<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES EXCHANGE ACT
OF 1934 (AMENDMENT NO. )
FILED BY THE REGISTRANT /X/
FILED BY A PARTY OTHER THAN THE REGISTRANT / /
CHECK THE APPROPRIATE BOX:
/ / Preliminary Proxy Statement
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
ANDREA ELECTRONICS CORPORATION
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(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
N/A
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(NAME OF PERSON(S) FILING PROXY STATEMENT)
PAYMENT OF FILING FEE (CHECK THE APPROPRIATE BOX):
/X/ $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2).
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:*
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(4) Proposed maximum aggregate value of transaction:
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* Set forth the amount on which the filing fee is calculated and state how
it was determined.
/ / 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:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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<PAGE> 2
ANDREA ELECTRONICS CORPORATION
11-40 45th Road
Long Island City, New York 11101
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD JUNE 20, 1996
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of ANDREA
ELECTRONICS CORPORATION ("Company") will be held at the Garden City Hotel, 45
7th Street, Garden City, New York 11530, on Thursday, June 20, 1996 at 10:00
A.M. local time, for the following purposes:
1. To elect eight directors to hold office until the next Annual Meeting
of Shareholders and until their respective successors have been duly elected
and qualified;
2. To ratify the selection of Arthur Andersen LLP as the Company's
independent accountants for the year ending December 31, 1996.
3. To transact such other business as may properly come before the
meeting, and any adjournment(s) thereof.
The transfer books will not be closed for the Annual Meeting. Only
shareholders of record at the close of business on April 26, 1996 will be
entitled to notice of, and to vote at, the meeting and any adjournments
thereof.
YOU ARE URGED TO READ THE ATTACHED PROXY STATEMENT, WHICH CONTAINS
INFORMATION RELEVANT TO THE ACTIONS TO BE TAKEN AT THE MEETING. IN ORDER TO
ASSURE THE PRESENCE OF A QUORUM, WHETHER OR NOT YOU EXPECT TO ATTEND THE
MEETING IN PERSON, PLEASE SIGN AND DATE THE ACCOMPANYING PROXY CARD AND MAIL
IT PROMPTLY IN THE ENCLOSED ADDRESSED, POSTAGE PREPAID ENVELOPE. YOU MAY
REVOKE YOUR PROXY IF YOU SO DESIRE AT ANY TIME BEFORE IT IS VOTED.
By Order of the Board of Directors
Jeffrey S. Gosman
Secretary
Long Island City, New York
April 29, 1996
<PAGE> 3
ANDREA ELECTRONICS CORPORATION
PROXY STATEMENT
GENERAL INFORMATION
ANNUAL MEETING
This Proxy Statement and the enclosed form of proxy are furnished in
connection with solicitation of proxies by the Board of Directors of Andrea
Electronics Corporation ("Company") to be used at the Annual Meeting of
Shareholders of the Company to be held on June 20, 1996 and any adjournment or
adjournments thereof ("Annual Meeting"). The matters to be considered at the
meeting are set forth in the attached Notice of Meeting.
The Company's executive offices are located at 11-40 45th Road, Long
Island City, New York 11101. On or about May 6, 1996, this Proxy Statement,
the enclosed form of proxy and the Company's Annual Report to Shareholders for
the fiscal year ended December 31, 1995, which contains audited financial
statements, are to be mailed to shareholders of record as of the close of
business on April 26, 1996.
SOLICITATION AND REVOCATION
Proxies in the form enclosed are solicited by and on behalf of the Board
of Directors. The persons named in the proxy have been designated as proxies
by the Board of Directors. Any proxy given pursuant to such solicitation and
received in time for the Annual Meeting will be voted as specified in such
proxy. If no instructions are given, proxies will be voted "FOR" the election
of the nominees listed below under the caption Election Of Directors, "FOR"
the selection of Arthur Andersen LLP to serve as the Company's independent
accountants for the year ending December 31, 1996, and, in the discretion of
the proxies named on the proxy card, with respect to any other matters
properly brought before the meeting and any adjournments thereof. In such
unanticipated event that any other matters are properly presented at the
Annual Meeting for action, the persons named in the proxy will vote the
proxies in accordance with their best judgment. Any proxy given pursuant to
this solicitation may be revoked by the shareholder at any time before it is
exercised by written notification delivered to the Secretary of the Company,
by voting in person at the Annual Meeting, or by delivering another proxy
bearing a later date. Attendance by a shareholder at the Annual Meeting does
not alone serve to revoke his or her proxy.
QUORUM
The presence of a majority of the outstanding shares of Common Stock,
represented in person or by proxy at the Annual Meeting, will constitute a
quorum. Shares represented by proxies that are marked "abstain" and proxies
relating to "street name" shares that are returned to the Company but marked
by brokers as "not voted" ("broker non-votes") will be treated as shares
present for purposes of determining the presence of a quorum on all matters
unless authority to vote is completely withheld on the proxy.
<PAGE> 4
RECORD DATE; OUTSTANDING SHARES
The Board of Directors has fixed the close of business on April 26, 1996
as the record date for the determination of shareholders of the Company who
are entitled to receive notice of, and to vote at, the Annual Meeting. At the
close of business on that date, an aggregate of 3,462,508 shares of Common
Stock were issued and outstanding, each of which is entitled to one vote on
each matter to be voted upon at the Annual Meeting. The Company's
shareholders do not have cumulative voting rights. The Company has no other
class of voting securities entitled to vote at the Annual Meeting.
SECURITY OWNERSHIP
<TABLE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information as of April 26, 1996
with respect to the stock ownership of (i) those persons or groups who
beneficially own more than 5% of the Company's Common Stock, (ii) each
director and director-nominee of the Company, (iii) each executive officer
whose compensation exceeded $100,000 in the 1995 fiscal year, and (iv) all
directors and executive officers of the Company as a group.
<CAPTION>
NAME OF AMOUNT AND NATURE OF PERCENT OF
BENEFICIAL OWNER BENEFICIAL OWNERSHIP(1) CLASS
- ---------------- -------------------- ----------
<S> <C> <C>
Frank A. D. Andrea, Jr.(2) 593,151(3) 16.0%
Mary Louise Andrea (2) 593,151(3) 16.0%
Camille Andrea Casling (2) 408,371 11.8%
ANC-I Limited Partnership(4) 230,000 6.6%
Phyllis Falino (2) 172,445 5.0%
Douglas J. Andrea (2) 186,733(5) 5.2%
John N. Andrea (2) 184,827(6) 5.1%
Patrick D. Pilch 37,500(7) 1.1%
Paul M. Morris 25,000 *
Christopher Dorney 2,700(8) *
Scott Koondel 2,500(9) *
Gary A. Jones 300 *
Directors and Executive
Officers as a group
(8 persons) 1,032,711(10) 25.3%
</TABLE>
* Less than 1%.
<PAGE> 5
(1) Beneficial ownership is determined in accordance with Rule 13d-3
promulgated under the Securities Exchange Act of 1934. The information
concerning the shareholders is based upon information furnished to the Company
by such shareholders. Except as otherwise indicated, all of the shares are
owned of record and beneficially and the persons identified have sole voting
and investment power with respect thereto.
(2) Camille Andrea Casling and Phyllis Falino are sisters of Frank A.D.
Andrea, Jr., Chairman of the Company. Mary Louise Andrea is the spouse of
Frank A.D. Andrea, Jr. Douglas J. Andrea and John N. Andrea, Co-Presidents of
the Company, are the sons of Frank A.D. Andrea, Jr. and Mary Louise Andrea.
The address of each of these individuals and ANC-I Limited Partnership is
c/o the Company, 11-40 45th Road, Long Island City, New York 11101.
(3) Includes (i) 56,174 shares owned directly by Frank A.D. Andrea, Jr.,
(ii) 56,173 shares owned by Mary Louise Andrea, his spouse, (iii) 30,804
shares owned by a son of Mr. and Mrs. Andrea, (iv) 200,000 of the 230,000
shares owned by ANC-I Limited Partnership, representing Mr. Andrea's 43.48%
and Mrs. Andrea's 43.48% interest in ANC-I Limited Partnership, and (v)
250,000 shares issuable to Mr. Andrea upon the exercise of options which are
currently exercisable and exercisable within 60 days from the date hereof.
Mr. and Mrs. Andrea disclaim beneficial ownership of the shares owned by the
son.
(4) ANC-I Limited Partnership is a Delaware limited partnership, of which
the General Partners are Frank A. D. Andrea, Jr. and Mary Louise Andrea. Each
of John N. Andrea and Douglas J. Andrea are limited partners of this
partnership.
(5) Includes (i) 16,329 shares owned directly by Douglas J. Andrea, (ii)
1,904 shares owned by Mr. Andrea's spouse, (iii) 6,000 of the 230,000 shares
owned by ANC-I Limited Partnership, representing Mr. Andrea's 2.6% interest in
ANC-I Limited Partnership, and (iv) 162,500 shares issuable upon the exercise
of options which are currently exercisable and exercisable within 60 days from
the date hereof. Does not include 37,500 shares which are not currently
exercisable or exercisable within 60 days from the date hereof.
(6) Includes (i) 6,160 shares owned directly by John N. Andrea, (ii)
10,167 shares owned by Mr. Andrea's spouse and minor children, (iii) 6,000 of
the 230,000 shares owned by ANC-I Limited Partnership, representing Mr.
Andrea's 2.6% interest in ANC-I Limited Partnership, and (iv) 162,500 shares
issuable upon the exercise of options which are currently exercisable and
exercisable within 60 days from the date hereof. Does not include 37,500
shares which are not currently exercisable or exercisable within 60 days from
the date hereof.
(7) Includes 37,500 shares issuable upon the exercise of options which are
currently exercisable pursuant to the terms of the 1991 Performance Equity
Plan (the "1991 Plan"). Does not include 37,500 shares issuable upon the
exercise of options which are not currently exercisable and will not become
exercisable within the next 60 days.
(8) Includes 2,500 shares issuable upon the exercise of options which are
currently exercisable pursuant to the terms of the 1991 Plan. Does not
include 7,500 shares issuable upon the exercise of options which are not
currently exercisable and will not become exercisable within the next 60 days.
(9) Does not include 25,000 shares issuable upon the exercise of options
which are not currently exercisable and will not become exercisable within the
next 60 days.
(10) Includes the shares issuable upon the exercise of the options
discussed in notes (3) and (5) through (9) above.
Section 16(a) of the Securities Exchange Act of 1934, as amended,
requires the Company's directors and officers and persons who beneficially own
more than ten percent of the Company's Common Stock to file with the
Securities and Exchange Commission ("SEC") and the American Stock Exchange
initial reports of ownership and reports of changes in ownership of Common
Stock in the Company. Officers, directors and greater-than-ten percent
shareholders are also required to furnish the Company with copies of all
Section 16(a) reports they file. To the Company's knowledge, based solely on
review of the copies of such reports furnished to the Company and written
representation that no other reports were required, during the fiscal year
ended December 31, 1995, all Section 16(a) filing requirements were complied
with.
<PAGE> 6
PROPOSAL 1: ELECTION OF DIRECTORS
The By-laws of the Company provide that the Board of Directors shall
determine the number of directors. The Board has determined that the number
of directors to be elected at the annual meeting shall be eight. The persons
listed below have been designated by the Board as candidates for election as
directors to serve until the next annual meeting of shareholders and until
their respective successors have been elected and qualified. Such persons
include all of the executive officers of the Company. Unless otherwise
specified in the form of proxy, the proxies solicited by the management will
be voted "FOR" the election of these candidates. The nominees receiving the
highest vote totals will be elected as the Directors of the Company.
Accordingly, abstentions and broker non-votes will not affect the outcome of
the election for Directors of the Company. In case any of these nominees
become unavailable for election to the Board of Directors, an event which is
not anticipated, the persons named as proxies, or their substitutes, shall
have full discretion and authority to vote or refrain from voting for any
other nominee in accordance with their judgment. The election of directors
requires a plurality of those shares voted at the meeting with respect to the
election of directors.
INFORMATION ABOUT NOMINEES
FRANK A.D. ANDREA, JR.
Mr. Andrea, age 69, has been Chairman of the Board since December 1965
and a Director of the Company since 1962. He served as President of the
Company from December 1965 to November 1992. Mr. Andrea is the father of
Douglas J. Andrea and John N. Andrea.
JOHN N. ANDREA
Mr. Andrea, age 38, has been Co-President of the Company since November
1992 and a Director of the Company since 1992. He served as Executive Vice
President of the Company from January 1992 to November 1992 and as Sales &
Marketing Director from September 1991 to November 1992. Mr. Andrea is the
son of Frank A.D. Andrea, Jr. and the brother of Douglas J. Andrea.
<PAGE> 7
DOUGLAS J. ANDREA
Mr. Andrea, age 33, has been Co-President of the Company since November
1992 and a Director of the Company since 1991. He served as Vice President -
Engineering of the Company from December 1991 to November 1992, and as
Secretary of the Company from 1989 to January 1993. Mr. Andrea is the son of
Frank A.D. Andrea, Jr. and the brother of Douglas J. Andrea.
PATRICK D. PILCH
Mr. Pilch, age 36, has been Executive Vice President and Chief Financial
Officer of the Company since April 1995 and a Director of the Company since
1992. He served as Vice President - Investment Banking at Greenwich Capital
Markets, Inc. from November 1991 to April 1995, and is a Certified Public
Accountant.
PAUL M. MORRIS
Mr. Morris, age 35, has been a Director of the Company since 1992. He
has been a Partner at Weiss, Peck & Greer since 1995 and prior to that he was
employed by Union Bank of Switzerland from 1987 to 1995, where his last
position was Managing Director - Equities.
CHRISTOPHER DORNEY
Mr. Dorney, age 53, has been a Director of the Company since April 1995.
He has been President of the Pulse Laser Division of Holographics, Inc. since
September 1994. He served as Director of Business Development at Grumman
Corporation s Electronic System Division from January 1989 to September 1994.
SCOTT KOONDEL
Mr. Koondel, age 32, has been a Director of the Company since April 1995.
He has been the Eastern Manager, Off-Network Television, Paramount Pictures, a
subsidiary of Viacom International since June 1993, and was the National Sales
Manager for WPIX-TV, a division of Tribune Broadcasting, from June 1990 to
June 1993.
GARY A. JONES
Mr. Jones, age 50, has been a Director of the Company since April 1996.
He has served as President of Digital Technologies, Inc. since 1994 and was
Chief Engineer, Allied Signal Ocean Systems from 1987 to 1994.
<PAGE> 8
DIRECTORS' FEES, BOARD MEETINGS AND COMMITTEES
The Board does not have a nominating committee or a committee performing
similar functions. In fiscal 1995, the Audit Committee was comprised of
Messrs. Douglas J. Andrea, Paul M. Morris, Christopher Dorney and Scott
Koondel. The Audit Committee meets with management to consider the adequacy
of the internal controls of the Company and the objectivity of the financial
reporting; the committee also meets with the independent accountants and with
appropriate Company financial personnel about these matters. The Audit
Committee met four times during 1995. The Compensation Committee is comprised
of Paul M. Morris, Scott Koondel and Christopher Dorney. The Compensation
Committee administers the 1991 Plan and makes recommendations to the Board of
Directors with respect to the compensation of management. The Compensation
Committee met four times in 1995. The Board of Directors held six meetings
during the last year. None of the directors attended less than 75% of such
meetings.
Each outside director receives a fee of $500 for each meeting attended.
Patrick D. Pilch, as an outside director for one meeting received $500. Paul
M. Morris, Scott Koondel and Christopher Dorney were each paid directors' fees
in the amount of $3000 during 1995.
<PAGE> 9
<TABLE>
EXECUTIVE COMPENSATION
The following table sets forth information during the last three fiscal
years, respecting compensation earned by the three most highly compensated
executive officers, including the Chief Executive Officer.
<CAPTION>
SUMMARY COMPENSATION TABLE
Other Annual
Name and Salary Bonus Compensation
Principal Position Year ($) ($) ($)
- ------------------ ---- --------- ------------ --------------
<S> <C> <C> <C> <C>
Frank A.D. Andrea, Jr. 1995 161,160 0 8,820(1)
Chairman of the Board, 1994 204,109 15,000 2,344(2)
Chief Executive Officer 1993 163,000 0 9,222(3)
John N. Andrea 1995 174,616 0 7,307(4)
Co-President 1994 141,956 10,000 3,987(5)
1993 122,425 10,000 7,363(6)
Douglas J. Andrea 1995 184,616 0 7,955(7)
Co-President 1994 142,500 10,000 1,916(8)
1993 99,567 10,000 5,932(9)
</TABLE>
(1) Represents contribution to Company's profit sharing plan equal to $6,750,
or 4.2% of Frank Andrea's salary, and car allowance payments of $2,070.
(2) Represents contribution to Company s profit sharing plan equal to $2,344,
or 1.1% of Frank Andrea s salary.
(3) Represents contribution to Company's profit sharing plan equal to $7,335,
or 4.5% of Frank Andrea's salary, and car allowance payments of $1,887.
(4) Represents contribution to Company's profit sharing plan equal to $4,508,
or 2.6% of John Andrea's salary, and car allowance payments of $2,807.
(5) Represents contribution to Company's profit sharing plan equal to $3,987,
or 2.8% of John Andrea's salary.
(6) Represents contribution to Company's profit sharing plan equal to $3,973,
or 3.2% of John Andrea's salary, and car allowance payments and partial
payment of club fees aggregating $3,390.
(7) Represents contribution to Company's profit sharing plan equal to $6,059,
or 3.3% of Douglas Andrea's salary, and car allowance payments of $1,896.
(8) Represents contribution to Company's profit sharing plan equal to $1,916,
or 1.3% of Douglas Andrea's salary.
(9) Represents contribution to Company's profit sharing plan equal to $4,481,
or 4.5% of Douglas Andrea's salary, and car allowance payments of $1,451.
<PAGE> 10
<TABLE>
<CAPTION>
FISCAL YEAR END OPTION VALUES(1)
Number of Securities Value of Unexercised
Underlying Options at In-the-Money Options
Fiscal Year End -- at Fiscal Year End --
Name Exercisable/Unexercisable Exercisable/Unexercisable(2)
- ----------- ------------------------- ---------------------------
<S> <C> <C>
Frank A.D. Andrea, Jr. 250,000 shares/ $2,717,550/
0 shares (3)(6) $0
John N. Andrea 162,500 shares/ $1,616,250/
37,500 shares (4)(6) $1,563
Douglas J. Andrea 162,500 shares/ $1,616,250/
37,500 shares (5)(6) $1,563
</TABLE>
(1) No options were granted or exercised by any of the above-named persons
during fiscal 1995.
(2) Values based on a closing trade price for the Company's Common Stock on
December 29, 1995 of $12-1/8 per share.
(3) Frank Andrea was granted options under the 1991 Plan to purchase 100,000
shares at a price of $.908 per share on December 31, 1991 and to purchase
150,000 shares at a price of $1.486 per share on June 26, 1992.
(4) John Andrea was granted options under the 1991 Plan to purchase 150,000
shares at a price of $1.35 per share on June 26, 1992 and to purchase 50,000
shares at a price of $12.00 per share on September 12, 1994. The 1994 grant
was subject to shareholder approval of an increase in the number of shares
covered by the 1991 Plan, which approval was obtained in September 1995.
(5) Douglas Andrea was granted options under the 1991 Plan to purchase
150,000 shares at a price of $1.35 per share on June 26, 1992 and to purchase
50,000 shares at a price of $12.00 per share on September 12, 1994. The 1994
grant was subject to shareholder approval of an increase in the number of
shares covered by the 1991 Plan, which approval was obtained in September
1995.
(6) Of the options granted, none were exercisable during the first year
following grant; 25% of the options became exercisable during the second year
following grant; an additional 25% will become exercisable during the third
year following grant; and the remaining 50% will become exercisable during the
fourth year following grant.
<PAGE> 11
STOCK PERFORMANCE GRAPH
The following graph compares the yearly percentage change in the
cumulative total stockholder return for the five years ended December 31, 1995
based upon the market price of the Company's Common Stock with the cumulative
total return on the AMEX Market Value Index and the AMEX High Technology
Subindex. The Company has elected to compare its yearly percentage change in
total stockholder return against the AMEX High Technology Subindex because
during 1995 the Company commenced sales of products embodying its Andrea
Anti-Noise(Registered Trademark) technology for voice-activated computing,
telecommunications and computer/Internet communications. While revenue from
the sale of these products comprised a small percentage of the Company's 1995
total revenue, the Company believes that an increasing percentage of its
revenue will be derived from the sale of these technology-oriented products.
The graph assumes a $100 investment on January 1, 1991 and the reinvestment of
all dividends.
<TABLE>
<CAPTION>
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN AMONG
ANDREA ELECTRONICS CORPORATION, AMEX MARKET INDEX AND
AMEX HIGH TECHNOLOGY SUBINDEX
Andrea Electronics AMEX High
Year Corporation AMEX Market Index Technology Subindex
- ---- ------------------ ----------------- --------------------
<S> <C> <C> <C>
1991 89.74 128.20 172.59
1992 458.96 129.55 146.37
1993 2,474.28 154.84 162.29
1994 2,448.64 140.73 156.23
1995 1,243.55 177.90 242.45
</TABLE>
[GRAPH TO BE FILED UNDER FORM SE]
<PAGE> 12
COMPENSATION COMMITTEE REPORT
For the year ended December 31, 1995, the majority of the Compensation
Committee of the Board of Directors for the Company was composed of
independent Directors. Currently, the Compensation Committee is comprised of
Paul M. Morris, Scott Koondel and Christopher Dorney. The Compensation
Committee is responsible for establishing and monitoring compensation policies
of the Company, evaluating the performance of executive officers and
establishing salary rates and increases.
It is the policy of the Company to evaluate the performance of senior
management annually using subjective criteria established by the Committee.
Compensation increases are determined by the Committee based on annual
evaluations. In addition, the Committee supplements its criteria with
extensive consultative studies of best compensation practices within the
industry in which the Company is engaged. The Committee reviews the
evaluations and sets compensation levels for the coming year.
The Compensation Committee considerations include management skills,
long-term performance, shareholder returns, operating results, new product and
technological developments and introductions, asset-liability management, and
unusual accomplishments as well as economic conditions and other external
events that affect the operations of the Company. Compensation policies must
promote the attraction and retention of highly qualified executives and the
motivation of these executives for performance related to a financial interest
in the success of the Company and the enhancement of long-term shareholders'
value.
In addition to salaries, the Company's compensation plan includes the
awarding of stock options based on performance, length of service and salary
grades. The awards of stock options should provide increased motivation to
work for the success of the Company, thereby increasing the potential for
personal financial success. Options granted to executives and employees are
at a price equal to the closing price of the Company's stock on the date of
grant.
The compensation of the Chairman of the Board and the two Co-Presidents
has been reconfigured to reflect new and expanded responsibilities among them
and their compensation for fiscal 1995 reflects these changes. The two co-
presidents have assumed certain responsibilities from the Chairman of the
Board which justify their higher compensation.
Compensation Committee
Paul M. Morris
Scott Koondel
Christopher Dorney
<PAGE> 13
INDEPENDENT ACCOUNTANTS
The Audit Committee of the Board of Directors has selected the firm of
Arthur Andersen LLP to serve as the Company's independent accountants for the
fiscal year ending December 31, 1996, subject to ratification by the
shareholders. Arthur Andersen LLP served as the Company's independent
accountants for the year ended December 31, 1995. The Board of Directors
recommends a vote FOR ratification of this selection. A representative of
Arthur Andersen LLP is expected to be present at the meeting with an
opportunity to make a statement if such representative desires to do so and is
expected to be available to respond to appropriate questions.
SOLICITATION OF PROXIES
The solicitation of proxies in the enclosed form is made on behalf of the
Company and the cost of this solicitation is being paid by the Company. In
addition to the use of the mails, proxies may be solicited personally or by
telephone or telegraph using the services of directors, officers and regular
employees of the Company at nominal cost. Banks, brokerage firms and other
custodians, nominees and fiduciaries will be reimbursed by the Company for
expenses incurred in sending proxy material to beneficial owners of the
Company's stock.
SHAREHOLDER PROPOSALS
Proposals of shareholders intended to be presented at the annual meeting
for the 1996 fiscal year must be received at the Company's offices by January
3, 1997 for inclusion in the proxy materials relating to that meeting.
OTHER BUSINESS
Action may be taken on the business to be transacted at the meeting on
the date provided in the Notice of the Annual Meeting or any date or dates to
which an original or later adjournment of such meeting may be adjourned. As
of the date of this Proxy Statement, the management does not know of any other
matters to be presented at the Annual Meeting. If, however, other matters
properly come before the Annual Meeting, whether on the original date provided
in the Notice of Annual Meeting or any dates to which any original or later
adjournment of such meeting may be adjourned, it is intended that the holders
of the proxy will vote in accordance with their best judgment. Any such
matter properly coming before the Annual Meeting will be decided by a majority
of the votes cast with respect to such matter. Abstentions and broker
non-votes are not considered as cast and, accordingly, will have no effect on
the vote with respect to such matter.
By Order of the Board of Directors
Jeffrey S. Gosman
Secretary
Long Island City, New York
April 29, 1996
<PAGE> 14
Solicited By The Board Of Directors for Annual Meeting To Be Held on June 20,
1996
PROXY
The undersigned Shareholder(s) of ANDREA ELECTRONICS CORPORATION, a New York
corporation ("Company"), hereby appoints Frank A.D. Andrea, Jr. and John N.
Andrea, or either of them, with full power of substitution and to act without
the other, as the agents, attorneys and proxies of the undersigned, to vote
the shares standing in the name of the undersigned at the Annual Meeting of
Shareholders of the Company to be held on June 20, 1996 and at all
adjournments thereof. This proxy will be voted in accordance with the
instructions given below. If no instructions are given, this proxy will be
voted FOR all of the following proposals.
1. To elect the following Directors: Frank A.D. Andrea, Jr.; Douglas J.
Andrea; John N. Andrea; Christopher Dorney; Gary A. Jones; Scott Koondel; Paul
M. Morris; and Patrick D. Pilch.
FOR ( ) WITHHELD ( )
(INSTRUCTION: To withhold authority to vote for any individual nominee write
the nominee's name in the space provided)
2. To ratify the selection of Arthur Andersen LLP as the Company's indepedent
accountants for the year ending December 31, 1996.
3. In their discretion, the proxies are authorized to vote upon such other
business as may come before the meeting or any adjournment thereof.
( ) I plan on attending the Annual Meeting.
Date , 1996
Signature
Signature if held jointly
Please sign exactly as name appears above. When shares are held by joint
tenants, both should sign. When signing as attorney, executor, administrator,
trustee or guardian, please give full title as such. If a corporation, please
sign in full corporate name by President or other authorized officer. If a
partnership, please sign in partnership name by authorized person.
ANDREA ELECTRONICS CORPORATION
