<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>
[X] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission
[ ] 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)
--------------------------------------------------------------------------------
(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:
----------------------------------------------------------------------
(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:
----------------------------------------------------------------------
<PAGE> 2
MEADE INSTRUMENTS CORPORATION
6001 OAK CANYON, IRVINE, CALIFORNIA 92618 U.S.A.
(949) 451-1450 M FAX: (949) 451-1460 M www.meade.com
MEADE LOGO
June , 2000
Dear Stockholder:
You are cordially invited to attend the 2000 Annual Meeting of Stockholders
of Meade Instruments Corp. ("Meade" or the "Company") to be held on July 13,
2000. 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 (i) re-elect Steven G. Murdock and
Harry L. Casari to the Board of Directors for a three year term expiring at the
2003 Annual Meeting of Stockholders and (ii) approve an amendment to the
Company's Certificate of Incorporation to increase the number of authorized
shares of Common Stock from 20,000,000 to 50,000,000.
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 92618
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JULY 13, 2000
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 13, 2000 for the following purposes:
(1) To re-elect Steven G. Murdock and Harry L. Casari to the Board of
Directors for a three year term expiring at the 2003 Annual Meeting of
Stockholders;
(2) To approve an amendment to the Company's Certificate of
Incorporation to increase the number of authorized shares of Common Stock
from 20,000,000 to 50,000,000; and
(3) 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 re-election of the directors named in the attached Proxy
Statement.
The Board of Directors has fixed the close of business on May 22, 2000 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 92618, 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 , 2000
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 92618
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 13, 2000, 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 ,
2000.
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, 2000, the record date with respect to this solicitation for
determining stockholders entitled to notice of and to vote at the Annual
Meeting, 8,196,101 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 92618, 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 (upon showing proper
evidence of such stockholder's ownership of such shares) 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
PROPOSAL 1
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 currently consists of six directors, each elected to serve until
his term has expired and until his successor has been duly elected and
qualified. The Certificate of Incorporation and Bylaws provide that the Board of
Directors shall 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. All
of the directors were previously elected to their present terms of office by the
stockholders of the Company with the exception of Michael P. Hoopis. Mr. Hoopis
was appointed by the Board to serve as a Class I director in March 2000. At the
2000 Annual Meeting of Stockholders, two directors are to be elected as Class II
directors for a three year term 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 such nominees.
The nominees are presently members of the Company's Board of Directors.
The nominees for election to the Board of Directors at the 2000 Annual
Meeting of Stockholders, together with their terms, are set forth below:
<TABLE>
<CAPTION>
CLASS NOMINEE TERM
----- ------- ----
<C> <C> <S>
II Steven G. Murdock Three year term expiring at the 2003 Annual Meeting
II Harry L. Casari Three year term expiring at the 2003 Annual Meeting
</TABLE>
If either 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 the 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 THE NOMINEES
LISTED ABOVE.
2
<PAGE> 6
NOMINEES AND CONTINUING DIRECTORS
The following table provides information regarding the nominees, the two
Class III directors whose terms of office expire at the 2001 Annual Meeting of
Stockholders and the two Class I directors whose terms of office expire at the
2002 Annual Meeting of Stockholders. The ages shown are as of June 1, 2000.
<TABLE>
<CAPTION>
DIRECTOR
NAME AND AGE BUSINESS EXPERIENCE AND DIRECTORSHIPS SINCE
------------ ------------------------------------- --------
<S> <C> <C>
NOMINEES:
Class II:
Steven G. Murdock (48)..... Steven G. Murdock has served as the Company's President and 1996
Chief Operating Officer since October 1990 and the
Company's Secretary since April 1996. From May 1980 to
October 1990, Mr. Murdock served as 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 a BS de-
gree in business administration from California State
University at Northridge.
Harry L. Casari (63)....... Harry L. Casari was a Certified Public Accountant and is 1997
currently a private investor. Mr. Casari worked for Ernst &
Young LLP from 1969 until 1994 when he retired as a
Partner. He serves as a member of the board of directors of
Cohu, Inc. Mr. Casari received a BS degree in business
administration from the University of Denver.
CONTINUING DIRECTORS:
Class III:
John C. Diebel (56)........ John C. Diebel serves as the Chairman of the Board and 1975 - 1986
Chief Executive Officer of the Company. Mr. Diebel founded 1991 - present
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 Com-
pany, Mr. Diebel worked as an engineer for TRW Inc. and
Hughes Aircraft Co. Mr. Diebel received BS and MS degrees
in electrical engineering from the California Institute of
Technology and a Ph.D. degree in electrical engineering
from the University of Southern California.
Timothy C. McQuay (48)..... 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 serves as a member of
the board of directors of Keystone Automotive Industries,
Inc. Mr. McQuay received a BA degree in economics from
Princeton University and a MBA degree in finance from the
University of California at Los Angeles.
</TABLE>
3
<PAGE> 7
<TABLE>
<CAPTION>
DIRECTOR
NAME AND AGE BUSINESS EXPERIENCE AND DIRECTORSHIPS SINCE
------------ ------------------------------------- --------
<S> <C> <C>
Class I:
Joseph A. Gordon, Jr. Joseph A. Gordon, Jr. has served as the Company's Senior 1996
(50)..................... Vice President -- North American Sales since June 1995.
From December 1984 to June 1995, he served 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 a BS degree in mar-
keting from the University of Cincinnati.
Michael P. Hoopis (49)..... Michael P. Hoopis has been President and Chief Executive 2000
Officer of Water Pik Technologies, Inc. since November
1999. From October 1998 to November 1999, Mr. Hoopis was
President and Chief Executive Officer of the consumer
products segment of Allegheny Teledyne, Inc., the
predecessor to Water Pik Technologies, Inc. From July 1996
to September 1998, Mr. Hoopis served as President of
Worldwide Household Products, Black & Decker Corporation.
From May 1992 to July 1996, Mr. Hoopis served as President
of Price Pfister, Inc., a division of Black & Decker
Corporation. Mr. Hoopis serves as a member of the board of
directors of Doskocil Manufacturing Company, Inc. Mr.
Hoopis received his BS degree in Industrial Engineering
from the University of Rhode Island.
</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 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 all 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,
provided that a new non-employee director will only receive one such automatic
grant during the calendar year in which such director is elected.
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 29, 2000, the Board of
Directors held four meetings. All directors attended 75% or more of the total
meetings of the Board of Directors and total meetings of the Committees of the
Board of Directors on which they served.
Audit Committee. During the fiscal year ended February 29, 2000, the Audit
Committee was comprised of Messrs. Casari (Chairman) and McQuay. As set forth in
the Company's Audit Committee Charter adopted March 1, 2000, the Audit
Committee's functions include reviewing the financial reporting process, the
system of internal control, the audit process, and the Company's process for
monitoring compliance with laws and regulations, recommending to the Board of
Directors the engagement of the Company's independent accountants and
determining the independence of such accountants. During the fiscal year ended
February 29, 2000, the Audit Committee held one meeting.
4
<PAGE> 8
Compensation Committee. During the fiscal year ended February 29, 2000, the
Compensation Committee was comprised of Messrs. McQuay (Chairman) and Casari.
Its functions include reviewing and approving the compensation of the Company's
Chief Executive Officer as well as making recommendations with respect to the
compensation of the Company's other 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 29, 2000, the Compensation Committee held
one meeting.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information with respect to the
beneficial ownership of the Common Stock as of June 1, 2000, for (i) each person
who beneficially owned 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. The following table does not
give effect to the two-for-one stock split (the "Announced Stock Split")
approved by the Board of Directors on May 4, 2000. The Announced Stock Split
will be effected in the form of a stock dividend payable on or about June 19,
2000 to all stockholders of record as of May 22, 2000.
SECURITY OWNERSHIP TABLE
<TABLE>
<CAPTION>
AMOUNT AND
NATURE OF
BENEFICIAL PERCENT
NAME AND ADDRESS OWNERSHIP OF CLASS
---------------- ---------- --------
<S> <C> <C>
Dresdner RCM Global Investors LLC(1)........................ 532,200 6.49%
John C. Diebel(2)(3)........................................ 1,296,977 15.82%
Steven G. Murdock(2)(4)..................................... 804,165 9.81%
Joseph A. Gordon, Jr.(2)(5)................................. 180,914 2.21%
Brent W. Christensen(2)(6).................................. 38,426 *
Mark D. Peterson(2)(7)...................................... 28,018 *
Robert A. Wood III(2)(8).................................... 44,978 *
Kenneth W. Baun(2)(9)....................................... 25,678 *
Timothy C. McQuay(2)(10).................................... 6,665 *
Harry L. Casari(2)(11)...................................... 8,065 *
Michael P. Hoopis(2)........................................ 0 *
Meade Instruments Corp. Employee Stock Ownership
Plan(2)(12)............................................... 1,253,855 15.30%
All current directors and executive officers as a group (10
persons)(13).............................................. 2,433,886 29.70%
</TABLE>
---------------
* Less than 1%
(1) According to a Schedule 13G, dated as of February 15, 2000, filed with the
Securities and Exchange Commission, Dresdner RCM Global Investors LLC
("RCM") has sole voting power as to 357,900 of such shares, sole
dispositive power as to 407,200 of such shares, shared voting power as to
none of such shares and shared dispositive power as to 125,000 of such
shares. RCM is an investment advisor under Section 240.13d-1(b)(1)(ii)(E)
of the Securities Exchange Act of 1934, as amended (the "Exchange Act").
RCM is a wholly-owned subsidiary of Dresdner RCM Global Investors US
Holdings, LLC, a Delaware limited liability company ("Holdings"), which, in
turn, is a wholly-owned subsidiary of Dresdner Bank AG, an international
bank headquartered in Frankfurt, Germany ("Dresdner"). Each of Holdings and
Dresdner is a Parent Holding Company as defined in Rule 13d-1(b)(1)(ii)(G)
of the Exchange Act. The mailing address of RCM is Four Embarcadero Center,
San Francisco, CA 94111-4189.
(2) The address for all directors and executive 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 92618.
(3) Includes 121,977 shares subject to options that are currently exercisable
or will become exercisable on or before July 31, 2000. Also includes
1,175,000 shares held by John C. Diebel, as Trustee of the Diebel Living
Trust u/d/t dated January 12, 1995.
(4) Includes 101,665 shares subject to options that are currently exercisable
or will become exercisable on or before July 31, 2000. Excludes 1,253,855
shares held by the ESOP. Mr. Murdock
5
<PAGE> 9
is a member of the ESOP Committee and disclaims beneficial ownership of any
of the shares owned by the ESOP. If the 1,253,855 shares owned by the ESOP
were included, Mr. Murdock would be deemed to beneficially own 2,058,020
shares, or 25.11%. Mr. Murdock is not a participant in the ESOP. See
footnote (12) below.
(5) Includes 100,414 shares subject to options that are currently exercisable
or will become exercisable on or before July 31, 2000.
(6) Includes 25,309 shares subject to options that are currently exercisable or
will become exercisable on or before July 31, 2000. Also includes 9,059
shares allocated to Mr. Christensen's ESOP account as an ESOP participant.
Mr. Christensen's ESOP shares are fully vested. Excludes 1,253,855 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 1,253,855 shares owned by the ESOP were
included, Mr. Christensen would be deemed to beneficially own 1,292,281
shares, or 15.77%. See footnote (12) below.
(7) Includes 28,018 shares subject to options that are currently exercisable or
will become exercisable on or before July 31, 2000. Excludes 6,123 shares
allocated to Mr. Peterson's ESOP account as an ESOP participant. Mr.
Peterson's ESOP shares will vest as of October 6, 2000.
(8) Includes 35,309 shares subject to options that are currently exercisable or
will become exercisable on or before July 31, 2000. Also includes 8,969
shares allocated to Mr. Wood's ESOP account as an ESOP participant. Mr.
Wood's ESOP shares are fully vested.
(9) Includes 18,250 shares subject to options that are currently exercisable or
will become exercisable on or before July 31, 2000. Also includes 7,428
shares allocated to Mr. Baun's ESOP account as an ESOP participant. Mr.
Baun's ESOP shares are fully vested.
(10) Includes 6,665 shares subject to options that are currently exercisable or
will become exercisable on or before July 31, 2000.
(11) Includes 6,665 shares subject to options that are currently exercisable or
will become exercisable on or before July 31, 2000.
(12) Unallocated shares of Common Stock held by the ESOP are voted by the
trustee of the ESOP, Wells Fargo Bank, N.A. (the "Trustee"), as directed by
the ESOP Committee. Each participant in the ESOP is entitled to direct the
Trustee as to how to vote shares allocated to his or her ESOP account,
irrespective of whether the participant's shares are vested. Any allocated
shares of Common Stock for which participants do not provide voting
instructions are voted by the Trustee in the manner directed by the ESOP
Committee. 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 1,253,855 shares owned by the
ESOP were included in the holdings of Ms. Grossman, she would be deemed to
beneficially own 1,253,855 shares, or 15.30%. 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.
(13) Includes 444,272 shares subject to options that are currently exercisable
or will become exercisable on or before July 31, 2000. Also includes 9,059,
8,969 and 7,428 shares allocated to Messrs. Christensen's, Wood's and
Baun's ESOP accounts respectively, as ESOP participants. Messrs.
Christensen's, Wood's and Baun's ESOP shares are fully vested. Excludes
6,123 shares allocated to Mr. Peterson's ESOP account, as an ESOP
participant. Mr. Peterson's shares will not vest on or before July 31,
2000. Also excludes 1,253,855 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 1,253,855 shares
owned by the ESOP were included, all directors and officers as a group
would be deemed to beneficially own 3,687,741 shares, or 44.99%. See
footnotes (3) through (12) above.
6
<PAGE> 10
EXECUTIVE COMPENSATION AND OTHER INFORMATION
SUMMARY OF EXECUTIVE COMPENSATION
The following table sets forth certain summary information concerning the
compensation paid to the Company's Chief Executive Officer and the Company's six
other most highly compensated executive officers based on the cash compensation
paid to executive officers of the Company during the 2000 fiscal year
(collectively, the "Named Executive Officers").(1)
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM(2)
ANNUAL COMPENSATION
COMPENSATION(3) SECURITIES
----------------- UNDERLYING ALL OTHER
SALARY BONUS OPTIONS COMPENSATION(4)
NAME AND PRINCIPAL POSITION YEAR ($) ($) (#) ($)
--------------------------- ---- ------- ------- ------------ ---------------
<S> <C> <C> <C> <C> <C>
John C. Diebel........................... 2000 433,700 257,600 85,000 --
Chairman of the Board and 1999 395,000 160,000 65,000 --
Chief Executive Officer 1998 297,000 173,400 100,000 --
Steven G. Murdock........................ 2000 356,300 212,000 60,000 --
President, Chief Operating 1999 325,000 125,000 40,000 --
Officer and Secretary 1998 225,000 103,700 100,000 --
Joseph A. Gordon, Jr..................... 2000 199,500 114,100 40,000 --
Senior Vice President -- 1999 175,000 30,000 20,000 --
North American Sales 1998 175,000 22,800 110,000 --
Mark D. Peterson......................... 2000 184,300 97,800 35,000 58,000
Vice President and General Counsel(5) 1999 150,000 10,000 20,000 46,300
1998 57,700 -- 45,000 --
Brent W. Christensen..................... 2000 174,200 88,100 35,000 58,000
Vice President -- Finance and 1999 135,000 28,300 20,000 46,300
Chief Financial Officer 1998 103,000 10,000 45,000 36,600
Robert A. Wood III....................... 2000 174,200 88,100 35,000 65,500(6)
Vice President -- Manufacturing 1999 135,000 28,300 20,000 45,100
1998 103,000 10,000 45,000 33,300
Kenneth W. Baun.......................... 2000 174,200 88,100 35,000 54,000
Vice President -- Engineering 1999 135,000 20,500 20,000 38,200
1998 112,000 -- 45,000 30,000
</TABLE>
---------------
(1) The Company has included six executive officers in addition to the Chief
Executive Officer in its various executive compensation tables because the
aggregate salary and bonus amounts for Messrs. Wood, Christensen and Baun
for fiscal 2000 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 "Option Grants in Last Fiscal Year" table
below for information relating to each specific grant. The amounts reported
have not been adjusted to give effect to the Announced Stock Split.
(3) The aggregate amount of perquisites and other personal benefits, securities
or property paid to each of the Named Executive Officers during the 2000
fiscal year did not exceed the lesser of 10% of such officer's total annual
salary and bonus for fiscal 2000 or $50,000. Therefore, no "Other Annual
Compensation" column has been included in this table.
(4) 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
7
<PAGE> 11
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").
(5) Mr. Peterson became employed by the Company in October 1997 (fiscal year
1998).
(6) Includes additional one-time merit based compensation benefits valued at
$7,500.
SUMMARY OF OPTION GRANTS
The following table provides certain summary information concerning grants
of options to the Named Executive Officers during the 2000 fiscal year. The
following table has not been adjusted to give effect to the Announced Stock
Split.
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 # # $/SH. EXPIRATION DATE $ $
---- ---------- --------------- -------------- --------------- ------- ---------
<S> <C> <C> <C> <C> <C> <C>
John C. Diebel......... 85,000 18.9% 10.625 03/30/09 567,970 1,439,350
Steven G. Murdock...... 60,000 13.3% 10.625 03/30/09 400,920 1,016,010
Joseph A. Gordon,
Jr. ................. 40,000 8.9% 10.625 03/30/09 267,280 677,340
Mark D. Peterson....... 35,000 7.8% 10.625 03/30/09 233,870 592,670
Brent W. Christensen... 35,000 7.8% 10.625 03/30/09 233,870 592,670
Robert A. Wood III..... 35,000 7.8% 10.625 03/30/09 233,870 592,670
Kenneth W. Baun........ 35,000 7.8% 10.625 03/30/09 233,870 592,670
</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 become exercisable one year after the
grant date and the remainder become 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 2000 fiscal
year together with the fiscal year-end value of unexercised options. The
following table has not been adjusted to give effect to the Announced Stock
Split.
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 76,457/173,543 1,115,550/2,390,700
Steven G. Murdock............ 0 0 67,082/132,918 981,960/1,843,040
Joseph A. Gordon, Jr......... 10,000 160,000 73,540/86,460 1,195,030/1,253,720
Mark D. Peterson............. 20,000 435,000 14,582/65,418 213,680/913,820
Brent W. Christensen......... 25,000 466,165 11,873/63,127 174,020/883,050
Robert A. Wood III........... 0 0 36,873/63,127 583,820/883,050
Kenneth W. Baun.............. 22,000 483,133 14,873/63,127 223,660/883,050
</TABLE>
---------------
(1) These amounts represent the difference between the market value of the
securities underlying the options at exercise date or on February 29, 2000
(the last day of trading for the fiscal year-ended on such date), as the
case may be, and the exercise or base price of "in-the-money" options.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
For the fiscal year ended February 29, 2000, the Company's Compensation
Committee consisted of Messrs. Timothy C. McQuay (Chairman) and Harry L. Casari.
Since March 1, 2000, the Company's Compensation Committee has consisted of
Messrs. Michael P. Hoopis (Chairman) and Harry L. Casari. Neither Messrs.
McQuay, Hoopis nor Casari is currently an officer or employee of the Company or
any of its subsidiaries. Mr. McQuay, a director of the Company, is a Managing
Director -- Investment Banking at A.G. Edwards & Sons, Inc. During the 2000
fiscal year, A.G. Edwards & Sons, Inc. received approximately $320,000 in
connection with investment banking services performed for the Company. The
Company believes that the amount paid for such services was reasonable and
customary for the nature of the services performed.
REPORT OF THE COMPENSATION COMMITTEE
To: The Board of Directors
As members of the Compensation Committee, it is our duty to review and
oversee 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. 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.
9
<PAGE> 13
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 establishes the compensation package for the
Company's Chief Executive Officer, Mr. John C. Diebel, and reviews the
compensation package of 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 for 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 bonuses and (c) long-term incentive or non-cash awards, primarily stock
options. Mr. Diebel's base salary for the 2000 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 $434,500 per year, subject to annual increases at the discretion
of the Board of Directors. Mr. Diebel's base salary for fiscal 2001 will be
based on his new Employment Agreement pursuant to which his base salary has been
set at $500,000. See "Employment Agreements" below.
During the 2000 fiscal year, Mr. Diebel also received a cash bonus of
$257,630. This bonus amount was paid during fiscal 2000 but was based primarily
on the Company's and Mr. Diebel's performance during fiscal 1999. The bonus
amount paid to Mr. Diebel during fiscal 2001 was based primarily on the
Company's and Mr. Diebel's performance during fiscal 2000. The cash bonus paid
to Mr. Diebel during fiscal 2001 was $434,500.
For the Company's performance during the 2001 fiscal year, the Company has
entered into Performance Share Award Agreements ("Bonus Agreements") with
certain members of management and other key employees of the Company, including
Mr. Diebel. Pursuant to these Bonus Agreements, these individuals will be
entitled to receive cash bonus awards equal to a targeted percentage of each
individual's respective base salary (Mr. Diebel's Bonus Agreement will entitle
him to receive a cash bonus award ranging from 0% to 100% of his base salary
with a target percentage of 50%). These cash bonus awards are based upon the
Company and each respective officer achieving certain quantitative and
qualitative financial and business objectives. For example, the amount of Mr.
Diebel's cash bonus award for fiscal 2001, if any, is based upon the Company
achieving targeted increases in certain pre-tax income amounts together with Mr.
Diebel satisfying certain qualitative key management objectives. The
establishment of this Bonus Agreement, 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
performance.
The Compensation Committee reviews 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.
The Company's 1997 Stock Incentive Plan 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
10
<PAGE> 14
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 2000 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 2000 fiscal year, Mr. Diebel was granted options to purchase up to
85,000 shares of the Company's Common Stock (such amount has not been adjusted
to give effect to the Announced Stock Split).
The Compensation Committee has considered the anticipated tax treatment of
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
Michael P. Hoopis (Chairman)
Harry L. Casari
11
<PAGE> 15
PERFORMANCE GRAPH
The following graph shows a comparison of cumulative total returns(1) for
(i) the Company, (ii) the Nasdaq U.S. Composite Index and (iii) the Russell 2000
Index(2) from the period April 14, 1997(3) until the end of the 2000 fiscal
year.
[PERFORMANCE GRAPH]
<TABLE>
<CAPTION>
NASDAQ STOCK MARKET
(U.S.) RUSSELL 2000 INDEX MEADE INSTRUMENTS CORP.
------------------- ------------------ -----------------------
<S> <C> <C> <C>
4/14/97 100.00 100.00 100.00
2/28/98 147.06 136.39 140.74
2/28/99 191.41 115.84 187.11
2/29/00 388.93 170.61 337.50
</TABLE>
---------------
(1) Total returns assumes reinvestment of dividends.
(2) The Russell 2000 Index is comprised of 2000 small U.S. company stocks
(companies with a median market capitalization of less than $500 million).
(3) 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 the Securities Act of 1933, as amended (the "Securities
Act"), or under the Exchange Act. Accordingly, no information has been
provided for any prior period.
(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. 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 than $500,000 for Mr. Diebel, $425,000 for Mr. Murdock, $225,000 for Mr.
Gordon, $210,000 for Mr. Peterson and $200,000 for each of 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, 401K 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), each Named Executive Officer would be
entitled to the greater of (i) 2.99 times the Named Executive Officer's highest
aggregate annual amount of compensation (including base salary, bonus and
additional benefits) during the preceding three fiscal years or (ii) 2.99 times
the Named Executive Officer's base salary and additional benefits, including the
full targeted amount of any bonus or incentive agreement for the year in which
the Named Executive Officer's resignation or discharge occurs, up to the amount
allowable without penalty under Section 280G of the Internal Revenue Code, as
amended. 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
Mr. McQuay, a director of the Company, is a Managing Director -- Investment
Banking at A.G. Edwards & Sons, Inc. During the 2000 fiscal year, A.G. Edwards &
Sons, Inc. received approximately $320,000 in connection with investment banking
services performed for the Company. The Company believes that the amount paid
for such services was reasonable and customary for the nature of the services
performed.
BENEFIT PLANS
Employee Stock Ownership Plan. The Board of Directors adopted the Employee
Stock Ownership Plan ("ESOP") effective March 1, 1996, as amended and restated
effective January 1, 1999. 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, and who work a minimum of 1,000
hours a year for the Company are eligible to participate in the ESOP. Generally,
a participant becomes fully vested in contributions to the ESOP upon completion
of three years of service with the Company or its affiliates. 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.
13
<PAGE> 17
Distributions from the ESOP are generally made to vested participants
following termination of employment, but in certain circumstances the ESOP
allows vested participants to receive in-service distributions of up to 50% of
the aggregate shares allocated to a vested participant's account. Shares of
Common Stock allocated to participants' accounts are voted in the manner
directed by such participants, irrespective of whether the participants' shares
are vested. The ESOP Committee directs the voting of unallocated shares and
shares for which participants do not provide voting instructions.
1997 Stock Incentive Plan. The Company and its stockholders adopted the
Company's 1997 Stock Incentive Plan (the "Plan") in February 1997 and approved
amendments thereto in 1998 and 1999. 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 and
performance share awards. The number of shares of Common Stock that may be
issued under the Plan is 2,000,000 (such amount has not been adjusted to give
effect to the Announced Stock Split). 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
preceding a year in which such director will continue in office, provided that a
new non-employee director will only receive one automatic grant during the
calendar year in which such director is elected. 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. (See
"Employee Stock Ownership Plan" above).
PROPOSAL 2
APPROVAL OF AMENDMENT TO CERTIFICATE OF INCORPORATION
The Board of Directors has approved and recommends that the stockholders
approve an amendment to the Company's Certificate of Incorporation to increase
the number of authorized shares of the Company's Common Stock from 20,000,000
shares to 50,000,000 shares. The Board of Directors believes the increase in the
number of authorized shares is necessary to provide the Company with the
flexibility to act in the future with respect to financing programs,
acquisitions, stock splits and other corporate purposes (although no such
specific activities are currently contemplated) without the delay and expense
associated with obtaining special stockholder approval each time an opportunity
requiring the issuance of shares may arise.
On May 22, 2000, the Company had approximately 8,196,101 shares of Common
Stock issued and outstanding and approximately 2,000,000 shares of Common Stock
reserved for issuance under the Company's 1997 Stock Incentive Plan (the
"Plan"), of which approximately 356,189 shares are available for grant. On June
19, 2000, the payment date for the two-for-one stock split (effected as a stock
dividend) declared by the Board of Directors on May 4, 2000, those numbers will
double to
14
<PAGE> 18
approximately 16,392,202 shares of Common Stock issued and outstanding and
approximately 4,000,000 shares of Common Stock reserved for issuance under the
Plan, of which approximately 712,378 shares of Common Stock would be available
for grant. Based on the foregoing numbers, following the stock split, the
Company will have approximately 32,895,420 shares remaining available for other
purposes.
The lack of authorized Common Stock available for issuance following the
stock split would unnecessarily limit the Company's ability to pursue
opportunities for future financings, acquisitions, mergers and other
transactions. The Company would also be limited in its ability to effectuate
future stock splits or stock dividends. The Board of Directors believes that the
increase in the authorized shares of Common Stock is necessary to provide the
Company with the flexibility to pursue the types of opportunities described
above without added delay and expense. Other than as permitted or required by
the Plan, outstanding options, and the ESOP, the Board of Directors has no
immediate plans, understandings, agreements or commitments to issue additional
shares of Common Stock. No additional action or authorization by the Company's
stockholders would be necessary prior to the issuance of such additional shares,
unless required by applicable law or the rules of any stock exchange or national
securities association trading system on which the Company's Common Stock is
then listed or quoted.
The authorization of additional shares of Common Stock pursuant to this
proposal will have no dilutive effect upon the proportionate voting power of the
current stockholders of the Company. However, to the extent that shares are
subsequently issued to persons other than the current stockholders and/or in
proportions other than the proportion that presently exists, such issuances will
have a dilutive effect on the voting power and stockholdings of current
stockholders. In addition, the issuance of additional shares could have a
dilutive effect on earnings per share.
The proposed amendment to increase the number of shares of Common Stock
could, under certain circumstances, have an anti-takeover effect, although this
is not the intention of this proposal. For example, in the event of a hostile
attempt to take over control of the Company, it may be possible for the Company
to endeavor to impede the attempt by issuing shares of Common Stock, thereby
diluting the voting power of the other outstanding shares and increasing the
potential cost to acquire control of the Company. The amendment therefore may
have the effect of discouraging unsolicited takeover attempts, thereby
potentially limiting the opportunity for the Company's stockholders to dispose
of their shares at the higher price generally available in takeover attempts or
that may be available under a merger proposal. The proposed amendment may have
the effect of permitting the Company's current management, including the current
Board of Directors, to retain its position, and place it in a better position to
resist changes that stockholders may wish to make if they are dissatisfied with
the conduct of the Company's business. However, the Board of Directors is not
aware of any attempt to take control of the Company, and the Board of Directors
has not presented this proposal with the intent that it be utilized as a type of
anti-takeover device.
The additional shares of Common Stock to be authorized by adoption of the
amendment to the Certificate of Incorporation would have rights identical to the
currently outstanding shares of Common Stock of the Company. Adoption of the
proposed amendment to the Certificate of Incorporation would not affect the
rights of the holders of the currently outstanding shares of Common Stock.
REQUIRED VOTE
Adoption of the amendment to the Certificate of Incorporation to increase
the Company's authorized Common Stock requires the vote of a majority of the
outstanding shares of the Company's Common Stock. If the proposal is approved,
the Company intends to file an amendment to the Certificate of Incorporation
shortly after the Annual Meeting. The amendment to the Certificate of
Incorporation will be effective immediately upon acceptance of filing by the
Delaware Secretary of State.
15
<PAGE> 19
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE APPROVAL OF THE
AMENDMENT TO THE COMPANY'S CERTIFICATE OF INCORPORATION. UNLESS A CONTRARY
CHOICE IS SPECIFIED, PROXIES SOLICITED BY THE BOARD OF DIRECTORS WILL BE VOTED
FOR APPROVAL OF THE AMENDMENT.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires that the Company's directors and
executive 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, executive officers and greater than 10% beneficial owners complied
with all filing requirements applicable to them with respect to transactions
during the 2000 fiscal year.
ANNUAL REPORT
A copy of the Company's 2000 Annual Report, containing audited consolidated
balance sheets as of February 28, 1999 and February 29, 2000, and the related
consolidated statements of income, of stockholders' equity, and of cash flows
for the three years ended February 29, 2000, 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
29, 2000, 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, c/o Meade Instruments Corp., 6001 Oak Canyon, Irvine, California
92618.
PROPOSALS OF STOCKHOLDERS
For stockholder proposals to be considered for inclusion in the proxy
materials for the Company's 2001 Annual Meeting of Stockholders, they must be
received by the Secretary of the Company no later than February , 2001.
RELATIONSHIP WITH INDEPENDENT ACCOUNTANTS
PricewaterhouseCoopers LLP are the independent accountants for the Company
for the fiscal year ended February 29, 2000 and have reported on the Company's
consolidated 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
PricewaterhouseCoopers LLP as the Company's independent accountants for the
fiscal year ending February 28, 2001. Representatives of PricewaterhouseCoopers
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.
16
<PAGE> 20
OTHER MATTERS
PRESENTED BY MANAGEMENT
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.
PRESENTED BY STOCKHOLDERS
The Company's Bylaws contain certain advance notice procedures which
stockholders must follow to submit proposals for consideration at future
stockholder meetings, including the nomination of persons for election as
directors. Such items of business must be submitted in writing to the Secretary
of the Company at the Company's headquarters (address shown on Page 1 of this
Proxy Statement) and must be received not less than 60 days nor more than 90
days prior to the scheduled annual meeting date. Thus, unless the Company
discloses a change in the scheduling of the next annual meeting, July 12, 2001,
stockholder proposals for consideration at that meeting must be received by the
Secretary of the Company by May 12, 2001. If the scheduled meeting date is
changed and the Company does not provide at least 70 days' advance notice or
public disclosure of the change, then stockholders have until the close of
business on the 10th day after the date the Company gave notice or publicly
disclosed the changed date of the annual meeting in which to submit proposals.
In addition, the notice must meet all requirements contained in the Company's
Bylaws. Stockholders may contact the Secretary of the Company at the Company's
headquarters for a copy of the relevant Bylaw provision regarding requirements
for making stockholder proposals and nominating director candidates.
By Order of the Board of Directors
LOGO
Mark D. Peterson
Vice President and General Counsel
Irvine, California
June , 2000
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.
17
<PAGE> 21
MEADE INSTRUMENTS CORP.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned appoints Mark D. Peterson and Robert L. Davis, 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, 2000, 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 13, 2000, and at any adjournment thereof,
upon the following matters:
(1) ELECTION OF CLASS II DIRECTORS
<TABLE>
<CAPTION>
NOMINEE TERM
------- ----
<S> <C> <C> <C>
Steven G. Murdock Three year term expiring at the 2003 Annual Meeting [ [
] FOR ] WITHHELD
Harry L. Casari Three year term expiring at the 2003 Annual Meeting [ [
] FOR ] WITHHELD
</TABLE>
(INSTRUCTIONS: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, CIRCLE
THAT NOMINEE'S NAME ABOVE.)
(2) APPROVAL OF AMENDMENT TO CERTIFICATE OF INCORPORATION
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(3) 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.
(Continued and to be signed on the reverse side)
<PAGE> 22
(continued from other side)
MARK HERE IF YOU PLAN TO ATTEND THE MEETING [ ]
MARK HERE FOR CHANGE OF ADDRESS AND NOTE AT LEFT [ ]
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) AND (2) ABOVE AND AS SAID PROXIES DEEM ADVISABLE ON SUCH OTHER
MATTERS AS MAY PROPERLY COME BEFORE THE MEETING OR AT ANY ADJOURNMENTS THEREOF.
IF ANY NOMINEE LISTED IN PROPOSAL (1) 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: , 2000
-------------------------
-------------------------
Signature(s) of
stockholder(s)
(Your signature(s) should
conform to your name(s)
as printed hereon.
Co-owners should all
sign.)
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.
