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
[ ] Definitivw Additional Materials
[ ] Soliciting Material Pursuant to S240.14a-11(c) or
S240.14a-12
DEL ELECTRONICS CORP.
(Name of Registrant as Specified In Its Charter)
LEONARD A. TRUGMAN, PRESIDENT
(Name of Person(s) Filing Proxy Statement)
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).
[ ] $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:
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(2) Aggregate number of securities to which transaction applies:
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<PAGE>
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:
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(4) Proposed maximum aggregate value ot transaction:
- --------------------------------------------------------------------------------
(5) Total Fee Paid:
$125
[ ] 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 Schedlue and the date of its filing.
1) Amount Previously Paid:
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2) Form, Schedule or Registration Statement No.:
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3) Filing Party:
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4) Date Filed:
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<PAGE>
DEL ELECTRONICS CORP.
1 Commerce Park
Valhalla, New York 10595
----------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
----------
February 14, 1996
TO THE STOCKHOLDERS:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders (the
"Meeting") of Del Electronics Corp. (the "Company") will be held on February 14,
1996, at 10:30 a.m. New York City time, at the offices of the Company, 1
Commerce Park, Valhalla, NY 10595, for the following purposes, all as more fully
described in the accompanying Proxy Statement:
(A) To elect a Board of Directors for the ensuing year;
(B) To amend the Company's Certificate of Incorporation to change the name
of the Company to "Del Global Technologies Corp.";
(C) To amend the Company's Amended and Restated Stock Option Plan to
increase by 250,000 the number of shares of common stock reserved for
issuance thereunder; and
(D) To transact such other business as may properly come before the
Meeting or any adjournments thereof.
Only stockholders of record as of the close of business on December 29,
1995 are entitled to notice of and to vote at the Meeting. A complete list of
the stockholders entitled to vote at the Meeting will be maintained at the
offices of the Company for a period of at least ten days prior to the Meeting.
By order of the Board of Directors,
MICHAEL TABER,
Secretary
Dated: January 17, 1996
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PLEASE FILL IN, DATE AND SIGN THE ENCLOSED PROXY AND RETURN THE PROXY
PROMPTLY IN THE ENCLOSED STAMPED ENVELOPE, WHETHER OR NOT YOU EXPECT TO
BE PRESENT AT THE MEETING. THE PROXY IS REVOCABLE AND WILL NOT AFFECT
YOUR RIGHT TO VOTE IN PERSON IF YOU ATTEND THE MEETING.
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<PAGE>
DEL ELECTRONICS CORP.
1 Commerce Park
Valhalla, New York 10595
----------
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
To Be Held on February 14, 1996
INTRODUCTION
The accompanying proxy is solicited by and on behalf of the Board of
Directors of Del Electronics Corp., a New York corporation (the "Company"), in
connection with the Annual Meeting of Stockholders (the "Meeting") to be held at
the offices of the Company, 1 Commerce Park, Valhalla, NY 10595, on February 14,
1996 at 10:30 a.m. New York City time, or any adjournment or adjournments
thereof. This Proxy Statement and the accompanying proxy will first be sent to
Stockholders on or about January 17, 1996.
Each proxy executed and returned by a stockholder may be revoked at any
time thereafter by written revocation, by execution of a written proxy bearing a
later date or by attending the Meeting and voting in person. No such revocation
will be effective, however, with respect to any matter or matters upon which,
prior to such revocation, a vote shall have been cast pursuant to the authority
conferred by such proxy. Where instructions are indicated, proxies will be voted
in accordance therewith. Where no instructions are indicated, proxies will be
voted for the election of the nominees for Director set forth herein and for the
other proposals.
The Board of Directors has fixed December 29, 1995 as the record date (the
"Record Date") for the purpose of determining the stockholders entitled to
notice of and to vote at the Meeting. As of such date, there were issued and
outstanding and entitled to vote 4,284,309 shares of Common Stock, each such
share being entitled to one vote. A quorum of the stockholders, present in
person or by proxy, consists of the holders of a majority of the outstanding
shares.
The cost of solicitation of proxies will be borne by the Company. The
Board of Directors may use the services of the individual Directors, officers
and other regular employees of the Company to solicit proxies personally or by
telephone or telegram and may request brokers, fiduciaries, custodians and
nominees to send proxies, Proxy Statements and other material to their
principals and reimburse them for their out-of-pocket expenses.
VOTING SECURITIES AND PRINCIPAL HOLDERS
The table below sets forth information concerning the shares of Common
Stock beneficially owned as of the Record Date by (i) each person known by the
Company to be the beneficial owner of more than five (5%) percent of the Common
Stock of the Company; (ii) each Director of the Company; (iii) each of the
executive officers named in the table under "Executive Compensation and Other
Information--Summary Compensation Table" and (iv) all Directors and executive
officers as a group.
<TABLE>
<CAPTION>
AMOUNT AND NATURE
NAME AND ADDRESS OF BENEFICIAL PERCENT OF
OF BENEFICIAL OWNER OWNERSHIP (1) COMMON STOCK
------------------- ----------------- --------------
<S> <C> <C>
LEONARD A. TRUGMAN................................... 852,246(2) 17.2%
c/o Del Electronics Corp.
1 Commerce Park
Valhalla, NY 10595
HOWARD BERTAN........................................ 141,926(3) 3.3%
c/o Bertan High Voltage Corp.
121 New South Road
Hicksville, NY 11801
</TABLE>
1
<PAGE>
<TABLE>
<CAPTION>
AMOUNT AND NATURE
NAME AND ADDRESS OF BENEFICIAL PERCENT OF
OF BENEFICIAL OWNER OWNERSHIP (1) COMMON STOCK
------------------- ----------------- --------------
<S> <C> <C>
NATAN V. BERTMAN..................................... 107,681(4) 2.5%
c/o Bertman & Levine
945 Manhattan Avenue
Brooklyn, NY 11222
RAYMOND KAUFMAN...................................... 53,946(5) 1.3%
c/o Del Electronics Corp.
1 Commerce Park
Valhalla, NY 10595
DAVID MICHAEL........................................ 151,241(6) 3.4%
c/o David Michael & Co., P.C.
Seven Penn Plaza
New York, NY 10001
LEONARD MICHAELS..................................... 118,459(7) 2.8%
c/o Dynarad Corp.
19 Jefryn Boulevard West
Deer Park, NY 11729
SEYMOUR RUBIN........................................ 107,856(8) 2.5%
c/o RFI Corporation
100 Pine Aire Drive
Bay Shore, NY 11706
JAMES TIERNAN........................................ 8,231(9) *
7 Patriot Court
New City, NY 10956
GEORGE SOLOMON....................................... 6,110(10) *
c/o Dynarad Corp.
19 Jefryn Boulevard West
Deer Park, NY 11729
All officers and Directors (12) as a group........... 1,591,420(11) 29.8%
</TABLE>
- -----------------
* Represents less than 1% of the outstanding shares of Common Stock of the
Company including shares issuable under options which are presently
exercisable or will become exercisable within 60 days of the Record Date.
(1) Unless otherwise indicated, each person has sole voting and investment
power with respect to the shares shown as beneficially owned by such
person.
(2) Includes 667,444 shares, options for which are presently exercisable or
will become exercisable within 60 days of the Record Date.
(3) Includes 39,393 shares, options for which are presently exercisable or
will become exercisable within 60 days of the Record Date.
(4) Includes 70,171 shares, options for which are presently exercisable or
will become exercisable within 60 days of the Record Date.
(5) Does not include 60 shares owned by Mrs. Kaufman, as to which Dr. Kaufman
disclaims beneficial ownership.
(6) Includes 115,214 shares, options for which are presently exercisable or
will become exercisable within 60 days of the Record Date.
(7) Includes 18,985 shares, options for which are presently exercisable or
will become exercisable within 60 days of the Record Date.
(8) Includes 96,502 shares, options for which are presently exercisable or
will become exercisable within 60 days of the Record Date.
(9) Includes 8,231 shares, options for which are presently exercisable or
will become exercisable within 60 days of the Record Date.
(10) Includes 5,796 shares, options for which are presently exercisable or
will become exercisable within 60 days of the Record Date.
(11) Includes 1,056,115 shares, options for which are presently exercisable or
will become exercisable within 60 days of the Record Date.
2
<PAGE>
PROPOSAL ONE: ELECTION OF DIRECTORS
There are six nominees for the Board of Directors. All Directors are to be
elected for a term of one year and until their respective successors are elected
and qualified.
Each of the persons listed below is currently a Director and each has
agreed to serve if elected. The Board of Directors expects that the nominees
named below will be available for election, but in the event of the refusal or
inability of any nominee to stand for election, proxies will be voted for the
election of such other person, if any, as may be nominated by the management of
the Company.
Set forth below is the name and age of each nominee, his position in the
Company and his principal occupation at present and during the past five years.
<TABLE>
<CAPTION>
Principal Occupation,
Name, Age and Position Business Experience and
with the Company Directorships
-------------------- ----------------------
<S> <C>
LEONARD A. TRUGMAN, 57............................... Chairman of the Board, Chief Executive Officer
Chairman of the Board, Chief Executive and President of the Company.
Officer and President
NATAN V. BERTMAN, 66................................. Partner of Bertman & Levine and a Director of the
Director Company.
RAYMOND KAUFMAN, 78.................................. Retired. Former Chairman of the Board, Chief
Director Executive Officer and President of the
Company. Director of the Company. Director
of the Sherman Dean Fund.
DAVID MICHAEL, 58.................................... President of David Michael & Co., P.C., C.P.A.
Director and a Director of the Company.
SEYMOUR RUBIN, 65.................................... Co-founder of RFI Corporation, a wholly owned
Director and Vice President subsidiary of the Company. President of RFI
Corporation. Director and Vice
President of the Company.
JAMES TIERNAN, 71.................................... Retired. Former Vice President of The Chase
Director Manhattan Bank, N.A. and a Director of the Company.
</TABLE>
DIRECTORS AND EXECUTIVE OFFICERS
Board of Directors and Committees
During the Company's last fiscal year, five meetings of the Board of
Directors were held. The Board of Directors has an Audit Committee, Compensation
Committee and a Stock Option Committee. The Audit Committee, which consists of
Messrs. Bertman, Michael and Trugman, met once during the last fiscal year. The
Compensation Committee, which consists of Messrs. Bertman and Michael, met once
during the last fiscal year. The Stock Option Committee, which consists of Mr.
Tiernan and Dr. Kaufman, met twice during the last fiscal year. The Company
presently has no nominating committee. All Directors attended at least 75% of
the Board of Directors' meetings.
3
<PAGE>
Executive Officers
The following table sets forth the names and ages of all executive
officers and significant employees of the Company and their positions with the
Company.
<TABLE>
<CAPTION>
Name Position Age
---- -------- ---
<S> <C> <C>
LEONARD A. TRUGMAN............................. Chairman of the Board, Chief Executive 57
Officer and President
HOWARD BERTAN.................................. President of Bertan High Voltage Corp. 60
DAVID ENGEL(1) ................................ Executive Vice President 46
LOUIS J. FARIN, Sr............................. Vice President and General Manager 52
of Del Power Conversion Division
LEONARD MICHAELS............................... Vice President and President of 57
Dynarad Corp.
SEYMOUR RUBIN.................................. Vice President and President of RFI 65
Corporation
GEORGE SOLOMON................................. Vice President and General Manager of 50
Dynarad Corp. and President of Del
Medical Systems Corp.
MICHAEL TABER.................................. Chief Financial Officer and Secretary 50
</TABLE>
(1) Mr. Engel was elected Executive Vice President effective January 1, 1996.
The officers of the Company, with the exception of Messrs. Trugman,
Michaels, Bertan and Solomon, are elected or appointed by the Board of Directors
to hold office until the meeting of the Board of Directors following the next
annual meeting of stockholders. Subject to the right of the Company to remove
officers pursuant to its By-Laws, officers serve until their successors are
chosen and have qualified. Mr. Trugman holds his position pursuant to an
employment agreement which expires on July 31, 2000. Mr. Michaels holds his
position pursuant to an employment agreement which expires on July 29, 1997. Mr.
Bertan holds his position pursuant to an employment agreement which expires on
April 23, 1997. Mr. Solomon holds his position pursuant to an employment
agreement which expires on July 31, 1997.
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's executive officers and Directors and persons who own more than ten
percent of a registered class of the Company's equity securities to file reports
of ownership and changes in ownership with the Securities and Exchange
Commission and the American Stock Exchange, Inc. The Company believes that all
filing requirements applicable to its executive officers and Directors were
complied with during the fiscal year ended July 29, 1995. In making this
statement, the Company has relied solely on the written representations of its
Directors and officers and on its review of the copies of initial reports of
ownership and reports of changes in ownership of Common Stock of the Company,
which officers, Directors and greater than ten percent stockholders are required
to file with the Securities and Exchange Commission and the American Stock
Exchange, Inc.
4
<PAGE>
EXECUTIVE COMPENSATION AND OTHER INFORMATION
Summary of Cash and other Compensation
The following table shows, for the fiscal years ended July 29, 1995, July
30, 1994 and July 31, 1993, the compensation paid or accrued by the Company to
or for the Company's Chief Executive Officer and each of the four other most
highly compensated executive officers of the Company during the fiscal year
ended July 29, 1995.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long-term
Compensation
Annual Compensation Awards
Name and ------------------------- ------------ All Other
Principal Salary Bonus Options Compen-
Position Year ($) ($) (#) sation ($)(4)
-------- ---- ------ ----- ------- -------------
<S> <C> <C> <C> <C> <C>
LEONARD A. TRUGMAN 1995 275,625 257,273(1) 53,045 40,356
Chairman of the Board, Chief 1994 262,500 164,000(1) -- 38,728
Executive Officer and President 1993 250,000 255,685(1) -- 39,061
SEYMOUR RUBIN 1995 210,000 50,000 10,609 8,539
Vice President and President 1994 200,000 50,000 28,981 5,709
of RFI Corporation 1993 185,000 40,000 -- 6,729
LEONARD MICHAELS 1995 168,404 -- -- 60,800(5)
Vice President and 1994 160,385 -- -- 61,285(5)
President of Dynarad Corp. 1993 138,461(2) 277,336(3) 25,314 313,967(6)
GEORGE SOLOMON 1995 155,392 5,000 -- 1,000
Vice President and 1994 119,534 -- 11,593 1,000
General Manager of 1993 -- -- -- --
Dynarad Corp., President
of Del Medical Systems Corp.
HOWARD BERTAN 1995 139,192 72,154 -- 1,000
President of Bertan 1994 45,769(7) 25,493(7) 39,393 --
High Voltage Corp. 1993 -- -- -- --
</TABLE>
- ---------------
(1) Includes deferred compensation in the amounts of $125,000, $100,000 and
$125,000 for the 1995, 1994 and 1993 fiscal years, respectively.
(2) Based upon 48 weeks of compensation for Fiscal 1993. Dynarad was acquired
in September 1992.
(3) Includes employment agreement signing bonus of $250,000.
(4) Includes insurance premiums where families of the officers are
beneficiaries and automobile expense allowances. The insurance premiums
paid in 1995, 1994, and 1993 were $13,058, $11,428 and $11,761 for Mr.
Trugman; $5,541, $5,709 and $6,728 for Mr. Rubin; and $7,800, $8,185 and
$2,800 for Mr. Michaels.
(5) Includes annual non-compete payment of $52,000.
(6) Includes a one time payment of $257,400 for covenant not-to-compete and
$47,667 which is a portion of an annual non-compete payment of $52,000.
(7) Based upon 17 weeks of compensation for Fiscal 1994. Bertan was acquired in
April 1994.
Stock Options
The following table contains information concerning the grant of stock
options under the Company's Amended and Restated Stock Option Plan ("Plan") to
the named executive officers of the Company during the fiscal year ended July
29, 1995.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
Potential Realizable
Value at Assumed Annual
Rates of Stock Price
Individual Grants Appreciation for Option Term(1)
----------------- % of Total -------------------------------
Options Options Granted Exercise
Granted to Employees Price Expiration
Name (#) in Fiscal Year ($/Sh) Date 5%($) 10%($)
---- ------- -------------- -------- ---------- ----- ------
<S> <C> <C> <C> <C> <C> <C>
LEONARD A. TRUGMAN...... 53,045 54% $4.71 01/25/03 $ 499,679 $1,256,123
SEYMOUR RUBIN........... 10,609 11% $4.71 01/25/03 $ 99,936 $ 251,225
LEONARD MICHAELS........ -- -- -- -- -- --
GEORGE SOLOMON.......... -- -- -- -- -- --
HOWARD BERTAN........... -- -- -- -- -- --
</TABLE>
- ----------------
(1) Fair market value of stock on grant date compounded annually at rate shown
in column heading for the option term less the exercise price.
5
<PAGE>
Option Exercises and Holdings
The following table sets forth information with respect to the named
executive officers concerning the exercise of options during the fiscal year
ended July 29, 1995 and unexercised options held as of the end of the fiscal
year ended July 29, 1995.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
Number of Value of
Unexercised Unexercised In-
Shares Value Options the-Money Options
Acquired on Realized at Fiscal at Fiscal Year-
Name Exercise (#) ($) (1) Year-End (#) End ($) (2)
---- ------------ -------- ------------- ----------------
Exercisable/ Exercisable/
Unexercisable Unexercisable
------------- ----------------
<S> <C> <C> <C> <C>
LEONARD A. TRUGMAN............ -- -- 612,255 / 94,971 $2,949,413 / $196,613
SEYMOUR RUBIN................. -- -- 78,219 / 47,059 $ 213,258 / $ 87,871
LEONARD MICHAELS.............. -- -- 12,656 / 12,656 $ 26,051 / $ 26,051
GEORGE SOLOMON................ -- -- 2,898 / 8,694 $ 5,318 / $ 15,953
HOWARD BERTAN................. -- -- 19,695 / 19,695 $ 11,268 / $ 11,268
</TABLE>
- ----------------
(1) Amounts reflect the difference between the fair market value of the
underlying shares of Common Stock on the date of exercise and the exercise
price on the date of exercise.
(2) Amounts reflect the difference between the fair market value of the
underlying shares of Common Stock and the exercise price for in-the-money
options on July 29, 1995 ($7.00).
Employment Agreements
Mr. Leonard A. Trugman has an employment agreement with the Company,
effective as of August 1, 1992, which was subsequently amended on July 20, 1994
and September 1, 1994, pursuant to which he has agreed to serve as Chairman of
the Board, President and Chief Executive Officer of the Company until July 31,
2000. Mr. Trugman's annual base salary was $275,625 for the twelve months ended
July 29, 1995. His annual base salary for the twelve months ending August 3,
1996 is $289,406 and was determined by multiplying $275,625 by the greater of 5%
or the increase in the Consumer Price Index as of August 1, 1995 over the amount
of such index as of August 1, 1994 ("Base Salary"). For each subsequent year
during the term of his agreement, his annual Base Salary is subject to increases
equal to the greater of 5% or the increase in the Consumer Price Index. Mr.
Trugman receives a bonus each year equal to 5% of the Company's pre-tax net
income for such year. Mr. Trugman's agreement also provides for a deferred
compensation account whereby the Company shall deposit (a) $100,000 annually and
(b) after receipt of the Company's audited financial statements with respect to
each fiscal year, an amount equal to the lesser of (x) $25,000 or (y) 5% of the
Company's pre-tax net income for such fiscal year less $100,000. Mr. Trugman's
deferred compensation account balance pursuant to his employment agreement was
$378,171 as of July 29, 1995. At the expiration of the employment agreement, or
in the event Mr. Trugman's employment is terminated for any reason whatsoever,
other than for cause or total disability, Mr. Trugman, at his sole option, may
elect to be engaged by the Company as a consultant for a term of five years. Mr.
Trugman's annual consulting compensation for the first year of the consulting
term shall be equal to (i) his base salary for the final year of his employment
agreement ("Last Base Salary") or (ii) his base salary in effect upon his
termination ("Termination Base Salary"), whichever is applicable. Mr. Trugman's
consulting compensation for the second through fifth year of the consulting term
shall be adjusted annually by multiplying the Last Base Salary or the
Termination Base Salary, as the case may be, by an applicable percentage ranging
from 92% in the second year to 61% in the fifth year. For the fiscal year ended
July 29, 1995 Mr. Trugman was granted options to purchase 53,045 shares of the
Company's Common Stock at an exercise price of $4.71 per share.
Mr. Trugman is also entitled to compensation in the event of a change of
control of the Company and his employment is terminated for any reason
whatsoever. Such compensation shall be an amount equal to three times (x) the
base salary to be paid to Mr. Trugman for the fiscal year in which such
termination occurs, plus (y) the guaranteed bonus paid to Mr. Trugman for the
immediately preceding year, plus (z) the amount credited to the deferred
6
<PAGE>
compensation account for the immediately preceding fiscal year, but in no event
in an aggregate amount greater than the maximum allowed pursuant to governing
law. Such payment must be made within 90 days after the change of control. The
employment agreement contains confidentiality provisions and a non-compete
provision for a term of one year after the termination of Mr. Trugman's
employment.
Mr. Leonard Michaels has an employment agreement with Dynarad Corp. which
commenced as of September 1, 1992 and terminates on July 29, 1997. Pursuant to
the terms of such agreement, Mr. Michaels agreed to serve as President of
Dynarad Corp. The employment agreement provides for the payment of a base salary
of $150,000 per annum, subject to increases on an annual basis equal to the
greater of 5% or increases in the Consumer Price Index. Mr. Michaels also
receives certain bonuses if the net income goals specified in such agreement are
achieved. Mr. Michaels' present base salary is $173,456. In consideration of Mr.
Michaels' covenant not-to-compete for ten years as set forth in the employment
agreement, he shall receive annual non-compete payments of $52,000 during the
ten year term thereof. At the expiration of the employment agreement, or in the
event Mr. Michaels' employment is terminated for any reason whatsoever, other
than for cause or total disability, Mr. Michaels, at his sole option, may elect
to be engaged by the Company as a consultant for a term of five years. Mr.
Michaels' annual consulting compensation for the first year of the consulting
term shall be equal to (i) his base salary for the final year of his employment
agreement ("Last Base Salary") or (ii) his base salary in effect upon his
termination ("Termination Base Salary"), whichever is applicable. Mr. Michaels'
consulting compensation for the second through fifth year of the consulting term
shall be adjusted annually by multiplying the Last Base Salary or the
Termination Base Salary, as the case may be, by an applicable percentage ranging
from 871/2% in the second year to 50% in the fifth year.
Mr. Howard Bertan has an employment agreement with Bertan High Voltage
Corp. which commenced on April 24, 1994 and terminates on April 23, 1997, unless
extended for up to an additional two (2) year period. Pursuant to the terms of
such agreement, Mr. Bertan agreed to serve as President and Chief Operating
Officer of Bertan High Voltage Corp. The employment agreement provides for the
payment of a base salary of $147,000 for the period commencing on April 24, 1995
and terminating on April 23, 1996, subject to increases on an annual basis equal
to the greater of 5% or increases in the Consumer Price Index. Mr. Bertan also
receives a bonus with respect to each fiscal year equal to 5% of Bertan High
Voltage Corp.'s pre-tax net income for such year. The employment agreement
contains standard confidentiality and non-compete provisions.
In consideration of Mr. Bertan's covenant not-to-compete for a period of
ten years after the completion of his employment agreement, he will receive
$500,000 payable in equal quarterly payments for a period of ten years after his
period of active employment. Such payments are subject to adjustment to reflect
the greater of 5% or increases in the Consumer Price Index.
Mr. George Solomon has an employment agreement with Dynarad Corp. which
commenced on October 11, 1993 and terminates on July 31, 1997. Pursuant to the
terms of such agreement, Mr. Solomon agreed to serve as Vice President and
General Manager of Dynarad Corp. The employment agreement provides for the
payment of a base salary of $148,000 per annum, subject to increases on an
annual basis equal to the greater of 5% or increases in the Consumer Price
Index. Mr. Solomon's present base salary is $163,170. Mr. Solomon also receives
a bonus each year if the net profit goals specified in such agreement are
achieved. Mr. Solomon is also entitled to compensation in the event of a change
of control of the Company or Dynarad Corp. and he is not offered a position with
the Company or Dynarad Corp. on substantially the same terms and conditions as
set forth in his employment agreement. Such compensation shall be an amount
equal to his salary at the time of notice of termination and a proportionate
share of his bonus payable in 26 bi-weekly payments.
Directors of the Company did not receive compensation for their services
as such except a fee of $500.00 for each meeting of the Board of Directors which
they attended. Messrs. Trugman, Michaels and Rubin waived their right to receive
such compensation. As of September 13, 1995, such attendance fee was increased
to $750.00 per meeting.
7
<PAGE>
REPORT OF THE DEL ELECTRONICS CORP.
BOARD OF DIRECTORS COMPENSATION COMMITTEE
The Compensation Committee (the "Committee") of the Board of Directors of
the Company determines the Company's executive compensation policies. The
Committee is comprised of two non-employee Directors. After evaluating the
performance of the Company and its executive officers, the Committee recommends
compensation programs and salary levels to the entire Board of Directors for
approval. Set forth below is a report submitted by the Committee addressing the
Company's compensation policies for the fiscal year ended
July 29, 1995 as they affected the executive officers of the Company.
Compensation Philosophy
The goals of the executive compensation program are to attract, retain and
award executive officers who contribute to the success of the Company.
Compensation opportunities are aligned with the Company's business objectives.
The compensation programs are designed to motivate executive officers to meet
annual corporate performance goals and enhance long-term stockholder value.
In designing and administering the executive compensation program, the
Committee strives to balance short and long-term incentive objectives and use
prudent judgment in establishing performance criteria, evaluating performance
and determining actual incentive awards. The Committee believes that stock
ownership by executive officers is beneficial in aligning the common interests
of management and stockholders to enhance stockholder value.
Components of Executive Compensation
The three components of the Company's executive compensation program are
base salary, annual bonus and stock option grants. These three elements are
structured by the Committee, in conjunction with the Company's stock option
committee which is comprised of two other non-employee Directors, to
cumulatively provide the Company's executive officers with levels of total
compensation consistent with the Company's executive compensation philosophy
described above.
The Company's executive salary levels are intended to be consistent with
competitive salary levels and job responsibilities of each executive. Salary
increases reflect competitive and economic trends, the overall financial
performance of the Company and the performance of the individual executive.
Factors considered in gauging the Company's overall financial performance
include the Company's revenues and profits.
Relationship of Corporation Performance to Executive Compensation
The Committee takes into account the executives' performance in special
projects undertaken during the past fiscal year, contribution to strategic
acquisitions and development of new products, marketing strategies,
manufacturing efficiencies and other factors. In addition, in determining
executive compensation the Committee also considers the contributions of each
executive officer to the growth in pre-tax earnings of the Company over the last
fiscal year.
Satisfaction of certain performance criteria (including initiative,
contribution to overall corporate performance and managerial ability) is
evaluated after informal discussions with other members of the Board and, for
all of the executives other than Mr. Trugman, after discussions with Mr.
Trugman.
Compensation of Chief Executive Officer
In addition to the factors mentioned above, the Committee's general
approach in setting Mr. Trugman's annual compensation is to seek to be
competitive with other companies in the Company's industry and to reward Mr.
Trugman's strategic management abilities in directing the Company's expansion
efforts and its development and exploitation of new markets, growth of its
international business and new business opportunities.
Mr. Trugman's annual base salary for the fiscal year ended July 29, 1995
was $275,625, an increase of $13,125 over his previous annual salary of
$262,500. Such increase reflects Mr. Trugman's base salary pursuant to his
employment agreement, effective as of August 1, 1992, which was subsequently
amended on July 20, 1994 and September 1, 1994. Mr. Trugman's base salary, bonus
8
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and deferred compensation for the fiscal year ended July 29, 1995 was $532,898
as compared to $426,500 for the previous fiscal year. Mr. Trugman's base salary
pursuant to his employment agreement was set in accordance with competitive
salary levels for companies of similar size and profitability. Such agreement
provides for future base salary increases in an amount equal to the greater of a
5% increase or the increase in the Consumer Price Index. The annual bonus paid
to Mr. Trugman for the fiscal year ended July 29, 1995 was equal to 5% of the
Company's pre-tax net income for such year. Mr. Trugman's deferred compensation
account payment for the fiscal year ended July 29, 1995 was $125,000 which
represents approximately 4.6% of the Company's pre-tax earnings for such fiscal
year. Such payment was based upon Mr. Trugman's employment agreement which
provides that the Company shall deposit (a) $100,000 annually and (b) after
receipt of the Company's audited financial statements with respect to each
fiscal year, an amount equal to the lesser of (x) $25,000 or (y) 5% of the
Company's pre-tax net income for such fiscal year less $100,000.
For the fiscal year ended July 29, 1995, Mr. Trugman was granted options to
purchase 53,045 shares of the Company's Common Stock at an exercise price of
$4.71 per share.
Compensation Committee
NATAN V. BERTMAN
DAVID MICHAEL
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Performance Graph
The following graph compares the yearly percentage change in the
cumulative total stockholder return on the Company's Common Stock with The
American Stock Exchange, Inc. market index and a peer group index for the period
commencing August 1, 1990 and ending July 29, 1995. The peer group consists of
56 companies engaged in the manufacture of electronic components and includes
Applied Magnetics Corporation, Espey Manufacturing & Electronics, General
Microwave Corporation, Hutchinson Tech, Inc., Medicore, Inc., Recoton
Corporation and Western Microwave, Inc. The graph assumes that $100 was invested
on August 1, 1990 in the Company's Common Stock and in each of the other indices
and assumes reinvestment of all dividends and is weighted on a market
capitalization basis.
[The following table was represented by a graph in the printed material]
COMPARE 5-YEAR CUMULATIVE TOTAL RETURN
AMONG DEL ELECTRONICS CORP.,
AMEX MARKET INDEX AND SIC CODE INDEX
<TABLE>
<CAPTION>
1990 1991 1992 1993 1994 1995
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Del Electronics Corp. $ 100.00 $ 103.64 $ 98.33 $ 103.18 $ 109.44 $ 121.90
AMEX Market Index 100.00 105.82 114.13 124.62 127.72 154.90
SIC Code Index 100.00 127.83 145.23 126.60 150.62 213.97
</TABLE>
ASSUMES $100 INVESTED ON AUG. 1, 1990
ASSUMES DIVIDEND REINVESTED
FISCAL YEAR ENDING JULY 29, 1995
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PROPOSAL TWO: PROPOSAL TO AMEND THE COMPANY'S
CERTIFICATE OF INCORPORATION TO CHANGE THE NAME OF THE COMPANY TO "DEL
GLOBAL TECHNOLOGIES CORP." FROM "DEL ELECTRONICS CORP."
On December 8, 1995, the Board of Directors unanimously adopted a
resolution recommending that the Company's Certificate of Incorporation be
amended to change its name to "Del Global Technologies Corp." from "Del
Electronics Corp."
The Company designs, manufactures and markets medical imaging and
specialty electronic components for medical, industrial and defense applications
and diagnostic OEM equipment. The Company's principal products are medical
imaging diagnostic equipment, high voltage power supplies, high voltage energy
storage devices, high voltage transformers and single and multi-circuit
electromagnetic interference and radio frequency interference filters.
The Company has completed a three year transition from being a defense
electronics supplier to being a supplier serving the medical imaging and
diagnostics market. During the fiscal year ended July 29, 1995, approximately
one half of the Company's net sales were in the medical imaging and diagnostics
market.
The Company is also increasing its international sales. During the three
fiscal years ended July 29, 1995, July 30, 1994 and July 31, 1993, export sales
accounted for approximately 36%, 28% and 21%, respectively, of the Company's
revenues.
The Board of Directors believes that it is in the best interests of the
Company to change its corporate name to reflect the increasing global and
diverse nature of its products. It is the view of the Board of Directors that
such a corporate name will accurately indicate that the Company is providing a
wide range of technological products throughout the world.
If approved by the stockholders at the Meeting, the new name will become
effective upon the filing of an amendment to the Company's Certificate of
Incorporation with the Department of State of the State of New York. The change
of corporate name will be accomplished by amending Article First of the
Company's Certificate of Incorporation to read as follows:
"Article First: The name of the Corporation is Del Global Technologies
Corp."
The change in corporate name will not affect the validity or
transferability of stock certificates presently outstanding and the Company's
stockholders will not be required to exchange any certificates presently held by
them.
Approval of the amendment requires the affirmative vote of the holders of a
majority of the shares of Common Stock represented at the Meeting.
The Board of Directors recommends a vote FOR the proposal to amend the
Company's Certificate of Incorporation.
PROPOSAL THREE: PROPOSAL TO AMEND THE COMPANY'S
AMENDED AND RESTATED STOCK OPTION PLAN TO INCREASE THE
NUMBER OF SHARES RESERVED FOR ISSUANCE THEREUNDER
At the Meeting, the stockholders will be asked to approve an amendment to
the Company's Amended and Restated Stock Option Plan (the "Plan") to increase by
250,000 the number of shares of Common Stock reserved for issuance thereunder.
There are 2,223,648 shares of the Company's Common Stock reserved for
issuance under the Plan, exclusive of the 250,000 shares subject to stockholder
approval at the Meeting. Upon approval of the amendment, 2,473,648 shares of the
Company's Common Stock will be reserved for issuance under the Plan. As of the
Record Date, options to purchase an aggregate of 1,532,416 shares were
outstanding and 265,491 shares, exclusive of the 250,000 shares subject to
stockholder approval at the Meeting, were available for future grant. The
purpose of the Plan is to advance the interests of the Company and its
stockholders by providing officers, key management employees and other eligible
participants with financial incentives tied directly to the Company's long term
business objectives. The Board of Directors believes that the remaining shares
available for grant under the Plan are insufficient to accomplish these
purposes.
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Approval of the amendment requires the affirmative vote of the holders of
a majority of the shares of Common Stock represented at the Meeting.
The Board of Directors recommends a vote FOR the proposal to amend the
Plan.
The following summary describes the features of the Plan.
Types of Incentive Awards. The Plan contains two optional forms of
incentive awards which may be used at the sole discretion of the Stock Option
Committee (the "Committee"). Incentive awards under the Plan may take the form
of stock options or stock appreciation rights ("SARs"). The stock options may be
incentive stock options ("ISOs") intended to qualify for special tax treatment
or non-qualified stock options ("NQSOs").
The type of incentive award being granted, as well as the terms and
conditions of the award, will be determined by the Committee at the time of
grant.
Eligibility. All officers of the Company are eligible to participate in
the Plan. Also eligible to participate, if so identified by the Committee, are
officers of wholly-owned subsidiaries of the Company, other key management
employees of the Company or any wholly-owned subsidiary of the Company, other
employees or consultants of the Company or any subsidiary or affiliate of the
Company, and other persons whose participation in the Plan is deemed by the
Committee to be in the best interests of the Company. The existing Stock Option
Plan permits participation by officers, employees and consultants of the
Company.
Administration of the Plan. The Committee will determine the eligible
participants who will be granted incentive awards, determine the amount and type
of award, determine the terms and conditions of awards, construe and interpret
the Plan, and make all other determinations with respect to the Plan, to the
extent permitted by applicable law.
Duration of the Plan. The Plan is a fifteen year program and will
terminate on December 31, 2009, unless terminated sooner according to the terms
of the Plan.
Stock Option Plan. The Committee may grant ISOs, NQSOs and tandem SARs to
eligible participants, subject to the terms and conditions of the Plan.
Stock Options. ISOs allow the optionee to buy a certain number of shares
of the Company's Common Stock at an option price equal to the market price at
the time the option is granted. NQSOs allow the optionee to buy a certain number
of shares of the Company's Common Stock at an option price equal to, more than,
or less than the market price at the time the option is granted. An option may
not be exercised until the right to do so has vested under a schedule approved
by the Committee. The vesting schedule generally approved by the Committee
generally provides that one-quarter of the options may be exercised on or after
the first anniversary of the date of grant, one-half on or after the second
anniversary, three-quarters on or after the third anniversary and 100 percent on
or after the fourth anniversary.
Tandem SARs. At the discretion of the Committee, options may be granted
with or without tandem SARs which permit an optionee to surrender an option or a
portion thereof in exchange for a cash payment equal to the difference between
the current market value of the stock and the option price. A tandem SAR is
subject to the same terms and conditions as the related option, except that it
may be exercised only when the market value exceeds the option price. In
addition, executive officers of the Company and other participants who are
subject to Section 16 of the Securities Exchange Act of 1934 may exercise SARs
only during certain quarterly window periods.
Payment for Shares Upon Exercise of Stock Options. At the time an option
is exercised, shares of Common Stock may be purchased using (1) cash; (2) shares
of the Company's Common Stock owned by the optionee for at least one year; (3) a
"cashless exercise" procedure (whereby a broker sells the shares or holds them
as collateral for a margin loan, delivers the option price to the Company, and
delivers the remaining sale or loan proceeds to the optionee); or (4) any
combination of the foregoing or any other method of payment which the Committee
may allow.
Term of Options and Tandem SARs. The term of each ISO and related tandem
SAR is ten years and the term of each NQSO and related tandem SAR is fifteen
years, subject to earlier termination as described below.
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Termination of Employment or Relationship with the Company. Upon
termination of the optionee's employment or relationship with the Company, any
unexercised options shall be cancelled and terminated immediately, except that
any unexercised options which are vested may be exercised during the balance of
their term or within nine months of termination, whichever is shorter. If an
optionee is terminated for cause or discharged, any unexercised options shall be
terminated immediately. In the event of a termination by reason of retirement by
reason of death or disability, or by reason of a divestiture or change in
control of the Company, special rules allow the optionee to exercise all vested
and unvested options within certain time periods after termination.
Adjustments Upon Changes in Number or Value of Shares of Common Stock. In
order to prevent enlargement or dilution of rights resulting from stock
dividends, stock splits, recapitalizations, mergers, consolidations, or other
events that materially increase or decrease the number or value of shares of the
Company's Common Stock, the Committee may adjust (1) the number of shares of
Common Stock available for future grants of incentive awards under the Plan, (2)
the number of shares represented by outstanding awards, and (3) the price of
those shares.
Non-Transferability of Options. Options shall not be transferable
otherwise than by will or by the laws of descent and distribution, and, subject
to the Committee's discretion, generally may be exercised during the lifetime of
the recipient only by the recipient.
Change in Control. Unless the Committee determines that a change in
control (as defined in the Plan) is in the best interests of stockholders of the
Company and will not adversely impact the recipients of incentive awards under
the Plan, (1) any time periods relating to the exercise or realization of any
incentive award shall be accelerated so that such award may be exercised or
realized in full immediately upon the change in control, and (2) the Committee
may offer recipients the option of having the Company purchase their awards for
an amount of cash which could have been attained upon the exercise or
realization of such awards if they had been fully exercisable or realizable.
Amendment and Termination of the Plan and Options. The Board of Directors
or the Committee may at any time suspend, terminate, modify or amend the Plan in
any respect. However, stockholder approval of amendments shall be obtained in
the manner and to the degree required by applicable laws or regulations. The
Committee also has broad discretion to amend or modify the terms and conditions
of any incentive award or cancel or annul any grant of an award, subject to
certain restrictions.
Funding. Inasmuch as the Plan is designed to encourage financial
performance and to improve the value of stockholders' investment in the Company,
the costs of the Plan will be funded from corporate earnings.
Federal Income Tax Consequences. The following summary of federal income
tax consequences does not purport to be a complete statement of the law in this
area. Furthermore, the discussion below does not cover the tax consequences of
the Plan (or the grant or exercise of options thereunder) under state and/or
other local tax laws, and such tax laws may not correspond to the federal tax
treatment described herein. Accordingly, individuals eligible to receive options
under the Plan should consult with their personal tax advisors prior to engaging
in any transactions under the Plan.
The characterization of income as either ordinary income or capital gain
is still required by the Internal Revenue Code ("IRC"), and may have important
tax consequences to participants under the Plan in some situations. Therefore,
the following summary continues to characterize income from various transactions
as either ordinary income or capital gain.
Incentive Stock Options. In general, an option holder will not be treated
as receiving taxable income upon either the grant or exercise of an option which
qualifies as an ISO, and the option holder generally will receive capital gain
or loss treatment, as the case may be, upon the sale of the shares acquired upon
the exercise of an ISO, if certain conditions relating to employment
requirements and holding period requirements under Section 422 of the IRC are
satisfied. Under most circumstances, the shares of Common Stock acquired
pursuant to the exercise of an ISO (a) must not be sold or otherwise disposed of
for two years from the date of the grant of such option, and (b) must be held
for at least one year after the transfer of such stock to the option holder upon
exercise of the option. (Neither of such holding periods apply to the
disposition of shares by the option holder's estate or the option holder's heirs
after death.)
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If shares acquired upon exercise of an ISO are disposed of in violation of
holding period requirements described above (a "Disqualifying Disposition"), the
option holder generally will recognize ordinary income in the year of such
Disqualifying Disposition in an amount equal to the difference between (a) the
option exercise price, and (b) the lesser of (i) the amount realized on such
disposition or (ii) the fair market value of such shares as of the date of
exercise of the option under which the shares were acquired. Any gain realized
on a Disqualifying Disposition in excess of such ordinary income amount
generally will be treated as capital gain (short-term or long-term depending on
the option holder's holding period with respect to such shares).
In the case of ISOs, the excess of the fair market value of the stock as
of the exercise date over the option exercise price is included in alternative
minimum taxable income in the year of exercise, and thus may be subject to the
alternative minimum tax.
Non-Qualified Stock Options. In general, there are no tax consequences to
the option holder upon the grant of a NQSO, but upon exercise the option holder
generally will recognize ordinary income equal to the difference between the
purchase price paid for the shares on exercise of the option and the fair market
value of such shares as of the date of exercise. However, a special rule (the
"Section 16(b) Deferral Rule") applies in the case of option holders (generally
officers, directors and 10% stockholders) who are subject to Section 16(b) of
the Exchange Act (under which an "insider's" profit on the purchase and sale or
sale and purchase within less than six months of equity securities of the issuer
may be recovered by the issuer). Under the Section 16(b) Deferral Rule, such
ordinary income attributable to the exercise of a NQSO generally will not be
recognized until the expiration of the period during which a sale of the stock
could subject the option holder to suit under Section 16(b), with the amount of
such ordinary income being measured by the fair market value of the stock at the
expiration of such period (the "Section 16(b) Expiration Date").
The Section 16(b) Deferral Rule can be waived by an option holder if he or
she makes a timely election (generally, within 30 days following exercise) under
Section 83(b) of the IRC to recognize ordinary income at the time of exercise of
the NQSO.
An option holder's tax basis in shares acquired on exercise of a NQSO
generally will be equal to the exercise price paid for such shares by the option
holder plus the amount of income recognized by the option holder by reason of
his or her exercise of the option under the rules described above. Upon a
subsequent disposition of the shares received on exercise of a NQSO, the
difference between the amount realized on such disposition and the option
holder's tax basis for such shares generally will be treated as a capital gain
or loss, which will be short-term or long-term depending on whether the shares
are held for the applicable long-term holding period following exercise of the
option (currently more than one year). However, in the case of an option holder
who is subject to the Section 16(b) Deferral Rule described above and who does
not waive such rule by filing an election under Section 83(b) of the IRC, such
option holder's capital gain holding period generally will not commence until
the Section 16(b) Expiration Date.
Tandem Stock Appreciation Rights. There will be no federal income tax
consequences to either the optionee or the Company upon the grant of a tandem
SAR or during the period that the unexercised right remains outstanding. Upon
the exercise of a tandem SAR, the amount received will be taxable to the
optionee as ordinary income and the Company will be entitled to a corresponding
deduction.
Use of Common Stock to Pay Exercise Price. Subject to the provisions of
the Plan, an option holder may be permitted to use shares of the Company's
Common Stock (previously acquired by the option holder) to pay the exercise
price under an ISO or a NQSO. The option holder should consult with his or her
personal tax advisor to review the tax consequences of delivering shares of
Common Stock to exercise stock options. If an individual exercises a NQSO by
delivering other shares, the individual will not recognize gain or loss with
respect to the exchanged shares, even if their then fair market value is
different from the individual's tax basis in such shares. The individual,
however, will be taxed as described above with respect to the exercise of the
NQSO as if the individual had paid the exercise price in cash, and the Company
generally will be entitled to an equivalent tax deduction. Provided the
individual receives a separate identifiable stock certificate therefor, the
individual's tax basis in that number of shares received on such exercise, which
is equal to the number of shares surrendered on such exercise, will be equal to
the individual's tax basis in the shares surrendered and the individual's
holding period for such number of shares received will include the individual's
holding period for the shares surrendered. The individual's tax basis and
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holding period for the additional shares received on exercise of a NQSO paid
for, in whole or in part, with shares will be the same as if the individual had
exercised the NQSO solely for cash. It should be noted, however, that the use by
an option holder of Common Stock acquired through the previous exercise of an
ISO to pay the exercise price under another ISO will be treated as a
Disqualifying Disposition of the previously acquired Common Stock if the
applicable holding period requirements have not yet been satisfied with respect
to such previously acquired stock. In such circumstances, the option holder will
be taxed as if such previously acquired shares had been sold (in a Disqualifying
Disposition) for their fair market value as of the date on which they are used
to pay the exercise price under such other ISO.
Company Deductions. In general, the Company will not be entitled to any
deductions with respect to ISOs granted under the Plan. However, if an employee
is required to recognize ordinary income upon a Disqualifying Disposition of
stock acquired under the Plan, then the Company generally will be allowed a
deduction to the extent of such ordinary income. In that regard, the Company may
require any option holder disposing of stock in a Disqualifying Disposition to
notify the Company of such disposition. In the case of NQSOs, the Company
generally will be entitled to a deduction in an amount equal to the ordinary
income recognized by the option holder upon exercise of such option (or as of
the Section 16(b) Expiration Date if the Section 16(b) Deferral Rule applies).
Withholdings and Information Reports. The Company generally is required to
make applicable federal payroll withholdings with respect to compensation income
recognized by employees under the Plan. Such withholdings ordinarily will be
accomplished by withholding the required amount from other cash compensation due
from the Company to the employee, by having the employee pay to the Company the
required withholding amount, or by such other permissible methods as the Company
may deem appropriate. Whether or not such withholdings are required, the Company
will make such information reports to the Internal Revenue Service as may be
required with respect to any income (whether or not that of an employee)
attributable to transactions involving the Plan.
Stock Purchase Plan
Employee Stock Purchase Plan
The Company has an employee stock purchase plan which is funded by payroll
deductions. Shares acquired pursuant to such plan by employees of the Company
are purchased in the open market by the custodian of the plan. The Company
administers such plan and pays all brokerage commissions incurred in connection
with such plan. All shares so purchased are held in street name until an
employee requests that the shares to which he is entitled, or a portion thereof,
be issued to him. Substantially all employees of the Company are eligible to
participate in such plan. As of December 29, 1995, 1,758, 355, 91, 2,638, 314,
512 and 5,577 shares have been purchased on behalf of Leonard A. Trugman, Howard
Bertan, David Engel, Seymour Rubin, George Solomon, Michael Taber and all
executive officers as a group, respectively.
Employee Benefit Plans
Defined Benefit Plan
The Company has a defined benefit pension plan which provides retirement
benefits for all full time employees ("Participants"). Effective February 1,
1986, the plan was frozen so that future salary increases are not considered in
determining a Participant's pension benefit, contributions by Participants are
no longer permitted and participation in the plan is limited to those
Participants as of August 1, 1984. Pursuant to the plan, Participants will
receive a benefit, computed by an actuary at retirement based upon their number
of years of credited service and average total annual compensation during five
consecutive years of their service, reduced by a portion of their benefits under
social security. The Company continues to fund the plan with contributions
determined on an actuarial basis.
The following table illustrates, for representative average annual covered
compensation and years of credited service classifications, the estimated annual
retirement benefits payable to employees under this plan upon retirement at age
15
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65 based on the plan's normal form of benefit and social security benefits
frozen as of August 1, 1984. Benefits under the plan are limited to the extent
required by the Employee Retirement Income Security Act of 1974.
PENSION PLAN TABLE
Average Annual Years of Credited Service
Covered Compensation 15 or more
-------------------- -------------------------
$ 40,000.......................................... $13,000
$ 50,000.......................................... $17,000
$ 75,000.......................................... $27,000
$ 100,000.......................................... $37,000
The executive officers named in the Summary Compensation Table do not
participate in the plan.
401(k) Plan and Profit Sharing Plan
Effective August 1, 1984, the Company established a 401(k) plan under which
employees may elect to defer a portion of their annual salary. This plan was
modified as of October 1, 1993 and combined with the RFI Corporation plan. Also,
employees of Dynarad Corp. were allowed to participate. Effective December 1,
1994, the Bertan High Voltage Corp. 401(k) plan was merged into the Company's
plan. All employees with over 90 days of service and over the age of 21 may
elect to defer from 2% to 15% of their annual salary. The modified plan is
administered by Connecticut General Life Insurance Company (CIGNA) and employees
may elect where their deferred salary will be invested. Highly compensated
employees' salary deferrals are limited by the contribution levels of all other
eligible participants. Distributions are made at retirement or upon termination
of employment.
On February 1, 1986 the Company initiated a profit sharing plan as part of
the 401(k) plan which allows substantially all of the Company's employees to
participate in the profits of the Company, regardless of whether or not the
employee elected to contribute to the 401(k) plan in any year. Since the profit
sharing plan is part of the 401(k) plan, eligibility, participation and other
requirements are governed by the provisions of the 401(k) plan. Contributions to
the plan are determined based upon a calculation directly related to the
Company's sales volume and pre-tax profits. There was a $32,500 contribution for
the period ended July 29, 1995.
OTHER BUSINESS
As of the date of this Proxy Statement, the only business which the Board
of Directors intends to present and knows that others will present at the
Meeting is as hereinabove set forth. If any other matter or matters are properly
brought before the Meeting, or any adjournments thereof, it is the intention of
the persons named in the accompanying form of proxy to vote the proxy on such
matters in accordance with their judgment.
Voting Procedures
Directors of the Company must be elected by a plurality of the vote of the
shares of Common Stock present in person or represented by proxy at the Annual
Meeting. Consequently, only shares that are voted in favor of a particular
nominee will be counted toward such nominee's achievement of a plurality. Shares
present at the Annual Meeting that are not voted for a particular nominee or
shares present by proxy where the stockholder properly withheld authority to
vote for such nominee (including broker non-votes) will not be counted toward
such nominee's achievement of a plurality.
With respect to the other matters submitted to the stockholders for a
vote, the affirmative vote of the holders of at least a majority of the shares
of Common Stock present in person or represented by proxy at the Annual Meeting
for a particular matter is required to become effective. With respect to
abstentions, the shares are considered present at the Annual Meeting for the
particular matter, but since they are not affirmative votes for the matter, they
will have the same effect as votes against the matter. With respect to broker
non-votes, the shares are not considered present at the Annual Meeting for the
particular matter as to which the broker withheld authority. Consequently,
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broker non-votes are not counted in respect of the matter, but they do have the
practical effect of reducing the number of affirmative votes required to achieve
a majority for such matter by reducing the total number of shares from which the
majority is calculated.
A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED JULY
29, 1995, INCLUDING FINANCIAL STATEMENTS AND SCHEDULES THERETO, FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS AVAILABLE TO EACH STOCKHOLDER WITHOUT
CHARGE. WRITTEN REQUESTS SHOULD BE ADDRESSED TO: MICHAEL TABER, SECRETARY, DEL
ELECTRONICS CORP., 1 COMMERCE PARK, VALHALLA, NEW YORK 10595.
RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS
The firm of Deloitte & Touche LLP, certified public accountants, the
Company's principal accountants for its last fiscal year, has been selected by
the Board of Directors of the Company as the Company's principal accountants for
the current fiscal year. It is anticipated that a representative of that firm
will be present at the Meeting. Such representative will be afforded an
opportunity to make a statement at the Meeting if he so desires and he will be
available to respond to appropriate questions.
1997 STOCKHOLDER PROPOSALS
Proposals by stockholders which are intended to be presented at the 1997
Annual Meeting must be received by the Company at its principal executive
offices on or before September 15, 1995.
By order of the Board of Directors,
DEL ELECTRONICS CORP.
MICHAEL TABER,
Secretary
Dated: January 17, 1996
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ANNEX A
DEL ELECTRONICS CORP.
PROXY Annual Meeting of Stockholders - February 14, 1996
(Solicited on Behalf of the Board of Directors)
KNOW ALL MEN BY THESE PRESENTS, that the undersigned stockholder of Del
Electronics Corp. constitutes and appoints Michael Taber and Leonard A. Trugman
or either of them, the attorneys and proxies of the undersigned with full power
of substitution to vote for and in the name, place and stead of the undersigned
at the Annual Meeting of the Stockholders of the Company, to be held at the
offices of the Company, 1 Commerce Park, Valhalla, N.Y. 10595 on February 14,
1996 at 10:30 A.M., and at any adjournment or adjournments thereof, upon the
following matters (which are more fully described in the accompanying Proxy
Statement).
(continued and signed on the reverse side)
<PAGE>
<TABLE>
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<S> <C> <C>
UNLESS YOU SPECIFY OTHERWISE, THIS PROXY WILL BE VOTED "FOR" Please mark [X]
THE ELECTION OF THE NOMINEES AS DIRECTED AND "FOR" ITEMS 2 AND 3. your votes as
indicated in
this example
1. FOR the election of the following nominees to the Board of Directors for the ensuing year: Leonard A. Trugman, Natan V. Bertman,
Raymond Kaufman, David Michael, Seymour Rubin and James Tiernan
For all nominees listed WITHHOLD (INSTRUCTION: To withhold 2. To amend the Company's certificate
above (except as AUTHORITY authority to vote for any of incorporation to change the name
marked to the contrary) to vote for all nominees individual nominee, write the of the Company to "Del Global
listed above nominee's name in the space Technologies Corp."
provided below.)
----------------------------- FOR AGAINST ABSTAIN
[ ] [ ] [ ] [ ] [ ]
3. The proposal to amend the Company's 4. In their discretion, upon other A majority of such attorneys and
Amended and Restated Stock Option Plan matters as may properly come before the proxies, or their substitutes at the
to increase by 250,000 the number of meeting or any adjournments thereof. meeting, or any adjournment or
shares of Common Stock reserved for adjournments thereof, may exercise all
issuance thereunder. of the powers hereby given. Any proxy to
vote any of the shares, with respect to
which the undersigned is or would be
FOR AGAINST ABSTAIN entitled to vote, heretofore given to
[ ] [ ] [ ] any person or persons other than the
persons named above, is revoked.
IN WITNESS WHEREOF, the undersigned
has signed and sealed this proxy and
hereby acknowledges receipt of a copy of
the notice of such meeting and proxy
statement in reference thereto both
dated January __ 1996.
Dated: ___________________________, 1996
---------------------------------------
(Stockholder(s) Signature)
(L.S.)
----------------------------------
---------------------------------------
Printed Name of Stockholder
NOTE: Signature should correspond with
name appearing on stock certificate.
When signing in a fiduciary or
representative capacity, sign full title
as such. Where more than one owner, each
should sign.
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