GENERAL MICROWAVE CORPORATION
5500 New Horizons Boulevard
Amityville, New York 11701
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JUNE 23, 1998
TO THE HOLDERS OF COMMON STOCK:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders
of
GENERAL MICROWAVE CORPORATION ("Corporation") will be held at
General
Microwave Corporation, 5500 New Horizons Boulevard, Amityville, New
York
11701 on Tuesday, June 23, 1998 at 9:30 A.M., Eastern Daylight
Saving Time,
for the following purposes:
l. To elect a Board of nine Directors.
2. To consider and vote upon the adoption and approval of an
amendment
to the Corporation's 1990 Stock Option Plan that would
increase the
number of shares of the Corporation's common stock that
may be
issued pursuant to the 1990 Stock Option Plan by 50,000
to 175,000.
3. To transact such other business as may come before the
meeting or
any adjournment or adjournments thereof.
The Board of Directors has fixed the close of business on May
4, 1998 as
the record date for determination of stockholders entitled to
notice of and
to vote at the meeting.
Your attention is called to the attached proxy statement.
Whether or not you plan to attend this meeting, you are urged to
complete,
sign and return the enclosed proxy card, to which no postage need
be affixed
if mailed in the United States. This may save the Corporation the
expense of
further proxy solicitation. If you attend the meeting in person,
you may
withdraw your proxy and vote your own shares.
BY ORDER OF THE BOARD OF DIRECTORS.
MICHAEL I. STOLZAR,
Secretary
May 27, 1998
<PAGE>
GENERAL MICROWAVE CORPORATION
5500 New Horizons Boulevard
Amityville, New York 11701
PROXY STATEMENT
FOR ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JUNE 23, 1998
The enclosed proxy is being solicited by the Board of Directors of
General
Microwave Corporation ("Corporation") for use at the Annual Meeting
of
Stockholders of the Corporation to be held on June 23, 1998. The
proxy may
be revoked by the stockholder at any time prior to its use at the
meeting by
submission of a later-dated proxy or by written notice to the
Corporation,
Attention: Stockholder Relations, or by attendance and voting in
person at
the Annual Meeting. Solicitation of proxies may be made by mail,
personal
interviews, telephone and other means of communication by officers
and
regular employees of the Corporation who will not be additionally
compensated
therefor. Expenses for postage, printing, and handling will be
paid by the
Corporation and it may reimburse brokers, banks, and other
custodians,
nominees and fiduciaries for their expenses in sending proxy
material to
their principals.
Only stockholders of record of the Corporation's Common Stock, par
value one
cent ($.01) per share ("Common Stock"), at the close of business on
May 4,
1998 are entitled to vote. On that date there were 1,210,659
shares of
Common Stock outstanding. Each share is entitled to one vote at
the meeting.
The principal executive offices of the Corporation are located at
5500 New
Horizons Boulevard, Amityville, New York 11701. This notice of
meeting and
proxy statement and enclosed proxy will be mailed to the
Corporation's
stockholders of record on or about May 28, 1998.
PROPOSAL NO. 1
ELECTION OF DIRECTORS
The persons named in the enclosed proxy, or their substitutes, will
cast the
votes authorized by the proxies received for the election of the
nominees
listed below as directors for the ensuing year and until their
respective
successors are elected and qualified. If any nominee is
unavailable to serve
at the time of election, it is intended that the persons named in
the proxy
or their substitutes will vote for an alternative nominee who will
be
designated by the Board of Directors of the Corporation. However,
the Board
of Directors of the Corporation has no reason to anticipate that
any of the
nominees listed below will not be candidates.
Directors are elected by a plurality of the votes cast by the
holders of the
Corporation's Common Stock at a meeting at which a quorum is
present.
Accordingly, the individuals who receive the largest number of
votes cast are
elected as directors up to the number of directors to be chosen at
the
meeting. Shares not voted, whether by abstention, broker non-vote
or
otherwise, have no impact on the election of directors unless the
failure to
vote for an individual results in another individual receiving a
larger
number of votes. The Corporation will tabulate proxies which are
received
prior to the meeting. The Corporation intends to have an employee
appointed
as the inspector of elections at the meeting to receive the
tabulation, to
tabulate all other votes, and to certify the results of the
election.
The following table sets forth the nominees (each of whom is
presently a
member of the Board of Directors). With respect to each such
person, the
table sets forth the age, principal occupation during the past five
years,
office and position presently held with the Corporation, and the
year in
which the person first became a director.
<PAGE>
<TABLE>
<CAPTION>
Principal Occupation
and Other Positions Year Term
First Became
Name Age with the Corporation Will Expire a
Director
<S> <C> <S> <C> <C>
Sherman A. Rinkel* 72 Chairman of the Board of 1998
1960
Directors of the Corporation,
Retired President and Chief
Executive Officer of the
Corporation <F1>
Moe Wind 74 Retired Senior Vice 1998
1960
President, Treasurer and
Assistant Secretary of
the Corporation <F2>
Stanley Simon 80 Owner of Stanley Simon & 1998
1989
Associates, management and
financial consultants <F3>
Mitchell Tuckman* 47 President and Chief 1998
1994
Executive Officer of the
Corporation <F4>
Edmond D. Franco 41 Principal of Franco, Lewis 1998
1995
& Company, Inc., an invest-
ment banking firm <F5>
Michael I. Stolzar 50 Attorney, Partner of Zissu 1998
1995
Gumbinger & Stolzar LLP <F6>
Michael D. Magidson* 55 Executive Vice President, 1998
1997
Gerald Metals, Inc., an
international metals
merchant, refiner and
processor
Arnold H. Levine 59 Vice President-Finance, 1998
1998
Treasurer, Chief Financial
Officer and Assistant
Secretary of the Corporation
<F7>
Rozalie Schachter 51 Vice President-Business 1998
1998
Development of the Corpora-
tion <F8>
_________________
* Member of the Executive Committee of the
Board of Directors of the Corporation
Footnotes appear on next page.
<PAGE>
<FN>
<F1> Mr. Rinkel retired as President and Chief Executive Officer
of the
Corporation on March 1, 1995. He became Chairman of the
Board in May,
1995.
<F2> Mr. Wind retired as an officer of the Corporation on March 1,
1992.
<F3> Mr. Simon is also a trustee of Vornado Realty Trust.
<F4> Mr. Tuckman became President-Chief Executive Officer of the
Corporation
in March, 1995. He was Executive Vice President and Chief
Operating
Officer of the Corporation from August, 1994 until then.
From June,
1993 until August, 1994, Mr. Tuckman was Vice
President-Microwave
Engineering of the Corporation. He was Chief Microwave
Engineer of the
Corporation before that.
<F5> Mr. Franco has been a principal of Franco, Lewis & Company,
Inc., an
investment banking firm he co-founded, since July, 1992.
From
February, 1992 until July, 1992, he was a Senior Advisor to
the
Ministry of Privatization of the Czech Republic. From
January, 1991
until February, 1992, Mr. Franco was an independent financial
consultant. From 1989 until December, 1990, Mr. Franco was
a
Principal-Investment Banking Division of Morgan Stanley &
Co.,
Incorporated. From 1978 until 1989, Mr. Franco was an
investment
banker in the Corporate Finance Department of Drexel Burnham
Lambert,
Incorporated where he held a variety of positions, the last
of which
was First Vice President.
<F6> Mr. Stolzar has been Secretary and Assistant Treasurer of the
Corporation since June, 1981. During the past five years, he
has been
principally employed as a practicing attorney. Mr. Stolzar
has been a
partner of Zissu Gumbinger & Stolzar LLP since November,
1980.
<F7> Mr. Levine became Vice President-Finance, Chief Financial
Officer,
Treasurer and Assistant Secretary of the Corporation in
March, 1995.
From 1989 until then, he was Vice President- Finance and a
director of
Cardion Inc., a subsidiary of Siemens Corporation.
<F8> Dr. Schachter became Vice President-Business Development of
the
Corporation in December, 1991. Prior to joining the
Corporation in
1990, Dr. Schachter was a technical director at American
Cyanimid
Corporation.
</TABLE>
The Board of Directors of the Corporation has an Audit Committee
and a
Compensation Committee, but does not have a Nominating Committee.
The Audit Committee's functions include reviewing annual and
quarterly
reports and proxy statements sent to stockholders and filed with
the
Securities and Exchange Commission, recommending to the Board of
Directors
the engaging of the independent auditors, reviewing with the
independent
auditors the plan and results of the auditors' engagement and other
matters
of interest to the Committee and reviewing with the Corporation's
officers
matters of interest to the Committee including the effectiveness of
the
Corporation's internal controls and the results of its operations.
The Audit
Committee, which held four meetings during the Corporation's last
fiscal
year, consists of three members, Messrs. Simon, Wind and Franco.
Mr. Simon
is the Chairman of the Audit Committee.
The Compensation Committee's function is to, at its discretion,
review and
make recommendations to the Board of Directors of the Corporation,
the
appropriate committee of the Board of Directors of the Corporation,
or the
Board of Directors of the appropriate subsidiary of the Corporation
concerning the salaries and other compensation of the officers of
the
Corporation and its subsidiaries. The Compensation Committee,
which held no
formal meetings during the Corporation's last fiscal year, consists
of three
members, Messrs. Rinkel, Wind and Magidson. Mr. Rinkel is the
Chairman of
the Compensation Committee.
The Board of Directors of the Corporation held four meetings during
the
Corporation's last fiscal year. During the last fiscal year, each
incumbent
Director of the Corporation attended at least 75% of the combined
total of
the meetings of the Board of Directors and the committees on which
such
Director served.
The Corporation is not aware of any family relationships between
any
director, executive officer, or person nominated or chosen by the
Corporation
to become a director or executive officer.
EXECUTIVE COMPENSATION
The following table sets forth information concerning total
compensation
earned by or paid during each of the last three fiscal years to the
President-Chief Executive Officer of the Corporation, and the four
most
highly compensated executive officers of the Corporation who served
in such
capacities on February 28, 1998 (the "named executive officers").
<TABLE>
<CAPTION>
Summary Compensation Table
Long Term
Compensation Awards
Name and Principal Fiscal Annual Compensation Securities
Underlying
Position Year Salary($) Bonus($)
Options/SAR's(#)<F3>
<S> <C> <C> <C> <C>
Mitchell Tuckman 1998 142,500 31,623 0
President-Chief 1997 142,500 0 10,000
Executive Officer 1996 146,000 0 0
Rozalie Schachter 1998 114,000 19,624 0
Vice President- 1997 114,000 0 7,500
Business Development 1996 117,000 0 0
Howard Cohen 1998 112,100 19,404 0
Vice President- 1997 112,100 0 3,500
Administration 1996 115,050 0 0
Arnold H. Levine <F1> 1998 112,000 19,393 0
Vice President- 1997 107,500 0 5,000
Finance, Treasurer, 1996 100,491 0 5,000
Chief Financial
Officer (Principal
Financial and Chief
Accounting Officer)
Robert DeBrecht <F2> 1998 105,000 18,583 0
Vice President- 1997 81,980 0 10,000
Engineering 1996 - -
<FN>
______________
<F1> Mr. Levine became an executive officer of the Corporation
during fiscal year 1996.
<F2> Mr. DeBrecht became an executive officer of the Corporation
during fiscal year 1997.
<F3> The options reported as granted in fiscal year 1997 were
previously
granted options which were repriced as part of a
Corporation-wide
option repricing to reflect the then current market value of
the
Corporation's common stock at that time. The options reported
as
granted to Mr. DeBrecht in that year (the only ones on the
table
originally granted in that year) were granted and then
repriced,
thus 10,000 shares are reported as securities underlying
options
granted to him in that year although after giving effect to
the
repricing, he only had an option to purchase 5,000 shares of
the
Corporation's Common Stock.
</TABLE>
Stock Option Grants and Exercises
The Corporation has in effect an employee stock option plan. It
does not
have any restricted stock or stock appreciation rights plans.
During the
last fiscal year, no options were granted to or exercised by any of
the named
executive officers. The following table contains information
concerning the
1998 fiscal year end value of unexercised options held by the named
executive
officers.
<TABLE>
<CAPTION>
Aggregate Option/SAR Exercises in Last Fiscal Year
and FY-End Option/SAR Values
Number of
Securities Value of
Underlying Unexercised
Unexercised In-the-Money
Options/SARs Options/SARs
at FY-End(#) at FY-End($)
Exercisable/ Exercisable/
Name Unexercisable Unexercisable
<S> <C> <C>
Mitchell Tuckman 10,000/0 22,500/0
Rozalie Schachter 7,500/0 16,875/0
Howard Cohen 3,500/0 7,875/0
Arnold H. Levine 3,750/1,250 8,437.50/2,812.50
Robert DeBrecht 2,500/2,500 5,625/5,625
</TABLE>
Employment Arrangements
In connection with his retirement as President and Chief Executive
Officer of
the Corporation on March 1, 1995 and in lieu of the following
standard
director compensation arrangements, Mr. Rinkel was retained as a
consultant
to the Corporation for a three year period for $25,000 a year and
agreed not
to compete with the Corporation for three years for $100,000 a
year. Mr.
Rinkel was retained on March 1, 1998 for two years as a consultant
to, and
non-executive Chairman of the Board of Directors of, the
Corporation for
$60,000 a year.
Other directors who are not officers of the Corporation are each
paid $500
for each meeting of the Board of Directors which they attend and
$4,000 per
year. Members of the Audit Committee of the Board of Directors are
also paid
$250 for each meeting of the Audit Committee which they attend.
Non-employee
directors also receive an option each year that they serve as a
director of
the Corporation to purchase 2,500 shares of common stock of the
Corporation
for its fair value on the date of grant, the date of the
Corporation's Annual
Meeting of Stockholders.
Certain Transactions
During the fiscal year ended February 28, 1998, the Corporation
paid $121,784
for legal services to the firm now known as Zissu Gumbinger &
Stolzar LLP, of
which Frederick Zissu is of counsel and Michael I. Stolzar is a
partner.
During the fiscal year ended February 28, 1998, Franco, Lewis &
Company, Inc.
of which Edmond D. Franco is a principal, performed, and during the
current
fiscal year may perform, investment banking services for the
Corporation.
During the fiscal year ended February 28, 1998, the Corporation
purchased an
officers' and directors' liability insurance policy from Great
American
Insurance Co. for $18,798. The contract dated May 24, 1997 expired
on May
24, 1998 and insured all officers and directors including those of
subsidiaries, as listed in the Corporation's Annual Report to
Stockholders.
The contract was renewed for double the liability limits for
$27,000 and
expires on May 24, 1999.
Stock Ownership of Certain Beneficial Owners and Management
The following table sets forth certain information as of April 1,
1998 with
respect to the ownership of the Corporation's Common Stock, par
value $.01
per share, by each director of the Corporation and nominee for
election as a
director, each of the named executive officers, all directors and
executive
officers of the Corporation as a group, and each person known to
the
Corporation to own beneficially more than five percent of the
Corporation's
Common Stock.
<TABLE>
<CAPTION>
Amount and Nature of Percent
Name Beneficial Ownership<F1> of
Class<F16>
<S> <C> <C>
Sherman A. Rinkel 85,872 <F2> 7.1%
71 Northgate Circle
Melville, New York 11747
Moe Wind 34,470 <F3> 2.8%
31 Longwood Drive
Dix Hills, New York 11746-4715
Stanley Simon 2,855 <F4> *
c/o Stanley Simon & Associates
70 Pine Street
New York, New York 10270
Mitchell Tuckman 11,838 <F5> 1.0%
c/o General Microwave Corporation
5500 New Horizons Boulevard
Amityville, New York 11701
Edmond D. Franco 825 <F6> *
Franco, Lewis & Company, Inc.
63 Wall Street
New York, New York 10005
Michael I. Stolzar 1,025 <F7> *
Zissu Gumbinger & Stolzar LLP
950 Third Avenue
New York, New York 10022
Michael D. Magidson 1,376 <F8> *
17 Broadview Road
Westport, Connecticut 06880
Arnold H. Levine 5,000 <F9> *
c/o General Microwave Corporation
5500 New Horizons Boulevard
Amityville, New York 11701
__________________
* Under 1%
Table continues on next page. Footnotes appear on page 11.
Rozalie Schachter 12,562 <F10> 1.0%
c/o General Microwave Corporation
5500 New Horizons Boulevard
Amityville, New York 11701
Howard Cohen 17,290 <F11> 1.4%
c/o General Microwave Corporation
5500 New Horizons Boulevard
Amityville, New York 11701
Robert DeBrecht 2,500 <F12> *
c/o General Microwave Corporation
5500 New Horizons Boulevard
Amityville, New York 11701
All directors and executive 175,613 <F13> 14.1%
<F17>
officers as a group (11 persons,
including those listed above)
Frederick Zissu 213,396 <F14> 17.6%
197 Hamburg Turnpike
Wayne, New Jersey 07470
Shufro, Rose & Ehrman LLC 256,250 <F15> 21.2%
745 Fifth Avenue
New York, New York 10151
* Under 1%
Footnotes appear on next page.
<FN>
<F1> Unless otherwise indicated, each person is the direct owner
of and has
sole voting power and sole investment power with respect to
such
shares.
<F2> Does not include 2,420 shares owned by Mr. Rinkel's wife in
which
shares Mr. Rinkel disclaims any beneficial interest.
Includes 825
shares which Mr. Rinkel could acquire within 60 days upon
exercise of
stock options.
<F3> Does not include 2,000 shares owned by Mr. Wind's daughter in
which
shares Mr. Wind disclaims any beneficial interest. Includes
825 shares
which Mr. Wind could acquire within 60 days upon exercise of
stock
options.
<F4> Includes 825 shares which Mr. Simon could acquire within 60
days upon
exercise of stock options and 700 shares owned by the estate
of Mr.
Simon's wife.
<F5> Includes 10,000 shares which Mr. Tuckman could acquire within
60 days
upon exercise of stock options.
<F6> Includes 825 shares which Mr. Franco could acquire within 60
days upon
exercise of stock options. Does not include 1,200 shares
which Mr.
Franco acquired in April, 1998.
<F7> Includes 825 shares which Mr. Stolzar could acquire within 60
days upon
exercise of stock options.
<F8> Does not include 4,851 shares owned by Mr. Magidson's wife in
which
shares Mr. Magidson disclaims any beneficial interest.
Includes 825
shares which Mr. Magidson could acquire within 60 days upon
exercise of
stock options.
<F9> Includes 5,000 shares which Mr. Levine could acquire within
60 days
upon exercise of stock options.
<F10> Includes 7,500 shares which Dr. Schachter could acquire
within 60 days
upon exercise of stock options.
<F11> Includes 3,500 shares which Mr. Cohen could acquire within 60
days upon
exercise of stock options.
<F12> Includes 2,500 shares which Mr. DeBrecht could acquire within
60 days
upon exercise of stock options.
<F13> Includes 33,450 shares which could be acquired within 60 days
upon
exercise of stock options.
<F14> Does not include 1,000 shares owned by Mr. Zissu's wife in
which shares
Mr. Zissu disclaims any beneficial interest.
<F15> Based on Amendment No. 10 to a Schedule 13G dated February
13, 1998
filed by Shufro, Rose & Ehrman LLC. Shufro, Rose & Ehrman
LLC is a
broker-dealer registered under the Securities Exchange Act of
1934 and
an investment adviser registered under the Investment
Advisers Act of
1940. Shufro, Rose & Ehrman LLC has sole voting power with
respect to
33,200 shares, shared voting power with respect to 0 shares,
sole
investment power with respect to 256,250 shares and shared
investment
power with respect to 0 shares.
<F16> Based on 1,210,659 shares outstanding as of April 1, 1998.
This number
has been adjusted, where necessary, with respect to
particular persons
by adding to it the number of shares which could be acquired
within 60
days upon exercise of stock options.
<F17> Based on 1,244,109 shares outstanding. This number was
arrived at by
adding to the total number of shares outstanding as of April
1, 1998,
the number of shares which could have been acquired within 60
days upon
exercise of stock options by persons included in the group.
</TABLE>
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934 requires
the
Corporation's officers and directors, and persons who own more than
ten (10%)
percent of the Corporation's Common Stock to file reports of
ownership and
changes in ownership with the Securities and Exchange Commission
("SEC") and
the American Stock Exchange. Officers, directors and greater than
ten (10%)
percent stockholders are required by SEC regulations to furnish the
Corporation with copies of all Section 16(a) forms they file.
Based solely on its review of the copies of such forms
received by the
Corporation, or written representations from certain reporting
persons that
no Forms 5 were required for those persons, the Corporation
believes that
during the fiscal year ended February 28, 1998, all Section 16(a)
filing
requirements applicable to its officers, directors, and greater
than ten
(10%) percent beneficial owners were complied with.
PROPOSAL NO. 2
AMENDMENT TO THE 1990 STOCK OPTION PLAN
At the 1990 Annual Meeting, the stockholders approved the
1990 Stock
Option Plan ("1990 Plan") which provided for the issuance of
options for and
the sale to key employees of the Corporation and its subsidiaries
of a
maximum of 75,000 shares of Common Stock of the Corporation. At
the 1994
Annual Meeting, the stockholders amended the 1990 Plan to increase
the number
of shares that may be issued pursuant to it by 50,000 to 125,000.
As of May
26, 1998, no shares remained available for the grant of options
under the
1990 Plan. Accordingly, on May 26, 1998, the Board of Directors of
the
Corporation unanimously adopted an amendment to the 1990 Stock
Option Plan
that increases the number of shares that may be issued pursuant to
it by
50,000 to 175,000. The amendment is subject to adoption and
approval by the
Corporation's stockholders at this meeting.
Description of the 1990 Stock Option Plan
The Board of Directors of the Corporation believes ownership
of the
Corporation's Common Stock by key employees is desirable, and that
stock
options can provide an effective incentive to encourage such
ownership. A
description of the 1990 Stock Option Plan, as amended, follows, but
your
attention is directed to the entire 1990 Plan, as amended, attached
hereto as
Exhibit A.
Under the 1990 Plan, as currently in effect, 125,000 shares
of Common
Stock of the Corporation were reserved for issuance upon exercise
of options
which could have been granted under the 1990 Plan. The proposed
amendment
increases this number to 175,000. Shares available for options
under the
1990 Plan may be authorized but unissued shares or treasury shares.
Any
shares subject to an option which expires or terminates unexercised
shall
again become available for other grants under the 1990 Plan. 1990
Plan
Options may either be incentive stock options ("ISO's") within the
meaning of
Section 422A of the Internal Revenue Code of 1986, as amended
("Code") or
options not qualified under the Code. The 1990 Plan expires on
June 26, 2000
and no further options may be granted thereafter. However, options
theretofore granted may extend beyond that date and no ISO's may be
granted
pursuant to the 1990 Plan after January 21, 2000.
All matters in connection with the 1990 Plan are administered
by the
Stock Option Committee of the Board of Directors of the Corporation
("Stock
Option Committee"). The Stock Option Committee consists of three
to five
members of the Board of Directors of the Corporation, selected by
the Board
of Directors of the Corporation, and serving at its pleasure. The
Stock
Option Committee has full power to interpret the 1990 Plan and to
establish
and amend rules and regulations for its administration. The Stock
Option
Committee may suspend or terminate the 1990 Plan or amend it from
time to
time to provide for options granted pursuant to it to qualify as
ISO's or in
other respects not involving a substantial departure from its
principles.
The Stock Option Committee may grant options under the 1990
Plan to key
employees of the Corporation and its subsidiaries, including
officers and
directors who are employees, for such number of shares of Common
Stock as it
determines.
The purchase price of stock under each option granted
pursuant to the
1990 Plan shall be determined by the Stock Option Committee;
provided,
however, that the purchase price contained in an ISO may not be
less than the
fair market value of the Common Stock subject to the option on the
date that
the option was granted, and may in no event be less than the par
value of the
stock. If any employee to whom as ISO is granted owns Common Stock
possessing more than 10% of the total voting power of all classes
of stock of
the Corporation, the option exercise price must be at least 110% of
the fair
market value of Common Stock at the time the option is granted and
the option
must terminate no later than five years from the date the option is
granted.
Options are exercisable as provided in an option agreement between
the
Corporation and an option holder. However, no 1990 Plan option may
be
exercised for at least six months after the date of grant.
1990 Plan Options may have a term not exceeding ten years
from the date
of grant, but are subject to earlier termination as described in
this section
or in the option agreement by which the option was granted. 1990
Plan
Options may be exercised by giving notice to the Corporation at its
executive
offices, specifying the number of shares purchased and accompanied
by payment
in full of the aggregate purchase price of the shares being
purchased. In no
case may a fraction of a share be purchased or issued pursuant to
the
exercise of a 1990 Plan Option.
The purchase price upon exercise of a 1990 Plan option may be
paid
either in cash or in shares of Common Stock of the Corporation
already owned
or a combination of cash and shares. A 1990 Plan option may
provide that the
optionee may exercise the option without payment of the option
price by
delivery to the Corporation of an exercise notice and irrevocable
instructions to deliver shares of Common Stock directly to the
stockbroker
named therein in exchange for payment of the option price and
withholding
taxes by such broker to the Corporation. No optionee shall have
any rights
to dividends or other rights of a stockholder with respect to the
shares
subject to the option until the purchase price for such shares has
been paid.
Use of shares of Common Stock as payment may, in some
instances, permit
holders of Common Stock acquired at a price lower than the market
value of
the shares on the exercise date to increase the number of shares of
Common
Stock they own without incurring any out-of-pocket cash expense.
The share
payment provision permits not only single exercise of stock options
through
payment in shares of Common Stock, but also the exercise of a stock
option in
successive transactions by the optionee applying the shares
received upon the
exercise of a portion of a stock option to satisfy the option price
for
additional portions of the option. While this latter technique
allows an
optionee to pay a smaller number of previously owned shares for the
option
exercise price, it cannot result in a yield to the optionee greater
than the
difference between the option exercise price of the full number of
shares
subject to his options and their fair market value.
In connection with the granting of any non-qualified 1990
Plan Option,
the Stock Option Committee may, in its discretion, impose upon the
holder of
the option such restrictions as it shall deem advisable to be
applicable to
the Common Stock to be purchased pursuant to any such option. Such
restrictions may include, but shall not be limited to, restrictions
which
render the Common Stock non-transferable, restrictions which create
a
substantial risk of forfeiture of Common Stock or restrictions
which by their
terms never lapse. Unless stated to the contrary in an option
agreement, the
Stock Option Committee may cancel or modify, in whole or in part,
any such
restrictions.
1990 Plan Options are not assignable by the optionee
otherwise than by
will or by the laws of descent and distribution, or pursuant to a
qualified
domestic relations order as defined in the Code.
Within one month after the termination of employment of an
optionee for
any reason other than death or disability, all 1990 Plan Options he
holds
shall expire and may not be exercised. If an optionee dies while
employed by
the Corporation or a subsidiary of the Corporation, all unexpired
1990 Plan
Options he holds may be exercised, to the extent they were
exercisable on the
date of his death, by his executor, administrator or other person
entitled by
law, at any time within six months after death. If an optionee is
terminated
from employment because he becomes disabled, as defined in the
Code, all
unexpired 1990 Plan Options granted to the employee shall terminate
one year
from the date the optionee was so terminated or within such shorter
period,
if any, specified in his Option Agreement to the extent the option
was
exercisable on the date of such termination. In no event, however,
may a
1990 Plan Option be exercised after the expiration of its term.
If there is any change in the outstanding Common Stock by
reason of a
share distribution, recapitalization, merger, consolidation,
split-up,
combination or exchange of shares, or similar changes, the
aggregate number
and kind of shares available under the 1990 Plan and the number and
kind of
shares subject to each outstanding option and the option price
shall be
appropriately adjusted by the Stock Option Committee.
Federal Income Tax Consequences
The following description of Federal income tax consequences
is based
upon current statutes, regulations and interpretations. The
description does
not include state or local tax consequences.
Under the 1990 Plan, the Corporation may grant ISO's or
non-qualified
stock options. The grant of options does not result in taxable
income to the
optionee or any tax deduction to the Corporation. However, the
transfer of
Common Stock of the Corporation to an optionee upon exercise of an
option may
or may not result in immediate or deferred taxable income to the
optionee and
tax deductions to the Corporation depending upon whether the option
was an
ISO or a non-qualified stock option.
In general, the exercise of an ISO is exempt from regular
income tax,
but is subject to alternative minimum tax and does not result in a
tax
deduction to the Corporation. However, if an optionee disposes of
stock he
received upon exercise of an ISO at least two years after the
option was
granted and at least one year after the exercise, the profit or
loss on the
disposition of such stock will be taxed as long-term capital gain
or loss to
the optionee.
If stock acquired upon exercise of an ISO is disposed of at
a profit
within two years after the option was granted or in less than one
year after
the Common Stock was acquired upon exercise (a "disqualifying
disposition"),
the optionee will recognize ordinary income in the year of
disposition
measured by the excess of the sale price of the stock over the
exercise price
of the option, or the excess of the fair market value of the Common
Stock on
the date of exercise over the exercise price of the option,
whichever is
less. The amount realized from sale in excess of the fair market
value on
the date of exercise will be taxed as capital gain, long-term or
short-term,
as the case may be. The Corporation will be allowed a deduction
against
income in the year in which such a disposition occurs in an amount
equal to
the amount of ordinary income recognized by the optionee.
If stock acquired upon exercise of an ISO is disposed of at
a loss, the
loss on the disposition of such stock will be taxed as a capital
loss, long-
term or short-term, as the case may be.
The exercise of a non-qualified stock option generally
results in
immediate taxable income to the optionee and a tax deduction to the
Corporation. The taxable income recognized by an optionee
exercising a non-
qualified stock option will be an amount equal to the excess of the
fair
market value of the Common Stock on the date of exercise over the
option
exercise price. However, no income is realized at the time of
exercise if
the Common Stock is subject to restrictions such that there is a
substantial
risk of forfeiture thereof, or if the Common Stock is
non-transferable by the
holder. In either of such events, income is recognized at the time
such
restriction lapses, or at the time the shares are sold, whichever
occurs
first. The amount of such income is measured by the difference
between the
option exercise price and the value of the shares, or the amount
received for
them, as the case may be, at such time.
Upon disposition of the stock acquired upon exercise of a
non-qualified
option, the employee will recognize capital gain or loss in an
amount equal
to the difference between his tax basis for the shares and the
amount
received for them. His tax basis will be the option exercise price
for the
shares increased by the amount of ordinary income he recognized
with respect
to the exercise of the option. The Corporation will be entitled to
a
deduction at the time of and in the amount of the ordinary income
recognized
by the optionee.
An employee may use shares of Common Stock to pay the option
exercise
price of an option (ISO or non-qualified), and no gain or loss will
be
recognized with respect to the shares used as payment. Shares
equal in
number to the shares used to pay the option exercise price will
have the same
tax basis and holding period as the shares used to pay the option
exercise
price. If the option exercised was an ISO, the remaining shares
received
will ordinarily have a zero tax basis and a holding period that
begins on the
date of exercise of the option. If the option exercised was a
non-qualified
option, the excess shares will have a basis equal to any cash paid
upon
exercise plus the ordinary income recognized by the employee; and
the holding
period will begin with the date the shares were acquired.
An employee does not recognize any capital gain or loss when
he uses
stock received upon the exercise of one ISO to pay the option
exercise price
of another ISO. However, if the stock used as payment had not been
held for
more than one year from the date it was acquired upon exercise and
two years
from the date of grant of the first ISO, the use of the shares as
payment
would constitute a disqualifying disposition of those shares. The
employee
would recognize ordinary income equal to the excess of (a) the
lesser of (i)
the fair market value of the shares used as payment on the date of
payment or
(ii) the fair market value of the shares used as payment as of the
date the
first ISO was exercised over (b) the option exercise price of the
first ISO.
The Corporation will be entitled to a corresponding deduction from
income.
In the case of a disqualifying disposition of zero tax basis stock
received
upon exercise of an ISO, the tax basis will be increased by the
ordinary
income recognized by the employee.
If an employee uses shares of Common Stock that were acquired
upon
exercise of an ISO to pay the option exercise price of a
non-qualified stock
option, and if the employee disposes of the stock he receives upon
exercise
of the non-qualified stock option within two years from the date
the ISO was
granted or within one year from the date the stock was acquired
upon
exercise, he may recognize ordinary income upon that disposition as
described
above with respect to the disposition of stock acquired upon
exercise of an
ISO.
The 1990 Plan is not subject to any of the provisions of the
Employee
Retirement Income Security Act of 1974 (ERISA). The provisions of
Section
401(a) of the Code are not applicable to the 1990 Plan, and,
accordingly, it
is not qualified pursuant thereto.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" PROPOSAL NO.
2
The affirmative vote of a majority of the votes cast at the
Annual
Meeting is required for adoption and approval of the amendment to
the 1990
Plan. Any shares not voted, whether by abstention, broker non-vote
or
otherwise, will have no impact on this vote.
OTHER MATTERS
Information Respecting the Corporation's Independent Auditors
The Board of Directors of the Corporation has selected KPMG Peat
Marwick LLP
as independent auditors for the current fiscal year. This firm
served in the
same capacity for the fiscal year ended February 28, 1998.
Representatives
of KPMG Peat Marwick LLP are expected to be present at the Annual
Meeting to
make any statements they feel appropriate and to respond to
appropriate
questions directed to them.
Additional Matters to Come Before the Meeting
The Board of Directors of the Corporation does not intend to
present any
other matters at the meeting, nor does it have any other
information that
other matters will be brought before the meeting. However, if any
other
matters properly come before the meeting, it is the intention of
the persons
named in the enclosed proxy to vote the proxy in accordance with
their
judgment on such matters.
Advance Notice By-law
The By-laws of the Corporation provide that in order for a
stockholder to
nominate a candidate for election as a director at an annual
meeting of
stockholders or propose business for consideration at such meeting,
notice
must be given to the Secretary of the Corporation no more than 90
days nor
less than 60 days prior to the first anniversary of the preceding
year's
annual meeting.
Stockholder Proposals
Stockholder proposals for the 1999 Annual Meeting must be received
at the
principal executive offices of the Corporation, 5500 New Horizons
Boulevard,
Amityville, New York 11701, Attention: President, not later than
January 28,
1999 for consideration for inclusion in the 1999 proxy statement
and form of
proxy.
BY ORDER OF THE BOARD OF DIRECTORS
MICHAEL I. STOLZAR,
Secretary
May 27, 1998
EXHIBIT A
GENERAL MICROWAVE CORPORATION
1990 STOCK OPTION PLAN
l. Purposes. The purposes of the plan ("Plan") are to
provide an
incentive to key employees of General Microwave Corporation
("Company") and
its subsidiaries, including officers and directors who are
employees, to
contribute to the success of the Company by purchasing a
proprietary interest
in the Company, and to offer an additional inducement in obtaining
and
retaining the services of key personnel. Purchases shall be made
in
accordance with "incentive stock options" or "nonqualified stock
options"
issued pursuant to the Internal Revenue Code of 1986, as amended
("Code"),
the Regulations and Rulings promulgated thereunder.
2. Stock Subject to the Plan. Options may be granted
under the
Plan to purchase in the aggregate not more than 175,000 shares of
the
Company's common stock, par value $.01 per share ("Common Stock")
which may
be authorized but unissued shares or treasury shares. Any shares
subject to
an option which for any reason expires or is terminated unexercised
as to
such shares, shall again become available for options under the
Plan.
3. Value of the Stock. The aggregate fair market value
(determined as of the time the option is granted) of the Common
Stock with
respect to which incentive stock options are exercisable (under
this and all
other stock option plans of the Company) for the first time during
any
calendar year by an employee to whom an incentive stock option is
granted
shall not exceed $100,000.
4. Administration and Selection. The Plan shall be
administered
by a committee designated as the Stock Option Committee
("Committee") to be
appointed by, and to serve at the pleasure of, the Board of
Directors which
committee shall consist of not less than three nor more than five
directors
of the Company. The Committee shall have full power to interpret
the Plan,
and to establish and amend rules and regulations for its
administration. The
interpretations and decisions with regard to any question arising
under the
Plan made by the Committee shall be final and conclusive on all
employees of
the Company and its subsidiaries participating or eligible to
participate in
the Plan. Subject to the terms hereof, the Committee shall also
have full
power to determine the terms and conditions of options granted
under the Plan
including, but not limited to, option price, term and
exercisability of
options and restrictions on Common Stock issued pursuant thereto.
The Board of Directors may from time to time appoint
members of
the Committee in substitution for or in addition to members
previously
appointed and may fill vacancies, however caused, in the Committee.
The
Committee shall hold its meetings at such times and places as it
shall deem
advisable. A majority of its members shall constitute a quorum.
Action of
the Committee shall be taken by a majority of its members at the
meeting.
Any action may be taken by a written instrument signed by a
majority of the
members, and action so taken shall be fully as effective as if it
had been
taken by a vote of a majority of the members at a meeting duly
called and
held.
5. Eligibility. The Committee, in its sole discretion,
may grant
options from time to time to key employees of the Company and its
subsidiaries, including officers and directors who are employees
(but
excluding members of the Committee), for such number of shares of
Common
Stock as the Committee may determine.
6. Option Price. The purchase price of the Common Stock
under
each option shall be such amount as the Committee, in its sole
discretion,
shall determine, provided, however, the purchase price pursuant to
an
incentive stock option shall not be less than the fair market value
of the
Common Stock on the date the option was granted, and shall not be
less than
the par value of the Common Stock. Such fair market value shall be
determined by the Committee on a consistent basis pursuant to any
rules or
regulations applicable to incentive stock options.
7. Term of Options. The term of each option granted
pursuant to
the Plan shall be for a period not exceeding ten (10) years from
the date of
granting thereof. The term of any option, validly granted, may
extend beyond
the termination of the Plan. Options shall be subject to earlier
termination
as provided hereinafter or in the Option Agreement.
8. Ten Percent Stockholders. Notwithstanding Sections
6 and 7
hereof, if an optionee, at the time an incentive stock option is
granted,
owns Common Stock possessing more than ten (10%) percent of the
total
combined voting power of all classes of stock of the Company, the
option
price shall be one hundred ten (110%) percent of the fair market
value of the
Common Stock at the time the option is granted, and the option
shall
terminate not later than five (5) years from the date the option is
granted.
9. Exercise of Options. Except as otherwise provided
herein, an
option may provide for its exercise during its term in such amounts
and at
such times as shall be specified in the Option Agreement. The
Committee, in
its sole discretion, may grant options or accelerate the exercise
of options
granted so that options are exercisable over a shorter period of
time than
that stated therein. If the full number of shares available for
purchase in
a period shall not be purchased, the balance may be purchased at
any time or
from time to time thereafter but prior to the termination of such
option.
Notwithstanding anything contained in this Plan to the contrary, no
option
granted hereunder shall be exercisable until this Plan has been
approved by
the stockholders of the Company as provided in Paragraph 17 hereof.
An option shall be exercised by giving written notice
to the
Company at its executive offices, specifying the number of shares
to be
purchased and accompanied by payment in full of the aggregate
purchase price
thereof. In no case may a fraction of a share be purchased or
issued
pursuant to the exercise of an option. The purchase price may be
paid in
cash, by certified or cashier's check or in full shares of Common
Stock, or
any combination of the foregoing. Any shares of Common Stock used
as payment
for shares being acquired shall be deemed to have a value per share
equal to
the closing sales price of the Common Stock on the day the written
notice of
exercise is received by the Company as reported by the American
Stock
Exchange, or, if no sales of Common Stock shall have been made on
that day,
the average of the high and low sales prices on the next preceding
day on
which sales were made as reported by the American Stock Exchange.
Payment of
taxes, if any, required to be withheld by the Company as a result
of the
exercise of an option, shall be in cash at the time of exercise or
on the
applicable tax date under Section 83 of the Code, if later;
provided,
however, tax withholding obligations may be met by the withholding
of Common
Stock otherwise deliverable to the optionee pursuant to procedures
approved
by the Committee and with the consent of the Committee. In no
event shall
Common Stock be delivered to any optionee until he has paid to the
Company,
in cash, the amount of tax required to be withheld by the Company
or has
elected to have his tax withholding obligation met by the
withholding of
Common Stock in accordance with the procedures approved by the
Committee and
with the Committee's consent; except that in the case of later tax
dates
under Section 83 of the Code, Common Stock may be delivered prior
to the
optionee's satisfaction of tax withholding obligations if the
optionee makes
arrangements satisfactory to the Company that such obligations will
be met on
the applicable tax date.
Each option may provide that the optionee may exercise the
option
without payment of the option price by delivery to the Company of
an exercise
notice and irrevocable instructions to deliver shares of Common
Stock
directly to the stockbroker named therein in exchange for payment
of the
option price and withholding taxes by such broker to the Company.
10. Restrictions on Common Stock. In connection with the
granting
of any non-qualified stock option hereunder, the Committee may in
its sole
discretion impose upon the holder thereof such restrictions as it
shall deem
advisable to be applicable to the Common Stock to be purchased
pursuant to
such option. Such restrictions may include, but shall not be
limited to,
restrictions which render the Common Stock non-transferable,
restrictions
which create a substantial risk of forfeiture of the Common Stock,
or
restrictions which by their terms will never lapse.
Unless expressly stated to the contrary in any Option
Agreement, the Committee, in its sole discretion, shall have the
right to
cancel, alleviate or modify, in whole or in part, any such
restrictions;
provided, however, that no such action shall be taken without the
consent of
the optionee if such action would have the effect of rendering the
restrictions more onerous to the optionee.
11. Termination of Employment. Any optionee whose
employment has
terminated for any reason other than death or disability may
exercise his
option within one (1) month after the date of such termination to
the extent
the option was exercisable on the date of such termination. If the
employment of an optionee is terminated because he becomes
disabled, as
defined in Section 105(d)(4) of the Code, the optionee may exercise
his
option within one (l) year after the date of such termination, or
within such
shorter period, if any, specified in his Option Agreement to the
extent the
option was exercisable on the date of such termination. In no
event,
however, shall the term of an option be extended beyond its normal
termination date as a result of the foregoing. Options granted
under the
Plan shall not be affected by any change of employment so long as
the
optionee continues to be an employee of the Company, a parent or
subsidiary
corporation of the Company, or of a corporation issuing or assuming
the
options in a transaction to which Section 425(a) of the Code
applies or a
parent or subsidiary corporation thereof.
12. Death of Employee. If an optionee dies while
employed by the
Company or a parent or subsidiary corporation of the Company, the
option may
be exercised to the extent exercisable on the date of his death, by
his
executor, administrator or other person entitled by law to the
optionee's
rights under the option, at any time within six (6) months after
death, but
in no event after the expiration of the term of the option.
13. Option Agreements. Options shall be evidenced by
Option
Agreements which need not be identical and which shall contain such
provisions as the Committee shall deem appropriate or advisable.
Each Option
Agreement shall state whether it will or will not be treated as an
incentive
stock option. Nothing in the Plan shall confer any rights on an
employee
other than those set forth in the Option Agreement, and neither the
Plan nor
the Option Agreement shall confer upon any employee any rights to
continue in
the employ of the Company or interfere in any way with the rights
of the
Company to terminate his employment at any time without liability
by the
Company.
14. Adjustments. Notwithstanding any other provision of
the Plan,
in the event of any change in the outstanding Common Stock by
reason of a
share distribution, recapitalization, merger, consolidation,
split-up,
combination or exchange of shares, or the like, the aggregate
number and kind
of shares available under the Plan and the number and kind of
shares subject
to each outstanding option and the option price shall be
appropriately
adjusted by the Committee.
15. Amendment and Termination. The Committee may at any
time
suspend or terminate the Plan or amend it from time to time in such
respects
as it may deem advisable to provide that options granted hereunder
may
qualify as incentive stock options under the Code, or may so amend
it in any
other respect not involving a substantial departure from the
principles
herein set forth. No amendment by the Committee shall serve to
alter the
class of persons eligible to receive options hereunder, or, except
as
provided in Section 14, increase the maximum number of shares with
respect to
which options may be granted hereunder. Unless sooner terminated
by the
Committee, the Plan shall terminate on June 26, 2000.
16. Non-Transferability of Options and Other Terms. An
option
granted under the Plan shall not be transferable other than by will
or the
laws of descent and distribution or pursuant to a qualified
domestic
relations order as defined in the Code, shall not be exercisable
for at least
six (6) months after the date of grant except in the case of death
or
disability, and may be exercised during the lifetime of the holder
thereof
only by him.
17. Effective Date of the Plan. The Plan shall become
effective
upon the date of adoption hereof by the Board of Directors of the
Company,
provided that the Plan shall be submitted for approval to the
stockholders of
the Company at an annual meeting to be held in 1990. If this Plan
is not
approved by the stockholders at such meeting, it shall become null
and void,
and all options granted pursuant hereto shall be null and void and
of no
force and effect.
<PAGE>
ANNUAL MEETING OF STOCKHOLDERS OF GENERAL MICROWAVE
CORPORATION
The undersigned, revoking all prior proxies, hereby
appoints SHERMAN
A. RINKEL and MITCHELL TUCKMAN, or either one of them, proxies,
with full
power of substitution, to vote all shares the undersigned is
entitled to vote
at the Annual Meeting of Stockholders of General Microwave
Corporation
("Corporation") to be held at General Microwave Corporation, 5500
New
Horizons Bouelvard, Amityville, New York 11701 on Tuesday, June 23,
1998 at
9:30 A.M., Eastern Daylight Saving Time, and all adjournments
thereof, and to
vote as directed below upon the proposals which are more fully set
forth in
the Proxy Statement and otherwise in their discretion upon such
other
business as may properly come before the meeting or any adjournment
or
adjournments thereof; all as more fully set forth in the Notice of
Meeting
and Proxy Statement, receipt of which is hereby acknowledged.
(Continued and to be Voted, Signed and
Dated on Reverse Side)
(over)
Place mark in this box if [ ]
you plan to attend the [ ]
stockholders meeting.
PLEASE SIGN AND RETURN PROMPTLY
<PAGE>
Proposal No. 1 Election of Directors-The Board of Directors
Recommends a Vote
"FOR" Election of Directors.
FOR all nominees WITHHOLD SHERMAN A. RINKEL, MOE WIND,
(except as indicated AUTHORITY STANLEY SIMON, MITCHELL
TUCKMAN,
herein) to vote for EDMOND D. FRANCO, MICHAEL I.
all nominees STOLZAR, MICHAEL D. MAGIDSON,
ARNOLD H. LEVINE, ROZALIE
SCHACHTER
(To withhold authority to
vote for
[ ] [ ] any individual nominee, write
that
[ ] [ ] nominee's name on the space
provided
below.)
PROPOSAL NO. 2 Adoption and Approval of Amendment to 1990 Stock
Option Plan-
The Board of Directors Recommends a Vote "FOR" Proposal
No. 2
FOR AGAINST ABSTAIN Dated:
, 1998
__ __ __
[ ] [ ] [ ]
[__] [__] [__]
Please sign exactly as your name or Signature(s)
names appear hereon. Each joint
owner must sign (Executors, Admin-
istrators, Trustees, etc., will
kindly so indicate when signing).
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS. UNLESS
OTHERWISE SPECIFIED,
THIS PROXY WILL BE VOTED "FOR" PROPOSALS 1 AND 2.
<PAGE>
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 Section 240.14a-11(c) or
Section 240.14a-12
GENERAL MICROWAVE CORPORATION
(Name of Registrant as Specified In Its Charter)
(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)(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 (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:
<PAGE>
