<PAGE> 1
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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
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
TELXON CORPORATION
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
TELXON 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(j)(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 transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:
(4) Proposed maximum aggregate value of transaction:
/ / 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
[TELXON LOGO]
3330 West Market Street
Akron, Ohio 44333
NOTICE OF 1996 ANNUAL MEETING OF STOCKHOLDERS
To Our Stockholders:
Notice is hereby given that the 1996 Annual Meeting of Stockholders (the
"Annual Meeting") of Telxon Corporation (the "Company") will be held at the
Ramada Plaza Hotel, 20 West Mill Street, Akron, Ohio 44308, at 10:00 A.M.,
E.D.T., on Wednesday, September 18, 1996, for the following purposes:
(1) To elect two directors of the Company to hold office until the
1999 annual meeting of stockholders or until their successors are elected
and qualified; and
(2) To transact such other business as may properly be brought before
the meeting or any adjournment thereof.
Only holders of record of the Common Stock of the Company at the close of
business on August 8, 1996 are entitled to notice of and to vote at the Annual
Meeting or any adjournment thereof.
Information relating to the matters to be considered at the Annual Meeting
is set out in the Proxy Statement accompanying this Notice.
By Order of the Board of Directors,
ROBERT A. GOODMAN
Secretary
August 20, 1996
PLEASE EXECUTE THE ENCLOSED PROXY AND RETURN
IT PROMPTLY IN THE ENCLOSED ENVELOPE WHETHER OR
NOT YOU EXPECT TO ATTEND THE ANNUAL MEETING
<PAGE> 3
1996 ANNUAL MEETING OF STOCKHOLDERS
[TEXLON LOGO]
3330 West Market Street
Akron, Ohio 44333
------------------
PROXY STATEMENT
The enclosed proxy is solicited on behalf of the Board of Directors of
Telxon Corporation, a Delaware corporation (the "Company"), for use at the 1996
Annual Meeting of Stockholders of the Company (the "Annual Meeting") to be held
at the Ramada Plaza Hotel, 20 West Mill Street, Akron, Ohio 44308, at 10:00
A.M., E.D.T., on Wednesday, September 18, 1996. Only holders of record of the
Company's Common Stock, par value $.01 per share (the "Common Stock"), on August
8, 1996 (the "Record Date") are entitled to notice of and to vote at the Annual
Meeting. At the close of business on that date, the Company had 16,092,142
shares of Common Stock (each, a "Share") outstanding. This Proxy Statement and
the accompanying form of proxy are first being mailed to stockholders on or
about August 22, 1996.
VOTING RIGHTS AND REQUIREMENTS
The Company's Restated Certificate of Incorporation (the "Charter")
provides that stockholders are entitled to one vote for each Share held, except
that in the election of directors each stockholder has cumulative voting rights
and is entitled to as many votes as equal the number of Shares held multiplied
by the number of directors to be elected (two), all of which votes may be cast
for a single nominee or distributed among any or all of the nominees. All votes
represented by proxy will be cast for the two nominees named herein unless
authorization to do so is withheld by a stockholder. Proxies cannot be voted for
more nominees than the number of directors to be elected (two).
Any person signing a proxy in the form accompanying this Proxy Statement
has the power to revoke such proxy prior to the closing of the polls at the
Annual Meeting or any adjournment thereof. A proxy may be revoked by a writing
stating that the proxy is revoked, by a subsequent proxy, or by attendance at
the Annual Meeting and voting in person.
A majority of the outstanding Shares, represented in person or by proxy,
will constitute a quorum at the Annual Meeting. Abstentions, withheld votes and
broker non-votes are counted as present in determining whether the quorum
requirement is satisfied.
<PAGE> 4
Directors are elected by a plurality of the votes cast in person or by
proxy at the Annual Meeting, provided a quorum is present. Votes that are
withheld with respect to the election of directors are excluded from the vote
and have no effect on the outcome.
As to any matter other than the election of directors, Shares represented
in person or by proxy at the Annual Meeting that the holder or the holder's
proxy abstains from voting as to that matter are considered in determining the
minimum number of shares required to be affirmatively voted for approval of such
matter. As a result, an abstention from voting on such a matter has the same
effect as a negative vote on the matter. Broker non-votes are not counted for
purposes of determining the number of Shares represented at the meeting of
stockholders with respect to the particular matter for which voting instructions
were not given by the beneficial owner.
The Board of Directors does not intend to bring any other business before
the meeting and knows of no other matters to be brought before the Annual
Meeting. However, as to any other business that properly may be brought before
the Annual Meeting, it is intended that proxies, in the form enclosed, will be
voted in accordance with the judgment of the persons holding such proxies. Any
such item of other business will require for its approval the affirmative vote
of the holders of a majority of the Shares represented in person or by proxy at
the Annual Meeting, provided a quorum is present, or such greater vote as may,
in the case of amendments to the Charter or other extraordinary subject matters,
be required under the Delaware General Corporation Law or the Charter.
ELECTION OF DIRECTORS
GENERAL
At the Annual Meeting, two directors are to be elected to hold office for
terms expiring at the 1999 annual meeting of stockholders. Robert F. Meyerson
and Norton W. Rose have been nominated by the Board of Directors for election as
such directors. The terms of the remaining five directors of the Company will
continue after the Annual Meeting. The nominees elected at the Annual Meeting
shall hold office until their successors have been elected and qualified. The
Shares represented by the enclosed proxy will be voted for the election of each
of Messrs. Meyerson and Rose unless the proxy is marked so as to withhold
authority to vote for such nominees. The Company does not know of any reason
that the nominees will be unable to serve. If either of the nominees is unable
to serve, then the proxies may be voted for such substitute(s) as may be
nominated by the Board of Directors.
INFORMATION CONCERNING NOMINEES AND CONTINUING DIRECTORS
Set forth below as to each nominee and each continuing director are their
respective principal occupations and business experience during the past five
years and all positions held with the Company, including the year each first
became a director of the Company.
The following persons have been nominated for election by the stockholders
as the class of directors whose term expires in 1999:
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Robert F. Meyerson, age 60, has been the Chief Executive Officer of
the Company since October 1992, Chairman of the Board of Directors of the
Company since November 1981 and a director of the Company since November
1977. He was the Company's Chief Executive Officer from August 1978 to May
1985 and its President from August 1978 to November 1981. Mr. Meyerson was
Chairman of the Board of Basicomputer Corporation (business computer sales,
integration and network services; "Basicomputer") from January 1984 until
it was acquired in September 1993 by The Future Now, Inc. (since
consolidated into Intelligent Electronics). From June 1985 through October
1992, he was Chief Executive Officer of Accipiter Corporation (consulting
firm).
Norton W. Rose, age 67, has been President and principal/owner of
Norton W. Rose & Co., Cleveland, Ohio (consulting firm) since August 1990,
Chairman of the Board of Premier Travel (formerly Prescott Travel) since
July 1991, and Executive Vice President of Creative Art Activities, Inc.
(craft kit manufacturer) since January 1994. He has served as a director of
Cohesant Technologies Inc. (manufacturer of specialty chemicals and
application equipment) since July 1994. Mr. Rose has been a director of the
Company since October 1990.
The other members of the Board of Directors whose terms of office will
continue after the Annual Meeting are the following:
Frank E. Brick, age 48, became President and Chief Operating Officer
of the Company in June 1996 and a director of the Company in July 1996. He
had previously served the Company as President and Chief Operating Officer,
Telxon International from February 1995 to June 1996 and as Senior
Executive Vice President from October 1993 to February 1995. From 1985 to
September 1993, Mr. Brick was President, and from 1988 to September 1993,
was Chief Executive Officer and a director, of Basicomputer. His current
term expires at the 1997 annual meeting.
Robert A. Goodman, age 61, has been the Company's General Counsel
since 1979 and Secretary since 1983. He has been senior partner of Goodman
Weiss Miller Goldfarb, a Cleveland, Ohio law firm, since 1986. Mr. Goodman
has been a director of the Company since October 1991. His current term
expires at the 1997 annual meeting.
Raj Reddy, PhD, age 59, has been Dean of the School of Computer
Science, and Herbert A. Simon University Professor, at Carnegie Mellon
University since July 1992. Since 1984 he had held the rank of University
Professor and for eleven years prior to that time held the rank of
Professor of Computer Science. He has been the Director of The Robotics
Institute at Carnegie Mellon since 1980. He also serves as a consultant in
the area of computer science, robotics and related disciplines. Dr. Reddy
has been a director of the Company since April 1987. His current term
expires at the 1997 annual meeting.
John H. Cribb, age 63, has been Vice Chairman of the Company's Board
of Directors and Chairman, Telxon International since January 1995. From
January 1993 to January 1995 he served the Company as President,
International, and from January 1990 to January 1993, as Senior Vice
President, International Operations. Mr. Cribb was a Vice President of the
Company and Managing Director of Telxon Limited, the Company's United
Kingdom subsidiary, from 1982 to 1990. He has been a director of the
Company since January 1995. His current term expires at the 1998 annual
meeting.
3
<PAGE> 6
Richard J. Bogomolny, age 61, retired as Chairman of the Board and
Chief Executive Officer of First National Supermarkets, Inc., in January
1992, positions which he held since June 1975. Since May of 1992, Mr.
Bogomolny has been a member of the Supervisory Board (board of directors)
of Royal Ahold n.v., the Netherland's largest food retailer with operations
also in the United States (Stop-N-Shop Cos. New England, Finast, BI-LO,
Giant, Tops and Edwards), Portugal, Spain, Thailand and the Czech Republic.
For ten years prior to his retirement he was a board member of the Food
Marketing Institute, the industry's international trade association. Mr.
Bogomolny has been a director of the Company since August 1995, and his
current term expires at the 1998 annual meeting.
INFORMATION RELATING TO THE BOARD OF DIRECTORS AND COMMITTEES OF THE BOARD
The Board of Directors of the Company met 15 times during the fiscal year
ended March 31, 1996 ("Fiscal 1996"). Each incumbent director attended at least
75 percent of the aggregate of all meetings of the Board of Directors and the
committees on which he served that were held during the year. The Board of
Directors has an Audit Committee, a Compensation and Organization Committee, a
Stock Option and Restricted Stock Committee and a Nominating Committee. The
general function of each committee, the identity of each committee's members and
the number of meetings held by each committee during Fiscal 1996 are set forth
below.
Audit Committee. The Audit Committee held five meetings during Fiscal
1996. The primary functions of the Committee are to evaluate the performance and
fees of the Company's independent auditors, review the annual audit and the
Company's internal accounting controls with the independent auditors, review the
results of the audit with management, consult with management with respect to
the Company's internal accounting controls and other operating systems, review
all related party transactions on an ongoing basis and review potential conflict
of interest situations where appropriate. The current members of the Audit
Committee are Messrs. Bogomolny, Goodman and Rose and Dr. Reddy.
Compensation and Organization Committee. The Compensation and Organization
Committee held three meetings during Fiscal 1996. The primary functions of the
Committee are to evaluate and improve the Company's organizational structure and
staffing and to review the remuneration arrangements of the Company's senior
management. The current members of the Compensation and Organization Committee
are Messrs. Bogomolny and Rose and Dr. Reddy.
Nominating Committee. The Nominating Committee held one meeting during
Fiscal 1996. The primary function of the Committee is to advise the Company's
Board of Directors as to nominees for election thereto. The current members of
the Nominating Committee are Messrs. Meyerson and Rose. In order for a
stockholder to nominate persons for election as directors at an annual meeting,
the Charter requires the stockholder to submit a written recommendation to the
Secretary of the Company not less than ninety days prior to the first
anniversary of the date of the last annual meeting. Such recommendation must
contain certain information specified in the Charter concerning the nominating
stockholder and each of his or her nominees. The recommendation must also state
that the nominating stockholder is on the date of such notice a stockholder of
record of the Company entitled to vote generally in the election of directors
and that he intends to appear in person at the meeting of the Company's
stockholders at which directors are to be elected to nominate the person(s)
specified in the notice of recommendation.
4
<PAGE> 7
Stock Option and Restricted Stock Committee. The Stock Option and
Restricted Stock Committee held nine meetings during Fiscal 1996. The primary
function of the Committee is to administer the Company's employee stock option,
restricted stock and stock purchase plans. The current members of the
Compensation and Organization Committee are Messrs. Goodman and Rose.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Norton W. Rose is a director and Chairman of the Compensation and
Organization Committee. Premier Travel Partners ("Premier"), in which members of
Mr. Rose's immediate family own in the aggregate an approximately 11 percent
interest, has served as the Company's travel agency since January 1994 under an
annually renewable contract subject to termination by either party upon written
notice to the other 90 days prior to the contract's December 31 anniversary
date. Premier was originally selected by the Company from among seven companies
that submitted service proposals to the Company. Under the contract, the Company
is entitled to all commissions with respect to air travel arranged by Premier
for the Company, and Premier receives a fixed monthly management fee plus a per
transaction fee. During Fiscal 1996, the commissions received by the Company
totaled $392,902, and the fees paid to Premier, $235,544. For April through
June, 1996, $108,764 in commissions have been received by the Company, and
$59,527 in fees have been paid to Premier.
Robert A. Goodman, a director and Secretary of the Company, was a member of
the Compensation and Organization Committee during Fiscal 1996 through August
1995. Over the full fiscal year, the Company paid to the law firm of Goodman
Weiss Miller Goldfarb, of which Mr. Goodman is senior partner, $1,867,608 for
legal services and $160,734 in reimbursement of expenses. It is anticipated that
payments will continue to be made to said firm in the future for additional
services.
COMPENSATION OF DIRECTORS
Cash Compensation. The Company's non-employee directors each receive an
annual fee, which, through August 31, 1995, was at an annual rate of $20,000
and, effective September 1, 1995, increased to $50,000 per year. The
non-employee directors also receive $2,500 plus travel expenses for each
directors' meeting attended ($1,250 for a telephonic meeting), and $2,500 for
each Audit Committee or Compensation and Organization Committee meeting
attended, unless the committee and the full Board meet on the same day, in which
event compensation in the amount of $1,250 is paid for attendance at such
committee meeting.
For the period April 1, 1995 through August 31, 1995, the Company also paid
the following consulting fees to its non-employee directors: Mr. Goodman
received $4,167 for strategic advisory services; Mr. Rose received $12,500 for
human resources advisory services; and Dr. Reddy received $10,417 for technology
advisory services. These consulting arrangements were discontinued effective as
of the September 1, 1995 increase in the directors' annual fee.
Messrs. Meyerson, Brick and Cribb, by reason of also being employees of the
Company, do not receive any compensation from the Company for their services as
directors (see the Summary Compensation Table under "EXECUTIVE COMPENSATION"
below for the compensation paid to them in their capacities as executive
officers of the Company).
5
<PAGE> 8
Stock Options. Directors who are not employees of the Company or a
subsidiary receive options to purchase Shares under the Company's 1990 Stock
Option Plan for Non-Employee Directors, as amended (the "Directors' Plan").
Under the Directors' Plan, each independent director is automatically granted an
option to purchase 25,000 Shares upon first being elected to the Board and
annually thereafter is also automatically granted a 10,000 Share option during
his or her continued service on the Board. Each option has a seven-year term and
an option price per Share equal to the closing sales price of the Common Stock
as reported on The Nasdaq Stock Market's National Market ("Nasdaq NNM") on the
trading day immediately preceding the date of grant. The initial 25,000 Share
grants become exercisable in equal thirds on each of the first three
anniversaries of their grant date, whereas the additional 10,000 Share grants
become exercisable in full on the third anniversary of their grant date. The
options terminate three months following the optionee no longer being a director
of the Company, six months following death and one year following disability.
REPORT OF BOARD COMPENSATION COMMITTEES
ON EXECUTIVE COMPENSATION
The Compensation and Organization Committee of the Board of Directors (the
"Committee") recommends, subject to the full Board's approval (except as to
stock option and restricted stock grants, which are administered by the Stock
Option and Restricted Stock Committee), the compensation of the Company's
executive officers. The Committee is currently composed of three independent
directors. One of the Committee members and the Company's fourth independent
director serve as the Stock Option and Restricted Stock Committee.
COMPENSATION POLICIES
The Company operates in the competitive and rapidly changing environment of
high technology businesses. The Committee seeks to establish compensation
policies that will allow the Company flexibility to respond to fluctuations in
the already dynamic business environment in which it operates and competes. The
Company's compensation philosophy thus is based upon the belief that achievement
in this environment can only be accomplished by attracting, retaining and
motivating highly energized, entrepreneurial-minded, talented, creative and
goal-oriented people. To achieve this, the Company has not used a quantitative
method or mathematical formula in setting elements of compensation. The
Committee exercises discretion and considers all elements of executive
compensation to provide the impetus and challenge for its key officers,
employees and associates. The Committee has access to and does study a variety
of surveys, reports and data which reflect compensation of executives in other
industrial sectors, and particularly in the technology world in which it
operates, including its direct and indirect competitors, vendors, customers and
other technology businesses from which it has attracted, and wishes to continue
to attract, the highest qualified people.
While the Committee considers such compensation data, the Committee does
not attempt to establish any self-selected peer group for compensation purposes
or to fix the Company's executive compensation levels at a defined percentile of
any such self-selected peer group. Rather, such data forms a part of the total
mix of information which the Committee evaluates in arriving at compensation
levels deemed necessary to effectively compete for highly qualified people in
the technology sector.
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COMPENSATION COMPONENTS
The Company's executive officers are compensated with a base salary
together with eligibility for short-term performance bonuses and long-term
incentive awards. The Committee assesses past and current as well as anticipated
future performance and contribution in its consideration of the total
compensation package (earned or potentially available) for each executive
officer.
Salary. The salaries of executive officers are determined by the Committee
generally on the basis of one to three year employment agreements which
encompass base salaries consistent with the Company's stated policy and
philosophy of competing for highly qualified people in the technology sector.
Bonus. The Committee reviews and approves an executive bonus plan for each
fiscal year under which each executive officer is eligible for a bonus computed
as a percentage of base salary, generally structured to reflect the officer's
individual performance and the Company's performance in the forthcoming year.
Criteria typically include revenue, profitability, and stock performance, to
none of which are any particular weights assigned, as well as additional, more
subjective bases. No bonuses were awarded by the Committee under the executive
bonus plan for Fiscal 1996 to any of the executive officers named in the Summary
Compensation Table under "EXECUTIVE COMPENSATION" below, although John H. Cribb
did receive incentive compensation in respect of Fiscal 1996 based upon
historical criteria relating to the performance of the Company's International
Division.
Awards of Stock Options and Restricted Stock. Awards of stock options, and
in certain instances restricted stock grants, under the Company's 1990 Stock
Option Plan and 1992 Restricted Stock Plan, are designed not only to provide
additional incentive for the performance and continued employ of the individual
officers, but also to more fully align their long-term interests with that of
the Company and the Company's stockholders. The Stock Option and Restricted
Stock Committee selects the officers to receive stock option and restricted
stock awards, and determines the number of shares of each such award. The size
of the grants and the frequency thereof is generally intended by the Stock
Option and Restricted Stock Committee to reflect the significance of the
executive's position, performance, continued tenure with the Company and
anticipated contributions to its growth.
The option program generally utilizes a three year vesting period, an eight
or ten year term and an exercise price equal to the closing market price of the
underlying stock. These options are to provide value to the officer only to the
extent that the price of the Company's Common Stock increases thereafter during
the term of employ.
The grant of restricted stock has been significantly less frequent and
utilized only for those members of the executive officer group who are
considered by the Board of Directors to be individuals upon whom the Company is
most reliant for its anticipated future success and achievement. These grants
typically are subject to forfeiture during a five year period, thereby providing
an additional incentive to the officer to remain with the Company. No grants of
restricted stock were made in Fiscal 1996.
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COMPENSATION OF THE CHIEF EXECUTIVE OFFICER
Although the compensation philosophy and policies of the Company are
applicable to all executive officers, including Robert F. Meyerson, the Chief
Executive Officer, Mr. Meyerson's current compensation package, including the
consulting arrangements with Accipiter described in detail under "RELATED PARTY
TRANSACTIONS" below, was established under contracts negotiated following the
request of the independent members of the Board of Directors in 1992 that he
reduce his outside responsibilities in order to return to the Company in a
full-time capacity, to function as the Chief Executive Officer and to create and
implement a long-term strategic growth plan for the Company. During Fiscal 1996,
the Stock Option and Restricted Stock Committee awarded Mr. Meyerson options to
purchase 40,000 Shares, which vest over a three year period and have a term of
ten years, and options to purchase an additional 300,000 Shares, which vest over
a thirty-one month period and have a term of eight years.
OMNIBUS BUDGET RECONCILIATION ACT OF 1993
In 1993, the Internal Revenue Code was amended by the Omnibus Budget
Reconciliation Act of 1993 ("OBRA") to limit to $1 million per year the
deduction allowed to public companies for federal income tax purposes for
compensation paid to their chief executive officer and four other most highly
compensated executive officers. This deduction limit, which first became
applicable to the Company in the fiscal year ended March 31, 1995 ("Fiscal
1995"), does not apply to compensation paid under a plan that meets certain
requirements for "performance-based compensation." To qualify as
"performance-based," (a) the compensation must be payable on account of the
attainment of one or more pre-established objective performance goals; (b) the
performance goals must be established by a compensation committee of the board
of directors that is comprised solely of two or more "outside directors"; (c)
the material terms of the compensation and the performance goals must be
disclosed to and approved by stockholders before payment; and (d) the
compensation committee must certify in writing that the performance goals have
been satisfied prior to payment. The Board of Directors does not believe that
OBRA will generally have an effect on the Company. Amendments to the Company's
1990 Stock Option Plan were approved by the Company's stockholders at the 1995
annual meeting which remove compensation resulting from the exercise of stock
options granted under the Plan from the OBRA deduction limit. Employee salaries,
bonuses and perquisites, and amounts which may be payable in the future under
consulting arrangements, are subject to approval by the Committee, but will not
be submitted to a vote of stockholders and, thus, will not be deductible to the
extent that such payments are subject to and exceed the OBRA deduction limit.
Otherwise, it is the Company's policy to structure, to the extent consistent
with other important corporate objectives, its incentive compensation programs
to satisfy the "performance-based compensation" OBRA exception and, thus, to
preserve the full deductibility of all compensation paid thereunder.
<TABLE>
<S> <C>
COMPENSATION AND ORGANIZATION STOCK OPTION AND RESTRICTED STOCK
COMMITTEE COMMITTEE
Norton W. Rose, Chairman Robert A. Goodman, Chairman
Raj Reddy Norton W. Rose
Richard J. Bogomolny
</TABLE>
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EXECUTIVE COMPENSATION
The following table shows all annual, long-term and other compensation for
services rendered to the Company in all capacities paid or awarded during each
of three most recently completed fiscal years to the Company's Chief Executive
Officer and the other four executive officers of the Company at the end of
Fiscal 1996 who received the highest combined salary and bonus compensation
during that year.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS
----------------------------------- ------------------------
OTHER RESTRICTED ALL
NAME AND ANNUAL STOCK STOCK OTHER
PRINCIPAL COMPEN- AWARDS OPTIONS COMPEN-
POSITION YEAR SALARY BONUS SATION ($)(1) (SHARES) SATION(2)
- --------------------------- ---- -------- -------- ------- ---------- -------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
Robert F. Meyerson 1996 $120,000(3) $ 0 $ 0 $ 0 340,000 $4,620
Chairman of the Board 1995 120,000(3) 0 0 0 120,000 4,620
and Chief Executive 1994 120,000(3) 0 0 0 0 4,997
Officer
John H. Cribb 1996 315,000 165,000(4) 84,251(5) 0 25,000 75,336
Vice Chairman of the 1995 315,000 415,385(6) 84,577(7) 155,000(8) 49,000 0
Board and Chairman, 1994 270,000 160,000(4) 0 43,750(9) 0 0
International
William J. Murphy 1996 367,788(11) 0 55,325(12) 0 130,000 6,062
President and 1995 281,250(13) 435,000(4) 80,661(14) 155,000(15) 90,000 11,832
Chief Operating 1994 250,000 285,000(16) 81,261(17) 131,250(18) 10,000(19) 6,072
Officer(10)
Frank E. Brick 1996 350,000 0 0 0 0 4,620
President and Chief 1995 350,000 0 0 0 0 3,374
Operating Officer, 1994 148,077(20) 0 0 543,750(21) 50,000 0
Telxon International(10)
Dan R. Wipff 1996 277,885(22) 0 0 0 11,250 4,187
President and Chief 1995 399,038 186,611(23) 0 0 0 47,144
Executive Officer, Telxon 1994 501,244 0 0 0 6,000(24) 4,997
Products
</TABLE>
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(1) The amounts shown are the dollar value of awards made under the Company's
1992 Restricted Stock Plan (the "Restricted Stock Plan") based on the
closing sale price per Share as reported on the Nasdaq NNM for the
respective dates of the awards. The vesting of each award is conditioned
upon the awardee continuing to be employed by the Company on the applicable
vesting date. The awards are subject to transfer restrictions during the
respective vesting periods.
(2) The amounts shown are matching contributions made by the Company under its
Retirement and Uniform Matching Profit Sharing Plan, except that the full
amount shown for Fiscal 1996 for Mr. Cribb was, and the amount shown for
Fiscal 1995 for each of Messrs. Brick, Murphy and Wipff also includes
$7,212, $43,389 and $2,524, respectively, paid pursuant to a one-time
election to surrender accumulated unused vacation time.
(3) The amount shown was paid to Mr. Meyerson exclusively for his services as
Chairman, and no portion thereof represents compensation to Mr. Meyerson
for his services as Chief Executive Officer. During each of the fiscal
years shown, the Company paid Accipiter
9
<PAGE> 12
Corporation $840,000 in consulting fees and a $240,000 general
administrative and overhead expense reimbursement, for services principally
performed by Mr. Meyerson, as more fully described under "RELATED PARTY
TRANSACTIONS".
(4) The amount shown was earned under the executive bonus plan (or in the case
of the amount shown for Mr. Cribb for Fiscal 1996, under historical
criteria relating to the performance of the Company's International
Division) in respect of the fiscal year shown but was paid during the
immediately succeeding fiscal year.
(5) Consists of a $64,237 contribution to a personal pension for Mr. Cribb, a
$15,000 personal expense account allowance and $5,041 for life insurance.
(6) The amount shown includes $256,835 in incentive compensation earned under
his employment agreement during Fiscal 1995, $202,045 of which was paid
during Fiscal 1995 and the remaining $54,790 of which was paid during
Fiscal 1996; $79,000 in discretionary bonus awarded in respect of Fiscal
1995 and paid during Fiscal 1996; and $80,000 in discretionary bonus
awarded in respect of the fiscal year ended March 31, 1994 ("Fiscal 1994")
(in addition to the bonus shown in the table for Fiscal 1994) paid during
Fiscal 1995 pursuant to an award made subsequent to the 1994 annual meeting
and, accordingly, not reflected in the proxy statement issued with respect
thereto as Fiscal 1994 compensation paid to Mr. Cribb.
(7) Consists of a $68,000 contribution to a personal pension for Mr. Cribb and
a $16,577 personal expense account allowance.
(8) An aggregate of 10,000 Shares was awarded to Mr. Cribb, 4,000 of which have
vested to date, with the remaining Shares vesting in 2,000 Share increments
on July 17, 1997, 1998 and 1999.
(9) An aggregate of 5,000 Shares was awarded to Mr. Cribb, all of which have
vested.
(10) The offices shown were held by these individuals throughout Fiscal 1996. In
June 1996, Mr. Brick succeeded Mr. Murphy as President and Chief Operating
Officer of the Company, and Mr. Murphy became Senior Executive Vice
President, Global Sales and Marketing.
(11) Includes $12,019 paid in recognition of Mr. Murphy's increased
responsibilities during Fiscal 1995 as the result of his January 1995
promotion to President and Chief Operating Officer.
(12) Consists of $46,273 paid toward living expenses and $9,052 for automobile
expenses.
(13) Includes $31,250 paid in Fiscal 1996 in recognition of Mr. Murphy's
increased responsibilities as the result of his January 1995 promotion to
President and Chief Operating Officer.
(14) Consists of $73,049 paid toward living expenses and $7,612 for automobile
expenses.
(15) An aggregate of 10,000 Shares was awarded to Mr. Murphy, 4,000 of which
have vested to date, with the remaining Shares vesting in 2,000 Share
increments on July 17, 1997, 1998 and 1999.
(16) Includes $50,000 paid in respect of Mr. Murphy's promotion to President,
North America Division and $235,000 earned under the executive bonus plan
in respect of Fiscal 1994 and paid during Fiscal 1995.
(17) Consists of $78,045 in relocation expenses and $3,216 in automobile
expenses.
10
<PAGE> 13
(18) An aggregate of 15,000 Shares was awarded to Mr. Murphy, 9,000 of which
have vested to date, with the remaining Shares vesting in 3,000 Share
increments on May 18, 1997 and 1998.
(19) The number of Shares shown represents repriced options received by Mr.
Murphy pursuant to his election to participate in the opportunity extended
by the Company in September 1993 to all holders of options (other than then
directors) under the Company's 1990 Stock Option Plan, in order to restore
the incentive intended to be afforded by the Plan but lost due to the
imbalance between the exercise prices under many of the Plan options then
outstanding (equal to the respective market prices for the Company's Common
Stock at the times they were granted) and the lower market prices which had
prevailed for the Common Stock since October 1992, to exchange two
outstanding options for one repriced option.
(20) Represents the salary earned by Mr. Brick during the portion of Fiscal 1994
after he joined the Company as an executive officer.
(21) An aggregate of 50,000 Shares was awarded to Mr. Brick, 20,000 of which
have vested to date, with the remaining Shares vesting in 10,000 Share
increments on October 27, 1996, 1997 and 1998.
(22) Includes $2,885 paid under Mr. Wipff's previous compensation arrangements.
(23) Includes $136,611 paid in connection with the July 1994 realignment of Mr.
Wipff's executive responsibilities and $50,000 earned under the executive
bonus plan in respect of Fiscal 1995 and paid during Fiscal 1996.
(24) This option, originally granted to Mr. Wipff in 1988 in his then capacity
as a non-employee director of the Company in conjunction with similar
grants to the Company's other then non-employee directors and scheduled to
expire October 18, 1993, was extended, by vote of the Board of Directors
during Fiscal 1994 prior to the expiration of its initial term and of the
Company's stockholders at the 1994 annual meeting, for an additional
five-year term expiring October 17, 1998. The extended option terminated by
its own terms three months after Mr. Wipff's January 19, 1995 resignation
from the Board.
EMPLOYMENT AGREEMENTS
During Fiscal 1996, pending finalization of a new employment agreement, Mr.
Brick continued to receive the same $350,000 annual base salary and to be
eligible to receive incentive compensation in the discretion of the Board of
Directors as provided under an employment agreement with the Company which
expired March 31, 1995. The expired agreement also provided for incentive
compensation, eligibility for grants of stock options and restricted stock and
severance benefits of twelve months base salary in the event that Mr. Brick's
employment was terminated by the Company other than for "cause". Effective July
1, 1996, Mr. Brick's rate of annual base salary was increased to $450,000 in
recognition of his promotion to President and Chief Operating Officer.
During Fiscal 1996, pending finalization of a new employment agreement, Mr.
Cribb has continued to receive the same $315,000 annual base salary and to be
eligible to receive incentive and bonus compensation in the discretion of the
Board of Directors as provided under an employment agreement with the Company
which expired March 31, 1995. The expired agree-
11
<PAGE> 14
ment also provided for incentive compensation based on the achievement of
specified financial objectives and severance benefits of twelve months base
salary in the event that Mr. Cribb's employment was terminated by the Company
other than for "cause".
Mr. Wipff has an employment agreement with the Company ending March 31,
1997, at a base salary of $275,000 per year, plus bonus compensation up to
$150,000 per year subject to achievement of certain goals agreed to by Mr. Wipff
and the Company's Chief Executive Officer and approved by the Board of
Directors. Mr. Wipff's employment agreement also entitles him or his estate to
certain benefits in the event of his permanent disability or death and to
severance benefits in the event the Company terminates Mr. Wipff's agreement
other than for "cause" in an amount equal to the greater of the remaining base
salary due under the employment agreement or $250,000.
STOCK OPTIONS
The following tables provide information with respect to options granted
to, and exercises by, the persons indicated during Fiscal 1996 and the value of
unexercised options held by such persons at the end of Fiscal 1996.
OPTION GRANTS IN FISCAL 1996
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
------------------------------------------------------------------------
PERCENT OF
TOTAL OPTIONS GRANT
OPTIONS GRANTED TO EXERCISE DATE
GRANTED EMPLOYEES IN PRICE EXPIRATION PRESENT
NAME (SHARES) FISCAL 1996 (PER SHARE) DATE VALUE(1)
- ------------------ ---------- ------------- ----------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Robert F. Meyerson 40,000 3.4% $15.500(2) 5/18/05 $ 351,840
300,000 25.3% $20.125(3) 8/31/03 2,627,100
John H. Cribb 15,000 1.3% $15.500(2) 5/18/05 131,940
10,000 0.8% $22.250(4) 10/19/03 97,190
William J. Murphy 30,000 2.5% $15.500(2) 5/18/05 263,880
100,000 8.4% $20.000(5) 10/11/03 875,600
Frank E. Brick -- -- -- -- --
Dan R. Wipff 11,250 0.9% $15.500(2) 5/18/05 98,955
</TABLE>
- ---------------
(1) Aggregate present value of the options granted during Fiscal 1996 as of the
date of their grant, calculated using the Cox-Ross-Rubenstein binomial
variation of the Black-Scholes option valuation model under the following
assumptions: (a) based upon historical data concerning the exercise by
employees of options for Shares granted under the Company's stock option
plans and survey data concerning the experience of other companies, an
executive may typically be expected to hold an option with a stated term of
ten years for a period of six years, and with a stated term of eight years,
for four years, prior to exercise; (b) the following stock price volatility
(based on the changes in the market price for Shares over a period preceding
the grant date equal to the applicable expected holding
12
<PAGE> 15
period assumed in (a) above) and interest rates (based on the published
yield as of each grant date of Treasury Strips maturing as of the end of
such assumed holding periods):
<TABLE>
<CAPTION>
GRANT DATE VOLATILITY INTEREST RATE
---------- ---------- -------------
<S> <C> <C>
5/18/95 51.63% 6.38%
8/31/95 46.72% 6.04%
10/11/95 47.52% 5.87%
10/19/95 47.52% 5.78%;
</TABLE>
and (c) a continuation of the $0.01 per Share annual dividend historically
paid by the Company.
(2) Equal to the closing sale price for the Common Stock as reported on the
Nasdaq NNM for the last trading day prior to the grant of these ten-year
options on May 18, 1995.
(3) Equal to the closing sale price for the Common Stock as reported on the
Nasdaq NNM for the last trading day prior to the grant of these eight-year
options on August 31, 1995.
(4) Equal to the closing sale price for the Common Stock as reported on the
Nasdaq NNM for the last trading day prior to the grant of these eight-year
options on October 19, 1995.
(5) Equal to the closing sale price for the Common Stock as reported on the
Nasdaq NNM for the last trading day prior to the grant of these eight-year
options on October 11, 1995.
AGGREGATED OPTION EXERCISES IN FISCAL 1996
AND
FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
FISCAL YEAR-END
EXERCISES DURING ---------------------------------------------------------------
FISCAL 1996
--------------------------- NUMBER OF UNEXERCISED VALUE OF UNEXERCISED
SHARES OPTIONS IN-THE-MONEY MONEY OPTIONS(2)
ACQUIRED ON VALUE ----------------------------- -----------------------------
NAME EXERCISE REALIZED(1) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ------------------ ------------ ----------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Robert F. Meyerson -- -- 144,985 320,000 $ 439,204 $ 995,000
John H. Cribb 33,500 $ 456,438 66,333 57,667 $ 591,498 $ 294,252
William J. Murphy -- -- 110,000 190,000 $ 988,750 $ 687,500
Frank E. Brick -- -- 33,333 16,667 $ 329,163 $ 164,587
Dan R. Wipff 40,000 $ 535,000 43,750 11,250 $ 497,656 $ 64,688
</TABLE>
- ---------------
(1) Excess of the closing price for the Common Stock as reported on the Nasdaq
NNM for the last trading day prior to the date of exercise over the exercise
price, multiplied by the number of Shares acquired upon exercise.
(2) Aggregate fair market value, based on the amount by which the closing sale
price for the Common Stock as reported on the Nasdaq NNM for March 29, 1996
(the last trading day during Fiscal 1996) exceeded the exercise price, of
all unexercised "in-the-money" (fair market value per Share in excess of
exercise price) options then held.
13
<PAGE> 16
RELATED PARTY TRANSACTIONS
In October 1992, the Company's independent directors asked Robert F.
Meyerson to accept the position of Chief Executive Officer, a position he had
previously held from 1979 to 1985. Following his 1985 retirement from that
office, he had continued to assist the Company only in his more limited role as
Chairman. The Summary Compensation Table under "EXECUTIVE COMPENSATION" above
sets forth the salary paid to Mr. Meyerson for his services as Chairman during
Fiscal 1996. Mr. Meyerson has received that same salary as Chairman since
September 1989 and has throughout been a director of the Company.
The Company's consulting arrangements, described below, with Accipiter
Corporation ("Accipiter"), a consulting firm owned by Mr. Meyerson's wife, are
in lieu of any other compensation to Mr. Meyerson in his capacity as Chief
Executive Officer of the Company. These arrangements were approved by the full
Board of Directors (Mr. Meyerson abstaining) in order to secure Mr. Meyerson's
full-time services for the Company in connection with his reassumption of the
office of Chief Executive Officer in October 1992. Mr. Meyerson's obligations to
the Company under the revised consulting arrangements constituted a full-time
personal commitment by Mr. Meyerson. Accipiter has been providing various
consulting services to the Company under a series of contracts which commenced
during the fiscal year ended March 31, 1988.
The contract governing the Company's consulting arrangements with
Accipiter, the term of which expired March 31, 1996, required Accipiter's
services to the Company to be principally performed by Mr. Meyerson and included
all services that would customarily be performed by a Chief Executive Officer of
a public company of the Company's size and character. For such services,
Accipiter received from the Company a fee of $840,000 per year, plus $240,000
per year in reimbursement of Accipiter's general administrative and overhead
expenses and reimbursement of its out-of-pocket expenses incurred on behalf of
the Company. The contract provided for Accipiter to receive a liquidation
benefit equal to three years' consulting fee in certain events, including a
failure by Telxon to extend the agreement beyond March 31, 1996. Pending
finalization of new contractual arrangements with Accipiter and/or Mr. Meyerson,
the parties have continued to perform under the terms of the expired contract.
As part of its five-year plan, Telxon 2000, announced in August 1995, the
Company has established a program providing key employees and advisors with a
long-term, entrepreneurial incentive opportunity to purchase stock in its
technology subsidiaries, thereby more closely aligning their objectives with the
long-term goals of the Company. Such investments are subject to certain risks
and restrictions and are based on outside opinions of the subsidiary's market
value. Purchases of stock made under the program since the implementation of the
program during Fiscal 1996 included the following investments in the Company's
Metanetics Corporation subsidiary: $409,984 by Accipiter, $30,772 by Frank E.
Brick, the Company's President and Chief Operating Officer and a director, and
$60,772 by William J. Murphy, the Company's Senior Executive Vice President,
Global Sales and Marketing and formerly one of its directors. Loans in the
following principal amounts, bearing interest at eight percent per annum and
secured by the portion of the stock purchased with loan proceeds, were among
those extended in connection with program investments during Fiscal 1996 and
remain outstanding in full, plus interest: $279,987 to Accipiter, $16,618 to Mr.
Brick and $16,618 to Mr. Murphy.
14
<PAGE> 17
During Fiscal 1996, the Board of Directors approved personal loans to Mr.
Meyerson. The largest amount of such indebtedness outstanding during Fiscal 1996
was $269,041 (principal and interest). Repayments reduced the outstanding loan
balance to zero in March 1996. Renewed borrowings of $250,000 in April 1996 and
an additional $100,000 in June 1996 remained outstanding, plus accrued interest,
at June 30, 1996. The above loans bore/bear interest at ten percent per annum
through January 15, 1996 and, reflecting the decrease in the Company's borrowing
costs, at eight percent thereafter.
Under the terms of his employment agreement with the Company for Fiscal
1994, Mr. Murphy received a $200,000 interest-free loan from the Company on
March 29, 1993, for his use in purchasing a home in connection with his then
promotion to Executive Vice President, North American Operations and associated
relocation to Akron. The loan, which was originally due April 1, 1994, has been
extended by the Company. The largest amount of such indebtedness outstanding
during Fiscal 1996 was $200,000, and at June 30, 1996, $150,000 remained
outstanding. In addition, the Company has advanced certain withholding taxes
owed by Mr. Murphy with respect to Shares awarded to him under the Restricted
Stock Plan as shown in the Summary Compensation Table; the largest amount of
such advances outstanding during Fiscal 1996 was $46,094, which remains
outstanding.
On December 3, 1993, and January 5, 1994, Mr. Brick received loans of
$75,985 and $58,000, respectively, from the Company, for his use in payment of
withholding and estimated tax obligations incurred with respect to Shares
awarded to him under the Restricted Stock Plan as shown in the Summary
Compensation Table. The loans are secured by the restricted stock and bear
interest at two percent in excess of the prime rate, adjusted quarterly. The
principal and accrued interest are due on October 27, 1996 or any earlier
termination of Mr. Brick's employment. Mr. Brick is also required to make annual
mandatory principal reductions with respect to these loans equal to 50 percent
of any after-tax bonus received. The largest amount of such indebtedness
outstanding during Fiscal 1996 was $164,005 (principal and interest). At June
30, 1996, Mr. Brick owed the Company $167,429 (principal and interest) in
respect of such loans.
For information concerning the legal fees paid and expenses reimbursed to
Goodman Weiss Miller Goldfarb, of which Robert A. Goodman, one of the Company's
directors and its Secretary, is senior partner, and concerning payments to
Premier Travel Partners, which is 11 percent owned by members of the family of
Norton W. Rose, also a Company director, see "ELECTION OF
DIRECTORS -- Compensation Committee Interlocks and Insider Participation."
15
<PAGE> 18
STOCK PERFORMANCE GRAPH
The following graph is a comparison of the cumulative total returns during
the preceding five fiscal year period for the Company, the S&P 500 Index and the
S&P High-Tech Composite Index assuming an initial investment of $100 and the
reinvestment of all dividends when received. The information presented should
not be interpreted as being necessarily indicative of future performance.
TOTAL RETURN TO SHAREHOLDERS
<TABLE>
<CAPTION>
MEASUREMENT PERIOD TELXON S&P HIGH-TECH
(FISCAL YEAR COVERED) CORPORATION S&P 500 INDEX COMPOSITE INDEX
<S> <C> <C> <C>
3/31/91 100.00 100.00 100.00
3/31/92 105.48 111.04 102.33
3/31/93 43.54 127.95 112.44
3/31/94 55.01 129.84 132.25
3/31/95 64.86 150.05 167.36
3/31/96 92.70 198.22 225.95
</TABLE>
16
<PAGE> 19
COMMON STOCK OWNERSHIP OF MANAGEMENT
The following table sets forth certain information with respect to the
beneficial ownership of the outstanding Shares, as of June 30, 1996, by all
directors of the Company, by the executive officers of the Company named in the
Summary Compensation Table, and by all directors and executive officers of the
Company as a group. The Company does not believe it had any greater than five
percent beneficial owners of its Shares at June 30, 1996.
<TABLE>
<CAPTION>
SHARES BENEFICIALLY
OWNED
NAME AND ADDRESS(1) ------------------------
OF BENEFICIAL OWNER NUMBER PERCENTAGE(2)
- ------------------------------------------------- --------- ----------
<S> <C> <C>
Richard J. Bogomolny............................. 50,000 *
Frank E. Brick................................... 87,483(3) *
John H. Cribb.................................... 95,666(4) *
Robert A. Goodman................................ 97,390(5) *
Robert F. Meyerson............................... 418,460(6) 2.6%
William J. Murphy................................ 161,450(7) *
Raj Reddy........................................ 58,500(8) *
Norton W. Rose................................... 45,500(9) *
Dan R. Wipff..................................... 78,000(10) *
All directors and executive officers as a group
(10 persons)................................... 1,116,832(11) 6.7%
</TABLE>
- ---------------
* less than 1 percent
(1) The address for the named individuals is 3330 West Market Street, Akron,
Ohio 44333.
(2) Computed based upon the 16,048,923 Shares outstanding as of June 30, 1996,
as adjusted with respect to the Shares which may be acquired within 60 days
by exercise of options by the person whose percentage ownership is being
computed.
(3) Includes 33,333 Shares which may be acquired within 60 days by exercise of
options. Also includes 30,000 Shares awarded to Mr. Brick under the
Restricted Stock Plan, which will vest in 10,000 Share increments on
October 27, 1996, 1997 and 1998, provided that he is then employed by the
Company, and are subject to transfer restrictions during the respective
vesting periods.
(4) Includes 1,000 Shares owned by Mr. Cribb's wife as to which Shares Mr.
Cribb disclaims beneficial ownership and 79,666 Shares which may be
acquired within 60 days by exercise of options. Also includes 8,000 Shares
awarded to Mr. Cribb under the Restricted Stock Plan, 2,000 of which have
vested since June 30, 1996, with the remaining Shares vesting in 2,000
Share increments on July 17, 1997, 1998 and 1999, provided that he is then
employed by the Company, and being subject to transfer restrictions during
the respective vesting periods.
(5) Includes 8,900 Shares owned by Mr. Goodman's wife as to which Shares Mr.
Goodman disclaims beneficial ownership and 78,500 Shares which may be
acquired within 60 days by exercise of options.
17
<PAGE> 20
(6) Includes 127,750 Shares beneficially owned by Mr. Meyerson's wife (4,950 of
which are held by Mrs. Meyerson as custodian for grandchildren under the
Uniform Gifts to Minors Act) as to which Shares Mr. Meyerson disclaims
beneficial ownership and 158,318 Shares which may be acquired within 60
days by exercise of options.
(7) Includes 1,000 Shares owned by Mr. Murphy's wife as to which Shares Mr.
Murphy disclaims beneficial ownership and 130,000 Shares which may be
acquired within 60 days by exercise of options. Also includes 14,000 Shares
awarded to Mr. Murphy under the Restricted Stock Plan, 2,000 of which have
vested since June 30, 1996, 6,000 of which will vest in 3,000 Share
increments on May 18, 1997 and 1998, and the remaining 6,000 of which will
vest in 2,000 Share increments on July 17, 1997, 1998 and 1999, provided
with respect to each of the foregoing installments that he is then employed
by the Company, and all of which installments are subject to transfer
restrictions during the respective vesting periods.
(8) Includes 51,000 Shares which may be acquired within 60 days by exercise of
options.
(9) Includes 40,000 Shares which may be acquired within 60 days by exercise of
options.
(10) Includes 17,500 Shares which may be acquired within 60 days by exercise of
options.
(11) Includes 606,649 Shares which may be acquired within 60 days by exercise of
options and 56,000 Shares awarded under the Restricted Stock Plan, of which
5,000 Shares have vested since June 30, 1996, and provided the respective
awardees are then employed by the Company, 10,000 Shares will vest during
the remaining portion of the current fiscal year ending March 31, 1997;
18,000 Shares, in each of the fiscal years ending March 31, 1998 and 1999;
and 5,000 Shares, in the fiscal year ending March 31, 2000.
COMPLIANCE WITH SECTION 16(A)
Section 16(a) of the Securities Exchange Act of 1934 (the "Exchange Act")
requires the Company's directors and executive officers, and persons who own
more than ten percent of a registered class of the Company's equity securities,
to file with the Securities and Exchange Commission initial reports of ownership
and reports of changes in ownership of Common Stock and other equity securities
of the Company. Officers, directors, and greater than ten-percent stockholders
are required by Securities and Exchange Commission regulations to furnish the
Company with copies of all Section 16(a) forms they file.
To the Company's knowledge, based solely on review of the copies of such
reports furnished to the Company and written representations that no other
reports were required, all Section 16(a) filing requirements applicable to its
officers and directors were complied with, except that Kenneth W. Haver, a
reporting officer, failed to file a Form 5 with respect to shares acquired
through the Company's 401(k) plan during Fiscal 1996 subsequent to those
reported in his Form 4 for February 1996. The Company does not believe it had
any greater than ten percent beneficial owners at any time during Fiscal 1996
based on its records and because it has not received copies of, and is not
otherwise aware of, any filings by any such beneficial owner with the Securities
and Exchange Commission under Section 13 or 16(a) of the Exchange Act.
18
<PAGE> 21
INDEPENDENT PUBLIC ACCOUNTANTS
Coopers & Lybrand L.L.P. has been reappointed as the independent public
accountants to examine the Company's financial statements for the fiscal year
ending March 31, 1997. Coopers & Lybrand has served as the Company's independent
auditors since October 1990. Representatives of Coopers & Lybrand are expected
to be present at the Annual Meeting and will have the opportunity to make a
statement if they so desire and to respond to appropriate questions.
EXPENSE OF SOLICITATION
The cost of solicitation of proxies in the accompanying form will be paid
by the Company. In addition to solicitation by use of the mails, certain
officers and regular employees of the Company may solicit the return of proxies
by telephone, telegram or personal interview. The Company has retained
Kissel-Blake Inc. to solicit proxies on behalf of the Board of Directors for a
fee of $8,000 plus reimbursement of out-of-pocket expenses.
STOCKHOLDER PROPOSALS FOR 1997 ANNUAL MEETING
In order for a stockholder proposal to be considered at the 1997 annual
meeting of stockholders, the Charter requires that it be received by the
Secretary of the Company at the Company's offices, 3330 West Market Street,
Akron, Ohio 44333, no later than June 20, 1997. Each proposal submitted must
contain certain information specified in the Charter about the proponent and the
business matter to be proposed and a statement that the proponent is as of the
date of such notice a stockholder of record. The stockholder must also state his
intention personally to appear at the 1997 annual meeting of stockholders to
present the proposal. Under Rule 14a-8 promulgated under the Exchange Act, in
order for a stockholder proposal to be included in the proxy statement with
respect to the 1997 annual meeting of stockholders, such proposal must be a
proper subject for action at a stockholders meeting, the proposal and its
proponent must satisfy the other requirements and conditions of Rule 14a-8, and
the proposal must be received by the Secretary of the Company at the address set
forth above not later than April 22, 1997.
By Order of the Board of Directors,
ROBERT A. GOODMAN
Secretary
August 20, 1996
19
<PAGE> 22
[TELXON LOGO]
Proxy for Annual Meeting of September 18, 1996
This Proxy is Solicited on Behalf of the Board of Directors
P
The undersigned hereby appoints Robert F. Meyerson, Frank E. Brick
R and Norton W. Rose as Proxies, each with the power to appoint his
substitute, and hereby authorizes any of them to represent and to
O vote, as provided on the reverse side hereof, all of the Common Stock
of Telxon Corporation held of record by the undersigned on August 8,
X 1996, at the Annual Meeting of Stockholders to be held on September
18, 1996 or any adjournment thereof.
Y
<TABLE>
<S> <C>
Election of Directors, Nominees: (change of address)
Robert F. Meyerson and Norton W. Rose ________________________________________________________
________________________________________________________
________________________________________________________
________________________________________________________
(If you have written in the above space, please mark the
corresponding box on the reverse side of this card.)
</TABLE>
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER
DIRECTED HEREIN BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS
MADE, THIS PROXY WILL BE VOTED "FOR" PROPOSAL 1.
IMPORTANT -- THIS PROXY MUST BE SIGNED AND DATED ON REVERSE SIDE.
SEE REVERSE
SIDE
- --------------------------------------------------------------------------------
PLEASE SIGN AND DETACH CARD ABOVE AND RETURN IT IN THE ENCLOSED ENVELOPE.
<PAGE> 23
<TABLE>
<C> <S> <C>
X PLEASE MARK YOUR SHARES IN YOUR NAME
VOTES AS IN THIS
EXAMPLE.
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <S> <C>
1. Election of FOR WITHHELD 2. In their discretion, the Proxies are authorized to vote upon
Directors / / / / such other business as may properly come before the meeting.
(see reverse)
For, except vote withheld from the following nominee(s):
_______________________________________________________
</TABLE>
<TABLE>
<S> <C> <C> <C>
Change
of / /
Address
Attend
Meeting / /
NOTE: Please sign exactly
as name appears hereon. Joint
owners should each sign. When signing as
attorney, executor, administrator, trustee or
guardian, please give full title as such.
If a corporation, please sign in full
SIGNATURE(S)________________________________________ DATE __________ corporate name by its president or other
authorized officer. If a partnership, please sign
SIGNATURE(S)________________________________________ DATE __________ in partnership name by an authorized person.
</TABLE>
- --------------------------------------------------------------------------------
PLEASE SIGN AND DETACH CARD ABOVE AND RETURN IT IN THE ENCLOSED ENVELOPE.
