Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, For Use of the
Commission Only (as permitted
by Rule14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Under Rule 14a-12
Park Electrochemical Corp.
(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)(1) and 0-11.
(1) Title of each class of securities to which transactions
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:
APPENDIX to electronically filed Proxy Statement dated June 12,
2003 of Park Electrochemical Corp. listing all graphic
information included in such Proxy Statement:
1. Stock Performance Graph appearing on page 17 of Proxy
Statement dated June 12, 2003 comparing the yearly percentage
change in the cumulative total shareholder return on the
Registrant's Common Stock with the cumulative total return of
the New York Stock Exchange Market Index and a Media General
Financial Services Index for electronic components and
accessories manufacturers comprised of the Company and 259
other companies for the period of the Company's five fiscal
years commencing March 2, 1998 and ending March 2, 2003,
assuming that $100 had been invested in the Company's Common
Stock and each index on February 27, 1998 and that all divi
dends on the Company's Common Stock and on each stock
included in each index were reinvested.
Such graph shows that such $100 invested in the Company's
Common Stock would have had a value of $86.10 on February
28, 1999, $72.69 on February 27, 2000, $162.69 on February 25,
2001, $126.78 on March 3, 2002 and $80.29 on March 2, 2003,
that such $100 invested in the Media General Financial
Services Index would have had values of $120.56, $355.95,
$155.81, $134.97 and $73.91, respectively, on such dates and
that such $100 invested in the New York Stock Exchange Market
Index would have had values of $109.94, $111.32, $119.46,
$112.18 and $91.28, respectively, on such dates.
PARK ELECTROCHEMICAL CORP.
5 Dakota Drive
Lake Success, New York 11042
Notice of Annual Meeting of Shareholders
July 17, 2003
___
The Annual Meeting of Shareholders of PARK ELECTROCHEMICAL
CORP. (the "Company") will be held at The Bank of New York, One
Wall Street - 47th Floor, New York, New York (attendees must use
the 80 Broadway entrance) on July 17, 2003 at 10:00 o'clock A.M.,
New York time, for the purpose of considering and acting upon the
following:
1. The election of five (5) directors to
serve until the next annual meeting of
shareholders and until their successors are
elected and qualified.
2. The transaction of such other business as may properly come
before the meeting.
Only holders of record of Common Stock at the close of
business on May 21, 2003 will be entitled to notice of, and to
vote at, the meeting or any adjournment or postponement thereof.
By Order of the Board of Directors,
Stephen E. Gilhuley
Senior Vice President,
Secretary and General Counsel
Dated: June 12, 2003
ALL SHAREHOLDERS ARE CORDIALLY INVITED TO ATTEND THE MEETING. IF
YOU DO NOT EXPECT TO BE PRESENT, PLEASE DATE AND SIGN THE
ENCLOSED FORM OF PROXY AND RETURN IT PROMPTLY TO THE COMPANY IN
THE ENCLOSED ENVELOPE WHICH REQUIRES NO POSTAGE IF MAILED IN THE
UNITED STATES.
PARK ELECTROCHEMICAL CORP.
5 Dakota Drive
Lake Success, New York 11042
P R O X Y S T A T E M E N T
Annual Meeting of Shareholders
July 17, 2003
This Proxy Statement is furnished in connection with the
solicitation by the Board of Directors (the "Board") of Park
Electrochemical Corp. (the "Company") of proxies with respect to
the Annual Meeting of Shareholders of the Company to be held on
July 17, 2003, and any adjournment or postponement thereof (the
"Meeting"). Any shareholder giving such a proxy (the form for
which is enclosed with this Proxy Statement) has the power to
revoke the same at any time before it is voted by (i) delivering
written notice of such revocation bearing a later date than the
proxy to the Secretary of the Company, (ii) submitting a later-
dated proxy, or (iii) attending the Meeting and voting in person.
This Proxy Statement and the accompanying form of proxy are
first being mailed on or about June 12, 2003 to all shareholders
of record as of the close of business on May 21, 2003.
VOTING SECURITIES
As of May 21, 2003, the outstanding voting securities of the
Company consisted of 19,755,755 shares of Common Stock, par value
$.10 per share, of the Company (the "Common Stock"), each share
of which, held of record at the close of business on May 21,
2003, is entitled to one vote. Presence in person or by proxy of
holders of a majority of the outstanding shares of Common Stock
will constitute a quorum for the transaction of business at the
Meeting. Abstentions and broker non-votes, if any, will be
included for purposes of determining a quorum. With respect to
the election of directors, abstentions and broker non-votes, if
any, will not be counted as having been voted and will have no
effect on the outcome of the votes.
As of May 21, 2003, all executive officers and directors of
the Company as a group (11 persons) beneficially owned an
aggregate of 2,641,183 shares of Common Stock (including options
to purchase an aggregate of 667,437 shares), constituting
approximately 12.9% of the outstanding shares of Common Stock
(giving effect to the exercise of such options).
STOCK OWNERSHIP
Principal Shareholders
The following table sets forth information as of May 21,
2003 with respect to each person (including any "group" of
persons as that term is used in Section 13(d)(3) of the
Securities Exchange Act of 1934, as amended (the "Exchange
Act")), who is known to the Company to be the beneficial owner
(for purposes of the rules of the Securities and Exchange
Commission) of more than 5% of the outstanding shares of Common
Stock as of that date.
Amount and
Nature of Percent
Name and Address Beneficial of
of Beneficial Owner Ownership Class
Deprince, Race & Zollo, 1,768,350(a) 9.0%
Inc.
201 S. Orange Avenue
Suite 850
Orlando, FL 32801
Jerry Shore 1,731,030(b) 8.7%
5 Dakota Drive
Lake Success, NY 11042
Wachovia Corporation 1,266,290(c) 6.4%
One Wachovia Center
Charlotte, NC 28288
(a) Deprince, Race & Zollo, Inc., a registered investment
adviser, holds sole investment power and sole voting power over
all of such shares, based on its Schedule 13G dated February 7,
2003, filed under the Exchange Act, which represented
approximately 9.0% of the outstanding shares of the Company's
Common Stock as of May 21, 2003.
(b) Includes 30,000 shares of Common Stock which Jerry Shore may
acquire pursuant to options, 168,615 shares owned by a member of
Jerry Shore's family, of which he disclaims beneficial ownership,
and 45,129 shares owned by a foundation, of which he disclaims
beneficial ownership.
(c) Wachovia Corporation, a parent holding company, holds sole
investment power over 1,244,540 of such shares and sole voting
power over 47,550 of such shares, based on its Schedule 13G dated
February 13, 2003, filed under the Exchange Act, which
represented approximately 6.4% of the outstanding shares of the
Company's Common Stock as of May 21, 2003.
Ownership of Directors and Executive Officers
The following table sets forth information as of May 21,
2003 with respect to shares of Common Stock beneficially owned
(for purposes of the rules of the Securities and Exchange
Commission) by each director and nominee, by each executive
officer of the Company who is identified in the Summary
Compensation table elsewhere in this Proxy Statement and by all
directors, nominees and executive officers of the Company as a
group.
Amount and
Nature of Percent
Beneficial of
Name of Beneficial Owner Ownership Class
Mark S. Ain 21,750(a) *
Anthony Chiesa 119,250(b) *
Lloyd Frank 24,000(c) *
Brian E. Shore 520,972(d) 2.6%
Jerry Shore 1,731,030(e) 8.7%
Emily J. Groehl 47,343(f) *
John Jongebloed 26,575(g) *
Thomas T. Spooner 42,624(h) *
Gary M. Watson 26,375(i) *
All directors and executive officers 2,641,183(j) 12.9%
as a group (11 persons)
* Less than 1%
(a) Consists of shares which Mark S. Ain may acquire pursuant to
options.
(b) Includes 6,750 shares which Anthony Chiesa may acquire
pursuant to options.
(c) Includes 18,000 shares which Lloyd Frank may acquire
pursuant to options and 3,000 shares owned by a member of Lloyd
Frank's family, of which he disclaims beneficial ownership.
(d) Includes 412,500 shares which Brian E. Shore may acquire
pursuant to options.
(e) See note (a) to the table under "Stock Ownership-Principal
Shareholders" for information with respect to these shares.
(f) Includes 32,634 shares which Emily J. Groehl may acquire
pursuant to options.
(g) Includes 24,775 shares which John Jongebloed may acquire
pursuant to options.
(h) Includes 42,282 shares which Thomas T. Spooner may acquire
pursuant to options.
(i) Includes 25,625 shares which Gary M. Watson may acquire
pursuant to options.
(j) Includes 1,973,746 shares owned by directors, nominees, and
executive officers and 667,437 shares issuable to directors,
nominees and executive officers upon exercise of options that are
exercisable as of May 21, 2003 or become exercisable within 60
days thereafter.
ELECTION OF DIRECTORS
The Board to be elected at the Meeting consists of five
members. Proxies will be voted in accordance with their terms
and, in the absence of contrary instructions, for the election as
directors of the nominees whose names appear in the following
table, to serve for the ensuing year and until their successors
are elected and qualified. Should any of the nominees not remain
a candidate at the time of the Meeting (a situation which is not
now anticipated), proxies solicited hereunder will be voted in
favor of those nominees who do remain as candidates and may be
voted for substituted nominees. The five nominees who receive a
plurality of the votes cast at the Meeting in person or by proxy
shall be elected. Each of the nominees is presently a member of
the Board.
Principal Occupation; Positions
and Offices with the Company; Director
Name Other Directorships Age Since
Mark S. Ain Chief Executive Officer and 60 1998
Chairman of the Board of Kronos
Incorporated, a manufacturer of
computerized systems for time and
labor management, Chelmsford,
Massachusetts; and a director of
KVH Industries, Inc. and LTX
Corporation
Anthony Chiesa Former Vice President of the 82 1954
Company
Lloyd Frank Partner, Jenkins & Gilchrist 77 1985
Parker Chapin LLP, New York City;
and director of DryClean, USA
Inc. and Volt Information
Sciences, Inc.
Brian E. Shore President and Chief Executive 51 1983
Officer of the Company
Jerry Shore Chairman of the Board of the 77 1954
Company
Each of the persons named in the above table has had the
principal occupation set forth opposite his name for at least the
past five years. Jenkins & Gilchrist Parker Chapin LLP, a law
firm of which Lloyd Frank is a partner, was retained to provide
counsel to the Company during its last fiscal year.
There are no family relationships among any of the persons
named in the above table or among any of such persons and any of
the other executive officers of the Company, except that Jerry
Shore is the father of Brian E. Shore.
The Company's Audit Committee currently consists of Mark S.
Ain, Anthony Chiesa and Lloyd Frank. The duties and
responsibilities of the Audit Committee are set forth in a
written charter adopted by the Board, a copy of which was
attached as Appendix A to the Company's Proxy Statement for its
Annual Meeting of Shareholders held on July 18, 2001, as required
by rules of the Securities and Exchange Commission, and are
described elsewhere in this Proxy Statement under the caption
"Other Matters - Audit Committee Report". The Audit Committee
also issues the Audit Committee Report required to be included in
the Company's Proxy Statement by rules of the Securities and
Exchange Commission. The Audit Committee Report for the Company's
2003 fiscal year is set forth under the caption "Other Matters -
Audit Committee Report" elsewhere in this Proxy Statement.
The Company has a Compensation Committee and a Stock Option
Committee, each consisting of Anthony Chiesa, Lloyd Frank and
Jerry Shore. Their functions are described elsewhere in this
Proxy Statement under the caption "Executive Compensation--Board
and Compensation Committee Report on Executive Compensation".
The Company does not have a nominating committee.
During the Company's last fiscal year, the Board of
Directors met eight times and authorized action by unanimous
written consent on eight occasions, the Audit Committee met
twice, the Compensation Committee met once, and the Stock Option
Committee met twice. Each of the directors attended at least 75%
of the meetings held by the Board and each committee thereof of
which he was a member during the Company's last fiscal year.
Each director who is not an employee of the Company or any
of its subsidiaries receives a fee of $10,000 per annum for his
services as a director and is reimbursed for travel expenses
incurred in attending meetings of the Board of Directors of the
Company.
On March 20, 2002, Messrs. Ain, Chiesa and Frank each
received a nonqualified stock option for 3,000 shares of Common
Stock at an exercise price of $29.05 per share under the
Company's 1992 Stock Option Plan, as amended. Each of these
options expires on March 20, 2012, and each is exercisable 25
percent after one year from date of grant, 50 percent after two
years from date of grant, 75 percent after three years from date
of grant and 100 percent after four years from date of grant.
EXECUTIVE COMPENSATION
Summary Compensation
The following table shows the compensation for each of the
three most recent fiscal years for the Company's Chief Executive
Officer and the four other most highly compensated executive
officers who were serving in such capacities at the end of the
Company's most recent fiscal year.
Annual Compensation
Other
Annual
Name and Year Compen-
Principal Position (a) Salary Bonus sation
Brian E. Shore(c) 2003 $357,760 $ -0- $-0-
President and Chief 2002 364,640 -0- -0-
Executive Officer 2001 357,760 200,000 -0-
Emily J. Groehl 2003 210,912 -0- -0-
Senior Vice President, 2002 214,968 -0- -0-
Sales and Marketing 2001 210,912 175,000 -0-
John Jongebloed(d) 2003 165,000 -0- -0-
Senior Vice President, 2002 168,173 -0- -0-
Global Logistics
Thomas T. Spooner(e) 2003 158,740 -0- -0-
Senior Vice President, 2002 161,793 -0- -0-
Corporate and 2001 158,740 90,000 -0-
Technology Development
Gary M. Watson(f) 2003 223,047 -0- 71,964
Senior Vice President, 2002 203,846 -0- -0-
Engineering and 2001 141,698 100,000 -0-
Technology and Senior
Vice President, Asian
Business Unit
Long-Term
Compensation
Awards
Securities All Other
Underlying Compen-
Name and Year Options/ sation
Principal Position (a) SARs(#) (b)
Brian E. Shore(c) 2003 25,000 $ 4,000
President and Chief 2002 40,000 8,500
Executive Officer 2001 75,000 17,000
Emily J. Groehl 2003 15,000 4,000
Senior Vice President, 2002 15,000 8,500
Sales and Marketing 2001 11,250 17,000
John Jongebloed(d) 2003 10,000 3,300
Senior Vice President, 2002 15,000 8,409
Global Logistics
Thomas T. Spooner(e) 2003 10,000 3,175
Senior Vice President, 2002 10,000 8,090
Corporate and 2001 11,250 17,000
Technology Development
Gary M. Watson(f) 2003 15,000 4,000
Senior Vice President, 2002 10,000 8,500
Engineering and 2001 22,500 -0-
Technology and Senior
Vice President, Asian
Business Unit
The salary amounts for Messrs. Shore and Spooner and Ms. Groehl
for the 2002 fiscal year are more than the salary amounts for the
2001 fiscal year not because of any salary increases, but because
the 2002 fiscal year consisted of 53 weeks while the 2001 fiscal
year consisted of 52 weeks. The 2003 fiscal year consisted of 52
weeks; accordingly, the salary amounts for Messrs. Shore and
Spooner and Ms. Groehl for the 2003 fiscal year are the same as
their salary amounts for the 2001 fiscal year. The salary amount
for Mr. Watson is more for the 2002 fiscal year than for the 2001
fiscal year because he was employed by the Company for only part
of the 2001 fiscal year. None of the named executive officers has
received any salary increase since February 28, 2000, other than
Mr. Watson (see note (f) below):
(a) Information is provided for the Company's fiscal years ended
March 2, 2003, March 3, 2002 and February 25, 2001,
respectively.
(b) Includes the amounts of the Company's annual profit sharing
contributions to the Company's Employees' Profit Sharing and
401(k) Retirement Savings Plan ("the Plan") which were accrued
for the accounts of the named executive officers for the fiscal
years shown. These amounts vest in accordance with a graduated
scale based on years of service of the employee with the Company.
Substantially all full-time employees of the Company and its
subsidiaries in the United States participate in the profit
sharing portion of the Plan, which is intended to provide
retirement benefits to such employees and which is subject to the
provisions of the Employee Retirement Income Security Act of 1974
("ERISA"). The amounts of profit sharing contributions, if any,
by the Company and its subsidiaries to the accounts of
participating employees are percentages of the eligible
compensation of the participating employees up to a maximum
amount of compensation for each employee established under the
Internal Revenue Code of 1986, which was $200,000 for the
Company's most recent fiscal year and $170,000 for each of the
Company's two prior fiscal years. The percentages of compensation
contributed to the Plan, which are determined each year by the
Board of Directors of the Company, may vary between the Company
and each subsidiary, but the percentage must be the same for each
participating employee of the Company or the subsidiary, as the
case may be.
Substantially all full-time employees of the Company's
subsidiaries in the United States are eligible to receive
contributions by the subsidiaries to match the contributions
of the employees to the 401(k) retirement savings portion of
the Plan, with the maximum matching contribution being 3% of
the compensation of the employees. However, employees of the
Company are not eligible to receive such matching
contributions, but it has been the Company's practice to
determine a gross annual profit sharing percentage of
eligible compensation to be contributed by each subsidiary to
the profit sharing portion of the Plan and to reduce such
percentage by the average percentage of the compensation of
such subsidiary's employees that was contributed by such
subsidiary as 401(k) retirement savings matching
contributions. Consistent with this practice, to compensate
employees of the Company for their ineligibility for matching
contributions to the 401(k) retirement savings portion of the
Plan, the Company has approved profit sharing contributions
for the named executive officers and for the other employees
of the Company in amounts equal to 2% of the eligible
compensation of such employees, since the Company's
subsidiaries' matching contributions under the 401(k)
retirement savings portion of the Plan for the 2003 fiscal
year approximated 2% of the eligible compensation of the such
subsidiaries' employees. Accordingly, the amounts shown for
2003 are contributions that will be made by the Company for
the named executive officers to compensate them for the fact
that they were not eligible for matching contributions under
the 401(k) retirement savings portion of the Plan.
(c)The Compensation Committee of the Board awarded Mr. Shore a
performance bonus of $250,000 for the fiscal year ended February
25, 2001, but Mr. Shore decided to limit his bonus to $200,000
for 2001 and to waive $50,000 of such bonus.
(d)Mr. Jongebloed became an executive officer on July 18, 2001,
but the salary shown for him is the salary paid to him by the
Company for the entire 2002 fiscal year. Under the Securities and
Exchange Commission's rules regarding the disclosure of executive
compensation, no information is required to be provided for Mr.
Jongebloed for prior years during which he was not an executive
officer.
(e)Mr. Spooner's title was Senior Vice President, Technology
until May 2001.
(f)Mr. Watson became an employee and an executive officer on
June 28, 2000, and the salary shown for him for 2001 is the total
amount of salary paid to him by the Company for the 2001 fiscal
year. Mr. Watson's title was Senior Vice President, Engineering
until May 2001, when he became Senior Vice President, Engineering
and Technology, and he also became Senior Vice President, Asian
Business Unit in August 2002. The salary amount for Mr. Watson
for the 2003 fiscal year is more than the salary amount for the
2002 fiscal year because of a salary increase granted to Mr.
Watson in connection with his becoming Senior Vice President,
Asian Business Unit and his relocation to Singapore in August
2002 to manage the Company's Asian Business Unit; and the amount
shown for Mr. Watson under "Other Annual Compensation" for 2003
consists of certain expenses paid on his behalf by the Company in
connection with his relocation to Singapore and certain living
expenses incurred by him in Singapore but paid by the Company
pursuant to the agreement between Mr. Watson and the Company
relating to his relocation to Singapore.
Stock Options
The Company's 1992 Stock Option Plan provided until March
24, 2002 for the grant to key employees of the Company of both
options which qualify as incentive stock options under the
Internal Revenue Code of 1986 and non-qualified stock options.
The Company's 2002 Stock Option Plan, which was approved by the
Company's shareholders on July 17, 2002, also provides for the
grant to key employees of the Company of both incentive stock
options and non-qualified stock options. The 1992 Stock Option
Plan and the 2002 Stock Option Plan are administered by the Stock
Option Committee.
The following table provides information with respect to
options to purchase shares of Common Stock granted pursuant to
the 1992 Stock Option Plan to the named executive officers during
the Company's last fiscal year. As of the date of this Proxy
Statement, no options have been granted pursuant to the 2002
Stock Option Plan.
Option/SAR Grants in Last Fiscal Year
-------------------------------------
Number of
Securities % of Total
Underlying Options/SARs
Options/SARs Granted to Exercise
Granted (#) Employees or Base
in Price
Name (a) Fiscal Year ($/sh.) Expiration
_ Date
Brian E. Shore 25,000 12.0% $29.05 March 20, 2012
Emily J. Groehl 15,000 7.2% 29.05 March 20, 2012
John Jongebloed 10,000 4.8% 29.05 March 20, 2012
Thomas T. Spooner 10,000 4.8% 29.05 March 20, 2012
Gary M. Watson 15,000 7.2% 29.05 March 20, 2012
Option/SAR Grants in Last Fiscal Year
-------------------------------------
Potential Realizable Value at
Assumed Annual Rates of Stock
Price Appreciation for Option
Term (b)
Name 0%($) 5%($) 10%($)
Brian E. Shore $-0- $ 456,735 $1,157,455
Emily J. Groehl -0- 274,041 694,473
John Jongebloed -0- 182,694 462,982
Thomas T. Spooner -0- 182,694 462,982
Gary M. Watson -0- 274,041 694,473
(a) Options become exercisable 25% one year from the date of
grant with an additional 25% exercisable each succeeding
anniversary of the date of grant. The Company has not granted
stock appreciation rights.
(b) The potential realizable value portion of the foregoing table
illustrates value that might be realized upon exercise of the
options at the expiration of their term, assuming the
specified compounded rates of appreciation on the Company's
Common Stock over the life of the options. This schedule does
not take into account provisions of the options providing for
termination of the option following termination of
employment, nontransferability or vesting over periods of
four years. The dollar amounts under these columns are the
result of calculations at the 5% and 10% rates set by the
Securities and Exchange Commission and therefore are not
intended to forecast possible future appreciation, if any, of
the Company's stock price. The column indicating 0%
appreciation is included to reflect the fact that a zero
percent gain in stock price will result in zero dollars for
the optionee. No gain to the optionees is possible without an
increase in stock price, which will benefit all shareholders
commensurately.
Aggregated Option Exercises in the Last Fiscal Year and Fiscal
Year-End Option Values
The following table provides information regarding the pre-
tax value realized from the exercise of stock options by the
named executive officers during the Company's last fiscal year
and the value of unexercised options held by such executive
officers as of the end of such fiscal year.
Number of Securities
Underlying Unexercised
Shares Value Options/SARs at FY-End
Acquired Realize (#)
Name On Exercise d
(#)(a) $(b)
Exercisable Unexercisable
Brian E. Shore -0- $ -0- 379,250 101,250
Emily J. Groehl -0- -0- 23,259 33,750
John Jongebloed -0- -0- 16,525 27,000
Thomas T. Spooner -0- -0- 31,344 26,250
Gary M. Watson -0- -0- 17,500 30,000
Value of Unexercised
In-the-Money
Options/SARs
at FY-End ($)(c)
Name Exercisable Unexercisable
Brian E. Shore $ 401,801 $ -0-
Emily J. Groehl -0- -0-
John Jongebloed -0- -0-
Thomas T. Spooner -0- -0-
Gary M. Watson -0- -0-
fn>
(a)The Company has not granted stock appreciation rights.
(b)Value realized equals market value of the underlying shares
on the date of exercise, less the exercise price, times the
number of shares acquired, without deducting any taxes paid
by the employee.
(c)Value of unexercised options equals market value of the
shares underlying "in-the-money" options at March 2 2003
($15.35), less exercise price, times the number of options
outstanding.
Employment and Consulting Agreements
Jerry Shore, Chairman of the Board, was President of the
Company until March 4, 1996 and Chief Executive Officer of the
Company until November 19, 1996. In accordance with the
provisions of an amended and restated employment agreement
between Jerry Shore and the Company, as amended, Jerry Shore is
serving as Chairman of the Board, and effective as of March 3,
1997, the first day of the Company's 1998 fiscal year, he retired
from full-time employment with the Company and commenced serving
as a consultant for a term of five years. In accordance with the
employment agreement, he was being paid an annual consulting fee
equal to 60% of his base salary in effect under the agreement at
the time of his retirement, subject to an indexed cost of living
increase. During the 2003 fiscal year, the Company paid him a
consulting fee of $248,992. In October 1997, in connection with
the Company's agreement to participate in a split dollar life
insurance agreement for Jerry Shore's benefit as discussed below,
Jerry Shore agreed to extend his consulting term for an
additional year and agreed not to compete with the Company during
the consulting term. Jerry Shore's consulting term expired on
March 2, 2003.
In October 1997, the Company entered into a split-dollar
life insurance agreement with a trust established by Jerry Shore
for the benefit of his descendants, of which Jerry Shore's
children, including Brian E. Shore, are the trustees. Pursuant to
this agreement, the Company pays to Jerry Shore an amount equal
to the portion of the annual premiums on two life insurance
policies held in the trust that represents the "economic benefit"
to Jerry Shore calculated in accordance with United States
Treasury Department rules then in effect ($22,731 in the 2003
fiscal year), and the Company pays the balance of the annual
premiums on the policies to the insurers ($106,121 in the 2003
fiscal year). Both policies are joint life policies payable on
the death of the survivor of Jerry Shore and his spouse, with an
aggregate face value of $5 million. The aggregate amount of the
premiums on the policies paid by the Company constitutes
indebtedness from the trust to the Company and is secured by
collateral assignments of the policies. Upon the termination of
the split-dollar life insurance agreement, whether by the death
of the survivor of the insureds or the earlier termination of the
agreement, the Company is entitled to be repaid by the trust the
amount of such indebtedness.
Board and Compensation Committee Report on Executive Compensation
Compensation of the Company's executive officers is composed
of salary, annual cash bonuses, stock options and the Company's
Profit Sharing Plan. The Board has a Compensation Committee which
considers and takes any necessary action regarding the
compensation of the Company's Chief Executive Officer, other than
the grant of stock options or compensation pursuant to plans
administered by the Board. Brian E. Shore, President and Chief
Executive Officer of the Company, determines the annual salary
and cash bonus for each executive officer other than himself. The
Board also has a Stock Option Committee which administers the
Company's Stock Option Plans, including decisions as to the
number of options to grant to each executive officer. The amount
of discretionary contributions to the Profit Sharing Plan for
each fiscal year is determined by the Board of Directors.
Salaries of executive officers are determined based on the
significance of the position to the Company, individual
experience and expertise, individual performance and information
gathered informally as to compensation levels of comparable
companies in the same geographic location as the Company. Brian
E. Shore reviews the salary of each key employee, including
executive officers, annually and makes adjustments as
appropriate.
Decisions as to the award of annual cash bonuses to
executive officers with respect to each fiscal year are made
after the close of the fiscal year. The amount awarded to each
executive officer is based on the Company's overall performance,
individual performance, base salary level, bonuses paid in
prior
years and overall equity and fairness.
The Company typically grants stock options under the
Company's Stock Option Plan once each year. The Stock Option
Committee bases its decisions on individual performance, base
salary and bonus levels, recommendations from senior management
and overall equity and fairness.
The Board decides annually the amount of the Company's
contribution to the Profit Sharing Plan. The amount of such
contribution is discretionary, but may not exceed 15% of the
total remuneration paid to eligible employees or such other
amount as is allowed under the Internal Revenue Code of 1986, as
amended (the "Code"). Subject to this limit, the Board determines
the amount to be contributed for each year based on the Company's
overall performance, the amount contributed in prior years and
the amounts of prior contributions recently forfeited by eligible
employees due to termination of employment prior to vesting. The
Profit Sharing Plan is a broad-based plan in which numerous
employees as well as executive officers are eligible to par
ticipate. Once the Company contribution is made, amounts are
allocated to eligible employees in accordance with a formula
based on their remuneration.
The Board, the Compensation Committee, the Stock Option
Committee and Brian E. Shore use no set formulas in making their
determinations and may afford different weight to different
factors for each executive officer. Such weighting may vary from
year to year.
The Board and the Compensation Committee have reviewed the
impact of Section 162(m) of the Code which limits the
deductibility of certain otherwise deductible compensation in
excess of $1 million paid to the Chief Executive Officer and the
other executive officers named in the table set forth under the
caption "Executive Compensation--Summary Compensation" elsewhere
in this Proxy Statement. It is the Company's policy to attempt to
design its executive compensation plans and arrangements to be
treated as tax deductible compensation wherever, in the judgment
of the Board or the Compensation Committee, as the case may be,
to do so would be consistent with the objectives of that
compensation plan or arrangement. Accordingly, the Board and the
Compensation Committee from time to time may consider whether
changes in the Company's compensation plans and arrangements may
be appropriate to continue to fulfill the requirements for
treatment as tax deductible compensation under the Code.
The Board of Directors Compensation Committee and
Stock Option Committee
Mark S. Ain Anthony Chiesa
Anthony Chiesa Lloyd Frank
Lloyd Frank Jerry Shore
Brian E. Shore
Jerry Shore
Compensation Committee Interlocks and Insider Participation
Anthony Chiesa, a member of the Compensation and Stock
Option Committees, is a former Vice President of the Company who
retired in 1977. Lloyd Frank, also a member of such Committees,
is a partner of the law firm Jenkins & Gilchrist Parker Chapin
LLP, which firm was retained to provide counsel to the Company
during its last fiscal year. Jerry Shore, the third member of
such Committees, was President of the Company until March 4, 1996
and Chief Executive Officer of the Company until November 19,
1996. Brian E. Shore, a director of the Company who is also an
executive officer of the Company, participated in deliberations
of the Board relating to the amount of the Company's contribution
to the Profit Sharing Plan during the Company's last fiscal year,
and Brian E. Shore determines the annual salary and cash bonus
for each executive officer of the Company, other than himself.
STOCK PERFORMANCE GRAPH
The graph set forth below compares the annual cumulative
total return for the Company's five fiscal years ended March 2,
2003 among the Company, the New York Stock Exchange Market Index
(the "NYSE Index") and a Media General Financial Services index
for electronic components and accessories manufacturers (the
"Group Index") comprised of the Company and 259 other companies.
The companies in the Group Index are classified in the same three-
digit industry group in the Standard Industrial Classification
Code system and are described as companies primarily engaged in
the manufacture of electronic components and accessories. The
returns of each company in the Group Index have been weighted
according to the company's stock market capitalization. The graph
has been prepared based on an assumed investment of $100 on
February 27, 1998 and the reinvestment of dividends (where
applicable).
[Graph]
1998 1999 2000 2001 2002 2003
Park $100.00 $ 86.10 $ 72.69 $162.69 $126.78 $ 80.29
Electrochemical
Group Index 100.00 120.56 355.95 155.81 134.97 73.91
NYSE Index 100.00 109.94 111.32 119.46 112.18 91.23
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires the Company's
officers and directors, and persons who own more than 10 percent
of a registered class of the Company's equity securities, to file
reports of ownership and changes in ownership with the Securities
and Exchange Commission and the New York Stock Exchange.
Officers, directors and greater than 10 percent shareholders are
required by regulations of the Securities and Exchange Commission
to furnish the Company with copies of all Section 16(a) reports
they file. Based solely on a review of the copies of such reports
furnished to the Company, or written representations that no Form
5 reports were required, the Company believes that all Section
16(a) filing requirements applicable to its officers, directors
and greater than 10 percent beneficial owners were complied with
during the 2003 fiscal year.
SHAREHOLDER PROPOSALS
Shareholder proposals intended to be presented at the year
2004 Annual Meeting of Shareholders pursuant to Rule 14a-8 under
the Exchange Act must be received by the Company at the Company's
principal executive offices for inclusion in the Proxy Statement
and form of Proxy relating to that meeting by February 11, 2004.
In order for shareholder proposals made outside of Rule 14a-8
under the Exchange Act to be considered "timely" within the
meaning of Rule 14a-4(c) under the Exchange Act, such proposals
must be received by the Company at the Company's principal
executive offices by April 18, 2004. The Company's By-Laws
require that proposals of shareholders made outside of Rule 14a-8
under the Exchange Act must be submitted, in accordance with the
requirements of the By-Laws, not later than April 18, 2004 and
not earlier than March 19, 2004.
OTHER MATTERS
Audit Committee Report
The Audit Committee assists the Board in fulfilling its oversight
responsibilities with respect to the accounting, auditing,
financial reporting and internal control functions of the Company
and its subsidiaries. The Board of Directors has determined that
all members of the Audit Committee are "independent", as required
by the current rules of the New York Stock Exchange. The
Committee functions pursuant to a Charter that has been adopted
by the Board, as required by rules of the New York Stock
Exchange, a copy of which was attached as Appendix A to the
Company's Proxy Statement for its Annual Meeting of Shareholders
held on July 18, 2001, as required by rules of the Securities and
Exchange Commission.
As set forth in the Charter, management of the Company is
responsible for the preparation, presentation and integrity of
the Company's financial statements, and for maintaining
appropriate accounting and financial reporting principles and
policies and internal controls and procedures designed to provide
reasonable assurance of compliance with accounting standards and
applicable laws and regulations. The independent accountants are
responsible for planning and carrying out an audit in accordance
with generally accepted auditing standards and expressing an
opinion as to the conformity of the financial statements with
generally accepted accounting principles.
In the performance of its oversight function, the Audit Committee
has reviewed and discussed the audited financial statements for
the fiscal year ended March 2, 2003 with management and with
Ernst & Young LLP, the Company's independent public accountants
for the 2003 fiscal year. The Audit Committee has also received
from the independent accountants a letter pursuant to Statement
on Auditing Standards No. 61, Codification of Statements on
Auditing Standards, AU 380, as currently in effect, and has
discussed the matters referred to in such letter with the
independent accountants. The Audit Committee has also received
the written disclosures and the letter from the independent
accountants required by Independence Standards Board Standard No.
1, Independence Discussions with Audit Committees, as currently
in effect. The Audit Committee has considered whether the
provision of non-audit services by the independent accountants to
the Company is compatible with maintaining the accountants'
independence and has discussed with Ernst & Young LLP LLP their
independence.
The members of the Audit Committee are not professionally engaged
in the practice of auditing or accounting. The Audit Committee's
considerations and discussions referred to above do not assure
that the audit of the Company's financial statements for the
fiscal year ended March 2, 2003 has been carried out in
accordance with generally accepted auditing standards or that the
financial statements are presented in accordance with generally
accepted accounting principles.
Based upon the review and discussions described in this Report,
and subject to the limitations on the role and responsibilities
of the Audit Committee referred to above and in the Charter, the
Audit Committee has recommended to the Board that the audited
financial statements be included in the Company's Annual Report
on Form 10-K for the fiscal year ended March 2, 2003 for filing
with the Securities and Exchange Commission.
Audit Committee
Mark S. Ain
Anthony Chiesa
Lloyd Frank
Audit and Other Fees
The aggregate fees billed by Ernst & Young LLP for services
rendered for the audit of the Company's annual financial
statements for the most recent fiscal year and the reviews of the
quarterly financial statements included in the Company's Form 10-
Q Quarterly Reports filed with the Securities and Exchange
Commission for such fiscal year were $386,167. The aggregate fees
billed for services rendered by Ernst & Young LLP, other than
audit services, were $132,883, including fees for audit related
services of $28,100 and fees for non-audit services of $104,783.
Audit related services included statutory audits of foreign
subsidiaries and the annual audit of the Company's Employees'
Profit Sharing and 401(k) Retirement Savings Plan, and non-audit
services included tax advice and services, legal services in
Europe and litigation assistance. Ernst & Young LLP did not
render financial information systems design and implementation
services to the Company for the most recent fiscal year.
Auditors
Upon the recommendation of the Audit Committee, the Board
appointed Ernst & Young LLP, the Company's independent auditors
for the past fiscal year, and the Audit Committee has appointed
Ernst & Young LLP as the auditors of the Company for the current
fiscal year. A representative of Ernst & Young LLP is expected to
be present at the Annual Meeting and will have an opportunity to
make a statement if such representative so desires and will be
available to respond to appropriate questions.
Directors' and Officers' Liability Insurance
The Company has for many years maintained directors' and
officers' liability insurance and fiduciary liability insurance
covering the directors and officers of the Company and its
subsidiaries against certain claims arising out of their service
to the Company and its subsidiaries and to certain employee
benefit plans of the Company and its subsidiaries. The current
directors' and officers' liability insurance policy runs for a
period of one year expiring May 17, 2004 at a total cost of
$346,835; and the current fiduciary liability insurance policy
runs for a period of one year expiring June 17, 2003 at a one-
year cost of $22,000.
Proxy Solicitation
The Company will bear the expense of proxy solicitation.
Directors, officers and employees of the Company and its
subsidiaries may solicit proxies by mail, telephone, telegraph,
facsimile or in person (but will receive no additional
compensation for such solicitation). The Company also has
retained D. F. King & Co., Inc., New York, New York, to assist in
the solicitation of proxies in the same manner at an anticipated
fee of approximately $6,000, plus reimbursement of certain out-of-
pocket expenses. In addition, brokerage houses and other
custodians, nominees and fiduciaries will be requested to forward
the soliciting material to beneficial owners and to obtain
authorizations for the execution of proxies, and if they in turn
so request, the Company will reimburse such brokerage houses and
other custodians, nominees and fiduciaries for their expenses in
forwarding such material.
Other Matters to be Presented to the Meeting
The Board does not know of any other matters to be brought
before the Meeting. If any other matters not mentioned in this
Proxy Statement are properly brought before the Meeting,
including matters incident to the conduct of the Meeting or
relating to the adjournment thereof, the persons named in the
enclosed proxy intend to vote such proxy in accordance with their
best judgment on such matters.
Annual Report
The Annual Report, including financial statements, of the
Company for the fiscal year ended March 2, 2003 is enclosed
herewith but is not a part of the proxy soliciting material.
By Order of the Board of Directors,
Stephen E. Gilhuley
Senior Vice President,
Secretary and General Counsel
Dated: June 12, 2003
[PROXY CARD]
PARK ELECTROCHEMICAL CORP.
PROXY FOR ANNUAL MEETING OF SHAREHOLDERS July 17, 2003
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby constitutes and appoints ANTHONY
CHIESA, LLOYD FRANK and BRIAN E. SHORE, and each of them, the
attorneys and proxies of the undersigned, with full power of
substitution, to attend the Annual Meeting of Shareholders of
PARK ELECTROCHEMICAL CORP. (the "Company") to be held at The Bank
of New York, One Wall Street, New York, New York on July 17, 2003
at 10:00 o'clock A.M., New York time, and any adjournments or
postponements thereof, to vote all the shares of Common Stock of
the Company which the undersigned would be entitled to vote if
personally present upon the following matters:
The Board of Directors recommends a vote "FOR" proposal 1.
1. ELECTION OF DIRECTORS
[ ] FOR all nominees listed below (except as marked to the
contrary below).
[ ] WITHHOLD AUTHORITY to vote for all nominees listed
below.
MARK S. AIN, ANTHONY CHIESA, LLOYD FRANK,
BRIAN E. SHORE and JERRY SHORE
(INSTRUCTION: To withhold authority to vote for any
individual nominee, check the "FOR" box above and write
the nominee's name in the space provided below.)
_____________________________________________________
2. The transaction of such other business as may properly come
before the meeting.
Each properly executed proxy will be voted in accordance with
specifications made hereon. If no specification is made, the
shares represented by this Proxy will be voted "FOR" the
nominees, and in the discretion of the Proxies on any other
business as may properly come before the meeting.
The undersigned hereby acknowledges receipt of the Company's
2003 Annual Report and the accompanying Notice of Meeting and
Proxy Statement and hereby revokes any proxy or proxies
heretofore given.
Dated: ___________________, 2003
___________________________________
___________________________________
(Signature(s) of Shareholder(s))
Please date and sign exactly as name
appears hereon. Executors,
administrators, trustees, etc.
should so indicate when signing. If
shares are held jointly, both
owners should sign.