<PAGE> 1
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
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:
Preliminary Proxy Statement [ ] Confidential, For Use of the
Commission Only (as permitted
by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
WHITE ELECTRONIC DESIGNS CORPORATION
(Name of Registrant as Specified In Its Charter)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[ ] Fee computed per Exchange Act Rules 14a-6(i)(1) and 0-11.
[ ] 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.
<PAGE> 2
WHITE ELECTRONIC DESIGNS CORPORATION
3601 EAST UNIVERSITY DRIVE
PHOENIX, ARIZONA 85034
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To be held on February 11, 1999
To the Shareholders of White Electronic Designs Corporation:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of White
Electronic Designs Corporation, an Indiana corporation ("Corporation"), will be
held at the offices of White Electronic Designs Corporation, 3601 East
University Drive, Phoenix, Arizona 85034, on February 11, 1999, at 11:00 A.M.,
Mountain Standard time, for the following purposes:
1. To elect six directors of the Corporation;
2. To ratify the appointment of PricewaterhouseCoopers LLP as
independent accountants of the Corporation and its subsidiary
for the fiscal year ending October 2, 1999; and
3. To transact such other business as may properly come before
the meeting or any adjournments thereof.
The Board of Directors has fixed the close of business on December 31, 1998, as
the record date for the determination of shareholders that are entitled to
notice of and to vote at the meeting.
By order of the Board of Directors,
JOSEPH G. WARREN, JR.
Secretary
Phoenix, Arizona
December 31, 1998
YOU ARE URGED TO SPECIFY YOUR CHOICES, DATE AND SIGN THE ACCOMPANYING PROXY AND
MAIL IT PROMPTLY IN THE ENCLOSED POSTAGE-PAID ENVELOPE, WHETHER OR NOT YOU PLAN
TO ATTEND THE MEETING.
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<PAGE> 3
WHITE ELECTRONIC DESIGNS CORPORATION
3601 E. UNIVERSITY DRIVE
PHOENIX, ARIZONA 85034
PROXY STATEMENT
FOR
ANNUAL MEETING OF SHAREHOLDERS
FEBRUARY 11, 1999
This Proxy Statement is furnished in connection with the solicitation of proxies
by the Board of Directors ("Board") of White Electronic Designs Corporation, an
Indiana corporation ("the Corporation"), to be used at the Annual Meeting of
Shareholders of the Corporation, to be held at the offices of White Electronic
Designs Corporation, 3601 East University Drive, Phoenix, Arizona 85034, on
February 11, 1999, at 11:00 A.M., Mountain Standard time, and at any
adjournments thereof, pursuant to the accompanying Notice of Meeting.
VOTING
You are requested to complete, date and sign the accompanying proxy and return
it promptly to the Corporation in the enclosed envelope. The proxy may be
revoked at any time before it is voted by written notice to the Corporation
prior to the start of the meeting, and any shareholder attending the meeting may
vote in person whether or not they have previously submitted a proxy. Where no
instructions are indicated, proxies will be voted in accordance with the
recommendations of the Board as specified in this Proxy Statement. The holders
of a majority of the outstanding shares of the Corporation's Common Stock,
without par value (stated value $.10 per share) ("Common Stock"), and the
Corporation's $3.00 Senior Voting Cumulative Preferred Stock, par value $1.00
per share ("$3.00 Preferred Stock"), present in person or by proxy, is required
for a quorum at the meeting.
The Board has fixed the close of business on December 31, 1998, as the record
date for the determination of shareholders that are entitled to notice of and to
vote at the meeting. The transfer books of the Corporation will not be closed.
On the record date, there were 15,789,010 outstanding shares of Common Stock and
119,906 shares of $3.00 Preferred Stock, the holders of which are entitled to
one vote per share.
This Proxy Statement and the accompanying Notice of Annual Meeting of
Shareholders and Proxy are being mailed to the Corporation's shareholders on or
about January 5, 1999.
PRINCIPAL STOCKHOLDERS
The following table sets forth, as of December 15, 1998, the names of all
persons known by the Corporation to be the beneficial owners of more than five
percent of the Corporation's Common Stock.
<TABLE>
<CAPTION>
Number of Shares of Percent
Name and Address of Beneficial Owner Common Stock* of Class
------------------------------------------------------------------------------------------
<S> <C> <C>
New York Life Insurance Company 2,272,126 14.39%
51 Madison Avenue
New York, NY 10010
Thomas J. Toy 835,733 (1) 5.29%
Technology Funding Inc.
2000 Alameda del las Pulgas
San Mateo, CA 94403
Technology Funding Partners III, L.P. 822,983 (2) 5.21%
2000 Alameda del las Pulgas
San Mateo, CA 94403
Edward A. White 1,499,866 (3) 9.50%
5780 Echo Canyon Circle
Phoenix, AZ 85018
</TABLE>
* There are no holders of 5% or more of the Corporation's $3.00 Preferred Stock
and none of the persons included in this table beneficially own any shares of
the $3.00 Preferred Stock.
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<PAGE> 4
(1) Includes options to purchase 12,750 shares of Common Stock granted
under the EDI stock option plan. Represents in part the shares owned by
Technology Funding Partners III, L.P. ("TFP") referenced below (see
note 2). Mr. Toy is a Group Vice President of Technology Funding Inc.
("TFI"), which is a managing general partner of TFP, and as such may be
deemed to be the beneficial owner of such shares.
(2) TFI and Technology Funding Ltd. ("TFL") are the managing general
partners of TFP. The following individuals are executive officers of
TFI and/or general partners of TFL, and as such may be deemed to be
beneficial owners of the shares of Common Stock held by TFP described
in the table: Charles R. Kokesh, Peter F. Bernardoni, Gregory T. George
and Thomas J. Toy.
(3) Includes options to purchase 4,000 shares of Common Stock granted under
the Corporation's Non-Qualified Stock Option Plan for Directors. Mr.
White has advised the Corporation that 1,495,866 shares of Common Stock
beneficially owned by him have been transferred to the Edward A. White
Family Limited Partnership, of which Mr. White is the sole general
partner and of which he and his wife are sole limited partners.
ELECTION OF DIRECTORS
Six directors of the Corporation are to be elected to the Board at the meeting.
Each such director will be elected to serve in accordance with the By-Laws of
the Corporation until the next annual meeting of shareholders and until his
successor is duly elected and qualified. Directors are elected by a plurality of
the votes cast, meaning that the six persons who receive the largest number of
the votes cast for the election of directors (counting both the Common Stock and
the $3.00 Preferred Stock) shall be elected directors, assuming there is a
quorum present. The aggregate number of votes entitled to be cast by all
shareholders present in person or represented by proxy at the meeting, whether
those shareholders vote "for", "against" or abstain from voting, will be counted
for purposes of determining the number of shares present to establish a quorum.
Abstentions and broker non-votes will result in the nominees receiving fewer
votes, but will not reduce the votes otherwise received by such nominees.
NOMINEES
It is the intention of the individuals named in the enclosed form of proxy to
vote such proxy for election as directors the following persons: Norman T. Hall,
Donald F. McGuinness, Thomas M. Reahard, Hamid R. Shokrgozar, Thomas J. Toy and
Edward A. White. Each of Messrs. Reahard and White have been previously elected
to the Board by the shareholders. Mr. Shokrgozar was appointed to the board in
February 1998. Dr. Hall and Messrs. McGuinness and Toy were appointed to the
Board pursuant to the Merger Agreement between the Corporation and EDI effective
on October 31, 1998. The Board has no reason to believe that any of the nominees
will not be available for election as a director. However, should any of them
become unwilling or unable to accept election, it is intended that the
individuals named in the enclosed proxy may vote for the election of such other
person or persons as the Board may recommend.
Set forth below is certain information concerning the nominees for election to
the Board.
NAME AND AGE BIOGRAPHICAL INFORMATION
NORMAN T. HALL (44) Current Director and nominee for reelection. Dr. Hall
is a partner in Alliant (formerly Bently Hall Von
Gehr International). Prior to joining Alliant, he
worked for Berkeley International Capital Corporation
and Intel Corporation. Dr. Hall was previously on the
EDI Board and is currently on the board of directors
of Atmel Corporation. Dr. Hall received his J.D. and
M.B.A. from Golden Gate University, Ph.D. and M.S.
from the University of Hawaii, and S.Sc. from the
University of Alberta. He is a member of the State
Bar of California. Dr. Hall has served as Director of
the Corporation since October 31, 1998.
DONALD F. MCGUINNESS (65) Current Director and nominee for reelection. Elected
Chairman of the Board, President, and Chief Executive
Officer of EDI in October 1995. Prior to joining EDI,
he was Chairman of the Board, President, and Chief
Executive Officer of EDI-MA, where he was employed
for eight years. Prior to his tenure at EDI-MA, he
spent 17 years with Sprague Electric Company in
various management positions, most
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<PAGE> 5
recently as Chief Operating Officer with
responsibility for worldwide manufacturing,
engineering, and marketing of all products, including
acquisitions, joint ventures, and corporate
partnerships and divestitures. He spent nine years
with Texas Instruments Incorporated and four years
with Westinghouse Electric Corporation. Mr.
McGuinness also serves on the board of directors of
Cabletron Systems, Inc., a local area networking
company and a S&P 500 company listed on the New York
Stock Exchange, and the board of directors of Ibis
Technology Corporation, a Nasdaq-listed
semiconductors materials company. He has served as a
Director of the Corporation since October 31, 1998.
THOMAS M. REAHARD (46) Current Director and nominee for reelection. Founder
in 1984 and Chairman and CEO of Symmetry Software
Corporation, a computer software development company.
He has been a Director of the Corporation since
November 1995.
HAMID R. SHOKRGOZAR (38) Current Director and nominee for reelection and has
served on Board since February 1998. Elected
President and Chief Executive Officer of the
Corporation in January 1998. Mr. Shokrgozar is
President of the White Microelectronics division of
the Corporation and has served in this capacity since
June 1993. From June 1989 to June 1993, Mr.
Shokrgozar was Vice President of Engineering for the
White Microelectronics division. Mr. Shokrgozar also
served as Vice Chairman of American Electronic
Association (AEA-Arizona). He received his Bachelors
and Masters of science degree in Engineering from
California State University Fullerton. Mr. Shokrgozar
holds a U.S. Patent for the invention of "Stacked
Silicon Die Carrier Assembly".
THOMAS J. TOY (42) Current Director and nominee for reelection. Mr. Toy
currently serves as Group Vice President of
Technology Funding Inc. and is partner of Technology
Funding Ltd. He has been employed by Technology
Funding, Inc. since January 1987. Mr. Toy was
previously on the EDI board. Mr. Toy also serves on
the Board of Directors of Physiometrix, Inc., SRG
Holdings, KOR Electronics, Thermatrix, and UT
Starcom, Inc. Mr. Toy received a B. A. in political
science in 1977 and a M.M. in Finance, Marketing, and
General Management in 1979 from Northwestern
University. He has served as Director of the
Corporation since October 31, 1998.
EDWARD A. WHITE (70) Current Director and nominee for reelection. Elected
Chairman of the Board in 1983 and served until
October 1998. He also served as Chief Executive
Officer of the Corporation from 1983 to 1992. Mr.
White, the founder of the Corporation, was President,
Chief Executive Officer and Chairman of the Board of
Directors of the Corporation from its incorporation
in 1951 until February 1975. From June 1980 to May
1986, Mr. White served as Chairman and Chief
Executive Officer of White Technology, Inc., which
was purchased by the Corporation in 1986.
THE BOARD RECOMMENDS THAT SHAREHOLDERS VOTE "FOR" THE ELECTION OF ALL OF THE
ABOVE-NAMED NOMINEES AS DIRECTORS OF THE CORPORATION.
MEETINGS AND COMMITTEES OF THE BOARD
The Board met 13 times during fiscal 1998. Each current director of the
Corporation who served (Messrs. Reahard, Shokrgozar and White) attended at least
75 percent of the aggregate of the total number of meetings of the Board and
each committee on which he served during fiscal 1998. During fiscal 1998, the
Board had an Audit Committee that recommended engagement of independent
auditors, reviewed the arrangement and scope of the audit, and considered
comments made by the independent auditors. During fiscal 1998, the Audit
Committee consisted of Thomas M. Reahard (chairman), Dan L. McGurk and Steven P.
Matteucci and met two times.
During fiscal 1998 the Board had a Compensation Committee, which administered
the Corporation's compensation and stock option plans. During fiscal 1998 the
Compensation Committee consisted of Steven P. Matteucci (chairman), Dan L.
McGurk and Thomas M. Reahard and met three times.
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<PAGE> 6
DIRECTOR COMPENSATION
Each of the directors of the Corporation, who were not also officers of the
Corporation, except Mr. White who served as Chairman of the Board, were paid
$3,000 per quarter for fiscal year 1998 plus $500 for each Board and Committee
meeting attended and related expenses. As Chairman, Mr. White received $9,000
per quarter with no additional payment for each board meeting. In addition,
under the Corporation's Non-Qualified Stock Option Plan for Non-Employee
Directors, upon each reelection, each of the outside directors are granted
options to acquire an additional 4,000 shares of Common Stock at a price equal
to 100% of the fair market value of the Common Stock as of the close of business
on the day immediately prior to reelection. Under the Plan each award vests as
to 2,000 shares six months following the date of grant and, as to the balance,
one year after such date.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the Corporation's
directors and officers, and persons who own more than ten percent of a
registered class of the Corporation's equity securities, to file with the
Securities and Exchange Commission and the American Stock Exchange initial
reports of beneficial ownership and reports of changes in beneficial ownership
of any equity securities of the Corporation.
To the Corporation's knowledge (based solely on review of the copies of such
reports furnished to the Corporation), all officers, directors and beneficial
owners of greater than ten percent of the Corporation's equity securities made
all required filings under Section 16(a).
EXECUTIVE OFFICERS
The following table sets forth certain information with respect to the executive
officers of the Corporation. These officers have been elected to terms which
will expire at the next annual meeting of the Board and until their successors
are elected and qualified.
<TABLE>
<CAPTION>
Name Age Officer Since Titles/Offices Held
-------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Hamid R. Shokrgozar 38 1998 President and Chief
Executive Officer
Joseph G. Warren, Jr. 53 1995 Vice President - Finance,
Chief Financial Officer,
Secretary and Treasurer
</TABLE>
Biographical information relating to Mr. Shokrgozar appears above in the listing
of nominees for election as Directors.
Joseph G. Warren, Jr. has served as Vice President Finance, Chief Financial
Officer, Secretary and Treasurer of the Corporation since August 1995. From 1994
to 1995 he served as Vice President and Chief Financial Officer of Axxess
Technologies, Inc. From 1993 to 1994 he served as Secretary Treasurer and Vice
President of Golden Technologies, Inc. From 1992 to 1993 he served as President
of Coors Ceramicon Designs, Ltd. From 1985 to 1992, Mr. Warren served as Vice
President of Coors Ceramics Company.
EXECUTIVE COMPENSATION
The following table sets forth the annual and long-term compensation for
services rendered in all capacities to the Corporation during the 1998, 1997 and
1996 fiscal years of those persons who were at fiscal year-end 1998 (i) the
chief executive officer and (ii) the other most highly compensated executive
officers whose salary and bonus exceeded $100,000 (hereinafter the "Named
Executive Officers").
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SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
- - - --------------------------------------------------------------------------------------------
Long Term
Compensation
Annual Compensation Awards
- - - --------------------------------------------------------------------------------------------
Name and Bonus Options All Other Compensations
Principal Position Year Salary ($) ($)(b) (#) (a)
- - - --------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
HAMID R. SHOKRGOZAR 1998 180,003 4,500 0 3,666
President, Chief 1997 140,000 91,000 32,500 2,730
Executive Officer 1996 125,000 83,758 81,500 2,631
- - - --------------------------------------------------------------------------------------------
JOSEPH G. WARREN, JR 1998 140,004 3,500 0 3,318
Vice President, Chief 1997 129,966 35,163 35,000 4,804
Financial Officer 1996 118,750 28,524 40,000 2,206
- - - --------------------------------------------------------------------------------------------
</TABLE>
(a) All Other Compensation includes contributions by the Corporation to its
401(k) Plan, and payments for officer's life insurance.
(b) Bonuses were paid in accordance with the policy established by the
Board and the Compensation Committee. See "Report of the Board and the
Compensation Committee" elsewhere in this Proxy Statement.
EMPLOYMENT AGREEMENTS
The Corporation has entered into employment agreements with certain of its
officers, including Hamid R. Shokrgozar and Joseph G. Warren, Jr. Mr. Shokrgozar
was and is employed as the President and Chief Executive Officer. Mr. Warren was
and is employed as the Vice President Finance, Chief Financial Officer,
Secretary and Treasurer.
Mr. Shokrgozar's agreement provides a term ending September 30, 1999 and
renewing automatically for subsequent two-year terms unless 30 days prior to a
renewal date either the Corporation or Mr. Shokrgozar notifies the other of its
intention not to renew. The agreement provides for an annual base salary of
$180,003 and participation by Mr. Shokrgozar in the fringe benefit programs of
the Corporation generally available to its senior executives. In the event of a
termination for cause, the Corporation is required to pay Mr. Shokrgozar only
those amounts earned by or accrued for his benefit under the Corporation's plans
to the date of termination. In the event of a termination without cause, the
Corporation is required to pay to Mr. Shokrgozar a lump sum severance payment
equal to the greater of (i) one year's base salary and incentive compensation,
or (ii) his base salary for the remainder of the term of the agreement as of the
date of such termination. The agreement also provides in such circumstance for
the continuation of his benefits for a period of at least twelve months,
provision of executive-level outplacement services and the immediate vesting of
his options, then exercisable for a period of twelve months after termination.
In the event the Corporation elects not to renew the agreement, the Corporation
is required to pay Mr. Shokrgozar a lump sum equal to his annual compensation.
Mr. Shokrgozar's agreement includes special provisions in the event of a "Change
in Control" (as defined in the agreement). Specifically, Mr. Shokrgozar's
employment term would automatically extend for a period of 18 months and during
that term Mr. Shokrgozar could terminate if his duties were materially changed,
his annual compensation was decreased, he was required to relocate or the
Corporation's successor failed to assume the Corporation's obligations under the
agreement. In the event of such a termination, Mr. Shokrgozar is entitled to a
lump sum severance payment equal to 1.5 times his then current base salary and
incentive compensation as well as the continuing benefits provided in the event
of a termination without cause by the Corporation.
The agreement with Mr. Warren is for one year terms and renews automatically
unless terminated by Mr. Warren or the Corporation on 30 days prior notice of an
intention not to renew, or otherwise in accordance with the agreement. The
agreement provides for an annual base salary of $140,004 and provides that Mr.
Warren shall be entitled to participate in the Corporation's incentive (bonus)
compensation programs, stock option plan and fringe benefit programs generally
available to senior executives of the Corporation. In the
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event of termination of Mr. Warren by the Corporation for cause, Mr. Warren will
be entitled to receive only that compensation earned through the date of the
termination. In the event of a termination by the Corporation without cause, Mr.
Warren will be entitled to a lump sum severance payment equal to Mr. Warren's
total base salary and incentive compensation paid for the calendar year
immediately preceding the termination, continuing benefit contributions (or the
cash equivalent) for twelve months, executive-level out placement services, and
the immediate vesting of all then unvested stock options and a twelve month
exercise period. The agreement provides that in the event of a Change in Control
(as defined in the agreement), if Mr. Warren is terminated or his duties are
materially changed, Mr. Warren's annual compensation or other benefits are
reduced, the Corporation requires Mr. Warren to relocate or the successor
corporation fails to assume the Corporation's obligations under the agreement,
Mr. Warren would receive termination benefits equal to those if Mr. Warren is
terminated without cause. Finally, in the event the Corporation gives notice of
its intention not to renew the agreement at the end of its term, Mr. Warren will
be entitled to a lump sum severance payment equal to Mr. Warren's total base
salary and incentive compensation paid for the calendar year immediately
preceding the termination, continuing benefit contributions (or the cash
equivalent) for twelve months, executive-level out placement services, and the
immediate vesting of all then unvested stock options and a twelve month exercise
period.
OPTION GRANTS IN 1998
During fiscal 1998, there were no additional options granted to the Named
Executive Officers by the Compensation Committee and Board of Directors.
OPTION EXERCISES AND FISCAL YEAR-END VALUES
The following table sets forth certain information with respect to the options
to purchase the Corporation's Common Stock which are held by the Named Executive
Officers:
AGGREGATED FISCAL YEAR-END OPTION VALUE
<TABLE>
<CAPTION>
- - - --------------------------------------------------------------------------------------------------------------------------
Shares
Acquired Value of Unexercised
on/or Value Number of Unexercised In-the-Money-Options at
Exercise Realized Options at Fiscal Year-End Fiscal Year-End
- - - --------------------------------------------------------------------------------------------------------------------------
Name Exercisable/Unexercisable Exercisable/Unexercisable
- - - --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
HAMID R. SHOKRGOZAR 0 N/A 65,500/59,500 $0/$0
JOSEPH G. WARREN JR. 0 N/A 36,250/38,750 $0/$0
==========================================================================================================================
</TABLE>
REPORT OF THE COMPENSATION COMMITTEE
The Board and the Compensation Committee of the Board ("Committee"), establishes
the compensation program and policy for, and determines the compensation of, the
Named Executive Officers. The current program consists of the following key
elements: annual payments of salary, bonuses, periodic grants of stock options.
Each element has a different purpose. Salary and bonus payments are principally
designed to reward current and past performance. Stock options are primarily
designed to provide incentives for superior long-term future performance and may
be forfeited if the Named Executive Officer leaves the Corporation before the
relevant vesting period.
The Compensation Committee is responsible for determining the timing and number,
if any, of stock options to be granted to the Named Executive Officers. Such
options are granted based upon the guidelines established in the Corporation's
Management Compensation Policy approved by the Board of Directors during fiscal
1997.
In determining the amount and form of executive compensation to be paid or
awarded in fiscal 1998, the Board and the Committee considered overall
performance rather than a formula based on any particular performance measure.
The Board and the Committee applied this subjective standard in determining the
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Chief Executive Officer's compensation (Mr. Shokrgozar not participating as to
his own compensation). The Board and the Committee reviewed and accepted Mr.
Shokrgozar's recommendations regarding the compensation of Mr. Warren.
The committee retained, without change for fiscal 1998, other elements of
executive compensation for the Named Executive Officers. These included health,
life and disability insurance, an automobile allowance and supplemental medical
expense coverage.
Current Compensation Committee: Thomas J. Toy and Thomas M. Reahard.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Mr. Shokrgozar is President and Chief Executive Officer of the Corporation. The
other members of the Board are not employees of the Corporation.
COMMON STOCK PERFORMANCE
The line graph which follows compares five years of yearly percentage changes in
the cumulative total shareholder return on the Common Stock against the
cumulative total return on the AMEX Market Value Index and the AMEX High
Technology Index.
COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN*
AMONG WHITE ELECTRONIC DESIGNS CORPORATION
THE AMEX MARKET VALUE INDEX
AND THE S&P TECHNOLOGY SECTOR INDEX
<TABLE>
<CAPTION>
Cumulative Total Return
----------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
9/93 9/94 9/95 9/96 9/97 9/98
WHITE ELECTRONIC DESIGNS CORPORATION 100.00 203.70 162.96 100.00 155.56 66.67
AMEX MARKET VALUE 100.00 99.66 118.32 124.13 156.28 140.52
S & P TECHNOLOGY SECTOR 100.00 116.42 183.66 225.63 366.43 414.86
</TABLE>
*$100 INVESTED ON 9/30/93 IN STOCK OR INDEX.
INCLUDING REINVESTMENT OF DIVIDENDS.
FISCAL YEAR ENDING SEPTEMBER 30.
RATIFICATION OF APPOINTMENT OF INDEPENDENT ACCOUNTANTS
The Board, upon recommendation of its Audit Committee, none of whose members is
an employee of the Corporation, intends to reappoint the firm of
PricewaterhouseCoopers LLP, independent accountants, to be auditors of the
Corporation and its subsidiary for the fiscal year ending October 2, 1999.
PricewaterhouseCoopers LLP served as auditors of the Corporation and its
subsidiary for the fiscal year ended October 3, 1998. Although it is not
required to do so, the Board of Directors is submitting the appointment of
PricewaterhouseCoopers LLP for ratification by shareholders in order to
ascertain the views of the shareholders. If such appointment is not ratified,
the Board will consider, but not necessarily select other auditors.
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<PAGE> 10
Representatives of PricewaterhouseCoopers LLP will be present at the
shareholders' meeting and will be given the opportunity to make a statement if
they desire to do so. They will also be available to respond to appropriate
questions. The Corporation has been advised by PricewaterhouseCoopers LLP that
no member of that firm has any financial interest, either direct or indirect, in
the Corporation or its subsidiary, and it has had no connection with the
Corporation or its subsidiary in any capacity other than that of independent
public accountants.
During the year ended October 3, 1998, PricewaterhouseCoopers LLP rendered to
the Corporation, in addition to audit services, certain non-audit professional
services. The audit services rendered included the audit of the annual financial
statements, pre-issuance reviews of quarterly financial results, and the audit
of the 401(k) and pension plans. Non-audit services involved tax assistance.
THE BOARD RECOMMENDS THAT SHAREHOLDERS VOTE "FOR" RATIFICATION OF THE RETENTION
OF PRICEWATERHOUSECOOPERS LLP AS THE CORPORATION'S INDEPENDENT ACCOUNTANTS.
SECURITY OWNERSHIP BY MANAGEMENT
The following table sets forth the beneficial ownership of the Corporation's
Common Stock as to (i) each of the Corporation's current directors; (ii) each of
the Corporation's Named Executive Officers; and (iii) all directors and
executive officers of the Corporation as a group. All such information reflects
beneficial ownership as of December 15, 1998 as known by the Corporation.
<TABLE>
<CAPTION>
Number of Shares
Name Beneficially Owned (1) Percent of Class(2)
---------------------------------------------------------------------------------------------
<S> <C> <C>
Norman T. Hall 84,711 (3) *
Donald F. McGuinness 582,165 (4) 3.56%
Thomas M. Reahard 22,000 (5) *
Hamid R. Shokrgozar 65,500 (6) *
Thomas J. Toy 835,733 (7) 5.29%
Joseph G. Warren, Jr. 41,250 (8) *
Edward A. white 1,499,866 (9) 9.50%
Directors and executive officers
as a group (7 persons) 3,131,225 (10) 18.93%
</TABLE>
* Represents less than 1% of the class.
(1) Unless otherwise noted the Corporation believes that all persons named
in the table have sole voting and investment power with respect to all
shares of the Corporation's Common Stock that are beneficially owned by
them. A person is deemed to be the beneficial owner of securities that
can be acquired by such person within 60 days upon the exercise of
options.
(2) Each owner's percentage ownership is determined by assuming that
options held by such person (but not those held by any other person)
which are exercisable within 60 days have been exercised. None of the
persons named in the table is a beneficial owner of the Corporation's
$3.00 Preferred Stock.
(3) Includes options to purchase 33,711 shares of Common Stock originally
granted under the EDI stock option plan.
(4) Includes options to purchase 579,870 shares of Common Stock originally
granted under the EDI stock option plan.
(5) Includes options to purchase 22,000 shares of Common Stock granted
under the Corporation's Non-Qualified Stock Option Plan for
Non-Employee Directors.
(6) Includes options to purchase 11,000 shares of Common Stock granted
under the Corporation's 1986 Stock Option Plan and options to purchase
54,500 shares of Common Stock granted under the Corporation's 1994
Flexible Stock Plan.
(7) See note 1 to the beneficial ownership table of persons owning in
excess of 5% of the Corporation's Common Stock at page 3.
(8) Includes options to purchase 36,250 shares of Common Stock granted
under the Corporation's 1994 Flexible Stock Plan.
9
<PAGE> 11
(9) See note 3 to the beneficial ownership table of person owning in excess
of 5% of the Corporation's Common Stock at page 3.
(10) Includes options as indicated in notes 3-9, above.
OTHER MATTERS
The Board of Directors does not know of any other matters which are likely to be
brought before the meeting. However, in the event that any other matters
properly come before the meeting, the persons named in the enclosed proxy will
vote said proxy in accordance with their judgment on such matters.
The cost of preparing, assembling and mailing this Proxy Statement, the Notice
of Meeting and the enclosed proxy will be borne by White Electronic Designs
Corporation. In addition to the solicitation of proxies by use of the mails, the
Corporation will utilize its stock transfer agent, American Stock Transfer and
Trust Company, to assist in the solicitation at no additional cost beyond the
annual retainer. The Corporation also may utilize the services of some of its
officers and regular employees (who will receive no compensation therefor in
addition to their regular salaries) to solicit proxies personally and by
telephone and telegraph. The Corporation will request banks, brokers and other
custodians, nominees and fiduciaries to forward copies of the proxy material to
their principals and to request authority for the execution of proxies, and will
reimburse such persons for their expenses in so doing.
A copy of the White Electronic Designs Corporation's Annual Report to
Shareholders for the fiscal year ended October 3, 1998, accompanies this Proxy
Statement. The Annual Report includes the Corporation's Annual Report on Form
10-K for such fiscal year, without exhibits, substantially as filed with the
Securities and Exchange Commission.
Copies of the omitted exhibit list are available to any shareholder free of
charge. Copies of the omitted exhibits are available for a fee equal to the
Corporation's reasonable expenses in furnishing such exhibits. Shareholders
desiring copies of either should address a written request to Mr. Joseph G.
Warren, Jr., Secretary, White Electronic Designs Corporation, 3601 E. University
Drive, Phoenix, Arizona 85034, and are asked to mark "1998 10-K Request" on the
outside of the envelope containing the request.
SHAREHOLDER PROPOSAL FOR 2000 ANNUAL MEETING
Proposals of shareholders intended to be presented at the 2000 Annual
Shareholders' Meeting pursuant to Rule 14a-8 promulgated under the Securities
Exchange Act of 1934, must be received at White Electronic Designs Corporation's
offices at 3601 E. University Drive, Phoenix, Arizona 85034, prior to September
8, 1999, for inclusion, if appropriate, in the 2000 Proxy Statement and form of
proxy. A shareholder proposal submitted other than pursuant to Rule 14a-8 will
be timely for purposes of Rule 14a-4(c)(1) if submitted to the Corporation on or
before November 22, 1999. If a proposal is not timely submitted pursuant to Rule
14a-4(c)(1), the proxies named in the Corporation's proxy statement for the 2000
Annual Meeting will have discretionary authority to vote with respect to any
such proposal subsequently raised at that meeting.
By order of the Board of Directors,
JOSEPH G. WARREN, JR.
Secretary
December 31, 1998
10
<PAGE> 12
WHITE ELECTRONIC DESIGNS CORPORATION
PROXY SOLICITED BY THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON FEBRUARY 11, 1999
The undersigned hereby names, constitutes and appoints HAMID R. SHOKRGOZAR,
JOSEPH G. WARREN, JR. AND DONALD F. MCGUINNESS, and each of them, as proxies of
the undersigned, with full power of substitution, to vote all shares of both
Common Stock of White Electronic Designs Corporation (the "Company") and $3.00
Preferred Stock of the Company held by the undersigned as of the close of
business on December 31, 1998, at the Annual Meeting of Shareholders to be held
at the Company's office at 3601 E. University Drive, Phoenix, Arizona 85038, on
February 11, 1999, at 11:00 a.m. Standard Time, and at any adjournments
thereof, on the matters set forth on the reverse side more fully described in
the accompanying Proxy Statement, hereby revoking any proxy or proxies
heretofore given.
(CONTINUED AND TO BE SIGNED ON THE OTHER SIDE)
<PAGE> 13
PLEASE DATE, SIGN AND MAIL YOUR
PROXY CARD BACK AS SOON AS POSSIBLE!
ANNUAL MEETING OF SHAREHOLDERS
WHITE ELECTRONIC DESIGNS CORPORATION
FEBRUARY 11, 1999
Please Detach and Mail in the Envelope Provided
Please mark your
/X/ votes as in this
example.
The Board of Directors recommends a vote FOR the following proposals and ALL
SHARES REPRESENTED BY THIS PROXY WILL BE SO VOTED UNLESS OTHERWISE INDICATED.
<TABLE>
<CAPTION>
FOR all nominees listed WITHHOLD AUTHORITY
at right (except as to vote for all nominees
marked to the contrary) listed to the right.
<S> <C> <C> <C>
1. Election
of / / / / Nominees:
Directors Hamid R. Shokrgozar
Donald F. McGuinness
INSTRUCTION: To withhold authority to vote for any Edward A. White
individual nominee, write that nominee's name on the Thomas M. Reahard
space provided: Norman T. Hall
Thomas J. Toy
______________________________________________________
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
FOR AGAINST ABSTAIN
2. Ratification of appointment of
PricewaterhouseCoopers LLP as / / / / / /
independent auditors.
</TABLE>
IF ANY OTHER BUSINESS IS PRESENTED AT THE MEETING, THIS PROXY WILL BE VOTED BY
THE PROXIES IN THEIR BEST JUDGMENT. AT PRESENT TIME, THE BOARD OF DIRECTORS
KNOWS OF NO OTHER BUSINESS TO BE PRESENTED AT THE ANNUAL MEETING. THIS PROXY
ALSO CONFERS DISCRETIONARY AUTHORITY ON THE PROXIES TO VOTE WITH RESPECT TO
THE ELECTION OF ANY PERSON AS DIRECTOR WHERE THE NOMINEES ARE UNABLE TO SERVE
OR FOR GOOD CAUSE WILL NOT SERVE AND MATTERS INCIDENT TO THE CONDUCT OF THE
ANNUAL MEETING.
The undersigned acknowledges receipt from the Company prior to the execution of
this proxy of the Notice of Annual Meeting of Shareholders, a Proxy Statement
and the 1998 Annual Report to Shareholders.
<TABLE>
<S> <C> <C>
Signature ____________________________ Signature __________________________ Dated: ___________, 1999
if held jointly
</TABLE>
NOTE: Shareholders should sign only as name(s) appear(s) above. Joint owners
should each sign personally. Trustees and other fiduciaries should
indicate their capacity, and where more than one name appears, a
majority must sign. An officer signing for a corporation should state
their title.
