SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
AND EXCHANGE ACT OF 1934
FILED BY THE REGISTRANT X
Check the appropriate box:
Preliminary Proxy Statement
Confidential, For Use of the Commission Only
X DEFINITIVE PROXY STATEMENT
Definitive Additional Materials
Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
CALIFORNIA AMPLIFIER, INC.
(Exact name of Registrant as specified in its Charter)
CALIFORNIA AMPLIFIER, INC.
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee:
X No fee required.
Fee computed on table below per Exchange Act Rules 14a-6(I)(1) 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 (1) (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>
CALIFORNIA AMPLIFIER, INC.
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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
to be held July 16, 1999
- ------------------------------------------------------------------------
To the Stockholders of CALIFORNIA AMPLIFIER, INC.:
The Annual Meeting of Stockholders of California Amplifier, Inc. will
be held at the Courtyard Marriott, 4994 Verdugo Way, Camarillo,
California 93012 on Friday, July 16, 1999 at 10:00 a.m. local time, for
the purpose of considering and acting upon the following proposals:
1. To elect five directors to hold office until the next Annual
Meeting of Stockholders.
2. To approve and ratify the 1999 Stock Option Plan.
3. To transact such other business as may properly come before the
meeting and any postponements or adjournments thereof.
The Board of Directors has fixed the close of business on May 17, 1999 as the
record date for the determination of stockholders entitled to notice of and to
vote at the meeting. A list of stockholders entitled to vote at the Annual
Meeting will be open to examination by any stockholder for any purposes related
to the Annual Meeting, during normal business hours, from July 6, 1999 until
July 16, 1999 at the Company's executive offices located at 460 Calle San Pablo,
Camarillo, California 93012.
By Order of the Board of Directors,
/s/ Michael R. Ferron
Corporate Secretary
Camarillo, California
June 15, 1999
STOCKHOLDERS ARE CORDIALLY INVITED TO ATTEND THE MEETING IN PERSON. WHETHER YOU
PLAN TO ATTEND THE MEETING, YOU ARE EARNESTLY REQUESTED TO SIGN, DATE AND RETURN
THE ENCLOSED PROXY TO MAKE SURE THAT YOUR SHARES ARE REPRESENTED AT THE MEETING.
STOCKHOLDERS MAY VOTE IN PERSON IF THEY ATTEND THE MEETING EVEN THOUGH THEY HAVE
EXECUTED AND RETURNED A PROXY.
<PAGE>
22
CALIFORNIA AMPLIFIER, INC.
Corporate Headquarters: Place of Meeting:
460 Calle San Pablo Courtyard Marriott
Camarillo, CA 93012 4994 Verdugo Way
Camarillo, CA 93012
Telephone: (805) 987-9000
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PROXY STATEMENT
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ANNUAL MEETING OF STOCKHOLDERS
July 16, 1999
Approximate date of mailing: June 15, 1999
This Proxy Statement is furnished in connection with the solicitation by the
Board of Directors of California Amplifier, Inc. (the "Company" or "California
Amplifier") of proxies for use at the Annual Meeting of Stockholders of
California Amplifier (the "Annual Meeting") to be held on Friday, July 16, 1999
at 10:00 a.m. local time or at any adjournment or postponement thereof.
VOTING RIGHTS
Stockholders of record of California Amplifier as of the close of business on
May 17, 1999 have the right to receive notice of and to vote at the Annual
Meeting. On May 17, 1999, California Amplifier had issued and outstanding
11,796,547 shares of Common Stock, par value $0.01 per share ("Common Stock"),
the only class of voting securities outstanding.
Each stockholder of record as of the record date will be entitled to one vote
for each share of Common Stock held as of the record date. The presence at the
Annual Meeting in person or by proxy of a majority of the shares of Common Stock
outstanding as of the record date will constitute a quorum for transacting
business. Abstentions and broker non-votes are counted for purposes of
determining the presence of a quorum for transaction of business. With regard to
election of directors, votes may be cast in favor or withheld; votes that are
withheld will be excluded entirely from the vote and will have no effect.
Abstentions may be specified on proposals other than the election of directors,
and will be counted as present for purposes of the item on which the abstention
is noted, and therefore counted in the tabulation of the votes cast on a
proposal with the effect of a negative vote. Under applicable Delaware law,
broker non-votes are not counted for purposes of determining the votes cast on a
proposal.
<PAGE>
PERSONS MAKING THE SOLICITATION
The Proxy is solicited on behalf of the Board of Directors of the Company. The
only solicitation materials to be sent to stockholders will be this Proxy
Statement and the accompanying Proxy. The Board of Directors does not intend to
use specially engaged employees or paid solicitors. The Board of Directors also
intends to solicit the Proxies held on behalf of stockholders by brokers,
dealers, banks and voting trustees, or their nominees. The Company will pay all
reasonable expenses by such holders for mailing the solicitation material to the
stockholders for whom they hold shares. All solicitation expenses are being paid
by the Company.
TERMS OF THE PROXY
The enclosed Proxy indicates the matters to be acted upon at the Annual Meeting
and provides a box to be marked to indicate the manner in which the
stockholder's shares are to be voted with respect to such matters. By
appropriately marking the boxes, a stockholder may specify, with respect to the
election of directors, whether the Proxy holder shall vote for or be without
authority to vote on any or all candidates. The Proxy also confers upon the
holders thereof discretionary voting authority with respect to such other
business as may properly come before the Annual Meeting.
Where a stockholder has appropriately directed how the Proxy is to be voted, the
shares will be voted in accordance with the stockholder's direction. In the
absence of instructions, shares represented by valid Proxies will be voted in
favor of the nominees for director and all proposals set forth in the Notice of
Meeting and this Proxy Statement. If any other matters are properly presented at
the Annual Meeting, the persons named in the Proxy will vote or refrain from
voting in accordance with their best judgment. A Proxy may be revoked at any
time prior to its exercise by giving written notice of the revocation thereof to
the Corporate Secretary of the Company or by filing a duly executed Proxy
bearing a later date. Stockholders may also vote in person if they attend the
Annual Meeting even though they have executed and returned a Proxy.
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information regarding the beneficial ownership of
the Company's Common Stock as of May 17, 1999 by (i) each person or entity who
is known by the Company to own beneficially more than 5% of the Company's Common
Stock, (ii) each director and nominee for director, (iii) each executive officer
appearing in the Summary Compensation Table appearing elsewhere in this Proxy
Statement and (iv) all directors and executive officers as a group. The Company
knows of no agreements among its stockholders which relate to voting or
investment power over its Common Stock:
Name of Shares
Beneficial Owner (1) : Beneficially Owned (2): Percent (3):
- -------------------------------------------------------------------------------
Ira Coron, Chairman
of the Board of Directors 318,000 2.5%
Fred Sturm, Chief Executive
Officer, President, and Director 61,000 *
Philip Cox, Vice President,
Wireless Products 23,750 *
Michael R. Ferron, Vice President,
Finance, Chief Financial Officer
and Corporate Secretary 166,250 1.3%
Robert Hannah, Vice President,
Satellite Products 62,500 *
Kris Kelkar, Vice President,
Voice and Data Products 130,850 1.0%
Arthur H. Hausman, Director 53,210 *
William E. McKenna, Director 204,300 1.6%
Thomas L. Ringer, Director 27,000 *
All directors and executive officers
as a group (nine persons) 1,068,110 8.5%
Quaker Capital Management Co. (4) 953,000 7.5%
* Less than 1.0% ownership
(1)The address of each Messrs. Coron, Sturm, Cox, Ferron, Hannah,
Kelkar, Hausman, McKenna, and Ringer is 460 Calle San Pablo,
Camarillo, California 93012.
<PAGE>
(2)Includes shares purchasable upon exercise of exercisable stock options as of
May 17, 1999 or within 60 days thereafter, but excludes shares purchasable
upon exercise of stock options which are not exercisable as of May 17, 1999
or within 60 days thereafter:
Exercisable Unexercisable
-----------------------------
Ira Coron 263,000 ---
Fred Sturm 37,500 162,500
Philip Cox 23,750 61,250
Michael R. Ferron 166,250 53,750
Robert Hannah 61,250 53,750
Kris Kelkar 128,750 66,250
Arthur H Hausman 40,000 8,000
William E. McKenna 60,000 8,000
Thomas L. Ringer 16,000 8,000
(3)For the purposes of determining the percentage of outstanding Common Stock
held by the persons set forth in the table, the number of shares is divided
by the sum of the number of outstanding shares of the Company's Common Stock
on May 17, 1999 (11,796,547 shares), plus the number of shares of Common
Stock subject to options exercisable currently or within 60 days of May 17,
1999 by such persons.
(4)This information is based solely on the Schedule 13G which was filed with
the Securities and Exchange Commission by such entity which states that these
shares were beneficially owned as of February 16, 1999.
<PAGE>
PROPOSAL No. 1
ELECTION OF DIRECTORS
A board of five directors will be elected at the Annual Meeting. It is intended
that each Proxy, unless otherwise specified, will be voted for the election to
the Board of Directors of each of the five nominees set forth below. Directors
shall be elected by a plurality of the votes of shares present in person or
represented by proxy at the meeting. The term of office of each person elected
as director will continue until the next Annual Meeting of Stockholders, or
until his successor has been elected and qualified.
In the event that any of the nominees for directors listed below should become
unavailable for election for any currently unforeseen reason, the persons named
in the accompanying Proxy have the right to use their discretion to vote for
such other person as may be determined by the holders of such proxies. To the
best of the Company's knowledge, all nominees are and will be available to
serve.
The following table sets forth the name and age of each nominee for director,
the calendar year each was first elected as a director and the positions each
currently holds with the Company:
Capacities in Director
Name Age Which Served Since
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Ira Coron 70 Chairman of the Board
of Directors 1994
Fred Sturm 41 Chief Executive Officer,
President, and Director 1997
Arthur H. Hausman 75 Director 1987
William E. McKenna 79 Director 1983
Thomas L. Ringer 67 Director 1996
Ira Coron has been Chairman of the Board for California Amplifier, Inc. since
March of 1994, and in addition was the Chief Executive Officer until 1997 but
remained an executive officer of the Company until February 1999. From 1989 to
1994 he was an independent management consultant to several companies and
venture capital firms. He retired from TRW, Inc., after serving in numerous
senior management positions from June 1967 to July 1989 among which was Vice
President and General Manager of TRW's Electronic Components Group. He also
serves on the Board of Directors of Made 2 Manage Systems, Inc., CMC Industries,
Inc., and is a member of the Executive Committee of the Wireless Communications
Association. Mr. Coron is a graduate of the United States Military Academy with
a Bachelor of Science in Engineering.
Fred M. Sturm was appointed Chief Executive Officer, President and Director in
August 1997. Prior to joining the Company, from 1990 to 1997, Mr. Sturm was
President of Chloride Power Systems (USA), and Managing Director of Chloride
Safety, Security, and Power Conversion (UK), both of which are part of Chloride
Group, PLC (LSE: CHLD). From 1979 to 1990, he held a variety of general
management positions with M/A-Com and TRW Electronics, which served RF and
microwave markets.
<PAGE>
Arthur H. Hausman has been a director of the Company since 1987. Mr. Hausman is
Chairman Emeritus of the Board of Ampex Corporation. He served as Chairman of
the Board of Directors and Chief Executive Officer of Ampex, having been with
Ampex for 27 years until his retirement in 1988. He currently serves as a
director of Drexler Technology Corporation, California Microwave, Inc., and
director emeritus of TCI, Inc. He was appointed by President Reagan to the
President's Export Council, to the Council's Executive Committee and to the
Chairmanship of the Export Administration Subordinate Committee of the Council
for the period 1985 to 1989.
William E. McKenna has been a director of the Company since October
1983. Since December 1977, Mr. McKenna has been general partner of MCK
Investment Company, a private investment company. Mr. McKenna was
Chairman of the Board of Directors of Technicolor, Inc. from 1970 to
1976 and was formerly Chairman of the Board of Directors and Chief
Executive Officer of Hunt Foods & Industries, Inc. and its successor,
Norton Simon, Inc. From 1960 to 1967, Mr. McKenna was associated with
Litton Industries, Inc. as a Director and in various executive
capacities. He is currently a director of Safeguard Health, Inc.,
Midway Games, Inc., Drexler Technology Company and WMS Industries, Inc.
Thomas L. Ringer has been a director of the Company since August 1996. Since
1990, Mr. Ringer has been actively involved as a member of the boards of
directors for various companies. Mr. Ringer is currently Chairman of Wedbush
Morgan Securities, Inc., Chairman of M.S. Aerospace, Inc., Chairman of Document
Sciences Corporation, Chairman of Aquatec Water Systems, and Chairman of the
Center for Innovation and Entrepreneurship. Prior to 1990, Mr. Ringer served as
Chairman, President and Chief Executive Officer of Recognition Equipment, Inc.,
President and Chief Executive Officer of Fujitsu Systems of America, Inc., and
President and Chief Executive Officer of Computer Machinery Corporation.
COMMITTEES OF THE BOARD
The Board of Directors has delegated certain of its authority to two
committees: The Audit Committee and the Compensation Committee. The
Audit Committee is composed of Messrs. McKenna and Ringer, with Mr.
McKenna serving as Chairman. The Compensation Committee is composed of
Messrs. Hausman and McKenna with Mr. Hausman serving as Chairman. No
member of either committee is a former or current officer or employee
of the Company.
The primary function of the Audit Committee is to review and approve the scope
of audit procedures performed by the Company's independent auditors, to review
the audit reports rendered by the Company's independent auditors, to monitor the
internal control environment within the Company, and to approve the audit fee
and other services charged by the independent auditors. The Audit Committee
reports to the Board of Directors with respect to such matters and makes
recommendations with respect to its findings.
The primary function of the Compensation Committee is to monitor the performance
and compensation of executive officers and other key employees, and to
administer the Company's Key Employee Stock Option Plan. The Compensation
Committee reports to the Board of Directors and makes recommendations to the
Board of Directors for compensation, incentive and discretionary bonuses, and
stock option grants.
<PAGE>
BOARD OF DIRECTOR AND COMMITTEE ATTENDANCE
In fiscal year 1999, the Board of Directors held nine meetings, the Compensation
Committee held six meetings, and the Audit Committee held two meetings. All
directors attended more than 75% of the aggregate of board and committee
meetings held during fiscal year 1999, or which were held while such director
held office.
COMPENSATION OF DIRECTORS
Each non-employee director received a monthly fee of $1,250 for serving on the
Board, plus out-of-pocket expenses for attending meetings. In addition, each
non-employee director receives an automatic grant of 8,000 non-qualified stock
options each year under the terms of the Company's 1989 Stock Option Plan which
expired in May 1999, and the Company's 1999 Stock Option Plan which is subject
to stockholder approval at the 1999 Annual Meeting of Stockholders (see Proposal
2 elsewhere herein). Directors who are also executive officers of the Company
receive no additional compensation for their services as director.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR"
ALL FIVE NOMINEES LISTED ABOVE.
<PAGE>
PROPOSAL No. 2
APPROVAL OF 1999 STOCK OPTION PLAN
INTRODUCTION
At the Annual Meeting, stockholders will be asked to approve the Company's 1999
Stock Option Plan (the "New Plan"), which was adopted by the Board of Directors
of the Company on June 8, 1999, subject to approval by the Company's
stockholders. The New Plan is intended to replace the Company's 1989 Key
Employee Stock Option Plan (the "Old Plan"), which expired on May 4, 1999.
OVERVIEW
As of February 27, 1999, under the Old Plan there were 2,017,775 options
outstanding at exercise prices ranging from $.69 to $26.97. The weighted average
exercise price for the outstanding options was $3.88. There were 175,225 options
available for future grant. As of May 17, 1999 there were 2,174,650 options
outstanding at exercise prices ranging from $.69 to $26.97. The weighted average
exercise price was $3.76. There were no options available for future grant since
the Old Plan expired on May 4, 1999.
Under the New Plan the aggregate number of options available for grant cannot
exceed the lesser of 500,000 or 4% of the total number of shares of the
Company's Common Stock (the "Shares") outstanding; provided that, in any event
the sum of the number of Shares subject to options outstanding under the Old
Plan and the New Plan plus the number of Shares available for grant under the
New Plan shall not exceed 22% of the total number of Shares. The sum of options
outstanding and options available for future grant as a percentage of total
Shares outstanding as of each fiscal year end was 17.1% in fiscal 1995, 14.4% in
fiscal 1996, 19.6% in fiscal 1997, 18.7% in fiscal 1998 and 18.6% in fiscal
1999. If the New Plan is approved by the stockholders, the initial options
available for grant would be 420,590 because of the application of the 22%
limitations described above.
SUMMARY OF THE NEW PLAN
The following is a summary of the main features of the New Plan. Capitalized
terms used herein and not otherwise defined herein shall have the meaning set
forth in the New Plan.
PURPOSE
The New Plan is designed to enable the Company to attract, retain and motivate
its employees, directors and consultants, and to further align their interests
with those of the stockholders of the Company, by providing for or increasing
the proprietary interests of such employees, directors and consultants in the
Company.
ADMINISTRATION
The New Plan will be administered by one or more committees of the Board of
Directors of the Company (any such committee, the "Committee"), although the
Board of Directors will administer the New Plan if no persons are designated by
the Board of Directors to serve on the Committee.
Subject to the express provisions of the New Plan, the Committee has broad
authority to administer and interpret the New Plan, including, without
limitation, authority to adopt, amend and rescind rules and regulations relating
to the New Plan, to determine who is eligible to participate in the New Plan and
to which of such persons, and when, Awards are granted under the New Plan, to
grant Awards and determine the terms and conditions thereof, including the
number of shares of Common Stock subject to Awards and the circumstances under
which Awards become exercisable or vested or are forfeited or expire, to cancel
an Award and grant a new Award to such holder in lieu thereof, interpret and
construe any terms and conditions of, and define any terms used in, the New
Plan, any rules and regulations under the New Plan and/or any Award granted
under the New Plan and determine the terms and conditions of the Nonemployee
Director Options.
ELIGIBILITY
Any person who is an employee, director or consultant of the Company or any of
its subsidiaries or affiliates (an "Eligible Person") is eligible to be
considered for the grant of Awards under the New Plan. Any director of the
Company who is not an employee (a "Nonemployee Director") shall automatically
receive Nonemployee Director Options pursuant to the New Plan, but shall not
otherwise participate in the New Plan. The Committee has not yet determined how
many individuals are ultimately to participate in the New Plan. While it is
generally expected that executives and senior middle managers will be eligible
to participate, Awards may from time to time be granted to employees who are not
in these groups but who have otherwise distinguished themselves for their
contributions to the Company.
STOCK SUBJECT TO THE NEW PLAN
The aggregate number of Shares that can be issued under the New Plan may not
exceed 500,000; provided, however, that on the first business day of each of the
Company's fiscal years during which the New Plan is in effect such maximum
number shall be reset to a number equal to four percent (4%) of the total number
of Shares issued and outstanding on each of such dates, provided further that
the aggregate number of options available for grant cannot exceed the lesser of
500,000 or 4% of the total number of Shares outstanding; provided that, in any
event the sum of the number of Shares subject to options outstanding under the
Old Plan and the New Plan plus the number of Shares available for grant under
the New Plan shall not exceed 22% of the total number of Shares. The aggregate
number of Shares subject to Incentive Stock Options that may be granted under
the New Plan may not exceed 500,000. The aggregate number of Shares subject to
Awards granted under the New Plan during any calendar year to any one Eligible
Person (including the number of Shares involved in Awards having a value derived
from the value of Shares) may not exceed 250,000.
The number of Shares subject to the New Plan and to outstanding Awards under the
New Plan will be appropriately adjusted by the Committee if the Common Stock is
affected through a reorganization, merger, consolidation, recapitalization,
restructuring, reclassification, dividend (other than a regular, quarterly cash
dividend) or other distribution, stock split, reverse stock split, spin-off or
the like, or sale of substantially all of the Company's property and assets. The
aggregate number of Shares issued under this Plan at any time shall equal only
the number of shares actually issued upon exercise or settlement of an Award and
not settled in cash or returned to the Company upon forfeiture of an Award or in
payment or satisfaction of the purchase price, exercise price or tax withholding
obligation of an Award.
AWARDS
General
The Committee, on behalf of the Company, is authorized under the New Plan to
enter into any type of arrangement with an Eligible Person for the grant of
stock options that is not inconsistent with the provisions of the New Plan and
that, by its terms, involves or might involve the issuance of shares of no par
value Common Stock of the Company. The entering into of any such arrangement is
referred to herein as the "grant" of an "Award."
<PAGE>
Terms and Conditions
The Committee, in its sole and absolute discretion, will determine all of the
terms and conditions of each Award granted under the New Plan, which terms and
conditions may (but need not) include, among other things:
(i) provisions permitting the Committee to allow or require the recipient
of such Award, including any Eligible Person who is a director or
officer of the Company, or permitting any such recipient the right, to
pay the purchase price of the Shares or other property issuable pursuant
to such Award, and/or such recipient's tax withholding obligation with
respect to such issuance, in whole or in part, by any one or more of the
following means: (1) the delivery of cash; (2) the delivery of other
property deemed acceptable by the Committee; (3) the delivery of
previously owned shares of capital stock of the Company (including
"pyramiding") or other property; (4) a reduction in the amount of Shares
or other property otherwise issuable pursuant to such Award; or (5) the
delivery of a promissory note of the Eligible Person or of a third
party, the terms and conditions of which shall be determined by the
Committee;
(ii) provisions specifying the exercise or settlement price for any
option;
(iii) provisions relating to the exercisability and/or vesting of Awards,
lapse and non-lapse restrictions upon the Shares obtained or obtainable
under Awards or under the New Plan and the termination, expiration
and/or forfeiture of Awards;
(iv) provisions conditioning or accelerating the grant of an Award or the
receipt of benefits pursuant to such Award, either automatically or in
the discretion of the Committee, upon the occurrence of specified
events, including, without limitation, the achievement of performance
goals, the exercise or settlement of a previous Award, the satisfaction
of an event or condition within the control of the recipient of the
Award or within the control of others, a change of control of the
Company, an acquisition of a specified percentage of the voting power of
the Company, the dissolution or liquidation of the Company, a sale of
substantially all of the property and assets of the Company or;
(v) provisions required in order for such Award to qualify (A) as an
incentive stock option under Section 422 of the Code (an "Incentive
Stock Option"), and/or (B) for an exemption from Section 16 of the
Exchange Act; and/or
(vi) provisions restricting the transferability of Awards or Shares
issued under Awards.
Options
Unless otherwise provided by the Committee in the written agreement evidencing
an Award, the terms of any stock option granted under the New Plan (other than
Nonemployee Director Options that are automatically granted under Section 10
hereof) shall provide:
(i) that the exercise price thereof shall not be less than 100% of the fair
market value of a share of Common Stock on the date the option is
granted;
(ii) that the term of such option shall be ten years from the date
of grant;
(iii) that if the Eligible Person to whom such option was granted (the
"Participant") ceases to be an Eligible Person for any reason other than
death or disability, the option shall not thereafter become exercisable
to an extent greater than it could have been exercised on the date the
Participant's status as an Eligible Person ceased, and that on the death
or disability of a Participant the option shall become fully
exercisable;
(iv) that the option shall expire ninety (90) days after the Participant
ceases to be an Eligible Person for any reason other than death,
disability or retirement in accordance with the retirement policies of
the Company, and shall expire twelve (12) months after the Participant's
death, disability or retirement in accordance with the retirement
policies of the Company; and
(v) that the option shall not be assignable or otherwise transferable
except by will or by the laws of descent and distribution or pursuant to
a domestic relations order, and during the lifetime of the Participant,
the option shall be exercisable only by the Participant or the
transferee under a domestic relations order.
NONEMPLOYEE DIRECTOR OPTIONS
Each year, on the first business day following the date of the annual meeting of
stockholders of the Company, or any adjournment thereof, at which directors of
the Company are elected (the "Date of Grant"), each Nonemployee Director shall
automatically be granted an option (a "Nonemployee Director Option") to purchase
8,000 Shares. If a person shall become a Nonemployee Director on any day after a
Date of Grant and prior to the annual meeting of the stockholders of the Company
immediately following such Date of Grant, and Nonemployee Director Options may
be granted under the New Plan on such day, such person shall automatically be
granted a Nonemployee Director Option to purchase 8,000 Shares.
Each Nonemployee Director Option granted under this Plan shall become
exercisable one year from the Date of Grant of such Nonemployee Director Option;
provided, however, that such Nonemployee Director Option shall become fully
exercisable on the date upon which the optionee shall cease to be a Nonemployee
Director as a result of normal retirement, death or total disability.
Each Nonemployee Director Option granted under this Plan shall expire upon the
first to occur of the following:
(i) Twelve months after the date upon which the optionee shall cease to be
a director of the Company (a) as a result of normal retirement, death or
total disability, or (b) in accordance with the retirement policies of
the Company.
(ii) The 90th day after the date upon which the optionee shall cease to be a
Nonemployee Director for any reason other than the reason specified in
Section 6.E.1. above.
(iii) The tenth anniversary of the Date of Grant of such Nonemployee Director
Option.
Each Nonemployee Director Option shall have an exercise price equal to the
greater of (i) the aggregate fair market value on the Date of Grant of such
option of the Shares subject thereto or (ii) the aggregate par value of such
Shares on such date.
AMENDMENT AND TERMINATION OF NEW PLAN
The Board may amend, alter or discontinue the Plan or any agreement evidencing
an Award made under the Plan, but no amendment or alteration shall be made which
would impair the rights of any Award holder, without such holder's consent,
under any Award theretofore granted, provided that no such consent shall be
required if the Committee determines in its sole discretion and prior to the
date of any change of control (as defined, if applicable, in the agreement
evidencing such Award) that such amendment or alteration is not reasonably
likely to significantly diminish the benefits provided under such Award, or that
any such diminishment has been adequately compensated. The Committee may
determine whether or not any amendment to a previously granted Award is, for
purposes of the Plan, deemed to be a cancellation and new grant of the Award.
Notwithstanding the foregoing, if an amendment to the Plan would affect the
ability of Awards granted under the Plan to comply with any law, rule or
regulation (including any rule of a self-regulatory organization), and if the
Committee determines that it is necessary or desirable for any Awards
theretofore or thereafter granted that are intended to comply with any such
provision to so comply, the amendment shall be approved by the Company's
stockholders to the extent required for such Awards to continue to comply with
such law, rule or regulation.
DURATION OF NEW PLAN
No Awards shall be made under the New Plan after the tenth anniversary of the
date upon which the New Plan was approved by the Board of Directors of the
Company (the "Effective Date"). Although Shares may be issued after the tenth
anniversary of the Effective Date pursuant to Awards made prior to such date, no
Shares shall be issued under the New Plan after the twentieth anniversary of the
Effective Date.
FEDERAL INCOME TAX CONSEQUENCES
The following is a brief description of the federal income tax treatment that
will generally apply to awards made under the New Plan, based on federal income
tax laws in effect on the date hereof. The exact federal income tax treatment of
awards will depend on the specific nature of any such award. The following
summary is not intended to be exhaustive, does not address state, municipal or
foreign tax laws, and does not address the circumstances of special classes or
individual circumstances of option holders, including, without limitation,
foreign persons.
ACCORDINGLY, EACH RECIPIENT OF OPTIONS UNDER THE NEW PLAN SHOULD CONSULT A TAX
ADVISER REGARDING THE TAX CONSEQUENCES OF THE GRANT OR EXERCISE OF SUCH OPTIONS
AND OF THE DISPOSITION OF ANY STOCK ACQUIRED UPON EXERCISE OF SUCH OPTIONS IN
LIGHT OF THE RECIPIENTS OWN SITUATION, INCLUDING THE APPLICATION OF ANY FEDERAL,
STATE, LOCAL OR FOREIGN INCOME AND OTHER TAX LAWS.
Tax Treatment of Incentive Stock Options
Pursuant to the New Plan, Eligible Persons who are employees of the Company may
be granted options which are intended to qualify as incentive stock options
("ISOs") under the provisions of Section 422 of the Code. Generally, the
optionee is not taxed, and the Company is not entitled to a deduction, on the
grant or exercise of an ISO. However, if the optionee sells the shares acquired
upon the exercise of an ISO at any time within (i) one year after the date of
exercise of the ISO or (ii) two years after the date of grant of the ISO, then
the optionee will recognize ordinary income in an amount equal to the excess, if
any, of the lesser of the sale price or the fair market value on the date of
exercise over the exercise price of the ISO. The Company receives no tax
deduction on the grant or exercise of an ISO, but is entitled to a tax deduction
if the option holder recognizes ordinary compensation income on account of a
premature disposition of ISO stock in the same amount and at the same time as
the option holder's recognition of income. The Plan provides that the maximum
number of shares of Company Common Stock that may be issued pursuant to ISOs, in
the aggregate, is 500,000 shares.
Unless an option holder disposes of stock received on exercise of an ISO within
the year in which exercise occurred, the excess of the value of the stock at
exercise over the option price will increase the option holder's alternative
minimum taxable income ("AMTI"). After a deductible, AMTI is subject to tax
rates ranging from 26 to 28%. The tax on AMTI is payable only to the extent that
such tax exceeds the option holder's "regular" federal income tax liability, and
any portion of the excess attributable to the exercise of an ISO is generally
creditable against the option holder's regular federal income tax liability for
future years.
Tax Treatment of Non-Qualified Stock Options
The grant of an option or other similar right to acquire stock that does not
qualify for treatment as an ISO (a "non-qualified stock option") is generally
not a taxable event for the optionee. Upon exercise of a non-qualified stock
option, the optionee will generally recognize ordinary income in an amount equal
to the excess of the fair market value of the stock acquired upon exercise
(determined as of the date of exercise) over the exercise price of such option,
and the Company will be entitled to a deduction equal to such amount.
If the stock received upon the exercise of an option is subject to a
"substantial risk of forfeiture," as defined in Section 83 of the Code, then the
timing of taxation of the recipient and of the deduction to the Company is
delayed until the date that the stock is not subject to the forfeiture
restriction. The New Plan permits the Committee to impose repurchase rights on
stock acquired upon exercise of options that would constitute such a
"substantial risk of forfeiture." If such repurchase rights are imposed, the
option holder would recognize taxable income and incur a tax liability, and the
optionee's holding period for tax purposes would commence, in the year or years
that the substantial risk of forfeiture terminates with respect to the stock.
Alternatively, an option holder holding a non-qualified stock option may elect,
within thirty days after the option is exercised, in accordance with Section
83(b), to be taxed on the difference between the option exercise price and the
fair market value of the stock on the date of exercise, even though the stock
acquired is subject to a substantial risk of forfeiture. If the option holder
makes this election, subsequent changes in the value of the Common Stock at the
time the forfeiture provisions lapse will generally result in capital gains or
losses, and will not result in ordinary compensation income to the option
holder.
Special Rules Applicable to Insiders
Special rules will apply, however, if the optionee is subject to Section 16 of
the Exchange Act and during any period of time (the "Section 16(b) Period") a
sale of the stock acquired upon exercise of the option could subject such
optionee to suit under Section 16. In such case, the optionee will not recognize
ordinary income and the Company will not be entitled to a deduction until the
expiration of the Section 16(b) Period. Upon such expiration, the optionee will
recognize ordinary income, and the Company will be entitled to a deduction,
equal to the excess of the fair market value of the stock (determined as of the
expiration of the Section 16(b) Period) over the option exercise price. As
described above, such an optionee may elect under Code Section 83(b) to
recognize ordinary income on the date of exercise, in which case the Company
would be entitled to a deduction at that time equal to the amount of the
ordinary income recognized.
Miscellaneous Issues
The terms of the agreements pursuant to which specific awards are made to
Eligible Persons under the New Plan may provide for accelerated vesting or
payment of an award in connection with a change in ownership or control of the
Company. In that event and depending upon the individual circumstances of the
recipient employee, certain amounts with respect to such awards may constitute
"excess parachute payments" under the golden parachute provisions of the Code.
Pursuant to such provisions, an employee will be subject to a 20% excise tax on
any "excess parachute payment" and the Company will be denied any deduction with
respect to such excess parachute payment.
Section 162(m) of the Code precludes a publicly traded corporation from taking a
deduction for compensation paid to certain highly paid executives for amounts in
excess of $1 million. Options, stock grants and other payments are excluded from
this rule if they qualify as performance-based compensation. Although the New
Plan has been designed to allow the Company to do so, the Company does not
presently intend to administer the New Plan so as to qualify grants thereunder
as performance-based compensation.
INITIAL GRANTS
The Committee has full discretion to determine the timing and recipients of any
stock option grants under the New Plan and the number of shares subject to any
such options that may be granted under the New Plan, subject to an annual
limitation on the total number of options that may be granted to any optionee.
Therefore, the benefits and amounts that will be received by each of the
executive officers, the executive officers as a group, the directors, the
non-employee directors and all other key employees under the New Plan are not
presently determinable.
The affirmative vote of a majority of the shares of Common Stock present at the
Annual Meeting and entitled to vote on the subject matter, whether in person or
by proxy, will be required for the approval of the New Plan.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE IN FAVOR OF THE
NEW PLAN. PROXIES SOLICITED BY THE BOARD OF DIRECTORS WILL BE VOTED
FOR THIS PROPOSAL UNLESS STOCKHOLDERS SPECIFY OTHERWISE IN THEIR
PROXIES.
<PAGE>
REPORT OF THE COMPENSATION COMMITTEE
As members of the Compensation Committee it is our duty to monitor the
performance and compensation of executive officers and other key employees, to
review compensation plans, including bonuses, and to administer the Company's
stock option plans. The Company's executive compensation program is designed to
attract, motivate and retain the executive talent needed to enhance stockholder
value in a competitive environment. The fundamental philosophy is to relate the
amount of compensation "at risk" for an executive directly to his or her
contribution to the Company's success in achieving superior performance
objectives and to the overall success of the Company. The Company's executive
and key employee compensation program consists of a base salary component, a
component providing the potential for an annual bonus based on overall Company
performance, and a component providing the opportunity to earn stock options
that focus the executives on building stockholder value through meeting
longer-term financial and strategic goals.
BASE SALARY
Base salary is designed to be consistent with comparable electronic
manufacturing companies. For this purpose, this Committee utilizes the wage and
salary surveys of the American Electronic Association. The Company generally
attempts to place its executives' base salaries at the top 75% of companies of
similar size in these surveys. In addition to the surveys, annual performance
reviews and the Company's financial performance are determining factors for an
individual's salary increase.
THE EXECUTIVE AND KEY EMPLOYEE BONUS PROGRAM
The Executive and Key Employee Bonus Program is designed to reward Company
executives and key employees for their contributions to corporate objectives.
Each eligible employee's award is expressed as a percentage of the participant's
base salary, which is determined by the same surveys used to establish base
salaries, as described above. The Compensation Committee re-evaluates the
Company's operating plan each fiscal year to ensure plan goals and proposed
bonuses are properly correlated.
During each fiscal year a bonus pool is generated as the Company achieves the
operating plan which was established at the beginning of the fiscal year.
Bonuses from this pool are paid to key employees based upon the Company's
achievement of specific performance objectives relating to their respective
functional areas. Among the objectives are sales, gross margins, manufacturing
productivity, expense levels, operating profits, financial ratios, and other
quantifiable objectives consistent with the Company's growth objectives. Target
bonuses range from 10% to 30% of an employee's base salary depending upon his or
her influence on achieving the established performance objectives. Actual
bonuses will vary depending upon the Company achieving certain income levels and
the employee's contribution to the achievement of his or her performance
objectives. The employee percentages will also be adjusted upward or downward as
the Company's actual income before tax exceeds or falls short of plan earnings.
In fiscal year 1999, no executives or members of senior management were awarded
any bonuses because the actual income before tax was below the plan earnings for
the year.
The Compensation Committee may recommend to the Board of Directors for approval
the awarding of discretionary bonuses to certain employees even though the
profit objectives established under the bonus plan were not achieved. No
discretionary bonus awards were awarded to executive officers for fiscal year
1999.
<PAGE>
STOCK OPTION PLAN
The Company's 1989 Key Employee Stock Option Plan expired on May 4, 1999. The
Board of Directors is recommending that the Company's 1999 Stock Option Plan
(the "New Plan") be approved by the stockholders at its annual meeting on July
16, 1999. The New Plan authorizes the granting of stock options to officers and
key employees, and is designed to:
(i) Encourage and create ownership of the Company's Common Stock.
(ii) Link the officers' or key employees' financial success to that of
the stockholders.
(iii) Focus attention on building stockholder value by balancing short-term
and long-term decision making, and meeting longer-term financial and
strategic goals.
(iv) Ensure broad-based participation of key employees in achieving Company
sales, profit, and financial objectives.
Option grants are based upon various subjective factors for, among other things,
hiring of employees, job responsibility and authority, performance, and prior
grants.
The Committee granted only non-qualified stock options to employees during
fiscal year 1999.
COMPENSATION OF CHIEF EXECUTIVE OFFICER
The Chief Executive base salary, incentive bonus, and stock option grants are
based upon the top 75% of salaries for Chief Executive Officers of companies of
similar size as the Company as reported in the surveys referred to above.
Mr. Sturm's salary for fiscal year 1999 was $220,000, and no bonus was paid to
Mr. Sturm with respect to fiscal year 1999 because the Company's profit
objectives were not achieved. In fiscal year 1999 Mr. Sturm was granted options
to purchase 30,000 shares of Common Stock under the 1989 Key Employee Stock
Option Plan.
COMPENSATION COMMITTEE
Arthur H. Hausman
William E. McKenna
<PAGE>
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth the annual and long-term compensation for
services in all capacities to the Company for each of the three fiscal years in
the period ended February 27, 1999 of (i) the Chief Executive Officer and (ii)
the four most highly compensated executive officers:
Long Term
Compensation
Awards
-----------
Stock
Name and Fiscal Annual Compensation Option All Other
Principal Position Year Salary Bonus Grants(1) Compensation(2)
- --------------------------------------------------------------------------------
Fred M. Sturm 1999 $220,000 $ 0 30,000 $ 5,298
Chief Executive 1998 $112,405 $ 0 120,000 $92,408
Officer and President
Philip Cox 1999 $150,000 $ 0 --- $ 6,625
Vice President, 1998 $150,691 $ 0 50,000 $ 5,523
Wireless Products 1997 $100,770 $ 0 15,000 $16,278
Michael R. Ferron 1999 $148,000 $ 0 25,000 $ 4,942
Vice President, Finance, 1998 $148,502 $ 0 30,000 $ 4,925
Chief Financial Officer 1997 $148,000 $ 0 10,000 $ 5,608
and Corporate Secretary
Robert Hannah 1999 $140,000 $ 0 --- $ 4,480
Vice President, 1998 $130,078 $ 0 55,000 $ 3,960
Satellite Products 1997 $120,000 $10,000 --- $ 3,824
Kris Kelkar 1999 $140,000 $ 0 --- $ 4,469
Vice President, Voice 1998 $131,849 $ 0 45,000 $ 4,107
and Data Products 1997 $144,000 $ 0 10,000 $ 4,666
(1) Mr. Cox, Mr. Kelkar and Mr. Hannah were granted options as part of the
fiscal year 1998 annual grant in March 1997, and also in January 1998 when
the Company was reorganized into three business units as each was
appointed to direct one of the business units. As a result, the number of
option grants reflected for each of the individuals in fiscal year 1998
relates to two option grants. Since each received a grant in January 1998,
they did not receive a fiscal year 1999 grant in March 1998 as did the
other executive officers.
(2) Includes Company matching of employee contributions pursuant to the
Company's 401-K plan, and premiums paid by the Company for additional life
insurance benefits and amounts paid to individuals in connection with
joining California Amplifier. Mr. Sturm was paid $91,363 in fiscal year
1998 relating to expenses for his relocation from England, and bonuses
forfeited at his prior employment. Mr. Cox was reimbursed $13,000 in
fiscal year 1997 relating to relocation expenses.
<PAGE>
OPTIONS GRANT TABLE
The following table sets forth information on grants of stock options pursuant
to the Company's 1989 Key Employee Stock Option Plan during the year ended
February 27, 1999 to the executive officers included in the Summary Compensation
Table:
% of Total Exercise
Options Granted or Base
Options to Employees in Price Expiration
Name Granted Fiscal Year ($/share) Date (1)
- ------------------------------------------------------------------------------
Fred Sturm 30,000 7.05% $2.76 3/10/08
Michael Ferron 25,000 5.8% $2.76 3/10/08
Potential Realizable Value
At Assumed Annual Rate
of Stock Price Appreciation
for Option Term (2)
Name 5% 10%
- ------------------------------------------------------------------------------
Fred Sturm $52,072 $131,962
Michael Ferron $43,394 $109,968
(1)Options become exercisable at the expiration of one year from the date of
grant of the option at a rate of 25% per year, and have an option term of ten
years.
(2)The potential realizable value is based upon the option term of ten years. It
is calculated assuming both a 5% and a 10% annual increase in the stock value
from the date and price of the option grant, and that the option is exercised
on the last day of the option period (expiration date). There can be no
assurances, however, that such future stock annual appreciation percentage
values can be achieved.
<PAGE>
OPTION EXERCISES AND FISCAL YEAR-END VALUE TABLE
The following table sets forth information as to options exercised during the
year ended February 27, 1999 and options held at February 27, 1999, by executive
officers named in the Summary Compensation Table as set forth below:
Number Number of Securities
of Shares Underlying Unexercised
Acquired on Value Options Held
Name Exercise Realized Exercisable (1) Unexercisable
- -------------------------------------------------------------------------------
Fred Sturm --- --- 37,500 162,500
Philip Cox --- --- 23,750 61,250
Michael R. Ferron --- --- 166,250 53,750
Robert Hannah --- --- 61,250 53,750
Kris Kelkar --- --- 128,750 66,250
Value of Unexercised In-The-Money Options (2)
Name Exercisable Unexercisable
- -------------------------------------------------------------------------------
Fred Sturm --- ---
Philip Cox --- ---
Michael R. Ferron $77,225 ---
Robert Hannah --- ---
Kris Kelkar --- ---
(1)Exercisable options include options which are considered exercisable for the
"Security Ownership of Certain Beneficial Owners and Management" table on
page 3 of this Proxy Statement.
(2)The value of in-the-money options is computed by multiplying the number of
in-the-money options by the difference between the option exercise prices and
closing stock price at February 27, 1999 of $1.81. In-the-money options are
options whose exercise price is less than $1.81 per share.
<PAGE>
STOCK PERFORMANCE GRAPH
The following graph and table compares the Company's stock performance to three
stock indexes over a five-year period assuming a $100 investment was made on
February 27, 1994. In prior years' proxy statements the Company used the Nasdaq
Telecommunications index. In 1999 the Company changed to the Nasdaq Electronic
Components index to comply with Nasdaq requirements:
[GRAPH]
- ------------------------------------------------------------------------
Years Ended 2/28 (in dollars) 1994 1995 1996 1997 1998 1999
- ------------------------------------------------------------------------
California Amplifier, Inc. 100 100 346 166 85 56
NASDAQ Stock Market 100 102 142 169 231 300
NASDAQ Electronic Components 100 117 173 299 372 467
NASDAQ Telecommunications 100 106 140 136 232 375
<PAGE>
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
Under the securities laws of the United States, the Company's directors, its
executive officers, and any persons holding more than ten percent of the
Company's Common Stock are required to report their initial ownership of the
Company's Common Stock and any subsequent changes in that ownership to the
Securities and Exchange Commission, the National Association of Securities
Dealers and the Company. Specific due dates for these reports have been
established and the Company is required to disclose in this proxy statement any
failure to file, or late filing, of such reports with respect to the period
ended February 27, 1999. Based solely upon a review of reports delivered to the
Company during this period, all of these filing requirements were satisfied on a
timely basis.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Company has adopted a policy pursuant to which material transactions between
the Company and its executive officers, directors, nominees for election as
directors, and principal stockholders (i.e., stockholders owning beneficially 5%
or more of the outstanding voting securities of the Company) and members of
immediate family of any of the foregoing persons, shall be submitted to the
Board of Directors for approval by a disinterested majority of the directors
voting with respect to the transaction. For this purpose, a transaction is
deemed material if such transaction, alone or together with a series of similar
transactions during the same fiscal year, involves an amount which exceeds
$60,000.
No such transactions occurred during the year ended February 27, 1999 other than
those described elsewhere herein.
INDEPENDENT PUBLIC ACCOUNTANTS
Arthur Andersen LLP acted as the independent public accountants for the Company
during the fiscal year ended February 27, 1999. Representatives of that firm are
expected to be present at the Annual Meeting and have the opportunity to make a
statement if they desire to do so, and are expected to be available to respond
to appropriate questions. The Company has selected Arthur Andersen LLP as the
Company's independent public accountants for the fiscal year ending February 26,
2000.
ANNUAL REPORT
The Annual Report to Stockholders for the fiscal year ended February 27, 1999 is
being sent to all stockholders with this Proxy Statement. The Annual Report to
Stockholders does not form any part of the material for the solicitation of any
Proxy.
A COPY OF THE ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED FEBRUARY 27, 1999 AS
FILED WITH THE SECURITIES AND EXCHANGE COMMISSION, WITHOUT EXHIBITS, IS
AVAILABLE WITHOUT CHARGE TO ANY STOCKHOLDER OF THE COMPANY UPON WRITTEN REQUEST
TO THE CORPORATE SECRETARY, CALIFORNIA AMPLIFIER, INC., 460 CALLE SAN PABLO,
CAMARILLO, CALIFORNIA 93012.
<PAGE>
STOCKHOLDER PROPOSALS
The Bylaws of the Company provide that at any meeting of the stockholders only
such business shall be conducted as shall have been brought before the meeting
by or at the discretion of the Board of Directors or by any stockholder of the
Company who gives written notice (in the form required by the Bylaws) of such
business in writing to the Corporate Secretary of the Company not less than
sixty days in advance of such meeting or, if later, the seventh day following
the first public announcement of the date of such meeting. The Bylaws also
provide that only such nominations for the election of directors may be
considered as are made by the Board of Directors, or by any stockholder entitled
to vote in the election of directors who provides written notice (in the form
required by the Bylaws) of such stockholder's intent to make such nomination to
the Corporate Secretary of the Company not later than sixty days in advance of
such meeting or, if later, the seventh day following the first public
announcement of the date of such meeting.
Stockholders who intend to submit proposals for inclusion in the Proxy Statement
relating to the year ending February 26, 2000 must do so by sending the proposal
and supporting statements, if any, to the Company no later than February 10,
2000. Such proposals should be sent to the attention of the Corporate Secretary,
California Amplifier, Inc., 460 Calle San Pablo, Camarillo, California 93012.
OTHER MATTERS
Except for the matters described herein, management does not intend to present
any matter for action at the Annual Meeting and knows of no matter to be
presented at such meeting that is a proper subject for action by the
stockholders. However, if any other matters should properly come before the
Annual Meeting, it is intended that votes will be cast pursuant to the authority
granted by the enclosed Proxy in accordance with the best judgment of the person
or person(s) acting under the Proxy.
By Order of the Board of Directors,
/s/ Michael R. Ferron
Corporate Secretary
Camarillo, California
June 15, 1999
<PAGE>
CALIFORNIA AMPLIFIER, INC.
1999 STOCK OPTION PLAN
SECTION 1. PURPOSE OF PLAN
The purpose of this 1999 Stock Option Plan ("Plan") of California
Amplifier, Inc., a Delaware corporation (the "Company"), is to enable the
Company to attract, retain and motivate its employees, directors and
consultants, and to further align the interests of such employees, directors and
consultants with those of the stockholders of the Company, by providing for or
increasing the proprietary interests of such employees and directors in the
Company.
SECTION 2. ADMINISTRATION OF PLAN
A. This Plan shall be administered by one or more committees of the Board of
Directors of the Company (the "Board") (any such committee, the
"Committee"). The Board will administer the Plan if no persons are
designated by the Board to serve on the Committee, in which case all
references herein to the Committee shall refer to the Board.
B. The Board shall have the discretion to appoint, add, remove or replace
members of the Committee, and shall have the sole authority to fill
vacancies on the Committee.
C. Unless otherwise provided by the Board: (i) with respect to any
Award (as defined in Section 5 below) for which it is
necessary and desired for such Award to be exempted by Rule 16b-3
of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), the Committee shall consist of the Board or of two or more
directors each of whom is a "non-employee director" (as such term
is defined in Rule 16b-3 promulgated under the Exchange Act, as
such Rule may be amended from time to time), and (ii) with
respect to any other Award, the Committee shall consist of one or
more directors (any of whom also may be an employee who has been
granted or is eligible to be granted Awards under the Plan).
D. Subject to the provisions of this Plan, the Committee shall be authorized
and empowered to do all things necessary or desirable in connection with
the administration of this Plan with respect to the Awards over which such
Committee has authority, including, without limitation, the following:
1. adopt, amend and rescind rules and regulations relating to this
Plan;
2. determine which persons are Eligible Persons (as defined in
Section 3 below) and to which of such Eligible Persons, if any,
and when Awards shall be granted hereunder;
3. grant Awards to Eligible Persons and determine the terms and
conditions thereof, including the number of Shares of the
Company's Common Stock ("Shares") subject thereto and the
circumstances under which Awards become exercisable or vested or
are forfeited or expire, which terms may but need not be
conditioned upon the passage of time, continued employment, the
occurrence of certain events (including events which the Board or
the Committee determine constitute a change of control), or other
factors;
4. at any time cancel an Award, with or without the consent of the holder
thereof, and grant a new Award to such holder in lieu thereof, which new
Award may be the same or a different type of Award, may be for a greater
or lesser number of Shares, may have a higher or lower exercise or
settlement price and otherwise may have similar or dissimilar terms to the
canceled Award;
5. determine whether, and the extent to which adjustments are
required pursuant to Section 9 hereof;
6. interpret and construe any terms and conditions of, and
define any terms used in, this Plan, any rules and regulations
under the Plan and/or any Award granted under this Plan; and
7. determine the terms and conditions of the Nonemployee Director Options (as
defined in Section 6 below) that are automatically granted hereunder,
other than the terms and conditions specified in Section 6 hereof.
E. All decisions, determinations, and interpretations of the Committee shall
be final and conclusive upon any Eligible Person to whom an Award has been
granted and to any other person holding an Award.
F. The Committee may, in the terms of an Award or otherwise, temporarily
suspend the exercisability of an Award and/or the issuance of Shares under
an Award if the Committee determines that securities law or other
considerations so warrant.
SECTION 3. PERSONS ELIGIBLE UNDER PLAN
Any person who is an employee, director or consultant of the Company or
any of its subsidiaries or affiliates (an "Eligible Person") shall be eligible
to be considered for the grant of Awards hereunder. Any director of the Company
who is not an employee (a "Nonemployee Director") shall automatically receive
Nonemployee Director Options pursuant to Section 6 hereof, but shall not
otherwise participate in this Plan. For purposes of this Plan, the Chairman of
the Board's status as a Nonemployee Director shall be determined by the Board.
SECTION 4. STOCK SUBJECT TO PLAN
A. Subject to adjustment as provided in Section 9 hereof, at
any time, the aggregate number of Shares issued and issuable
pursuant to all Awards (including all Incentive Stock Options (as
defined in Section 5 below)) granted under this Plan shall not
exceed 500,000, provided, however, that on the first business day
of each of the Company's fiscal years during which this Plan is
in effect such maximum number shall be reset to a number equal to
four percent (4%) of the number of Shares issued and outstanding
on each of such dates; provided further that the aggregate number
of Shares available for grant at any time cannot exceed the
lesser of 500,000 or 4% of the total number of Shares
outstanding, provided that, in any event, the sum of the number
of Shares subject to options outstanding under the Company's 1989
Stock Option Plan plus the number of Shares subject to options
outstanding under this Plan and available for grant under the
this Plan shall not exceed 22% of the total number of Shares
outstanding at any time. Such maximum number does not include
the number of Shares subject to the unexercised portion of any
option granted under this Plan that expires or is terminated.
B. Subject to adjustment as provided in Section 9 hereof, the aggregate
number of Shares subject to Incentive Stock Options granted under this
Plan shall not exceed 500,000.
C. Subject to adjustment as provided in Section 9 hereof, the aggregate
number of Shares subject to Awards granted during any calendar year to any
one Eligible Person (including the number of shares involved in Awards
having a value derived from the value of Shares) shall not exceed 250,000.
D. The aggregate number of Shares issued under this Plan at any time shall
equal only the number of shares actually issued upon exercise or
settlement of an Award and not settled in cash or returned to the Company
upon forfeiture of an Award or in payment or satisfaction of the purchase
price, exercise price or tax withholding obligation of an Award.
SECTION 5. AWARDS
A. The Committee, on behalf of the Company, is authorized under this Plan to
enter into any type of arrangement with an Eligible Person for the grant
of stock options that is not inconsistent with the provisions of this Plan
and that, by its terms, involves or might involve the issuance of shares
of no par value Common Stock of the Company. The entering into of any such
arrangement is referred to herein as the "grant" of an "Award."
B. The terms upon which an Award is granted shall be evidenced
by a written agreement executed by the Company and the Eligible
Person to whom such Award is granted.
C. Subject to the provisions of this Plan, the Committee, in its sole and
absolute discretion, shall determine all of the terms and conditions of
each Award granted under this Plan, which terms and conditions may (but
need not) include, among other things:
1. provisions permitting the Committee to allow or require the
recipient of such Award, including any Eligible Person who
is a director or officer of the Company, or permitting any
such recipient the right, to pay the purchase price of the
Shares or other property issuable pursuant to such Award,
and/or such recipient's tax withholding obligation with
respect to such issuance, in whole or in part, by any one or
more of the following means:
(a) the delivery of cash;
(b) the delivery of other property deemed acceptable by the
Committee;
(c) the delivery of previously owned shares of capital stock of
the Company (including "pyramiding") or other property;
(d) a reduction in the amount of Shares or other property
otherwise issuable pursuant to such Award; or
(e) the delivery of a promissory note of the Eligible Person or
of a third party, the terms and conditions of which shall be
determined by the Committee;
2. provisions specifying the exercise or settlement price for any
option, or specifying the method by which such price is
determined;
3. provisions relating to the exercisability and/or vesting of
Awards, lapse and non-lapse restrictions upon the Shares obtained
or obtainable under Awards or under the Plan and the termination,
expiration and/or forfeiture of Awards;
4. provisions conditioning or accelerating the grant of an
Award or the receipt of benefits pursuant to such Award, either
automatically or in the discretion of the Committee, upon the
occurrence of specified events, including, without limitation,
the exercise or settlement of a previous Award, the satisfaction
of an event or condition within the control of the recipient of
the Award or within the control of others, a change of control of
the Company, an acquisition of a specified percentage of the
voting power of the Company, the dissolution or liquidation of
the Company, a sale of substantially all of the property and
assets of the Company or an event of the type described in
Section 9 hereof;
5. provisions required in order for such Award to qualify (A) as an incentive
stock option under Section 422 of the Code (an "Incentive Stock Option"),
and/or (B) for an exemption from Section 16 of the Exchange Act; and/or
6. provisions restricting the transferability of Awards or
Shares issued under Awards.
D. Unless otherwise provided by the Committee in the written agreement
evidencing an Award, the terms of any stock option granted under the Plan
(other than Nonemployee Director Options that are automatically granted
under Section 10 hereof) shall provide:
1. that the exercise price thereof shall not be less than 100% of
the fair market value of a share of Common Stock on the date
the option is granted;
2. that the term of such option shall be ten years from the
date of grant;
3. that if the Eligible Person to whom such option was granted (the
"Participant") ceases to be an Eligible Person for any reason other than
death or disability, the option shall not thereafter become exercisable to
an extent greater than it could have been exercised on the date the
Participant's status as an Eligible Person ceased, and that on the death
or disability of a Participant the option shall become fully exercisable;
4. that the option shall expire ninety (90) days after the Participant ceases
to be an Eligible Person for any reason other than death, disability or
retirement in accordance with the retirement policies of the Company, and
shall expire twelve (12) months after the Participant's death, disability
or retirement in accordance with the retirement policies of the Company;
and
5. that the option shall not be assignable or otherwise transferable except
by will or by the laws of descent and distribution or pursuant to a
domestic relations order, and during the lifetime of the Participant, the
option shall be exercisable only by the Participant or the transferee
under a domestic relations order.
SECTION 6. NONEMPLOYEE DIRECTOR OPTIONS
A. Each year, on the first business day following the date of the annual
meeting of stockholders of the Company, or any adjournment thereof, at
which directors of the Company are elected (the "Date of Grant"), each
Nonemployee Director shall automatically be granted an option (a
"Nonemployee Director Option") to purchase 8,000 Shares.
B. If a person shall become a Nonemployee Director on any day after a Date of
Grant and prior to the annual meeting of the stockholders of the Company
immediately following such Date of Grant, and Nonemployee Director Options
may be granted under this Plan on such day, such person shall
automatically be granted a Nonemployee Director Option to purchase 8,000
Shares.
C. If, on any date upon which Nonemployee Director Options are
to be automatically granted pursuant to this Section 6, the
number of Shares remaining available for options under this Plan
is insufficient for the grant to each Nonemployee Director of a
Nonemployee Director Option to purchase the entire number of
Shares specified in this Section 6, then a Nonemployee Director
Option to purchase a proportionate amount of such available
number of Shares (rounded to the nearest whole share) shall be
granted to each Nonemployee Director on such date.
D. Each Nonemployee Director Option granted under this Plan shall become
exercisable one year from the Date of Grant of such Nonemployee Director
Option; provided, however, that such Nonemployee Director Option shall
become fully exercisable on the date upon which the optionee shall cease
to be a Nonemployee Director as a result of normal retirement, death or
total disability.
E. Each Nonemployee Director Option granted under this Plan
shall expire upon the first to occur of the following:
1. Twelve months after the date upon which the optionee shall cease to be a
director of the Company (a) as a result of normal retirement, death or
total disability, or (b) in accordance with the retirement policies of the
Company.
2. The 90th day after the date upon which the optionee shall
cease to be a Nonemployee Director for any reason other than the
reason specified in Section 6.E.1. above.
3. The tenth anniversary of the Date of Grant of such
Nonemployee Director Option.
F. Each Nonemployee Director Option shall have an exercise price equal to the
greater of (i) the aggregate fair market value on the Date of Grant of
such option of the Shares subject thereto or (ii) the aggregate par value
of such Shares on such date.
SECTION 7. AMENDMENT AND TERMINATION OF PLAN
The Board may amend, alter or discontinue the Plan or any agreement
evidencing an Award made under the Plan, but no amendment or alteration shall be
made which would impair the rights of any Award holder, without such holder's
consent, under any Award theretofore granted, provided that no such consent
shall be required if the Committee determines in its sole discretion and prior
to the date of any change of control (as defined, if applicable, in the
agreement evidencing such Award) that such amendment or alteration is not
reasonably likely to significantly diminish the benefits provided under such
Award, or that any such diminishment has been adequately compensated. The
Committee may determine whether or not any amendment to a previously granted
Award is, for purposes of the Plan, deemed to be a cancellation and new grant of
the Award. Notwithstanding the foregoing, if an amendment to the Plan would
affect the ability of Awards granted under the Plan to comply with any law, rule
or regulation (including any rule of a self-regulatory organization), and if the
Committee determines that it is necessary or desirable for any Awards
theretofore or thereafter granted that are intended to comply with any such
provision to so comply, the amendment shall be approved by the Company's
stockholders to the extent required for such Awards to continue to comply with
such law, rule or regulation.
SECTION 8. NATURE AND DURATION OF PLAN
A. This Plan is intended to constitute an unfunded arrangement
for a select group of management or other key employees.
B. No Awards shall be made under this Plan after the tenth anniversary of the
Effective Date of the Plan (as provided in Section 10). Although Shares
may be issued after the tenth anniversary of the Effective Date pursuant
to Awards made prior to such date, no Shares shall be issued under this
Plan after the twentieth anniversary of the Effective Date.
SECTION 9. ADJUSTMENTS
If the outstanding securities of the class then subject to this Plan are
increased, decreased or exchanged for or converted into cash, property or a
different number or kind of shares or securities, or if cash, property or shares
or securities are distributed in respect of such outstanding securities, in
either case as a result of a reorganization, merger, consolidation,
recapitalization, restructuring, reclassification, dividend (other than a
regular, quarterly cash dividend) or other distribution, stock split, reverse
stock split, spin-off or the like, or if substantially all of the property and
assets of the Company are sold, then, unless the terms of such transaction shall
provide otherwise, the Committee shall make appropriate and proportionate
adjustments in:
(i) the number and type of shares or other securities or cash or
other property that may be acquired pursuant to Awards theretofore
granted under this Plan other than Incentive Stock Options and the
exercise or settlement price of such Awards; and
(ii) the maximum number and type of shares or other securities that
may be issued pursuant to such Awards thereafter granted under this
Plan; provided, however, that notwithstanding the foregoing, (B) the
maximum number and type of shares or other securities that may be
acquired pursuant to Incentive Stock Options theretofore granted
under this Plan and that may be subject to Incentive Stock Options
thereafter granted under this Plan (which need not correspond to the
maximum number and type of shares or other securities that may be
issued pursuant to such Awards thereafter granted under this Plan)
shall be determined under this Section 9 in a manner consistent with
the requirements for Incentive Stock Options.
SECTION 10. EFFECTIVE DATE OF PLAN
The Effective Date of this Plan shall be the date upon which it was
approved by the Board, subject however to approval of the Plan by the
affirmative votes of the holders of a majority of the securities of the Company
present, or represented, and entitled to vote on the subject matter at the
Company's annual meeting of stockholders.
SECTION 11. COMPLIANCE WITH OTHER LAWS AND REGULATIONS
The Plan, the grant and exercise of Awards thereunder, and the obligation
of the Company to sell and deliver shares under such Awards, shall be subject to
all applicable federal and state laws, rules and regulations and to such
approvals by any governmental or regulatory agency as may be required. The
Company shall not be required to issue or deliver any certificates for shares of
Common Stock prior to the completion of any registration or qualification of
such shares under any federal or state law or issuance of any ruling or
regulation of any government body which the Company shall, in its sole
discretion, determine to be necessary or advisable.
SECTION 12. NO RIGHT TO COMPANY EMPLOYMENT
Nothing in this Plan or as a result of any Award granted pursuant to this
Plan shall confer on any individual any right to continue in the employ of the
Company or interfere in any way with the right of the Company to terminate an
individual's employment at any time. The agreement evidencing an Award may
contain such provisions as the Committee may approve with respect to the effect
of approved leaves of absence.
SECTION 13. LIABILITY OF COMPANY
The Company and any affiliate which is in existence or hereafter comes
into existence shall not be liable to an Eligible Person or other persons as to:
A. The Non-Issuance of Shares. The non-issuance or sale of shares as to
which the Company has been unable to obtain from any regulatory
body having jurisdiction the authority deemed by the Company's
counsel to be necessary to the lawful issuance and sale of any
shares hereunder; and
B. Tax Consequences. Any tax consequence expected, but not
realized, by any Eligible Person or other person due to the
issuance, exercise, settlement, cancellation or other transaction
involving any Award granted hereunder.
SECTION 14. GOVERNING LAW
This Plan and any Awards and agreements hereunder shall be interpreted and
construed in accordance with the laws of the State of California and applicable
federal law.
CALIFORNIA AMPLIFIER, INC.
460 Calle San Pablo
Camarillo, California 93012
PROXY FOR 1999 ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON JULY 16,
1999
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF CALIFORNIA
AMPLIFIER, INC.
The undersigned hereby acknowledges receipt of the Notice of Annual Meeting of
Stockholders and the accompanying Proxy Statement for the 1999 Annual Meeting of
Stockholders, revoking all prior proxies, hereby appoints Fred M. Sturm and
Michael R. Ferron, and each of them, as Proxies, each with the power to appoint
his substitute, and hereby authorizes each of them to represent and to vote as
designated on the reverse side, all the shares of Common Stock of California
Amplifier, Inc. (the "Company") held of record by the undersigned on May 17,
1999 at the Annual Meeting of Stockholders to be held on July 16, 1999 and any
postponements or adjournments thereof.
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY, USING THE ENCLOSED
ENVELOPE. THIS PROXY WILL BE VOTED IN ACCORDANCE WITH THE INSTRUCTIONS
INDICATED; HOWEVER, IF NO INSTRUCTIONS ARE GIVEN, THIS PROXY WILL BE VOTED IN
FAVOR OF THE NOMINEES FOR DIRECTOR LISTED, IN FAVOR OF THE 1999 STOCK INCENTIVE
PLAN AND IN THE DISCRETION OF THE PROXIES ON ALL SUCH OTHER MATTERS AS MAY
PROPERLY COME BEFORE SUCH MEETING.
(Continued on reverse side)
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY
THE UNDERSIGNED STOCKHOLDER. IF NO INSTRUCTIONS ARE GIVEN, THIS PROXY WILL BE
VOTED IN FAVOR OF THE NOMINEES FOR DIRECTOR LISTED BELOW, IN FAVOR OF THE MATTER
DESCRIBED IN ITEM 2, AND IN THE DISCRETION OF THE PROXIES ON MATTERS DESCRIBED
IN ITEM 3.
1. Election of Directors: Ira Coron, Fred M. Sturm, Thomas L. Ringer,
William E. McKenna, and Arthur H. Hausman
FOR all Nominees listed (except as noted to the contrary below) |_|
WITHHOLD AUTHORITY to vote for all Nominees listed above |_|
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL
NOMINEE, WRITE THAT NOMINEE'S NAME IN THE SPACE PROVIDED BELOW)
2. To consider and vote upon a proposal to approve the California
Amplifier, Inc. 1999 Stock Option Plan.
For |_| Against |_| Abstain |_|
3. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before such meeting and any and all
postponements or adjournments thereof.
Do you plan to attend the meeting: Yes No
Dated:
Signature:
Title:
Signature if held jointly:
Please sign exactly as the name appears hereon. When shares are held by joint
tenants, both should sign. When signing as attorney, executor, administrator,
trustee or guardian, please give your full title as such. If a corporation,
please sign in full corporate name by the president or other authorized officer.
If a partnership, please sign in the partnership's name by an authorized person.
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