<PAGE> 1
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SCHEDULE 14A
(RULE 14A)
INFORMATION REQUIRED IN PROXY STATEMENT
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:
<TABLE>
<S> <C>
/ / Preliminary Proxy Statement / / CONFIDENTIAL, FOR USE OF THE COMMISSION
ONLY (AS PERMITTED BY RULE 14A-6(E)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12
</TABLE>
CINCINNATI MICROWAVE
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
XXXXXXXXXXXXXXXX
(NAME OF PERSON(S) FILING PROXY STATEMENT, IF OTHER THAN THE REGISTRANT)
Payment of filing fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE> 2
CINCINNATI
MICROWAVE
June 21, 1995
TO THE SHAREHOLDERS OF
CINCINNATI MICROWAVE, INC.
You are cordially invited to attend the Annual Meeting of Shareholders of
Cincinnati Microwave, Inc. to be held:
DATE: Monday, July 24, 1995
TIME: 9:30 A.M., Eastern Daylight Time
PLACE: Cincinnati Microwave, Inc.
One Microwave Plaza
Cincinnati, Ohio 45249
Information concerning the Company and the matters to be voted upon are
contained in the attached notice of meeting and proxy statement. A current
report on the affairs of the Company will be presented after the close of the
formal part of the meeting, and shareholders will have an opportunity for
questions and comments.
EVEN IF YOU PLAN TO ATTEND THE MEETING, WE ASK THAT YOU RETURN YOUR PROXY
AT ONCE IN THE ENCLOSED ENVELOPE WHICH REQUIRES NO POSTAGE IF MAILED IN THE
UNITED STATES.
James L. Jaeger Jacques A. Robinson
Chairman of the Board President and
Chief Executive Officer
<PAGE> 3
CINCINNATI MICROWAVE, INC.
One Microwave Plaza
Cincinnati, Ohio 45249
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD JULY 24, 1995
The Annual Meeting of Shareholders of Cincinnati Microwave, Inc., an Ohio
corporation, will be held on July 24, 1995, at Cincinnati Microwave, Inc., One
Microwave Plaza, Cincinnati, Ohio 45249, at 9:30 A.M., Eastern Daylight Time,
for the following purposes:
1. To fix the number of directors for the ensuing year;
2. To elect directors;
3. To consider and act upon a proposal to ratify the selection of Price
Waterhouse LLP as the Company's independent accountants for the year
ending December 31, 1995;
and to consider and act upon such other business as may properly come before the
meeting.
The Board of Directors has appointed R. Gregory Blair, Elaine M. Bacon and
Neil Ganulin as members of the proxy committee and has fixed the close of
business on May 30, 1995, as the record date for the determination of
shareholders entitled to notice of the annual meeting and to vote thereat.
By Order of the Board of Directors
Walter P. Masavage, Secretary
Cincinnati, Ohio
June 21, 1995
EVEN IF YOU PLAN TO ATTEND THE MEETING, WE ASK THAT YOU PLEASE SIGN THE
ENCLOSED PROXY CARD AND FORWARD IT AT ONCE IN THE ENCLOSED ENVELOPE WHICH
REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES. SHAREHOLDERS WHO ARE PRESENT
AT THE MEETING MAY, IF DESIRED, WITHDRAW THEIR PROXIES AND VOTE IN PERSON.
<PAGE> 4
CINCINNATI MICROWAVE, INC.
One Microwave Plaza
Cincinnati, Ohio 45249
PROXY STATEMENT
INTRODUCTION
SOLICITATION AND REVOCATION OF PROXIES
This Proxy Statement is furnished in connection with the solicitation of
proxies for use at the Annual Meeting of Shareholders of Cincinnati Microwave,
Inc. (the "Company") to be held at Cincinnati Microwave, Inc., One Microwave
Plaza, Cincinnati, Ohio 45249, at 9:30 A.M., Eastern Daylight Time, on July 24,
1995, and at any adjournment thereof. The principal executive offices of the
Company are located at One Microwave Plaza, Cincinnati, Ohio 45249; its
telephone number is 513-489-5400. This Proxy Statement and the proxy are being
mailed to shareholders on or about June 21, 1995.
The members of the proxy committee named in the enclosed proxy were
appointed by the Board of Directors, and solicitation of your proxy hereby is
being made by the Board of Directors of the Company. All shares represented by
properly executed proxies will be voted in accordance with the directions on the
proxies, unless such proxies are revoked prior to the vote. If no contrary
instruction is indicated on the proxy card, shares will be voted in favor of the
proposals set forth in the notice of the meeting and this Proxy Statement and in
favor of the election of the directors nominated by the Board of Directors and
the ratification of the selection of the Company's independent accountants. (See
"PROPOSAL TO ESTABLISH NUMBER OF DIRECTORS" and "ELECTION OF DIRECTORS.")
Proxies indicating an abstention from voting on any matter will be tabulated as
a vote withheld on such matter and will be included in computing the number of
shares present for purposes of determining the presence of a quorum for the
shareholder meeting. If a broker indicates on the form of proxy that it does not
have discretionary authority as to certain common shares to vote on a particular
matter, those common shares will be considered as present for purposes of
determining the presence of a quorum for the shareholder meeting but not
entitled to vote with respect to that matter. If any other matters are properly
presented for action at the meeting, it is intended that the members of the
proxy committee will vote in accordance with their best judgment on such
matters. This solicitation of proxies is being made by mail and all costs of the
solicitation will be borne by the Company. Brokerage houses and other
custodians, nominees, or fiduciaries will be reimbursed for the expense of
forwarding documents to beneficial owners of shares held in their names.
The giving of the proxy does not affect your right to attend and vote in
person at the meeting. Your presence at the meeting, however, will not itself
revoke your proxy; it may be revoked at any time prior to its exercise by the
execution of a later proxy, by giving written notice of revocation to the
Secretary of the Company, or by making a statement of revocation in person at
the meeting. A revocation made during the meeting shall not affect any vote
previously taken.
OUTSTANDING VOTING SECURITIES
Only shareholders of record at the close of business on May 30, 1995 (the
"Record Date") are entitled to vote on matters to come before the meeting. On
the Record Date, the Company
-1-
<PAGE> 5
had outstanding 13,996,803 common shares, without par value ("Common Shares").
Each Common Share carries one vote. The Common Shares are the only voting
securities the Company has outstanding. Of the outstanding Common Shares,
6,471,713 shares are currently owned by the present officers and directors of
the Company and the nominees for election as directors at the meeting. (See
"SECURITY OWNERSHIP OF MANAGEMENT" elsewhere herein.)
CUMULATIVE VOTING
If notice in writing is given by a shareholder to the Chairman of the
Board, the President, a Vice President, or the Secretary of the Company, not
less than 48 hours before the time fixed for the holding of the Annual Meeting
that such shareholder desires that the voting with respect to the election of
directors shall be cumulative, and if announcement of the giving of such notice
is made upon the convening of the Annual Meeting by the Chairman or Secretary or
by or on behalf of the shareholder giving such notice, each shareholder (or the
proxy therefor) shall have the right to cumulate such voting power as he
possesses for the election of directors.
Under cumulative voting, a shareholder may cast as many votes as shall
equal the number of directors to be elected multiplied by the number of his
shares. Such votes may be cast all for one nominee or distributed among two or
more nominees as the shareholder may select or, in the case of proxies, as the
proxy holder may select. If cumulative voting is invoked in connection with the
election of directors at the Annual Meeting, the proxy committee designated by
the Board of Directors intends to distribute the votes of shares represented by
proxies it holds so as to elect the seven nominees for director nominated by the
Board of Directors. (See "PROPOSAL TO ESTABLISH NUMBER OF DIRECTORS" and
"ELECTION OF DIRECTORS.")
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL HOLDERS
As of the Record Date, James L. Jaeger, Kopp Investment Advisors, Inc., a
Minnesota corporation, and Jacques A. Robinson were the only persons known by
the Company to be beneficial owners of more than 5% of its outstanding Common
Shares. The following table provides information as to ownership of Common
Shares by Mr. Jaeger, Kopp Investment Advisors, Inc. and Mr. Robinson.
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------
NAME AND ADDRESS OF AMOUNT AND NATURE OF PERCENT OF
TITLE OF CLASS BENEFICIAL OWNER BENEFICIAL OWNERSHIP CLASS
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C>
Common Shares James L. Jaeger 6,157,179(1) 43.9%
One Microwave Plaza
Cincinnati, Ohio 45249
Common Shares Kopp Investment Advisors, Inc. 3,221,015(2) 22.3%
6600 France Avenue South
Edina, MN 55435
Common Shares Jacques A. Robinson 726,992(3) 5.0%
One Microwave Plaza
Cincinnati, Ohio 45249
- ----------------------------------------------------------------------------------------
</TABLE>
-2-
<PAGE> 6
(1) Mr. Jaeger shares voting and investment power with regard to 23,629 of the
Common Shares shown opposite his name and exercises sole voting and
investment power over the remainder of such shares. All but 23,629 of such
Common Shares are owned of record by Mr. Jaeger. Mr. Jaeger's beneficial
shares include 30,000 outstanding warrants to purchase 30,000 Common Shares.
(2) Kopp Investment Advisors, Inc. ("KIA") serves as a financial advisor for its
clients. As such, KIA holds no voting power for the shares owned by its
clients. KIA does, however, exercise limited investment power over the
Common Shares owned by its clients. As of the Record Date, numerous
individuals own 2,009,515 Common Shares, which includes 49,355 outstanding
warrants to purchase 49,355 Common Shares. The remaining 1,211,500 Common
Shares, which includes 400,000 outstanding warrants to purchase 400,000
Common Shares, are controlled by LeRoy C. Kopp, President and 100% owner of
Kopp Investment Advisors, Inc.
(3) The Scotcrest Group, Inc., a California corporation beneficially owned by
Jacques A. Robinson, owns 216,992 Common Shares and has an option
exercisable at any time to acquire an additional 500,000 Common Shares. Mr.
Robinson has voting and investment power over all Common Shares held by
Scotcrest. Mr. Robinson's beneficial shares include 10,000 outstanding
warrants to purchase 10,000 Common Shares.
Mr. Jaeger owns 43.9% of the Common Shares entitled to vote at the Annual
Meeting and presently intends to vote his shares in favor of all proposals of
the Board of Directors. Accordingly, Mr. Jaeger has sufficient voting power to
significantly influence the outcome of the proposals submitted to the
shareholders.
Section 16(a) of the Securities Exchange Act of 1934 ("Section 16(a)")
requires the Company's directors and executive officers, 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 and the National Association of Securities Dealers.
Directors, executive officers and greater-than-ten-percent shareholders are
required by the Commission's regulations to furnish the Company with copies of
all forms which they file under Section 16(a). Based solely on its review of the
copies of such forms received by it, the Company believes that all such filing
requirements applicable to its directors and executive officers during 1994 were
complied with, except for Form 4's related to non-employee directors' (Mr.
Fullgraf, Mr. O'Donnell, and Mr. Wachsman) restricted stock compensation that
have subsequently been filed; procedures have been implemented to avoid late
filings in the future.
PROPOSAL TO ESTABLISH NUMBER OF DIRECTORS
(ITEM 1 ON PROXY CARD)
Article 6 of the Regulations of the Company provides that the Board of
Directors shall consist of not less than three or not more than nine members, as
determined by the shareholders at each annual meeting or any special meeting
called for the election of directors. The Board of Directors has proposed that
the size of the Company's Board for the next year be set at seven. The seven
positions for directors would be filled by a vote of the shareholders at the
Annual Meeting. The persons receiving the seven highest total votes will be
elected as directors at the Annual Meeting.
-3-
<PAGE> 7
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THIS PROPOSAL. Adoption of
this proposal requires the affirmative vote of a majority of the Common Shares
represented at the meeting.
ELECTION OF DIRECTORS
(ITEM 2 ON PROXY CARD)
Each of the seven persons named below is a nominee for election as a
director, to hold office until the next annual meeting and until his or her
successor has been duly elected and qualified. It is intended that the proxies
solicited hereby, unless authority is withheld by the shareholder giving the
proxy, will be voted for the election of the seven nominees named herein. Each
nominee has indicated that he or she is willing to serve, and the Board has no
reason to believe that any nominee will be unavailable or unable to serve. If,
however, any nominee should decline or become unable to serve, proxies solicited
hereby will be voted for the election of such person or persons as the Board of
Directors may recommend. All nominees are U.S. citizens. The following
information is supplied as to each nominee.
CHARLES M. FULLGRAF Age -- 76
Principal Occupation -- Retired from The Procter & Gamble Company ("P&G")
(a diversified manufacturer of household and industrial products headquartered
in Cincinnati, Ohio) in 1982 after a 42-year career serving P&G in various
management positions. From 1978 to 1982 Mr. Fullgraf was a Group Vice President
of P&G and served on its Board of Directors. He also served as trustee of the
P&G Profit Sharing Trust. He has been a Director of the Company since 1985.
JAMES L. JAEGER Age -- 48
Principal Occupation -- Founder of the Company. In May 1985 he was elected
Chairman of the Board. He also served as Chief Executive Officer of the Company
from June 1983 until June 1988 and from January 1990 through April 22, 1991. He
has been a Director of the Company since 1976.
JOHN W. NOLAND Age -- 54
Principal Occupation -- Executive Vice President and Chief Operating
Officer of the Company since November 1992. Prior to this, Mr. Noland was with
Thomson Consumer Electronics serving as Vice President, TV Division Asia,
located in Singapore. In this position, he was responsible for Asian marketing,
product development, design, manufacturing and managing manufacturing locations
in five Asian countries. Mr. Noland was with General Electric Company's Consumer
Electronics Business ("GE") from 1963 through 1987 and held various
manufacturing positions in the television, audio and communications divisions of
GE. He was general manager of the cathode ray tube manufacturing operations when
Thomson acquired all of GE's consumer electronics business in 1987. He has been
a Director of the Company since November 1992.
JOSEPH M. O'DONNELL Age -- 49
Principal Occupation -- Managing Director of his own consulting firm. Mr.
O'Donnell has been President and Chief Executive Officer of Computer Products,
Inc. (multi-national
-4-
<PAGE> 8
manufacturer of electronic products and subsystems) since July 1994. Mr.
O'Donnell was Chief Executive Officer of Savin Corporation (manufacturer of
office products and equipment) from October 1993 to February 1994. From June
1990 through July 1992, Mr. O'Donnell was President and Chief Executive Officer
of GO/DAN Industries (a company that manufactures and markets products for the
automotive aftermarket business). From October 1988 to May 1990, Mr. O'Donnell
was Group Vice President of Handy & Harmon (a company primarily involved in
precious metals refining, stamping, forging and fabrication headquartered in New
York, New York); from August 1987 to September 1988 he was President of OD&S
Ventures, Inc. (a venture capital company). He has been a Director of the
Company since 1991.
JACQUES A. ROBINSON Age -- 48
Principal Occupation -- President and Chief Executive Officer of the
Company since April 23, 1991. From July 1987 through February 1991, Mr. Robinson
served as President of Carillon Technology, Inc., a California company that
manufactured consumer audio technology products. From 1979 through June 1987,
Mr. Robinson held various positions with the General Electric Company and his
most recent position with that company was Vice President and General Manager of
the Consumer Electronics Business Operations. He has been a Director of the
Company since 1991.
GILBERT L. WACHSMAN Age -- 47
Principal Occupation -- President of Wachsman Management Consulting, Inc.
serving retailers and consumer oriented manufacturers from 1990. Pursuant to his
consulting practice, Mr. Wachsman served as Vice Chairman of Universal
International, Inc. (wholesaler/retailer of close-out merchandise) from October
1992 to February 1995. From December 1988 to July 1990, Mr. Wachsman was
President of Lieberman Enterprises (a distributor of pre-recorded music, video
and personal computer software); from January 1986 to December 1988 he was
President of Child World, Inc. (one of the largest U.S. toy chains). He has been
a Director of the Company since 1991.
ERIKA WILLIAMS Age -- 48
Principal Occupation -- President of the Erika Williams Group, a consulting
firm. From 1993 to March 1995, Ms. Williams was Senior Vice President and
General Manager of Enterprise Storage Systems of Amdahl Corporation of Sunnyvale
California. Since 1978, Ms. Williams held various positions with Amdahl
Corporation including the Corporate Officer responsible for product management
of the main frame business, Vice President of Processor Technology and
Development and Director of Product Software and Diagnostics. She has been a
Director of the Company since 1994.
MATTERS RELATING TO THE BOARD
The Board of Directors has established an Audit Committee and a
Compensation Committee to assist it in the discharge of its responsibilities.
There is no Nominating Committee or Executive Committee. The Committees meet
separately from the regular Board meetings whenever required. A brief statement
of the principal responsibilities of the Committees of the Board and the
identification of their members are given below.
-5-
<PAGE> 9
Audit Committee -- The Audit Committee of the Board presently consists of
Messrs. O'Donnell (Chairman), Fullgraf, Wachsman and Ms. Williams. The Committee
is charged with responsibility for recommending the independent accountants to
be retained by the Company to audit its financial statements, overseeing the
audits of the Company and reviewing the Company's accounting controls and
reporting practices. The Audit Committee held two meetings during 1994.
Compensation Committee -- The Compensation Committee of the Board is
responsible for reviewing and making recommendations to the full Board with
regard to the salary and other compensation arrangements for the senior
management of the Company. The Committee is also responsible for administering
the Company's 1991 Stock Option Plan for employees and granting options under
such plan to eligible employees of the Company or its subsidiaries. The
Committee presently consists of Messrs. Fullgraf, O'Donnell, Wachsman (Chairman)
and Ms. Williams. Members of the Committee are not eligible to receive stock
options under the plan. The Compensation Committee held three meetings during
1994.
Meetings -- Eleven meetings of the Board were held during 1994. Each
Director attended at least 75% of the meetings of the Board and the Committees
on which he or she served during 1994.
Compensation -- Directors who are not employees of the Company receive a
monthly fee of $1,000 and receive $1,000 for each Board meeting attended and for
each Committee meeting attended which is held on a separate day, plus expenses.
Directors who are employees of the Company receive no compensation for serving
as Directors but are reimbursed for their expenses. Pursuant to the Directors'
Restricted Share Plan, a portion (70%) of the Directors' fees is deferred and
paid in Company restricted shares and 30% is paid in cash. In addition, pursuant
to the 1992 Stock Option Plan for Non-Employee Directors, each non-employee
director receives an option to purchase 5,000 Common Shares on the date of each
annual meeting of shareholders provided that such non-employee director
continues in office subsequent to such annual meeting.
-6-
<PAGE> 10
SECURITY OWNERSHIP OF MANAGEMENT
The following table discloses information concerning the beneficial
ownership of Common Shares by each Director and Director nominee, by each of the
Executive Officers named in the Summary Compensation Table elsewhere in this
Proxy Statement and by all Directors and Officers of the Company and nominees as
a group as of the Record Date.
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------
NAME AND ADDRESS OF AMOUNT AND NATURE OF PERCENT
TITLE OF CLASS BENEFICIAL OWNER BENEFICIAL OWNERSHIP OF CLASS
- -----------------------------------------------------------------------------------
<S> <C> <C> <C>
Common Shares James L. Jaeger 6,157,179(1) 43.9%
Common Shares Jacques A. Robinson 726,992(2) 5.0%
Common Shares John W. Noland 111,250(3) .8%
Common Shares R. Gregory Blair 86,080(4) .6%
Common Shares Gary S. Oppito 3,750(5) .0%
Common Shares Charles M. Fullgraf 39,832(6) .3%
Common Shares Joseph M. O'Donnell 25,262(7) .2%
Common Shares Gilbert L. Wachsman 33,051(8) .2%
Common Shares Erika Williams 5,048(9) .0%
Common Shares All Directors and Officers 7,237,535(10) 49.0%
as a group (13 persons)
- --------------------------------------------------------------------------------
<FN>
(1) Mr. Jaeger shares voting and investment power with regard to 23,629 of the
Common Shares shown opposite his name and exercises sole voting and
investment power over the remainder of such shares. All but 23,629 of such
Common Shares are owned of record by Mr. Jaeger. Mr. Jaeger's beneficial
shares include 30,000 outstanding warrants to purchase 30,000 Common
Shares.
(2) The Scotcrest Group, Inc. owns 216,992 Common Shares and has an option
exercisable at any time to acquire an additional 500,000 Common Shares. Mr.
Robinson has voting and investment power over all Common Shares held by
Scotcrest. Mr. Robinson's beneficial shares include 10,000 outstanding
warrants to purchase 10,000 Common Shares.
(3) Includes 81,250 shares related to outstanding options and 10,000 shares
related to outstanding warrants.
(4) Includes 49,500 shares related to outstanding options.
(5) Includes 3,750 shares related to outstanding options.
(6) Includes 15,000 shares related to outstanding options.
(7) Includes 15,000 shares related to outstanding options and 697 shares
related to outstanding warrants.
(8) Includes 15,000 shares related to outstanding options.
(9) Includes 5,000 shares related to outstanding options.
(10) Includes 708,625 shares related to outstanding options and 57,197 shares
related to outstanding warrants.
</TABLE>
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<PAGE> 11
PROPOSAL TO RATIFY SELECTION OF AUDITORS
(ITEM 3 ON PROXY CARD)
In accordance with the recommendation of the Audit Committee of the Board
of Directors, the firm of Price Waterhouse LLP has been selected by the Board,
subject to the approval by the shareholders, as independent accountants to audit
the financial statements of the Company and its subsidiaries for the year ending
December 31, 1995. Price Waterhouse LLP is an international firm of accountants
which the Board of Directors considers to be well qualified to serve as the
Company's independent accountants. Price Waterhouse LLP has served as the
Company's independent accountants since 1984. A representative of Price
Waterhouse LLP will be present at the Company's Annual Meeting of Shareholders
on July 24, 1995. The representative will have the opportunity to make a
statement at the meeting, if he desires to do so, and will be available to
respond to appropriate questions from shareholders.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THIS PROPOSAL, APPROVAL OF
WHICH REQUIRES THE AFFIRMATIVE VOTE OF A MAJORITY OF THE COMMON SHARES
REPRESENTED AT THE MEETING. If the shareholders do not ratify the selection of
Price Waterhouse LLP, the selection of other independent accountants will be
considered by the Board.
EXECUTIVE COMPENSATION
The following table is a summary of certain information concerning the
compensation awarded or paid to, or earned by, the Company's Chief Executive
Officer and each of the Company's other four most highly compensated executive
officers (the "Named Executives") during each of the last three fiscal years.
-8-
<PAGE> 12
<TABLE>
SUMMARY COMPENSATION TABLE
<CAPTION>
LONG TERM COMPENSATION
-------------------------------------
ANNUAL COMPENSATION AWARDS PAYOUTS
---------------------------- -------------------------- --------
OTHER SECURITIES ALL
ANNUAL RESTRICTED UNDERLYING OTHER
COMPEN- STOCK OPTIONS/ LTIP COMPEN-
NAME AND SALARY BONUS SATION AWARDS SARS PAYOUTS SATION
PRINCIPAL POSITION YEAR ($) ($) ($) ($) (#) ($) ($)
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Jacques A. Robinson(1).... 1994 390,000 0 0 0 0 0 0
President and Chief 1993 313,500 0 0 0 0 0 0
Executive Officer 1992 391,125 832,000 0 0 0 0 0
John W. Noland(2)......... 1994 200,000 0 0 0 0 0 11,152
Executive Vice President 1993 200,000 0 0 0 25,000 0 7,500
and Chief Operating 1992 21,465 0 0 0 150,000 0 70,000
Officer
R. Gregory Blair(3)....... 1994 142,875 0 0 0 5,000 0 11,412
Vice President 1993 136,500 0 0 0 10,000 0 10,933
1992 130,000 0 0 0 10,000 0 10,446
James L. Jaeger(4)........ 1994 125,000 0 0 0 0 0 10,071
Chairman of the Board 1993 125,000 0 0 0 0 0 10,071
1992 125,000 0 0 0 0 0 8,821
Gary S. Oppito(5)......... 1994 115,730 0 0 0 10,000 0 8,969
Vice President 1993 102,000 0 0 0 10,000 0 7,964
1992 96,807 0 0 0 7,500 0 44,790
- --------------------------------------------------------------------------------
<FN>
(1) Mr. Robinson's compensation was paid to The Scotcrest Group, Inc., a company
beneficially owned by Mr. Robinson. Scotcrest was paid $832,000 on March 27,
1992 for Mr. Robinson's services in finding, negotiating and consummating a
transaction on behalf of the Company with BI Incorporated, in which the
Company's Guardian Technologies, Inc. subsidiary ("Guardian") was sold. Of
such amount, $375,000 was paid in cash and the remainder in 166,000 Common
Shares. Mr. Robinson does not participate in any of the Company's stock
option or other employee benefit plans. Mr. Robinson received $78,000 of his
compensation in the form of Common Shares in 1993.
(2) All Other Compensation includes: (a) non-cash compensation pertaining to
life insurance premiums in the amounts of $1,152 and $2,016 for the years
1994 and 1993, respectively; (b) $10,000, and $5,484 representing 1994 and
1993 contributions made pursuant to the Company's profit sharing plan,
respectively; and (c) $70,000 in relocation expenses in 1992.
(3) All Other Compensation includes: (a) non-cash compensation pertaining to
life insurance premiums in the amounts of $696, $696 and $696 for the years
1994, 1993 and 1992, respectively; (b) $3,572, $3,412 and $3,250
representing matching contributions made pursuant to the Company's
retirement savings plan for the years 1994, 1993, and 1992, respectively;
and (c) $7,144, $6,825 and $6,500 representing 1994, 1993 and 1992
contributions made pursuant to the Company's profit sharing plan,
respectively.
(4) All Other Compensation includes: (a) non-cash compensation pertaining to
life insurance premiums and tax preparation fees in the amounts of $696,
$696 and $408 for the years 1994, 1993 and 1992, respectively; (b) $3,125,
$3,125 and $2,163 representing matching contributions made pursuant to the
Company's retirement savings plan for the years 1994, 1993 and 1992,
respectively; and (c) $6,250, $6,250 and $6,500 representing 1994, 1993 and
</TABLE>
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<PAGE> 13
1992 contributions made pursuant to the Company's profit sharing plan,
respectively. Mr. Jaeger received $27,000 of his compensation in the form of
Common Shares in 1993.
(5) All Other Compensation includes: (a) non-cash compensation pertaining to
life insurance premiums in the amounts of $371, $314 and $294 for the years
1994, 1993 and 1992, respectively; (b) $2,811, $2,550 and $1,220
representing matching contributions made pursuant to the Company's
retirement savings plan for the years 1994, 1993 and 1992, respectively; (c)
$5,787, $5,100 and $2,440 representing 1994, 1993 and 1992 contributions
made pursuant to the Company's profit sharing plan, respectively; and (d)
$40,836 in relocation expenses in 1992.
STOCK OPTIONS
The following table sets forth information concerning individual grants of
options to purchase the Company's Common Shares made to the Named Executives in
1994.
<TABLE>
OPTION/SAR GRANTS IN LAST FISCAL YEAR
<CAPTION>
% OF
NUMBER TOTAL POTENTIAL REALIZABLE
OF SECURITIES OPTIONS VALUE AT ASSUMED
UNDERLYING GRANTED TO EXERCISE ANNUAL RATES OF STOCK
OPTIONS EMPLOYEES OR BASE PRICE APPRECIATION FOR
GRANTED IN FISCAL PRICE EXPIRATION OPTION TERM
NAME (# SHS)(1) YEAR ($/SHARE) DATE 5% 10%
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Jacques A. Robinson.... 0 -- -- -- -- --
John W. Noland......... 0 -- -- -- -- --
R. Gregory Blair....... 5,000 1.6% $6.06 10/20/04 $ 19,063 $ 48,310
James L. Jaeger........ 0 -- -- -- -- --
Gary S. Oppito......... 5,000 1.6% $7.88 04/22/04 $ 24,762 $ 62,754
5,000 1.6% $6.06 10/20/04 $ 19,063 $ 48,310
- ----------------------------------------------------------------------------------------------------------
<FN>
(1) All options are granted at 100% of fair market value on the date of grant.
The options are exercisable during a period commencing 6 months and one day
after the date of grant and ending on the date specified in the option
agreement which, in no event, is later than ten years after the date of
grant.
</TABLE>
The following table sets forth certain information regarding individual
exercises of stock options during 1994 and stock options unexercised at the end
of 1994 with respect to the Named Executives.
-10-
<PAGE> 14
<TABLE>
AGGREGATED OPTION/SAR EXERCISES IN 1994
AND FISCAL YEAR-END OPTION/SAR VALUE TABLE
<CAPTION>
NUMBER OF
SECURITIES VALUE OF
UNDERLYING UNEXERCISED
UNEXERCISED IN-THE-MONEY
SHARES OPTIONS AT OPTIONS AT
ACQUIRED YEAR-END YEAR-END
ON VALUE EXERCISABLE/ EXERCISABLE/
EXERCISE REALIZED UNEXERCISABLE UNEXERCISABLE
NAME (#) ($) (#) ($)
- -----------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Jacques A. Robinson....... 0 0 E 500,000/ E$1,187,500/
U 0 U$ 0
John W. Noland............ 0 0 E 81,250/ E$ 46,875/
U 93,750 U$ 46,875
R. Gregory Blair.......... 0 0 E 49,500/ E$ 71,375/
U 31,500 U$ 25,875
James L. Jaeger........... 0 0 E 0/ E$ 0/
U 0 U$ 0
Gary S. Oppito............ 1,875 12,891 E 19,375/ E$ 25,547/
U 26,250 U$ 10,469
- --------------------------------------------------------------------------------
</TABLE>
EMPLOYMENT CONTRACTS AND TERMINATION OF EMPLOYMENT
AND CHANGE-IN-CONTROL ARRANGEMENTS
Of the persons named in the Executive Compensation table, Messrs. Blair and
Noland have employment agreements with the Company. Mr. Blair's agreement
provides that, if his employment is terminated by the Company without cause, he
shall continue to be paid his monthly base salary and receive certain benefits
for a period of twelve months after termination less any compensation he
receives from any subsequent employment held during such period. The agreement
also provides that, if such termination occurs after a change in control of the
Company (as defined in the agreement), he will continue to be paid his monthly
base salary for a period of twenty-four months after the termination less any
compensation he receives from any subsequent employment held during such period.
Monthly base salary for Mr. Blair is currently $11,906. The employment agreement
of Mr. Blair can be terminated only by mutual agreement with the Company or by
termination of employment.
The employment agreement between Mr. Noland and the Company provides that
if his employment is terminated for any reason other than a justifiable cause
(e.g. poor performance of responsibilities, misfeasance, malfeasance, etc.), he
shall continue to receive his salary for a period ending the earlier of twelve
months after termination or upon obtaining subsequent employment. The term of
this agreement expires November 1995.
The Company retained The Scotcrest Group, Inc. in February 1991 on a
consulting basis to assist it in reviewing and examining its operations. On
April 23, 1991, the Board of Directors approved a contract with Scotcrest
wherein Scotcrest assists the Company in implementing its operating plan by
providing general management services to the Company and appointed Jacques A.
Robinson, President of Scotcrest, as President of the Company. The contract was
-11-
<PAGE> 15
amended in May 1995. The terms of the contract with Scotcrest provide, among
other provisions, that: (i) Scotcrest shall be paid at a per diem rate of $1,800
for the services of Mr. Robinson; (ii) Scotcrest has been granted an option to
purchase 150,000 Common Shares at $12.25 per share vesting at a rate of 37,500
shares per year on each of May 15, 1996, 1997, 1998 and 1999; (iii) Scotcrest
shall receive a cash bonus of $100,000 for achievement of a 1995 net income goal
determined by the Compensation Committee of the Board of Directors and an amount
equal to 4% of net income reported in excess of such goal; and (iv) either the
Company or Scotcrest can terminate the contract at any time without cause.
REPORT OF THE COMPENSATION COMMITTEE
The Compensation Committee of the Board is responsible for reviewing and
making recommendations to the full Board with regard to the salary and other
compensation arrangements for the senior management of the Company. The
Committee is also responsible for administering the Company's 1991 Stock Option
Plan for employees and granting options under such plan to eligible employees of
the Company. Members of this Committee are not eligible to receive stock options
under the plan.
In general, salaries are set by this Committee at a level sufficient to
attract and retain qualified executives. In addition, stock options are granted
to provide incentive compensation to the named executive officers that is tied
to the enhancement of shareholder value as reflected by performance of the
Company's common stock. In determining the salary and stock options for the
named executive officers (other than the Chief Executive Officer), the
Compensation Committee receives from the Chief Executive Officer oral
performance appraisals regarding the other named executive officers, which in
each case are based on the CEO's subjective evaluation of such officer's
performance. Based on the CEO's report and the Compensation Committee's
subjective evaluation of that officer's performance, historical compensation
data for such named executive officer and its subjective evaluation of the
general financial condition of the Company, the Compensation Committee set the
1994 salary and stock option grant levels for the named executive officers.
As to the compensation of the Chief Executive Officer, as previously set
forth, the Company entered into a contract with Scotcrest for the services of
Mr. Robinson during April 1991. Pursuant to that contract, Mr. Robinson's
compensation for 1994 was based on a per diem rate of $1,500 per day, which rate
was identical to the rates charged by Scotcrest since April 1991. Mr. Robinson
does not participate in any of the Company's stock option or other employee
benefit plans.
The Compensation Committee is aware of Section 162(m) of the Internal
Revenue Code but believes that it has no application to the Company at the
present time based on the present levels of qualifying compensation paid to its
executive officers.
Charles M. Fullgraf Gilbert L. Wachsman
Joseph M. O'Donnell Erika Williams
-12-
<PAGE> 16
CORPORATE PERFORMANCE GRAPH
The following graph compares the yearly percentage change in the Company's
cumulative total shareholder return on its Common Shares with the CRSP (Center
for Research in Security Prices) Total Return Index for the Nasdaq Stock Market
(US Companies) and the CRSP Total Return Index for Nasdaq Stocks (SIC 3600
through 3699 -- Electronics and Electrical Equipment except Computer Equipment)
over the preceding five year period.
<TABLE>
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURNS
CINCINNATI MICROWAVE VS. MARKET INDICES
<CAPTION>
1989 1990 1991 1992 1993 1994
<S> <C> <C> <C> <C> <C> <C>
CNMW 100 14.3 19.0 41.3 106.3 48.2
NASDAQ 100 86.7 130.8 159.7 180.6 178.7
NASDAQ - Electronics 100 87.1 123.4 194.3 269.1 279.0
</TABLE>
Assumes $100 invested on December 31, 1989 in Cincinnati Microwave, Inc. Common
Shares, the CRSP Total Return Index for the Nasdaq Stock Market (US Companies)
and the CRSP Total Return Index for Nasdaq Stocks (SIC 3600 through 3699 --
Electronics and Electrical Equipment except Computer Equipment).
-13-
<PAGE> 17
OTHER BUSINESS
The Company's Board of Directors does not know of any other business which
will be presented for action by the shareholders at the meeting. However, if any
business other than that set forth in the Notice of the meeting should be
properly presented at the meeting, it is the intention of the members of the
proxy committee to vote according to their judgment of what is in the best
interests of the Company.
PROPOSALS FOR 1996 ANNUAL MEETING
Security holders desiring to submit any proposal for action at the Annual
Meeting of Shareholders to be held in 1996 must submit a complete copy of the
proposal in writing prior to February 12, 1996, in order that the proposal can
be considered for inclusion in the Company's proxy statement and form of proxy
relating to such annual meeting. Any such proposal should be addressed to:
Corporate Secretary, Cincinnati Microwave, Inc., One Microwave Plaza,
Cincinnati, Ohio 45249. In order to eliminate any uncertainty as to the date on
which a proposal is received by the Company, shareholders should submit their
proposals by certified mail, return receipt requested.
By Order of the Board of Directors
Walter P. Masavage, Secretary
Cincinnati, Ohio
June 21, 1995
-14-
<PAGE> 18
PROXY PROXY
CINCINNATI MICROWAVE, INC.
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints R. Gregory Blair, Elaine M. Bacon and
Neil Ganulin, and each of them, acting by a majority if more than one be
present, as proxies of the undersigned, each with full power of substitution,
to vote all the Common Shares of Cincinnati Microwave, Inc. which the
undersigned is entitled to vote at the Annual Meeting of Shareholders of
Cincinnati Microwave, Inc., to be held at Cincinnati Microwave, Inc, One
Microwave Plaza, Cincinnati, Ohio 45249, on Monday, July 24, 1995, at 9:30 A.M.
Eastern Daylight Time, and at any adjournment thereof, upon the matters listed
below and in accordance with their best judgment on such other matters properly
coming before the meeting. If the voting for directors is on a cumulative
basis, such proxies are directed to split the votes which the undersigned has
given them authority to vote among the nominees authorized hereby in accordance
with their best judgment.
THIS PROXY WILL BE VOTED AS DIRECTED OR, IF NO DIRECTION IS INDICATED,
WILL BE VOTED FOR THE ELECTION OF DIRECTORS NAMED BELOW AND FOR ALL OTHER
ITEMS. IF 2 IS MARKED "WITHHOLD AUTHORITY", THE PROXY HOLDERS WILL NOT VOTE
THE PROXY FOR THE ELECTION OF DIRECTORS.
1. Fixing number of directors to serve for the ensuing year at seven:
[ ] FOR [ ] AGAINST [ ] ABSTAIN
2. Election of the following nominees as directors (or substitute in the event
a nominee cannot serve):
[ ] FOR all nominees [ ] WITHHOLD AUTHORITY to vote
(except as withheld in for all nominees listed
the space provided) below
CHARLES M. FULLGRAF, JAMES L. JAEGER, JOHN W. NOLAND, JOSEPH M. O'DONNELL
JACQUES A. ROBINSON, GILBERT L. WACHSMAN, ERIKA WILLIAMS
(INSTRUCTION: To withhold authority to vote for any individual nominee, write
that nominee's name in the space provided below.)
________________________________________________________________________________
(Continued on Reverse)
- --------------------------------------------------------------------------------
3. Ratification of selection of Price Waterhouse LLP as independent auditors
for 1995.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
PLAN TO ATTEND THE MEETING
[ ] YES [ ] NO
IMPORTANT: Please date and
sign as name appears at left.
If shares are held jointly,
each shareholder named should
sign. Executors,
administrators, trustees, etc.,
should so indicate when
signing. If the signer is a
corporation, please sign full
corporate name by duly
authorized offiers.
NUMBER OF SHARES
Dated ____________________, 1995
________________________________
Signature
________________________________
Signature if held jointly
