TRACOR
Tracor, Inc., 6500 Tracor Lane, Austin, Texas 78725-2000
NOTICE OF ANNUAL MEETING
April 21, 1998
The Annual Meeting of the Shareholders of Tracor, Inc. will be held at
Tracor, Inc., 6500 Tracor Lane, Austin, Texas 78725-2000, on Tuesday, April 21,
1998, at 10:00 a.m., for the following purposes:
1. To elect two directors;
2. To approve and ratify the selection by the Board of Directors of
Ernst & Young LLP as independent auditors for 1998; and
3. To transact such other business as may properly come before the
meeting.
Shareholders of record at the close of business on Monday, March 9, 1998,
are entitled to receive notice of, and to vote at, the meeting. A list of
Shareholders entitled to vote will be kept at the offices of Tracor, Inc., 6500
Tracor Lane, Austin, Texas 78725-2000, for a period of 10 days prior to the
meeting.
BY ORDER OF THE BOARD OF DIRECTORS, March 20, 1998
RUSSELL E. PAINTON
SECRETARY
YOUR VOTE IS IMPORTANT!
PLEASE PROMPTLY MARK, DATE, SIGN, AND
RETURN YOUR PROXY IN THE ENCLOSED ENVELOPE.
<PAGE>
TRACOR
Tracor, Inc., 6500 Tracor Lane, Austin, Texas 78725-2000
PROXY STATEMENT
FOR
ANNUAL MEETING OF
SHAREHOLDERS
TO BE HELD ON APRIL 21, 1998
This Proxy Statement is furnished in connection with the solicitation by
the Board of Directors of Tracor, Inc. ("Tracor" or the "Company") of proxies to
be voted at the Annual Meeting of Tracor Shareholders on April 21, 1998. This
Proxy Statement and the accompanying Proxy Card are being mailed to shareholders
on or about March 26, 1998. Business at the Annual Meeting is conducted in
accordance with the procedures determined by the presiding officer and is
generally limited to matters properly brought before the meeting by or at the
instance of the Board of Directors or by a shareholder pursuant to provisions
requiring advance notice and disclosure of relevant information.
The expense of preparing, printing, and mailing proxy materials to the
Company's shareholders will be borne by the Company. In addition to
solicitations by mail, a number of regular employees of the Company may solicit
proxies on behalf of the Board of Directors in person or by telephone. The
Company will reimburse brokerage houses and other nominees for their expenses in
forwarding proxy materials to verified owners of the Company's stock.
VOTING OF PROXIES
Shareholders are urged to read carefully the material in this Proxy
Statement, specify their choice on each matter by marking the appropriate boxes
on the enclosed Proxy Card, and sign, date, and return the card in the enclosed
postage-paid envelope. If no choice is specified and the card is properly
executed and returned, the shares will be voted by the management of Tracor. A
shareholder of record who executes a proxy may revoke or revise that proxy at
any time before the meeting or, by voting by ballot at the meeting, cancel any
proxy previously returned.
If any nominees for director named in Item 1. (Election of Directors),
beginning on page 6, should be unavailable for election, the proxies will be
voted for the election of such other person as may be recommended by the Company
in place of such nominee.
Shareholders of record at the close of business on Monday, March 9, 1998,
are entitled to receive notice of the meeting and to vote the shares held on
that date. Each share is entitled to one vote. The holders of at least a
majority of the outstanding shares of common stock must be represented in person
or by proxy at the Annual Meeting for the meeting to be held. With regard to
the election of directors, votes may be cast in favor of or withheld from each
nominee; votes that are withheld will not be counted either for or against any
of the nominees. Abstentions may be specified on all proposals, except the
election of directors, and will be counted as present for purposes of
determining the existence of a quorum for holding the meeting and with respect
to the item on which the abstention is noted. The affirmative vote of a
majority of the shares represented at the meeting, in person or by proxy, is
required for approval of all matters to be voted upon. In the case of the
election of directors, an abstention would be counted as a vote against the
election of the director. Under the rules of the New York Stock Exchange
(NYSE), brokers who hold shares in street name have the authority to vote on
certain items when they have not received instructions from beneficial owners.
Under applicable Delaware law, a broker non-vote will have no effect on the
outcome of the election of directors or the other matters to be voted on. Votes
will be tabulated by ballot counters appointed by the Company.
OWNERSHIP OF TRACOR, INC. COMMON STOCK
The following tables set forth as of February 17, 1998, certain information
known to the Company with respect to the beneficial ownership (as defined in the
rules of the Securities and Exchange Commission hereafter, the "SEC" or the
"Commission") of Tracor Common Stock by all directors; the chief executive
officer and the other executive officers named on the Summary Compensation Table
(on page 8); all directors and executive officers as a group; and any person
who is known by the Company to be the beneficial owner of more than five percent
of Tracor Common Stock. The percentages are calculated including shares which
are subject to outstanding warrants and options held by directors and officers.
<TABLE>
<CAPTION>
Name and Address Number of
of Beneficial Owner Shares Percent
------------------- --------- -------
<S> <C> <C> <C>
William E. Conway, Jr. 91,038 (1) *
The Carlyle Group
1001 Pennsylvania Avenue, N.W.
Suite 220 South
Washington, DC 20004
Julian Davidson 4,200 (2) *
991 Discovery Drive
Huntsville, AL 35801
Anthony Grillo 14,200 (3) *
The Blackstone Group
345 Park Avenue
New York, NY 10154-0191
Bob Marbut 32,700 (4) *
Hearst-Argyle Television, Inc.
200 Concord Plaza
Suite 700
San Antonio, TX 78216
Elvis L. Mason 1,415,071 (5) 5.6%
Mason Best Company
2121 San Jacinto
Suite 1000
Dallas, TX 75201
Thomas P. Stafford 8,200 (6) *
Stafford, Burke and Hecker, Inc.
1006 Cameron Street
Alexandria, VA 22314
James B. Skaggs 521,564 (7) 2.1%
Tracor, Inc.
6500 Tracor Lane
Austin, TX 78725-2000
Barry G. Campbell 59,487 (8) *
Tracor Systems Technologies, Inc.
1601 Research Boulevard
Rockville, MD 20850
Robert K. Floyd 99,111 (9) *
Tracor, Inc.
6500 Tracor Lane
Austin, TX 78725-2000
George R. Melton 91,200 (10) *
Tracor Aerospace, Inc.
6500 Tracor Lane
Austin, TX 78725-2070
Terry A. Straeter 211,531 (11) *
GDE Systems, Inc.
16550 West Bernardo Drive
San Diego, CA 92127
Franklin Advisors, Inc. 1,321,300 (12) 5%
777 Mariners Island Boulevard
San Mateo, CA 94403-7777
Mason Best Co., L.P. 1,398,067 (13) 5.6%
2121 San Jacinto
Suite 1000
Dallas, TX 75201
Gerald B. Unterman 2,010,374 (14) 8%
70 East 55th Street
New York, NY 10022
All directors and executive 2,847,671 (15) 11%
officers as a group, including
those named above
</TABLE>
- ------------
*= less than 1%.
(1) 15,046 shares are held by Mr. Conway and 1,200 shares are held pursuant to
stock options exercisable within 60 days of the date of the proxy.
Mr. Conway owns more than 90% of the stock of Stupar Holdings Corporation,
a private company which owns 74,792 shares of common stock.
(2) 3,000 shares are held by Dr. Davidson; 1,200 shares are held pursuant to
stock options exercisable within 60 days of the date of the proxy.
(3) 13,000 shares are held by Mr. Grillo; 1,200 shares are held pursuant to
stock options exercisable within 60 days of the date of the proxy.
(4) 31,500 shares are held by Mr. Marbut; 1,200 shares are held pursuant to
stock options exercisable within 60 days of the date of the proxy.
(5) 7,000 shares are held by Mr. Mason; 1,200 shares are held pursuant to
stock options exercisable within 60 days of the date of the proxy.
Mr. Mason is the president of E. L. Mason Corporation, which is the general
partner of MB Partners, Ltd. ("MB Partners"), which is the general partner
of the Mason Best Company, L.P. ("Mason Best"). Mason Best directly owns
1,398,067 shares of common stock. Mr. Mason owns 50% of the general
partner of Mason Best, MB Partners; however, Mr. Mason holds 100% of the
voting rights in the general partner of Mason Best. In addition, Mr. Mason
is the managing partner of Mason Best. As a result, Mr. Mason may be
deemed to beneficially own 100% of the shares held by Mason Best. MB
Partners directly owns 8,804 shares of common stock, and Mr. Mason owns
100% of E.L. Mason Corporation, which is the general partner of MB
Partners, and may be deemed to beneficially own 100% of the shares held by
MB Partners.
(6) 7,000 shares are held by Lt. Gen. Stafford; 1,200 shares are held
pursuant to stock options exercisable within 60 days of the date of the
proxy.
(7) 47,364 shares are held by Mr. Skaggs; 469,200 shares are held pursuant to
stock options exercisable within 60 days of the date of the proxy. In
addition, 5,000 shares are held pursuant to Series A Warrants which are
convertible into common stock.
(8) 1,887 shares are held by Mr. Campbell; 57,600 shares are held pursuant to
stock options exercisable within 60 days of the date of the proxy.
(9) 3,411 shares are held by Mr. Floyd; 94,700 shares are held pursuant to
stock options exercisable within 60 days of the date of the proxy. In
addition, 1,000 shares are held pursuant to Series A Warrants which are
convertible into common stock.
(10) 12,600 shares are held by Mr. Melton; 75,600 shares are held pursuant to
stock options exercisable within 60 days of the date of the proxy. In
addition, Mrs. Melton holds 3,000 shares of common stock.
(11) 13,000 shares are owned by Dr. Straeter; 33,200 shares are held pursuant
to stock options exercisable within 60 days of the date of the proxy. In
addition, a family trust over which Dr. Straeter has control holds 163,331
shares and 2,000 shares are held pursuant to Series A Warrants which are
convertible into common stock.
(12) Shares are beneficially owned by one or more open or closed-end investment
companies or other managed accounts which are advised by direct and
indirect investment advisory subsidiaries (the "Adviser Subsidiaries") of
Franklin Resources, Inc. ("FRI"). Such advisory contracts grant to such
Adviser Subsidiaries all investment and/or voting power over the securities
owned by such advisory clients. Therefore, such Adviser Subsidiaries may
be deemed to be the beneficial owner of the securities. Charles B. Johnson
and Rupert H. Johnson, Jr. (the "Principal Shareholders") each own in
excess of 10% of the outstanding common stock of FRI and are the principal
shareholder of FRI. FRI, the Principal Shareholders, and each of the
Adviser Subsidiaries disclaim any economic interest or beneficial ownership
in the Tracor, Inc. shares. Franklin Advisors, Inc. has sole power to vote
or to direct the vote of, and to dispose or to direct the disposition of,
1,321,300 shares. Franklin Mutual Advisers, Inc. has sole power to vote or
to direct the vote of, and to dispose or to direct the disposition of,
567,000 shares. Franklin Management, Inc. has sole power to dispose or to
direct the disposition of 4,040 shares.
(13) See footnote (5) above.
(14) GBU, Inc. is the sole general partner of Oak Tree Partners, L.P. and GEM
Convertible Securities Partners, L.P. GBU, Inc. beneficially owns
1,146,424 shares (which are directly owned by Oak Tree Partners, L.P.) and
152,500 shares are held pursuant to Series A Warrants which are convertible
into common stock (which are owned by GEM Convertible Securities Partners,
L.P.). Mr. Unterman is the president, majority shareholder, and a director
of GBU, Inc. He is also the president, sole shareholder, and a director of
GEM Capital Management, Inc. GEM Capital Management, Inc. is a registered
investment advisor whose accounts own 71,175 shares which Mr. Unterman may
be deemed to beneficially own. Mr. Unterman is the trustee of a profit
sharing plan which owns 25,900 shares. Mr. Unterman owns 100,000 shares;
additionally 514,375 shares are held pursuant to Series A Warrants which
are convertible into common stock.
With respect to the 1,146,424 shares owned by Oak Tree Partners, L.P., GBU
owns a 19.4% interest in that partnership and Gerald B. Unterman owns 83%
of GBU, Inc. Therefore, Mr. Unterman claims beneficial ownership of only
184,597 of those shares.
With respect to the 152,500 shares held pursuant to the Series A Warrants
owned by GEM Convertible Securities Partners, L.P., GBU, Inc. owns a 1%
interest in that partnership, and Mr. Unterman owns 83% of GBU, Inc.
Therefore, Mr. Unterman claims beneficial ownership of only 1,266 of those
shares.
(15) Includes shares subject to outstanding warrants and options which are
exercisable within 60 days of the date of the proxy.
<PAGE>
OUTSTANDING VOTING SECURITIES
The number of voting securities of Tracor outstanding on February 17, 1998,
was 25,189,051 shares of common stock, $.01 par value, owned by approximately
304 shareholders of record.
1. ELECTION OF DIRECTORS.
Pursuant to the General Corporation Law of the State of Delaware, as
implemented by Tracor's Certificate of Incorporation and Bylaws, all corporate
powers are exercised by or under the direction of the Board of Directors, and
the Company's business, property, and affairs are managed by or under the
direction of the Board.
The Board of Directors has created committees with responsibility for
audits, compensation, and ethical issues. Each director who is not an employee
of Tracor or a subsidiary serves on one committee. See Committees of the Board.
Two directors are to be elected at this meeting to serve until 2001 or
until their successors have been elected and qualified. Mr. Skaggs and Lt. Gen.
Stafford are currently directors of the Company and have been nominated by the
Board of Directors for election at this Annual Meeting.
Outside (non-employee) directors of the Company receive annual Board
retainers of $22,750, plus travel and allowances where appropriate. Attendance
fees of $1,200 per meeting are also paid. Directors who also serve on a
committee of the Board of Directors receive $1,050 for each committee meeting
attended. Directors who chair committees receive an additional $1,000 per
meeting attended. Directors who are currently on the Board at the first of each
year receive 1,000 shares of restricted common stock and are granted 2,000
stock options at the then current market price.
A vacancy in any director position may be filled by a majority vote of the
remaining directors. The individual elected to the vacant director position
would serve until the next Annual Meeting of Shareholders.
During 1997, the Board of Directors met five times. Each director attended
more than 75% of the aggregate of (a) the total number of meetings held during
1997 and (b) the total number of meetings held by all committees of the Board of
Directors on which each served.
Following are the nominees of the Company, with information including their
age, principal occupation and other business affiliations, the year each was
first elected as a director, the Board committee memberships of each, and other
affiliations.
The Board of Directors recommends a vote FOR each of the nominees listed
below.
James B. Skaggs has been a director of the Company since March 1990. He
has also served as the president and CEO of the Company since November
1991. Mr. Skaggs served as president, CEO, and a director of Westmark
Systems, Inc. from March 1990 through December 1991, and is currently a
director of Alamo Group Inc.
Lt. Gen. Thomas P. Stafford, USAF (ret.) has been a director of the
Company since April 1994. He is a member of the Audit/Ethics Committee.
Lt. Gen. Stafford, a former astronaut, is a co-founder of the technical
consulting firm of Stafford, Burke and Hecker, Inc. (1983). He serves on
the boards of directors of AlliedSignal Corporation (March 1981 to
present); CMI, Inc. (1983 to present); Seagate Technologies, Inc. (March
1988 to present); Tremont, Inc. (October 1990 to present); and
Wheelabrator Technologies, Inc. (September 1987 to present), all of which
are listed on the New York Stock Exchange. He also serves on the
boards of Timet, Inc. (April 1996 to present) and Cycomm International
(October 1996 to present), listed, respectively, on Nasdaq and the
American Stock Exchange.
REMAINING DIRECTORS AND TERMS
The directors not up for election at this Annual Meeting are:
William E. Conway, Jr. has been a director since April 25, 1995. He is a member
of the Audit/Ethics Committee. Mr. Conway joined The Carlyle Group in August
1987 and is a managing director. He serves on the boards of directors of GTS
Duratek, Inc. (January 1995 to present); Howmet International, Inc. (December
1995 to present); and Nextel Communications, Inc. (February 1997 to present).
He also serves on the boards of several private companies in which Carlyle has
invested. Prior to Tracor's acquisition of GDE Systems, Inc. ("GDE"), he served
as chairman of the board of GDE. Mr. Conway's term expires in 2000.
Dr. Julian Davidson has been a director of the Company since November 1991. He
is chairman of the Compensation/Stock Option Committee. Dr. Davidson is
president and CEO of Davidson Enterprises, LLC, a commercial and defense
consulting firm since April 1, 1996. Before that, he was a senior vice
president of Booz, Allen and Hamilton from May 1984 to April 1996. He also
serves as a director on the boards of several privately held companies.
Dr. Davidson's term expires in 1999.
Anthony Grillo has been a director of the Company since December 1991. He is
chairman of the Audit/Ethics Committee. Mr. Grillo is a senior managing
director of The Blackstone Group, L.P., an investment banking firm. Mr. Grillo
currently serves as a member of the board of directors of Littelfuse, Inc.
(November 1991 to present), a former affiliate of Tracor's predecessor, as well
as a member of the boards of People's Choice TV; Bar Technolgies Inc.; and The
Academy of Political Science. Mr. Grillo's term expires in 1999.
Bob Marbut has been a director of the Company since November 1991. He is a
member of the Compensation/Stock Option Committee. Mr. Marbut is chairman and
co-CEO of Hearst-Argyle Television, Inc., a Nasdaq-traded television station
group which was created in the merger of Hearst Broadcasting and Argyle
Television, Inc. in August 1997. Previously, he was co-founder, chairman, and
CEO of Argyle Television since its inception in 1994. He also founded Argyle
Television Holding, Inc. in 1993, a television station group for which he served
as chairman and CEO until it was sold in April 1995. He is also chairman and
CEO of Argyle Communications, Inc. (founded in January 1992), which is the
managing general partner of Argyle Communications Partners, L.P., a limited
partnership involved in the acquisition and operation of television stations,
and successor to The Argyle Group, of which he had been chairman and CEO since
January 1992. He serves on the boards of directors of Tupperware Corporation
(1996 to present); Ultramar Diamond Shamrock, Inc. (December 1996 to present);
Hearst-Argyle Television, Inc. (August 1997 to present); and Argyle
Communications, Inc. (January 1992 to present). Mr. Marbut's term expires in
2000.
Elvis L. Mason has been a director of the Company since November 1991. He is a
member of the Compensation/Stock Option Committee. Since August 1984, he has
served as managing partner of Mason Best Company, L.P. ("Mason Best"), a
merchant banking firm, and on the boards of several privately held companies in
which Mason Best was a significant shareholder. He also has served, since
December 1991, as a director and, since February 1992, as chairman of the board
and CEO of San Jacinto Holdings, parent company of Safeguard Business Systems,
Inc., a supplier of office management products and services for small
businesses. Mr. Mason became Chairman and CEO of Safeguard Business Systems,
Inc. in August 1997. Mr. Mason also serves as a director of United Meridian
Corporation. Mr. Mason's term expires in 1999.
EXECUTIVE COMPENSATION
The following Summary Compensation Table shows the compensation of the
Company's five most highly compensated executive officers, including the chief
executive officer, for the three most recent fiscal years:
<TABLE>
Summary Compensation Table
<CAPTION>
ALL
OTHER
ANNUAL COMPENSATION LONG-TERM COMPENSATION COMPENSATION(1)
------------------------ ----------------------- ---------------
AWARDS PAYOUTS
-------------- -------
SECUR- LONG
ITIES TERM
RESTRI- UNDER- INCEN-
CTED LYING TIVE
NAME AND STOCK OPTIONS/ PLAN
PRINCIPAL POSITION YEAR SALARY BONUS AWARDS SAR(2) PAYOUTS
- --------------------- ---- -------- -------- ------ ------- ------- -------------
<S><C> <C> <C> <C> <C> <C> <C> <C>
James B. Skaggs, 1997 $635,003 $409,140 - 0 - 100,000 - 0 - $67,882
President & CEO 1996 577,533 490,445 - 0 - 100,000 - 0 - 39,281
1995 523,921 410,987 - 0 - 200,000 - 0 - 28,687
Barry G. Campbell, 1997 $241,308 $159,417 - 0 - 18,000 - 0 - $23,431
Vice President 1996 235,885 129,938 - 0 - 12,000 - 0 - 11,865
1995 209,244 105,074 - 0 - 20,000 - 0 - 9,699
Robert K. Floyd, 1997 $258,232 $128,552 - 0 - 20,000 - 0 - $37,238
Vice President & 1996 230,568 149,446 - 0 - 12,000 - 0 - 22,585
CFO 1995 216,448 126,703 - 0 - 20,000 - 0 - 17,592
George R. Melton, 1997 $232,419 $180,945 - 0 - 20,000 - 0 - $23,175
Vice President 1996 200,366 133,502 - 0 - 12,000 - 0 - 16,803
1995 166,675 88,069 - 0 - 18,000 - 0 - 10,973
Terry A. Straeter, 1997 $254,128 $184,375 - 0 - 20,000 - 0 - $49,933
Vice President 1996 226,900 174,177 - 0 - 12,000 - 0 - 50,605
1995 212,019 138,273 - 0 - 15,000 $243,132 24,296
</TABLE>
__________________
(1) Includes term life insurance premiums paid by the Company on behalf of each
named individual.
(2) No SARs have been issued as of the dates indicated.
<TABLE>
<CAPTION>
Potential Realizable Value
at Assumed Annual Rates
of Stock Price Appreciation
Individual Grants for Full Option Term
----------------------------------------------------- ----------------------------
% of
Total
# of Granted
Secur- to
ities Employ- Exer-
Under- ees cise
lying in or
Options Fiscal Base Expiration
Name Granted 1997 Price Date 5% 10%
---------------- ------- ------ ------ ---------- ------------- -------------
<S><C> <C> <C> <C> <C> <C> <C>
James B. Skaggs 100,000 20.91% $22.38 02/12/2007 $1,407,465.80 $3,566,795.20
Barry G. Campbell 18,000 3.76% 22.38 02/12/2007 253,343.84 642,023.13
Robert K. Floyd 20,000 4.18% 22.38 02/12/2007 281,493.16 713,359.04
George R. Melton 20,000 4.18% 22.38 02/12/2007 281,493.16 713,359.04
Terry A. Straeter 20,000 4.18% 22.38 02/12/2007 281,493.16 713,359.04
</TABLE>
- ------------
(1) The per share option exercise prices are the fair market value of the
Company's common stock on the date of the grant, and the term of each
option is 10 years. 30% of each option is exercisable one year after the
date of grant, an additional 30% is exercisable two years after the grant,
and the remainder is exercisable three years after the grant.
<TABLE>
<CAPTION>
Aggregate Option Exercises in Last Fiscal Year
and Fiscal Year-End Option Values
# of Unexer- Value of Unexercised
cised Options In-the-Money Options at
Fiscal Year End Fiscal Year End(1)
----------------- -----------------------
# of
Shares
Acquir-
ed on Exer-
Exer- Value cisable Unexer- Exer- Unexer-
Name cise Realized 12/31/97 cisable cisable cisable
----------------- ------ -------- -------- ------- ---------- ----------
<S><C> <C> <C> <C> <C> <C> <C>
James B. Skaggs 15,000 $390,000 329,200 250,000 $7,391,496 $3,187,900
Barry G. Campbell -0- -0- 40,600 34,400 816,110 402,740
Robert K. Floyd -0- -0- 77,100 36,400 1,900,105 418,740
George R. Melton 3,000 69,750 62,600 35,600 1,578,670 404,836
Terry A. Straeter -0- -0- 17,600 34,400 298,370 383,980
</TABLE>
- ------------
(1) The last sale price of the Common Stock on December 31, 1997, was $30.38
per share.
Employment Agreements. Effective as of November 22, 1996, the Company
entered into employment agreements with certain of its officers who had not
previously entered into employment agreements with the Company and, further,
entered into amended and restated employment agreements with certain of its
officers who had previously entered into employment agreements with the
Company. Each of the above-named officers has executed employment agreements
with the Company, except Dr. Straeter. All of the agreements provide for
a termination date of December 31, 1999, or the first day of the year following
the year in which the officer reaches his/her 65th birthday. The agreements
also provide for automatic renewals unless terminated earlier by the officer or
the Board of Directors.
Among other things, the employment agreements assure the continuation of
each such officer's base salary as of such date and his/her continued
participation in the Company incentive and other welfare and benefit plans, as
well as continuation of his/her then current level of job position and
responsibilities, failing which such officer may terminate his/her employment
with the Company and receive, as termination pay, stipulated amounts equal to up
to two times such officer's base salary then in effect and other benefits. Under
each employment agreement, the Company has the right to terminate an officer for
cause, under which circumstances the officer would not be entitled to
termination pay. Each agreement provides that upon termination the officer will
not compete with the Company for a period of six months after the date of
termination nor will the officer divulge confidential information or trade
secrets to third parties.
Retirement Benefits and Related Information. The Company has a Defined
Benefit Retirement Plan (the "Retirement Plan") which provides retirement
benefits for its employees and employees of participating affiliates. The
Retirement Plan has three benefit formulas as described below for Tracor, Vitro,
and GDE employees. Employees covered under the Tracor formula become vested in
the Retirement Plan upon the completion of five years of vesting service.
Monthly benefits, payable at normal retirement age, are based upon an amount
equal to one percent of final "average monthly compensation" up to "covered
compensation" plus one and one-half percent of final average monthly
compensation in excess of covered compensation, multiplied by the years of
credited service with the Company, less one year. Average monthly compensation
s defined as the average monthly compensation actually paid, including bonuses
and overtime pay for the five highest successive calendar years. Covered
compensation is defined as the average of the maximum wages subject to social
security taxes for the 35 years ending in the calendar year before the employee
reached Social Security retirement age. Credited service is the period of the
employee's total employment with the Company. The monthly benefits are not
subject to deductions for Social Security or other offset amounts.
Employees covered under the Vitro formula are provided monthly benefits,
payable at normal retirement age, which are based on the amount equal to one and
one-tenth percent of average annual compensation up to covered compensation plus
one and three-quarters percent of average annual compensation in excess of
covered compensation, multiplied by the years of credited service. Average
annual compensation means the average of annual earnings during the employee's
five consecutive highest paid years with Vitro. Credited service generally
means all the employee's years of service with Vitro. The monthly benefits are
not subject to deductions for Social Security or other offset amounts.
Employees covered under the GDE formula are provided monthly benefits,
payable at normal retirement age, which are based on the amount equal to
approximately one and three-tenths percent of average annual compensation,
multiplied by the years of credited service. Average annual compensation means
the average of annual earnings during the employee's five consecutive highest
paid years with GDE. Credited service generally means all the employee's years
of service with GDE. The monthly benefits are not subject to deductions for
Social Security or other amounts.
The following tables show the estimated annual benefits payable upon
retirement to persons in specified remuneration and years of service
classifications who would retire in 1998 at age 65. The amounts shown in the
tables were determined as normal retirement benefits at December 31, 1997, and
were based on pay limited by Section 401(a)(17) of the Internal Revenue Code
(the "Code"). Benefits are limited by Section 415 of the Code without regard to
combined plan limitations.
<TABLE>
<CAPTION>
Retirement Plan Annual Benefits
Tracor, Inc.
Years of Service
Final Average
Annual Compensation 15 20 25 30 35
------------------- -- -- -- -- --
<S> <C> <C> <C> <C> <C> <C>
$100,000 $18,949 $25,716 $32,484 $39,251 $46,018
$125,000 24,199 32,841 41,484 50,126 58,768
$150,000 29,449 39,966 50,484 61,001 71,518
$175,000 33,824 46,230 58,634 71,040 83,444
$200,000 37,574 51,854 66,134 80,414 94,694
$225,000 41,324 57,480 73,634 89,790 105,944
$250,000 42,950 59,918 76,886 93,854 110,822
$300,000 42,950 59,918 76,886 93,854 110,822
$350,000 42,950 59,918 76,886 93,854 110,822
$400,000 42,950 59,918 76,886 93,854 110,822
$450,000 42,950 59,918 76,886 93,854 110,822
$500,000 42,950 59,918 76,886 93,854 110,822
$1,252,972(1) 42,950 59,918 76,886 93,854 110,822
</TABLE>
- ------------
(1) Represents 120% of covered compensation for the most highly compensated
individual who would be entitled to benefits under this particular plan.
<TABLE>
<CAPTION>
Tracor Systems Technologies, Inc.(2)
Years of Service
Final Average
Annual Compensation 15 20 25 30 35
------------------- -- -- -- -- --
<S> <C> <C> <C> <C> <C> <C>
$100,000 $23,393 $31,191 $38,988 $46,786 $54,583
$125,000 29,955 39,940 49,926 59,911 69,896
$150,000 36,518 48,690 60,863 73,036 85,208
$175,000 42,070 56,448 70,826 85,204 99,582
$200,000 46,882 63,448 80,013 96,579 113,145
$225,000 53,695 70,448 89,201 107,954 125,000
$250,000 53,781 73,483 93,185 112,886 125,000
$300,000 53,781 73,483 93,185 112,886 125,000
$350,000 53,781 73,483 93,185 112,886 125,000
$400,000 53,781 73,483 93,185 112,886 125,000
$480,870(1) 53,781 73,483 93,185 112,886 125,000
</TABLE>
- ------------
(1) Represents 120% of covered compensation for the most highly compensated
individual who would be entitled to benefits under this particular plan.
(2) Employees of Tracor Systems Technologies, Inc. and Tracor Services
Corporation whose credited service begins on or after January 1, 1996, are
covered under the Tracor benefit formula. Benefits based on pay over
$160,000 are limited with a minimum benefit, as of December 31, 1993, under
prior pay plan.
<TABLE>
<CAPTION>
GDE Systems, Inc.
Years of Service
Final Average
Annual Compensation 15 20 25 30 35
------------------- -- -- -- -- --
<S> <C> <C> <C> <C> <C> <C>
$100,000 $20,000 $26,667 $33,333 $40,000 $46,667
$125,000 25,000 33,333 41,667 50,000 58,333
$150,000 30,000 40,000 50,000 60,000 70,000
$175,000 34,200 45,866 57,533 69,200 80,866
$200,000 37,866 51,200 64,533 77,866 91,199
$225,000 41,533 56,533 71,533 86,533 101,533
$250,000 43,123 58,845 74,568 90,291 106,013
$300,000 43,123 58,845 74,568 90,291 106,013
$350,000 43,123 58,845 74,568 90,291 106,013
$400,000 43,123 58,845 74,568 90,291 106,013
$450,000 43,123 58,845 74,568 90,291 106,013
$526,204 (1) 43,123 58,845 74,568 90,291 106,013
</TABLE>
- ------------
(1) Represents 120% of covered compensation for the most highly compensated
individual who would be entitled to benefits under this particular plan.
As of December 31, 1997, the persons named in the Summary Compensation
Table were credited with the following years of service under the Retirement
Plan: Mr. Skaggs, 7.8; Mr. Campbell, 27.6; Mr. Floyd, 7.6; Mr. Melton, 7.8;
and Dr. Straeter, 17.8.
Non-Qualified Supplemental Retirement Benefit. During 1993, the Company
established a Non-Qualified Supplemental Retirement Program for certain of its
officers, which was amended and restated effective as of January 30, 1997
(hereafter, the "Program"). The Program provides that upon normal retirement or
termination not for cause, Company officers covered by the Program will receive
a monthly income of up to 50% of his/her average compensation for the 36 months
immediately prior to the date of retirement or termination, less the amount of
retirement benefits which the officer would otherwise be entitled to under the
Retirement Plan. The actual amount the participant would be entitled to receive
is determined by the participant's total number of years of service to the
Company after December 21, 1991. The Program further provides that upon the
death of the participant, his or her spouse would also be entitled to receive a
monthly income equal to one-half of the benefit which would otherwise be payable
to the officer. Currently, Messrs. Skaggs, Floyd, and Melton are participants
in the Program. The Program additionally provides that if any of the
participants are terminated without cause, they shall become immediately 100%
vested in the Program, and in the case of Messrs. Skaggs and Floyd, they may
elect to receive the benefits payable to them under the Program in a lump sum.
Assuming the individuals remain in the employ of the Company until their normal
retirement age, each of the following executives will receive an annuity, as
described above, which, on an actuarial basis, is equal to the following annual
payments: Mr. Skaggs, $490,480; Mr. Floyd, $176,384; and Mr. Melton,
$233,496.
Dr. Straeter is eligible to receive benefits from the GDE Systems, Inc.
Supplemental Retirement Plan. This plan is designed to replace any pension
benefit lost to Dr. Straeter if his final average covered compensation is in
excess of the limitations for eligible compensation contained in Sections 415 or
401(a)(17) of the Code. Assuming Dr. Straeter remains employed by the Company
until his normal retirement age, he will receive an annuity with an estimated
annual payment of $150,540.
Mr. Campbell is eligible to receive benefits from the Tracor Benefit
Restoration Plan. This plan, adopted October 1, 1996, is designed to replace
any pension benefit lost to Mr. Campbell if his final average monthly covered
compensation is in excess of the limitations for eligible compensation contained
in Sections 415 or 401(a)(17) of the Code. Assuming Mr. Campbell remains with
the Company until his normal retirement age, he will receive an estimated lump
sum payment of $1,615,485.
Effective December 1, 1996, Tracor adopted the Tracor Deferred Compensation
Plan designed primarily to replace 401(k) Plan benefits lost due to the Code
limitations on employee deferrals and covered compensation used to determine
benefits from the qualified Tracor, Inc. 401(k) Plan. For 1997, matching
contributions were credited in the amount of $13,287 to Mr. Skaggs; $5,043 to
Mr. Campbell; $3,427 to Mr. Floyd; and $5,262 to Mr. Melton.
COMMITTEES OF THE BOARD
Audit/Ethics Committee. The Audit/Ethics Committee met two times in 1997.
The duties of the Committee are to:
a. recommend to the Board of Directors a firm of independent auditors to
perform the audit of the annual financial statements of the Company;
b. review with the independent auditors and with financial management the
proposed scope of the annual audit, past audit experience, the
Company's internal audit program, recently completed internal audits,
and other matters bearing upon the scope of the audit;
c. review with the independent auditors and with financial management
significant matters revealed in the course of the audit of the annual
financial statements of the Company;
d. review on an annual basis whether the Company's ethics policies have
been communicated by the Company to all key employees of the Company
and its subsidiaries;
e. review with financial management any suggestions and recommendations of
the independent auditors of the Company;
f. meet on a regular basis with a representative or representatives of the
Internal Audit Department of the Company and to review the Internal
Audit Department's Reports of Operations; and
g. report its activities and actions to the Board at least once each
fiscal year.
Members of the Audit/Ethics Committee are Anthony Grillo, Chairman;
William E. Conway; and Thomas P. Stafford.
The independent auditors and Tracor's internal auditor have direct access
to the Committee and may discuss with it any matters which may arise in
connection with audits, the maintenance of internal accounting controls, or any
other matter relating to Tracor's financial affairs. Furthermore, the Committee
may authorize the independent auditors to investigate any matters which the
Committee deems appropriate and may present its recommendations and conclusions
to the Board.
Compensation/Stock Option Committee. The Compensation/Stock Option
Committee met five times in 1997. The duties of the Committee are to:
a. administer the Tracor stock option plan;
b. recommend policies dealing with compensation, position evaluations, and
personnel engagements, transfers, and terminations, including the
Company's annual incentive program;
c. review and recommend major compensation plans;
d. recommend the Company's management development programs and procedures;
e. approve and recommend to the Board of Directors compensation for
corporate officers; and
f. review the administration of the Company's Retirement Plan.
Members of the Compensation/Stock Option Committee are Julian Davidson,
Chairman; Bob Marbut; and Elvis L. Mason.
COMPENSATION/STOCK OPTION COMMITTEE REPORT
Executive Compensation Principles. The Company's Executive Compensation
Program is based on guiding principles designed to align executive compensation
with Company values and objectives, business strategies, management initiatives,
and business financial performance. In applying these principles, the
Compensation/Stock Option Committee (the "Committee") has established a program
to:
a. attract and retain key executives critical to the long-term success of
the Company and each of its business groups;
b. reward executives for long-term strategic management and enhancement of
shareholder values;
c. integrate compensation programs with both the Company's annual and
long-term strategic planning and measuring processes; and
d. support a performance-oriented environment that rewards performance not
only with respect to Company goals but also Company performance as
compared to that of industry performance levels.
Executive Compensation Program. The total compensation program consists of
both cash and equity-based compensation. The annual compensation consists of a
base salary and an annual incentive. The Committee determines the level of
salary for executive officers. Actual salary changes are based upon performance
and upon national industry salary surveys in related industries, depending on
the areas in which the particular executive is employed, and supplemented by
other surveys which are used to enhance the analysis. These surveys covered
essentially the same companies that are included in the graph comparing the
cumulative total returns of the Company, set forth below. The salary levels
are targeted to the median of such surveys, with variations based upon the
experience of each officer and the complexity of his/her particular
responsibilities. In considering the salary increases from 1997 to 1998, the
Committee also evaluated each executive's performance in several areas,
including increases in sales and revenue from the preceding year, increases in
profits in the executive's area of responsibility, and the success of his/her
budgetary controls. No increases were required, or given, pursuant to the terms
of any employment agreements.
Incentive Compensation Program. Effective December 1991, the Company
adopted a performance incentive plan under which executive officers and other
high-level employees may receive compensation based on the achievement of
individual and Company objectives. Eligible participants include officers and
other key employees of the Company who are in a position to make substantial
contributions to the management, growth, and success of the Company. Payment of
an award is contingent upon the achievement of specified levels of earnings,
bookings, revenue, and cash generation of the Company or the employee's unit
("performance goals") each year based upon the annual operating plan of the
Company. A smaller portion of each person's incentive payment is based on
individual and organizational goals such as increases in efficiency of the
executive's area of responsibility, adherence to budgetary plans, and
implementation of new operating procedures and programs. At the close of each
fiscal year, the performance of the operating unit in which the employee
participates is reviewed against the performance goals, division objectives are
evaluated, and awards are issued. In the event the performance goals are not
achieved, the awards are reduced or eliminated entirely. If performance goals
are exceeded, the amount of an award may be increased. In reviewing the
performance of the named executives for 1997, the Committee determined each
individual and Tracor exceeded most of their respective goals for the year.
Executive officers as a group were awarded payments totaling $1,736,257.11 and
all employees as a group received payments totaling $7,657,956.91 under this
plan in 1997.
Stock Plan. The Company adopted, in December 1991, the Stock Plan for
Employees of Tracor, Inc. and its Subsidiaries (the "1991 Plan"). In April
1995, the Company adopted the 1995 Stock Plan for Employees of Tracor, Inc. and
its Subsidiaries (the "1995 Plan" or, collectively, the "Stock Plans") pursuant
to which options to purchase common stock of the Company, stock appreciation
rights ("SARs") (rights, granted in tandem with an option (or alone), to receive
cash payments equal to any appreciation in value of the shares subject to option
from the date of the option grant to the date of exercise in lieu of the
exercise of an option), and/or shares of restricted stock may be granted to
officers and other key employees of the Company and its subsidiaries. The plans
are administered by the Committee which has authority to determine the
individuals to whom and the terms pursuant to which grants shall be made. Per
share option prices are not less than the fair market value of the Company's
common stock on the date of the option grant, and the term of the options
cannot exceed 10 years. The two plans are identical in all material respects,
except that outside directors participate in the 1995 Plan.
Under the Stock Plans, the Committee grants stock options, restricted
shares, and/or SARs based upon its review of surveys and publicly available
information relating to the amount and type of awards granted to executives in
the aerospace and defense industry, as well as its review of each executive's
performance, evaluated as described above. Through the award of options, the
objective of aligning executive officers' long-range interests with those of the
shareholders are met by providing the executive officers with the opportunity to
build a meaningful stake in the Company.
Officer Compensation. The Compensation Committee of the Board of Directors
met for the purpose of evaluating the performance of the Company's CEO. In
accordance with the Company's Executive Compensation Program, the Committee
evaluated Mr. Skaggs' performance for the year based on both objectively
evaluated quantitative criteria and on subjectively evaluated qualitative
criteria. Mr. Skaggs' base salary and total compensation were also evaluated
with respect to similar positions in the industry using a number of compensation
surveys. The goal of the Committee was to determine whether an increase in his
base salary was merited, and, if so, how much of an increase should be
recommended to the Board. The Committee additionally determined the amount of
incentive compensation and stock options to recommend that the Board should
award to Mr. Skaggs.
Quantitative and Qualitative Goals. At the beginning of each fiscal year,
the Board of Directors establishes quantitative and qualitative goals or
"targets" for the CEO of the Company. Results are evaluated at the end of the
fiscal year.
For 1997, the Committee evaluated the results of three quantitative
criteria. They were:
<TABLE>
<CAPTION>
Target Actual
(in Millions) (in Millions) % of Target
------------- ------------- -------------
<S><C> <C> <C> <C>
Earnings (1) $99.00 $101.91 102.9%
Net Cash Activity $60.00 $47.69 79.5%
Bookings $1,370.00 $1,505.79 109.9%
</TABLE>
________________
(1) Before interest, income taxes, and extraordinary item.
In addition, the Committee subjectively evaluated the results of
qualitative criteria. They include:
a. return on shareholders' equity;
b. share price increase;
c. shareholders' equity increase;
d. achievement of strategic business goals;
e. the conduct of business operations;
f. board communication; and
g. quality of management team.
Base Salary and Annual Incentive Compensation. Based upon its review of
Mr. Skaggs' overall 1997 performance for base salary and annual incentive
purposes, the Committee determined that, overall, Mr. Skaggs exceeded most
quantitative and qualitative target measures. The Committee also considered the
Company's 1997 performance improvements over 1996 in determining the base salary
increase. These improvements included a 17% increase in sales; a 15% increase
in earnings before interest, income taxes, and extraordinary item (and also
excluding a non-recurring gain in 1996); a 29% increase in income before
extraordinary item (and also excluding a non-recurring gain in 1996); a 23%
increase in firm backlog; a 20% increase in total backlog; and a 40% increase
in bookings. As a result, the Committee recommended that Mr. Skaggs should
receive a base salary increase of approximately 10%, effective for the 1998
year.
Mr. Skaggs' annual incentive compensation for 1997 was calculated using a
mathematical equation which took into account quantitative performance results
related to earnings, net cash, and bookings plus the achievement of qualitative
goals as evaluated by the Committee. Using the mathematical equation and the
evaluated incentive results described above, Mr. Skaggs' recommended annual
incentive bonus is 66.8% of his 1997 base salary.
Stock Option Grants. The stock option grants made to Mr. Skaggs under the
Company's Stock Plan were determined using the criteria described under the
Stock Plan referenced previously. Option grants received by Mr. Skaggs in
fiscal year 1997 are noted under the Executive Compensation section showing the
five most highly compensated officers.
Compensation/Stock Option Committee
Julian Davidson, Chairman
Bob Marbut
Elvis L. Mason
COMPARISON OF CUMULATIVE TOTAL RETURN (1)
AMONG THE NASDAQ STOCK MARKET INDEX,
DOW JONES DEFENSE & AEROSPACE INDEX,
AND TRACOR, INC.
Set forth below is a line graph comparing the cumulative total shareholder
return on the Company's common stock, based on the market price of the common
stock and assuming reinvestment of dividends, with the cumulative total return
of companies on the Nasdaq Stock Market Index and the Dow Jones Defense &
Aerospace Index.
<TABLE>
[GRAPH APPEARS HERE]
COMPARISON OF FIVE-YEAR CUMULATIVE RETURN
AMONG DOW JONES DEFENSE & AEROSPACE INDEX,
NASDAQ STOCK MARKET INDEX, AND TRACOR, INC.
<CAPTION>
Measurement DJ Defense & Nasdaq Tracor
Period Aerospace Stock Market Inc.
<S> <C> <C> <C>
4th Quarter '92 100.00 100.00 100.00
1st Quarter '93 102.62 101.88 78.13
2nd Quarter '93 111.87 103.83 153.13
3rd Quarter '93 117.49 112.58 167.19
4th Quarter '93 129.22 114.80 225.00
1st Quarter '94 133.68 109.97 196.88
2nd Quarter '94 135.35 104.83 187.50
3rd Quarter '94 138.34 113.51 203.13
4th Quarter '94 145.32 112.21 303.13
1st Quarter '95 167.74 122.33 287.50
2nd Quarter '95 200.64 139.93 340.63
3rd Quarter '95 220.63 156.79 412.50
4th Quarter '95 252.71 158.70 362.50
1st Quarter '96 270.94 166.10 435.94
2nd Quarter '96 284.70 179.66 431.25
3rd Quarter '96 307.91 186.05 515.63
4th Quarter '96 335.83 195.19 531.25
1st Quarter '97 314.75 184.61 581.25
2nd Quarter '97 356.30 218.45 628.13
3rd Quarter '97 384.94 255.40 768.75
4th Quarter '97 353.18 239.53 759.38
</TABLE>
- ------------
(1) Assumes $100.00 invested on December 31, 1992, in the Nasdaq Stock Market
Index, Dow Jones Defense & Aerospace Index, and Tracor, Inc.
<PAGE>
2. APPROVAL AND RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS.
The Board of Directors desires to obtain shareholders' ratification of the
Board's action in appointing Ernst & Young LLP, Certified Public Accountants,
700 Lavaca, Suite 1400, Austin, Texas 78701, as independent auditors of Tracor
and its subsidiaries for the year 1998.
Ernst & Young LLP has been serving as the independent accountants of Tracor
and its subsidiaries (including its predecessor) since 1967. It has no direct
financial or material indirect financial interest in Tracor or any of its
subsidiaries and, during the past three years, has had no connection therewith
in the capacity of promoter, underwriter, voting trustee, director, officer, or
employee.
The Board of Directors recommends a vote FOR the following resolution which
will be presented at the meeting:
"RESOLVED, that the appointment, by the Board of Directors of the
Company, of Ernst & Young LLP as independent auditors of the Company
and its subsidiary companies, for the year 1998, be, and the same
hereby is, approved and ratified."
Representatives of Ernst & Young LLP are expected to be present at the 1998
Annual Meeting, will have an opportunity to make a statement if they so desire,
and will be available to respond to appropriate questions.
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
officers and directors and persons who own more than 10% of a registered class
of the Company's equity securities to file reports of ownership and changes in
ownership with the Securities and Exchange Commission (SEC). Officers,
directors, and greater than 10% shareholders are required by SEC regulation to
furnish the Company with copies of all Section 16(a) forms they file.
Based solely on its review of the copies of such forms received by the
Company, or written representations from certain reporting persons that no Form
5s were required for those persons, the Company believes that all of its
officers and directors filed all requisite reports required to be filed by
Section 16(a) of the Securities Exchange Act for 1997.
OTHER BUSINESS
Tracor is not aware of any business or matters other than those indicated
in this document which may be properly presented at the meeting.
SHAREHOLDER PROPOSALS
Shareholders who wish to submit proposals to the Company for possible
inclusion in the Company's Proxy Statement for the purpose of presentation at
the Company's Annual Meeting of Shareholders in 1999 must cause such proposals
to be received by the Company not less than 120 days in advance of March 21,
1999. If the date of such Annual Meeting should, subsequent to the date hereof,
be advanced from April 20, 1999, by more than 30 days or delayed by more than 90
calendar days, the Company will so inform the shareholders of such change and
the date by which proposals of shareholders must be received.
MISCELLANEOUS
The information contained in this Proxy Statement relating to the
occupations and security holdings of directors and officers of the Company and
their transactions with the Company, if any, is based solely upon information
provided by the individual as of February 10, 1998.
Please date, sign, and return the Proxy Card at your earliest convenience
in the enclosed envelope. No postage is required for mailing in the United
States. A prompt return of your Proxy will be appreciated, as it will save the
expense of additional mailings.
If you plan to attend the Annual Meeting, please check the appropriate box
on your Proxy Card. You have the right, upon your identification as a
shareholder, to attend without prior indication of doing so.
By Order of the Board of Directors,
Russell E. Painton
Secretary
Austin, Texas
March 20, 1998
Tracor, Inc. Proxy This Proxy is Solicited on Behalf
6500 Tracor Lane of the Board of Directors. The
Austin, Texas 78725-2000 undersigned hereby appoints James
512/926-2800 B. Skaggs and Russell E. Painton,
as Proxies, each with the power
to appoint his substitute and
hereby authorizes them to represent
and to vote, as designated below,
all the shares of common stock
of Tracor, Inc., held of record
by the undersigned on Monday,
March 9, 1998, at the Annual Meeting
of Shareholders to be held at
10:00 a.m., April 21, 1998, Tracor,
Inc., 6500 Tracor Lane, Austin,
Texas, and at any adjournments
thereof as follows:
1. Election of Directors
[ ] FOR all nominees listed below [ ] WITHHOLD authority
(except as marked to the contrary to vote for all
below) nominees listed below
J. Skaggs; T. Stafford
(INSTRUCTION: To withhold authority to vote for any individual
nominee, write that nominee's name on the space provided below.)
-----------------------------------------------------------------------
2. Proposal to ratify the selection of Ernst & Young LLP as the
Company's independent auditors for 1998.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
With discretionary authority to vote on any other matter incident
to the conduct of the meeting or matters with respect to which
the Board of Directors has no knowledge, and which may properly
come before the meeting.
This Proxy when properly executed will be voted in the manner
directed herein by the undersigned shareholder. If no direction
is made, this proxy will be voted FOR proposals 1. and 2., and
the discretionary authority set forth in proposal will be deemed
to be given.
Dated: ___________, 1998
___________________________
Signature
___________________________
Printed Name
___________________________
Signature, if held jointly
___________________________
Printed Name
(Joint owners should EACH
sign. Please sign EXACTLY as
your name(s) appear(s) on this
card. When signing as
attorney, trustee, executor,
administrator, guardian, or
corporate officer, please give
your FULL title.)
[ ] I plan to attend the meeting on
April 21, 1998.
