SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(X) Filed by the Registrant
( ) Filed by a Party other than the Registrant
Check the appropriate box:
( ) Preliminary Proxy Statement
( ) Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
(X) Definitive Proxy Statement
( ) Definitive Additional Materials
( ) Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12
Glenayre Technologies, Inc.
(Name of Registrant as Specified in its Charter)
(Name of Person(s) Filing Proxy Statement, if other than 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)(1) and 0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
( ) Fee paid previously with preliminary materials.
( ) Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule, or Registration Statement No.:
3) Filing Party:
4) Date Filed:
<PAGE>
(Glenayre logo appears here)
GLENAYRE TECHNOLOGIES, INC.
5935 Carnegie Boulevard
Charlotte, North Carolina 28209
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 21, 1997
The 1997 Annual Meeting of the Stockholders of Glenayre Technologies, Inc.,
a Delaware corporation (the "COMPANY"), will be held at the office of the
Company at 5935 Carnegie Boulevard, Charlotte, North Carolina 28209, on May 21,
1997 at 11:00 a.m., local time, for the following purposes:
1. To elect three Class I Directors.
2. To ratify the selection of Ernst & Young LLP as independent auditors to
audit the financial statements of the Company.
3. To transact any other business that may properly come before the 1997
Annual Meeting and any adjournment(s) thereof.
The close of business on March 31, 1997 has been fixed as the record date
for determination of stockholders entitled to notice of and to vote at the 1997
Annual Meeting and any adjournment(s) thereof.
A Proxy Statement, a form of proxy, a Summary Annual Report to the
stockholders of the Company and a Form 10-K as filed with the Securities and
Exchange Commission for the year ended December 31, 1996 are enclosed with this
Notice.
A list of stockholders entitled to vote at the 1997 Annual Meeting will be
open to the examination of any stockholder for any purpose germane to the 1997
Annual Meeting, during ordinary business hours, for a period of 10 days prior to
the 1997 Annual Meeting at the office of the Company at 5935 Carnegie Boulevard,
Charlotte, North Carolina 28209.
Stockholders are cordially invited to attend this meeting. Each
stockholder, whether or not he or she expects to be present in person at the
1997 Annual Meeting, is requested to SIGN, DATE AND RETURN THE ENCLOSED PROXY in
the accompanying envelope as promptly as possible.
A stockholder may revoke his or her proxy at any time prior to voting.
BY ORDER OF THE BOARD OF DIRECTORS
Eugene C. Pridgen
SENIOR VICE PRESIDENT AND SECRETARY
April 21, 1997
<PAGE>
<PAGE>
GLENAYRE TECHNOLOGIES, INC.
PROXY STATEMENT
THE 1997 ANNUAL MEETING
This Proxy Statement is furnished in connection with the solicitation by
the Board of Directors of the Company of proxies for use at the 1997 Annual
Meeting of Stockholders of Glenayre Technologies, Inc. (the "COMPANY" or
"GLENAYRE") to be held at the office of the Company at 5935 Carnegie Boulevard,
Charlotte, North Carolina 28209, on May 21, 1997 at 11:00 a.m., local time, and
at any adjournment(s) thereof.
VOTING AND RECORD DATE
As of March 31, 1997, the record date for the determination of stockholders
of the Company entitled to notice of and to vote at the 1997 Annual Meeting, the
Company had 60,197,344 shares of common stock, $.02 par value ("COMMON STOCK"),
outstanding and entitled to vote. Each holder of Common Stock at the close of
business on March 31, 1997 will be entitled to one vote for each share so held
of record. All votes at the 1997 Annual Meeting specified in this Proxy
Statement will be by written ballot.
Under rules followed by the National Association of Securities Dealers,
Inc., brokers who hold shares in street name for customers have the authority to
vote on certain items when they have not received instructions from beneficial
owners. Brokers that do not receive instructions are entitled to vote on the
election of directors. With respect to the other proposals presented to
stockholders, no broker may vote shares held for customers without specific
instruction from such customers. One-third of the total outstanding shares will
constitute a quorum at the meeting. Abstentions and broker non-votes are counted
for purposes of determining the presence or absence of a quorum for the
transaction of business.
SOLICITATION OF PROXIES
Any stockholder giving a proxy for the 1997 Annual Meeting may revoke it at
any time prior to the voting thereof by giving written notice to the Chairman or
the Secretary of the Company by filing a later-dated proxy with either of them
prior to the commencement of the 1997 Annual Meeting or by voting in person at
the 1997 Annual Meeting. Proxies and notices of revocation should be mailed or
delivered to American Stock Transfer & Trust Company, 40 Wall Street, 46th
Floor, New York, New York 10005 for receipt by American Stock Transfer & Trust
Company no later than two business days prior to the 1997 Annual Meeting, or
should be deposited with the Chairman or the Secretary of the Company
immediately prior to the commencement of the 1997 Annual Meeting.
All shares of stock represented by proxies will be voted at the 1997 Annual
Meeting, and at any adjournment(s) thereof, as specified therein by the persons
giving the proxies. If no direction is given, the proxy will be voted to elect
the nominees listed under "ELECTION OF DIRECTORS," to ratify the selection of
Ernst & Young LLP as independent auditors and in the discretion of the holders
of the proxies on all other matters properly brought before the 1997 Annual
Meeting and any adjournment(s) thereof.
This Proxy Statement, the Notice of the 1997 Annual Meeting (the "NOTICE")
and the form of proxy were first mailed to stockholders on or about April 21,
1997. The Company's principal executive offices are located at 5935 Carnegie
Boulevard, Charlotte, North Carolina 28209, telephone number (704) 553-0038.
Solicitation of proxies is being made primarily by mail; however, there may
also be further solicitation in person and by telephone at nominal cost by
directors, officers, employees and agents of the Company, who will receive no
additional compensation therefor. The Company will bear all costs of soliciting
proxies including charges made by brokers and other persons holding stock in
their names or in the names of nominees for reasonable expenses incurred in
sending proxy material to beneficial owners and obtaining their proxies.
1
<PAGE>
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of March 7, 1997, certain information
with respect to Common Stock beneficially owned by each director of the Company,
by the Chief Executive Officer and the Company's five other highest paid
executive officers (collectively, the "NAMED EXECUTIVE OFFICERS"), by all
current directors and executive officers of the Company as a group, and by each
person known to the Company as of March 7, 1997 to beneficially own more than 5%
of such Common Stock. The information, including Percent Outstanding, includes
shares subject to stock options exercisable within 60 days of March 7, 1997.
<TABLE>
<CAPTION>
AMOUNT AND
NATURE
OF BENEFICIAL PERCENT
NAME OF BENEFICIAL OWNER OWNERSHIP (1) OUTSTANDING
<S> <C> <C>
Ramon D. Ardizzone 67,465 (2) *
Gary B. Smith 97,901 (3) *
Clarke H. Bailey 826,875 (4) 1.36%
Donald S. Bates 1,096 (5) *
Peter W. Gilson -0- *
John J. Hurley 197,398 (6) *
Stephen P. Kelbley 300 (7) *
Kenneth C. Thompson 93,939 (8) *
Stanley Ciepcielinski 60,450 (9) *
Russ K. Allen 66,298 (10) *
Lee M. Ellison 40,756 (11) *
All directors and executive officers as a group (18 Persons) 1,766,612 (12) 2.86%
Massachusetts Financial Services Company (13) 7,275,674 12.09%
Cramer Rosenthal McGlynn, Inc. (14) 4,044,222 6.72%
T. Rowe Price Associates, Inc. (15) 3,690,000 6.13%
State of Wisconsin Investment Board (16) 5,153,200 8.56%
</TABLE>
* Does not exceed 1%.
(1) All shares are owned with sole voting and dispositive power except as
otherwise noted.
(2) Includes the presently exercisable right to acquire 50,000 shares pursuant
to the Company's Long-Term Incentive Plan (the "1991 PLAN") and 16,667
shares pursuant to the 1996 Incentive Stock Plan (the "1996 PLAN").
(3) Includes the presently exercisable right to acquire 66,000 shares pursuant
to the 1991 Plan and 31,667 shares pursuant to the 1996 Plan.
(4) Includes the presently exercisable right to acquire 826,875 shares pursuant
to the 1991 Plan.
(5) Includes 539 shares held by Mr. Bates' wife.
(6) Includes the presently exercisable right to acquire 37,500 shares pursuant
to the 1991 Plan.
(7) Includes 300 shares owned by Mr. Kelbley's wife.
(8) Includes the presently exercisable right to acquire 81,027 shares pursuant
to the 1991 Plan and 11,667 shares pursuant to the 1996 Plan.
(9) Includes the presently exercisable right to acquire 48,625 shares pursuant
to the 1991 Plan and 11,667 shares pursuant to the 1996 Plan.
(10) Includes the presently exercisable right to acquire 53,750 shares pursuant
to the 1991 Plan and 8,334 shares pursuant to the 1996 Plan.
(11) Includes the presently exercisable right to acquire 32,000 shares pursuant
to the 1991 Plan and 8,334 shares pursuant to the 1996 Plan.
(12) Includes the presently exercisable right to acquire 1,374,777 shares
pursuant to the 1991 Plan and 144,006 shares pursuant to the 1996 Plan.
(13) The address of Massachusetts Financial Services Company ("MFS") is 500
Boylston Street, Boston, MA 02116. This information is provided as of March
7, 1997 and is based on information provided by MFS to the Company. MFS has
sole voting power with respect to 7,046,774 shares.
(14) The address of Cramer Rosenthal McGlynn, Inc., an investment management
firm ("CRM"), is 707 Westchester Avenue, White Plains, New York 10604. The
information with respect to the holdings of CRM is provided as of December
2
<PAGE>
31, 1996 and is based on information provided by CRM to the Company. CRM
has shared voting and dispositive power with respect to such shares.
(15) The address of T. Rowe Price Associates ("T. Rowe Price") is 100 East Pratt
Street, Baltimore, MD 21202. This information is provided as of March 7,
1997 and is based on information provided by T. Rowe Price to the Company.
T. Rowe Price has sole voting power with respect to 90,000 shares.
(16) The address of State of Wisconsin Investment Board ("Wisconsin Investment")
is P.O. Box 7842, Madison, WI 53707. This information is provided as of
March 7, 1997 and is based on information provided by Wisconsin Investment
to the Company.
EXECUTIVE OFFICERS OF THE REGISTRANT
Following are the persons who were the executive officers of Glenayre as of
March 1997, their ages, their current titles and their positions held during the
last five years:
Ramon D. Ardizzone; age 59; Chairman of the Board of Directors of the
Company since June 1996; President of the Company from December 1994 to June
1996; Chief Executive Officer of the Company from May 1995 through December
1996; Acting Chief Executive Officer of the Company from December 1994 to May
1995; Director of the Company since November 1992; Chief Operating Officer of
the Company from June 1994 to December 1994; Acting Chief Operating Officer of
the Company from May 1994 to June 1994; Executive Vice President of the Company
from November 1992 to December 1994; and Executive Vice President of the Company
in charge of Sales and Marketing from November 1992 to May 1994. Executive Vice
President -- Sales and Marketing of Glentel, Inc. (from which the Company
acquired the telecommunications equipment and related software business (the
"GEMS Business") in 1992) from August 1988 to November 1992; President of
Aerotron, Inc., a land-mobile radio manufacturing company from 1986 to 1988; and
employed by General Electric Company in various management positions from 1956
to 1986.
Gary B. Smith; age 38; Director and President of the Company since June
1996; Chief Executive Officer of the Company since January 1997; Chief Operating
Officer of the Company from June 1996 to January 1997; Executive Vice President
of the Company from September 1994 to June 1996; General Manager, Wireless
Messaging group of the Company since February 1995; Chief Technical Officer of
the Company from September 1994 to February 1995; and various engineering
management positions with the Company or the GEMS Business from 1983 to
September 1994.
Kenneth C. Thompson; age 50; Executive Vice President, Business Operations,
of the Company from November 1996 through March 1997; Executive Vice President
of the Company and General Manager, Voice and Data Technologies Group from
February 1995 to November 1996; and various marketing management positions with
the Company or the GEMS Business from December 1990 to February 1995. General
Manager of a division of Science Application International Corporation from
December 1987 to December 1990.
Stanley Ciepcielinski; age 40; Executive Vice President, Finance and
Administration Operations of the Company since February 1995; Executive Vice
President and Chief Financial Officer of the Company since January 1993;
Treasurer of the Company since April 1993; and Secretary of the Company from
April 1993 to March 1997. Director of Finance for the Transformer Business Unit
of Square D Company from 1989 to 1992; and Corporate Accounting Manager of
Alcatel, Inc. from 1984 to 1989.
Eugene C. Pridgen; age 51; Senior Vice President and General Counsel of the
Company since December 1996; and Secretary of the Company since March 1997.
Attorney, Kennedy Covington Lobdell & Hickman, L.L.P., from 1978 to 1996
(partner from 1984 to 1996).
Beverley W. Cox; age 39; Senior Vice President, Human Resources, of the
Company since November 1996; Vice President, Human Resources, of the Company
from February 1995 to November 1996; Corporate Director-Human Resources with the
Company from November 1993 to February 1995. Various human resource management
positions with Cadmus Communications, Inc. from July 1989 to November 1993.
Billy C. Layton; age 50; Vice President of the Company since December 1995;
Controller and Chief Accounting Officer of the Company since November 1992; and
various accounting management positions with the GEMS Business from December
1990 to November 1992.
Russ K. Allen; age 56; Executive Vice President, Corporate Sales of
Glenayre Electronics, Inc., a wholly-owned subsidiary of the Company ("GEI")
since November 1996; Executive Vice President, Field Sales and Support
Operations of the
3
<PAGE>
Company from February 1995 to November 1996; and various sales management
positions with the Company of the GEMS Business from 1985 to February 1995.
Lee M. Ellison; age 42; Senior Vice President, International Operations of
GEI since November 1996; and various sales management positions with the Company
or the GEMS Business from July 1985 to November 1996.
Mats Gerschman; age 46; Senior Vice President, Operations and Manufacturing
of GEI since November 1996 and various manufacturing management positions with
the Company or the GEMS Business since 1987. Employed by the Ericsson Group in
various management positions from 1975 to 1987.
Dan H. Case; age 45; President and General Manager -- Integrated Network
group of GEI since November 1996; and various management positions with the
Company or the GEMS Business since January 1985.
James W. Marion; age 36; President and General Manager -- Wireless
Messaging group of GEI since November 1996; and various management positions
with the Company from September 1993 to November 1996. Employed by NEC America,
Mobile Radio Division in various management positions from 1984 to September
1993.
Michael J. Gresham; age 47; President and General Manager -- Wireless
Interconnect group of GEI since November 1996. Employed by Western Multiplex
Corporation (acquired by the Company in April 1995) in various management
positions since June 1984.
ELECTION OF DIRECTORS
The Company's Board of Directors presently consists of nine members. The
Company's Certificate of Incorporation and By-laws provide that the Board of
Directors shall be divided into three classes, each consisting, as nearly as may
be possible, of one-third of the total number of directors, for terms of three
years. At the 1997 Annual Meeting, three Class I Directors are to be elected.
The Board of Directors has nominated Clarke H. Bailey, Donald S. Bates and Peter
W. Gilson for election as Directors to serve for three-year terms expiring at
the Annual Meeting of Stockholders in 2000, and until their respective
successors shall have been elected and qualified. All nominees are now serving
as directors of the Company.
The Board of Directors recommends a vote FOR all of the nominees. The
affirmative vote of a plurality of shares voted is required for the election of
the nominees by the holders of the shares entitled to vote at a meeting at which
a quorum is present. Provided a quorum is present, abstentions and shares not
voted are not taken into account in determining a plurality. The shares
represented by the proxies which the Board of Directors receives will be voted
for the election of the three nominees in the absence of contrary instructions.
Each of the nominees has indicated his willingness to serve if elected, and the
Board of Directors has no reason to believe that any nominee will be
unavailable. In the event that a vacancy arises among such nominees by death or
any other reason prior to the 1997 Annual Meeting, the proxy may be voted for a
substitute nominee or nominees designated by the Board of Directors.
Biographical information follows for each person nominated and each person
whose term as a director will continue after the 1997 Annual Meeting. The
information concerning the directors and nominees has been furnished by them to
the Company.
4
<PAGE>
<PAGE>
NOMINEES FOR ELECTION AS CLASS I DIRECTORS AT THE 1997 ANNUAL MEETING
<TABLE>
<CAPTION>
NAME AGE POSITIONS WITH COMPANY, BUSINESS EXPERIENCE AND OTHER DIRECTORSHIPS
<S> <C> <C>
Clarke H. Bailey 42 Director of the Company since December 1990; Chairman of the Executive Committee since
March 1994; Vice Chairman of the Company from November 1992 to June 1996; Chief Executive
Officer of the Company from December 1990 to March 1994; and Acting Chief Executive
Officer of the Company from May 1994 to December 1994. Chairman and Chief Executive
Officer of United Acquisition Company and its parent, United Gas Holding Corporation,
since February 1995; Chairman of Arcus, Inc. since July 1995; Co-Chairman of Hudson River
Capital L.L.C. since February 1995; and a variety of capacities for the investment
banking firm of Oppenheimer & Co., Inc. from March 1984 to December 1990, most recently
as Managing Director and head of the Principal Investments Department. Director of
Connectivity Technologies, Inc. and Swiss Army Brands, Inc.
Donald S. Bates 68 Director of the Company since January 1997. Private consultant in the electronics and
telecommunications industry since 1988. President of Piezo Electric Co. from 1984 to
1988. President of United Telecom Computer Group, Inc. from 1981 to 1983. Employed by
General Electric Company from 1951 to 1981 where he held several managerial positions in
electronics, communications and computing services retiring as Senior Vice President and
Group Executive. Director of 3D Systems Corporation.
Peter W. Gilson 56 Director of the Company since March 1997. President, Chief Executive Officer and Director
of Physician Support Systems, Inc. since 1991; President, Chief Executive Officer and
Chairman of the Board of Warrington Group, Inc. from 1988 to 1991; Chief Operating
Officer of the Timberland Company from 1986 to 1988; President of the Goretex Fabrics
Division of W.L. Gore & Associates from 1978 to 1986. Director of Swiss Army Brands, Inc.
and Sweetwater, Inc.
<CAPTION>
DIRECTORS CONTINUING IN OFFICE AS CLASS II DIRECTORS UNTIL THE 1998 ANNUAL MEETING
NAME AGE POSITIONS WITH COMPANY, BUSINESS EXPERIENCE AND OTHER DIRECTORSHIPS
<S> <C> <C>
John J. Hurley 62 Director of the Company since November 1992; Vice Chairman of the Company from December
1994 to June 1996; President of the Company from November 1992 to December 1994; Chief
Operating Officer of the Company from November 1992 to March 1994; and Chief Executive
Officer of the Company from March 1994 to May 1994. President of Glentel, Inc. ("GEL")
(from which the Company acquired the telecommunications equipment and related software
business (the "GEMS Business") in 1992) from July 1988 to November 1992; Director of GEL
from July 1988 to June 1993; Chief Operating Officer of Antenna Specialists Company, a
communications antenna manufacturer from 1985 to 1988; and employed by General Electric
Company from 1966 to 1985, where he held several positions, including General Manager of
General Electric Company's cellular business. Director of Preferred Networks, Inc.
Gary B. Smith 38 Director and President of the Company since June 1996; Chief Executive Officer of the
Company since January 1997; Chief Operating Officer of the Company from June 1996 to
January 1997; Executive Vice President of the Company from September 1994 to June 1996;
General Manager, Wireless Messaging Group of the Company from February 1995 to June 1996;
Chief Technical Officer of the Company from September 1994 to February 1995; and various
engineering management positions with the Company or the GEMS Business from 1983 to
September 1994.
</TABLE>
5
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
DIRECTORS CONTINUING IN OFFICE AS CLASS III DIRECTORS UNTIL THE 1999 ANNUAL MEETING
NAME AGE POSITIONS WITH COMPANY, BUSINESS EXPERIENCE AND OTHER DIRECTORSHIPS
<S> <C> <C>
Ramon D. Ardizzone 59 Chairman of the Board of Directors of the Company since June 1996; President of the
Company from December 1994 to June 1996; Chief Executive Officer of the Company from May
1995 through December 1996; Acting Chief Executive Officer of the Company from December
1994 to May 1995; Director of the Company since November 1992; Chief Operating Officer of
the Company from June 1994 to December 1994; Acting Chief Operating Officer of the
Company from May 1994 to June 1994; Executive Vice President of the Company from November
1992 to December 1994; and Executive Vice President of the Company in charge of Sales and
Marketing from November 1992 to May 1994. Executive Vice President -- Sales and Marketing
of GEL from August 1988 to November 1992; President of Aerotron, Inc., a land-mobile
radio manufacturing company from 1986 to 1988; and employed by General Electric Company
in various management positions from 1956 to 1986. Director of Arcus, Inc. and
Connectivity Technologies, Inc.
Stephen P. Kelbley 54 Director of the Company since January 1997. Executive Vice President of Springs
Industries, Inc., a home furnishings company ("Springs") since 1991; President of
Springs' Diversified Home Products Group since January 1997; President of Springs'
Diversified Group from May 1995 to January 1997; President of Springs' Specialty Fabrics
Group from March 1994 to May 1995; Chief Financial Officer of Springs from 1991 to 1994.
Senior Vice President -- Finance of Bausch & Lomb, Inc. from 1984 to 1991. Senior Vice
President -- Finance & Administration of Moog Automotive, Inc. from 1982 to 1984.
Employed by General Electric Company from 1963 to 1982 where he held several senior
financial management positions. Director of Connectivity Technologies, Inc.
</TABLE>
COMMITTEES OF THE BOARD OF DIRECTORS AND MEETING ATTENDANCE
The Board of Directors met three times during the last fiscal year. The
Board of Directors has standing Executive, Audit, Compensation and Plan
Administration Committees. The functions and membership of each are set forth
below. The Board of Directors has no standing nominating committee.
The Executive Committee currently consists of Messrs. Bailey, Ardizzone and
Smith. The Executive Committee held twelve meetings during the last fiscal year.
The Executive Committee exercises the full powers of the Board of Directors to
the extent permitted by law between Board of Directors meetings.
The Audit Committee currently consists of Messrs. Kelbley and Hurley. The
Audit Committee met six times during the last fiscal year. The function of the
Audit Committee is to review the internal accounting control procedures of the
Company, review the consolidated financial statements of the Company and review
with the independent public accountants the results of their audit.
The Compensation Committee currently consists of Messrs. Bates and Gilson.
The Compensation Committee met one time during the last fiscal year. The
Compensation Committee exercises all powers of the Board of Directors in
connection with compensation matters, other than those matters which are subject
to the administration of the Plan Administration Committee.
The Plan Administration Committee currently consists of Messrs. Hurley and
Bailey. The Plan Administration Committee met two times during the last fiscal
year. The function of the Plan Administration Committee is to administer the
1996 Plan, the 1991 Plan and the 1987 Stock Option Plan.
Each member of the current Board of Directors attended 75% or more of the
aggregate number of meetings of the Board of Directors and the meetings of all
committees of the Board of Directors on which he served during the last fiscal
year.
6
<PAGE>
<PAGE>
COMPENSATION
COMPENSATION OF DIRECTORS
In December 1996, the Board of Directors adopted a new compensation plan
for non-employee directors effective January 1, 1997 in order to attract and
retain high quality members. The new plan includes: (i) an annual fee of $18,000
plus $2,000 for attendance at each Board of Directors' meeting; (ii) an annual
fee of $2,000 for each committee participation; and (iii) an annual fee of
$2,000 for each committee chair participation except the executive committee
chair position which will receive $10,000. Additionally, non-employee directors
receive automatic formula-based awards of options to purchase common stock under
the 1996 Plan. No fees are paid to employee directors in addition to their
regular compensation. All directors are reimbursed for their reasonable travel
and accommodation expenses incurred with respect to their duties as directors.
Under the Company's By-laws, the Chairman of the Board is considered an officer
of the Company.
EXECUTIVE COMPENSATION
The following table sets forth certain information with respect to
compensation paid to the named Executive Officers during 1996:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
NUMBER OF
ANNUAL COMPENSATION SECURITIES
OTHER UNDERLYING
ANNUAL OPTIONS
NAME AND PRINCIPAL SALARY BONUS COMPENSATION GRANTED
POSITION YEAR ($) ($) ($)(1) (#)
<S> <C> <C> <C> <C> <C>
Ramon D. Ardizzone 1996 $350,000 $133,104 -- 50,000
Chairman of the Board of 1995 232,738 229,430 -- 187,500
Directors of the Company(4) 1994 196,203 78,975 -- --
Gary B. Smith 1996 225,577 86,474 -- 95,000
President and Chief 1995 157,685 141,699 -- 45,000
Executive Officer of the 1994 119,973 61,027 -- 108,000
Company (4)
Kenneth C. Thompson 1996 190,000 72,759 -- 35,000
Executive Vice President of 1995 147,901 132,818 -- 90,000
the Company (5)
Stanley Ciepcielinski 1996 180,000 62,037 -- 35,000
Executive Vice President and 1995 148,571 133,580 -- 37,500
Chief Financial Officer of 1994 121,660 47,628 -- 106,625
the Company
Russ K. Allen 1996 308,173 125,000 -- 25,000
Executive Vice President, 1995 361,804 51,600 -- 30,000
Glenayre Electronics, Inc. (5,6)
Lee M. Ellison 1996 200,058 101,000 -- 30,000
Senior Vice President,
Glenayre Electronics, Inc.
(6,7)
<CAPTION>
ALL OTHER
NAME AND PRINCIPAL COMPENSATION
POSITION ($)
<S> <C>
Ramon D. Ardizzone $ 12,937(2)
Chairman of the Board of 12,937
Directors of the Company(4) 12,937
Gary B. Smith 6,000(3)
President and Chief 9,762
Executive Officer of the 9,098
Company (4)
Kenneth C. Thompson 6,000(3)
Executive Vice President of 6,000
the Company (5)
Stanley Ciepcielinski 6,000(3)
Executive Vice President and 6,000
Chief Financial Officer of 6,000
the Company
Russ K. Allen 17,807(3)
Executive Vice President, 10,191
Glenayre Electronics, Inc. (5,6)
Lee M. Ellison 5,686(3)
Senior Vice President,
Glenayre Electronics, Inc.
(6,7)
</TABLE>
(1) While officers enjoy certain perquisites, such perquisites do not exceed the
lesser of $50,000 or 10% of such officer's salary and bonus.
(2) Includes a $6,000 matching contribution to a defined contribution plan and
$6,937 term life insurance premiums paid on behalf of the executive officer.
(3) Represents a matching contribution to a defined contribution plan or a
payment related to an individual investment retirement account.
(4) Mr. Ardizzone was Chairman and Chief Executive Officer and Mr. Smith was
President and Chief Operating Officer at December 31, 1996.
(5) Messrs. Thompson and Allen were first elected executive officers in February
1995. Mr. Thompson resigned from the Company effective March 31, 1997.
7
<PAGE>
(6) Glenayre Electronics, Inc. is a wholly-owned subsidiary of the Company.
(7) Mr. Ellison was first elected an executive officer in November 1996.
The following table sets forth information with respect to grants of stock
options to the named Executive Officers during 1996:
OPTION GRANTS IN 1996
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
NUMBER OF
SECURITIES POTENTIAL REALIZABLE VALUE
UNDERLYING % OF TOTAL OPTIONS AT ASSUMED ANNUAL RATES OF
OPTIONS GRANTED TO EXERCISE OR STOCK PRICE APPRECIATION
GRANTED(1) EMPLOYEES IN BASE PRICE EXPIRATION FOR OPTION TERM
NAME (#) 1996 ($/SHARE) DATE 5% 10%
<S> <C> <C> <C> <C> <C> <C>
Ramon D. Ardizzone 50,000 4.0% $ 23.875 12/2/2006 $ 750,869 $ 1,902,838
Gary B. Smith 50,000 4.0% 46.875 6/26/2006 1,474,219 3,735,938
45,000 3.6% 23.75 12/10/2006 672,244 1,703,588
Kenneth C. Thompson 35,000 2.8% 23.88 11/19/2006 525,718 1,332,265
Stanley
Ciepcielinski 35,000 2.8% 23.88 11/19/2006 525,718 1,332,265
Russ K. Allen 25,000 2.0% 23.88 11/19/2006 375,513 951,618
Lee M. Ellison 5,000 0.4% 48.38 6/18/2006 152,155 385,589
5,000 0.4% 23.88 6/18/2006 75,103 190,324
20,000 1.6% 23.88 11/19/2006 300,410 761,294
</TABLE>
(1) Options granted under the 1996 Plan which are subject to a two-year vesting
schedule with one-third vesting upon grant and the remainder vesting equally
on each anniversary date of the grant. Vesting may be accelerated in certain
events relating to a Change in Control of the Company, as defined.
The following table sets forth certain information with respect to the number
and value of options held by the named Executive Officers at the end of 1996:
AGGREGATED OPTION EXERCISES IN 1996
AND 1996 YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING IN-THE-MONEY
UNEXERCISED OPTIONS AT OPTIONS AT
SHARES ACQUIRED DECEMBER 31, 1996 (#) DECEMBER 31, 1996 ($)(1)
NAME ON EXERCISE (#) VALUE REALIZED ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
<S> <C> <C> <C> <C> <C> <C>
Ramon D. Ardizzone 37,500 $ 734,250 66,667 95,833 $ -0- $ -0-
Gary B. Smith 36,000 1,117,501 97,667 78,333 224,251 -0-
Kenneth C. Thompson 28,150 924,268 77,694 53,333 224,384 72,570
Stanley
Ciepcielinski 12,375 430,855 60,292 35,833 147,165 -0-
Russ K. Allen 33,750 1,050,223 62,084 26,666 227,735 -0-
Lee M. Ellison 24,750 716,312 40,334 19,166 188,021 -0-
</TABLE>
(1) Represents the difference between the closing market price of the Common
Stock on the Nasdaq National Market System on December 31, 1996 and the
exercise price of the options.
8
<PAGE>
10-YEAR OPTION REPRICINGS
<TABLE>
<CAPTION>
LENGTH OF
ORIGINAL
MARKET OPTION
NUMBER OF PRICE OF EXERCISE TERM
SECURITIES STOCK AT PRICE AT NEW REMAINING AT
UNDERLYING OPTIONS TIME OF TIME OF EXERCISE DATE OF
NAME DATE REPRICED (#) REPRICING REPRICING PRICE ($) REPRICING
<S> <C> <C> <C> <C> <C> <C>
Lee M. Ellison 11/19/96 5,000 $23.875 $ 48.38 $ 23.88 9.6 years
Dan H. Case 11/19/96 7,500 $23.875 $ 48.38 $ 23.88 9.6 years
Mats Gerschman 11/19/96 7,500 $23.875 $ 48.38 $ 23.88 9.6 years
Michael J. Gresham 11/19/96 9,000 $23.875 $ 48.38 $ 23.88 9.6 years
Billy C. Layton 11/19/96 4,000 $23.875 $ 48.38 $ 23.88 9.6 years
James W. Marion 11/19/96 4,000 $23.875 $ 48.38 $ 23.88 9.6 years
</TABLE>
EMPLOYMENT AGREEMENTS
SMITH AGREEMENT. The Company is party to an employment agreement with Mr.
Smith dated as of August 27, 1996, as amended (the "SMITH AGREEMENT"), which
provides for his employment as President and Chief Executive Officer of the
Company through June 26, 1998. Thereafter, the term of the Smith Agreement is
automatically extended for successive two-year renewal terms unless either party
gives at least 180 days prior notice to the other party of a decision not to
extend the term. Mr. Smith is entitled to an annual salary ("Base Salary") of
$275,000, which may be increased but not decreased based upon an annual salary
review. In 1997, pursuant to the Smith Agreement, Mr. Smith shall participate in
the Management by Objective Plan ("MBO Plan") and is eligible to receive an
annual bonus of 52.5% to 150% of his base salary based on the performance of the
Company. In 1996, Mr. Smith was entitled to and received a bonus as specified in
the Smith Agreement (see "Executive Compensation-Summary Compensation" table).
If Mr. Smith's employment is terminated by the Company before the
completion of the term of the Smith Agreement without "Cause" as defined, or if
Mr. Smith resigns his employment for "Good Reason" as defined, the Company is
required to pay Mr. Smith a lump sum equal to two times his annual rate of Base
Salary at the time of such termination. In addition, if Mr. Smith's employment
is terminated because of his resignation for "Good Reason," Mr. Smith's death or
his "Total and Permanent Disability" as defined, he (or his estate) is entitled
to a pro rata share of the MBO Plan bonus for the fiscal year of the Company in
which such termination occurs, calculated on the assumption that the results of
operations and financial condition of the Company as of the termination date
shall continue on the same basis through the end of such fiscal year. If Mr.
Smith's employment had been terminated without "Cause" or if Mr. Smith resigned
for "Good Reason," as of March 31, 1997, payments under the Smith Agreement
would have been $550,000 and $601,563, respectively. If Mr. Smith's employment
terminates upon expiration of the term of the Smith Agreement, the Company must
pay Mr. Smith a lump sum equal to 50% of the annual rate of Base Salary being
paid to him at the time of such termination unless he refuses to negotiate with
the Company for a renewal agreement substantially similar to the Smith
Agreement.
Mr. Smith is entitled to terminate his employment upon a "Change in
Control" of the Company as defined in the Smith Agreement. The definition of
"Change in Control" includes: (i) the acquisition by any person of 25% or more
of the Company's Common Stock, which acquisition is not supported by Mr. Smith;
or (ii) a material change in the composition or character of the Board of
Directors, including (i) the replacement of a majority of the incumbent
Directors with Directors not supported by Mr. Smith and (ii) the election at any
meeting of the stockholders of a majority of Directors standing for election who
have not been supported by Mr. Smith. In the event of such termination, Mr.
Smith would be entitled to the same benefits that he would receive in the event
of his resignation for "Good Reason."
ARDIZZONE AGREEMENT. The Company is party to an employment agreement with
Mr. Ardizzone dated as of June 21, 1995, as amended (the "ARDIZZONE AGREEMENT"),
which provides for him to serve as Chairman of the Board of Directors of the
Company through December 31, 1997. The other terms and conditions of the
Ardizzone Agreement are substantially the same as those contained in the Smith
Agreement, except that Mr. Ardizzone's base salary is $250,000, Mr. Ardizzone is
eligible to receive an annual bonus of 37.5% to 100% of his base salary, Mr.
Ardizzone is entitled to a $200,000 payment upon any termination of his
employment on account of his "Total and Permanent Disability" and Mr. Ardizzone
is not entitled to receive a lump sum equal to 50% of the annual rate of his
base salary if his employment terminates upon expiration of the term of the
Ardizzone Agreement. If Mr. Ardizzone's employment had been terminated other
than for "Cause" or if Mr. Ardizzone resigned for "Good Reason," as of March 31,
1997, payments under the Ardizzone Agreement would have
9
<PAGE>
been $500,000 and $531,250, respectively. Mr. Ardizzone and his dependents are
entitled to participate in the Company's Retiree Medical Plan upon termination
of his employment for any reason.
EXECUTIVE SEVERANCE BENEFIT AGREEMENTS. The Company is party to an
agreement with Mr. Ciepcielinski (the "CIEPCIELINSKI AGREEMENT"), dated February
1, 1995 which entitles Mr. Ciepcielinski to certain benefits if a "Change in
Control" occurs and if Mr. Ciepcielinski's employment is terminated within three
years after the "Change in Control" for any reason other than for Mr.
Ciepcielinski's (i) death; (ii) disability; (iii) retirement; (iv) termination
for "Cause" as defined in the Ciepcielinski Agreement; or (v) voluntary
termination other than for "Good Reason" as defined in the Ciepcielinski
Agreement.
The definition of "Change in Control" is similar to that under the Smith
Agreement above. In the event of such termination, the Company shall pay Mr.
Ciepcielinski a lump sum equal to (i) 140% of the greater of the base salary in
effect on such termination date or in effect on the date immediately preceding
the "Change in Control" date and (ii) a pro rata share of any bonus in which Mr.
Ciepcielinski participates for the fiscal year in which such termination occurs.
An Executive Severance Benefit Agreement, dated February 1, 1995 between
the Company and Russ K. Allen is identical, in all material respects, to the
Ciepcielinski Agreement.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During the fiscal year, the following served on the Compensation Committee:
Messrs. Gray and Rosenthal; and the following served on the Plan Administration
Committee: Messrs. Rosenthal, Skidmore, and Israel. Mr. Hurley, who served as an
executive officer of the Company from November 1992 to June 1996, was appointed
to the Plan Administration Committee in January 1997. Mr. Bailey, who served as
an executive officer of the Company from December 1990 to June 1996, was
appointed to the Plan Administration Committee in March 1997.
REPORT OF THE COMPENSATION AND PLAN ADMINISTRATION COMMITTEES ON EXECUTIVE
COMPENSATION
The Company's Board of Directors approves all compensation decisions (other
than with respect to stock options) with regard to executive officers, including
the Chief Executive Officer, based on recommendations from the Compensation
Committee. The Compensation Committee is responsible for the establishment of
all compensation and benefit programs, excluding the Company's 1987 Stock Option
Plan (the "1987 Plan"), the 1991 Plan and the 1996 Plan, as well as the overall
monitoring of those programs. The Plan Administration Committee is responsible
for administering the 1996 Plan, the 1991 Plan and the 1987 Plan. The Company's
compensation philosophy and executive compensation programs are discussed in
this report.
EXECUTIVE COMPENSATION PHILOSOPHY. In general, executive officers who are
in a position to make a substantial contribution to the success and growth of
the Company should have interests similar to those of the stockholders.
Executive officers should be motivated by and benefit from increased stockholder
value. Therefore, the Company believes that executive officers should hold a
meaningful equity position in the Company through the purchase of Common Stock
and/or the award of options to purchase Common Stock.
The Company also believes that a significant percentage of an executive
officer's cash compensation, consisting of salary and bonus, should be based on
performance ranked in the following order: corporate, function and individual
performance. Again, the Company's objective is to align the financial interests
of the executive officers with those of the Company's stockholders.
The Company's Board of Directors believes that the executive compensation
program must be competitive with those of other companies of comparable size and
complexity in order to attract, retain and motivate talented individuals.
EXECUTIVE COMPENSATION PROGRAM. The Company's compensation program consists
of base salary, annual incentive bonus (paid in cash) and long-term incentives,
generally in the form of Common Stock and options to purchase Common Stock.
BASE SALARY. The Compensation Committee generally reviews and
determines the relative levels of base salary for executive officers on an
annual basis. In determining the levels of base salary for an executive
officer, the Compensation Committee considers relative levels of
responsibility, individual and Company performance and cost of living
increases.
10
<PAGE>
ANNUAL INCENTIVE COMPENSATION. During 1996, executive officers
participated in the MBO Plan, the Company's annual incentive cash bonus
program. The goal of the MBO Plan is to motivate and provide incentive to
the key managers of the Company to maximize profits. The MBO Plan provides
for the payment of quarterly cash awards to corporate executive officers
based 70% on target Company earnings and 30% on the achievement of
individual objectives and to operating executive officers based 20% on
target Company earnings, 30% on individual objectives and 50% on the
individual's sector target performance. If 100% of the 1997 target Company
earnings objective is reached and all the individual objectives are
achieved, the maximum potential bonuses range from 30% to 75% of each
corporate executive officer's base annual salary. If 100% of the 1997
target Company earnings objective and the individual's sector target
performance are reached and all the individual objectives are achieved, the
maximum potential bonuses range from 50% to 65% of each operating executive
officer's base annual salary. MBO Plan payout percentage of each corporate
executive officer's base annual salary varies proportionately as a result
of the Company attaining at a minimum 70% up to a maximum of 200% of target
Company earnings. MBO Plan payout percentage of each operating executive
officer's base salary varies proportionately as a result of the Company
attaining at a minimum 70% of the target Company earnings and also varies
proportionately as a result of the individual's sector attaining at a
minimum 70% of the individual's sector target performance, up to a maximum
of 200% of target Company earnings. The cash awards based on individual
objectives are not subject to attaining target Company earnings or sector
target performance, but may increase if the Company exceeds 100% of target
Company earnings.
CHIEF EXECUTIVE OFFICER COMPENSATION. Mr. Ardizzone served as Chief
Executive Officer from May 1995 through December 1996. In accordance with
the Ardizzone Agreement, Mr. Ardizzone participated in the MBO Plan in 1996
and received a bonus of $133,104 based on the operating earnings of the
Company in 1996.
LONG-TERM INCENTIVES. On May 22, 1996, the Company established the
1996 Plan to provide for various types of equity-related awards to (i)
promote the success and enhance the value of the Company by linking the
personal interests of participants to those of the Company's stockholders,
and by providing participants with an incentive for outstanding performance
and (ii) provide flexibility to the Company in its ability to motivate,
attract and retain the services of participants upon whose judgment,
interest and special effort the successful conduct of its operation largely
is dependent.
Under the 1996 Plan, the Plan Administration Committee has the
discretion to determine who will be given awards in any year, the types of
awards to be made (such as stock options, SARs, restricted stock or other
awards) and the number of shares of Common Stock to be covered by a
particular award. In determining whether to make an award to a particular
executive officer and the size of such award, the Plan Administration
Committee considers the executive officer's level of responsibility within
the Company, prior awards made to the executive officer, individual and
Company performance and the amount of the executive officer's other
compensation components. In December 1996, due to a significant decline in
the market price of the Company's Common Stock, the Plan Administration
Committee reduced the exercise price to $23.88 per share on options to
purchase shares at $48.38 per share to restore the incentive value of such
options granted earlier in 1996 to Mr. Ellison and certain other officers.
For information related to options granted to the named Executive Officers
in 1996, see "Options Granted in 1996" and "10-Year Option Repricings"
tables.
The Revenue Reconciliation Act of 1993 added Section 162(m) to the Internal
Revenue Code of 1986 (the "Code"). Code Section 162(m) provides that
compensation paid to a company's chief executive officer and the four other
highest paid executive officers employed by the company at year-end will not be
deductible by the company for federal income tax purposes to the extent such
compensation exceeds $1.0 million. Code Section 162(m) excepts from this
limitation certain "performance-based compensation."
Although base salary and bonuses paid to the named Executive Officers have
traditionally been well under $1.0 million, compensation from the exercise of
stock options can cause a named Executive Officer to have compensation in excess
of $1.0 million. However, all options granted to the named Executive Officers
prior to October 1993 are exempt from Code Section 162(m) under a "grandfather"
provision. In May 1994, the Company's stockholders approved an amendment to the
terms of the 1991 Plan so that, among other things, awards from that date under
the 1991 Plan qualified as "performance-based compensation." Under the terms of
the 1996 Plan, awards may qualify as "performance-based compensation."
11
<PAGE>
This report is submitted by the Compensation Committee and the Plan
Administration Committee which currently consists of the following members:
<TABLE>
<S> <C>
COMPENSATION COMMITTEE PLAN ADMINISTRATION
COMMITTEE
Donald S. Bates, Chairman John J. Hurley, Chairman
Peter W. Gilson Clarke H. Bailey
</TABLE>
PERFORMANCE GRAPH
The following graph compares the cumulative total return on $100 invested
on December 31, 1991 in each of the Company's Common Stock, the Standard &
Poor's 500 Stock Index, the Standard & Poor's Communication Equipment
Manufacturers Index and the Nasdaq-100 Index at the end of each fiscal year
through 1996. The returns are calculated assuming the reinvestment of dividends.
The Company has not paid any cash dividends during the period covered by the
graph below. The Company entered the telecommunications equipment and related
software business in November 1992. Before November 1992, the Company was
variously engaged in the oil and gas pipeline construction business and the real
estate business. The stock price performance shown on the graph below is not
necessarily indicative of future stock price performance.
(Performance Graph presented here
using data in table below)
INDEXED/CUMULATIVE RETURNS
<TABLE>
<CAPTION>
COMPANY/
INDEX NAME 1991 1992 1993 1994 1995 1996
<S> <C> <C> <C> <C> <C> <C>
Glenayre $100 $177 $1,004 $1,333 $3,232 $1,679
S&P 500 100 108 118 120 165 203
S&P CEMI 100 108 104 118 177 207
Nasdaq-100 100 109 120 122 174 248
</TABLE>
12
<PAGE>
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires that directors and officers of
the Company and persons who beneficially own more than 10% of the Common Stock
file with the SEC initial reports of beneficial ownership and reports of changes
in beneficial ownership of the Common Stock of the Company. Directors, officers
and greater than 10% beneficial owners are required by SEC regulations to
furnish the Company with copies of all Section 16(a) forms they file.
To the Company's knowledge, based solely on review of the copies of such
reports, and amendments thereto, furnished to the Company and written
representations that no other reports were required, during 1996 all reports
required by Section 16(a) to be filed by its directors, officers and greater
than 10% beneficial owners were filed on a timely basis.
INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors has selected Ernst & Young LLP as independent
auditors to audit the financial statements of the Company and its subsidiaries
for the year ending December 31, 1997. This selection is being presented to the
stockholders for their ratification or rejection at this Annual Meeting.
Representatives of Ernst & Young LLP are expected to be present at the
Annual Meeting with an opportunity to make a statement if they desire to do so,
and the representatives are expected to be available to respond to appropriate
questions.
The Board of Directors recommends a vote FOR the ratification of the
selection of Ernst & Young LLP as independent auditors to audit the financial
statements of the Company and its subsidiaries for the year ending December 31,
1997, and proxies solicited by the Board of Directors will be so voted unless
stockholders specify a different choice.
If the stockholders do not ratify the selection of Ernst & Young LLP, the
selection of independent auditors will be reconsidered by the Board of
Directors.
PROPOSALS OF STOCKHOLDERS
Proposals of stockholders intended to be presented at the Annual Meeting of
Stockholders to be held in 1998 must be received in writing by the Secretary of
the Company no later than December 22, 1997 to be considered for inclusion in
the Company's proxy statement and form of proxy relating to that meeting.
OTHER MATTERS
The Board of Directors does not know of any matters to be presented at the
1997 Annual Meeting other than those set forth in the Notice. However, if any
other matters do come before the 1997 Annual Meeting, it is intended that the
holders of the proxies will vote thereon in their discretion.
13
<PAGE>
*******************************************************************************
APPENDIX
*******************************************************************************
<TABLE>
<S> <C>
PROXY GLENAYRE TECHNOLOGIES, INC.
5935 Carnegie Boulevard
Charlotte, North Carolina 28209
</TABLE>
PROXY SOLICITED BY AND ON BEHALF OF
THE BOARD OF DIRECTORS OF GLENAYRE TECHNOLOGIES, INC.
The undersigned hereby appoints Ramon D. Ardizzone, Gary B. Smith and Stanley
Ciepcielinski, and each of them, as Proxies, each with full power of
substitution, and hereby authorizes them to represent and to vote, as designated
below, all of the shares of Common Stock of Glenayre Technologies, Inc. held by
the undersigned on March 31, 1997 at the 1997 Annual Meeting of Stockholders to
be held at the office of the Company at 5935 Carnegie Boulevard, Charlotte,
North Carolina 28209 on May 21, 1997 at 11:00 a.m., local time, and at any
adjournment(s) thereof.
1. ELECTION OF DIRECTORS.
<TABLE>
<CAPTION>
<S> <C>
[ ] FOR ALL NOMINEES LISTED BELOW [ ] WITHHOLD AUTHORITY
(EXCEPT AS MARKED TO THE CONTRARY BELOW) (TO VOTE FOR ALL NOMINEES LISTED BELOW)
</TABLE>
TO WITHHOLD AUTHORITY FOR ANY INDIVIDUAL NOMINEE STRIKE A LINE THROUGH THE
NOMINEE'S NAME:
Clarke H. Bailey Donald S. Bates Peter W. Gilson
2. PROPOSAL TO APPROVE THE APPOINTMENT OF ERNST & YOUNG LLP AS INDEPENDENT
AUDITORS OF THE COMPANY.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. In their discretion, the Proxies each are authorized to vote upon such other
business as may properly come before the 1997 Annual Meeting and at any
adjournment(s) thereof.
<PAGE>
This proxy when properly executed will be
voted in the manner directed by the
undersigned stockholder. IF NO DIRECTION IS
MADE WITH RESPECT TO ANY PROPOSAL, THIS
PROXY WILL BE VOTED "FOR" THE ELECTION OF
ALL NOMINEES AND "FOR" PROPOSAL 2.
Receipt of the Notice of the 1997 Annual
Meeting and accompanying Proxy Statement is
hereby acknowledged. Dated: , 1997
(Signature of Stockholder)
(Signature of Joint Stockholder, if
any)
Please check box if you intend to
be present at the meeting: [ ]
IMPORTANT: Please date this proxy
and sign exactly as your name
appears hereon. If stock is held
jointly, both holders should sign.
Executors, administrators,
trustees, guardians and others
signing in a representative
capacity should give full title.
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.
