<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [x]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[x] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to sec. 240.14a-11(c) or sec. 240.14a-12
Vertex Communications Corporation
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[x] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(l) and
0-11.
(1) Title of each class of securities to which transaction applies:
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee
is calculated and state how it was determined):
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
(5) Total fee paid:
- --------------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
- --------------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
- --------------------------------------------------------------------------------
(3) Filing Party:
- --------------------------------------------------------------------------------
(4) Date Filed:
- --------------------------------------------------------------------------------
<PAGE> 2
[LOGO]
VERTEX COMMUNICATIONS CORPORATION
2600 N. LONGVIEW STREET
KILGORE, TEXAS 75662
(903) 984-0555
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD JANUARY 23, 1997
To the Shareholders of
Vertex Communications Corporation:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders (the
"Meeting") of Vertex Communications Corporation (the "Company") will be held at
the Roy H. Laird Country Club, 1306 Houston Street, Kilgore, Texas, at 11:00
A.M., local time, on Thursday, January 23, 1997, for the following purposes:
(1) To elect five (5) directors to serve until the next
Annual Meeting of Shareholders and until their respective successors
shall be elected and shall qualify;
(2) To consider and vote upon a proposal to ratify the
appointment of Arthur Andersen LLP as independent public accountants
of the Company for the fiscal year ending September 30, 1997; and
(3) To transact such other business as may properly come
before the Meeting or any adjournments thereof.
Only holders of Common Stock of record at the close of business on
December 2, 1996, are entitled to notice of and to vote at the Meeting.
A Proxy Statement, which describes the nominees for election to the
Board of Directors and the independent public accountants recommended for
selection by the Board of Directors, and a form of Proxy accompany this Notice.
ALL SHAREHOLDERS ARE CORDIALLY INVITED TO ATTEND THE MEETING IN
PERSON. SHAREHOLDERS ARE URGED, WHETHER OR NOT THEY PLAN TO ATTEND THE
MEETING, TO DATE AND SIGN THE ENCLOSED PROXY AND RETURN IT PROMPTLY IN THE
ENCLOSED POSTAGE PREPAID ENVELOPE. IF A SHAREHOLDER WHO HAS RETURNED A PROXY
FINDS THAT HE OR SHE CAN ATTEND THE MEETING IN PERSON, HE OR SHE MAY REVOKE HIS
OR HER PROXY AND VOTE IN PERSON ON ALL MATTERS SUBMITTED TO THE MEETING.
By Order of the Board of Directors
Bill R. Womble
Secretary
Kilgore, Texas
December 20, 1996
<PAGE> 3
VERTEX COMMUNICATIONS CORPORATION
2600 N. LONGVIEW STREET
KILGORE, TEXAS 75662
--------------------------
PROXY STATEMENT
FOR
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD JANUARY 23, 1997
--------------------------
SOLICITATION AND REVOCABILITY OF PROXIES
The enclosed proxy (the "Proxy") is being solicited on behalf of the
Board of Directors of Vertex Communications Corporation (the "Company") for use
at the Annual Meeting of Shareholders (the "Meeting") to be held at the Roy H.
Laird Country Club, 1306 Houston Street, Kilgore, Texas, at 11:00 A.M., local
time, on Thursday, January 23, 1997, or at such other time and place to which
the Meeting may be adjourned. Proxies, together with copies of this Proxy
Statement, are being mailed to shareholders of the Company on or about December
20, 1996.
Execution and return of the enclosed Proxy will not affect a
shareholder's right to attend the Meeting and to vote in person. Any
shareholder executing a Proxy retains the right to revoke it at any time prior
to exercise at the Meeting. A Proxy may be revoked by delivery of written
notice of revocation to the Secretary of the Company, by execution and delivery
of a later Proxy or by voting the shares in person at the Meeting. A Proxy,
when executed and not revoked, will be voted in accordance with the
instructions thereon. In the absence of specific instructions, Proxies will be
voted by those named in the Proxy "FOR" the election as directors of those
nominees named in the Proxy Statement, "FOR" the proposal to ratify the
appointment of Arthur Andersen LLP, as independent public accountants for the
Company, and in accordance with their best judgment on all other matters that
may properly come before the Meeting.
The enclosed form of Proxy provides a method for shareholders to
withhold authority to vote for any one or more of the nominees for director
while granting authority to vote for the remaining nominees. The names of all
nominees are listed on the Proxy. If you wish to grant authority to vote for
all nominees, check the box marked "FOR". If you wish to withhold authority to
vote for all nominees, check the box marked "WITHHOLD AUTHORITY". If you wish
your shares to be voted for some nominees and not for one or more of the
others, check the box marked "FOR" and indicate the name(s) of the nominee(s)
for whom you are withholding the authority to vote by writing the name(s) of
such nominee(s) on the Proxy in the space provided.
RECORD DATE AND VOTING SECURITIES
Shareholders of record at the close of business on December 2, 1996,
will be entitled to notice of and to vote at the Meeting. On December 2, 1996,
the Company had issued and outstanding 4,442,056 shares of Common Stock, $.10
par value (the "Common Stock"), which is the only class of its capital stock
outstanding.
<PAGE> 4
QUORUM AND VOTING
The presence at the Meeting, in person or by Proxy, of the holders of
a majority of the issued and outstanding shares of Common Stock is necessary to
constitute a quorum. Each holder of Common Stock is entitled to one vote for
each share held on each matter, including the election of directors, to be
voted on at the Meeting. Assuming the presence of a quorum, the affirmative
vote of the holders of a majority of the outstanding shares of Common Stock
entitled to vote at the Meeting, present in person or by Proxy, is required for
the approval of each matter submitted to the Meeting, except that in the
election of directors, the five nominees receiving the greatest number of votes
shall be deemed elected even though receiving the affirmative vote of less than
a majority of the outstanding shares entitled to be voted at the Meeting.
Additionally, in the election of directors, cumulative voting is prohibited and
Proxies cannot be voted for more than five nominees.
SECURITY OWNERSHIP OF MANAGEMENT
AND PRINCIPAL SHAREHOLDERS
The following table sets forth information regarding the beneficial
ownership of shares of the Common Stock of the Company as of December 2, 1996,
by (i) each person known by the Company to own more than 5% of the outstanding
shares of Common Stock, (ii) each director and nominee as a director of the
Company, (iii) the Company's Chief Executive Officer, (iv) each of the
Company's four other most highly compensated executive officers for fiscal 1996
and (v) the directors and executive officers of the Company as a group. The
persons and entities named in the table have sole voting and investment power
with respect to all such shares owned by them, unless otherwise indicated.
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF PERCENT
NAME OF BENEFICIAL OWNER OR GROUP(1) BENEFICIAL OWNERSHIP OF CLASS
--------------------------------- --------------------- --------
<S> <C> <C>
Fidelity Management & Research Corporation . . . . . . . . . 444,300 10.0%
Ryback Management Corporation . . . . . . . . . . . . . . . . 434,900 9.8
J. Rex Vardeman(2) . . . . . . . . . . . . . . . . . . . . . 271,070 6.1
William L. Anton(2) . . . . . . . . . . . . . . . . . . . . . 94,730 2.1
A. Don Branum(2) . . . . . . . . . . . . . . . . . . . . . . . 86,070 1.9
James D. Carter(2) . . . . . . . . . . . . . . . . . . . . . 82,833 1.9
Bill R. Womble (2) . . . . . . . . . . . . . . . . . . . . . 25,550 *
Manfred Stupnik(2) . . . . . . . . . . . . . . . . . . . . . . 14,500 *
Donald E. Heitzman, Sr. (2) . . . . . . . . . . . . . . . . . 10,000 *
All directors and executive officers
as a group (8 persons) (3) . . . . . . . . . . . . . . . . 599,686 13.2
</TABLE>
- -----------------------
* Represents beneficial ownership of less than 1% of the outstanding shares
of Common Stock.
(1) The addresses of the persons or entities shown in the foregoing table who
are beneficial owners of more than 5% of the Common Stock are as follows:
Fidelity Management & Research Corporation, 82 Devonshire Street, Boston,
Massachusetts 02109; Ryback Management Corporation, 7711 Carondelet
Avenue, Box 16900, St. Louis, Missouri 63105; and J. Rex Vardeman, 2600 N.
Longview Street, Kilgore, Texas 75662.
(2) Includes 19,000, 12,400, 19,000, 16,000, 10,000, 7,000, and 5,000 shares
as to which beneficial ownership could be acquired by Messrs. Vardeman,
Anton, Branum, Carter, Womble, Stupnik, and Heitzman, respectively,
within sixty days of December 2, 1996, upon the exercise of outstanding
options.
(3) Includes an aggregate of 103,333 shares as to which beneficial ownership
could be acquired by all such persons within sixty days of December 2,
1996, upon the exercise of outstanding options.
-2-
<PAGE> 5
ELECTION OF DIRECTORS
The Company's Board of Directors for the ensuing year will consist of
five directors who are each to be elected at the Meeting for a term of office
expiring at the next Annual Meeting of Shareholders or until their respective
successors have been elected and qualified. It is intended that the persons
named in the following table will be nominated as directors of the Company and
that the persons named in the accompanying Proxy, unless otherwise directed,
will vote for the election of such nominees at the Meeting. Each of the
nominees is an incumbent director of the Company and has indicated his
willingness to continue to serve as a member of the Board of Directors, if
elected. In the event any nominee should become unavailable for election to
the Board of Directors for any reason not presently known or contemplated, the
Proxy holders will be vested with discretionary authority in such instance to
vote the enclosed Proxy for such substitute as the Board of Directors shall
designate.
The following slate of five nominees has been nominated by the Board
of Directors:
<TABLE>
<CAPTION>
DIRECTOR
NAME OF NOMINEE AGE POSITION(S) SINCE
--------------- --- ----------- -----
<S> <C> <C> <C>
J. Rex Vardeman (1)(2) . . . . . . . 57 Chairman of the Board, President, Chief
Executive Officer and Director 1984
A. Don Branum (2) . . . . . . . . . . 59 Senior Vice President, Assistant 1984
Secretary and Director; Vice
President/General Manager,
Vertex Antenna Division
James D. Carter (2)(3) . . . . . . . 49 Vice President-Finance, Treasurer and
Director 1984
Bill R. Womble (1)(3) . . . . . . . . 58 Secretary and Director 1984
Donald E. Heitzman, Sr. (1)(3) . . . 70 Director 1992
</TABLE>
(1) Member of the Compensation Committee.
(2) Member of the Stock Option Committee of the Outside Directors Stock Option
Plan.
(3) Member of the Audit Committee.
J. Rex Vardeman is a co-founder of the Company and has served as
Chairman of the Board, President, Chief Executive Officer and a director since
its inception in October 1984. Prior to founding the Company, Mr. Vardeman
served as Vice President of Harris Antenna Operations ("Harris Antenna
Operations"), a unit of the Satellite Communications Division of Harris
Corporation ("Harris"), until the acquisition in 1984 of the Harris Antenna
Operations by the Company. In 1973, Mr. Vardeman co-founded Radio Mechanical
Structures, Inc. ("RMS"), the predecessor to the Harris Antenna Operations, and
served as its Vice President and General Manager and a director until the
acquisition of RMS by Harris in 1977. For more than ten years prior thereto,
he was employed by E-Systems, Inc., a major electronics company, in various
engineering and management positions. Mr. Vardeman holds no other
directorships.
-3-
<PAGE> 6
A. Don Branum, a co-founder of the Company, has served as Senior Vice
President, Assistant Secretary, and a director since its inception in October
1984, and as Vice President/General Manager of the Company's Vertex Antenna
Division since April 1994. Prior to joining the Company, Mr. Branum served as
Vice President of the Harris Antenna Operations, with responsibility for
product marketing. Mr. Branum served as President of Dallas
Telecommunications, Inc., a communication marketing and consulting firm which
he founded from 1981 through 1984. From 1978 through 1981, Mr. Branum served
as Vice President and General Manager of the Satellite Communications Division
of Harris, of which the Harris Antenna Operations were a part. Mr. Branum was
a co-founder of RMS in 1973 and served as its President and a director until
its acquisition by Harris in 1977. He holds no other directorships.
James D. Carter has served the Company as Vice President - Finance and
Treasurer and a director since its inception in October 1984. Prior to joining
the Company, Mr. Carter was employed by Harris as Controller of the Harris
Antenna Operations since 1978. For more than six years prior thereto, Mr.
Carter was employed by Harris in various accounting positions. Mr. Carter
holds no other directorships.
Bill R. Womble has served as Secretary and a director of the Company
since October 1984. He has been continuously engaged in the private practice
of law since 1963 and is a shareholder of the firm of Thompson & Knight, P.C.
(attorneys), in Dallas, Texas. Mr. Womble holds no other directorships.
Donald E. Heitzman, Sr. has served as a director of the Company since
September 1992. Mr. Heitzman is President of International & Defense
Consultants, of Dallas, Texas, a private consulting firm which he founded in
May 1992. He was previously employed by Electrospace Systems, Inc.
(telecommunications systems), as Senior Vice President of International
Business Development for more than five years. Mr. Heitzman holds no other
directorships.
All directors of the Company hold office until the next ensuing Annual
Meeting of Shareholders and until their respective successors are duly elected
and qualified. All officers of the Company are elected annually by the Board
of Directors and serve at the discretion of the Board. There are no family
relationships between any director or officer and any other such person.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF SUCH NOMINEES.
-4-
<PAGE> 7
BOARD OF DIRECTORS AND COMMITTEES
The business affairs of the Company are managed under the direction of
the Board of Directors. The Board meets on a regularly scheduled basis during
the fiscal year of the Company to review significant developments affecting the
Company and to act on matters requiring Board approval. It also holds special
meetings as required from time to time when important matters arise requiring
Board action between scheduled meetings. The Board of Directors or its
authorized committees met eight times and acted by unanimous written consent
one time during the 1996 fiscal year. During fiscal year 1996, each incumbent
director participated in at least 75% or more of the aggregate of (i) the total
number of meetings of the Board of Directors (held during the period for which
he was a director) and (ii) the total number of meetings of all committees of
the Board on which he served (during the period that he served). For the Board
of Directors as a whole, attendance was 100% during the 1996 fiscal year.
The Board of Directors has established Audit, Compensation, and
Outside Directors Stock Option Committees to devote attention to specific
subjects and to assist it in the discharge of its responsibilities. The
functions of these committees, their current members and the number of meetings
held during fiscal year 1996 are described below.
Audit Committee. The Audit Committee recommends to the Board of
Directors the appointment of the firm selected to be independent public
accountants for the Company and monitors the performance and independence of
such firm; reviews and approves the scope of the annual audit and quarterly
reviews and evaluates with the independent public accountants the Company's
annual audit and annual consolidated financial statements; reviews with
management the status and effectiveness of internal accounting controls;
evaluates problem areas having a potential financial impact on the Company
which may be brought to its attention by management, the independent public
accountants or the Board of Directors; and evaluates all public financial
reporting documents of the Company. James D. Carter (Chairman), Bill R.
Womble and Donald E. Heitzman, Sr. are members of the Audit Committee. The
Audit Committee met one time during the 1996 fiscal year.
Compensation Committee. The Compensation Committee is empowered to
review and advise management and make determinations with respect to the
compensation and other employment benefits of executive officers and key
employees of the Company. The Compensation Committee also administers the
Company's Stock Option Plan for Key Employees, the 1995 Stock Compensation
Plan, Qualified Employee Stock Purchase Plan for employees, Management
Incentive Compensation Plans for officers and key employees and Employee Profit
Sharing Bonus Plans for employees. The Compensation Committee is authorized,
among other powers, to determine from time to time the individuals to whom
stock options shall be granted, the number of shares to be covered by each
option and the time or times at which options shall be granted pursuant to the
stock option plans for officers and other employees.
The Compensation Committee is comprised of J. Rex Vardeman (Chairman)
and Messrs. Womble and Heitzman. The Compensation Committee met one time and
acted by unanimous written consent one time during the 1996 fiscal year.
Stock Option Committee. The Company's Outside Directors Stock Option
Plan (the "Outside Directors Plan") is administered by the Stock Option
Committee of the Board comprised of Messrs. Vardeman (Chairman), Carter and A.
Don Branum, each of whom is an executive officer and director of the Company
and ineligible to participate in such plan. The Outside Directors Plan defines
"Outside Directors" eligible to participate in such plan as those directors of
the Company who are not regular salaried employees of the Company. The Stock
Option Committee is authorized to determine from time to time the individuals
to whom stock options will be granted, the number of shares covered by each
option and the time or times at which options shall be granted pursuant to such
plan.
Currently, two directors of the Company are eligible to participate in
the Outside Directors Plan. The Stock Option Committee held no meetings during
the 1996 fiscal year.
-5-
<PAGE> 8
The Company does not have a nominating committee. The functions
customarily attributable to a nominating committee are performed by the Board
of Directors as a whole.
PROPOSAL TO RATIFY THE APPOINTMENT
OF INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors of the Company has appointed Arthur Andersen
LLP, independent public accountants, to serve as independent auditors of the
Company and to audit its consolidated financial statements for fiscal year
1997, subject to approval by shareholders at the Meeting. Arthur Andersen LLP
has served as the Company's independent public accountants since the Company's
inception and is, therefore, familiar with its affairs and financial
procedures. To the knowledge of management of the Company, neither such firm
nor any of its members has any direct or material indirect financial interest
in the Company, nor any connection with the Company in any capacity other than
as independent public accountants.
Although shareholder ratification and approval of this appointment is
not required by law or otherwise, in keeping with the Company's policy that its
shareholders should be entitled to a voice in this regard and as a matter of
good corporate practice, the Board of Directors is seeking ratification of this
appointment. If the appointment is not ratified, the Board of Directors must
then determine whether to appoint other auditors prior to the end of the
current fiscal year, and in such case, the opinions of shareholders will be
taken into consideration.
The following resolution concerning the ratification of the
appointment of independent public accountants will be submitted to the Meeting:
"RESOLVED, that the appointment by the Board of Directors of
the Company of Arthur Andersen LLP, independent public
accountants, to audit the consolidated financial statements
and related books, records, and accounts of the Company and
its subsidiaries for the fiscal year ending September 30,
1997, is hereby ratified."
A representative of Arthur Andersen LLP, the Company's independent
public accountants for fiscal year 1996, is expected to be in attendance at the
Meeting and will be afforded the opportunity to make a statement. The
representative will also be available to respond to appropriate questions.
The enclosed Proxy will be voted as specified, but if no specification
is made, it will be voted in favor of the adoption of the resolution of
ratification.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THIS PROPOSAL.
-6-
<PAGE> 9
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION INFORMATION
The following table sets forth certain information regarding all cash
compensation paid or to be paid by the Company or any of its subsidiaries, as
well as other compensation paid or accrued, during the fiscal years indicated,
to the Company's Chief Executive Officer and each of the Company's four other
most highly compensated executive officers for such respective periods in all
capacities in which they served.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
----------------------------------
ANNUAL COMPENSATION AWARDS PAYOUTS
----------------------------------- ------------------------ --------
OTHER SECURITIES
ANNUAL RESTRICTED UNDERLYING ALL OTHER
COMPEN- STOCK OPTIONS/ LTIP COMPEN-
NAME AND PRINCIPAL FISCAL SATION AWARD(S) SARS PAYOUTS SATION
POSITION YEAR SALARY ($) BONUS ($)(1) ($)(2) ($) (#) ($) ($)(3)
- -------------------- ------- ---------- ------------ ------ ---------- ------------ --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
J. Rex Vardeman,
Chairman of the
Board, President 1996 $ 188,000 $ 77,000 -- -- -- -- $ 800
and Chief 1995 188,000 50,000 -- -- 25,000(4)(5) --
Executive 1994 188,000 46,000 -- -- -- -- 800
Officer . . . . . 800
A. Don Branum,
Senior Vice
President; 1996 160,000 94,000 -- -- -- -- 800
Vice President/ 1995 160,000 -0- -- -- 25,000(4)(5) -- 800
General Manager, 1994 160,000 37,000 -- -- -- -- 800
Vertex Antenna
Division . . . .
James D. Carter,
Vice President - 1996 125,000 51,000 -- -- -- -- 800
Finance and 1995 125,000 30,000 -- -- 25,000(4)(5) -- 800
Treasurer . . . . 1994 125,000 28,000 -- -- -- 800
--
William L. Anton,
Vice President; 1996 105,000 55,000 -- -- -- -- 800
Vice President - 1995 105,000 -0- -- -- 16,000(4)(6) -- 800
Marketing, 1994 105,000 26,000 -- -- -- -- 800
Vertex Antenna
Division . . . .
Manfred Stupnik, 1996 115,000 79,000 -- -- -- -- 800
Vice President; 1995 109,000 52,000 -- -- 10,000(4) --
President, Gamma-f 1994 104,000 55,700 -- -- -- -- 75,000(7)
Corp (8). . . . . 800
</TABLE>
(1) Includes incentive bonus payments earned for services rendered to the
Company or a subsidiary in the year indicated that were paid in the
following year.
(2) Excludes certain incidental perquisites, the total of which did not exceed
the lesser of $50,000 or 10% of the cash compensation for any named
individual.
(3) Except as noted in footnote (8) below, the amounts reflected in this column
consist of the annual employer matching payments to the Company's qualified
Savings/Profit Sharing Plan.
(4) Incentive stock options to acquire shares of Common Stock pursuant to the
Company's 1995 Stock Compensation Plan.
-7-
<PAGE> 10
(5) Includes Stock Appreciation Rights ("SARs") with respect to 20,000
underlying shares of Common Stock.
(6) Includes SARs with respect to 16,000 underlying shares of Common Stock.
(7) Includes (i) nonrecurring bonus compensation of $75,000 paid in fiscal year
1995 resulting from tenure of three years with Gamma-f Corp. since its
acquisition by the Company in September 1991, and (ii) the annual employer
matching contribution of $800 to the Company's qualified Savings/Profit
Sharing Plan.
(8) Compensation reflected in the Summary Compensation Table for Mr. Stupnik
represents compensation for services as President of Gamma-f Corp., the
Company's wholly-owned subsidiary, and, since January 1995, as Vice
President of the Company.
-8-
<PAGE> 11
OPTION GRANTS DURING FISCAL YEAR 1996
No options to acquire shares of Common Stock or related SARs were granted
to the named executive officers of the Company during fiscal year 1996.
1996 OPTION EXERCISES AND FISCAL YEAR END HOLDINGS
The following table sets forth information with respect to options
exercised by the named executives of the Company during fiscal year 1996 and
the number and value of unexercised options and SARs held at fiscal year end.
AGGREGATE OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION/SAR VALUES
<TABLE>
<CAPTION>
VALUE OF UNEXERCISED
NUMBER OF SECURITIES IN-THE-MONEY
UNDERLYING UNEXERCISED OPTIONS/SARS
OPTIONS/SARS AT FY-END(#) AT FY-END ($)(*)
------------------------- --------------------
SHARES
ACQUIRED
NAME ON EXERCISE(#) VALUE REALIZED($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
------------------ -------------- ----------------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
J. Rex Vardeman . -- -- 14,000 26,000 $ 83,500 $ 131,500
A. Don Branum . . -- -- 14,000 26,000 83,500 131,500
James D. Carter . -- -- 11,000 24,000 63,250 118,000
William L. Anton -- -- 9,200 16,800 54,900 84,600
Manfred Stupnik . 3,000 $ 29,625 5,000 8,000 33,500 38,000
</TABLE>
- ------------------------
* The closing price for the Company's Common Stock as reported by The Nasdaq
Stock Market (National Market System) on September 30, 1996, was $16.75 per
share. The indicated value is calculated on the basis of the difference
between the option exercise price per share and $16.75, multiplied by the
number of shares of Common Stock underlying each option.
COMPENSATION OF DIRECTORS
The Company has adopted a policy whereby all Outside Directors
(non-employees) receive directors' fees of $1,000 for each meeting of the Board
of Directors attended (exclusive of telephonic meetings) and for each meeting
of a committee of the Board of Directors attended (exclusive of committee
meetings held on the same day as Board meetings). No director who is an
employee of the Company receives any fees for services as a director or member
of any committee of the Board. All directors are reimbursed for reasonable
travel and out-of-pocket expenses incurred in connection with attendance at
meetings of the Board of Directors or of committees of the Board.
In addition, the Company has adopted the Outside Directors Plan
whereby stock option grants have been made from time to time on an irregular
basis to reward director performance and to encourage those qualifying
directors of the Company who are not employees to participate in the Company's
long-term success. Pursuant to this plan, the Company has previously granted
non-qualified stock options in fiscal year 1993 to Messrs. Womble and Heitzman
to purchase 5,000 shares of Common Stock each at the exercise price of $10.00
per share, and in fiscal year 1995 for an additional 5,000 shares of Common
Stock each at an exercise price of $12.00 per share. To date, Mr. Heitzman has
partially exercised his 1993 option to the extent of 2,000 shares.
-9-
<PAGE> 12
EMPLOYMENT AGREEMENTS
J. Rex Vardeman, A. Don Branum and James D. Carter, in their
capacities as (i) Chairman of the Board, President and Chief Executive Officer,
(ii) Senior Vice President and Assistant Secretary, and (iii) Vice
President--Finance and Treasurer of the Company, respectively, have each
executed employment agreements with the Company. These employment agreements
are each for three-year terms which automatically renew on a daily basis.
Among other provisions, these agreements provide that, in
consideration for remaining in the employ of the Company, each officer is
entitled, subject to certain conditions, to receive benefits in the event of
termination of employment under certain circumstances, including, among other
reasons, a Change of Control of the Company. If such an officer is terminated
for a reason other than (a) his death, disability or retirement, (b) for cause,
or (c) his voluntary termination other than for good reason, such officer would
be entitled to receive from the Company, except as otherwise indicated below, a
lump-sum severance payment equal to the sum of the following payments: (i) the
officer's full base salary through the effective date of his termination at the
rate then in effect, (ii) any authorized but unreimbursed business expenses and
any vacation benefits which have accrued but are unpaid or unused as of the
effective date of termination, (iii) any accrued but unpaid annual bonus
compensation to the effective date of termination, but without accelerating the
bonus payment date, (iv) an amount equal to three times the average aggregate
direct annual compensation (salary and bonus) of the officer for the five
fiscal years of the Company ended immediately prior to the effective date of
his termination, and (v) in the event such officer is subject to the excise tax
imposed by Section 4999 of the Internal Revenue Code of 1986, as amended (the
"Code"), resulting from any "excess parachute payment" received by such officer
as described in Section 280G(b) of the Code, an amount sufficient to ensure
that after payment of such excise tax, plus interest or penalties thereon, if
any, as the result of such "excess parachute payment," such officer will retain
free and clear of all claims, taxes, and impositions an amount equal to such
excise tax, interest and penalties, if any, imposed upon the excess payment
received. In the event that any such officer receives a parachute payment as a
result of termination of employment, such officer would be deemed to receive an
"excess parachute payment" if it equals or exceeds 300% of the officer's "base
amount," generally the average annual compensation received by such officer
over the five most recent tax years. The "excess parachute payment" is computed
as that portion of the "parachute payment" which exceeds the "base amount."
In addition, certain key employees of the Company have executed
proprietary information protection agreements acknowledging that all their
discoveries made while an employee of the Company will be the property of the
Company and that they will not disclose trade secrets or other confidential
information of the Company to others.
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<PAGE> 13
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
General. Pursuant to rules designed to enhance disclosure of
executive compensation policies, the Company is required to provide certain
data and information regarding compensation and benefits provided to its Chief
Executive Officer and four other most highly compensated officers. The
disclosure requirements for these executive officers include the use of tables
and a report explaining the rationale and considerations which resulted in
fundamental executive compensation decisions affecting these individuals. In
response to this requirement, the Compensation Committee submits the following
report for inclusion in this Proxy Statement. The data and information
included in the various compensation tables appearing elsewhere in this Proxy
Statement should be read in conjunction with and are deemed to be a part of
this report.
Named Executives. This report includes disclosure of the required
compensation information for the Company's Chief Executive Officer and its four
other most highly compensated officers (collectively, the "Named Executives")
for 1996.
Compensation Committee. Decisions on compensation of the Company's
executive officers are made by the three- member Compensation Committee
comprised of J. Rex Vardeman, Chairman, Bill R. Womble and Donald E. Heitzman,
Sr.
Compensation Policies. The Company's executive compensation policies,
as endorsed by the Board of Directors, are designed to:
Provide competitive levels of compensation which support a
pay-for-performance policy that integrates pay with
achievement of annual and long-term performance goals by the
Company as a whole and its respective subsidiaries and
divisions, rewards noteworthy corporate performance, and
recognizes individual initiative and achievements;
Provide a comprehensive program which enhances opportunities
to achieve strategic business initiatives and facilitates the
recruitment, retention and motivation of talented executives
whose abilities are critical to the long-term success and
competitiveness of the Company; and
Reward executives for long-term strategic management which
supports the Company's strategy of providing superior value to
its shareholders.
Target levels of overall compensation of the Named Executives are
intended to be reasonably consistent with those paid to similarly situated
executives of other employers of comparable size in the Company's industry, but
are increasingly being weighted toward programs contingent upon the performance
by the Company or its respective subsidiaries or divisions, as applicable. As
a result of the increased emphasis on tying executive compensation to corporate
performance (either of the Company as a whole or its respective subsidiaries or
divisions, as appropriate), in any particular year the Company's executives may
be paid more or less than executives of the Company's competitors, depending
upon the Company's performance or the performance of its respective
subsidiaries or divisions, as applicable. The Compensation Committee also
endorses the position that stock ownership by management and stock-based
performance compensation arrangements are beneficial in aligning the interests
of management and shareholders in the enhancement of shareholder value. Thus,
the Compensation Committee has increasingly utilized these elements in
determining the Company's compensation benefits for its executive officers.
-11-
<PAGE> 14
Compensation paid the Company's executive officers in 1996, as
reflected in the foregoing tables as to the Named Executives, consisted of base
salary and annual bonus compensation. No stock options were granted to any of
the Named Executives under the Company's Stock Option Plans during the 1996
fiscal year.
Relationship of Performance. The Compensation Committee's emphasis on
tying pay to performance criteria is reflected in the cash compensation paid to
the Named Executives for 1996, as a range from approximately 29.0% to
approximately 40.7% of the amounts paid to the Named Executives for 1996
(approximately 29.1% for the Chief Executive Officer) resulted from
performance-based compensation pursuant to the respective Management Incentive
Compensation Plans (the "Management Incentive Plans") for annual cash incentive
bonuses of the Company as a whole, its subsidiaries, Gamma-f Corp., Vertex
Antennentechnik GmbH, and Maxtech, Inc. (the "Subsidiaries"), and its
divisions, Vertex Antenna Division, Vertex Control Systems Division, and Vertex
Integrated Satellite Antenna Technology Division (the "Divisions"). The
objective measures of performance that are utilized under the Management
Incentive Plans include targeted versus actual annual net income after tax of
the Company as a whole, and targeted versus actual net pre-tax income for the
respective Divisions and Subsidiaries, each viewed separately. Subjective
considerations are considered only in establishing base salaries and, to a
lesser degree, the criteria for establishing the annual operating plan for the
Company as a whole, its Divisions, and its Subsidiaries, respectively, from
which annual cash bonuses are determined and in determining the target annual
bonus award of each participant pursuant to the respective Management Incentive
Plans of the Company, its Divisions, and its Subsidiaries, as applicable.
Annual Salaries. For 1996, the Compensation Committee established the
annual base salaries of the respective Named Executives (including the Chief
Executive Officer) at the same levels which prevailed in 1995, except for one
of the Named Executives who was awarded an increase of approximately 5.5% in
annual base salary in 1996 compared to 1995. While adjustments for 1996 may
have been warranted as to each Named Executive, including the Chief Executive
Officer, based on enhanced duties and responsibilities, competitive data,
individual performance, initiative and contribution to overall corporate
performance, tenure and internal comparability considerations, the Company as a
whole actually achieved 99.9% of the targeted net income after tax projected
pursuant to its 1995 annual operating plan. Accordingly, consistent with the
Company's executive compensation policy of tying executive compensation to
performance, the 1996 base salaries of the respective Named Executives remained
unchanged from 1995 levels, except as noted above.
Annual Bonuses. The annual cash incentive bonuses payable under the
respective Management Incentive Plans to the Named Executives reported in the
Summary Compensation Table are based primarily on objective criteria and to a
lesser extent on subjective standards. Objective criteria include actual
versus target annual net income after tax of the Company as a whole, and actual
versus target annual net pre-tax income of each of the Company's Divisions and
Subsidiaries, respectively. Subjective criteria encompass factors considered
(i) in promulgating the annual operating plan and (ii) in determining the
target bonus award for each eligible participant under the applicable
Management Incentive Plan based upon the above described standards utilized in
determining annual base salaries. Target annual net income, after tax or
pre-tax, as applicable, utilized for purposes of establishing target annual
cash incentive bonuses for the year is based on the annual operating plan for
the Company, its Divisions, and its Subsidiaries, respectively, developed by
management and approved by the Board of Directors as a whole. In September
1995, the full Board of Directors, acting upon the recommendations and with the
participation of management, established the following: (i) the parameters of
the 1996 annual operating plan, including, among other information, the
financial objectives of the Company, its Divisions, and its Subsidiaries,
respectively, for such year; (ii) the percentage of net income after tax of the
Company to be available as the aggregate annual bonus fund under the Company's
Management Incentive Plan for its eligible participants, including certain of
the Named Executives, measured by the degree of achievement of the Company's
actual net income after tax for 1996, as compared to the target net income
after tax for such
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<PAGE> 15
year pursuant to the annual operating plan; (iii) the percentage of pre-tax
income of its respective Divisions to be available as the aggregate bonus fund
under the Management Incentive Plan applicable to each Division for its
eligible participants, including certain of the Named Executives, measured by
the degree of achievement of each Division's actual pre-tax income for 1996, as
compared to its target pre-tax income for such year pursuant to the annual
operating plan; and (iv) the percentage of pre-tax income of its respective
Subsidiaries to be available as the aggregate annual bonus fund under the
Management Incentive Plan applicable to each Subsidiary for its eligible
participants, including one of the Named Executives, measured by the degree of
achievement of each Subsidiary's actual pre-tax income for 1996, as compared to
its target pre-tax income for such year pursuant to the annual operating plan.
In October 1995, through application of the criteria described above,
the Compensation Committee determined the target annual bonus award of each
eligible participant under the respective Management Incentive Plans, including
each Named Executive, as a percentage share of the target annual bonus fund
available under such plans, respectively, for 1996. As a result of the
performance of the Company as a whole, its Divisions, and its Subsidiaries in
1996, the Compensation Committee determined the actual 1996 cash bonus award
for each Named Executive, including the Chief Executive Officer, by applying
the objective criteria described above, which procedure was also uniformly
applied in determining the actual 1996 cash bonuses for all other officers of
the Company (including its Divisions) and its Subsidiaries. The Compensation
Committee followed the same procedure in October 1996 to determine target 1997
cash incentive bonus awards pursuant to the Management Incentive Plans.
Stock Option Grants. The Company has adopted three stock option plans
(collectively, the "Stock Plans") to provide long-term incentive compensation
for eligible participants: the Stock Option Plan for Key Employees (the "Key
Employee Plan"), the 1995 Stock Compensation Plan (the "1995 Stock Plan") and
the Qualified Employee Stock Purchase Plan (the "Stock Purchase Plan").
Generally, executive officers and other key employees of the Company (including
its Divisions) and its Subsidiaries are entitled to participate in these Stock
Plans. Stock option grants under the Key Employee Plan and the 1995 Stock Plan
provide the right to purchase shares of the Company's Common Stock at fair
market value (the average of the high and low trading prices) on the date of
grant, while stock option grants pursuant to the Stock Purchase Plan provide
the right to purchase shares of the Company's Common Stock at an exercise price
equal to the lesser of 85% of fair market value at the date of grant or 95% of
fair market value at the date of exercise of the stock option. Additionally,
the 1995 Stock Plan provides that optionees may be granted stock appreciation
rights with respect to shares of Common Stock covered by related options
granted under such plan, which permit optionees to be paid the appreciation on
the related stock option in lieu of exercising such option. Each stock option
granted under the Key Employee Plan or the 1995 Stock Plan is effectively
exercisable based on an incremental vesting schedule of 20% per annum over five
years; and may have a maximum term of seven years under the Key Employee Plan
or ten years pursuant to the 1995 Stock Plan. Options granted pursuant to the
Stock Purchase Plan are for a term of 13 months and are exercisable after the
expiration of one year from date of grant. The Stock Plans are structured to
encourage the retention of shares purchased under the Stock Plans and provide
long-term compensation opportunities to participating executives and other key
employees only to the extent that shareholders of the Company have benefitted.
Option grants have been made from time to time on an infrequent basis
under the Stock Plans to reward executive performance and to encourage
optionees to participate in the Company's long-term success as measured by the
value of the Company's Common Stock. Factors considered in determining the
amounts of options include multiples of base salary (designed to create greater
opportunities commensurate with enhanced responsibilities), competitive data,
managerial abilities, and individual initiative and achievements. In fiscal
year
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<PAGE> 16
1995, the Named Executives were each granted certain stock options. No stock
options were awarded to any of the Named Executives in fiscal year 1996.
The 1996 annual compensation of J. Rex Vardeman, as reflected in
certain tables accompanying this report, was based on the policies described
above.
Respectfully submitted,
COMPENSATION COMMITTEE
of the Board of Directors
J. Rex Vardeman, Chairman
Bill R. Womble
Donald E. Heitzman, Sr.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During fiscal year 1996, the members of the Compensation Committee
were responsible for determining executive compensation and made decisions
related to stock option grants to certain officers other than executive
officers. J. Rex Vardeman, Chairman of the Board, President and Chief
Executive Officer, serves as Chairman of the Compensation Committee and
participated in deliberations concerning executive officer compensation.
No member or nominee for election as a member of the Board of
Directors or any Committee of the Board has an interlocking relationship with
the board (or member of such board) or any committee (or member of such
committee) of a board of any other company.
-14-
<PAGE> 17
STOCK PERFORMANCE INFORMATION
The following chart illustrates the percentage of change in the
cumulative total shareholder return on the Company's Common Stock during each
of the fiscal years in the five-year period ended September 30, 1996, compared
with the cumulative total returns on the Center for Research in Security Prices
("CRSP") Index for The Nasdaq Stock Market (U.S. Companies) and the CRSP Index
for Nasdaq Communications Equipment Stocks, respectively, for the same periods.
STOCK PERFORMANCE*
[GRAPH]
- --------------------------------------------------------------------------------
LEGEND
<TABLE>
<CAPTION>
Index Description 9/30/91 9/30/92 9/30/93 9/30/94 9/29/95 9/30/96
----------------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Vertex Communications Corporation . . . . . . . 100.0 125.7 151.4 128.6 197.1 191.4
CRSP Index for The Nasdaq Stock Market . . . . 100.0 112.1 146.8 148.0 204.4 242.6
CRSP Index for Nasdaq Communications Equipment 100.0 102.6 250.6 206.8 425.9 477.5
Stocks . . . . . . . . . . . . . . . . . . . .
</TABLE>
NOTES:
A. The lines represent monthly index levels derived from compounded daily
returns that include all dividends.
B. The indexes are reweighted daily, using the market capitalization on
the previous trading day.
C. If the monthly interval, based on the fiscal year end, is not a trading
day, the preceding trading day is used.
D. The index level for each series was set to $100.00 on September 30,
1991.
- --------------------------------------------------------------------------------
- --------------------
* The comparison assumes (i) $100 was invested on September 30,1991, in the
Company's Common Stock and in each of the foregoing indices and (ii) that any
dividends paid by companies included in the comparative indices were
reinvested in additional shares of the same class of equity securities of
such companies at the frequency with which dividends were paid during the
applicable periods depicted.
-15-
<PAGE> 18
The stock performance information depicted in the preceding chart is
not necessarily indicative of future stock price performance. The chart shall
not be deemed to be incorporated by reference in any filing by the Company
under the Securities Act of 1933, as amended, or the Securities Exchange Act of
1934, as amended (the "Exchange Act"), except to the extent that the Company
specifically incorporates such information by reference.
CERTAIN TRANSACTIONS
The Board of Directors of the Company has adopted a policy that
transactions between the Company, its officers, directors, principal
shareholders, and affiliates be conducted on terms at least as favorable to the
Company as those which could be obtained from independent parties.
The Company has entered into certain indemnification agreements with
each of its directors and executive officers to provide the maximum
indemnification allowed pursuant to its articles or incorporation, bylaws and
applicable law.
SECTION 16 REQUIREMENTS
Section 16(a) of the Exchange Act requires the Company's directors and
officers, and persons who own more than 10% of a registered class of the
Company's equity securities, to file initial reports of ownership and reports
of changes in ownership with the Securities and Exchange Commission (the
"SEC"). Such persons are required by SEC regulation promulgated pursuant to
the Exchange Act to furnish the Company with copies of all Section 16(a) report
forms they file with the SEC.
Based solely on its review of the copies of such report forms received
by it with respect to fiscal year 1996, or written representations from certain
reporting persons, the Company believes that all filing requirements applicable
to its directors, officers and persons who own more than 10% of a registered
class of the Company's equity securities have been timely complied with in
accordance with Section 16(a) of the Exchange Act.
SHAREHOLDER PROPOSALS
Shareholders may submit proposals on matters appropriate for
shareholder action at subsequent annual meetings of the Company consistent with
Rule 14a-8 promulgated under the Exchange Act. For such proposals to be
considered for inclusion in the Proxy Statement and Proxy relating to the 1998
Annual Meeting of Shareholders, such proposals must be received by the Company
not later than August 21, 1997. Such proposals should be directed to Vertex
Communications Corporation, P. O. Box 1277, Kilgore, Texas 75663-1277,
Attention: Investor Relations (telephone: [903] 984-0555; telecopy: [903]
984-2090).
EXPENSES OF SOLICITATION
All costs incurred in the solicitation of Proxies for the Meeting will
be borne by the Company. In addition to the solicitation by mail, officers and
employees of the Company may solicit Proxies by telephone, telefax, or
personally, without additional compensation. The Company may also make
arrangements with brokerage houses and other custodians, nominees and
fiduciaries for the forwarding of solicitation materials to the beneficial
owners of shares of Common Stock held of record by such persons, and the
Company may reimburse such brokerage houses and other custodians, nominees and
fiduciaries for their out-of-pocket expenses incurred in connection therewith.
-16-
<PAGE> 19
ADDITIONAL INFORMATION AVAILABLE
UPON THE WRITTEN REQUEST OF ANY SHAREHOLDER, THE COMPANY WILL FURNISH,
WITHOUT CHARGE, A COPY OF THE COMPANY'S 1996 ANNUAL REPORT ON FORM 10-K, AS
FILED WITH THE SEC, INCLUDING THE FINANCIAL STATEMENTS AND SCHEDULES THERETO.
THE REQUEST SHOULD BE DIRECTED TO INVESTOR RELATIONS AT THE COMPANY'S OFFICES
INDICATED ABOVE.
The Company's 1996 Annual Report to Shareholders accompanies this
Proxy Statement. The Annual Report, which includes financial statements, does
not form and is not to be deemed part of this Proxy Statement.
OTHER BUSINESS
As of the date of this Proxy Statement, the Board of Directors and
management are not aware of any other matter, other than those described
herein, which will be presented for consideration at the Meeting. Should any
other matter requiring a vote of the shareholders properly come before the
Meeting or any adjournment thereof, the enclosed Proxy confers upon the persons
named in and entitled to vote the shares represented by such Proxy
discretionary authority to vote the shares represented by such Proxy in
accordance with their best judgment in the interest of the Company on such
matters. The persons named in the enclosed Proxy also may, if it is deemed
advisable, vote such Proxy to adjourn the Meeting from time to time.
PLEASE SIGN, DATE AND RETURN PROMPTLY THE ENCLOSED PROXY AT YOUR
EARLIEST CONVENIENCE IN THE ENCLOSED ENVELOPE, WHICH REQUIRES NO POSTAGE, IF
MAILED IN THE UNITED STATES.
By Order of the Board of Directors
Bill R. Womble
Secretary
Kilgore, Texas
December 20, 1996
-17-
<PAGE> 20
P VERTEX COMMUNICATIONS CORPORATION
2600 NORTH LONGVIEW STREET
R KILGORE, TEXAS 75662
O ANNUAL MEETING OF SHAREHOLDERS -- JANUARY 23, 1997
X THIS PROXY IS SOLICITED
BY THE BOARD OF DIRECTORS OF THE COMPANY
Y
THE UNDERSIGNED SHAREHOLDER(S) OF VERTEX COMMUNICATIONS CORPORATION, A
TEXAS CORPORATION (THE "COMPANY"), HEREBY APPOINTS J. REX VARDEMAN AND BILL R.
WOMBLE, AND EACH OF THEM, ATTORNEYS-IN-FACT AND PROXIES OF THE UNDERSIGNED,
WITH FULL POWER OF SUBSTITUTION, TO REPRESENT AND TO VOTE ALL SHARES OF COMMON
STOCK OF THE COMPANY WHICH THE UNDERSIGNED IS ENTITLED TO VOTE AT THE ANNUAL
MEETING OF SHAREHOLDERS OF THE COMPANY TO BE HELD AT THE ROY H. LAIRD COUNTRY
CLUB, 1306 HOUSTON STREET, KILGORE, TEXAS 75662, AT 11:00 A.M., LOCAL TIME, ON
THURSDAY, JANUARY 23, 1997, AND AT ANY ADJOURNMENT THEREOF. THE ABOVE NAMED
PROXIES ARE HEREBY INSTRUCTED TO VOTE SUCH SHARES AS INDICATED ON THE REVERSE
SIDE HEREOF.
(CONTINUED, AND TO BE MARKED, DATED AND SIGNED ON THE REVERSE SIDE)
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<PAGE> 21
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED BY THE
UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS GIVEN, THIS PROXY WILL BE VOTED FOR
PROPOSALS 1, 2, AND 3.
1. Election of Directors
FOR all nominees WITHHOLD
listed (except AUTHORITY
as marked to the to vote for all
contrary) to the nominees listed.
right:. [ ] [ ]
Director nominees:
J. Rex Vardeman, A. Don Branum, James D. Carter, Bill R. Womble, and Donald E.
Heitzman, Sr.
INSTRUCTIONS: To withhold authority to vote for any individual nominee, write
that nominee's name in the space provided below.
- ------------------------------------------------------------------------------
2. To ratify the appointment of Arthur Andersen LLP as independent public
accountants of the Company for the fiscal year ending September 30,
1997.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
3. In their discretion, upon such other matters as may properly come before
the meeting.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
- --------------------------------------------------------------------------------
"PLEASE MARK INSIDE BLUE BOXES SO THAT DATA
PROCESSING EQUIPMENT WILL RECORD YOUR VOTES"
- --------------------------------------------------------------------------------
This Proxy, when properly executed, will be voted in the manner directed by the
undersigned. Please refer to the Proxy Statement for a discussion of each of
these matters. If NO DIRECTION IS GIVEN, THIS PROXY WILL BE VOTED FOR EACH OF
THE PROPOSALS.
Please sign exactly as name appears hereon. When shares are held by joint
tenants, both should sign. If acting as attorney, executor, trustee, or in any
other representative capacity, sign name and indicate title.
Dated: , 199
----------------------------------------- -----
- ---------------------------------------------------------
Signature
- ---------------------------------------------------------
Signature
PLEASE MARK, SIGN, DATE AND PROMPTLY RETURN THIS PROXY
CARD USING THE ENCLOSED ENVELOPE.
-19-
