SOLICITATION OF PROXIES
SCHEDULE 14A
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] 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 Section 240.14a-11(c) or Section
240.14a-12
.......................................................................
Applied Signal Technology, Inc.
Applied Signal Technology, Inc.
Brian M. Offi
Vice President-Finance, CFO
400 West California Avenue
Sunnyvale, CA 94086
.......................................................................
Payment of Filing Fee (Check the appropriate box):
[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(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:
.......................................................................
APPLIED SIGNAL TECHNOLOGY, INC.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MARCH 12, 1997
The 1998 Annual Meeting of Shareholders of Applied Signal
Technology, Inc. (the "Company") will be held at the Santa Clara Marriott Hotel,
located at 2700 Mission College Boulevard, Santa Clara, California, on March 12,
1998 at 4:00 p.m., local time, for the following purposes:
1. To elect three (3) Class II directors to hold office
until the 2000 Annual Meeting of Shareholders or
until their respective successors are elected and
qualified.
2. To vote on a proposal to ratify the appointment of
Ernst & Young LLP as the independent auditors for the
Company for the fiscal year ending October 31, 1998.
3. To transact such other business as may properly come
before the meeting, or any adjournment thereof.
Shareholders of record at the close of business on January 26,
1998 are entitled to notice of, and to vote at, this meeting and any
continuation or adjournments thereof.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Gary L. Yancey
----------------------------------
Gary L. Yancey, President
Sunnyvale, California
February 2, 1998
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, YOU ARE URGED
TO SIGN AND PROMPTLY MAIL THE ENCLOSED PROXY IN THE RETURN
ENVELOPE SO THAT YOUR STOCK MAY BE REPRESENTED AT THE MEETING.
PROXY STATEMENT
1997 ANNUAL MEETING OF SHAREHOLDERS
APPLIED SIGNAL TECHNOLOGY, INC.
400 West California Avenue
Sunnyvale, California 94086
(408) 749-1888
This Proxy Statement is furnished in connection with the solicitation
by the Board of Directors (the "Board") of Applied Signal Technology, Inc., a
California corporation (the "Company"), of Proxies for use at the Annual Meeting
of Shareholders to be held on March 12, 1998, or any adjournment thereof, for
the purposes set forth in the accompanying Notice of Annual Meeting. This Proxy
Statement and accompanying Proxy are first being sent to shareholders,
on approximately, February 9, 1998. The cost of the solicitation
of Proxies will be borne by the Company. The Board may use the services of
the Company's directors, officers and others to solicit Proxies, personally or
by telephone. The Board may also arrange with brokerage houses and other
custodians, nominees and fiduciaries to forward solicitation material to the
beneficial owners of the stock held of ord by such persons and the Company may
reimburse them for their reasonable out-of-pocket expenses incurred in so doing.
The Annual Report to Shareholders for the fiscal year ended October 31, 1997,
including financial statements mailed to shareholders concurrently with the
mailing of this Proxy Statement.
VOTING RIGHTS
The voting securities of the Company entitled to vote at the Annual
Meeting consist of shares of Common Stock. Only shareholders of record at the
close of business on January 26, 1998 are entitled to notice of and to vote at
the annual meeting. On that date, there were 8,597,151 shares of the Company's
Common Stock issued and outstanding. Each share of CommonStock is
entitled to one vote. The Company's Bylaws provide that a majority of
all of the shares of the stock entitled to vote, whether present in person or
by proxy, shall constitute a quorum for the transaction of business at the
meeting. If an executed Proxy is submitted without any instruction for the
voting of such Proxy, the Proxy will be voted in favor of the proposals
described.
All shares represented by valid Proxies received prior to the Annual
Meeting will be voted and, where a shareholder specifies by means of the Proxy a
choice with respect to any matter to be acted upon, the shares will be voted in
accordance with the specifications so made. A shareholder who signs and
returns a Proxy will have the power to revoke it at any time before it is
voted. A Proxy may be revoked by filing with the Secretary of
the Company a written revocation or duly executed Proxy bearing a later
date, or by appearing at the Annual Meeting and electing to vote in person.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding
beneficial ownership of the Company's Common Stock as of January 5, 1997 by (i)
each person who is known by the Company to own beneficially more than 5 percent
of the outstanding Common Stock of the Company, (ii) each of the Company's
directors and director-nominees, (iii) the Chief Executive Officer and the other
executive officers of the Company whose total salary and bonus for the year
ended October 31, 1997 exceeded $100,000, and (iv) all directors and executive
officers of the Company as a group.
<TABLE>
<CAPTION>
SHARES PERCENT OF
NAME OF BENEFICIAL OWNER OF GROUP BENEFICIALLY COMMON STOCK
AND NATURE OF BENEFICIAL OWNERSHIP(1) OWNED OUTSTANDING
- ---------------------------------------- ---------------- ------------
<S> <C> <C>
David D. Elliman 510,205 (2) 6.1%
18 East 74th Street
New York, NY 10021
James F. Collins 413,311 4.9
John R. Treichler 500,361 6
Gary L. Yancey 460,361 (3) 5.5
Bani M. Scribner, Jr. 16,564 *
Kenneth Snow 29,175 (4) *
Kenway Wong 51,535 (5)
Brian M. Offi 26,426 *
Stuart G. Whittelsey, Jr. 2,001 *
John P. Devine 1,000 *
All directors and executive officers 2,168,838 (6) 27.1
as a group (11 persons)
</TABLE>
- -----------
* Less than 1%
(1) Except as indicated in the footnotes to this table, the persons named
in the table possess sole voting and investment power with respect to
all shares of Common Stock shown as beneficially owned by them, subject
to joint tenancy, tenancy-in-common or community property laws, where
applicable. Unless otherwise indicated, the business address of each of
the beneficial owners is 400 W. California Avenue, Sunnyvale, CA 94086.
(2) Includes 100,000 shares held by Rama Investment Partners and 58,333
shares held by Pararock Limited Partnership (of which the reporting
person is a general partner of which the reporting person disclaims
beneficial ownership of shares in excess of his partnership interest);
150,417 shares held by Underhill Charitable Trust (of which the
reporting person is a trustee; the reporting person disclaims
beneficial ownership of share in excess of beneficiary's interest in
the trust); 118,544 shares held by Trust u/w Isabel S. Rockefeller of
which the reporting person is a trustee and a member of the reporting
persons' immediate family is a beneficiary; 36,666 shares held by
Trust u/d Avery Rockefeller of which the reporting person is
Rockefeller Charitable Trust of which the reporting person is trustee
and a beneficiary and the reporting person disclaims beneficial
ownership of shares in excess of the reporting person's interest in
the trust, 14,375 shares held by A.A. Rockefeller Trust of which the
reporting person is a trustee and a beneficiary, and 12,391 shares
held as an individual.
(3) Includes 360 shares subject to options that are exercisable within 60
days of January 5, 1998.
(4) Includes 5,360 shares subject to options that are exercisable within 60
days of January 5, 1998.
(5) Includes 4,700 shares subject to an option that is exercisable within
60 days of January 5, 1998.
(6) Includes 16,720 shares subject to options that are exercisable within
60 days of January 5, 1998.
PROPOSAL ONE
NOMINATION AND ELECTION OF DIRECTORS
The Company's Articles of Incorporation, as amended, provide for a
classified Board of Directors consisting of two classes of directors. At the
1997 Annual Meeting of Shareholders, three Class I Directors were elected to
terms expiring in 1999. three Class II Directors were elected in 1996
to terms expiring at this year's Annual Meeting. The Board has designated
three current Directors as nominees for election at this meeting as Class II
Directors (James F. Collins, John R. Treichler, and Stuart G. Whittelsey, Jr.).
Directors elected at this meeting will serve until the 2000 Annual Meeting
of Shareholders and until their respective successors are duly elected and
qualified.
Management knows of no reason why any nominee should be unable or
unwilling to serve. However, if any nominee(s) should for any reason be unable
or unwilling to serve, the proxies will be voted for such substitute nominees
as the Board may designate.
If a quorum is present and voting, the nominees receiving the highest
number of votes will be elected as directors. Abstentions and shares held by
brokers that are present, but not voted because the brokers were prohibited from
exercising discretionary authority, i.e., "broker non-votes," will be counted
as present for purposes of determining if a quorum is present.
Set forth below is certain information with respect to age and
background for each of the Company's directors.
<TABLE>
<CAPTION>
DIRECTOR
NAME POSITIONS WITH THE COMPANY AGE SINCE
- -------------------------- -------------------------------------- ----- --------
<S> <C> <C> <C>
Class II directors, who are nominees for election at this annual meeting:
James F. Collins Laboratory Manager and Director 55 1984
John R. Treichler Senior Scientist and Director 50 1984
Stuart G. Whittelsey, Jr. Director 68 1990
Class I directors, who se terms will expire at the 1999 Annual Meeting of Shareh
John P. Devine Director 60 1995
David D. Elliman Director 47 1991
Gary L. Yancey President and Chairman of the Board 52 1984
</TABLE>
James F. Collins, a co-founder of the Company, has been a
director of and employed by the Company since its incorporation in 1984. His
present position with the Company is Laboratory Manager. Prior to co-founding
the Company, Mr. Collins worked at ARGOSystems Inc., a manufacturer of
electronic reconnaissance systems, for fourteen years, most recently serving in
the Strategic Systems Division. Prior to working at ARGOSystems Inc., Mr.
Collins served for three years as an officer in the United States Navy.
John R. Treichler, a co-founder of the Company, has been a
director of and employed by the Company since its incorporation in 1984. His
present position with the Company is Senior Scientist. Prior to co-founding the
Company, he worked at ARGOSystems Inc. for seven years, most recently serving as
a senior scientist in the Strategic Systems Division, and at Stanford University
for three years in the Information Systems Laboratory.
Stuart G. Whittelsey, Jr. has been a director of the Company
since 1990. He is a principal of his own consulting firm, Whittelsey Associates,
which is engaged in corporate financial management. From July 1993 through April
1994, he was Chief Executive Officer of Lytton Garden Inc., a residence for HUD
qualified seniors combined with a skilled nursing facility in Palo Alto,
California. From January 1990 through June 1993, he was employed by Acurex
Environmental Corporation, an environmental engineering firm, and its affiliated
companies, where he most recently served as Vice President, Finance and
Administration and Chief Financial Officer.
John P. Devine has been a director of the Company since May,
1995. Mr. Devine served as Deputy Director, National Security Agency (NSA), for
Technology and Systems from 1992-1995 and as Deputy Director, NSA for Research
and Engineering from 1990-1992. From 1989-1990 he served as NSA Chief of Staff.
Mr. Devine is currently a consultant to the industy.
David D. Elliman has been a director of the Company since
1991. He founded in 1981 and continues to serve as a principal of Elmrock, Inc.,
an investment advising firm. He is a trustee of numerous trusts, the director of
closely held companies and general partner of several limited partnerships
engaged in investment activities. Mr. Elliman serves as President of several
special purpose finance affiliates of Citicorp Bank, Chase Manhattan Bank,
Sovran Financial Bank, Society Bancorp, Hyatt International and State Street
Bank and Trust.
Gary L. Yancey, a co-founder of the Company, has served the
Company as President and Chairman of the Board since the Company's incorporation
in January 1984. Prior to co-founding the Company, he was employed for ten years
by ARGOSystems Inc., a manufacturer of electronic reconnaissance systems, most
recently serving as Director of the Strategic Systems Division, and for seven
years as an engineer with GTE Sylvania Inc., a defense electronics company.
MEETINGS OF THE BOARD OF DIRECTORS
During fiscal 1997, the Board held four meetings. During that
period, the Audit Committee of the Board held one meeting and the Compensation
Committee held one meeting. The Company does not have a nominating committee of
the Board. No director serving on the Board in fiscal 1997 attended less than
75% of such meetings of the Board and the committees on which he serves.
The members of the Audit Committee during the Company's 1997
fiscal year were Stuart G. Whittelsey, Jr., John P. Devine, and David D.
Elliman. The functions of the Audit Committee include reviewing and approving
the results of the annual audit.
The members of the Compensation Committee during fiscal 1997
were Stuart G. Whittelsey, Jr., John P. Devine, and David D. Elliman. The
function of the Compensation Committee is to set and administer the total
compensation program for the executive officers of the Company.
THE BOARD RECOMMENDS A VOTE "FOR" THIS PROPOSAL.
PROPOSAL TWO
APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors has selected Ernst & Young LLP to serve as
independent auditors to audit the financial statements of the Company for fiscal
1998. Ernst & Young LLP has acted in such capacity since its appointment for
fiscal 1985. Representatives of Ernst & Young LLP who will be present at the
Annual Meeting,will be given the opportunity to make a statement if the
representatives desire and will be available to respond to appropriate
questions.
THE BOARD RECOMMENDS A VOTE "FOR" THIS PROPOSAL. In the event
that ratification by the shareholders of the appointment of Ernst & Young LLP as
the Company's independent auditors is not obtained, the Board will reconsider
such appointment.
The affirmative vote of a majority of the votes cast at the
annual meeting of shareholders, at which a quorum representing a majority of all
outstanding shares of Common Stock of the Company is present and voting, either
in person or by proxy, is required for approval of this proposal. Abstentions
and broker non-votes will each be counted as present for purposes of determining
the presence of a quorum, but will not be counted as having been voted on the
proposal.
EXECUTIVE COMPENSATION AND OTHER MATTERS
COMPENSATION OF EXECUTIVE OFFICERS
The following table sets forth information for each of the
Company's last three fiscal years concerning the compensation of the chief
executive officer of the Company and the other executive officers of the Company
whose total salary and bonus for service in all capacities to the Company for
the fiscal year ended October 31, 1997 exceeded $100,000 during such fiscal
year:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long Term
Annual Compensation Compensation
----------------------------- ------------
Securities
Other Underlying
Fiscal Salary Bonus Annual Options
Name and Principal Position Year ($) ($) Compensation(*) (#)
- ----------------------------- --------- --------- --------- --------------------------
<S> <C> <C> <C> <C> <C>
Gary L. Yancey 1997 $334,720 $12,051 $15,592 0
President and Chief Executive 1996 308,516 998 15,249 0
Officer 1995 292,061 10,418 14,330 0
Kenneth Snow 1997 205,572 5,141 8,071 0
Vice President-Operations 1996 182,710 2,215 7,166 1,000
1995 159,037 5,869 5,709 0
Brian M. Offi 1997 205,578 5,192 8,122 0
Vice President Finance and 1996 185,159 2,324 7,834 6,000
Chief Financial Officer 1995 175,273 6,295 7,264 0
Bani M. Scribner, Jr. 1997 204,382 4,020 7,229 20,000
Vice President-Strategic 1996 120,549 1,658 4,771 20,000
Systems Division
Kenway Wong 1997 179,015 4,591 6,903 0
Vice President-Communication 1996
Systems Division (**)
* Company funded retirement plan contribution.
** Appointed an executive officer in November 1997.
</TABLE>
OPTION GRANTS IN LAST FISCAL YEAR - 1997
Options were granted in fiscal 1997 to one person named in
the Summary Compensation Table.
<TABLE>
<CAPTIOM>
Potential realizab
value at assumed
annual rates of
stock price
apperciation for
Individual Grants option term
----------------- ------------------
Number of
securities Percent of total
underlying options granted Exercise or
Options to employees base price
Name granted (#) in fiscal year ($/Sh) Expiration dat 5% ($) 10% ($)
- ---------------- ------------ --------------- ----------- -------------- ------ -------
<S> <C> <C> <C> <C> <C> <C>
Ben Scribner 20,000 100% $4.50 3/6/2002 $114,800 $145,000
</TABLE>
OPTION EXERCISES AND FISCAL 1997 YEAR-END VALUES
During fiscal 1997 Brian Offi exercised options to purchase
6,000 option shares at an exercise price of $4.63/share. The value realized on
such transaction was $48,720. The following table provides the specified
information concerning unexercised options held as of October 31, 1997 by the
persons named in the Summary Compensation Table:
AGGREGATED OPTION EXERCISES
AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money Options
Options at 10/31/97 at 10/31/97 (2)
------------------------------- -------------------------------
Name Exercisable (1) Unexercisable Exercisable (1) Unexercisable
- ----------------------- --------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
Gary L. Yancey 360 0 4,342 0
Brian M. Offi 8,270 0 99,736 0
Kenneth Snow 5,360 0 64,642 0
Bani M. Scribner, Jr. 0 40,000 0 482,400
Kenway Wong 11,560 0 139,414 0
</TABLE>
----------
(1) Most options are only exercisable at the end of a two-year
vesting period. Under the Company's 1991 Stock Option Plan,
the Board retains discretion to modify the terms, including
the prices, of outstanding options.
(2) Based on the value of $12.06 which was the closing price of
the Company's Common Stock as reported by Nasdaq National
Market on October 31, 1997.
COMPENSATION OF DIRECTORS
Directors who are employees of the Company are not compensated by the
Company for services provided as a director. Each of the Company's directors who
are not employees was paid $16,000 in annual retainer fees during fiscal 1997.
The Company expects to pay an annual retainer of approximately $16,000 to its
non-employee directors in fiscal 1998. In addition, the Company reimburses
out-of-pocket travel expenses of non-employee directors not residing in the San
Francisco Bary area in accordance with the Company's travel policy.
CHANGE OF CONTROL ARRANGEMENTS
Under the Company's 1991 Stock Option Plan (the "Option Plan"), upon
a change of control of the Company pursuant to a merger or acquisition of the
Company,the acquiring or surviving company must either assume the Company's
obligations under outstanding options or substitute options for its own shares.
For options granted by the Company under the Option Plan prior to January 4,
1992, if the acquiring or surviving company in certain transactins does not
either assume these obligations or substitute these options, the Board must
accelerate the vesting and exercisability of unvested and unexercisable options
to a date prior to the completion of the transaction. Under these terms of
the Option Plan, all accelerated options not exercised prior to the completion
of the transaction will terminate. Of the officers named in the Summary
Compensation Table, Mr. Snow holds options granted under the Option Plan prior
to January 4, 1992 to purchase 4,000 shares.
REPORT OF THE COMPENSATION COMMITTEE
ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors set
compensation for the Company's executive officers for fiscal 1997, the Committee
is comprised of the three non-employee directors of the Company, Messrs.
Elliman, Devine and Whittelsey.
The Compensation Committee is responsible for setting and
administering the total compensation program for the executive officers of the
Company. Recommendations for annual salary for the executive officers are made
to the Compensation Committee by the Chief Executive Officer ("CEO") and the
Company's Human Resources Manager.
Salaries are generally set for the executive officers by evaluating
their performance, evaluating their goals, evaluating the importance of each
position to the achievement of the Company's strategic goals, and comparing
compensation for the same positions at similarly sized electronics companies.
The compensation of the Company's executive officers consists of
salaries which are set toward the upper end of the appropriate salary ranges
observed at similarly sized electronics companies and relatively modest bonuses
received under plans in which all employees of the Company participate
(under which bonuses are determined using a common objective formula
based upon the entire Company's profit performance), thereby leading to
otal cash compensation (salary and bonus) of the Company's executive
officers within the range of the total cash compensation of similarly situated
counterparts at other electronics companies.
For fiscal 1997 the Committee again considered whether to change the
historical compensation structure for the executive officers to provide for
discretionary cash bonuses or equity awards such as stock options based on
personal performance goals. The Committee has decided to increase the use
of stock options for executive compensation. It believes this will
more closely align the compensation of Company executives with Company
performance, as well as with the compensation packages offered executives at
other similarly sized electronic companies. As of the date of this report,
grants have been made to Gary Yancey, Brian Offi, Ken Snow, Ben Scribner,
Kenway Wong, JohnTreichler, and Jim Collins for 5,600 shares each and Mary Rogge
for 800 shares at fair market value on 20 November 1997.
With the background of this philosophy, the Compensation Committee
used the following criteria to establish compensation for fiscal 1997 for its
executive officers. First, the Committee considered the current importance of
each position held by an executive officer to the ability of the Company to
achieve its strategic objectives, including not only the importance of
the group managed by the executive officer, but also the group's
management needs, considering its organization and operation.
Second, the Committee received and considered compensation survey data
covering the cash compensation (salary and bonus) paid by companies in the
electronics industry with similar annual revenues to the Company. Finally,
the Committee reviewed the self-evaluations of each executive officer and the
CEO's annual review of all other executive officers.
With respect to the Company's CEO, the Committee evaluated his
performance during fiscal year 1997 with respect to the Company's revenues, the
Company's profit margin, the size and progress of the Company's research and
development efforts, and the quality of the CEO's management of his line
managers. The Committee unanimously concluded that the CEO had a successful
fiscal year, and approved a percentage increase in the CEO's
salary which was in line with the Company's average salary increase for
the fiscal year and placed the CEO in approximately the 75-80th percentile
in terms of total cash compensation as compared to his peers at similarly
sized electronics companies.
The Company's policy with respect to compensation paid to its
executive officers is to deduct such compensation which qualifies under
Section 162 (m) of the Internal Revenue Code, as amended, as an expense.
THE COMPENSATION COMMITTEE
David D. Elliman
John P. Devine
Stuart G. Whittelsey, Jr.
COMPARISON OF SHAREHOLDER RETURN
Set forth below is a line graph comparing the annual
percentage change in the cumulative total return on the Company's Common Stock
with the cumulative total return of the Standard & Poor's 400 Mid-Cap Index
("S&P 400") and the Standard & Poor's Aerospace and Defense Index ("S&P
Aerospace and Defense") for the period commencing on March 31, 1993, and ending
on October 31, 1997.
COMPARISON OF CUMULATIVE TOTAL RETURN FROM MARCH 31, 1993
THROUGH OCTOBER 31, 1997(2)
APPLIED SIGNAL TECHNOLOGY, INC., S&P 400, S&P AEROSPACE AND DEFENSE
[CHART 1]
PLOT POINTS
<TABLE>
<CAPTION>
Applied S&P
Signal S&P 400 Aerospace
Date Technology Mid-Cap and Defense
- ---------------- ------------- ------------ ------------
<S> <C> <C> <C>
31 Mar. 1993 $100.00 $100.00 $100.00
29 Oct. 1993 $82.14 $106.61 $116.67
Oct. 1994 $57.14 $106.96 $128.65
Oct. 1995 $67.86 $127.20 $186.08
Oct. 1996 $67.86 $146.85 $249.46
Oct. 1997 $172.32 $192.02 $270.27
</TABLE>
- - ------------
(1) The effective date of the Company's initial public offering was March 26,
1993. Industry index information is available for month-ends only.
(2) Assumes that $100.00 was invested on March 31, 1993, in the Company's
Common Stock and each index and that all dividends were reinvested. No
dividends have been declared on the Company's Common Stock. Shareholder returns
over the indicated period should not be considered indicative of future
shareholder returns.
SHAREHOLDER PROPOSALS TO BE PRESENTED
AT NEXT ANNUAL MEETING
Proposals of shareholders intended to be presented at the next
annual meeting of shareholders of the Company (i) must be received by the
Company at its offices at 400 West California Avenue, Sunnyvale, California
94086 no later than October 2, 1998 and (ii) must satisfy the conditions
established by the Securities and Exchange Commission for shareholder proposals
to be included in the Company's Proxy Statement for that meeting.
TRANSACTION OF OTHER BUSINESS
At the date of this Proxy Statement, the only business which
the Board intends to present or knows that others will present at the Annual
Meeting is as set forth above. If any other matter or matters are properly
brought before the Annual Meeting, or any adjournment thereof, it is the
intention of the persons named in the accompanying form of Proxy to vote the
Proxy on such matters in accordance with their best judgment.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Gary L. Yancey
----------------------------------
Gary L. Yancey, President
Dated: February 2, 1998
APPLIED SIGNAL TECHNOLOGY, INC.
Proxy for Annual Meeting of Shareholders
Solicited by the Board of Directors
The undersigned hereby appoints Gary L. Yancey and Brian M. Offi, and
each of them, with full power of substitution to represent the undersigned and
to vote all of the shares of stock in Applied Signal Technology, Inc. (the
"Company") which the undersigned is entitled to vote at the Annual Meeting of
Shareholders of said Company to be held at the Santa Clara Marriott Hotel,
2700 Mission College Boulevard, Santa Clara, California on Thursday,
March 12, 1998 at 4:00 p.m. local time, and at any adjournment thereof
(1) as hereinafter specified upon the proposals listed below and as more
particularly described in the Company's Proxy Statement, receipt of which is
hereby acknowledged and 2) in their discretion upon such other matters
as may properly come before the meeting.
A vote FOR the following proposals is recommended by the Board of
Directors:
1. Election of Class II directors listed below.
Nominees: James F. Collins, John R. Treichler, Stuart G. Whittelsey, Jr.
[ ] FOR [ ] WITHHELD
[ ] ______________________________________________________
INSTRUCTION: To withhold authority to vote for any nominee,
mark the above box and list the name(s) of the nominee(s) in
the space provided.
2. To ratify the appointment of Ernst & Young LLP as the Company's
independent auditors for the Company for the fiscal year ending
October 31, 1998.
[ ] FOR [ ] WITHHELD [ ] ABSTAIN
3. To transact such other business as may properly come before the
meeting or any adjournment thereof.
The shares represented hereby shall be voted as specified. If no
specification is made, such shares shall be voted FOR proposals 1 and 2.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF THE COMPANY.
Dated _______________________, 1998
(Be sure to date Proxy)
_________________________________
Signature(s)
Sign exactly as your name(s) appears on your stock certificate. If
shares of stock stand on record in the names of two or more persons or in the
name of husband and wife, whether as joint tenants or otherwise, both or all of
such persons should sign the above Proxy. If shares of stock are held of record
by a corporation, the Proxy should be executed by the President or Vice
President and the Secretary or Assistant Secretary, and the corporate seal
should be affixed thereto. Executors or administrators or other fiduciaries
who execute the above Proxy for a deceased stockholder should give their full
title. Please date the Proxy.
Even if you are planning to attend the meeting in person, you are
urged to sign and mail the Proxy in the return envelope so that your stock
may be represented at the meeting.
