SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
Filed by the registrant /x/
Filed by a party other than the registrant / /
Check the appropriate box:
/ / Preliminary proxy statement
/x/ Definitive proxy statement
/ / Definitive additional materials
/ / Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
COMPUTER PRODUCTS, INC.
(Name of Registrant as Specified in Its Charter)
COMPUTER PRODUCTS, INC.
(Name of Persons(s) Filing Proxy Statement)
Payment of filing fee (Check the appropriate box):
/x/ $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2).
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on the 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 transactions apply:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:
(4) Proposed maximum aggregate value of transaction:
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the form or schedule and the date of its filing.
(1) Amount previously paid:
(2) Form, schedule or registration statement no.:
(3) Filing party:
(4) Date filed:
<PAGE>
COMPUTER PRODUCTS, INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON THURSDAY, APRIL 27, 1995
To the Stockholders:
The Annual Meeting of the Stockholders of Computer Products, Inc. (the
'Company') will be held on Thursday, April 27, 1995, at 10:00 A.M., local time,
at the Deerfield Beach Hilton, 100 Fairway Drive, Deerfield Beach, Florida, for
the following purposes:
1. To elect seven directors to hold office until the Annual Meeting of
Stockholders in 1996 and until their respective successors have been duly
elected and qualified; and
2. To transact such other business as may properly come before the
meeting and any adjournment(s) thereof.
The Board of Directors has fixed the close of business on March 1, 1995 as
the record date for the determination of stockholders entitled to notice of, and
to vote at, the Annual Meeting of Stockholders (the 'Meeting'). Only
stockholders of record at the close of business on such date will be entitled to
notice of, and to vote at, the Meeting and any adjournment(s) thereof.
By Order of the Board of Directors
RICHARD J. THOMPSON
SECRETARY
March 15, 1995
YOU ARE URGED TO COMPLETE, DATE AND SIGN THE ENCLOSED PROXY AND RETURN IT
PROMPTLY IN THE POSTAGE PREPAID ENVELOPE WHICH HAS BEEN PROVIDED, WHETHER OR NOT
YOU PLAN TO ATTEND THE MEETING IN PERSON. THE PROXY MAY BE REVOKED BY YOU AT ANY
TIME PRIOR TO EXERCISE, AND IF YOU ARE PRESENT AT THE MEETING YOU MAY, IF YOU
WISH, REVOKE YOUR PROXY AT THAT TIME AND EXERCISE YOUR RIGHT TO VOTE YOUR SHARES
IN PERSON.
<PAGE>
PROXY STATEMENT
COMPUTER PRODUCTS, INC.
7900 GLADES ROAD, SUITE 500
BOCA RATON, FLORIDA 33434
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON APRIL 27, 1995
GENERAL INFORMATION
This proxy statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Computer Products, Inc., a Florida
corporation (the 'Company'), to be voted at the 1995 Annual Meeting of
Stockholders (the 'Meeting') and at any adjournment(s) thereof for the purposes
set forth in the accompanying Notice of Annual Meeting of Stockholders. The
Meeting is to be held on April 27, 1995, at the Deerfield Beach Hilton, 100
Fairway Drive, Deerfield Beach, Florida at 10:00 A.M., local time.
The principal executive offices of the Company are located at 7900 Glades
Road, Suite 500, Boca Raton, Florida 33434 (telephone no. 407-451-1000). The
enclosed proxy and this proxy statement are being first sent to stockholders of
the Company on or about March 15, 1995.
SOLICITATION AND REVOCATION
Proxies in the form enclosed are solicited by, or on behalf of, the Board
of Directors. The persons named in the proxy have been designated as proxies by
the Board of Directors. If a quorum consisting of the holders of a majority of
the outstanding shares of common stock, $.01 par value, of the Company (the
'Common Stock'), is present at the Meeting, in person or by proxy, the
affirmative vote of the holders of a plurality of the shares present at the
Meeting and entitled to vote will be required to act on the election of
directors and to act on all other matters to come properly before the Meeting.
Abstentions and shares of record held by a broker or nominee ('Broker Shares')
that are voted on any matter will be included in determining the existence of a
quorum and will be counted in determining whether a proposal has been approved.
Broker Shares that are not voted on any matter are treated as shares as to which
voting power has been withheld by the beneficial owners of such shares and,
therefore, as shares not entitled to vote on the proposal and will not be
included in determining the existence of a quorum. Non-voted Broker Shares will
therefore not have an effect on the outcome of the election of the seven
nominees for directors or any other proposal to come before the Meeting.
Shares represented by properly executed proxies received by the Company
will be voted at the Meeting in the manner specified therein or, if no
specification is made, will be voted 'FOR' the election of all of the nominees
for directors named herein. In the event that any other matters are properly
presented at the Meeting for action, the persons named in the proxy will vote
the proxies (which confer authority upon them to vote on any such matters) in
accordance with their best judgment. Any proxy given pursuant to this
solicitation may be revoked by the stockholder at any time before it is
exercised by written notification delivered to the Secretary of the Company, by
voting in person at the Meeting, or by executing another proxy bearing a later
date. Attendance by a stockholder at the Meeting does not alone serve to revoke
his or her proxy.
The solicitation of proxies will be made by mail and, in addition, may be
made by directors, officers and employees of the Company, personally or by
telephone or telegraph. Brokers, nominees and fiduciaries will be reimbursed for
their out-of-pocket and clerical expenses in transmitting proxies and related
material to beneficial owners. The costs of soliciting proxies will be borne by
the Company. The Company has also retained D.F. King & Co. to assist in
soliciting proxies for a fee of approximately $5,000 plus reimbursement of
out-of-pocket expenses.
<PAGE>
ANNUAL REPORT
The Company's Annual Report to Stockholders for the fiscal year ended
December 30, 1994, which contains audited financial statements, is being mailed
with this Proxy Statement to all persons who were stockholders of record as of
the close of business on March 1, 1995.
RECORD DATE; OUTSTANDING SHARES
The Board of Directors has fixed the close of business on March 1, 1995 as
the record date for the determination of stockholders of the Company who are
entitled to receive notice of, and to vote at, the Meeting. At the close of
business on that date, an aggregate of 20,421,902 shares of Common Stock were
issued and outstanding, each of which is entitled to one vote on each matter to
be voted upon at the Meeting. The Company's stockholders do not have cumulative
voting rights. The Company has no other class of voting securities entitled to
vote at the Meeting.
SECURITY OWNERSHIP
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth, as of the close of business on March 1,
1995, information as to those stockholders which are known by the Company to
beneficially own more than 5% of its outstanding Common Stock (based solely upon
filings by each of said holders with the Securities and Exchange Commission on
Schedule 13D or Schedule 13G):
<TABLE>
<CAPTION>
NUMBER OF SHARES PERCENT OF
NAME AND ADDRESS OF BENEFICIAL OWNER BENEFICIALLY OWNED(1) COMMON STOCK
- - ------------------------------------ --------------------- ------------
<S> <C> <C>
Heartland Advisors, Inc.
790 N. Milwaukee Street
Milwaukee, Wisconsin....................................................... 2,495,500 12.2%
Brinson Holdings, Inc.(2)
Brinson Partners, Inc.(2)
Brinson Trust Company(2)
209 S. LaSalle Street
Chicago, Illinois.......................................................... 2,226,700 10.9%
FMR Corp.(3)
82 Devonshire Street
Boston, Massachusetts...................................................... 2,192,317 10.7%
RCM Capital Management(4)
RCM Limited L.P.(4)
RCM General Corporation(4)
RCM Capital Funds, Inc.(4)
Four Embarcadero Center
Suite 2900
San Francisco, California.................................................. 2,007,000 9.8%
David L. Babson & Company, Inc.(5)
One Memorial Drive
Cambridge, Massachusetts................................................... 1,441,500 7.1%
<FN>
- - ------------------------
(1) Beneficial ownership, as reported in the above table, has been determined in
accordance with Rule 13d-3 under the Securities Exchange Act of 1934, as
amended. Unless otherwise indicated, beneficial ownership includes both sole
voting and sole dispositive power.
2
<PAGE>
(2) Brinson Partners, Inc. ('BPI'), a Delaware corporation, is a wholly-owned
subsidiary of Brinson Holdings, Inc. ('BHI'), a Delaware corporation;
Brinson Trust Company ('BTC'), an Illinois corporation, is a wholly-owned
subsidiary of BPI. BPI directly holds 954,073 shares and BTC directly holds
1,272,627 shares. BPI may be deemed to beneficially own the shares held by
BTC, through its ownership of BTC. BHI may be deemed to beneficially own the
shares owned by BPI and BTC through its ownership of BPI, which in turn owns
BTC.
(3) FMR Corp. ('FMR') has sole dispositive power with respect to such shares,
which are beneficially owned by Fidelity Management & Research Company, a
wholly-owned subsidiary of FMR and an investment advisor to several
registered investment companies (the 'Funds'). One of the Funds, Fidelity
Convertible Securities Fund, beneficially owns 1,742,917 shares of the
Company's Common Stock, as to which the Board of Trustees of the Funds has
sole voting power.
(4) RCM Capital Management ('RCM') is a registered investment advisor which
directly and beneficially owns 2,007,000 shares of Common Stock, with sole
dispositive power over all of such shares and with sole voting power over
1,777,000 of such shares. In its capacity as investment adviser, RCM may
have discretionary authority to dispose of or to vote securities that are
under its management, and as a result may be deemed to beneficially own such
securities. However, RCM does not have any economic interest in such
securities; clients are the actual owners of the 2,007,000 shares and have
the sole right to receive and the power to direct the receipt of dividends
from or proceeds from the sale of such securities. RCM Limited L.P. ('RCM
Limited') is the general partner of RCM and RCM General Corporation ('RCM
General') is the general partner of RCM Limited. RCM Limited and RCM General
may be deemed to have beneficial ownership of the securities managed by RCM.
RCM serves as investment manager for the RCM Growth Equity Fund and the RCM
Small Cap Fund, two series of the RCM Capital Funds, Inc. (the 'RCM Funds').
As of December 31, 1994, the RCM Funds held 1,177,000 shares of the
Company's Common Stock (which shares are included in the shares as to which
RCM is deemed to have beneficial ownership). All these shares were held by
the RCM Small Cap Fund.
(5) David L. Babson & Co., Inc. ('Babson') is a registered investment advisor
which has sole dispositive power with respect to such shares and sole voting
power with respect to 1,173,000 of such shares.
</FN>
</TABLE>
OWNERSHIP BY MANAGEMENT
The following table sets forth, as of the close of business on March 1,
1995, information concerning beneficial ownership of the Common Stock of the
Company by each director and nominee for election as a director of the Company,
the Named Executives, as defined below, who are currently serving as executive
officers, and all directors and current executive officers as a group (based
upon information furnished by such persons):
<TABLE>
<CAPTION>
NUMBER OF SHARES PERCENT OF
NAME BENEFICIALLY OWNED(1)(2) COMMON STOCK
- - ---- ------------------------ ------------
<S> <C> <C>
John N. Lemasters.......................................................... 1,073,100 5.0%
Bert Sager................................................................. 365,546(3) 1.8%
Joseph M. O'Donnell........................................................ 235,000(4) 1.2%
Stephen A. Ollendorff...................................................... 125,355 *
Phillip A. O'Reilly........................................................ 121,721 *
J. Earl Templeton.......................................................... 110,087 *
Edward S. Croft, III....................................................... 88,317(5) *
Richard J. Thompson........................................................ 68,339(6) *
Louis R. DeBartelo......................................................... 10,062 *
Robert J. Aebli............................................................ 7,906 *
Salvatore R. Provanzano.................................................... 7,500 *
Directors and executive officers
as a group (13 persons).................................................... 2,315,933 10.4%
<FN>
- - ------------------------
* Represents less than one (1%) percent.
(1) Beneficial ownership, as reported in the above table, has been determined in
accordance with Rule 13d-3 under the Securities Exchange Act of 1934, as
amended. Unless otherwise indicated, beneficial ownership includes both sole
voting and sole dispositive power.
(2) Includes the following shares that may be acquired upon the exercise of
options within 60 days of March 1, 1995: Mr. Lemasters - 1,000,000; Mr.
Sager - 84,755; Mr. O'Donnell - 185,000; Mr. Ollendorff - 84,755; Mr.
O'Reilly - 71,721; Mr. Templeton - 84,755; Mr. Croft - 84,755; Mr. Thompson
- 46,667; Mr. DeBartelo - 5,000; Mr. Aebli - 7,500; Mr. Provanzano - 7,500;
and all directors and executive officers as a group (13 persons) -
1,758,408.
3
<PAGE>
(3) Includes 23,040 shares which are owned of record by Mr. Sager's wife, with
respect to which Mr. Sager disclaims beneficial ownership; also includes
21,621 shares which are issuable upon conversion of certain of the Company's
9 1/2% Convertible Subordinated Debentures due May 1997 ('Debentures') held
by Mr. Sager.
(4) Does not include options to purchase 265,000 shares of Common Stock which
become exercisable in July 2003, except that 135,000 of such options will
become immediately exercisable if and when the Fair Market Value (as defined
in the Stock Option Agreement between the Company and Mr. O'Donnell, dated
June 29, 1994) of the Common Stock equals or exceeds $5.38 per share, and
except that options to purchase the remaining 130,000 shares will become
immediately exercisable when the Fair Market Value of the Common Stock
equals or exceeds $7.50 per share.
(5) Includes 2,162 shares which are issuable upon conversion of certain
Debentures held by Mr. Croft.
(6) Includes 4,324 shares which are issuable upon conversion of certain
Debentures held by Mr. Thompson.
</FN>
</TABLE>
4
<PAGE>
ELECTION OF DIRECTORS
The entire Board of Directors is to be elected at the Meeting. The maximum
number of directors is set by the Company's By-laws at 12; however, by
resolution, the number of directors is presently set at seven. The seven persons
listed below, all of whom have consented to being named in this Proxy Statement
and to serving if elected, have been nominated to serve as directors of the
Company until the annual meeting of stockholders to be held in 1996 and until
their respective successors have been duly elected and qualified. All of the
nominees are currently directors of the Company and each, with the exception of
Joseph M. O'Donnell, was elected by the stockholders at the Company's 1994
annual meeting of stockholders. Mr. O'Donnell was elected to the Board on July
26, 1994 by the Board of Directors.
Proxies in the accompanying form will be voted at the Meeting in favor of
the election of each of the nominees listed on the accompanying form of proxy,
unless authority to do so is withheld as to an individual nominee or nominees or
all nominees as a group. Proxies cannot be voted for a greater number of persons
than the number of nominees named. In the unexpected event that any of such
nominees should become unable to or for good cause will not serve, proxies may
be voted for the election of substitute nominees. Directors will be elected by a
plurality of the votes cast by the holders of shares entitled to vote thereon
who are present at the Meeting in person or by proxy.
Set forth below is certain information with respect to each nominee for
election as a director of the Company at the Meeting:
<TABLE>
<CAPTION>
YEAR OF
FIRST
ELECTION PRINCIPAL OCCUPATIONS
AGE AS A DURING PAST FIVE YEARS;
NAME (AS OF 3/1/95) DIRECTOR OTHER DIRECTORSHIPS
- - ---- --------------- --------- -----------------------------------------------------------
<S> <C> <C> <C>
Joseph M. O'Donnell 48 1994 Since July 1994, Chief Executive Officer and President of
the Company; from March 1994 to June 1994 and from
October 1992 to September 1993, Managing Director of
O'Donnell Associates, a consulting firm; from October
1993 to February 1994, Chief Executive Officer of Savin
Corporation, an office products distributor; from June
1990 to September 1992, President and Chief Executive
Officer of Go/Dan Industries, a manufacturer of
automotive parts; from 1988 to June 1990, Group Vice
President of Handy & Harman, a manufacturer of electronic
components; director of Cincinnati Microwave, Inc., a
manufacturer of consumer electronics, and director of
V-Band Corporation, a manufacturer of computer systems.
</TABLE>
5
<PAGE>
<TABLE>
<CAPTION>
YEAR OF
FIRST
ELECTION PRINCIPAL OCCUPATIONS
AGE AS A DURING PAST FIVE YEARS;
NAME (AS OF 3/1/95) DIRECTOR OTHER DIRECTORSHIPS
- - ---- --------------- --------- -----------------------------------------------------------
<S> <C> <C> <C>
John N. Lemasters 61 1988 Since July 1994, a consultant to the Company; from March
(1)(2) 1988 until July 1994, Chairman of the Board and Chief
Executive Officer and, until July 1992, President of the
Company; from April 1987 to March 1988, President of
Lemasters & Associates, a consulting firm; from 1985 to
1987, President and Chief Executive Officer of Contel
Corporation, a provider of information services; director
of Augat, Inc., a manufacturer of electromechanical
components and of Dialogic, Inc., a supplier of computer
products to the telephone call-processing market.
Bert Sager 69 1968 Since 1949, a practicing attorney; director of Acorn
(1)(2)(3) Venture Capital Corporation, a registered business
development company, and Windmere Corporation, a
manufacturer of personal care products.
J. Earl Templeton 79 1978 Retired executive for more than the past five years; former
(1)(2)(3) Executive Vice President and Chief Operating Officer of
the Company and Corporate Vice President and Group Vice
President of Illinois Tool Works, Inc.; director of Acorn
Venture Capital Corporation.
Edward S. Croft, III 52 1980 Since 1983, Managing Director of The Robinson-Humphrey
(1)(2)(3) Company, Inc., an investment banking firm.
Stephen A. Ollendorff 56 1984 Practicing attorney for more than the past five years;
(1)(2)(3) since December 1990, Of Counsel to Hertzog, Calamari &
Gleason; from 1983 to present, Vice President then
President, Chief Executive Officer and director of Acorn
Venture Capital Corporation.
Phillip A. O'Reilly 68 1988 Since January 1, 1989, retired executive; from 1979 to
(1)(2)(3) December 31, 1988, President (then Chairman) and Chief
Executive Officer of Houdaille Industries, Inc., a
manufacturer of industrial products.
<FN>
- - ------------------------
(1) Member of the Audit Committee.
(2) Member of the Compensation and Stock Option Committee.
(3) Member of the Nominating Committee.
</FN>
</TABLE>
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE 'FOR' THE ELECTION OF
THE SEVEN NOMINEES NAMED ABOVE AS DIRECTORS OF THE COMPANY.
6
<PAGE>
BOARD OF DIRECTORS; COMMITTEES OF THE BOARD
The Board of Directors met 14 times during fiscal 1994 and acted twice by
unanimous written consent. During fiscal 1994, no director attended fewer than
75% of the total number of meetings of the Board and of the committees of the
Board on which he served. The Board has established three standing committees,
which consist of a Compensation and Stock Option Committee, an Audit Committee
and a Nominating Committee. The current functions of such committees are as
follows:
The Compensation and Stock Option Committee, which held five meetings
during fiscal 1994, sets and approves salary levels of all corporate officers
and has primary responsibility for the administration of the Company's 1981
Stock Option Plan and 1990 Performance Equity Plan (the 'Equity Plan'),
including primary responsibility for the granting of options thereunder. See
'Compensation and Stock Option Committee Report on Executive Compensation'
below. The Chairman of this Committee is Phillip A. O'Reilly.
The Audit Committee, which held three meetings during fiscal 1994, reviews
the internal and external audit functions of the Company and makes
recommendations to the Board of Directors with respect thereto. It also has
primary responsibility for the formulation and development of the auditing
policies and procedures of the Company, and for making recommendations to the
Board of Directors with respect to the selection of the Company's independent
auditing firm. The Chairman of this Committee is Edward S. Croft, III.
The Nominating Committee, which did not hold any meetings during fiscal
1994, recommends nominees to fill vacancies on the Board and will consider
responsible recommendations by the Company's stockholders of candidates to be
nominated as directors of the Company. The Nominating Committee met early in
fiscal 1995 to discuss the current nominees to the Board. All such
recommendations must be in writing and addressed to the Secretary of the
Company. By accepting a stockholder recommendation for consideration, the
Nominating Committee does not undertake to adopt or take any other action
concerning the recommendation or to give the proponent its reasons for any
action or failure to act. The Chairman of this Committee is Bert Sager.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation and Stock Option Committee consists of Bert Sager, J. Earl
Templeton, Edward S. Croft, III, Stephen A. Ollendorff, Phillip A. O'Reilly and
John N. Lemasters. It is not expected that Messrs. Croft and Ollendorff will
continue to serve on the Compensation and Stock Option Committee following the
Meeting. None of the Committee members are executive officers of the Company,
however, Mr. Templeton formerly served as Executive Vice President of the
Company and Mr. Lemasters formerly served as Chairman of the Board and Chief
Executive Officer and, prior to that, as President of the Company. None of the
executive officers of the Company has served on the board of directors or on the
compensation committee of any other entity, any of whose officers served on the
Board of the Company. Mr. Ollendorff is Of Counsel to the law firm of Hertzog,
Calamari & Gleason which acts as counsel for the Company. Mr. Croft is Managing
Director of The Robinson-Humphrey Company, Inc. which provides various
investment banking services to the Company. In addition, Bert Sager, a director
of the Company, is a partner in the law firm Bert Sager, Esq. which provided
limited legal services to the Company in fiscal 1994.
COMPENSATION OF DIRECTORS
Directors who are not employees of the Company ('Outside Directors') are
compensated for their services by payment of an annual fee of $12,000 plus
$1,000 per day for each Board meeting attended and
7
<PAGE>
$750 per day for each committee meeting attended (with a maximum payment of
$1,750 per day for attendance at meetings of the Board and committees of the
Board).
During fiscal 1994, options to purchase 10,000 shares of Common Stock, at
an exercise price of $2.6875 per share, were granted by the Company to each of
the Outside Directors pursuant to the Company's 1990 Outside Directors' Stock
Option Plan. Under such plan, each Outside Director is automatically granted an
option, exercisable over 10 years, to purchase 10,000 shares of Common Stock
each time that such person is elected or re-elected by the stockholders to serve
as a director of the Company.
Outside Directors who have served for five or more years are entitled to
receive certain annual benefits under the Company's Outside Directors'
Retirement Plan. The annual benefits are based upon the number of years served
and the annual retainer at the time of retirement.
LOANS TO MANAGEMENT
On October 5, 1994, the Company granted an extension on a loan made by the
Company in April 1993 to Louis R. DeBartelo, President of the Company's North
American Power Conversion Division, and his wife. The original loan, in amount
of $144,000, was made in connection with relocation expenses incurred by Mr. and
Mrs. DeBartelo. In exchange for such loan, Mr. and Mrs. DeBartelo issued a
promissory note (the 'DeBartelo Note') in favor of the Company bearing annual
interest at the prime rate as published in the WALL STREET JOURNAL and payable
on October 5, 1993, with installments of principal and interest payable monthly
thereon. Since October 5, 1993, however, the Company has extended the DeBartelo
Note for additional six-month periods and the amount due on the DeBartelo Note
has been reduced to $130,833.53. The DeBartelo Note is currently due and payable
on April 5, 1995, subject to further extension at the option of the Company.
On February 14, 1995, Joseph M. O'Donnell, President and Chief Executive
Officer of the Company, issued a promissory note in favor of the Company in the
amount of $115,000 (the 'O'Donnell Note'). The Company loaned such amount to Mr.
O'Donnell in connection with relocation expenses incurred by Mr. O'Donnell,
pursuant to the terms of his employment agreement, dated June 29, 1994. See
'Executive Compensation--Employment and Termination Arrangements.' The O'Donnell
Note is interest-free and is due and payable on February 14, 1996.
8
<PAGE>
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth information for the fiscal years ended
December 30, 1994, December 31, 1993 and January 1, 1993 respecting compensation
earned by the Chief Executive Officer serving at the end of fiscal 1994, the
Chief Executive Officer serving during fiscal 1994 but not at the end of such
year and the other four most highly compensated executive officers (over
$100,000) of the Company serving at the end of fiscal 1994 (the 'Named
Executives'), in all capacities in which they served.
<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
---------------------------------------- ------------
SECURITIES
OTHER ANNUAL UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($)(2) COMPENSATION($)(3) OPTIONS(#)(4) COMPENSATION($)
- - --------------------------- ---- --------- ----------- ------------------ ------------ ---------------
<S> <C> <C> <C> <C> <C> <C>
Joseph M. O'Donnell 1994 105,770 65,693 14,517(5) 450,000 18,822(6)
Chief Executive Officer(1)
John N. Lemasters 1994 175,000 110,364 14,700 -0- 155,390(7)
Chairman of the Board 1993 300,000 37,550 11,250 -0- 9,472
and Chief Executive Officer(1) 1992 311,539 101,236 -0- -0- 3,332
Richard J. Thompson 1994 150,850 76,435 -0- 20,000 6,347(8)
Vice President--Finance, 1993 144,519 14,550 -0- -0- 4,497
Chief Financial Officer, 1992 143,339 73,665 19,030(9) 20,000 3,333
Secretary and Treasurer
Louis R. DeBartelo 1994 157,226 55,090 69,352(10) 15,000 5,353(11)
President 1993 145,000 51,214 -0- -0- 4,506
North American Power 1992 140,000 66,389 -0- -0- 2,148
Conversion Division
Robert J. Aebli 1994 140,000 43,701 39,016(12) -0- 7,933(13)
President--Heurikon 1993(14) 8,077 13,500 -0- 30,000 97
Corporation
Salvatore R. Provanzano 1994 132,723 70,750 5,129(15) -0- 6,145(16)
President of RTP Corp. 1993(14) 10,385 3,425 -0- 30,000 139
<FN>
- - ------------------------
(1) Mr. Lemasters retired as Chairman of the Board and Chief Executive Officer
of the Company, and Mr. O'Donnell was elected to replace him as Chief
Executive Officer in July 1994. Mr. Lemasters remains a director of the
Company.
(2) Includes amounts awarded under the Executive Incentive Plan (the 'Incentive
Plan') to each of the Named Executives and, for Messrs. Aebli and
Provanzano, starting bonuses of $10,000 for fiscal 1993 and 1994,
respectively.
(3) Represents reimbursement by the Company for payment of taxes by the Named
Executives.
(4) Represents options awarded under various stock option plans. See '--Stock
Option Grants in Last Fiscal Year.'
(5) Represents a payment by the Company to reimburse Mr. O'Donnell for expenses
related to his relocation.
(6) Includes insurance premiums paid by the Company in the amount of $12,917
with respect to two life insurance policies for the benefit of Mr.
O'Donnell, including a whole-life policy and a hybrid policy. Also includes
premiums paid by the Company with respect to medical insurance for the
benefit of Mr. O'Donnell and $5,000 in legal fees paid by the Company on
behalf of Mr. O'Donnell in connection with Mr. O'Donnell's employment
agreement.
(7) Includes a contribution in the amount of $2,772 by the Company to the
Company's 401(k) plan for the benefit of Mr. Lemasters, $27,618 of
insurance premiums paid by the Company with respect to term life insurance
and health insurance for the benefit of Mr. Lemasters and $125,000 in fees
paid to Mr. Lemasters for consulting services to the Company from July 1994
through December 1994.
(8) Includes a contribution in the amount of $2,772 by the Company to the
Company's 401(k) plan for the benefit of Mr. Thompson, and also includes
insurance premiums in the amount of $3,575 paid by the Company with respect
to term life insurance and health insurance for the benefit of Mr.
Thompson.
(9) Represents payment to cover certain tax liabilities.
(10) Represents a payment by the Company to reimburse Mr. DeBartelo for expenses
related to his relocation.
9
<PAGE>
(11) Includes a contribution in the amount of $704 by the Company to the
Company's 401(k) plan for the benefit of Mr. DeBartelo, and also includes
insurance premiums in the amount of $4,649 paid by the Company with respect
to term life insurance and health insurance for the benefit of Mr.
DeBartelo.
(12) Also includes a payment by the Company in the amount of $37,798 to
reimburse Mr. Aebli for expenses related to his relocation.
(13) Includes a contribution in the amount of $2,431 by the Company to the
Company's 401(k) plan for the benefit of Mr. Aebli, and also includes
insurance premiums in the amount of $5,502 paid by the Company with respect
to term life insurance and health insurance for the benefit of Mr. Aebli.
(14) Messrs. Aebli and Provanzano became employed by the Company in November
1993.
(15) Represents a payment by the Company to reimburse Mr. Provanzano for
expenses related to his relocation.
(16) Includes a contribution in the amount of $2,126 by the Company to the
Company's 401(k) plan for the benefit of Mr. Provanzano, and also includes
insurance premiums in the amount of $4,019 paid by the Company with respect
to term life insurance and health insurance for the benefit of Mr.
Provanzano.
</FN>
</TABLE>
STOCK OPTION GRANTS IN LAST FISCAL YEAR
The following table sets forth information concerning stock options granted
to the Named Executives in fiscal 1994.
<TABLE>
<CAPTION>
PERCENTAGE OF
NUMBER OF TOTAL OPTIONS
SECURITIES GRANTED TO EXERCISE
UNDERLYING EMPLOYEES IN PRICE PER EXPIRATION GRANT DATE PRESENT
NAME OPTIONS GRANTED(#) FISCAL YEAR(%) SHARE($) DATE VALUE($)(1)
- - ---- ------------------ -------------- --------- ---------- -------------------
<S> <C> <C> <C> <C> <C>
Joseph M. O'Donnell.................. 400,000(2) 73.8 2.6875 6/29/04 664,078
50,000(3) 9.2 3.0625 8/11/99 77,794
John N. Lemasters.................... N/A N/A N/A N/A N/A
Richard J. Thompson.................. 20,000(4) 3.7 2.375 1/25/04 30,375
Louis R. DeBartelo................... 15,000(4) 2.8 2.375 1/25/04 22,781
Robert J. Aebli...................... N/A N/A N/A N/A N/A
Salvatore R. Provanzano.............. N/A N/A N/A N/A N/A
<FN>
- - ------------------------
(1) Based upon the Black-Scholes option pricing model adopted for use in valuing
executive stock options. The actual value, if any, a Named Executive may
realize will depend upon the excess of the market price of the Common Stock
over the exercise price on the date the option is exercised. There is,
therefore, no assurance that the value realized by a Named Executive will be
at or near the value estimated by the Black-Scholes model. The estimated
values under the model are based upon certain assumptions which the Company
believes are reasonable, such as a risk-free rate of return of 7.9%, stock
price volatility of .73, future dividend yield of 0% and time to exercise of
2.65 years. The values do not take into account certain features of the
stock plans which may affect such values, such as conditions to
exercisability and nontransferability.
(2) Options to purchase 135,000 of such shares of Common Stock are currently
exercisable. Options to purchase the remaining 265,000 shares become
exercisable in July 2003, except that 135,000 of such options will become
immediately exercisable if and when the Fair Market Value (as defined in the
Stock Option Agreement between the Company and Mr. O'Donnell, dated June 29,
1994) of the Common Stock equals or exceeds $5.38 per share, and except that
options to purchase the remaining 130,000 shares will become immediately
exercisable when the Fair Market Value of the Common Stock equals or exceeds
$7.50 per share.
(3) Such options, granted pursuant to the terms of Mr. O'Donnell's employment
agreement, were exercisable in full upon the grant thereof. See
'--Employment and Termination Arrangements.'
(4) Options to purchase 33-1/3% of such shares became exercisable on January 26,
1995, options to purchase an additional 33-1/3% of such shares become
exercisable on January 26, 1996 and options to purchase the remaining shares
become exercisable on January 26, 1997. Such options were granted pursuant
to the Company's Equity Plan.
</FN>
</TABLE>
OPTIONS EXERCISED IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION VALUES TABLE
The following table sets forth information respecting stock options
exercised by the Named Executives in fiscal 1994 and information respecting
exercisable and non-exercisable stock options held on
10
<PAGE>
December 30, 1994 by the Named Executives. The table also includes the value of
'in-the-money' stock options which represents the spread between the exercise
price of the existing stock options and the year-end price of the Common Stock.
<TABLE>
<CAPTION>
NUMBER OF SHARES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY
OPTIONS HELD AT OPTIONS HELD AT
SHARES DECEMBER 30, 1994(#) DECEMBER 30, 1994($)(1)
ACQUIRED ON VALUE ------------------------------ ------------------------------
NAME EXERCISE(#) REALIZED($) EXERCISABLE NOT EXERCISABLE EXERCISABLE NOT EXERCISABLE
- - ------------------------------- ----------- ----------- ----------- --------------- ----------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Joseph M. O'Donnell............ N/A N/A 185,000 265,000(2) 108,438 182,188
John N. Lemasters.............. N/A N/A 1,000,000 500,000 1,186,847 562,500
Richard J. Thompson............ N/A N/A 35,000 145,000 9,375 149,375
Louis R. DeBartelo............. 15,000 11,250 -0- 75,000 -0- 82,500
Robert J. Aebli................ N/A N/A 7,500 22,500 7,463 22,388
Salvatore R. Provanzano........ N/A N/A 7,500 22,500 7,463 22,388
<FN>
- - ------------------------
(1) Based upon the closing price of the Common Stock on December 30, 1994
($3.375).
(2) Such options are not exercisable until July 2003, except that 135,000 of
such options will become immediately exercisable if and when the Fair Market
Value (as defined in the Stock Option Agreement between the Company and Mr.
O'Donnell, dated June 29, 1994) of the Common Stock equals or exceeds $5.38
per share, and that options to purchase the remaining 130,000 shares will
become immediately exercisable when the Fair Market Value of the Common
Stock equals or exceeds $7.50 per share.
</FN>
</TABLE>
EMPLOYMENT AND TERMINATION ARRANGEMENTS
On June 29, 1994, the Company and Joseph M. O'Donnell, Chief Executive
Officer of the Company, entered into an employment agreement which provides that
Mr. O'Donnell is to receive a base salary at the rate of $250,000 per year for
the first year of his employment and $300,000 per year thereafter. The base
salary is to be reviewed by the Board of Directors periodically. In addition,
the agreement provides that Mr. O'Donnell is eligible to receive an incentive
payment (the 'Incentive Payment') each year in an amount equal to up to 50% of
his base salary for such year, payable 50% in cash and 50% in stock, awarded in
accordance with the terms of the Incentive Plan. The agreement also provides for
the grant to Mr. O'Donnell of stock options to purchase 400,000 shares of Common
Stock (see '--Stock Option Grants in Last Fiscal Year') as well as additional
options the grant and terms of which are contingent upon Mr. O'Donnell's
purchase of certain amounts of Common Stock in the open market. Under the terms
of the agreement, Mr. O'Donnell is also entitled to reimbursement of expenses,
including reimbursement of relocation expenses up to an estimated $100,000 and a
bridge loan for the purchase of a new home pending the sale of his prior home of
up to $250,000 (see 'Election of Directors--Loans to Management'), and health,
disability and life insurance benefits, and the Company has agreed to cause him
to be nominated as a director throughout the term of his employment. The
agreement expires on July 26, 1997, but is renewable each year for a one-year
term unless either party provides notice of termination.
Upon any event of earlier termination of the agreement, Mr. O'Donnell is
entitled to receive his base salary through the date of termination. In the
event of Mr. O'Donnell's death or 'disability' (as defined in the agreement), he
is entitled to receive his base salary for an additional year from the date of
termination, except that payments for the additional year will be offset by
certain Company-sponsored insurance benefits payable during such period, plus
any prorated Incentive Payment to which he may be entitled. In the event that
Mr. O'Donnell's employment is terminated by the Company without 'cause' (as
defined in the agreement), by Mr. O'Donnell due to the Company's 'substantial
breach' (as defined in the agreement) or if the Company terminates the agreement
for 'cause', Mr. O'Donnell is entitled to receive his base salary for up to 18
months. Mr. O'Donnell is also entitled to receive any prorated Incentive Payment
to which he may be entitled and reimbursement of expenses of
outplacement-related services up to $45,000. In the event of the Company's
termination of the agreement without 'cause', or termination of the agreement by
11
<PAGE>
Mr. O'Donnell due to the Company's 'substantial breach', following a 'change of
control' (as defined in the agreement), Mr. O'Donnell is entitled to receive a
lump sum payment equal to the lesser of (a) the product of the sum of his base
salary and the amount of his last Incentive Payment multiplied by two and (b)
the maximum amount that would be permitted without the imposition of certain
taxes, or the loss of certain tax deductions, under the Internal Revenue Code of
1986, as amended, within 10 days from the date of termination.
Effective July 26, 1994, John N. Lemasters retired as the Chairman of the
Board and Chief Executive Officer of the Company pursuant to the terms of an
agreement between Mr. Lemasters and the Company dated April 5, 1994. Pursuant to
the agreement, the Company has retained Mr. Lemasters as a consultant to the
Company until August 29, 1995, to perform tasks assigned by the Board of
Directors for an average maximum of five days per month. As compensation for
such services, the Company has agreed to pay Mr. Lemasters consulting fees of
$300,000 per year as well as insurance benefits and reimbursement of travel
expenses. The agreement also provides that Mr. Lemasters has the right to demand
registration under the Securities Act of 1933, as amended, of the 300,000 shares
of Common Stock underlying options granted to him by the Board of Directors in
March 1988, and sets the expiration date of all options granted to Mr. Lemasters
at August 1, 1996.
Richard J. Thompson, Vice President of Finance, Secretary, Treasurer and
Chief Financial Officer of the Company, entered into a letter agreement with the
Company on April 28, 1994, which provides that if Mr. Thompson's employment is
terminated without 'cause' (as defined in the agreement), or if he resigns
within 30 days after a substantial reduction in his responsibilities, duties or
compensation, Mr. Thompson shall be entitled to receive an amount equal to his
annual base salary plus any incentive payment he may have earned, as well as
insurance and other employee benefits, for a period of 12 months from
termination. Such payments are payable to Mr. Thompson as they would have been
paid if his employment had continued without termination. The agreement further
provides that upon such termination all stock options previously granted to Mr.
Thompson shall remain outstanding until the 90th day following the 12-month
period during which he is entitled to receive post-termination compensation,
except that options granted under the 1981 Stock Option Plan shall be reissued
under the Equity Plan at an exercise price equal to the closing price of the
Common Stock as of the date of the agreement, and the Company will compensate
Mr. Thompson for any loss caused by such repricing. The agreement provides that
Mr. Thompson is eligible for the compensation described therein following his
execution of a release of the Company from all claims he may have against the
Company, its officers and directors.
Effective January 10, 1994, Ronald J. Ritchie, President, Chief Operating
Officer and director, resigned as an officer and director of the Company. The
Company and Mr. Ritchie entered into an agreement, dated January 24, 1994,
setting forth the terms of Mr. Ritchie's resignation. In addition to other
terms, the agreement provided for payment of salary and bonus at the rate of
$280,000 per year from January 1995 to January 1996 if Mr. Ritchie is unable to
secure comparable employment. Mr. Ritchie is obligated to use reasonable efforts
to obtain comparable employment but, as of March 1, 1995, he had not secured
such employment. In fiscal 1994, the Company paid an aggregate amount of
$289,538 to Mr. Ritchie under the terms of the agreement.
Certain options granted to the Named Executives become immediately
exercisable in the event of a 'change of control' or if the Executives's
employment is terminated within six months after a 'change of control' of the
Company pursuant to the terms of the option plan under which the options were
granted.
12
<PAGE>
COMPENSATION AND STOCK OPTION COMMITTEE
REPORT ON EXECUTIVE COMPENSATION
The Compensation and Stock Option Committee (the 'Committee') of the
Company's Board of Directors is comprised of six individuals, each of whom is a
non-employee director. The Committee is responsible for establishing the overall
philosophy of the Company's executive compensation program and overseeing the
executive compensation plans developed to execute the Company's compensation
strategy.
THE COMPANY'S EXECUTIVE COMPENSATION STRATEGY
The Company's executive compensation program has been designed to promote
stockholder interests and to:
1. Attract, reward and retain key executives who are important to the
Company's long-term viability and success.
2. Provide compensation that is competitive with that of companies of
comparable size and stature in the electronics and high technology industries.
3. Reward management for achieving specific short-term and long-term
financial goals and strategies.
4. Align management's interests with the interests of other Company
stockholders with awards that can result in the ownership of Company stock.
It is the Company's intention to ensure that all compensation paid to its
executives is tax deductible under Internal Revenue Code Section 162(m).
Although Section 162(m) of the Internal Revenue Code imposes limits on
deductibility for compensation to certain executives exceeding $1 million per
year, the Company does not currently anticipate that this limitation will affect
the deductibility of any compensation paid to any executive.
ELEMENTS OF THE EXECUTIVE COMPENSATION PROGRAM
The Company's executive compensation program includes two principal
elements: annual cash compensation and long-term awards. The Company uses
competitive survey data of companies in the high-technology industry with
comparable revenue levels in assessing base salaries and awards. This evaluation
also considers competitive data of the Company's Selected Peer Group included in
the Stock Performance Graph.
Annual cash compensation includes both base salaries and annual incentive
awards pursuant to the Incentive Plan. Executives' base salaries are evaluated
each year based upon an assessment of competitive market data of comparable
companies, as discussed above. Executives are eligible for adjustments in base
salary based upon assessments of individual performance and changes in principal
job duties and responsibilities.
Executives are eligible to receive annual incentive awards under the
Incentive Plan. Each executive participating in the Incentive Plan has a
targeted annual incentive award, based upon competitive practice which
represents a stated percentage of the executive's base salary. The performance
of executives with corporate-wide responsibilities is evaluated based upon the
achievement of corporate financial targets, which in 1994 were measured by the
Company's pre-tax net income, percentage of revenue growth and return on equity.
The performance of executives with divisional and/or subsidiary responsibility
is evaluated based upon the achievement of Company and divisional or subsidiary
financial targets, which in 1994 were measured as the Company's net income and
division management net income and earnings growth. The
13
<PAGE>
financial targets for 1994 were developed from the Company's annual planning
process. The Committee reviews and approves the targets each year based upon
fairness, degree of difficulty and reasonableness. Further, for 1994, the
Company had to achieve a minimum pre-tax net income performance threshold before
any executive, whether at the Company, division or subsidiary level, could
receive a financial target payout under the Incentive Plan. In addition, annual
incentive awards were limited to no more than 10% of the Company's net income,
excluding extraordinary items, before the total after-tax cost of the executive
annual incentive payout, unless otherwise approved by the Committee and the
Board of Directors.
Long-term incentive compensation is granted pursuant to the Equity Plan.
The Equity Plan permits the Company to grant non-qualified stock options to
selected executives at a price no less than 100% of the fair market value of the
Common Stock on the date of grant.
THE COMMITTEE'S ACTIONS IN 1994
Each year the Committee reviews and approves annual salaries, annual
incentive awards, grants of long-term incentive awards and the performance
targets and criteria established for both the annual and long-term incentive
plans. In addition, the Committee reviews the performance of the Company and its
divisions and subsidiaries and exercises the final authority in approving the
payout of executive incentive awards. The Committee has engaged executive
compensation consultants and used competitive compensation data.
In the beginning of 1994, the Committee reviewed and approved the financial
targets to be included in the Incentive Plan for Mr. Lemasters, the Chairman and
Chief Executive Officer, and the other Named Executives. Based upon the
Committee's review of the Company's performance by the Named Executives
following the conclusion of the 1994 fiscal year, the Company granted awards to
the Named Executives under the Incentive Plan based on the attainment of Company
and divisional objectives.
In order to focus the Named Executives more closely on the Company's goal
of creating value for stockholders, the Company made several changes to the
Incentive Plan for 1994 in creating the Incentive Plan for 1995. The maximum
individual annual incentive award has been increased from one and one-half times
to two times the targeted annual incentive award. The performance of executives
with corporate-wide responsibilities will be evaluated based upon the
achievement of corporate financial targets measured by the Company's net income
and percent revenue growth. The performance of executives with divisional and/or
subsidiary responsibility will be evaluated based upon the achievement of
divisional or subsidiary financial targets measured by management net income,
revenue growth and cash flow. The financial targets were developed from the
Company's annual planning process and market growth expectations. Further, to
encourage increased stock ownership by senior management the Company added a
feature to the Incentive Plan which stipulates that incentive compensation
earned above the 100% target will be paid 65% - 75% in Common Stock and the
remainder in cash. For each share of Common Stock earned by a Named Executive,
one option share will be granted with a two-year vesting period. To be eligible
to exercise the option after two years, the Named Executive must still own those
shares purchased under this provision.
In connection with the termination of the 1990 Long Term Performance Plan,
the Company granted, in 1994, non-qualified stock options to Richard J. Thompson
to purchase 20,000 shares, and to Louis R. DeBartelo to purchase 15,000 shares.
Based upon assessments of individual performance, the Company awarded an
increase in base salary in 1994 to Messrs. Thompson and DeBartelo. No other
Named Executive received a salary adjustment in 1994.
14
<PAGE>
COMPENSATION OF THE CHIEF EXECUTIVE OFFICER
Mr. O'Donnell was hired as President and Chief Executive Officer effective
July 26, 1994 and his base salary was established at $250,000. The base salary
of Mr. O'Donnell was based upon an assessment of competitive market data of
comparable companies, as described above. The Company also granted to Mr.
O'Donnell a ten-year, non-qualified stock option to purchase 400,000 shares of
Common Stock at an exercise price of $2.6875, exercisable as follows: (i)
135,000 option shares vested on July 27, 1994, and (ii) the remaining 265,000
option shares vest on the ninth anniversary of the date of grant, but vest
earlier if certain performance criteria are achieved. Mr. O'Donnell received an
annual incentive award of $65,693 under the Incentive Plan based on attainment
of Company's financial results during the 1994 fiscal year period when he was
President and Chief Executive Officer.
Mr. Lemasters' employment as Chairman and Chief Executive Officer was
terminated effective July 26, 1994, and he has been retained by the Company as a
consultant, pursuant to the terms of a consulting agreement which terminates
effective August 29, 1995. Pursuant to such agreement, Mr. Lemasters is entitled
to compensation for such consulting services at the rate of $300,000 per year,
payable bi-weekly, and to continuation of all health, life and disability
insurance benefits received pursuant to the terms of his previous employment
agreement. The Company and Mr. Lemasters have agreed that any options held by
Mr. Lemasters upon commencement of the consulting period which vest by their
terms by August 1, 1996 may be exercised until such date and that all
unexercised or unvested options shall expire and become null and void after such
date. Mr. Lemasters received an annual incentive award of $110,364 under the
Incentive Plan based on attainment of Company's financial results during the
1994 fiscal year period when he was Chairman and Chief Executive Officer.
MEMBERS OF THE COMPENSATION AND STOCK OPTION COMMITTEE:
Phillip A. O'Reilly, Chairman
Edward S. Croft, III
Stephen A. Ollendorff
Bert Sager
J. Earl Templeton
John N. Lemasters
15
<PAGE>
STOCK PERFORMANCE GRAPH
The line graph below compares the cumulative total stockholder return
(assuming reinvestment of dividends) on the Company's Common Stock, over the
most recent five-year period, with the cumulative total return of companies on
the Russell 2000[REGISTER MARK] Index and an index representing the performance
of public companies from different industry groups representing the Company's
lines of business (the 'Selected Peer Group').
The Selected Peer Group consists of the following companies corresponding
to the Company's three lines of business: power conversion--ASTEC (BSR) Plc,
Vicor Corporation and Unitech Plc; industrial automation--Data Translation,
Inc., Fischer & Porter Company and Keithley Instruments, Inc.; and computer
systems--Concurrent Computer Corp., SBE Inc. and Ciprico Inc. Within each
business line sub-group, each component company was weighted according to its
relative market capitalization as of the beginning of each period. Additionally,
each line of business sub-group was weighted based upon the Company's quarterly
revenues in each line of business. If the number of outstanding shares was not
available for each quarter, the number of shares outstanding as of the most
recent date available was used to compute market capitalization for companies in
the Selected Peer Group. Adjustments were made each quarter to the market
capitalization of companies in the power conversion sub-group based on exchange-
rate fluctuations as required.
CUMULATIVE TOTAL RETURN
Based on reinvestment of $100 beginning December 31, 1989
<TABLE>
<CAPTION>
DEC-89 DEC-90 DEC-91 DEC-92 DEC-93 DEC-94
------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
CPRD........................................................... $ 100 $ 62 $ 96 $ 102 $ 82 $ 120
Russell 2000................................................... $ 100 $ 80 $ 118 $ 139 $ 166 $ 163
Selected Peer Group............................................ $ 100 $ 65 $ 118 $ 98 $ 137 $ 165
</TABLE>
16
<PAGE>
INDEPENDENT AUDITORS
Pursuant to a recommendation of the Audit Committee, the Board of Directors
has selected and retained the firm of Arthur Andersen LLP to act as independent
public accountants for the Company for the 1995 fiscal year. Representatives of
Arthur Andersen LLP are expected to be present at the Meeting, to have the
opportunity to make a statement, if they so desire, and will be available to
respond to appropriate questions. Arthur Andersen LLP was retained as the
Company's independent public accountants beginning in March 1991.
OTHER MATTERS
At the date of this proxy statement, the Board has no knowledge of any
business which will be presented for consideration at the Meeting, other than as
described above. If any other matter or matters are properly brought before the
Meeting or any adjournment(s) thereof, it is the intention of the persons named
in the accompanying form of proxy to vote proxies on such matters in accordance
with their best judgment.
SUBMISSION OF STOCKHOLDER PROPOSALS
Any proposal which is intended to be presented by any stockholder for
action at the 1996 Annual Meeting of Stockholders must be received in writing by
the Secretary of the Company at 7900 Glades Road, Suite 500, Boca Raton, Florida
33434, not later than November 15, 1995 in order for such proposal to be
considered for inclusion in the Proxy Statement and form of Proxy relating to
the 1996 Annual Meeting of Stockholders.
By Order of the Board of Directors
RICHARD J. THOMPSON
SECRETARY
Dated: March 15, 1995
17
