<PAGE> 1
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the registrant [X]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[ ] Preliminary proxy statement [ ] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
ANDREW CORPORATION
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
ANDREW CORPORATION
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of filing fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
(1) Title of each class of securities to which transaction applies:
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee
is calculated and state how it was determined):
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
(5) Total fee paid:
- --------------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
- --------------------------------------------------------------------------------
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the form or schedule and the date of its filing.
(1) Amount previously paid:
- --------------------------------------------------------------------------------
(2) Form, schedule or registration statement no.:
- --------------------------------------------------------------------------------
(3) Filing party:
- --------------------------------------------------------------------------------
(4) Date filed:
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<PAGE> 2
[1999 ANNUAL MEETING]
[LOGO OF ANDREW CORP APPEARS HERE]
NOTICE OF 1999 ANNUAL MEETING OF STOCKHOLDERS AND PROXY STATEMENT
-----------------------------------------------------------------
MEETING DATE: TUESDAY, FEBRUARY 9, 1999
---------------------------------------
ANDREW CORPORATION
10500 WEST 153RD STREET
ORLAND PARK, ILLINOIS U.S.A. 60462
---------------------------------------------------
IN A COMMUNICATING WORLD . . . ANDREW IS EVERYWHERE
---------------------------------------------------
<PAGE> 3
[LOGO OF ANDREW CORP. APPEARS HERE]
December 17, 1998
DEAR STOCKHOLDER:
You are cordially invited to attend the Annual Meeting of Stockholders of
Andrew Corporation at Drury Lane, 100 Drury Lane, Oakbrook Terrace, Illinois on
Tuesday, February 9, 1999 at 10:00 a.m. You will find a map to Drury Lane on
the back cover of this booklet.
This Notice of Annual Meeting and Proxy Statement describes the business
to be transacted at the meeting and provides other information concerning
Andrew that you should be aware of when you vote your shares.
The principal business of the Annual Meeting will be to elect directors
and to ratify the appointment of Andrew's independent auditors. As in prior
years, we plan to review the status of the company's business at the meeting
and answer any questions you may have.
It is important that your shares are represented at the Annual Meeting
whether or not you plan to attend. To ensure that you will be represented, we
ask you to sign, date and return the enclosed proxy card or proxy voting
instruction form as soon as possible. If your bank or broker offers telephone
or Internet voting and you choose to use one of those forms of voting, it is
not necessary for you to return your proxy card. In any event, please vote as
soon as possible.
On behalf of the Board of Directors and management, I would like to
express our appreciation for your continued interest in the affairs of Andrew.
Sincerely,
/s/ F. L. English
Floyd L. English
Chairman, President and
Chief Executive Officer
<PAGE> 4
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
- --------------------------------------------------------------------------------
Tuesday, February 9, 1999
- --------------------------
10:00 a.m.
- --------------------------
Drury Lane
- --------------------------
100 Drury Lane
- --------------------------
Oakbrook Terrace, Illinois
- --------------------------
THE PURPOSE OF OUR ANNUAL MEETING IS TO:
1. Elect seven Directors for the ensuing year; and
2. Ratify the appointment of Ernst & Young LLP as
independent public auditors for fiscal 1999.
You can vote at the Annual Meeting in person or
by proxy if you were a stockholder of record on
December 11, 1998. Our Annual Report for the
fiscal year ended September 30, 1998 is enclosed.
You may revoke your proxy at any time prior to
its exercise at the Annual Meeting.
By Order of the Board of Directors,
James F. Petelle
Secretary
December 17, 1998
<PAGE> 5
- -----------------
TABLE OF CONTENTS
- -----------------
<TABLE>
<CAPTION>
<S> <C>
Questions and Answers................................. 1
Election of Directors................................. 3
Ownership of Andrew Common Stock...................... 5
Section 16(a) Beneficial Ownership
Reporting Compliance................................. 6
Meetings and Committees of the Board
of Directors......................................... 7
Director Compensation................................. 8
Executive Compensation................................ 8
Report of the Compensation Committee of the
Board of Directors................................... 11
Company Performance................................... 13
Executive Officers.................................... 14
Appointment of Independent Public Auditors............ 14
</TABLE>
- --------------------------
ANNUAL REPORT ON FORM 10-K
- --------------------------
YOU MAY OBTAIN A FREE COPY OF OUR ANNUAL REPORT ON FORM
10-K FOR THE YEAR ENDED SEPTEMBER 30, 1998, INCLUDING
SCHEDULES, THAT WE FILED WITH THE SEC. PLEASE CONTACT LYNN
NICKLESS, INVESTOR RELATIONS, ANDREW CORPORATION, 10500 WEST
153RD STREET, ORLAND PARK, ILLINOIS 60462, OR
[email protected] BY E-MAIL.
<PAGE> 6
[QUESTIONS & ANSWERS]
<TABLE>
<CAPTION>
<S> <C>
WHAT AM I VOTING ON? - Election of seven Directors; and
- Ratification of Ernst & Young LLP as Andrew's independent public auditors.
WHO IS ENTITLED TO VOTE? Stockholders at the close of business on December 11, 1998 (the record date) are entitled to
vote. On that date, there were 82,921,670 shares of Andrew common stock outstanding and entitled to
vote at the Annual Meeting.
HOW MANY VOTES DO I HAVE? Each share of Andrew common stock that you own entitles you to one vote.
HOW DO I VOTE? All stockholders may vote by mail. You also may vote by telephone or over the Internet if
you hold your shares through a bank or broker that offers either of those options. If one of those
options is available to you, we encourage you to use it, because it is faster and less costly. To
vote by mail, please sign, date and mail your proxy card in the postage paid envelope provided.
If you attend the Annual Meeting in person, we will give you a ballot when you arrive. If
your shares are held in the name of your broker, bank or other nominee, you need to bring an account
statement or letter from the nominee indicating that you were the beneficial owner of the shares on
December 11, 1998, the record date for voting.
HOW DOES DISCRETIONARY VOTING If you sign, date and return your proxy card, but do not indicate how you want to vote, you give
AUTHORITY APPLY? authority to Floyd L. English and James F. Petelle to cast your vote on the items discussed in these
proxy materials and any other matter that is properly brought at the Annual Meeting. In such a case,
your proxy will be voted FOR each of the director nominees and the ratification of our public
auditors.
MAY I REVOKE MY PROXY? You may revoke your proxy at any time before it is exercised in one of four ways:
- notify Andrew's Corporate Secretary in writing before the Annual Meeting that
you are revoking your proxy;
- submit another proxy with a later date;
- vote by telephone or Internet after you have given your proxy; or
- vote in person at the Annual Meeting.
WHAT DOES IT MEAN IF I RECEIVE Your shares are likely registered differently or are in more than one account. You
MORE THAN ONE PROXY CARD? should sign and return all proxy cards to guarantee that all of your shares are voted.
WHAT CONSTITUTES A QUORUM? The presence of the holders of a majority of the shares entitled to vote at the
Annual Meeting constitutes a quorum. Presence may be in person or by proxy.
Therefore, you will be considered part of the quorum if you return a signed and
dated proxy card or if you vote by telephone or Internet (if your broker of bank
offers these options).
Abstentions are counted as "shares present" at the meeting for purposes of determining
whether a quorum exists. In the election of directors, abstentions will have no effect on the
voting. In the ratification of our independent public auditors, abstentions will have the effect of
a vote "against" the proposal. Proxies submitted by brokers that do not indicate a vote for some or
all of the proposals because the brokers do not have discretionary voting authority and have not
received instructions from you as to how to vote on those proposals (so-called "broker non-votes")
are considered "shares present" for purposes of determining whether a quorum exists. However, broker
non-votes are not considered to be shares voted and will not affect the outcome of the vote.
</TABLE>
<PAGE> 7
<TABLE>
<CAPTION>
<S> <C>
WHAT VOTE IS REQUIRED TO APPROVE Election of Directors: The seven nominees who receive the highest number of votes will be
EACH PROPOSAL? elected. If you do not want to vote your shares for a particular nominee, you may indicate
that in the space provided on the proxy card or withhold authority as prompted during telephone
or Internet voting.
Ratification of Independent Public Auditors: Although we are not required to submit the
appointment of our auditors to a vote of stockholders, we believe that it is appropriate to ask
that you ratify the appointment. Ratification of Ernst & Young LLP as our independent public
auditors requires the affirmative vote of a majority of the shares present or represented by proxy
at the Meeting.
WHO PAYS THE COSTS OF SOLICITING Andrew will pay all of the costs of soliciting these proxies. We will ask banks, brokers and
THESE PROXIES? other institutions, nominees and fiduciaries to forward the proxy materials to the beneficial
owners of Andrew common stock and to obtain the authority to execute proxies. We will reimburse
them for their reasonable expenses.
In addition to mailing proxy materials, our directors, officers and employees may solicit
proxies in person, by telephone or otherwise. We also have employed Morrow & Company, Inc. to
solicit proxies on our behalf and will pay them approximately $6,500 for their services.
HOW DO I SUBMIT A STOCKHOLDER You must submit a proposal to be included in our proxy statement for the next annual meeting
PROPOSAL? (February 2000) in writing no later than August 19, 1999. Your proposal must comply with the
proxy rules of the Securities and Exchange Commission (SEC).
If you do not want your proposal to be included in the proxy statement but want to raise
your proposal at the next annual meeting, then we must receive your proposal no later than
November 11, 1999. If you submit a proposal after November 2, 1999, but before the November 11
deadline, then the SEC rules permit the individuals named in the proxies solicited by Andrew's
Board of Directors for that meeting to exercise discretionary voting power with respect to that
proposal. Under our by-laws, your proposal must give: (1) a brief description of the business you
want to bring before the meeting; (2) your name and address as they appear on Andrew's stock
records; (3) the class and number of shares of Andrew that you beneficially own; and (4) any
interest you may have in the business you want to bring before the meeting. You should send your
proposal to the Secretary at our address on the cover of this proxy statement.
HOW DO I NOMINATE A DIRECTOR? Your nominations for directors of Andrew must meet all of the requirements for stockholder
proposals discussed above. Our by-laws also require that for each person you propose to nominate
you give: (1) their name, age and home and business addresses; (2) their principal occupation or
employment; (3) the class and number of shares of Andrew that they beneficially own; (4) any other
information required by the proxy rules of the SEC; and (5) a description of all arrangements or
understandings under which you are making the nominations. In addition, you must represent that
you plan to appear in person or by proxy at the annual meeting to make the nomination.
</TABLE>
<PAGE> 8
---------------------
ELECTION OF DIRECTORS
---------------------
Stockholders will elect seven directors at the Annual Meeting. Each
director will serve until the next annual meeting or until a qualified
successor director has been elected.
We will vote your shares as you specify on the enclosed proxy card. If
you do not specify how you want your shares voted, we will vote them FOR
the election of all the nominees listed below. If unforeseen circumstances
(such as death or disability) make it necessary for the Board of Directors
to substitute another person for any of the nominees, we will vote your
shares FOR that other person. The Board of Directors does not anticipate
that any nominee will be unable to serve. The nominees have provided the
following information about themselves.
NOMINEES
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------
<S> <C>
[PHOTO OF
JOHN G. BOLLINGER]
JOHN G. BOLLINGER
Age: 63
Director Since: 1984
Business Experience: Dr. Bollinger has been Bascom Professor of Engineering and Dean of the
College of Engineering at the University of Wisconsin at Madison since 1981.
Other Directorships: Kohler Corporation and Marquette Electronics, Inc.
- ------------------------------------------------------------------------------------------------------
[PHOTO OF
THOMAS A. DONAHOE]
THOMAS A. DONAHOE
Age: 63
Director Since: November 12, 1998
Business Experience: Mr. Donahoe retired as Vice Chairman and Midwest Managing Partner of
Price Waterhouse LLP, an international accounting, auditing and consulting
firm, in 1996. He first joined Price Waterhouse in 1958 and became a partner
of the firm in 1970.
Other Directorships: BWAY Corporation; Nicor, Inc.; Chairman of the Board of Chicago Botanic
Garden and trustee of Rush-Presbyterian-St. Lukes Medical Center.
- ------------------------------------------------------------------------------------------------------
[PHOTO OF
KENNETH J. DOUGLAS]
KENNETH J. DOUGLAS
Age: 76
Director Since: 1989
Business Experience: 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.
Other Directorships: Richardson Electronics, Ltd.; Chairman of West Suburban Hospital Medical
Center and Vice Chairman of Loyola University Health System.
</TABLE>
<PAGE> 9
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------
<S> <C> <C>
[PHOTO OF
FLOYD L. ENGLISH]
FLOYD L. ENGLISH
Age: 64
Director Since: 1982
Business Experience: Dr. English was elected Chairman of Andrew Corporation 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.
Other Directorships: Executives Club of Chicago; the International Engineering
Consortium and the Illinois Math and Science Academy.
- ------------------------------------------------------------------------------------------------------
[PHOTO OF
JERE D. FLUNO]
JERE D. FLUNO
Age: 57
Director Since: 1996
Business Experience: Mr. Fluno is Vice Chairman of W.W. Grainger, Inc., the leading distributor
of maintenance, repair and operating supplies and related information in
North America. He has spent 29 years with Grainger in numerous positions.
Other Directorships: W.W. Grainger, Inc.; the Chicago Stock Exchange subsidiaries, Midwest
Clearing Corporation and Midwest Securities Trust Company; the
University of Wisconsin Foundation and other not-for-profit boards;
governor of the Chicago Stock Exchange; trustee of the Museum of Science
and Industry and member of the University of Wisconsin School of
Business Dean's Advisory Board.
- ------------------------------------------------------------------------------------------------------
[PHOTO OF
GLEN O. TONEY, PH.D.]
GLEN O. TONEY, PH.D.
Age: 59
Director Since: Newly Slated
Business Experience: Dr. Toney has been Group Vice President, Corporate Affairs of
Applied Materials, Inc., the leading worldwide supplier of semiconductor
wafer fabrication equipment since July 1995. Prior to that date, he was Group
Vice President, Global Human Resources, since 1990. He first joined Applied
Materials, Inc. in 1979.
Other Directorships: Chairman of Silicon Valley Network's 21st Century Education Initiative;
Applied Materials Foundation; National Conference for Community and
Justice; and Bay Area School Reform Council. Dr. Toney is also a member of
the advisory board for the School of Engineering and Computer Science at
California State University at Chico and of the Curriculum Redesign Committee
at San Jose State University.
- ------------------------------------------------------------------------------------------------------
[PHOTO OF
ORMAND J. WADE]
ORMAND J. WADE
Age: 59
Director Since: 1993
Business Experience: Mr. Wade retired in 1992 as Vice Chairman of Ameritech Corporation, a
regional provider of telecommunications services, a position he had held
since 1989. Previously, he served as President of The Ameritech Bell Group
since 1987 and President and CEO of Illinois Bell from 1982 to 1987.
Mr. Wade began his career with AT&T in 1961 and first became a Vice
President in 1978.
Other Directorships: Illinois Tool Works Inc.; Westell Technologies, Inc. and Northwestern
Memorial Hospital; and member of the Board of Visitors of the University
of Maine.
</TABLE>
<PAGE> 10
- --------------------------------
OWNERSHIP OF ANDREW COMMON STOCK
- --------------------------------
DIRECTORS AND EXECUTIVE OFFICERS
This table indicates how much Andrew common stock the nominees for
director, the named executive officers and all executive officers and directors
as a group beneficially owned as of September 30, 1998. The named executive
officers include the Chief Executive Officer and the four other most highly
compensated executive officers based on compensation earned during the last
fiscal year.
Beneficial ownership is a technical term broadly defined by the SEC to
mean more than ownership in the usual sense. In general, beneficial ownership
includes any shares a director or executive officer can vote or transfer and
stock options that are exercisable currently or become exercisable within 60
days. Except as otherwise noted, the stockholders named in this table have sole
voting and investment power for all shares shown as beneficially owned by them.
Effective July 1, 1998, the Board of Directors amended the Andrew Profit
Sharing Trust to provide for participant directed investment. In connection
with that amendment, Andrew common stock was allocated directly to
participants' accounts as shown in the table. For participants in the director
fee deferral plan described under "Director Compensation," the number of common
stock equivalents represents the share equivalents held in their accounts under
the plan.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------
SHARES OF
SHARES OF OPTIONS COMMON STOCK IN
DIRECTORS AND COMMON STOCK EXERCISABLE COMMON STOCK PROFIT-SHARING
NOMINEES OWNED WITHIN 60 DAYS EQUIVALENTS TRUST TOTAL
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
John G. Bollinger 7,250 108,901 -0- -0- 116,151
- ------------------------------------------------------------------------------------------------------------------------
Jon L. Boyes (1) 10,080 73,637 -0- -0- 83,717
- ------------------------------------------------------------------------------------------------------------------------
Thomas A. Donahoe (2) 1,500 -0- -0- -0- 1,500
- ------------------------------------------------------------------------------------------------------------------------
Kenneth J. Douglas 9,618 100,801 12,262 -0- 122,681
- ------------------------------------------------------------------------------------------------------------------------
Jere D. Fluno 6,000 13,725 3,084 -0- 22,809
- ------------------------------------------------------------------------------------------------------------------------
Glen O. Toney -0- -0- -0- -0- -0-
- ------------------------------------------------------------------------------------------------------------------------
Ormand J. Wade 3,012 59,475 6,604 -0- 69,091
- ------------------------------------------------------------------------------------------------------------------------
NAMED EXECUTIVE OFFICERS
- ------------------------------------------------------------------------------------------------------------------------
Floyd L. English 197,187(3) 195,687 -0- 92,660 483,745
- ------------------------------------------------------------------------------------------------------------------------
Thomas E. Charlton 152,025 90,500 -0- -0- 242,525
- ------------------------------------------------------------------------------------------------------------------------
William R. Currer (4) 443,805 45,700 -0- 2,639 92,144
- ------------------------------------------------------------------------------------------------------------------------
Charles R. Nicholas 107,061 83,750 -0- 53,287 244,098
- ------------------------------------------------------------------------------------------------------------------------
John B. Scott 33,273 81,625 -0- 20,781 135,679
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Mr. Boyes intends to retire as of February 10, 1999 and therefore is not
a candidate for re-election to Andrew's Board of Directors.
(2) Mr. Donahoe first became a director on November 12, 1998.
(3) This number includes 169,148 shares directly owned by Dr. English,
16,980 shares owned by a charitable trust for which he shares voting
control, 2,514 shares owned by his wife and 8,545 shares owned by his minor
child.
(4) Mr. Currer resigned from the Company in November 1998.
<PAGE> 11
As of September 30, 1998, all directors and executive officers as a group
beneficially owned 1,679,579 shares, or 2% of the outstanding shares of Andrew
common stock. No person in the table owns more than 1% of the outstanding shares
of Andrew common stock.
CERTAIN STOCKHOLDERS
As of December 11, 1998, the record date, we do not know of any beneficial
owners of more than 5% of Andrew's common stock.
- -------------------------------------------------------
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
- -------------------------------------------------------
Section 16(a) of the Securities Exchange Act of 1934 requires that
Andrew's executive officers, directors and 10% stockholders file reports of
ownership and changes of ownership of Andrew common stock with the SEC and the
Nasdaq Stock Market National Market. Based on a review of copies of these
reports provided to us during fiscal 1998, we believe that all filing
requirements were met.
<PAGE> 12
- -------------------------------------------------
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
- -------------------------------------------------
The Board of Directors met four times during the fiscal year. In addition
to meetings of the full Board, directors attended meetings of Board committees.
The Board of Directors has standing audit, compensation, human resources and
nominating committees. Each director attended all of the meetings of the Board
and of the committees on which he served, except Jon L. Boyes, who attended
three of the four Board meetings and four of the six meetings of committees on
which he served. The following table shows the membership of the various
committees.
COMMITTEE MEMBERSHIP
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------
HUMAN
NAME AUDIT COMPENSATION RESOURCES NOMINATING
- ------------------------------------------------------------------------
<S> <C> <C> <C> <C>
John G. Bollinger [ ] [ ]
- ------------------------------------------------------------------------
Jon L. Boyes [ ]* [ ]*
- ------------------------------------------------------------------------
Thomas A. Donahoe [ ] [ ]
- ------------------------------------------------------------------------
Kenneth J. Douglas [ ]* [ ] [ ]
- ------------------------------------------------------------------------
Floyd L. English
- ------------------------------------------------------------------------
Jere D. Fluno [ ] [ ]
- ------------------------------------------------------------------------
Ormand J. Wade [ ]* [ ] [ ]
- ------------------------------------------------------------------------
</TABLE>
* Chairman
AUDIT COMMITTEE: The Audit Committee recommends the independent auditors to the
Board. It reviews and approves the scope of the audit, the financial statements
and the auditors' fees and related expenses. It also reviews with the auditors
their comments on accounting procedures and systems of control and management's
responses to that letter. The Audit Committee met twice during the fiscal year.
COMPENSATION COMMITTEE: This committee establishes the compensation programs
for officers and reviews Andrew's overall compensation and benefit programs.
The committee also administers and selects participants for the Management
Incentive Program, the Employee Retirement Benefit Restoration Plan and the
Executive Severance Benefit Plan, and administers the Employee Stock Purchase
Plan. The Compensation Committee met three times during the fiscal year.
HUMAN RESOURCES COMMITTEE: This committee reviews management development and
succession planning, and identifies and recommends candidates for corporate
officer positions. The Human Resources Committee met three times during the
fiscal year.
NOMINATING COMMITTEE: The Nominating Committee considers and makes
recommendations regarding qualifications of directors and identifies and
recommends candidates for membership on the Board. Stockholders who wish to
submit nominees for director may do so in accordance with the requirements
described under the caption "How do I nominate a director?" The Nominating
Committee met three times during the fiscal year.
<PAGE> 13
- ---------------------
DIRECTOR COMPENSATION
- ---------------------
Directors who are Andrew employees receive no fees for their services as
directors. Non-employee "outside" directors receive an annual retainer of
$19,600 and a fee of $1,000 for each Board meeting and each committee meeting
they attend. Committee chairmen receive an additional fee of $1,000 for each
committee meeting they attend.
Outside directors can defer part or all of their director fees under a
deferred compensation plan. In lieu of cash payment, the director's account is
credited with share units equal to the value of Andrew common stock at the end
of the quarter in which the director elected to defer the fees. Upon leaving
the Board, the director will receive the deferred amount in cash, based on the
then current value of Andrew common stock. The director may elect to receive
the cash payment in a lump sum or in five or fewer equal annual installments.
Three of the five outside directors who served during the last fiscal year
deferred some or all of their director fees.
Outside directors also participate in the Andrew Corporation Stock Option
Plan for Non-Employee Directors. Under this plan, each eligible director is
automatically granted an option to purchase 12,000 shares of Andrew common
stock at the Board of Directors' meeting following the annual stockholders'
meeting.
- ----------------------
EXECUTIVE COMPENSATION
- ----------------------
This table summarizes the before-tax compensation for Floyd L. English,
the Chairman and Chief Executive Officer of Andrew, and the four next highest
compensated executive officers of Andrew.
SUMMARY COMPENSATION
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------
LONG-TERM COMPENSATION
--------------------------------------
ANNUAL COMPENSATION AWARDS PAYOUTS
- ------------------------------------------------------------------------------------------------------------------------------------
SECURITIES
NAME AND FISCAL OTHER ANNUAL RESTRICTED UNDERLYING LTIP ALL OTHER
PRINCIPAL POSITION YEAR SALARY BONUS(1) COMPENSATION(2) STOCK AWARDS OPTIONS PAYOUTS COMPENSATION(3)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Floyd L. English 1998 $456,960 $1,005,312 $10,043 -0- 74,000 -0- $23,821
Chairman, President and 1997 439,300 -0- 25,090 -0- 67,500 $844,467 16,477
Chief Executive Officer 1996 422,400 852,254 11,065 -0- 101,250 -0- 18,588
- ------------------------------------------------------------------------------------------------------------------------------------
Thomas E. Charlton 1998 $283,700 $335,192 $5,255 -0- 32,000 -0- $23,821
Group President 1997 280,800 129,164 3,605 -0- 30,000 $380,704 16,477
Communication Products 1996 270,000 291,600 4,781 -0- 45,000 -0- 18,588
- ------------------------------------------------------------------------------------------------------------------------------------
William R. Currer 1998 $252,000 $242,046 $3,882 -0- 25,000 -0- $23,821
Group President 1997 240,000 98,280 6,129 -0- 26,250 $215,704 16,477
Communication Systems 1996 205,000 167,670 3,615 -0- 33,750 -0- 18,588
- ------------------------------------------------------------------------------------------------------------------------------------
Charles R. Nicholas 1998 $281,700 $403,465 $4,137 -0- 32,000 -0- $23,821
Exec. Vice President, 1997 270,000 118,503 3,356 -0- 30,000 $337,932 16,477
Chief Financial Officer 1996 241,980 320,720 2,650 -0- 45,000 -0- 18,588
- ------------------------------------------------------------------------------------------------------------------------------------
John B. Scott 1998 $243,000 $307,760 $766 -0- 25,000 -0- $23,821
Vice President, 1997 233,000 107,617 556 -0- 22,500 $317,632 16,477
Corporate R&D, 1996 226,560 238,296 780 -0- 33,750 -0- 18,588
Marketing and MIS
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Annual bonus amounts are earned and accrued during the fiscal years
indicated, but paid after the end of each fiscal year.
(2) Other annual compensation consists of the value of personal use of company
cars, an annual Christmas bonus (which is received by all employees)
based on years of service and, in the case of Dr. English, tax-return
preparation and financial planning services provided at Andrew's expense.
(3) All other compensation represents contributions by Andrew to the Andrew
Profit Sharing Trust on behalf of the named individuals.
<PAGE> 14
OPTION GRANTS IN LAST FISCAL YEAR
This table gives information relating to option grants to Dr. English
and the four next most highly compensated executive officers in fiscal
1998. The exercise price of the options is based upon the fair market value
of Andrew common stock on the date the option is granted. As the SEC
requires, the calculation of potential realizable values is based on
assumed annualized rates of stock price appreciation of 5% and 10% over the
full ten-year term of the options.
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------
POTENTIAL REALIZABLE VALUE AT
ASSUMED ANNUAL RATES
SECURITIES % OF TOTAL OF STOCK PRICE APPRECIATION
UNDERLYING OPTIONS GRANTED EXERCISE OR FOR OPTION TERM
OPTIONS TO EMPLOYEES BASE PRICE --------------------------------
NAME GRANTED IN FISCAL YEAR PER SHARE EXPIRATION DATE 5% 10%
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
F. L. English 74,000 11.2 $23.125 11/12/07 $1,076,330 $2,727,200
- -------------------------------------------------------------------------------------------------------------
T. E. Charlton 32,000 4.8 23.125 11/12/07 465,440 1,179,360
- -------------------------------------------------------------------------------------------------------------
W. R. Currer 25,000 3.8 23.125 11/12/07 363,625 921,375
- -------------------------------------------------------------------------------------------------------------
C. R. Nicholas 32,000 4.8 23.125 11/12/07 465,440 1,179,360
- -------------------------------------------------------------------------------------------------------------
J. B. Scott 25,000 3.8 23.125 11/12/07 363,625 921,375
- -------------------------------------------------------------------------------------------------------------
</TABLE>
OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION VALUES
This table provides information regarding the exercise of options
during fiscal 1998 by Dr. English and the four next highest compensated
executives. The "value realized" is calculated using the difference between
the option exercise price and the price of Andrew common stock on the date
of exercise multiplied by the number of shares underlying the option. The
"value of unexercised in-the-money options at September 30, 1998" is
calculated using the difference between the option exercise price and
$13.25 (the price of Andrew common stock on that date) multiplied by the
number of shares underlying the option. An option is in-the-money if the
market value of the common stock subject to the option is greater than the
exercise price.
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------
SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED OPTIONS IN-THE-MONEY OPTIONS AT
AT FISCAL YEAR-END FISCAL YEAR-END
SHARES ACQUIRED -------------------------------------------------------------
NAME ON EXERCISE VALUE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
F. L. English 30,375 $453,043 101,250 209,000 -0- -0-
- ----------------------------------------------------------------------------------------------------------------
T. E. Charlton 50,625 1,062,112 50,250 90,500 -0- -0-
- ----------------------------------------------------------------------------------------------------------------
W. R. Currer 6,075 51,516 19,724 66,289 -0- -0-
- ----------------------------------------------------------------------------------------------------------------
C. R. Nicholas 20,250 155,216 43,500 90,500 -0- -0-
- ----------------------------------------------------------------------------------------------------------------
J. B. Scott -0- -0- 47,813 72,250 $127,372 -0-
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 15
LONG-TERM PERFORMANCE CASH AWARDS IN LAST FISCAL YEAR
Andrew's current long-term performance cash award program covers fiscal
years 1997 through 1999. Executive officers are eligible for target payouts
ranging from 20% to 120% of their average annual salary during that three-year
period if long-term performance goals established by the Compensation Committee
for the program are met. Performance goals for the current program include
aggregate, three-year (1997, 1998 and 1999) earnings per share and specific
revenue targets for fiscal 1999. Payments will be made to Andrew executives
participating in the program if return on sales and return on equity exceed
established minimums and Andrew achieves either 75% of the earnings per share
target or 75% of the revenue target. 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.
The following table illustrates a range of estimated payouts that could be
made early in fiscal 2000 to Dr. English and the four next most highly
compensated executives.
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------
ESTIMATED FUTURE PAYOUTS UNDER LONG-TERM INCENTIVE PLAN
TARGETED PERFORMANCE --------------------------------------------------------
NAME AWARD PERIOD THRESHOLD TARGET MAXIMUM
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
F. L. English 120% of Average Oct. 1, 1996 $205,630 $548,350 $1,096,700
1997-1999 Salary Sept. 30, 1999
- ----------------------------------------------------------------------------------------------------------
T. E. Charlton 80% of Average Oct. 1, 1996 85,110 226,960 453,920
1997-1999 Salary Sept. 30, 1999
- ----------------------------------------------------------------------------------------------------------
W. R. Currer 80% of Average Oct. 1, 1996 75,600 201,600 403,200
1997-1999 Salary Sept. 30, 1999
- ----------------------------------------------------------------------------------------------------------
C. R. Nicholas 80% of Average Oct. 1, 1996 84,510 225,360 450,720
1997-1999 Salary Sept. 30, 1999
- ----------------------------------------------------------------------------------------------------------
J. B. Scott 80% of Average Oct. 1, 1996 72,900 194,400 388,800
1997-1999 Salary Sept. 30, 1999
- ----------------------------------------------------------------------------------------------------------
</TABLE>
EXECUTIVE SEVERANCE BENEFIT PLAN
Key executives of Andrew selected by the Compensation Committee receive
benefits under the Executive Severance Benefit Plan in the event of termination
of employment following a change in control as defined in the plan.
Following a change in control, Andrew is obligated to pay certain benefits
to a participant in the Severance Plan under two circumstances. First, benefits
will be paid if his or her employment is terminated for any reason other than
death, disability, retirement or cause. Second, benefits will be paid if he or
she resigns due to a material reduction in compensation or duties, relocation
requirements or breach of the Severance Plan within one year of a change in
control. Andrew is obligated to pay each affected participant an amount equal
to the sum of: (1) 36 months of salary, bonus, Andrew profit sharing and
matching contributions, (2) the aggregate spread between the option price and
fair market value of Andrew common stock on the severance date for all of the
participant's outstanding stock options, and (3) up to 36 months of medical,
life and similar insurance benefits. If a participant's employment is
terminated or if he or she resigns more than one year after a change in
control, the amount of the benefits Andrew must pay are reduced
proportionately.
Under the Severance Plan, if a participating executive's employment
terminates due to death, disability, retirement or cause, or if he or she
resigns for reasons other than those described above within two years of a
change of control, Andrew is obligated to pay the participant (or his or her
estate) one-half of the amounts and rights discussed above. The Severance Plan
also provides for an adjustment in the benefits Andrew must pay 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 of the
executives named in the Summary Compensation Table, Andrew would have been
required to pay them the following amounts at September 30, 1998: Floyd L.
English, $4,060,000; Thomas E. Charlton, $1,804,000; William R. Currer,
$1,037,000; Charles R. Nicholas, $1,820,000; and John B. Scott, $1,563,000.
<PAGE> 16
EMPLOYEE RETIREMENT BENEFIT RESTORATION PLAN
Andrew's Employee Retirement Benefit Restoration Plan provides additional
retirement benefits to certain senior executives selected by the Compensation
Committee. Because of limitations imposed by the Internal Revenue Service,
these executives' benefits from the Andrew Profit Sharing Trust are reduced. In
general, executives participating in the Restoration Plan receive benefits that
compensate them for the decreased benefits under the Profit Sharing Trust.
A participant is not eligible to receive benefits under the Restoration
Plan until the earlier of turning 65 or his or her termination of employment
with Andrew by reason of death, disability, retirement or change in control.
Generally, the participant can elect to receive benefit payments under the
Restoration Plan in a lump sum or in installments over 15 years. Upon a change
in control, however, the participant will receive benefit payments in a lump
sum.
If there had been an event requiring lump-sum payment under the plan,
Andrew would have been required to pay the executives named in the Summary
Compensation Table the following amounts at September 30, 1998: Floyd L.
English, $170,039; Thomas E. Charlton, $94,486; William R. Currer, $60,482;
Charles R. Nicholas, $86,164; and John B. Scott, $75,736.
OTHER ARRANGEMENTS
In November 1991, Andrew entered into an agreement that obligates Andrew
to retain Mr. Scott as an advisor to the Company for two years after the
termination of his employment for a retainer fee of $100,000, a per diem rate
of $500 and the reimbursement of expenses.
- --------------------------------------------------------------
REPORT OF THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS
- --------------------------------------------------------------
The Compensation Committee of the Board of Directors establishes Andrew's
general compensation policies as well as specific compensation plans,
performance goals and compensation levels for executive officers. The Committee
selects participants for and administers the Management Incentive Program, the
Employee Retirement Benefit Restoration Plan and the Executive Severance
Benefit Plan, and administers the Employee Stock Purchase Plan. The Committee
is composed of three non-employee directors who have no interlocking
relationships.
COMPENSATION PHILOSOPHY
The Committee's principal objective is to align executive compensation
with stockholder value. To achieve that objective, executive compensation has
various components. One component is base salary, which is set below the median
for similar positions at comparable companies. Other cash components are annual
bonus and long-term performance cash awards, which are linked to aggressive
performance factors that relate to stockholder value, such as earnings per
share and sales. Stock options further align long-term executive performance
with stockholder value. The Committee believes that this multi-faceted approach
to compensation provides a particular incentive since executives can receive
above-average total compensation if Andrew's performance is exceptional.
BASE SALARY
The Committee establishes Dr. English's salary by comparison to the
salaries of chief executive officers of comparable companies. An outside
consultant compiles salary data for a group of technology companies that are
similar to Andrew. Some of these companies are included in the S&P
Communications Equipment Manufacturers Index used in the
<PAGE> 17
Performance Graph. Based on the salary information provided by the consultant,
the Committee set Dr. English's salary for the last three fiscal years below
the median for companies comparable to Andrew. Dr. English received a 4%
increase in base salary for fiscal 1998.
The Committee also uses salary survey data compiled by consultants to
determine salaries for other executive officers. Like the CEO's salary, the
Committee sets the executive officers' base salaries below the median salaries
for similar positions at comparable companies. The Committee also considers
other factors, such as relative company performance, the officer's past
performance and his or her potential.
ANNUAL BONUS
The Committee determines the CEO's annual cash bonus based on Andrew's
growth in earnings per share during the past fiscal year. Each year, the
Committee sets a minimum earnings per share target. The bonus is calculated
using a formula based on the amount that earnings per share for the year
exceeds the target. Earnings per share for fiscal 1998 were $1.18, which
exceeded the target. Therefore, Dr. English received a cash bonus of $1,005,312
in November 1998. The Committee has established a similar target and formula
for fiscal 1999.
Cash bonuses for other executive officers are based on three factors: (1)
earnings per share growth, using the same formula as for the CEO; (2) operating
results of the businesses or business functions that report to the executive;
and (3) achievement of specified, measurable objectives that relate to the
executive's area of responsibility.
LONG-TERM PERFORMANCE CASH AWARD
The long-term performance cash award programs for senior executives are
based on objective measurements at a corporate level, which emphasize Andrew's
long-term results. Each program covers three fiscal years. The Committee
establishes minimum, target and maximum performance goals, which include
earnings per share growth over the three years and the level of sales for the
third year of the program.
The most recent program covered fiscal years 1995 through 1997. For that
program, 60% of the target bonus was based on earnings per share growth during
the period and 40% was based on the level of sales in fiscal 1997. Under that
program, Dr. English received $844,467 after the end of fiscal 1997.
The current program covers fiscal years 1997 through 1999. Under this
program, 50% of the target bonus will be based on earnings per share growth
during the period and 50% will be based on the level of sales in fiscal 1999.
In addition, Andrew must maintain a minimum average return on equity and return
on sales during the three-year period. Any payments under the current program
likely will be made in December 1999.
OPTIONS
The Committee believes that stock options are an essential element of
executive compensation because they focus management's attention on stockholder
interests. Through periodic grants of stock options, the Committee intends to
encourage executive officers and other key employees to increase stockholder
value. Option grants are made at fair market value of Andrew common stock on
the grant date.
Andrew's stock option plan does not provide for the re-pricing of options
that are "under water." An option is under water if the market value of the
stock subject to the option is less than the exercise price.
At its meeting on November 11, 1998, the Committee granted Dr. English
options on 110,000 shares of Andrew common stock. The Committee also granted
options to the other most highly compensated executive officers as follows: Mr.
Charlton, 48,000 shares; Mr. Nicholas 48,000 shares; and Mr. Scott, 42,000
shares. Mr. Currer did not receive a grant of options in 1998 due to his
resignation from the company.
<PAGE> 18
DEDUCTIBILITY OF EXECUTIVE COMPENSATION
Internal Revenue Code Section 162(m) limits the deductibility by Andrew of
compensation in excess of $1,000,000 paid to each of the chief executive
officer and the other four most highly compensated executive officers. Certain
"performance based compensation" is not included in compensation counted for
purposes of the limit. The Committee believes that it has structured Andrew's
compensation programs to preserve full deductibility and will continue to
assess the impact of Section 162(m) on its compensation practices.
COMPENSATION COMMITTEE
Kenneth J. Douglas, Chairman
John G. Bollinger
Jere D. Fluno
- -------------------
COMPANY PERFORMANCE
- -------------------
This graph shows a five-year comparison of cumulative total returns for
Andrew, the Standard & Poor's (S&P) 500 Composite Index and the S&P
Communications Equipment Manufacturers Index. The graph assumes an investment
of $100 on September 30, 1993 and the reinvestment of dividends.
[graph]
ANDREW CORPORATION
S&P COMMUNICATIONS EQUIPMENT
S&P 500
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------
CUMULATIVE TOTAL RETURN
-----------------------------------------------------------------------------
9/93 9/94 9/95 9/96 9/97 9/98
-----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Andrew Corporation 100.00 195.29 357.22 437.23 344.35 174.23
-----------------------------------------------------------------------------
S&P 500 100.00 103.69 134.53 161.89 227.37 247.93
-----------------------------------------------------------------------------
S&P Communications Equipment 100.00 116.05 192.35 212.58 328.32 335.99
-----------------------------------------------------------------------------
</TABLE>
<PAGE> 19
- ------------------
EXECUTIVE OFFICERS
- ------------------
Following is certain information concerning the executive officers of Andrew at
September 30, 1998, based on information furnished by them.
FLOYD L. ENGLISH, 64
Chairman, President and Chief Executive Officer
Dr. English was elected Chairman in 1994, having served as President and Chief
Executive Officer of Andrew 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.
THOMAS E. CHARLTON, 62
Group President, Communication Products
Dr. Charlton became Group President, Communication Products in January 1998,
having previously served as Group President, Communication Systems since June
1996. Prior to 1996, he served as Vice President, Communication Products since
1992. He was first elected a Vice President of Andrew in 1986.
WILLIAM R. CURRER, 51
Group President, Communication Systems
Mr. Currer became Group President, Communication Systems in January 1998,
having previously served as Group President, Communication Products since June
1996. Prior to 1996, he served as Vice President, Antenna Systems since 1992.
Mr. Currer joined Andrew in 1991 as General Manager of Andrew's Earth Station
Antennas business unit. Mr. Currer resigned from Andrew in November 1998.
ROBERT J. HUDZIK, 49
Vice President, Business Development
Mr. Hudzik joined Andrew as Vice President, Business Development in July 1996.
Mr. Hudzik was Director, Marketing and Sales, Network Services for PTT Telecom
of the Netherlands from January 1994 until July 1996. Previously, Mr. Hudzik
was Vice President, Marketing for Ameritech Services from 1990 to 1994 and held
various other positions with Ameritech or the Bell System between 1968 and
1990.
DEBRA B. HUTTENBURG, 41
Group President, Antenna Systems and Wireless Products
Ms. Huttenburg became Group President, Antenna Systems in September 1997, after
having previously served as Vice President, Antenna Systems since 1996. Ms.
Huttenburg joined Andrew in 1988 as Broadcast Accounts Manager, and became
Broadcast Systems Business Unit Manager in 1993.
CHARLES R. NICHOLAS, 52
Executive Vice President, Finance, Administration and CFO
Mr. Nicholas became Executive Vice President, Chief Financial Officer in
September 1995, having served as Vice President, Finance, 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.
JOHN B. SCOTT, 57
Vice President, Corporate R&D, Marketing and MIS
Mr. Scott became Vice President, Corporate R&D, Marketing and MIS in 1995,
having served as Group Vice President, Network Group and Corporate Marketing
since 1992 and Vice President, Network Products since 1987.
- -----------------------------------
APPOINTMENT OF INDEPENDENT AUDITORS
- -----------------------------------
Upon the recommendation of the Audit Committee, the Board of Directors
appointed Ernst & Young LLP, independent public auditors, to serve for the
fiscal year ending September 30, 1999. Ernst & Young LLP has been employed to
perform this function since 1970.
Representatives of Ernst & Young will be at the Annual Meeting, will be
given the opportunity to make a statement and will respond to appropriate
questions.
Although we are not required to do so, we believe that it is appropriate
to request that stockholders ratify the appointment of our auditors. If
stockholders do not ratify the appointment, the Audit Committee will
investigate the reasons for the stockholders' rejection and the Board of
Directors will reconsider the appointment.
- -------------------------------------------------------------------------------
THE BOARD OF DIRECTORS UNANIMOUSLY
RECOMMENDS A VOTE FOR RATIFICATION OF THE APPOINTMENT OF ERNST & YOUNG LLP.
- -------------------------------------------------------------------------------
<PAGE> 20
[DRURY LANE LETTERHEAD]
[MAP APPEARS HERE]
WHEN APPROACHING FROM THE NORTH OR SOUTH ON ROUTE 83:
Exit at Roosevelt/Butterfield Road east (Roosevelt Road is Route 38). Follow
the green sign to Drury Lane.
WHEN APPROACHING FROM THE EAST OR WEST ON ROOSEVELT ROAD:
Exit Route 83 (Kingery Highway) south to Roosevelt Road (Route 38) east and
follow the green sign to Drury Lane.
WHEN APPROACHING FROM DOWNTOWN CHICAGO:
Take the Eisenhower Expressway (I-290) west to the East-West Tollway (I-88),
Aurora exit. Immediately after paying the $.40 toll at the Cermak Road/22nd
Street tollbooth, exit right and proceed north on Spring Road to Drury Lane.
WHEN APPROACHING FROM THE WEST ON I-88:
Exit at Midwest Road, turn right, proceed north to Butterfield Road (Route 56).
Turn right onto Butterfield Road, exit Roosevelt Road (Route 38) east to Drury
Lane.
WHEN APPROACHING FROM I-294 (TRI-STATE TOLLWAY):
Take I-88 (East-West Tollway) west, to Aurora exit. Immediately after paying
the $.40 toll at the Cermak Road/22nd Street tollbooth, exit right and proceed
north on Spring Road to Drury Lane.
WHEN COMING FROM O'HARE AIRPORT:
Take I-294 (Tri-State Tollway) south, and follow above instructions.
[LOGO OF ANDREW CORP. APPEARS HERE]
<PAGE> 21
PROXY PROXY
ANDREW CORPORATION
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned Stockholder of ANDREW CORPORATION 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., Tuesday,
February 9, 1999, 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, THIS PROXY WILL BE VOTED FOR
ITEMS 1, 2 AND 3.
(Continued and to be signed on reverse side.)
<TABLE>
<CAPTION>
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" EACH OF THE LISTED PROPOSALS.
For Withhold For all
All All Except nominee(s) written in below
<S> <C> <C> <C>
1. TO ELECT SEVEN DIRECTORS FOR [ ] [ ] [ ]
THE ENSUING YEAR. -------------------------------------------------------
Nominees: John G. Bollinger,
Thomas A. Dohahoe, Kenneth J. For Against Abstain
Douglas, Floyd L. English, Jere D. 2. To ratify the appointment [ ] [ ] [ ]
Fluno, Glen O. Toney and of Ernst & Young as
Ormand J. Wade independent public auditors
for fiscal 1999.
3. In their discretion, the
proxies are authorized to
vote upon such other business
as may properly come before
the meeting.
--------------------------------------------------------
(Signature)
--------------------------------------------------------
(Signature)
Dated:
--------------------------------------------------
</TABLE>
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.
- -----------------------------------------------------------------------------
* FOLD AND DETACH HERE *
PLEASE VOTE, SIGN, DATE AND RETURN THIS PROXY FORM PROMPTLY USING THE ENCLOSED
ENVELOPE.
