<PAGE>
SCHEDULE 14C
(RULE 14C-101)
Information Statement Pursuant to Section 14(c) of
the Securities Exchange Act of 1934
Check the appropriate box:
/ / Preliminary Information Statement
/X/ Definitive Information Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14c-5(d)(2))
RADYNE CORP.
- - --------------------------------------------------------------------------------
(Name of Registrant As Specified In Its Charter)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required
/ / Fee computed on table below per Exchange Act Rules 14c-5(g) and 0-11.
(1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
(5) Total fee paid:
------------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------------------
(3) Filing Party:
------------------------------------------------------------------------
(4) Date Filed:
------------------------------------------------------------------------
<PAGE>
RADYNE CORP.
APRIL 6, 1998
TO THE SHAREHOLDERS OF RADYNE CORP.
You are invited to attend the Annual Meeting (the "Annual Meeting") of
the Shareholders of Radyne Corp. (the "Company") to be held on Tuesday, May
5, 1998 at 11:00 a.m., local time, at the Radisson Phoenix Airport Hotel,
3333 East University Drive, Phoenix, Arizona 85034.
Details of the business to be conducted at the Annual Meeting are given
in the attached Notice of Annual Meeting and Information Statement.
We look forward to seeing you at the Annual Meeting.
Robert C. Fitting
President
April 6, 1998
<PAGE>
RADYNE CORP.
5225 SOUTH 37TH STREET
PHOENIX, ARIZONA 85040
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON MAY 5, 1998
NOTICE IS HEREBY GIVEN that an Annual Meeting of Shareholders (the "Annual
Meeting") of Radyne Corp. (the "Company"), a New York corporation, will be held
on Tuesday, May 5, 1998 at 11:00 a.m., local time, at the Radisson Phoenix
Airport Hotel, 3333 East University Drive, Phoenix, Arizona 85034 for the
following purposes:
1. To elect directors to serve for the ensuing year and until their
successors are elected;
2. To approve an amendment of the Company's Certificate of
Incorporation (a) prescribing a majority vote of outstanding shares for the
adoption or approval of a plan of merger or consolidation, the sale, lease,
exchange or other disposition of all or substantially all of the assets of
the Company, or a plan of binding share exchanges, and (b) permitting the
shareholders to act without a meeting by written consent of the holders of
less than all of the outstanding shares;
3. To ratify the selection of Deloitte & Touche LLP as the Company's
independent accountants for the fiscal year ended December 31, 1997; and
4. To act upon such other matters as may properly come before the
meeting or any adjournments or postponements thereof.
The foregoing items of business are more fully described in the Information
Statement accompanying this Notice.
Only Shareholders of record at the close of business on April 3, 1998 are
entitled to notice of and to vote at the meeting and at any adjournment thereof.
The stock transfer books will not be closed between the record date and the date
of the meeting. A list of Shareholders entitled to vote at the Annual Meeting
will be available for inspection at the offices of the Company, 5225 South 37th
Street, Phoenix, Arizona 85040.
All shareholders are cordially invited to attend the meeting in person.
However, since it is anticipated that a single shareholder which holds a
majority of the Common Stock of the Company will vote in favor of the
aforementioned proposals, proxies are not being solicited.
<PAGE>
RADYNE CORP.
5225 SOUTH 37TH STREET
PHOENIX, ARIZONA 85040
------------------------
INFORMATION STATEMENT
PURSUANT TO SECTION 14
OF THE SECURITIES EXCHANGE ACT OF 1934
AND REGULATION 14C AND SCHEDULE 14C THEREUNDER
------------------------
WE ARE NOT ASKING YOU FOR A PROXY AND
YOU ARE REQUESTED NOT TO SEND US A PROXY
------------------------
This Information Statement (the "Information Statement") is being furnished
pursuant to Sections 14(a) and 14(c) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), to the holders (the "Shareholders") of the common
stock, par value $.002 per share (the "Common Stock"), of Radyne Corp., a New
York corporation (the "Company"), in connection with certain proposals to be
voted on by the Shareholders at an Annual Meeting to be held on May 5, 1998 at
11:00 a.m., local time, at the Radisson Phoenix Airport Hotel, 3333 East
University Drive, Phoenix, Arizona 85034. This Information Statement was first
mailed to shareholders on or about April 6, 1998.
PURPOSE OF MEETING
The Annual Meeting is being held for the following purposes:
1. To elect directors to serve for the ensuing year and until their
successors are elected;
2. To approve an amendment of the Company's Certificate of
Incorporation (a) prescribing a majority vote of outstanding shares for the
adoption or approval of a plan of merger or consolidation, the sale, lease,
exchange or other disposition of all or substantially all of the assets of
the Company, or a plan of binding share exchanges, and (b) permitting the
shareholders to act without a meeting by written consent of the holders of
less than all of the outstanding shares;
3. To ratify the selection of Deloitte & Touche LLP as the Company's
independent accountants for the fiscal year ended December 31, 1997; and
4. To act upon such other matters as may properly come before the
meeting or any adjournments or postponements thereof.
The foregoing items of business are more fully described herein. The record
date for determining those Shareholders who will be entitled to notice of, and
to vote at, the Annual Meeting and at any adjournment thereof is April 3, 1998
(the "Record Date"). The stock transfer books will not be closed between the
Record Date and the date of the meeting. A list of Shareholders entitled to vote
at the Annual Meeting will be available for inspection at the offices of the
Company, 5225 South 37th Street, Phoenix, Arizona 85040.
VOTING RIGHTS
Each share of Common Stock entitles the holder thereof to one vote. It is
anticipated that at the Annual Meeting, Stetsys US, Inc. and Stetsys Pte Ltd,
members of the Singapore Technologies group which together hold almost 91% of
the 5,931,346 shares of Common Stock outstanding as of the Record Date, will
vote in favor of the aforementioned proposals. Since the proposals will have
been approved by the holders of the required majority of the Common Stock issued
and outstanding, and since the Company has no other outstanding class of stock,
no proxies are being solicited in connection with this Information Statement and
the accompanying Notice of Annual Meeting of the Shareholders of the Company.
<PAGE>
Pursuant to Rule 14c-2 under the Exchange Act, the proposals will not be
adopted until a date at least twenty (20) days after the date on which this
Information Statement has been mailed to the Shareholders. As this Information
Statement is being sent to the beneficial owners of the Common Stock on April 6,
1998, which is more than twenty (20) days before the date of the Annual Meeting,
the Company anticipates that the actions contemplated by this Information
Statement will be effected on or about the close of business on the date of the
Annual Meeting.
The Company has asked brokers and other custodians, nominees and fiduciaries
to forward this Information Statement to the beneficial owners of the Common
Stock held of record by such persons and will reimburse such persons for
out-of-pocket expenses incurred in forwarding such material.
OWNERSHIP OF SECURITIES
The following table sets forth, as of the date of this Information
Statement, the ownership of the Common Stock by (i) each person who is known by
the Company to own of record or beneficially more than 5% of the outstanding
shares of Common Stock, (ii) each director of the Company, (iii) each of the
executive officers named in the table under "Executive Compensation and Related
Information--Executive Compensation--Summary Compensation Table" below , and
(iv) all directors and executive officers of
2
<PAGE>
the Company as a group. Except as otherwise indicated, the shareholders listed
in the table have sole voting and investment powers with respect to the shares
indicated.
<TABLE>
<CAPTION>
NUMBER OF SHARES PERCENTAGE
NAME AND ADDRESS BENEFICIALLY OF
OF BENEFICIAL OWNER OWNED CLASS
- - -------------------------------------------------------------------------------- ----------------- ------------
<S> <C> <C>
Stetsys US, Inc................................................................. 3,400,000 57.3%
c/o Singapore Technologies Pte Ltd
83 Science Park Drive #01-01/02
The Curie Singapore Science Park
Singapore 118258.
Stetsys Pte Ltd................................................................. 5,376,000(1) 90.6%*
c/o Singapore Technologies Pte Ltd
83 Science Park Drive #01-01/02
The Curie Singapore Science Park
Singapore 118258.
Steven Eymann................................................................... 4,000 *
5225 S. 37th Street
Phoenix, Arizona 85040
Robert C. Fitting............................................................... 0 0
5225 S. 37th Street
Phoenix, Arizona 85040
Robert A. Grimes................................................................ 5,500 *
5225 S. 37th Street
Phoenix, Arizona 85040
Lee Yip Loi..................................................................... 0 0
c/o Singapore Technologies Pte Ltd
83 Science Park Drive #01-01/02
The Curie Singapore Science Park
Singapore 118258
Chan Wee Piak................................................................... 10,000 *
c/o Singapore Technologies Pte Ltd
83 Science Park Drive #01-01/02
The Curie Singapore Science Park
Singapore 118258
Lim Ming Seong.................................................................. 0 0
c/o Singapore Technologies Pte Ltd
83 Science Park Drive #01-01/02
Singapore 118258
All executive officers and directors as a group (4 persons)..................... 21,000 *
</TABLE>
- - ------------------------
* Less than one percent
(1) The shares reported as owned by Stetsys Pte Ltd include the shares reported
as beneficially owned by Stetsys US, Inc., of which Stetsys Pte Ltd is the
sole shareholder. All of the stock of Stetsys US, Inc. and Stetsys Pte Ltd
is ultimately owned by Singapore Technologies Pte Ltd and, in turn, by
Minister of Finance (Incorporated) of Singapore.
SHAREHOLDER PROPOSALS TO BE PRESENTED AT NEXT ANNUAL MEETING
Shareholder proposals that are intended to be presented at the Company's
annual meeting of Shareholders to be held in 1999 must be received by the
Company no later than February 5, 1999 in order to be included in the
information or proxy statement and related materials relating to that meeting.
3
<PAGE>
PROPOSAL ONE
ELECTION OF DIRECTORS
GENERAL
A board of five (5) directors is to be elected at the Annual Meeting. It is
expected that a majority of the Common Stock will be voted in favor of the five
(5) nominees named below, all of whom are presently directors of the Company. In
the event that any management nominee is unable or declines to serve as a
director at the time of the Annual Meeting, an alternate nominee shall be
designated by the present Board of Directors to fill the vacancy. The Company is
not aware of any nominee who will be unable or will decline to serve as a
director. The term of office for each person elected as a director will continue
until the next Annual Meeting of Shareholders or until his or her successor has
been elected and qualified.
VOTE REQUIRED
If a quorum is present and voting, the five nominees receiving the highest
number of votes will be elected to the Board of Directors.
NOMINEES
The names of the nominees, each of whom is currently a director of the
Company, and certain information about them are set forth below:
<TABLE>
<CAPTION>
NAME OF NOMINEE AGE TITLE
- - ----------------------------------------------------- --- -----------------------------------------------------
<S> <C> <C>
Lim Ming Seong....................................... 50 Chairman of the Board of Directors
Lee Yip Loi.......................................... 54 Director
Chan Wee Piak........................................ 42 Director
Robert A. Grimes..................................... 45 Director
Robert C. Fitting.................................... 62 Director and President
</TABLE>
Lim Ming Seong has been a Director and Chairman of the Board of the Company
since August 13, 1996 and is chairman of its Compensation Committee. He is the
Chairman of Stetsys US, Inc., which owns a majority of the Company's outstanding
Common Stock, and of Vertex Management, Inc., another member of the Singapore
Technologies group, and he has been Group Director of Singapore Technologies Pte
Ltd since February 1995. From March 1992 to February 1995, he was Executive
Director of Singapore Technologies Ventures Pte Ltd and from February 1990 to
March 1992, he was Group President of Singapore Technologies Holding Pte Ltd.
Prior to that time he held various corporate and government positions, including
Deputy Secretary of the Singapore Ministry of Defense from 1979 to 1986.
Lee Yip Loi, has been a Director of the Company since August 13, 1996 and is
chairman of the Audit Committee and a member of the Compensation Committee of
the Board. He is also a Director of Stetsys US, Inc., which is the Company's
majority shareholder. He has been Regional Director (America) of Singapore
Technologies Pte Ltd since March 1994. From May 1990 to January 1997, he was
President of Metheus Corporation, another member of the same group of companies.
Prior to that time he held a number of managerial positions with such companies
as Morgan Guaranty Trust and Singapore Technologies Pte Ltd and government
positions with the Singapore Ministries of Education, Defense, Culture and Home
Affairs.
Chan Wee Piak has been a Director since August 13, 1996 and is a member of
the Compensation Committee of the Board. He is also a Director of Stetsys US,
Inc., which is the Company's majority shareholder. He has been General Manager
of Agilis Communication Technologies Pte Ltd, also a member of the Singapore
Technologies group, since January 1992. From November 1989 to February 1992, he
was General Manager of Chartered Microwave Pte Ltd. Prior to that time, he held
various managerial positions in the Singapore Ministry of Defense and Singapore
Electronic and Engineering.
4
<PAGE>
Robert C. Fitting, a member of the Audit Committee of the Board, has been
President of the Company since February 1995, and became a Director of the
Company in March 1995. For 11 years prior to March, 1995, Mr. Fitting served as
Chief Executive Officer and Chairman of the Board of Directors of EFData
Corporation, which he co-founded. Mr. Fitting has also served as a Director of
California Microwave, Inc. and as a Director of Satellite Technology Management,
Inc.
Robert A. Grimes, a member of the Audit and Compensation Committees of the
Board, has served as a member of the Board of Directors since December 1994. For
the past seven years, Mr. Grimes has also served as a member of the Board of
Directors of Engineering and Technical Services, Inc., of which he was President
until December 31, 1997. He was also President of Stetsys US, Inc., the
Company's majority shareholder, from February 24, 1997 to January 23, 1998.
BOARD MEETINGS AND COMMITTEES
The Board of Directors of the Company held a total of four meetings during
the year ended December 31, 1997. Each Director attended all of the meetings of
the Board of Directors and committees thereof, if any, upon which such Director
served. The Board of Directors has an Audit Committee and a Compensation
Committee.
The Audit Committee, which consists of directors Lee, Grimes and Fitting,
met three times during the fiscal year ended December 31, 1997. The Audit
Committee reviews and approves the scope of the audit performed by the Company's
independent auditors as well as the Company's accounting principles and internal
accounting controls.
The Compensation Committee, which consists of directors Lim, Lee, Chan and
Grimes, met three times during the fiscal year ended December 31, 1997. The
Committee reviews the performance of management and will at the appropriate
times review the structure of management and plans for management succession.
The Committee also reviews and approves the Company's compensation policies and
administers the Company's 1996 Incentive Stock Option Plan.
The Company's policy during the year ended December 31, 1997 was to provide
no compensation to directors for their services as such.
PROPOSAL TWO
APPROVAL TO AMEND THE CERTIFICATE OF INCORPORATION
OF THE COMPANY
GENERAL
On March 20, 1998, the Board of Directors authorized, subject to approval by
the Shareholders, an amendment of the Certificate of Incorporation of the
Company (a) prescribing a majority vote of outstanding shares for the adoption
or approval of a plan of merger or consolidation, the sale, lease, exchange or
other disposition of all or substantially all of the assets of the Company, or a
plan of binding share exchanges, and (b) permitting the shareholders to act
without a meeting by written consent of the holders of less than all of the
outstanding shares.
Each of these proposed amendments is discussed in greater detail below.
Additionally, a proposed form of Certificate of Amendment of the Certificate of
Incorporation of the Company is included as Exhibit A of this Information
Statement. A Certificate in substantially the form of Exhibit A will be filed
with the New York department of state promptly after the Annual Meeting if, as
expected, the proposed amendments are adopted by the Shareholders.
The Board of Directors has determined that the adoption of the proposed
amendments will be in the best interests of the Company.
5
<PAGE>
VOTE REQUIRED FOR MERGERS AND CERTAIN OTHER TRANSACTIONS
Until recently, New York law provided that a merger or consolidation or a
sale, lease, exchange or other disposition of all or substantially all of the
assets of a New York corporation, such as the Company, would require the
affirmative vote of the holders of at least two-thirds of the shares entitled to
vote thereon. A similar requirement applied to certain exchanges of the shares
of an acquired corporation for shares of an acquiring corporation.
Effective as of February 23, 1998, New York law has been amended to reduce
the two-thirds minimum vote requirement for the above described transactions to
a simple majority of the shares entitled to vote on the proposed transaction, as
long as the Company's Certificate of Incorporation has been amended to so
provide. The Company's Board of Directors believes that the Company should take
advantage of this modernization of New York law, which has conformed the New
York Business Corporation Law to the laws of popular states of incorporation
such as Delaware.
After the proposed amendment, Stetsys US, Inc. and Stetsys Pte Ltd, as the
Company's majority shareholders, will continue to have the ability to control
Company decisions regarding such transactions, even should they at some point
reduce their present collective ownership from approximately 91% to as little as
a bare majority of the Company's Common Stock. However, the Board believes that
the Company's Shareholders' opportunity to maximize the value of their Common
Stock will be enhanced if such a transaction cannot be blocked by a minority of
the shareholders. Moreover in many cases, New York law provides a mechanism
whereby Shareholders who vote against such a transaction can receive fair value
for their shares.
SHAREHOLDER ACTION WITHOUT A MEETING
Until recently New York law permitted the Shareholders to take action
without a meeting only if all Shareholders signed a written consent to such
action. Effective as of February 23, 1998, the New York statute has been amended
to permit such action when the written consent is signed by the holders of
shares having at least the minimum number of votes that would be necessary to
take the action at a shareholders meeting at which all shares were present and
voting. In order for the action to be effective, the minimum number of signed
written consents must be delivered to the Company within a sixty-day period in
accordance with the New York Business Corporation Law. Moreover, prompt notice
of the action must be given to any Shareholders who do not sign the written
consent.
In order for the Company to take advantage of this liberalization of New
York law, the Company's Certificate of Incorporation must be amended to so
provide. The Board considers such an amendment to be in the best interests of
the Company and the Shareholders, because it will obviate the expense and the
timing problems associated with the necessity of calling special shareholders
meetings or deferring actions until the next annual meeting. Although the
amendment will permit the majority shareholder to take action on a unilateral
basis without a meeting, the majority shareholder already has the right to take
such action at a shareholders meeting. Thus, the meeting performs an essentially
informational function which can be less expensively served by the circulation
of written notice of the action taken. As the vast majority of beneficial owners
of the Common Stock tend to forgo attendance at shareholders meetings, they will
be better served by eliminating the need for special meetings to the fullest
extent possible.
REQUIRED VOTE
The adoption of the above described amendments and the Certificate of
Amendment of the Certificate of Incorporation requires the affirmative vote of
not less than a majority of the votes entitled to be cast by all shares of
Common Stock issued and outstanding on the Record Date. Thus, abstentions and
broker non-votes can have the effect of preventing approval where the number of
affirmative votes, though a majority of the votes cast, does not constitute a
majority of the votes entitled to be cast.
6
<PAGE>
PROPOSAL THREE
RATIFICATION OF INDEPENDENT ACCOUNTANTS
The Company is asking the Shareholders to ratify the selection of Deloitte &
Touche LLP as the Company's independent accountants for the fiscal year ended
December 31, 1997. It is anticipated that holders of a majority of the shares of
Common Stock outstanding will vote in favor of this proposal, which will be
sufficient for such ratification.
Deloitte & Touche LLP has audited the Company's financial statements since
the fiscal year ended December 16, 1994. It is not expected that a
representative of Deloitte & Touche LLP will be present at the Annual Meeting.
The Board of Directors is continuing its review of cost and service delivery
considerations involved in the selection of the Company's independent
accountants for the current fiscal year. Accordingly, the Company is not
presently asking the Shareholders to act on the selection of auditors for the
fiscal year ending December 31, 1998.
EXECUTIVE COMPENSATION AND RELATED INFORMATION
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Company's executive officers, Robert C. Fitting, Steven Eymann and Garry
D. Kline, its president (chief executive officer), executive vice president and
chief financial officer, respectively, are compensated pursuant to an employment
agreement which was executed in 1995 prior to the Committee members' election to
the Board. Mr. Fitting's, Mr. Eymann's and Mr. Kline's compensation is composed
principally of base salary and stock options granted in 1996, which become
exercisable in accordance with a milestone schedule by reference to the
Company's earnings before interest and taxes and provide for a cash bonus to
assist in the exercise of any such options which become exercisable. At this
time, none of those options have become exercisable.
On April 29, 1997, in recognition of their fine performance during the
previous two years, the Committee recommended, and the Board approved,
substantial increases in the executives' base salaries. These increases, the
first since the inception of the executives' employment with the Company in
early 1995, take into account the relocation of the Company's office and
manufacturing facility, the rebuilding of its staff, the rejuvenation of its
product lines, the multiplication of its sales figures and substantial progress
toward profitability. Mr. Fitting's annual salary was increased to $130,000 per
year, Mr. Eymann's to $125,000 and Mr. Kline's to $75,000.
Compensation Committee:
Lim Ming Seong, Chairman
Lee Yip Loi
Chan Wee Piak
Robert A. Grimes
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee consists of Messrs. Lim, Chan, Lee and Grimes.
There were no interlocking relationships between the Company and other entities
that might affect the determination of the compensation of the executive
officers of the Company.
7
<PAGE>
SUMMARY COMPENSATION TABLE
The following table sets forth the compensation for services in all
capacities to the Company for the period from the commencement of employment on
March 1, 1995 through December 31, 1997 of the Company's President and Vice
President. No other executive officer or employee received total annual salary
and bonus of more than $100,000.
<TABLE>
<CAPTION>
YEAR ALL OTHER
NAME AND PRINCIPAL POSITION ENDED (1) SALARY OPTIONS (#) COMPENSATION(2)
- - ----------------------------------------------------------- --------- ---------- ----------- -----------------
<S> <C> <C> <C> <C>
Robert C. Fitting--President............................... 12/31/97 $ 116,529 0 $ 1,165
12/31/96 40,000 279,085 435
06/30/96 80,000 0 738
06/30/95 29,231 0 0
Steven Eymann--Vice Pres................................... 12/31/97 111,162 0 1,112
12/31/96 40,000 279,085 435
06/30/96 80,000 0 738
06/30/95 29,231 0 0
</TABLE>
- - ------------------------
(1) Mr. Fitting's and Mr. Eymann's employment with the Company commenced on
March 1, 1995, so the figures shown for the fiscal year ended June 30, 1995
reflect a four-month period. The Company's fiscal year has been changed to
the calendar year, so the figures shown for the year ended December 31, 1996
reflect a period of six months.
(2) Matching 401(k) plan contributions.
STOCK OPTIONS
No stock options were granted to the above named executive officers during
the fiscal year ended December 31, 1997.
AGGREGATE OPTION EXERCISES IN 1997 AND HOLDINGS AT YEAR END
The following table sets forth information concerning option exercises and
option holdings for the fiscal year ended December 31, 1997 with respect to
Robert C. Fitting, the President of the Company, and Steven Eymann, its Vice
President.
<TABLE>
<CAPTION>
NUMBER OF VALUE OF UNEXERCISED,
SHARES NUMBER OF UNEXERCISED IN-THE-MONEY
ACQUIRED VALUE OPTIONS HELD AT OPTIONS AT
NAME ON EXERCISE REALIZED($)(1) DECEMBER 31, 1997 DECEMBER 31, 1997(2)
- - -------------------------------------- ------------- --------------- ---------------------------- ------------------------------
<S> <C> <C> <C> <C> <C> <C>
EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
Robert C. Fitting--President.......... 0.00 $ 0.00 $ 0.00 215,085 $ 0.00 $ 0.00
Steven Eymann--Vice Pres.............. 4,000 $ 0.00 $ 0.00 215,085 $ 0.00 $ 0.00
</TABLE>
- - ------------------------
(1) Based on the fair market value of the Common Stock on the exercise date,
less the per share exercise price.
(2) Based on the fair market value of the Common Stock of $2.50 per share, as
determined by the Company's Board of Directors, less the per share exercise
price.
8
<PAGE>
PERFORMANCE GRAPH
Set forth below is a line graph comparing the cumulative total returns
(assuming the investment of $100 on January 31, 1993 and the reinvestment of
dividends(1)) on the Company's Common Stock against the Russell 3000 Stock Index
and the SIC Code 366--Communication Equipment Index prepared by Media General
Financial Services, Inc. for the period from January 31, 1993 through December
31, 1997. It should be noted that the Company operated under Chapter 11
bankruptcy protection from April 1994 until December 16, 1994, and that the
results reported in the graph are not to be interpreted as forecasts of the
future performance of the Company's Common Stock.
COMPARISON OF CUMULATIVE TOTAL RETURN
OF COMPANY, INDUSTRY INDEX AND BROAD MARKET
<TABLE>
<CAPTION>
FISCAL YEAR ENDING
-----------------------------------------------------------------------------------
COMPANY 1/31/93 1/31/94 12/16/94 6/30/95 6/30/96 12/31/96 12/31/97
- - ---------------------------------------------- ----------- --------- ----------- --------- --------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
RADYNE CORP................................... 100 104.00 40.00 260.00 300.00 320.00 288.00
INDUSTRY INDEX (SIC Code 366)................. 100 150.52 156.28 176.26 204.83 191.59 219.77
BROAD MARKET (Russell 3000 Index)............. 100 113.16 109.99 131.19 165.31 183.30 241.56
</TABLE>
EMPLOYMENT AGREEMENTS
Under the employment agreement between the Company and Messrs. Fitting and
Eymann, they will serve as President and Vice President of the Company until the
earlier of June 30, 2000 or such time as the stock options described in the
above table become fully exercisable. Pursuant to the agreement, the Company
presently pays Mr. Fitting an annual salary of $130,000 and Mr. Eymann an annual
salary of $125,000 and has granted them the stock options described in the above
table. Each of Mr. Fitting and Mr. Eymann has also agreed that if he exercises
any of the stock options, he will not engage in any business which competes with
the Company until after the second anniversary of his termination of employment
with the Company, except in the case of involuntary termination without cause.
- - ------------------------
(1) No cash dividends have been declared on the Company's Common Stock.
9
<PAGE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The principal shareholders of the Company, Stetsys US, Inc. and Stetsys Pte
Ltd, are members of the Singapore Technologies group of companies (the "ST
Group"). Messrs. Lim Ming Seong, Lee Yip Loi and Chan Wee Piak are all both
Directors of the Company and officers and directors of other companies in the ST
Group. From February 24, 1997 to January 23, 1998, Robert A. Grimes, a Director
of the Company, was also president of Stetsys US, Inc.
During the fiscal year ended December 31, 1997, the Company made sales to
Engineering and Technical Services, Inc. ("ETS") of $152,000. ETS is a wholly
owned subsidiary of Stetsys US, Inc.
During the fiscal year ended December 31, 1997, the Company made sales to
Agilis Communication Technologies Pte Ltd, another member of the ST Group, of
$540,500. The General Manager of Agilis, Chan Wee Piak, is a Director of the
Company.
On August 12, 1996, Singapore Technologies Electronics Pte Ltd, another
member of the ST Group, made an unsecured loan of $4,500,000 to the Company, the
proceeds from which were used to pay down a loan payable to ETS. This loan,
which bore interest at 8%, was repaid on February 10, 1997 from the proceeds of
loans provided by Citibank NA and Stetsys US, Inc. Between November 8 and
December 18, 1996, Stetsys US, Inc. made loans to the Company in the aggregate
principal amount of $2,100,000, with interest at 8% per annum and maturing in
March, 1997. At or about maturity, the accrued interest on these loans was paid
by the Company and the principal amounts were repaid with the proceeds of new
loans maturing on April 30, 1997. These loans, totalling $4,100,000, were repaid
with proceeds of the Rights Offering which was made to the Company's
stockholders during the second quarter of 1997.
The purpose of these loans was to provide Radyne with working capital
pending the arrangement of suitable commercial credit lines and completion of
the Rights Offering. A $5,000,000 line of credit from Bank of America NT & SA,
for which a nonbinding letter of awareness was issued by Singapore Technologies
Pte Ltd, had been drawn down by $4,500,000 as of December 31, 1997. The Company
also has an uncommitted $5,500,000 line of credit from Citibank NA (of which
$5,000,000 had been drawn down as of December 31, 1997) with respect to which
Singapore Technologies Pte Ltd has issued a nonbinding letter of awareness.
Interest expense on notes payable to affiliates was $148,000 for the year
ended December 31, 1997. Subsequent to December 31, 1997, Stetsys US, Inc. made
loans to the Company of $500,000 and $4,618,272. The loans bear interest at
6.844% per annum with the principal and accrued interest due on January 4, 1999
and February 15, 1999, respectively. The proceeds of the $4,618,272 loan were
used by the Company to repay a note payable under the above mentioned $5,000,000
line of credit which was outstanding as of December 31, 1997 and has since been
terminated.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
executive officers and directors, and persons who own more than ten percent of a
registered class of the Company's equity securities to file reports of ownership
and changes in ownership with the Securities and Exchange Commission ("SEC").
Executive officers, directors and greater than ten percent stockholders are
required by SEC regulation to furnish the Company with copies of all Section
16(a) forms they file. Based solely on its review of the copies of such forms b
received by it during the year ended December 31, 1997, the Company believes
that, during such year its executive officers, directors and ten percent
stockholders complied with all such filing requirements, except that Stetsys Pte
Ltd, Temasek Holdings (Private) Limited, Radyne Corp. and Chan Wee Piak each
filed a late Form 4 report with regard to a single transaction.
OTHER MATTERS
The Board knows of no other matters to be presented for shareholder action
at the Annual Meeting. However, other matters may properly come before the
Annual Meeting or any adjournment or postponement thereof.
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<PAGE>
ADDITIONAL INFORMATION
THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR THE FISCAL YEAR ENDED DECEMBER
31, 1997, INCLUDING FINANCIAL STATEMENTS, IS ENCLOSED HEREWITH. THE COMPANY WILL
FURNISH ANY EXHIBIT TO SUCH ANNUAL REPORT ON FORM 10-K UPON REQUEST BY A
STOCKHOLDER DIRECTED TO DIRECTOR OF ADMINISTRATION, RADYNE CORP., 5225 SOUTH
37TH STREET, PHOENIX, ARIZONA 85040, FOR A FEE LIMITED TO THE COMPANY'S
REASONABLE EXPENSES IN FURNISHING SUCH EXHIBITS.
By order of the Board of Directors
/s/ GARRY KLINE
--------------------------------------
Garry Kline
Secretary
Phoenix, Arizona
April 6, 1998
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<PAGE>
EXHIBIT A
CERTIFICATE OF AMENDMENT
OF THE
CERTIFICATE OF INCORPORATION
OF
RADYNE CORP.
Under Section 805 of the Business Corporation Law
Pursuant to the provisions of Section 805 of the Business Corporation Law,
the undersigned, being the President and the Secretary of the corporation,
hereby certify as follows:
FIRST: The name of the corporation is: Radyne Corp.
SECOND: The date when the certificate of incorporation was filed by the
Department of State is the 25th day of November, 1980.
THIRD: The certificate of incorporation is amended to effect the following
amendments:
1. As permitted by Sections 903, 909 and 913 of the Business Corporation
Law, Paragraph NINTH, prescribing a majority of the votes of all outstanding
shares entitled to vote thereon as the required vote for adoption or approval of
a plan of merger or consolidation, a sale, lease, exchange or other disposition
of all or substantially all of the assets of the corporation or a plan for
binding share exchanges, is added to the certificate of incorporation to read as
follows:
"NINTH: By an affirmative vote of the holders of a majority of all
outstanding shares entitled to vote thereon, (i) a plan of merger or
consolidation in which the corporation would be a constituent corporation
may be adopted by the shareholders of the corporation as provided in Section
903 of the Business Corporation Law, (ii) a sale, lease, exchange or other
disposition of all or substantially all of the assets of the corporation may
be approved by the shareholders of the corporation, and the shareholders of
the corporation may fix, or may authorize the board of directors of the
corporation to fix, any of the terms and conditions of such sale, lease,
exchange or other disposition and the consideration to be received by the
corporation therefor, as provided in Section 909 of the Business Corporation
Law, or (iii) a plan of exchange in which the corporation would be the
subject corporation, within the meaning of Section 913 of the Business
Corporation Law, may be adopted by the shareholders of the corporation as
provided in paragraph (c) of Section 913 of the Business Corporation Law."
2. As permitted by Section 615 of the Business Corporation Law, Paragraph
TENTH, permitting the shareholders of the corporation under certain
circumstances to take action on the written consent of the holders of less than
all of the outstanding shares, is added to the certificate of incorporation to
read as follows:
"TENTH: Whenever the shareholders are required or permitted to take any
action by vote, such action may be taken without a meeting on written
consent, setting forth the action so taken, signed by the holders of
outstanding shares having not less than the minimum number of votes that
would be necessary to authorize or take such action at a meeting at which
all shares entitled to vote thereon were present and voted; provided that no
such written consent shall be effective unless written consents signed by a
sufficient number of holders to take action are delivered to the corporation
within the time, and in the manner, required by paragraph (b) of Section 615
of the Business Corporation Law."
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<PAGE>
FOURTH: This certificate of amendment of the certificate of incorporation
was authorized by an affirmative vote of the holders of a majority of all
outstanding shares entitled to vote thereon, at a meeting of shareholders
subsequent to the affirmative vote of the board of directors of the corporation.
IN WITNESS WHEREOF, we hereunto sign our names and affirm that the
statements made herein are true under the penalties of perjury, this 5th day of
May, 1998.
<TABLE>
<S> <C>
RADYNE CORP.
------------------------------------------------
Robert C. Fitting,
PRESIDENT
------------------------------------------------
Garry Kline,
SECRETARY
</TABLE>
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