NOTICE OF ANNUAL MEETING OF STOCKHOLDERS OF
OPTEK TECHNOLOGY, INC.
1215 West Crosby Road
Carrollton, Texas 75006
To Be Held March 19, 1996
Notice is hereby given that the Annual Meeting of Stockholders of Optek
Technology, Inc. will be held on Tuesday, March 19, 1996, at 10:00 a.m.,
Dallas, Texas time at the offices of the Company, 1215 West Crosby Road,
Carrollton, Texas 75006, for the following purposes:
1. To elect a Board of Directors of six (6) persons as nominated in the
accompanying Proxy Statement, such Directors to hold office until the next
annual meeting of stockholders and until their successors are elected; and
2. To transact such procedural matters as may properly be brought before
the meeting or any adjournment or adjournments thereof.
Said meeting may be adjourned from time to time without other notice than
by announcement at said meeting, or at any adjournment thereof, and any and
all business for which said meeting is hereby noticed may be transacted at
any such adjournment.
The Board of Directors has fixed January 19, 1996 as the date for taking of
a record of the stockholders entitled to notice of and to vote at the meeting
and at any adjournment or adjournments thereof. The stock transfer books
will not be closed.
Enclosed is a form of Proxy solicited by the Board of Directors of the
Company. Stockholders who do not plan to attend the meeting in person are
requested to date, sign and return the enclosed Proxy in the enclosed
envelope, to which no postage need be affixed if mailed in the United
States. Your Proxy may be revoked at any time before it is exercised and
will not be used if you attend the meeting and prefer to vote in person.
BY ORDER OF THE BOARD OF DIRECTORS
THOMAS R. FILESI
President and Chief Executive Officer
Carrollton, Texas
January 19, 1996
<PAGE>
OPTEK TECHNOLOGY, INC.
1215 West Crosby Road
Carrollton, Texas 75006
PROXY STATEMENT
Solicitation by the Board of Directors
of Proxies from Stockholders for
the Annual Meeting of Stockholders
to be held on March 19, 1996
The Board of Directors of Optek Technology, Inc. (hereinafter called
"Optek" or the "Company") solicits your proxy in the enclosed form, which
you are requested to fill out, sign as indicated and return to the Company
in the enclosed self-addressed envelope, which requires no postage if
mailed in the United States. The approximate day on which this Proxy
Statement and form of proxy will be sent to security holders is January 26,
1996.
Any proxy given pursuant to this solicitation may be revoked by the
person giving it at any time before it is exercised by filing a written
revocation or a duly executed proxy bearing a later date. Any written
revocation may be delivered in person or mailed to the Company at the
address set out above. A stockholder who attends the Annual Meeting in
person may revoke his proxy at the Annual Meeting and vote in person
if he so desires.
Proxies are being solicited by mail and all expenses of solicitation
have been or will be borne by the Company.
January 19, 1996 has been fixed as the date of record for the
determination of stockholders of the Company entitled to notice of and
to vote at the Annual Meeting or at any adjournments thereof. At the
close of business on that date, 3,480,366 shares of Common Stock, par
value $0.01 per share (the "Common Stock"), were issued and outstanding,
each share entitling the holder thereof to one vote. Cumulative voting
in the election of Directors is not allowed.
The presence, in person or by proxy, of record holders of a majority of
the shares of Common Stock outstanding as of the date of record
constitutes a quorum for the transaction of business. Directors are
elected by a plurality of the votes cast by stockholders. Abstentions
and broker non-votes will be counted for purposes of determining the
presence or absence of a quorum, but will not be counted in determining
the number of votes cast for a nominee for Director.
All shares of the Company's Common Stock represented by proxies
received in time and in proper form and condition and not revoked will
be voted as specified in the proxy, or in the absence of specific
direction, the proxy will be voted by the person designated therein:
1. FOR the election as Directors of the Company of the six (6) nominees
named below to hold office until the next annual meeting of stockholders
and until their respective successors shall be duly elected. In the event
any of such nominees becomes unable to serve as a Director, the proxies
will be voted in accordance with the best judgment of the person acting
under it.
The management knows of no other matters to be submitted to the 1996
Annual Meeting with respect to which the stockholders are entitled to
vote, but if other procedural matters do properly come before the meeting,
the persons named in the proxy will vote according to the best judgment
of the appointed proxy.
<PAGE>
SECURITIES OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information regarding the Company's
Common Stock held at January 19, 1996 by (i) each stockholder known by
the Company to own beneficially more than 5% of the Company's Common
Stock, (ii) each of the Company's Directors, nominees for Director and
executive officers named in the "Executive Compensation" section of this
statement, and (iii) all executive officers and Directors as a group.
So far as is known to the Company, the persons named in the table have
sole voting and in community property laws, where applicable, and the
information contained in the footnotes to the table.
<TABLE>
<CAPTION>
Percentage Number of Percentage
Number of of Shares of
Outstanding Outstanding Beneficially Beneficial
Name and Address Shares Owned Shares Owned (2) Ownership
(1) (3)
<S> <C> <C> <C> <C>
First Source
Financial, Inc. - - 3,150,000 (4) 47.5%
2850 W. Golf Rd.,
5th Floor
Rolling Meadows,
IL 60008
Allstate Insurance
Company 1,028,230 29.5% 1,028,230 29.5%
Allstate Plaza
North E-5
Northbrook,
IL 60062
James D. Crownover 317,602 9.1% 317,602 9.1%
P.O. Box 7812
Horseshoe Bay
Texas 78657
Thomas R. Filesi 101,000 2.9% 245,500 (5) 6.8%
632 Hawthorn Circle
Lewisville, TX
75067
Grant A. Dove 11,000 * 208,301 (6) 5.7%
7557 Rambler Road
Suite 112
Dallas, TX 75231
Michael E. Cahr 12,500 * 36,500 (7) 1.0%
William H.
Daughtrey, Jr. 9,500 * 23,500 (8) *
Rodes Ennis 15,700 * 39,700 (9) 1.1%
Wayne Stevenson - - 12,250 (10) *
Richard G. Dahlberg 10,000 * 35,889 (11) 1.0%
Thomas S. Garrett - - 59,666 (12) 1.7%
Robert J. Kosobucki - - - -
D. Vinson Marley 17,500 * 73,333 (13) 2.1%
All executive officers
and Directors as a
group (10 persons) 177,200 5.1% 734,639 (14) 14.7%
____________________________
</TABLE>
* Less than 1%.
<PAGE>
(1) Includes only shares of Common Stock actually issued and out-
standing, and not shares issuable upon exercise of options, warrants or
other rights to acquire common stock.
(2) Includes shares of Common Stock not outstanding which are
subject to rights to acquire shares exercisable or to become exercisable
within 60 days of the date of this report.
(3) Shares of the Common Stock not outstanding which are subject to
rights exercisable or to become exercisable within 60 days of the date of
this statement are deemed to be outstanding for the purpose of computing
the percentage of beneficial ownership with respect to the holder of such
rights, but are not deemed to be outstanding for the purpose of computing
the percentage of any other person.
(4) Consists of 3,150,000 shares which may be acquired at any time
prior to October 31, 1998 upon exercise of a Warrant at an exercise price
of $0.50 per share. The exercise price is subject to adjustment in the
event the Company fails to meet certain cumulative performance criteria.
The exercise price and number of shares are also subject to adjustment upon
the occurrence of certain events in order to address dilution.
(5) Includes 36,000 shares issuable pursuant to Incentive Stock
Options at a price of $2.31 per share. Also includes 8,500 shares
exersiable or to become exercisable at a price of $2.125 per share and
100,000 shares exercisable at a price of $0.19 per share pursuant to
options issued under the Company's Long-Term Stock Investment Plan.
Mr. Filesi is President and Chief Executive Officer and a Director of
the Company.
(6) Includes 1,500 shares presently purchasable at a price of $6.125
per share and 10,000 shares purchasable at a price of $1.53 per share
pursuant to warrants issued to the Company's non-employee Directors and
3,500 shares exercisable at a price of $2.11 per share and 3,500 shares
exercisable at a price of $1.04 per share pursuant to options awarded under
the Company's Directors' Formula Award Plan. Also includes 8,759 shares
purchasable at a price of $1.11 per share, 38,462 shares purchasable at a
price of $0.65 per share and 131,580 shares purchasable at a price of
$0.19 per share, all issuable pursuant to warrants issued for services
performed by Mr. Dove as Chairman of the Board during the fiscal quarters
ended April 30, 1993, July 31, 1993 and October 29, 1993. Mr. Dove is
Chairman of the Board and a Director of the Company.
(7) Includes 10,000 shares purchasable at a price of $1.53 per share
pursuant to warrants issued to the Company's non-employee Directors and
3,500 shares exercisable at a price of $2.11 per share, 3,500 shares
exercisable at a price of $1.04 per share, 3,500 shares exercisable at a
price of $0.44 per share, and 3,500 shares which will become exercisable
at a price of $1.83 per share after the 1996 annual meeting pursuant to
options awarded under the Company's Directors' Formula Award Plan. Also
includes 5,500 shares owned of record by Mr. Cahr's wife of which Mr.
Cahr may be deemed the beneficial owner. Mr. Cahr is a Director of
the Company.
(8) Includes 3,500 shares exercisable at a price of $2.11 per share,
3,500 shares exercisable at a price of $1.04 per share, 3,500 shares
exercisable at a price of $0.44 per share, and 3,500 shares which will
become exercisable at a price of $1.83 per share after the 1996 annual
meeting pursuant to options awarded under the Company's Directors' Formula
Award Plan. Mr. Daughtrey is a Director of the Company.
(9) Includes 10,000 shares purchasable at a price of $1.53 per share
pursuant to warrants issued to the Company's non-employee Directors and
3,500 shares exercisable at a price of $2.11 per share, 3,500 shares
exercisable at a price of $1.04 per share, 3,500 shares exercisable at a
price of $0.44 per share, and 3,500 shares which will become exercisable
at a price of $1.83 per share after the 1996 annual meeting pursuant to
options awarded under the Company's Directors' Formula Award Plan.
Mr. Ennis is a Director of the Company.
(10) Includes 1,750 shares exercisable at a price of $2.18 per share
pursuant to the Company's Long-Term Stock Investment Plan and 3,500 shares
exercisable at a price of $1.04 per share, 3,500 shares exercisable at a
price of $0.44 per share, and 3,500 shares which will become exercisable
at a price of $1.83 per share after the 1996 annual meeting pursuant to
options awarded under the Company's Directors' Formula Award Plan. Mr.
Stevenson is a Director of the Company.
<PAGE>
(11) Includes 1,889 shares exercisable at a price of $5.18 per share,
1,334 shares exercisable at a price of $3.44 per share and 1,000 shares
exercisable at a price of $6.625 per share, all issuable pursuant to
Incentive Stock Options. Also includes 5,000 shares exercisable at a
price of $2.125 per share which have vested or will vest on March 19, 1996
and 16,666 shares exercisable at a price of $0.19 per share pursuant to
options issued under the Company's Long-Term Stock Investment Plan. Mr.
Dahlberg is Vice President, Engineering of the Company.
(12) Includes 10,000 shares issuable pursuant to Incentive Stock
Options presently exercisable at a price of $1.65 per share. Also
includes 3,000 shares exercisable at a price of $2.125 per share and
46,666 shares exercisable at a price of $0.19 per share pursuant to
options issued under the Company's Long Term Stock Investment Plan.
Mr. Garrett is Vice President, Operations of the Company.
(13) Includes 55,833 shares exercisable at a price of $0.19 per share
pursuant to options issued under the Company's Long Term Stock Investment
Plan. Mr. Marley is Vice President, Finance and Chief Financial Officer of
the Company.
(14) Includes 282,888 shares which may be acquired upon exercise of
employee options presently exercisable or which will become exercisable on
or before March 19, 1996, 95,750 shares presently purchasable or which will
become purchasable after the 1996 annual meeting of stockholders pursuant
to warrants and options issued to the Company's non-employee Directors, and
178,801 shares issuable pursuant to warrants issued for services rendered.
Compliance With Section 16(a) of the Exchange Act.
Based solely upon a review of Forms 3, 4 and 5 furnished to the Company and
upon written representations received by the Company, the following persons
were all Directors, executive officers or beneficial owners of more than 10
percent of the Company's Common Stock during fiscal 1995 who failed to file
any such report on a timely basis, and the following table summerizes the
timeliness of all reports filed by them during that fiscal year:
<TABLE>
<CAPTION>
Reports Filed
Timely 1-5 Days Late Over 5 Days
<S> <C> <C> <C>
Virginia Financial
Ventures, Inc. 1
Dominion Capital, Inc. 1
Dominion Resources, Inc. 1
First Source Financial LLP 1
HCFS Corporate Finance
Venture, Inc. 1
Household International, Inc. 1
Household Commercial Financial
Services, Inc. 1
James D. Crownover 1 1
Thomas R. Filesi 1
William H. Daughtrey, Jr. 1 1
Rodes Ennis 1
Wayne Stevenson 1
Richard G. Dahlberg 2 2 1
Thomas S. Garrett 1
William C. Grunau 1 1
Robert J. Kosobucki 1 1
D. Vinson Marley 1
</TABLE>
Based thereon, none of such persons failed to file any report under
Section 16(a) of the Exchange Act with respect to the Company's most
recent fiscal year.
<PAGE>
ELECTION OF DIRECTORS AND INFORMATION
AS TO DIRECTORS, NOMINEES AND EXECUTIVE OFFICERS
At the 1996 Annual Meeting, the stockholders of the Company will elect
six (6) directors, in each case to hold office until the next Annual
Meeting and until their respective successors shall be duly elected.
To be elected a Director, each nominee must receive a plurality of all
votes cast at the meeting. There will be submitted by the Board of
Directors to the 1996 Annual Meeting for election as Directors the
following six (6) nominees:
Grant A. Dove
Thomas R. Filesi
Michael E. Cahr
William H. Daughtrey, Jr.
Rodes Ennis
Wayne Stevenson
All of the nominees are now Directors of the Company and were elected to
their present terms of office at the Annual Meeting of Stockholders in
March 1995. Certain information concerning each of these nominees is set
forth below. In the event any of the nominees becomes unable to serve as
a Director, the proxy will be voted in accordance with the best judgment of
the person acting under it; however, no circumstances are at present known
which would render any nominee unavailable.
The Directors and executive officers of the Company are as follows:
<TABLE>
<CAPTION>
Name Age Position
<S> <C> <C>
Grant A. Dove 67 Director and Chairman of the Board
Thomas R. Filesi 60 Director, President and
Chief Executive Officer
Michael E. Cahr 55 Director
William H. Daughtrey 55 Director
Rodes Ennis 60 Director
Wayne Stevenson 60 Director
Richard G. Dahlberg 42 Vice President, Engineering
Thomas S. Garrett 49 Vice President, Operations
Robert J. Kosobucki 44 Vice President, Worldwide Sales
and Marketing
D. Vinson Marley 54 Vice President, Finance,
and Chief Financial Officer
</TABLE>
Mr. Dove was elected a Director of the Company in July 1989 and
Chairman of the Board in March 1993. He is currently a managing
partner of Technology Strategies & Alliance, a strategic planning and
investment banking firm. He spent 28 years with Texas Instruments,
retiring in 1987 as Executive Vice President. He then served as
Chairman and Chief Executive Officer of Microelectronics and Computer
Technology Corporation ("MCC"), a research and development consortium,
retiring in 1992. He currently serves on the boards of MCC; the Cooper
Cameron Corporation, a public company engaged in oilfiled services;
U.S. WEST, Inc., a public company engaged in telecommunications; and
Control Data Systems, Inc., a public corporation engaged in computer
systems integration. Mr. Dove received his Bachelor of Science in
Electrical Engineering from Virginia Polytechnic Institute.
Mr. Filesi became President and a Director of the Company in April 1991.
Before joining Optek, he was with Motorola, Inc. Semiconductor Products
Sector in Phoenix, Arizona and Austin, Texas, completing his tenure there
as Director of Manufacturing, RF Products. He received a Bachelor of
Science degree in Chemical Engineering from Johns Hopkins University and
did graduate studies in Management Science at Johns Hopkins and Arizona
State.
Mr. Cahr was elected a Director of the Company in August 1988. He is
President and Chief Executive Officer of Allscrips Pharmaceuticals, Inc.,
a private company engaged in the sale of prepackaged pharmaceuticals,
having served in that capacity since January 1995. Until late 1994 he was
Manager of Venture Capital at Allstate Venture
<PAGE>
Capital in Northbrook,Illinois, having been with Allstate since 1987.
Mr. Cahr received a Bachelor of Arts from Colgate University and a
Master of Business Administration from Fairleigh Dickinson University.
Mr. Daughtrey was elected a Director of the Company in March 1992. Mr.
Daughtrey is currently President of Princeton Associates, Inc., a
management consulting firm. Prior to founding Princeton Associates, Inc.
in January 1991, he was Group Managing Partner for Virginia/Maryland
Management Consulting Services at Coopers & Lybrand, Richmond, Virginia
from December 1984. He received a Bachelor of Science in Physics and a
Master of Science in Nuclear Physics from Virginia Polytechnic Institute.
He also received a Master of Business Administration in Finance from the
University of Connecticut.
Mr. Ennis was elected a Director of the Company in February 1987. Mr.
Ennis acts as a general management consultant and formerly served as
President of the Journeys and Hardy Divisions of Genesco, Inc. from March
1990 to December 1992, having served as President of the Journeys Division
of Genesco, Inc. since November 1988. Mr. Ennis is a certified public
accountant and received a Bachelor of Science degree in accounting from
Bowling Green College of Commerce. He currently serves as a Director of
Tread Corporation.
Mr. Stevenson was elected to serve on the Board of Directors in
September 1992. Mr. Stevenson is the Chairman and Chief Executive Officer
of CSI Control Systems International, Inc. located in Carrollton, Texas,
a firm engaged in the manufacture and installation of environmental
controls for the commercial market, a position he has held since 1986.
Mr. Stevenson received a Bachelor of Science in Chemical Engineering from
Louisiana Tech and is a registered professional engineer in Texas and
Louisiana.
Mr. Dahlberg was elected Vice President, Engineering in March 1994. Mr.
Dahlberg has been employed by the Company since 1983 and has served in
various engineering capacities. He received a Bachelor of Science degree
in Electrical Engineering from Texas Tech University and is a Registered
Professional Engineer in the State of Texas.
Mr. Garrett joined the Company in October 1991 as Vice President,
Operations. In April 1988 he founded Garrett Consulting Group and was
President of that firm until December 1990, at which time it merged with
Northwest Technology Group, Inc. These companies provided comprehensive
consulting services to the micro-electronics and other high technology
related industries. Mr. Garrett received a Bachelor of Arts in Chemistry
from Lamar University and he has completed studies toward a Master of
Science in Industrial Economics and Management.
Mr. Kosobucki joined the Company as Vice President, Worldwide Sales and
Marketing in July 1995. Prior to his employment by Optek, he served in
various strategic marketing and sales capacities for Summagraphics Corp.
from 1991, serving during that time as a Vice President, Senior Vice
President and finally, Director of Strategic Sales and Product Marketing.
Mr. Kosobucki received a Bachelor of Science in Electrical Engineering
from Cornell University and a Master of Business Administration from the
University of Michigan. He is a Registered Professional Engineer in
the State of New York.
Mr. Marley joined the Company as Vice President, Finance in June 1993.
Prior to his employment by the Company, he served as President of Marley
Industries, Inc., an investment/management company which operated
principally as a leveraged-buy-out firm investing in middle market
companies in the Southwest Mr. Marley holds a Master of Science in
Accounting and a Bachelor of Science in Accounting from Arizona State
University.
Directors are elected annually and serve until their successors are duly
elected and qualified. Officers serve at the discretion of the Board.
There is no family relationship between any Director, nominee for Director
or executive officer of the Company.
The Company's Board of Directors has appointed a Compensation Committee,
composed of the non-employee Directors Rodes Ennis, Michael Cahr and Wayne
Stevenson; an Audit Committee, composed of the non-employee Directors Rodes
Ennis, William Daughtrey and Wayne Stevenson; and a Board Affairs Committee
composed of the non-employee Directors Michael Cahr and William Daughtrey.
The Compensation Committee administers the Company's employee benefit plans
and sets executive compensation. The Audit Committee has been appointed
to review the Company's financial statements and its relationship with
its independent auditors. The Board
<PAGE>
Affairs Committee selects nominees for the Board of Directors to be
presented for consideration to the Company's stockholders and reviews the
renumeration of non-employee Directors; the committee will consider
nominees recommended by stockholders submitted in the manner provided for
stockholders' proposals herein.
During the fiscal year ended October 27, 1995, the Compensation
Committee held six meetings, the Audit Committee held two meetings and
the Nominating Committee held one meeting. During the fiscal year ended
October 27, 1995, the Company's Board of Directors held a total of six
meetings, and each incumbent Director then serving attended at least 75%
of the aggregate number of meetings of the Board and its Committees.
EXECUTIVE COMPENSATION
Summary Compensation Table
The following table summarizes monetary and non-monetary compensation
awarded to, earned by or paid to the Company's five most highly
compensated officers during the three fiscal years ended October 28, 1994:
<TABLE>
<CAPTION>
Long Term
Compensation
Annual Compensation Awards
Number of
Name and Shares Subject to
Principal Position Year Salary Bonus Options Granted
<S> <C> <C> <C> <C>
Thomas R. Filesi 1995 $175,000 $150,000 30,000
President and Chief
Executive Officer 1994 $172,307 $110,000 300,000
1993 $167,980 0 0
Richard G. Dahlberg 1995 $91,400 $60,000 20,000
Vice President,
Engineering 1994 $89,994 $40,000 80,000
1993 $89,199 0 0
Thomas S. Garrett 1995 $115,000 $65,000 20,000
Vice President,
Operations 1994 $113,231 $50,000 70,000
1993 $113,365 0 0
Robert J. Kosobucki 1995 $ 36,538(1) $23,000 30,000
Vice President, World
Wide Sales and
Marketing
D. Vinson Marley 1995 $125,000 $75,000 20,000
Vice President,
Finance and Chief 1994 $123,077 $62,500 100,000
Financial Officer 1993 $ 41,827(2) 0 10,000
</TABLE>
(1) Represents compensation paid from July 1995 - October 27, 1995
(2) Represents compensation paid from June 1993 - October 29, 1993
<PAGE>
Option Grants
The following table contains information about stock options granted to the
executive officers named in the preceding table during the fiscal year
ended October 27, 1995:
<TABLE>
<CAPTION>
Number % of
of Total Potential Realizable
Shares Options Value at Assumed
Under- Granted Annual Rates of Stock
lying to Emplo- Price Appreciation
Options yees in Exercise for Option Term
Granted Fiscal Price ($/ Expiration
Name Year Share) Date 5% ($) 10% ($)
<S> <C> <C> <C> <C> <C> <C>
Thomas R.
Filesi 30,000 15.3% $6.05 8/16/2005 $114,345 $288,585
Richard G.
Dahlberg 20,000 10.2% $6.05 8/16/2005 $76,230 $192,390
Thomas S.
Garrett 20,000 10.2% $6.05 8/16/2005 $76,230 $192,390
Robert J.
Kosobucki 10,000 5.1% $3.10 6/16/2005 $19,530 $49,290
20,000 10.2% $6.05 8/16/2005 $76,230 $192,390
D. Vinson
Marley 20,000 10.2% $6.05 8/16/2005 $76,230 $192,390
</TABLE>
Option Exercises And Fiscal Year End Option Values
The following table reflects option exercises during the fiscal year
ended October 27, 1995, the number of shares underlying both exercisable
and unexercisable options as of the fiscal year end and the value of
unexercised "in the money" options as of the fiscal year end:
<TABLE>
<CAPTION>
Number of Value of
Shares Underlying Unexercised
Unexercised In the Money
Number of Options At Options At
Shares Fiscal Year End Fiscal Year End(2)
Acquired
Name on Value Exercis- Unexer- Exercis- Unexer-
Exercise Realized(1) able cisable able cisable
<S> <C> <C> <C> <C> <C> <C>
Thomas R.
Filesi 100,000 $562,500 44,500 230,000 $210,278 $1,390,500
Richard G.
Dahlberg 31,900 $74,998 7,557 74,993 $24,815 $390,313
Thomas S.
Garrett 0 0 36,333 66,667 $227,023 $336,802
Robert J.
Kosobucki 0 0 0 30,000 0 $58,000
D. Vinson
Marley 0 0 39,999 90,001 $269,127 $494,073
</TABLE>
(1) For purposes of calculating the value realized, the Company has used
the average of the bid and asked prices as reported by a market maker on
the date of exercise.
(2) For purposes of calculating the value of unexercised "in the money"
options, the Company has used the average of the bid and asked prices as
reported by a market maker for the Company's Common Stock as of October
27, 1995.
Employment Agreements
The Company has entered into employment agreements with the President of
the Company and two of its Vice Presidents. The agreements with Mr. Filesi
and Mr. Marley provide an initial term of three years and one year,
respectively, renewable for additional terms of one year unless either
party gives notice of intent not to renew at least six months prior to the
end of each term. These agreements also provide for continuation of salary
and benefits for up to one year after a change of control of the Company
if the executive's employment is terminated during that time.
The agreement of Mr. Garrett provides an initial term of one year renew-
able for additional terms of one year unless either party gives notice of
intent not to renew at least ninety days prior to the end of each term and
addition-
<PAGE>
ally provide a continuation of salary for up to ninety days after
termination if the Company elects not to renew the term of employment.
All such agreements contain provisions assigning all discoveries by the
employee to the Company and restricting use or disclosure of confidential
information.
Compensation Committee Report on Executive Compensation
The Compensation Committee reviews and recommends to the Board of
Directors the compensation payable to the senior executive officers of
the Company. The determination of base salary has been based in the past
largely upon that level required to compete with other employers in the
industry in which the Company is engaged. The Compensation Committee
annually reviews compensation payable to the senior executives and the
award of options and other nonmonetary benefits to those individuals.
At present, the Compensation Committee has determined to hold the base
salaries of the Company's more highly paid personnel (over $60,000 per
year) at a relatively constant level from year to year. The intent of
this policy is to have base salaries in the lower range of competitive
industry companies, but to use "at risk" cash bonuses to augment total
cash compensation when Optek performs well. This current limitation
applies to the chief executive officer and other executive officers of
the Company.
In October 1994 the Committee approved, adopted and recommended to the
entire Board, which ratified, a cash bonus plan which provided for
aggregation of a bonus pool for all employees of up to 10% of budgeted
operating profit if the Company exceeded its operating budget for the
fiscal year with lesser percentages for performance at or below budget.
As a result of the Company's excellent performance, the target originally
established was fully reserved by the end of the third fiscal quarter. In
order to reward the continued achievements of management, the Compensa-
tion Committee approved a continuation of the accrual to the pool at the
same rate previously approved through the fourth fiscal quarter. The
committee then allocated the pool among employees to reward performance.
As a result, the chief executive officer and other officers of the
Company were awarded bonuses based upon their performance related to goals
established prior to the beginning of the fiscal year. The Committee
believes that providing key managerial personnel the means to achieve
additional compensation in the mid-term through these programs stimulates
the kind of productive efforts evidenced during the 1995 fiscal year.
Further, to provide longer-term incentives, the Compensation Committee
has awarded stock options which will provide a return to these executives
as the Company becomes successful. During 1995, the Committee approved
awards of ten year stock options to key managerial personnel in order to
incentivize execution of the long-term plan and to align their interests
with those of the stockholders.
Michael E. Cahr
Rodes Ennis
Wayne Stevenson
Directors Compensation
Non-employee Directors of the Company were paid $1,000 for each Directors'
meeting attended in fiscal 1995 and are reimbursed for travel expenses
incurred in connection with each such meeting. For future periods, the
Board has approved an annual payment of $5,000 to be made in December in
addition to the other compensation now paid to Directors.
Each non-employee Director of the Company is also awarded upon election
at an annual meeting of stockholders options to acquire up to 3,500 shares
of the Common Stock pursuant to the Company's Directors' Formula Award
Plan. These awards contain the following rights:
1. Stock Options - Options to acquire common stock which are not
entitled to treatment as incentive stock options under the Internal Revenue
Code.
<PAGE>
2. Reload Options - Options to reacquire shares of common stock
which are used to exercise stock options.
3. Alternative Appreciation Rights - Rights to acquire an equivalent
number of shares equal in present market value to the difference between
current market value and exercise price of the stock purchasable pursuant
to any of the preceding options.
The exercise price of all options granted is 100% of the fair market value
of the Company's Common Stock on the date of grant, determined on a formula
based upon the price of the Common Stock for the twenty trading days
preceding the date of the award. Each option awarded pursuant to the
Directors' Plan vests and becomes fully exercisable if such individual
continues to serve as a Director until the next annual meeting of
stockholders. Options granted under the Plan expire ten years from the
date of grant, and no option may be exercised by any person after the
expiration of its term.
HISTORICAL STOCK PERFORMANCE
The following graph compares the cumulative stockholder return on the
Company's common stock with the cumulative return of (1) equity securities
listed on the NASDAQ Market Index and (2) other companies reporting results
who are classified in the same Standard Industrial Classification number as
the Company.
<TABLE>
<CAPTION>
1990 1991 1992 1993 1994 1995
<S> <C> <C> <C> <C> <C> <C>
Optek Technology 100 36.11 38.89 19.44 30.56 150
NASDAQ Market Index 100 126.8 154.7 240.32 288.35 537.93
SIC Code Index 100 127.2 123.22 161.7 171.91 203.93
</TABLE>
Assumes $100 invested on October 27, 1990
Assumes Dividend Reinvested
Fiscal Year Ending October 27, 1995
INDEPENDENT AUDITORS
The Board of Directors of the Company has selected KPMG Peat Marwick
LLP as the Company's auditors for fiscal 1996. Representatives of KPMG
Peat Marwick are not expected to be present at the Annual Meeting of
Stockholders to be held on March 19, 1996.
STOCKHOLDERS' PROPOSALS
The day by which proposals of stockholders intended to be presented at
the 1997 annual meeting of stockholders must be received by the Company
for inclusion in the Company's proxy statement and form of proxy relating
to that meeting is September 21, 1996.
<PAGE>
It is important that proxies be returned promptly. Stockholders are
requested to date, sign and return the enclosed proxy in the enclosed
envelope, to which no postage need be affixed if mailed in the United
States. If you attend the 1996 Annual Meeting, you may revoke your proxy
and vote in person if you so desire; otherwise your proxy will be voted for
you.
BY ORDER OF THE BOARD OF DIRECTORS
Thomas R. Filesi, President
Carrollton, Texas
January 19, 1996
NOTICE: Upon written request from a stockholder of record at January 19,
1996 (or from any beneficial owner representing that he/she is or was
entitled to vote at the meeting), the Company will furnish without charge
of copy of its Annual Report on Form 10-K for the fiscal year ended
October 27, 1995, as filed with the Securities and Exchange Commission,
including financial statements and schedules thereto and a list of exhibits
not contained therein. The Company will furnish copies of the full text of
any of the exhibits described in the list of exhibits accompanying the
Annual Report on Form 10-K, if requested, upon payment in advance of the
prescribed fee limited the Company's reasonable expenses incurred in
providing copies of the exhibits. Requests should be directed to:
D. Vinson Marley
Vice President - Finance
Optek Technology, Inc.
1215 West Crosby Road
Carrollton, Texas 75006
<PAGE>
OPTEK TECHNOLOGY, INC.
PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned stockholder of Optek Technology, Inc. (the
"Company"), revoking all prior proxies does by these presents
name, constitute and appoint Thomas R. Filesi and D. Vinson
Marley, and each of them, the true and lawful proxy and
attorney-in-fact of the undersigned, with full power of
substitution, to vote all shares of the Common Stock,
par value $0.01 per share, of the Company standing in
the name of the undersigned on the books of the Company
at the close of business on January 19, 1996 or in respect
of which the undersigned is entitled to vote at the
Company's Annual Meeting of Stockholders, to be held
March 19, 1996 at 10:00 a.m., Dallas, Texas time at the
offices of the Company, 1215 West Crosby Road, Carrollton,
Texas 75006, and at any and all adjournments thereof,
on the following matters:
<PAGE>
Common
Election of Directors
FOR all nominees listed to the right (except as marked to the contrary)
WITHHOLD AUTHORITY to vote for all nominees.
Nominees: Thomas R. Filesi, Rodes Ennis, Michael E. Cahr,
Grant A. Dove, William H. Daughtrey, Jr. and Wayne Stevenson.
(INSTRUCTIONS: To withhold authority to vote for any individual
nominee, write that nominee's name in the space provided below).
IF NO SPECIFIC DIRECTION IS GIVEN, THIS PROXY WILL BE VOTED
"FOR" NUMBER 1.
The undersigned hereby acknowledges receipt of the Notice of Annual
Meeting of Stockholders and the Proxy Statement each dated
January 19 1996.
Dated ____________________
__________________________
Stockholders Signature
__________________________
Stockholders Signature
Please complete, sign and mail this proxy promptly in the
enclosed self-addressed envelope, which requires no postage
if mailed in the United States.
NOTE: Please sign exactly as your name is shown hereon. If
stock stands in two or more names, please have all sign.
If this Proxy is executed by a corporation, it should be
signed in the name of the corporation by an officer thereunto
duly authorized. If this Proxy is to be signed as attorney,
executor, administrator, trustee, guardian, or in any
representative capacity, the title of the person should be
given in full and any necessary documentary evidence of
authority to sign this Proxy should be presented.
<PAGE>
