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
[ ] Confidential, for Use of the Commission Only (as permitted
by Rule 14a-6 (e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to ss.240.14a-11(c) or
ss.240.14a-12
DEL GLOBAL TECHNOLOGIES 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] 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:
- --------------------------------------------------------------------------------
<PAGE>
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value ot 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:
- --------------------------------------------------------------------------------
2
<PAGE>
DEL GLOBAL TECHNOLOGIES CORP.
1 Commerce Park
Valhalla, New York 10595
----------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
----------
February 13, 1997
TO THE STOCKHOLDERS:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders (the
"Meeting") of Del Global Technologies Corp. (the "Company") will be held on
February 13, 1997, at 10:00 a.m. New York City time, at the Hotel
Inter-Continental, 111 East 48th Street, New York, NY 10017, 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 increase the
number of authorized shares of the Company's Common Stock from
10,000,000 to 20,000,000; and
(C) 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 26,
1996 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 14, 1997
- --------------------------------------------------------------------------------
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.
- --------------------------------------------------------------------------------
<PAGE>
DEL GLOBAL TECHNOLOGIES CORP.
1 Commerce Park
Valhalla, New York 10595
----------
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
To Be Held on February 13, 1997
INTRODUCTION
The accompanying proxy is solicited by and on behalf of the Board of
Directors of Del Global Technologies Corp., a New York corporation (the
"Company"), in connection with the Annual Meeting of Stockholders (the
"Meeting") to be held at the Hotel Inter-Continental, 111 East 48th Street, New
York, NY 10017, on February 13, 1997 at 10:00 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 14, 1997.
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 26, 1996 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 7,411,934 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 facsimile 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.
Amount and Nature
Name and Address of Beneficial Percent of
of Beneficial Owner Ownership (1) Common Stock
------------------- ----------------- --------------
LEONARD A. TRUGMAN.......................... 918,127(2) 11.3%
c/o Del Global Technologies Corp.
1 Commerce Park
Valhalla, NY 10595
NATAN V. BERTMAN............................ 107,861(3) 1.4%
c/o Bertman & Levine
945 Manhattan Avenue
Brooklyn, NY 11222
1
<PAGE>
Amount and Nature
Name and Address of Beneficial Percent of
of Beneficial Owner Ownership (1) Common Stock
------------------- ----------------- --------------
DAVID ENGEL................................. 8,725(4) *
c/o Del Global Technologies Corp.
1 Commerce Park
Valhalla, NY 10595
LOUIS J. FARIN, SR.......................... 40,601(5) 1.0%
c/o Del Global Technologies Corp.
1 Commerce Park
Valhalla, NY 10595
PAUL J. LIESMAN............................. 3,733(6) *
c/o Bertan High Voltage Corp.
121 New South Road
Hicksville, NY 11801
JOHN D. MACLENNAN........................... 5,305 *
c/o Gendex-Del Medical Imaging Corp.
11550 West King Street
Franklin Park, IL 60634
DAVID MICHAEL............................... 160,450(7) 2.1%
c/o David Michael & Co., P.C.
Seven Penn Plaza
New York, NY 10001
SEYMOUR RUBIN............................... 144,299(8) 1.9%
c/o RFI Corporation
100 Pine Aire Drive
Bay Shore, NY 11706
GEORGE SOLOMON.............................. 12,651(9) *
c/o Del Global Technologies Corp.
1 Commerce Park
Valhalla, NY 10595
MICHAEL TABER............................... 16,680(10) *
c/o Del Global Technologies Corp.
1 Commerce Park
Valhalla, NY 10595
JAMES TIERNAN............................... 8,733(11) *
7 Patriot Court
New City, NY 10956
All officers and Directors (12) as a group.. 1,427,165(12) 16.7%
- ----------
* 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 722,160 shares, options for which are presently exercisable or
will become exercisable within 60 days of the Record Date.
(3) Includes 74,445 shares, options for which are presently exercisable or will
become exercisable within 60 days of the Record Date.
(4) Includes 8,364 shares, options for which are presently exercisable or will
become exercisable within 60 days of the Record Date.
(5) Includes 31,473 shares, options for which are presently exercisable or will
become exercisable within 60 days of the Record Date.
(6) Includes 3,602 shares, options for which are presently exercisable or will
become exercisable within 60 days of the Record Date.
2
<PAGE>
(7) Includes 122,230 shares, options for which are presently exercisable or
will become exercisable within 60 days of the Record Date.
(8) Includes 122,246 shares, options for which are presently exercisable or
will become exercisable within 60 days of the Record Date.
(9) Includes 11,876 shares, options for which are presently exercisable or will
become exercisable within 60 days of the Record Date.
(10) Includes 15,749 shares, options for which are presently exercisable or will
become exercisable within 60 days of the Record Date.
(11) Includes 8,733 shares, options for which are presently exercisable or will
become exercisable within 60 days of the Record Date.
(12) Includes 1,120,878 shares, options for which are presently exercisable or
will become exercisable within 60 days of the Record Date.
PROPOSAL ONE: ELECTION OF DIRECTORS
There are five 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, 58............................... Chairman of the Board, Chief Executive Officer
Chairman of the Board, Chief Executive and President of the Company.
Officer and President
NATAN V. BERTMAN, 67................................. Partner of Bertman & Levine and a Director of the
Director Company.
DAVID MICHAEL, 59.................................... President of David Michael & Co., P.C., C.P.A.
Director and a Director of the Company.
SEYMOUR RUBIN, 66.................................... Director and Vice President of the Company.
Director and Vice President President of RFI Corporation, a wholly owned
subsidiary of the Company.
JAMES TIERNAN, 73.................................... Retired. Former Vice President of The Chase
Director Manhattan Bank, N.A. and a Director of the Company.
</TABLE>
Required Vote
Directors are elected by a plurality of votes cast. Votes withheld and
broker non-votes are not counted toward a nominee's total.
The Board of Directors recommends a vote FOR the election of each of the
nominated Directors.
DIRECTORS AND EXECUTIVE OFFICERS
Board of Directors and Committees
During the Company's last fiscal year, 4 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
Messrs. Michael and Tiernan met once during the last fiscal year. The Company
presently has no nominating committee. All Directors, with the exception of Mr.
Bertman who failed to attend 2 meetings, 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.
Name Position Age
---- -------- ---
LEONARD A. TRUGMAN.......... Chairman of the Board, Chief Executive 58
Officer and President
DAVID ENGEL................. Executive Vice President and Chief 47
Financial Officer
LOUIS J. FARIN, Sr.......... Vice President and Vice President and 53
General Manager of Del Power
Conversion Division
PAUL J. LIESMAN............. Vice President and Vice President and 35
General Manager of Bertan
High Voltage Corp.
JOHN D. MACLENNAN........... Vice President and Vice President and 44
General Manager of Gendex-Del
Medical Imaging Corp.
SEYMOUR RUBIN............... Vice President and President of RFI 66
Corporation
GEORGE SOLOMON.............. Vice President--International Sales 51
and Marketing and President of Del
Medical Systems Corp.
MICHAEL TABER............... Vice President--Finance, Secretary and 51
Chief Accounting Officer
The officers of the Company, with the exception of Messrs. Trugman 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. Solomon holds his position pursuant to an
employment agreement which expires on July 31, 1997. Mr. MacLennan holds his
position pursuant to an employment agreement which expires on March 18, 1999.
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
NASDAQ Stock Market. The Company believes that all filing requirements
applicable to its executive officers and Directors were complied with during the
fiscal year ended August 3, 1996. 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 NASDAQ Stock Market.
4
<PAGE>
EXECUTIVE COMPENSATION AND OTHER INFORMATION
Summary of Cash and other Compensation
The following table shows, for the fiscal years ended August 3, 1996, July
29, 1995 and July 30, 1994, 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 and two additional
individuals during the fiscal year ended August 3, 1996.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long-term
Compensation
Annual Compensation Awards
-------------------------- -------------
Name and All Other
Principal Salary Bonus Options Compen-
Position Year ($) ($) (#) sation ($)(1)
--------- ----- -------- ----------- -------- ----------
<S> <C> <C> <C> <C> <C>
LEONARD A. TRUGMAN 1996 289,406 343,318(2) -- 39,708
Chairman of the Board, Chief 1995 275,625 257,273(2) 56,275 40,356
Executive Officer and President 1994 262,500 164,000(2) -- 38,728
SEYMOUR RUBIN 1996 223,379 32,284 10,609 7,274
Vice President and President 1995 210,000 50,000 11,255 8,539
of RFI Corporation 1994 200,000 50,000 30,747 5,709
GEORGE SOLOMON 1996 164,721 5,000 10,609 1,410
Vice President - 1995 155,392 5,000 -- 1,000
International Sales and 1994 119,534 -- 12,299 1,000
Marketing, President
of Del Medical Systems Corp.
DAVID ENGEL 1996 109,423 7,500 10,609 1,496
Executive Vice President and 1995 86,634 1,500 5,628 666
Chief Financial Officer 1994 55,769(3) -- 5,797 --
LOUIS J. FARIN, SR. 1996 105,000 20,815 10,609 1,532
Vice President and General Manager 1995 100,000 4,000 -- --
of Del Power Conversion Division 1994 82,500 4,500 17,742 1,000
HOWARD BERTAN(4) 1996 154,918 117,665 10,815 1,655
Senior Technical Consultant 1995 139,192 72,154 -- 1,000
1994 45,769(3) 25,493(3) 41,792 --
LEONARD MICHAELS(5) 1996 150,902 -- -- 61,187(6)
Senior Technical Consultant 1995 168,404 -- -- 60,800(6)
1994 160,385 -- -- 61,285(6)
</TABLE>
- ----------
(1) Includes insurance premiums where families of the officers are
beneficiaries and automobile expense allowances. The insurance premiums
paid in 1996, 1995, and 1994 were $13,908, $13,058 and $11,428 for Mr.
Trugman; $5,418, $5,541 and $5,709 for Mr. Rubin; and $7,500, $7,800 and
$8,185 for Mr. Michaels.
(2) Includes deferred compensation in the amounts of $125,000, $125,000 and
$100,000 for the 1996, 1995 and 1994 fiscal years, respectively.
(3) Based upon 17 weeks of compensation for Fiscal 1994. Bertan was acquired in
April 1994.
(4) Mr. Bertan was President of Bertan High Voltage Corp. until May 28, 1996,
at which time he became a senior technical consultant to the Company.
(5) Mr Michaels was President of Dynarad Corp. until April 1, 1996, at which
time he became a senior technical consultant to the Company.
(6) Includes an annual non-compete payment of $52,000.
5
<PAGE>
Stock Options
The following table contains information concerning the grant of stock
options under the Company's Amended and Restated Stock Option Plan to the named
executive officers of the Company and two additional individuals during the
fiscal year ended August 3, 1996.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
Potential Realizable
Value at Assumed Annual
Rates of Stock Price
Individual Grants Appreciation for Option Term(1)
----------------- -------------------------------
% of Total
Options Options Granted Exercise
Granted to Employees Price Expiration
Name (#) in Fiscal Year ($/Sh) Date 5%($) 10%($)
------ ------- --------------- -------- ---------- ----- ------
<S> <C> <C> <C> <C> <C> <C>
LEONARD A. TRUGMAN........ -- -- -- -- -- --
SEYMOUR RUBIN............. 10,609 4% $6.18 12/29/10 $113,723 $294,729
GEORGE SOLOMON............ 10,609 4% $6.18 12/29/10 $113,723 $294,729
DAVID ENGEL............... 10,609 4% $6.18 12/29/10 $113,723 $294,729
LOUIS J. FARIN, SR........ 10,609 4% $6.18 12/29/10 $113,723 $294,729
HOWARD BERTAN............. 10,609 4% $6.18 12/29/10 $113,723 $294,729
LEONARD MICHAELS.......... -- -- -- -- -- --
</TABLE>
- ----------
(1) Fair market value of stock on grant date compounded annually at rate shown
in column heading for the option term less the exercise price.
Option Exercises and Holdings
The following table sets forth information with respect to the named
executive officers and two additional individuals concerning the exercise of
options during the fiscal year ended August 3, 1996 and unexercised options held
as of the end of the fiscal year ended July 29, 1995.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
Number of Value of
Unexercised Unexercised In-
Shares Value Options the-Money Options
Acquired on Realized at Fiscal at Fiscal Year-
Name Exercise (#) ($) (1) Year-End (#) End ($) (2)
----- ------------ -------- -------------- -------------------
Exercisable/ Exercisable/
Unexercisable Unexercisable
-------------- -------------------
<S> <C> <C> <C> <C>
LEONARD A. TRUGMAN............ -- -- 708,092/42,206 $4,284,488/$155,507
SEYMOUR RUBIN................. -- -- 116,780/26,736 $ 472,489/$ 78,280
GEORGE SOLOMON................ -- -- 2,898/ 8,694 $ 5,318/$ 15,953
DAVID ENGEL................... -- -- 4,305/17,728 $ 13,444/$ 23,811
LOUIS J. FARIN, SR............ -- -- 28,820/17,942 $ 122,729/$ 41,546
HOWARD BERTAN................. -- -- 41,792/10,609 $ 94,743/$ 20,652
LEONARD MICHAELS.............. 25,314 247,053 -- --
</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 August 3, 1996 ($8.375).
Amended and Restated Stock Option Plan
The following summary describes the material features of the Amended and
Restated Stock Option Plan (the "Plan").
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").
6
<PAGE>
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.
The Plan is a fifteen year program and will terminate on December 31, 2009,
unless terminated sooner according to the terms of the Plan. 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 upon termination of
the optionee's employment or relationship with the Company.
The Committee may grant ISOs, NQSOs and tandem SARs to eligible
participants, subject to the terms and conditions of the Plan.
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.
There are 1,952,928 shares of the Company's Common Stock reserved for
issuance under the Plan. As of the Record Date, options to purchase an aggregate
of 1,792,044 shares were outstanding and 160,884 shares were available for
future grant.
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 $289,406 for the twelve months ended
August 3, 1996. His annual base salary for the twelve months ending August 2,
1997 is $303,876 and was determined by multiplying $289,406 by the greater of 5%
or the increase in the Consumer Price Index as of August 1, 1996 over the amount
of such index as of August 1, 1995 ("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
$545,476 as of August 3, 1996. 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.
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
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.
7
<PAGE>
Mr. John MacLennan, who joined the Company on March 6, 1996 with the
acquisition of Gendex-Del Medical Imaging Corp., has an employment agreement
which commenced on March 19, 1996 and terminates on March 18, 1999. Pursuant to
the terms of the Agreement, Mr. MacLennan agreed to serve as Vice President and
General Manager of Gendex-Del Medical Imaging Corp. The employment agreement
provides for a base salary of $125,000 per annum for the first year, with 5%
increases for the second and third years. Mr. MacLennan also receives a bonus
with respect to each fiscal year equal to 3% of the Gendex-Del Medical Imaging
Corp.'s pre-tax net income in excess of $500,000.
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 is currently Vice President of
International Sales and Marketing and President of Del Medical Systems Corp. The
employment agreement provides for a current base salary of $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.
Mr. Leonard Michaels has an employment agreement with Dynarad Corp. which
commenced as of September 1, 1992 and terminates on July 29, 1997. Mr. Michaels
served as President of Dynarad Corp. from September 1992 to April 1996. As of
April 1, 1996, Mr. Michaels became a technical consultant to the Company. 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' base salary for the period from July 30, 1995 to March 31, 1996 was
$135,526. 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.
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 served as President and Chief Operating Officer of
Bertan High Voltage Corp. from April 1994 to May 1996. As of May 28, 1996, Mr.
Bertan became a technical consultant to the Company. The employment agreement
provides for the payment of a base salary of $154,350 for the period commencing
on April 24, 1996 and terminating on April 23, 1997, 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.
Directors of the Company did not receive compensation for their services as
such except a fee of $750.00 for each meeting of the Board of Directors which
they attended. Messrs. Trugman and Rubin waived their right to receive such
compensation.
8
<PAGE>
REPORT OF THE DEL GLOBAL TECHNOLOGIES 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 August 3, 1996 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 Company 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 August 3, 1996
was $289,406, an increase of $13,781 over his previous annual salary of
$275,625. 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
9
<PAGE>
and deferred compensation for the fiscal year ended August 3, 1996 was $632,724
as compared to $532,898 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 August 3, 1996 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 August 3, 1996 was $125,000 which
represents approximately 2.9% 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.
Compensation Committee
NATAN V. BERTMAN
DAVID MICHAEL
10
<PAGE>
Performance Graph
The following graph compares the yearly percentage change in the cumulative
total stockholder return on the Company's Common Stock with The Nasdaq Market
Index and a peer group index for the period commencing August 1, 1991 and ending
August 3, 1996. The peer group consists of 51 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 Telepanel Systems, Inc. The
graph assumes that $100 was invested on August 1, 1991 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 information was depicted as a line graph in the printed material]
COMPARE 5-YEAR CUMULATIVE TOTAL RETURN
AMONG DEL GLOBAL TECHNOLOGIES CORP.,
NASDAQ MARKET INDEX AND SIC CODE INDEX
------------------ FISCAL YEAR ENDING-----------------
COMPANY 1991 1992 1993 1994 1995 1996
- ------- ---- ---- ---- ---- ---- ----
DEL GLOBAL TECH CORP 100 94.88 99.56 105.59 117.62 157.71
SIC CODE INDEX 100 113.61 99.04 117.83 167.38 174.90
NASDAQ MARKET INDEX 100 102.46 127.27 138.88 170.19 185.53
ASSUMES $100 INVESTED ON AUGUST 1, 1991
ASSUMES DIVIDEND REINVESTED
FISCAL YEAR ENDING AUGUST 3, 1996
11
<PAGE>
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 they are
issued semi-annually or 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 26,
1996, 658 and 1,977 shares have been issued and 540 and 1,662 shares are being
held in such plan on behalf of Leonard A. Trugman 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 some 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
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, with the exception of Louis J. Farin, Sr., 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. 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
12
<PAGE>
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 $40,000 contribution for
the period ended August 3, 1996.
PROPOSAL TWO: PROPOSAL TO AMEND THE COMPANY'S
CERTIFICATE OF INCORPORATION TO INCREASE THE NUMBER OF
AUTHORIZED SHARES OF THE COMPANY'S COMMON STOCK
On November 5, 1996, the Board authorized an amendment of the Company's
Certificate of Incorporation to increase the number of authorized shares of
Common Stock, par value $.10 per share, from 10,000,000 to 20,000,000. The
stockholders are being asked to approve this proposed amendment. As of the
Record Date, 7,411,934 shares of Common Stock were issued and outstanding and
2,033,596 shares were reserved for issuance under the Company's amended and
restated stock option plan and employee 401(k) profit sharing plan, leaving only
494,467 shares (including Treasury shares) available for issuance.
The Board believes that the proposed increase is desirable so that, as the
need may arise, the Company will have more flexibility to issue shares of Common
Stock, without the expense and delay of a special stockholders' meeting, in
connection with possible future stock dividends or stock splits, equity
financings, future opportunities for expanding the business through investments
or acquisitions, management incentive and employee benefit plans and for other
general corporate purposes.
Authorized but unissued shares of the Company's Common Stock may be issued
at such times, for such purposes and for such consideration as the Board of
Directors may determine to be appropriate without further authority from the
Company's stockholders, except as otherwise required by applicable law or stock
exchange policies.
The increase in authorized Common Stock will not have any immediate effect
on the rights of existing stockholders. However, the Board will have the
authority to issue authorized Common Stock without requiring future stockholder
approval of such issuances, except as may be required by applicable law or
exchange regulations. To the extent that the additional authorized shares are
issued in the future, they will decrease the existing stockholders' percentage
equity ownership and, depending upon the price at which they are issued, could
be dilutive to the existing stockholders.
The increase in the authorized number of shares of Common Stock and the
subsequent issuance of such shares could have the effect of delaying or
preventing a change in control of the Company without further action by the
stockholders. Shares of authorized and unissued Common Stock could, within the
limits imposed by applicable law, be issued in one or more transactions which
would make a change in control of the Company more difficult, and therefore less
likely. While the Company has no present plans to issue any shares of additional
Common Stock authorized by this proposal, any such issuance of additional stock
could have the effect of diluting the earnings per share and book value per
share of outstanding shares of Common Stock, and such additional shares could be
used to dilute the stock ownership or voting rights of a person seeking to
obtain control of the Company. The Company has previously adopted certain
measures that may have the effect of helping to resist an unsolicited takeover
attempt.
The approval of the adoption of the amendment to the Company's Certificate
of Incorporation requires the affirmative vote of a majority of the shares of
Common Stock represented at the Meeting. Abstentions and broker non-votes are
not affirmative votes and, therefore, will have the same effect as a vote
against the proposal.
The Board of Directors recommends a vote FOR the proposal to amend the
Company's Certificate of Incorporation.
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.
13
<PAGE>
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,
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
AUGUST 3, 1996, 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
GLOBAL TECHNOLOGIES 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 1998
Annual Meeting must be received by the Company at its principal executive
offices on or before September 15, 1997.
By order of the Board of Directors,
DEL GLOBAL TECHNOLOGIES CORP.
MICHAEL TABER,
Secretary
Dated: January 14, 1997
14
<PAGE>
ANNEX A
DEL GLOBAL TECHNOLOGIES CORP.
PROXY Annual Meeting of Stockholders - February 13, 1997
(Solicited on Behalf of the Board of Directors)
KNOW ALL MEN BY THESE PRESENTS, that the undersigned stockholder of Del Global
Technologies 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
Hotel Inter-Continental, 111 East 48th Street, New York, NY 10017 on February
13, 1997 at 10:00 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>
<CAPTION>
<S> <C> <C> <C> <C>
Please mark [X]
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,
David Michael, Seymour Rubin and James Tiernan
FOR all nominees WITHHOLD (INSTRUCTION: To withhold authority to vote for any individual nominee,
listed above AUTHORITY write that nominee's name in the space provided below.)
(except as marked to vote for all
to the contrary) nominees listed ___________________________________________________________________________
above
[_] [_]
2. To amend the Company's certificate of 3. In their discretion, upon other A majority of such attorneys and
incorporation to increase the number matters as may properly come before proxies, or their substitutes at the
of authorized shares of the Company's the meeting or any adjournments meeting, or any adjournment or
Common Stock from 10,000,000 to thereof. adjournments thereof, may exercise
20,000,000. all of the powers hereby given. Any
proxy to vote any of the shares, with
FOR AGAINST ABSTAIN respect to which the undersigned is
[_] [_] [_] or would be 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 14, 1997.
Dated: ______________________, 1997
_____________________________________
(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. When more
than one owner, each should sign.
</TABLE>
<PAGE>
Annual Meeting
of
Del Global Technologies Corp.
Thursday, February 13, 1997
10:00 A.M.
Hotel Inter-Continental
111 East 48th Street
New York, NY 10017
========================================================================
Agenda
------
* Election of Directors
* Amend the Certificate of Incorporation
* Report on the progress of the Company
* Discussion on matters of current interest
========================================================================
