<PAGE> 1
SCHEDULE 14A
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 Section 240.14a-11(c) or Section 240.14a-2.
AEROFLEX INCORPORATED
(Name of Registrant as Specified in its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
- --------------------------------------------------------------------------------
2) Aggregate number of securities to which transaction applies:
- --------------------------------------------------------------------------------
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:
- --------------------------------------------------------------------------------
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:
----------------------------------------------------------------------
<PAGE> 2
AEROFLEX INCORPORATED
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
NOVEMBER 13, 1997
------------------------------
To the Stockholders of
AEROFLEX INCORPORATED
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of AEROFLEX
INCORPORATED will be held on Thursday, November 13, 1997 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 II Directors to serve
until the 2000 Annual Meeting of Stockholders or until their respective
successors have been duly elected and qualified.
2. To consider and act upon a proposal to approve a deferred compensation
agreement between the Company and its Chairman of the Board permitting
him to elect to defer payment of his incentive compensation, as set
forth in Exhibit "A".
3. 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 25, 1997 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 1, 1997
<PAGE> 3
AEROFLEX INCORPORATED
35 SOUTH SERVICE ROAD
PLAINVIEW, NEW YORK 11803
ANNUAL MEETING OF STOCKHOLDERS
THURSDAY, NOVEMBER 13, 1997
PROXY STATEMENT
The Annual Meeting of Stockholders of Aeroflex Incorporated (the "Company")
will be held on Thursday, November 13, 1997 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 1, 1997.
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 25, 1997 (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 14,063,808 shares of Common Stock, $.10 par value ("Common Stock"),
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 Deltec Asset Management Corporation, 535 Madison Avenue, New
York, New York 10022, which beneficially owns 1,042,200 shares, representing
approximately 7.4% of the Company's outstanding Common Stock and Leonard Borow,
35 South Service Road, Plainview, New York 11803, who beneficially owns 871,881
shares, representing approximately 6.0% of the Company's outstanding Common
Stock.
<PAGE> 4
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 nine 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 1999) STOCKHOLDERS IN 1997) 1998)
- ----------------------- ---------------------------- -------------------
<S> <C> <C>
Robert Bradley, Sr.(2) Harvey R. Blau Leonard Borow
Michael Gorin Ernest E. Courchene, Jr.(1) Milton Brenner(1)
Donald S. Jones (1) John S. Patton(2) Eugene Novikoff(2)
</TABLE>
- ---------------
(1) Member of Audit Committee.
(2) Member of Compensation/Stock Option Committee.
Harvey R. Blau, Ernest E. Courchene, Jr., and John S. Patton, directors in
Class II, are nominated for election to hold office until the Annual Meeting of
Stockholders in 2000 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 Messrs. Blau, Courchene
and Patton (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 four meetings of the Board of Directors during the fiscal
year ended June 30, 1997, three meetings of the audit committee and three
meetings of the compensation/stock option committee. Each director attended or
participated in all of such meetings of the Board of Directors and his
respective committees. The Company's audit committee is involved in discussions
with the Company's independent certified 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 Company does not have a nominating committee.
2
<PAGE> 5
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
DIRECTOR OWNED AS OF
NAME AGE OCCUPATION SINCE 9/25/97(1)(2)
- --------------------------- --- ------------------------- -------------- --------------------
<S> <C> <C> <C> <C> <C> <C>
Harvey R. Blau............. 61 Chairman and CEO of the July 1980 711,019 (4.9%) (3)
Company
Michael Gorin.............. 55 President of the Company August 1990 534,167 (3.7%) (4)
Leonard Borow.............. 49 Executive Vice President November 1992 871,881 (6.0%) (5)
of the Company
Carl Caruso................ 53 Vice President -- -- 119,834 -- (6)
Manufacturing
Charles Badlato............ 38 Treasurer and Assistant -- 54,298 -- (7)
Secretary
Robert Bradley, Sr......... 78 Retired February 1979 30,487 -- (8)
Milton Brenner............. 69 Retired August 1988 145,666 (1.0%) (8)
Ernest E. Courchene, Jr.... 65 Business Consultant April 1980 103,440 -- (9)
Donald S. Jones............ 69 Consultant November 1993 31,000 -- (8)
Eugene Novikoff............ 73 Self-employed Engineering June 1979 31,183 -- (8)
Consultant
John S. Patton............. 79 Consultant August 1985 30,500 -- (8)
All Directors and Officers
as a Group (11 persons).... 2,663,475 (16.9%)
</TABLE>
- ---------------
(1) No officer or director owns more than one percent of the issued and
outstanding Common Stock of the Company unless otherwise indicated.
Ownership represents sole voting and investment power.
(2) Includes options currently exercisable or exercisable within 60 days under
the Company's 1989 Non-Qualified Stock Option Plan, 1993 Outside Director
Stock Option Plan, 1994 Non-Qualified Stock Option Plan and 1996 Stock
Option Plan.
(3) Includes options currently exercisable or exercisable within 60 days to
purchase 548,333 shares of Common Stock. Also includes 3,614 shares held by
the Blau, Kramer, Wactlar & Lieberman, P.C. Profit Sharing Plan and 136,132
shares owned by his wife, to which Mr. Blau disclaims beneficial ownership.
(4) Includes options currently exercisable or exercisable within 60 days to
purchase 431,667 shares of Common Stock.
(5) Includes options currently exercisable or exercisable within 60 days to
purchase 431,667 shares of Common Stock. Also includes 8,888 shares owned by
his wife to which Mr. Borow disclaims beneficial ownership.
(6) Includes options currently exercisable or exercisable within 60 days to
purchase 58,333 shares of Common Stock.
(7) Includes options currently exercisable or exercisable within 60 days to
purchase 48,333 shares of Common Stock.
(8) Includes options currently exercisable to purchase 30,000 shares of Common
Stock.
(9) Includes options currently exercisable to purchase 30,000 shares of Common
Stock and 25% (14,167 shares) of the 56,666 shares owned by a partnership in
which Mr. Courchene is a 25% partner.
3
<PAGE> 6
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 is also Chairman
of the Board of Griffon Corporation and a director of Nu Horizons Electronics
Corp. and Reckson Associates Realty Corp. Mr. Blau 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, 1997, the Company paid approximately $174,000 in legal
fees to the firm.
Mr. Leonard Borow has been employed by the Company in various executive
positions since November, 1989 and has been Executive Vice President 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, a subsidiary of the Company,
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. 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.
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.
4
<PAGE> 7
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
and Principal Accounting Officer)
Leonard Borow........................ Executive Vice President (Chief
Operating Officer) and Secretary
Carl Caruso.......................... Vice President -- Manufacturing
Charles Badlato...................... Treasurer and Assistant Secretary
</TABLE>
- ---------------
Mr. Carl Caruso has been employed by the Company in various executive
capacities since November 1989 and has been Vice President -- Manufacturing
since February 1997. For more than 14 years prior thereto, Mr. Caruso was Vice
President of Comstron Corporation which was acquired by the Company in November
1989.
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.
5
<PAGE> 8
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, 1997 for services rendered for the years ended
June 30, 1997, 1996 and 1995.
<TABLE>
<CAPTION>
ANNUAL COMPENSATION LONG-TERM COMPENSATION
------------------------------------ ----------------------------------------------------
OTHER ANNUAL RESTRICTED STOCK LONG-TERM ALL OTHER
NAME AND FISCAL COMPENSATION STOCK OPTION INCENTIVE COMPENSATION
PRINCIPAL POSITION YEAR SALARY(1) BONUS (2) AWARDS AWARDS(#) PLAN PAYOUTS (3)
- ----------------------- ------ --------- -------- ------------- ---------- --------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Harvey R. Blau......... 1997 $216,471 $212,010 $-- $-- 200,000 -- $ 754
Chairman and Chief 1996 208,517 218,165 -- -- 175,000 -- 686
Executive Officer 1995 200,000 255,464 -- -- 250,000 -- 1,819
Michael Gorin.......... 1997 $281,261 $212,010 $-- $-- 50,000 -- $5,283
President and Chief 1996 262,962 218,165 -- -- 150,000 -- 2,978
Financial Officer 1995 260,531 255,464 -- -- 200,000 -- 2,526
Leonard Borow.......... 1997 $281,261 $212,010 $-- $-- 50,000 -- $4,309
Executive Vice 1996 262,962 218,165 -- -- 150,000 -- 3,587
President-Chief 1995 253,430 255,464 -- -- 200,000 -- 3,290
Operating Officer
Carl Caruso............ 1997 $173,564 $ 60,000 $-- $-- 35,000 -- $3,022
Vice President -- 1996 162,363 50,000 -- -- 25,000 -- 2,756
Manufacturing 1995 150,042 50,000 -- -- 50,000 -- 3,060
Charles Badlato........ 1997 $120,875 $ 30,000 $-- $-- 15,000 -- $3,084
Treasurer and 1996 106,217 30,000 -- -- 25,000 -- 3,214
Assistant Secretary 1995 92,756 30,000 -- -- 25,000 -- 2,560
</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, 1997, 1996 and 1995: Michael Gorin -- $11,242, $9,310 and $6,428,
respectively; Leonard Borow -- $10,262, $9,414 and $10,158, respectively;
Carl Caruso -- $10,073, $9,186 and $10,201, respectively; and Charles
Badlato -- $10,175, $10,913 and $11,120, 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.
EMPLOYMENT AGREEMENTS
In July 1994, the Company entered into employment agreements, as amended in
February 1997, with Messrs. Blau, Gorin and Borow for the period July 1, 1994 to
December 31, 2002. The agreements provide for salaries at the annual rate of
$200,000, $289,000 and $289,000, 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 February, 1997, the Company entered into an employment agreement with
Mr. Caruso for the period February 5, 1997 to February 5, 2000. The agreement
provides for an annual salary of $180,000, together with cost of living
increments.
6
<PAGE> 9
In the event that any of these four individuals' employment is terminated
by the Company without cause, the terminated employee is entitled to receive his
salary and incentive payment for the remainder of the contract term. 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, each of Messrs. Blau, Gorin and
Borow has the right to receive a lump sum payment equal to three (3) times his
salary and incentive payment last previously awarded and Mr. Caruso has the
right to receive his base salary for the remainder of the term of the contract.
In May 1997, the Company and Mr. Blau entered into a deferred compensation
agreement, subject to stockholder approval, which provides that Mr. Blau can
elect to defer all or any portion of the incentive compensation payable to him
pursuant to his employment agreement and receive such deferred compensation in
cash or Common Stock. Subject to obtaining stockholder approval of such
agreement, Mr. Blau has elected to defer all of his incentive compensation for
the fiscal year ended June 30, 1998 and receive such deferred compensation in
Common Stock. See Proposal 2 and Exhibit A to this Proxy Statement regarding the
approval of the deferred compensation agreement permitting Mr. Blau to defer
payment of his incentive compensation and to elect to receive such compensation
in cash or in Common Stock of the Company.
STOCK OPTION PLANS
The Company currently has four stock option plans -- the 1989 Non-Qualified
Stock Option Plan ("1989 NQSOP"), the Outside Director Stock Option Plan
("Director Plan"), the 1994 Non-Qualified Stock Option Plan (the "1994 Plan")
and the 1996 Stock Option Plan (the "1996 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, subject to stockholder
approval obtained in November 1994, the Director Plan which, as amended in
November 1996, covers 500,000 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
should 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, 1994 Plan and 1996 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. The 1996
Plan, which expires in 2006, permits the granting of both Non-Qualified and
Incentive Options to the Company's officers and employees. 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 (or ten years for the 1996 Plan). 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.
7
<PAGE> 10
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, 1997:
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS(1) POTENTIAL REALIZED VALUE AT
------------------------------------------------- ASSUMED ANNUAL RATES OF
% OF TOTAL STOCK PRICE APPRECIATION
OPTIONS FOR OPTION TERM(1)(5)
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.......... 200,000 30.0% $4.50 2/4/07 $7.33 $566,000 $11.67 $1,434,000
Michael Gorin........... 50,000 7.5% 4.50 2/4/07 7.33 141,500 11.67 358,500
Leonard Borow........... 50,000 7.5% 4.50 2/4/07 7.33 141,500 11.67 358,500
Carl Caruso............. 35,000 5.2% 4.50 2/4/07 7.33 99,050 11.67 250,950
Charles Badlato......... 15,000 2.2% 4.50 2/4/07 7.33 42,450 11.67 107,550
</TABLE>
- ---------------
(1) All grants are under the Company's 1996 Stock Option Plan (the "1996 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 pursuant to the 1996 Plan vest 33 1/3% on the
first anniversary of the date of grant, 33 1/3% on the second anniversary of
the date of grant and 33 1/3% on the third anniversary of the date of grant.
(3) Total options granted to employees, consultants and directors in 1997 were
for 667,500 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, 1997 (stock price of $5.13 per share) over the ten year period used
in this table, aggregate $45,285,462 at a 5% rate and $114,760,673 at 10%.
AGGREGATE OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END
OPTION/SAR VALUES
The following table sets forth information concerning options exercised
during the year ended June 30, 1997, by the named executive officers and the
value of unexercised options held by them as of June 30, 1997:
<TABLE>
<CAPTION>
VALUE OF UNEXERCISED
NUMBER OF UNEXERCISED IN-THE-MONEY
OPTIONS/SARS AT OPTIONS/SARS AT
SHARES FISCAL YEAR-END FISCAL YEAR-END(1)
ACQUIRED ON VALUE ----------------------------- -----------------------------
NAME EXERCISE(#) REALIZED($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ----------------- ----------- ----------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Harvey R. Blau... 400,000 $ 1,275,000 548,333 266,667 967,083 216,667
Michael Gorin.... 50,000 125,000 431,667 108,333 734,792 111,458
Leonard Borow.... 50,000 125,000 431,667 108,333 734,792 111,458
Carl Caruso...... 40,000 100,000 58,333 51,667 73,958 44,792
Charles
Badlato........ -- -- 48,333 31,667 57,083 32,292
</TABLE>
- ---------------
(1) Based upon the closing price of the Company's Common Stock of $5.13 on June
30, 1997.
8
<PAGE> 11
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
Effective January 1, 1994 the Company established the Aeroflex Incorporated
Supplemental Executive Retirement Plan ("SERP") for certain of its officers. No
benefits were payable prior to January 1, 1996.
The Normal Retirement Age under the SERP is 70. The SERP would provide an
annual benefit of 50% of Final Average Pay. "Final Average Pay" means the
average of the three highest paid calendar years out of the last ten prior to
retirement. The benefits payable under the SERP are not subject to deduction for
Social Security amounts. Benefits are also payable, on a reduced basis, for
early retirement after the sum of a participant's age and years of service
equals 70 and the participant attains age 55. Retirement benefits are payable
for life, with a guarantee of 10 years of payments. In addition, the SERP
provides a pre-retirement death benefit payable for 10 years to the
participant's beneficiary and a disability benefit with a guarantee of 10 years
of payment; provided that any disability benefit shall be reduced by the amount
of the disability benefit payable under the participant's employment agreement,
if any.
A trust has been established to which contributions are made annually to
provide for the benefits under the SERP. The trust is funding the benefits
partially through insurance contracts.
The following tables show the projected annual benefits payable at age 70
under the SERP. The number of years of credited service of the participants as
of June 30, 1997 are: Mr. Blau, 16; Mr. Gorin, 11; Mr. Borow, 19; and Mr.
Badlato, 9.
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN TABLE
ANNUAL BENEFIT AT NORMAL RETIREMENT
<TABLE>
<CAPTION>
YEARS OF SERVICE
FINAL AVERAGE ----------------------------------
ANNUAL PAY(1) 10 15 20
-------- -------- --------
<S> <C> <C> <C>
$50,000............................. $ 25,000 $ 25,000 $ 25,000
$100,000............................ 50,000 50,000 50,000
$200,000............................ 100,000 100,000 100,000
$300,000............................ 150,000 150,000 150,000
$400,000............................ 200,000 200,000 200,000
$500,000............................ 250,000 250,000 250,000
</TABLE>
- ---------------
(1) Average of a participant's highest three year's compensation out of the last
ten prior to retirement as reported on Form W-2 but excluding stock related
compensation.
BOARD OF DIRECTORS INTERLOCKS AND INSIDER PARTICIPATION
During fiscal 1997, the Company's Compensation/Stock Option Committee
consisted of Messrs. Robert Bradley, Eugene Novikoff and John S. Patton. None of
these persons were officers or employees of the Company during fiscal 1997 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.
9
<PAGE> 12
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
1997 is furnished by the directors who comprised the Compensation/Stock Option
Committee during fiscal 1997.
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 shareholder 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
focuses 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 1997, pursuant to the terms of his employment agreement with the
Company, the Company's Chairman received a base salary and additional
compensation (See "Employment Agreements"). The
10
<PAGE> 13
Compensation/Stock Option Committee also recommended the issuance, and the
Chairman received, options to purchase 200,000 shares of Common Stock at $4.50
per share.
THE COMPENSATION COMMITTEE:
Robert Bradley, Sr.
Eugene Novikoff
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 New York Stock Exchange (the
"NYSE"). 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 NYSE.
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 1997, except that Carl Caruso filed late a report on
Form 3.
COMMON STOCK PERFORMANCE
The following graph provides a comparison of cumulative stockholder return
among the Company, Standard and Poors' 500 companies and Standard and Poors'
electronics (instrumentation) companies from June 1992 to August 1997:
COMPARISON OF 62 MONTH CUMULATIVE TOTAL RETURN*
AMONG AEROFLEX INCORPORATED, THE S&P 500 INDEX
AND THE S&P ELECTRONICS (INSTRUMENTATION) INDEX
<TABLE>
<CAPTION>
MEASUREMENT PERIOD S & P ELECTRONICS
(FISCAL YEAR COVERED) (INSTRUMENTATION) S & P 500 AEROFLEX INC.
<S> <C> <C> <C>
JUN-92 100 100 100
JUN-93 120 114 138
JUN-94 113 115 246
JUN-95 221 145 292
JUN-96 251 183 377
JUN-97 360 247 315
AUG-97 337 266 504
</TABLE>
11
<PAGE> 14
PROPOSAL TO APPROVE A DEFERRED COMPENSATION AGREEMENT
BETWEEN THE COMPANY AND ITS CHAIRMAN OF THE BOARD
As noted above under "Employment Agreements," in May 1997, the Company and
Harvey Blau, its Chairman of the Board, entered into a deferred compensation
agreement, subject to stockholder approval, which provides that Mr. Blau can
elect to defer all or any portion of the incentive compensation payable to him
pursuant to his employment agreement and receive such deferred compensation in
cash or Common Stock.
Mr. Blau's employment agreement provides for the payment to him of an
annual bonus equal to three (3%) percent of the Company's consolidated pre-tax
earnings for a fiscal year, but not to exceed two hundred (200%) percent of his
then base salary. For the Company's fiscal year ended June 30, 1997, Mr. Blau's
base salary was $216,471 and his annual bonus was $212,010.
The deferred compensation agreement permits Mr. Blau, at his election not
later than the last day of a fiscal year prior to the fiscal year for which he
is making an election, to defer all or any portion of his annual bonus and
receive such deferred compensation in cash, in Common Stock or a combination
thereof. Any compensation so deferred is payable to Mr. Blau upon the earliest
to occur of (i) the failure to the stockholders of the Company to approve the
deferred compensation agreement by the affirmative vote of a majority of such
stockholders, (ii) termination of Mr. Blau's employment in accordance with his
employment agreement, (iii) in the event of any emergency or necessity as shall
be solely determined by the Board of Directors or (iv) an adverse change of
financial condition of the Company deemed to be perceived inability to pay the
amounts deferred pursuant to the deferred compensation agreement.
Subject to obtaining stockholder approval of the deferred compensation
agreement, Mr. Blau has elected to defer all of his incentive compensation for
the fiscal year ended June 30, 1998 and receive such deferred compensation in
Common Stock.
In the event that the deferred compensation agreement is not approved by
the stockholders of the Company, Mr. Blau's incentive compensation will continue
to be payable to him in cash at the time that it is calculated pursuant to the
terms of his employment agreement. Accordingly, the Board of Directors believes
that permitting Mr. Blau to elect to receive his bonus compensation in Common
Stock of the Company, enables the Company to pay Mr. Blau in a way that further
encourages Mr. Blau to manage the Company from the perspective of an owner with
an equity stake in the business.
Accordingly, the Board of Directors recommends a vote FOR the approval of
the deferred compensation agreement between the Company and its Chairman of the
Board.
MISCELLANEOUS INFORMATION
KPMG Peat Marwick, LLP, the Company's independent auditor for the fiscal
year ended June 30, 1997, 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. As of the date of this Proxy Statement, 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.
12
<PAGE> 15
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 3, 1998 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: October 1, 1997
Plainview, New York
13
<PAGE> 16
EXHIBIT A
DEFERRED COMPENSATION AGREEMENT
Deferred Compensation Agreement dated as of May 9, 1997 between Aeroflex
Incorporated, a Delaware corporation, with its principal office located at 35
South Service Road, Plainview, NY 11803 (the "Company") and Harvey R. Blau, who
resides at 125 Wheatley Road, Old Westbury, NY 11568 (the "Executive").
WHEREAS, the Company and the Executive entered into an Employment Agreement
dated as of July 1, 1994 (the "Employment Agreement"), pursuant to which the
Executive receives compensation from the Company;
WHEREAS, the Company and the Executive wish to provide that the Executive
may, at his election, defer certain of the compensation payable to Executive
pursuant to the terms of the Employment Agreement.
NOW, THEREFORE, it is agreed as follows:
1. DEFINITIONS. All capitalized terms not otherwise defined herein shall
have the meanings provided in the Employment Agreement.
2. DEFERRED COMPENSATION.
(a) Not later than the later of (i) the last day of each Fiscal Year
of the Company prior to a Fiscal Year with respect to which an Annual Bonus
is payable to Executive in accordance with Section 4 of the Employment
Agreement and (ii) five (5) days from the date of this Agreement, Executive
may elect in writing to defer all or any portion of such Annual Bonus for
such Fiscal Year, as Executive desires.
(b) At the same time as the Executive elects to defer compensation
under this Agreement, the Executive shall elect whether such deferred
compensation shall be payable in cash or in the Company's common stock, par
value $.10 per share ("Common Stock"), or a combination thereof. In the
event that the Executive determines that all or a portion of his deferred
compensation shall be paid in Common Stock of the Company, the Common Stock
shall be valued at its Fair Market Value on 31st trading day of the Fiscal
Year next succeeding the Fiscal Year for which such Annual Bonus was
deferred (each such 31st day, a "Valuation Date"). For the purposes of the
foregoing, "Fair Market Value" shall mean the average market price of the
Common Stock on the New York Stock Exchange consolidated reporting system
for the 30 consecutive trading days immediately preceding the applicable
Valuation Date. If no sales shall have been reported on the New York Stock
Exchange consolidated reporting system on such dates, Fair Market Value
shall be determined by the Committee in accordance with the Treasury
Regulations applicable to incentive stock options under Section 422 of the
Internal Revenue Code of 1986, as amended.
(c) All amounts deferred under this Agreement above shall be one
hundred percent (100%) vested and non-forfeitable at all times. Payments of
said deferred compensation shall begin upon the earliest to occur of (i)
the failure to the stockholders of the Company to approve this Agreement by
the affirmative vote of a majority of such stockholders at the annual or
special meeting of the stockholders next succeeding the date of this
Agreement, (ii) termination of the Executive's employment in accordance
with Section 9 of the Employment Agreement, (iii) in the event of any
emergency or necessity as shall be solely determined by the Board of
Directors or (iv) an adverse change of financial condition of the Company
deemed to be perceived inability to pay the amounts deferred pursuant to
this Agreement.
A-1
<PAGE> 17
Amounts payable to the Executive pursuant to this Agreement shall be in
addition to any amounts payable to the Executive pursuant to Section 9 of
the Employment Agreement.
(d) In order to meet its contingent deferred obligation hereunder, the
Company may (i) each year set aside or earmark funds in an amount equal to
the total cash amount allocated and deferred for such year and (ii)
purchase or otherwise allocate shares of Common Stock in an amount equal to
the amount designated by the Executive pursuant to Section 2(b) hereof.
(e) Funds set aside or earmarked to meet the Company's contingent cash
deferred obligation hereunder may be kept in cash, or invested and
reinvested in the discretion of the Company. To the extent that such funds
are kept in cash, they shall be deemed to accrue interest at the rate of
five (5%) percent per annum.
(f) Investments of funds set aside or earmarked for the Company's
contingent deferred obligation hereunder may be made in stock, bonds or
other securities; provided, however, that except as provided in Section
2(d), no portion of such funds shall be invested in any securities of the
Company.
(g) In the event that amounts become payable in accordance with this
Agreement, (i) to the extent that the Executive has elected that such
amounts shall be paid in cash, said payment shall be in an amount equal to
the value, determined as of the date of such event, of all deferred amounts
plus all amounts earned or deemed earned thereon, and shall be made as soon
as feasible in one lump sum and (ii) to the extent that the Executive has
elected that any such amounts shall be paid in Common Stock, the Company
shall deliver to the Executive the total number of shares of Common Stock
determined by dividing the amount of Annual Bonus which the Executive
deferred and elected to have paid in Common Stock in respect of any Fiscal
Year by the Fair Market Value of the Common Stock on the Valuation Date for
each respective Fiscal Year calculated in accordance with Section 2(b)
hereof, and shall be delivered as soon as feasible after such number of
shares of Common Stock have been determined.
(h) Nothing contained herein shall be deemed to create a trust
relationship. Funds invested hereunder shall continue for all purposes to
be part of the general funds of the Company, subject to the claims of
creditors of the Company, and no entity or person other than the Company
shall, by virtue of the provisions of this Agreement, have any interest in
such funds. To the extent that Executive acquires a right to receive
payments from the Company under this Agreement, such right shall be
non-forfeitable and secured to the full extent that the law will allow.
(i) Subject to the approval of this Agreement by the affirmative vote
of a majority of such stockholders at the annual or special meeting of the
stockholders next succeeding the date of this Agreement, Executive hereby
elects (i) to defer all of the Annual Bonus payable to him in respect of
the Fiscal Year ending June 30, 1998 and (ii) that such deferred
compensation shall be payable to Executive in Common Stock.
3. EFFECT OF AGREEMENT ON OTHER BENEFITS. The existence of this Agreement
shall not prohibit or restrict the Executive's entitlement to participate fully
in the executive compensation, employee benefit and other plans or programs of
the Company in which senior executives are eligible to participate.
4. ASSIGNABILITY; BINDING NATURE. This Agreement shall be binding upon
and inure to the benefit of the Parties and their respective successors, heirs
(in the case of the Executive) and assigns. No rights or obligations of the
Company under this Agreement may be assigned or transferred by the Company
except that such rights or obligations may be assigned or transferred pursuant
to (a) a merger or consolidation in which the Company is not the continuing
entity or (b) sale or liquidation of all or substantially all of the assets of
the
A-2
<PAGE> 18
Company, provided that the assignee or transferee is the successor to all or
substantially all of the assets of the Company and such assignee or transferee
assumes the liabilities, obligations and duties of the Company, as contained in
the Employment Agreement and this Agreement, either contractually or as a matter
of law. The Company further agrees that, in the event of a sale of assets or
liquidation as described in the preceding sentence, it will use its best efforts
to cause such assignee or transferee expressly to assume the liabilities,
obligations and duties of the Company hereunder.
5. ENTIRE AGREEMENT. Except to the extent otherwise provided herein, this
Agreement contains the entire understanding and agreement between the Parties
concerning the subject matter hereof and supersedes any prior agreements,
whether written or oral, between the Parties concerning the subject matter
hereof.
6. AMENDMENT OR WAIVER. No provision in this Agreement may be amended
unless such amendment is agreed to in writing and signed by both the Executive
and an authorized officer of the Company other than the Executive. No waiver by
either Party of any breach by the other Party of any condition or provision
contained in this Agreement to be performed by such other Party shall be deemed
a waiver of a similar or dissimilar condition or provision at the same or any
prior or subsequent time. Any waiver must be in writing and signed by the
Executive or an authorized officer of the Company other than the Executive, as
the case may be.
7. SEVERABILITY. In the event that any provision or portion of this
Agreement shall be determined to be invalid or unenforceable for any reason, in
whole or in part, the remaining provisions of this Agreement shall be unaffected
thereby and shall remain in full force and effect to the fullest extent
permitted by law.
8. SURVIVORSHIP. The respective rights and obligations of the Parties
hereunder shall survive any termination of the Executive's employment with the
Company to the extent necessary to the intended preservation of such rights and
obligations as described in this Agreement.
9. BENEFICIARIES/REFERENCES. The Executive shall be entitled to select
(and change, to the extent permitted under any applicable law) a beneficiary or
beneficiaries to receive any compensation or benefit payable hereunder following
the Executive's death by giving the Company written notice thereof. In the event
of the Executive's death or of a judicial determination of his incompetence,
reference in this Agreement to the Executive shall be deemed to refer to his
beneficiary, and if the Executive shall not have designated a beneficiary, his
Spouse.
10. GOVERNING LAW/JURISDICTION. This Agreement shall be governed by and
construed and interpreted in accordance with the laws of New York, without
reference to principles of conflict of laws.
11. NOTICES. Any notice given to either Party shall be in writing and
shall be deemed to have been given when delivered either personally, by fax, by
overnight delivery service (such as Federal Express) or sent by certified or
registered mail, postage prepaid, return receipt requested, duly addressed to
the Party concerned at the address indicated below or to such changed address as
such Party may subsequently give such notice of.
If to the Company or the Board:
Aeroflex Incorporated
35 South Service Road
Plainview, NY 11803
Attention: Michael Gorin
FAX: (516) 694-4823
A-3
<PAGE> 19
If to the Executive:
Harvey R. Blau
125 Wheatley Road
Old Westbury, NY 11568
12. HEADINGS. The headings of the sections contained in this Agreement
are for convenience only and shall not be deemed to control or affect the
meaning or construction of any provision of this Agreement.
13. COUNTERPARTS. This Agreement may be executed in two or more
counterparts.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
date first written above.
AEROFLEX INCORPORATED
By: /s/ CHARLES BADLATO
------------------------------------
Name: Charles Badlato
Title: Treasurer
/s/ HARVEY BLAU
------------------------------------
Harvey R. Blau
A-4
<PAGE> 20
AEROFLEX INCORPORATED
The undersigned hereby appoints Harvey R. Blau and Leonard Borow, 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 13, 1997 and any
adjournments thereof.
(CONTINUED AND TO BE SIGNED ON REVERSE SIDE)
SEE REVERSE
SIDE
<PAGE> 21
[X] PLEASE MARK
YOUR VOTES AS
IN THIS EXAMPLE
The Board of Directors recommends a vote FOR the following proposals:
<TABLE>
<S> <C> <C> <C>
1. Election of the fol- FOR ALL NOMINEES WITHHOLD NOMINEES: Harvey R. Blau, Ernest E. Courchene, Jr.,
lowing nominees, LISTED BELOW AUTHORITY TO VOTE John S. Patton
as set forth in the [ ] [ ]
proxy statement
</TABLE>
(Instruction: To withhold authority to vote for any individual nominee, print
the nominee's name on the line provided below)
- ----------------------
2. Proposal to approve a Deferred FOR AGAINST ABSTAIN
Compensation Agreement between [ ] [ ] [ ]
the Company and its Chairman to
permit him to defer payment of his
incentive compensation.
3. Upon such other business as may properly come before the meeting or any
adjournment thereof.
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, SHAREHOLDERS MAY WITHHOLD THE VOTE FOR ONE OR MORE
NOMINEE(S) BY WRITING THE NOMINEE(S) NAME(S) IN THE BLANK SPACE PROVIDED ABOVE.
IF NO SPECIFICATION IS MADE, THE SHARES WILL BE VOTED FOR THE PROPOSALS SET
FORTH ABOVE.
PLEASE DATE, SIGN AND RETURN THIS PROXY IN THE ENCLOSED ENVELOPE
SIGNATURE(S) ________________________ DATED: ______________, 1997
(Note: Please sign exactly as your name appears hereon. Executors,
administrators, trustees, etc. should so indicate when signing, giving
full title as such. If a 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.)
