<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary proxy statement
[X] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or
Rule 14a-12
ANDREW CORPORATION
- -------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
ANDREW CORPORATION
- -------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of filing fee (Check the appropriate box):
[X] $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(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:
------------------------------------------------------------------------
(2) Aggregate number of securities to which transactions applies:
------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11: (1)
------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registrations 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:
------------------------------------------------------------------------
(1) Set forth the amount on which the filing fee is calculated and state how it
was determined.
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[ANDREW LOGO]
- --------------------------------------------------------------------------------
ANDREW CORPORATION 10500 West 153rd Street
Orland Park, Illinois U.S.A. 60462
Phone (708) 349-3300
December 29, 1995
Dear Stockholder:
You are cordially invited to attend the next regular Andrew Corporation
Annual Meeting of Stockholders, to be held at 10:00 A.M., Wednesday, February 7,
1996 at the Drury Lane, Oakbrook Terrace, Illinois. A map showing the location
of the Drury Lane is on the back cover of this Proxy Statement.
This meeting will be our forty-eighth annual stockholders meeting and our
sixteenth as a publicly owned company. You will have an opportunity to discuss
each item of business described in the Notice of Annual Meeting and Proxy
Statement and to ask questions about the Company and its operations.
To make certain your shares are represented at the meeting, whether or not
you plan to attend, please sign and return the enclosed proxy card, using the
envelope provided. If you attend the meeting, you may vote your shares in
person, even though you have previously signed and returned your proxy.
Sincerely,
[SIG.]
Floyd L. English
Chairman, President and
Chief Executive Officer
<PAGE> 3
ANDREW CORPORATION
10500 WEST 153RD STREET
ORLAND PARK, ILLINOIS 60462
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD FEBRUARY 7, 1996
The Annual Meeting of Stockholders of Andrew Corporation will be held at
10:00 A.M., Wednesday, February 7, 1996, at the Drury Lane, Oakbrook Terrace,
Illinois, for the following purposes:
1. To elect eight Directors for the ensuing year;
2. To ratify the appointment of Ernst & Young as independent public
auditors for fiscal 1996; and
3. To transact such other business as may properly come before the meeting
or any adjournment thereof.
The close of business on December 13, 1995 has been fixed as the record
date for the determination of stockholders entitled to notice of and to vote at
the meeting and any adjournment thereof.
A copy of the Andrew Corporation Annual Report for the fiscal year ended
September 30, 1995 is being mailed to stockholders with this Proxy Statement.
By Order of the Board of Directors,
James F. Petelle
Secretary
December 29, 1995
------------------------
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE MARK, DATE AND SIGN
THE ACCOMPANYING PROXY AND PROMPTLY RETURN IT IN THE ENCLOSED ENVELOPE. IF YOU
ATTEND THE MEETING, YOU MAY VOTE YOUR SHARES IN PERSON, EVEN THOUGH YOU HAVE
PREVIOUSLY SIGNED AND RETURNED YOUR PROXY.
<PAGE> 4
ANDREW CORPORATION
10500 WEST 153RD STREET
ORLAND PARK, ILLINOIS 60462
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS TO BE HELD FEBRUARY 7, 1996
This proxy statement is furnished in connection with the solicitation by
the Board of Directors of Andrew Corporation (the "Company" or "Andrew") of
proxies to be voted at the Annual Meeting of Stockholders of the Company to be
held on February 7, 1996, at the Drury Lane, Oakbrook Terrace, Illinois, and at
any adjournment thereof. This proxy statement and the proxies solicited hereby
are first being sent or delivered to stockholders on or about December 29, 1995.
VOTING
A proxy may be revoked by a stockholder at any time prior to its use. If it
is signed properly by the stockholder and is not revoked, it will be voted at
the meeting. If a stockholder specifies how the proxy is to be voted with
respect to any of the proposals for which a choice is provided, the proxy will
be voted in accordance with such specifications. If a stockholder fails to so
specify with respect to such proposals, the proxy will be voted FOR items 1 and
2.
Only stockholders of record at the close of business on December 13, 1995
will be entitled to vote at the meeting. The Common Stock of the Company, $.01
par value ("Common Stock"), is the only authorized class of stock, and as of
December 13, 1995, there were 39,035,020 shares of Common Stock of the Company
issued, outstanding and entitled to one vote each.
ELECTION OF DIRECTORS
Eight directors are to be elected at the Annual Meeting to serve until the
earlier of the next Annual Meeting of Stockholders or until their respective
successors have been elected and qualified. Directors are elected by a plurality
of the votes of the shares of Common Stock present in person or represented by
proxy and entitled to vote at the Annual Meeting. Consequently, any shares not
voted (whether by abstention, broker non-vote or votes withheld) will have no
effect on the election of directors. If any nominee for election as director is
unable to serve, which the Board of Directors does not anticipate, the persons
named in the proxy may vote for another person in accordance with their
judgment. Except for Mr. Jere D. Fluno, all of the nominees have served as
directors of the Company since the last Annual Meeting of Stockholders held
February 8, 1995. Mr. Fluno has been nominated to fill the seat which has been
held by Mr. Donald N. Frey, who will retire as a director effective at the
February 7, 1996 Annual Meeting.
The names and ages of the nominees, their principal occupations or
employment during the past five years and other data regarding them as of
September 30, 1995, based upon information received from them, are as follows:
<PAGE> 5
NOMINEES FOR DIRECTORSHIPS
[PHOTO OF JOHN G. BOLLINGER, 60
JOHN G. (Director since 1984)
BOLLINGER] Dr. Bollinger is Bascom Professor of Engineering and Dean of the
College of Engineering at the University of Wisconsin at Madison. He
is also a director of Kohler Corporation and EFORM Corporation. Dr.
Bollinger is a member of the Audit and Compensation Committees.
[PHOTO OF JON L. BOYES, 74
JON L. (Director since 1989)
BOYES] Admiral Boyes, Ph.D., is an international telecommunications
consultant and Chairman of SAMA Corporation, a government and
military consultant principally in the area of command, control and
communication. He was President, Armed Forces Communications and
Electronics Association for over ten years and President of the
National Science Center Foundation. He had 34 years of experience in
the Department of Defense, serving on Navy, Joint and NATO staffs,
and in submarines and destroyers before retiring in 1977. Admiral
Boyes is Chairman of the Human Resources Committee.
[PHOTO OF GEORGE N. BUTZOW, 66
GEORGE N. (Director since 1980)
BUTZOW] Mr. Butzow is Founder and Chairman Emeritus of MTS Systems
Corporation, which designs and manufactures dynamic testing and
service simulation systems, industrial controls, and systems for
intelligent processing of materials. He served as President of MTS
Systems Corporation from 1971 through 1987. Mr. Butzow is also a
director of Pentair, Inc. He is a member of the Audit and Human
Resources Committees.
[PHOTO OF KENNETH J. DOUGLAS, 73
KENNETH J. (Director since 1989)
DOUGLAS] Mr. Douglas retired in 1992 as Vice Chairman of the Board of Dean
Foods Company, a diversified food processing business, having served
as Vice Chairman since January 1988 and as Chairman prior to that
time since 1970. He is also a director of American National Bank and
Trust Co., American National Corporation and Richardson Electronics,
Ltd. and serves as Chairman of the Board of West Suburban Hospital
Medical Center. Mr. Douglas is a member of the Compensation and
Human Resources Committees.
2
<PAGE> 6
[PHOTO OF FLOYD L. ENGLISH, 61
FLOYD L. (Director since 1982)
ENGLISH] Dr. English was elected Chairman of Andrew in 1994, having served as
President and Chief Executive Officer since 1983, and as President
and Chief Operating Officer since 1982. Dr. English joined Andrew in
1980 as Vice President, Corporate Development and became Vice
President, U.S. Operations in February 1981. Dr. English is a member
of the boards of the Executives Club of Chicago, the International
Engineering Consortium and the Illinois Math and Science Academy.
[PHOTO OF JERE D. FLUNO, 54
JERE D. (Newly slated)
FLUNO] Mr. Fluno is Vice Chairman of W. W. Grainger, Inc., a leading
nationwide distributor of maintenance, repair and operating supplies
and related information. He has spent 26 years with Grainger in
numerous positions, and has been Vice Chairman since 1984. Mr. Fluno
is a governor of the Chicago Stock Exchange and a director of
Midwest Clearing Corporation, Midwest Securities Trust Company, and
Securities Trust Company of New Jersey. He is a trustee of the
Museum of Science and Industry, a member of the University of
Wisconsin School of Business Dean's Advisory Board, and a director
of the University of Wisconsin Foundation, as well as other
not-for-profit boards.
[PHOTO OF CAROLE M. HOWARD, 50
CAROLE M. (Director since 1993)
HOWARD] Mrs. Howard retired in 1995 from The Reader's Digest Association,
Inc., a global publisher and direct marketer. Prior to her
retirement, she had been Vice-President--Public Relations and
Communications Policy since 1985, and also was a member of that
company's management committee and President of the Reader's Digest
Foundation. Previously she worked for AT&T for 18 years in a variety
of management positions in public relations, advertising and
marketing. An author and frequent speaker on marketing, management
and communications, Mrs. Howard serves on several editorial,
professional and non-profit boards and is on the summer faculty of
the Stanford University Professional Publishing Course. She is a
member of the Compensation and Human Resources Committees.
[PHOTO OF ORMAND J. WADE, 56
ORMAND J. (Director since 1993)
WADE] Mr. Wade retired in 1992 as Vice Chairman of Ameritech Corporation,
a regional provider of telecommunications services, a position he
had held since 1989. He previously served as president of Ameritech
Bell Group since 1987 and president and CEO of Illinois Bell from
1982-1987. Mr. Wade began his career with AT&T in 1961, and first
became a vice-president of AT&T in 1978. He is currently a director
of Illinois Tool Works Inc., Westell, Inc., NBD Bancorp, National
Bank of Detroit, Northwestern Memorial Hospital and Local Initiative
Support Corporation. Mr. Wade is also a trustee of the University of
Chicago. He is Chairman of the Audit Committee.
3
<PAGE> 7
SECURITY OWNERSHIP
The following table sets forth information regarding ownership of the
Company's Common Stock as of September 30, 1995 by nominees for Directors, by
each of the named Executive Officers and by all Executive Officers and Directors
as a group:
<TABLE>
<CAPTION>
AMOUNT OF BENEFICIAL OWNERSHIP
--------------------------------------------------------
DIRECT PERCENT OF CLASS
---------------------------- BENEFICIALLY OWNED
NO. OF SHARES EXERCISABLE --------------------
OWNED OPTIONS(1) INDIRECT(2) TOTAL DIRECT INDIRECT
------------- ----------- ----------- --------- ------ --------
<S> <C> <C> <C> <C> <C> <C>
DIRECTORS
- -------------------------
John G. Bollinger........ -0- 17,550 -0- 17,550 * -0-
Jon L. Boyes............. 4,125 7,650 -0- 11,775 * -0-
George N. Butzow......... 4,500 22,050 -0- 26,550 * -0-
Kenneth J. Douglas....... 4,275 13,500 -0- 17,775 * -0-
Jere D. Fluno............ 500 -0- -0- 500 * -0-
Carole M. Howard......... 750 2,250 -0- 3,000 * -0-
Ormand J. Wade........... 450 6,750 -0- 7,200 * -0-
</TABLE>
<TABLE>
<CAPTION>
NAMED EXECUTIVE OFFICERS
- -------------------------
<S> <C> <C> <C> <C> <C> <C>
Floyd L. English......... 163,310 6,750 2,199,914 2,369,974 0.4% 5.7%
Thomas E. Charlton....... 65,531 22,050 2,196,562 2,284,143 0.2% 5.7%
Charles R. Nicholas...... 56,893 4,500 2,196,562 2,257,955 0.2% 5.7%
John B. Scott............ 47,708 4,500 2,196,562 2,248,770 0.1% 5.7%
William L. Shockley...... 3,202 33,750 2,196,562 2,233,514 0.1% 5.7%
All Executive Officers
and Directors as a
group (13 persons)..... 352,744 141,300 2,199,914 2,693,958 1.2% 5.7%
</TABLE>
- ------------
*Less than .1% of class.
(1) Refers to the number of shares covered by options exercisable within 60 days
of September 30, 1995.
(2) Indirectly owned shares include 2,196,562 shares owned by the Andrew Profit
Sharing Trust, of which Messrs. English, Charlton, Nicholas, Scott and
Shockley are trustees, and as to which such individuals share voting and
investment powers. In the case of Dr. English, indirectly owned shares also
include 3,352 shares owned by his wife.
As of September 30, 1995, the following entity is known to be the
beneficial owner of more than 5% of the Company's Common Stock:
<TABLE>
<CAPTION>
AMOUNT OF
NAME AND ADDRESS BENEFICIAL PERCENT
OF BENEFICIAL OWNER OWNERSHIP OF CLASS
---------------------------------------------- --------- --------
<S> <C> <C> <C>
Andrew Profit Sharing Trust.......................... 2,196,562 5.7%
10500 West 153rd Street
Orland Park, Illinois 60462
</TABLE>
4
<PAGE> 8
COMMITTEES OF THE BOARD OF DIRECTORS
The Board of Directors has standing Audit, Compensation and Human Resources
Committees.
AUDIT COMMITTEE: The committee met three times during fiscal 1995. The
committee recommends the independent auditors to the Board and reviews and
approves the scope of the audit, the financial statements, the independent
auditors' letter of comments and management's responses thereto and the fees
charged for audit and tax services and any special assignments.
COMPENSATION COMMITTEE: The committee met three times during fiscal 1995.
The committee establishes the compensation programs for officers of the Company
and reviews overall compensation and benefit programs of the Company. The
committee also administers and selects participants for the Management Incentive
Program and the Executive Severance Benefit Plan, and administers the Employee
Stock Purchase Plan.
HUMAN RESOURCES COMMITTEE: The committee met three times during fiscal
1995. The committee reviews management development and identifies and recommends
candidates for membership on the Board of Directors and for corporate officer
positions. Stockholders wishing to suggest nominees for membership on the Board
may do so by letter addressed to the Company in care of James F. Petelle,
Secretary, and received at the Company by August 30, 1996.
DIRECTOR COMPENSATION
During fiscal 1995, the Board of Directors met on four occasions. All
Directors attended at least 75% of the meetings of the Board and the committees
on which they sat. Andrew paid its non-employee directors an annual fee of
$19,600 and a fee of $1,000 per meeting for each meeting called during fiscal
1995.
Under a plan adopted as of October 1, 1984, a non-employee Director may
defer up to 100% of director fees until he or she leaves the Board. In lieu of
cash payment, the Director is credited with equivalent shares equal to the value
of the Common Stock at the time of deferral. When the Director leaves the Board,
the deferred amount will be paid in cash, based on the then current value of the
Common Stock. Such cash payment may be made either in a lump sum or in equal
annual installments over five years or less at the Director's election.
The Andrew Corporation Stock Option Plan for Non-Employee Directors (the
"Plan") was approved by the stockholders on February 4, 1988 and amended on
February 5, 1992. Those directors who have not been officers or employees of the
Company or its subsidiaries or affiliates within the past three years are
eligible to participate. Under the Plan, each eligible director was
automatically granted an option to purchase 11,250* shares of Common Stock, at
an exercise price of $38.50 per share, at the Board of Directors' meeting
following the annual stockholders' meeting on February 8, 1995.
The aggregate number of shares of Common Stock issuable under the Plan is
450,000*, subject to certain adjustments. The option price must be 100% of the
fair market value of the Common Stock on the date of grant. Options are for 10
years and are not exercisable during the first 12 months following grant.
Thereafter, they may be exercised at a cumulative rate of 20% per year until the
end of five years when they are exercisable in full. Options must be exercised
within 10 years of the date of grant.
*These numbers and corresponding per-share prices, as with other references
in this Proxy Statement, have been adjusted, where appropriate, for the 3-for-2
split in the Company's stock paid in March 1995, for the 3-for-2 split paid in
March, 1994, and for the 2-for-1 split paid in March, 1993.
5
<PAGE> 9
EXECUTIVE COMPENSATION
The following table summarizes the compensation of the Chief Executive
Officer and the four other most highly compensated executive officers of the
Company for the fiscal year ended September 30, 1995 and for the Company's two
previous fiscal years.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM COMPENSATION
---------------------------------
ANNUAL COMPENSATION AWARDS
------------------------------------- ----------------------- PAYOUTS
OTHER RESTRICTED SECURITIES -------
NAME AND ANNUAL STOCK UNDERLYING LTIP ALL OTHER
PRINCIPAL SALARY BONUS(1) COMPENSATION(2) AWARDS OPTIONS/ PAYOUTS COMPENSATION(3)
POSITION YEAR ($) ($) ($) ($) SARS(#) ($) ($)
- ------------------------ ---- ------- --------- --------------- ---------- ---------- ------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Floyd L. English 1995 405,000 1,325,455 8,744 -0- 37,500 366,406 18,243
Chairman, President and 1994 405,000 1,122,955 11,975 -0- 33,750 -0- 25,909
Chief Executive Officer 1993 387,600 209,950 11,915 -0- -0- 320,724 20,640
Thomas E. Charlton 1995 232,916 389,285 4,576 -0- 15,000 152,290 18,243
Group President, 1994 187,807 286,787 4,142 -0- 22,500 -0- 25,909
Communication Products 1993 161,100 72,862 1,940 -0- 22,500 96,713 17,683
Charles R. Nicholas 1995 212,160 396,530 4,126 -0- 15,000 148,853 18,243
Exec.Vice-President, 1994 204,000 382,908 3,999 -0- 22,500 -0- 25,909
Chief Financial 1993 192,000 82,790 3,270 -0- -0- 128,290 20,640
Officer
John B. Scott 1995 220,080 288,525 1,574 -0- 15,000 156,079 18,243
Vice President, 1994 213,600 267,534 970 -0- 22,500 -0- 25,909
Corporate R&D and 1993 204,000 70,666 2,030 -0- -0- 129,422 20,640
Marketing
William L. Shockley 1995 201,599 283,450 3,920 -0- 15,000 132,661 18,243
Group President, 1994 179,057 274,762 4,040 -0- 22,500 -0- 25,909
Communication Systems 1993 152,400 56,266 4,010 -0- -0- 96,968 19,867
</TABLE>
- ------------
(1) Annual bonus amounts are earned and accrued during the fiscal years
indicated, and paid subsequent to the end of each fiscal year.
(2) Consists of the value of personal use of Company automobiles, an annual
Christmas bonus (in which all employees participate) based on years of
service and, in the case of Dr. English, tax-planning services provided at
Company expense.
(3) These amounts represent contributions by the Company to the Andrew Profit
Sharing Trust on behalf of the named individuals.
OPTION GRANTS IN LAST FISCAL YEAR
The following table shows information with respect to grants of options to
the Chief Executive Officer and the four other named executives in fiscal year
1995. As required by the Securities and Exchange Commission, the calculation of
potential realizable values shown for such awards is based on assumed annualized
rates of stock price appreciation of 5% and 10% over the full five-year term of
the options.
<TABLE>
<CAPTION>
NUMBER OF
SECURITIES % OF TOTAL
UNDERLYING OPTIONS GRANTED EXERCISE OR POTENTIAL
OPTIONS TO EMPLOYEES BASE EXPIRATION REALIZABLE VALUE
NAME GRANTED(1) IN FY 95 PRICE/SHARE(2) DATE 5% 10%
- ---------------------- ---------- --------------- -------------- ---------- -----------------
<S> <C> <C> <C> <C> <C>
Floyd L. English...... 37,500 12.5% $34.33 11/16/99 $355,500/786,000
Thomas E. Charlton.... 15,000 5% $34.33 11/16/99 $142,200/314,400
Charles R. Nicholas... 15,000 5% $34.33 11/16/99 $142,200/314,400
John B. Scott......... 15,000 5% $34.33 11/16/99 $142,200/314,400
William L. Shockley... 15,000 5% $34.33 11/16/99 $142,200/314,400
</TABLE>
- ------------
(1) These options are exercisable as follows: 20% on or after November 16, 1996;
60% on or after November 16, 1997; 100% on or after November 16, 1998
through November 16, 1999.
(2) Exercise price is based upon fair market value on the date of the award.
6
<PAGE> 10
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND OPTION VALUES AT SEPTEMBER 30, 1995
This table sets forth information regarding exercise of options during
fiscal year 1995 by the Chief Executive Officer and the other four named
executives. The "value realized" is based on the market price on the date of
exercise, while the "value of unexercised in-the-money options at September 30,
1995" is based on the market price on that date.
<TABLE>
<CAPTION>
SHARES NUMBER OF SECURITIES VALUE OF UNEXERCISED
ACQUIRED UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS
ON VALUE OPTIONS AT SEPT. 30, 1995 AT SEPT. 30, 1995($)
NAME EXERCISE(#) REALIZED($) EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
- ---------------------- ----------- ----------- ------------------------- -------------------------
<S> <C> <C> <C> <C>
Floyd L. English...... 337,500 15,560,461 0/71,250 0/2,539,033
Thomas E. Charlton.... 33,750 1,857,657 8,550/55,500 463,374/2,355,991
Charles R. Nicholas... 135,000 6,078,701 0/37,500 0/1,424,739
John B. Scott......... 54,000 1,662,750 0/37,500 0/1,424,739
William L. Shockley... -0- -0- 11,250/73,500 603,907/3,287,242
</TABLE>
LONG-TERM PERFORMANCE CASH AWARDS
The current long-term performance cash award program covers the three
Company fiscal years 1995 through 1997. Certain executives of the Company are
eligible for target payouts ranging from 15% to 100% of their average annual
salary during the three year period if performance goals established for the
plan are met. Performance goals for the current program include aggregate,
three-year (1995, 1996 and 1997) earnings per share and a specific revenue
target for fiscal year 1997. Thresholds for earnings per share and revenue must
be met to trigger payments of 75% of target. If neither threshold is achieved,
no payment is made. If maximum earnings per share and revenue are achieved for
the three-year period then payouts are limited to two times the target bonus
amounts. A range of estimated payouts which could be made early in fiscal 1998
to the Chief Executive Officer and the other four named executives is shown in
the following table:
<TABLE>
<CAPTION>
ESTIMATED FUTURE PAYOUTS UNDER
LONG-TERM INCENTIVE PLAN
TARGETED PERFORMANCE ----------------------------------------
NAME AWARD PERIOD THRESHOLD $ TARGET $ MAXIMUM $
- --------------------------------- ----------------- --------------- ----------- -------- ---------
<S> <C> <C> <C> <C> <C>
Floyd L. English................. 100% of Average Oct. 1,1994 332,640 443,520 887,040
1995-1997 Salary Sept. 30, 1997
Thomas E. Charlton............... 70% of Average Oct. 1, 1994 148,837 198,450 396,900
1995-1997 Salary Sept. 30, 1997
Charles R. Nicholas.............. 70% of Average Oct. 1, 1994 133,391 177,855 355,710
1995-1997 Salary Sept. 30, 1997
John B. Scott.................... 70% of Average Oct. 1, 1994 124,892 166,522 333,044
1995-1997 Salary Sept. 30, 1997
William L. Shockley.............. 70% of Average Oct. 1, 1994 121,716 162,288 324,576
1995-1997 Salary Sept. 30, 1997
</TABLE>
7
<PAGE> 11
EXECUTIVE SEVERANCE BENEFIT PLAN
The Company has an Executive Severance Benefit Plan which provides benefits
to certain key executives, as selected by the Compensation Committee, in the
event of termination of employment following a change in control, as defined in
the Plan.
Upon termination of employment for any reason other than death, disability,
retirement or cause; or upon a resignation because of a material reduction in
compensation or duties, relocation requirements or breach of the plan within one
year of a change in control; the Company is obligated to pay each affected
participant an amount equivalent to the sum of: (i) 36 months of salary, bonus,
Company profit sharing and matching contributions; (ii) the aggregate spread
between the option price and fair market value of the Common Stock on the
severance date for all of the participant's outstanding stock options; and (iii)
up to 36 months of medical, life and similar insurance benefits. If termination
or resignation occurs more than one year after a change in control, the benefits
are reduced proportionately. If a participant terminates employment due to
death, disability, retirement or cause, or resigns for reasons other than those
described above within two years of a change in control, the Company is
obligated to pay him one-half of the amounts and rights referred to above. The
Plan also provides for adjustment in benefits payable if any payment is
considered an "excess parachute payment" under the Internal Revenue Code.
If there had been a change in control and termination of employment, the
executives named in the Summary Compensation Table would have been entitled to
the following payments at September 30, 1995: Floyd L. English, $3,539,000;
Thomas E. Charlton, $1,179,300; Charles R. Nicholas, $1,390,600; John B. Scott,
$1,197,600; William L. Shockley, $1,035,900.
In addition, the Company entered into an agreement in November, 1991
pursuant to which the Company would retain Mr. Scott as an advisor to the
Company for two years after his termination of employment, for a retainer fee of
$100,000, a per diem rate of $500 and reimbursement of expenses.
REPORT OF THE COMPENSATION COMMITTEE
OF THE BOARD OF DIRECTORS
The Compensation Committee ("Committee") of the Board of Directors
establishes the general compensation policies of the Company and establishes the
specific compensation plans, performance goals and compensation levels for
executive officers. The Committee also administers and selects participants for
the Management Incentive Program and the Executive Severance Benefit Plan, and
administers the Employee Stock Purchase Plan. The Committee is composed of four
independent, non-employee directors who have no interlocking relationships.
COMPENSATION PHILOSOPHY
The principal objective of the Committee's approach to executive
compensation is to align such compensation with stockholder value. The Committee
seeks to accomplish this objective by setting base salaries below the median for
similar positions at comparable companies, while linking the two remaining
variable components of cash compensation (annual bonus and long term performance
cash award) to aggressive performance factors which enhance stockholder value.
Stock options are used as a vehicle to further align long-term executive
performance with stockholder value. In this way, above-average total
compensation is achieved only for outstanding Company performance. The Committee
has used essentially this approach to executive compensation for at least the
last eight years.
8
<PAGE> 12
BASE SALARY
The Committee establishes the salary of the Chief Executive Officer ("CEO")
by comparison to the salaries of other CEOs of comparable companies. The
Committee's practice is to obtain salary data from its consultant which includes
data from a group of comparably-sized technology-based companies deemed similar
to the Company, some (but not all) of which companies are members of the S&P
Communications Equipment Manufacturers Index used in the Performance Graph.
Using this information, the Committee established the CEO's salary for fiscal
years 1994 and 1995 below the median for companies perceived to be comparable to
the Company. The Committee did not grant a salary increase to the CEO for fiscal
year 1995, to further emphasize the incentive components of his compensation
package.
For other executive officers, the Committee uses salary survey data
supplied by outside consultants on the same basis as the CEO, and establishes
base salaries that are below the median of salaries for persons holding
similarly-responsible positions at companies in the survey. In addition, the
Committee considers other factors including relative company performance, the
individual's past performance and his or her future potential.
ANNUAL BONUS
For a number of years, the CEO's annual cash bonus has been established as
a direct function of growth in the Company's earnings per share (EPS) during the
most recent fiscal year. The Committee annually establishes a minimum target for
EPS, and the CEO's bonus for the fiscal year is a strict function of the amount
by which the minimum EPS target is exceeded during the fiscal year. In December
1995, a cash bonus of $1,325,455 was paid to the CEO based on fiscal year 1995
EPS of $1.73, which was substantially in excess of the targeted amount. For
fiscal year 1996, a target and formula have been established in a similar
fashion.
The annual cash bonus for executives other than the CEO is determined based
on four factors: (i) growth in the Company's EPS (using the same formula as for
the CEO); (ii) the operating results of the businesses or functions reporting to
the executive; (iii) achievement of specified, measurable objectives related to
the executive's area of responsibilities and (iv) a small subjective factor
based on the executive's performance.
LONG TERM PERFORMANCE CASH AWARD
The long-term performance cash award program for senior executives of the
Company also is tied directly to objective measurements of performance with the
emphasis on long-term results. The most recent program covered fiscal years 1993
through 1995 with a payment of $366,406 made to the CEO in December 1995.
Seventy percent of the target bonus was based on achievement of specified levels
of growth in aggregate three-year earnings per share (1993 through 1995). The
remaining 30% was based on the achievement of a specified sales goal in fiscal
year 1995. In each case, minimum, target and maximum performance goals were
established to qualify for the minimum, target and maximum long-term incentive
payment, respectively.
For the long-term performance cash award program covering fiscal years 1995
through 1997, 60% of the target bonus will be based on specified levels of
growth in aggregate three-year EPS. The other 40% will be determined by the
achievement of a specified sales goal in fiscal year 1997. In addition to
meeting minimum EPS and sales goals, the Company must maintain a minimum return
on equity and return on sales during the three year period. Payments under this
program will likely be made in December 1997, subsequent to the close of the
Company's 1997 fiscal year.
9
<PAGE> 13
OPTIONS
Stock options are an important component of the compensation package for
the CEO and other executives because they directly focus management's attention
on the interests of stockholders. The Committee makes periodic grants of stock
options to executive officers and other key employees to foster a commitment to
increasing long-term stockholder value.
The Committee granted the CEO options on 45,000 shares at its meeting on
November 15, 1995. It granted options on 15,000 shares to Mr. Scott and on
20,000 shares to each of the other named executive officers on that date. The
Company's grants of options are always at fair market value on the date of
grant.
DEDUCTIBILITY OF EXECUTIVE COMPENSATION
The Committee believes that its compensation programs have been structured
in a manner to preserve full deductibility to the Company of executive
compensation for Federal Income Tax purposes.
Donald N. Frey, Chairman John G. Bollinger, Member
Compensation Committee Kenneth J. Douglas, Member
Carole M. Howard, Member
10
<PAGE> 14
COMPANY PERFORMANCE
The following graph shows a five-year comparison of cumulative total
returns for Andrew Corporation, the S&P 500 Composite Index and the S&P
Communications Equipment Manufacturers Index. Since Andrew is a company within
the Standard & Poor's ("S&P") 500 Stock Index, the SEC proxy rules require the
use of that Index. Under those rules, the second index used for comparison may
be a published industry or line-of-business index. In Andrew's case, the S&P
Communications Equipment Manufacturers Index (which includes Andrew
Corporation), shown below, is such an index.
The graph assumes $100 invested on September 30, 1990 in Andrew Common
Stock and $100 invested at that time in each of the S&P indices. The comparison
assumes that all dividends are reinvested.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN
AMONG ANDREW CORPORATION, THE S&P COMMUNICATIONS
EQUIPMENT MANUFACTURERS INDEX AND THE S&P 500 INDEX
<TABLE>
<CAPTION>
MEASUREMENT PERIOD ANDREW S&P 500 IN- S&P COMM.
(FISCAL YEAR COVERED) CORPORATION DEX EQUIP.
<S> <C> <C> <C>
09/90 100 100 100
09/91 176 161 131
09/92 194 143 146
09/93 428 166 165
09/94 835 193 171
09/95 1528 320 221
</TABLE>
<TABLE>
<CAPTION>
CUMULATIVE TOTAL RETURN
-------------------------------------------------
9/90 9/91 9/92 9/93 9/94 9/95
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Andrew Corp....................................... 100 176 194 428 835 1528
S&P Communications Equipment Manufacturers........ 100 161 143 166 193 320
S&P 500 Index..................................... 100 131 146 165 171 221
</TABLE>
11
<PAGE> 15
EXECUTIVE OFFICERS
Set forth below is certain information concerning the executive officers of
Andrew during fiscal year 1995, based on data furnished by them:
<TABLE>
<CAPTION>
NAME AGE POSITION SINCE
- ----------------------- --- ------------------------------------------------------- -----
<S> <C> <C> <C>
Floyd L. English....... 61 Chairman; President; Chief Executive Officer 1994
Thomas E. Charlton..... 59 Group President, Communication Products 1995
Charles R. Nicholas.... 49 Executive Vice President, Chief Financial Officer 1995
Alan J. Rossi.......... 47 Group President, Andrew Telecom 1995
John B. Scott.......... 54 Vice President, Corporate R&D and Marketing 1995
William L. Shockley.... 64 Group President, Communications Systems 1995
</TABLE>
Except as discussed below, all of these officers of Andrew have held
executive positions with Andrew for more than five years.
Dr. English was elected Chairman in 1994, having served as President and
Chief Executive Officer since 1983, and as President and Chief Operating Officer
since 1982. Dr. English joined Andrew in 1980 as Vice President, Corporate
Development and became Vice President, U.S. Operations in February 1981.
Dr. Charlton became Group President, Communication Products in September
1995, having most recently served as Group Vice President, Communication
Products since 1992. He previously served as Vice President, Antenna Products
after first becoming a Vice President in 1986.
Mr. Nicholas became Executive Vice President, Chief Financial Officer in
September 1995, having served as Vice President, Finance and Administration and
CFO since 1992, as Vice-President and CFO since 1986 and as Vice-President,
Finance since 1982. Mr. Nicholas joined Andrew in 1980 as Treasurer.
Mr. Rossi became Group President, Andrew Telecom, in September 1995. He
joined the Company as Group Vice President, Andrew Telecom in December 1994. Mr.
Rossi was Vice-President and General Manager of Sprint International a provider
of international communications services, from 1992-1994, having previously been
an independent management consultant in the field of telecommunications.
Mr. Scott became Vice President, Corporate R&D and Marketing in 1995,
having served as Group Vice President, Network Group and Corporate Marketing
since 1992, and Vice President, Network Products since 1987. He founded and was
President of Scott Communications, Inc., a data communications business, from
1984 until it was acquired by Andrew in 1987.
Mr. Shockley became Group President, Communications Systems in September
1995, having served as Group Vice President, Telecommunications Systems since
August, 1991, and previously as President, Andrew SciComm Inc. and General
Manager, Government Electronics Group since 1990. Mr. Shockley held various
executive positions with ADC Telecommunications, Inc. from 1986 to 1990.
Officers serve at the pleasure of the Board or until their successors are
elected and qualified.
APPOINTMENT OF INDEPENDENT PUBLIC AUDITORS
Upon the recommendation of the Audit Committee and subject to ratification
by the stockholders, the Board of Directors appointed Ernst & Young, independent
public auditors, to serve for the fiscal year ending September 30, 1996.
12
<PAGE> 16
Ernst & Young has informed management that it will send representatives to
the annual meeting to make a statement, if they desire to do so, and that such
representatives will be available to answer any questions that might arise in
connection with Ernst & Young's audit of the Company and its subsidiaries.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR APPROVAL OF THE APPOINTMENT.
DEADLINE FOR STOCKHOLDER PROPOSALS
Proposals of stockholders intended to be presented at the following Annual
Meeting (February 1997) must be received by the Company not later than August
30, 1996, for inclusion in its Proxy Statement and form of proxy relating to
that meeting.
The Company will bear the cost of solicitation of proxies and will
reimburse brokers, custodians, nominees and fiduciaries for their reasonable
expenses in sending solicitation material to the beneficial owners of the
Company's shares. In addition to soliciting proxies through the mails, proxies
may also be solicited by officers and employees of the Company by telephone or
otherwise. The Company has also employed Morrow & Company, Inc., 345 Hudson St.,
New York, New York 10014, which will be paid approximately $4,500 in fees, plus
reasonable expenses, to solicit proxies on behalf of the Company.
13
<PAGE> 17
ANDREW CORPORATION
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned Stockholder of ANDREW COROPORATION appoints Floyd L. English and
James F. Petelle, or either of them, proxies, with full power of substitution,
to vote at the Annual Meeting of Stockholders of the Company to be held at the
Drury Lane, Oakbrook Terrace, Illinois at 10:00 A.M., Wednesday, February 7,
1996, and any adjournment or adjournments thereof, the shares of Common Stock
of ANDREW CORPORATION which the undersigned is entitled to vote, on all matters
that may properly come before the Meeting.
YOU ARE URGED TO CAST YOUR VOTE BY MARKING THE APPROPRIATE BOXES. PLEASE NOTE
THAT, UNLESS A CONTRARY DISPOSITION IS INDICATED, PROXY WILL BE VOTED FOR ITEMS
1 AND 2.
CONTINUED AND TO BE SIGNED ON REVERSE SIDE
<PAGE> 18
<TABLE>
<S><C>
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" EACH OF THE LISTED PROPOSALS.
PLEASE MARK VOTE IN OVAL IN THE FOLLOWING MANNER USING DARK INK ONLY. / X /
[ ]
For all
For Withheld Except nominee(s) written below.
1. The election of eight Directors / / / / / / _____________________________________________________________
for the ensuing year. Nominees:
John G. Bollinger, Jon L. Boyes, 2. To ratify the appointment of Ernst For Against Abstain
George N. Butzow, Kenneth J. Douglas, & Young as independent public / / / / / /
Floyd L. English, Jere D. Fluno, auditors for fiscal 1996.
Carole M. Howard and Ormand J. Wade.
3. In their discretion, the proxies are
authorized to vote upon such other
business as may properly come
before the meeting.
_____________________________________________________________
(Signature)
_____________________________________________________________
(Signature)
Dated: ________________________________________________, 1996
IMPORTANT: Please sign your name or names exactly as shown hereon and date your proxy in the blank space provided above. For joint
accounts, each joint owner must sign. When signing as attorney, executor, administrator, trustee or guardian, please give your full
title as such. If the signer is a corporation, please sign full corporate name by duly authorized officer.
</TABLE>
