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:
<TABLE>
<S> <C>
/x/ Preliminary Proxy Statement / / Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
/ / Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a.-12
</TABLE>
C. R. BARD, INC.
- -----------------------------------------------------------------------------
(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/ $125 per Exchange Act Rules 0-11(c)(1)(ii), or 14a-6(i)(1), or 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.
/ / $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:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price of 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:
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
(BARD LOGO)
C. R. BARD, INC.
730 Central Avenue
Murray Hill, New Jersey 07974
March 8, 1996
Dear Shareholder:
Your Board of Directors joins me in extending an invitation to attend the
1996 Annual Meeting of Shareholders which will be held on Wednesday, April 17,
1996 at the Hamilton Park Conference Center, 175 Park Avenue, Florham Park, New
Jersey 07932. 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
Chairman and
Chief Executive Officer
C. R. BARD, INC.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
April 17, 1996
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of C.
R. Bard, Inc. will be held on Wednesday, April 17, 1996 at the Hamilton Park
Conference Center, 175 Park Avenue, Florham Park, New Jersey 07932 at 10:00
a.m. for the following purposes:
1. To elect three Class III directors for a term of three years and one
Class I director for a term of one year;
2. To consider and vote upon a proposed amendment to the Company's
Restated Certificate of Incorporation which would reduce the maximum
number of directors of the Company;
3. To approve an amendment to the Company's 1993 Long Term Incentive
Plan to increase the number of shares of Common Stock available for
grant thereunder and amend certain other provisions;
4. To ratify the appointment of Arthur Andersen LLP as independent
public accountants for the year 1996;
5. To consider and vote upon a shareholder proposal relating to annual
election of directors;
6. To consider and vote upon a shareholder proposal relating to
compensation of non-employee directors; and
7. 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 26, 1996
are entitled to notice of and to vote at the meeting.
A copy of the Annual Report of C. R. Bard, Inc. for 1995 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 8, 1996
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.
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 8, 1996 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 Proposal No. 2, FOR
Proposal No. 3, FOR Proposal No. 4, AGAINST Proposal Nos. 5 and 6 (the
"Shareholder Proposals") 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 Proposal No. 2 requires the
affirmative vote of at least seventy-five percent of the outstanding shares of
the Company's Common Stock. Adoption of Proposal No. 3 requires the
affirmative vote of at least a majority of the shares present and entitled to
vote at the Annual Meeting of Shareholders, provided that a majority of the
outstanding shares of Common Stock votes on the proposal. Adoption of Proposal
No. 4 and the Shareholder Proposals requires the affirmative vote of at least a
majority of the votes cast.
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 will have
the effect of votes against Proposal No. 2 and Proposal No. 3 and will not be
counted in tabulating the number of votes cast on Proposal No. 4 and the
Shareholder Proposals. Broker non-votes will have the effect of votes against
Proposal No. 2 and will not be counted in tabulating the number of votes cast
on Proposal No. 3, Proposal No. 4 and the Shareholder Proposals.
On February 26, 1996, 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 __________ shares of Common
Stock. Each share is entitled to one vote.
PROPOSAL NO. 1--ELECTION OF DIRECTORS
There are currently eleven members of the Board of Directors, divided into
three classes. Class I consists of four directors whose terms expire in 1997
(Messrs. Butler, Carey and Cronin were elected to serve three-year terms in
1994 and Mr. Bopp was appointed by the Board of Directors on July 12, 1995 and
is standing for election by shareholders at this time). Class II consists of
four directors whose terms expire in 1998. Class III consists of three
directors whose terms expire in 1996. Upon election by shareholders, directors
serve for a three-year term and until their successors are elected and
qualified.
Four directors are to be elected at the Annual Meeting of Shareholders.
Three current members of the Board of Directors constituting Class III
directors are nominated for re-election. One additional person, who is
designated as a nominee for election as a Class I director, is also nominated
to be elected.
Votes pursuant to the accompanying proxy will be cast, unless otherwise
indicated on the proxy, for the election of the four 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.
Set forth below are the names, principal occupations and ages of the four
nominees for 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 III Directors
<TABLE>
<S> <C>
T. Kevin Dunnigan Chairman and Chief Executive Officer of Thomas
& Betts Corporation (electrical/electronics
components) since 1992 and, prior thereto,
President from 1980 to 1994; age 58.
Mr. Dunnigan has been a Director since
December 1994 and is a member of the Audit
Committee and Regulatory Compliance Committee.
He is also a director of Lukens, Inc. and
Elsag Bailey Process Automation N.V.
Regina E. Herzlinger Nancy R. McPherson Professor of Business
Administration, Harvard Business School since
1971; age 52. Professor Herzlinger has been a
Director since 1991 and is a member of the
Audit Committee and Regulatory Compliance
Committee. 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 Chairman and Chief Executive Officer since
September 1995, having been President and
Chief Executive Officer since June 1994,
President and Chief Operating Officer from
September 1991 to June 1994 and Executive Vice
President and Chief Operating Officer from
February 1989 to September 1991. In addition,
from October 1993 to September 1995,
Mr. Longfield had been delegated the
additional responsibilities of Chairman of the
Board and from October 1993 to June 1994 he
had been delegated the additional
responsibilities of Chief Executive Officer;
age 57. Mr. Longfield has been a Director
since 1990 and is a member of the Executive
Committee and Policy, Procedures and
Organization Committee. He is also a director
of Manor Care, Inc., United Dental Care, The
West Company and Horizon Mental Health
Management, Inc.
Nominee For Election As A Class I Director
William C. Bopp Executive Vice President and Chief Financial
Officer since October 1995, having been Senior
Vice President and Chief Financial Officer
since 1992 and Vice President and Treasurer
since 1988; age 52. Mr. Bopp has been a
director since July 1995 and is a member of
the Finance Committee.
Other Directors of the Company
Class I Directors (Terms Expire 1997)
William T. Butler, M.D. Chancellor of Baylor College of Medicine since
January 1996, having been President and Chief
Executive Officer since 1979; age 63. Dr.
Butler has been a Director since 1988 and is a
member of the Compensation Committee;
Regulatory Compliance Committee; and Policy,
Procedures and Organization Committee. He is
a member of the Institute of Medicine of the
National Academy of Sciences. He is also a
director of Browning-Ferris Industries Inc.
and Lyondell Petrochemical Company.
Raymond B. Carey, Jr. Retired Chairman and Chief Executive Officer
of ADT, Inc. (electronic protection systems);
age 69. Mr. Carey has been a Director since
1991 and is a member of the Audit Committee;
Regulatory Compliance Committee; and Finance
Committee. 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 67. 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 Committee; Finance
Committee; and Executive Committee. He is
also a director of Altron Corporation.
Class II Directors (Terms Expire 1998)
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 67. Mr. Abely has been a
Director since December 1985 and is a member
of the Compensation Committee; Finance
Committee; and Regulatory Compliance
Committee. He is also a director of
Perkin-Elmer Corporation, Burlington
Industries, Inc.
Robert P. Luciano Chairman of the Board of Schering-Plough
Corporation (pharmaceuticals and consumer
products) since January 1996, having been
Chairman and Chief Executive Officer since
January 1986; age 62. Mr. Luciano has been a
Director since 1981 and is a member of the
Executive Committee; Compensation Committee;
and Policy, Procedures and Organization
Committee. He is also a director of
AlliedSignal 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 69. Mr. McCaffrey has
been a Director since 1976 and is a member of
the Executive Committee, Finance Committee and
Policy, Procedures and Organization Committee.
He is also a director of KLM Communications,
Inc.
Benson F. Smith President and Chief Operating Officer since
October 1995, having been Executive Vice
President and Chief Operating Officer since
July 1994, Executive Vice President--
Operations since December 1993 and, prior
thereto, Group Vice President from September
1991 to December 1993 and Group Executive from
February 1990 to September 1991; age 48.
Mr. Smith has been a director since July 1994
and is a member of the Finance Committee.
</TABLE>
Securities Ownership of Certain Beneficial Owners
The table below indicates all persons who management knows as of the
record date to beneficially own more than 5 percent of the Company's
outstanding Common Stock:
<TABLE>
<CAPTION>
Number of shares
of Common Stock
beneficially
Name and address of beneficial owner owned Percent of Class
____________________________________ _______________ ________________
<S> <C> <C>
Swiss Bank Corporation<F1>
Aeschenplatz 6 CH-4002
Basel, Switzerland 3,244,548<F2> 5.8
Loomis Sayles & Company, L.P.
One Financial Center
Boston, Massachusetts 02111 5,262,249<F3> 9.3
Wellington Management Company
75 State Street
Boston, Massachusetts 02109 3,396,400<F4> 6.0
____________________
<FN>
<F1> SBC Holding (USA), Inc. ("SBCUSA"), located at 222 Broadway, New York,
New York, is a wholly-owned subsidiary of Swiss Bank Corporation
("SBC"), a holding company. Brinson Holdings, Inc. ("BHI"),
located at 209 South LaSalle, Chicago, Illinois, is a wholly-owned
subsidiary of SBCUSA. Brinson Partners, Inc. ("BPI"), located
at 209 South LaSalle, Chicago, Illinois, is a wholly-owned subsidiary
of BHI. By virtue of these corporate relationships, (i) SBC may be
deemed to beneficially own and have the power to dispose and vote
or direct the disposition or voting of 6,337 shares of Common Stock
of the Company held directly or indirectly by it, (ii) SBC and SBCUSA
may be deemed to beneficially own and have the power to dispose and
vote or direct the disposition or voting of 4,561 shares of Common
Stock of the Company held directly or indirectly by SBCUSA and (iii)
SBC, SBCUSA, BHI and BPI may be deemed to beneficially own and have
the power to dispose and vote or direct the disposition or voting
of an aggregate of 3,233,650 shares of Common Stock of the Company
held by BPI and its wholly-owned subsidiary, Brinson Trust Company.
<F2> Denotes shared voting power and shared dispositive power with respect to
all shares indicated.
<F3> Denotes shared dispositive power with respect to all shares indicated,
sole voting power with respect to 1,821,925 of such shares and shared
voting power with respect to none of such shares.
<F4> Denotes shared dispositive power with respect to all shares indicated,
shared voting power with respect to 408,900 of such shares and shared
voting power with respect to none of such shares.
</TABLE>
Securities Ownership of Management
The table below contains information as of February 26, 1996 with respect
to the beneficial ownership of Common Stock of the Company by each director of
the Company, the Company's Chief Executive Officer and the Company's other four
most highly compensated executive officers (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 (19
people) own beneficially ___ percent of the outstanding stock. Unless
otherwise noted in the footnote following the 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 within
60 days of
February 26,
Held as of 1996
Name February 26, 1996 under Options
_____ ___________________ ________________
<S> <C> <C>
Joseph F. Abely, Jr . . . . . . . . .
William C. Bopp . . . . . . . . . . .
William T. Butler, M.D. . . . . . . .
Raymond B. Carey, Jr. . . . . . . . .
Daniel A. Cronin, Jr. . . . . . . . .
T. Kevin Dunnigan . . . . . . . . . .
Regina E. Herzlinger. . . . . . . . .
William H. Longfield. . . . . . . . .
Robert P. Luciano . . . . . . . . . .
Robert H. McCaffrey<F1> . . . . . . .
Timothy M. Ring . . . . . . . . . . .
Benson F. Smith . . . . . . . . . . .
William T. Tumber . . . . . . . . . .
All Directors and Executive
Officers as a group (19 people) . .
____________________
<FN>
<F1> Includes ______ shares owned by his wife as to which he disclaims
beneficial ownership. Includes ______ shares held by a trust for his
child. Includes ______ shares owned by a foundation of which he is
President. Includes _______ shares owned by two foundations of which he
is a co-trustee and as to all of which investment or voting power is
shared.
</TABLE>
Board Meetings and Committees
The Board of Directors met eight times in 1995. No director of the
Company attended fewer than 92% 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 Committee and a Policy, Procedures
and Organization Committee.
The Audit Committee, currently composed of Directors Carey, Cronin,
Dunnigan and Herzlinger, met two times during 1995. The principal functions of
the Audit Committee are to (i) make recommendations to the full Board
concerning the appointment of independent public accountants, (ii) review the
scope of the audit and related fees, (iii) review the Company's accounting
principles, policies and reporting practices with the independent public
accountants, internal auditors and management, (iv) discuss with the
independent public accountants 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 public accountants 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 Committee, currently composed of Directors Abely, Butler
and Luciano, reviews and reports to the Board of Directors on all matters
involving compensation of employees and management and administers the
Company's 1994 Executive Bonus Plan and 1993 Long Term Incentive Plan. During
1995 there were three meetings of the Compensation 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 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 1995.
Executive Compensation
Compensation Committee Report
The Company's executive compensation program is designed to create a link
between pay and 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. The
Compensation Committee believes that a strong link between pay and performance
will enhance the Company's ability to attract, motivate and retain key
employees.
Base Salaries
Base salaries are determined by evaluating the responsibility of the
executive and by reference to the competitive marketplace for executive talent.
In order to attract and retain high caliber executives, base salaries are
targeted slightly above average but below the high end compared with the
Company's competition for executive talent. The Company believes that its
competition for executive talent comes from a selected group of companies in
the same industry as, and with sales and products similar to those of, the
Company. This selected group of companies is larger than, and does not contain
all the companies in, the peer group which makes up the S&P medical product
index in the Comparison of Five Year Cumulative Total Return below, as the
Company believes that reference to the S&P medical product index provides the
most meaningful comparison for shareholder returns, while the larger, selected
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 corporate and individual performance,
inflation rates and the salary levels prevailing at the selected group of
companies described above. Increases in base salaries are influenced by the
performance of the Company and the individual as compared with 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 shareholders' investment, as well as individual goals consisting of
the attainment of strategic and operational initiatives (i.e., expansion of
globalization, acquisitions/divestitures). For purposes of base salary
increases, no particular weight is assigned to any goal.
In determining the base salary of Mr. Longfield, the Compensation
Committee weighed corporate and individual performance more heavily than
inflation or analysis of competitive salary data. Mr. Longfield, who was
delegated the responsibilities of Chairman and Chief Executive Officer in
October of 1993, was elected Chief Executive Officer in June of 1994 and
Chairman of the Board in September of 1995.
The Compensation Committee considers the recommendation of the Chairman
and Chief Executive Officer in approving the base salaries of Messrs. Smith,
Bopp, Ring, Tumber 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 individual strategic and operational initiatives.
Performance is weighed more heavily than inflation and competitive salary data.
The Compensation Committee establishes each year a merit fund which is
used to increase base salaries for professional and managerial employees. The
amount of the merit fund is determined on the basis of an analysis of several
industry specific and general non-industry specific surveys which are conducted
on an annual basis by consulting companies and trade associations. Individuals
receive a salary increase paid out of the merit fund based on a formula which
is designed to reward superior individual performance.
Bonus Plans
Awards under the Company's bonus plans are determined based on the degree
to which corporate and, in certain cases, group financial and individual,
non-financial goals are attained.
Actual incentive compensation awards may be either more or less than
targeted amounts depending on actual results compared with corporate and group
and individual performance measures. Thus the Company's incentive plans create
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 Company's bonus plans for Mr. Longfield and the other executive
officers, other than Group Vice Presidents whose bonuses are determined as
described below. All bonuses are based on operational results exclusive of
items of an unusual and/or non-recurring nature.
Certain executive officers of the Company, including the Named Executive
Officers, receive their bonuses under the Company's 1994 Executive Bonus Plan.
Bonuses under this plan for 1995 were determined by reference to the degree to
which the Company's earnings per share target for 1995 was achieved and, with
respect to Group Vice Presidents, including Messrs. Ring and Tumber, with equal
weight by reference to the degree to which the net income target established
for their respective groups was achieved. In 1995, 97% of the Company's
earnings per share target (exclusive of items of an unusual and/or
non-recurring nature) was achieved and 103.2% and 85.1% of the net income
targets for the respective groups of Messrs. Ring and Tumber were achieved. In
awarding bonuses to the Named Executive Officers, the Compensation Committee
may grant less than, but not more than, the amounts determined pursuant to
guidelines established pursuant to the 1994 Executive Bonus Plan.
Except as set forth below, bonuses for the Company's other executive
officers for 1995 were determined by reference to the degree to which the
Company's earnings per share target for 1995 was achieved and the degree to
which individual strategic and operational initiatives for 1995 were achieved.
The Chairman and Chief Executive Officer establishes individual strategic and
operational goals taking into account the executive's position in the Company
and the executive's particular strengths and opportunities for improvement.
Approximately 80% of the bonuses awarded to these executives in 1995 was based
on the degree of achievement of the Company's earnings per share target and
approximately 20% was based on the degree of achievement of individual
strategic and operational initiatives. The executive officers of the Company
who are responsible for quality control and regulatory and medical affairs do
not participate in the Company's bonus plans.
Stock Options
Under the 1993 Long Term Incentive Plan, in 1995 the Compensation
Committee granted stock options to selected executive officers, including the
Named Executive Officers. 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 average but below
the high end of the selected group of companies described above. Actual awards
may be more or less than targeted amounts depending on actual results compared
with corporate and, in certain cases, group and individual performance measures
as described under "Bonus Plans".
In determining the number 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 stock options.
Restricted Stock Awards
Under the 1993 Long Term Incentive Plan, in 1995 the Compensation
Committee granted restricted stock to selected executive officers, including
the Named Executive Officers. In addition, the Compensation Committee in 1995
separately granted Mr. Smith and Mr. Bopp 7,500 and 5,000 shares of restricted
stock, respectively, in conjunction with their promotions. Restricted stock
vests in accordance with a schedule specified by the Compensation Committee.
Restricted stock is combined with other long term incentives to target total
compensation for long term incentives at slightly above the average but below
the high end of the selected group of companies described above. Executive
officers may receive more or less than the targeted amounts depending on actual
results compared with corporate and, in certain cases, group and individual
performance measures as described under "Bonus Plans".
The formula for determining the number of shares of restricted stock
granted to 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.
Compliance with Internal Revenue Code Section 162(m)
Section 162(m) of the Internal Revenue Code, enacted in 1993, generally
disallows a tax deduction to public companies for compensation over $1,000,000
paid to the Chief Executive Officer and the four other most highly compensated
executive officers for 1994 and thereafter. Qualifying performance-based
compensation is not subject to the deduction limit if certain requirements are
met. The Company's 1994 Executive Bonus Plan and 1993 Long Term Incentive
Plan, as proposed to be amended, have been structured such that annual
incentive bonuses and long-term equity-based compensation paid thereunder for
the Company's most senior executives should constitute qualifying
performance-based compensation under Section 162(m). The Company's
shareholders have approved both such plans. However, the Compensation
Committee recognizes that unanticipated future events, such as a change of
control of the Company or a change in executive personnel, could result in a
disallowance of compensation deductions under Section 162(m). Moreover, the
Compensation Committee may from time to time award compensation that is
non-deductible under Section 162(m) when in the exercise of the Compensation
Committee's business judgment such award would be in the best interest of the
Company. The Compensation Committee believes that all compensation reported in
the Summary Compensation Table below for 1995 should be deductible under the
Internal Revenue Code.
THE COMPENSATION COMMITTEE
Robert P. Luciano, Chairperson
Joseph F. Abely, Jr.
William T. Butler, M.D.
Summary Compensation Table
The table below sets forth information concerning compensation paid to the
Named Executive Officers during the last three fiscal years.
<TABLE>
<CAPTION>
Annual Compensation Long Term Compensation
______________________________________________ __________________________________
Awards Payouts
______________________ __________
Other Securities
Annual Restricted Under- All other
Compen- Stock lying LTPIP Compen-
Name and Salary Bonus sation Awards Options Payouts sation
Principal Position Year ($) ($) ($)<F1> ($)<F2> (#)<F3> ($)<F4> ($)<F5>
___________________ __________ __________ __________ __________ __________ __________ __________ __________
<S> <C> <C> <C> <C> <C> <C> <C> <C>
William H. Longfield . . . . . . 1995 575,000 310,500 16,926 303,747 74,220 53,999 193,826
Chairman and 1994 525,000 315,000 15,834 302,563 89,352 46,137 171,270
Chief Executive Officer 1993 442,278 250,000 14,742 162,908 39,400 40,131 121,533
Benson F. Smith . . . . . . . . . 1995 374,256 198,000 9,920 359,164 29,360 27,692 34,625
President and 1994 317,500 192,500 9,280 119,130 34,128 23,660 28,968
Chief Operating Officer 1993 243,237 146,000 8,640 63,130 15,300 9,555 25,561
William C. Bopp . . . . . . . . . 1995 226,057 109,800 4,650 203,742 12,260 11,472 47,742
Executive Vice President and 1994 208,700 104,400 4,350 59,796 15,264 12,675 42,921
Chief Financial Officer 1993 195,000 76,000 4,050 37,183 9,100 2,499 30,818
Timothy M. Ring . . . . . . . . . 1995 224,000 106,800 -0- 54,442 13,008 -0- 12,572
Group Vice President 1994 201,458 95,600 -0- 49,637 14,296 -0- 11,148
1993 161,874 69,500 -0- 27,285 6,400 -0- 7,734
William T. Tumber . . . . . . . . 1995 246,925 78,000 8,060 56,822 12,452 25,714 76,749
Group Vice President 1994 235,125 87,500 7,540 47,607 13,756 21,970 73,038
1993 225,000 75,500 7,020 59,118 14,400 8,820 76,532
____________________
<FN>
<F1> All of these amounts represent dividend equivalents paid under the Long
Term Performance Incentive Plan ("LTPIP").
<F2> As of December 31, 1995: William H. Longfield held an aggregate of
29,710 shares of restricted stock with an aggregate value of $958,147;
Benson F. Smith held an aggregate of 19,760 shares of restricted stock
with an aggregate value of $637,260; William C. Bopp held an aggregate
of 10,610 shares of restricted stock with an aggregate value of $342,172;
Timothy M. Ring held an aggregate of 5,050 shares of restricted stock
with an aggregate value of $162,862; and William T. Tumber held an
aggregate of 6,230 shares of restricted stock with an aggregate value of
$200,917. Dividends are paid on all shares of restricted stock.
<F3> Grants consist of stock options with attached limited rights exercisable
in the event of a change of control. See "Certain Compensation
Arrangements" below for a description of the material features of the
limited stock appreciation rights.
<F4> The dollar amounts for 1995, 1994 and 1993 were derived by multiplying
the number of vested performance units by $9.89, $8.45 and $7.35,
respectively, the book values of a share of the Common Stock of the
Company at December 31, 1995, December 31, 1994 and December 31, 1993,
respectively. These payouts are not made until the employee retires or
otherwise leaves employment with the Company.
<F5> 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, Bopp, Ring and Tumber would be
$111,158, $31,878, $24,554, $6,423 and $31,574, respectively, in 1995,
$96,732,$24,484, $22,001, $0 and $28,207, respectively, in 1994, and
$84,736, $18,282, $19,196, $0 and $27,190, respectively, in 1993, as
opposed to the amounts shown in the column.
For William H. Longfield, the 1995 amount in the column represents Company
contributions of $3,750 under the Retirement Savings Plan, $185,680 accrued
under the Supplemental Insurance/Retirement Plan and $4,396 which, net of tax,
is reimbursement for insurance premiums paid under such latter plan; the 1994
amount in the column represents Company contributions of $3,750 under the
Retirement Savings Plan, $163,940 accrued under the Supplemental
Insurance/Retirement Plan and $3,580 which, net of tax, is reimbursement for
insurance premiums paid under such latter plan; 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.
For Benson F. Smith, the 1995 amount in the column represents Company
contributions of $3,750 under the Retirement Savings Plan, $29,424 accrued
under the Supplemental Insurance/Retirement Plan and $1,451 which, net of tax,
is reimbursement for insurance premiums paid under such latter plan; the 1994
amount in the column represents Company contributions of $3,750 under the
Retirement Savings Plan, $24,160 accrued under the Supplemental
Insurance/Retirement Plan and $1,058 which, net of tax, is reimbursement for
insurance premiums paid under such latter plan; 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.
For William C. Bopp, the 1995 amount in the column represents Company
contributions of $3,750 under the Retirement Savings Plan, $42,830 accrued
under the Supplemental Insurance/Retirement Plan and $1,162 which, net of tax,
is reimbursement for insurance premiums paid under such latter plan; the 1994
amount in the column represents Company contributions of $3,750 under the
Retirement Savings Plan, $38,156 accrued under the Supplemental
Insurance/Retirement Plan and $1,015 which, net of tax, is reimbursement for
insurance premiums paid under such latter plan; 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.
For Timothy M. Ring, the 1995 amount in the column represents Company
contributions of $3,750 under the Retirement Savings Plan, $8,327 accrued under
the Supplemental Insurance/Retirement Plan and $495 which, net of tax, is
reimbursement for insurance premiums paid under such latter plan; the 1994
amount in the column represents Company contributions of $3,750 under the
Retirement Savings Plan, $6,961 accrued under the Supplemental
Insurance/Retirement Plan and $437 which, net of tax, is reimbursement for
insurance premiums paid under such latter plan; the 1993 amount in the column
represents Company contributions of $3,750 under the Retirement Savings Plan,
$3,584 accrued under the Supplemental Insurance/Retirement Plan and $400 which,
net of tax, is reimbursement for insurance premiums paid under such latter
plan.
For William T. Tumber, the 1995 amount in the column represents Company
contributions of $3,750 under the Retirement Savings Plan, $70,210 accrued
under the Supplemental Insurance/Retirement Plan and $2,709 which, net of tax,
is reimbursement for insurance premiums paid under such latter plan; the 1994
amount in the column represents Company contributions of $3,750 under the
Retirement Savings Plan, $66,786 accrued under the Supplemental
Insurance/Retirement Plan and $2,502 which, net of tax, is reimbursement for
insurance premiums paid under such latter plan; 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.
</TABLE>
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 Mr. Smith, Mr. Bopp, Mr.
Ring, Mr. Tumber and five 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 generally 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) an
amount equal to the annual payment that would be made to Mr. Longfield if the
sum of benefits to which Mr. Longfield is entitled under the Company's
qualified and non-qualified pension plans (as of the date benefits under the
agreement commence) were converted into an actuarially equivalent 15-year
installment payment of benefits. 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 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 $24,000 annual retainer plus $1,100 per
Board meeting attended and an additional $1,100 per committee meeting attended,
except for committee chairpersons who receive a committee meeting fee of
$2,200 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
such units were 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.
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 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.
In July of each year, each non-employee director is 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.
Related Transactions
Regina Herzlinger, a member of the Company's Board of Directors, serves on
the Board of Directors of Belmont Instrument Corp. ("Belmont"). In 1995 the
Vascular Systems Division of the Company purchased from Belmont approximately
$2,358,000 of a product developed by Belmont and distributed by the Company.
Professor Herzlinger's husband, George, is the President and a director of
Belmont, and the Herzlingers are its majority shareholders. The Company's
business relationship with Belmont predates and is independent of Professor
Herzlinger's election to the Company's Board of Directors. The Company's Board
of Directors has determined that the contract between the Company and Belmont
is fair and reasonable and in the best interest of the Company's shareholders.
Professor Herzlinger excused herself from the meeting of the Board of Directors
while such matter was discussed and such determination made.
Option Grants in Last Fiscal Year
The table below sets forth information concerning options granted to the
Named Executive Officers during the last fiscal year.
<TABLE>
<CAPTION>
Grant
Date
Individual Grants Value<F1>
____________________________________________________________________ ____________
Number
of % of
Securities Total
Underlying Options Grant
Options Granted to Exercise or Date
Granted Employees in Base Price Expiration Present
Name (#)<F2> Fiscal Year ($/Share) Date Value($)
______ _____________ _____________ ________________ ____________________ ____________
<S> <C> <C> <C> <C> <C>
William H. Longfield . . . . . . . . . . . . 74,220 10.7 29.75 July 12, 2005 761,113
Chairman and
Chief Executive Officer
Benson F. Smith . . . . . . . . . . . . . . . 29,360 4.2 29.75 July 12, 2005 301,082
President and
Chief Operating Officer
William C. Bopp . . . . . . . . . . . . . . . 12,260 1.8 29.75 July 12, 2005 125,724
Executive Vice President and
Chief Financial Officer
Timothy M. Ring . . . . . . . . . . . . . . . 13,008 1.9 29.75 July 12, 2005 133,395
Group Vice President
William T. Tumber . . . . . . . . . . . . . . 12,452 1.8 29.75 July 12, 2005 127,693
Group Vice President
____________________
<FN>
<F1> 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 .20816 based on daily stock prices of the
Company's Common Stock for the one-year period prior to the grant date;
(b) a risk-free rate of return of 6.28%; (c) the Company's Common Stock
five-year dividend yield of 2.08%; and (d) a ten-year period from time of
grant until exercise.
<F2> Grants consist of stock options with attached limited stock appreciation
rights which are exercisable in the event of a change of control. See
"Certain Compensation Arrangements" above for a description of the
material features of the limited stock appreciation rights. 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.
</TABLE>
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
Underlying Unexercised
Unexercised In-the-Money
Options at Options at
FY-End(#)<F1> FY-End($)(1)
Shares Value _________________ _________________
Acquired on Realized Exercisable/ Exercisable/
Name Exercise(#) ($) Unexercisable Unexercisable<F2>
______ _________________ _________________ _________________ _________________
<S> <C> <C> <C> <C>
William H. Longfield . . . . . . . . . . . . . . -0- -0- 132,438/165,834 1,272,217/974,642
Chairman and
Chief Executive Officer
Benson F. Smith . . . . . . . . . . . . . . . . . 4,000 81,560 54,658/65,106 555,148/379,544
President and
Chief Operating Officer
William C. Bopp . . . . . . . . . . . . . . . . . -0- -0- 32,341/30,358 259,584/179,527
Executive Vice President and
Chief Financial Officer
Timothy M. Ring . . . . . . . . . . . . . . . . . -0- -0- 11,274/28,430 81,192/163,645
Group Vice President
William T. Tumber . . . . . . . . . . . . . . . . 28,636 224,350 10,889/32,319 76,308/185,810
Group Vice President
____________________
<FN>
<F1> These options were granted over a period of years.
<F2> Rounded value at $32.25 per share market price.
</TABLE>
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 1995.
<TABLE>
<CAPTION>
Five Year Years of Participation
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 pensionable earnings, which include regular salary, commissions,
bonuses, overtime pay and shift differentials. 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 annual compensation for
purposes of the Company's Employees' Retirement Plan, Excess Benefit Plan and
Supplemental Executive Retirement Plan until the succeeding year.
The estimated credited full years of service for Messrs. Longfield, Smith,
Bopp, Ring and Tumber are 6, 15, 14, 3 and 15, 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 & 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 & Supplies Index
on December 31, 1990 and that all dividends were reinvested.
<TABLE>
<CAPTION>
S&P Medical
Measurement Period C.R. Bard, Products &
(Fiscal Year Covered) Inc. S&P 500 Index Supplies Index
<S> <C> <C> <C>
1990 100 100 100
1991 183.64 130.47 163.54
1992 202.13 140.41 140.12
1993 157.27 154.56 106.86
1994 172.04 156.60 126.72
1995 209.92 215.45 214.17
</TABLE>
PROPOSAL NO. 2--BOARD OF DIRECTORS PROPOSAL
RELATING TO REDUCTION OF MAXIMUM BOARD SIZE
On February 14, 1996, the Board of Directors unanimously approved, subject
to shareholder approval, an amendment to the Company's Restated Certificate of
Incorporation (the "Charter") to provide that the size of the Board of
Directors shall be no fewer than three (3) and no more than fourteen (14)
persons, with the exact number of directors to be determined in accordance with
the By-Laws of the Company.
The Board of Directors' statement in support of the proposal is as follows:
The Charter currently includes provisions effectively fixing the Board of
Directors at a total of not fewer than three nor more than 21 persons, with the
exact number of directors to be determined in accordance with the By-Laws of
the Company.
The present maximum of 21 directors is inconsistent with the philosophy of
the Board of Directors that a smaller board promotes both efficiency in the
ability of the Board of Directors to fulfill its obligations and accountability
of the directors.
Accordingly, the Board of Directors has concluded that adoption of the
proposed amendment to the Charter will be beneficial to and in the best
interests of the Company and its shareholders.
The full text of the first paragraph of Article SIXTH of the Charter, as
currently in effect and as proposed to be amended, is set forth in Appendix A
to this Proxy Statement. In the case of the text of Article SIXTH of the
Charter as proposed to be amended, dated historical references have been
deleted. The preceding description of the proposed amendment to the Charter is
qualified in its entirety by reference to Appendix A.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" PROPOSAL NO. 2.
PROPOSAL NO. 3--APPROVAL OF AMENDMENT TO
1993 LONG TERM INCENTIVE PLAN
On February 14, 1996, the Board of Directors unanimously approved,
subject to shareholder approval, an amendment to the Company's 1993 Long Term
Incentive Plan (the "1993 Plan") to (i) provide for an increase in the number
of shares authorized to be issued under the plan from 2,550,000 to 4,100,000,
(ii) limit the maximum number of shares of Common Stock that may be granted as
restricted stock, stock awards and unrestricted stock in any calendar year to
40 percent of the total number of shares of Common Stock granted or subject to
awards granted under the 1993 Plan in such year, (iii) limit to 400,000 the
maximum number of shares as to which options or stock appreciation rights
(including limited stock appreciation rights issued in tandem with options) may
be granted during each calendar year to any participant, (iv) specify the
performance goals upon which Performance-Based Awards (as defined below) under
the 1993 Plan are based (and to set forth certain related procedures), (v)
limit to $500,000 the maximum dollar amount of Performance-Based Awards under
the 1993 Plan that may granted during each calendar year to any participant
and (vi) enable employees, subject to the Company's discretion, to pay related
withholding taxes by delivering shares of Common Stock or by having shares of
Common Stock withheld by the Company from any shares that would otherwise be
received.
Under the 1993 Plan, adopted by shareholders at the 1993 Annual
Meeting of Shareholders, the maximum number of authorized shares of Common
Stock is 2,550,000 shares. As of December 31, 1995, only 297,926 shares of
Common Stock remained available under the 1993 Plan. As a result of the
limited number of shares of Common Stock remaining available for the 1993 Plan,
the shareholders are requested to authorize additional shares of Common Stock
under the 1993 Plan to cover anticipated awards to be granted by the Company in
the future in accordance with its normal compensation practices.
The shareholders are also requested to limit the maximum number of
shares of Common Stock that may be granted as restricted stock, stock awards
and unrestricted stock in any calendar year in order to reduce the aggregate
potential value of the total shares granted during such year. Additionally,
the shareholders are requested to authorize the limitation on the maximum
number of shares to which options or stock appreciation rights may be
granted during each calendar year to any given participant, to specify the
performance goals upon which Performance-Based Awards under the 1993 Plan are
based (and certain related procedures) and to authorize the limitation of the
maximum dollar amount of such Performance-Based Awards that may be granted
during each calendar year to any given participant, in each case in order for
such Performance-Based Awards to be treated as qualified performance-based
compensation under Section 162(m) of the Internal Revenue Code (the "Code")
(see "Executive Compensation -- Compensation Committee Report"). Finally, the
shareholders are requested to enable 1993 Plan participants, subject to the
Company's discretion, to pay withholding taxes by delivering shares of Common
Stock or by having shares of Common Stock withheld by the Company from any
shares otherwise to be received in order to provide additional flexibility to
such participants.
The Company believes that the 1993 Plan has helped it to attract and
retain the services of selected key employees, including officers and directors
who are employees, of the Company and its subsidiaries who are in a position to
make a material contribution to the successful operation of the business of the
Company and its subsidiaries by enabling the Company to offer a variety of long
term incentive awards.
Description of the 1993 Plan
Introduction. The description of the 1993 Plan (as proposed to be
amended) 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 1993 Plan
itself. The complete text of the 1993 Plan, as amended and restated, is set
forth in Appendix A to this Proxy Statement.
Administration. The 1993 Plan is administered by the Compensation
Committee, which will consist of disinterested, non-employee directors.
Eligibility. Participants in the 1993 Plan are selected by the
Compensation Committee from key employees of the Company and its subsidiaries
who are in a position to have a material impact on the results of operations of
the Company and its subsidiaries. Participants may be selected and awards may
be made at any time during the period that awards may be made under the 1993
Plan. The maximum number of shares to which options or stock appreciation
rights (including limited stock appreciation rights issued in tandem with
options) may be granted under the 1993 Plan during each calendar year to any
given participant is 400,000 shares; the maximum dollar amount of Performance-
Based Awards that may granted under the 1993 Plan during each calendar year to
any given participant shall not exceed $500,000.
Determination and Maximum Number of Awards. Awards under the 1993
Plan shall be in the form of restricted stock, stock awards, unrestricted
stock, stock options and stock appreciation rights. The total number of shares
of Common Stock which may be acquired under the 1993 Plan shall not exceed
4,100,000. The maximum number of shares of Common Stock that may be granted as
awards of restricted stock, stock awards and unrestricted stock in any calendar
year shall not exceed 40 percent of the total number of shares of Common Stock
granted or subject to awards granted under the 1993 Plan during such year. The
Compensation Committee has exclusive power to determine the amount of, and
method for determining, awards.
Restricted Stock, Stock Awards and Unrestricted Stock. An award of
restricted stock to an employee entitles the employee to receive the number of
shares of Common Stock specified by the Compensation Committee. An award of
restricted stock will vest in accordance with a schedule specified by the
Compensation Committee. Except as otherwise provided by the Compensation
Committee, an employee receiving an award of restricted stock shall, prior to
the vesting of such restricted stock, have all the rights of a holder of Common
Stock, including the right to receive dividends paid on and the right to vote
restricted stock. However, prior to the vesting of an award of restricted
stock, such restricted stock may not be sold, assigned, transferred, pledged or
otherwise encumbered. If, prior to the vesting of an employee's restricted
stock, such employee ceases to be an employee of the Company or any of its
subsidiaries for any reason other than death or retirement, the Compensation
Committee may accelerate the vesting of all unvested restricted stock to the
date of cessation of employment. If the Compensation Committee does not
accelerate the vesting of restricted stock held by such employee, such unvested
restricted stock shall be forfeited to the Company. If, prior to the vesting
of an employee's restricted stock, employment is terminated by reason of death
or retirement, all restricted stock held by such employee shall be immediately
vested on the date of such termination.
The Compensation Committee may grant stock awards in its discretion
to selected key employees of the Company and its subsidiaries. A stock award
consists of Common Stock to be distributed in three approximately equal
installments, the first delivery on the date of the stock award and thereafter
on the first and second anniversaries of such date, unless otherwise specified
by Compensation Committee. No such installment will be delivered if prior to
such delivery the employee is terminated (except, in the discretion of the
Compensation Committee, by reason of death or retirement).
Upon the occurrence of a change of control of the Company (defined
substantially in the same manner as in the agreement with Mr. Longfield,
described under "Certain Compensation Arrangements" above), all restricted
stock and stock awards shall vest and all restrictions on restricted stock
shall expire.
The Compensation Committee may grant awards of unrestricted Common
Stock of the Company under the 1993 Plan to employees which Common Stock is
delivered to the employee on or about the award date and which is not subject
to any restrictions.
Certain awards of restricted stock, stock awards and unrestricted
stock granted under the 1993 Plan may be granted in a manner which should be
deductible by the Company under Section 162(m) of the Code. Such awards
("Performance-Based Awards") shall be based upon earnings per share, net
income, group financial goals set forth in the Company's 1994 Executive Bonus
Plan, return on shareholders' investment, return on assets, attainment of
strategic and operational initiatives, appreciation in the price of the
Company's Common Stock, customer income, market share, sales, net profits,
economic value-added models or comparisons with the Standard & Poor's Medical
Product Index and 500-Stock Index. With respect to Performance-Based Awards,
(i) the Compensation Committee shall establish in writing the objective
performance goals applicable to a given period of service no later than 90 days
after the commencement of such period of service (but in no event after 25
percent of such period of service has elapsed) and (ii) no awards shall be
granted to any participant for a given period of service until the Compensation
Committee certifies in writing that the objective performance goals (and any
other material terms) applicable to such period have been satisfied.
Stock Options and Stock Appreciation Rights. The Compensation
Committee may award to selected key employees incentive stock options and
non-qualified stock options with or without stock appreciation rights. Options
may be awarded with terms ranging from one to ten years. Unless the
Compensation Committee specifies a different vesting schedule, options granted
pursuant to the 1993 Plan may be exercised (i) within twelve months after the
grant thereof or (ii) as to more than 25% of the number of shares subject to
the option within twenty-four months, 50% within thirty-six months or 75%
within forty-eight months; provided, however, that the Compensation Committee
may accelerate the vesting of options granted pursuant to the 1993 Plan upon
the retirement of an employee; and, provided further, that upon the occurrence
of a change of control of the Company all outstanding options which are not
then exercisable shall become exercisable immediately. The exercise price per
share of Common Stock for any option awarded shall not be less than 100% of the
fair market value of a share of Common Stock on the day the option is granted.
The aggregate fair market value, determined as of the day an option is granted,
of the Common Stock for which any employee may be awarded incentive stock
options which are first exercisable by the employee during any calendar year
under the 1993 Plan or any other stock option plan maintained by the Company or
any of its subsidiaries may not exceed $100,000.
An option may be exercised by paying the exercise price by certified
or bank cashier's check, and/or, to the extent permitted by law, Common Stock
or other form of consideration acceptable to the Company. The proceeds
received from the sale of shares upon the exercise of an option shall be added
to the general funds of the Company and used for general corporate purposes.
If an employee ceases to be an employee because of retirement, an
option held by such employee shall remain exercisable after cessation of
employment for three months, if an incentive option, or three years, if a non-
qualified option, to the extent such option was otherwise exercisable at the
time of retirement. The Compensation Committee may, however, in its
discretion, accelerate the vesting date and allow retiring employees to
exercise outstanding options which would not otherwise be exercisable on the
date of retirement. If an employee ceases to be an employee because of death,
an option held by such employee shall remain exercisable for one year and, if
not already fully exercisable, shall become exercisable with respect to all
shares subject thereto. If an employee ceases to be an employee because of
termination other than by reason of death or retirement, an option held by such
employee shall remain exercisable for 60 days, to the extent such option was
otherwise exercisable at the time of termination. The Compensation Committee
may, however, in its discretion, accelerate the vesting date and allow
terminated employees to exercise outstanding options which would not otherwise
be exercisable on the date of termination. Upon the occurrence of a change of
control of the Company, all outstanding options which are not then exercisable
shall become exercisable in full immediately. In no event shall an option be
exercisable beyond the end of the option period.
The Compensation Committee may, in its discretion, grant limited
stock appreciation rights that may only be exercised during the 60-day period
commencing upon the date of the first public disclosure of a change of control
of the Company. Such limited stock appreciation rights shall be exercisable
whether or not the holder is then employed by the Company. Upon exercise of a
limited stock appreciation right, the employee shall be entitled to receive an
amount in cash equal to the greater of (i) the fair market value of the Common
Stock 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 paid in such transaction or transactions during the
exercise period of the limited stock appreciation right up to the date of
exercise over the option price of such shares.
Stock appreciation rights entitle an employee to receive Common Stock
or, with the consent of the Compensation Committee, cash in an amount equal to
the excess of the fair market value of a share of Common Stock on the date the
right is exercised over the price at which the employee could exercise an
option to purchase that share. Stock appreciation rights shall be granted only
in connection with the granting of non-qualified stock options. Stock
appreciation rights shall be exercisable on the same terms as the options with
which they are paired, and an employee may choose to exercise either an option
or the related stock appreciation right. The exercise of one terminates the
other.
Amendment and Termination. The Board of Directors may amend or
terminate the 1993 Plan at any time, provided that it may not, without
stockholder approval, increase the number of shares which may be acquired under
the 1993 Plan, extend the term during which options may be granted under the
1993 Plan or reduce the exercise price below the fair market value of the
Common Stock on the date on which an option was granted. No amendment or
termination of the 1993 Plan shall deprive any participant of awards already
made. No awards may be made under the 1993 Plan after April 20, 2003.
Tax Status of 1993 Plan Awards
Introduction. The following description of the federal income tax
status of awards under the 1993 Plan, as amended and restated, is a summary and
does not purport to be complete.
Restricted Stock, Stock Awards and Unrestricted Stock. The Company
shall receive a deduction and the employee shall recognize taxable income equal
to the fair market value of the restricted stock at the time the restrictions
on the shares awarded lapse, unless the employee elects to pay such tax as may
be then due within 30 days immediately following notification by the Company to
the employee of a restricted stock award as permitted under Section 83(b) of
the Code in which case both the Company's deduction and the employee's
inclusion in income occur on the award date. The value of each installment of
a stock award distributed to employees shall be taxable as ordinary income to
such employees in the year in which such installment is received, and the
Company will be entitled to a corresponding tax deduction. The value of shares
of Common Stock of the Company awarded to employees as unrestricted stock will
be taxable as ordinary income to such employees in the year received, and the
Company will be entitled to a corresponding tax deduction.
Incentive Stock Options. If the option is an incentive stock option,
no income shall be realized by the employee upon award or exercise of the
option, and no deduction shall be available to the Company. If the Common
Stock purchased upon the exercise of an incentive stock option is held by an
employee for at least two years from the date of the award of such option and
for at least one year after exercise, any resulting gain shall be taxed at
long-term capital gains rates. If the Common Stock purchased pursuant to the
option is disposed of before the expiration of that period, any gain on the
disposition, up to the difference between the fair market value of the Common
Stock at the time of exercise and the option price, shall be taxed at ordinary
rates as compensation paid to the employee, and the Company shall be entitled
to a deduction for an equivalent amount. Any amount realized by the employee
in excess of the fair market value of the stock at the time of exercise shall
be taxed at capital gains rates.
Non-qualified Options. If the option is a non-qualified option, no
income shall be realized by the employee at the time of award of the option,
and no deduction shall be available to the Company. At the time of exercise,
ordinary income shall be realized by the employee in an amount equal to the
difference between the option price and the fair market value of the shares on
the date of exercise, and the Company shall receive a tax deduction for the
same amount. Upon disposition, any appreciation or depreciation of the Common
Stock after the date of exercise shall be treated as either short-term or
long-term capital gain or loss depending on whether the shares have been held
more than one year.
Stock Appreciation Rights. No income shall be realized by the em-
ployee at the time a stock appreciation right is awarded, and no deduction
shall be available to the Company. When the right (including a limited stock
appreciation right) is exercised, ordinary income shall be realized in the
amount of the cash or Common Stock received by the employee, and the Company
shall be entitled to a deduction of equivalent value.
Compliance with Section 162(m). Subject to shareholder approval, the
1993 Plan will be amended to limit the maximum number of shares to which
options or stock appreciation rights may be granted during each calendar year
to any given participant, to specify the performance goals upon which
Performance-Based Awards are based (and to set forth certain related
procedures) and to limit the maximum dollar amount of such Performance-Based
Awards that may granted during each calendar year to any given participant.
The amendment should allow options, stock appreciation rights and Performance-
Based Awards under the 1993 Plan to be treated as qualified performance-based
compensation under Section 162(m) of the Code (discussed under "Compensation
Committee Report" above).
Other Information
As of December 31, 1995, approximately 1,500 officers, employee
directors and other key employees were eligible for participation in the 1993
Plan. Grants of options under the 1993 Plan made during 1995 to the Named
Executive Officers are shown under "Option Grants in Last Fiscal Year" above.
During 1995, options to purchase a total of 692,176 shares of Common Stock were
granted under the 1993 Plan. As of December 31, 1995, options to purchase an
aggregate of 2,017,946 shares of Common Stock, at a weighted average exercise
price of $26.30 per share, were granted under the 1993 Plan since its
inception, of which options to purchase an aggregate of 648,708 shares of
Common Stock, at a weighted average exercise price of $26.20 per share, were
granted to directors and executive officers as a group. On March 1, 1996, the
mean between the high and low sales price of the Common Stock, as reported on
the New York Stock Exchange, was $______.
Adoption of Amendment to 1993 Plan
The Board of Directors believes that the Company's best interests
will be served by amending the 1993 Plan to increase the number of shares
authorized to be acquired under the 1993 Plan. The amendment to the 1993 Plan
will enable the Company to be in a position to continue to grant long term
incentive awards to officers and other key salaried employees, including those
who through promotions and development of the Company's business will be
entrusted with new and more important responsibilities. The amendment should
also allow options, stock appreciation rights and Performance-Based Awards
under the 1993 Plan to be treated as qualified performance-based compensation
under Section 162(m) of the Code and will provide additional flexibility to the
participants with respect to the means by which withholding occurs under the
1993 Plan. All of the Company's other benefit plans, as well as the other
provisions of the 1993 Plan, shall continue in accordance with their respective
terms. The 1993 Plan, as amended and restated, is attached as Appendix B.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" PROPOSAL NO. 3.
PROPOSAL NO. 4--RATIFICATION OF THE APPOINTMENT OF
ARTHUR ANDERSEN LLP AS INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors has selected Arthur Andersen LLP to audit the
accounts of the Company for the fiscal year ending December 31, 1996. 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 LLP 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 "FOR" PROPOSAL NO. 4.
PROPOSAL NO. 5--SHAREHOLDER PROPOSAL
RELATING TO ANNUAL ELECTION OF DIRECTORS
A shareholder of the Company has advised the Company that he will submit
the resolution set forth below for action at the Annual Meeting of
Shareholders. The name and address of the proponent and the number of shares
of the Company's Common Stock held by the proponent will be furnished by the
Company to any person, orally or in writing as requested, promptly upon the
receipt of any oral or written request. The Board of Directors has concluded
that it cannot support this proposal for the reasons stated in the Board of
Directors' statement below.
"RESOLVED, that the stockholders of the Company request that the
Board of Directors take the necessary steps, in accordance with state law,
to declassify the Board of Directors so that all directors are elected
annually, such declassification to be effected in a manner that does not
affect the unexpired terms of directors previously elected."
The proponent's statement in support of the resolution is as follows:
"At last year's annual meeting of stockholders a similar resolution
was approved by a significant number of the voting shares.
"The election of directors is the primary avenue for stockholders to
influence corporate governance policies and to hold management accountable
for its implementation of those policies. I believe that the
classification of the Board of Directors, which results in only a portion
of the Board being elected annually, is not in the best interests of the
Company and its stockholders.
"The Board of Directors of the Company is divided into three classes
serving staggered three-year terms. I believe that the Company's
classified Board of Directors maintains the incumbency of the current
Board and therefore of current management, which in turn limits
management's accountability to stockholders.
"The elimination of the Company's classified Board would require each
new director to stand for election annually and allow stockholders an
opportunity to register their views on the performance of the Board
collectively and each director individually. I believe this is one of the
best methods available to stockholders to insure that the Company will be
managed in a manner that is in the best interests of stockholders.
"I am a founding member of the Investors Rights Association of
America and I believe that concerns expressed by companies with classified
boards that the annual election of all directors could leave companies
without experienced directors in the event that all incumbents are voted
out by stockholders, are unfounded. In my view, in the unlikely event
that stockholders vote to replace all directors, this decision would
express stockholder dissatisfaction with the incumbent directors and
reflect the need for change.
"I URGE YOUR SUPPORT, VOTE FOR THIS RESOLUTION."
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "AGAINST" THE
SHAREHOLDER PROPOSAL
The Board of Directors' statement against the shareholder proposal is as
follows:
An identical proposal by the same shareholder was submitted for action at
the 1995 Annual Meeting of Shareholders and failed to receive the requisite
level of shareholder support for adoption.
Under the Company's current system for electing directors, the Board of
Directors is divided into three classes, with the number of directors in each
class being as nearly equal as possible. Each director serves a three-year
term, and directors for one of the three classes are elected each year. This
staggered system of election is similar to procedures which have been adopted
by the shareholders of many major corporations, including more than half of all
Fortune 500 companies.
The Board of Directors believes that the staggered system of election
facilitates continuity and stability of leadership and policy by assuring that
experienced personnel familiar with the Company and its business will be on the
Board of Directors at all times. The classified Board of Directors is also
intended to prevent precipitous changes in the composition of the Company's
Board of Directors and thereby serves to moderate those changes in the
Company's policies, business strategies and operations which the Board of
Directors deems not to be in the best interest of the Company and its
shareholders. The Company's directors are fully accountable to serve the
shareholders' interests throughout their terms.
Board classification is also intended to encourage any person seeking to
acquire control of the Company to initiate such action through arm's-length
negotiations with management and the Board of Directors, who are in a position
to negotiate a transaction which is in the best interest of all shareholders.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "AGAINST"
PROPOSAL NO. 5.
PROPOSAL NO. 6--SHAREHOLDER PROPOSAL
RELATING TO COMPENSATION OF NON-EMPLOYEE DIRECTORS
A shareholder of the Company has advised the Company that he will submit
the resolution set forth below for action at the Annual Meeting of
Shareholders. The name and address of the proponent and the number of shares
of the Company's Common Stock held by the proponent will be furnished by the
Company to any person, orally or in writing as requested, promptly upon the
receipt of any oral or written request. The Board of Directors has concluded
that it cannot support this proposal for the reasons stated in the Board of
Directors' statement below.
"RESOLVED that the shareholders recommend that the board of directors
take the necessary steps to ensure that from here forward all non-employee
directors should receive a minimum of fifty percent of their total
compensation in the form of company stock which cannot be sold for three
years."
The proponent's statement in support of the resolution is as follows:
"A significant equity ownership by outside directors is probably the best
motivator for facilitating identification with shareholders.
"Traditionally, outside directors, usually selected by management, were
routinely compensated with a fixed fee, regardless of corporate performance.
In today's competitive global economy, outside directors must exercise a
critical oversight of management's performance in furthering corporate
profitability. All too often, outside directors' oversight has been marked by
complacency, cronyism, and inertia.
"Corporate America has too many examples of management squandering company
assets on an extended series of strategic errors. Meanwhile, Boards of
Directors stood by and passively allowed the ineptitude to continue, well after
disaster struck. They fiddled while Rome was burning.
"When compensation is in company stock, there is a greater likelihood that
outside directors will be more vigilant in protecting their own, as well as
corporate, and shareholder interests.
"What is being recommended in this proposal is neither novel nor untried.
A number of corporations have already established versions of such practices,
namely, Scott Paper, The Travelers, and Hartford Steam Boiler.
"Robert B. Stobough, Professor of Business Administration at the Harvard
Business School, did a series of studies comparing highly successful to poorly
performing companies. He found that outside directors in the better performing
companies had significantly larger holdings of company stock than outside
directors in the mediocre performing companies.
"It can be argued that awarding stock options to outside directors
accomplishes the same purpose of insuring director's allegiance to a company's
profitability, as paying them exclusively in stock. However, it is our
contention that stock options are rewarding on the upside, but offer no
penalties on the downside, where shareholders bear the full downside risks.
There are few strategies that are more likely to cement outside directors with
shareholder interests and company profitability than one which results in their
sharing the same bottom line."
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "AGAINST" THE
SHAREHOLDER PROPOSAL.
The Board of Directors' statement against the shareholder proposal is as
follows:
While the Board of Directors shares the proponent's belief in the
importance of equity-based compensation for directors, it is also the Company's
policy to maintain a Board of Directors composed of qualified, dedicated and
highly regarded individuals who have experience relevant to the Company's
business operations, understand the complexities of the Company's business
environment and represent the best interests of the Company and all of its
shareholders.
The Company's director compensation, a portion of which is in the form of
restricted stock and stock options, is designed to be competitive with the
compensation paid to directors of companies of comparable size so as to enable
the Company to attract and retain highly qualified individuals to serve as
directors. Arbitrarily fixing a percentage of director compensation to be paid
in restricted stock would inhibit the Company's ability to offer competitive
director compensation and could adversely impact the Company's ability to
attract and retain highly qualified directors.
Consistent with the Company's belief in the importance of equity-based
compensation for directors and the practices of companies of comparable size,
the Company maintains the 1988 Directors Stock Award Plan, as amended, pursuant
to which non-employee directors are granted both Common Stock subject to
certain restrictions on transfer and options to purchase additional shares of
Common Stock.
The Company believes that the equity-based compensation it pays to its
non-employee directors is adequate in amount to align their interests with
those of the Company's shareholders and comprises a portion of a competitive
compensation package through which the Company is able to attract and retain
highly qualified individuals to serve as directors.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "AGAINST"
PROPOSAL NO. 6.
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 1995 all these filing
requirements were satisfied other than with respect to Mr. Tumber, who filed
one late Form 4 report for one transaction.
The Annual Report of the Company for 1995, 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 8, 1996.
APPENDIX A
AMENDMENT TO RESTATED CERTIFICATE OF INCORPORATION
LIMITING THE SIZE OF THE BOARD OF DIRECTORS TO
NO LESS THAN THREE AND NO MORE THAN FOURTEEN PERSONS
The full text of the first paragraph of Article SIXTH of the Restated
Certificate of Incorporation of the Company, as currently in effect, is set
forth below:
SIXTH: The directors of the Corporation shall be divided into
three classes, namely, Classes I, II and III, with each class consisting
of not less than one nor more than seven directors, as determined in
accordance with the By-Laws of the Corporation. At each annual meeting of
shareholders commencing with the 1976 annual meeting, the successors to
any class of directors whose terms shall then expire shall be elected to
serve until the third annual meeting following their election and until
their successors shall be elected and qualified. Directors elected as
hereinbefore provided may not be removed prior to the expiration of their
respective terms of office without cause.
The full text of the first paragraph of Article SIXTH of the Restated
Certificate of Incorporation of the Company, as proposed to be amended, is set
forth below:
SIXTH: The Board of Directors of the Corporation shall consist of
no fewer than three and no more than fourteen directors, with the exact
number of directors to be determined in accordance with the By-Laws of the
Corporation. The directors of the Corporation shall be divided into three
classes, namely, Classes I, II and III, with each class consisting of not
fewer than one nor more than five directors, as determined in accordance
with the By-Laws of the Corporation. At each annual meeting of
shareholders, the successors to any class of directors whose terms shall
then expire shall be elected to serve until the third annual meeting
following their election and until their successors shall be elected and
qualified. Directors elected as hereinbefore provided may not be removed
prior to the expiration of their respective terms of office without cause.
APPENDIX B
1993 LONG TERM INCENTIVE PLAN
(AS AMENDED AND RESTATED)
OF
C. R. BARD, INC.
SECTION 1 -- PURPOSE AND TERM OF PLAN
The Long Term Incentive Plan of C. R. Bard, Inc. is designed to
attract and retain the services of selected key employees of the Corporation
and its Subsidiaries who are in a position to make a material contribution to
the successful operation of the business of the Corporation and its
Subsidiaries. Awards under the Plan shall be made to selected key employees in
the form of Options, Restricted Stock, Stock Appreciation Rights and other
stock-based awards. The Plan, as amended and restated, shall be effective on
April 17, 1996. No awards may be made under the Plan after April 20, 2003.
SECTION 2 -- DEFINITIONS
For purposes of the Plan, the following terms shall have the
indicated meanings:
(a) "Board" means the Board of Directors of the Corporation.
(b) "Change of Control Event" means a change of control of the
nature that would be required to be reported in response to item 1(a) of
the Current Report on Form 8-K as in effect on April 21, 1993 pursuant to
Section 13 or 15(d) of the Exchange Act, provided that, without
limitation, a "Change of Control Event" shall be deemed to have occurred
if (i) any person shall become the beneficial owner, as those terms are
defined herein, of capital stock of the Corporation, the voting power of
which constitutes 20% or more of the general voting power of all of the
Corporation's outstanding capital stock or (ii) individuals who, as of
April 21, 1993, constitute the Board (the "Incumbent Board") cease for any
reasons to constitute at least a majority of the Board, provided that any
person becoming a Director subsequent to April 21, 1993 whose election, or
nomination for election by the Corporation's shareholders, was approved by
a vote of at least three quarters of the Directors comprising the
Incumbent Board (other than an election or nomination of an individual
whose initial assumption of office is in connection with an actual or
threatened election contest relating to the election of the Directors of
the Corporation, which is or would be subject to Rule 14a-11 of the
Regulation 14A promulgated under the Exchange Act) shall be, for purposes
of the Plan, considered as though such person were a member of the
Incumbent Board. No sale to underwriters or private placement of its
capital stock by the Corporation nor any acquisition by the Corporation,
through merger, purchase of assets or otherwise, effected in whole or in
part by issuance or reissuance of shares of its capital stock, shall
constitute a Change of Control Event. For purposes of the definition of
"Change of Control Event", the following definitions shall be applicable:
(i) The term "person" shall mean any individual, group, corporation
or other entity.
(ii) Any person shall be deemed to be the beneficial owner of any
shares of capital stock of the Corporation:
(A) which that person owns directly, whether or not of record,
or
(B) which that person has the right to acquire pursuant to any
agreement or understanding or upon exercise of conversion rights,
warrants, or options, or otherwise, or
(C) which are beneficially owned, directly or indirectly
(including shares deemed owned through application of clause (B)
above), by an "affiliate" or "associate" (as defined in the rules of
the Securities and Exchange Commission under the Securities Act of
1933) of that person, or
(D) which are beneficially owned, directly or indirectly
(including shares deemed owned through application of clause (B)
above), by any other person with which that person or such person's
"affiliate" or "associate" (defined as aforesaid) has any agreement,
arrangement or understanding for the purpose of acquiring, holding,
voting or disposing of capital stock of the Corporation.
(iii) The outstanding shares of capital stock of the Corporation shall
include shares deemed owned through application of clauses (ii)(B), (C)
and (D), above, but shall not include any other shares which may be
issuable pursuant to any agreement or upon exercise of conversion rights,
warrants or options, or otherwise, but which are not actually outstanding.
(iv) Shares of capital stock, if any, held by The Chase Manhattan
Bank N.A. under the Indenture and the Escrow Agreement dated as of
November 1, 1971 between International Paper Company and said bank shall
not be deemed owned by International Paper Company or by said bank for
purposes of this Plan, so long as they are held by said bank under said
Escrow Agreement, but said shares shall be deemed outstanding for the
purpose of determining the aggregate number of outstanding shares of
capital stock of the Corporation.
(c) "Change of Control Exercise Period" means the 60-day period
commencing upon the date of the first public disclosure of a Change of
Control Event.
(d) "Code" means the Internal Revenue Code of 1986, as amended.
(e) "Committee" means the Compensation and Stock Option Committee of
the Board or such other committee as may be designated by the Board.
(f) "Common Stock" means the Common Stock of the Corporation, par
value $0.25 per share.
(g) "Corporation" means C. R. Bard, Inc., a New Jersey corporation.
(h) "Director" means a member of the Board.
(i) "Disinterested Persons" means Directors who are not full time
employees of the Corporation and who are eligible to serve as Plan
administrators or to approve Plan awards under the provisions of Rule
16b3 promulgated under the Exchange Act. The preceding sentence shall
have no effect if any specification of such persons is eliminated from
the rules promulgated under Section 16 of the Exchange Act.
(j) "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
(k) "Fair Market Value" of the Common Stock on a specified day means
(1) the mean between the high and low sales price on that day as reported
on the New York Stock Exchange -- Composite Transactions Tape or, if no
sale of the Common Stock shall have occurred on the New York Stock
Exchange on that day, on the next preceding day on which there was a sale,
or (2) in the case of a simultaneous exercise and sale, the actual price
an optionee receives in the open market on the date of the exercise. If
the Common Stock is not traded on the New York Stock Exchange, the Fair
Market Value shall be the amount that is reasonably determined by the
Committee.
(l) "Limited Stock Appreciation Rights" shall have the meaning set
forth in Section 5.8.
(m) "Option" means an Option to purchase Common Stock awarded to a
Participant as provided in Section 5.
(n) "Option Period" means the period from the date of the grant of
an Option to the date of its expiration as provided in Section 5.3.
(o) "Optionee" means a Participant who has been granted an Option
under the Plan.
(p) "Participant" means a key employee, including officers and
directors who are employees, of the Corporation or any of its Subsidiaries
who has been selected by the Committee to receive an award under the Plan.
(q) "Performance-Based Awards" shall have the meaning set forth in
Section 4.11.
(r) "Plan" means the 1993 Long Term Incentive Plan of C. R. Bard,
Inc.
(s) "Restricted Period" means the vesting period, if any, of up to
10 years specified by the Committee pursuant to Section 4.2.
(t) "Restricted Stock" means Common Stock awarded to a Participant
subject to restrictions as provided in Section 4 as long as those
restrictions are in effect.
(u) "Retirement" means normal or early retirement under the terms of
a pension plan of the Corporation or voluntary termination of employment,
provided that in each case the Corporation must have given its prior
consent to treat the person's termination of employment as a retirement.
(v) "Stock Appreciation Right" means a right awarded to a
Participant as provided in Section 5 to receive in the form of Common
Stock or, with the consent of the Committee, cash, an amount equal to the
excess of the Fair Market Value of a share of Common Stock on the day the
right is exercised over the price at which the Participant could exercise
an Option to purchase that share.
(w) "Stock Award" means an award of Common Stock delivered in
installments as specified by the Committee pursuant to Section 4.8.
(x) "Subsidiary" means any corporation or other legal entity,
domestic or foreign, more than 50% of the voting power of which is owned
or controlled, directly or indirectly, by the Corporation.
(y) "Unrestricted Stock" means Common Stock awarded to a Participant
which Common Stock is not subject to a vesting period or installment
delivery specified by the Committee.
SECTION 3 -- GENERAL PROVISIONS
3.1 The Committee in its sole discretion shall select those key
employees to whom awards are made under the Plan and shall specify the type of
awards made, the number of Options, shares of Restricted Stock, stock awards,
unrestricted stock and Stock Appreciation Rights which in each case are
awarded, the Restricted Period, number of installments or Option Period
applicable to the awards and any other conditions relating to the awards that
are consistent with the Plan and that the Committee deems appropriate.
Participants shall be selected from among the key employees of the Corporation
and its Subsidiaries who are in a position to have a material impact on the
future results of operations of the Corporation and its Subsidiaries.
Participants may be selected and awards may be made at any time during the
period that awards may be granted under the Plan. Participants do not have to
be selected and awards do not have to be made at the same time by the
Committee. Any award made to a Participant shall not obligate the Committee to
make any subsequent awards to that Participant.
3.2 Shares of Common Stock acquired under the Plan may be authorized
and unissued shares of Common Stock or authorized and issued shares of Common
Stock held in the Corporation's treasury. Subject to Section 8.7, the total
number of shares of Common Stock which may be acquired under the Plan shall not
exceed 4,100,000. The number of shares of Common Stock available at any time
for awards under the Plan shall be determined in a manner which reflects the
number of shares of Common Stock then subject to outstanding awards and the
number of shares of Common Stock previously acquired under the Plan. For
purposes of such determinations, shares of Common Stock returned to the
Corporation as a result of the forfeiture of Restricted Stock, stock awards or
Options which expire or terminate, other than by reason of the exercise of
Stock Appreciation Rights, shall again be available for awards under the Plan.
SECTION 4 -- RESTRICTED STOCK, STOCK AWARDS AND UNRESTRICTED STOCK
4.1 An award of Restricted Stock, Stock Awards and Unrestricted
Stock to a Participant shall entitle the Participant to receive the number of
shares of Common Stock specified by the Committee in accordance with the terms
and conditions of this Section 4.
Restricted Stock awarded to a Participant may not be sold, assigned,
transferred, pledged or otherwise encumbered, except as hereinafter provided.
Except as provided in this Section 4.2 and/or as otherwise provided by the
Committee, a Participant, as the owner of Restricted Stock, shall have all the
rights of a holder of Common Stock, including but not limited to the right,
subject to the provisions of Sections 8.7 and 8.8, to receive all dividends or
dividend equivalents paid on and the right to vote such Restricted Stock.
Notwithstanding anything to the contrary in the Plan, upon the occurrence of a
Change of Control Event the Restricted Period applicable to Restricted Stock
shall end and all restrictions on Restricted Stock shall expire.
4.3 If a Participant holding Restricted Stock ceases to be an
employee of the Corporation or any of its Subsidiaries during the Restricted
Period for any reason other than death or Retirement, the Committee may at the
time of cessation of employment terminate the Restricted Period with respect to
any or all of such Restricted Stock. If the Committee does not terminate the
Restricted Period with respect to such Restricted Stock at the time of
cessation of employment, such Restricted Stock shall be forfeited.
4.4 If a Participant holding Restricted Stock ceases to be an
employee of the Corporation or any of its Subsidiaries during the Restricted
Period by reason of death or Retirement, Restricted Stock held by that
Participant shall become free of all restrictions thereon and, pursuant to
Section 4.7, the Corporation shall deliver that Restricted Stock to that
Participant or that Participant's beneficiary, as the case may be, within 60
days.
4.5 Each Participant awarded Restricted Stock, Stock Awards or
Unrestricted Stock shall enter into such agreement with the Corporation as may
be specified by the Committee in which the Participant agrees to the terms and
conditions of the award and such other matters as the Committee in its sole
discretion shall specify.
4.6 Each certificate representing Restricted Stock awarded under the
Plan shall be registered in the name of the Participant to whom the Restricted
Stock was awarded, deposited by the Participant with the Corporation together
with a stock power endorsed in blank and bear the following, or a substantially
similar, legend:
The transferability of this Certificate and the Common Stock
represented hereby is subject to the terms and conditions, including
forfeiture, contained in Section 4 of the 1993 Long Term Incentive Plan of
C. R. Bard, Inc. and an Agreement entered into between the registered
owner and C. R. Bard, Inc. Copies of the Plan and Agreement are on file
in the executive office of C. R. Bard, Inc. 730 Central Avenue, Murray
Hill, New Jersey 07974.
4.7 When the restrictions imposed by Section 4.2 and any related
restrictions on Restricted Stock have expired or have otherwise been satisfied,
the Corporation shall deliver to the Participant holding that Restricted Stock,
or the Participant's legal representative, beneficiary or heir, a certificate
or certificates, without the legend referred to in Section 4.6, for the number
of shares of Restricted Stock deposited with the Corporation by the Participant
pursuant to Section 4.6 with respect to which all restrictions have expired or
been satisfied. At that time, the Agreement referred to in Section 4.5 shall
terminate forthwith as to those shares.
4.8 Stock Awards shall be made by the Committee in numbers of
shares, and, unless otherwise specified by the Committee and subject to Section
4.9, a Stock Award shall be delivered to a Participant in three approximately
equal installments (in order to avoid the issuance of fractional shares) on the
date of the Stock Award and on the following anniversaries of the date of the
Stock Award.
4.9 No installment of shares shall be delivered on any anniversary
of the date of the Stock Award to a Participant whose employment has been
terminated, or who has, or has been, served notice of termination prior to the
award or anniversary date of such installment; provided, however, that where
such termination has occurred due to a Participant's death or retirement, the
Committee may, in its discretion, waive this condition precedent to delivery of
awarded but undelivered shares. Any shares not delivered to a Participant
pursuant to this Section 4.9 may be subsequently awarded to another
Participant. A Participant shall have no voting rights with respect to, and
shall not be entitled to any dividends declared in respect of, any awarded but
undelivered shares.
4.10 The Committee may award Unrestricted Stock to a participant,
which Common Stock shall not be subject to forfeiture pursuant to this Section
4. Certificates representing Unrestricted Stock shall be delivered to the
Participant as soon as practicable following the grant thereof.
4.11 Notwithstanding the foregoing, certain awards granted under
this Section 4 of the Plan may be granted in a manner which is deductible by
the Corporation under Section 162(m) of the Code. Such awards (the
"Performance-Based Awards") shall be based upon earnings per share, net income,
Group Financial Goals (as defined in the C. R. Bard, Inc. 1994 Executive Bonus
Plan), return on shareholders' investment, return on assets, attainment of
strategic and operational initiatives, appreciation in the price of Common
Stock, customer income, market share, sales, net profits, economic value-added
models or comparisons with the Standard & Poor's Medical Product Index and 500-
Stock Index. With respect to Performance-Based Awards, (i) the Committee shall
establish in writing the objective performance goals applicable to a given
period of service no later than 90 days after the commencement of such period
of service (but in no event after 25 percent of such period of service has
elapsed) and (ii) no awards shall be granted to any participant for a given
period of service until the Committee certifies in writing that the objective
performance goals (and any other material terms) applicable to such period
have been satisfied. The maximum dollar amount of Performance-Based Awards
that may be granted to each Participant during any calendar year shall not
exceed $500,000.
4.12 The maximum number of shares of Common Stock that may be
granted as Restricted Stock, Stock Awards and Unrestricted Stock in any
calendar year shall not exceed 40 percent of the total number of shares of
Common Stock granted or subject to awards granted under the Plan during such
calendar year.
SECTION 5 -- OPTIONS AND STOCK APPRECIATION RIGHTS
5.1 Subject to the provisions of this Section 5, the Committee may
grant incentive Options and non-qualified Options with or without Stock
Appreciation Rights to selected key employees of the Corporation and its
Subsidiaries. Each Option shall be evidenced by a Stock Option Agreement
between the Corporation and the Optionee which contains the terms and
conditions specified by this Section 5 and such other terms and conditions as
the Committee in its sole discretion shall specify.
5.2 The exercise price per share of Common Stock with respect to
each Option shall not be less than 100% of the Fair Market Value of a share of
Common Stock on the day the Option is granted.
5.3 Except as otherwise specifically set forth in the grant thereof
in accordance with this paragraph, each Option shall be for a term of up to ten
years as determined by the Committee, and no Option shall be exercisable during
the 12 months following the date of the grant. After the 12 month period, 25%
of the total number of options granted are exercisable; after 24 months from
the date of grant, 50% are exercisable; after 36 months, 75% are exercisable;
and, after 48 months, 100% of the options granted are exercisable.
Notwithstanding anything to the contrary in this paragraph, the Committee may,
when granting Options to any person under the Plan, grant Options that are
exercisable immediately or Options that are exercisable according to a schedule
different from that set forth in the preceding sentence. In addition, notwith-
standing any of the foregoing, upon the occurrence of a Change of Control
Event, all Options shall be immediately exercisable. Accrued installments of
Options may be exercised in whole or in part, and in no case may a fraction of
a share be purchased under the Plan.
5.4 At the time any Option is exercised in whole or in part, the
Optionee or other person exercising the Option shall pay to the Corporation, by
certified or bank cashier's check payable to the order of the Corporation,
and/or, to the extent permitted by law, Common Stock or other form of
consideration acceptable to the Corporation, the full exercise price of the
shares purchased, and the purchased shares shall be delivered to the Optionee
promptly. No Optionee or his or her legal representatives, legatees or
distributees, as the case may be, shall be deemed to be a holder of any shares
upon the exercise of an Option until the date of issuance of a stock
certificate to the Optionee for those shares. The proceeds from the sale of
shares upon the exercise of Options shall be added to the general funds of the
Corporation and used for general corporate purposes.
5.5 If an Optionee shall cease to be employed by the Corporation or
any of its Subsidiaries prior to the end of the Option Period by reason of
Retirement, each Option then held by the Optionee shall, to the extent that it
was exercisable at the time of Retirement, remain exercisable for a period of
(a) three months from the date of Retirement, if an incentive Option or
(b) three years from the last day of the month of Retirement, if a non-
qualified Option, and thereafter, such Option shall terminate; provided,
however, if an Optionee shall die after Retirement, each Option then held by
the Optionee shall be exercisable to the extent, and during the period, that it
would, but for the Optionee's death, have otherwise been exercisable after
Retirement. Notwithstanding anything to the contrary contained in this
paragraph, the Committee may, in its discretion, accelerate the vesting date
and allow retiring employees to exercise outstanding Options which would not
otherwise be exercisable under the Plan on the date of such employee's
Retirement. If an Optionee shall cease to be employed by the Corporation or
any of its Subsidiaries prior to the end of the Option Period by reason of
death, each Option then held by the Optionee shall, without regard to the
extent that it was exercisable at the time of death, be fully exercisable for a
period of one year from the first day of the month in which the Optionee died,
and thereafter, such Option shall terminate. If the employment of an Optionee
with the Corporation shall terminate, each Option then held by the Optionee
shall, to the extent it was exercisable on the date of termination, be
exercisable until 60 days following the date of termination and thereafter,
such Option shall terminate. Notwithstanding anything to the contrary
contained in this paragraph, the Committee may, in its discretion, accelerate
the vesting date and allow terminated employees to exercise outstanding Options
which would not otherwise be exercisable under the Plan on the date of such
employee's termination. Notwithstanding the foregoing, no Option shall be
exercisable later than the end of the Option Period relating thereto.
5.6 The Committee may grant Stock Appreciation Rights to Optionees
in tandem with non-qualified Options so that exercise of a Stock Appreciation
Right will have the effect of terminating the Option or portion thereof to
which it relates, and exercise of an Option or portion thereof to which a Stock
Appreciation Right relates will have the effect of terminating the Stock
Appreciation Right. Stock Appreciation Rights shall be exercisable in the same
installments and be subject to the same terms and conditions as the Options to
which they relate and to such other terms and conditions as the Committee in
its sole discretion shall specify.
5.7 The aggregate Fair Market Value, determined as of the date an
Option is granted, of the Common Stock for which any Participant may be awarded
incentive Options which are first exercisable by the Participant during any
calendar year under the Plan or any other stock option plan maintained by the
Corporation or its Subsidiaries shall not exceed $100,000.
5.8 The Committee may, in its discretion, grant limited stock
appreciation rights ("Limited Stock Appreciation Rights") that, notwithstanding
any other provision of the Plan, may only be exercised during a Change of
Control Exercise Period, and such Limited Stock Appreciation Rights shall be so
exercisable during the Change of Control Exercise Period whether or not such
person is then employed by the Corporation. 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 (a) the Fair Market Value of the shares of the
Common Stock with respect to which the Limited Stock Appreciation Right was
exercised over the option price of such shares under the Plan and (b) if the
Change of Control Event is the result of a transaction or a series of
transactions, the highest price per share of Common Stock paid in such
transaction or transactions during the Change of Control Exercise Period up to
the date of exercise over the exercise price per share of Common Stock under
the Plan. The Committee is authorized to amend the terms of a Limited Stock
Appreciation Right held by any employee subject to Section 16 of the Exchange
Act, as may be necessary so that the holding and exercise of such Limited Stock
Appreciation Right will be exempt under such Section.
5.9 The maximum number of Options, Stock Appreciation Rights and
Limited Stock Appreciation Rights that may be granted to each Participant
during any calendar year shall not exceed 400,000.
SECTION 6 -- ADMINISTRATION
6.1 The Plan shall be administered by the Committee, which shall
consist of Disinterested Persons (and, in the case of awards granted to
individuals subject to Section 162(m) of the Code, the Committee shall also
consist of Directors who are "outside directors" within the meaning of Section
162(m) of the Code and the regulations promulgated thereunder), and such
Directors shall serve at the pleasure of the Board.
6.2 Subject to the provisions of the Plan, the Committee shall have
exclusive power to select the key employees who shall be Participants and to
determine the amount of, or method of determining, the awards to be made to
Participants.
6.3 The Committee's interpretation of the Plan and of any award
granted under the Plan shall be final and binding on all Participants.
6.4 The Committee shall have the authority to establish, adopt or
revise such rules and regulations relating to the Plan and to make such
determinations as it deems necessary or advisable for the administration of the
Plan.
SECTION 7 -- AMENDMENT OR TERMINATION
7.1 The Board may amend any provision of the Plan and any agreement
under the Plan at any time, provided that no amendment may be made that would
(a) increase the maximum number of shares of Common Stock which may be acquired
under the Plan, (b) extend the term during which Options may be granted under
the Plan or (c) reduce the exercise price per share to less than the Fair
Market Value of the Common Stock on the date an Option was granted unless the
amendment has been approved by the stockholders of the Corporation as provided
in Rule 16b-3(b) under the Exchange Act, if continuation of the exemption
granted by Rule 16b-3 under the Exchange Act requires such approval. The Board
shall also have the right to terminate the Plan at any time. Except with a
Participant's consent, no amendment, suspension or termination shall impair the
rights of the Participant in any Options, Restricted Stock or Stock
Appreciation Rights awarded to the Participant under the Plan.
7.2 The Committee may refrain from designating Participants and from
making any awards, but that shall not be deemed a termination of the Plan. No
employee of the Corporation or any of its Subsidiaries shall have any claim or
right to be granted awards under the Plan.
SECTION 8 -- MISCELLANEOUS
8.1 The fact that a key employee of the Corporation or any of its
Subsidiaries has been designated a Participant shall not confer on that
employee any right to be retained in the employ of the Corporation or any of
its Subsidiaries or to subsequent awards under the Plan.
8.2 No award under the Plan shall be taken into account in
determining a Participant's compensation for purposes of any group life
insurance or other employee benefit or pension plan of the Corporation,
including the Company's Employees' Retirement Plan, Excess Benefit Plan and
Supplemental Executive Retirement Plan.
8.3 The Plan shall not be deemed an exclusive method of providing
incentive compensation for the officers and employees of the Corporation and
its Subsidiaries, and it shall not preclude the Board from authorizing or
approving other forms of incentive compensation.
8.4 All expenses and costs in connection with the operation of the
Plan shall be borne by the Corporation.
8.5 Options, Restricted Stock and Stock Appreciation Rights awarded
under the Plan shall not be transferable by a Participant other than by will or
the laws of descent and distribution, and Options and Stock Appreciation Rights
awarded under the Plan shall be exercisable during a Participant's lifetime
only by the Participant.
8.6 A Participant may appoint a beneficiary, on a form supplied by
the Committee, to exercise Options and Stock Appreciation Rights in the event
of the Participant's death and may change that beneficiary at any time prior to
the date of the Participant's death.
8.7 In the event of any change in the outstanding shares of Common
Stock by reason of any stock dividend or split, recapitalization, merger,
consolidation, combination or exchange of shares or other similar corporate
change, the maximum aggregate number and class of shares in which awards may be
granted under the Plan, the number of shares subject to outstanding Options and
Stock Appreciation Rights shall be appropriately adjusted by the Committee,
whose determination shall be conclusive. Any shares of stock or other
securities distributed to a Participant with respect to Restricted Stock shall
be subject to the restrictions and requirements imposed by Section 4, including
depositing the certificates therefor with the Corporation together with a stock
power and bearing a legend as provided in Section 4.6.
8.8 If the Corporation shall be consolidated or merged with another
corporation, each Participant who has received Restricted Stock that is still
subject to restrictions imposed by Section 4.2 may be required to deposit with
the successor corporation the certificates for the stock or securities or the
other property that the Participant is entitled to receive by reason of
ownership of Restricted Stock in a manner consistent with Section 4.6, and such
stock, securities or other property shall become subject to the restrictions
and requirements imposed by Section 4, and the certificates therefor or other
evidence thereof shall bear a legend similar in form and substance to the
legend set forth in Section 4.6.
8.9 The Corporation shall have the right to deduct from any payment
made under the Plan any federal, state or local income or other taxes required
by law to be withheld with respect to such payment at the highest marginal
individual income tax rate. It shall be a condition to the obligation of the
Corporation to deliver shares or pay any cash pursuant to any award that the
Participant pay to the Corporation such amount as may be requested by the
Corporation for the purpose of satisfying any liability for such withholding
taxes. Any award agreement may provide that the Participant may elect, in
accordance with any conditions set forth in such award agreement, to pay a
portion or all of such withholding taxes by (a) delivery of shares of Common
Stock or (b) having shares of Common Stock withheld by the Corporation from the
shares otherwise to be received. The number of shares so delivered or withheld
shall have an aggregate Fair Market Value sufficient to satisfy the applicable
withholding taxes. The acceptance of any such election by a Participant shall
be at the sole discretion of the Committee, and, in the case of a Participant
subject to Section 16 of the Exchange Act, the Corporation may require that the
method of making such payment be in compliance with Section 16 and the rules
and regulations thereunder.
8.10 The Plan shall be construed in accordance with the laws of the
State of New Jersey. Notwithstanding anything to the contrary in the Plan,
nothing in the Plan shall be construed to prevent the transfer of funds to a
grantor trust for the purpose of paying benefits under the Plan.
8.11 If in the opinion of counsel for the Corporation, any issuance
or delivery of shares of Common Stock to a Participant will violate the
requirements of any applicable federal or state laws, rules and regulations
(including, without limitation, the provisions of the Securities Act of 1933,
as amended, or the Exchange Act), such issuance or delivery may be postponed
until the Corporation is satisfied that the distribution will not violate such
laws, rules or regulations. Certificates delivered to Participants pursuant to
Section 4 hereof or issued on exercise of Options or Stock Appreciation Rights
may bear such legends as the Corporation may deem advisable to reflect
restrictions which may be imposed by law, including, without limitation, the
Securities Act of 1933.
P R O X Y
C. R. BARD, INC.
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
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 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 vote at the Annual Meeting
of Shareholders of C. R. BARD, INC. to be held at the Hamilton Park
Conference Center, 175 Park Avenue, Florham Park, New Jersey 07932
on Wednesday, April 17, 1996 at 10:00 a.m. and at any adjournments
thereof (a) as specified on the items listed on the reverse hereof,
and (b) in accordance with their discretion on any other business
which may properly come before said meeting.
Election of Directors:William C. Bopp, T. Kevin Dunnigan,
Regina E. Herzlinger and William H. Longfield
- FOLD AND DETACH HERE -
<PAGE> 1436
PLEASE MARK YOUR
/X/ 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 ELECTION OF DIRECTORS, FOR
PROPOSALS 2, 3 AND 4 AND AGAINST PROPOSALS 5 AND 6.
- -------------------------------------------------------------------
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSALS 1, 2, 3 AND
4.
- -------------------------------------------------------------------
FOR WITHHELD
1. Election of / / / /
Directors
(see reverse)
For, except vote withheld from the following nominee(s):
- --------------------------------------------------------
FOR AGAINST ABSTAIN
2. Amendment to / / / / / /
Restated Certificate
of Incorporation
FOR AGAINST ABSTAIN
3. Amendment to / / / / / /
1993 Long Term
Incentive Plan
FOR AGAINST ABSTAIN
4. Ratification of / / / / / /
Independent Public
Accountants
- -------------------------------------------------------------------
THE BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST PROPOSALS 5 AND 6.
- ------------------------------------------------------------------
FOR AGAINST ABSTAIN
5. Shareholder proposal / / / / / /
relating to annual
election of directors
FOR AGAINST ABSTAIN
6. Shareholder proposal / / / / / /
relating to
compensation of
non-employee directors
PLEASE MARK THIS BOX IF YOU PLAN TO ATTEND THE MEETING / /
NOTE: This proxy must be signed exactly as name(s) appear(s)
hereon. Executors, administrators, trustees, guardians, attorneys
and officers signing for corporation should give full title. For
joint accounts each owner should sign.
- ---------------------------------------------
- ---------------------------------------------
SIGNATURE(S) DATE
