ASTROCOM CORPORATION
3500 Holly Lane North, Suite 60
Plymouth, Minnesota 55447
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To be held
May 24, 2000
TO THE SHAREHOLDERS OF ASTROCOM CORPORATION:
NOTICE IS HEREBY GIVEN that the Annual Meeting of the shareholders of
Astrocom Corporation (the "Company"), a Minnesota corporation, will be held
on Wednesday, May 24, 2000, at 3:30 p.m., Central Daylight Time, at the
Minneapolis Club, 729 Second Avenue South, Minneapolis, Minnesota, for the
following purposes:
1. To elect two Class I directors of the Company to serve until the
annual meeting of shareholders in 2003.
2. To increase the number of shares authorized for issuance under the
Company's 1998 Stock Option Plan.
3. To act upon such other matters as may properly come before the Annual
Meeting or any adjournments thereof.
Pursuant to the Restated Bylaws of the Company, the Board of Directors
has fixed the close of business on March 27, 2000, as the record date for the
determination of shareholders entitled to notice of and to vote at the Annual
Meeting and any adjournments thereof. The stock transfer books of the Company
will not be closed.
Each of you is invited and urged to attend the Annual Meeting in person,
if possible. Whether or not you are able to attend in person, you are
requested to mark, date, sign and return promptly the enclosed proxy in the
envelope enclosed for your convenience.
By Order of the Board of Directors,
\s\ Ronald B. Thomas
Ronald B. Thomas
President and Chief Executive Officer
April 14, 2000
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ASTROCOM CORPORATION
3500 Holly Lane North, Suite 60
Plymouth, Minnesota 55447
PROXY STATEMENT
For Annual Meeting of Shareholders
To be held May 24, 2000
GENERAL INFORMATION
The accompanying proxy is solicited by the Board of Directors of Astrocom
Corporation (the "Company"), a Minnesota corporation, for use at its annual
meeting of shareholders to be held on May 24, 2000 (the "Annual Meeting"), at
3:30 p.m., Central Daylight Time, at the Minneapolis Club, 729 Second Avenue
South, Minneapolis, Minnesota, or any adjournment thereof, for the purposes
set forth in the accompanying Notice of Annual Meeting of Shareholders.
Solicitation of proxies may be made in person or by mail, telephone or
facsimile transmission by directors, officers and regular employees of the
Company. The directors, officers and regular employees of the Company will
not receive any additional compensation for such activities. The Company may
also request banking institutions, brokerage firms, custodians, nominees and
fiduciaries to forward solicitation materials to the beneficial owners of
Common Stock of the Company held of record by such persons, and the Company
will reimburse the reasonable forwarding expenses. The cost of this
solicitation of proxies will be paid by the Company. This Proxy Statement and
the enclosed form of proxy are furnished in connection with the proxy
solicitation and are first being mailed to stockholders on or about April 14,
2000.
REVOCATION OF PROXY
Any shareholder returning the accompanying proxy may revoke such proxy at
any time prior to its exercise (a) by giving written notice to the Company of
such revocation at or before the meeting, (b) by voting in person at the
meeting, or (c) by executing and delivering to the Company a later dated
proxy. Attendance at the Annual Meeting will not in itself constitute
revocation of a proxy. Any written notice or proxy revoking a proxy should be
sent to Astrocom Corporation, 3500 Holly Lane North, Suite 60, Plymouth,
Minnesota, 55447 Attention: Ronald B. Thomas.
RECORD DATE AND VOTING
The voting securities of the Company are shares of its common stock, $.10
par value per share ("Common Stock"), each share of which entitles the holder
thereof to one vote on each matter to come before the Annual Meeting or any
adjournment thereof.
At the close of business on March 27, 2000 (the "Record Date"), the
Company had issued and outstanding 26,014,161 shares of Common Stock. Only
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holders of record of Common Stock are entitled to vote on matters that
come before the Annual Meeting or any adjournment thereof. As provided in the
Restated Articles of Incorporation of the Company, there is no right of
cumulative voting. All matters being voted upon by the shareholders require a
majority vote of the shares of Common Stock represented at the Annual Meeting
either in person or by proxy.
The presence at the Annual Meeting in person or by proxy of the holders
of a majority of the outstanding shares of Common Stock entitled to vote shall
constitute a quorum for the transaction of business. Proxies not revoked will
be voted in accordance with the instructions specified by shareholders by
means of the ballot provided on the Proxy for that purpose. Proxies which are
signed but which lack any such specific instructions with respect to any
proposal will, subject to the following, be voted in favor of the proposals
set forth in the Notice of Meeting. If a shareholder abstains from voting as
to any proposal, then the shares held by such shareholder shall be deemed
present at the Annual Meeting for purposes of determining a quorum and for
purposes of calculating the vote with respect to such proposal, but shall not
be deemed to have been voted in favor of such proposal. Abstentions as to any
proposal, therefore, will have the same effect as votes against such proposal.
If a broker returns a "non-vote" proxy, indicating a lack of voting
instruction by the beneficial holder of the shares and a lack of discretionary
authority on the part of the broker to vote on a particular proposal, then the
shares covered by such non-vote proxy shall be deemed present at the Annual
Meeting for purposes of determining a quorum, but shall not be deemed to be
represented at the Annual Meeting for purposes of calculating the vote
required for approval of such proposal.
ACTION TO BE TAKEN UNDER THE PROXY
Shares represented by properly executed and returned proxies will be
voted as specified on the proxies. Shares represented by proxies where no
specification has been made will be voted (i) FOR the election of the two
persons named in this Proxy Statement as nominees for election to the Board of
Directors; (ii) FOR the amendment of the Company's Stock Option Plan to
increase the number of shares authorized for issuance thereunder; and (iii) in
the discretion of the proxy holders, as to any other business that properly
comes before the meeting.
LEGAL PROCEEDINGS
No director, officer, affiliate, beneficial owner of more than 5% of the
Common Stock or shareholder of the Company is known to be an adverse party to
the Company or have a material interest adverse to the Company in a legal
proceeding.
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ELECTION OF DIRECTORS
The Company's Restated Articles of Incorporation provide that the Board
of Directors shall consist of not less than three nor more than fifteen
members, as determined from time to time by the Board of Directors, divided
into three classes as nearly equal in size as possible.
The term of each class of directors is three years, and the term of one
class expires each year in rotation. At the 1999 Annual Meeting, S. Albert D.
Hanser and Duane S. Carlson were elected as Class III directors for terms
expiring in 2002. The terms of Ronald B. Thomas and Douglas M. Pihl will
expire at this Annual Meeting.
The Board of Directors has nominated Ronald B. Thomas and Douglas M. Pihl
for reelection as Class I directors, to serve for terms of three years,
expiring at the Annual Meeting of shareholders in 2003. Unless otherwise
instructed by the shareholder, the persons named in the enclosed proxy intend
to vote for the election of Ronald B. Thomas and Douglas M. Pihl as directors.
In the event Mr. Thomas or Mr. Pihl for any reason should not be available as
a candidate for director, votes will be cast pursuant to authority granted by
the enclosed proxy for such other candidate as may be nominated by the Board
of Directors. Management knows of no reason to anticipate that either of the
nominees will not be a candidate, having consented to be named and to serve if
elected.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" THE ELECTION OF
ITS NOMINEES TO THE BOARD OF DIRECTORS.
Certain information with respect to the current directors of the Company
and the nominees is set forth below. The Common Stock ownership of each
director is provided under "Security Ownership of Certain Beneficial Owners
and Management."
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Name Age Positions Held Director Since
Nominees for Class I Directors Whose Terms Will Expire in 2003:
Ronald B. Thomas 56 President, Chief Executive Officer,
Secretary, Treasurer and Director 1997
Douglas M. Pihl 60 Director 1997
Class II Director Whose Term Expires in 2001:
Gary L. Deaner 60 Director 1998
Class III Directors Whose Terms Expire in 2002:
S. Albert D. Hanser 62 Director 1991
Duane S. Carlson 64 Director 1998
Each of the persons named in the foregoing table is now a director of the
Company and has continuously served as a director of the Company since the
year indicated.
Ronald B. Thomas joined the Company in 1997. He was elected a director
on June 26, 1997, Chief Executive Officer effective June 27, 1997, President
effective June 30, 1997 and Secretary and Treasurer on October 13, 1997. Mr.
Thomas was a private investor from 1987-1997. Mr. Thomas was a director
of Ciprico, Inc., from 1978 to 1999.
Douglas M. Pihl was elected a director of the Company in 1997. Since
November 1999, Mr. Pihl has served as Chairman and Chief Executive Officer of
MathStar, Inc., a developer of DSP integrated circuits. Mr. Pihl has been
Chairman of Vital Images, Inc., a publicly held provider of software for the
medical industry, since August 1997, and was Chief Executive Officer from
February 1998 to January 2000. Mr. Pihl has been Chairman of RocketChips,
Inc., a developer of high-speed silicon CMOS communication chips, since
November 1996, and has also been Chief Financial Officer since October 1999.
From 1996 to 1997, Mr. Pihl served as a consultant to Ascend Communications,
Inc., and from 1991 to 1996, served as President and Chief Executive Officer
of NetStar, Inc. Mr. Pihl is also a director of Destron Fearing Corporation.
Gary L. Deaner was elected a director of the Company in 1998. Mr. Deaner
has been Managing Director of Raintree Associates, a consulting group, since
June 1998. He was Vice President of Marketing and Strategic Planning of J.
River, Inc., a developer of communications and security software, from
1996-1998. He was previously employed by Digi International from 1985-1996.
Mr. Deaner has been a director of Ciprico, Inc., since 1995.
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S. Albert D. Hanser joined the Company as a director in 1991.
He was elected Chairman of the Board on March 30, 1992. He was elected interim
President and Chief Executive Officer on September 10, 1992, and was elected
President and Chief Executive Officer on December 17, 1992. He resigned as
President on May 23, 1996, resigned as Chief Executive Officer on June 26,
1997, and resigned as Chairman of the Board on January 1, 2000. Mr. Hanser has
been employed as Chairman of Hanrow Financial Group, Ltd., a merchant banking
firm, since 1989.
Duane S. Carlson was elected a director of the Company in 1998. Mr.
Carlson has been a business consultant since 1997. His previous experience
was as Executive Vice President and CFO of NetStar, Inc., a computer
networking equipment company, from 1990-1997. Mr. Carlson is also a director
of Appliance Recycling Centers, Inc.
ACTIONS AND COMMITTEES OF THE BOARD OF DIRECTORS
During 1999, there were four meetings of the Board of Directors. Mr.
Carlson, Mr. Deaner, Mr. Pihl and Mr. Thomas were present at all of the
meetings; Mr. Hanser was absent from one meeting. The Company's Audit
Committee met once during 1999; however, the Company's Compensation Committee
and standing Nominating Committee (consisting of those directors whose terms
as directors do not expire at the next scheduled meeting of the shareholders)
did not meet during the year.
COMPENSATION OF DIRECTORS
The Company's 1998 Stock Option Plan provides that each non-employee
member elected to the Board, and each employee member of the Board who later
becomes a non-employee member of the Board, will automatically be granted
a non-qualified option for 10,000 shares at 100% of fair market value.
The Company's 1998 Stock Option Plan, as amended by the Board of
Directors on January 3, 2000, also provides that each non-employee director,
serving as of the beginning of each calendar year, shall automatically be
granted a non-qualified option to purchase 120,000 shares at 100% of fair
market value on the date of grant for his or her services to the Company. Such
non-qualified options vest as to 1/12th of the 120,000 shares at the end of
each calendar month during the year following the grant of the non-qualified
option.
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EXECUTIVE OFFICERS
Name Age Position
Ronald B. Thomas 56 President, Chief Executive Officer,
Secretary and Treasurer
Frederic H. Sweeny 57 Vice President of Sales and Marketing
See the biographical information on Mr. Thomas under "ELECTION OF
DIRECTORS" above.
Frederic H. Sweeny was elected Vice President of Sales and Marketing on
March 17, 2000. Mr. Sweeny joined the Company in November 1999. From 1997 to
1999 he served as an independent management consultant for numerous
technology-related businesses, including the Company. From 1992 to 1997 he
was Chief Executive Officer of Unimax Systems Corporation, a designer and
developer of configuration management software for multi-vendor
telecommunications systems.
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table contains certain information regarding the
compensation paid by the Company during the three year period January 1, 1997,
through December 31, 1999, to the Company's Chief Executive Officer. No other
executive officer of the Company received compensation in excess of $100,000
in 1999.
Annual Compensation(1) Long Term Compensation
Name and Principal Position Year Salary Bonus Other Securities Underlying
Options
S. Albert D. Hanser (2) 1999 - - - None (4)
1998 - - - None (4)
1997 $53,077 - - None (4)
Ronald B. Thomas, 1999 115,504 - - None (5)
President and Chief 1998 123,937 - - None (5)
Executive Officer (3) 1997 50,577 - - None (5)
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(1) Does not include any amounts paid under the Company's group medical
and hospitalization plan that is available generally to all employees.
Does not include the value of certain noncash compensation or benefits
made available to executive officers, which were less than amounts
required to be reported pursuant to applicable SEC regulations.
(2) Mr. Hanser resigned as Chief Executive Officer effective June 26, 1997.
(3) Mr. Thomas joined the Company in 1997 and was elected Chief Executive
Officer effective June 27, 1997.
(4) Does not include warrants granted to Hanrow Financial Group, Ltd.,
Hanrow Capital Fund X or Hanrow Business Finance.
(5) Does not include warrants granted to Mr. Thomas. See "Thomas Warrants."
OPTION GRANTS
There were no option grants in 1999 to Ronald B. Thomas or Frederic H.
Sweeny, the Company's executive officers.
AGGREGATED OPTION EXERCISES IN 1999 AND YEAR-END OPTION VALUES
The following table provides information on the number and value of the
unexercised options held by the named executive officers at year-end.
Number of
Securities Value of
Underlying Unexercised
Unexercised In-the-money
Options at 12/31/99 Options at 12/31/99
Exercisable */ Exercisable */
Name Unexercisable ** Unexercisable **
S. Albert D. Hanser 214,500* -
Ronald B. Thomas - -
Frederic H. Sweeny - -
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1998 STOCK OPTION PLAN
In 1998 the shareholders approved the 1988 Stock Option Plan (the "1998
Plan") of the Company. The 1998 Plan allows the Company to grant both
incentive stock options and non-qualified options.
The 1998 Plan is administered by the Stock Option Committee of the Board
of Directors of the Company which has full authority and discretion to select
participants, determine the times at which options shall be granted, set the
period and the terms and conditions under which each option becomes
exercisable (as limited by the 1988 Plan), and make any other determinations
which it believes necessary or advisable for the administration of the 1998
Plan. Incentive stock options may only be granted to any full-time or
part-time employee (which term includes, but is not limited to, officers and
directors who are also employees) of the Company or of its present and future
subsidiary corporations. Non-qualified options may be granted to other
persons, including, but not limited to, members of the Board of Directors,
consultants or independent contractors providing services to the Company, or
its present and future subsidiary corporations. No optionee may receive
incentive stock options exercisable for the first time during any calendar
year having an aggregate fair market value (determined as of the time the
option is granted) in excess of $100,000.
Each non-employee member of the Board of Directors first elected to the
Board after approval of the 1998 Plan by the shareholders, and each employee
member of the Board who became a non-employee member of the Board after said
date, was automatically granted a non-qualified option for 10,000 shares at
100% of fair market value.
Each non-employee director of the Company, serving as of the beginning of
each calendar year, shall automatically be granted a non-qualified option
under the 1998 Plan providing for the purchase of shares of the
Company's Common Stock at 100% of the fair market value of such Common Stock
on the date of grant for his/her services to the Company during such year.
The 1998 Plan initially provided that such non-qualified option would be for
20,000 shares; on January 3, 2000, the Board of Directors, acting pursuant to
the 1998 Plan, amended the 1998 Plan to provide that such non-qualified option
for the years 2000 and thereafter would be for 120,000 shares. Such
non-qualified option received by a non-employee director shall vest as to
1/12th of the 120,000 shares of the Company's Common Stock at the end of each
calendar month during the year as long as the non-employee director has
continued to serve as a director of the Company. Each non-employee director
of the Company elected during a calendar year shall automatically be granted a
non-qualified option providing for the purchase of a pro rata portion of
120,000 shares, which shall vest monthly during the balance of the calendar
year.
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The exercise price of incentive stock options may not be less than
the fair market value of the shares on the date of the grant, but if the
optionee owns more than 10% of the total combined voting power of the
outstanding stock of the Company, the exercise price may not be less than 110%
of the fair market value of the shares on the date of grant. The exercise
price of non-qualified options may not be less than 85% of the fair market
value of the shares on the date of grant. All options are nontransferable.
Incentive stock options are exercisable only while the optionee is an
employee (or for 90 days after termination, if due to age or disability), or
within one year after death, if death occurs while the optionee is an
employee. The term of options granted under the 1988 Plan cannot exceed 10
years from the date of grant, or five years from the date of grant of an
incentive stock option if the optionee owns more than 10% of the total
combined voting power of all outstanding stock.
The 1998 Plan currently provides for the issuance of 1,500,000 shares of
Common Stock. At the 2000 Annual Meeting of the shareholders, the
shareholders will be asked to amend the 1998 Plan to increase the number of
shares authorized for issuance under the 1998 Plan to 4,000,000 shares. As of
March 27, 2000, no shares had been purchased pursuant to the exercise of
options granted under the 1998 Plan. Options to purchase an aggregate
1,461,667 shares are outstanding under the 1998 Plan and expire at varying
times between May 28, 2003 and February 14, 2005. As of March 27, 2000,
options to purchase an aggregate 70,000 shares had been granted to employees
in 2000, and options to purchase an aggregate 480,000 shares had been granted
to directors in 2000.
1988 STOCK OPTION PLAN
The Company's 1988 Stock Option Plan allowed the Company to grant both
incentive stock options and non-qualified stock options. Incentive stock
options could be granted to key employees at prices equal to the fair market
value at the date of grant. Non-qualified stock options could be granted to
employees, members of the Board of Directors, consultants, and other persons
who provided services to the Company. Non-qualified options could be granted
at prices not less than 85% of the fair market value at the date of grant.
Under the terms of this Plan, no options could be granted after February 21,
1998.
The 1988 Plan, as amended, provided for the issuance of 2,000,000 shares
of Common Stock. As of March 27, 2000, 414,125 shares had been purchased
pursuant to the exercise of options granted under the 1988 Plan. Options to
purchase an aggregate 150,000 shares are outstanding under the 1988 Plan and
expire at varying times between January 31, 2002 and March 26, 2003. As of
March 27, 2000, no options had been granted to employees or directors in 2000.
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RETIREMENT SAVINGS PLAN
The Company provides for eligible employees an Employee Retirement
Savings Plan (the "401(k) Plan") under Section 401(k) of the Internal Revenue
Code, as amended. The 401(k) Plan was effective December 1, 1986, and was
restated in its entirety effective April 1, 1994. The 401(k) Plan provides
that eligible employees may make earnings reduction contributions, on a
pre-tax basis, to the 401(k) Plan. Eligible employees are allowed to defer up
to 15% of their earnings each year (up to the federal maximum limit).
Employee contributions are currently invested in various equity funds, fixed
income funds, principal protection funds and money market funds, at the
election of the participant. All full-time employees over the age of
21 who have completed three months of employment are eligible to participate.
As of March 27, 2000, 12 employees (out of a total of approximately 13
eligible employees) were participating in the 401(k) Plan.
The 401(k) Plan also provides that the Company may make a discretionary
matching contribution, in cash or common stock of the Company, of from 0% to
25% of the contribution of each employee electing to participate in the 401(k)
Plan. The Company did not make a contribution to the 401(k) Plan in 1999.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth as of March 27, 2000, certain information
with respect to the beneficial ownership of the Common Stock (i) by each
person who is known by the Company to beneficially own more than five percent
(5%) of the outstanding Common Stock, (ii) by each of the Company's Named
Executive Officers and each Director and nominee, and (iii) by all current
executive officers, Directors and nominees as a group. Unless otherwise
noted, each person or group identified has sole voting and investment power
with respect to the shares shown.
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Name and Address of Amount and Nature of
Beneficial Owner Beneficial Ownership Percent of Class (8)
Duane S. Carlson 140,000(1) *
3500 Holly Lane North
Plymouth, MN 55447
Gary L. Deaner 141,667(2) *
3500 Holly Lane North #60
Plymouth, MN 55447
Hanrow Capital Fund Five, a 1,377,478 5.30%
Minnesota limited partnership
121 S. 8th St., Ste. 700
Minneapolis, MN 55402
S. Albert D. Hanser 2,390,505(3) 9.12%
3500 Holly Lane North #60
Plymouth, MN 55447
Perkins Capital Management 2,877,000(4) 10.77%
730 East Lake Street
Wayzata, MN 55391
Douglas M. Pihl 113,750(5) *
3500 Holly Lane North #60
Plymouth, MN 55447
John E. Rogers 2,400,000 9.23%
80 South Eighth Street, Suite 4628
Minneapolis, MN 55402
Ronald B. Thomas 5,316,995(6) 17.91%
3500 Holly Lane North #60
Plymouth, MN 55447
All Directors and Officers as a Group
(6 Persons) 8,441,917(1)(2)(3)(5)(6)(7) 27.77%
* Less than 1%
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(1) Includes 90,000 shares that would be issuable within 60 days
if stock options held by Mr. Carlson were exercised.
(2) Includes 91,667 shares that would be issuable within 60 days if
stock options held by Mr. Deaner were exercised.
(3) Includes 1,377,478 shares held by Hanrow Capital Fund Five, a
Minnesota limited partnership, 107,600 shares held by Hanrow
Capital Fund and 175,000 shares held by Hanrow Financial Group,
Ltd. Also includes shares that Hanrow Financial Group, Ltd.
and Hanrow Business Finance have the right to acquire pursuant to
the terms of warrants issued to them. Does not include 200,000
shares of convertible preferred stock held by Hanrow Financial
Group, Ltd. Mr. Hanser is Chairman, director and a shareholder of
Hanrow Financial Group, Ltd., the general partner of Hanrow
Capital Fund and Hanrow Capital Fund Five. Although Mr. Hanser
may be deemed to be the beneficial owner of the foregoing
shares, he disclaims voting and dispositive powers over all of
said shares.
Also includes 60,000 shares held by the Custodian of Mr. Hanser's
IRA and 80,000 shares which would be issuable within 60 days if
stock options and/or warrants held by Mr. Hanser were exercised.
(4) Based on a Schedule 13G dated March 10, 2000, filed with the
Securities and Exchange Commission by Perkins Capital Management,
Inc. Perkins Capital Management claims sole voting power over
1,762,500 of the shares and sole dispositive power over all of the
shares. Does not include shares held by Richard W. Perkins;
Perkins Capital Management, Inc. has disclaimed beneficial
ownership in all of shares held by Richard W. Perkins.
(5) Includes 100,000 shares that would be issuable within 60 days if
stock options held by Mr. Pihl were exercised.
(6) Includes 3,669,516 shares that would be issuable within 60 days if
warrants held by Mr. Thomas were exercised.
(7) Includes 100,000 shares held by Frederic H. Sweeny, Vice President
of Sales and Marketing, and 239,000 shares that would be issuable
within 60 days if warrants held by Mr. Sweeny were exercised.
(8) Each figure showing the percentage of outstanding shares
owned beneficially has been calculated by treating as outstanding
and owned the shares which would be issuable within 60 days if
stock options and/or warrants held by the indicated owner were
exercised.
See "Hanrow Warrants" and "Thomas Warrants."
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CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
HANROW WARRANTS
S. Albert D. Hanser, a director of the Company, is Chairman, director and
a shareholder of Hanrow Financial Group, Ltd. On August 28, 1997, the Company
issued a Warrant entitling Hanrow Financial Group, Ltd. to purchase 37,500
shares of the Company's Common Stock, at a price of $.50 per share, during the
period from the date of the Warrant to July 31, 2002.
On August 1, 1996, and September 1, 1996, the Company issued Warrants
entitling Hanrow Business Finance to purchase an aggregate 75,000 shares of
the Company's Common Stock, at a price of $1.50 per share, during the period
from the date of the Warrant to August 1, 2001 and September 1, 2001,
respectively. Hanrow Business Finance is a subsidiary of Hanrow Financial
Group, Ltd.
THOMAS WARRANTS
Effective July 2, 1997, the Company issued a warrant entitling Ronald B.
Thomas to purchase 2,892,403 shares of the Company's Common Stock, at a price
of $.47 per share. The right to purchase the shares may be exercised at any
time through July 1, 2007.
In connection with a loan made to the Company by Mr. Thomas, on August
28, 1997, the Company issued a warrant entitling Mr. Thomas to purchase 37,500
shares of the Company's Common Stock, at a price of $.50 per share. The
warrant is exercisable through July 31, 2002.
Effective August 28, 1998, the Company issued a warrant entitling Ronald
B. Thomas to purchase 739,613 shares of the Company's Common Stock, at a price
of $.35 per share. The right to purchase the shares may be exercised at any
time through August 28, 2008.
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's directors and executive officers, and persons who own more than 10%
of the Company's outstanding stock, to file with the Securities and Exchange
Commission initial reports of ownership and reports of changes in ownership of
common stock and other equity securities of the Company. To the Company's
knowledge, during the fiscal year ended December 31, 1999, all Section 16(a)
filing requirements applicable to its officers, directors and greater than 10%
beneficial owners were satisfied.
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PROPOSAL TO AMEND THE COMPANY'S 1998 STOCK OPTION PLAN
The Board of Directors of the Company has unanimously adopted a
resolution approving and recommending to the shareholders that the number of
shares authorized for issuance under the 1998 Stock Option Plan of Astrocom
Corporation be increased from 1,500,000 shares to 4,000,000 shares.
The affirmative vote of the holders of a majority of the voting power of
the shares of common stock of the Company present and entitled to vote at a
meeting of shareholders is required to increase the number of shares
authorized under the 1998 Plan. Proxies solicited by the Board of Directors
will be voted in favor of the proposed amendment unless a contrary vote is
specified.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THE PROPOSAL TO
INCREASE TO 4,000,000 THE NUMBER OF SHARES AUTHORIZED FOR ISSUANCE UNDER THE
1998 PLAN.
RELATIONSHIP WITH INDEPENDENT PUBLIC AUDITORS
The firm of Ernst & Young LLP, Minneapolis, Minnesota, independent public
auditors, audited the books, records and accounts of the Company for the year
1999. A representative of Ernst & Young LLP will be present at the Annual
Meeting. The representative will have an opportunity to make a statement if
he or she desires to do so and will be available to respond to appropriate
questions from shareholders.
No auditors have been selected for the year 2000. It is anticipated that
a decision will be made by the Board of Directors in June 2000.
AVAILABLE INFORMATION
The Company is subject to the informational reporting requirements of the
Securities Exchange Act of 1934, as amended, and in accordance therewith files
reports and other information with the Securities and Exchange Commission (the
"Commission"). Such reports, proxy statements and other information filed by
the Company can be inspected and copied at the public reference facilities of
the Commission at 450 Fifth Street NW, Washington, D.C., and at the
Commission's Regional Offices at 75 Park Place, New York, New York and 230
South Dearborn Street, Chicago, Illinois. Copies of such materials can be
obtained from the Public Reference Section of the Commission at 450 Fifth
Street NW, Washington, D.C. 20549, at prescribed rates.
PROPOSALS OF SHAREHOLDERS
Proposals of shareholders intended to be presented at the next Annual
Meeting must be received by the Company, 3500 Holly Lane North, Suite 60,
Plymouth, Minnesota 55447, no later than December 15, 2000, in order to be
considered for inclusion in the Company's Proxy Statement and form of proxy
relating to that meeting.
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OTHER MATTERS
At the date of this Proxy Statement, management knows of no other matters
that may come before this Annual Meeting. However, if any other matters
properly come before the meeting, it is the intention of the persons named in
the enclosed proxy to vote such proxies received by the Company in accordance
with their judgment on such matters.
By the Order of the Board of Directors,
/S/ Ronald B. Thomas
Ronald B. Thomas
President and Chief Executive Officer
April 14, 2000
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ASTROCOM CORPORATION
3500 Holly Lane North, Suite 60
Plymouth, Minnesota 55447
PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS FOR USE
AT THE ANNUAL MEETING ON MAY 24, 2000.
The shares of stock you hold in your account will be voted as you specify
below.
If no choice is specified, the proxy will be voted FOR Proposals 1 and 2.
By signing the proxy, you revoke all prior proxies and appoint Ronald B.
Thomas and John M. Bucher as Proxies, each with the power to appoint his
substitute, and hereby authorize them to represent and to vote your shares, as
designated, on the matters shown on the reverse side and any other matters
which may come before the Annual Meeting and all adjournments.
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Please mark, sign and date your proxy card and return it in the enclosed
postage-paid envelope or return it to: Astrocom Corporation, c/o Shareowner
Services, P.O. Box 64873, St. Paul, MN 55164-0873.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSALS 1 AND 2.
1. ELECTION OF CLASS I DIRECTORS FOR TERMS EXPIRING AT THE 2003
ANNUAL MEETING:
01 Ronald B. Thomas 02 Douglas M. Pihl
____ VOTE FOR all nominees
____ VOTE WITHHELD from all nominees
Instructions: To withhold authority to vote for any indicated nominee, write
the number of the nominee in the blank provided to the right. ______________
2. AMENDMENT OF 1998 STOCK OPTION PLAN TO INCREASE TO 4,000,000 THE NUMBER OF
SHARES AUTHORIZED FOR ISSUANCE THEREUNDER. Mark only one of the following
choices:
____ VOTE FOR
____ VOTE AGAINST
____ VOTE WITHHELD
3. IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON SUCH
OTHER MATTERS AS MAY PROPERLY COME BEFORE THE MEETING.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED AS DIRECTED OR, IF
NO DIRECTION IS GIVEN, WILL BE VOTED FOR PROPOSALS 1 AND 2.
__________________________________
Date
__________________________________
Signature
Please sign exactly as name(s) appears on Proxy. If held in joint
tenancy, all persons must sign. Trustees, administrators, etc. should include
title and authority. Corporations should provide full name of corporation and
title of authorized officer signing the proxy.
