SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] Confidential, for Use of the
Commission Only (as permitted)
by Rule 14a-6(e)(2)
[ ] Definitive Proxy Statement
[X] Definitive Additional Materials
[_] Soliciting Material Proxy Pursuant to Section 240.14a-11(c)
or Section 240.14a-12
RELM WIRELESS CORPORATION
------------------------------------------------------------------------------
(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] No fee 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):
------------------------------------------------------------------------
<PAGE>
(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:
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<PAGE>
RELM WIRELESS CORPORATION
7505 Technology Drive
West Melbourne, Florida 32904
----------------------------------
NOTICE OF 1998 ANNUAL MEETING OF SHAREHOLDERS
----------------------------------
The Annual Meeting of Shareholders (the "Meeting") of RELM Wireless
Corporation, a Nevada corporation (the "Company"), will be held on Friday,
August 21, 1998 at 9:00 a.m., local time, at the offices of RELM Communications,
Inc., 7505 Technology Drive, West Melbourne, Florida, for the following
purposes:
1. To elect seven (7) directors to hold office until the Annual Meeting
of Shareholders in 1999 and until their respective successors are duly
elected and qualified;
2. To consider and vote upon approval of the Company's 1997 Stock Option
Plan.
3. To transact such other business as may properly come before the
Meeting and any and all adjournments and postponements thereof.
The Board of Directors has fixed the close of business on July 10, 1998 as
the record date for the Meeting. Only shareholders of record at that time are
entitled to notice of and to vote at the Meeting and any adjournment or
postponement thereof.
The enclosed proxy is solicited by the Board of Directors of the Company.
Reference is made to the accompanying Proxy Statement for further information
with respect to the business to be transacted at the Meeting.
The Board of Directors urges you to date, sign and return the enclosed
proxy promptly. The return of the enclosed proxy will not affect your right to
vote in person if you do attend the Meeting.
By Order of the Board of Directors,
July 17, 1998 William P. Kelly
Secretary
<PAGE>
RELM WIRELESS CORPORATION
7505 Technology Drive
West Melbourne, Florida 32904
----------------------------------
PROXY STATEMENT
FOR ANNUAL MEETING OF SHAREHOLDERS
AUGUST 21, 1998
----------------------------------
INTRODUCTION
This Proxy Statement is being furnished to shareholders by the Board of
Directors of RELM Wireless Corporation (formerly known as Adage, Inc.), a Nevada
corporation (the "Company"), in connection with the solicitation of the
accompanying proxy (each a "Proxy" and collectively, "Proxies") for use at the
Company's Annual Meeting of Shareholders (the "Meeting") which is scheduled to
be held at 9:00 a.m., local time, on Friday, August 21, 1998 at the offices of
RELM Communications, Inc., 7505 Technology Drive, West Melbourne, Florida, for
the purposes set forth in the foregoing Notice of 1998 Annual Meeting of
Shareholders (the "Notice") or any adjournment thereof.
The mailing address of the principal executive offices of the Company is 7505
Technology Drive, West Melbourne, Florida 32904. This Proxy Statement and the
accompanying Proxy and Annual Report to shareholders will first be sent or given
to shareholders on approximately July 17, 1998.
VOTING SECURITIES AND SECURITY OWNERSHIP
Record Date and Voting Securities
At the close of business on July 10, 1998, the record date fixed for the
determination of shareholders entitled to notice of and to vote at the Meeting
(the "Record Date"), there were outstanding 5,041,123 shares of the Company's
Common Stock, $.60 par value per share (the "Common Stock"). Holders of Common
Stock have one vote per share on each matter to be acted upon. Only holders of
Common Stock (the "Shareholders") of record at the close of business on the
Record Date will be entitled to vote at the Meeting and at any adjournment
thereof. The presence, in person or by proxy, of Shareholders entitled to cast
at least a majority of the votes that all Shareholders are entitled to cast at
the Meeting shall constitute a quorum for the Meeting. On all matters brought
before the Meeting each Shareholder shall be entitled to one vote for each share
such Shareholder is entitled to vote at the Meeting.
1
<PAGE>
Voting of Proxies
Shares of Common Stock represented by Proxies, which are properly executed, duly
returned and not revoked, will be voted in accordance with the directions
contained therein. If no direction is given in the Proxy, the shares of Common
Stock represented thereby will be voted: (i) for the election of each of the
seven (7) nominees of the Board of Directors in the election of directors; (ii)
for approval of the Company's 1997 Stock Option Plan; and (iii) on any other
matter that may properly be brought before the Meeting in accordance with the
judgment of the person or persons voting the Proxies.
The execution of a Proxy will in no way affect a Shareholder's right to attend
the Meeting and to vote in person. Any Proxy executed and returned by a
Shareholder may be revoked at any time thereafter if written notice of
revocation is given to the Secretary of the Company prior to the vote to be
taken at the Meeting, or by execution of a subsequent proxy that is presented
before the Meeting, or if the Shareholder attends the Meeting and votes by
ballot, except as to any matter or matters upon which a vote shall have cast
pursuant to the authority conferred by such Proxy prior to such revocation. For
purposes of determining the presence of a quorum for transacting business at the
Meeting, abstentions and nominee "non-votes" (i.e., proxies from brokers or
nominees indicating that such persons have not received instructions from the
beneficial owner or other persons entitled to vote shares on a particular matter
with respect to which brokers or nominees do not have discretionary power) will
be treated as shares that are present but have not been voted.
Solicitation of Proxies
The cost of solicitation of the Proxies being solicited on behalf of the Board
of Directors will be borne by the Company. In addition to the use of the mail,
proxy solicitation may be made by telephone, telegraph and personal interview by
officers, directors and regular employees of the Company or its subsidiaries.
The Company will, upon request, reimburse brokerage houses and persons holding
Common Stock in the names of their nominees for their reasonable expenses in
sending soliciting material to their principals.
Security Ownership of Certain Beneficial Owners and Management
The table below sets forth certain information as of July 10, 1998 regarding the
beneficial ownership, as defined in regulations of the Securities and Exchange
Commission, of Common Stock of (i) each person who is known to the Company to be
the beneficial owner of more than 5% of the outstanding shares of the Company's
Common Stock, (ii) each director and nominee for director of the Company, which
includes Mr. Goebert, who, as the Company's President until December 1, 1997,
was the only executive officer of the Company whose salary and bonus
compensation exceeded $100,000 during 1997, and (iii) all directors and
executive officers as a group. Unless
2
<PAGE>
otherwise specified, the named beneficial owner has sole voting and
investment power. The information in the table below was furnished by the
persons listed
<TABLE>
<CAPTION>
Amount Beneficially Percent
Name of Beneficial Owner Owned of Class(1)
------------------------ --------------------------- -----------
<S> <C> <C>
Dimensional Fund Advisors 307,433(2) 6.1%
1299 Ocean Avenue, 11th Floor
Santa Monica, CA 90401
Donald F.U. Goebert .................................... 1,534,763(3)(4)(5) 29.9%
400 Willowbrook Lane
West Chester, PA 19382
Richard K. Laird ....................................... 0 *
Ralph R. Whitney, Jr ................................... 51,187(5) *
Buck Scott ............................................. 15,000(5) *
Joel A. Schleicher ..................................... 8,124(5) *
James C. Gale .......................................... 9,166(5) *
George N. Benjamin, III ................................ 7,183(5) *
Robert L. MacDonald .................................... 5,000(5) *
All executive officers and directors as a group
(9 persons) ......................................... 1,631,673(3)(4)(6) 31.5%
</TABLE>
- -----------------------
* Less than 1%
(1) Based upon 5,041,123 outstanding shares as of July 10, 1998 and, with
respect to each holder of options exercisable within 60 days, the shares
represented by such options.
(2) According to the Schedule 13G filed by Dimensional Fund Advisors Inc. (the
"Reporting Person") dated February 6, 1997, the Reporting Person had sole
voting power with respect to 193,738 of the reported shares and sole
investment power with respect to 307,433 of the reported shares and all of
the reported shares were owned by advisory clients of the Reporting Person.
(3) Includes 85,942 shares owned by Chester County Fund, Inc., the majority
shareholder of which is Mr. Goebert and 60,000 shares owned by a
partnership controlled by Mr. Goebert. Also includes 11,840 shares held in
trust for Mr. Goebert's children.
(4) Includes 23,366 shares held in a custodial account for the Company's
Employee Stock Purchase Program, of which Mr. Goebert is a Custodian, and
789 shares held in a Trust under the Company's 401(k) Retirement-Investment
Plan, of which Mr. Goebert is a Trustee.
3
<PAGE>
(5) Share ownership of the noted persons includes shares subject to immediately
exercisable options or options exercisable within 60 days as follows:
Donald F. U. Goebert 100,000 shares;
Ralph R. Whitney, Jr. 9,166 shares;
Buck Scott 5,000 shares;
Joel A. Schleicher 8,124 shares
James C. Gale 9,166 shares;
George N. Benjamin, III 7,083 shares;
Robert L. MacDonald 5,000 shares
(6) Includes an aggregate of 144,789 shares subject to immediately exercisable
options held by executive officers and directors as a group.
EXECUTIVE COMPENSATION
Summary Compensation Table
The following table sets forth certain information regarding compensation paid
during each of the last three years to Messrs. Goebert and Laird, each of whom
served as the Company's President and Chief Executive Officer during 1997. No
other executive officer of the Company was paid salary and bonus compensation
which exceeded $100,000 during 1997.
<TABLE>
<CAPTION>
Long-Term Compensation
Awards
----------------------------
Annual Compensation
-------------------------------------
Number of
Other Annual Securities All Other
Salary Bonus Compensation Underlying Compensation
Name and Principal Position Year ($) ($) ($)(1) Options(#) ($)
- --------------------------- ---- ------- -------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Donald F. U. Goebert
President and CEO,
Chairman(2) 1997 $150,000 $ -- $ -- $ -- $ --
1996 150,000 -- -- -- --
1995 150,000 -- -- -- --
Richard K. Laird
President and CEO(2)(3) 1997 11,538 -- -- -- --
1996 -- -- -- -- --
1995 -- -- -- -- --
</TABLE>
<PAGE>
- --------------------
(1) Neither of the named executive officers received any other annual
compensation not categorized as salary or bonus except for perquisites and
other personal benefits which in the
4
<PAGE>
aggregate did not exceed the lesser of $50,000 or 10% of the total annual
salary and bonus reported for such named executive officer.
(2) Mr. Goebert served as President and CEO until December 1, 1997, when Mr.
Laird assumed the office of President and CEO. Mr. Goebert continues to
serve as Chairman of the Board. Mr. Laird was employed at a salary rate of
$200,000 per year, effective December 1, 1997. Effective January 1, 1998,
Mr. Goebert's salary as Chairman of the Board became $50,000 per year.
(3) Under the terms of Mr. Laird's employment he was granted options under the
Company's 1997 Stock Option Plan for the purchase of 100,000 shares of
Common Stock upon the commencement of his employment and is to be granted
options for additional increments of 50,000 shares six months, twelve
months, eighteen months and twenty-four months thereafter. Such options
will be granted at the then current market value of the shares. The options
granted and to be granted will become exercisable as to increments of 25%
of the optioned shares on the first, second, third and fourth year
anniversaries of the date of the grant. In the event of a change in
control, as defined in the Plan agreement, 50% of any otherwise unvested
options shall become vested and exercisable. Mr. Laird shall also be
eligible to receive a bonus of up to 50% of his salary upon attaining
earnings per share and/or share price goals or other performance criteria
to be mutually agreed upon with the Board of Directors.
Stock Option Grants
The following table contains information concerning the grant of stock options
under the Company's 1997 Stock Option Plan to the executive officers named in
the Summary Compensation Table above (the "Named Officers") during 1997.
<TABLE>
<CAPTION>
Option Grants in 1997
Individual Grants
Potential Realizable
Value (3) at Assumed
Number of Annual Rates of Stock
Securities % of Total Exercise Price Appreciation for
Underlying Options Granted or Base Option Term
Options Granted to Employees in Price Expiration -----------------------
Name (# of Shares)(1)(2) 1997 ($/Sh) Date(2) 5%($)(3) 10%($)(3)
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Donald F.U. Goebert -- -- -- -- -- --
Richard K. Laird 100,000 100 $6.25 12/01/07 $393,059 $996,089
</TABLE>
- -------------------
(1) These are options granted under the 1997 Stock Option Plan to acquire
shares of Common Stock. Options with respect to 64,000 shares are incentive
stock options ("ISOs") under ss.422
5
<PAGE>
of the Internal Revenue Code of 1986, as amended and options with respect
to 36,000 shares are non-qualified stock options. The options are
exercisable with respect to increments of 25% of the optioned shares
(prorated among the ISOs and the non-qualified options) as of the first,
second, third and fourth anniversaries of the option grant date. These
options were granted at fair market value on the date of the grant.
Shareholder approval of the 1997 Stock Option Plan is a proposal to be
considered at the Meeting. If the proposal is not approved by the
shareholders, the 1997 Stock Option Plan will remain in effect and the
options granted to Mr. Laird will remain outstanding under the Plan. Absent
shareholder approval, all of such options shall be non-qualified options
and none of the options granted thereunder to Mr. Laird will qualify as
ISO's. In addition, shareholder approval is also required under the Rules
of the National Association of Securities Dealers, Inc. (The "NASD") as a
condition to the listing of the subject shares with the NASDAQ.
(2) These options could expire earlier in certain situations.
(3) The potential realizable value of the options, if any, granted in 1997 was
calculated by multiplying those options by the excess of (a) the assumed
market value, at December 1, 2007, of Common Stock if the market value of
Common Stock were to increase 5% or 10% in each year of the option's
10-year term over (b) the base price shown. This calculation does not take
into account any taxes or other expenses which might be owed. The assumed
market value at a 5% assumed annual appreciation rate over the 10-year term
is $10.18 and such value at a 10% assumed annual appreciation rate over
that term is $16.21. At $10.18 the total market value of the shares of
Common Stock outstanding on March 31, 1998 would be $51,319,548 which would
be an increase of $13,192,854 from the market value of such shares at the
close of business on December 31, 1997. At $16.21, the total market value
of the shares of Common Stock outstanding on March 31, 1998 would be
$81,718,063 which would be an increase of $43,591,369 from the market value
of such shares at the close of business on December 31, 1997. The 5% and
10% appreciation rates are set forth in the Securities and Exchange
Commission Rules and no representation is made that the Common Stock will
appreciate at these assumed rates or at all.
The Company does not currently have (and has not previously had) any plan
pursuant to which any stock appreciation rights ("SARs") may be granted.
Stock Option Exercises and Holdings
The following table sets forth information relating to options exercised during
1997 by each of the Named Officers and the number and value of options held on
December 31, 1997 by such individuals.
6
<PAGE>
<TABLE>
<CAPTION>
Aggregated Option Exercises in 1997 and Option Values at December 31, 1997
Shares
Acquired
on Number of Securities Value of Unexercised
Exercise Value Underlying Unexercised In-the-Money Options at
Name (#) Realized ($) Options at Dec. 31, 1997(#) Dec. 31, 1997 ($)(1)
---- -------- ------------- ----------------------------- ---------------------------
Exercisable Unexercisable Exercisable Unexercisable
----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Donald F. U. Goebert(2) 0 $ 0 87,500 12,500 $256,638 $ 36,663
Richard K. Laird (3) 0 0 0 100,000 0 131,300
</TABLE>
- ---------------
(1) Total value of unexercised options is based upon the difference between the
last sales price of the Company's Common Stock on the NASDAQ on December
31, 1997, which was $7.563 per share, and the exercise price of the
options, multiplied by the number of option shares.
(2) Options granted under the Company's 1988 Stock Plan.
(3) Options granted under the 1997 Stock Option Plan.
REPORT OF THE COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION
The Company's compensation program for the Named Officers, as well as for its
other executive officers, is administered by the Board of Directors with the
advice and counsel of the Compensation Committee of the Board. The members of
the Compensation Committee provide such advice and counsel through their
participation as directors in meetings of the Board and as members of the
Committee in meetings of the Committee held separate and apart from meetings of
the Board. During 1997, the Compensation Committee, consisted of three outside
directors, James C. Gale, Chairman, and George N. Benjamin, III., who are
nominees for reelection as directors, and Joel A. Schleicher, whose term of
office as a director will expire at the meeting The Compensation Committee did
not hold any separate meetings during 1997.
The principal actions taken by the Board with respect to executive
compensation during 1997 were approval of the compensation package pursuant to
which Mr. Laird was employed as President and Chief Executive Officer on
December 1, 1997 and the approval of a change in the compensation of Mr. Goebert
for the year beginning January 1, 1998 to reflect the change in his
responsibilities from Chairman of the Board, President and Chief Executive
Officer to Chairman of the Board. All of the members of the Committee approved
these actions and neither Mr. Laird nor Mr. Goebert participated in the Board
action which affected his compensation.
The Company's officer compensation is composed of base salary, incentive
compensation in the form of an annual cash bonus and discretionary long-term
incentive compensation in the form of stock
7
<PAGE>
options. Each officer is also a participant in medical life insurance,
non-contributory 401(k) and other plans which are generally made available to
employees of the Company or of the business units managed by such officer.
The Compensation Committee and the Board of Directors strive to offer to the
Company's officers a compensation package consisting of base salary and
incentive compensation which will attract, retain, motivate, and reward talented
executives. To achieve its objectives, the Committee and the Board evaluate the
performance of the Company's officers and consider data on other companies in
its industry which are comparable in size, location and financial performance.
The Committee and the Board intend to base a significant portion of the
compensation of senior executives upon the Company's financial success so that
the Company's officers are rewarded on the same basis as the Company's
shareholders.
Consistent with the compensation objectives of the Committee and the Board, the
use of stock options has been a material part of the compensation package for
the Company's President and Chief Executive Officer. The compensation package
agreed upon for the employment of Mr. Laird as President and Chief Executive
Officer included, in addition to his salary, the grant to him, upon commencement
of employment, of an option under the Company's 1997 Stock Option Plan for the
purchase of up to 100,000 shares of the Company's Common Stock, and for the
grant to him of additional options for increments of up to 50,000 shares each
six months, twelve months, eighteen months and twenty-four months thereafter.
Such options will vest and become exercisable during his employment at the rate
of 25% of the optioned shares on each of the first, second, third and fourth
anniversaries of the grant date. Similarly, in 1994, Mr. Goebert, who served as
President and Chief Executive Officer of the Company until December 1, 1997, was
granted options under the Company's 1988 Stock Plan for the purchase of 100,000
shares which became vested and exercisable over a five year period. In light of
the 1994 grants, the Committee determined for fiscal years since 1994 to
maintain the 1994 level of base salary compensation for Mr. Goebert. Stock
options, constituting a less material element of overall compensation, have also
been granted to William P. Kelly, the other executive officer of the Company,
and to other key employees of the Company and its subsidiaries.
From time to time the Board, upon the recommendation of the Committee,
implements bonus plans or grants discretionary bonus payments to its executive
and other officers based upon performance criteria and the results of the
Company's operations. It is the continuing philosophy of the Compensation
Committee to include corporate goals, stock price, and financial results
measured by return on shareholder equity as determinants of total executive
compensation. The terms of Mr. Laird's employment provide for the payment of a
bonus of up to 50% of his salary based upon earnings and/or share price goals or
other performance criteria to be mutually agreed upon with the Board of
Directors.
The Internal Revenue Code provides that publicly-held corporations may not
deduct, for federal income tax purposes, non-performance based compensation for
its chief executive officer and certain other executive officers to the extent
that such compensation exceeds $1,000,000 for the executive. The Compensation
Committee and the Board intend to take such actions as are appropriate to
qualify compensation paid to executives for deductibility under these recent
amendments. In this regard, base salary and bonus levels are expected to remain
well below the $1,000,000 limitation in the foreseeable future. Options granted
under the Company's Stock Option Plans are designed to constitute
performance-based compensation, which would not be included in calculating
compensation for purposes of the $1,000,000 limitation.
8
<PAGE>
Members of the Compensation Committee
James C. Gale, Chairman George N. Benjamin, III Joel A. Schleicher
Compensation Committee Interlocks and Insider Participation
During 1997, the Compensation Committee of the Company's Board of Directors was
composed of independent, outside directors, Messrs. Gale, Benjamin and
Schleicher. As noted above, the Company's compensation program for its
executives is administered by the Board of Directors with the advice and counsel
of the Compensation Committee. As a result, Messrs. Goebert and Laird provide
input to the deliberations by the Committee and the Board concerning executive
compensation. Neither Mr. Goebert nor Mr. Laird, each of whom is a director of
the Company, voted as a member of the Board in the Board action which affected
his compensation.
STOCK PERFORMANCE GRAPH
The graph below compares the five-year cumulative total shareholder return on
the Company's Common Stock with the five-year cumulative total return of the
Nasdaq Stock Index, U.S. ("Nasdaq") and the Nasdaq non-financial stocks index
("Composite").
[GRAPHIC]
In the printed document, there is a line chart representing the following:
Annual Returns Endings
December 31,
NASDAQ COMPOSITE RELM
1992 100 100 100
1993 114.7932 115.4545052 112.195122
1994 112.2085 111.0153274 95.12195122
1995 158.6839 154.7107292 82.92682927
1996 195.1942 187.9706742 65.85365854
1997 239.6321 220.7663684 147.5707317
9
<PAGE>
PROPOSAL 1: ELECTION OF DIRECTORS
Nominees for Election
In accordance with the By-Laws of the Company, the Board of Directors has
determined the size of the Board at seven directors commencing with the election
of directors at the meeting. At the Meeting, the shareholders will elect seven
directors to hold office until the Annual Meeting of Shareholders in 1999, and
until their respective successors are duly elected and qualified. Unless
contrary instructions are given, the shares represented by a properly executed
proxy will be voted "FOR" the election of the of the following nominees. Donald
F.U. Goebert; Richard K. Laird; Buck Scott; Robert L. MacDonald; Ralph R.
Whitney, Jr.; James C. Gale; and George N. Benjamin, III. All of the nominees
are presently members of the Board of Directors of the Company. Joel A.
Schleicher, who is presently a director, has declined to be nominated for
reelection because of other business and scheduling commitments.
The Board of Directors believes that the nominees will be able to serve as
directors. If any nominee is unable to serve, the person's name in the enclosed
proxy will vote the shares they represent for the election of such other person
as the Board of Directors may recommend, unless the Board of Directors reduces
the number of directors.
Set forth below is certain information concerning the nominees for election
as directors:
<TABLE>
<CAPTION>
Principal Occupation
Name Age During Past Five Years Directorships
---- --- ---------------------- -------------
<S> <C> <C> <C>
Donald F.U. Goebert 61 President, Chester County Fund, Inc. Progress Financial Corporation;
since 1968; Chairman of the Board of Investors Insurance Group, Inc.
Directors of Company and its
predecessor since March 1968;
President of the Company's
predecessor from March 1968 to
October 1988 and President and
CEO of the Company April 1993
to December 1997.
Richard K. Laird 50 President and CEO of the Company since
December 1997; Executive Vice President and
Chief Operating Officer of Antec Corp. From
January 1994 to December 1996; Chairman and
CEO of Keptel Inc. 1983 to January 1994.
Director since December 1997.
Buck Scott 68 Private investor since January 1995;
President of Electrical Energy Enterprises,
Inc. from 1991 through 1994. Director of
Company since 1980 (including its
predecessor).
10
<PAGE>
Robert L. MacDonald 70 Retired, Director of Financial Aid Wharton
Graduate Division and Lecturer in
Management, Wharton School, University of
Pennsylvania 1953 to March 1993. Director
of Company since February 1991.
Ralph R. Whitney, Jr. 63 President and CEO of Hammond Kennedy Whitney IFR Systems, Inc.; Excel
& Co., Inc. since January, 1971; Director of Industries, Inc.; Baldwin
Company since January 1992. Technologies Inc.; Control
Devices, Inc.; Selas
Corporation of America
James C. Gale 48 Managing Director of Gruntal & Co., LLC from Latshaw Enterprises, Inc.
1991 to present. Director of
Company since October 1993.
George N. Benjamin, III 60 President of BICC Brand-Rex since September
1997; Vice President, BICC Cables Corp.
Since September, 1997; Management Consultant
of Trig Systems, LLC since July 1987;
President and CEO of Tie/Communications,
Inc. from April 1992 to November 1995; Group
Vice President of The Marmon Group, Inc.
prior to April 1992; Director since January
1996.
</TABLE>
Required Vote
The directors are to be elected by the affirmative vote of the holders of a
plurality of the shares entitled to vote and present in person or represented by
proxy at the Meeting. Nominee holders that do not receive instructions are
entitled to vote in the Election of Directors. Votes withheld from the Election
of Directors will have no effect, because they will not represent votes cast at
the Meeting for the purpose of electing directors.
Recommendation of the Board of Directors
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF EACH OF THE
NOMINEES AS DIRECTORS.
Meetings and Committees of the Board of Directors
The Board of Directors has a Compensation Committee and an Audit Committee.
The Company does not have an Executive Committee or Nominating Committee.
Messrs. Gale, Schleicher and Benjamin served as members of the Compensation
Committee during 1997. The primary function of the Compensation Committee is
compensation review with respect to the principal executive officers of the
Company. The members of the Compensation Committee provide advice and counsel to
the Board of Directors through their participation as directors in meetings of
the Board and as members of the Committee in meetings of the Committee held
separate and apart from the meetings of the Board. The Compensation Committee
also serves as the Committee which administers the Company's 1996 Stock Option
Plan for Non-Employee Directors
11
<PAGE>
(the "1996 Director Plan") and 1997 Stock Option Plan. The Compensation
Committee did not hold any separate meetings during 1997.
Messrs. Scott, MacDonald, Whitney, Gale and Schleicher served as members of the
Audit Committee during 1997. The primary function of the Audit Committee is to
meet with the Company's independent public accountants, counsel and management
to discuss the scope and results of the annual audit, internal accounting
procedures and certain other questions of accounting policy. The Audit Committee
held 2 meetings during 1997. At its 1997 meetings, the Committee considered and
recommended to the Board of Directors the replacement of the firm of MacDade
Abbott LLP with Ernst & Young LLP as the Company's auditors. The Board adopted
the recommendation of the Committee.
The Board of Directors held 6 meetings in 1997. No member of the Board of
Directors attended fewer than 75% of the aggregate of the total number of
meetings of the Board of Directors and the total number of meetings held by all
committees of the Board of Directors on which such director served.
Compensation of Directors
During 1997 the Company paid to each of its non-employee directors meeting fees
of $1,000 for attendance at each Board meeting and $500 for attendance at each
meeting of any committee of the Board of Directors which is not held in
conjunction with a meeting of the Board. Beginning with the 1997 fiscal year, as
a result of approval by the shareholders of the 1996 Director Plan, compensation
for non-employee directors was modified to provide for the grant of stock
options in lieu of a quarterly retainer for service as a director. Pursuant to
the terms of the 1996 Director Plan, beginning in 1997, a grant of a stock
option for the purchase of 5,000 shares is made to each non-employee director on
the date of each annual meeting of shareholders at which such person is elected
or reelected as a director (or if such annual meeting has not been held by June
30 of such year such grant is made as of such June 30 to each such person who
has been a non-employee director for at least three months). Such options are
granted at an exercise price equal to the fair market value of the Common Stock
on the date of grant, become fully exercisable eleven months after the date of
the grant or, if earlier, upon a change of control as defined in the Plan and
expire five years from the date of the grant or earlier in the event service as
a director ceases. Such options were granted to the Company's non-employee
directors as of June 30, 1997 at an exercise price of $4.06 per share and as of
June 30, 1998 at an exercise price of $3.06 per share.
CERTAIN TRANSACTIONS
The Company leased its headquarters and a manufacturing facility from entities
owned principally by Messrs. Goebert and Scott during 1997. The lease was
terminated on June 5, 1997 concurrently with the sale of the Allister assets
referred to in the following paragraph. Rentals under these leases were $83,000
for the year ended December 31, 1997.
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On June 5, 1997 the Company sold all of the assets of its specialty
manufacturing subsidiary, Allister Manufacturing Company, Inc. ("Allister") to
c.p. Allstar Corporation ("Allstar"), a corporation owned by Robert T. Holland,
who was until that date a director and executive officer of the Company.
Allister was primarily engaged in the manufacturing of automatic garage door and
gate control systems. For the fiscal years ended December 31, 1994, 1995 and
1996 Allister had incurred operating losses of $395,000, $898,000 and $715,000,
respectively. Under the terms of the Asset Purchase Agreement dated April 22,
1997 (the "Agreement") between Allister and Allstar the assets of Allister were
purchased for an aggregate purchase price, after adjustments of $1,946,000 which
was paid at closing by payment in cash of $1,592,000 and delivery to the Company
of 83,327 shares of Common Stock and options for the purchase of 75,000 shares
of Common Stock at an agreed upon aggregate value of $696,029 based upon the
book value of the shares on the date of the Agreement. and the possible future
value of the options. The approximate book value and the market value of the
Common Stock on the date of the Agreement were $5.60 per share and $3.625 per
share, respectively, and the average exercise price under the options was $4.63
per share. The pre-adjustment purchase price of $1,800,000 was based upon an
assumed closing date net book value of $2,700,000 and adjusted to increase or
decrease the purchase price from $1,800,000 on a dollar for dollar basis to the
extent that the closing date net book value was greater than or less than
$2,700,000 and to increase or decrease the purchase price by any decrease or
increase in earnings before interest, taxes, depreciation and amortization for
the period from March 1, 1997 until June 5, 1997, the date of closing of the
purchase transaction. The Company's basis in the net assets was $3,763,681 and
the purchase price was determined by the Board of Directors based upon net book
value of tangible assets, less a discount. During 1996 the Board of Directors
determined to divest the Company of its specialty manufacturing and recycled
paper manufacturing subsidiaries in order to concentrate the Company's
management and financial resources on its principal business, the manufacture
and sale of wireless communications products. The sale of the assets of Allister
resulted in the disposition of the Company's specialty manufacturing business.
On June 16, 1997, the Company sold Fort Orange Paper Co., Inc., its recycled
paper manufacturing subsidiary to an unaffiliated third party.
During 1997 the Board of Directors approved the sale to affiliates of Mr.
Goebert of the real estate which consisted of most of the remaining assets of
the Company's commercial real estate operations, which the Company elected to
discontinue in 1994. These properties constituted land located in the Naaman's
Creek Center. Four of the properties were sold during 1997 for an aggregate
purchase price, after adjustment of $1,733,000 which was paid at closing by
payment in cash of $1,533,000 and delivery to the Company of a seven year, 7%
promissory note in the amount of $200,000. The Company's cost basis in these
properties was $1,965,114 and the purchase price was determined based upon their
market value as determined by independent appraisal. In April, 1998 an
additional property was sold for $549,000. The remaining property is expected to
be sold during April, 1998. The Company's basis in these properties is
approximately the same as the selling price.
In general, the Company believes that the terms of the transaction described in
this section are at least as favorable as those that might have been obtained
from unaffiliated third parties.
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PROPOSAL 2: APPROVAL OF 1997 STOCK OPTION PLAN
The Company's 1997 Stock Option Plan (the "1997 Plan") which was approved by the
Company's Board of Directors as of October 13, 1997 and amended as of June 23,
1998, has been recommended for shareholder approval by a unanimous resolution of
the Board. The 1997 Plan is a successor plan to the Company's previous 1988
Stock Plan (the "1988 Plan") which expired on January 27, 1997. A summary of the
principal features of the 1997 Plan is provided below, but such summary is
qualified in its entirety by reference to the full text of the 1997 Plan which
is included as Appendix A to this Proxy Statement.
Purposes
The purposes of the 1997 Plan, like those of the 1988 Plan, are to closely
associate the economic interests of employees of the Company and its
subsidiaries with the economic interests of the shareholders of the Company, to
promote the success of the Company's business, maintain competitive compensation
levels for the employees, and to provide an incentive to the employees to
continue in the employment of the Company. As amended, the 1997 Plan limits the
persons who shall be eligible to receive options thereunder to employees of the
Company and its subsidiaries. The 1988 Plan and the 1997 Plan as originally
adopted, also permitted the granting of options to non-employee directors. No
options had been granted to non-employee directors under either the 1988 Plan or
the 1997 Plan. Since the beginning of the 1997 fiscal year, non-employee
directors have been eligible to receive options under the 1996 Director Plan.
The Board of Directors believes that the 1988 Plan has been effective in
accomplishing its intended purposes.
ISO's and Nonqualified Options
The 1997 Plan is intended to qualify as a tax qualified incentive stock option
plan under which tax qualified incentive stock options ("ISO's"), as described
in Section 422 of the Internal Revenue Code of 1986, as amended (the "Code"),
may be granted to employees. To the extent the 1997 Plan applies to employees to
whom the Committee, as hereinafter defined, intends to grant options which are
not intended to be ISO's ("nonqualified options"), the 1997 Plan is intended to
be a nonqualified stock option plan under Section 83 of the Code. If the 1997
Plan is not adopted by the shareholders by October 13, 1998, it shall remain in
effect, but all options granted thereunder, or to be granted thereunder, shall
be nonqualified stock options.
Shares
The 1997 Plan provides that options may be granted for the purchase of up to a
maximum of 1,500,000 shares of Common Stock. As of June 12, 1998, options for an
aggregate of 150,000 shares had been granted and 1,350,000 shares remained
available for options to be granted under the 1997 Plan. All of the options
which have been granted under the Plan were granted to Mr. Laird as a part of
the compensation package pursuant to which he was initially employed by the
Company in 1997 as its Chief Executive Officer. See "Report of the Compensation
Committee on Executive Compensation."
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Under the terms of the 1997 Plan, the number of shares available for options and
the number of shares subject to any then outstanding option (and the price of
the shares under any such outstanding option) shall be adjusted for any increase
or decrease in the number of issued shares of the Common Stock resulting from a
subdivision or consolidation of shares or the payment of a stock dividend (but
only on the Common Stock) or any other increase or decrease in the number of
such shares effected without receipt of consideration by the Company. In the
event of a proposed sale of all of the assets of the Company, or the merger of
the Company with or into another corporation, an outstanding option shall be
assumed or an equivalent option shall be substituted by such successor
corporation or its parent or subsidiary, unless it does not agree to assume the
option or substitute an equivalent option, in which case such option shall be
exercisable (without vesting restrictions) through the date of such sale or
merger, thereafter, the option shall terminate.
Administration
The 1997 Plan is administered by the Compensation Committee of the Board of
Directors which is a committee appointed by the Board of Directors (the
"Committee") consisting of two or more members of the Board of Directors who are
"non-employee directors" as defined in Rule 16b-3, implementing the Securities
Exchange Act of 1934, as amended. Generally, a "non-employee director" is a
director who: (i) is not currently an officer of the Company or a parent or
subsidiary of the Company, or is otherwise currently employed by the Company or
a parent or subsidiary of the Company; (ii) does not receive compensation
directly or indirectly from the Company or a parent or subsidiary of the Company
for services rendered as a consultant or in a capacity other than as a director,
except for an amount that does not require proxy statement disclosure; (iii)
does not possess an interest in any other transaction with the Company or a
parent or subsidiary of the Company that requires proxy statement disclosure;
and (iv) is not engaged in any business relationship with respect to the Company
or a parent or subsidiary of the Company which requires proxy statement
disclosure. In accordance with the terms of the 1997 Plan, the Committee, in its
sole discretion, but subject to the terms of the Plan, shall have the authority:
to grant options to employees in such amount and on such terms as it shall
determine; to impose limitations, restrictions and conditions upon the award of
any option, provided in the case of a grant of an option to an employee that is
intended to be an ISO, such limitations, restrictions and conditions are
consistent with Section 422 of the Code; and to interpret the Plan and take
other actions necessary or appropriate for the implementation and administration
of the Plan.
Amendment of the Incentive Plan
The 1997 Plan may be amended at any time, and from time to time, by the Board of
Directors. The Board of Directors may not, however, amend the Plan without
shareholder approval if such amendment would: (i) increase the number of shares
subject to the Plan; (ii) extend the period during which any option may be
exercised; or (iii) extend the term of the Plan. The Committee at the written
request of an optionee may, in its discretion, take such actions as may be
necessary to convert such optionee's ISO into a nonqualified option at any time
prior to the expiration of such option including, but not limited to, extending
the exercise period or reducing the exercise price of the appropriate
installments of such options.
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Eligibility
The persons who shall be eligible to receive options under the 1997 Plan shall
include any employee of the Company or a subsidiary of the Company, including,
but not limited to employees who are also officers or directors of the Company
or a subsidiary of the Company. The approximate number of all employees which
the Board of Directors believes are eligible to participate in the 1997 Plan is
approximately 210 persons, provided that the Committee shall have the discretion
to select optionees from among such employees.
Effective Date and Termination
The 1997 Plan was adopted by the Board of Directors on October 13, 1997. Unless
the Plan is terminated earlier by the Board of Directors, no award of an Option
shall be made after the date which is ten years after the date the Plan was
adopted by the Board of Directors. Termination of the 1997 Plan will not
adversely affect any rights under any then outstanding option.
Options and Option Agreements
The Committee may, from time to time and subject to its provisions of the Plan,
grant to any employee one or more options under the 1997 Plan. The grant of an
option shall be evidenced by a written option agreement stating the number of
shares subject to the option and stating whether, and to the extent that, the
option is intended to be an ISO or a nonqualified option. Options shall be
evidenced by agreements in such form as the Committee shall from time to time
approve which shall comply with the following terms:
(i) Number of Shares. Each option shall state the number of shares to
which it pertains. If the aggregate fair market value of the shares of
stock (determined as of the time of the grant) with respect to which
ISO's are exercisable for the first time by the optionee in any
calendar year (under all plans of the Company) exceeds $100,000 then
only the first $100,000 of options shall be ISO's and any excess over
$100,000 shall be non-qualified options.
(ii) Option Price. Each option shall state the option price with respect to
an ISO, the option price shall not be less than 100% of the fair
market value of the shares of Common Stock on the date of the granting
of the option; provided, however, that if an ISO option is granted to
an optionee who, at the time of the grant, is the owner (as determined
under the Code) of Common Stock of the Company possessing more than
10% of the total voting power of all classes of stock of the Company
(a "more than 10% owner"), then the option price for such ISO shall be
not less than 110% of the fair market value of the fair market value
of the shares of Common Stock on the date of the granting of the
option. With respect to a nonqualified option, the option price shall
be no less than the lesser of the book value per share as of the end
of the fiscal
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year immediately preceding the date of the grant or 50% of the fair
market value on the date of the grant. While transactions in the
Common Stock are reported on the Nasdaq, the "fair market value" shall
be the last reported sale price on the date of the grant.
(iii) Manner of Payment. Upon the exercise of an option, the optionee shall
pay to the Company, at the Committee's discretion: (a) the cost of the
shares in cash; (b) in exchange for shares of Common Stock previously
acquired by the optionee that at the time of such exercise have a fair
market value equal to the exercise price; (c) by delivery of a
personal recourse note bearing interest payable not less than annually
at no less than 100% of the lowest applicable federal rate as
specified by the Code and the Internal Revenue Service; or (d) any
combination of the foregoing.
(iv) Term and Exercise of Options. Each option shall specify the dates upon
which it can be exercised and the maximum number of shares that can be
purchased on such dates. The term of an option shall be no more than
ten years from the date of the grant, provided, however, that no ISO
granted to a more than 10% owner shall be exercisable more than five
(5) years after the date such option was granted. During the lifetime
of the optionee, the option shall be exercisable only by the optionee
and shall not be assignable or transferable by the optionee, nor shall
any other person acquire any rights therein. In the event an optionee
shall terminate his employment with the Company such optionee shall
have the right to exercise any then exercisable ISO at any time within
the earlier of the remaining term of the option or sixty (60) days
prior to the date of such termination (or such shorter period as is
specified by the Committee in the option agreement). If an optionee
shall become disabled or die while in the employ of the Company and
shall not have fully exercised any ISO, such ISO shall be exercisable,
to the extent otherwise then currently exercisable, at any time within
180 days after the optionee's death (in the case of disability by the
optionee or in the case of death by the personal representative of the
optionee or by the holder thereof who has obtained the same under the
applicable laws of descent and distribution). In the case of the death
or disability of an optionee holding a non-qualified option such
option may be exercised, to the extent exercisable at death, at any
time during the remaining term of the option.
(v) Adjustment in Number and Price of Shares; Restrictions on Certain
Shares. The number and price subject to any option shall be subject to
adjustment and/or substitution or set forth above under "Shares" The
shares of Common Stock issued to an optionee pursuant to the 1997 Plan
shall be subject to any and all federal and state securities laws,
rules and regulations generally applicable to the Common Stock,
including without limitation, any restrictions on the sale or other
transfer of the shares. Any certificate representing such shares shall
contain a restrictive legend evidencing the existence of any such
restrictions.
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Federal Income Tax Consequences
The following discussion of the federal income tax consequences of the 1997
Plan is intended to be a summary of applicable federal income tax law. State and
local tax consequences may differ. Because the federal income tax rules
governing options are complex and subject to frequent change, participants are
advised to consult their tax advisors prior to exercise of options or
dispositions of stock acquired pursuant to an option exercise.
Options granted under the 1997 Plan that are intended to qualify as ISO's
must comply with the requirements of Section 422 of the Code.
An optionee is not taxed upon the grant or exercise of an ISO, however, the
difference between the fair market value of the shares on the exercise date
will, however, be an item of adjustment for purposes of the alternative minimum
tax. If an optionee holds the shares acquired upon the exercise of an ISO for at
least two (2) years following the date of the grant of the option and at least
one year following the exercise of the option, the optionee's gain, if any, by a
subsequent disposition of such shares will be treated as long-term capital gain
for federal income tax purposes. The measure of the gain is the difference
between the proceeds received on disposition and the optionee's basis in the
shares (which generally equals the exercise price). If the optionee disposes of
shares acquired pursuant to exercise of an ISO before satisfying the one-and-two
year holding periods described above, the optionee will recognize both ordinary
income and capital gain in the year of disposition. The amount of the ordinary
income will be the lesser of: (i) the amount realized on disposition less the
optionee's adjusted basis in the shares (usually the option exercise price); or
(ii) the difference between the fair market value of the shares on the exercise
date and the option price. The balance of the consideration received on such
disposition will be long-term capital gain if the shares had been held for at
least one year following exercise of the incentive stock option. The Company is
not entitled to an income tax deduction on the grant or the exercise of an ISO
or on the optionee's disposition of the shares after satisfying the holding
period requirement described above. If the holding periods are not satisfied,
the Company will be entitled to an income tax deduction in the year the optionee
disposes of the shares, in an amount equal to the ordinary income recognized by
the optionee.
In the case of a nonqualified option, an optionee is not taxed on the grant of a
nonqualified option. Upon exercise, however, the participant recognizes ordinary
income equal to the difference between the option price and the fair market
value of the shares on the date of the exercise. The Company is entitled to an
income tax deduction in the year of exercise in the amount recognized by the
Optionee of the ordinary income. Any gain on subsequent disposition of the
shares is long-term capital gain if the shares are held for at least one year
following the exercise. The Company does not receive an income tax deduction for
this gain.
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Required Vote
Assuming the presence of a quorum at the Meeting, the affirmative vote of the
holders of a majority of the shares voting on the proposal at the Meeting is
required for approval of the 1997 Plan. An abstention, withholding of authority
to vote or a nominee non-vote, therefore, will have the same effect as a
negative vote.
Recommendation of the Board of Directors
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE APPROVAL OF THE 1997 STOCK
OPTION PLAN.
INFORMATION CONCERNING INDEPENDENT AUDITORS
The firm of Ernst & Young LLP ("Ernst & Young") served as independent auditors
for the Company's 1997 fiscal year and has been engaged by the Board of
Directors as independent auditors for the Company's current fiscal year.
Representatives of Ernst & Young are expected to be present at the Meeting and
will have the opportunity to make a statement if they so desire and will be
available to respond to appropriate questions.
The financial statements of the Company for its 1996 fiscal year were audited by
the firm of MacDade Abbott LLP ("MacDade"). Effective November 13, 1997 the
Company engaged Ernst & Young as its independent auditors for its 1997 fiscal
year. The decision to change certifying accountants was approved by the Board of
Directors acting upon the recommendation of the Audit Committee. During the two
most recent fiscal years which were audited by MacDade and during each
subsequent interim period, MacDade's reports on the Company's financial
statements contained no adverse opinion or disclaimer of opinion nor were any of
the opinions contained therein qualified or modified as to uncertainty, audit
scope, or accounting principles, neither was there any disagreement between the
Company and MacDade on any matter of accounting principles or practices,
financial statement disclosure or auditing scope or procedure, which
disagreement, if not resolved to the satisfaction of MacDade, would have caused
MacDade to make reference to the subject matter of disagreement in connection
with MacDade's report.
During the Company's two most recent fiscal years and each subsequent interim
period preceding the date of engagement of Ernst & Young, the Company did not
engage Ernst & Young as a consultant with respect to any matter or otherwise
engage the services of Ernst & Young. The Company's engagement of Ernst & Young
replacing MacDade was previously reported in its Form 8-K/A Current Report dated
December 2, 1997 filed with the Securities and Exchange Commission.
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SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
officers and directors and persons who own more than 10% of the Company's Common
Stock (collectively, the "Reporting Persons") to file reports of ownership and
changes in ownership with the Securities and Exchange Commission and to furnish
the Company with copies of these reports. Based on the Company's review of the
copies of these reports received by it, and from written representations
received from the Reporting Persons, the Company believes that, with the
exception of the filing by William P. Kelly and Richard K. Laird, in each case,
of an initial statement of beneficial ownership more than ten days after his
appointment as an executive officer of the Company, all filings required to be
made by the Reporting Persons for the period January 1, 1997 through December
31, 1997 were made on a timely basis.
SHAREHOLDER PROPOSALS
Proposals of shareholders intended to be presented at the annual meeting of
shareholders in 1999 must be received by the Company at its principal office in
West Melbourne, Florida, no later than March 17, 1999 in order to be considered
for inclusion in the Company's Proxy Statement and form of proxy relating to
that meeting.
OTHER MATTERS
As of the date of this Proxy Statement, the Board of Directors knows of no
matters other than the Election of Directors and approval of the 1997 Stock
Option Plan which will be presented for consideration at the Meeting. If any
other matter or matters are properly brought before the Meeting or any
adjournment thereof, the persons named in the accompanying Proxy will have
discretionary authority to vote, or otherwise act, with respect to such matters
in accordance with their judgment.
ANNUAL REPORT ON FORM 10-K
THE COMPANY WILL PROVIDE WITHOUT CHARGE TO EACH PERSON SOLICITED BY THIS PROXY
STATEMENT, ON THE WRITTEN REQUEST OF SUCH PERSON, A COPY OF THE COMPANY'S ANNUAL
REPORT ON FORM 10-K, INCLUDING THE FINANCIAL STATEMENTS AND SCHEDULES THERETO,
AS FILED WITH THE SEC FOR ITS MOST RECENT FISCAL YEAR, SUCH WRITTEN REQUESTS
SHOULD BE DIRECTED TO WILLIAM P. KELLY, VICE PRESIDENT OF FINANCE, OF THE
COMPANY, AT THE ADDRESS OF THE COMPANY APPEARING ON THE FIRST PAGE OF THIS PROXY
STATEMENT.
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APPENDIX A
RELM WIRELESS CORPORATION
1997 STOCK OPTION PLAN
(As amended June 23, 1998)
ARTICLE I
GENERAL
1.01 Purpose. The purposes of this Stock Option Plan are to:
(a) closely associate the economic interests of the Employees of the
Company with the economic interests of the shareholders of the Company;
(b) promote the success of the Company's business;
(c) maintain competitive compensation levels for the Employees of the
Company; and
(d) provide an incentive to the Employees of the Company to continue in the
employment or service of the Company.
1.02 Construction. The Plan (and the Options granted hereunder), as it applies
to Options granted to Employees of the Company, is intended to qualify as a tax
qualified, incentive stock option plan, and to be described under Code Section
422 and Regulations issued thereunder. To the extent the Plan (and the Options
granted hereunder) applies to Employees to whom the Committee intends to grant
nonqualified stock options, the Plan is intended to be a nonqualified, stock
option plan under Code Section 83 and Regulations issued thereunder. The Plan,
and the Options granted hereunder, shall be interpreted and construed to achieve
the intended purpose.
1.03 Effective Date. The Plan is effective as of October 13, 1997.
ARTICLE II
DEFINITIONS
As used in the Plan, capitalized words in the Plan shall be defined as follows:
2.01 "Beneficiary" means the person designated in the last will and testament
of the Optionee as the beneficiary of the Optionee with respect to the Option.
In the absence of such designation, the beneficiary of the Optionee shall be
determined under the laws of descent and distribution of the state of domicile
of the Optionee at the time of the Optionee's death.
2.02 "Board" means the Board of Directors of the Company.
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2.03 "Code" means the Internal Revenue Code of 1986, as amended from time to
time.
2.04 "Committee" means the Compensation Committee of the Board which is a
committee of two or more members of the Board who are Non-Employee Directors.
The Committee shall administer the Plan in accordance with Section 3.01 below.
2.05 "Common Stock" means the voting common stock of the Company.
2.06 "Company" means RELM Wireless Corporation, a Nevada corporation, its
parents (if any), and any present or future subsidiaries.
2.07 "Employee" means a common law employee of the Company, or any subsidiary
of the Company, including, but not limited to common law employees who are also
officers or directors of the Company .
2.08 "Grant Date" means the date an Option is granted to an Employee and shall
mean the date selected by the Committee as of which the Committee allots a
specific number of Shares to an Optionee pursuant to the Plan.
2.09 "Non- Employee Director" means a member of the Board who is a
"non-employee director" as defined in Rule 16b-3 implementing the Securities
Exchange Act of 1934, as amended.
2.10 "Option" means the stock option granted pursuant to the Plan, which if
granted to an Employee may be designated as being intended to qualify as a tax
qualified, incentive stock option within the meaning of Code Section 422 or may
be designated as being intended to be treated as a nonqualified, stock option
within the scope of Code Section 83.
2.11 "Option Agreement" means the written agreement between the Company and the
Optionee evidencing the grant of the Option by the Company to the Optionee.
2.12 "Optionee" means an Employee who has been granted an Option pursuant to
the Plan, and who has executed an Option Agreement.
2.13 "Plan" means this 1997 Stock Option Plan.
2.14 "Share" means one share of Common Stock, as adjusted for recapitalization
transactions in accordance with Section 7.01 below.
2.15 "Regulations" means Treasury Regulations promulgated in accordance with
the Code.
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ARTICLE III
ADMINISTRATION
3.01 The Committee. The Plan shall be administered by the Committee. The
Committee may select one of its members as its chairperson, and shall hold
meetings at such time and places as it may determine. Acts by a majority of the
Committee, or acts reduced to or approved in writing by a majority of the
members of the Committee, shall be the valid acts of the Committee.
3.02 Authority of Committee. The Committee shall have the authority, in its
sole discretion, but subject to the terms of the Plan, to:
(a) grant Options to Employees in accordance with the terms of the Plan in such
amount and on such terms as the Committee shall determine;
(b) impose such limitations, restrictions and conditions upon any such award as
the Committee shall deem appropriate, provided such limitation, restriction
and/or condition, in the case of a grant of an Option to an Employee that is
intended to be a tax qualified stock option, is consistent with Code Section
422, the Regulations thereunder, and this Plan; and
(c) in its discretion, interpret the Plan, adopt, amend and rescind rules and
regulations relating to the Plan, and make all other determinations, and take
all other actions necessary or appropriate for the implementation and
administration of the Plan.
3.03 Decisions Final. All actions, decisions, interpretations and
determinations of the Committee on all matters relating to the administration
and operation of the Plan shall be within the Committee's sole discretion and
shall be final and conclusive. No members of the Committee shall be liable for
any action taken or decision made in good faith relating to the Plan or any
award thereunder.
3.04 Indemnification of Committee. The Company indemnifies and holds harmless
the members of the Committee in their capacity as Committee members against all
liability and expenses (including reasonable attorney, paralegal, and
professional fees and court costs) arising from any threatened, pending or
completed action, suit, proceeding (including administrative proceedings or
investigations) or appeal, incurred by reason of the fact that such individual
is or was a member of the Committee, provided that such individual (i) acted, or
failed to act, in good faith and in a manner he or she reasonably believed to be
in, or not opposed to, the best interests of the Company as well as the
Employees and Optionees, or (ii) with respect to any criminal action or
proceeding, had no reasonable cause to believe his or her conduct was unlawful.
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ARTICLE IV
ELIGIBILITY AND SCOPE
4.01 Eligibility for Participation. Optionees under the Plan shall be selected
by the Committee from amongst the Employees. An Optionee must be employed by the
Company at the time the Option is granted. In making this selection and in
determining the form and amount of awards, the Committee shall consider any
factors deemed relevant, including the Employee's functions, responsibilities,
value of services to the Company, and past and potential contributions to the
Company's profitability and growth.
4.02 Aggregate Limitations on Awards. Subject to the recapitalization
provisions of Section 7.01 below, the maximum number of Shares of Common Stock
which may be issued under the Plan shall be 1,500,000. The Shares of Common
Stock may be authorized but unissued Shares, or may be treasury stock of the
Company. If an Option should expire or become unexercisable for any reason
without having been exercised in full, the unpurchased Shares which were subject
to an Option shall again become available for a future grant under the Plan,
unless the Plan previously shall have been terminated.
ARTICLE V
GRANT OF OPTIONS
5.01 Grant of Options. The Committee may, from time to time and subject to the
provisions of the Plan and such rules and regulations as are prescribed by the
Committee, grant to any Employee one or more Options to purchase a stated number
of Shares of Common Stock for (i) cash, (ii) the exchange for Shares of Common
Stock previously acquired by the Employee, (iii) in the discretion of the
Committee, by delivery of the Optionee's personal recourse promissory note
bearing interest payable not less than annually at no less than 100% of the
lowest applicable federal rate as specified by the Internal Revenue Code and
Internal Revenue Service, or (iv) in the discretion of the Committee, by some
combination of the foregoing.
5.02 Option Agreements. The grant of an Option shall be evidenced by a written
Option Agreement, executed by the Company and the Optionee, stating the number
of Shares of Common Stock subject to the Option evidenced thereby, and in such
form as the Committee may from time to time determine. Such Option Agreement
shall state on its face whether the Option is intended to be a tax qualified,
incentive stock option under Code Section 422 or a nonqualified, stock option
subject to Code Section 83.
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5.03 Option Price.
A. With respect to an Option granted to an Employee that is intended to be a
tax qualified, incentive stock Option under Code Section 422, the price per
Share of Common Stock deliverable upon the exercise of the Option shall not be
less than one hundred percent (100%) of the fair market value of a Share of
Common Stock on the Grant Date. Notwithstanding the foregoing, in the event an
Employee to whom the Option is to be granted owns Shares of Common Stock, as of
the Grant Date, that comprise more than ten percent (10%) of the total combined
voting power of all classes of stock of the Company, or its parent or
subsidiaries, if any, the foregoing price per Share of Common Stock shall not be
less than one hundred ten percent (110%) of the fair market value of a Share of
Common Stock on the Grant Date.
B. The price per Share specified in the agreement relating to each
nonqualified, stock option subject to Code Section 83 granted under the Plan
shall in no event be less than the lesser of (i) the book value per Share of
Common Stock as of the end of the fiscal year of the Company immediately
preceding the date of such grant, or (ii) fifty percent (50%) of the fair market
value per Share of Common Stock on the date of such grant.
5.04 Determination of Fair Market Value. If, at the time an Option is granted
under the Plan, the Company's Common Stock is publicly traded, "fair market
value" shall be determined as of the last business day for which the prices or
quotes discussed in this sentence are available prior to the date such Option is
granted and shall mean (i) the average (on that date) of the high and low prices
of the Common Stock on the principal national securities exchange on which the
Common Stock is traded, if the Common Stock is then traded on a national
securities exchange; or (ii) the last reported sale price (on that date) of the
Common Stock on the NASDAQ National Market List, if the Common Stock is not then
traded on a national securities exchange; or (iii) the closing bid price (or
average of bid prices) last quoted (on that date) by an established quotation
service for over-the-counter securities, if the Common Stock is not reported on
the NASDAQ National Market List. However, if the Common Stock is not publicly
traded at the time an Option is granted under the Plan, "fair market value"
shall be deemed to be the fair market value of the Common Stock as determined by
the Committee after taking into consideration all factors which it deems
appropriate including, without limitation, recent sale and offer prices of the
Common Stock in private transactions negotiated at arm's length. Notwithstanding
the foregoing, the fair market value of the Common Stock shall be determined
without regard to any restrictions other than a restriction which, by its terms,
will never lapse.
5.05 Maximum Amount of Grant. With respect to an Option granted to an Employee
that is intended to be a tax qualified, incentive stock option under Code
Section 422, the aggregate, fair market value of the Shares of Common Stock that
may be subject to an Option (and to any other incentive stock options granted by
the Company or its parent or subsidiaries, if any) and that shall be exercisable
for the first time by the Optionee in a calendar year shall not exceed
$100,000.00. For purposes of this Section, the fair market value of the Common
Stock shall be determined as of the
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Grant Date. Such $100,000.00 limit shall not apply to nonqualified, stock
options granted to Employees.
5.06 Term of Plan. Unless the Plan is terminated earlier by the Board, no award
of an Option shall be made under the Plan after the date which is ten (10) years
after the earlier of the date the Plan was adopted by the Board or the date the
Plan was approved by the shareholders of the Company. Provided, however, that
the Plan and all Options granted under the Plan prior to the termination of the
Plan shall remain in effect until such Options have been exercised, satisfied or
terminated in accordance with the Plan and the terms of such Options.
5.07 Term of Options. Except as provided in Article VI below, the term of each
Option shall be no more than ten (10) years from the date of the grant.
Notwithstanding the foregoing, in the event the Employee to whom an Option
intended to be a tax qualified, incentive stock option under Code Section 422 is
to be granted owns Shares of Common Stock, as of the Grant Date, that comprise
more than ten percent (10%) of the total combined voting power of all classes of
stock of the Company, or its parent or subsidiaries, if any, the term of each
Option to such Employee shall be no more than five (5) years from the date of
the grant.
5.08 Other Terms. In addition to the foregoing terms and conditions, the
Committee may impose such additional terms, conditions and restrictions,
including a vesting schedule, as are not otherwise inconsistent with this Plan.
ARTICLE VI
EXERCISE OF OPTION
6.01 Procedure for Exercise.
A. Any Option granted hereunder shall be exercisable at such times and under
such terms and conditions as are determined by the Committee at the time of the
grant and as are consistent with the terms of the Plan. An Option shall be
deemed to be exercised when written notice of such exercise, along with full
payment (be it in cash, promissory note or by the transfer of other Shares, in
accordance with Section 5.01 above) for the Shares, has been delivered to the
Secretary of the Company in accordance with the terms of the Option. Until the
issuance of the stock certificate by the Company or its transfer agent, the
Optionee shall have no right to vote the Shares nor to receive dividends, and
shall not have any other rights as a stockholder of the Company with respect to
the Shares of Common Stock subject to the Option. The Company or its transfer
agent shall issue, or cause to be issued, such Common Stock certificate promptly
upon exercise of the Option.
B. The exercise of an Option in any manner shall result in a decrease in the
number of Shares available for grant under the terms of the Plan and under the
terms of the Option.
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6.02 Termination of Employment. In the case of an Option granted to an Employee
that is intended to be a tax qualified, incentive stock option under Code
Section 422 (not including such an Option converted to a nonqualified stock
option within the scope of Code Section 83 under Paragraph 7.07 hereunder), in
the event the employment of the Optionee terminates, whether voluntarily or
involuntarily, such Employee may exercise his or her Options to the extent
exercisable at the time of such termination of employment. Such exercise shall
occur within the earlier of the remaining term of the option or sixty (60) days
from such termination of employment(or such shorter period as is specified by
the Committee in the Option Agreement). To the extent that the Optionee was not
entitled to exercise the Option at the effective date of the Optionee's
termination of employment or service to the Company, or the Optionee fails to
exercise the Option within the time specified, the Option shall terminate.
6.03 Disability of Optionee. In the case of an Option granted to an Employee
that is intended to be a tax qualified, incentive stock option under Code
Section 422, in the event the employment of the Optionee terminates due to the
disability of the Optionee, such Optionee may exercise his or her Options to the
extent exercisable at the time of such termination of employment. Such exercise
shall occur within the earlier of the remaining term of the option or one
hundred eighty (180) days after the effective date of the Optionee's termination
of employment. For purposes of this Section 6.03, "disability" shall be as
defined in Code Section 22(e)(3) and the Regulations thereunder.
6.04 Death of Optionee.
A. In the event of the death of an Employee to whom an Option that is intended
to be a tax qualified, incentive stock option under Code Section 422 has been
granted, any Option exercisable on the date of the Optionee's death may be
exercised by the Beneficiary, provided that such exercise occurs within the
earlier of the remaining term of the Option or one hundred eighty (180) days
from the date of the Optionee's death. In the event the Optionee's employment
had terminated prior to death, but the Option was still exercisable pursuant to
Sections 6.01, 6.02 or 6.03 above, the Beneficiary shall be permitted to
exercise the Option during the time periods specified in this Section 6.04.
B. In the case of death, an Option granted to an Employee that is intended to be
a nonqualified stock option under Code Section 83 may be exercised, to the
extent exercisable at death, at any time during the remaining term of the
Option.
6.05 Options Non-Transferable. Any Option granted hereunder may not be sold,
pledged, assigned, hypothecated, transferred, or disposed of, in any manner
other than by the Optionee's last will or by the laws of descent and
distribution, and may be exercised during the Optionee's lifetime, only by the
Optionee.
6.06 Manner of Payment. Upon the exercise of an Option, the Optionee shall pay
to the Company, at the Committee's discretion:
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(a) the cost of the Shares of Common Stock in cash;
(b) in exchange for Shares of Common Stock previously acquired by the
Optionee that at the time of such exercise have a fair market value equal to the
exercise price;
(c) by delivery of a personal recourse note bearing interest payable not
less than annually at no less than 100% of the lowest applicable federal rate as
specified by the Internal Revenue Code and Internal Revenue Service; or
(d) any combination thereof.
6.07 Restrictions on Certain Shares. The Shares of Common Stock issued to
an Optionee pursuant to this Plan shall be subject to any and all federal and
state securities laws, rules and regulations generally applicable to the Common
Stock of the Company, including without limitation, any restrictions on the sale
or other transfer of the Shares of Common Stock. Any certificate representing
such Shares shall contain a restrictive legend evidencing the existence of any
such restrictions.
ARTICLE VII
MISCELLANEOUS
7.01 Recapitalizations.
A. Subject to any required action by the stockholders of the Company, the
number of Shares of Common Stock covered by each outstanding Option, and the
number of Shares of Common Stock which have been authorized for issuance under
the Plan but as to which no Options have yet been granted or which have been
returned to the Plan upon cancellation or expiration of an Option, as well as
the price per Share of Common Stock covered by each such outstanding Option,
shall be proportionately adjusted for any increase or decrease in the number of
issued Shares of Common Stock resulting from a stock split, reverse stock split,
stock dividend, combination, or reclassification of the Common Stock, or any
other increase or decrease in the number of issued Shares of Common Stock
effected without receipt of consideration by the Company. Provided, however,
that conversion of any convertible securities of the Company shall not be deemed
to have been "effected without receipt of consideration." Any adjustment made
pursuant to this Section shall be made by the Committee, whose determination in
that respect shall be final, binding and conclusive. Except as expressly
provided herein, no issuance by the Company of shares of stock of any class, or
securities convertible into shares of stock of any class, shall affect, and no
adjustment by reason thereof shall be made with respect to, the number or price
of Shares of Common Stock subject to an Option.
B. Except as declared by the Board, in the event of the dissolution or
liquidation of the Company, the Options granted under the Plan immediately shall
terminate.
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C. In the event of a proposed sale of all or substantially all of the assets of
the Company, or the merger of the Company with or into another corporation, the
Option shall be assumed or an equivalent option shall be substituted by such
successor corporation or a parent or subsidiary of such successor corporation,
unless such successor corporation does not agree to assume the Option or to
substitute an equivalent option, in which case the Optionee shall retain the
right to exercise the Option (which right shall no longer be subject to
restrictions, including vesting provisions) as to all of the Shares of Common
Stock subject to the Option through the date of the sale of the assets or the
merger of the Company. Thereafter, the Option shall terminate. In the event any
of the Options are not fully vested at the time of such sale or merger, such
Options shall become fully vested and exercisable at that time.
D. In the event of a recapitalization or reorganization of the Company (other
than a transaction described in subparagraph C above) pursuant to which
securities of the Company or of another corporation are issued with respect to
the outstanding shares of Common Stock, an Optionee upon exercising an Option
shall be entitled to receive for the purchase price upon such exercise the
securities he would have received if he had exercised his Option prior to such
recapitalization or reorganization.
E. Except as expressly provided herein, no issuance by the Company of shares of
stock of any class or securities convertible into shares of stock of any class
shall affect, and no adjustment by reason thereof shall be made with respect to
the number or price of shares subject to Options. No adjustments shall be made
for dividends paid in cash or in property other than securities of the Company.
F. No fractional shares shall be issued under the Plan and the Optionee shall
receive from the Company cash in lieu of such fractional shares.
7.02 Withholding Taxes. Whenever the Company is required to issue or transfer
Shares of Common Stock under the Plan, the Company shall have the right to
require the Optionee to remit to the Company any amount sufficient to satisfy
any required federal, state and/or local withholding taxes prior to the delivery
of any certificate or certificates for such Shares. Alternatively, the Company
may issue or transfer such Shares of Common Stock, net of the number of Shares
of Common Stock sufficient to satisfy the withholding requirements. For
withholding tax purposes, the Shares of Common Stock shall be valued on the date
the withholding obligation is incurred.
7.03 Right to Terminate Employment. Nothing in the Plan or Option, or in any
agreement entered into pursuant to the Plan shall confer upon any Employee the
right to continue in the employ of the Company or effect any right which the
Company may have to terminate the employment of such Employee regardless of the
effect of such termination of employment on the rights of the Employee under the
Plan or any Option.
7.04 Non-Uniform Determinations. The Committee's determinations under the Plan
(including without limitation determinations of the Employees to receive awards,
the form, amount and timing
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of such awards, the terms and provisions of such awards and the agreements
evidencing same) need not be uniform and may be made by the Committee
selectively among Employees who receive, or who are eligible to receive, awards
under the Plan, whether or not such persons are similarly situated.
7.05 Leaves of Absence. Employment shall be considered as continuing
uninterrupted during any bona fide leave of absence (such as those attributable
to illness, military obligations or governmental service) provided that the
period of such leave does not exceed 90 days or, if longer, any period during
which such Optionee's right to reemployment is guaranteed by statute. A bona
fide leave of absence with the written approval of the Committee shall not be
considered an interruption of employment under the Plan, provided that such
written approval contractually obligates the Company to continue the employment
of the Optionee after the approved period of absence. Options under the Plan
shall not be affected by any change of employment within or among the Company,
so long as the Optionee continues to be an employee of the Company.
Notwithstanding the foregoing, the Committee shall be entitled to make such
rules, regulations and determinations as it deems appropriate under the Plan in
respect of any leave of absence taken by an Optionee.
7.06 Amendment of Plan.
A. The Board may, without further action by the shareholders of the Company,
and without receiving any further consideration from the Optionees, amend this
Plan or condition or modify awards under this Plan in respect to changes in
securities, taxation or other laws or rules, regulations, or regulatory
interpretations thereof applicable to this Plan, or to comply with stock
exchange rules or requirements.
B. The Committee may at any time, and from time to time, terminate, modify or
amend the Plan (including modifying the mix of Shares to be issued pursuant to
Code Sections 422 and 83) in any respect, except that without shareholder
approval, the Committee may not (i) increase the aggregate, maximum number of
Shares of Common Stock which may be issued under the Plan (other than increases
pursuant to Section 7.01), (ii) extend the period during which any award may be
granted or exercised, or (iii) extend the term of the Plan. Except as required
or permitted by the preceding paragraph, the termination, modification or
amendment of the Plan shall not affect an Optionee's rights under an award
previously granted to such Optionee.
7.07 Conversion of Qualified Options Into Non-Qualified Options. The Committee,
at the written request of any Optionee may, in its discretion, take such actions
as may be necessary to convert such Optionee's tax qualified, incentive stock
option within the meaning of Code Section 422 (or any installments or portions
of installments thereof) that have not been exercised on the date of conversion
into nonqualified, stock options within the scope of Code Section 83 at any time
prior to the expiration of such Qualified Options, regardless of whether the
Optionee is an Employee of the Company at the time of such conversion. Such
actions may include, but not be limited to, extending the exercise period or
reducing the exercise price of the appropriate installments of such Options. At
the time of such conversion, the Committee (with the consent of the Optionee)
may impose such conditions on the exercise of the resulting nonqualified options
as the Committee, in its discretion,
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may determine, provided that such conditions shall not be inconsistent with
this Plan. Nothing in the Plan shall be deemed to give any Optionee the right to
have such Optioned's tax qualified, incentive stock option converted into a
nonqualified option, and no such conversion shall occur until and unless the
Committee takes appropriate action.
7.08 Application of Funds. The proceeds received by the Company from the sale
of Shares pursuant to Options granted and purchases authorized under the Plan
shall be used for general corporate purposes.
7.09 Notice to Company of Disqualifying Disposition. Each Employee who receives
a tax qualified, incentive stock option within the meaning of Code Section 422
must agree to notify the Company in writing immediately after the Employee makes
a "disqualifying disposition" of any Shares of Common Stock acquired pursuant to
the exercise of a tax qualified, incentive stock option. A disqualifying
disposition is any disposition (including any sale) of such Shares of Common
Stock before the later of (a) two (2) years after the date the Employee was
granted the tax qualified, incentive stock option or (b) one (1) year after the
date the Employee acquired Shares of Common Stock by exercising the tax
qualified, incentive stock option. If the Employee has died before such Shares
of Common Stock are sold, these holding period requirements do not apply and no
disqualifying disposition can occur thereafter.
7.10 Governing Law; Construction. The validity and construction of the Plan and
any instrument evidencing Common Stock rights shall be governed by the laws of
the State of Nevada. In construing this Plan, the singular shall include the
plural and the masculine gender shall include the feminine and neuter, unless
the context otherwise requires.
7.11 Shareholder Approval. In the event this Plan is not adopted by the
shareholders of the Company by October 13, 1998, the Plan shall remain in
effect, but all options granted hereunder, or to be granted hereunder, shall be
nonqualified stock options under Code Section 83 and Regulations issued
thereunder.
Originally adopted by the Board of Directors as of October 13, 1997 and
amended by the Board of Directors as of June 23, 1998.
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RELM WIRELESS CORPORATION
THIS PROXY IS SOLICITED ON BEHALF OF
THE BOARD OF DIRECTORS OF RELM WIRELESS CORPORATION
The undersigned, a holder of Common Stock of RELM WIRELESS CORPORATION,
hereby constitutes and appoints DONALD F.U. GOEBERT and WILLIAM P. KELLY, and
each of them acting individually, as the attorney adn proxy of the undersigned,
with full power of substitution, for and in the name and stead of the
undersigned, to attend the Annual Meeting of Shareholders of the Company to be
held on Friday, August 21, 1998 at 9:00 a.m., at the offices of RELM
Communications, Inc., 7505 Technology Drive, West Melbourne, Florida, and any
adjournment or postponement thereof, and thereat to vote all shares of Common
Stock which the undersigned would be entitled to vote if personally present,
as follows:
(Please sign and date on reverse side)
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
/X/ Please mark your
votes as in this
example.
VOTE FOR WITHHOLD
EACH OF THE AUTHORITY NOMINEES FOR ELECTION FOR AGAINST ABSTAIN
NOMINEES FOR ALL AS DIRECTORS:
LISTED AT RIGHT NOMINEES 2. APPROVAL OF THE / / / / / /
COMPANY'S 1997
1. ELECTION / / / / Donald F.U. Goebert STOCK OPTION PLAN.
OF Richard K. Laird
DIRECTORS Buck Scott 3. DISCRETIONARY AUTHORITY
Robert L. MacDonald To transact such other business as may properly
INSTRUCTIONS: To withhold authority to Ralph R. Whitney, Jr. come before the meeting and any adjournment
vote for any individual nominee, write that James C. Gale thereof according to the proxies discretion and
Nominees's name on the line provided below. George N. Benjamin, III in their discretion.
- ------------------------------------------- THIS PROXY WHEN PROPERLY EXECUTED
WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED SHARE-
HOLDER. IF NO DIRECTION IS INDICATED,
THIS PROXY WILL BE VOTED FOR EACH OF
THE SEVEN NOMINEES FOR ELECTION
AS DIRECTORS AND FOR PROPOSAL 2.
The undersigned hereby acknowledges receipt of
the notice of annual meeting and proxy statement
of RELM Wireless Corporation.
PLEASE FILL IN, DATE, SIGN AND MAIL
THIS PROXY IN THE ENCLOSED POSTAGE
PAID RETURN ENVELOPE.
Signature Signature Dated , 1998
------------------------------- ------------------------------------ ------------------
Please mark, date and sign exactly as your name appears on this proxy card. When shares are held jointly, both holders should sign.
When signing as attorney, executor, administrator, trustee or guardian, please give your full title. If the holder is a corporation
or partnership, the full corporate or partnership name should be signed by a duly authorized officer.
</TABLE>
