<PAGE> 1
SCHEDULE 14A INFORMATION
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:
<TABLE>
<S> <C>
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission
[X] Definitive Proxy Statement Only (as permitted by Rule 14a-6(e)(2))
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to
sec. 240.14a-11(c) or sec. 240.14a-12
</TABLE>
MEADE INSTRUMENTS CORP.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
N/A
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] Fee not required.
[ ] 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:
N/A
----------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
N/A
----------------------------------------------------------------------
(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):
N/A
----------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
N/A
----------------------------------------------------------------------
(5) Total fee paid:
N/A
----------------------------------------------------------------------
[ ] 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:
N/A
----------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
N/A
----------------------------------------------------------------------
(3) Filing Party:
N/A
----------------------------------------------------------------------
(4) Date Filed:
N/A
----------------------------------------------------------------------
<PAGE> 2
[MEADE LOGO] MEADE INSTRUMENTS CORPORATION
6001 OAK CANYON, IRVINE, CALIFORNIA 92620 U.S.A.
(949) 451-1450 [ ] FAX: (949) 451-1460 [ ] www.meade.com
- --------------------------------------------------------------------------------
June 9, 1998
Dear Stockholder:
You are cordially invited to attend the 1998 Annual Meeting of Stockholders
of Meade Instruments Corp. ("Meade" or the "Company") to be held on Thursday,
July 9, 1998. We sincerely hope that you will be able to attend the meeting
which will be held at the Irvine Marriott Hotel, 18000 Von Karman Avenue,
Irvine, California 92612, beginning at 10:00 a.m., local time.
At this meeting you are being asked to elect a Board of Directors for
staggered one, two and three year terms in accordance with the Company's
Certificate of Incorporation and Bylaws. You are being asked to re-elect to the
Board of Directors: (i) John C. Diebel and Timothy C. McQuay for a three year
term expiring at the 2001 Annual Meeting of Stockholders, (ii) Steven G. Murdock
and Harry L. Casari for a two year term expiring at the 2000 Annual Meeting of
Stockholders and (iii) Joseph A. Gordon, Jr. for a one year term expiring at the
1999 Annual Meeting of Stockholders.
The members of the Board of Directors and management look forward to
personally greeting as many stockholders as possible at the Annual Meeting.
However, whether or not you plan to attend personally, and regardless of the
number of shares you own, it is important that your shares be represented.
Although you presently may plan to attend the Annual Meeting, please
complete, sign, date and promptly return the enclosed proxy card. If you do
attend the Annual Meeting and wish to vote in person, you may revoke your proxy
at that time.
Sincerely,
/s/ JOHN C. DIEBEL
-----------------------------------
John C. Diebel
Chairman of the Board and
Chief Executive Officer
<PAGE> 3
MEADE INSTRUMENTS CORP.
6001 OAK CANYON
IRVINE, CALIFORNIA 92620
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JULY 9, 1998
The Annual Meeting of Stockholders of Meade Instruments Corp., a Delaware
corporation ("Meade" or the "Company"), will be held at the Irvine Marriott
Hotel, 18000 Von Karman Avenue, Irvine, California 92612, beginning at 10:00
a.m., local time., on Thursday, July 9, 1998, for the following purposes:
(1) To elect a Board of Directors to hold office for staggered one,
two and three year terms in accordance with the Company's Certificate of
Incorporation and Bylaws or until their successors are elected and
qualified; and
(2) To transact such other business as may properly come before the
Annual Meeting and at any adjournment thereof.
Shares represented by properly executed proxies will be voted in accordance
with the specifications therein. It is the intention of the Board of Directors
that shares represented by proxies, which are not limited to the contrary, will
be voted for the election of the directors named in the attached Proxy
Statement.
The Board of Directors has fixed the close of business on May 22, 1998 as
the record date for determining stockholders entitled to notice of and to vote
at the Annual Meeting and at any adjournment thereof. A complete list of
stockholders entitled to vote at the Annual Meeting will be available for
examination by any stockholder, for any purpose germane to the Annual Meeting,
at the office of the Secretary of the Company, at 6001 Oak Canyon, Irvine,
California 92620, during the ten-day period preceding the Annual Meeting.
By Order of the Board of Directors
/s/ MARK D. PETERSON
--------------------------------------
Mark D. Peterson
Vice President and General Counsel
Irvine, California
June 9, 1998
YOUR VOTE IS IMPORTANT
NO MATTER HOW MANY SHARES YOU OWNED ON THE RECORD DATE, PLEASE INDICATE
YOUR VOTING INSTRUCTIONS ON THE ENCLOSED PROXY CARD AND DATE, SIGN AND RETURN IT
IN THE ENVELOPE PROVIDED, WHICH IS ADDRESSED FOR YOUR CONVENIENCE AND NEEDS NO
POSTAGE IF MAILED IN THE UNITED STATES. IN ORDER TO AVOID THE ADDITIONAL EXPENSE
TO THE COMPANY OF FURTHER SOLICITATION, WE ASK YOUR COOPERATION IN PROMPTLY
MAILING IN YOUR PROXY CARD.
<PAGE> 4
MEADE INSTRUMENTS CORP.
6001 OAK CANYON
IRVINE, CALIFORNIA 92620
PROXY STATEMENT
SOLICITATION OF PROXIES
The accompanying proxy is being solicited by the Board of Directors of
Meade Instruments Corp. ("Meade" or the "Company") for use at the Company's
Annual Meeting of Stockholders to be held on Thursday, July 9, 1998, at 10:00
a.m. local time, at the Irvine Marriott Hotel, 18000 Von Karman Avenue, Irvine,
California 92612, and at any adjournment thereof. This Proxy Statement and the
accompanying proxy are first being mailed to stockholders on or about June 9,
1998.
The expense of soliciting proxies will be borne by the Company. Proxies
will be solicited principally through the use of the mail, but directors,
officers and regular employees of the Company may solicit proxies personally or
by telephone or special letter without any additional compensation. The Company
also will reimburse banks, brokerage houses and other custodians, nominees and
fiduciaries for any reasonable expenses in forwarding proxy materials to
beneficial owners.
OUTSTANDING SHARES AND VOTING RIGHTS
On May 22, 1998, the record date with respect to this solicitation for
determining stockholders entitled to notice of and to vote at the Annual
Meeting, 7,875,500 shares of the Company's Common Stock were outstanding. No
shares of any other class of stock were outstanding. Only stockholders of record
on such date are entitled to notice of and to vote at the Annual Meeting and at
any adjournment thereof. Each stockholder of record is entitled to one vote for
each share held on all matters to come before the Annual Meeting and at any
adjournment thereof.
All shares represented by each properly executed unrevoked proxy received
in time for the Annual Meeting will be voted in the manner specified therein. An
executed proxy may be revoked at any time before its exercise by filing with the
Secretary of the Company, at 6001 Oak Canyon, Irvine, California 92620, the
principal executive office of the Company, a written notice of revocation or a
duly executed proxy bearing a later date. The execution of the enclosed proxy
will not affect a stockholder's right to vote in person should such stockholder
find it convenient to attend the Annual Meeting and desire to vote in person.
Votes cast by proxy or in person at the Annual Meeting will be counted by
the persons appointed by the Company to act as election inspectors for the
meeting. The election inspectors will treat shares represented by proxies that
reflect abstentions as shares that are present and entitled to vote for purposes
of determining the presence of a quorum and for purposes of determining the
outcome of any matter submitted to the stockholders for a vote. Abstentions,
however, do not constitute a vote "for" or "against" any matter and thus will be
disregarded in the calculation of a plurality or of "votes cast."
The election inspectors will treat shares referred to as "broker non-votes"
(i.e., shares held by brokers or nominees over which the broker or nominee lacks
discretionary power to vote and for which the broker or nominee has not received
specific voting instructions from the beneficial owner) as shares that are
present and entitled to vote for purposes of determining the presence of a
quorum. However, for purposes of determining the outcome of any matter as to
which the broker has indicated on the proxy that it does not have discretionary
authority to vote, those shares will be treated as not present and not entitled
to vote with respect to that matter (even though those shares are considered
entitled to vote for quorum purposes and may be entitled to vote on other
matters).
1
<PAGE> 5
ELECTION OF DIRECTORS
The Company's Bylaws provide that the authorized number of directors of the
Company shall not be less than three nor more than fifteen, with the exact
number of directors to be determined from time to time solely by resolution
adopted by the affirmative vote of a majority of the directors then in office.
The full Board of Directors currently consists of five directors. All such
directors were elected at the Company's 1997 Annual Meeting to serve until their
successors are duly elected and qualified. As of the record date for the 1997
Annual Meeting, the Company determined that it is a "listed corporation" under
California law for purposes of classification of its board of directors. The
Certificate of Incorporation and Bylaws provide that the Board of Directors
shall, upon such determination, be divided into three classes, designated Class
I, Class II and Class III. Each Class shall consist, as nearly as may be
possible, of one-third of the total number of directors constituting the entire
Board of Directors. At the 1998 Annual Meeting of Stockholders, a total of five
directors are to be elected into Class I, Class II and Class III, for staggered
one, two and three year terms, respectively, or until election and qualification
of their successors.
The accompanying proxies solicited by the Board of Directors will be voted
for the election of the nominees named below, and for the terms listed below,
unless the proxy card is marked to withhold authority to vote for any nominee.
The nominees are all presently members of the Company's Board of Directors.
The nominees for election to the Board of Directors at the 1998 Annual
Meeting of Stockholders, together with their respective terms, are set forth
below:
<TABLE>
<CAPTION>
CLASS NOMINEE TERM
- ----- ------- ----
<S> <C> <C>
I Joseph A. Gordon, Jr. One year term expiring at the 1999 Annual Meeting
II Steven G. Murdock Two year term expiring at the 2000 Annual Meeting
II Harry L. Casari Two year term expiring at the 2000 Annual Meeting
III John C. Diebel Three year term expiring at the 2001 Annual Meeting
III Timothy C. McQuay Three year term expiring at the 2001 Annual Meeting
</TABLE>
If any of the nominees should become unavailable for election to the Board
of Directors, the persons named in the proxy or their substitutes shall be
entitled to vote for a substitute to be designated by the Board of Directors.
Alternatively, the Board of Directors may reduce the number of directors. The
Board of Directors has no reason to believe that it will be necessary to
designate a substitute nominee or reduce the number of directors.
REQUIRED VOTE
For the purpose of electing directors, each stockholder is entitled to one
vote for each director to be elected for each share of Common Stock owned. The
candidates receiving the highest number of votes, up to the number of directors
to be elected, will be elected. Votes cast against a candidate or votes withheld
will have no legal effect. Any unmarked proxies, including those submitted by
brokers or nominees, will be voted as indicated on the accompanying proxy card.
Stockholders do not have the right to cumulate votes in the election of
directors.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF EACH OF THE
NOMINEES LISTED ABOVE.
2
<PAGE> 6
DIRECTOR NOMINEES
The following table provides information regarding the nominees for
election as directors of the Company. The ages shown are as of June 1, 1998.
<TABLE>
<CAPTION>
BUSINESS EXPERIENCE DIRECTOR
NAME AND AGE AND DIRECTORSHIPS SINCE
------------ ------------------- --------
<S> <C> <C>
John C. Diebel (54)............... John C. Diebel is the Chairman of the Board and 1975-1986
Chief Executive Officer of the Company. Mr. Diebel 1991-present
founded the Company in 1972. He has been the
Chairman of the Board and Chief Executive Officer
of the Company for the majority of the time since
December 1975. Prior to founding the Company, Mr.
Diebel worked as an engineer for TRW Inc. and
Hughes Aircraft Co. Mr. Diebel received his BS and
MS degrees in electrical engineering from the
California Institute of Technology and his Ph.D.
degree in electrical engineering from the
University of Southern California.
Steven G. Murdock (46)............ Steven G. Murdock has been the Company's President 1996
and Chief Operating Officer since October 1990.
From May 1980 to October 1990, Mr. Murdock was the
Company's Vice President of Optics. From November
1968 to May 1980, Mr. Murdock worked as the
optical manager for Coulter Optical, Inc., an
optics manufacturer. Mr. Murdock received his BS
degree in business administration from California
State University at Northridge.
Joseph A. Gordon, Jr. (48)........ Joseph A. Gordon, Jr. has been the Company's 1996
Senior Vice President -- North American Sales
since June 1995. From December 1984 to June 1995,
he worked as the Company's Vice President -- North
American Sales. From January 1981 to December
1984, Mr. Gordon was the Vice President of Sales
at Celestron. Mr. Gordon received his BS degree in
marketing from the University of Cincinnati.
Timothy C. McQuay (46)............ Timothy C. McQuay has been a Managing Director -- 1997
Investment Banking at A.G. Edwards & Sons, Inc.
since August 1997. From May 1995 to August 1997
Mr. McQuay was a Partner at Crowell, Weedon & Co.
and from October 1994 to August 1997 he also
served as Managing Director -- Corporate Finance.
From May 1993 to October 1994, Mr. McQuay served
as Vice President, Corporate Development with Kerr
Group, Inc., a New York Stock Exchange listed
plastics manufacturing company. From May 1990 to
May 1993, Mr. McQuay served as Managing Director
-- Merchant Banking with Union Bank. He is a
director of Keystone Automotive Industries, Inc.
Mr. McQuay received his BA degree in economics
from Princeton University and his MBA degree in
finance from the University of California at Los
Angeles.
Harry L. Casari (61).............. Harry L. Casari was a Certified Public Accountant 1997
and is currently a private investor. Mr. Casari
worked for Ernst & Young LLP from 1969 until 1994
when he retired as a Partner. He is a director of
Cohu, Inc. Mr. Casari received his BS degree in
business administration from the University of
Denver.
</TABLE>
DIRECTORS' FEES
Directors who also are employees of the Company are reimbursed for expenses
incurred in attending meetings of the Board of Directors but do not otherwise
receive compensation for serving as
3
<PAGE> 7
directors of the Company. Each director who is not an employee of the Company is
entitled to receive (i) an annual fee of $5,000 for his services as a director,
(ii) a fee of $750 for each Board and Committee meeting attended and (iii)
reimbursement for his expenses incurred in attending Board and Committee
meetings. In addition, each director who is not an employee of the Company is
entitled to receive 5,000 options to purchase the Company's Common Stock upon
his initial election to the Board together with an additional grant of 5,000
options on the date of each annual meeting of stockholders preceding a year in
which such director will continue in office.
COMMITTEES AND MEETINGS OF THE BOARD OF DIRECTORS
The Committees of the Board of Directors consist of an Audit Committee and
a Compensation Committee, each of which is comprised solely of outside
directors. During the fiscal year ended February 28, 1998, the Board of
Directors held four meetings. All directors attended 75% or more of the total
meetings of the Board of Directors and Committees of the Board of Directors on
which they served.
Audit Committee. The Audit Committee is comprised of Messrs. Carsari
(Chairman) and McQuay. Its functions include recommending to the Board of
Directors the engagement of the Company's independent accountants, reviewing
with such accountants the audit plan and results of their examination of the
Financial Statements and determining the independence of such accountants.
During the fiscal year ended February 28, 1998, the Audit Committee held two
meetings.
Compensation Committee. The Compensation Committee is comprised of Messrs.
McQuay (Chairman) and Casari. Its functions include reviewing and making
recommendations with respect to the compensation of officers and key employees,
including the grant of options or other awards under the Company's 1997 Stock
Incentive Plan. During the fiscal year ended February 28, 1998, the Compensation
Committee held one meeting.
4
<PAGE> 8
SECURITY OWNERSHIP OF PRINCIPAL STOCKHOLDERS AND MANAGEMENT
The following table sets forth certain information with respect to the
beneficial ownership of the Common Stock as of June 1, 1998, for (i) each person
who beneficially owns more than 5% of the Common Stock, (ii) each of the
directors and Named Executive Officers (as defined in the "Summary of Executive
Compensation" section below) and (iii) all directors and executive officers as a
group. Except as otherwise indicated, beneficial ownership includes voting and
investment power with respect to the shares shown.
SECURITY OWNERSHIP TABLE
<TABLE>
<CAPTION>
AMOUNT AND
NATURE OF
BENEFICIAL PERCENT
OWNERSHIP OF CLASS
------------- --------
<S> <C> <C>
Dresdner RCM Global Investors LLC(1)........................ 516,000 6.6%
BankAmerica Corporation(2).................................. 435,750 5.5%
John C. Diebel(3)........................................... 1,275,000 16.2%
Steven G. Murdock(3)(4)..................................... 762,500 9.7%
Joseph A. Gordon, Jr.(3)(5)................................. 148,750 1.9%
Brent W. Christensen(3)(6).................................. 10,312 *
Kenneth W. Baun(3)(7)....................................... 10,312 *
Robert A. Wood III(3)(8).................................... 22,755 *
Timothy C. McQuay(3)(9)..................................... 1,666 *
Harry L. Casari(3)(10)...................................... 3,066 *
Meade Instruments Corp. Employee Stock Ownership
Plan(3)(11)............................................... 1,490,509 18.9%
All current directors and executive officers as a group
(9 persons)(12)........................................... 2,234,361 28.1%
</TABLE>
- ---------------
* Less than 1%
(1) According to a Schedule 13G, dated as of January 30, 1998, filed with the
Securities and Exchange Commission, Dresdner RCM Global Investors LLC
("RCM") has sole voting power as to 371,000 of such shares, sole
dispositive power as to 411,000 of such shares, shared voting power as to
none of such shares and shared dispositive power as to 105,000 of such
shares. RCM is a registered investment advisor under Section 203 of the
Investment Advisors Act of 1940. RCM is a wholly-owned subsidiary of
Dresdner Bank AG, an international banking organization headquartered in
Frankfurt, Germany and a Parent Holding Company as defined in Rule
13d-1(b)(ii)(G) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"). The mailing address of RCM is Four Embarcadero Center,
Suite 3000, San Francisco, CA 94111-4189.
(2) According to a Schedule 13G, dated as of February 6, 1998, filed with the
Securities and Exchange Commission, BankAmerica Corporation ("BAC") has
sole voting and dispositive power as to none of such shares, shared voting
power as to 435,750 of such shares and shared dispositive power as to
335,750 of such shares. BAC is a registered bank holding company. The
mailing address for BAC is 555 California Street, San Francisco, California
94104.
(3) The address for all directors and officers of the Company and the Company's
Employee Stock Ownership Plan ("ESOP") Committee is c/o Meade Instruments
Corp., 6001 Oak Canyon, Irvine, California 92620.
(4) Excludes 1,490,509 shares held by the ESOP. Mr. Murdock is a member of the
ESOP Committee and disclaims beneficial ownership of any of the shares
owned by the ESOP. If the 1,490,509 shares owned by the ESOP were included,
Mr. Murdock would be deemed to beneficially own 2,253,009 shares, or 28.6%.
Mr. Murdock is not a participant in the ESOP. See footnote (11) below.
5
<PAGE> 9
(5) Includes 31,250 shares subject to options that are currently exercisable or
will become exercisable on or before July 31, 1998.
(6) Includes 10,312 shares subject to options that are currently exercisable or
will become exercisable on or before July 31, 1998. Excludes 11,994 shares
allocated to Mr. Christensen's ESOP account as an ESOP participant. Mr.
Christensen's ESOP shares will vest as of August 23, 1998. Also excludes
1,490,509 shares held by the ESOP. Mr. Christensen is a member of the ESOP
Committee and, other than as a participant, disclaims beneficial ownership
of any of the shares owned by the ESOP. If the 1,490,509 shares owned by
the ESOP were included, Mr. Christensen would be deemed to beneficially own
1,500,821 shares, or 19.0%. See footnote (11) below.
(7) Includes 10,312 shares subject to options that are currently exercisable or
will become exercisable on or before July 31, 1998. Excludes 9,540 shares
allocated to Mr. Baun's ESOP account as an ESOP participant. Mr. Baun's
ESOP shares will vest as of March 15, 2000.
(8) Includes 10,312 shares subject to options that are currently exercisable or
will become exercisable on or before July 31, 1998. Also includes 11,743
shares allocated to Mr. Wood's ESOP account as an ESOP participant. Mr.
Wood's ESOP shares are fully vested.
(9) Includes 1,666 shares subject to options that are currently exercisable or
will become exercisable on or before July 31, 1998.
(10) Includes 1,666 shares subject to options that are currently exercisable or
will become exercisable on or before July 31, 1998.
(11) Common Stock held by the ESOP is voted by the trustee of the ESOP, Wells
Fargo Bank, N.A. (the "Trustee"), as directed by the ESOP Committee, except
that participants in the ESOP are entitled to direct the Trustee as to how
to vote shares allocated to their ESOP accounts. The ESOP Committee is
comprised of Steven G. Murdock, the Company's President, Chief Operating
Officer and Secretary, Brent W. Christensen, the Company's Vice
President -- Finance and Chief Financial Officer, and Pamela Diebel
Grossman, the Company's Director of Administration and sister of John C.
Diebel, the Company's Chairman of the Board and Chief Executive Officer.
(If the 1,490,509 shares owned by the ESOP were included in the holdings of
Ms. Grossman, she would be deemed to beneficially own 1,490,509 shares, or
18.9%. Mr. Murdock and Ms. Grossman are not participants in the ESOP. Each
of the members of the ESOP Committee, other than as a participant with
respect to Mr. Christensen, disclaims beneficial ownership of any of the
shares owned by the ESOP. The Trustee's address is 707 Wilshire Boulevard,
Los Angeles, California 90017.
(12) Includes 65,518 shares subject to options that are currently exercisable or
will become exercisable on or before July 31, 1998. Also includes 11,743
shares allocated to Mr. Wood's ESOP account as an ESOP participant.
Excludes 11,994 and 9,540 shares allocated to Mr. Christensen's and Mr.
Baun's ESOP accounts, respectively, as ESOP participants. Neither Mr.
Christensen's nor Mr. Baun's ESOP shares will vest on or before July 31,
1998. Also excludes 1,490,509 shares held by the ESOP. Messrs. Murdock and
Christensen are members of the ESOP Committee and, other than as a
participant with respect to Mr. Christensen, each disclaims beneficial
ownership of any of the shares owned by the ESOP. If the 1,490,509 shares
owned by the ESOP were included, all directors and officers as a group
would be deemed to beneficially own 3,724,870 shares, or 46.9%. See
footnotes (3) through (11) above.
6
<PAGE> 10
EXECUTIVE COMPENSATION AND OTHER INFORMATION
SUMMARY OF EXECUTIVE COMPENSATION
The following table sets forth certain summary information concerning the
compensation of the Company's Chief Executive Officer and the Company's five
other most highly compensated executive officers during the 1998 fiscal year
(collectively, the "Named Executive Officers").(1)
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL LONG-TERM(2)
COMPENSATION(3) COMPENSATION
------------------ OPTIONS ALL OTHER
SALARY BONUS GRANTED COMPENSATION(5)
NAME YEAR(4) ($) ($) (#) ($)
---- ------- ------- ------- ------------ ---------------
<S> <C> <C> <C> <C> <C>
John C. Diebel.................. 1998 297,000 160,000 100,000 --
Chairman of the Board and 1997 400,000 173,400 0 --
Chief Executive Officer
Steven G. Murdock............... 1998 225,000 125,000 100,000 --
President, Chief Operating 1997 225,000 103,700 0 --
Officer and Secretary
Joseph A. Gordon Jr............. 1998 175,000 30,000 110,000 --
Senior Vice President -- North 1997 137,000 22,800 0 --
American Sales
Brent W. Christensen............ 1998 103,000 28,300 45,000 36,600
Vice President -- Finance and 1997 84,000 10,000 0 57,000
Chief Financial Officer
Robert A. Wood III.............. 1998 103,000 28,300 45,000 33,300
Vice President -- 1997 84,000 10,000 0 57,700
Manufacturing
Kenneth W. Baun................. 1998 112,000 20,500 45,000 30,000
Vice President -- Engineering 1997 96,000 0 0 44,700
</TABLE>
- ---------------
(1) The Company has included five executive officers in addition to the Chief
Executive Officer in its various executive compensation tables because the
aggregate salary and bonus amounts for Messrs. Christensen and Wood were
identical.
(2) The Company has not issued stock appreciation rights or restricted stock
awards. The Company currently has no "long-term incentive plan" as that term
is defined in the applicable rules. The Compensation Committee has the
ability to create such a plan under the Company's 1997 Stock Incentive Plan.
All stock options granted to the Named Executive Officers were non-qualified
options granted at fair market value pursuant to the Company's 1997 Stock
Incentive Plan. Please see the "Options Grants in Last Fiscal Year" table
below for information relating to each specific grant.
(3) The aggregate amount of perquisites and other personal benefits, securities
or property paid to each of the Named Executive Officers during the 1998
fiscal year did not exceed the lesser of 10% of such officer's total annual
salary and bonus for fiscal 1998 or $50,000. Therefore, no "Other Annual
Compensation" column has been included in this table.
(4) The Company completed its initial public offering on April 14, 1997.
Accordingly, no compensation information is provided for any fiscal years
prior to the 1997 fiscal year.
(5) Amounts represent the aggregate value of shares of the Company's Common
Stock (based upon the share price as of the end of each respective fiscal
year) allocated to each Named Executive Officer's ESOP account pursuant to
(i) the Company's matching contribution under the ESOP Plan for amounts
deferred under the Company's 401(k) Plan (see "Benefit Plans -- 401(k)
Plan") and (ii) the Company's contribution under the ESOP Plan (see "Benefit
Plans -- Employee Stock Ownership Plan").
7
<PAGE> 11
SUMMARY OF OPTION GRANTS
The following table provides certain summary information concerning grants
of options to the Named Executive Officers of the Company during the 1998 fiscal
year.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT ASSUMED
ANNUAL RATES OF
NUMBER OF STOCK PRICE
SECURITIES % OF TOTAL APPRECIATION FOR
UNDERLYING OPTIONS GRANTED OPTION TERM
OPTIONS TO EMPLOYEES IN ---------------------
GRANTED(1) FISCAL YEAR EXERCISE PRICE 5% 10%
NAME # # $ EXPIRATION DATE $ $
---- --------------- --------------- -------------- --------------- -------- ----------
<S> <C> <C> <C> <C> <C> <C>
John C. Diebel......... 100,000 15.50% $8.875 01/27/08 558,100 1,414,400
Steven G. Murdock...... 100,000 15.50% $8.875 01/27/08 558,100 1,414,400
Joseph A. Gordon Jr. .. 100,000 15.50% $7.000 04/13/07 440,200 1,115,600
10,000 1.55% $8.875 01/27/98 55,800 141,400
Brent W. Christensen... 25,000 3.88% $7.000 04/13/07 110,100 278,900
10,000 1.55% $7.250 07/10/07 45,600 115,500
10,000 1.55% $8.875 01/27/08 55,800 141,400
Robert A. Wood III..... 25,000 3.88% $7.000 04/13/07 110,100 278,900
10,000 1.55% $7.250 07/10/07 45,600 115,500
10,000 1.55% $8.875 01/27/08 55,800 141,400
Kenneth W. Baun........ 25,000 3.88% $7.000 04/13/07 110,100 278,900
10,000 1.55% $7.250 07/10/07 45,600 115,500
10,000 1.55% $8.875 01/27/08 55,800 141,400
</TABLE>
- ---------------
(1) Each of the options are non-qualified options granted pursuant to the
Company's 1997 Stock Incentive Plan. Each option is subject to a four-year
vesting schedule: 25% of such options becoming exercisable one year after
the grant date with the remainder becoming exercisable in substantially
equal installments over the succeeding thirty six months.
8
<PAGE> 12
SUMMARY OF OPTIONS EXERCISED
The following table provides certain summary information concerning the
exercise of stock options by the Named Executive Officers during the 1998 fiscal
year together with the fiscal year-end value of unexercised options.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION
VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED IN
SHARES OPTIONS AT THE MONEY OPTIONS AT
ACQUIRED ON VALUE(1) FISCAL YEAR END FISCAL YEAR-END(1)
EXERCISE REALIZED EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
# $ # $
----------- -------- ------------------------- -------------------------
<S> <C> <C> <C> <C>
John C. Diebel................ 0 0 0/100,000 0/62,500
Steven G. Murdock............. 0 0 0/100,000 0/62,500
Joseph A. Gordon Jr........... 0 0 0/110,000 0/256,250
Brent W. Christensen.......... 0 0 0/45,000 0/91,250
Robert A. Wood III............ 0 0 0/45,000 0/91,250
Kenneth W. Baun............... 0 0 0/45,000 0/91,250
</TABLE>
- ---------------
(1) Market value of the securities underlying the options at exercise date or
year-end, as the case may be, minus the exercise or base price of
"in-the-money" options and transaction costs.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Company's Compensation Committee consists of Messrs. Timothy C. McQuay
and Harry L. Casari. Neither Mr. McQuay nor Mr. Casari is an officer or employee
of the Company.
Timothy C. McQuay, a director of the Company, was previously a partner with
Crowell, Weedon & Co., one of the Underwriters of the Company's initial public
offering that was completed in April 1997. Crowell, Weedon & Co. received
customary compensation for its services as an Underwriter in connection with the
Company's initial public offering. Such compensation was approximately $190,000.
9
<PAGE> 13
REPORT OF THE COMPENSATION COMMITTEE
To: The Board of Directors
As members of the Compensation Committee, it is our duty to administer the
Company's overall compensation program for its senior management. The
Compensation Committee oversees the administration of the Meade Instruments
Corp. 1997 Stock Incentive Plan (the "Plan"). In addition, the Compensation
Committee establishes the compensation and evaluates the performance of the
Chief Executive Officer. The Compensation Committee is comprised entirely of
non-employee directors.
The primary philosophy of the Company regarding compensation is to offer a
program which rewards each of the members of senior management commensurately
with the Company's overall growth and financial performance, including each
person's individual performance during the previous fiscal year. The Company's
compensation program for senior management is designed to attract and retain
individuals who are capable of leading the Company in achieving its business
objectives in an industry characterized by competitiveness, growth and change.
The Company believes a substantial portion of the annual compensation of
each member of senior management should relate to, and should be contingent
upon, the financial success of the Company, as well as the individual
contribution of each particular person to that success. As a result, a
significant portion of the total compensation package consists of variable,
performance-based components, such as bonuses and stock awards, which can
increase or decrease to reflect changes in corporate and individual performance.
The Compensation Committee evaluates the total compensation for the
Company's Chief Executive Officer, Mr. John C. Diebel, and certain other members
of senior management in light of information collected by the Compensation
Committee regarding the compensation practices of similar companies. The
Compensation Committee considers various indicators of success on both a
corporate and an individual level in determining the overall compensation
package for Mr. Diebel and other members of senior management. The Compensation
Committee considers such corporate performance measures, among others, as
revenue, operating income and earnings per share in its calculation of Mr.
Diebel's compensation.
The Company's annual compensation package for Mr. Diebel and the other
members of senior management will typically consist of: (a) salary, (b) annual
cash incentive or bonus and (c) long-term incentive or non-cash awards,
primarily stock options.
Mr. Diebel's base salary for the 1998 fiscal year was based on his
employment agreement with the Company (the "Former Employment Agreement"),
pursuant to which he served as Chairman of the Board and Chief Executive
Officer. The Former Employment Agreement established Mr. Diebel's minimum annual
base salary at $295,000 per year, subject to annual increases at the discretion
of the Board of Directors of not less than the annual increase in the consumer
price index. Mr. Diebel's base salary for fiscal 1999 will be based on his new
Employment Agreement pursuant to which his base salary has been set at $395,000.
See "Employment Agreements" below.
During the 1998 fiscal year, Mr. Diebel also received a cash bonus of
$160,000. This bonus amount, together with Mr. Diebel's increase in base salary,
was determined to be appropriate by the Compensation Committee given Mr.
Diebel's contribution in connection with the Company's growth and the successful
completion of the Company's initial public offering.
For the 1999 fiscal year, the Company has entered into Performance Share
Award Agreements ("Bonus Agreements") with certain members of senior management
of the Company, including Mr. Diebel. Pursuant to these Bonus Agreements,
certain senior officers will be entitled to receive cash bonus awards ranging
from 0% to 100% of their base salaries. These cash bonus awards are based upon
the Company and each respective executive officer achieving certain quantitative
and qualitative financial and business objectives. For example, the amount of
Mr. Diebel's cash bonus award for fiscal
10
<PAGE> 14
1999, if any, is based upon the Company achieving targeted increases in pre-tax
income before ESOP and bonus expense amounts together with Mr. Diebel satisfying
certain qualitative key management objectives.
The Compensation Committee determines the cash compensation paid to the
other members of senior management in a similar manner as that of the Chief
Executive Officer. Each officer's overall cash compensation is based upon the
Company achieving certain financial objectives, together with each officer
satisfying certain qualitative individual management objectives.
In February 1997, prior to the Company's initial public offering, the
stockholders of the Company approved the Plan, which provides the Company with
the ability to periodically reward key employees with options to purchase shares
of the Company's Common Stock. These long-term incentives are designed to couple
the interests of key employees with those of the stockholders of the Company.
Stock option grants provide an incentive that focuses the individual's attention
on managing the Company from the perspective of an owner, with an equity stake
in the business. The value of stock options is tied to the future performance of
the Company's Common Stock and provides value to the recipient only when the
price of the Company's Common Stock increases above the option grant price.
Stock options reward management for long-term strategic planning through the
resulting enhancement of share price. The Company believes that a compensation
structure which includes the periodic granting of long-term incentives such as
stock options helps to attract and retain senior managers with long-term
management perspectives. During the 1998 fiscal year, the Company granted
non-qualified stock options to various members of the Company's management,
including Mr. Diebel. The number of options granted to each member of senior
management was determined in accordance with the relative position, seniority
and contribution of each such officer. During the 1998 fiscal year, Mr. Diebel
was granted options to purchase up to 100,000 shares of the Company's Common
Stock.
The Compensation Committee has considered the anticipated tax treatment to
the Company regarding the compensation and benefits paid to the executive
officers of the Company in light of the enactment of Section 162(m) of the
Internal Revenue Code of 1986, as amended (the "Code"). The basic philosophy of
the Compensation Committee is to strive to provide the executive officers of the
Company with a compensation package which will preserve the deductibility of
such payments for the Company. However, certain types of compensation payments
and their deductibility (e.g., the spread on exercise of non-qualified options)
depend upon the timing of an executive officer's vesting or exercise of
previously granted rights. Moreover, interpretations of and changes in the tax
laws and other factors beyond the Compensation Committee's control may affect
the deductibility of certain compensation payments. The Compensation Committee
will consider various alternatives to preserving the deductibility of
compensation payments and benefits to the extent reasonably practicable and to
the extent consistent with its other compensation objectives.
THE COMPENSATION COMMITTEE
OF THE BOARD OF DIRECTORS
Timothy C. McQuay (Chairman)
Harry L. Casari
11
<PAGE> 15
PERFORMANCE GRAPH
The following graph shows a comparison of cumulative total returns(1) for
(i) the Company from the period April 14, 1997(2) until the end of the 1998
fiscal year, (ii) the Nasdaq U.S. Composite Index and (iii) the Russell 2000
Index(3).
<TABLE>
<CAPTION>
Measurement Period Nasdaq Stock Meade
(Fiscal Year Covered) Market (U.S.) Russell 2000 Index Instruments Corp.
--------------------- ------------- ------------------ -----------------
<S> <C> <C> <C>
4/14/97 $100.00 $100.00 $100.00
2/27/98 $147.06 $136.39 $140.74
</TABLE>
- ---------------
(1) Total returns assumes reinvestment of dividends.
(2) The Company completed the initial public offering of its Common Stock on
April 14, 1997. Prior to that date, no securities of the Company were
registered under Securities Act of 1933, as amended (the "Securities Act"),
or under the Exchange Act. Accordingly, no information has been provided for
any prior period.
(3) The Russell 2000 Index is comprised of 2000 small U.S. company stocks
(companies with a market capitalization of less than $500 million).
(4) Assumes $100 invested on April 14, 1997.
IT SHOULD BE NOTED THAT THIS GRAPH REPRESENTS HISTORICAL STOCK PRICE
PERFORMANCE AND IS NOT NECESSARILY INDICATIVE OF ANY FUTURE STOCK PRICE
PERFORMANCE.
THE FOREGOING REPORT OF THE COMPENSATION COMMITTEE OF THE BOARD OF
DIRECTORS REGARDING COMPENSATION AND THE PERFORMANCE GRAPH THAT APPEARS
IMMEDIATELY AFTER SUCH REPORT SHALL NOT BE DEEMED TO BE SOLICITING MATERIAL OR
TO BE FILED WITH THE SECURITIES AND EXCHANGE COMMISSION UNDER THE SECURITIES
ACT, OR THE EXCHANGE ACT, OR INCORPORATED BY REFERENCE IN ANY DOCUMENT SO FILED.
12
<PAGE> 16
EMPLOYMENT AGREEMENTS
The Company has employment agreements (the "Employment Agreements") with
each of the Named Executive Officers. Except for the different salary levels for
each of the Named Executive Officers, the material terms of those Employment
Agreements are as follows: The term of each of the Employment Agreements is one
year which automatically renews unless otherwise notified by either party. The
Employment Agreements provide for the payment of an annual base salary of not
less that $395,000 for Mr. Diebel, $325,000 for Mr. Murdock, $175,000 for Mr.
Gordon and $135,000 for Messrs. Christensen, Wood and Baun. The amount of these
base salaries will be reviewed annually by the Compensation Committee. The Named
Executive Officers are also entitled to participate in and be covered by all
bonus, incentive and other employee health, insurance, pension and other plans
and benefits currently established for the employees of the Company. Except for
Messrs. Diebel, Murdock and Gordon, each of the Named Executive Officers is also
entitled to participate in the Company's ESOP. In addition, the Employment
Agreements provide the Named Executive Officers with vacation benefits of three
weeks per year and reimbursement of all business expenses. If the Company
terminates a Named Executive Officer's employment without cause, or if a Named
Executive Officer terminates his employment under certain circumstances set
forth in the Employment Agreement, then the Named Executive Officer shall be
entitled to a lump sum payment equal to one year's aggregate salary and
benefits. If the Named Executive Officer is terminated for a disability, then
such Named Executive Officer is entitled to receive 100% of his or her base
salary (less any amount paid to such individual pursuant to any disability
insurance or benefit plan provided by the Company) for up to 24 months. In the
event of a change-in-control of the Company (as defined in the Employment
Agreements), the Named Executive Officers would be entitled to 2.99 times the
highest aggregate salary and benefits received by each such Named Executive
Officer in the three most recent fiscal years. In addition, a Named Executive
Officer may not compete with the Company or solicit its customers or employees,
during the term of the Employment Agreement or for one year after the
termination thereof.
CERTAIN TRANSACTIONS
Timothy C. McQuay, a director of the Company, was previously a partner with
Crowell, Weedon & Co., one of the Underwriters of the Company's initial public
offering that was completed in April 1997. Crowell, Weedon & Co. received
customary compensation for its services as an Underwriter in connection with the
Company's initial public offering. Such compensation was approximately $190,000.
BENEFIT PLANS
Employee Stock Ownership Plan. The Board of Directors adopted the Employee
Stock Ownership Plan ("ESOP") effective March 1, 1996. The purpose of the ESOP
is to enable participating employees to share in the growth and prosperity of
the Company and to provide an opportunity for participating employees to
accumulate capital for their future economic advantage by receiving beneficial
ownership of the Company's Common Stock in proportion to their relative
compensation. The ESOP is intended to be a stock bonus plan that is qualified
under Section 401(a) of the Code. Except for certain officers of the Company and
their families, all employees who have completed at least six months of service
with the Company are eligible to participate in the ESOP. Generally, a
participant becomes fully vested in contributions to the ESOP upon completion of
five years of service with the Company or its affiliates (including service
prior to the adoption of the ESOP).
Distributions from the ESOP are generally made to participants only
following termination of employment. Shares of Common Stock allocated to
participants' accounts are voted in the manner directed by such participants,
and the ESOP Committee directs the voting of unallocated shares and shares for
which participants do not provide voting instructions.
13
<PAGE> 17
1997 Stock Incentive Plan. In February 1997, the Company and its
stockholders adopted the Company's 1997 Stock Incentive Plan (the "Plan"). The
Plan provides a means to attract and retain key employees (including officers,
whether or not directors) of the Company and its subsidiaries and to promote the
success of the Company.
Under the Plan, awards consist of any combination of stock options
(incentive or non-qualified), restricted stock, stock appreciation rights
("SARs") and performance share awards. The number of shares of Common Stock that
may be issued under the Plan is 750,000. Awards under the Plan may be made to
any officer or key employee of the Company and to consultants to the Company
whether or not such consultants are employees. Participants in the Plan are
selected by the Compensation Committee. The Compensation Committee is selected
by the Board of Directors and is empowered to determine the terms and conditions
of each award made under the Plan.
The Plan also provides for the automatic granting of stock options to
non-employee directors. Each time a new non-employee director is elected, a
stock option to purchase 5,000 shares of Common Stock will be automatically
granted to such non-employee director at the then fair market value of the
Common Stock. In addition, non-employee directors will receive an additional
grant of 5,000 options on the date of each annual meeting of stockholders
(commencing in 1998) preceding a year in which such director will continue in
office. All options granted to non-employee directors will be non-qualified
stock options. The option exercise price will be the fair market value of the
Common Stock as of the date of the grant.
401(k) Plan. The Company maintains a 401(k) Plan which is qualified under
Section 401(k) of the Code for all employees of the Company who have completed
at least six months of service with the Company and are at least 21 years of
age. The 401(k) Plan is designed for all eligible employees to save for
retirement on a tax-deferred basis. Eligible employees may contribute up to 15%
of their annual compensation up to a maximum amount allowed under the Code. The
401(k) Plan does not currently include an employer match provision, however,
under the Company's ESOP, the Company matches 100% (in the form of Common Stock)
of the amount deferred by employees under the 401(k) Plan, up to 4% of each
employee's annual compensation. This matching contribution vests according to
the provisions of the Company's ESOP.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires that the Company's directors and
officers, and persons who own more than 10% of a registered class of the
Company's equity securities, file reports of ownership and changes in ownership
with the Securities and Exchange Commission and the National Association of
Securities Dealers, Inc. Directors, officers, and greater than 10% stockholders
are required by the Securities and Exchange Commission to furnish the Company
with copies of the reports they file.
Based solely on its review of the copies of such reports and written
representations from certain reporting persons that certain reports were not
required to be filed by such persons, the Company believes that all of its
directors, officers and greater than 10% beneficial owners complied with all
filing requirements applicable to them with respect to transactions during the
1998 fiscal year except as provided below.
Form 5s for Messrs. Diebel, Murdock, Gordon and Christensen disclosing the
options granted to each of such officers during the 1998 fiscal year (as
disclosed in the "Options Grants in Last Fiscal Year" table) were inadvertently
not filed on a timely basis at the end of the 1998 fiscal year. In addition, a
Form 3 for Mr. Casari unintentionally omitted disclosure relating to a purchase
of 1,400 shares of the Company's Common Stock on April 9, 1997. Each such Form 5
and an amended Form 3 has subsequently been filed with the Securities and
Exchange Commission and the National Association of Securities Dealers, Inc.
14
<PAGE> 18
ANNUAL REPORT
A copy of the Company's 1998 Annual Report, containing audited balance
sheets as of February 28, 1997 and 1998, and the related statements of income,
of stockholders' equity (deficit), and of cash flows for the three years ended
February 28, 1998 accompanies this Proxy Statement. Upon written request, the
Company will send you, without charge, a copy of its Annual Report on Form 10-K
(without exhibits) for the fiscal year ended February 28, 1998, which the
Company has filed with the Securities and Exchange Commission. Copies of
exhibits to the Form 10-K are available, but a reasonable fee per page will be
charged to the requesting stockholder. Stockholders may make requests in writing
to the Company's Stockholders' Communications Department, Attention: Ms. Julie
Morris, c/o Meade Instruments Corp., 6001 Oak Canyon, Irvine, California 92620.
PROPOSALS OF STOCKHOLDERS
For stockholder proposals to be considered for inclusion in the proxy
materials for the Company's 1999 Annual Meeting of Stockholders, they must be
received by the Secretary of the Company no later than February 9, 1999.
RELATIONSHIP WITH INDEPENDENT ACCOUNTANTS
Price Waterhouse LLP are the independent accountants for the Company for
the fiscal year ended February 28, 1998 and have reported on the Company's
financial statements included in the Annual Report of the Company which
accompanies this Proxy Statement. The Company's independent accountants are
appointed by the Board of Directors. The Board of Directors has reappointed
Price Waterhouse LLP as the Company's independent accountants for the fiscal
year ending February 28, 1999. Representatives of Price Waterhouse LLP are
expected to be present at the Annual Meeting of Stockholders and will have an
opportunity to make a statement at the Annual Meeting if they desire to do so.
The representatives will also be available to respond to appropriate questions.
OTHER MATTERS
At the time of the preparation of this Proxy Statement, the Board of
Directors knows of no other matters which will be acted upon at the Annual
Meeting. If any other matters are presented for action at the Annual Meeting or
at any adjournment thereof, it is intended that the proxies will be voted with
respect thereto in accordance with the best judgment and in the discretion of
the proxy holders.
By Order of the Board of Directors
/s/ MARK D. PETERSON
------------------------------------
Mark D. Peterson
Vice President and General Counsel
Irvine, California
June 9, 1998
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY. THEREFORE, STOCKHOLDERS
ARE URGED TO COMPLETE, SIGN, DATE AND RETURN THE ACCOMPANYING PROXY IN THE
ENCLOSED ENVELOPE.
15
<PAGE> 19
MEADE INSTRUMENTS CORP.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned appoints Brent W. Christensen and Mark D. Peterson, and each
of them, proxies with full power of substitution, to vote all shares of Common
Stock of Meade Instruments Corp. (the "Company") held of record by the
undersigned on May 22, 1998, the record date with respect to this solicitation,
at the Annual Meeting of Stockholders of the Company to be held at the Irvine
Marriott Hotel, 18000 Von Karman Avenue, Irvine, CA 92612, beginning at 10:00
A.M., local time on Thursday, July 9, 1998, and at any adjournment thereof, upon
the following matters:
(1) ELECTION OF DIRECTORS
<TABLE>
<S> <C>
[ ] FOR the nominees and terms listed below (except as [ ] WITHHOLD AUTHORITY to vote for each nominee listed
noted to the contrary below) below
</TABLE>
<TABLE>
<CAPTION>
CLASS NOMINEE TERM
- ----- --------------------- ---------------------------------------------------
<S> <C> <C>
I Joseph A. Gordon, Jr. One year term expiring at the 1999 Annual Meeting
II Steven G. Murdock Two year term expiring at the 2000 Annual Meeting
II Harry L. Casari Two year term expiring at the 2000 Annual Meeting
III John C. Diebel Three year term expiring at the 2001 Annual Meeting
III Timothy C. McQuay Three year term expiring at the 2001 Annual Meeting
</TABLE>
(Instructions: To withhold authority to vote for any individual nominee, circle
that nominee's name above.)
(Continued and to be signed on the reverse side)
<PAGE> 20
(continued from other side)
(2) OTHER MATTERS
In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the meeting and at any adjournment thereof.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED BY THE
UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS GIVEN, THIS PROXY WILL BE VOTED FOR
PROPOSAL (1) ABOVE. IF ANY NOMINEE DECLINES OR IS UNABLE TO SERVE AS A DIRECTOR,
THEN THE PERSONS NAMED AS PROXIES SHALL HAVE FULL DISCRETION TO VOTE FOR ANY
OTHER PERSON DESIGNATED BY THE BOARD OF DIRECTORS.
Dated: , 1998
-------------------------
Signature(s) of
stockholder(s)
-------------------------
(Your signature(s) should
conform to your name(s)
as printed hereon.
Co-owners should all
sign.)
