<PAGE> 1
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (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))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
AEROFLEX INCORPORATED
- --------------------------------------------------------------------------------
(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/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
(1) Title of each class of securities to which transaction applies:
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
(5) Total fee paid:
- --------------------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
- --------------------------------------------------------------------------------
/ / Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
- --------------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
- --------------------------------------------------------------------------------
(3) Filing Party:
- --------------------------------------------------------------------------------
(4) Date Filed:
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<PAGE> 2
AEROFLEX INCORPORATED
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
NOVEMBER 8, 1995
------------------------
To the Stockholders of
AEROFLEX INCORPORATED
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of AEROFLEX
INCORPORATED will be held on Wednesday, November 8, 1995 at the deSeversky
Conference Center, Northern Boulevard, Old Westbury, New York 11568, at 10:00
a.m., or at any adjournment thereof (the "Annual Meeting"), for the following
purposes:
1. To elect three directors comprising the Class III Directors to serve
until the 1998 Annual Meeting of Stockholders or until their
respective successors have been duly elected and qualified.
2. To consider and act upon such other business as may properly come
before the meeting or any adjournment thereof.
The above matters are set forth in the Proxy Statement attached to this
Notice to which your attention is directed.
Only stockholders of record on the books of the Company at the close of
business on September 21, 1995 will be entitled to vote at the Annual Meeting or
at any adjournment thereof. You are requested to sign, date and return the
enclosed proxy at your earliest convenience in order that your shares may be
voted for you as specified.
By Order of the Board of Directors,
LEONARD BOROW
Secretary
Dated: Plainview, New York
October 5, 1995
<PAGE> 3
AEROFLEX INCORPORATED
35 SOUTH SERVICE ROAD
PLAINVIEW, NEW YORK 11803
------------------------
ANNUAL MEETING OF STOCKHOLDERS
WEDNESDAY, NOVEMBER 8, 1995
------------------------
PROXY STATEMENT
The Annual Meeting of Stockholders of Aeroflex Incorporated (the "Company")
will be held on Wednesday, November 8, 1995 at the deSeversky Conference Center,
Northern Boulevard, Old Westbury, New York 11568, at 10:00 a.m., for the
purposes set forth in the accompanying Notice of Annual Meeting of Stockholders.
THE ENCLOSED PROXY IS SOLICITED BY AND ON BEHALF OF THE BOARD OF DIRECTORS OF
THE COMPANY FOR USE AT THE ANNUAL MEETING OF STOCKHOLDERS. The approximate date
on which this proxy statement and the enclosed proxy are being mailed to
stockholders is October 5, 1995.
If a proxy in the accompanying form is duly executed and returned, the
shares represented by such proxy will be voted as specified. Any person
executing the proxy may revoke it prior to its exercise either by letter
directed to the Company or in person at the Annual Meeting.
VOTING RIGHTS
Only stockholders of record on September 21, 1995 (the "Record Date"), will
be entitled to vote at the annual meeting or any adjournment thereof. The
Company had outstanding at the Record Date one class of voting securities,
namely 11,874,209 shares of Common Stock, $.10 par value, excluding treasury
shares. Stockholders of record are entitled to one vote for each share
registered in their names. The affirmative vote of a majority of the votes cast
at the meeting is required for approval of each matter to be submitted to a vote
of the stockholders. For purposes of determining whether proposals requiring a
majority of the votes cast at the meeting have received a majority vote,
abstentions will not be included in the vote totals, and in instances where
brokers are prohibited from exercising discretionary authority for beneficial
owners who have not returned a proxy (so called "broker non-votes"), those votes
will not be included in the vote totals. Therefore, abstentions and broker
non-votes will have no effect on such vote, but will be counted in the
determination of a quorum.
To the knowledge of the Board of Directors, upon whose behalf this
solicitation is made, the only persons owning of record or beneficially as of
the Record Date more than five (5%) percent of the outstanding Common Stock of
the Company were Harvey R. Blau, 100 Jericho Quadrangle, Jericho, NY 11753, who
beneficially owns 752,691 shares, representing approximately 6% of the Company's
outstanding Common Stock, and Leonard Borow, 35 South Service Road, Plainview,
New York 11803, who beneficially owns 688,747 shares, representing approximately
5.7% of the Company's outstanding Common Stock.
ELECTION OF DIRECTORS
The By-Laws of the Company provides for a Board of Directors of not less
than three nor more than ten directors, classified into three classes as nearly
equal in number as possible, whose terms of office expire in successive years.
The Company's Board of Directors now consists of ten directors, with directors
in each class as set forth below:
<TABLE>
<CAPTION>
CLASS III
CLASS I CLASS II (TO SERVE UNTIL THE
(TO SERVE UNTIL THE (TO SERVE UNTIL THE ANNUAL MEETING OF
ANNUAL MEETING OF ANNUAL MEETING OF STOCKHOLDERS IN
STOCKHOLDERS IN 1996) STOCKHOLDERS IN 1997) 1995)
- --------------------------- ---------------------------- -------------------
<S> <C> <C>
Robert Bradley, Sr.(1)(2) Harvey R. Blau Leonard Borow
Jerome Fox(2) Ernest E. Courchene, Jr.(1) Milton Brenner(2)
Michael Gorin John S. Patton(2) Eugene Novikoff(1)
Donald S. Jones(1)
</TABLE>
- ---------------
(1) Member of Audit Committee.
(2) Member of Compensation/Stock Option Committee.
<PAGE> 4
The three directors in Class III are to be elected to hold office until the
Annual Meeting of Stockholders in 1998 and until their successors are chosen and
qualified. Shares represented by executed proxies in the form enclosed will be
voted, unless otherwise indicated, for the election as directors of the nominees
named in Class III (each of whom is now a director) unless any nominee shall be
unavailable, in which event such shares will be voted for a substitute nominee
designated by the Board of Directors. The Board of Directors has no reason to
believe that any of the nominees will be unavailable or, if elected, will
decline to serve.
Directors who are not employees of the Company receive an annual fee of
$7,500 and a fee of $500 for each Board of Directors or Committee meeting
attended. There were five meetings of the Board of Directors during the fiscal
year ended June 30, 1995, four meetings of the audit committee and four meetings
of the compensation/stock option committee. Each director attended or
participated in at least 75% of such meetings of the Board of Directors and his
respective committee(s). The Company's audit committee is involved in
discussions with the Company's independent certified public accountants with
respect to the year end audited financial statements and the compensation/stock
option committee recommends executive compensation and the granting of stock
options to key employees. See "Compensation/Stock Option Committee Report on
Executive Compensation."
The following information, including stock ownership, is submitted with
respect to the directors of the Company, each executive officer named in the
"Summary Compensation Table" and for all executive officers and directors as a
group:
<TABLE>
<CAPTION>
NUMBER OF SHARES OF
COMMON STOCK
BENEFICIALLY OWNED AS
DIRECTOR OF SEPTEMBER 1,
NAME AGE OCCUPATION SINCE 1995(1)(2)
- -------------------------- --- ---------------------------------- ------------- -----------------------
<S> <C> <C> <C> <C>
Harvey R. Blau............ 59 Chairman and CEO July 1980 752,691 (6.0%) (3)
Michael Gorin............. 53 President August 1990 343,033 (2.8%) (4)
Leonard Borow............. 47 Executive Vice President and November 1992 688,747 (5.7%) (5)
Secretary
Charles Badlato........... 36 Treasurer and Assistant Secretary -- 29,298* (6)
Robert Bradley, Sr........ 76 Retired February 1979 10,487* (7)
Milton Brenner............ 67 Retired August 1988 127,066 (1.1%) (7)
Ernest E. Courchene, 63 Business Consultant April 1980 83,440* (8)
Jr......................
Jerome Fox................ 82 Retired Engineer April 1980 75,266* (7)
Donald S. Jones........... 67 Consultant November 1993 11,000* (7)
Eugene Novikoff........... 71 Self-employed Engineering June 1979 11,183* (7)
Consultant
John S. Patton............ 77 Consultant August 1985 10,500* (7)
All Directors and Officers
as a Group (11
persons)................ 2,142,711 (16.3%)
</TABLE>
- ---------------
* Less than 1%.
(1) No officer or director owns more than one percent of the issued and
outstanding Common Stock of the Company unless otherwise indicated. Except
where otherwise indicated, ownership represents sole voting and investment
power.
(2) Includes options exercisable within 60 days under the Company's 1989
Non-Qualified Stock Option Plan, 1993 Outside Director Stock Option Plan
and 1994 Non-Qualified Stock Option Plan.
(3) Includes options exercisable within 60 days to purchase 673,333 shares of
Common Stock and 1,836 shares allocated under the Company's Employee Stock
Ownership Plan ("ESOP"). Also includes 3,614 shares held by the Blau,
Kramer, Wactlar & Lieberman, P.C. Profit Sharing Plan and 62,246 shares
owned by his wife, to which Mr. Blau disclaims beneficial ownership.
(4) Includes options exercisable within 60 days to purchase 256,667 shares and
4,491 shares allocated under the Company's ESOP.
(5) Includes options exercisable within 60 days to purchase 256,667 shares and
1,315 shares allocated under the Company's ESOP. Also includes 8,888 shares
owned by his wife, to which Mr. Borow disclaims beneficial ownership.
2
<PAGE> 5
(6) Includes options exercisable within 60 days to purchase 23,333 shares and
965 shares allocated under the Company's ESOP.
(7) Includes options exercisable within 60 days to purchase 10,000 shares.
(8) Includes options exercisable within 60 days to purchase 10,000 shares and
25% (14,167 shares) of the 56,666 shares owned by a partnership in which
Mr. Courchene is a 25% partner.
PRINCIPAL OCCUPATIONS OF DIRECTORS
Mr. Harvey R. Blau, appointed Chairman of the Board of the Company in
October 1991, was Vice Chairman since November 1983. Mr. Blau has been a
practicing attorney in the State of New York since 1961, and is a member of the
law firm of Blau, Kramer, Wactlar & Lieberman, P.C., general counsel to the
Company. For the year ended June 30, 1995, the Company paid approximately
$235,000 in legal fees and disbursements to the firm. Mr. Blau is Chairman of
the Board of Griffon Corporation. Mr. Blau is also a director of Nu Horizons
Electronics Corp. and Reckson Associates Realty Corp.
Mr. Leonard Borow has been employed by the Company in various executive
positions since November, 1989 and has been Executive Vice President (Chief
Operating Officer) since October 1991. For more than the five years prior
thereto, Mr. Borow was President of Comstron Corporation, a manufacturer of fast
switching frequency synthesizers and components, which was acquired by the
Company in November 1989.
Mr. Robert Bradley, Sr. was actively engaged as an employee and executive
of commercial banks for more than 30 years prior to his retirement in 1979. He
was Executive Vice President of Central State Bank, New York, New York from May
1976 to 1979. During the period from 1974 to 1976 he was Senior Vice President
of European-American Bank and Trust Company. Mr. Bradley is a director of
Griffon Corporation.
Mr. Milton Brenner, until his retirement in September 1988, had been
President of Aeroflex Laboratories Incorporated for more than fifteen years. Mr.
Brenner was previously a director of the Company from 1973 to 1986 and was again
elected a director in August 1988.
Mr. Ernest E. Courchene, Jr. served from May 1987 to May 1992 as Vice
Chairman and a director of Digitech Industries, Inc., a manufacturer of data
communications diagnostic equipment. From May 1983 to May 1987, Mr. Courchene
was President of Southport Capital Group Ltd., an investment banking firm and
from March 1980 to November 1985, he was Chairman of the Board of Harbor
Electronics Inc., a manufacturer of cable assemblies for the electronics
industry.
Mr. Jerome Fox has been associated with Polytechnic Institute of New York
since 1951, having been Research Coordinator and Assistant Director of the
Microwave Research Institute from 1971 through 1978. From 1978 to date, Mr. Fox
has been a consultant to the Polytechnic Institute.
Mr. Michael Gorin has been employed by the Company in various executive
positions since July 1985 and has been President since October 1988. From 1986
to October 1988, Mr. Gorin was Vice President-Finance. From May 1980 until July
1985, Mr. Gorin was Senior Vice President of Republic National Bank of New York.
For more than ten years prior thereto, he was employed by Arthur Andersen & Co.,
becoming a partner in April 1973.
Vice Admiral Donald S. Jones (USN Ret.) retired from the United States
government in 1987 after more than 37 years of service. From March 1988 to March
1990 Vice Admiral Jones was Vice President for Government and International
Affairs for Tracor Inc., a manufacturer of electronic products and a provider of
aircraft service and repair. Since retirement, Admiral Jones also has acted as
an independent consultant.
Mr. Eugene Novikoff is a professional engineer and during the period from
1972 to 1978 was a director and Vice President (in charge of development and
engineering) for Knogo Corporation, a manufacturing and service organization
engaged in providing equipment and devices to libraries and retail businesses to
reduce losses from pilferage. Since January 1979, Mr. Novikoff has been a
self-employed consulting engineer.
3
<PAGE> 6
Major General John S. Patton (USAF Ret.) retired from the United States
government in 1978 after more than 36 years of service. Since retirement, he has
acted as an independent analytical technical consultant.
MANAGEMENT
OFFICERS OF THE COMPANY
The officers of the Company are as follows:
<TABLE>
<CAPTION>
NAME POSITION HELD
- ----------------- ------------------------------------------------
<S> <C>
Harvey R. Blau Chairman of the Board (Chief Executive Officer)
Michael Gorin President (Chief Financial Officer)
Leonard Borow Executive Vice President (Chief Operating
Officer) and Secretary
Charles Badlato* Treasurer and Assistant Secretary
</TABLE>
- ---------------
* Mr. Charles Badlato has been employed by the Company in various financial
positions since December 1987 and has been Treasurer since February 1994. From
May 1981 until December 1987 Mr. Badlato was employed by various certified
public accounting firms. Prior to his employment with the Company, he was an
audit manager with Touche Ross & Co.
SUMMARY COMPENSATION TABLE
The following table sets forth information with respect to the
Chairman/Chief Executive Officer and each of the other executive officers of the
Company serving as of June 30, 1995, for services rendered for the years ended
June 30, 1995, 1994 and 1993.
<TABLE>
<CAPTION>
ANNUAL COMPENSATION LONG-TERM COMPENSATION
------------------------------------ -----------------------------------------------------
RESTRICTED STOCK LONG-TERM
NAME AND FISCAL OTHER ANNUAL STOCK OPTION INCENTIVE ALL OTHER
PRINCIPAL POSITION YEAR SALARY(1) BONUS COMPENSATION(2) AWARDS AWARDS(#) PLAN PAYOUTS COMPENSATION(3)
- ------------------ ------ --------- -------- --------------- ---------- ---------- ------------ ---------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Harvey R. Blau...... 1995 $200,000 $255,464 $-- -- 250,000 $-- $ 1,819
Chairman and Chief 1994 -- 275,000 -- -- 115,000 -- 1,262
Executive Officer 1993 -- 163,000 -- -- 75,000 -- 1,440
Michael Gorin....... 1995 $260,531 $255,464 $-- -- 200,000 -- $ 2,526
President and Chief 1994 222,188 150,000 -- -- 90,000 -- 3,315
Financial Officer 1993 224,607 75,000 -- -- 50,000 -- 2,004
Leonard Borow....... 1995 $253,430 $255,464 $-- -- 200,000 -- $ 3,290
Executive Vice 1994 218,222 150,000 -- -- 90,000 -- 2,705
President-Chief 1993 217,946 75,000 -- -- 50,000 -- 1,825
Operating Officer
Charles Badlato..... 1995 $ 92,756 $ 30,000 $-- -- 25,000 -- $ 2,560
Treasurer and 1994 83,818 18,000 -- -- 15,000 -- 1,000
Assistant Secretary 1993 70,579 10,000 -- -- -- -- 555
</TABLE>
- ---------------
(1) Includes the following contributions to the Aeroflex Incorporated Employees'
401(k) Plan by each of the executive officers for the fiscal years ended
June 30, 1995, 1994 and 1993: Michael Gorin -- $6,428, $8,994, and $10,272,
respectively; Leonard Borow -- $10,158, $8,982, and $10,042, respectively;
and Charles Badlato -- $11,120, $5,481, and $9,423, respectively.
(2) Other annual compensation does not include amounts of certain perquisites
and other non-cash benefits provided by the Company since such amounts do
not exceed the lesser of $50,000 or 10% of the total annual base salary and
bonus disclosed in this table for the respective officer.
(3) All other compensation includes the compensation component of certain life
insurance policies and the Company's matching contribution to the Aeroflex
Incorporated Employees' 401(k) Plan.
4
<PAGE> 7
EMPLOYMENT AGREEMENTS
In July 1994, the Company entered into employment agreements with Messrs.
Blau, Gorin and Borow for the period July 1, 1994 to June 30, 1999. The
agreements provide for salaries at the annual rate of $200,000, $250,000 and
$250,000, respectively, together with cost of living increments. The agreements
each provide for an incentive equal to three (3%) percent of the consolidated
pre-tax earnings of the Company but not more than two hundred (200%) percent of
the respective individual's salary. In the event that any of these three
individuals' employment is terminated by the Company without cause, the
terminated employee is entitled to receive his salary and incentive payment for
a three (3) year period following such termination. The employment agreements
also provide that in the event there is a change in control of the Company, as
defined therein, the employee has the option, exercisable within six (6) months
of becoming aware of such event, to terminate his employment agreement. Upon
such termination, the employee has the right to receive a lump sum payment equal
to three (3) times his salary and incentive payment last previously awarded.
STOCK OPTION PLANS
The Company currently has three stock option plans -- the 1989
Non-Qualified Stock Option Plan ("1989 NQSOP" or the "Plan"), Outside Director
Stock Option Plan ("Director Plan") and the 1994 Non-Qualified Stock Option Plan
(the "1994 Plan"). The plans were designed for the purpose of strengthening the
Company's ability to retain and attract in its employ persons of training,
experience and ability and to furnish additional incentives to key employees,
consultants and directors.
In December 1993, the Board of Directors adopted the Director Plan which
covers 250,000 shares of the Company's Common Stock and expires in 2003. The
Director Plan provides for an annual grant to each non-employee director of
options to purchase 10,000 shares of the Company's Common Stock. The plan is
administered by a committee of two or more members of the Board of Directors who
determine, among other things, the individuals to whom options would be granted
and the purchase price of the shares with the exception that no option may be
granted at less than market value at the time of grant and options may only be
exercised before the expiration of ten years from the date of grant.
The 1989 NQSOP and 1994 Plan each covers 1,500,000 shares of the Company's
Common Stock. The 1989 NQSOP and the 1994 Plan, which expire in 1999 and 2004,
respectively, permit the granting of Non-Qualified Options to the Company's
officers and other senior executives and management and supervisory personnel
and consultants and for the 1989 NQSOP, also directors. These Plans are
administered by a committee of two or more members of the Board of Directors who
determine, among other things, the individuals to whom, and the time or times at
which, options shall be granted, the number of shares to be subject to each
option, the purchase price of the shares and the term of each option, with the
exception that no option can be granted at less than market value at the time of
grant and options may only be exercised before the expiration of five years from
the date of grant. Each option granted under these Plans may be exercised only
during the continuance of an optionee's employment or service with the Company,
except under certain circumstances.
5
<PAGE> 8
Stock Option Grants in Last Fiscal Year(1)
The following table sets forth all stock option grants to the named
executive officers during the fiscal year ended June 30, 1995:
<TABLE>
<CAPTION>
POTENTIAL REALIZED VALUE AT
ASSUMED ANNUAL RATES OF
STOCK PRICE APPRECIATION
INDIVIDUAL GRANTS(1) FOR OPTION TERM(1)(5)
---------------------------------------------------- ---------------------------------------
% OF TOTAL
OPTIONS
GRANTED TO
OPTIONS EMPLOYEES/ EXERCISE STOCK STOCK
GRANTED CONSULTANTS IN PRICE EXPIRATION PRICE DOLLAR PRICE DOLLAR
NAME (#)(2) FISCAL YEAR(3) ($/SH)(2) DATE 5%(4) GAIN 10%(4) GAIN
- ---- ------- -------------- --------- ---------- ----- -------- ------ --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Harvey R. Blau............. 250,000 21.6% $3.88 11/9/99 $4.95 $267,500 $6.24 $590,000
Michael Gorin.............. 200,000 17.2% 3.88 11/9/99 4.95 214,000 6.24 472,000
Leonard Borow.............. 200,000 17.2% 3.88 11/9/99 4.95 214,000 6.24 472,000
Charles Badlato............ 25,000 2.1% 3.88 11/9/99 4.95 26,750 6.24 59,000
</TABLE>
- ---------------
(1) All grants are under the Company's 1994 Non-Qualified Stock Option Plan.
Dollar gains are based on the assumed annual rates of appreciation of the
exercise price of each option for the term of the option.
(2) Grants were made at 100% of the closing price of the Company's Common Stock
on the date of grant. Grants vest 33 1/3% immediately, 33 1/3% on the first
anniversary of the date of grant and 33 1/3% on the second anniversary of
the date of grant. The options awarded to Messrs. Blau, Gorin and Borow are
not exercisable until (a) the market value of the stock reaches $6.00 per
share or (b) six (6) months prior to expiration.
(3) Total options granted to employees, consultants and directors in 1995 were
for 1,160,000 shares of Common Stock.
(4) The stock price represents the price of the Company's Common Stock if the
assumed annual rates of stock price appreciation are achieved over the term
of each of the options.
(5) The increases in market value of the Company's stock for all stockholders as
of the Record Date, assuming annual rates of stock price appreciation from
June 30, 1995 (stock price of $4.63 per share) over the five year period
used in this table, aggregate $15,198,988 at a 5% rate and $33,604,011 at
10%.
AGGREGATE OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR-END OPTION/SAR VALUES
The following table sets forth information concerning options exercised
during the year ended June 30, 1995, by the named executive officers and the
value of unexercised options held by them as of June 30, 1995.
<TABLE>
<CAPTION>
VALUE OF UNEXERCISED
NUMBER OF UNEXERCISED IN-THE-MONEY
OPTIONS/SARS AT OPTIONS/SARS AT
SHARES FISCAL YEAR-END FISCAL YEAR-END(1)
ACQUIRED ON VALUE ---------------------------- ----------------------------
NAME EXERCISE(#) REALIZED($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- ----------- ----------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Harvey R. Blau................. 75,000 $ 131,250 723,333 166,667 $1,673,125 $ 125,000
Michael Gorin.................. 58,032 108,298 323,635 133,333 591,436 100,000
Leonard Borow.................. -- -- 256,667 133,333 457,500 100,000
Charles Badlato................ -- -- 28,333 16,667 23,125 12,500
</TABLE>
- ---------------
(1) Based upon the closing price of the Company's Common Stock of $4.63 on June
30, 1995.
6
<PAGE> 9
BOARD OF DIRECTORS INTERLOCKS AND INSIDER PARTICIPATION
During fiscal 1995, the Company's Compensation/Stock Option Committee
consisted of Messrs. Robert Bradley, Milton Brenner, Jerome Fox and John S.
Patton. None of these persons were officers or employees of the Company during
fiscal 1995 nor had any relationship requiring disclosures in this Proxy
Statement.
In accordance with rules promulgated by the Securities and Exchange
Commission, the information included under the captions
"Compensation/Stock Option Committee Report on Executive Compensation"
and "Common Stock Performance" will not be deemed to be filed or to be
proxy soliciting material or incorporated by reference in any prior or
future filings by the Company under the Securities Act of 1933 or the
Securities Exchange Act.
COMPENSATION/STOCK OPTION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The compensation of the Company's executive officers is generally
determined by the Compensation/Stock Option Committee of the Board of Directors,
subject to applicable employment agreements. Each member of the
Compensation/Stock Option Committee is a director who is not an employee of the
Company or any of its affiliates. The following report with respect to certain
compensation paid or awarded to the Company's executive officers during fiscal
1995 is furnished by the directors who comprised the Compensation/Stock Option
Committee during fiscal 1995.
GENERAL POLICIES
The Company's compensation programs are intended to enable the Company to
attract, motivate, reward and retain the management talent required to achieve
corporate objectives, and thereby increase stockholder value. It is the
Company's policy to provide incentives to its senior management to achieve both
short-term and long-term objectives and to reward exceptional performance and
contributions to the development of the Company's businesses. To attain these
objectives, the Company's executive compensation program includes a competitive
base salary, cash incentive bonuses and stock-based compensation. See
"Management-Employment Agreements".
Stock options are granted to employees, including the Company's executive
officers, by the Compensation/Stock Option Committee under the Company's option
plans. The Committee believes that stock options provide an incentive that focus
the executive's attention on managing the Company from the perspective of an
owner with an equity stake in the business. Options are awarded with an exercise
price equal to the market value of Common Stock on the date of grant. Among the
Company's executive officers, the number of shares subject to options granted to
each individual generally depends upon the level of that officer's
responsibility. The largest grants are awarded to the most senior officers who,
in the view of the Compensation/Stock Option Committee, have the greatest
potential impact on the Company's profitability and growth. Previous grants of
stock options are reviewed but are not considered the most important factor in
determining the size of any executive's stock option award in a particular year.
From time to time, the Compensation/Stock Option Committee may utilize the
services of independent consultants to perform analyses and to make
recommendations to the Committee relative to executive compensation matters. No
compensation consultant is paid on a retainer basis.
RELATIONSHIP OF COMPENSATION TO PERFORMANCE AND
COMPENSATION OF CHIEF EXECUTIVE OFFICER
The Compensation/Stock Option Committee annually establishes, subject to
the approval of the Board of Directors and any applicable employment agreements,
the salaries which will be paid to the Company's executive officers during the
coming year. In setting salaries, the Compensation/Stock Option Committee takes
into account several factors, including competitive compensation data, the
extent to which an individual may participate in the stock plans maintained by
the Company, and qualitative factors bearing on an individual's experience,
responsibilities, management and leadership abilities, and job performance.
For fiscal 1995, pursuant to the terms of his employment agreement with the
Company, the Company's Chief Executive Officer received a base salary and
additional compensation (See "Employment Agreements.") The Compensation/Stock
Option Committee also recommended the issuance, and the Chief
7
<PAGE> 10
Executive Officer received, options to purchase 250,000 shares of Common Stock
at $3.88 per share exercisable through November 9, 1999. The exercise of these
options is subject to certain restrictions as previously set forth in this Proxy
Statement.
Robert Bradley, Sr.
Milton Brenner
Jerome Fox
John S. Patton
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT
Section 16(a) of the Exchange Act requires the Company's executive
officers, directors and persons who own more than ten percent of a registered
class of the Company's equity securities ("Reporting Persons") to file reports
of ownership and changes in ownership on Forms 3, 4 and 5 with the Securities
and Exchange Commission (the "SEC") and the National Association of Securities
Dealers, Inc. (the "NASD"). These Reporting Persons are required by SEC
regulation to furnish the Company with copies of all Forms 3, 4 and 5 they file
with the SEC and NASD. Based solely upon the Company's review of the copies of
the forms it has received, the Company believes that all Reporting Persons
complied on a timely basis with all filing requirements applicable to them with
respect to transactions during fiscal 1995.
COMMON STOCK PERFORMANCE
The following graph provides a comparison of cumulative stockholder return
among the Company, Standard and Poor's 500 companies and Standard and Poor's
electronics (instrumentation) companies from June 1990 to date:
<TABLE>
<CAPTION>
[GRAPH]
S&P Elec-
tronics (In-
Measurement Period Aeroflex In- strumentation)
(Fiscal Year Covered) corporated S&P 500 Index
<S> <C> <C> <C>
1990 100 100 100
1991 41 107 112
1992 45 122 146
1993 62 138 175
1994 110 140 166
1995 131 177 322
</TABLE>
8
<PAGE> 11
MISCELLANEOUS INFORMATION
KPMG Peat Marwick LLP, the Company's independent auditors for the fiscal
year ended June 30, 1995, has advised the Company that a representative of the
firm plans to be present at the Annual Meeting, with the opportunity to make a
statement if he desires to do so, and will be available to respond to
appropriate questions. The Board of Directors does not intend to present at the
meeting any matters not referred to in the form of Proxy. If any proposal not
set forth in this Proxy Statement should be presented for action at the meeting,
it is intended that the shares represented by proxies will be voted with respect
to such matters in accordance with the judgment of the persons voting them.
As of the date of this Proxy Statement, the Board of Directors does not
know of any business other than that specified above to come before the meeting,
but, if any other business does lawfully come before the meeting, it is the
intention of the persons named in the enclosed Proxy to vote in regard thereto
in accordance with their judgment.
The Company will pay the cost of soliciting proxies in the accompanying
form. In addition to solicitation by use of the mails, certain officers and
regular employees of the Company may solicit proxies by telephone, telegraph or
personal interview. The Company may also request brokerage houses and other
custodians and nominees and fiduciaries, to forward soliciting material to the
beneficial owners of stock held of record by such persons, and may make
reimbursement for payments made for their expense in forwarding soliciting
material to such beneficial owners.
Stockholder proposals with respect to the Company's next Annual Meeting of
Stockholders must be received by the Company no later than June 10, 1996 to be
considered for inclusion in the Company's next Proxy Statement.
A copy of the Annual Report has been mailed to every stockholder as of the
Record Date. The Annual Report is not to be considered proxy soliciting
material.
By Order of the Board of Directors,
LEONARD BOROW
Secretary
Dated: Plainview, New York
October 5, 1995
9
<PAGE> 12
AEROFLEX INCORPORATED
The undersigned hereby appoints Harvey R. Blau and Michael Gorin, or either
of them, attorneys and Proxies with full power of substitution in each of them,
in the name and stead of the undersigned to vote as Proxy all the stock of the
undersigned in Aeroflex Incorporated, a Delaware corporation, at the Annual
Meeting of Stockholders scheduled to be held November 8, 1995 and any
adjournments thereof.
The Board of Directors recommends a vote FOR the following proposals:
1. Election of the following nominees, as set forth in the proxy statement:
Leonard Borow, Milton Brenner, Eugene Novikoff
- --------------------------------------------------------------------------------
2. Upon such other business as may properly come before the meeting or any
adjournment thereof.
(Continued and to be signed on reverse side.)
<PAGE> 13
THE SHARES REPRESENTED HEREBY SHALL BE VOTED BY PROXIES, AND EACH OF THEM, AS
SPECIFIED AND, IN THEIR DISCRETION, UPON SUCH OTHER MATTERS AS MAY PROPERLY COME
BEFORE THE MEETING. STOCKHOLDERS MAY WITHHOLD THE VOTE FOR ONE OR MORE
NOMINEES(S) BY WRITING THE NOMINEE(S) NAME(S) IN THE BLANK SPACE PROVIDED ON THE
REVERSE HEREOF. IF NO SPECIFICATION IS MADE, THE SHARES WILL BE VOTED FOR THE
PROPOSALS SET FORTH ON THE REVERSE HEREOF.
DATED: , 1995
[L.S.]
----------------------------------
(SIGNATURE)
[L.S.]
----------------------------------
(SIGNATURE)
(NOTE: PLEASE SIGN EXACTLY AS YOUR NAME
APPEARS HEREON. EXECUTORS,
ADMINISTRATORS, TRUSTEES, ETC. SHOULD SO
INDICATE WHEN SIGNING, GIVING FULL TITLE
AS SUCH. IF SIGNER IS A CORPORATION,
EXECUTE IN FULL CORPORATE NAME BY
AUTHORIZED OFFICER. IF SHARES ARE HELD IN
THE NAME OF TWO OR MORE PERSONS, ALL
SHOULD SIGN.)
PLEASE DATE, SIGN AND RETURN THIS PROXY IN THE ENCLOSED ENVELOPE
