SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE
SECURITIES EXCHANGE ACT OF 1934 (AMENDMENT NO. )
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[ ] Preliminary Proxy Statement
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[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to ss.240.14a-11(c) or ss.240.14a-12
Anaren Microwave, Inc.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
Anaren Microwave, Inc.
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
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Item 22(a)(2) of Schedule 14A.
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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:
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computed pursuant to Exchange Act Rule 0-11: (Set forth the
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was determined).
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<PAGE>
ANAREN MICROWAVE, INC.
6635 Kirkville Road
East Syracuse, New York 13057
-------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held on November 19, 1996
-------------------
To the Holders of the Common Stock
of Anaren Microwave, Inc.:
PLEASE TAKE NOTICE, that the Annual Meeting of Stockholders of Anaren
Microwave, Inc. (the "Company") will be held on November 19, 1996 at 11:00 a.m.
Eastern Standard Time at the Syracuse Marriott, 6302 Carrier Parkway, East
Syracuse, New York 13057, for the following purposes:
(1) To elect six directors, for the term of one year and until their
successors have been elected and qualified; and
(2) To transact such other business as may be properly brought before the
Meeting.
Stockholders of record as of the close of business on October 1, 1996 will
be entitled to notice of and to vote at the Meeting.
Enclosed is the annual report for the fiscal year ended June 30, 1996,
along with a proxy statement and proxy. Stockholders who do not expect to attend
the Meeting are requested to sign and return the proxy in the enclosed envelope.
By Order of the Board of Directors
David M. Ferrara
Secretary
Dated: October 11, 1996
East Syracuse, New York
<PAGE>
ANAREN MICROWAVE, INC.
6635 Kirkville Road
East Syracuse, New York 13057
--------------------
This Proxy Statement is being mailed on or about October 11, 1996, to the
stockholders of Anaren Microwave, Inc. ("Anaren" or the "Company") entitled to
receive the accompanying Notice of Annual Meeting of Stockholders and is
provided, by order of its Board of Directors, in connection with the
solicitation of proxies to be used at the Annual Meeting of Stockholders (the
"Meeting") of the Company to be held on November 19, 1996 at 11:00 a.m. and at
any adjournment or adjournments thereof, for the purposes set forth in the
Notice.
If the enclosed form of proxy is executed and returned, it may nevertheless
be revoked at any time prior to its exercise by (i) submitting a subsequently
dated proxy; or (ii) by filing written notice of such revocation with the
Secretary of the Meeting. The proposals will be presented by the Board of
Directors of the Company. Where a choice is specified with respect to a
proposal, the shares represented by the proxy will be voted in accordance with
the specifications made. Where a choice is not so specified, the shares
represented by the proxy will be voted to elect the nominees for director named
herein.
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
At the close of business on October 1, 1996, the record date stated in the
accompanying Notice, the Company had outstanding 4,103,842 shares of common
stock, $.01 par value (the "Common Stock"), each of which share is entitled to
one vote with respect to each matter to be voted on at the Meeting. A majority
of the issued and outstanding shares of Common Stock present in person or by
proxy, a total of 2,051,922 shares, will be required to constitute a quorum for
the transaction of business at the Meeting. The Company has no class or series
of voting stock outstanding other than the Common Stock.
Abstentions and broker non-votes (as hereinafter defined) are counted as
present for the purpose of determining the presence or absence of a quorum for
the transaction of business. For the purpose of determining the vote required
for approval of matters to be voted on at the Meeting, shares held by
stockholders who abstain from voting will be treated as being "present" and
"entitled to vote" on the matter and, thus, an abstention has the same legal
effect as a vote against the matter. However, in the case of a broker non-vote
or where a stockholder withholds authority from his proxy to vote the proxy as
to a particular matter, such shares will not be treated as "present" and
"entitled to vote" on the matter. Accordingly, a broker non-vote or the
withholding of a proxy's authority will have no effect on the outcome of the
vote on the matter. A "broker non-vote" refers to shares represented at the
Meeting in person or by proxy by a broker or nominee where such broker or
nominee (i) has not received voting instructions on a particular matter from the
beneficial owner or persons entitled to vote; and (ii) the broker or nominee
does not have the discretionary voting power on such matter.
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth certain information with respect to persons
known to the Company to own beneficially more than 5% of the outstanding shares
of Common Stock of the Company, as of October 1, 1996 (except as otherwise
indicated):
Numbers of Shares
Name and Address of Common Stock Percent
of Beneficial Owner Beneficially Owned(1) of Class
- ------------------- --------------------- --------
Global Securities, Inc. .................. 1,307,800 30.19%
P.O. Box 560
Sudbury, MA 01776
Carl W. Gerst, Jr. ....................... 360,356(2) 8.32
c/o Anaren Microwave, Inc.
6635 Kirkville Road
East Syracuse, NY 13057
Dimensional Fund ......................... 250,200(3) 5.78
Advisors Inc.
1299 Ocean Avenue
Santa Monica, CA 90401
BankAmerica Corporation .................. 296,250(4) 6.84
555 California Street
San Francisco, CA 94104
- ---------------
(1) Except as otherwise indicated, as of October 1, 1996 all of such shares are
owned with sole voting and investment power.
(2) Includes 44,756 shares held in trust for, or owned by, Mr. Gerst's family
and relatives and includes 75,000 shares which Mr. Gerst has the right to
acquire within 60 days pursuant to outstanding stock options.
(3) Dimensional Fund Advisors, Inc. ("Dimensional"), a registered investment
advisor, is deemed to have beneficial ownership of 250,200 shares of the
Company's Common Stock, as of June 30, 1996, all of which shares are held
in portfolios of DFA Investment Dimensions Group, Inc., a registered
open-end investment company (the "Fund"), or in series of The DFA
Investment Trust Company, a Delaware business trust (the "Trust"), or the
DFA Group Trust and the DFA Participating Group Trust, investment vehicles
for qualified employee benefit plans, for all of which Dimensional serves
as investment manager. Dimensional has reported to the Company that it has
sole dispositive power with respect to all 250,200 shares and sole voting
power with respect to 143,000 of such shares and Dimensional does not share
voting power or dispositive power with respect to any of the shares and
Dimensional disclaims beneficial ownership of all such shares. Persons who
are officers of Dimensional also serve as officers of the Fund and the
Trust, each an open-end management investment company registered under the
Investment Company Act of 1940. In their capacities as officers of the Fund
and the Trust, these persons vote 69,400 additional shares which are owned
by the Fund and 37,800 shares which are owned by the Trust (both included
in sole dispositive power).
(4) BankAmerica Corporation, a registered bank holding company ("BAC"), is
deemed to have beneficial ownership of 296,250 shares of Common Stock, as
of June 30, 1996, which includes 77,300 shares beneficially owned by BofA
Capital Management, Inc. ("BCM"), an investment advisor registered under
the Investment Advisors Act of 1940, 216,650 shares beneficially owned by
Bank of America NT&SA ("BANTSA"), a national banking association organized
under the laws of the United States, and 2,300 shares beneficially owned by
Bank of America NW, National Association ("BofA NW"), a national banking
association organized under the laws of the United States. BANTSA and BofA
NW are wholly-owned subsidiaries of BAC. BCM is a direct, wholly-owned
subsidiary of BANTSA. All shares of Common Stock are held indirectly by BAC
through the above subsidiaries. BANTSA, BCM and BofA NW have sole voting
power over respectively, 214,350, 77,300 and 2,300 shares of Common Stock.
Investment power over 255,850 of these shares is shared with BAC and its
subsidiaries and investment power with regard to 40,400 shares is shared
with a third party.
2
<PAGE>
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth certain information, as of October 1, 1996,
with respect to the beneficial ownership of the Company's Common Stock by (i)
each director and nominee for director who own beneficially any shares of Common
Stock, (ii) each executive officer of the Company named in the Summary
Compensation Table under "Executive Compensation" below, and (iii) all directors
and executive officers of the Company as a group:
Number of Shares
Name of of Common Stock Percent
Beneficial Owner Beneficially Owned(1) of Class
- ---------------- --------------------- --------
Hugh A. Hair ............................ 208,800(2) 4.82%
Carl W. Gerst, Jr. ...................... 360,356(3) 8.32
William J. Mackay ....................... 29,000(4) *
Abraham Manber .......................... 916 *
Lawrence A. Sala ........................ 28,200(5) *
Dale F. Eck ............................. -0- -0-
Herbert I. Corkin ....................... 7,500(6) *
Gert R. Thygesen ........................ 31,000(7) *
Joseph E. Porcello ...................... 21,490(8) *
All Directors and Officers
as a Group (9 persons) ................ 687,262(9) 15.87%
- ----------------
* Indicates less than 1%
(1) Except as otherwise indicated, as of October 1, 1996, all of such shares
are owned with sole voting and investment power.
(2) Includes 75,000 shares which Mr. Hair has the right to acquire within 60
days pursuant to outstanding stock options, but does not include 2,700
shares owned by Mr. Hair's relatives.
(3) Includes 44,756 shares held in trust for, or owned by, Mr. Gerst's family
and relatives and includes 75,000 shares which Mr. Gerst has the right to
acquire within 60 days pursuant to outstanding stock options.
(4) Includes 29,000 shares owned by Mr. Mackay jointly with his wife.
(5) Includes 28,000 shares which Mr. Sala has the right to acquire within 60
days pursuant to outstanding stock options.
(6) Does not include 1,307,800 shares owned by Global Securities, Inc.
("Global"), as to which Mr. Corkin, the owner of 24% of the capital stock
of Global, disclaims beneficial ownership.
(7) Includes 31,000 shares which Mr. Thygesen has the right to acquire within
60 days pursuant to outstanding stock options.
(8) Includes 18,500 shares which Mr. Porcello has the right to acquire within
60 days pursuant to outstanding stock options.
(9) Includes 227,500 shares which all directors and officers as a group have
the right to acquire within 60 days pursuant to outstanding stock options.
ELECTION OF DIRECTORS
Six directors are to be elected for the ensuing year and until their
successors are elected and qualified. The shares represented by the enclosed
proxy will be voted for the nominees for directors set forth herein who shall
constitute the entire Board of Directors. The Board of Directors has nominated
fewer nominees than the number of directors fixed by the Company's Board of
Directors pursuant to the By-laws, which provide for seven directors, pending
identification of a director candidate suitable to the Board of Directors who is
willing to serve as a director of the Company. The enclosed proxy cannot be
voted for a greater number of persons than the number of nominees identified.
Following identification of a suitable candidate who is willing to serve as a
director, it is anticipated that the vacancy on the Board of Directors will be
filled by the Board of Directors for a term of office expiring at the time of
the 1997 Annual Meeting of Stockholders or at the time such director's successor
is elected and has qualified.
3
<PAGE>
If any nominee for director should be unavailable to serve, it is intended
that the persons named in the accompanying form of proxy will vote the shares
represented by such proxy for another person duly nominated by the Board of
Directors in such nominee's stead or if no other person is so nominated, to vote
such shares only for the remaining nominees. All nominees for director set forth
herein have consented to serve, and the Company's Board of Directors believes
they will serve, as directors.
Certain Information Concerning Nominees for Directors
Set forth below is certain information concerning the nominees for election
as directors. The information has been furnished to the Company by such persons:
Name, Age, Nature of
Positions and Offices Held Year First Principal Occupation, Experience
with the Company Became Director and Other Directorships
- ---------------- --------------- -----------------------
Hugh A. Hair, 61 ........... 1968 Mr. Hair has been actively engaged
Chief Executive Officer, President in the Company's
Chairman of the Board business since its of the
founding in 1967. Mr. Hair
served asCompany from its
founding until May 1995 and has
served as Chief Executive
Officer and Chairman of the
Board for more than the past
five years.
Carl W. Gerst, Jr., 59 ..... 1968 Mr. Gerst has been actively
Chief Technical Officer, engaged in the Company's
Treasurer, Vice Chairman business since its founding in
of the Board 1967. Mr. Gerst served as
Executive Vice President from
the Company's founding until May
1995 when he became Chief
Technical Officer and Vice
Chairman of the Board. Mr. Gerst
has also served as Treasurer
since May, 1992.
Lawrence A. Sala, 33 ....... 1995 Mr. Sala has been President of the
President and Director Company since May 1995. Mr. Sala
has held various engineering and
management positions with the
Company since 1984 and was most
recently, Vice President of
Marketing.
Abraham Manber, 67 ....... 1971 Mr. Manber was President of Amtech
Director Patent Licensing Corp. from 1979
until his retirement in March
1993.
Herbert I. Corkin, 74 ...... 1989 Mr. Corkin has been Chairman of
Director the Board of The Entwistle
Company, a defense contractor,
since 1954. Mr. Corkin also
served as the President of The
Entwistle Company from 1954
through December 1993 and has
served as its Chief Executive
Officer since December 1993.
Dale F. Eck, 53 ............ 1995 Mr. Eck has been Vice President of
Director Finance, Treasurer and a
Director of The Entwhistle
Company since 1978.
4
<PAGE>
EXECUTIVE COMPENSATION AND OTHER INFORMATION
Summary of Cash and Certain Other Compensation
The following table sets forth certain information with respect to
compensation, received in all capacities in which they served, for each of the
last three fiscal years ended July 2, 1994, July 1, 1995 and June 30, 1996 of
the Company's Chief Executive Officer and each of the four other most
highly-compensated officers during the most recent fiscal year:
Summary Compensation Table
<TABLE>
<CAPTION>
LongTerm
Compensation
---------------------------
Annual Securities
Compensation Underlying All Other
Salary Options<F6> Compensation<F7>
Name and Principal Position Year ($) (#) ($)
------------------------- ---- ------------ ---------- --------------
<S> <C> <C> <C> <C>
Hugh A. Hair, .................................... 1996 $225,000 0 $11,991
Chief Executive Officer 1995 225,000 0 10,521
and Chairman of the Board<F1> 1994 225,000 0 9,874
Carl W. Gerst, Jr., .............................. 1996 225,000 0 9,086
Chief Technical Officer, Vice Chairman 1995 225,000 0 8,363
and Treasurer<F2> 1994 225,000 0 8,313
Lawrence A. Sala, ................................ 1996 128,084 5,000 2,233
President<F3> 1995 88,195 40,000 1,323
Gert R. Thygesen, ................................ 1996 115,570 0 2,006
Vice President of Operations<F4> 1995 112,736 30,000 1,691
Joseph E. Porcello, .............................. 1996 83,885 0 1,258
Vice President of Finance<F5> 1995 76,752 20,000 1,151
<FN>
- -----------------
<F1> Mr. Hair also served as the Company's President until May 1995.
<F2> Mr. Gerst served as the Company's Executive Vice President until May 1995
when he was elected to the position which he currently holds, Chief
Technical Officer.
<F3> Mr. Sala served as the Company's Vice President of Marketing until May
1995 when he was elected President. Mr. Sala's current annual salary is
$135,000.
<F4> Mr. Thygesen served as one of the Company's Program Managers from 1990
through 1992 and as the Company's Operations Manager from 1992 until May
1995 when he was elected to the position which he currently holds, Vice
President of Operations.
<F5> Mr. Porcello served as the Company's Director of Finance from prior to
1990 until May 1995 when he was elected to the position which he
currently holds, Vice President of Finance.
<F6> The table reflects the number of shares which are subject to incentive
stock options granted to Messrs. Sala, Thygesen and Porcello pursuant to
the Company's Incentive Stock Option Plan.
<F7> All Other Compensation consists of contributions to the Company's 401(k)
Salary Savings Plan and, with respect to Messrs. Hair and Gerst,
reimbursement for premiums on life insurance policies owned by executive
officers.
</FN>
</TABLE>
5
<PAGE>
Fiscal Year Option Grants
The following table sets forth certain information regarding options
granted by the Company during the last fiscal year to the individuals named in
the above compensation table, including information as to potential realizable
value of such options at assumed annual rates of stock price appreciation for
the ten-year terms of the options:
Option Grants In Last Fiscal Year
<TABLE>
<CAPTION>
Individual Grants
---------------------------------------------------
Percent
of Total Potential Realizable Value
Number of Options at Assumed Annual Rates
Securities Granted to of Stock Price Appreciation
Underlying Employees Exercise or for Option Term<F1>
Options Fiscal Base Price Expiration ---------------------------
Name Granted Year ($/sh) Date 5%($) 10%($)
----- --------- ---------- ---------- --------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Hugh A. Hair ................ 0 0% $ 0 N/A $ 0 $ 0
Carl W. Gerst, Jr. .......... 0 0 0 N/A 0 0
Lawrence A. Sala ............ 5,000 8 7.50 12/06/05 23,584 59,765
Gert R. Thygesen ............ 0 0 0 N/A 0 0
Joseph E. Porcello .......... 0 0 0 N/A 0 0
<FN>
- ---------------
<F1> Amounts represent hypothetical gains that could be achieved for the
respective options if exercised at the end of the option term. These
gains are based on arbitrarily assumed rates of stock price appreciation
of 5% and 10% compounded annually from the date the respective options
are granted to their expiration date.
</FN>
</TABLE>
Outstanding Unexercised Option Values
The following table sets forth certain information with respect to
unexercised options held by the named executive officers at fiscal year-end:<F1>
<TABLE>
<CAPTION>
Fiscal Year End Option Values
Number of Securities Underlying Value of In-the-Money
Unexercised Options at June 30, 1996 Options At June 30, 1996<F2>
------------------------------- ----------------------------
Name Exercisable Unexercisable Exercisable Unexercisable
----- ---------- ------------ ---------- ------------
<S> <C> <C> <C> <C>
Hugh A. Hair .......................... 75,000 -0- $226,875 -0-
Carl W. Gerst, Jr. .................... 75,000 -0- 226,875 -0-
Lawrence A. Sala ...................... 28,000 37,000 98,375 76,000
Gert R. Thygesen ...................... 31,000 24,000 96,125 57,000
Joseph E. Porcello .................... 18,500 16,000 49,125 38,000
<FN>
- ------------------
<F1> No executive officer exercised any options during the Company's last
fiscal year.
<F2> Amount represents the difference between the aggregate exercise price of
the options and a $6.75 market price of the underlying common stock on
June 30, 1996.
</FN>
</TABLE>
Pension Plan
The Company maintains a non-contributory Pension Plan for the benefit of
all employees over the age of 23 who have completed one year of service and who
are not covered by any other retirement plan sponsored by a recognized
bargaining unit. The Company pays all amounts required to provide retirement
income benefits. The Pension Plan provides fixed benefits to be paid upon
retirement at a specific age. Pension expense, including amortization of prior
service cost over 30 years, was $149,896 for fiscal 1996.
6
<PAGE>
The table below illustrates the estimated aggregate annual benefit that
would be payable to executive officers of the Company who are at least 65 years
of age at retirement, based on the formula in effect after June 30, 1992 and the
Employee Retirement Income Security Act of 1974, as amended ("ERISA") limits on
compensation and benefits after 15, 20, 25, 30 and 35 credited years of service;
for illustration purposes, the table assumes all years of service under the
current Pension Plan formula:
Pension Plan Table
<TABLE>
<CAPTION>
Final
Average Annual Estimated Annual Pension Payable
Compensation Based on Years of Service Indicated
--------------- ---------------------------------------------------------------------------
15 Years 20 Years 25 Years 30 Years 35 Years
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
$100,000 ..................... $11,250 $15,000 $18,750 $22,600 $26,250
125,000 ..................... 14,063 18,750 23,438 28,125 32,813
150,000 ..................... 16,875 22,500 28,125 33,750 39,375
175,000 ..................... 16,875 22,500 28,125 33,750 39,375
200,000 ..................... 16,875 22,500 28,125 33,750 39,375
225,000 ..................... 16,875 22,500 28,125 33,750 39,375
250,000 ..................... 16,875 22,500 28,125 33,750 39,375
275,000 ..................... 16,875 22,500 28,125 33,750 39,375
</TABLE>
Under the terms of the Pension Plan, each member who is at least 65 years
of age at his retirement is entitled to a Normal Retirement Benefit (as defined
under the Pension Plan). The compensation used in determining the Pension Plan
benefit for executive officers is based upon their annual salary as shown on the
Summary Compensation Table above. The Normal Retirement Benefit is the aggregate
of:
A. 0.60% of average of highest five consecutive year's compensation from
date of employment to June 30, 1992 multiplied by Benefit Service (as
defined under the Pension Plan) to June 30, 1992; plus
B. 0.75% of compensation for each year of Benefit Service thereafter;
but not less than the accrued benefit under the prior plan at June 30,
1992.
Employees who have attained at least twelve years of service and are at
least 55 years of age can retire and receive a proportionately reduced benefit.
Under ERISA, the maximum annual benefit payable at age 65 is $120,000. The
maximum compensation that could be considered for all participants, including
the Company's executive officers, Messrs. Hair, Gerst, Sala, Thygesen and
Porcello is $150,000 for 1996. These benefit and compensation limits are indexed
to increases in the Consumer Price Index.
The credited years of service as of June 30, 1996 under the Pension Plan
for each of Messrs. Hair and Gerst are 24, and for Messrs. Sala, Thygesen and
Porcello are 11, 15 and 19 respectively.
Change-in-Control Arrangements
The Company has maintained since November, 1988, a plan for severance
compensation to employees after a hostile takeover (the "Severance Plan"). The
Severance Plan defines a hostile takeover to include, among others, the
following events, if not approved by two-thirds of the members of the Board of
7
<PAGE>
Directors in office immediately prior to any such event: (1) the election of
directors not nominated by the Board of Directors; or (2) a business
combination, such as a merger. All full-time employees who had completed at
least two years of continuous employment with the Company on the effective date
of the Severance Plan became participants therein. After the effective date,
nonparticipating full-time employees become participants as they complete two
years of continuous full-time employment with the Company. A severance benefit
is payable under the plan if a participant's employment with the Company
terminates, voluntarily or involuntarily, within two years after a hostile
takeover for reasons such as reduction in compensation, discontinuance of
employee benefit plans without replacement with substantially similar plans,
change in duties or status, certain changes in job location and involuntary
termination of employment for reasons other than just cause. For participants
who have completed two but less than five years, the benefit is equal to the
employee's annual compensation during the year immediately preceding the
termination of employment. For employees who have completed five or more years
of continuous full-time employment, the benefit is equal to two and nine-tenths
times the employee's annual compensation during the 12 months ending on the date
of termination of employment, but may not exceed 2.99 times average annual
compensation during the preceding five years. Annual compensation is defined for
purposes of the Severance Plan as the amount of an employee's wages, salary,
bonuses and other incentive compensation. Benefits are payable in lump sum not
less than ten days after termination of employment.
To date, the Company is not aware of any event which would trigger the
provisions of the Severance Plan.
Compensation of Directors
The Company currently pays each director who is not an operating officer of
the Company $7,500 per year and reimburses each such director for the reasonable
expenses incurred in attending meetings of the Board of Directors.
Compensation Committee Interlocks and Insider Participation
During the fiscal year ended June 30, 1996, the Company's Compensation
Committee consisted of Herbert I. Corkin, Dale F. Eck, William J. Mackay and
Abraham Manber. William J. Mackay, who has served as a member of the
Compensation Committee of the Board of Directors, has also acted as the
Company's Secretary through February 29, 1996.
Board Compensation Committee Report on Executive Compensation
The Compensation Committee (the "Committee") of the Board of Directors
consists of four outside directors who are not executive officers of the
Company. The Committee reviews and determines executive compensation for the
Company's five executive officers on an annual basis. The Committee has
implemented an executive compensation philosophy that seeks to relate executive
compensation to corporate performance, individual performance and creation of
shareholder value. Historically, this has been achieved through compensation
programs which focus on both short- and long-term results.
In accordance with the Committee's executive compensation philosophy, the
major components of executive compensation have been base salary and stock
option grants. Option grants had been made pursuant to the Company's former
Incentive Stock Option Plan which expired pursuant to its terms in October 1991,
8
<PAGE>
and may be made in the future pursuant to the Incentive Stock Option Plan which
was adopted by the Board of Directors on May 15, 1995 and approved by the
Stockholders of the Company at the 1995 Annual Meeting of Stockholders held on
December 6, 1995.
Salaries for executive officers are based on current individual and
organizational performance, affordability and competitive market trends. For
purposes of informing the Committee of competitive trends within the electronics
industry, the compensation data from the American Electronics Association
Compensation Survey is made available to the Committee. The salary trend data
used represents companies with similar sales volume within the electronics
industry, and the Company's executive officer salary ranges are positioned
between the median and the high end of the survey data.
The Company's Chief Executive Officer and Chief Technical Officer have not
received increases in compensation since 1990 and at the end of fiscal 1992,
they voluntarily reduced their base salaries by ten percent. This action was
taken as a result of corporate performance which was adversely impacted by
declining defense budgets, industry wide consolidation, defense industry
procurement delays and the depressed economy. As a consequence of these
conditions, the Committee does not anticipate making any changes in the
compensation levels of such executive officers until such time as the Company's
results of operations significantly improve.
The Company's President, Vice President of Operations and Vice President of
Finance, who were elected to their respective offices by the Board of Directors
in May 1995, received increases in compensation in fiscal year 1996 in
recognition of their additional responsibilities and respective contributions to
the Company's recent growth in the wireless communications market as well as in
the radar and satellite communications markets.
-------------------
Section 162(m) ("Section 162") of the Internal Revenue Code of 1986, as
amended (the "Code"), generally limits federal income tax deductions for
compensation paid after 1993 to the chief executive officer and the four other
most highly compensated officers of a company to $1 million per year, but
contains an exception for performance-based compensation that satisfies certain
conditions. The Company has not adopted an absolute policy regarding Section 162
as it does not anticipate its executive compensation to reach such levels in the
foreseeable future. Nevertheless, the Company is studying the implications of
Section 162 on its compensation programs. In making compensation decisions, the
Company will consider the net cost of compensation to it and whether it is
practicable and consistent with other compensation objectives to qualify the
Company's incentive compensation under the applicable exemption of Section 162.
The Company recognizes that deductibility of compensation payments must be one
among a number of factors used in ascertaining appropriate levels or modes of
compensation, and that the Company will make its compensation decisions based
upon an overall determination of what it believes to be in the best interests of
its stockholders.
The members of the Compensation Committee:
Abraham Manber Herbert I. Corkin
Dale F. Eck William J. Mackay
9
<PAGE>
Performance Graph
The following performance graph compares the total stockholder return of
the Company's Common Stock to The NASDAQ Stock Market-US Index and the NASDAQ
Electronics Components Index. The graph assumes that $100 was invested in the
Company's Common Stock and each Index on June 30, 1991 and that all dividends
were reinvested.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN
AMONG ANAREN, THE NASDAQ STOCK MARKET-US INDEX
AND THE NASDAQ ELECTRONICS COMPONENTS INDEX
[THE FOLLOWING TABLE WAS REPRESENTED BY A GRAPH IN THE PRINTED MATERIAL]
<TABLE>
<CAPTION>
1991 1992 1993 1994 1995 1996
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Anaren Microwave, Inc. ............ 100.00 52.0 62.0 80.0 200.0 216.0
NASDAQ Electronic Components ...... 100.00 122.0 210.0 231.0 476.0 504.0
NASDAQ Stock Market-US ............ 100.00 120.0 151.0 153.0 204.0 261.0
</TABLE>
Notwithstanding anything set forth in any of the Company's previous filings
under the Securities Act of 1933 or the Securities Exchange Act of 1934 which
might incorporate future filings, including this Proxy Statement, in whole or in
part, the preceding performance graph and the report of the Compensation
Committee shall not be deemed incorporated by reference into any such filings.
10
<PAGE>
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Based solely upon the Company's review of copies of reports received by the
Company pursuant to Section 16(a) of the Securities Exchange Act of 1934, and
the written representations of its incumbent directors and officers and
beneficial owners of more than 10% of the Company's Common Stock, the Company
believes that, for the fiscal year ended June 30, 1996, its officers, directors
and the beneficial owners of more than 10% of the Common Stock complied with the
filing requirements under Section 16(a) of the Securities Exchange Act of 1934
except that, due to the illness of William J. Mackay, a member of the Board of
Directors, sales of 33,600 shares of the Company's Common Stock owned by him and
effected on Mr. Mackay's behalf in fifteen separate sale transactions were not
timely reported by his representatives; upon learning of the reporting
obligation the failure was rectified and the transactions reported.
RELATIONSHIP WITH INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
During the fiscal year ended June 30, 1996, KPMG Peat Marwick, the
Company's independent accountant, was retained by the Board of Directors to
perform the annual examination of the consolidated financial statements of the
Company and its subsidiaries. The Board also retained KPMG Peat Marwick to
provide assistance in the preparation of federal income and state franchise tax
returns.
The independent certified public accountants selected by management to
audit the Company's books and records for the current fiscal year is the firm of
KPMG Peat Marwick, 113 South Salina Street, Syracuse, New York, which firm has
been the Company's principal accountants for the past 25 years. It is
anticipated that a representative of KPMG Peat Marwick will be present at the
Annual Meeting of Stockholders and will have an opportunity to make a statement
and to answer questions of stockholders.
BOARD MEETINGS AND COMMITTEES
During the Company's last fiscal year, the Board of Directors of the
Company held 4 meetings and took action by unanimous written consent on 1
occasion. No current director attended fewer than 75% of the aggregate number of
meetings other than William J. Mackay, who attended fewer than 75% of the
meetings due to illness.
The Company's Board of Directors has a Compensation Committee, which is
made up of Board members Abraham Manber, William J. Mackay, Herbert I. Corkin
and Dale F. Eck. The function of the Compensation Committee is to recommend to
the Board of Directors competitive compensation plans for officers and key
employees. During the fiscal year ended June 30, 1996, the Compensation
Committee held 1 meeting.
The Company's Audit Committee consists of Abraham Manber and William J.
Mackay. The Audit Committee did not meet during the last fiscal year. The
function of the Audit Committee is to review the Company's annual audit with the
Company's independent accountant. The Company has not appointed a nominating
committee of the Board of Directors.
11
<PAGE>
MISCELLANEOUS
Other Matters
As of the date of this Proxy Statement, management has no knowledge of any
business which will be presented for consideration at the Meeting other than
that described herein. Should any other matter properly come before the Meeting,
it is the intention of the persons named in the accompanying proxy to vote such
proxy in accordance with their best judgment.
Solicitation of Proxies
The entire expense of preparing, assembling and mailing the proxy
statement, form of proxy and other material used in the solicitation of proxies
will be paid by the Company. In addition to the solicitation of proxies by mail,
arrangement may be made with brokerage houses and other custodians, nominees and
fiduciaries to send proxy material to their principals, and the Company will
reimburse them for expenses in so doing. To the extent necessary to insure
sufficient representation, officers and regular employees of the Company may
request, without additional compensation, therefor, the return of proxies
personally by telephone or telegram. The extent to which this will be necessary
depends entirely on how promptly proxies are received and stockholders are urged
to send their proxies without delay.
STOCKHOLDER PROPOSALS
In order for a stockholder proposal to be considered for inclusion in the
Company's Proxy Statement relating to the 1997 Annual Meeting of Stockholders
such proposal must be received by the Company by June 11, 1997.
David M. Ferrara
Secretary
Date: October 11, 1996
Syracuse, New York
12
<PAGE>
ANNEX 1
PROXY ANAREN MICROWAVE, INC. PROXY
6635 Kirkville Road
East Syracuse, New York 13057
THIS IS YOUR PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE
BOARD OF DIRECTORS OF ANAREN MICROWAVE, INC.
The undersigned hereby (1) acknowledges receipt of the notice of the Annual
Meeting of Stockholders of Anaren Microwave, Inc. (the "Company") to be held at
the Syracuse Marriott, 6302 Carrier Parkway, East Syracuse, New York on Tuesday,
November 19, 1996 at 11:00 A.M., local time and of the Proxy Statement in
connection therewith and (2) appoints Hugh A. Hair and Lawrence A. Sala and each
of them as proxies, each with the power to appoint his substitute, and hereby
authorizes them to represent and to vote, as designated below, all of the shares
of common stock, $.01 par value, of Anaren Microwave, Inc. held of record by the
undersigned on October 1, 1996 at the Annual Meeting of Stockholders, or any
adjournment thereof. If any nominee for director should be unavailable to serve,
it is intended that all of the shares will be voted for such substitute nominee
as may be determined by the Board of Directors. The undersigned directs that
this Proxy be voted as follows:
<TABLE>
<S> <C> <C>
PROPOSAL 1: ELECTION OF DIRECTORS FOR all nominees listed below [ ] WITHHOLD AUTHORITY to vote for all [ ]
(except as marked to the contrary). nominees listed below.
</TABLE>
Nominees: Hugh A. Hair, Carl W. Gerst, Jr., Abraham Manber, Lawrence A. Sala,
Herbert I. Corkin and Dale F. Eck
(Instruction: To withhold authority to vote for any individual nominee, strike a
line through that nominee's name in the above list.)
In their discretion the proxies are authorized to vote upon such other business
as may properly come before the Meeting or any adjournment thereof.
(Continued and to be dated and signed on the reverse.)
<PAGE>
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL
BE VOTED FOR THE ELECTION OF THE NOMINEES FOR DIRECTOR.
IMPORTANT. Please sign exactly as name appears on this card. Each joint owner
should sign. Executors, administrators, trustees, etc. should give full title.
SIGNATURES:
Dated:________________________________, 1996
____________________________________________
Signature
____________________________________________
Please Print Name Here
____________________________________________
Signature
____________________________________________
Please Print Name Here
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY
PROMPTLY USING THE ENCLOSED ENVELOPE. NO
POSTAGE IS REQUIRED.
