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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>
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-2.
</TABLE>
C.R. Bard, Inc.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-12.
(1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
(5) Total fee paid:
------------------------------------------------------------------------
[ ] 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:
------------------------------------------------------------------------
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LOGO
C. R. BARD, INC.
730 CENTRAL AVENUE
MURRAY HILL, NEW JERSEY 07974
March 6, 1998
Dear Shareholder:
Your Board of Directors joins me in extending an invitation to attend the
1998 Annual Meeting of Shareholders which will be held on Wednesday, April 15,
1998 at the Hamilton Park Conference Center, 175 Park Avenue, Florham Park, New
Jersey. 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 to be
acted upon by shareholders.
If you plan to attend the meeting and are a shareholder of record, please
mark your proxy card in the space provided for that purpose. An admission ticket
is included with the proxy card for each shareholder of record. If your shares
are not registered in your name, please advise the shareholders of record (your
bank, broker, etc.) that you wish to attend. That firm must provide you with
evidence of your ownership which will enable you to gain admission to the
meeting.
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,
LOGO
WILLIAM H. LONGFIELD
Chairman and
Chief Executive Officer
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C. R. BARD, INC.
---------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
APRIL 15, 1998
---------------------
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of C. R.
Bard, Inc. will be held on Wednesday, April 15, 1998 at the Hamilton Park
Conference Center, 175 Park Avenue, Florham Park, New Jersey, at 10:00 a.m. for
the following purposes:
1. To elect three Class II directors for a term of three years;
2. To approve the 1998 Employee Stock Purchase Plan of C. R. Bard, Inc.;
3. To approve an amendment to the 1993 Long Term Incentive Plan of C. R.
Bard, Inc., as previously amended, to increase the number of shares of
common stock available for grant thereunder;
4. To approve amendments to the C. R. Bard, Inc. 1988 Directors Stock
Award Plan, as previously amended, to increase the number of shares of
common stock available for grant thereunder and to provide for the
ability to grant thereunder non-formula based awards to non-employee
directors;
5. To ratify the appointment of Arthur Andersen LLP as independent
public accountants for the year 1998; and
6. 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 23, 1998
are entitled to notice of and to vote at the meeting.
A copy of the Annual Report of C. R. Bard, Inc. for 1997 is enclosed with
this Notice, the attached Proxy Statement and the 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 6, 1998
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 AND
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.
<PG$PCN>
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 6, 1998 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 Nos. 2, 3, 4
and 5 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. The approval of Proposal Nos. 2 and 5
requires the affirmative vote of a majority of the votes cast on each proposal.
The approval of Proposal Nos. 3 and 4 requires the affirmative vote of a
majority of the votes cast on each proposal, provided that a majority of the
outstanding shares of Common Stock votes on each proposal.
Votes cast at the Annual Meeting of Shareholders will be tabulated by the
Company's transfer agent. Votes withheld for the election of directors have no
impact on the election of directors, except that votes withheld may result in
another individual receiving a higher number of votes. Abstentions and broker
non-votes will have no effect on Proposal Nos. 2, 3, 4 and 5; however, in the
case of Proposal Nos. 3 and 4, abstentions and broker non-votes will not be
counted as votes cast for purposes of determining whether a majority of the
outstanding shares of Common Stock voted on such proposal.
On February 23, 1998, the record date for the determination of shareholders
entitled to notice of and to vote at the Annual Meeting of Shareholders, the
outstanding voting securities of the Company consisted of 56,955,574 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 2000.
Class II consists of four directors whose terms expire in 1998. Class III
consists of three directors whose terms expire in 1999. Upon election by
shareholders, directors serve for a three-year term and until their successors
are elected and qualified.
At the Meeting of the Company's Board of Directors on February 11, 1998,
the Board of Directors adopted a policy providing that the Board of Directors
shall not nominate for election as a director any employee of the Company, other
than any employee who is the Chairman of the Board or the Chief Executive
Officer of the Company. Accordingly, Benson F. Smith, the Company's President
and Chief Operating Officer, is not being nominated for re-election as a Class
II director. In connection with the foregoing, at such meeting of the Board of
Directors, the Board of Directors passed a resolution to decrease the number of
directors from eleven to ten and the number of Class II directors from four to
three, effective as of the Annual Meeting of Shareholders. As a result, three
directors are to be elected at the Annual Meeting of Shareholders. Three of the
four current members of the Board of Directors constituting Class II directors
are nominated for re-election.
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Votes pursuant to the accompanying proxy will be cast, unless otherwise
indicated on the proxy, for the election of the three nominees named below. In
the event that any such nominee shall be unable to serve as a director, it is
intended that the proxy solicited hereby will be voted for such other person or
persons as may be nominated by management. Management has no reason to believe
that the nominees will be unable to serve.
Set forth below are the names, principal occupations and ages of the three
nominees for re-election as directors and the current directors with unexpired
terms, as well as certain information relating to other positions held by them
with the Company and other companies. Except as otherwise indicated, the
information set forth below as to principal occupation is for at least the last
five years. There are no family relationships among directors and nominees.
NOMINEES FOR RE-ELECTION AS CLASS II DIRECTORS
<TABLE>
<C> <S>
Joseph F. Abely, JOSEPH F. ABELY, JR.
Jr. Retired Chairman and Chief Executive Officer of Sea-Land
Corporation (international intermodal freight transportation
and related trade services) since 1987, having been prior
thereto, Vice Chairman of the Board and a director of RJR
Nabisco, Inc. (international consumer products); age 69. Mr.
Abely has been a director since 1985 and is a member of the
Compensation Committee; Finance Committee; and Regulatory
Compliance Committee. He is also a director of The
Perkin-Elmer Corporation and Burlington Industries, Inc.
Robert P. Luciano 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 64. Mr. Luciano has been a director since
1981 and is a member of the Executive Committee;
Compensation Committee; and Governance Committee. He is also
a director of AlliedSignal Inc. and Merrill Lynch & Co.,
Inc.
Tony L. White TONY L. WHITE
Chairman, President and Chief Executive Officer of The
Perkin-Elmer Corporation (life science systems and
analytical instruments) since September 1995, having been
Executive Vice President, Baxter International Inc. from
November 1993 to September 1995 and Executive Vice
President, Global Business, Baxter International Inc. from
March 1992 to November 1993; age 51. Mr. White has been a
director since 1996 and is a member of the Audit Committee;
Compensation Committee; and Regulatory Compliance Committee.
He is also a director of Ingersoll-Rand Company.
</TABLE>
2
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OTHER DIRECTORS OF THE COMPANY
CLASS III DIRECTORS
(TERMS EXPIRE 1999)
<TABLE>
<C> <S>
T. Kevin Dunnigan T. KEVIN DUNNIGAN
Chairman of Thomas & Betts Corporation
(electrical/electronic components, connectors and
accessories) since 1997; Chairman and Chief Executive
Officer from 1992 to 1997; Chief Executive Officer 1985 to
1992; President from 1980 to 1994; age 60. Mr. Dunnigan has
been a director since 1994 and is a member of the Executive
Committee; Audit Committee; and Governance Committee. He is
also a director of Lukens, Inc. and Elsag Bailey Process
Automation N.V.
Regina E. REGINA E. HERZLINGER
Herzlinger
Nancy R. McPherson Professor of Business Administration,
Harvard Business School since 1971; age 54. Professor
Herzlinger has been a director since 1991 and is a member of
the Audit Committee; Finance Committee; and Regulatory
Compliance Committee. She is also a director of Deere &
Company, Manor Care, Inc., Cardinal Health Inc.,
Schering-Plough Corporation and Total Renal Care, Inc.
William H. WILLIAM H. LONGFIELD
Longfield
Chairman and Chief Executive Officer since September 1995,
having been President and Chief Executive Officer since June
1994 and President and Chief Operating Officer from
September 1991 to June 1994; age 59. Mr. Longfield has been
a director since 1990 and is a member of the Executive
Committee and Governance Committee. He is also a director of
Manor Care, Inc., United Dental Care, The West Company and
Horizon Health Corporation.
</TABLE>
CLASS I DIRECTORS
(TERMS EXPIRE 2000)
<TABLE>
<C> <S>
William C. Bopp WILLIAM C. BOPP
Executive Vice President and Chief Financial Officer since
October 1995, having been Senior Vice President and Chief
Financial Officer since 1992; age 54. Mr. Bopp has been a
director since 1995 and is a member of the Finance
Committee.
</TABLE>
3
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<TABLE>
<C> <S>
Marc C. Breslawsky MARC C. BRESLAWSKY
President and Chief Operating Officer of Pitney Bowes Inc.
(systems to manage the exchange and distribution of
information and packages) since May 1996, having been Vice
Chairman since October 1994 and President of Pitney Bowes
Office Systems from 1990 to 1994; age 55. Mr. Breslawsky has
been a director since 1996 and is a member of the Audit
Committee; Finance Committee; and Regulatory Compliance
Committee. He is also a director of Pitney Bowes Inc., The
United Illuminating Company and Pitney Bowes Credit Corp.
William T. Butler WILLIAM T. BUTLER, M.D.
Chancellor of Baylor College of Medicine since January 1996,
having been President and Chief Executive Officer since
1979; and Chairman of Lyondell Petrochemical Company since
June 1997; age 65. Dr. Butler has been a director since 1988
and is a member of the Compensation Committee; Regulatory
Compliance Committee; and Governance 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.
Daniel A. Cronin, DANIEL A. CRONIN, JR.
Jr.
President, Northbridge Management Company (investment
management); age 69. 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.
</TABLE>
SECURITIES OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The table below indicates all persons who, to the knowledge of management,
beneficially owned more than 5% of the Company's outstanding Common Stock as of
February 23, 1998:
<TABLE>
<CAPTION>
NUMBER OF SHARES
OF COMMON STOCK PERCENT
NAME AND ADDRESS OF BENEFICIAL OWNER BENEFICIALLY OWNED OF CLASS
------------------------------------ ------------------ --------
<S> <C> <C>
Wellington Management Company, LLP(1)....................... 6,897,638(2) 12.12
75 State Street
Boston, Massachusetts 02109
Vanguard Specialized Portfolios, Inc.(3).................... 3,196,400(4) 5.62
Health Care Portfolio
Post Office Box 2600
Valley Forge, Pennsylvania 19482
</TABLE>
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(1) Based upon a Schedule 13G, dated February 11, 1998.
(2) Denotes shared voting power with respect to 1,099,000 of such shares, shared
dispositive power with respect to all of such shares and sole voting power
and sole dispositive power with respect to none of such shares.
(3) Based upon a Schedule 13G, dated February 9, 1998.
(4) Denotes sole voting power and shared dispositive power with respect to all
such shares and shared voting power and sole dispositive power with respect
to none of such shares.
4
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SECURITIES OWNERSHIP OF MANAGEMENT
The table below contains information as of February 23, 1998 with respect
to the beneficial ownership of Common Stock of the Company by each director of
the Company and the Company's Chief Executive Officer and four other 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 Common Stock. All directors and executive officers as a group (23
people) own beneficially 0.86% of the outstanding Common Stock. Unless otherwise
noted in the footnotes 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
HELD AS OF FEBRUARY 23, 1998
NAME FEBRUARY 23, 1998(1) UNDER OPTIONS
---- -------------------- -----------------
<S> <C> <C>
Joseph F. Abely, Jr....................................... 5,288 2,400
William C. Bopp........................................... 35,479 42,481
Marc C. Breslawsky........................................ 5,337 200
William T. Butler, M.D. .................................. 7,588 2,400
Daniel A. Cronin, Jr. .................................... 13,688 2,400
T. Kevin Dunnigan......................................... 11,182 600
Regina E. Herzlinger...................................... 10,426 2,400
William H. Longfield...................................... 102,775 255,586
Robert P. Luciano......................................... 29,803 2,400
Benson F. Smith........................................... 74,616 95,149
William T. Tumber......................................... 30,104 36,507
John H. Weiland........................................... 13,781 7,858
Tony L. White............................................. 5,287 200
All Directors and Executive Officers as a group (23
people)................................................. 490,549 626,981
</TABLE>
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(1) Includes phantom stock shares credited to the accounts of non-employee
directors under the Deferred Compensation Agreement for Non-Employee
Directors, as follows: Marc C. Breslawsky, 2,241; T. Kevin Dunnigan, 4,072;
Regina E. Herzlinger, 7,238; Tony L. White, 2,191. See "Compensation of
Outside Directors -- Fees and Deferred Compensation." Includes share
equivalent units credited to the accounts of non-employee directors under
the Stock Equivalent Plan for Outside Directors, as follows: Joseph F.
Abely, Jr., 1,288; Marc C. Breslawsky, 2,696; William T. Butler, M.D.,
1,288; Daniel A. Cronin, Jr., 1,288; T. Kevin Dunnigan, 5,510; Regina E.
Herzlinger, 1,288; Robert P. Luciano, 23,803; Tony L. White, 2,696. See
"Compensation of Outside Directors -- Stock Equivalent Plan for Outside
Directors."
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
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 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 year 1997 all these filing requirements were
timely satisfied.
BOARD MEETINGS AND COMMITTEES
Seven regular meetings of the Board of Directors were held during 1997. The
average attendance of all directors at the seven Board meetings was 99%. The
average attendance of all directors at all meetings of the Board and Committees
of the Board during 1997 was 98%. During this period each director attended 82%
or more of all meetings of the Board of Directors and of the Committees on which
they served.
5
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The Board of Directors has several standing committees, including, among
others, an Audit Committee, a Compensation Committee and a Governance Committee.
The Audit Committee, currently composed of directors Breslawsky, Cronin,
Dunnigan, Herzlinger and White, met two times during 1997. The principal
functions of the Audit Committee are to (i) make recommendations to the full
Board of Directors 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 control
structure; (v) meet separately with each of the independent public accountants
and the internal auditors and (vi) consider other audit and nonaudit matters
from time to time as requested by the full Board of Directors.
The Compensation Committee, currently composed of directors Abely, Butler,
Luciano and White, met four times during 1997. The principal functions of the
Compensation Committee are to review and report to the Board of Directors on all
matters involving compensation of employees and management and to administer the
Company's 1994 Executive Bonus Plan and 1993 Long Term Incentive Plan, as
amended and restated.
The Governance Committee, currently composed of directors Butler, Dunnigan,
Longfield and Luciano, met two times during 1997. The principal functions of the
Governance Committee are to advise and make 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. In
addition, the Governance Committee administers the Company's Stock Equivalent
Plan for Outside Directors and will administer the Company's 1988 Directors
Stock Award Plan if amended as proposed. See "Proposal No. 3."
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.
Stock Ownership Program
To further align the interests of management and shareholders, in 1998 the
Compensation Committee established formal stock ownership guidelines for the
Named Executive Officers and others holding senior executive positions at the
corporate and divisional levels. The targets are expressed in terms of the value
of the Company's Common Stock held by the executive as a multiple of that
executive's base salary.
Under the guidelines of this program, the Chief Executive Officer is
required to own a multiple of five times base salary, the Chief Operating
Officer four times base salary, the Chief Financial Officer and Group Presidents
three times base salary and other executives one to two times base salary.
Ownership levels must be achieved by July 15, 2002. Beginning with bonuses
earned in 1998, executives who are subject to the stock ownership guidelines
will be required to contribute a minimum of 25% of their bonuses to purchase
Common Stock of the Company under a Management Stock Purchase Plan and will be
required to continue to do so annually until such time as the executive has
reached the applicable ownership guidelines. After the executive has reached the
applicable ownership guidelines, contribution to the Management Stock Purchase
Plan is voluntary. Executives newly hired who are subject to ownership
guidelines will have five years to meet such guidelines.
6
<PG$PCN>
While the Named Executive Officers and other executives in this program
have been given five years in which to comply with this program, the Committee
will monitor participation and expects that incremental progress will be made
each year by each executive during the phase-in period.
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 Products and Supplies
Index in the Comparison of Five Year Cumulative Total Returns below, as the
Company believes that reference to the S&P Medical Products and Supplies 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.
The Compensation Committee considers the recommendation of Mr. Longfield in
approving the base salaries of Messrs. Smith, Weiland, Tumber and Bopp and all
other executives whose base salaries exceed $150,000 annually. Goals and
objectives for these individuals are based on the targeted levels described
above for the Divisions or corporate staff functions for which they are
responsible and on individual strategic and operational initiatives. Performance
is weighed more heavily than inflation and competitive salary data.
Each year, the Compensation Committee establishes a merit fund which is
used to increase base salaries for professional and managerial employees. The
amount of the merit fund is determined on the basis of an analysis of several
industry specific and general, non-industry specific surveys which are conducted
on an annual basis by consulting companies and trade associations. Individuals
receive a salary increase paid out of the merit fund based on a formula which is
designed to reward superior individual performance.
Bonus Plans
Awards under the Company's bonus plans are determined on the basis of the
degree to which corporate and, in certain cases, group financial and individual,
non-financial goals are attained.
Actual incentive compensation awards may be either more or less than
targeted amounts depending on actual results compared with corporate and group
and individual performance measures. Thus, the Company's incentive plans create
a direct link between pay and performance.
At the beginning of each year, the Board of Directors, for corporate
planning purposes and in consultation with the management of the Company,
approves certain financial targets for the Company, including an earnings per
share target. The earnings per share target then becomes the critical financial
indicator used by the Compensation Committee in determining awards under the
Company's bonus plans for Mr. Longfield and the other executive officers, other
than Group Presidents whose bonuses are determined as described below. All
bonuses are based on operational results exclusive of items of an unusual and/or
non-recurring nature.
7
<PG$PCN>
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 1997 were determined by reference to the degree to
which the Company's earnings per share target for 1997 was achieved and, with
respect to Group Presidents, including Mr. Weiland, with equal weight by
reference to the degree to which the net income target established for their
respective groups was achieved. In 1997, 92% of the Company's earnings per share
target (exclusive of items of an unusual and/or non-recurring nature) was
achieved and 102.4% of the net income target for the group of Mr. Weiland was
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 1997 were determined by reference to the degree to which the
Company's earnings per share target for 1997 was achieved and the degree to
which individual strategic and operational initiatives for 1997 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 1997 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 incentives. The executive officers of the Company who are
responsible for quality control and regulatory and medical affairs did not
participate in the Company's bonus plan.
Restricted Stock Awards
Under the Company's 1993 Long Term Incentive Plan, as amended and restated,
in 1997 the Compensation Committee granted restricted stock to selected
executive officers, including the Named Executive Officers. Restricted stock
vests in accordance with a schedule specified by the Compensation Committee.
Certain grants of restricted stock ("Performance Shares") vest based upon
appreciation in the price of the Company's Common Stock. With respect to such
grants made in 1997, 50% of the Performance Shares become eligible for vesting
when the price of the Company's Common Stock reaches $42.00 per share and the
average of the closing prices of the Company's Common Stock during the following
30 day period is at least $42.00 per share. The remaining 50% of the Performance
Shares become eligible for vesting when the price of the Company's Common Stock
reaches $48.00 per share and the average of the closing prices of the Company's
Common Stock during the following 30 day period is at least $48.00 per share.
Performance Shares vest five years after becoming eligible for vesting.
Performance Shares which do not become eligible for vesting within three years
of their date of grant are forfeited.
Restricted stock is combined with other long-term incentives to target
total compensation for long-term incentives at slightly above the average but
below the high end of the selected group of companies described above. The
formula for determining the number of shares of restricted stock other than
Performance Shares granted to each individual is a multiple of base salary
weighted for attainment of goals and objectives and divided by the share price
on the date of grant. Executive officers may receive more or less than the
targeted amounts depending on actual results compared with corporate and, in
certain cases, group and individual performance measures as described under
"Bonus Plans." The number of Performance Shares granted to each individual is
determined by the Compensation Committee. All grants of restricted stock to the
Named Executive Officers in 1997 were grants of Performance Shares.
Stock Options
Under the Company's 1993 Long Term Incentive Plan, as amended and restated,
in 1997 the Compensation Committee granted stock options to selected executive
officers, including the Named Executive Officers. The Compensation Committee
granted limited stock appreciation rights, which may only be exercised in the
event of a change of control of the Company, in tandem with all stock options
granted to
8
<PG$PCN>
executive officers. Stock options vest in accordance with a schedule specified
by the Compensation Committee.
Certain grants of stock options ("Performance Options") become exercisable
based, in part, upon appreciation in the price of the Company's Common Stock.
With respect to such grants made in 1997, 50% of the Performance Options become
exercisable when the price of the Company's Common Stock reaches $42.00 per
share and the average of the closing prices of the Company's Common Stock during
the following 30 day period is at least $42.00 per share. The remaining 50% of
the Performance Options become exercisable when the price of the Company's
Common Stock reaches $48.00 per share and the average of the closing prices of
the Company's Common Stock during the following 30 day period is at least $48.00
per share. If the Performance Options do not become exercisable as described
above within three years of the date of grant, the Performance Options will vest
on the ninth anniversary of the date of grant.
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. In determining
the number of options other than Performance Options granted to each individual,
the Compensation Committee uses a multiple of base salary divided by the share
price on the date of grant. Executive Officers may receive 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." The number of Performance Options granted to each individual is
determined by the Compensation Committee. None of the grants of stock options to
the Named Executive Officers in 1997 were grants of Performance Options.
The Company uses the Black-Scholes method to determine the potential value
of stock options.
Compliance with Internal Revenue Code Section 162(m)
Section 162(m) of the Internal Revenue Code of 1986, enacted in 1993,
generally disallows a tax deduction to public companies for compensation over
$1,000,000 paid to the Chief Executive Officer and the four other most highly
compensated executive officers for 1994 and thereafter. Qualifying
performance-based compensation is not subject to the deduction limit if certain
requirements are met. The Company's 1994 Executive Bonus Plan and 1993 Long Term
Incentive Plan, as amended and restated, have been structured such that annual
incentive bonuses and long-term equity-based compensation paid thereunder for
the Company's most senior executives should constitute qualifying
performance-based compensation under Section 162(m). The Company's shareholders
have approved both such plans. However, the Compensation Committee recognizes
that unanticipated future events, such as a change of control of the Company or
a change in executive personnel, could result in a disallowance of compensation
deduction under Section 162(m). Moreover, the Compensation Committee may from
time to time award compensation that is non-deductible under Section 162(m) when
in the exercise of the Compensation Committee's business judgment such award
would be in the best interest of the Company. The Compensation Committee
believes that all compensation reported in the Summary Compensation Table below
for 1997 should be deductible under the Internal Revenue Code.
THE COMPENSATION COMMITTEE
Robert P. Luciano, Chairman
Joseph F. Abely, Jr.
William T. Butler, M.D.
Tony L. White
9
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SUMMARY COMPENSATION TABLE
The table below sets forth information concerning compensation paid to the
Named Executive Officers during the last three fiscal years.
<TABLE>
<CAPTION>
ANNUAL COMPENSATION LONG TERM COMPENSATION
-------------------------------- ---------------------------------
AWARDS PAYOUTS
----------------------- -------
OTHER RESTRICTED SECURITIES
ANNUAL STOCK UNDERLYING LTPIP ALL OTHER
NAME AND SALARY BONUS COMPENSATION AWARDS OPTIONS PAYOUTS COMPENSATION
PRINCIPAL POSITION YEAR ($) ($) ($)(1) ($)(2) (#)(3) ($)(4) ($)(5)
------------------ ---- ------- ------- ------------ ---------- ---------- ------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
William H. Longfield.......... 1997 650,000 286,000 19,110 -0-(6) 55,980 32,893 209,476
Chairman and Chief Executive 1996 625,000 287,500 18,018 263,812 67,048 34,426 206,864
Officer 1995 575,000 310,500 16,926 303,747 74,220 53,999 193,826
Benson F. Smith............... 1997 428,525 174,600 11,200 -0-(6) 23,060 15,135 40,282
President and Chief 1996 416,000 175,500 10,560 124,687 27,892 29,568 37,877
Operating Officer 1995 374,256 198,000 9,920 359,164 29,360 27,692 34,625
John H. Weiland*.............. 1997 280,833 116,300 -0- -0-(6) 12,212 -0- 13,084
Group President 1996 208,333 76,100 -0- 119,140 21,432 -0- 9,250
William T. Tumber............. 1997 292,056 97,300 9,100 -0-(6) 12,624 14,126 7,710
Senior Vice President 1996 274,275 44,800 8,580 47,906 11,856 27,456 31,027
1995 246,925 78,000 8,060 56,822 12,452 25,714 76,749
William C. Bopp............... 1997 264,150 96,900 5,250 -0-(6) 9,600 11,704 53,638
Executive Vice President and 1996 254,000 97,400 4,950 51,516 11,612 12,250 53,077
Chief Financial Officer 1995 226,057 109,800 4,650 203,742 12,260 11,472 47,742
</TABLE>
- ---------------
* Prior to March 1, 1996, Mr. Weiland was not affiliated with the Company.
(1) All of these amounts represent dividend equivalents paid under the Long Term
Performance Incentive Plan ("LTPIP"). No grants have been made under this
Plan since January 1, 1993.
(2) As of December 31, 1997: William H. Longfield held an aggregate of 37,750
shares of restricted stock with an aggregate value of $1,181,952; Benson F.
Smith held an aggregate of 23,560 shares of restricted stock with an
aggregate value of $737,663; John H. Weiland held an aggregate of 3,410
shares of restricted stock with an aggregate value of $106,767; William T.
Tumber held an aggregate of 7,690 shares of restricted stock with an
aggregate value of $240,773; and William C. Bopp held an aggregate of 12,180
shares of restricted stock with an aggregate value of $381,355. The
foregoing numbers of shares and amounts and the amounts in the table exclude
holdings and grants of Performance Shares (as defined above under "Executive
Compensation -- Compensation Committee Report -- Restricted Stock Awards").
See footnote (6) below.
Dividends are paid on all shares of restricted stock.
(3) 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.
(4) The dollar amounts for 1997, 1996 and 1995 were derived by multiplying the
number of vested performance units by $10.09, $10.56 and $9.89,
respectively, the book values of a share of the Common Stock of the Company
at December 31, 1997, December 31, 1996 and December 31, 1995, respectively.
These payouts are not made until the employee retires or otherwise leaves
employment with the Company. No grants have been made under this Plan since
January 1, 1993.
(5) 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, Weiland, Tumber and
Bopp would be 130,029, 44,404, 16,070, 34,871 and 31,173, respectively, in
1997, $121,922, $35,953, $9,817, $32,288 and $27,588, respectively, in 1996
and $111,158, $31,878, $0, $31,574 and $24,554, respectively, in 1995, as
opposed to the amounts shown in the column.
10
<PG$PCN>
For William H. Longfield, the 1997 amount in the column represents Company
contributions of $4,000 under the Retirement Savings Plan, $198,810 accrued
under the Supplemental Insurance/Retirement Plan and $6,666 which, net of
tax, is reimbursement for insurance premiums paid under such later plan; the
1996 amount in the column represents Company contributions of $3,750 under
the Retirement Savings Plan, $197,738 accrued under the Supplemental
Insurance/Retirement Plan and $5,376 which, net of tax, is reimbursement for
insurance premiums paid under such the Supplemental Insurance/Retirement
Plan; 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.
For Benson F. Smith, the 1997 amount in the column represents Company
contributions of $4,000 under the Retirement Savings Plan, $33,886 accrued
under the Supplemental Insurance/Retirement Plan and $2,396 which, net of
tax, is reimbursement for insurance premiums paid under such latter plan;
the 1996 amount in the column represents Company contributions of $3,750
under the Retirement Savings Plan, $32,374 accrued under the Supplemental
Insurance/Retirement Plan and $1,753 which, net of tax, is reimbursement for
insurance premiums paid under such latter plan; 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.
For John H. Weiland, the 1997 amount in the column represents Company
contributions of $4,000 under the Retirement Savings Plan and $9,084 accrued
under the Supplemental Insurance/Retirement Plan; the 1996 amount in the
column represents Company contributions of $3,392 under the Retirement
Savings Plan and $5,500 accrued under the Supplemental Insurance/Retirement
Plan.
For William T. Tumber, the 1997 amount in the column represents Company
contributions of $4,000 under the Retirement Savings Plan and $3,710 which,
net of tax, is reimbursement for insurance premiums paid under the
Supplemental Insurance/Retirement Plan; the 1996 amount in the column
represents Company contributions of $3,750 under the Retirement Savings
Plan, $24,078 accrued under the Supplemental Insurance/Retirement Plan and
$3,199 which, net of tax, is reimbursement for insurance premiums paid under
such latter plan; 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.
For William C. Bopp, the 1997 amount in the column represents Company
contributions of $4,000 under the Retirement Savings Plan, $47,671 accrued
under the Supplemental Insurance/Retirement Plan and $1,967 which, net of
tax, is reimbursement for insurance premiums paid under such latter plan;
the 1996 amount in the column represents Company contributions of $3,750
under the Retirement Savings Plan, $47,904 accrued under the Supplemental
Insurance/Retirement Plan and $1,423 which, net of tax, is reimbursement for
insurance premiums paid under such latter plan; 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.
(6) All grants of restricted stock awards in 1997 to the Named Executive
Officers were grants of Performance Shares. As of December 31, 1997: William
H. Longfield held 50,000 Performance Shares with a value of $1,565,500;
Benson F. Smith held 30,000 Performance Shares with a value of $939,300;
John H. Weiland held 10,000 Performance Shares with a value of $313,100;
William T. Tumber held 10,000 Performance Shares with a value of $313,100;
and William C. Bopp held 10,000 Performance Shares with a value of $313,100.
No Performance Shares were granted in 1996 or 1995. For a discussion of the
terms upon which such Performance Shares vest, see "Executive
Compensation -- Compensation Committee Report -- Restricted Stock Awards."
Dividends are paid on all Performance Shares.
CERTAIN COMPENSATION ARRANGEMENTS
The Company has an agreement with Mr. Longfield which provides for benefits
upon any termination of employment within three years after a change of control
(defined to include the acquisition by a person or a group of 20% or more of the
voting power of the Company's stock or a change in the members of the Board of
Directors such that the continuing directors cease to constitute a majority of
the Board of Directors during a two-year period). This agreement expires three
years after any change of control, but under certain circumstances may be
terminated by the Board of Directors prior to any change of control and will
expire immediately upon the earlier of Mr. Longfield's death, permanent
disability or termination of employment for cause. Benefits include (i)
severance pay of three times the sum of Mr. Longfield's highest base salary and
his average annual bonus during the three years prior to severance and (ii)
continued participation in the Company's benefit plans for one year (or, if such
participation is not possible, provision for substantially similar benefits).
The Company has similar agreements with Messrs. Smith, Weiland, Tumber and Bopp
and eight other executive officers. In addition, the Company has entered into a
Supplemental Executive Retirement Agreement with Mr. Longfield which provides
for additional benefits each year for a period of fifteen years to Mr. Longfield
generally equal to (i) 50% of his salary and bonus averaged over the five
completed calendar years which provide the highest average of all the completed
calendar years ending before
11
<PG$PCN>
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, as amended and restated,
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.
Stock options granted under the Company's prior stock option plans; stock
options, stock appreciation rights and restricted stock granted under the
Company's 1993 Long Term Incentive Plan, as amended and restated; 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 $26,000 annual retainer plus $1,200 per
Board meeting attended and an additional $1,200 per committee meeting attended,
except for committee chairmen who receive a committee meeting fee of $2,400 for
each committee meeting chaired. Under the Deferred Compensation Agreement for
Non-Employee Directors, all or a portion of such fees may be deferred at the
election of the director, and any amount so deferred is valued at the election
of the director either (i) as if invested in an interest-bearing account or (ii)
as if invested in units which are valued as if such units were Common Stock of
the Company (phantom stock shares). Deferred fees are payable in cash, in
installments or as a lump sum upon termination of services as a director.
Directors who are also employees do not receive any fees as directors for
attendance at Board and committee meetings.
1988 Directors Stock Award Plan, as Amended
Under the Company's 1988 Directors Stock Award Plan, as amended (the "1988
Plan"), directors who are not employees of the Company are awarded additional
compensation in the form of shares of Common Stock of the Company and options to
purchase shares of Common Stock of the Company.
12
<PG$PCN>
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 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.
The directors have adopted, subject to shareholder approval, amendments to
the 1988 Plan. See Proposal No. 4, below.
Stock Equivalent Plan for Outside Directors
On December 11, 1996, the Board of Directors approved the Stock Equivalent
Plan for Outside Directors (the "Stock Equivalent Plan"), effective January 1,
1997, to replace a retirement income plan formerly maintained by the Company.
Pursuant to the Stock Equivalent Plan, on December 31 of each year, commencing
December 31, 1997, each non-employee director of the Company is credited with a
number of units equal to (i) the sum of (A) the annual retainer for non-employee
directors then in effect and (B) 12 times the per meeting fee for non-employee
directors then in effect, divided by (ii) the average of the high and low
selling prices of the Common Stock of the Company on the New York Stock Exchange
on such date. Upon termination of service as a non-employee director, a
participant in the Stock Equivalent Plan who shall have served on the Board of
Directors for at least five years shall become entitled to receive an amount in
cash equal to the product of (i) the number of units credited to such
participant and (ii) the average of the closing prices of the Common Stock of
the Company on the New York Stock Exchange during the six-month period
immediately preceding such participant's termination of service, payable in
installments over that number of years equal to the number of full or partial
years of such participant's service on the Board of Directors. In the
13
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event of a change of control of the Company (defined substantially the same as
under "Certain Compensation Arrangements" above), participants in the Stock
Equivalent Plan become entitled to receive benefits thereunder. In the event of
a participant's death, his or her surviving spouse shall receive the same
benefits that such director would have received had he or she survived.
The Company formerly maintained a retirement income plan for non-employee
directors who served on the Board of Directors for at least five years. Upon
retirement, such directors became entitled to 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 were made
for that number of years equal to the number of full or partial years of service
on the Board of Directors. In the event of the retired director's death, his or
her surviving spouse became entitled to receive the same benefits that such
director would have received had he or she survived. Currently serving
non-employee directors of the Company entitled to benefits accumulated under the
retirement income plan elected either to have such benefits paid out upon
retirement as provided under the former retirement income plan or to convert
such benefits into share equivalent units under the Stock Equivalent Plan. The
Company continues to make payments under the retirement income plan for the
benefit of non-employee directors who retired prior to January 1, 1997 with at
least five years of service on the Board of Directors.
Related Transactions
Regina Herzlinger, a member of the Company's Board of Directors, serves on
the Board of Directors of Belmont Instrument Corporation ("Belmont"). In 1997,
the Vascular Systems Division of the Company purchased from Belmont
approximately $4,065,107 of a product developed by Belmont and distributed by
the Company. Professor Herzlinger's husband, Dr. George Herzlinger, 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.
The Board of Directors has approved the Company's acquisition of certain
assets of Belmont. The amount of the purchase price is performance based, and if
all performance-based milestones are met, Belmont could realize up to
$10,000,000. In addition, the Company expects to retain Dr. Herzlinger as a
consultant on terms to be negotiated. Professor Herzlinger did not participate
in, or contribute to, the analysis or consideration of the transaction by the
Company's management or by Belmont, and Professor Herzlinger excused herself
from that portion of the meeting of the Board of Directors during which the
transaction was considered and approved.
The purchase price was determined based on negotiations between Belmont and
the Company, with various members of the Company's senior management
participating. A condition to the consummation of the transaction is the receipt
by the Board of Directors of a letter from a nationally-recognized investment
banking firm as to the fairness of the purchase price.
14
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OPTION GRANTS IN LAST FISCAL YEAR
The table below sets forth information concerning options granted to the
Named Executive Officers during the last fiscal year.
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS GRANT DATE
----------------------------------------------------------- VALUE(1)
NUMBER OF -----------
SECURITIES % OF TOTAL
UNDERLYING OPTIONS
OPTIONS GRANTED TO EXERCISE OR GRANT DATE
GRANTED EMPLOYEES IN BASE PRICE EXPIRATION PRESENT
NAME (#)(2) FISCAL YEAR ($/SHARE) DATE VALUE ($)
---- -------------- ------------ ----------- ---------- -----------
<S> <C> <C> <C> <C> <C>
William H. Longfield........... 55,980 5.4 37.1563 7/9/2007 657,765
Chairman and Chief Executive
Officer
Benson F. Smith................ 23,060 2.2 37.1563 7/9/2007 270,955
President and Chief Operating
Officer
John H. Weiland................ 12,212 1.1 37.1563 7/9/2007 143,491
Group President
William T. Tumber.............. 12,624 1.2 37.1563 7/9/2007 148,332
Senior Vice President
William C. Bopp................ 9,600 0.9 37.1563 7/9/2007 112,800
Executive Vice President and
Chief Financial Officer
</TABLE>
- ---------------
(1) The valuation calculations are solely for the purposes of compliance with
the rules and regulations promulgated under the Securities Exchange Act of
1934, as amended, and are not intended to forecast possible future
appreciation, if any, of the price of the Company's Common Stock. 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 26.00% 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 6.20%; (c) the
Company's Common Stock five-year dividend yield of 2.00%; and (d) an
expected option life of 6.25 years.
(2) 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 other than
Performance 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. Performance Options become
exercisable based, in part, on appreciation in the price of the Company's
Common Stock. For a discussion of the terms upon which Performance Options
become exercisable, see "Executive Compensation -- Compensation Committee
Report -- Stock Options."
15
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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>
VALUE OF
NUMBER OF SECURITIES UNEXERCISED IN-THE-
SHARES UNDERLYING UNEXERCISED MONEY OPTIONS AT
ACQUIRED ON OPTIONS AT FY-END (#)(1) FY-END ($)(1)
EXERCISE VALUE --------------------------- ------------------------------
NAME (#) REALIZED ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE(2)
---- ----------- ------------ ----------- ------------- ----------- ----------------
<S> <C> <C> <C> <C> <C> <C>
William H. Longfield...... -0- -0- 255,586 165,714 1,658,575 237,211
Chairman and
Chief Executive Officer
Benson F. Smith........... 5,776 66,311 95,149 67,191 599,891 91,241
President and
Chief Operating Officer
John H. Weiland........... -0- -0- 5,358 28,286 -0- -0-
Group President
William T. Tumber......... -0- -0- 36,507 31,181 173,011 37,165
Senior Vice President
William C. Bopp........... 13,175 182,810 42,481 28,255 207,137 40,257
Executive Vice President
and Chief Financial
Officer
</TABLE>
- ---------------
(1) These options were granted over a period of years.
(2) Rounded value at $31.31 per share market price.
PENSION TABLE
The table below sets forth the aggregate estimated annual retirement
benefits payable under the Company's Employees' Retirement Plan, Excess Benefit
Plan and Supplemental Executive Retirement Plan for employees retiring at normal
retirement age (65) in 1997.
<TABLE>
<CAPTION>
YEARS OF PARTICIPATION
FIVE YEAR AVERAGE --------------------------------------------------------------------------
COMPENSATION 10 15 20 25 30 35 40
----------------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
$ 50,000............... $ 7,000 $ 10,500 $ 14,000 $ 17,500 $ 21,000 $ 24,500 $ 28,000
100,000............... 14,500 22,000 29,000 36,500 43,500 51,000 58,000
150,000............... 22,000 33,000 44,000 55,000 66,000 77,000 88,000
200,000............... 29,500 44,500 59,500 74,000 88,500 103,500 118,000
250,000............... 37,000 55,500 74,000 92,500 111,000 129,500 148,000
300,000............... 44,500 67,000 89,000 111,500 133,500 156,000 178,000
400,000............... 59,500 89,500 119,000 149,000 178,500 208,500 238,000
500,000............... 74,500 112,000 149,000 186,500 223,500 261,000 298,000
600,000............... 89,500 134,500 179,000 224,000 268,500 313,500 358,000
700,000............... 104,500 157,000 209,000 261,500 313,500 366,000 418,000
800,000............... 119,500 179,500 239,000 299,000 358,500 418,500 478,000
900,000............... 134,500 202,000 269,000 336,500 403,500 471,000 538,000
1,000,000............... 149,500 224,500 299,000 374,000 448,500 523,500 598,000
</TABLE>
Under the Company's Employees' Retirement Plan, Excess Benefit Plan and
Supplemental Executive Retirement Plan, benefits are determined on the basis of
an employee's 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
16
<PG$PCN>
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,
Weiland, Tumber and Bopp are 8, 17, 1, 17 and 16, 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 $150,000 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 $100 in each of the Company's Common
Stock, the S&P 500 Index and the S&P Medical Products & Supplies Index on
December 31, 1992 and that all dividends were reinvested.
<TABLE>
<CAPTION>
Measurement Period Hlth Care(Med
(Fiscal Year Covered) 'C. R. Bard, Inc' PDS&Supp)-500 S&P 500 Index
<S> <C> <C> <C>
1992 100 100 100
1993 77.81 76.26 110.06
1994 85.12 90.43 111.53
1995 103.86 152.85 153.45
1996 92.04 175.42 188.68
1997 105.27 218.71 251.63
</TABLE>
17
<PG$PCN>
PROPOSAL NO. 2 -- APPROVAL OF THE 1998 EMPLOYEE
STOCK PURCHASE PLAN OF C. R. BARD, INC.
The Board of Directors has approved, subject to shareholder approval, the
1998 Employee Stock Purchase Plan of C. R. Bard, Inc. (the "Employee Purchase
Plan"), effective July 1, 1998. The purpose of the Employee Purchase Plan is to
provide eligible employees of the Company and its subsidiaries with an
opportunity to acquire a proprietary interest in the Company through the
purchase of Common Stock and, thus, to develop a stronger incentive to work for
the long-term success of the Company. The Employee Purchase Plan is intended to
be an "employee stock purchase plan" within the meaning of Section 423(b) of the
Internal Revenue Code of 1986, as amended (the "Code").
The description of the Employee Purchase Plan set forth below is a summary,
does not purport to be complete and is qualified in its entirety by reference to
the provisions of the Employee Purchase Plan itself. The complete text of the
Employee Purchase Plan is attached as Exhibit A to this Proxy Statement.
DESCRIPTION OF THE EMPLOYEE PURCHASE PLAN
ADMINISTRATION. The Employee Purchase Plan is administered by a plan
administrator. The plan administrator will have authority to make rules and
regulations for the administration of the plan and its interpretations, and
decisions with regard to the plan and such rules and regulations will be final
and conclusive. It is intended that the Employee Purchase Plan shall at all
times meet the requirements of Section 423 of the Code, if applicable, and the
plan administrator will, to the extent possible, interpret the provision of the
Employee Purchase Plan so as to carry out such intent.
ELIGIBILITY. Each employee of the Company or any domestic subsidiary, and
each employee of a foreign subsidiary to which the Retirement Committee of the
Company extends the Employee Purchase Plan, except for employees whose customary
employment is for less than five months per calendar year or for less than 20
hours per week, will be eligible to participate in the Employee Purchase Plan.
STOCK SUBJECT TO PLAN. The aggregate number of shares which may be sold
under the Employee Purchase Plan is 500,000, subject to adjustment in certain
circumstances. The Company will make open-market purchases to provide shares of
Common Stock for purchase under the Employee Purchase Plan. If sufficient shares
are not available through open-market purchases, the Company will sell treasury
shares or issue authorized but unissued shares.
PARTICIPATION IN THE PLAN. Eligible employees may participate in the
Employee Purchase Plan by completing and filing with the Company or its
designated recordkeeper an election form which authorizes payroll deductions
from the employee's compensation. This deduction will start on the first January
1 or July 1 (each, a "grant date") after the filing of the form as elected by
the employee, and shall continue until the employee terminates participation or
the Employee Purchase Plan is terminated. Eligible employees may participate
only through payroll deductions.
Notwithstanding the foregoing, an employee will not be permitted to
participate in the Employee Purchase Plan on any grant date if such employee
owns stock possessing 5% or more of the total combined voting power or value of
all classes of stock of the Company or any subsidiary.
PAYROLL DEDUCTIONS. Payroll deductions will be made from the compensation
paid to each participant for each payroll period in such whole percentage from
1% to 10% as the participant authorizes in such participant's election form.
TERMINATION OF PARTICIPATION IN PLAN. A participant may, at any time and
for any reason, voluntarily terminate participation in the Employee Purchase
Plan by written notification of withdrawal delivered to the appropriate payroll
office. The participant's payroll deductions under the plan will cease as soon
as practicable following delivery of such notice. A participant's participation
in the Employee Purchase Plan will be terminated upon termination of such
participant's employment with the Company and its subsidiaries for any reason.
If the former participant remains employed by the Company or any of its
subsidiaries after termination of participation in the Employee Purchase Plan,
any payroll deductions credited to such participant's plan
18
<PG$PCN>
account shall be used to purchase shares of Common Stock on the next purchase
date. If the former participant is no longer employed by the Company or any of
its subsidiaries after termination of participation in the plan, any payroll
deductions credited to such participant's plan account will be paid to such
participant in cash as soon as practicable following termination of employment.
An employee whose participation in the Employee Purchase Plan is terminated may
rejoin the Employee Purchase Plan by filing a new election form.
PURCHASE OF SHARES. On each grant date, each participant will be deemed to
have been granted an option. On each June 30 and December 31 (or the following
business day if such date is not a business day) (each, a "purchase date"), each
participant will be deemed, without any further action, to have purchased that
number of whole shares of Common Stock determined by dividing the purchase price
into the balance in the participant's plan account on the purchase date. Unless
the plan administrator decides before a grant date that a different price
applies, the purchase price shall be 85% of the lesser of the fair market value
of the Common Stock on the grant date or the purchase date. Any amount remaining
in the participant's plan account will be carried forward to the next purchase
date unless the plan account is closed. As soon as practicable after each
purchase date, a statement will be delivered to each participant which will
include (i) the number of shares of Common Stock purchased on the purchase date
on behalf of such participant; (ii) the purchase price per share; (iii) the
total amount of cash transferred to the participant's account by payroll
deduction and (iv) the amount of cash in the participant's account that will be
carried forward. A stock certificate for whole shares of Common Stock in a
participant's plan account will be issued upon request of the participant at any
time after such shares have been held in such participant's plan account for a
period of six months. Notwithstanding the preceding sentence, if the
participant's employment with the Company and its subsidiaries terminates, a
stock certificate for whole shares of Common Stock in such participant's plan
account will be issued as soon as administratively feasible thereafter. A cash
payment will be made for any fraction of a share in such account, if necessary
to close the account.
RIGHTS AS A SHAREHOLDER. As of the purchase date, a participant will be
treated as record owner of such participant's shares purchased pursuant to the
Employee Purchase Plan. Each participant will be required to advise the Company
promptly if the participant disposes of any shares of Common Stock purchased
under the Employee Purchase Plan if such disposition is within two years of the
grant date immediately preceding the participant's purchase of such shares.
APPLICATION OF FUNDS. All funds of participants received or held by the
Company under the Employee Purchase Plan before purchase of the shares of Common
Stock shall be held by the Company without liability for interest or other
increment.
ADJUSTMENTS IN CASE OF CHANGES AFFECTING SHARES. In the event of a
subdivision or consolidation of outstanding shares of Common Stock or the
payment of a stock dividend, the number of shares approved for the Employee
Purchase Plan will be increased or decreased proportionately, and such other
adjustment will be made as may be deemed equitable by the plan administrator. In
the event of any other change affecting the Common Stock, such adjustment will
be made as is deemed equitable by the plan administrator to give proper effect
to such event.
AMENDMENT AND TERMINATION. The plan administrator may, at any time or from
time to time, amend or modify the Employee Purchase Plan; provided, however,
that no amendment will be made increasing or decreasing the number of shares
authorized for the Employee Purchase Plan other than adjustments made in the
case of changes affecting shares described above or the termination of the
Employee Purchase Plan described below. Except to conform the Employee Purchase
Plan to the requirements of the Code, no amendment will be made which would
cause the Employee Purchase Plan to fail to meet the applicable requirements of
Section 423 of the Code.
The Employee Purchase Plan will terminate upon the earlier of (i) the
termination of the Employee Purchase Plan by the Board of Directors as specified
below or (ii) the date no more shares remain to be purchased under the Employee
Purchase Plan. The Board of Directors may terminate the Employee Purchase Plan
as of any date, and the date of termination will be deemed a purchase date. If
on such purchase date participants in the aggregate have options to purchase
more shares of Common Stock than are available for purchase under the Employee
Purchase Plan, each participant will be eligible to purchase a reduced number
19
<PG$PCN>
of shares of Common Stock on a pro rata basis, and any excess payroll deductions
will be returned to participants, all as provided by rules and regulations
adopted by the plan administrator.
GOVERNMENTAL REGULATIONS. The Company's obligation to sell and deliver
Common Stock pursuant to the Employee Purchase Plan is subject to the approval
of any governmental authority required in connection with the authorization,
issuance or sale of such stock.
WITHHOLDING. The Company reserves the right to withhold from stock or cash
distributed to a participant any amounts which it is required by law to
withhold.
SALE OF COMPANY. In the event of a proposed sale of all or substantially
all of the assets of the Company or a merger of the Company with or into another
corporation, the Company shall require that each outstanding option be assumed
or an equivalent right to purchase stock of the successor or purchaser
corporation be substituted by the successor or purchaser corporation, unless the
Employee Purchase Plan is terminated.
FEDERAL INCOME TAX CONSEQUENCES
The following discussion of the federal income tax consequences relating to
the Employee Purchase Plan is based on present federal tax laws and regulations
and does not purport to be a complete description of the federal income tax
laws. Participants may also be subject to certain state and local taxes which
are not described below.
The Employee Purchase Plan is intended to qualify as an "employee stock
purchase plan" under Section 423 of the Code. The Employee Purchase Plan is
subject to shareholder approval, as required by Section 423. Under the Code, no
taxable income is generally recognized by a participant either as of the grant
date or as of the purchase date. Depending upon the length of time the acquired
shares are held by the participant, the federal income tax consequences will
vary. If the shares are held for a period of two years or more from the grant
date and for at least one year from the purchase date (the "Required Period"),
and are sold at a price in excess of the purchase price paid by the participant
for the shares, the gain on the sale of the shares will be taxed as ordinary
income to the participant to the extent of the lesser of (i) the amount by which
the fair market value of the shares on the grant date exceeded the purchase
price or (ii) the amount by which the fair market value of the shares at the
time of their sale exceeded the purchase price. Any portion of the gain not
taxed as ordinary income will be treated as long-term capital gain. If the
shares are held for the Required Period and are sold at a price less than the
purchase price paid by the participant for the shares, the loss on the sale will
be treated as a long-term capital loss to the participant. The Company will not
be entitled to any deduction for federal income tax purposes for shares held for
the Required Period that are subsequently sold by the participant, whether at a
gain or loss.
If a participant disposes of shares within the Required Period (a
"Disqualifying Disposition"), the participant will recognize ordinary income in
an amount equal to the difference between the purchase price paid by the
participant for the shares and the fair market value of the shares on the
purchase date, and the Company will be entitled to a corresponding deduction for
federal income tax purposes. In addition, if a participant makes a Disqualifying
Disposition at a price in excess of the purchase price paid by the participant
for the shares, the participant will recognize a capital gain in an amount equal
to the difference between the selling price of the shares and the fair market
value of the shares on the purchase date. Alternatively, if a participant makes
a Disqualifying Disposition at a price less than the fair market value of the
shares on the purchase date, the participant will recognize a capital loss in an
amount equal to the difference between the fair market value of the shares on
the purchase date and the selling price of the shares. The Company will not
receive a deduction for federal income tax purposes with respect to any capital
gain recognized by a participant who makes a Disqualifying Disposition.
OTHER INFORMATION
As of December 31, 1997, approximately 8,000 employees of the Company and
its subsidiaries would have been eligible for participation in the Employee
Purchase Plan. Because the benefits conveyed under the Employee Purchase Plan
are contingent upon, among other things, the amount of contributions
participating
20
<PG$PCN>
employees make on a voluntary basis, it is not possible to predict what benefits
eligible employees will receive under the Employee Purchase Plan.
ADOPTION OF THE EMPLOYEE PURCHASE PLAN
The Company believes that its best interests will be served by the adoption
of the Employee Purchase Plan. The Board of Directors approved the Employee
Purchase Plan at its meeting held on February 11, 1998.
Approval of Proposal No. 2 requires the affirmative vote of a majority of
the votes present and entitled to vote at the Annual Meeting of Shareholders,
provided that a majority of the outstanding shares of the Common Stock votes on
the proposal.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" PROPOSAL NO. 2.
PROPOSAL NO. 3 -- APPROVAL OF AMENDMENT TO THE 1993 LONG TERM
INCENTIVE PLAN OF C. R. BARD, INC., AS PREVIOUSLY AMENDED
The Board of Directors has approved, subject to shareholder approval, an
amendment to the Company's 1993 Long Term Incentive Plan, as previously amended
(the "1993 Plan"), to provide for an increase in the number of shares authorized
to be issued under the 1993 Plan from 4,100,000 to 5,500,000.
Under the 1993 Plan, originally adopted by shareholders at the 1993 Annual
Meeting of Shareholders and amended by an amendment approved by shareholders at
the 1996 Annual Meeting of Shareholders, the maximum number of authorized shares
of Common Stock that may be issued under the 1993 Plan is 4,100,000 shares. As
of December 31, 1997, approximately 125,000 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 Company believes that the 1993 Plan has helped it to attract and retain
the services of selected key 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. 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 proposed to be amended)
is attached as Exhibit B to this Proxy Statement.
DESCRIPTION OF THE 1993 PLAN
ADMINISTRATION. The 1993 Plan is administered by the Compensation
Committee, which consists 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 be granted under the 1993 Plan during each calendar year to any
given participant may not exceed $500,000.
DETERMINATION AND MAXIMUM NUMBER OF AWARDS. Awards under the 1993 Plan
shall be in the form of stock options, restricted stock, stock awards,
unrestricted stock and stock appreciation rights. The total number of shares of
Common Stock which may be granted under the 1993 Plan shall not exceed
5,500,000.
21
<PG$PCN>
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% 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.
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. Except as specifically
set forth in the grant thereof, options may be awarded with terms ranging from
one to ten years and no option will 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
participant under the 1993 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. 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 grant stock appreciation rights. 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.
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
22
<PG$PCN>
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.
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
such 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. 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 the 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
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% 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.
AMENDMENT AND TERMINATION. The Board of Directors may amend or terminate
the 1993 Plan at any time, provided that it may not, without shareholder
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.
23
<PG$PCN>
TAX STATUS OF 1993 PLAN AWARDS
INTRODUCTION. The following discussion of the federal income tax status of
awards under the 1993 Plan, as proposed to be amended and restated, is based on
present federal tax laws and regulations and does not purport to be a complete
description of the federal income tax laws. Employees may also be subject to
certain state and local taxes which are not described below.
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, mid-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 employee 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.
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 not later than 30 days after the date of the transfer 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.
OTHER INFORMATION
As of December 31, 1997 fifteen executive officers and approximately 850
other officers and key employees were eligible for participation in the 1993
Plan. Because the benefits conveyed under the 1993 Plan are at the discretion of
the Compensation Committee, it is not possible to predict what benefits eligible
employees will receive in the future under the 1993 Plan. Grants of options
under the 1993 Plan made during 1997 to the Named Executive Officers are shown
under "Option Grants in Last Fiscal Year" above. Grants of restricted stock
under the 1993 Plan during 1997 to the Named Executive Officers are shown under
"Summary Compensation Table" above. During 1997, options to purchase a total of
230,624 shares of Common Stock, with a total dollar value of $8,569,134, were
granted to executive officers under the 1993 Plan and options to purchase a
total of 794,324 shares of Common Stock, with a total dollar value of
$29,514,140, were granted to other officers and key employees under the 1993
Plan. Also during 1997, 5,470 shares of restricted stock other than Performance
Shares and 130,000 Performance Shares, with a total dollar value of
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$203,245 and $4,830,319, respectively, were granted to executive officers under
the 1993 Plan, and 27,580 shares of restricted stock with a total dollar value
of $1,024,770, none of which were Performance Shares, were granted to other
officers and key employees under the 1993 Plan. On February 23, 1998 the mean
between the high and low sales price of the Common Stock, as reported on the New
York Stock Exchange, was $35.07.
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 employees, including those who through promotions and
development of the Company's business will be entrusted with new and more
important responsibilities.
Approval of Proposal No. 3 requires the affirmative vote of a majority of
the Company's Common Stock represented at the Annual Meeting of Shareholders,
provided that a majority of the outstanding shares of the Common Stock votes on
the proposal.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" PROPOSAL NO. 3.
PROPOSAL NO. 4 -- APPROVAL OF AMENDMENT TO THE 1988 DIRECTORS
STOCK AWARD PLAN OF C. R. BARD, INC., AS PREVIOUSLY AMENDED
The Board of Directors has approved, subject to shareholder approval, an
amendment to the Company's 1988 Directors Stock Award Plan, as previously
amended (the "1988 Plan"), to (i) provide for an increase in the number of
shares authorized to be issued under the 1988 Plan from 50,000 to 75,000; and
(ii) permit the granting of non-formula based awards to non-employee directors
as described more fully below.
Under the 1988 Plan, originally adopted by shareholders at the 1988 Annual
Meeting of Shareholders and amended by an amendment approved by shareholders at
the 1993 Annual Meeting of Shareholders, the maximum number of authorized shares
of Common Stock that may be issued under the 1988 Plan is 50,000 shares. As of
December 31, 1997, only 4,600 shares of Common Stock remained available under
the 1988 Plan. As a result of the limited number of shares of Common Stock
remaining available for the 1988 Plan, the shareholders are requested to
authorize additional shares of Common Stock under the 1988 Plan to cover
anticipated awards to be granted by the Company in the future.
The 1988 Plan currently provides that 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. In addition each non-employee
director who is serving as such on the second Wednesday of July of every year is
granted one option to purchase 600 shares of Common Stock of the Company. In
1996, changes were made in the federal securities laws and regulations which
would allow non-formula based awards to be awarded to non-employee directors
pursuant to plans which comply with Rule 16b-3 under the Securities Exchange Act
of 1934, as amended. After review and deliberation, the Board of Directors
determined that it was desirable to amend the 1988 Plan to permit the granting
of non-formula based awards to non-employee directors. The shareholders are
requested to authorize an amendment of the 1988 Plan providing for the granting
of non-formula based awards to non-employee directors as described more fully
below.
The Company believes that the 1988 Plan has helped it to attract and retain
highly qualified individuals to serve as directors of the Company and to align
the non-employee directors' compensation more closely to the Company's
performance and the shareholders' interests. The Company believes that the
approval by the shareholders of the proposed amendment will help it to continue
to do so. The description of the 1988 Plan (as proposed to be amended) set forth
below is a summary, does not purport to be complete and is qualified in its
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entirety by reference to the provisions of the 1988 Plan itself. The complete
text of the 1988 Plan (as proposed to be amended) is set forth in Exhibit C to
this Proxy Statement.
DESCRIPTION OF THE 1988 PLAN
ADMINISTRATION. Except as otherwise described in the 1988 Plan, the 1988
plan will be administered by the Governance Committee of the Board of Directors
(the "Governance Committee").
ELIGIBILITY. Participants in the 1988 Plan are selected by the Governance
Committee from non-employee directors of the Company. Participants may be
selected and awards may be made at any time during the period that awards may be
granted under the 1988 Plan.
DETERMINATION AND MAXIMUM NUMBER OF AWARDS. Awards under the 1988 Plan
will be in the form of stock options, restricted stock, stock awards,
unrestricted stock and stock appreciation rights. The total number of shares of
Common Stock subject to the 1988 Plan will be limited so that the aggregate
number of shares which may be awarded under the 1988 Plan will not exceed 75,000
shares of Common Stock. Shares of Common Stock returned as a result of the
forfeiture of stock awarded or the expiration or termination of options granted
shall be available under the 1988 Plan. The Governance Committee has exclusive
power to determine the amount of, and method for determining, awards.
FORMULA-BASED STOCK OPTIONS AND STOCK AWARDS. On each second Wednesday in
July each non-employee director of the Company on such dates will be granted one
option to purchase 600 shares of Common Stock of the Company, provided, that
from time to time the Governance Committee may specify that any formula-based
option not yet granted shall be exercisable to purchase such lesser number of
shares of Common Stock as the Governance Committee shall specify and that any
such option shall become exercisable according to such schedule as the
Governance Committee shall specify. All such formula-based options shall have a
term of ten years and will become exercisable with respect to 200 shares of
Common Stock subject thereto on each of the first three anniversaries following
the date of grant. The exercise price per share of Common Stock with respect to
each formula-based option shall not be less than 100% of the fair market value
of a share of Common Stock on the day the formula-based option is granted.
A formula-based 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 a formula-based
option shall be added to the general funds of the Company and used for general
corporate purposes.
If a non-employee director shall cease to be a member of the Board of
Directors by reason of retirement, a formula-based option held by such
non-employee director will remain exercisable after cessation of employment for
three years to the extent such formula-based option was otherwise exercisable at
the time of retirement. If a non-employee director ceases to be a non-employee
director because of death, a formula-based option held by such non-employee
director shall remain exercisable for one year and, if not already fully
exercisable, shall become exercisable with respect to all shares subject
thereto. If a non-employee director ceases to be a non-employee director other
than by reason of death or retirement, a formula-based option held by such
non-employee director shall remain exercisable for 60 days, to the extent such
formula-based option was otherwise exercisable at the time of termination. If a
non-employee director shall die after the date he or she ceases to be a member
of the Board of Directors while holding an outstanding formula-based option,
such option shall be exercisable to the extent, and during the period, that such
formula-based option would, but for his or her death, have otherwise been
exercisable by such non-employee director. In no event shall a formula-based
option be exercisable beyond the end of the option period.
Upon election of any non-employee director, he or she will be granted the
right to receive 200 shares of Common Stock for each year or partial year
remaining in his or her current term of directorship (other than a partial year
resulting from the election of a non-employee director subsequent to the October
1 immediately preceding the annual meeting at which the term of office of such
director will expire), provided, that from time to time the Governance Committee
may specify that any subsequent grant shall be for the right to receive such
lesser number of shares of Common Stock as the Governance Committee shall
specify for each
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such year or partial year. Any grant of shares of Common Stock to a non-employee
director as described in the preceding sentence will be transferred on, or
promptly following, the first business day in October during each year of such
director's term of office. However, such non-employee director will not be
entitled to any such installment of shares in the event that for any reasons
such non-employee director is not a non-employee director on the date on which
an installment of shares of Common Stock would otherwise have been transferable.
No shares of Common Stock transferred to a non-employee director as a
formula-based stock award may be sold, pledged, assigned, transferred or
otherwise encumbered or disposed of until the expiration of two years from the
date of the transfer of such shares to the non-employee director; provided,
however, that such transfer restriction shall cease to apply upon the death or
permanent disability of the non-employee director.
NONFORMULA-BASED STOCK OPTIONS AND STOCK APPRECIATION RIGHTS. The
Governance Committee may award to non-employee directors non-qualified stock
options with or without stock appreciation rights. Nonformula-based options may
be awarded with terms ranging from one to ten years. Unless otherwise
specifically set forth in the grant thereof no nonformula-based option will be
exercisable during the 12 months following the date of the grant. After the 12
month period, 25% of the total number of nonformula-based 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
nonformula-based options granted are exercisable. Notwithstanding anything to
the contrary, the Governance Committee may, when granting nonformula-based
options to any non-employee director, grant options that are exercisable
immediately or options that are exercisable according to a schedule different
from that set forth in the preceding sentence. The exercise price per share of
Common Stock with respect to each nonformula-based option shall not be less than
100% of the fair market value of a share of Common Stock on the day the
nonformula-based option is granted.
A nonformula-based 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 a
nonformula-based option shall be added to the general funds of the Company and
used for general corporate purposes.
If a non-employee director shall cease to be a member of the Board of
Directors by reason of retirement, a nonformula-based option held by such
non-employee director will remain exercisable after cessation of employment for
three years to the extent such nonformula-based option was otherwise exercisable
at the time of retirement. If a non-employee director ceases to be a
non-employee director because of death, a nonformula-based option held by such
non-employee director shall remain exercisable for one year and, if not already
fully exercisable, shall become exercisable with respect to all shares subject
thereto. If a non-employee director ceases to be a non-employee director other
than by reason of death or retirement, a nonformula-based option held by such
non-employee director shall remain exercisable for 60 days, to the extent such
nonformula-based option was otherwise exercisable at the time of termination. If
a non-employee director shall die after the date he or she ceases to be a member
of the Board of Directors while holding an outstanding nonformula-based option,
such option shall be exercisable to the extent, and during the period, that such
nonformula-based option would, but for his or her death, have otherwise been
exercisable by such non-employee director. In no event shall a nonformula-based
option be exercisable beyond the end of the option period.
The Governance Committee may grant stock appreciation rights. Stock
appreciation rights entitle a non-employee director to receive Common Stock or,
with the consent of the Governance 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 non-employee director could exercise a
nonformula-based option to purchase that share. Stock appreciation rights shall
be granted only in connection with the granting of nonformula-based stock
options. Stock appreciation rights shall be exercisable on the same terms as the
nonformula-based options with which they are paired, and a non-employee director
may choose to exercise either a nonformula-based option or the related stock
appreciation right. The exercise of one terminates the other.
NONFORMULA-BASED RESTRICTED STOCK, STOCK AWARDS AND UNRESTRICTED STOCK. An
award of restricted stock to a non-employee director entitles the non-employee
director to receive the number of shares of
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Common Stock specified by the Governance Committee. An award of restricted stock
will vest in accordance with a schedule specified by the Governance Committee.
Except as otherwise provided by the Governance Committee, a non-employee
director 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 or dividend equivalents paid on and the
right to vote such 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 a non-employee
director's restricted stock, such non-employee director ceases to be a member of
the Board of Directors during the restricted period for any reason other than
death or retirement, the Governance Committee may at the time of cessation of
service as a member of the Board of Directors terminate the restricted period
with respect to any or all of such restricted stock. If the Governance Committee
does not terminate the restricted period with respect to such restricted stock
at the time of such cessation, such restricted stock will be forfeited. If a
non-employee director holding restricted stock ceases to be a member of the
Board of Directors during the restricted period by reason of death or
retirement, restricted stock held by that non-employee director shall become
free of all restrictions thereon and the Company will deliver that restricted
stock to that non-employee director or that non-employee director's beneficiary,
as the case may be, within 60 days.
The Governance Committee may grant stock awards in its discretion to
non-employee directors of the Company. 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 the Governance Committee. No such
installment will be delivered on any anniversary of the date of the stock award
to a non-employee director whose service as a member of the Board has ceased
(except, in the discretion of the Governance Committee, by reason of death or
retirement).
The Governance Committee may grant awards of unrestricted Common Stock
under the 1988 Plan to non-employee directors, which Common Stock is delivered
to the non-employee director on or about the award date and which is not subject
to any restrictions.
AMENDMENT AND TERMINATION. The 1988 Plan may be amended, suspended or
terminated at any time or from time to time by action of the Board of Directors;
provided, however, that no such amendment shall be made, which would, without
shareholder approval: (i) increase the number of shares that may be transferred
under the 1988 Plan; (ii) materially modify the requirements as to eligibility
for participation in the 1988 Plan; or (iii) otherwise materially increase the
benefits accruing to the non-employee directors.
The 1988 Plan provisions governing the eligibility for participation, the
amount and timing of awards, the timing of the delivery of shares in
installments, exercise prices and exercise periods, shall not be amended more
than once every six months, other than to comport with changes in the Internal
Revenue Code of 1986, as amended, the Employee Retirement Income Security Act of
1974, as amended, or the rules thereunder.
MISCELLANEOUS. Notwithstanding anything to the contrary contained herein,
no shares of Common Stock shall be transferred by the Company pursuant to the
1988 Plan prior to the date of shareholder approval, and no non-employee
director shall be entitled to any rights as a shareholder with respect to any
shares of Common Stock granted under the 1988 Plan, including, without
limitation, voting rights and the right to receive dividends, until such shares
have been transferred.
If the issuance of Common Stock pursuant to the 1988 Plan has not been
registered under the Securities Act of 1933, as amended, any certificate
representing shares transferred pursuant to the 1988 Plan, including pursuant to
the exercise of an option, shall include the following legend:
"The Shares represented by this certificate have not been registered
under the Securities Act of 1933 (the "Act") and, accordingly, may not be
offered, sold or otherwise pledged, hypothecated or transferred unless (a)
pursuant to an effective registration statement under the Act or (b) an
applicable exemption from the registration requirements of the Act is
available. In addition, the transferability of this certificate and the
shares of stock represented hereby are subject to the terms and conditions
contained in the C. R. Bard, Inc. 1988 Directors Stock Award Plan."
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A non-employee director shall not dispose of shares of Common Stock awarded
hereunder, including shares of Common Stock awarded pursuant to the exercise of
an option, in transactions which, in the opinion of counsel to the Company,
would violate the Securities Act of 1933, as then amended, and the rules and
regulations thereunder.
TAX STATUS OF 1988 PLAN AWARDS
INTRODUCTION. The following discussion of the federal income tax status of
awards under the 1988 Plan, as proposed to be amended and restated, is based on
present federal tax laws and regulations and does not purport to be a complete
description of the federal income tax laws. Non-employee directors may also be
subject to certain state and local taxes which are not described below.
OPTIONS. Options granted under the 1988 Plan result in no immediate tax
consequences to the Company or the optionee. Upon the exercise of an option
(other than by delivery of Common Stock to the Company) the optionee will be
treated as receiving compensation taxable as ordinary income in an amount equal
to the excess of the fair market value of the shares at the time of transfer to
the optionee over the option price. The tax basis of the shares received by the
optionee will be their fair market value on the date of transfer to the
optionee. If an option is exercised by delivering Common Stock to the Company, a
number of shares received by the optionee equal to the number of shares so
delivered will be received free of tax and will have a tax basis and holding
period equal to the shares so delivered. The fair market value of additional
shares received by the optionee will be taxable to the optionee as ordinary
income, and the optionee's tax basis in such shares will be their fair market
value on the date of exercise. Upon a subsequent disposition of any shares
received from the Company, any difference between the tax basis of the shares
and the amount realized on the disposition is treated as long-term, mid-term or
short-term capital gain or loss, depending on the holding period of the shares.
The amount treated as compensation taxable as ordinary income may be claimed as
a deduction by the Company at the same time that the optionee is treated as
realizing compensation.
STOCK AWARDS. The value of each installment of shares of Common Stock of
the Company distributed to non-employee directors will be taxable as ordinary
income to such directors in the year such installment is received. The Company
will be entitled to a corresponding tax deduction upon the distribution of each
installment of shares of Common Stock of the Company pursuant to the stock
awards.
RESTRICTED STOCK. The Company will receive a deduction and the
non-employee director will 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 non-employee director elects to pay such tax as may be then
due not later than 30 days after the transfer by the Company to the non-employee
director of a restricted stock award as permitted under Section 83(b) of the
Code, in which case both the Company's deduction and the non-employee director's
inclusion in income occur on the award date.
STOCK APPRECIATION RIGHTS. No income shall be realized by the non-employee
director 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 non-employee director, and
the Company shall be entitled to a deduction of equivalent value.
OTHER INFORMATION
As of December 31, 1997, eight non-employee directors were eligible for
participation in the 1988 Plan. Because the non-formula based benefits conveyed
under the 1988 Plan are at the discretion of the Governance Committee, it is not
possible to predict what non-formula based benefits non-employee directors will
receive under the 1988 Plan. For a discussion of the formula based awards
granted to non-employees directors under the 1988 Plan, see "Compensation of
Outside Directors." On February 23, 1998, the mean between the high and low
sales price of the Common Stock, as reported on the New York Stock Exchange, was
$35.07.
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ADOPTION OF AMENDMENT TO THE 1988 PLAN
The Board of Directors believes that the Company's best interests will be
served by amending the 1988 Plan. The amendment to the 1988 Plan will enable the
Company to be in a position to continue to attract and retain highly qualified
individuals to serve as directors of the Company and to align the non-employee
directors' compensation more closely to the Company's performance and the
shareholders' interests.
Approval of Proposal No. 4 requires the affirmative vote of a majority of
the votes present and entitled to vote at the Annual Meeting of Shareholders,
provided that a majority of the outstanding shares of the Common Stock votes on
the proposal.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" PROPOSAL NO. 4.
PROPOSAL NO. 5 -- 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, 1998. 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. 5.
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 Georgeson &
Company Inc., to assist in the solicitation of proxies and expects to pay such
firm a fee of approximately $8,000 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.
The Annual Report of the Company for 1997, 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 6, 1998.
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EXHIBIT A
1998 EMPLOYEE STOCK PURCHASE PLAN
OF
C. R. BARD, INC.
The 1998 Employee Stock Purchase Plan of C. R. Bard, Inc. provides Eligible
Employees of C. R. Bard, Inc., a New Jersey corporation (the "Company"), and its
Subsidiaries an opportunity to purchase shares of Common Stock of the Company on
the terms and conditions set forth below.
1. Definitions
(a) Business Day -- any day the New York Stock Exchange is open for
business.
(b) Code -- the Internal Revenue Code of 1986, as amended.
(c) Common Stock -- the Company's Common Stock, par value $.25 per
share.
(d) Compensation -- with respect to a Participant, the portion of the
Participant's "basic pay," as defined in the Retirement Plan, paid to the
Participant during the applicable payroll period.
(e) Eligible Employee -- an employee who is eligible to participate in
the Plan pursuant to Section 3.
(f) Fair Market Value -- the mean between the high and low sales price
of the Common Stock on the subject 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 is a sale. 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 Plan Administrator.
(g) Grant Date -- each January 1 and July 1.
(h) Option -- an option to purchase shares of Common Stock under the
Plan, pursuant to the terms and conditions hereof.
(i) Participant -- an Eligible Employee who is participating in the
Plan pursuant to Section 4.
(j) Purchase Date -- except as provided in Section 15, each June 30
and December 31 (or the following Business Day if such date is not a
Business Day).
(k) Purchase Price -- unless the Plan Administrator determines before
a Grant Date that a higher or lower price that complies with Code Section
423 shall apply, the Purchase Price of the shares of Common Stock which are
to be sold under the Plan on the Purchase Date next following such Grant
Date shall be the lesser of 85% of the Fair Market Value of Common Stock on
such Grant Date and 85% of the Fair Market Value of a share of Common Stock
on such Purchase Date.
(l) Plan -- 1998 Employee Stock Purchase Plan of C. R. Bard, Inc., as
amended from time to time.
(m) Plan Account -- an account maintained by the Company or its
designated recordkeeper for each Participant to which the Participant's
payroll deductions are credited, against which funds used to purchase
shares of Common Stock are charged and to which shares of Common Stock
purchased are credited.
(n) Plan Administrator -- the Retirement Committee under the
Retirement Plan, or such other person or persons, including a committee, as
may be appointed by the Board of Directors of the Company to administer the
Plan. The Board of Directors of the Company may at any time remove or
replace the Plan Administrator.
(o) Retirement Plan -- the Employees' Retirement Plan of C. R. Bard,
Inc., as amended.
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(p) Subsidiary -- any corporation, other than the Company, in an
unbroken chain of corporations beginning with the Company if, at the time
of the granting of the Option, each of the corporations other than the last
corporation in the unbroken chain owns stock possessing 50% or more of the
total combined voting power of all classes of stock in one of the other
corporations in such chain.
2. Stock Subject to the Plan. Subject to Section 12, the aggregate number
of shares of Common Stock which may be sold under the Plan is 500,000. The
Company shall make open-market purchases to provide shares of Common Stock for
purchase under the Plan. If sufficient shares are not available through open
market purchases, the Company shall sell Treasury shares or issue authorized but
unissued shares of Common Stock.
3. Eligible Employees. An "Eligible Employee" means each employee of the
Company or any domestic Subsidiary, and each employee of a foreign Subsidiary to
which the Plan is extended by the Plan Administrator, except:
(a) an employee whose customary employment is fewer than 20 hours or
less per week; or
(b) an employee whose customary employment is for fewer than five
months in any calendar year.
4. Participation in the Plan.
(a) An Eligible Employee may participate in the Plan by completing and
filing with the Company or its designated recordkeeper an election form which
authorizes payroll deductions from the employee's Compensation. Such deductions
shall commence on the first Grant Date thereafter as elected by the Employee,
and shall continue until the Employee terminates participation in the Plan or
the Plan is terminated. An Eligible Employee may participate in the Plan only
through payroll deductions. Other contributions will not be accepted.
(b) Notwithstanding the foregoing, an Eligible Employee shall not be
granted an Option on any Grant Date if such employee, immediately after the
Option is granted, owns stock possessing 5% or more of the total combined voting
power or value of all classes of stock of the Company or any Subsidiary. For
purposes of this paragraph, the rules of Code Section 424(d) shall apply in
determining the stock ownership of an individual, and stock which an employee
may purchase under outstanding options shall be treated as stock owned by the
employee.
5. Payroll Deductions. Payroll deductions shall be made from the
Compensation paid to each Participant for each payroll period in such whole
percentage from 1% to 10% as the Participant shall authorize in such
Participant's election form. No Eligible Employee may be granted an Option which
permits such Eligible Employee to purchase Common Stock under the Plan, and any
other stock purchase plan of the Company or any Subsidiary that is qualified
under Section 423 of the Code, to accrue at a rate which exceeds $25,000 of Fair
Market Value of such stock (determined at the time such Option is granted) for
each calendar year in which the Option is outstanding at any time.
6. Changes in Payroll Deductions. Subject to the minimum and maximum
deductions set forth above, a Participant may change the amount of such
Participant's payroll deductions as of the next Grant Date by filing a new
election form with the Company or its designated recordkeeper no later than ten
Business Days in advance of the next Grant Date. The change shall be effective
until revoked in writing.
7. Termination of Participation in Plan. A Participant may, at any time
and for any reason, voluntarily terminate participation in the Plan by written
notification of withdrawal delivered to the appropriate payroll office. Such
Participant's payroll deductions under the Plan shall cease as soon as
practicable following delivery of such notice. A Participant's participation in
the Plan shall be terminated upon termination of such Participant's employment
with the Company and its Subsidiaries for any reason. If the former Participant
remains employed by the Company or any of its Subsidiaries after termination of
participation in the Plan, any payroll deductions credited to such Participant's
Plan Account shall be used to purchase shares of Common Stock on the next
Purchase Date. If the former Participant is no longer employed by the Company or
any of its Subsidiaries after termination of participation in the Plan, any
payroll deductions credited to such Participant's Plan Account shall be paid to
such Participant in cash as soon as practicable following
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termination of employment. An Eligible Employee whose participation in the Plan
is terminated may rejoin the Plan by filing a new election form in accordance
with Section 6.
8. Purchase of Shares.
(a) On each Grant Date, each Participant shall be deemed to have been
granted an Option.
(b) On each Purchase Date, each Participant shall be deemed, without any
further action, to have purchased that number of whole shares of Common Stock
determined by dividing the Purchase Price into the balance in the Participant's
Plan Account on the Purchase Date. Any amount remaining in the Participant's
Plan Account shall be carried forward to the next Purchase Date unless the Plan
Account is closed.
(c) As soon as practicable after each Purchase Date, a statement shall be
delivered to each Participant which shall include (i) the number of shares of
Common Stock purchased on the Purchase Date on behalf of such Participant under
the Plan, (ii) the purchase price per share, (iii) the total amount of cash
transferred to the Participant's Plan Account pursuant to Section 5 and (iv) the
amount of cash in the Participant's Plan Account that will be carried forward.
(d) A stock certificate for whole shares of Common Stock in a Participant's
Plan Account shall be issued upon request of the Participant at any time after
such shares have been held in such Participant's Plan Account for a period of
six months. Notwithstanding the preceding sentence, if the Participant's
employment with the Company and its Subsidiaries terminates, a stock certificate
for whole shares of Common Stock in such Participant's Plan Account shall be
issued as soon as administratively feasible thereafter. Stock certificates under
the Plan shall be issued, at the election of the Participant, in such
Participant's name or in such Participant's name and the name of another person
as joint tenants with right of survivorship or as tenants in common. A cash
payment shall be made for any fraction of a share in such account, if necessary
to close a Participant's Plan Account.
9. Rights as a Shareholder. As of the Purchase Date, a Participant shall
be treated as record owner of such Participant's shares purchased pursuant to
the Plan.
10. Rights Not Transferable. Rights under the Plan are not transferrable
by a Participant other than by will or the laws of descent and distribution, and
are exercisable during the Participant's lifetime only by the Participant or by
the Participant's guardian or legal representative. No rights or payroll
deductions of a Participant shall be subject to execution, attachment, levy,
garnishment or similar process.
11. Sale of Purchased Stock. An Eligible Employee must advise C. R. Bard,
Inc. promptly if the Eligible Employee disposes of any shares of Common Stock
purchased by the Eligible Employee under the Plan if such disposition shall have
occurred within two years after the Grant Date immediately preceding the
Eligible Employee's purchase of such shares.
12. Application of Funds. All funds of Participants received or held by
the Company under the Plan before purchase of the shares of Common Stock shall
be held by the Company without liability for interest or other increment.
13. Adjustments in Case of Changes Affecting Shares. In the event of a
subdivision or consolidation of outstanding shares of Common Stock, or the
payment of a stock dividend, the number of shares approved for the Plan shall be
increased or decreased proportionately, and such other adjustment shall be made
as may be deemed equitable by the Plan Administrator. In the event of any other
change affecting the Common Stock, such adjustment shall be made as shall be
deemed equitable by the Plan Administrator to give proper effect to such event.
14. Administration of the Plan. The Plan shall be administered by the
Plan Administrator. The Plan Administrator shall have authority to make rules
and regulations for the administration of the Plan and its interpretations, and
decisions with regard to the Plan and such rules and regulations shall be final
and conclusive. It is intended that the Plan shall at all times meet the
requirements of Code Section 423, if applicable, and the Plan Administrator
shall, to the extent possible, interpret the provision of the Plan so as to
carry out such intent.
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15. Amendments to the Plan. The Plan Administrator may, at any time, or
from time to time, amend or modify the Plan; provided, however, that no
amendment shall be made increasing or decreasing the number of shares authorized
for the Plan (other than as provided in Section 12 or 15), and that, except to
conform the Plan to the requirements of the Code, no amendment shall be made
which would cause the Plan to fail to meet the applicable requirements of Code
Section 423.
16. Termination of Plan. The Plan shall terminate upon the earlier of (a)
the termination of the Plan by the Board of Directors of the Company as
specified below or (b) the date no more shares remain to be purchased under the
Plan. The Board of Directors of the Company may terminate the Plan as of any
date, and the date of termination shall be deemed a Purchase Date. If on such
Purchase Date Participants in the aggregate have Options to purchase more shares
of Common Stock than are available for purchase under the Plan, each Participant
shall be eligible to purchase a reduced number of shares of Common Stock on a
pro rata basis, and any excess payroll deductions shall be returned to
Participants, all as provided by rules and regulations adopted by the Plan
Administrator.
17. Costs. All costs and expenses incurred in administering the Plan
shall be paid by the Company. Any costs or expenses of selling shares of Common
Stock acquired pursuant to the Plan shall be borne by the holder thereof.
18. Governmental Regulations. The Company's obligation to sell and
deliver Common Stock pursuant to the Plan is subject to the approval of any
governmental authority required in connection with the authorization, issuance
or sale of such stock.
19. Applicable Law. The Plan shall be interpreted under the laws of the
United States of America and, to the extent not inconsistent therewith, by the
laws of the State of New Jersey. The Plan is not to be subject to the Employee
Retirement Income Security Act of 1974, as amended, but is intended to comply
with Code Section 423, if applicable. Any provisions required to be set forth in
the Plan by such Code section are hereby included as fully as if set forth in
the Plan in full.
20. Effect on Employment. The provisions of the Plan shall not affect the
right of the Company or any Subsidiary or any Participant to terminate the
Participant's employment with the Company or any Subsidiary.
21. Withholding. The Company reserves the right to withhold from stock or
cash distributed to a Participant any amounts which it is required by law to
withhold.
22. Sale of Company. In the event of a proposed sale of all or
substantially all of the assets of the Company or a merger of the Company with
or into another corporation, the Company shall require that each outstanding
Option be assumed or an equivalent right to purchase stock of the successor or
purchaser corporation be substituted by the successor or purchaser corporation,
unless the Plan is terminated.
23. Effective Date. The Plan shall become effective July 1, 1998,
provided that the stockholders of the Company approve it within 12 months after
the date the Plan was adopted by the Board of Directors of the Company.
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EXHIBIT B
1993 LONG TERM INCENTIVE PLAN
OF
C. R. BARD, INC.
(AS AMENDED AND RESTATED)
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 15, 1998.
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
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(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 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 16b-3
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 4.8.
(m) "Option" means an Option to purchase Common Stock awarded to a
Participant as provided in Section 4.
(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 4.3.
(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.
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(q) "Performance-Based Awards" shall have the meaning set forth in
Section 5.11.
(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 5.2.
(t) "Restricted Stock" means Common Stock awarded to a Participant
subject to restrictions as provided in Section 5 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 4 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 5.8.
(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
5,500,000. 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 -- OPTIONS AND STOCK APPRECIATION RIGHTS
4.1 Subject to the provisions of this Section 4, 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
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the Optionee which contains the terms and conditions specified by this Section 4
and such other terms and conditions as the Committee in its sole discretion
shall specify.
4.2 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.
4.3 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, notwithstanding 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.
4.4 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.
4.5 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.
4.6 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 Rights 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.
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4.7 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.
4.8 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.
4.9 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 5 -- RESTRICTED STOCK, STOCK AWARDS AND UNRESTRICTED STOCK
5.1 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 5.
5.2 During the Restricted Period specified by the Committee, 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 5.2 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.
5.3 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.
5.4 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 5.7, the
Corporation shall deliver that Restricted Stock to that Participant or that
Participant's beneficiary, as the case may be, within 60 days.
5.5 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.
5.6 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
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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 5 of the 1993 Long Term Incentive Plan of
C. R. Bard, Inc., as amended, 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.
5.7 When the restrictions imposed by Section 5.2 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 5.6, for the number of
shares of Restricted Stock deposited with the Corporation by the Participant
pursuant to Section 5.6 with respect to which all restrictions have expired or
been satisfied. At that time, the Agreement referred to in Section 5.5 shall
terminate forthwith as to those shares.
5.8 Stock Awards shall be made by the Committee in numbers of shares, and,
unless otherwise specified by the Committee and subject to Section 5.9, 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. Notwithstanding anything to the contrary in the Plan, upon the occurrence
of a Change of Control Event, any installment of a Stock Award not yet delivered
shall become immediately deliverable.
5.9 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 5.9 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.
5.10 The Committee may award Unrestricted Stock to a Participant, which
Common Stock shall not be subject to forfeiture pursuant to this Section 5.
Certificates representing Unrestricted Stock shall be delivered to the
Participant as soon as practicable following the grant thereof.
5.11 Notwithstanding the foregoing, certain awards granted under this
Section 5 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.
5.12 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.
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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.
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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 appropriate 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 5, including depositing the
certificates therefor with the Corporation together with a stock power and
bearing a legend as provided in Section 5.6.
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 5.2 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 5.6, and such
stock, securities or other property shall become subject to the restrictions and
requirements imposed by Section 5, and the certificates therefor or other
evidence thereof shall bear a legend similar in form and substance to the legend
set forth in Section 5.6.
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 grant or 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
5 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.
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EXHIBIT C
1988 DIRECTORS STOCK AWARD PLAN
OF
C. R. BARD, INC.
(AS AMENDED AND RESTATED)
SECTION 1 -- PURPOSE
The purposes of the C. R. Bard, Inc. 1988 Directors Stock Award Plan (the
"Plan") are (a) to attract and retain highly qualified individuals to serve as
Directors of C. R. Bard, Inc. ("Bard"), (b) to relate non-employee directors'
compensation more closely to Bard's performance and its shareholders' interests,
and (c) to increase non-employee directors' stock ownership in Bard.
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) "Code" means the Internal Revenue Code of 1986, as amended.
(c) "Committee" means the Governance Committee of the Board or such
other committee as may be designated by the Board.
(d) "Common Stock" means the Common Stock of the Corporation, par
value $0.25 per share.
(e) "Corporation" means C. R. Bard, Inc., a New Jersey corporation.
(f) "Director" means a member of the Board.
(g) "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
(h) "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.
(i) "Option" means an Option to purchase Common Stock awarded to a
Participant as provided in Section 5.
(j) "Option Period" means the period from the date of the grant of an
Option to the date of its expiration as provided in Section 3.1.
(k) "Optionee" means a Participant who has been granted an Option
under the Plan.
(l) "Participant" means a non-employee Director.
(m) "Permanent Disability" means any disability which prevents a
Director from performing all duties as a Director.
(n) "Plan" means the C. R. Bard, Inc. 1988 Directors Stock Award Plan.
(o) "Restricted Period" means the vesting period, if any, of up to 10
years specified by the Committee pursuant to Section 6.2.
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(p) "Restricted Stock" means Common Stock awarded to a Participant
subject to restrictions as provided in Section 6 as long as those
restrictions are in effect.
(q) "Retirement" means the voluntary cessation of service as a
director by a director who is 55 years of age or older and who has served
on the Board for at least five years.
(r) "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.
(s) "Stock Award" means an award of Common Stock delivered in
installments as specified by the Committee pursuant to Section 4.8.
(t) "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 Except as provided in Section 4 and Sections 5.4 and 5.5, the
Committee, in its sole discretion, shall select those non-employee directors 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 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 The total number of Shares of Common Stock subject to the Plan shall be
limited so that the aggregate number of shares which may be awarded under the
Plan shall not exceed 75,000 shares of Common Stock, as currently constituted.
Shares of Common Stock returned to Bard as a result of the forfeiture of stock
awarded or the expiration or termination of options granted shall be available
under the Plan.
3.3 The Plan shall become effective when it is adopted by the Board (the
"Effective Date"); provided, however, if within one year after the Plan is
adopted by the Board the Plan is not approved by the vote of a majority of the
holders of the outstanding shares of Common Stock present, or represented, and
entitled to vote, at a meeting of shareholders where the total vote cast on
whether to adopt the Plan represents a majority of the Common Stock entitled to
vote on such matter (such approval is referred to herein as "Shareholder
Approval"), then the Plan (and any entitlement of non-employee directors to
receive shares of Common Stock hereunder) shall terminate at the time of such
meeting, or, if no meeting is held, after the passage of one year from the date
the Plan was adopted by the Board.
SECTION 4 -- FORMULA-BASED STOCK AWARDS
4.1 On the first business day in October following the Effective Date, each
non-employee director shall be granted the right to receive, subject to
Shareholder Approval, 200 shares of Common Stock, for each year or partial year
remaining in his or her current term of directorship, which shares shall only be
transferred by Bard to such Director subject to and in accordance with the terms
of this Section 4. Any grant of shares of Common Stock to a non-employee
director pursuant to the immediately preceding sentence shall be transferred in
installments (or an installment to the extent only one year remains under the
term of office of a non-employee director) of 200 shares as follows: (a) the
transfer of shares of Common Stock covered by the first installment shall occur
promptly following the date of Shareholder Approval, and (b) the transfer of
shares of Common Stock covered by the second and third installments, if any,
shall occur on the first business day in October during each year of such
Director's term of office; provided, however, with respect to such second and
third installments, such Director shall not be entitled to any such installment
of shares and such shares shall not, under any circumstances, be transferred to
such Director in the event that for any reason such
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Director is not a non-employee director of Bard on the date on which an
installment of shares of Common Stock would otherwise have been transferable
hereunder.
4.2 After the Effective Date upon the election of any non-employee
director, he or she shall be granted the right to receive 200 shares of Common
Stock, subject to Section 8.7, for each year or partial year remaining in his or
her current term of directorship (other than a partial year resulting from the
election of a Director subsequent to the October 1st immediately preceding the
annual meeting at which the term of office of such Director will expire), which
shares shall only be transferred by Bard to such Director subject to and in
accordance with the terms of this Section 4.2. Any grant of shares of Common
Stock to a non-employee director pursuant to the terms of this Section 4.2 shall
be transferred in equal installments of 200 shares each, which shares shall be
transferred on, or promptly following, the first business day in October during
each year of such Director's term of office; provided, however, such Director
shall not be entitled to any such installment of shares and such shares shall
not, under any circumstances, be transferred in the event that for any reason
such Director is not a non-employee director of Bard on the date on which an
installment of shares of Common Stock would otherwise have been transferable
hereunder. Notwithstanding the foregoing, the Committee may specify that any
subsequent grant shall be for the right to receive such lesser number of shares
of Common Stock as the Committee shall specify for each such year or partial
year.
4.3 No shares of Common Stock transferred to a non-employee director under
this Section 4 of the Plan may be sold, pledged, assigned, transferred or
otherwise encumbered or disposed of until the expiration of two years from the
date of the transfer of such shares to the non-employee director (the "Transfer
Restriction"); provided, however, such Transfer Restriction shall cease to apply
upon the death or permanent disability of the non-employee director.
SECTION 5 -- STOCK OPTIONS AND STOCK APPRECIATION RIGHTS
5.1 Subject to the provisions of this Section 5, the Committee may grant
non-qualified Options with or without Stock Appreciation Rights to Participants.
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. Exercisable 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 On each second Wednesday in July, each person who is a non-employee
director of Bard on such date shall be granted one Option entitling the grantee
thereof to purchase 600 shares of Common Stock. Such Options shall have a ten
year term and shall become exercisable with respect to 200 shares of Common
Stock subject thereto on each of the first three anniversaries following the
date of grant thereof. Notwithstanding the foregoing, from time to time the
Committee may specify that any such Option not yet granted shall be exercisable
to purchase such lesser number of shares of Common Stock as the Committee shall
specify and that any such Option shall become exercisable according to such
schedule as the Committee shall specify.
5.5 If a non-employee director shall, by reason other than death or
Retirement, cease to be a member of the Board 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; 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
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Common Stock to the extent exercisable by such non-employee director at the time
he or she ceased to be a member of the Board. If a non-employee director shall
die after the date he or she ceases to be a member of the Board 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.
5.6 If a non-employee director shall cease to be a member of the Board 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 to the extent exercisable by such non-employee
director at the time he or she retired.
5.7 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.
5.8 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 Rights 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.
SECTION 6 -- NONFORMULA-BASED STOCK AWARDS AND RESTRICTED STOCK
6.1 An award of Restricted Stock and Stock Awards 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 6.
6.2 During the Restricted Period specified by the Committee, 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 6.2 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 8.5 and 8.6, to receive all dividends or dividend equivalents paid
on and the right to vote such Restricted Stock.
6.3 If a Participant holding Restricted Stock ceases to be a member of the
Board during the Restricted Period for any reason other than death or
Retirement, the Committee may at the time of cessation of service as a member of
the Board 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 such cessation, such Restricted
Stock shall be forfeited.
6.4 If a Participant holding Restricted Stock ceases to be a member of the
Board 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 6.7, the Corporation shall deliver that Restricted
Stock to that Participant or that Participant's beneficiary, as the case may be,
within 60 days.
6.5 Each Participant awarded Restricted Stock or Stock Awards 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.
6.6 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
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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 6 of the C. R. Bard, Inc. 1988 Directors
Stock Award Plan, as amended, 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.
6.7 When the restrictions imposed by Section 6.2 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 6.6, for the number of
shares of Restricted Stock deposited with the Corporation by the Participant
pursuant to Section 6.6 with respect to which all restrictions have expired or
been satisfied. At that time, the Agreement referred to in Section 6.5 shall
terminate forthwith as to those shares.
6.8 Stock Awards shall be made by the Committee in numbers of shares, and,
unless otherwise specified by the Committee and subject to Section 6.9, 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.
6.9 No installment of shares shall be delivered on any anniversary of the
date of the Stock Award to a Participant whose service as a member of the Board
has ceased; provided, however, that where such cessation 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 6.9 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.
6.10 The Committee may award Unrestricted Stock to a participant, which
Common Stock shall not be subject to forfeiture pursuant to this Section 6.
Certificates representing Unrestricted Stock shall be delivered to the
Participant as soon as practicable following the date thereof.
SECTION 7 -- ADMINISTRATION
7.1 Subject to the provisions of the Plan, the Plan shall be administered
by the Committee and the Committee shall have exclusive power to determine the
amount of, or method of determining, the awards to be made to Participants.
7.2 The Committee's interpretation of the Plan and of any award granted
under the Plan shall be final and binding on all Participants.
7.3 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 8 -- MISCELLANEOUS
8.1 All expenses and costs in connection with the operation of the Plan
shall be borne by the Corporation.
8.2 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.
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8.3 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.
8.4 The option price shall be paid in full by certified or bank cashier's
check payable to the order of Bard and/or, to the extent permitted by law, by
surrendering or delivering to Bard shares of Common Stock or any other form of
consideration acceptable to Bard. Upon exercise of an option, the stock
purchased shall be promptly delivered. No nonemployee director holding an
option, or his or her legal representatives, legatees or distributees, as the
case may be, will be deemed to be a holder of any shares of Common Stock
pursuant to exercise of an option until the date of the issuance of a stock
certificate to him or her for such shares of Common Stock. The proceeds of the
sale of Common Stock subject to options are to be added to the general funds of
Bard and used for its general corporate purposes.
8.5 If the outstanding Common Stock shall at any time be changed or
exchanged by declaration of a stock dividend, stock split, combination of
shares, recapitalization, merger, consolidation or other corporate
reorganization in which Bard is the surviving corporation, the maximum number of
shares which may be awarded under the Plan, the number of shares of Common Stock
distributable pursuant to Sections 4 and 6 of the Plan, the number of options
distributed and outstanding pursuant to Section 5 of the Plan and the number of
options distributable pursuant to Section 5 of the Plan shall be appropriately
and equitably adjusted.
8.6 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 6.2 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 6.6, and such
stock, securities or other property shall become subject to the restrictions and
requirements imposed by Section 6, and the certificates therefor or other
evidence thereof shall bear a legend similar in form and substance to the legend
set forth in Section 6.6.
8.7 Notwithstanding anything to the contrary contained herein, no shares of
Common Stock shall be transferred by Bard pursuant to this Plan prior to the
date of Shareholder Approval, and no non-employee director shall be entitled to
any rights as a shareholder with respect to any shares of Common Stock granted
hereunder, including, without limitation voting rights and the right to receive
dividends, until such shares have been transferred.
8.8 If the issuance of Common Stock pursuant to the Plan has not been
registered under the Securities Act of 1933, as amended, any certificate
representing shares transferred pursuant to this Plan, including pursuant to the
exercise of an option, shall include the following legend:
"The Shares represented by this certificate have not been registered
under the Securities Act of 1933 (the "Act") and, accordingly, may not be
offered, sold or otherwise pledged, hypothecated or transferred unless (a)
pursuant to an effective registration statement under the Act or (b) an
applicable exemption from the registration requirements of the Act is
available. In addition, the transferability of this certificate and the
shares of stock represented hereby are subject to the terms and conditions
contained in the C. R. Bard, Inc. 1988 Directors Stock Award Plan."
A non-employee director shall not dispose of shares of Common Stock awarded
hereunder, including shares of Common Stock awarded pursuant to the exercise of
an option, in transactions which, in the opinion of counsel to Bard, would
violate the Securities Act of 1933, as then amended, and the rules and
regulations thereunder.
8.9 This Plan shall be construed in accordance with the laws of the State
of New Jersey and may be amended, suspended or terminated at any time or from
time to time by action of the Board; provided, however, that no such amendment
shall be made, which would, without shareholder approval:
(a) increase the number of shares that may be transferred under this
Plan;
(b) materially modify the requirements as to eligibility for
participation in this Plan; or
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(c) otherwise materially increase the benefits accruing to the
non-employee directors.
8.10 The Plan provisions governing the eligibility for participation, the
amount and timing of awards, the timing of the delivery of shares in
installments, exercise prices and exercise periods, shall not be amended more
than once every six months, other than to comport with changes in the Internal
Revenue Code of 1986, as amended, the Employee Retirement Income Security Act of
1974, as amended, or the rules thereunder.
8.11 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.
C-7
<PG$PCN>
C. R. BARD, INC.
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
P The undersigned hereby constitutes and appoints William C. Bopp and Richard
A. Flink, and each of them, his true and lawful attorneys and proxies, with
R power of substitution, to represent the undersigned and to vote all of the
shares of stock of C. R. BARD, INC. that the undersigned is entitled to
O vote at the Annual Meeting of Shareholders of C. R. BARD, INC. to be held
at the Hamilton Park Conference Center, 175 Park Avenue, Florham Park, New
X Jersey, on Wednesday, April 15, 1998 at 10:00 a.m. and at any adjournments
thereof (a) as specified on the items listed on the reverse hereof, and (b)
Y in accordance with their discretion on any other business which may
properly come before said meeting.
ELECTION OF DIRECTORS, NOMINEES:
JOSEPH F. ABELY, JR., ROBERT P. LUCIANO AND TONY L. WHITE
-------------
SEE REVERSE
SIDE
-------------
- --------------------------------------------------------------------------------
FOLD AND DETACH HERE
This portion of your proxy will serve as
an ADMISSION TICKET to the
Annual Meeting of Shareholders
of C. R. Bard, Inc.
should you be able to attend.
April 15, 1998 at 10:00 a.m.
Hamilton Park Conference Center
175 Park Avenue
Florham Park, New Jersey
Attendee(s) Signature(s):
-----------------------------------
-----------------------------------
Please print name(s)
<PG$PCN>
[X] Please mark your --- | 1436
votes as in this | |
example. -----
This proxy when properly executed will be voted in the manner directed hereon
by the undersigned shareholder. If no direction is made, this proxy will be
voted FOR the election of directors and FOR proposals 2, 3, 4 and 5.
- ------------------------------------------------------------------------------
The Board of Directors recommends a vote FOR each of the following proposals:
- ------------------------------------------------------------------------------
FOR WITHHELD
1. Election of [ ] [ ]
Directors
(see reverse)
For, except vote withheld from the following nominee(s):
- --------------------------------------------------------
FOR AGAINST ABSTAIN
2. Approval of the [ ] [ ] [ ]
1998 Employee Stock
Purchase Plan.
3. Approval of Amendment
to the 1993 Long Term [ ] [ ] [ ]
Incentive Plan.
4. Approval of Amendments [ ] [ ] [ ]
to the 1988 Directors Stock
Award Plan.
5. Ratification of Independent [ ] [ ] [ ]
Public Accountants.
- ------------------------------------------------------------------------------
Please mark this box if you plan to [ ]
attend the meeting
NOTE: This proxy must be signed exactly as name(s)
appear(s) hereon. Executors, administrators,
trustees, guardians, attorneys and officers
signing for corporations should give full title.
For joint accounts each owner must sign.
------------------------------------------------
------------------------------------------------
SIGNATURE(S) DATE
- ------------------------------------------------------------------------------
* FOLD AND DETACH HERE *
[BARD LOGO]
Dear Bard Employee,
This past year brought us many new challenges as we continued to focus on
being competitive in a dynamic global environment. We believe we have positioned
the Company for improved performance in the coming year, and we continue to
depend on your efforts to achieve our goals.
/s/ Bill
William H. Longfield
<PG$PCN>
PROXY
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, on
Wednesday, April 15, 1998 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, NOMINEES:
JOSEPH F. ABELY, JR., ROBERT P. LUCIANO AND TONY L. WHITE
SEE REVERSE
SIDE
- --------------------------------------------------------------------------------
FOLD AND DETACH HERE
This portion of your proxy will serve as
an ADMISSION TICKET to the
Annual Meeting of Shareholders
of C. R. Bard, Inc.
should you be able to attend.
April 15, 1998 at 10:00 a.m.
Hamilton Park Conference Center
175 Park Avenue
Florham Park, New Jersey
Attendee(s) Signature(s):
-----------------------------------
-----------------------------------
Please print name(s)
<PG$PCN>
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 the election of directors and FOR proposals 2, 3, 4 and 5.
- --------------------------------------------------------------------------------
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR EACH OF THE FOLLOWING PROPOSALS:
- --------------------------------------------------------------------------------
1. Election of Directors (see reverse) FOR WITHHELD
/ / / /
For, except vote withheld from the following nominee(s):
----------------------------------------------------------
2. Approval of the 1998 Employee Stock FOR AGAINST ABSTAIN
Purchase Plan. / / / / / /
3. Approval of Amendment to the 1993
Long Term Incentive Plan. / / / / / /
4. Approval of Amendments to the 1998
Directors Stock Award Plan. / / / / / /
5. Ratification of Independent Public
Accountants. / / / / / /
- --------------------------------------------------------------------------------
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 corporations should give
full title. For joint accounts each
owner must sign.
-------------------------------------
-------------------------------------
SIGNATURE(S) DATE
- --------------------------------------------------------------------------------
- FOLD AND DETACH HERE -
[BARD LOGO]
SHAREHOLDER SERVICES
DirectSERVICE Program for Shareholders
Under the DirectSERVICE Program, registered shareholders and non-shareholders
may purchase Bard common stock at any time with a low fee structure compared
with normal brokerage fees. Dividends may be reinvested in Bard stock at no
cost to the shareholder. The program is a convenient and economical way for
shareholders to initiate and increase their investment in Bard through the
purchase of shares with voluntary cash payments and all or part of their
dividends. Cash payments may be made by mail or through automatic monthly
deductions from your bank account.
Direct Deposit of Dividends
Shareholders receiving a dividend check may have payments deposited directly
into their checking or savings account at any financial institution
participating in the ACH network. Through an Electronic Funds Transfer, your
dividend can be deposited electronically on the dividend payment date. There is
no charge to shareholders for this service.
For details or enrollment in the DirectSERVICE Program or for direct deposit of
dividends, simply contact First Chicago Trust Company of New York, who
administers these programs for Bard. Their address and convenient "800" numbers
are shown below.
DirectSERVICE Program
for Shareholders of C. R. Bard, Inc.
c/o First Chicago Trust Company of New York
P.O. BOX 2598
Jersey City, New Jersey 07303-2598
Existing shareholders: (800) 446-2617
Non-shareholders inquiring
about the program: (800) 828-1639
Be sure to include a reference to C. R. Bard, Inc.
