporting practices with the independent and internal auditors and management,
(iv) discuss with the independent auditors the results of their audit and
determine what action, if any, is required with respect to the Company's
internal controls, (v) meet separately with the independent auditors as well as
separate meetings with the internal auditors and (vi) consider other audit and
nonaudit matters from time to time as requested by the full Board.
The Compensation and Stock Option Committee, currently composed of
Directors Butler, Herzlinger, Luciano and O'Brien, reviews and reports to the
Board of Directors on all matters involving compensation of employees and
management and administers the Company's 1993 Long Term Incentive Plan. During
1993 there were five meetings of the Compensation and Stock Option Committee.
The Policy, Procedures and Organization Committee, currently composed of
Directors Butler, Longfield, Luciano and McCaffrey, advises and makes
recommendations to the Board of Directors on all matters
4
<PAGE> 8
concerning Board procedures and directorship practices. The Committee also
reviews and makes recommendations to the Board of Directors concerning the
qualifications and selection of candidates as nominees for election as directors
and will consider nominees recommended by shareholders. Such recommendations
should be submitted to the Secretary of the Company. The Policy, Procedures and
Organization Committee met three times during 1993.
EXECUTIVE COMPENSATION
COMPENSATION AND STOCK OPTION COMMITTEE (THE "COMPENSATION COMMITTEE") REPORT
The Company's executive compensation program is based on pay for
performance. Performance is the critical factor in all compensation decisions.
The Company relies on established compensation consultants to analyze and
evaluate the total compensation paid to executives against that of competitive
companies. The components of total compensation are base salary, annual cash
bonus incentives and long-term incentives. In 1993 the Compensation Committee
commissioned a review of all of the Company's compensation programs by an
outside consultant. It is the Company's philosophy to have a strong link between
pay and performance and several changes were made to strengthen that tie in 1993
with the creation of a more formalized management by objectives program, as
described below, for both base salary and long-term incentive programs. The
Compensation Committee believes that these program changes will enhance the
Company's ability to attract, motivate and retain key employees and
simultaneously result in a stronger link to shareholder return.
Base Salaries
Base salaries are initially determined by evaluating the responsibility of
the position held and by reference to the competitive marketplace for executive
talent. In order to attract and retain high caliber executives, base salary is
targeted slightly above median but below the high end for competitors in medical
device manufacturing companies. For purposes of establishing these levels, the
Company compares itself with a selected group of companies in the same industry
with sales and products similar to those of the Company. This group of companies
is larger than, and does not contain all the companies in, the peer group index
in the Comparison of Five Year Cumulative Total Return which follows, as the
Company believes that reference to the S&P medical product index provides the
most meaningful comparison for shareholder returns, while the larger group of
companies is more representative of the Company's competition for executive
talent.
In determining base salary increases as well as total compensation, the
Compensation Committee takes into account individual performance, inflation
rates and the salary levels prevailing at the selected group of companies
described above. Increases to base salaries are influenced by the performance of
the Company and the individual against established goals and objectives. Goals
and objectives vary by individual and include the attainment of targeted levels
of sales, net profits, earnings per share and return on shareholder's
investment, as well as personal goals such as the attainment of strategic
initiatives (i.e., expansion of globalization, acquisitions/divestitures). For
purposes of base salary increases, no particular weighting is assigned to any
goals.
In determining the base salaries of both Mr. Longfield and Mr. Maloney, the
committee weighed performance against goals more heavily than inflation factors
or analysis of the competitors' salaries. In October of 1993, upon the
resignation of George T. Maloney as Chairman and Chief Executive Officer, the
Board of Directors delegated to William H. Longfield the additional
responsibilities of Chairman and Chief Executive Officer and adjusted his base
salary accordingly.
The Compensation Committee considers the recommendation of the Chief
Executive Officer in approving the base salaries of Messrs. Smith, Tumber,
Thomas, Bopp and all other executives whose base salaries exceed $150,000
annually. Goals and objectives for these individuals are based on the targeted
levels described above for the Divisions or corporate staff functions for which
they are responsible and personal strategic and operational initiatives. In
determining base salary increases, no particular weight is assigned to any goal.
Performance is weighted more heavily than inflation and the results of
competitive salary data.
5
<PAGE> 9
In addition, the Compensation Committee approved a merit budget for base
salaries which is established for professional/managerial employees. The merit
budget is the amount of money set aside each year by the Company for increases
for these employees. The amount of the merit budget is determined based on an
analysis of several industry specific and general industry-wide surveys which
are conducted on an annual basis by consulting companies and trade associations.
Individuals receive a salary increase paid out of the merit budget based on a
formula which is designed to reward superior individual performance. The salary
for the President and Chief Operating Officer is not included in the merit pool.
Bonus Plan
Awards under the Company's bonus plan are determined by the degree to which
corporate and, in certain cases, group financial goals are attained, as well as
on the achievement of non-financial, individual goals.
Actual incentive compensation awards may be either more or less than
targeted amounts depending on actual results compared with performance measures
being used. Thus the Company's incentive plans forge a direct link between pay
and performance.
At the beginning of each year, the Board of Directors, for corporate
planning purposes and in consultation with the management of the Company,
approves certain financial targets for the Company including an earnings per
share target. The earnings per share target then becomes the critical financial
indicator used by the Compensation Committee in determining awards under the
Bonus Plan for Mr. Longfield and the other executives, other than Group Vice
Presidents whose bonuses are determined as described below.
An evaluation of each participant's performance against established
individual goals is reviewed. Individual goals are established to take account
of the executive's position within the Company and the individual's particular
strengths and opportunities for improvement. In determining individual goals,
the Compensation Committee looks at the individual's contributions in terms of
developing and implementing strategic initiatives.
For purposes of determining the bonus paid to Messrs. Longfield and Bopp,
financial and individual results for 1993 were used. The bonus plan rewards
executives based on operational results exclusive of any extraordinary items
that may occur during any fiscal year. Of the payments made, approximately 80%
were based on attainment of financial goals and 20% on attainment of individual
goals. For the 1993 bonus, 91% of the financial target was achieved.
In the case of the Company's other executive officers earning more than
$150,000 base salary, including Messrs. Smith, Tumber and Thomas, awards by the
Compensation Committee were based on the recommendation of Mr. Longfield, taking
into account achievement of the 1993 Corporate earnings per share target and
their respective group's financial performance. Group financial performance is
primarily based on achievement of operating income target. The payment of
bonuses is based on 50% Corporate financial goals and 50% group financial goals
for Messrs. Smith, Tumber and Thomas. These individuals achieved 98%, 93% and
69% of their aggregate goals, respectively.
Stock Options
Under the 1993 Long Term Incentive Plan, the Compensation Committee granted
in 1993 stock options to selected employees including certain of the Named
Executive Officers. The Plan provides that in the event of change of control of
the Company, all options shall be immediately exercisable. The Compensation
Committee may, in its discretion, grant limited stock appreciation rights that
may only be exercised in the event of a change of control of the Company.
Limited stock appreciation rights were granted in tandem with all options
granted to executive officers.
Stock options are combined with other long term incentives to target total
compensation for long term incentives at slightly above the median but below the
high end of the selected group of companies described above.
6
<PAGE> 10
The Named Executive Officers are granted options based on attainment of
goals and objectives as detailed under base salaries. As a result of the
compensation study commissioned by the Compensation Committee, it was determined
that the Company's long term incentive plans were not competitive with our
industry survey group. As a result, enhancements were made to the 1993 Long Term
Incentive Plan including a stronger link to attainment of objectives. Actual
awards may be more or less than target based on performance.
Grants of stock options are based on achievement of goals and objectives as
described above. In determining the amount of options granted to each individual
the Compensation Committee uses a multiple of base salary divided by the share
price on the date of grant.
The Company uses the Black-Scholes method to determine the potential value
of the stock option.
In determining the number of options granted, the Compensation Committee
does not consider the amount of options previously granted.
Restricted Stock Awards
The Compensation Committee awarded restricted stock which vests in
accordance with a schedule specified by the Compensation Committee under the
1993 Long Term Incentive Plan. Restricted stock is combined with other long term
incentives to target total compensation for long term incentives at slightly
above the median but below the high end of the selected group of companies
described above. Executive Officers may receive more or less than the target
based on performance. Awards are based on achievement of goals and objectives as
described under base salary.
The formula for restricted stock for each individual is a multiple of base
salary weighted for attainment of goals and objectives and divided by the share
price on the date of grant.
In 1993, the Compensation Committee awarded shares of restricted stock to
Messrs. Longfield, Smith, Tumber, Thomas and Bopp.
The Omnibus Budget Reconciliation Act of 1993 disallows, effective January
1, 1994, a federal income tax deduction for compensation, other than certain
performance-based compensation, in excess of $1 million annually paid by the
Company to any currently serving officer named in the Summary Compensation
Table. The Company has determined to qualify compensation payable under its
performance-based plans for deductibility under this provision. In this regard,
the Company is submitting its 1994 Executive Bonus Plan for shareholder approval
and has amended the restricted stock provisions of its 1993 Long Term Incentive
Plan to comply with the requirements for deductibility. The Company intends to
take such future action as is necessary to qualify its remaining
performance-based compensation for deductibility.
THE COMPENSATION AND STOCK OPTION COMMITTEE
Robert P. Luciano, Chairperson
William T. Butler, M.D.
Regina E. Herzlinger
Ralph H. O'Brien
7
<PAGE> 11
SUMMARY COMPENSATION TABLE
The table below sets forth information concerning compensation paid to the
Named Executive Officers during the last three fiscal years.
<TABLE>
<CAPTION>
LONG TERM COMPENSATION
-------------------------------
ANNUAL COMPENSATION AWARDS PAYOUTS
-------------------------------------- ---------------------- -------
OTHER RESTRICTED SECURITIES
ANNUAL STOCK UNDERLYING LTPIP ALL OTHER
NAME AND SALARY BONUS COMPENSATION AWARDS OPTIONS PAYOUTS COMPENSATION
PRINCIPAL POSITION YEAR ($) ($) ($)(1)(2) ($)(3) (#)(4) ($)(5) ($)(2)(6)
- ------------------------- ----- -------- -------- ------------ ---------- ---------- ------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
William H. Longfield..... 1993 442,278 250,000 14,742 162,908 39,400 40,131 121,533
President and COO 1992 390,000 257,400 13,650 -0- 19,600 40,076 85,861
1991 365,000 215,000 -0- 20,000 15,180
Benson F. Smith.......... 1993 243,237 146,000 8,640 63,130 15,300 9,555 25,561
Executive Vice 1992 221,000 125,800 4,250 -0- 10,000 9,659 15,312
President 1991 190,490 115,500 -0- 6,500 11,730
William T. Tumber........ 1993 225,000 75,500 7,020 59,118 14,400 8,820 76,532
Group Vice President 1992 212,000 109,100 3,900 -0- 9,400 8,916 69,945
1991 202,000 110,100 -0- 6,000 -0-
Richard J. Thomas........ 1993 225,000 47,500 5,670 59,118 14,400 15,435 15,626
Group Vice President 1992 204,500 127,200 5,250 -0- 9,400 15,603 14,248
1991 165,687 136,400 -0- 5,800 4,140
William C. Bopp.......... 1993 195,000 76,000 4,050 37,183 9,100 2,499 30,818
Senior Vice President 1992 180,000 102,000 850 -0- 8,400 2,526 16,330
and Chief Financial 1991 146,000 48,900 -0- 4,500 2,346
Officer
George T. Maloney........ 1993 568,183 -0- 93,906 -0- -0- 72,030 215,217
Former Chairman and 1992 530,000 381,600 73,200 -0- 30,800 72,814 182,176
CEO 1991 495,000 315,000 -0- 31,000 92,460
</TABLE>
- ---------------
(1) All of these amounts represent dividend equivalents paid under the Long Term
Performance Incentive Plan "LTPIP."
(2) No amounts are presented for 1991 in accordance with a transition rule
relating to executive compensation disclosure adopted by the Securities and
Exchange Commission.
(3) As of December 31, 1993: William H. Longfield held an aggregate of 6,090
shares of restricted stock with an aggregate value of $153,772.50; Benson F.
Smith held an aggregate of 2,360 shares of restricted stock with an
aggregate value of $59,590.00; William T. Tumber held an aggregate of 2,210
shares of restricted stock with an aggregate value of $55,802.50; Richard J.
Thomas held an aggregate of 2,210 shares of restricted stock with an
aggregate value of $55,802.50; William C. Bopp held an aggregate of 1,390
shares of restricted stock with an aggregate value of $35,097.50; and George
T. Maloney held no shares of restricted stock. Dividends are paid on all
shares of restricted stock.
(4) Grants consist of stock options with attached limited rights exercisable in
the event of a change of control.
(5) The dollar amounts for 1993, 1992 and 1991 were derived by multiplying the
number of vested performance units by $7.35, $7.43 and $6.90, respectively,
the book values of a share of the Common Stock of the Company at December
31, 1993, December 31, 1992 and December 31, 1991, respectively. These
payouts are not made until the employee retires or otherwise leaves
employment with the Company.
(6) As required by the rules of the Securities and Exchange Commission, the
amounts reflected in this column include the annual accruals to the
employees' accounts under the Supplemental Insurance/Retirement Plan. Under
this plan, the annual accruals are disproportionately higher in the later
years of an employee's participation in order to create an incentive to an
executive to continue employment with the Company until at least age 62 when
accruals cease. The Company believes that a more realistic reflection of the
accruals under the Supplemental Insurance/Retirement Plan is the actuarial
average, over the years of an executive's participation in the plan, of the
aggregate expected accruals under the plan. On this basis, the actuarial
average accrual amounts for Messrs. Longfield, Smith, Tumber, Thomas, Bopp
and Maloney would be $84,736, $18,282, $27,190, $14,540, $19,196 and
$61,910, respectively, in 1993, and $48,509, $11,434, $19,533, $8,835,
$10,382 and $49,449, respectively, in 1992, as opposed to the amounts shown
in the column.
8
<PAGE> 12
For William H. Longfield, the 1993 amount in the column represents Company
contributions of $8,648 under the Retirement Savings Plan, $110,060 accrued
under the Supplemental Insurance/Retirement Plan and $2,825 which, net of
tax, is reimbursement for insurance premiums paid under such latter plan;
the 1992 amount in the column represents Company contributions of $8,040
under the Retirement Savings Plan, $75,736 accrued under the Supplemental
Insurance/Retirement Plan and $2,085 which, net of tax, is reimbursement for
insurance premiums paid under such latter plan.
For Benson F. Smith, the 1993 amount in the column represents Company
contributions of $5,482 under the Retirement Savings Plan, $19,228 accrued
under the Supplemental Insurance/Retirement Plan and $851 which, net of tax,
is reimbursement for insurance premiums paid under such latter plan; the
1992 amount in the column represents Company contributions of $5,384 under
the Retirement Savings Plan, $9,341 accrued under the Supplemental
Insurance/Retirement Plan and $587 which, net of tax, is reimbursement for
insurance premiums paid under such latter plan.
For William T. Tumber, the 1993 amount in the column represents Company
contributions of $3,747 under the Retirement Savings Plan, $70,392 accrued
under the Supplemental Insurance/Retirement Plan and $2,393 which, net of
tax, is reimbursement for insurance premiums paid under such latter plan;
the 1992 amount in the column represents Company contributions of $3,629
under the Retirement Savings Plan, $64,584 accrued under the Supplemental
Insurance/Retirement Plan and $1,732 which, net of tax, is reimbursement for
insurance premiums paid under such latter plan.
For Richard J. Thomas, the 1993 amount in the column represents Company
contributions of $5,621 under the Retirement Savings Plan, $9,340 accrued
under the Supplemental Insurance/Retirement Plan and $665 which, net of tax,
is reimbursement for insurance premiums paid under such latter plan; the
1992 amount in the column represents Company contributions of $5,050 under
the Retirement Savings Plan, $8,732 accrued under the Supplemental
Insurance/Retirement Plan and $466 which, net of tax, is reimbursement for
insurance premiums paid under such latter plan.
For William C. Bopp, the 1993 amount in the column represents Company
contributions of $4,872 under the Retirement Savings Plan, $25,016 accrued
under the Supplemental Insurance/Retirement Plan and $930 which, net of tax,
is reimbursement for insurance premiums paid under such latter plan; the
1992 amount in the Column represents Company contributions of $4,325 under
the Retirement Savings Plan, $11,334 accrued under the Supplemental
Insurance/Retirement Plan and $671 which, net of tax, is reimbursement for
insurance premiums paid under such latter plan.
For George T. Maloney, the 1993 amount in the column represents Company
contributions of $8,963 under the Retirement Savings Plan, $199,934 accrued
under the Supplemental Insurance/Retirement Plan and $6,320 which, net of
tax, is reimbursement for insurance premiums paid under such latter plan;
the 1992 amount in the column represents Company contributions of $8,728
under the Retirement Savings Plan, $168,678 accrued under the Supplemental
Insurance/Retirement Plan and $4,770 which, net of tax, is reimbursement for
insurance premiums paid under such latter plan.
CERTAIN COMPENSATION ARRANGEMENTS
The Company has an agreement with Mr. Longfield which provides for benefits
upon any termination of employment within three years after a change of control
(defined to include the acquisition by a person or a group of 20% or more of the
voting power of the Company's stock or a change in the members of the Board of
Directors such that the continuing directors cease to constitute a majority of
the Board of Directors during a two-year period). This agreement expires three
years after any change of control, but under certain circumstances may be
terminated by the Board of Directors prior to any change of control and will
expire immediately upon the earlier of the officer's death, permanent disability
or termination of employment for cause. Benefits include (i) severance pay of
three times the sum of the officer's highest base salary and his average annual
bonus during the three years prior to severance and (ii) continued participation
in the Company's benefit plans for one year (or, if such participation is not
possible, provision for substantially similar benefits). The Company has similar
agreements with Messrs. Bopp and Maloney and three other executive officers. In
addition, the Company has entered into a Supplemental Executive Retirement
Agreement with Mr. Longfield which provides for additional benefits each year
for a period of fifteen years to Mr. Longfield equal to (i) 50% of his salary
and bonus averaged over the five completed calendar years which provide the
highest average of all the completed calendar years ending before the time Mr.
Longfield becomes entitled to benefits under such agreement minus (ii) the sum
of benefits which Mr. Longfield receives under the Company's qualified and
non-qualified pension plans in the applicable year. Benefits under this plan
commence upon death, disability, termination other than by reason of discharge
for cause, voluntary retirement on or after age 62 or voluntary retirement
within two years after a change of control. Change of control for this purpose
is defined in substantially the same manner as described above.
The Company provides supplemental annuities to certain officers, including
the Named Executive Officers, and other key employees for a fifteen-year period
commencing on retirement pursuant to the
9
<PAGE> 13
Supplemental Insurance/Retirement Plan or, with respect to officers, following a
termination of employment within two years after a change of control. Change of
control for this purpose is defined in substantially the same manner as in the
agreements with Mr. Longfield.
The Company's 1993 Long Term Incentive Plan provides that the Compensation
Committee may grant limited stock appreciation rights entitling the holder
thereof to surrender to the Company, under certain circumstances, such rights in
exchange for cash as described below. A limited stock appreciation right can
only be exercised within the sixty-day period commencing upon the date of the
first public disclosure of a change of control. Change of control for this
purpose is defined in substantially the same manner as in the agreements with
Mr. Longfield. Limited stock appreciation rights are exercisable whether or not
the holder thereof is then employed by the Company. Upon exercise of a limited
stock appreciation right, the holder thereof shall be entitled to receive an
amount in cash equal to the greater of (i) the fair market value of the shares
of the Common Stock of the Company with respect to which the limited stock
appreciation right was exercised over the option price of such shares and (ii)
if the change of control is the result of a transaction or a series of
transactions, the highest price per share of Common Stock of the Company paid in
such transaction or transactions during the sixty-day period up to the date of
exercise over the option price of such shares. There are also limited stock
appreciation rights outstanding under the Company's 1989 Employee Stock
Appreciation Rights Plan, as amended.
Stock options granted under the Company's prior stock option plans, and
stock options, stock appreciation rights and restricted stock granted under the
Company's 1993 Long Term Incentive Plan and performance units (representing the
right to future cash payments based on the per share net book value of the
Company's Common Stock) granted under the Company's Long Term Performance
Incentive Plan vest immediately upon the occurrence of a change of control
(defined in substantially the same manner as in the agreements with Mr.
Longfield).
COMPENSATION OF OUTSIDE DIRECTORS
Fees and Deferred Compensation
Non-employee directors receive a $20,000 annual retainer plus $1,000 per
Board meeting attended and an additional $1,000 per committee meeting attended,
except for committee chairpersons who receive a committee meeting fee of $2,000
for each committee meeting chaired. All or a portion of such fees may be
deferred at the election of the director, and any amount so deferred is valued
at the election of the director either (i) as if invested in an interest-bearing
account or (ii) as if invested in units which are valued as if invested in
Common Stock of the Company. Deferred fees are payable in cash, in installments
or as a lump sum upon termination of services as a director. Directors who are
also employees do not receive any such fees. An agreement with Mr. McCaffrey
provided that the Company pay Mr. McCaffrey $12,000 per year for ten years
beginning at age 65. In accordance with the terms of such agreement, on July 14,
1993, the Compensation Committee approved a lump sum payout of $75,260 to Mr.
McCaffrey.
1988 Directors Stock Award Plan, as Amended
Under the 1988 Directors Stock Award Plan, as amended (the "1988 Plan"),
directors who are not employees of the Company are awarded additional
compensation in the form of shares of Common Stock of the Company and options to
purchase shares of Common Stock of the Company.
In October of the year in which a non-employee director is elected to the
Board of Directors, such non-employee director is granted the right to receive
200 shares of Common Stock of the Company during each year of the director's
term. However, such director is not entitled to any such installment of shares
in the event that for any reason such director is not a non-employee director on
the date on which an installment of shares of Common Stock would otherwise be
transferable under the 1988 Plan. The 1988 Plan provides that no shares of
Common Stock awarded to a non-employee director under the 1988 Plan may be
disposed of for any purpose until the expiration of two years from the date of
the transfer of such shares to the non-employee director; however, such transfer
restriction ceases to apply upon the death or permanent disability of the non-
employee director.
10
<PAGE> 14
In April of 1993 and in July of each year thereafter, each non-employee
director was or will be, as the case may be, granted an option to purchase 600
shares of Common Stock of the Company. Such options have a ten-year term and
become exercisable with respect to 200 shares of Common Stock of the Company
subject thereto on each of the first three anniversaries following the date of
grant. The purchase price per share of Common Stock of the Company purchased
under an option granted pursuant to the 1988 Plan shall not be less than the
mean between the high and low sale price, regular way, on the New York Stock
Exchange-Composite Tape on the date the option was granted.
If a non-employee director shall, by reason other than death or retirement,
cease to be a member of the Board of Directors of the Company while holding an
outstanding option, such non-employee director shall be permitted to exercise
such option within sixty days from the day he or she ceased to be a member of
the Board of Directors; but in no event later than the expiration date of the
option, with respect to all or any part of the entire balance of shares of
Common Stock of the Company to the extent exercisable by such non-employee
director at the time he or she ceased to be a member of the Board of Directors.
If a non-employee director shall die after the date he or she ceases to be a
member of the Board of Directors of the Company while holding an outstanding
option, such option shall be exercisable to the extent, and during the period,
that such option would, but for his or her death, have otherwise been
exercisable by such non-employee director. If a non-employee director shall
cease to be a member of the Board of Directors of the Company by reason of
retirement while holding an outstanding option, such non-employee director shall
be permitted to exercise such option within three years from the last day of the
month in which he or she retired; but in no event later than the expiration date
of the option, with respect to all or any part of the entire balance of shares
of Common Stock of the Company to the extent exercisable by such non-employee
Director at the time he or she retired. If a non-employee director shall die
while holding an outstanding option, and at the time of death, such option was
then exercisable with respect to less than 100% of the shares subject thereto,
the number of shares with respect to which such option shall be exercisable
shall be increased to 100% of the total number of shares subject thereto. The
period during which such option shall be exercisable shall commence on the date
of death and end on the first anniversary of the month in which the date of
death occurred, but in no event shall the period extend beyond the expiration
date of the option.
Retirement Plan for Outside Directors
The Company maintains a retirement income plan for non-employee directors
who have served on the Board of Directors for at least five years. Upon
retirement, such directors will receive annual payments equal to an amount
composed of the annual retainer together with an amount based upon the annual
meeting fees in effect at the time of retirement. Such payments will be made for
that number of years equal to the number of full or partial years of service on
the Board. In the event of the retired director's death, his or her surviving
spouse shall receive the same benefits that such director would have received
had he or she survived.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Regina Herzlinger, a member of the Company's Compensation Committee, serves
on the Board of Directors of Belmont Instrument Corp. In 1993 the
Cardiopulmonary Division of the Company purchased from Belmont Instrument Corp.
approximately $1,063,000 of a product originally developed by Belmont Instrument
Corp. and licensed to the Company. Professor Herzlinger's husband, George, is
the President and a director of the corporation, and the Herzlingers are its
majority shareholders. The Company's business relationship with Belmont
Instrument Corp. predates and is independent of Professor Herzlinger's election
to the Company's Board of Directors, and pursuant to existing Company policies,
the subsequent execution of a contract with this corporation did not require
submission to the Company's Board of Directors for approval. The Company
believes that the transactions with Belmont Instrument Corp. were on terms no
less favorable than if the transactions were with an unaffiliated party.
11
<PAGE> 15
OPTION GRANTS IN LAST FISCAL YEAR
The table below sets forth information concerning options granted to the
Named Executive Officers during the last fiscal year.
<TABLE>
<CAPTION> GRANT DATE
INDIVIDUAL GRANTS VALUE(1)
--------------------------------------------------------------- ----------
NUMBER OF
SECURITIES % OF TOTAL
UNDERLYING OPTIONS GRANTED EXERCISE OR GRANT DATE
OPTIONS GRANTED TO EMPLOYEES IN BASE PRICE EXPIRATION PRESENT
NAME (#)(2) FISCAL YEAR ($/SHARE) DATE VALUE($)
- ---------------------------------- --------------- --------------- ----------- ------------- ----------
<S> <C> <C> <C> <C> <C>
William H. Longfield.............. 39,400 7.2 26.75 July 14, 2003 411,040
President and COO
Benson F. Smith................... 15,300 2.8 26.75 July 14, 2003 161,254
Executive Vice President
William T. Tumber................. 14,400 2.6 26.75 July 14, 2003 151,769
Group Vice President
Richard J. Thomas................. 14,400 2.6 26.75 July 14, 2003 151,769
Group Vice President
William C. Bopp................... 9,100 1.7 26.75 July 14, 2003 95,909
Senior Vice President and Chief
Financial Officer
George T. Maloney................. -0- 0.0 N/A N/A N/A
Former Chairman and CEO
</TABLE>
- ---------------
(1) Grant date values are based on the Black-Scholes option pricing model
adapted for use in valuing executive stock options. The actual value, if
any, an executive may realize will depend on the excess of the stock price
over the exercising price on the date the option is exercised, so that there
is no assurance the value realized by an executive will be at or near the
value estimated by the Black-Scholes model. The grant date values were
determined based in part upon the following assumptions: (a) an expected
volatility of .3296 based on the prior five years of quarterly closing stock
prices of the Company's Common Stock; (b) a risk-free rate of return of
6.20%; (c) the Company's Common Stock five-year dividend yield of 2.00%; and
(d) a ten-year period from time of grant until exercise. Additionally, a 3%
per annum discount was applied to reflect vesting restrictions.
(2) Grants consist of stock options with attached limited rights which are
exercisable in the event of a change of control. Options become exercisable
in four annual installments commencing one year after the date of grant and
are exercisable at a price equal to the market price on the date of grant.
12
<PAGE> 16
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR, AND FISCAL YEAR-END OPTION
VALUES
The table below sets forth information concerning exercises of stock
options by the Named Executive Officers during the last fiscal year and the
fiscal year-end value of the Named Executive Officers' unexercised options.
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING IN-THE-MONEY
UNEXERCISED OPTIONS OPTIONS
AT FY-END(1)(#) AT FY END(1)($)
VALUE -------------------- --------------------
SHARES ACQUIRED REALIZED EXERCISABLE/ EXERCISABLE/
NAME ON EXERCISE(#) ($) UNEXERCISABLE UNEXERCISABLE(2)
- ------------------------------------- --------------- -------- -------------------- --------------------
<S> <C> <C> <C> <C>
William H. Longfield................. -0- -0- 62,950/71,750 282,264/73,153
President and COO
Benson F. Smith...................... 500 7,898 39,601/28,675 373,064/25,102
Executive Vice President
William T. Tumber.................... -0- -0- 18,786/26,850 95,054/22,950
Group Vice President
Richard J. Thomas.................... -0- -0- 16,475/25,825 67,389/14,105
Group Vice President
William C. Bopp...................... -0- -0- 21,675/19,375 109,086/16,495
Senior Vice President and Chief
Financial Officer
George T. Maloney.................... -0- -0- 135,586/51,275 790,401/121,205
Former Chairman and CEO
</TABLE>
- ---------------
(1) These options were granted over a period of years.
(2) Rounded value at $25.250 per share market price.
PENSION TABLE
The table below sets forth the aggregate estimated annual retirement
benefits payable under the Company's Employees' Retirement Plan, Excess Benefit
Plan and Supplemental Executive Retirement Plan for employees retiring at normal
retirement age (65) in 1993.
<TABLE>
<CAPTION>
YEARS OF PARTICIPATION
FIVE YEAR AVERAGE ---------------------------------------------------------------------------
COMPENSATION 10 15 20 25 30 35 40
- ----------------- --------- --------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
$ 50,000 $ 7,000 $ 10,500 $ 14,000 $ 17,500 $ 21,000 $ 24,500 $ 28,000
100,000 14,500 22,000 29,000 36,500 43,500 51,000 58,000
150,000 22,000 33,000 44,000 55,000 66,000 77,000 88,000
200,000 29,500 44,500 59,500 74,000 88,500 103,500 118,000
250,000 37,000 55,500 74,000 92,500 111,000 129,500 148,000
300,000 44,500 67,000 89,000 111,500 133,500 156,000 178,000
400,000 59,500 89,500 119,000 149,000 178,500 208,500 238,000
500,000 74,500 112,000 149,000 186,500 223,500 261,000 298,000
600,000 89,500 134,500 179,000 224,000 268,500 313,500 358,000
700,000 104,500 157,000 209,000 261,500 313,500 366,000 418,000
800,000 119,500 179,500 239,000 299,000 358,500 418,500 478,000
900,000 134,500 202,000 269,000 336,500 403,500 471,000 538,000
1,000,000 149,500 224,500 299,000 374,000 448,500 523,500 598,000
</TABLE>
Under the Company's Employees' Retirement Plan, Excess Benefit Plan and
Supplemental Executive Retirement Plan, benefits are determined on the basis of
an employee's compensation as calculated for purposes of the Summary
Compensation Table, except that annual bonus amounts reflected in the Summary
Compensation Table relate to the year in which such bonuses were accrued and are
not included in the calculation of their annual compensation for purposes of the
Plan until the succeeding year.
13
<PAGE> 17
The estimated credited full years of service for Messrs. Longfield, Smith,
Tumber, Thomas, Bopp and Maloney are 4, 13, 13, 8, 12 and 33, respectively. The
estimated annual retirement benefits payable are based on employer contributions
on a lifetime annuity basis to persons whose highest average compensation over a
period of five consecutive years of service are in the indicated
classifications. The benefits listed in the table are not subject to deductions
for Social Security or any other offset amounts.
Under the Supplemental Executive Retirement Agreement between the Company
and Mr. Longfield described above under "Certain Compensation Arrangements," if
Mr. Longfield were to retire at age 62, his estimated annual benefit at such
time would be approximately $120,000 annually more than the estimated value of
the Company's qualified and non-qualified pension plans available to Mr.
Longfield at such age.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURNS
The graph below compares the cumulative total shareholder return on the
Company's Common Stock for the last five years with the cumulative total return
on the S&P 500 Index and the S&P Medical Products and Supplies Index over the
same period. The graph assumes the investment of $100 in each of the Company's
Common Stock, the S&P 500 Index and the S&P Medical Products and Supplies Index
on December 31, 1988 and that all dividends were reinvested.
<TABLE>
<CAPTION>
S & P Medi-
cal Products
Measurement Period C.R. Bard, S & P 500 & Supplies
(Fiscal Year Covered) Inc. Index Index
<S> <C> <C> <C>
1988 100 100 100
1989 97.74 131.69 137.19
1990 77.14 127.60 161.01
1991 141.67 166.47 263.31
1992 155.93 179.15 225.60
1993 121.32 197.21 172.05
</TABLE>
14
<PAGE> 18
PROPOSAL NO. 2 -- APPROVAL OF THE 1994
EXECUTIVE BONUS PLAN OF C. R. BARD, INC.
The Board of Directors has approved, subject to shareholder approval, the
1994 Executive Bonus Plan of C. R. Bard, Inc. (the "1994 Plan"), which will be
effective commencing with the 1994 fiscal year. The 1994 Plan is designed to
help attract, retain and motivate the executives required to manage the Company
and promote the achievement of rigorous but realistic financial goals. The 1994
Plan is also designed to qualify compensation under the plan for a federal
income tax deduction as performance based compensation. The description of the
1994 Plan set forth below is a summary, does not purport to be complete and is
qualified in its entirety by reference to the provisions of the 1994 Plan
itself. A copy of the 1994 Plan is attached as Exhibit A.
ADMINISTRATION. The Plan is administered by the Compensation Committee,
which contains at least two outside directors (as such term is defined in
Section 162(m) of the Internal Revenue Code of 1986, as amended, and the
regulations proposed or adopted thereunder).
ELIGIBILITY. Participants in the 1994 Plan in any of the Company's fiscal
years will be limited to individuals who on the first day of such fiscal year
occupy the office of Chairman, Chief Executive Officer, President, Vice
Chairman, Chief Operating Officer, Executive Vice President, Chief Financial
Officer or Group Vice President. Six officers are currently eligible for the
1994 Plan.
DETERMINATION OF AWARDS. Awards under the 1994 Plan shall be in the form
of cash. No award to any individual in any fiscal year shall exceed $1,400,000.
Awards will be made to participants by reference to the Company's earnings
per share for each fiscal year, and, with respect to Group Vice Presidents, by
reference to an established group financial goal. Prior to the beginning of each
fiscal year (or, in the case of fiscal year 1994, prior to April 1, 1994), the
Compensation Committee will set the earnings per share and group financial goal
targets and the amount of bonus (expressed as a percentage of base salary in
effect on the first day of the fiscal year) payable to each participant to the
extent that the earnings per share and, as applicable, the group financial
performance equal, or fall within a range above or below, the applicable target.
PAYMENT OF AWARDS. Each award will be paid in cash following the fiscal
year to which it relates; however, a participant may, prior to a fiscal year,
elect to defer all or any portion of an award for that fiscal year. Deferred
awards will be held by the Company in an interest-bearing account for the
participant, and shall be paid in a lump sum upon termination of employment or
in installments as requested by the participant and agreed to by the
Compensation Committee.
AMENDMENT AND TERMINATION. The Compensation Committee, with the approval
of the Board of Directors, may amend or terminate the 1994 Plan at any time. No
amendment or termination of the 1994 Plan shall deprive any participant of
awards for fiscal years already ended.
The Company believes that its best interests will be served by the adoption
of the 1994 Plan, which will enable the Company to be in a position to grant
bonus awards to officers, including those who through promotions and development
of the Company's business will be entrusted with new and more important
responsibilities, while preserving the tax deductibility of these awards. All of
the Company's other benefit plans shall continue in accordance with their
respective terms.
The Board of Directors approved the 1994 Plan at its February 9, 1994
meeting.
Approval of Proposal No. 2 requires the affirmative vote of a majority of
shares of the Company's Common Stock cast on the proposal. If such approval is
not obtained, the Company may forfeit tax deductions on a portion of the bonus
awards which the Compensation Committee may approve for 1994 and subsequent
years.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE IN FAVOR OF PROPOSAL NO. 2.
15
<PAGE> 19
PROPOSAL NO. 3 -- RATIFICATION OF THE APPOINTMENT OF
ARTHUR ANDERSEN & CO. AS INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors has selected Arthur Andersen & Co. to audit the
accounts of the Company for the fiscal year ending December 31, 1994. Since
their report will be addressed to the shareholders as well as the Board of
Directors, the holders of Common Stock are asked to ratify this selection. The
Company has been advised that a representative of Arthur Andersen & Co. will be
present at the Annual Meeting of Shareholders with the opportunity to make a
statement if the representative desires to do so. It is expected that the
representative will be available to respond to appropriate questions.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE IN FAVOR OF PROPOSAL NO. 3.
MISCELLANEOUS
The Company does not know of any business other than that described above
to be presented for action to the shareholders at the meeting, but it is
intended that the proxies will be exercised upon any other matters and proposals
that may legally come before the meeting and any adjournments thereof in
accordance with the discretion of the persons named therein.
The cost of this solicitation will be borne by the Company. It is
contemplated that proxies will be solicited through the use of the mails, but
officers and regular employees of the Company may solicit proxies personally or
by telephone or special letter. The Company has retained the firm of D.F. King &
Co., Inc. to assist in the solicitation of proxies and expects to pay such firm
a fee of approximately $10,000 plus out-of-pocket expenses. Although there is no
formal agreement to do so, the Company will reimburse banks, brokerage houses
and other custodians, nominees and fiduciaries for their reasonable expenses in
forwarding proxy material to their principals.
Under the federal securities laws, the Company's directors, officers and
ten percent shareholders are required to report to the Securities and Exchange
Commission and the New York Stock Exchange, by specific due dates, transactions
and holdings in the Company's Common Stock. Based solely on its review of the
copies of such forms received by it or written representations from certain
reporting persons that no annual corrective filings were required for those
persons, the Company believes that during fiscal 1993 all these filing
requirements were satisfied.
The Annual Report of the Company for 1993, including certified financial
statements, has been furnished to all persons who were shareholders of the
Company on the record date for the Annual Meeting of Shareholders.
PROPOSALS OF SECURITY HOLDERS
A proposal of a security holder intended to be presented at the next Annual
Meeting of Shareholders and to be included in the proxy statement must be
received at the Company's principal executive offices at 730 Central Avenue,
Murray Hill, New Jersey 07974 on or before November 15, 1994.
16
<PAGE> 20
EXHIBIT A
C. R. BARD, INC.
1994 EXECUTIVE BONUS PLAN
This is the C. R. Bard, Inc. 1994 Executive Bonus Plan (the "Plan"), as
authorized by the Board of Directors (the "Board") of C. R. Bard, Inc. (the
"Company"), for the payment of incentive compensation to designated employees.
1. Definitions
As used in the Plan, the following terms have the following meanings:
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Committee" shall mean the Compensation and Stock Option Committee of the
Board.
"Earnings Per Share" shall mean net income per share as reported in the
audited annual consolidated financial statements of the Company and its
subsidiaries, as adjusted for any items of an unusual and/or nonrecurring nature
which are specified in writing by the Committee prior to the beginning of the
plan year and are confirmed as such by the Company's independent auditors.
"Group Financial Goal" as to any person shall mean the sum of the amounts
reported as net income on the respective financial statements of the divisions
or operating units which report to such person, as adjusted for any items of an
unusual and/or nonrecurring nature which are specified in writing by the
Committee prior to the beginning of the plan year and are confirmed as such by
the Company's independent auditors.
"Outside Directors" shall have the meaning ascribed to it in Section 162(m)
of the Code and the regulations proposed or adopted thereunder.
2. Objectives
The objectives of the Plan are to:
- Help attract, retain and motivate the executives required to manage the
Company; and
- Promote the achievement of rigorous but realistic financial goals and
encourage intensive fact-based business planning.
3. Administration
The Plan will be administered by the Committee. The Committee shall contain
at least two Outside Directors. Subject to the provisions of the Plan, the
Committee will have full authority to interpret the Plan, to establish and amend
rules and regulations relating to it, to determine the terms and provisions for
making awards and to make all other determinations necessary or advisable for
the administration of the Plan.
4. Participation
Participation in the Plan in any fiscal year will be limited to individuals
who on the first day of the Company's fiscal year occupy the office of Chairman,
Chief Executive Officer, President, Vice Chairman, Chief Operating Officer,
Executive Vice President, Chief Financial Officer or Group Vice President.
5. Performance Goals
Bonuses hereunder for all participants except Group Vice Presidents will be
determined by reference to Earnings Per Share for each fiscal year, and bonuses
hereunder for Group Vice Presidents will be determined 50 percent by reference
to each of (i) Earnings Per Share for each fiscal year and (ii) the Group
Financial Goal for each fiscal year. Before the commencement of each fiscal
year, the Committee shall establish the Earnings Per Share and Group Financial
Goal targets and the amount of bonus (expressed as a percentage of
A-1
<PAGE> 21
base salary in effect on the first day of the fiscal year) payable to each
participant to the extent that Earnings Per Share and, as applicable, the Group
Financial Goal equal, or fall within a range above or below the applicable
target; provided, however, that with respect to the 1994 fiscal year, the
Committee shall set such targets and percentages no later than April 1, 1994. In
the event of any change in the outstanding shares of Common Stock by reason of
any stock dividend or split, recapitalization, or other similar corporate
change, the Earnings Per Share target shall be appropriately adjusted by the
Committee.
6. Maximum
No bonus payable to an individual under this Plan for a given fiscal year
shall exceed $1,400,000.
7. Time and Form of Payment
(a) Payment. Except as provided in paragraph (b), of this Section 7,
awards will be paid in cash as soon as practicable following the public
announcement by the Company of its financial results for the fiscal year
and written certification from the Committee that the goals described in
Section 5 hereof have been attained.
(b) Deferral. A participant in the Plan may, prior to the
commencement of a fiscal year, elect to defer payment of all or any portion
of a bonus award. Amounts so deferred will be credited by the Company to an
account for the participant and will be credited with interest on a
quarterly basis at (i) the average interest rate received by the Company on
its United States short-term investments for the fiscal quarter for which
interest is credited or (ii) if no such short-term investments were held,
the prime rate in effect on the last business day of the fiscal quarter
announced by J. P. Morgan or, if no such rate is published, the prime rate
published in the The Wall Street Journal on such date. Amounts deferred
pursuant to this paragraph 7(b) shall be paid in a lump sum upon
termination of employment by reason of retirement, death, disability or
otherwise or in installments as requested by the participant and agreed to
by the Committee.
8. Death or Disability
A participant in the Plan (or a participant's beneficiary) whose employment
terminates during a fiscal year due to death or disability shall receive, after
the end of the fiscal year, an amount equal to the bonus which would have been
payable to such participant, pro-rated for that portion of the fiscal year
during which the participant was employed.
9. Miscellaneous
(a) Amendment and Termination of the Plan. The Committee with the
approval of the Board may amend, modify or terminate this Plan at any time
and from time to time. Notwithstanding the foregoing, no such amendment,
modification or termination shall affect payment of a bonus for a fiscal
year already ended.
(b) No Assignment. Except as otherwise required by applicable law, no
interest, benefit, payment, claim or right of any participant under the
Plan shall be subject in any manner to any claims of any creditor of any
participant or beneficiary, nor to alienation by anticipation, sale,
transfer, assignment, bankruptcy, pledge, attachment, charge or encumbrance
of any kind, and any attempt to take any such action shall be null and
void.
(c) No Rights to Employment. Nothing contained in the Plan shall give
any person the right to be retained in the employment of the Company or any
of its affiliates or associated corporations or affect the right of any
such employer to dismiss any employee.
(d) Beneficiary Designation. The Committee shall establish such
procedures as it deems necessary for a participant to designate a
beneficiary to whom any amounts would be payable in the event of the
participant's death.
A-2
<PAGE> 22
(e) Communications.
(i) All notices and communications to the Committee in connection
with the Plan shall be in writing, shall be delivered by first class
mail, by courier or by hand, shall be addressed to the Committee and
shall be deemed to have been given and delivered only upon actual
receipt thereof by the Committee. All notices and communications from
the Committee to participants or beneficiaries which the Committee deems
necessary in connection with the Plan shall be in writing and shall be
delivered to the participant or beneficiary or other person at the
person's address last appearing on the records of the Company.
(ii) Each participant shall file with the Committee such pertinent
information concerning the participant or the participant's beneficiary
as is required by the Committee.
(f) Plan Unfunded. The entire cost of this Plan shall be paid from
the general assets of the Company. The rights of any person to receive
benefits under the Plan shall be only those of a general unsecured
creditor, and neither the Company, the Board nor the Committee shall be
responsible for the adequacy of the general assets of the Company to meet
and discharge Plan liabilities nor shall the Company be required to reserve
or otherwise set aside funds for the payment of its obligations hereunder.
(g) Applicable Law. The Plan and all rights thereunder shall be
governed by and construed in accordance with the laws of the State of New
Jersey.
A-3
<PAGE> 23
C. R. BARD, INC.
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
P The undersigned hereby constitutes and appoints William C. Bopp and Richard
A. Flink, and each of them, his true and lawful attorneys and proxies, with
R power of substitution, to represent the undersigned and to vote all of the
shares of stock of C. R. BARD, INC. that the undersigned is entitled to
O vote at the Annual Meeting of Shareholders of C. R. BARD, INC. to be held
at the Somerset Hills Hotel, 200 Liberty Corner Road, Warren, New Jersey
X 07059 on Wednesday, April 20, 1994 at 10:00 A.M. and at any adjournments
thereof (a) as specified on the items listed on the reverse hereof, and (b)
Y in accordance with their discretion on any other business which may
properly come before said meeting.
ELECTION OF DIRECTORS: WILLIAM T. BUTLER, M.D., RAYMOND B. CAREY, JR. AND
DANIEL A. CRONIN, JR.
- --------------------------------------------------------------------------------
| FOLD AND DETACH HERE |
<PAGE> 24
[X] PLEASE MARK YOUR 1436
VOTES AS IN THIS EXAMPLE.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREON
BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED FOR PROPOSALS 1, 2 AND 3.
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------------
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSALS 1, 2 AND 3.
- ---------------------------------------------------------------------------------------------------------------------------------
FOR WITHHELD FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Election of [ ] [ ] 2. Approval of 1994 [ ] [ ] [ ] 3. Ratification of [ ] [ ] [ ]
Directors Executive Bonus Independent Public
Plan Accountants
</TABLE>
For, except vote withheld from the following nominee(s):
- --------------------------------------------------------
NOTE: This proxy must be signed exactly as name(s) appear(s) hereon. Executors,
administrators, trustees, guardians, attorneys and officers signing for
corporations should give full title. For joint accounts each owner should sign.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
SIGNATURE(S) DATE
- --------------------------------------------------------------------------------
| FOLD AND DETACH HERE |
[LOGO]
DIVIDEND REINVESTMENT PLAN
C. R. Bard, Inc. offers a Dividend Reinvestment Plan together with a cash
contribution feature for all shareholders of Bard Common Stock.
PLAN HIGHLIGHTS
. THE PLAN PROVIDES A CONVENIENT AND ECONOMICAL WAY TO
INCREASE YOUR INVESTMENT IN BARD THROUGH THE PURCHASE OF
ADDITIONAL SHARES WITH ALL OR PART OF YOUR DIVIDENDS AND
ANY VOLUNTARY CASH PAYMENTS ($10 MINIMUM, $5,000 MAXIMUM,
PER MONTH) YOU WISH TO MAKE.
. ALL BROKERAGE COMMISSIONS AND COSTS FOR ADMINISTERING THE
PLAN CONNECTED WITH STOCK PURCHASES WILL BE PAID BY BARD.
FOR MORE INFORMATION ABOUT THE PLAN AND AN ENROLLMENT FORM, OR FOR QUESTIONS
CONCERNING YOUR ACCOUNT, PLEASE CONTACT:
FIRST CHICAGO TRUST COMPANY OF NEW YORK
DIVIDEND REINVESTMENT PLAN
P.O. BOX 2598
JERSEY CITY, NJ 07303-2598
(800)-446-2617
BE SURE TO INCLUDE A REFERENCE TO C. R. BARD, INC. IN
YOUR CORRESPONDENCE.
