<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
FILED BY THE REGISTRANT / /
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 sec.240.14a-11(c) or sec.240.14a-12
Alpha Industries, Inc.
(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/ $125 per Exchange Act Rules 0-11(c)(1), 14a-6(i)(1), or 14a-6(i)(2) or Item
22(a)(2) of Schedule 14A.
/ / $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 (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> 2
[LOGO]
ALPHA INDUSTRIES, INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS OF
ALPHA INDUSTRIES, INC. TO BE HELD ON SEPTEMBER 11, 1995
The Annual Meeting of Stockholders of ALPHA INDUSTRIES, INC. (the
"Company") will be held on Monday, September 11, 1995, at 2:00 p.m. at the
Swissotel Boston, One Avenue de Lafayette, Boston, Massachusetts for the
following purposes:
1. To elect one Class 3 director to hold office until the 1998 Annual
Meeting of Stockholders and until his successor is elected and
qualified; and
2. To consider and act upon any other matters which may properly come
before the Meeting or any adjourned session thereof.
The Board of Directors has fixed July 20, 1995, as the record date for
determining the stockholders entitled to notice of, and to vote at, the Meeting.
You are cordially invited to attend the Meeting.
By Order of the Board of Directors
DONALD E. PAULSON, Secretary
Boston, Massachusetts
August 2, 1995
YOUR VOTE IS IMPORTANT
YOU ARE URGED TO DATE, SIGN AND PROMPTLY RETURN THE ACCOMPANYING FORM OF
PROXY, SO THAT IF YOU ARE UNABLE TO ATTEND THE ANNUAL MEETING YOUR SHARES MAY
NEVERTHELESS BE VOTED.
<PAGE> 3
ALPHA INDUSTRIES, INC.
PROXY STATEMENT
FOR THE ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON SEPTEMBER 11, 1995
This proxy statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Alpha Industries, Inc., a Delaware
corporation with its executive offices at 20 Sylvan Road, Woburn, Massachusetts
01801 (the "Company"), for use at the Annual Meeting of Stockholders to be held
on Monday, September 11, 1995, and at any adjournment or adjournments thereof
(the "Meeting"). The enclosed proxy relating to the Meeting is solicited on
behalf of the Board of Directors of the Company and the cost of such
solicitation will be borne by the Company. It is expected that this proxy
statement and the accompanying proxy will be mailed to stockholders on or about
August 2, 1995. Certain of the officers and regular employees of the Company may
solicit proxies by correspondence, telephone or in person, without extra
compensation. The Company may also pay to banks, brokers, nominees and certain
other fiduciaries their reasonable expenses incurred in forwarding proxy
material to the beneficial owners of securities held by them.
Only holders of Common Stock of the Company of record on its books at the
close of business on July 20, 1995 will be entitled to receive notice of, and to
vote at, the Meeting. As of such date, there were issued and outstanding
7,786,894 shares of Common Stock. Each stockholder is entitled to one vote for
each share of Common Stock and may vote such shares either in person or by
proxy.
The enclosed proxy, if executed and returned, will be voted as directed on
the proxy or, in the absence of such direction, for the election of the nominee
as a director. If any other matters shall properly come before the Meeting, the
enclosed proxy will be voted by the proxies in accordance with their best
judgment. The proxy may be revoked at any time prior to exercise by filing with
the Secretary of the Company a written revocation, by executing a proxy with a
later date, or by attending in person and voting at the Meeting.
PROPOSAL 1
ELECTION OF DIRECTORS
The Company's Certificate of Incorporation, as amended, and By-Laws, as
amended, provide for the division of the Board of Directors into three classes,
each having a three-year term of office. The term of one class expires each
year. One director, Gerald T. Cameron, Sr., resigned his directorship as of
January 4, 1995. The term of one director, George S. Kariotis, expires at the
Meeting. Mr. Kariotis has been renominated as a Class 3 director to hold office
until the 1998 Annual Meeting of Stockholders and until his successor has been
duly elected and qualified.
It is the intention of the persons named as proxies to vote for the
election of the one nominee as a Class 3 director. In the unanticipated event
that the nominee should be unable to serve, the persons named as proxies will
vote the proxy for such substitute, if any, as the present Board of Directors
may designate or to reduce the number of directors. The nominee has not been
nominated pursuant to any arrangement or understanding with any person.
<PAGE> 4
<TABLE>
The following table sets forth certain information with respect to the
nominee, including the year in which the nominee's term would expire, if
elected, and with respect to each of the Class 1 and Class 2 directors whose
terms will continue after the Meeting.
The nominee for Class 3 director is indicated by an asterisk.
<CAPTION>
YEAR TERM
PRINCIPAL OCCUPATION, EXPIRES,
BUSINESS EXPERIENCE DIRECTOR IF ELECTED,
NAME AGE AND OTHER DIRECTORSHIPS SINCE AND CLASS
---- --- ----------------------- -------- -----------
<S> <C> <C> <C> <C>
*George S. Kariotis(1).. 72 Chairman of the Board and Director of 1962 1998
the Company. Class 3
Arthur Pappas........... 59 Founder of Datel Systems, Inc., a 1988 1997
manufacturer of data conversion Class 2
products, Power General Corporation, a
manufacturer of switching power
supplies, and Metra-Byte Corporation, a
manufacturer of measurement and
control products for personal
computers.
Martin J. Reid(2)....... 53 President and Chief Executive Officer 1985 1996
of the Company. Class 1
Raymond Shamie(3)....... 74 Former President, Shamie Management 1985 1997
Corporation, an investment management Class 2
and consulting company.
Sidney Topol(4)......... 70 Director of Scientific-Atlanta, Inc., a 1992 1996
manufacturer of satellite Class 1
communications and cable television
equipment, Director of Wandel and
Golterman Technologies, Inc., a
manufacturer of test instruments,
President of The Topol Group, Inc., a
consulting company, and Chairman,
Massachusetts Telecommunications
Council.
<FN>
- ---------------
(1) Mr. Kariotis was Chairman of the Board and Chief Executive Officer from 1962
when the Company was founded until 1978, and from 1974 to 1978, he was also
Treasurer of the Company. From 1979 to 1983, Mr. Kariotis was the Secretary
of Manpower Development and Economic Affairs for the Commonwealth of
Massachusetts. He was re-elected Chairman of the Board in 1983 and Chief
Executive Officer in 1985. Mr. Kariotis resigned as Chief Executive Officer
in July 1986 while he campaigned for public office. He was re-elected Chief
Executive Officer in November 1986 and served in that capacity until May
1991.
(2) From 1975 to 1981, Mr. Reid was a Vice President of the Company, and from
1981 to 1985 he was a Senior Vice President of the Company. Mr. Reid was
elected President and Chief Operating Officer in 1985 and was elected acting
Chief Executive Officer in July 1986. He relinquished that position and
resumed his position as Chief Operating Officer in November 1986. Mr. Reid
was promoted to the position of Chief Executive Officer in May 1991.
</TABLE>
2
<PAGE> 5
(3) Mr. Shamie was President of Shamie Management Corporation from 1986 to 1995.
Prior to 1986, Mr. Shamie was Chairman of the Board and Chief Executive
Officer of Metal Bellows Corporation.
(4) Mr. Topol was President of Scientific-Atlanta, Inc. from 1971 to 1983, Chief
Executive Officer from 1975 to 1987 and Chairman of the Board from 1978 to
1990. Prior to 1971, Mr. Topol held various executive positions with
Raytheon Company for 22 years.
MEETINGS OF THE BOARD OF DIRECTORS
During the fiscal year ended April 2, 1995 the Board of Directors held six
meetings. Each director attended at least 75% of the aggregate number of
meetings of the Board of Directors and of committees of which they were members.
During the fiscal year ended April 2, 1995, the Audit Committee of the
Board of Directors, currently composed of Mr. Pappas and Mr. Topol (who replaced
Mr. Cameron on the Audit Committee following his resignation), held one meeting.
The functions performed by the Audit Committee included recommending to the
Board of Directors the engagement of the independent auditors, reviewing the
scope of the proposed audit, reviewing the scope of internal controls and
reviewing the implementation by management of recommendations made by the
independent auditors.
The Board of Directors also has a Compensation Committee, currently
composed of Mr. Pappas and Mr. Topol. Mr. Shamie resigned from the Compensation
Committee on March 31, 1995. The Compensation Committee held one meeting during
the fiscal year ended April 2, 1995. The functions of the Compensation Committee
included making recommendations to the Board of Directors concerning executive
compensation, incentive compensation and incentive plans for key employees.
The Board of Directors does not have a nominating committee. Changes in
directors are considered by the Board of Directors as a whole.
SECURITIES BENEFICIALLY OWNED BY CERTAIN PERSONS
On July 20, 1995 there were 7,786,894 issued and outstanding shares of
Common Stock of the Company.
The following table sets forth the beneficial holdings of the Company's
Common Stock as of July 20, 1995 of each of the directors of the Company, each
of the executive officers named under the heading "Executive Compensation,"
below, all directors and executive officers as a group and each person known by
the Company to be the beneficial owner of 5% or more of the Company's Common
Stock, based on information received from or on behalf of the persons named.
Unless noted otherwise, the beneficial owners have sole voting and investment
power with respect to the shares listed.
3
<PAGE> 6
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF PERCENT
NAME OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP OF CLASS
------------------------ -------------------- --------
<S> <C> <C>
George S. Kariotis(2).................................... 4,710 (1)
Arthur Pappas(3)......................................... 1,000 (1)
Martin J. Reid(4)........................................ 210,391 2.7%
Raymond Shamie(3)........................................ 1,000 (1)
Sidney Topol(3).......................................... 7,000 (1)
David J. Aldrich......................................... -- --
Robert E. Goldwasser(5).................................. 2,901 (1)
P. Daniel Gallagher(6)................................... 79,249 1.0%
Joseph J. Alberici(7).................................... 56,036 (1)
Thomas C. Leonard(8)..................................... 64,734 (1)
Executive Officers and Directors as a group (12
persons)(9)............................................ 442,597 5.7%
Harvey Kaylie and Gloria W. Kaylie(10)................... 1,541,200 19.8%
13 Neptune Avenue
Brooklyn, NY 11235
Dimensional Fund Advisors Inc.(11)....................... 407,283 5.2%
1299 Ocean Avenue, 11th Floor
Santa Monica, CA 90401
The TCW Group, Inc.(12).................................. 534,700 6.9%
865 South Figueroa Street
Los Angeles, CA 90017
<FN>
- ---------------
(1) Less than one percent.
(2) Includes 3,745 shares allocated to his account under the Company's
401(k)/ESOP as to which he has voting power.
(3) Includes 1,000 shares subject to currently exercisable stock options issued
under the 1994 Non-Qualified Stock Option Plan for Non-Employee Directors.
(4) Includes 9,037 shares held by his wife, 26,142 shares held jointly with his
wife, 5,755 shares allocated to his account under the Company's 401(k)/ESOP
as to which he has voting power and 164,000 shares subject to currently
exercisable stock options.
(5) Includes 1,301 shares allocated to his account under the Company's
401(k)/ESOP as to which he has voting power and 1,000 shares subject to
currently exercisable stock options.
(6) Includes 272 shares allocated to his account under the Company's
401(k)/ESOP as to which he has voting power and 78,400 shares subject to
currently exercisable stock options.
(7) Includes 4,045 shares held jointly with his wife, 215 shares allocated to
his account under the Company's 401(k)/ESOP as to which he has voting power
and 43,600 shares subject to currently exercisable stock options.
(8) Includes 6,557 shares held jointly with his wife, 3 shares allocated to his
account under the Company's 401(k)/ESOP as to which he has voting power and
45,000 shares subject to currently exercisable stock options.
</TABLE>
4
<PAGE> 7
(9) Includes 12,456 shares allocated to certain officers under the Company's
401(k)/ESOP as to which such officers have voting power and 339,667 shares
subject to currently exercisable stock options.
(10) As reported in a Schedule 13D, as amended, dated September 19, 1990,
Scientific Components Corporation ("Scientific"), as of September 19, 1990,
was the record and beneficial owner of 1,508,300 shares of the Company's
Common Stock (representing 19.4% of the shares outstanding), and the
pension and profit sharing plans of Scientific were the record and
beneficial owners of 32,900 shares (representing .4% of the shares
outstanding). Harvey Kaylie and his wife, Gloria W. Kaylie, are each
directors, officers and principal stockholders of Scientific and trustees
of the pension and profit sharing plans, and may be deemed to be the
beneficial owners of the shares held of record by Scientific and its
pension and profit sharing plans. Mr. and Mrs. Kaylie have shared power to
vote and dispose of all of the aforementioned shares. See "CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS."
(11) As reported in a Schedule 13G, dated January 30, 1995, Dimensional Fund
Advisors Inc. ("Dimensional"), a registered investment advisor, as of
December 31, 1994, had sole dispositive power over 407,283 shares of the
Company's Common Stock, all of which are held in portfolios of DFA
Investment Dimensions Group, Inc. (the "Fund"), a registered open-end
investment company, or in series of the DFA Investment Trust Company (the
"Trust"), a Delaware business trust, or the DFA Group Trust and DFA
Participation Group Trust, investment vehicles for qualified employee
benefit plans, as to all of which Dimensional serves as investment manager.
Of that amount, Dimensional had sole voting power with respect to 286,383
shares (representing 3.7% of the shares outstanding). Certain officers of
Dimensional also serve as officers of the Fund and the Trust, and in such
capacity have the power to vote the remaining 86,700 and 34,200 shares
(representing 1.1% and .4% of the shares outstanding) which are owned by
the Fund and the Trust, respectively. Dimensional disclaims beneficial
ownership of all 407,283 shares.
(12) As reported in a Schedule 13G dated January 21, 1995, the TCW Group, Inc.
disclaims beneficial ownership of all 534,700 shares.
5
<PAGE> 8
<TABLE>
EXECUTIVE COMPENSATION
The following Summary Compensation Table sets forth the compensation of the
Chief Executive Officer and each of the six most highly compensated executive
officers of the Company for each of the Company's last three fiscal years.
Information with respect to certain of the executive officers does not appear
for all three fiscal years because such officers were not executive officers
during all such fiscal years. All of the executive officers listed in the Table
are collectively referred to as the "Named Executive Officers".
SUMMARY COMPENSATION TABLE
<CAPTION>
LONG-TERM
COMPENSATION AWARDS
ANNUAL COMPENSATION -------------------------
------------------------- SECURITIES LONG-TERM
NAME AND FISCAL INCENTIVE UNDERLYING INCENTIVE ALL OTHER
PRINCIPAL YEAR SALARY COMPENSATION OPTIONS PLAN PAYOUTS COMPENSATION
POSITION ENDED ($) ($)(1) (#)(2) ($) ($)(3)
-------- ----- ------ ------------ ---------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
George S. Kariotis 4/2/95 $ 51,923 $ -- -- $1,472(4) $ 637
Chairman of the Board 4/3/94 100,000 -- -- 641(4) 764
and Director 3/28/93 97,308 -- -- -- 756
Martin J. Reid 4/2/95 $212,938 $50,000(5) 20,000(6) $ -- $2,508
President, Chief 4/3/94 204,308 -- -- -- 2,280
Executive Officer 3/28/93 193,269 -- 50,000 -- 2,219
and Director
David J. Aldrich(7) 4/2/95 $ 10,000 $ -- 30,000(8) $ -- $ 29
Vice President, -- -- -- -- -- --
Chief Financial -- -- -- -- -- --
Officer and Treasurer
Robert E. Goldwasser 4/2/95 $ 81,510(9) $ -- -- $ -- $1,340
Senior Vice President 4/3/94 106,312(9) -- -- -- 1,276
3/28/93 131,625 -- 5,000 -- 1,261
P. Daniel Gallagher 4/2/95 $162,672 $15,000(5) -- $ -- $1,536
Vice President 4/3/94 156,295 -- -- -- 1,731
3/28/93 148,881 -- 40,000 -- 1,732
Joseph J. Alberici(10) 4/2/95 $147,308 $ -- -- $ -- $ 899
Vice President and 4/3/94 138,462 27,000(11) -- -- 867
President of -- -- -- -- -- --
Trans-Tech, Inc.
Thomas C. Leonard(12) 4/2/95 $146,577 $15,000(5) -- $ -- $ 888
Vice President 4/3/94 140,608 -- -- -- 872
-- -- -- -- -- --
<FN>
- ---------------
(1) Payments to the Named Executive Officers under the Alpha Incentive
Compensation Program is based on a system of incentive compensation for
superior performance as determined by the Compensation Committee.
(2) Options granted under the 1986 Long-Term Incentive Plan (the "1986 Plan").
(3) Represents premiums paid by the Company for various term life and whole
life insurance policies for the Named Executive Officers, except for $500
in each year ($441 with respect to Mr. Gallagher in fiscal 1993) which
amounts represent Company contributions to the employee's account under the
Company's 401(k) plan (for all such officers other than Mr. Aldrich), which
plan merged with the Company's ESOP on March 31, 1995 (hereafter referred
to as the "401(k)/ESOP").
</TABLE>
6
<PAGE> 9
(4) Mr. Kariotis received a distribution from the Company's 401(k)/ESOP plan of
203 and 205 shares of Common Stock during fiscal 1995 and fiscal 1994,
respectively.
(5) Incentive compensation for fiscal 1995 which will be paid to the respective
officer in fiscal 1996.
(6) Options granted in fiscal 1996 for fiscal 1995 performance.
(7) Mr. Aldrich joined the Company on February 27, 1995.
(8) Includes 10,000 options granted in fiscal 1996 as an adjustment to his
initial grant in connection with the commencement of his employment.
(9) Mr. Goldwasser also received certain additional amounts in disability
insurance benefits.
(10) Mr. Alberici became an executive officer of the Company on April 28, 1994.
(11) Mr. Alberici's $27,000 incentive compensation for fiscal 1994 was paid in
fiscal 1995.
(12) Mr. Leonard became an executive officer of the Company on July 14, 1994.
The following table sets forth certain information with respect to option
grants to the Named Executive Officers during the fiscal year ended April 2,
1995.
<TABLE>
OPTION GRANTS IN LAST FISCAL YEAR
<CAPTION>
INDIVIDUAL GRANTS POTENTIAL REALIZABLE
-------------------------------------------- VALUE AT ASSUMED
NUMBER OF ANNUAL RATES OF
SECURITIES % OF TOTAL STOCK PRICE
UNDERLYING OPTIONS EXERCISE APPRECIATION FOR
OPTIONS GRANTED TO OR BASE OPTION TERM(2)
GRANTED EMPLOYEES IN PRICE EXPIRATION --------------------
NAME (#)(1) FISCAL YEAR ($/SH) DATE 5%($) 10%($)
---- ---------- ------------ -------- ---------- ----- ------
<S> <C> <C> <C> <C> <C> <C>
George S. Kariotis......... -- -- $ -- -- $ -- $ --
Chairman of the Board
and Director
Martin J. Reid (3)......... -- -- $ -- -- $ -- $ --
President, Chief
Executive Officer and
Director
David J. Aldrich (3)....... 20,000 35.7% $9.25 02/27/05 $116,400 $294,800
Vice President, Chief
Financial Officer
and Treasurer
Robert E. Goldwasser....... -- -- $ -- -- $ -- $ --
Senior Vice President
P. Daniel Gallagher........ -- -- $ -- -- $ -- $ --
Vice President
Joseph J. Alberici......... -- -- $ -- -- $ -- $ --
Vice President and
President of
Trans-Tech, Inc.
Thomas C. Leonard.......... -- -- $ -- -- $ -- $ --
Vice President
<FN>
- ---------------
(1) The options were granted under the 1986 Plan, and are subject to a vesting
schedule pursuant to which, in general, the options become exercisable at a
rate of 20% per year commencing one
</TABLE>
7
<PAGE> 10
year after the date of grant provided the holder of the option remains
employed by the Company. Options may not be exercised beyond 90 days after
the holder ceases to be employed by the Company, except in the event of
termination by reason of death, retirement or permanent disability, in which
event the option may be exercised for up to one year following termination.
(2) The assumed rates are compounded annually for the full term of the options.
(3) Subsequent to the fiscal year end, the Company granted options to Mr. Reid
and Mr. Aldrich to purchase 20,000 and 10,000 shares of Common Stock,
respectively, at an exercise price of $12.25 per share.
<TABLE>
The following table sets forth certain information with respect to the
exercise of options and the aggregated number and value of options exercisable
and unexercisable by the Named Executive Officers as of April 2, 1995.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND
FISCAL YEAR END OPTION VALUES
<CAPTION>
NUMBER OF
SECURITIES VALUE OF
UNDERLYING UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS OPTIONS AT
SHARES AT 4/2/95 4/2/95
ACQUIRED VALUE EXERCISABLE/ EXERCISABLE/
ON EXERCISE REALIZED UNEXERCISABLE UNEXERCISABLE
NAME (#) ($) (#)(1) ($)(1)
---- ----------- -------- ------------- -------------
<S> <C> <C> <C> <C>
George S. Kariotis.................. -- $ -- -- $ --
Chairman of the -- --
Board and Director
Martin J. Reid...................... -- $ -- 164,000 $1,430,000
President, Chief Executive 66,000 570,000
Officer and Director
David J. Aldrich.................... -- $ -- -- $ --
Vice President, 20,000 40,000
Chief Financial
Officer and Treasurer
Robert E. Goldwasser................ 25,000 $90,938 14,600 $ 127,750
Senior Vice President 12,400 107,750
P. Daniel Gallagher................. -- $ -- 70,400 $ 612,000
Vice President 38,000 326,500
Joseph J. Alberici.................. -- $ -- 36,600 $ 317,875
Vice President and 32,400 279,000
President of
Trans-Tech, Inc.
Thomas C. Leonard................... -- $ -- 38,000 $ 332,000
Vice President 37,000 320,500
<FN>
- ---------------
(1) The options were granted under the 1986 Plan. See Note 1 to the previous
table.
</TABLE>
8
<PAGE> 11
<TABLE>
LONG-TERM COMPENSATION PLAN
The Company's Long-Term Compensation Plan (the "Long-Term Compensation
Plan") is a non-qualified deferred compensation plan for senior executives
designated by the Compensation Committee. The following table illustrates the
approximate level of benefits payable to a participant under the Long-Term
Compensation Plan who retires at age 65 and receives his or her benefit in the
form of a single life annuity. The amounts shown do not reflect any reduction
for Offset Amounts, as defined below.
PENSION PLAN TABLE
<CAPTION>
HIGHEST 12 MONTHS YEARS OF SERVICE
BASE PAY DURING ---------------------------------------
FINAL 36 MONTHS 1 5 10 15 OR MORE
----------------- ------ ------- ------- ----------
<S> <C> <C> <C> <C>
$100,000............................................. $3,333 $16,667 $33,333 $ 50,000
$150,000............................................. $5,000 $25,000 $50,000 $ 75,000
$200,000............................................. $6,667 $33,333 $66,667 $100,000
$250,000............................................. $8,333 $41,667 $83,333 $125,000
</TABLE>
The benefit payable under the Long-Term Compensation Plan is based upon a
straight life annuity beginning at age 65 equal to 50% of a participant's
regular base pay during the highest 12 consecutive months within the 36 month
period immediately preceding the participant's retirement. The benefit is
ratably reduced if the participant retires with less than 15 Years of Service as
a full time employee following October 1, 1990 or retires prior to age 65. The
cash benefit payable to a participant is offset by the sum of (i) certain
benefits received under the 401(k)/ESOP plan (see "Compensation Committee Report
on Executive Compensation", below) and (ii) 50% of the value of an annuity which
could be purchased using the gain from exercised stock options or, in certain
cases, stock options which are then exercisable, which have been designated by
the Compensation Committee as options to be offset (the "Offset Amounts"). The
cash benefit is not subject to offset for social security benefits.
If a participant elects to retire before age 65 and to begin receiving
benefits immediately, or if a participant elects a joint and survivor benefit,
the amount of the benefit is actuarially adjusted. Alternatively, the
participant may elect to take a lump sum distribution of an actuarially
equivalent amount. If a participant dies prior to retirement, his or her
beneficiary is entitled to a ten year annuity at a rate equal to 25% of the
participant's base pay, less the value of the Offset Amounts.
During the fiscal year ended April 2, 1995, five individuals participated
in the Long-Term Compensation Plan: Mr. Reid, Mr. Goldwasser, Mr. Gallagher, Mr.
Alberici and Mr. Leonard. The compensation amounts that would have been included
in base compensation for Messrs. Reid, Goldwasser, Gallagher, Alberici and
Leonard for purposes of calculating the benefit under the Long-Term Compensation
Plan were: Mr. Reid - $212,938; Mr. Goldwasser - $131,625; Mr. Gallagher -
$162,672; Mr. Alberici - $147,308; and Mr. Leonard - $146,577. At year end, Mr.
Reid, Mr. Goldwasser and Mr. Gallagher each had four Years of Service under the
Long-Term Compensation Plan, and Mr. Alberici and Mr. Leonard had less than one
year.
In adopting the Long-Term Compensation Plan, the Board of Directors
established a goal (but not an obligation of the Company or a right of the
participant) of granting options to participants which, after ten years, would
have an economic value equal to 60% of base compensation, thereby reducing the
amount of the Company's funding obligation. The Board of Directors also required
each participant in the Long-Term Compensation Plan, as a condition to commence
participation,
9
<PAGE> 12
to enter into an employment agreement with the Company. See "Employment
Agreements," below. Under these agreements, the Company may not terminate, amend
or otherwise reduce a participant's benefits under the Long-Term Compensation
Plan unless it substitutes substantially equivalent benefits.
EXECUTIVE COMPENSATION PLAN
The Company's Executive Compensation Plan (the "Executive Compensation
Plan") is an unfunded, non-qualified deferred compensation plan for the purpose
of providing deferred compensation for selected management employees.
Participants may elect to defer a portion of their compensation, and the
Company, in its sole discretion, may make additional contributions to the
account of a participant on such terms as the Company specifies. All deferred
amounts are held in a trust. Participants defer recognizing taxable income on
the amount held for their benefit until the amounts are paid.
A participant elects the date at which the deferrals and vested Company
contributions will be paid to the participant. Special rules are provided for
distributions in the case of a participant's death or disability, a change in
control of the Company, early retirement, or in the event of unforeseen
emergencies, all as defined in the Executive Compensation Plan. During the
fiscal year ended April 2, 1995, Mr. Reid and Mr. Alberici participated in the
Executive Compensation Plan. The Company did not make any discretionary
contributions to their accounts for fiscal 1995.
EMPLOYMENT AGREEMENTS
The Company has employment agreements with each of Messrs. Kariotis, Reid
and Gallagher which have been extended until September 30, 1996. The employment
agreements for both Mr. Kariotis and Mr. Reid provide for an annual salary of
$200,000, subject to increase at the discretion of the Board of Directors.
However, Mr. Kariotis voluntarily accepted a lower salary of $100,000 from
October 1, 1990 to March 31, 1994 and a salary of $50,000 commencing April 1,
1994.
On April 28, 1994, the Company entered into an employment agreement with
Mr. Alberici which provides for an annual salary of $136,000, subject to
increase by the Company, which agreement has been extended through September 30,
1996. In addition, on August 3, 1994, the Company entered into an employment
agreement with Mr. Leonard which provides for an annual salary of $140,400,
subject to increase by the Company, through September 30, 1996.
At the end of fiscal year 1995, the base salaries of the Named Executive
Officers were as follows: Mr. Kariotis - $50,000; Mr. Reid - $220,000; Mr.
Aldrich - $130,000; Mr. Goldwasser - $140,400; Mr. Gallagher - $165,490; Mr.
Alberici - $157,000; and Mr. Leonard - $155,000. The following salary increases
will become effective September 1, 1995: Mr. Reid - $290,000; Mr. Aldrich -
$140,000; Mr. Goldwasser - $145,000; Mr. Gallagher - $172,200; Mr. Alberici -
$165,000; and Mr. Leonard - $165,000.
The Company provides for salary continuation for the Named Executive
Officers generally for a period of two years following termination of employment
for any reason other than termination for cause, subject to adjustment in the
event the executive officer secures other employment. The employment agreements
provide that any options then held by such terminated executive officers,
whether or not by their terms then exercisable, shall become immediately
exercisable for a period of 90 days following the termination date. The
employment agreements also provide that if the executive officer is terminated
for any reason within 24 months of a change in control of the Company, the
executive officer shall be entitled to receive a severance payment generally
equal to
10
<PAGE> 13
twice the executive officer's annual compensation for the 12 month period prior
to the change in control, subject to certain adjustments. Furthermore, options
granted to executive officers generally provide for immediate vesting upon a
change in control of the Company.
COMPENSATION OF DIRECTORS
Directors who are not employees of the Company are paid a quarterly
retainer of $2,125 plus an additional $1,000 for each full-day meeting
(including committee meetings) attended. Directors who are committee chairmen
receive an additional quarterly retainer of $250.
Following the Annual Meeting of Stockholders held on September 12, 1994,
each director was granted a stock option to acquire 5,000 shares of the
Company's Common Stock pursuant to the 1994 Non-Qualified Stock Option Plan for
Non-Employee Directors adopted by the stockholders at that Annual Meeting. In
addition, each new non-employee director shall receive an option to acquire
5,000 shares of Common Stock immediately following the Company's Annual Meeting
of Stockholders at which said director is first elected by the stockholders.
In August 1992, the Company entered into a consulting arrangement with Mr.
Topol pursuant to which Mr. Topol will provide consulting services to the
Company in return for a fee of $7,000 per quarter.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee of the Board of Directors consists of Mr. Pappas
and Mr. Topol. No member of the Compensation Committee is a former or current
officer or employee of the Company or any of its subsidiaries. See "Compensation
Committee Report on Executive Compensation."
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors is composed of two
non-employee directors. The Compensation Committee is responsible for developing
and making recommendations to the Company with respect to executive officer
compensation policies addressing such matters as salaries, incentive
compensation and other incentive plans and benefits. The Compensation Committee
determines the compensation to be paid to the Chief Executive Officer and each
of the other executive officers of the Company.
The objectives of the Compensation Committee in determining the type and
amount of Chief Executive Officer and executive officer compensation are to
provide a level of compensation which allows the Company to attract and retain
superior talent to achieve its business objectives and to align the financial
interests of the executive officers with the stockholders of the Company.
The compensation of an executive officer of the Company includes cash
compensation, consisting of a base salary and incentive compensation under the
Alpha Incentive Compensation Program; long-term incentive compensation in the
form of stock options under the 1986 Long-Term Incentive Plan (the "1986 Plan");
participation in the 401(k)/ESOP and an employee stock purchase plan (the "Stock
Purchase Plan"); and participation in various benefit plans generally available
to employees of the Company. In addition, executive officers designated by the
Compensation Committee participate in the Long-Term Compensation Plan and the
Executive Compensation Plan which are discussed under "Long-Term Compensation
Plan" and "Executive Compensation Plan" above.
11
<PAGE> 14
In determining compensation, the Compensation Committee strives to maintain
compensation for the Company's Chief Executive Officer and other executive
officers at levels which the Compensation Committee believes are competitive
with the compensation of comparable officers in similar companies. The
Compensation Committee initially establishes a competitive range for salaries by
reviewing a study completed by the Wyatt Company on executive compensation and
the salaries of companies which have a similar line of business. The
Compensation Committee places particular emphasis on reviewing salaries for
companies located on the eastern coast of the United States and the greater
Boston, Massachusetts area. The Compensation Committee sets the salaries of the
Chief Executive Officer and each of the executive officers at a base rate that
corresponds to comparable salaries and determines expected incentive
compensation. The combination of base salary and expected incentive compensation
results in a salary that corresponds to the median range of comparable salaries.
In establishing individual salaries, the Compensation Committee also considers
the individual experience and performance of the Chief Executive Officer and
each executive officer, as well as the performance of the Company. The
Compensation Committee also relies on the recommendations of the Chief Executive
Officer for determining the salaries for the other executive officers.
The Company provides financial incentives to its executive officers through
incentive compensation under the Alpha Incentive Compensation Program. Under the
Program, officers, division managers and other key employees may be awarded
incentive compensation based in part upon the Company's net operating income for
the year, each participant's salary and performance and the profitability of the
participant's division. Incentive compensation related to fiscal 1995 but which
will be paid in fiscal 1996 was awarded to the following executive officers: Mr.
Reid - $50,000; Mr. Gallagher - $15,000; and Mr. Leonard - $15,000. Mr. Alberici
received a $27,000 incentive compensation award related to fiscal 1994 that was
paid in fiscal 1995. Other than the above-mentioned incentive compensation
awards, no other incentive compensation has been paid to any other executive
officers for the last three fiscal years. See "Summary Compensation Table",
above.
Under the 1986 Plan, stock options (with or without Stock Appreciation
Rights), Book Value Awards and Restricted Share Awards may be granted to
participants. A Stock Appreciation Right entitles the holder to surrender to the
Company all or a portion of an exercisable, related stock option, and to receive
in lieu thereof, cash or shares of Common Stock of a value equal to the amount
by which the fair market value of each such share of Common Stock on the date of
exercise exceeds the option price of the related stock option. Stock
Appreciation Rights are exercisable at the same times and with regard to the
same number of shares as the related stock option, except that no Stock
Appreciation Right may be exercisable prior to six months and one day from the
date of its grant. Book Value Awards are grants of Book Value Shares or options
to purchase Book Value Shares, with the option price per share equal to the Book
Value of Common Stock. Book Value is defined as the common stockholders' equity
per share as reported in the Company's financial statements contained in either
the immediately preceding annual or quarterly report to stockholders, as the
Compensation Committee may determine. Book Value Shares which have not been
acquired by the Company in accordance with such terms as the Company imposes
upon such Book Value Shares at the time of award, will be repurchased by the
Company at either (i) the time of the recipient's death, retirement or permanent
disability at the then Book Value of said shares, or (ii) at the time of the
recipient's termination of employment for any other reason at the recipient's
original acquisition price. Restricted Share Awards are grants of Restricted
Shares or options to purchase Restricted Shares. Restricted Shares are shares of
Common Stock which may not be transferred or otherwise encumbered, subject to
certain exceptions. During the fiscal year ended April 2, 1995, the Company did
not grant any options, Stock Appreciation Rights, Book Value Awards or
Restricted
12
<PAGE> 15
Share Awards to any of the Named Executive Officers, with the exception of
options to purchase 20,000 shares granted to Mr. Aldrich in connection with the
commencement of his employment. Subsequent to the fiscal year end, the Company
granted options to purchase 20,000 and 10,000 shares to Mr. Reid and Mr.
Aldrich, respectively.
On March 31, 1995, the Company's employee stock ownership plan was merged
into its 401(k) plan (the "401(k)/ESOP"). The 401(k)/ESOP retains features of
the merged employee stock ownership plan, including employer discretionary
contributions in the Company's Common Stock. The employee stock ownership plan
component (the "ESOP") of the 401(k)/ESOP is intended to provide certain
retirement benefits to employees. Under the ESOP, Company contributions are
allocated among those participants using a formula based upon compensation. The
amounts allocated to each participant's account are fully vested immediately and
are nonforfeitable. Participants are entitled to direct voting of shares of the
Company's Common Stock allocated to their accounts. The Company accrued $226,000
for contribution to the ESOP for the fiscal year ended April 2, 1995, which
amount will be paid to the ESOP and allocated to participants' accounts during
fiscal 1996.
Under the Stock Purchase Plan, employees may purchase shares of the
Company's Common Stock through payroll deductions. The Stock Purchase Plan is
intended to qualify as an employee stock purchase plan under Section 423 of the
Internal Revenue Code. The Stock Purchase Plan allows each participant to
purchase at a discount that number of shares of Common Stock as his or her
accumulated payroll deductions on the last day of each offering period will pay
for at the discounted price.
The stock ownership afforded under the 1986 Plan, the 401(k)/ESOP and the
Stock Purchase Plan allows executive officers to acquire a significant,
long-term stock ownership position in the Company which serves to align the
executives' interests with stockholders' interests.
Compensation Committee
Arthur Pappas
Sidney Topol
13
<PAGE> 16
<TABLE>
PERFORMANCE GRAPH
The following graph compares the yearly change in the Company's cumulative
total stockholder return for fiscal years ended March 31, 1991, March 29, 1992,
March 28, 1993, April 3, 1994 and April 2, 1995, based upon the market price of
the Company's Common Stock, with the cumulative total return on the Standard &
Poor's 500 Stock Index and an industry peer index consisting of the following
companies: Anaren Microwave, Inc., Electromagnetic Sciences, Inc., Frequency
Electronics, Inc., General Microwave Corporation, M/A-COM, Inc., Watkins-Johnson
Company and Western Microwave, Inc.
COMPARISON OF CUMULATIVE TOTAL RETURN*
<CAPTION>
Measurement Period
(Fiscal Year Covered) ALPHA INDS S & P 500 PEER GROUP
--------------------- ---------- --------- ----------
<S> <C> <C> <C>
1990 100.00 100.00 100.00
1991 134.78 114.41 125.23
1992 82.61 127.05 109.32
1993 100.00 146.39 104.77
1994 108.70 148.55 136.86
1995 391.30 171.68 204.54
</TABLE>
ASSUMES INITIAL INVESTMENT OF $100
*TOTAL RETURN ASSUMES REINVESTMENT OF DIVIDENDS
NOTE:TOTAL RETURNS BASED ON MARKET CAPITALIZATION AT THE BEGINNING
OF EACH PERIOD
14
<PAGE> 17
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Scientific Components Corporation, currently the record holder of 19.8% of
the Company's Common Stock, is a customer of the Company. During the fiscal year
ended April 2, 1995, Scientific Components Corporation purchased approximately
$1,877,000 of the Company's products in the ordinary course of business. See
"PROPOSAL 1 -- ELECTION OF DIRECTORS -- Securities Beneficially Owned by Certain
Persons".
OTHER MATTERS
VOTING PROCEDURES
The votes of stockholders present in person or represented by proxy at the
Meeting will be tabulated by an inspector of elections appointed by the Company.
The nominee for director of the Company who receives the greatest number of
votes cast by stockholders present in person or represented by proxy at the
Meeting and entitled to vote thereon will be elected a director of the Company.
Abstentions will have no effect on the outcome of the vote for the election
of a director. Shares of Common Stock held of record by brokers who do not
return a signed and dated proxy will not be considered present at the Meeting,
will not be counted towards a quorum and will not be voted in the election of
directors.
RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors has appointed KPMG Peat Marwick LLP as the
independent certified public accountants to audit the consolidated financial
statements of the Company for the fiscal year ending March 31, 1996. Such firm
and its predecessors have served continuously in that capacity since 1974.
A representative of KPMG Peat Marwick LLP will be present at the Meeting
and will be afforded the opportunity to make a statement if he or she desires to
do so. Such representative is expected to be available to respond to appropriate
questions.
INCORPORATION BY REFERENCE
To the extent that this Proxy Statement has been or will be specifically
incorporated by reference into any filing by the Company under the Securities
Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, the
sections of the Proxy Statement entitled "Compensation Committee Report on
Executive Compensation" and "Performance Graph" shall not be deemed to be so
incorporated, unless specifically otherwise provided in any such filing.
OTHER PROPOSED ACTION
As of the date hereof, the management of the Company knows of no business
to come before the Meeting other than the election of a director. However, if
any other business should properly be presented to the Meeting, the proxies will
be voted in respect thereof in accordance with the judgment of the person or
persons holding the proxies.
15
<PAGE> 18
ANNUAL REPORT ON FORM 10-K
COPIES OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR THE FISCAL YEAR
ENDED APRIL 2, 1995 AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ARE
AVAILABLE TO STOCKHOLDERS WITHOUT CHARGE UPON WRITTEN REQUEST ADDRESSED TO
INVESTOR RELATIONS, ALPHA INDUSTRIES, INC. AT 20 SYLVAN ROAD, WOBURN,
MASSACHUSETTS 01801.
STOCKHOLDER PROPOSALS
Proposals which stockholders wish to include in the Company's proxy
materials relating to its 1996 Annual Meeting of Stockholders must be received
by the Company no later than April 3, 1996.
16
<PAGE> 19
ALPHA INDUSTRIES, INC.
P The undersigned hereby appoints Martin J. Reid and Donald E. Paulson,
and each of them, acting singly, with full power of substitution,
R attorneys and proxies to represent the undersigned at the Annual Meeting
of Stockholders of Alpha Industries, Inc. to be held on September 11, 1995,
O and at any adjournment or adjournments thereof, with all power which the
undersigned would possess if personally present, and to vote all shares of
X stock which the undersigned may be entitled to vote at said meeting upon
the election of directors, as more fully described in the notice of and
Y proxy statement for the meeting, in accordance with the instructions on
the reverse side and with discretionary authority upon such other matters
as may come before the meeting. All previous proxies are hereby revoked.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS. IT WILL BE
VOTED AS DIRECTED BY THE UNDERSIGNED AND IF NO DIRECTION IS INDICATED, IT WILL
BE VOTED FOR THE ELECTION OF THE NOMINEE AS A DIRECTOR.
-----------
Continued, and to be signed, on reverse side SEE REVERSE
SIDE
(Please fill in the reverse side and mail in enclosed envelope) -----------
/X/ Please mark votes as in this example.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE NOMINEE AS A DIRECTOR.
1. Election of Directors
Nominee: George S. Kariotis
/ / FOR NOMINEE / / WITHHOLD AUTHORITY FROM NOMINEE
<TABLE>
<S> <C> <C> <C> <C>
MARK / / MARK / /
HERE FOR HERE IF
ADDRESS YOU
CHANGE PLAN TO
AND NOTE ATTEND
AT LEFT THE
MEETING
</TABLE>
<TABLE>
<S> <C> <C>
(Signatures should be the same as the
name printed hereon. Executors, Signature: Date
administrators, trustees, guardians, ------------------------------------------------- ----------
attorneys, and officers of
corporations should add their titles Signature: Date
when signing.) ------------------------------------------------- -----------
</TABLE>
