<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] 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
GTI 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:
GTI CORPORATION
ANNUAL MEETING OF STOCKHOLDERS
OCTOBER 22, 1998
<PAGE> 2
NOTICE
To the Stockholders:
The Annual Meeting of the Stockholders (the "Annual Meeting") of GTI
Corporation, a Delaware corporation (the "Company"), will be held at the Hyatt
Regency La Jolla, 3777 La Jolla Village Drive, San Diego, California, on
Thursday, October 22, 1998, at 10:00 a.m., local time, for the following
purposes:
(1) To elect a Board of Directors of four members;
(2) To ratify the selection of Arthur Andersen LLP as the Company's
independent public accountants for 1998;
(3) To transact any and all other business which may properly come before
the Annual Meeting or any adjournment or adjournments thereof.
A Proxy Statement containing information for stockholders is annexed hereto
and a copy of the Annual Report of the Company for the fiscal year ended
December 31, 1997, is enclosed herewith.
Stockholders of record at the close of business on Tuesday, September 22,
1998, will be entitled to notice of and to vote at the Annual Meeting and any
and all adjournments thereof. A list of stockholders entitled to vote at the
Annual Meeting will be available for inspection by stockholders at the Company's
corporate offices, located at 9715 Business Park Avenue, San Diego, California
92131. Stockholders may examine the list during ordinary business hours during
the 10-day period before the Annual Meeting. The list will also be available for
inspection at the Annual Meeting.
STOCKHOLDERS WHO DO NOT EXPECT TO ATTEND THE ANNUAL MEETING AND DESIRE TO
HAVE THEIR STOCK VOTED AT THE ANNUAL MEETING ARE REQUESTED TO COMPLETE, DATE AND
SIGN THE ENCLOSED PROXY AND RETURN THE SAME IN THE ENCLOSED ENVELOPE, WHICH
REQUIRES NO POSTAGE, IF MAILED IN THE UNITED STATES.
By Order of the Board of Directors,
/s/ BRUCE C. MYERS
Bruce C. Myers
Secretary
October 2, 1998
San Diego, California
<PAGE> 3
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
INTRODUCTION................................................ 1
PURPOSES OF THE ANNUAL MEETING............................ 1
PROPOSAL ONE ELECTION OF DIRECTORS (ITEM 1 ON THE PROXY
CARD)..................................................... 2
NOMINEES FOR ELECTION AS DIRECTORS........................ 2
INFORMATION REGARDING NOMINEES............................ 2
VOTE REQUIRED............................................. 3
AGGREGATE STOCK OWNERSHIP OF DIRECTORS AND OFFICERS....... 3
PRINCIPAL STOCKHOLDERS.................................... 4
BOARD COMMITTEES.......................................... 5
Audit Committee........................................ 5
Nominating Committee................................... 5
Compensation Committee................................. 5
Special Committee...................................... 5
BOARD AND COMMITTEE MEETING ATTENDANCE.................... 5
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER
PARTICIPATION.......................................... 6
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS............ 6
COMPENSATION AND OTHER TRANSACTIONS WITH OFFICERS AND
DIRECTORS.............................................. 7
SUMMARY COMPENSATION TABLE................................ 7
COMPENSATION COMMITTEE REPORT............................. 7
1997 COMPENSATION COMMITTEE REPORT........................ 7
EMPLOYMENT AGREEMENTS AND SEVERANCE AND RETIREMENT
ARRANGEMENTS........................................... 9
CHANGE OF CONTROL AGREEMENTS.............................. 9
STOCK OPTIONS............................................. 10
Stock Incentive Plan................................... 10
OPTION/SAR GRANTS IN LAST FISCAL YEAR..................... 11
AGGREGATED OPTION EXERCISES IN 1997 AND YEAR END OPTION
VALUE.................................................. 11
DIRECTORS' COMPENSATION................................... 11
Director Remuneration.................................. 11
Non-Employee Director Stock Options.................... 11
COMPLIANCE WITH SECTION 16 OF THE EXCHANGE ACT............ 12
CUMULATIVE TOTAL STOCKHOLDER RETURN....................... 13
PROPOSAL TWO RATIFICATION OF INDEPENDENT PUBLIC ACCOUNTANTS
(ITEM 2 ON THE PROXY CARD)................................ 13
METHODS AND EXPENSES OF SOLICITATION........................ 14
FORM 10-K/A................................................. 14
STOCKHOLDERS' PROPOSALS..................................... 14
</TABLE>
i
<PAGE> 4
GTI CORPORATION
9715 BUSINESS PARK AVENUE
SAN DIEGO, CALIFORNIA 92131-1642
(619) 537-2500
------------------------
ANNUAL MEETING OF STOCKHOLDERS
OCTOBER 22, 1998
------------------------
PROXY STATEMENT
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of GTI Corporation, a Delaware corporation
(the "Company"), to be voted at the Annual Meeting of the Stockholders of the
Company (the "Annual Meeting") to be held on Thursday, October 22, 1998, at
10:00 a.m., local time, at the Hyatt Regency La Jolla, 3777 La Jolla Village
Drive, San Diego, California, and at any and all adjournments thereof.
The only business that the management of the Company intends to present, or
knows that others will present, at the Annual Meeting is specified in the
accompanying notice. If other matters are properly presented at the Annual
Meeting, however, such matters will be considered and acted upon, and the
persons named in the proxies being solicited will vote such proxies in
accordance with their best judgment on such matters.
This Proxy Statement and the accompanying notice and form of proxy will be
mailed to stockholders on or about October 2, 1998.
Stockholders of record at the close of business on September 22, 1998 (the
"Record Date") will be entitled to vote at the Annual Meeting. On the Record
Date, there were outstanding 8,973,475 shares of the Company's Common Stock, par
value $0.04 per share (the "Common Stock"), and 8,110 shares of the Company's
$35.00 Cumulative Convertible Preferred Stock, par value $1.00 per share (the
"Preferred Stock"). Holders of Common Stock are entitled to one vote per share,
while holders of Preferred Stock are entitled to 234.314 votes per share. In
electing directors of the Company and voting on the other proposals presented,
holders of Common Stock and holders of Preferred Stock will vote together as a
single class. The presence, in person or by proxy, of the holders of shares
representing at least 5,436,881 votes at the Annual Meeting shall constitute a
quorum.
All shares represented by properly executed and unrevoked proxies will be
voted at the Annual Meeting. Shares represented by proxies marked as abstentions
on any matter will not be voted on that matter, although they will be counted
for quorum purposes and to determine voting results. Broker's shares held in
"street name" and represented by proxies but not voted by such broker will be
counted for quorum purposes but will not be counted to determine voting results.
The proxy accompanying this Proxy Statement may be revoked at any time prior to
voting by providing written notice to the Secretary of the Company or by
appearance at the Annual Meeting and voting in person.
There are no dissenters' rights of appraisal with respect to any matter to
be acted upon at the Annual Meeting.
INTRODUCTION
PURPOSES OF THE ANNUAL MEETING
The purposes of the Annual Meeting are to: (1) elect four directors to
serve on the Company's Board of Directors (the "Board of Directors") for a term
of one year and until their successors are duly elected and qualified; (2)
ratify the selection of Arthur Andersen LLP as the Company's independent public
accountants for 1998; and (3) transact any and all other business which may
properly come before the Annual Meeting or any adjournment or adjournments
thereof.
<PAGE> 5
PROPOSAL ONE
ELECTION OF DIRECTORS
(ITEM 1 ON THE PROXY CARD)
NOMINEES FOR ELECTION AS DIRECTORS
At the Annual Meeting, four directors are to be elected to serve on the
Board of Directors for a term of one year and until their successors are duly
elected and qualified. The Board of Directors currently consists of five
members: Timothy M. Curtis, Edmund B. Fitzgerald, Albert J. Hugo-Martinez,
Kenneth E. Maud, and Robert E. Venter. However, Mr. Fitzgerald, having reached
the age of 72, is no longer eligible to stand for re-election, pursuant to the
Company's By-laws. The Board of Directors has voted to reduce the number of
directors from five members to four, effective at the Annual Meeting. All four
of the nominees are currently serving as directors of the Company. It is
intended that all proxies in the enclosed form will be voted for the nominees
listed below, unless otherwise directed. If any of the nominees listed below is
unable to serve for any reason not presently known, a substitute or substitutes
will be nominated by the Company's Board of Directors and the proxies will be
voted for such substitute or substitutes. THE BOARD OF DIRECTORS UNANIMOUSLY
RECOMMENDS VOTING "FOR" THE FOUR NOMINEES LISTED BELOW.
INFORMATION REGARDING NOMINEES
The following table sets forth the name, age, principal occupation for the
periods indicated, and other directorships of each of the current nominees at
the Annual Meeting:
Timothy M. Curtis, age 55, has been a Director since 1994. Since February
1992, Mr. Curtis has been the Chief Executive and a director of Telemetrix PLC,
a United Kingdom corporation, which is listed on the London Stock Exchange and
is engaged in the manufacture and sale of advanced electronics products. From
1994 through 1996, he was a Non-Employee Director of Bournemouth and West
Hampshire Water PLC, and from 1994 to 1995 a Non-Employee Director of Dobson
Park Industries PLC. He is currently a Non-Executive Director of Pace Micro
Technology PLC.
Albert J. Hugo-Martinez, age 52, has served as President, Chief Executive
Officer and a Director of the Company since March 1996. From 1988 to 1995, Mr.
Hugo-Martinez was President and Chief Executive Officer of Applied Micro
Circuits Corp. in San Diego, California. Prior thereto, he held various
management positions with TRW, Burr Brown Corporation and Motorola
Semiconductor. Mr. Hugo-Martinez is a director of Microchip Corp. and the UCSD
Cancer Center.
Kenneth E. Maud, age 53, has been a Director since 1995. Mr. Maud served as
interim President and Chief Executive Officer of the Company from January 1996
to March 1996. Mr. Maud also served as the Chairman of Peek PLC ("Peek"), a
multinational group of companies specializing in advanced electronic traffic
management systems and field data systems, from April 1991 through May 1997.
From September 1986 to April 1991, Mr. Maud served as the Chief Executive of
Peek. For the past 21 years, Mr. Maud has been directly involved in the
development of publicly-owned electronics groups in different parts of the
world. Mr. Maud is a director and Chairman of Atlantis International
Corporation.
Robert E. Venter, age 37, has been a Director since 1993. Mr. Venter has
been a senior executive with Allied Electronics Corporation Limited, a South
African corporation ("Allied") since September 1990, most recently serving as
Chief Executive of and a director of Power Technologies Limited, a Johannesburg
Stock Exchange listed electrical engineering company, and an affiliate of Allied
(see Note 1 to "Principal Stockholders"). Previously, he was a Vice President of
Corporate Finance of Bear Stearns Co., Inc. from 1988 to 1990. Mr. Venter is
also a director of Ventron Corporation and Allied, which are both listed on the
Johannesburg Stock Exchange, as well as a director of Telemetrix PLC.
2
<PAGE> 6
VOTE REQUIRED
Directors will be elected by a plurality of the votes represented by the
Common Stock and Preferred Stock, voting together as a single class, present in
person or by proxy at the Annual Meeting and entitled to vote. Telemetrix PLC,
which as of the Record Date directly or indirectly owned 47.9% of the
outstanding shares of Common Stock and 100% of the outstanding shares of
Preferred Stock, collectively representing approximately 57% of the vote, has
indicated its intention to vote for all four of the above nominees.
AGGREGATE STOCK OWNERSHIP OF DIRECTORS AND OFFICERS
The following table sets forth certain information regarding the beneficial
ownership of the Common Stock as of September 1, 1998, by (i) each director of
the Company and each of the executive officers of the Company named below in the
"Summary Compensation Table" (collectively, the "Named Officers"), except for
Mr. Kopenhaver whose employment terminated in June 1998, and (ii) all directors
and executive officers of the Company as a group. One hundred percent (100%) of
the Preferred Stock is held by Telemetrix PLC. (See "Principal Stockholders.")
The table is based upon information supplied by directors and officers of the
Company. Unless otherwise indicated, each of the listed persons has sole voting
and sole investment power with respect to the shares beneficially owned, subject
to community property laws where applicable.
<TABLE>
<CAPTION>
PERCENT OF
AMOUNT AND NATURE CLASS AS PERCENT
OF BENEFICIAL OF SEPTEMBER 1, OF VOTING
NAME OF BENEFICIAL OWNER OR IDENTITY OF GROUP OWNERSHIP(1) 1998 POWER
--------------------------------------------- ----------------- --------------- ---------
<S> <C> <C> <C>
Timothy M. Curtis(2)........................... 10,000 * *
Edmund B. Fitzgerald........................... 15,000 * *
Michael Hollabaugh............................. 12,500 * *
Albert J. Hugo-Martinez(3)..................... 88,500 * *
Kenneth E. Maud................................ 60,000 * *
Bruce C. Myers(4).............................. 15,000 * *
William Staunton............................... 10,000 * *
Robert E. Venter(2)............................ 12,000 * *
All directors and executive officers as a group
(8 persons).................................. 208,000 2.3% 1.9%
</TABLE>
- ---------------
* Less than one percent (1%)
(1) Includes only shares of Common Stock that such person has the right to
acquire under option plans which are exercisable within 60 days of September
1, 1998 unless otherwise noted by footnote.
(2) Messrs. Curtis and Venter are members of the Board of Directors of
Telemetrix PLC. At the Record Date, Telemetrix PLC beneficially owned
4,544,300 shares of Common Stock and 8,110 shares of Preferred Stock. See
also Note 1 to Principal Stockholders.
(3) Includes 3,500 shares of Common Stock beneficially owned by Martinez Family
Trust.
(4) Includes 5,000 shares of Common Stock beneficially owned.
3
<PAGE> 7
PRINCIPAL STOCKHOLDERS
To the knowledge of the Company's management, only the following persons
owned of record or beneficially more than five percent of the shares of Common
Stock and Preferred Stock as of September 1, 1998:
<TABLE>
<CAPTION>
PERCENT OF
AMOUNT AND NATURE CLASS AS OF PERCENT OF
NAME AND ADDRESS OF BENEFICIAL OF BENEFICIAL SEPTEMBER 1, TOTAL
OWNER OR IDENTITY OF GROUP TITLE OF CLASS OWNERSHIP 1998 VOTE
------------------------------ -------------- ----------------- ------------ ----------
<S> <C> <C> <C> <C>
Telemetrix PLC(1)(2).................... Common Stock 4,544,300 49.3% 40.9%
Preferred
Knaves Beech Estate, Loudwater, Stock 8,110 100.0% 17.1%
----
High Wycombe, Bucks, HP10 9QZ
United Kingdom Total 57.9%
====
Dimensional Fund Advisors, Inc.(3)...... Common Stock 562,400 6.3% 5.2%
1299 Ocean Avenue, 11th Floor
Santa Monica, CA 90401
The TCW Group, Inc.(4).................. Common Stock 547,400 6.1% 5.0%
865 South Figueroa Street
Los Angeles, CA 90017
</TABLE>
- ---------------
(1) The Company has been advised that 47.1% of the capital stock of Telemetrix
PLC is owned by Dr. William P. Venter (a citizen of South Africa), related
family trusts and corporations and Allied Electronics Corporation Limited
("Allied"), a publicly held South African corporation of which Dr. Venter
owns more than a majority of the outstanding shares of capital stock. Dr.
Venter is also a director of Telemetrix PLC as are Messrs. Curtis and Robert
E. Venter. (See Note 2 of "Aggregate Stock Ownership of Directors and
Officers.") Dr. Venter is the father of Robert E. Venter. Allied and Dr.
Venter disclaim beneficial ownership of any outstanding securities of the
Company.
(2) Of these shares, 3,844,300 shares of Common Stock are held by Telemetrix
Investments Limited, a wholly owned subsidiary of Telemetrix PLC, and
450,000 shares of Common Stock are held by Telemetrix Overseas Investments
BV, another wholly owned subsidiary of Telemetrix PLC. The shares of Common
Stock reflected herein also include 250,000 shares of Common Stock issuable
upon the exercise of a warrant held by Telemetrix to purchase shares of
Common Stock at $6.00 per share. The shares of Common Stock do not include
1,900,287 shares of Common Stock issuable upon conversion of the Preferred
Stock, which is presently convertible by Telemetrix into shares of Common
Stock. All of the Preferred Stock owned by Telemetrix is held by Telemetrix
Investments Limited, a wholly owned subsidiary of Telemetrix PLC. Telemetrix
directly or indirectly owns approximately 47.9% of the outstanding shares of
Common Stock and 100% of the outstanding shares of Preferred Stock. If
Telemetrix were to convert its shares of Preferred Stock, it would control
approximately 57% of the outstanding shares of Common Stock. Telemetrix has
informed the Company that Telemetrix does not intend, at the present time,
to so convert its shares of Preferred Stock.
(3) Dimensional Fund Advisors Inc. ("Dimensional"), a registered investment
advisor, is deemed to have beneficial ownership of these shares, all of
which shares are held in portfolios of DFA Investment Dimensions Group Inc.,
a registered open end investment company, or in a series of the DFA
Investment Trust Company, a Delaware business trust, or the DFA Group Trust
and DFA Participation Trust, investment vehicles for qualified employee
benefit plans, all of which Dimensional serves as investment manager.
Dimensional disclaims beneficial ownership of all such shares. This
information is contained in a Schedule 13G filed by Dimensional on February
10, 1998, and is the most recent information possessed by the Company
concerning Dimensional's interest in the Common Stock.
(4) The TCW Group, Inc. may be deemed for the purposes of reporting under
Section 13(d) or 13(g) of the Securities Exchange Act to be the beneficial
owner of the reported securities. The TCW Group, Inc. expressly disclaims
ownership of the securities which are held by an investment manager
subsidiary of The TCW Group, Inc. for the benefit of such subsidiary's
clients. Robert A. Day may be deemed to control The TCW Group, Inc. for the
benefit of such subsidiary's clients. Mr. Day expressly disclaims beneficial
ownership of the securities. This information is contained in a Schedule 13G
filed by The TCW Group, Inc. on February 12, 1998, and is the most recent
information possessed by the Company concerning The TCW Group, Inc.'s
interest in the Common Stock.
4
<PAGE> 8
BOARD COMMITTEES
The Board of Directors has three standing committees: the Audit Committee,
the Nominating Committee and the Executive Compensation and Stock Option
Committee (the "Compensation Committee"). On November 20, 1997, the Board of
Directors appointed a Special Committee of two independent non-employee
directors of the Company to examine strategic alternatives available to the
Company, including a possible sale of the Company.
Audit Committee
The members of the Audit Committee are Messrs. Curtis, Fitzgerald
(Chairman), and Venter. The Audit Committee primarily oversees and reviews the
Company's financial reporting and accounting practices and consults with the
Company's independent public accountants with respect thereto. The Audit
Committee also recommends to the Board of Directors and the stockholders the
retention or replacement of the Company's independent public accountants.
Nominating Committee
The current members of the Nominating Committee are Messrs. Venter and
Fitzgerald. The functions of the Nominating Committee are to recommend nominees
for directors to be elected by the stockholders at their annual meeting and to
recommend nominees to fill vacancies on the Board of Directors that may exist
from time to time. The Nominating Committee will consider recommendations for
nominees that are submitted in writing to the Company by stockholders.
Compensation Committee
The current members of the Compensation Committee are Messrs. Maud
(Chairman) and Venter. The functions of the Compensation Committee are to review
and approve changes in salaries of employees who report directly to the Chief
Executive Officer and to review from time to time the compensation structure of
the Company. The compensation of the Chief Executive Officer is reviewed by the
full Board of Directors.
Special Committee
The current members of the Special Committee are Messrs. Maud (Chairman)
and Fitzgerald. The functions of the Special Committee have been to consider
strategic alternatives available to the Company, including a possible sale of
the Company. The Special Committee, after an extensive process, recommended that
the Company enter into a merger agreement ("Merger Agreement") with two
subsidiaries of Technitrol, Inc. ("Technitrol"). The Board of Directors, after
careful consideration, approved the Merger Agreement and recommended a vote in
favor of the Merger Agreement to the Company's shareholders. At an adjourned
special meeting of stockholders on September 3, 1998, holders of a majority of
GTI Common Stock and Preferred Stock voted to adopt the Merger Agreement.
Technitrol has informed the Company of its refusal to close the transaction
because of asserted breaches of warranty, which the Company has denied. The
Company has filed suit in the Delaware Chancery Court seeking a court order,
among other things, requiring Technitrol, through two of its subsidiaries, to
close the acquisition of the Company pursuant to the Merger Agreement.
BOARD AND COMMITTEE MEETING ATTENDANCE
During 1997, the Board of Directors met seven times at regularly scheduled
meetings. The Audit Committee met three times, the Nominating Committee did not
meet, the Compensation Committee met four times, and the Special Committee met
three times. Each incumbent director attended at least 75% of all meetings of
the Board of Directors in 1997 and the committees of the Board of Directors on
which he served, except Mr. Curtis who attended five of the seven Board of
Directors meetings in 1997.
5
<PAGE> 9
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
No member of the Compensation Committee was at any time during the 1997
fiscal year or at any other time an officer or employee of the Company. Messrs.
Venter and Curtis serve as directors of Telemetrix PLC. No other director of the
Company served on a compensation committee of a board of directors of any entity
that has one or more executive officers serving as a member of the Company's
Board of Directors or the Compensation Committee.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In February 1997, the Company and Valor Electronics, Inc., a wholly-owned
subsidiary of the Company ("Valor"), entered into a certain Note Purchase
Agreement (the "Note") and related Common Stock Purchase Warrant Agreement with
Telemetrix PLC. According to the terms of the Note, Telemetrix PLC loaned to
Valor $2.5 million to be repaid in four equal semi-annual installments
commencing in August 1997 plus interest at the prime rate of interest plus 4%
(12.25% at September 30, 1998). Additionally, the Company granted to Telemetrix
PLC a warrant (the "Warrant") to purchase 250,000 shares of Common Stock at an
exercise price of $6.00 per share. The Warrant is exercisable at any time and
expires 30 days after the Note is paid in full. The Company believes that the
terms and conditions of such financing transaction were as favorable to the
Company as those it would have received from an unrelated third party.
GTI Board members Messrs. Curtis and Venter are members of the six member
Board of Directors of Telemetrix PLC. Telemetrix PLC beneficially owns 4,544,300
shares of Common Stock and 8,110 shares of Preferred Stock.
6
<PAGE> 10
COMPENSATION AND OTHER TRANSACTIONS WITH OFFICERS AND DIRECTORS
SUMMARY COMPENSATION TABLE
The following table sets forth information concerning compensation received
by the executive officers in 1997, 1996 and 1995.
<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
-----------------------
AWARDS
ANNUAL COMPENSATION($) -----------------------
--------------------------- OPTIONS/SARS OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS(1) (# OF SHARES) ($)(2)
--------------------------- ---- ------- -------- ------------- ------
<S> <C> <C> <C> <C> <C>
Albert J. Hugo-Martinez................. 1997 310,096 72,500 60,000 4,700
President and CEO 1996 234,231 26,064 200,000 7,200
GTI Corporation(3) 1995 -0- -0- -0- -0-
William W. Staunton..................... 1997 165,531 32,500 55,000 3,600
Executive Vice President 1996 79,327 84,000 40,000 -0-
Valor Electronics, Inc.(4) 1995 -0- -0- -0- -0-
Michael D. Hollabaugh................... 1997 173,269 10,200 20,000 2,900
Vice President of Sales 1996 -NA- -NA- -NA- -NA-
Valor Electronics, Inc.(5) 1995 -0- -0- -0- -0-
Bruce C. Myers.......................... 1997 142,481 9,300 60,000 1,000
Vice President of Finance and CFO 1996 -0- -0- -0- -0-
GTI Corporation(6) 1995 -0- -0- -0- -0-
William H. Kopenhaver................... 1997 136,012 25,260 60,000 1,000
Vice President of Operations 1996 -0- -0- -0- -0-
Valor Electronics, Inc.(7) 1995 -0- -0- -0- -0-
</TABLE>
- ---------------
(1) Represents amounts paid pursuant to the 1997 bonus plan.
(2) Represents primarily the amount contributed by the Company to the Amended
and Restated Cash or Deferred Profit Sharing Plan for Employees of GTI
Corporation and its affiliates.
(3) Mr. Hugo-Martinez became President and CEO of GTI in March 1996.
(4) Mr. Staunton became Vice President of Quality of Valor in May 1996 and was
promoted to Executive Vice President in November 1997.
(5) Mr. Hollabaugh became Vice President of Sales of Valor in May 1996.
(6) Mr. Myers became Vice President of Finance and Chief Financial Officer of
GTI in January 1997.
(7) Mr. Kopenhaver became Vice President of Operations of Valor in April 1997.
Mr. Kopenhaver's employment by Valor terminated in June 1998.
COMPENSATION COMMITTEE REPORT
The Compensation Committee determines the specific forms and levels of
compensation for executive officers of the Company and administers the Company's
stock incentive and option plans.
The following is the Compensation Committee's report to the stockholders
with respect to the Company's executive compensation policies and with respect
to the compensation of the Chief Executive Officer for 1997. In accordance with
the rules of the Securities and Exchange Commission (the "Commission"), this
report shall not be incorporated by reference into any of the Company's
registration statements, reports or filings under the Securities Act of 1933, as
amended (the "Securities Act"), or the Securities Exchange Act of 1934, as
amended (the "Exchange Act").
1997 COMPENSATION COMMITTEE REPORT
The Company's compensation policies are strongly oriented toward incentives
designed to encourage the Chief Executive Officer and other executive officers
to maximize the potential of the Company and ultimately enhance stockholder
value. Specific corporate-performance objectives are established reflecting the
Com-
7
<PAGE> 11
pany's belief that the contribution of the Chief Executive Officer and the other
executive officers to stockholder value is derived from maximizing operating
performance and earnings on an overall company level and, if applicable, an
individual segment or operating unit level. The Compensation Committee, while
desiring to provide compensation to the Company's executive officers at
competitive levels in order to retain and attract qualified executive officers,
believes that achieving planned operating-profit objectives is critical to the
Company's success.
The compensation of the Chief Executive Officer and other executive
officers of the Company in 1997 principally consisted of three elements: base
salary, a cash-bonus plan, and stock options. The base salary component
represents the basic rate of pay provided to an executive officer for carrying
out the overall responsibilities of the job. The base salary is determined using
comparisons with other companies of similar size revenues, market dynamics, and
organizational complexity. Additional determinants weighed in the consideration
of base salary for the Chief Executive Officer and other executive officers
include employment agreements, scope of responsibilities, experience, and other
factors as may be deemed appropriate. During 1997, Mr. Hugo-Martinez's base
salary was increased from $300,000 to $321,000 on June 30, 1997.
In setting the Chief Executive Officer's salary for 1997, the Compensation
Committee took note of the business operations and prospects of the Company when
Mr. Hugo-Martinez was hired in March 1996 and the steps taken by Mr.
Hugo-Martinez in the remainder of 1996 to improve that position. The
Compensation Committee was of the view that it was in the best interests of the
Company and its stockholders to increase Mr. Hugo Martinez's salary in order to
retain his services in a tight job market and to give him an incentive and
reward to continue his efforts to strengthen the management of various aspects
of the Company's business, including sales, operations, quality control, cost
control and research and development.
The Company has a cash-bonus incentive plan in which the Chief Executive
Officer, the Vice President of Sales, and the Vice President of Finance and
Chief Financial Officer, as well as the Executive Vice President and the Vice
President of Operations of Valor participate. At the beginning of each year,
performance goals are established for the purposes of determining annual
bonuses, with the principal emphasis being the achievement of planned
operating-profit objectives and certain financial objectives. In calculating the
Chief Executive Officer's bonus, substantial weight is given to earnings per
share goals for the Company's Common Stock. Under this plan, no bonus based on
the categories of operating-profit or on financial objectives is awarded unless
at least 100% of the operating-profit objective is achieved. If these
established goals are met, the Chief Executive Officer could receive target
bonuses up to 50% of his base salary. If performance goals are exceeded, the
Chief Executive Officer could be entitled to receive additional bonus amounts,
subject to a maximum additional bonus of 75% of the target bonus. The Chief
Executive Officer received a cash bonus during 1997 of $72,500 in connection
with the above cash-bonus incentive plan.
The GTI Corporation Stock Incentive Plan (1989), as amended (the "Stock
Incentive Plan"), was the only stock option plan of the Company in which the
Chief Executive Officer and the other executive officers could participate in
1997. The Compensation Committee believes that the Stock Incentive Plan helps
recruit, retain, and motivate executive personnel. Moreover, the Compensation
Committee views stock options and stock ownership by the Chief Executive Officer
and other executive officers as an important component of performance-based
compensation, as the value of stock options directly relates to the price of the
Company's Common Stock and provides the Chief Executive Officer and other
executive officers with an incentive to enhance stockholder value. Stock options
are granted on a periodic basis, with interim rewards being made in the case of
new employees, promotions, or a significant increase in job responsibilities.
The number of shares granted under stock options to participants in the Stock
Incentive Plan (including the Chief Executive Officer and the other executive
officers) is calculated using a formula based on the base salary of the
participant, which in turn depends on the factors enumerated above, including
comparisons to other companies, scope of responsibilities and experience. To
determine the number of shares to be granted under options, a range of
8
<PAGE> 12
dollar values is assigned to each level in the organization, which equates to a
multiple of the individual's base salary that is then divided by the average
price of the Company's Common Stock for the 12 months preceding the date of
grant. Such formula was used in determining the stock options granted in 1997 as
shown on the table entitled "Options/SAR Grants in Last Fiscal Year." The Chief
Executive Officer was granted stock options for an aggregate of 60,000 shares of
the Company's Common Stock in 1997. Options granted in 1997 vest over a period
of four years from the date of grant, at the rate of 25% per year, in order to
provide incentives for the executive officer to perform over the long term and
enhance stockholder value, except for 20,000 of 100,000 shares granted to Mr.
Hugo-Martinez, which vested upon his employment with the Company.
As and to the extent compensation of the Chief Executive Officer and other
executive officers increase, the Company intends to comply with Rule 162(m) of
the Internal Revenue Code and the regulations promulgated thereunder to fully
preserve the Company's compensation deduction.
The Compensation Committee will continue to review and evaluate the
Company's executive compensation structure at least annually. When appropriate,
the Compensation Committee will also continue to consult with independent
compensation consultants, law firms and accounting firms with respect to its
executive-compensation structure and its effectiveness in attaining the
objectives set by the Committee.
Compensation Committee
By: Kenneth E. Maud
Robert E. Venter
EMPLOYMENT AGREEMENTS AND SEVERANCE AND RETIREMENT ARRANGEMENTS
Albert J. Hugo-Martinez. In March 1996, the Company and Mr. Hugo-Martinez
entered into an at-will employment agreement, pursuant to which Mr.
Hugo-Martinez became the President and Chief Executive Officer of the Company on
March 13, 1996. Pursuant to such employment agreement, Mr. Hugo-Martinez
received a hiring bonus of $15,000 (net of taxes) and an annual base salary of
$300,000. In addition, Mr. Hugo-Martinez is entitled to receive bonus
compensation consisting of 50% of his base salary (pro-rated for 1996) if the
specified annual bonus target is achieved and up to a maximum of 75% of his base
salary if the bonus target is exceeded by 20%. Mr. Hugo-Martinez was also
granted options under the Stock Incentive Plan to purchase 100,000 shares of
Common Stock at the fair market value of $8.75 per share on March 13, 1996 (See
"Stock Options -- Stock Incentive Plan."). Twenty percent of such options vested
upon the commencement of his employment. The remaining options vest 20% per year
on the four respective anniversaries of the date of grant. Mr. Hugo-Martinez is
also entitled to receive certain fringe benefits including a monthly automobile
allowance in the amount of $800. In the event that his employment is terminated
for reasons other than gross misconduct, death or disability, Mr. Hugo-Martinez
is eligible to receive severance payments in an aggregate amount equal to 12
months of his annual base salary which will be paid over a 12-month period.
Bruce C. Myers. In January 1997, the Company and Mr. Myers entered into an
at-will employment agreement, pursuant to which Mr. Myers became the Vice
President, Finance and Chief Financial Officer of the Company on January 21,
1997. Such employment agreement provides that Mr. Myers will receive an annual
base salary of $155,000. In addition, Mr. Myers is entitled to receive bonus
compensation consisting of 40% of his base salary if the specified annual bonus
target is achieved. Mr. Myers was also granted options under the Stock Incentive
Plan to purchase 40,000 shares of Common Stock at the fair market price, subject
to vesting over a five year period at a rate of 10,000 shares of Common Stock
per year, beginning on the second anniversary of the date of grant. Mr. Myers is
also entitled to receive certain fringe benefits. Mr. Myers' employment
agreement contains no provision for severance payments.
CHANGE OF CONTROL AGREEMENTS
In January 1998, in order to provide an incentive for Mr. Hugo-Martinez and
the other executive officers to remain employed with the Company until a
strategic alternative (including a possible sale of the Company) is consummated,
and in order to provide an incentive to these employees to maximize the value to
the
9
<PAGE> 13
shareholders of such strategic transaction, the Company executed Change of
Control agreements with Mr. Hugo-Martinez and with each of the other Executive
Officers. If there occurs a Change of Control of the Company, as defined in the
agreements, on or before January, 1999, then Mr. Hugo-Martinez will receive a
lump sum payment equal to eighteen months of his base salary and the other
Executive Officers will receive a lump sum cash payment equal to nine months of
their respective base salaries at the closing of a Change of Control
transaction, assuming that they are still employed by the Company at that time.
In addition, in July 1998, the Board of Directors decided to increase Mr. Myers'
lump sum payment at the closing of a Change of Control transaction by an amount
reflecting the importance to the Company of the extraordinary efforts that Mr.
Myers would be required to make in connection with the proposed Change of
Control transaction. The amount of such additional lump sum payment is to be
determined by the Board of Directors based on Mr. Myers' performance, in an
amount that will not be less than $75,000. These payments supersede and replace
any other severance payment to which these employees might otherwise be
entitled, except that Mr. Hugo-Martinez continues to be entitled to receive
severance benefits pursuant to his employment agreement if he is terminated in
circumstances other than those covered by his Change of Control agreement with
the Company. In addition, each of the executive officers will receive an
additional lump sum cash payment at closing equal to one months salary for each
33 cents per share that the Company's shareholders receive in excess of $6 per
share in the change of control transaction.
STOCK OPTIONS
The Company has one stock option plan for its officers and other management
employees: the GTI Corporation Stock Incentive Plan (1989), as amended (the
"Stock Incentive Plan"). The Company also has three stock option plans for
non-employee directors (see Directors Compensation).
Stock Incentive Plan
The Stock Incentive Plan currently provides that a maximum of 1,200,000
shares of Common Stock from the Company's authorized but unissued shares of
Common Stock or from shares acquired by the Company, including shares purchased
in the open market, are available for issuance by the Company in connection with
awards of stock options, reload options, stock appreciation rights, performance
shares and shares of restricted stock, subject to adjustment. Whenever an award
under the Stock Incentive Plan is terminated or forfeited for any reason, the
shares of Common Stock covered by such award will again become available for
award under the Stock Incentive Plan. Also, whenever the exercise price of a
stock option is paid for, in whole or in part, with shares of Common Stock, the
number of shares available for award will only be decreased by the excess of the
number of shares issued to the participant over the number of shares the
participant surrendered. Shares may be awarded to any key employee of the
Company or any subsidiary of the Company who, in the opinion of the committee
administering the Stock Incentive Plan (currently the Compensation Committee),
has the capacity to contribute in a substantial measure to the successful
performance of the Company. The Stock Incentive Plan became effective on
December 13, 1989, and no awards may be granted under the Stock Incentive Plan
after December 13, 1999.
Approximately 76 persons are currently eligible to participate in the Stock
Incentive Plan. As of September 1, 1998, awards covering 857,625 and 116,675
shares were outstanding and available, respectively, for grant under the Stock
Incentive Plan. All outstanding options become fully exercisable upon a change
of control of the Company.
10
<PAGE> 14
OPTION/SAR GRANTS IN LAST FISCAL YEAR
The following table sets forth information concerning stock options granted
during the fiscal year ended December 31, 1997, to each of the executive
officers and all employees as a group:
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT ASSUMED
ANNUAL RATES OF PRICE
APPRECIATION FOR
INDIVIDUAL GRANTS OPTION TERM
---------------------------------------------------- ----------------------
PERCENT OF
NUMBER OF TOTAL
SECURITIES OPTIONS/SARS EXERCISE
UNDERLYING GRANTED TO OF BASE
OPTIONS/SARS EMPLOYEES IN PRICE EXPIRATION
NAME GRANTED(#) FISCAL YEAR ($/SHARE) DATE 5%($) 10%($)
---- ------------ ------------ --------- ---------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Albert J. Hugo-Martinez...... 60,000 13.0% 5.63 11/19/07 213,000 537,000
Michael D. Hollabaugh........ 20,000 4.3% 5.63 11/19/07 71,000 179,000
William H. Kopenhaver........ 40,000 8.7% 5.50 3/20/07 139,000 350,000
20,000 4.3% 5.63 11/19/07 71,000 179,000
Bruce C. Myers............... 40,000 8.7% 6.06 1/21/07 153,000 385,000
20,000 4.3% 5.63 11/19/07 71,000 179,000
William W. Staunton.......... 55,000 11.9% 5.63 11/19/07 195,000 492,000
All employees as a group..... 461,750 100.0% 5.50 various
</TABLE>
AGGREGATED OPTION EXERCISES IN 1997 AND YEAR END OPTION VALUE
The following table sets forth information concerning stock options
exercised in 1997 by each of the executive officers, the aggregate number of
options held by each executive officer and the value realized from exercised
options and inherent in exercised and unexercised options at December 31, 1997:
<TABLE>
<CAPTION>
NUMBER OF
SECURITIES VALUE OF UNEXERCISED
UNDERLYING IN-THE-MONEY
UNEXERCISED OPTIONS/SARS
SHARES OPTIONS/SARS AT AT FISCAL
ACQUIRED ON VALUE FISCAL YEAR-END(#) YEAR-END($)
NAME EXERCISE(#) REALIZED($) EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
---- ----------- ----------- ------------------------- -------------------------
<S> <C> <C> <C> <C>
Albert J. Hugo-Martinez....... -0- -0- 65,000 / 195,000 -0- / -0-
Michael D. Hollabaugh......... -0- -0- 12,500 / 57,500 -0- / -0-
William H. Kopenhaver......... -0- -0- -0- / 60,000 -0- / -0-
Bruce C. Myers................ -0- -0- -0- / 60,000 -0- / -0-
William W. Staunton........... -0- -0- 10,000 / 85,000 -0- / -0-
</TABLE>
DIRECTORS' COMPENSATION
Director Remuneration
Each director of the Company, except Mr. Maud and Mr. Hugo-Martinez, is
paid an annual retainer of $18,000, plus $600 for each time that he attends a
meeting of the Board of Directors. Each member of the Audit Committee and the
Compensation Committee is paid $500 for each time that he attends a meeting of
each such committee. Mr. Maud is paid an annual stipend of $50,000, payable
quarterly, for his service as Chairman of the Board of Directors.
Non-Employee Director Stock Options
The GTI Corporation 1985 Stock Option Plan for Non-Employee Directors, as
amended (the "1985 Directors Plan"), provides for the automatic grant of
nonstatutory stock options covering an aggregate of 100,000 shares of Common
Stock to members of the Board of Directors who have been elected by the
Company's stockholders and who are not full-time employees of the Company or any
of its subsidiaries,
11
<PAGE> 15
subject to the limitation that no eligible director may be granted nonstatutory
stock options for more than 10,000 shares. The 1985 Directors Plan provides that
the exercise price of each nonstatutory stock option must not be less than the
fair-market value of the Common Stock on the date of grant. No additional stock
options can be granted under the 1985 Directors Plan as of December 13, 1995.
The GTI Corporation 1989 Stock Option Plan for Non-Employee Directors, as
amended (the "1989 Directors Plan"), provides for the automatic grant of
nonstatutory stock options with respect to 10,000 shares of Common Stock to
directors of the Company who first become directors after the effective date of
the 1989 Directors Plan (December 13, 1989), who are not otherwise full-time
employees of the Company or any subsidiary of the Company for any part of the
preceding fiscal year and who never received stock options under the 1985
Directors Plan. A maximum of 100,000 shares of Common Stock of the Company's
authorized but unissued shares of Common Stock or treasury stock are available
for issuance under the 1989 Directors Plan, subject to adjustment. As of
September 1, 1998, stock options covering 10,000 shares have been exercised,
60,000 shares were available for future grant, and stock options covering 30,000
shares were outstanding under the 1989 Directors Plan. No stock options under
the 1989 Directors Plan may be granted on or after December 13, 1999.
The GTI Corporation 1996 Stock Option Plan for a Non-Employee Director (the
"1996 Plan") provides for the grant of nonstatutory stock options covering a
member of the Board of Directors who has been elected by the Company's
stockholders and who is not a full-time employee of the Company or any of its
subsidiaries, subject to the limitation that no eligible director may be granted
nonstatutory stock options for more than 25,000 shares. The 1996 Plan provides
that the exercise price of each nonstatutory stock option must not be less than
the fair-market value of the Common Stock on the date of grant. Further, the
options are exercisable immediately and have a 10 year term. Mr. Maud received a
grant of 25,000 shares under the 1996 Plan in May 1996. As of September 1, 1998,
there were stock options for 25,000 shares outstanding under the 1996 Plan and
there were no additional shares under the 1996 Plan available for future grant.
The GTI Corporation 1996 Stock Option Plan II for a Non-Employee Director
(the "1996 Plan II") provides for the grant of nonstatutory stock options
covering a member of the Board of Directors who has been elected by the
Company's stockholders and who is not a full-time employee of the Company or any
of its subsidiaries, subject to the limitation that no eligible director may be
granted nonstatutory stock options for more than 25,000 shares. The 1996 Plan II
provides that the exercise price of each nonstatutory stock option must not be
less than the fair-market value of the Common Stock on the date of grant.
Further, the options are exercisable immediately and have a 10 year term. Mr.
Maud received a grant of 25,000 shares under the 1996 Plan II in December 1996.
As of September 1, 1998, there were stock options outstanding under the 1996
Plan II for 25,000 shares and there were no additional shares under the 1996
Plan II available for future grant.
COMPLIANCE WITH SECTION 16 OF THE EXCHANGE ACT
Section 16(a) of the Exchange Act requires the Company's officers and
directors, and persons who own more than 10% of a registered class of the
Company's equity securities, to file reports of ownership and changes in
ownership with the Commission and the Nasdaq National Market System. Officers,
directors, and holders of more than 10% of the Common Stock are required by
regulations promulgated by the Commission under the Exchange Act to furnish the
Company with copies of all Section 16(a) forms they file. The Secretary of the
Company will assist beneficial owners of more than 10% of the Common Stock in
complying with the reporting requirements of Section 16(a) of the Exchange Act.
Based solely on its review of the copies of such forms received by it, the
Company believes that, since January 1, 1997, its directors, officers and
greater than 10% beneficial owners complied with all applicable Section 16(a)
reporting requirements.
12
<PAGE> 16
CUMULATIVE TOTAL STOCKHOLDER RETURN
Set forth below is a line graph comparing the yearly percentage change in
the cumulative total stockholder return on the Company's Common Stock against
the cumulative total return of the Russell 2000 Index and the NASDAQ Electronic
Components Index (measured in accordance with the rules of the Commission), for
the period of five calendar years commencing January 1, 1993 and ending December
31, 1997. In accordance with the rules of the Commission, this presentation
shall not be incorporated by reference into any of the Company's registration
statements, reports, or filings under the Securities Act or the Exchange Act.
GTI CORPORATION
COMPARISON OF FIVE YEAR CUMULATIVE SHAREHOLDER TOTAL RETURN
AMONG GTI CORPORATION, THE RUSSELL 2000 INDEX AND THE NASDAQ
ELECTRONIC COMPONENTS INDEX
<TABLE>
<CAPTION>
NASDAQ
ELECTRONIC
GTI COROPRATION RUSSELL 2000 INDEX COMPONENTS INDEX
<S> <C> <C> <C>
1/1/93 100 100 100
12/31/93 103 119 137
12/31/94 62 117 152
12/31/95 66 150 251
12/31/96 18 175 435
12/31/97 18 214 456
</TABLE>
PROPOSAL TWO
RATIFICATION OF INDEPENDENT PUBLIC ACCOUNTANTS
(ITEM 2 ON THE PROXY CARD)
Arthur Andersen LLP served as the Company's independent public accountants
in 1995, 1996 and 1997 and, upon recommendation of the Audit Committee, has been
selected by the Board of Directors to serve in the same capacity for 1998,
subject to the ratification of such selection at the Annual Meeting. If the
stockholders do not ratify the selection of Arthur Andersen LLP, the appointment
of the independent public accountants will be reconsidered by the Board of
Directors. Representatives of Arthur Andersen LLP will be present at the Annual
Meeting, may make a statement at the Annual Meeting if they so desire, and will
be available to respond to appropriate questions at the Annual Meeting.
Ratification of the selection of Arthur Andersen LLP as the Company's
independent public accountants for 1998 requires the affirmative vote of the
holders of a majority of the votes represented by the outstanding
13
<PAGE> 17
shares of Common Stock and Preferred Stock, voting together as a single class,
present in person or by proxy at the Annual Meeting and entitled to vote
thereon. Telemetrix PLC, which as of the Record Date directly or indirectly
owned 47.9% of the outstanding shares of Common Stock and 100% of the
outstanding shares of Preferred Stock, collectively, representing approximately
57% of the voting securities, has indicated its intention to ratify such
selection.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THE RATIFICATION
OF THE SELECTION OF ARTHUR ANDERSEN LLP AS THE COMPANY'S INDEPENDENT PUBLIC
ACCOUNTANTS.
METHODS AND EXPENSES OF SOLICITATION
The cost of solicitation of the enclosed form of proxy will be borne by the
Company. Solicitation will be made primarily through the use of the mails, but
directors, officers and regular employees of the Company may solicit proxies
personally, by mail, or by telephone and telegraph. The Company will reimburse
banks, brokers and other custodians, nominees and fiduciaries for their
reasonable expenses incurred in sending proxy material to beneficial owners and
obtaining their proxies.
FORM 10-K/A
A copy of the Company's annual report for the year ended December 31, 1997
is included with this proxy statement to shareholders entitled to notice of the
Meeting. This annual report was prepared on March 30, 1998 and has not been
updated to reflect subsequent events. At any shareholder's written request, the
Company will provide without charge, a copy of Company's Annual Report on Form
10-K/A, as filed with the SEC. If copies of exhibits are requested, a copying
charge of $0.15 per page will be charged. All requests should be sent to:
Investor Relations, GTI Corporation, 9715 Business Park Avenue, San Diego,
California 92131.
STOCKHOLDERS' PROPOSALS
Any stockholder who intends to submit a proposal for action at the 1999
Annual Meeting of Stockholders must provide notice to the Company, which must be
received on or before June 24, 1999, in order for the proposal to be included in
management's proxy statement and form of proxy relating to the 1999 Annual
Meeting of Stockholders.
By Order of the Board of Directors,
/s/ BRUCE C. MYERS
Bruce C. Myers
Secretary
October 2, 1998
San Diego, California
14
<PAGE> 18
PREFERRED STOCK
PROXY
GTI CORPORATION
ANNUAL MEETING OF STOCKHOLDERS OCTOBER 22, 1998
The undersigned hereby appoints Timothy M. Curtis, Albert J.
Hugo-Martinez, Kenneth E. Maud, and Robert E. Venter, and each of them, with
power of substitution in each, as proxies or proxy to represent the undersigned
at the Annual Meeting of the Stockholders of GTI Corporation (the "Company") to
be held at the Hyatt Regency La Jolla, 3777 La Jolla Village Drive, San Diego,
California, on Thursday, October 22, 1998, at 10:00 a.m. local time, and at any
adjournment or adjournments thereof, and to vote the number of shares of $35.00
Cumulative Convertible Preferred Stock, which the undersigned would be entitled
to vote if personally present, (a) in the manner designated on the reverse side
hereof with respect to the election of directors and the other identified
proposals and (b) in their discretion on such other matters as may properly come
before the meeting or any adjournments thereof.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
This proxy when properly executed will be voted in the manner directed
herein. If no direction is made, this proxy will be voted "FOR" all nominees and
proposals listed on the reverse side hereof.
(Continued and to be marked, dated, and signed on the other side.)
FOLD AND DETACH HERE
GTI CORPORATION Annual Meeting of Stockholders
Thursday, October 22, 1998
10:00 a.m.
Hyatt Regency La Jolla
3777 La Jolla Village Drive
San Diego, California
STOCKHOLDERS WHO DO NOT EXPECT TO ATTEND THE MEETING AND DESIRE TO HAVE THEIR
STOCK VOTED AT THE MEETING ARE REQUESTED TO COMPLETE, DATE AND SIGN THE ABOVE
PROXY ON THE REVERSE SIDE AND RETURN THE SAME IN THE ENCLOSED ENVELOPE, WHICH
REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES.
<PAGE> 19
Please mark
your votes as /X/
indicated in
this example.
(1) ELECTION OF DIRECTORS:
Timothy M. Curtis, Albert J. Hugo-Martinez, Kenneth E. Maud, and Robert E.
Venter.
FOR ALL WITHHOLD
NOMINEES AUTHORITY
listed except as otherwise to vote for
indicated with respect to all nominees
individual nominees. listed
/ / / /
(To withhold authority to vote for any individual nominee, write his name on the
following line.)
- ------------------------------------------
(2) RATIFICATION OF INDEPENDENT PUBLIC ACCOUNTANTS: Ratification of the
selection of Arthur Andersen LLP as the Company's independent public
accountants for 1998.
FOR AGAINST ABSTAIN
/ / / / / /
I plan to attend this meeting / /
DATED: Signature(s)
-------------------- ----------------------------------------
Please sign exactly as your name appears on this proxy. When signing as
attorney, executor, administrator, trustee, guardian, etc., or as officer of a
corporation, give full title. For joint accounts obtain both signatures.
FOLD AND DETACH HERE
<PAGE> 20
COMMON STOCK
PROXY
GTI CORPORATION
ANNUAL MEETING OF STOCKHOLDERS OCTOBER 22, 1998
The undersigned hereby appoints Timothy M. Curtis, Albert J.
Hugo-Martinez, Kenneth E. Maud, and Robert E. Venter, and each of them, with
power of substitution in each, as proxies or proxy to represent the undersigned
at the Annual Meeting of the Stockholders of GTI Corporation (the "Company") to
be held at the Hyatt Regency La Jolla, 3777 La Jolla Village Drive, San Diego,
California, on Thursday, October 22, 1998, at 10:00 a.m. local time, and at any
adjournment or adjournments thereof, and to vote the number of shares of Common
Stock, which the undersigned would be entitled to vote if personally present,
(a) in the manner designated on the reverse side hereof with respect to the
election of directors and the other identified proposals and (b) in their
discretion on such other matters as may properly come before the meeting or any
adjournments thereof.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
This proxy when properly executed will be voted in the manner directed
herein. If no direction is made, this proxy will be voted "FOR" all nominees and
proposals listed on the reverse side hereof.
(Continued and to be marked, dated, and signed on the other side.)
FOLD AND DETACH HERE
GTI CORPORATION Annual Meeting of Stockholders
Thursday, October 22, 1998
10:00 a.m.
Hyatt Regency La Jolla
3777 La Jolla Village Drive
San Diego, California
STOCKHOLDERS WHO DO NOT EXPECT TO ATTEND THE MEETING AND DESIRE TO HAVE THEIR
STOCK VOTED AT THE MEETING ARE REQUESTED TO COMPLETE, DATE AND SIGN THE ABOVE
PROXY ON THE REVERSE SIDE AND RETURN THE SAME IN THE ENCLOSED ENVELOPE, WHICH
REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES.
<PAGE> 21
Please mark
your votes as /X/
indicated in
this example
(1) ELECTION OF DIRECTORS:
FOR ALL WITHHOLD
NOMINEES AUTHORITY
listed except as otherwise to vote for
indicated with respect to all nominees
individual nominees. listed
/ / / /
Timothy M. Curtis, Albert J. Hugo-Martinez, Kenneth E. Maud, and Robert E.
Venter.
(To withhold authority to vote for any individual nominee, write his name on the
following line.)
- ------------------------------------------
(2) RATIFICATION OF INDEPENDENT PUBLIC ACCOUNTANTS: Ratification of the
selection of Arthur Andersen LLP as the Company's independent public
accountants for 1998.
FOR AGAINST ABSTAIN
/ / / / / /
I plan to attend this meeting / /
DATED: Signature(s)
-------------------- ----------------------------------------
Please sign exactly as your name appears on this proxy. When signing as
attorney, executor, administrator, trustee, guardian, etc., or as officer of a
corporation, give full title. For joint accounts obtain both signatures.
FOLD AND DETACH HERE
