-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, hqsBAsHV5PB3CftDrvZqWm6GkHLVEI3D46Re1adpzoOX+C35zE8yYGcEq0zExTXn /JZ8JdFU/s0uZPtpB1TScw== 0000278352-95-000009.txt : 19950615 0000278352-95-000009.hdr.sgml : 19950615 ACCESSION NUMBER: 0000278352-95-000009 CONFORMED SUBMISSION TYPE: DEF 14A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19950508 FILED AS OF DATE: 19950320 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: SYMBOL TECHNOLOGIES INC CENTRAL INDEX KEY: 0000278352 STANDARD INDUSTRIAL CLASSIFICATION: COMPUTER PERIPHERAL EQUIPMENT, NEC [3577] IRS NUMBER: 112308681 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: DEF 14A SEC ACT: 1934 Act SEC FILE NUMBER: 001-09802 FILM NUMBER: 95521834 BUSINESS ADDRESS: STREET 1: 116 WILBUR PL CITY: BOHEMIA STATE: NY ZIP: 11716 BUSINESS PHONE: 5165632400 MAIL ADDRESS: STREET 1: 116 WILBUR PL CITY: BOHEIMIA STATE: NY ZIP: 11716 DEF 14A 1 March 20, 1995 Securities and Exchange Commission Judiciary Plaza 450 Fifth Street, NW Washington, DC 20549-1004 Gentlemen: Re: Symbol Technologies, Inc. (the "Company") Definitive Proxy Material Commission File No. 1-9802 Registrant CIK No. 0000278352 I transmit for filing, pursuant to Section 14(a) of the Securities Exchange Act of 1934 (the "Act") the following definitive proxy materials in connection with the Annual Meeting of Shareholders of the Company scheduled for May 8, 1995 Pursuant to Rule 14a-3(c) of the Act, Seven (7) copies of the Company's Annual Report to Shareholders, which will be mailed to shareholders together with the definitive proxy materials, will be submitted in paper form by copy of this letter. This report is not to be deemed "soliciting material" or "filed" with the Commission and is solely for your information. I have been advised by the Company that the financial statements contained in the report do not reflect any changes from the preceding year's financial statements with respect to accounting principals or practices or in the method of applying such principals or practices. Kindly address any comments you may have concerning the following proxy materials to the undersigned. The Company intends to release definitive proxy materials together with the Annual Report to Shareholders on or about March 20, 1995. The purpose of the Annual Meeting is to consider proposals to (1) elect nine (9) directors of the Company, (2) adopt an amendment to the 1991 Employee Stock Option Plan, (3) adopt the Executive Bonus Plan, (4) ratify the appointment of Deloitte & Touche as the Company's independent accountants for fiscal year 1995, and (4) transact any such business as may properly come before the meeting. Securities and Exchange Commission March 20, 1995 Page -2- A certified check in the amount of $125.00 in payment of the filing fee has been deposited in the SEC Lockbox Account No. 910-8739 at Mellon Bank in Pittsburgh, PA 15251. Very truly yours, s/Leonard H. Goldner Leonard H. Goldner Senior Vice President and General Counsel LHG:mk Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934 Filed by the Registrant [X] Filed by a Party other than the Registrant [ ] Check the appropriate box: [ ] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission Only (as permitted by Rule 14a- 6(e)(2)) [X] Definitive Proxy Statement [ ] Definitive Additional Materials [ ] Soliciting Material Pursuant to 240.14a- 11(c) or 240.14a-12 SYMBOL TECHNOLOGIES, INC. Payment of Filing Fee [X] $125 per exchange Act Rules 0-11(c)(1)(ii), 14a- 6(i)(1), 14a-6(i)(2) or Item 22(a)(2) of Schedule 14A. [ ] $500 per each party to the controversy pursuant to Exchange Act Rule 14a-6(i)(3). [ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0- 11. 1) Title of each class of securities to which transaction applies: _______________________________________________________ ______ 2) Aggregate number of securities to which transaction applies: _______________________________________________________ _______ 3) Per unit price 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 date of its filing: 1) Amount Previously Paid: 2) Form, Schedule or Registration Statement No.: 3) Filing Party: 4) Date Filed: SYMBOL TECHNOLOGIES, INC 116 Wilbur Place Bohemia, New York 11716 ____________________ NOTICE OF ANNUAL MEETING OF SHAREHOLDERS MAY 8, 1995 ___________________ NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of Symbol Technologies, Inc. (the "Corporation") will be held at 11:00 A.M., local time, on May 8, 1995 at Chemical Banking Corp., World Headquarters, 270 Park Avenue, New York, New York, for the following purposes: 1. To elect nine directors of the Corporation to serve until the next annual meeting of shareholders and until the election and qualification of their respective successors; 2. To vote upon a proposal to amend the 1991 Employee Stock Option Plan; 3. To vote upon a proposal to approve the adoption of the Executive Bonus Plan; 4. To ratify the appointment of Deloitte & Touche, independent certified public accountants, as auditors for fiscal 1995; and 5. To transact such other business as may properly come before the meeting. Only holders of record of the Corporation's Common Stock at the close of business on March 10, 1995 are entitled to notice of, and to vote at, the meeting and any adjournment thereof. Such shareholders may vote in person or by proxy. The stock transfer books of the Corporation will not be closed. Shareholders who find it convenient are cordially invited to attend the meeting in person. If you are not going to do so and wish that your shares be voted, you are requested to fill in, sign, date and return the accompanying proxy in the enclosed envelope. No postage is required if mailed in the United States. By Order of the Board of Directors, Leonard H. Goldner Secretary Dated: March 16, 1995 SYMBOL TECHNOLOGIES, INC. 116 Wilbur Place Bohemia, New York 11716 ____________________ PROXY STATEMENT ___________________ This Proxy Statement is furnished in connection with the solicitation by the Board of Directors of Symbol Technologies, Inc. (the "Corporation") of proxies to be used at the Annual Meeting of Shareholders of the Corporation to be held at 11:00 A.M., local time on May 8, 1995, at the Chemical Banking Corp., World Headquarters, 270 Park Avenue, New York, New York, and at any adjournment thereof. If proxy cards in the accompanying form are properly executed and returned, the shares of Common Stock represented thereby will be voted as instructed on the proxy. If no instructions are given, such shares will be voted (1) for the election as directors of the nominees of the Board of Directors named below, (2) in favor of the proposal to amend the 1991 Employee Stock Option Plan, (3) in favor of the proposal to approve the adoption of the Executive Bonus Plan, (4) to ratify the appointment of Deloitte & Touche as the Corporation's auditors for fiscal 1995, and (5) in the discretion of the proxies named in the proxy card on any other proposals to properly come before the meeting or any adjournment thereof. Any proxy may be revoked by a shareholder prior to its exercise upon written notice to the Secretary of the Corporation, or by the vote of a shareholder cast in person at the meeting. The approximate date of mailing of this Proxy Statement and the accompanying proxy is March 20, 1995. VOTING Holders of record of the Corporation's Common Stock on March 10, 1995, will be entitled to vote at the Annual Meeting or any adjournment thereof. As of that date, there were 25,747,690 shares of Common Stock outstanding and entitled to vote and a majority, or 12,873,846 of these shares, will constitute a quorum for the transaction of business. Each share of Common Stock entitles the holder thereof to one vote on all matters to come before the meeting, including election of directors. Only votes cast "for" a motion constitute affirmative -1- votes. Votes "withheld" or abstentions (including broker non-votes) are considered for quorum purposes but since they are not votes "for" a motion, they will have the same effect as negative votes or votes "against" such matters. The closing price of the Corporation's Common Stock on the New York Stock Exchange on March 10, 1995 was $28.25 per share. NOMINEES FOR ELECTION The following information is supplied with respect to the nominees for election as directors of the Corporation: Positions and Offices Has Been a Name Age Presently Held With the Corporation Director Since Jerome Swartz 54 Chairman of the Board of Directors, 1973 Chief Executive Officer and Director Harvey P. Mallement 54 Director 1977 Frederic P. Heiman 55 Executive Vice President and Director 1981 Raymond R. Martino 57 Vice Chairman of the Board of Directors 1983 Saul P. Steinberg 55 Director 1985 Lowell C. Freiberg 55 Director 1985 George Bugliarello 67 Director 1992 Jan Lindelow 49 President, Chief Operating Officer and Director 1994 Charles Wang 50 Director 1994 Dr. Swartz co-founded and has been employed by the Corporation from its inception in 1973. He has been the Chairman of the Board of Directors and Chief Executive Officer of the Corporation for more than the past ten years. Dr. Swartz was an industry consultant for the prior 12 years in the areas of optical and electronic systems and instrumentation and has a total of some 110 issued and pending U.S. patents and technical papers to his credit. He is presently a member of the Board of Trustees of Polytechnic University and an adjunct full professor at S.U.N.Y., Stony Brook. Mr. Mallement has been one of the Managing General Partners of Harvest Partners, Inc., a venture capital and leveraged buyout investment management company, since its inception in April 1981. He is an officer and director of seven privately held companies. Dr. Heiman has been Executive Vice President of the Corporation since July 1986. In addition, in 1993 he was appointed the Corporation's Chief Technology Officer and in 1994 General Manager of the Corporation's Network Systems Organization. He was previously employed by Intel Corporation, a manufacturer of semiconductor components, from May 1982 until July 1986, in a number of positions, the most recent of which was as its Director of Corporate -2- Planning. Dr. Heiman is the inventor or co-inventor of 20 issued U.S. patents, including basic elements of the MOS integrated circuit chip, which became the basis of much of the modern revolution in computer and electronics communications and the first silicon storage tube used in display and scanning applications. Mr. Martino was the Corporation's President and Chief Operating Officer from December 1983 until June 30, 1994. He is currently the Corporation's Vice Chairman of the Board of Directors and is employed by the Corporation on a part-time and consulting basis. Mr. Steinberg founded and has been the Chief Executive Officer and a Director of Reliance Group Holdings, Inc. ("Reliance") and predecessors of Reliance since 1961. Reliance is a holding company whose principal business is the ownership of property and casualty and title insurance companies. He is also a member of the Board of Trustees of the University of Pennsylvania and Chairman of the Wharton School Board of Overseers. Mr. Steinberg served Telemundo Group, Inc. ("Telemundo") as Chief Executive Officer from February 1990 until May 1992, and as President from February 1990 until February 1991. Telemundo consented to the entry of an order for relief under Chapter 11 of the U.S. Bankruptcy Code in July 1993. Telemundo's Plan of Reorganization was consumated on December 30, 1994. Mr. Steinberg is also a Director of Reliance Insurance Company, Reliance Financial Services Corporation and Zenith National Insurance Corp. Mr. Freiberg has been employed by Reliance and its predecessors since 1969. For more than the past five years, he has been the Senior Vice President and Chief Financial Officer of Reliance. Dr. Bugliarello has been Chancellor of Polytechnic University since July 1, 1994. For the prior 21 years, he was President of Polytechnic University. He has been a member of several scientific organizations including past Chairman of the Board of Science and Technologies for International Development of the National Academy of Sciences. He is a member of the National Academy of engineering and is also the U.S. Member of the Science for Stability Steering Group of the Scientific Affairs Division of NATO. He is a member of the Board of Directors of several organizations including the Long Island Lighting Company, Comtech Laboratories and Spectrum Information Technologies, Inc. In January 1995, Spectrum Information Technologies, Inc. filed for bankruptcy under Chapter 11 of the U.S. Bankruptcy Code. -3- Mr. Lindelow joined the Corporation in June 1994. Previously, he was employed by Asea Brown Boveri LTD ("ABA"), a Swiss multinational conglomerate, from May 1989 until June 1994. From January 1992 until leaving ABB, Mr. Lindelow served as President of its U.S. Industrial and Diversified Business Segment with responsibility for 15 companies having combined revenue in excess of $2 billion and from May 1989 until December 1991, as chairman and CEO of ABB Power T&D Company Inc. Prior to that time, he was employed for more than 18 years by Sperry Univac Corporation (now Unisys Corporation) in various technical and senior management positions. Mr. Wang founded and has been the Chairman and Chief Executive Officer of Computer Associates International, Inc. since 1976. Computer Associates is the world's second largest software company with fiscal 1994 revenues exceeding $2.1 billion. Pursuant to agreements between Reliance and the Corporation, Reliance currently has the right to designate one person to the Corporation's Board of Directors. Reliance has designated Mr. Steinberg . MEETINGS OF THE BOARD During the fiscal year ended December 31, 1994, the Board of Directors held 8 meetings. Each director attended 75% or more of the aggregate of (1) the total number of meetings of the Board of Directors and (2) the total number of meetings held by all the committees of the Board on which such director served. The Board of Directors has an Audit Committee consisting of Messrs. Mallement and Bugliarello. The primary functions of the Audit Committee are to review the Corporation's financial statements, to recommend the appointment of the Corporation's independent auditors and to review the overall scope of the audit. The Audit Committee held two meetings in 1994. The Board of Directors has a Compensation/Stock Option Committee consisting of Messrs. Mallement and Steinberg. The primary functions of this Committee are to review the salaries, benefits and any other compensation of the Corporation's senior executive officers, to make recommendations to the Board of Directors with respect to these matters and to administer the Corporation's stock option plans. During 1994, the Committee held 8 meetings and acted twice by unanimous written consent. -4- The Board of Directors has a Nominating Committee consisting of Messrs. Swartz, Mallement and Steinberg. The primary function of this Committee is to review and recommend to the Board potential candidates for election to the Board of Directors. Shareholders wishing to recommend candidates for consideration by the Committee can do so by writing to the Secretary of the Corporation at its corporate office in Bohemia, New York, giving the candidate's name, biographical data and qualifications. Any such recommendation should be accompanied by a written statement from the individual of his or her consent to be nominated as a candidate and, if nominated and elected, to serve as a director. The Committee held two meetings in 1994. PRINCIPAL SHAREHOLDERS The following table sets forth certain information with respect to the Common Stock of the Corporation beneficially owned by any person who is known to the Corporation to be the beneficial owner of more than 5% of the Corporation's voting securities: Name and Address Amount and Nature of Percent of of Beneficial Owner Beneficial Ownership(1) Common Stock Saul P. Steinberg and 3,579,884(2) 13.9 Reliance Financial Services Corporation Park Avenue Plaza New York, New York 10055 Edward C. Johnson and 3,123,900(3) 12.1 FMR Corp. 82 Devonshire Street Boston, Massachusetts 02109 Prudential Insurance Company of America 2,201,063(4) 8.5 Prudential Plaza New York, New York 07102 _______________ (1) The table identifies any persons having sole voting and investment power with respect to the shares set forth opposite their names as of March 15, 1994, except as otherwise disclosed in the footnotes to the table, according to information publicly filed or otherwise furnished to the Corporation. -5- (2) Of the Common Stock shown, 3,568,634 shares are beneficially owned by Reliance Financial Services Corporation ("Reliance Financial"). Reliance Financial is a wholly owned subsidiary of Reliance. Approximately 47% of the common voting stock of Reliance is owned by Saul P. Steinberg, members of his family and affiliated trusts. As a result of his stock holdings in Reliance, Mr. Steinberg may be deemed to control Reliance Financial and to be a beneficial owner of the shares beneficially owned by Reliance Financial. Sole voting and dispositive power with respect to such shares are held as follows: Reliance Insurance Company, a subsidiary of Reliance Financial, 2,870,534 shares; United Pacific Insurance Company, a subsidiary of Reliance Insurance Company, 500,000 shares;Reliance National Indemnity, a subsidiary of Reliance Insurance Company, 198,100 shares. Mr. Steinberg disclaims beneficial ownership of the 3,568,634 shares beneficially owned by Reliance Financial. Includes 11,250 shares Mr. Steinberg beneficially owns which may be acquired within 60 days of March 15, 1995, pursuant to the exercise of a warrant and an option held by him. (3) The number of shares beneficially owned as of December 31, 1994 according to a statement on Schedule 13G filed with the Securities and Exchange Commission. Of such shares, 11,200 are beneficially owned by Fidelity International Limited ("FIL"). Approximately 47.22% of the voting stock of FIL is owned by Edward C. Johnson and members of his family. Mr. Johnson, members of his family and associated trusts form a controlling group with respect to the common voting stock of FMR Corp. ("FMR"). Mr. Johnson serves as Chairman of FIL and FMR. As a result of such common ownership and control, FMR may be deemed to be a beneficial owner of the shares held by FIL. FMR disclaims beneficial ownership of the 11,200 shares beneficially owned by FIL. Of the Common Stock shown, Fidelity Magellan Fund, an investment company, had the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of 2,266,900 of such shares. (4) The number of shares beneficially owned as of December 31, 1994 according to a statement on Schedule 13G filed with the Securities and Exchange Commission. Prudential Insurance Company, an insurance company, has sole power to vote or direct the vote and dispose of or direct the disposition of 169,000 of such shares, shared power to vote or direct the vote of 1,626,863 of such shares and shared power to dispose or direct the disposition of 2,032,063 of such shares. Prudential may have direct or indirect voting and/or investment discretion over 2,201,063 shares which are held for the benefit of its clients by its separate accounts, externally managed accounts, registered investment companies, subsidiaries and/or other affiliates. SECURITY OWNERSHIP OF MANAGEMENT The following table sets forth certain information as of March 15, 1995 with respect to the Common Stock of the Corporation beneficially owned by (i) all directors and nominees, (ii) the executive officers listed in the following Summary Compensation Table, and (iii) all executive officers and directors as a group: -6- Amount and Nature of Percent of Name of Individual or Identity of Group Beneficial Ownership(1) Common Stock Jerome Swartz................................................ 685,938(2) 2.6 Harvey P. Mallement...................................... 57,048(3) * Frederic Heiman............................................. 29,900(4) * Raymond R. Martino...................................... 220,366(5) * Saul P. Steinberg............................................ 3,579,884(6) 13.9 Lowell C. Freiberg.......................................... 36,250(7) * George Bugliarello.......................................... 2,750(8) * Jan Lindelow.................................................. 2,000 * Charles Wang................................................. 10,000 * Tomo Razmilovic........................................... 38,350(9) * All executive officers and directors as a group. 4,826,481 (10) 18.0 (consisting of 17 individuals) ____________________ * Less than 1% (1) The persons identified in this table have sole voting and investment power with respect to the shares set forth opposite their names, except as otherwise disclosed in the footnotes to the table, according to information furnished to the Corporation by each of them. (2) Includes (i) 403,750 shares which may be acquired pursuant to the exercise of options within 60 days of March 15, 1995, (ii) 50,000 shares held in trust for the benefit of Dr. Swartz and his family, (iii) 5,509 shares owned by his wife, and (iv) 14,600 shares held by a charitable lead trust of which he is a co-trustee and his adult children are ultimate beneficiaries. Does not include 27,902 shares owned by his children. Dr. Swartz disclaims beneficial ownership of the shares held by or for the benefit of members of his family. (3) Includes 21,250 shares that may be acquired pursuant to the exercise of an option or warrants within 60 days of March 15, 1995. Also includes 23,798 shares which are owned by a limited partnership in which he is a General Partner. Mr. Mallement has an indirect beneficial ownership of 1,831 of such shares. Mr. Mallement disclaims beneficial ownership of any other shares held by this partnership. (4) Represents 14,900 shares that may be acquired pursuant to the exercise of options within 60 days of March 15, 1995 and 15,000 shares owned jointly by Dr. Heiman and his wife. (5) Represents 200,366 shares that may be acquired pursuant to the exercise of options within 60 days of March 15, 1995 and 20,000 shares owned by Mr. Martino. (6) Represents 3,568,634 shares owned by Reliance Financial and its subsidiaries and 11,250 shares that may be acquired by Mr. Steinberg pursuant to the exercise of an option and a warrant within 60 days of March 15, 1995. See "Principal Shareholders." -7- (7) Represents shares that may be acquired pursuant to the exercise of an option and warrants within 60 days of March 15, 1995. Mr. Freiberg disclaims beneficial ownership of the shares owned by Reliance Financial. See "Principal Shareholders." (8) Represents 1,500 shares owned jointly by Dr. Bugliarello and his wife and 1,250 shares that may be acquired pursuant to the exercise of an option within 60 days of March 15, 1995. (9) Represents 28,350 shares that may be acquired pursuant to the exercise of options within 60 days of March 15, 1995 and 10,000 shares owned by Mr. Razmilovic. (10) Includes an aggregate of 952,091 shares which may be acquired pursuant to the exercise of options and warrants within 60 days of March 15, 1995. COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT Section 16(a) of the Securities Exchange Act of 1934 requires the Corporation's directors and executive officers, and persons who own more than 10% of a registered class of the Corporation's equity securities, to file with the Securities and Exchange Commission and the New York Stock Exchange, reports of ownership and reports of changes in ownership of Common Stock and other equity securities of the Corporation and to furnish the Corporation with copies of all Section 16(a) forms they file. Based on a review of the copies of such reports furnished to the Corporation, the Corporation believes that, during the 1994 fiscal year, all filing requirements applicable to its executive officers, directors and greater than 10% shareholders were complied with except that Mr. Wang made a late filing of his initial Form 3 in September 1994. The filing indicated he did not own any shares of Common Stock or any other equity securities of the Corporation other than an option which was awarded to him automatically upon his election as a director of the Corporation. -8- COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION The Corporation's Compensation/Stock Option Committee (the "Committee") is composed entirely of outside directors. Messrs. Mallement and Steinberg are the current members of the Committee. Mr. Mallement was the Corporation's Vice President-Finance from September 1977 until February 1982 and its Secretary from November 1980 until February 1982. Mr. Steinberg has never been an officer or employee of the Corporation. COMPENSATION/STOCK OPTION COMMITTEE REPORT ON EXECUTIVE COMPENSATION A primary role of the Committee is to oversee compensation practices for the Corporation's senior executive officers. The Committee's responsibilities include reviewing the salaries, benefits and other compensation of the Corporation's senior executive officers, making recommendations to the full Board of Directors with respect to these matters and administering the Corporation's stock option plans. In its oversight capacity, the Committee is dedicated to ensuring that the Corporation's financial resources are used effectively to support the achievement of its short- and long-term business objectives. The Committee has available to it an outside compensation consultant and access to independent compensation data. In the course of its executive compensation decision making, the Committee adheres to several guiding principles. Specifically, the Committee takes the position that the executive compensation program should: Target pay levels at rates that are competitive in light of market practices so as to ensure that the Corporation is positioned to attract and retain high performing management talent, particularly in the areas of technology in which it competes. Reflect a pay-for-performance orientation, linking overall compensation paid to senior executives with the Corporation's financial performance. Encourage share ownership on the part of key associates with the objective of aligning the interests of management and investors, thereby promoting the maximization of shareholder value. -9- The Corporation's total compensation program is described below. The Committee believes that the Corporation's executive compensation program is structured to appropriately recognize the performance and contribution of individual officers and to attract and retain top quality management talent. The Committee further believes that the executive compensation program is effective in supporting the Corporation's business goals and human resource strategies. Description of Compensation Policies It is the Corporation's policy to pay its senior executives at levels that reflect the Corporation's financial performance relative to comparable organizations. This policy is implemented by means of a coordinated, total pay program comprised of discrete elements that reward individual value added to the Corporation, provide motivation to achieve corporate financial targets that are consistent with shareholder expectations, and encourage long-term share ownership by senior executives. These elements exist in the context of a reward system that includes base salary, a bonus plan and awards of stock options. The Corporation, with the assistance of outside consulting firms, periodically conducts comparisons of the compensation practices of approximately 30 selected companies. This panel consists of "high tech" companies with which the Corporation believes it competes in attracting and retaining employees. Twelve of the panel companies are included in the S&P High Tech Composite Index. The Corporation seeks to target the total compensation (e.g. base salary, annual bonus and stock options) paid to its senior executives at approximately the 75th percentile of the total compensation paid for comparable positions at the panel companies, after adjusting by regression analysis for the different magnitude of revenues. Based on a review of Internal Revenue Service regulations which have been proposed but not yet adopted and awsuming shareholder approval of the Executive Bonus Plan, the Committee believes that all compensation paid in 1994 and payable in 1995 to its senior executive officers (including Dr. Swartz) will be fully deductible by the Corporation. After final regulations are adopted, the Committee will review the Corporation's compensation programs and will revise these programs, if necessary, to insure that future compensation payable to its senior executive officers will continue to be deductible to the fullest extent possible under applicable law. -10- Relationship of Executive Compensation to Performance Base Salary Executive officers' base salaries are normally reviewed each year. An exception to this policy has historically been made with respect to the consideration of base salaries for the Corporation's three most senior executive officers due to their employment agreements which required that salary reviews for these executives be undertaken biennially and salary increases be fixed for a period of two consecutive years. In 1995 and succeeding years, after the expiration of these agreements, it is anticipated that all senior executive officers salaries will be reviewed on an annual basis, except for Dr. Swartz who will continue to be reviewed on a biennial basis. In assessing the extent to which executive salary increases are warranted, the Committee considers a number of factors, including performance on the job, external market pay practices, the incremental value the executive adds to the Corporation and the executive's level of experience and expertise. In the case of Dr. Swartz, the Committee considered his effectiveness as Chairman of the Board and Chief Executive Officer of the Corporation as well as his many noteworthy contributions to the Corporation. These contributions include 58 issued U.S. patents which he has assigned to the Corporation and which provide competitive advantages to the Corporation and have also generated significant licensing revenues that have materially added to the Corporation's profitability. Adjustments in base salary are generally not based upon the financial performance of the Corporation. In 1994, after a period of two years during which time their annual base salaries had remained unchanged pursuant to the terms of their employment agreements, the Committee increased (i) Dr. Swartz' annual base salary by 5% to $656,250 for the ensuing two-year period July 1, 1994 through June 30, 1996 and (ii) Dr. Heiman's annual base salary by 9% from $343,750 to $375,000 for the ensuing 18 month period July 1, 1994 through December 31, 1995. Profit Sharing Bonus Plan The Corporation promotes a pay-for-performance philosophy through the operation of its Profit Sharing Bonus Plan (the "Profit Sharing Plan"). The Profit Sharing Plan was designed to ensure that cash compensation levels correlate closely with the Corporation's financial results. In 1994, most of the Corporation's North American based management level associates participated in the Profit Sharing Plan, including all executive officers other than Mr. Razmilovic. -11- Effective January 1, 1995, subject to shareholder approval, the Committee adopted, and the Board of Directors ratified, the creation of an Executive Bonus Plan to replace the Profit Sharing Bonus Plan for all executive officers of the Corporation. The purpose of the Executive Bonus Plan is to more directly tie the level of annual executive incentive compensation to the financial performance of the Corporation than was possible under the Profit Sharing Plan. If the Corporation achieves its plan level of profitability in 1995, bonuses under the Executive Bonus Plan will approximate those that would have been paid under the Profit Sharing Plan. However, under the Executive Bonus Plan, bonuses will generally be lower than they would have been under the Profit Sharing Plan if the Corporation's operating performance is below plan and higher than they would have been under the Profit Sharing Plan if the Corporation's operating performance exceeds plan. For additional information concerning the Executive Bonus Plan, see the "Proposal to Approve the Adoption of the Executive Bonus Plan." Under the Profit Sharing Plan, participants were assigned a Target Bonus which equaled a defined percentage of the participant's annual base salary. The Target Bonus percentages for Messrs. Swartz, Martino, Lindelow and Heiman were established in their employment agreements based on their level of responsibility. With respect to other participants in the Profit Sharing Plan, their defined percentage was based on the participant's relative level of responsibility. The Target Bonus (for participants other than Messrs. Swartz, Martino, Lindelow and Heiman) could be adjusted at the end of each year based upon the participant's performance during the year. Actual bonuses under the Profit Sharing Plan were determined by multiplying the Target Bonus by a fraction, the numerator of which was the percentage of the Corporation's consolidated net operating income which the Board of Directors designated as the Bonus Pool and the denominator of which was the aggregate of all Target Bonuses for all participants in the Profit Sharing Plan. The designation of the percentage of the Corporation's consolidated net operating income allocated to the Bonus Pool was left to the discretion of the Board which each year made its determination after considering the Corporation's financial results for the preceding fiscal year and reviewing the Corporation's financial projections for the year ahead. For 1994, the Board determined that 10% of the Corporation's consolidated net operating income would be contributed to the Bonus Pool, except that there would have been no contribution to the Profit Sharing Plan in 1994 if consolidated net operating income had not equaled or exceeded 7.5% of total revenue. This designation was consistent with past Board actions. -12- In 1994, all executive officers who participated in the Profit Sharing Plan (including Dr. Swartz) received as their actual bonus payment an amount approximating 129% of their Target Bonus. In 1993, the Corporation had lower operating revenues and all participants in the Profit Sharing Plan (including Dr. Swartz) received as their actual bonus payment an amount approximately 61% of their target bonus. In 1992, the Corporation had a net operating loss and, accordingly, no payments were made to any participant (including Dr. Swartz) under the Profit Sharing Plan. This result reinforced the sensitivity of the Profit Sharing Plan to the Corporation's actual financial results. Stock Options The Corporation reinforces the importance of producing satisfactory returns to shareholders over the long term through the operation of its 1990 Non- Executive Stock Option Plan and 1991 Employee Stock Option Plan (the "Plans"). Stock options granted under the Plans provide associates with the opportunity to acquire an equity interest in the Corporation, and to participate in the creation of shareholder value as reflected in growth in the price of the Corporation's Common Stock. Option exercise prices are equal to 100% of the fair market value of the Corporation's Common Stock on the date of option grant. This ensures that participants will derive benefits only as shareholders realize corresponding gains. To encourage a long-term decision making perspective, options are generally assigned a 10-year term and options generally become exercisable ratably over five years with a two year waiting period followed by equal vesting over the next three years. The Committee grants, generally on a biennial basis, additional options to selected associates based on an assessment of competitive compensation practices, particularly in high technology industries, individual contribution and performance. The Committee believes that in granting such stock options, it is effectively reinforcing the Corporation's objective of insuring a strong link between associate rewards and shareholder interests. In 1994, the Committee determined that it was appropriate and desirable to grant Dr. Swartz a one- time bonus award of an option to purchase 100,000 shares of Common Stock under the 1991 Employee Stock Option Plan at a price of $26.125 per share (the fair market value of the Corporation's Common Stock on the date the option was granted by the Committee) in recognition that, among other factors, (i) the plan of consolidation -13- and reorganization (recommended in December 1992, by Dr. Swartz and his management team) had been implemented, resulting in significant cost savings and substantially improved operating results; (ii) the Corporation had attained record revenues, operating income and net income in 1994; and (iii) Dr. Swartz successfully completed a search for and recruited a new President and Chief Operating Officer and facilitated the smooth transition of duties from Mr. Martino to the new President, Mr. Lindelow. Stock Ownership and Option Retention Program Effective January 1, 1995, the Committee established for executive officers a stock ownership and option retention program which it will administer. The Committee firmly believes that the long term interests of the Corporation's shareholders are best served when management maintains a significant, equity- based interest in the Corporation. The Committee considers both vested, unexercised options and shares owned as meaningful expressions of such interest. Accordingly, the Committee developed a program with target levels of equity interest for each executive officer. Under the program, without prior permission of the Committee, unless and until an executive has attained the minimum requirements described below, there will exist significant limitations on an executive's freedom to reduce his equity position. Executive officers must agree to participate in the program to be eligible to receive option awards after January 1, 1995. The program limits the exercise of vested options (other than in the last year of the term of an option) unless the executive meets and will continue to meet the equity interest requirement described below after the exercise and sale of shares acquired upon exercise. The equity interest requirement provides that the combined value of the Corporation's Common Stock and vested options held by the executive, each valued at the then market price of the Corporation's Common Stock, must be equal to or greater than a designated multiple of target cash compensation (annual base salary plus target bonus) ("TCC"). If the equity interest requirement is satisfied, the program allows for the exercise of vested options but within strict limits. At least 50% of the net after tax proceeds obtainable upon the exercise of any option (other than options awarded after January 1, 1994 as part of an executive's initial hire award) must be retained in the form of shares of the Corporation's Common Stock unless and until the executive then owns shares of Common Stock having a market value equal to a specified multiple of his base salary. -14- Equity Share Position Interest Ownership Requireme Requireme t nt Chairman of the 5 times Base Board 7 times Salary TCC President 3 5 times times TCC Base Salary Executive and Senior 2 Vice 3 times times President TCC Base Salary Vice 1 President 2 times times TCC Base Salary Summary The Committee is responsible for recommending to the Board, for its approval, compensation decisions affecting the Corporation's senior executive officers. The Committee ensures that the overall compensation offered to senior executive officers is consistent with the Corporation's interest in providing competitive pay opportunities, reflective of its pay-for-performance orientation, encourages share ownership on the part of executives and is generally supportive of the Corporation's short- and long-term business goals. The Committee will continue to actively monitor the effectiveness of the Corporation's senior executive compensation plans and assess the appropriateness of senior executive pay levels to assure prudent application of the Corporation's resources. Compensation /Stock Option Committee Harvey P. Mallement, Chairman Saul P. Steinberg -15- MANAGEMENT REMUNERATION AND TRANSACTIONS The following Summary Compensation Table sets forth compensation information with respect to the Corporation's Chief Executive Officer and the four other executive officers who in 1994 were the most highly paid executive officers, for services rendered in all capacities during the fiscal years ended December 31, 1994, 1993 and 1992. Summary Compensation Table Annual Compensation Long Term Compensation Name and Other Securities All Principal Yea Salar Bonus Annual Underlying Other Position r y E Compens Options (#) Compens ationF ationF Jerome Swartz 199 $640, $ Chairman 4 462A $824, $0 100,000 13,621H of the Board, 199 $562, 915 $ Chief 3 500B $0 195,000 11,912H Executive 199 $562, $346, $ Officer 2 500C 361 $0 49,500 9,861H and Director $0 Raymond R. 199 $437, $ Martino 4 717A $563, $0 0 13,061I President, 199 $393, 509 $ Chief 3 750B $0 117,000 12,404I Operating 199 $393, $242, $ Officer 2 750C 442 $0 31,500 11,941I and Vice Chairman $0 of the Board Jan Lindelow 199 $218, $223,50 4 859D $281, 0G 275,000 $ 0 President, 199 -- 739 - ----- Chief 3 ----- ------- -- ------ Operating 199 -- ----- - ----- Officer 2 ----- -- -- -- ------ and Director ------ ----- -- Frederic P. 199 $359, $ Heiman 4 001A $254, $0 0 4,620J Executive 199 $309, 316 $ Vice 3 375B $0 58,000 4,497J President 199 $309, $104, $ and 2 375C 780 $0 22,500 4,364J Director $0 Tomo 199 $262, 0 Razmilovic 4 500 $196, $0 $118,83 Senior 199 $250, 875 101,500 9K Vice 3 000 $0 President 199 $250, $125, 12,750 $234,64 World Wide 2 000 000 $0 4K Sales and $ $ Services 50,00 60,261K and Managing 0 Director- International Operations ____________________ A Includes $9,240 in contributions to the Corporation's 401(k) deferred compensation plan. B Includes $8,994 in contributions to the Corporation's 401(k) deferred compensation plan. C Includes $8,728 in contributions to the Corporation's 401(k) deferred compensation plan. D Represents payments for only a portion of 1994. -16- E Represents amounts earned and accrued pursuant to the Corporation's Bonus Profit Sharing Plan in the fiscal year indicated but generally paid in the first quarter of the next succeeding year for all named executives other than Mr. Razmilovic. Mr. Razmilovic did not participate in this Plan. His bonuses were based upon his attainment of certain sales related goals established by the President. F Not included are the amounts of certain perquisites and other personal benefits provided by the Corporation since such amounts do not exceed the lesser of (i) $50,000 or (ii) 10% of the total annual salary and bonus reported in the table for any named executive officer. G $111,750 of which was paid in 1994 and $111,750 of which is payable in 1995. This represents a bonus for joining the Corporation and compensation for a portion of the compensation he forfeited from his prior employer. H Represents $4,364 in 1992, $4,497 in 1993 and $4,620 in 1994 for contributions to the Corporation's 401(k) deferred compensation plan and $5,497 in 1992, $7,415 in 1993 and $9,001 in 1994 for (i) premiums paid on his behalf on a term life insurance policy for which members of his family are the beneficiary and (ii) the estimated dollar value of the economic benefit to Dr. Swartz for insurance premium payments made by the Corporation on a split dollar whole life policy for which the Corporation will eventually recover all premiums paid. I Represents $4,364 in 1992, $4,497 in 1993 and $4,620 in 1994 for contributions to the Corporation's 401(k) deferred compensation plan and $7,577 in 1992, $7,907 in 1993 and $8,441 in 1994 for premiums for which the Corporation reimburses Mr. Martino on a term life insurance policy for which members of his family are beneficiaries. J Represents contributions to the Corporation's 401(k) deferred compensation plan. K Represents (i) $140,000 for a disturbance allowance to reimburse Mr. Razmilovic for a portion of the expenses incurred in connection with his relocation to the Long Island area due to his promotion in 1993 to Senior Vice President - World Wide Sales and Services, (ii) $33,462 in 1993 and $48,000 in 1994 to reimburse him for a portion of his duplicate housing expenses since his duties for the Corporation and its subsidiaries require that he maintain a home in both the United Kingdom and Long Island, and (iii) $60,261 in 1992, $61,184 in 1993 and $70,839 in 1994 for contributions to a defined contribution retirement plan maintained by the Corporation's UK subsidiary on his behalf. On July 1, 1990, Dr. Swartz and the Corporation entered into an employment agreement which terminates on June 30, 1995, pursuant to which Dr. Swartz will receive an annual base salary of $656,250 for the two years ending June 30, 1996 which is subject to renegotiation thereafter. Dr. Swartz is also eligible to participate in the Corporation's Executive Bonus Plan. The target amount of his bonus for 1995 is 100% of his base salary. In addition, if his employment with the Corporation is terminated for any reason (other than for cause or his voluntary resignation), Dr. Swartz will receive a payment in an amount equal to his annual base salary and bonus during the last completed fiscal year immediately preceding any such termination. -17- On May 12, 1994, the Corporation and Mr. Martino entered into an employment agreement pursuant to which Mr. Martino was employed as the Corporation's President and Chief Operating Officer until his successor was appointed and then to assist his successor in the transition. Effective January 1, 1995 and for the ensuing five year period, he is to be employed on a part-time and consulting basis, assisting the Chairman of the Board and President. His salary during such 5 year period is $150,000 per annum. Effective January 1, 1995, he is no longer eligible to participate in any corporate bonus plan. On August 18, 1994, the Corporation purchased Mr. Martino's home in St. James, New York for $435,000 which price was determined by an independent appraiser. The Corporation is currently utilizing this property as temporary housing for associates locating to the Long Island area. The Corporation believes that it will eventually sell this property to an unaffiliated third party. On May 12, 1994, the Corporation and Mr. Lindelow entered into an employment agreement which terminates on June 30, 1999, pursuant to which Mr. Lindelow will receive an annual base salary of $437,500 for the 18 months period ending December 31, 1995, which is subject to renegotiation thereafter. Mr. Lindelow is also eligible to participate in the Corporation's Executive Bonus Plan. The target amount of his bonus for 1995 is 100% of his base salary. Half of his target bonus for 1995 has been guaranteed by the Corporation. In addition, if his employment with the Corporation is terminated (other than for cause or his voluntary resignation without good reason), he will receive severance payments which will vary, depending on the reasons for the termination of his employment, between one and two year's annual base salary plus one to two times the annualized bonus he received during the last completed fiscal year preceding any such termination. On July 1, 1990, the Corporation and Dr. Heiman entered into an employment agreement which terminates on June 30, 1995, pursuant to which Dr. Heiman will receive an annual base salary of $375,000 for the 18 months ending December 31, 1995. Dr. Heiman will also participate in the Corporation's Executive Bonus Plan. The target amount of his bonus for 1995 is 55% of his base salary. In addition, if his employment with the Corporation is terminated for any reason (other than for cause or his voluntary resignation), he will receive a payment in an amount equal to his annual base salary and bonus during the last completed fiscal year immediately preceding any such termination. -18- Mr. Razmilovic, the Corporation and Symbol Technologies Limited, a wholly-owned United Kingdom subsidiary of the Corporation have entered into agreements dated as of May 1, 1993 pursuant to which he is employed by the Corporation and Symbol Technologies Limited until December 31, 1995. Under these agreements, Mr. Razmilovic will receive an aggregate base salary of $278,034 for 1995. In 1995, Mr. Razmilovic is also eligible to participate in the Corporation's Executive Bonus Plan. The target amount of his bonus for 1995 is 55% of his base salary. In addition, to assist in his relocation to the United States, the Corporation loaned Mr. Razmilovic $50,000 in 1993 and an additional $100,000 in 1994. These loans bore interest at the prime rate ( 6% in 1994). The loans were repaid in their entirety in 1994. In addition, if his employment is terminated for any reason (other than for cause or his voluntary resignation), he will receive a severance payment equal to two years base salary plus twice the bonus he received during the last completed fiscal year immediately preceding any such termination. In February 1993, the Corporation assumed a second mortgage held by the former employer of Mr. Lieberman, Senior Vice President-Operations, on his residence in the Boston, Massachusetts area. Under the terms of the mortgage, Mr. Lieberman owed the Corporation $361,262. This loan bore interest at the prime rate (6% in 1994). On January 2, 1994, the Corporation purchased Mr. Lieberman's former residence. The purchase price was $655,000, which was the price determined by an independent third party appraiser. In connection with the purchase, Mr. Lieberman repaid the loan to the Corporation in its entirety. On September 2, 1994, the Corporation sold the residence to an unaffiliated third party for $585,000. Directors who are not employees of the Corporation receive an annual retainer of $10,000, payable in quarterly installments as well as a fee of $2,500 for each Board of Directors meeting attended or each meeting of a committee which is not held in conjunction with a Board of Directors meeting. Directors who are employees receive no additional compensation for serving as directors or for attending Board or committee meetings. The Corporation reimburses Directors for expenses incurred in connection with attending meetings of the Board of Directors or committees of the Board. In addition, Directors who are not employees of the Corporation participate in the Corporation's 1994 Directors' Stock Option Plan (the "1994 Plan"). Pursuant to the 1994 Plan, when a person is initially elected to the Board of Directors, he is awarded an option to purchase 10,000 shares. Moreover, -19- commencing in 1994, every person who has been a Director for more than 11 months is, upon re-election at the annual meeting of shareholders, granted an option to purchase 2,500 shares of the Corporation's Common Stock. Each option has a term of ten years, becomes exercisable in two equal annual installments beginning on the first anniversary of the date of grant and has an exercise price equal to 100% of the fair market value of shares of the Corporation's Common Stock on the date of grant. Pursuant to the 1994 Plan, in 1994 Mr. Wang was granted an option to purchase 10,000 shares and Messrs. Mallement, Steinberg, Freiberg and Bugliarello each received options to purchase 2,500 shares. If re-elected at the 1995 Annual Meeting, Messrs. Mallement, Steinberg, Freiberg and Bugliarello will also each be awarded an option to purchase an additional 2,500 shares in 1995. Option Grants Currently, the Corporation maintains two stock option plans, the 1990 Non-Executive Stock Option Plan (the "1990 Plan") and the 1991 Employee Stock Option Plan (the "1991 Plan") pursuant to which options may be granted to employees of the Corporation. The 1990 Plan and the 1991 Plan authorize the Compensation/Stock Option Committee of the Board of Directors to grant options, from time to time, to key employees of the Corporation and of its subsidiaries (and in the case of the 1991 Plan, key officers, including those who are executive officers of the Corporation). Under the 1991 Plan, no individual may be awarded options to purchase more than 275,000 shares in any calendar year. Certain of the options, by their terms, as determined by the Committee at the time of grant, may be qualified under the Internal Revenue Code of 1986 (the "Code") as Incentive Stock Options ("ISO's") and certain of the options may be non-qualified options. No option granted under the 1990 Plan or the 1991 Plan is exercisable for a period exceeding ten years. No ISO granted under the 1991 Plan to owners of 10% or more of the Common Stock of the Corporation is exercisable for a period exceeding five years. The exercise price of an option under the Plans must be at least 100% of the fair market value of the underlying Common Stock on the date of grant. ISO's must comply with certain provisions of the Code relating to, among other matters, the maximum amount that can be vested by an optionee in any one calendar year and the minimum exercise price of an ISO. The 1990 Plan terminates on April 30, 2000 and the 1991 Plan terminates on October 13, 2001. -20- The following table shows, as to each individual named in the Summary Compensation Table, certain information with respect to stock options granted to such individuals under all stock option plans administered by the Corporation: Potential Realizable Value at Assumed Annual Individual Grants in 1994 Rates of Stock Price Appreciation for Option TermA Name Number % of of Total Securiti Options Exerci 5% 10% es Granted se or Expirati Stock Dollar Stock underlyi to Base on PriceE Gain PriceE Dollar ng Employees PriceD Date Gain Options in Fiscal Granted YearC (#)B All -- - $1,028,21 Shareholders ----- ------ -------- $40.86 $405,78 $65.06 1,838 - 5,781 Jerome Swartz $ $ 100,000 16% $26.12 8/4/04 $42.55 1,642,5 $67.76 4,163,500 5 00 CEO's Gain as % of All Shareholders' .405% .405% Gain Raymond R. -- Martino 0 ----- ------ -------- -------- ------- - ---- --------- ---- -- -- -- ----- - Jan Lindelow $ $ 250,000 40% $24.25 6/7/04 $39.50 3,812,5 $62.90 9,662,500 00 $ 25,000 4% $29.25 12/11/04 $47.65 $ $75.87 1,165,500 460,000 Frederic P. Heiman 0 ------- ------ -------- -------- ------- ------ _____ ----- -- -- -- ----- Tomo -- - -- - Razmilovic 0 ----- ------ ----- ------ ------ ------ ------
A Total dollar gains based on the assumed annual rates of appreciation of the exercise price of each option. The gain derived by all shareholders is based on the outstanding number of shares at December 31, 1994. The actual value, if any, an executive will realize will depend on the excess of the market price over the exercise price on the date the option is actually exercised. There can be no assurance that the value actually realized by an executive or any shareholder will be at or near the values estimated in this table. B The options awarded to Messrs. Swartz and Lindelow vest in four equal, annual installments commencing two years after date of grant. If a change in control of the Corporation were to occur, all of the then unvested portion of each option would become immediately exercisable. -21- C Based on 620,475 options granted to all employees in 1994. D 100% of the closing price of the Corporation's Common Stock on the date of grant. E The stock price represents the price of the Corporation's Common Stock if the assumed annual rates of stock price appreciation are achieved over the term of the options using a weighted average share price of options granted to Messrs. Swartz and Lindelow. -22- Option Exercises and Fiscal Year-End Values Shown below is information with respect to the unexercised options to purchase the Corporation's Common Stock as of December 31, 1994 and the value realized upon the exercise in 1994 of any option by the individuals named in the Summary Compensation Table. Value of Number Number of Unexercised, In-The- of Securities Money Shares Underlying Options Acquire Value Unexercised Held at December 31, Name d on Reali Options 1994A Exercis zed Held at December e in 31, 1994 Exercisable 1994 Unexercisable Exercisable Unexercisable Jerome $8,74 $7,928, Swartz 453,842 1,877 365,650 336,100 794 $4,199,738 Raymond R. $3,66 $3,766, Martino 185,500 6,855 176,666 143,700 585 $2,552,288 Jan 0 Lindelow 0 0 275,000 0 $1,696,875 Frederic P. $3,78 Heiman 185,100 9,613 0 79,100 0 $1,390,463 Tomo $1,28 $ Razmilovic 84,100 1,853 5,100 98,650 63,113 $1,776,994 ABased on the closing price of the Corporation's Common Stock on the New York Stock Exchange on that date of $30.875. Employees of the Corporation and certain of its subsidiaries are eligible to participate in a 401(k) deferred compensation plan after 90 days of service. A participant may elect to make pre-tax contributions, subject to certain limitations, with a maximum contribution of $9,240 in 1994 and 1995. The first 6% contributed by each participant during each pay period is eligible for a matching 50% contribution by the Corporation. There is immediate vesting of the individual's contribution and 100% vesting of the Corporation's contribution after one year of service. Amounts accumulated under this plan are normally paid to a participant on retirement or termination of employment and depend, among other factors, on the amounts contributed by the participant, the manner in which contributions have been invested, and the amount of any prior withdrawal. The Corporation maintains an Executive Retirement Plan (the "Retirement Plan"), which is a non-qualified deferred compensation arrangement for a select group of senior management employees of the Corporation. Participants are selected by the Compensation/Stock Option Committee of the Board of Directors. Under the Retirement Plan, the maximum benefit payable to a participant is the participant's average compensation (base salary plus bonus) for the three year period ending on the date the participant ceases to be a full time employee of the -23- Corporation multiplied by five (the "Benefit Ceiling Amount"). After five successive years of participation in the Retirement Plan, a participant is entitled to 50% of the Benefit Ceiling Amount. After each additional year of participation in the Retirement Plan up to five additional years of participation, a participant is entitled to an additional 10% of the Benefit Ceiling Amount. Benefits are normally payable in equal monthly installments over a ten year period after retirement, beginning after the participant attains age 65 (or age 62 with 20 years or more of credited service). However, upon death or disability, payment is accelerated and made in a lump sum but the amount is reduced to the then present value of the benefit payments which would have been made under the normal mode of payment. Messrs. Swartz, Lindelow and Heiman are participants in the Retirement Plan. Mr. Martino was a participant in the Retirement Plan for 11 years. In March 1995, the Corporation will make a lump sum payment to him of $1,238,007 which will represent the discounted value of his benefits under the Retirement Plan and satisfy all obligations to him under the Retirement Plan. The following table illustrates the estimated annual retirement benefits payable under the Retirement Plan to a participant at specified average compensation levels and years of service. There is no offset in benefits under the Retirement Plan for Social Security benefits. However, benefits payable under the Retirement Plan will be reduced by the value of any retirement income of the participant attributable to contributions by the Corporation to any qualified pension plan adopted by the Corporation (excluding the Corporation's current 401(k) deferred compensation plan). PENSION PLAN TABLE Years of Service 3 Years Average Annual Compensation 5 10 $ 400,000 $100,000 $200,000 800,000 200,000 400,000 1,200,000 300,000 600,000 1,600,000 400,000 800,000 As of January 1, 1995, Messrs. Swartz, Lindelow and Heiman had 20, 0 and 8 years, respectively, of credited service. -24- Shareowner Return Performance Presentation Set forth below is a graph comparing the yearly percentage change in the cumulative total shareowner return on the Corporation's Common Stock against the cumulative total return of the S&P Composite-500 Stock Index and the S&P High Technology Composite Index for the period of five years commencing January 1, 1990 and ending December 31, 1994, assuming in each case a fixed investment of $100 at the respective closing prices on December 31, 1989 and reinvestment on a quarterly basis of all dividends. -25- Symbol Technologies, Inc. Total Shareholder Return Versus S&P 500 and S&P High-Tech Composite Measurement Period (Fiscal Year Covered) Symbol Technologies, Inc. S&P Index S&P High-Tech Composite Measurement Pt. 12/31/89 100 100 100 FYE 1990 72 97 102 FYE 1991 158 126 116 FYE 1992 79 136 121 FYE 1993 112 150 149 FYE 1994 190 152 174 -26- PROPOSAL TO AMEND THE 1991 EMPLOYEE STOCK OPTION PLAN The Board of Directors, subject to shareholder approval, has amended the 1991 Plan to increase the authorized number of shares that may be issued under the 1991 Plan by an additional 1,500,000 shares to a total of 2,500,000 shares. As of March 13, 1995, options to purchase 42,900 shares had been exercised and there were outstanding options to purchase 1,521,775 shares under the 1991 Plan. The number of shares covered by the outstanding options includes options to purchase an aggregate of 560,000 shares which were issued pursuant to the foregoing amendment to the 1991 Plan (including options to purchase 200,000, 135,000, 27,500 and 32,500 awarded to Messrs. Swartz, Lindelow, Heiman and Razmilovic, respectively). If the foregoing amendment is not approved by shareholders, any options issued in excess of the number currently permitted under the 1991 Plan will be canceled. The Corporation has agreed to make other arrangements with Mr. Lindelow to provide him with benefits comparable to those he would have had with respect to options to purchase 110,000 shares which would have to be canceled. Reference is made to the information contained under the headings "Security Ownership of Management" and "Management Remuneration and Transactions" above. The Board of Directors believes that, as a result of the Corporation's anticipated continued growth, it will be necessary to hire additional management personnel. In view of these personnel needs, and in light of the present level of remuneration paid to management (see "Management Remuneration and Transactions") and the present level of management's equity in the Corporation (see "Security Ownership of Management"), the Board of Directors is of the opinion that it is appropriate that stock options continue to be a major component of the Corporation's management remuneration package and that, accordingly, the number of shares of the Corporation's Common Stock available for the grant of stock options to key employees and officers under the 1991 Plan should be increased by an additional 1,500,000 shares of Common Stock to a total of 2,500,000. Accordingly, on June 8, 1994 and February 6, 1995 the Board of Directors, subject to shareholder approval, amended the 1991 Plan to provide that the aggregate number of shares that have been purchased and that may henceforth be purchased pursuant to the exercise of options under the 1991 Plan shall not exceed 2,500,000 shares. -27- Options under the 1991 Plan may be granted to officers and key employees of the Corporation selected by the Compensation/Stock Option Committee of the Board. Shares of Common Stock issued upon the exercise of options under the 1991 Plan may be reserved or made available from the Corporation's authorized and unissued shares or from shares reacquired and held in the Corporation's treasury. A more complete summary of the material terms of the 1991 Plan, as amended, is set forth in Annex A to this Proxy Statement. The closing sale price of the Corporation's Common Stock as quoted on the New York Stock Exchange on March 10, 1995 was $28.25 per share. The affirmative vote of the holders of a majority of the outstanding shares of the Corporation's Common Stock present or represented and entitled to vote at the meeting will be required for the approval of this proposal. Accordingly, your Board of Directors recommends a vote FOR the proposal to approve the foregoing amendment to the 1991 Plan. PROPOSAL TO APPROVE THE ADOPTION OF THE EXECUTIVE BONUS PLAN The Corporation promotes a pay-for- performance philosophy wherein a significant element of annual compensation is directly linked to the financial performance of the Corporation. This has been accomplished in prior years through the administration of the Profit Sharing Bonus Plan in which most of the Corporation's North American-based management level associates, including all executive officers except Mr. Razmilovic participated. Effective January 1, 1995, subject to shareholder approval, the Compensation/Stock Option Committee of the Board (the "Committee") adopted and the Board of Directors ratified the creation of an Executive Bonus Plan (the "Executive Bonus Plan"), the purpose of which is to more directly tie the level of annual executive incentive compensation to the financial performance of the Corporation than was possible under the prior Profit Sharing Plan. All executive officers of the Corporation will participate in the Executive Bonus Plan. Under the Executive Bonus Plan, participants will generally receive lower bonuses than they would have under the Profit Sharing Plan if the Corporation's operating performance is below plan and higher than they would have under the Profit Sharing Bonus Plan if the Corporation's operating performance exceeds plan. The Committee has full authority to construe, interpret and administer the Executive Bonus Plan, as well as to determine the extent, if any, to which operating -28- performance standards have been met. The Committee will also have authority to modify (prior to the beginning of the calendar year for which the targets will be applicable) the specific targets for the performance goals under the Executive Bonus Plan. Under the Executive Bonus Plan, the Committee will each year, establish corporate financial performance objectives (exclusive of extraordinary revenues and charges), expressed in terms of earnings per share. Three levels of performance will be identified: threshold performance, at which the minimum award will be earned and below which no award will be earned; target performance, at which the target award will be earned and; maximum performance, at which the maximum award (twice a participant's target bonus) will be earned and above which no additional award will be earned. For 1995, threshold performance has been established at results equal to 85% of the Corporation's 1995 Business Plan; target performance has been established at results between 97% and 100% of the 1995 Business Plan; and maximum performance has been established at results equal to or greater than 120% of the 1995 Business Plan. Each participant in the Executive Bonus Plan has been assigned a target bonus representing a percentage of the participant's base salary. The target bonuses for 1995 for Messrs. Swartz, Lindelow, Heiman and Razmilovic are 100%, 100%, 55% and 55%, respectively, which is consistent with past practice and in conformity with their individual employment agreements. The target bonuses for all other participants in the Executive -----END PRIVACY-ENHANCED MESSAGE-----