[LOGO]
BEI ELECTRONICS, INC.
One Post Street, Suite 2500
San Francisco, CA 94104
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON FEBRUARY 29, 1996
TO THE STOCKHOLDERS OF BEI ELECTRONICS, INC.:
Notice Is Hereby Given that the Annual Meeting of Stockholders of BEI
Electronics, Inc., a Delaware corporation (the "Company"), will be held on
Thursday, February 29, 1996 at 1:30 p.m. local time, at BEI Systron Donner
Inertial Division, 2700 Systron Drive, Concord, California, for the following
purposes:
1. To elect two directors to hold office until the 1999 Annual Meeting
of Stockholders.
2. To ratify the selection of Ernst & Young LLP as independent public
accountants of the Company for its fiscal year ending September 28, 1996.
3. To transact such other business as may properly come before the
meeting or any adjournment thereof.
The foregoing items of business are more fully described in the Proxy
Statement accompanying this Notice.
The Board of Directors has fixed the close of business on January 8,
1996 as the record date for the determination of stockholders entitled to notice
of and to vote at this Annual Meeting and at any adjournment or postponement
thereof.
By Order of the Board of Directors
/s/ Robert R. Corr
Robert R. Corr
Corporate Secretary
San Francisco, California
January 24, 1996
ALL STOCKHOLDERS ARE CORDIALLY INVITED TO ATTEND THE MEETING IN PERSON.
WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING, PLEASE COMPLETE, DATE, SIGN AND
RETURN THE ENCLOSED PROXY AS PROMPTLY AS POSSIBLE IN ORDER TO ENSURE YOUR
REPRESENTATION AT THE MEETING. A RETURN ENVELOPE (WHICH IS POSTAGE PREPAID IF
MAILED IN THE UNITED STATES) IS ENCLOSED FOR THAT PURPOSE. EVEN IF YOU HAVE
GIVEN YOUR PROXY, YOU MAY STILL VOTE IN PERSON IF YOU ATTEND THE MEETING. PLEASE
NOTE, HOWEVER, THAT ATTENDANCE AT THE MEETING WILL NOT BY ITSELF REVOKE A PROXY.
FURTHERMORE, IF YOUR SHARES ARE HELD OF RECORD BY A BROKER, BANK OR OTHER
NOMINEE AND YOU WISH TO VOTE AT THE MEETING, YOU MUST OBTAIN FROM THE RECORD
HOLDER A PROXY ISSUED IN YOUR NAME.
<PAGE>
BEI ELECTRONICS, INC.
One Post Street, Suite 2500
San Francisco, CA 94104
PROXY STATEMENT
INFORMATION CONCERNING SOLICITATION AND VOTING
General
The enclosed proxy is solicited on behalf of the Board of Directors of
BEI Electronics, Inc., a Delaware corporation (the "Company"), for use at the
Annual Meeting of Stockholders to be held on February 29, 1996, at 1:30 p.m.
local time (the "Annual Meeting"), or at any adjournment or postponement
thereof, for the purposes set forth herein and in the accompanying Notice of
Annual Meeting. The Annual Meeting will be held at BEI Systron Donner Inertial
Division, 2700 Systron Drive, Concord, California. The Company intends to mail
this proxy statement and accompanying proxy card on or about January 24, 1996 to
all stockholders entitled to vote at the Annual Meeting.
Solicitation
The Company will bear the entire cost of solicitation of proxies,
including preparation, assembly, printing and mailing of this proxy statement,
the proxy and any additional information furnished to stockholders. Copies of
solicitation materials will be furnished to banks, brokerage houses, fiduciaries
and custodians holding in their names shares of Common Stock beneficially owned
by others to forward to such beneficial owners. The Company may reimburse
persons representing beneficial owners of Common Stock for their costs of
forwarding solicitation materials to such beneficial owners. Original
solicitation of proxies by mail may be supplemented by telephone, telegram or
personal solicitation by directors, officers or other regular employees of the
Company. No additional compensation will be paid to directors, officers or other
regular employees for such services.
Voting Rights and Outstanding Shares
Only holders of record of Common Stock at the close of business on
January 8, 1996 will be entitled to notice of and to vote at the Annual Meeting.
At the close of business on January 8, 1996, the Company had outstanding and
entitled to vote 6,877,872 shares of Common Stock. Each holder of record of
Common Stock on such date will be entitled to one vote for each share held on
all matters to be voted upon at the Annual Meeting.
All votes will be tabulated by the inspector of election appointed for
the meeting, who will separately tabulate affirmative and negative votes,
abstentions and broker non-votes. Abstentions will be counted towards the
tabulation of votes cast on proposals presented to the stockholders and will
have the same effect as negative votes. Broker non-votes are counted towards a
quorum, but are not counted for any purpose in determining whether a matter has
been approved.
Revocability of Proxies
Any person giving a proxy pursuant to this solicitation has the power
to revoke it at any time before it is voted. It may be revoked by filing with
the Secretary of the Company at the Company's principal executive office, One
Post Street, Suite 2500, San Francisco, California 94104, a written notice of
revocation or a duly executed proxy bearing a later date, or it may be revoked
by attending the meeting and voting in person. Please note, however, that
attendance at the meeting will not by itself revoke a proxy. Furthermore, if the
shares are held of record by a broker, bank or other nominee and the stockholder
wishes to vote at the meeting, the stockholder must obtain from the record
holder a proxy issued in the stockholder's name.
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Stockholder Proposals
Proposals of stockholders that are intended to be presented at the
Company's 1997 Annual Meeting of Stockholders must be received by the Company
not later than September 26, 1996 in order to be included in the proxy statement
and proxy relating to that annual meeting.
Proposal 1
Election Of Directors
The Company's Restated Certificate of Incorporation and By-Laws provide
that the Board of Directors shall be divided into three classes, each class
consisting, as nearly as possible, of one-third of the total number of
directors, with each class having a three-year term. Vacancies on the Board may
be filled by the affirmative vote of the holders of a majority of the voting
power of the then outstanding shares of Common Stock or by the affirmative vote
of a majority of the remaining directors. A director elected by the Board to
fill a vacancy (including a vacancy created by an increase in the authorized
number of directors on the Board) shall serve for the remainder of the full term
of the class of directors in which the vacancy occurred and until such
director's successor is elected and has qualified or until his earlier death,
resignation or removal.
The Board of Directors is presently composed of seven members. There
are two directors in the class whose term of office expires in 1996. The two
nominees for election to this class, C. Joseph Giroir, Jr. and Gary D. Wrench,
are directors of the Company who were previously elected by the stockholders. If
elected at the Annual Meeting, each of the nominees would serve until the 1999
annual meeting and until his successor is elected and has qualified, or until
such director's earlier death, resignation or removal.
Directors are elected by a plurality of the votes present in person or
represented by proxy and entitled to vote at the meeting. Shares represented by
executed proxies will be voted, if authority to do so is not withheld, for the
election of the two nominees named below. In the event that any nominee should
be unavailable for election as a result of an unexpected occurrence, such shares
will be voted for the election of such substitute nominee as the Board of
Directors may propose. Each person nominated for election has agreed to serve if
elected, and the Board of Directors has no reason to believe that any nominee
will be unable to serve.
Set forth below is biographical information for each person nominated
and each person whose term of office as a director will continue after the
Annual Meeting.
Nominees for Election for a Three-Year Term Expiring at the 1999 Annual Meeting
C. Joseph Giroir, Jr.
Mr. Giroir, age 56, served as Secretary of the Company from 1974 until
February 1995 and has served as a director of the Company since 1978. He is
currently a member of the law firm of Giroir & Gregory, a Professional
Association. From 1965 to May 1988, Mr. Giroir was a member of Rose Law Firm, a
Professional Association. Both law firms have rendered services to the Company.
Mr. Giroir holds a B.A. and an L.L.B. from the University of Arkansas and an
L.L.M. from Georgetown University.
Gary D. Wrench
Mr. Wrench, age 62, has served as Senior Vice President and Chief
Financial Officer of the Company since July 1993 and as a director of the
Company since February 1986. He served as Vice President of the Company from
April 1985 to July 1993, during which time he also served as President and Chief
Executive Officer of Motion Systems Company, Inc., a wholly-owned subsidiary of
the Company which was reorganized into BEI Sensors & Systems Company, Inc., a
wholly-owned subsidiary of the Company ("Sensors and Systems"). He served as
President of Wrench Consulting Group, an independent consulting firm, from 1984
to 1985. From 1978 until 1983, Mr. Wrench served as Chief Operating Officer of
Kratos Incorporated, a measurement and control devices manufacturer. From 1958
through 1978, he held various management positions with Hughes Aircraft Company,
serving most recently as President of Spectrolab, Inc., a Hughes subsidiary. Mr.
Wrench holds a B.A. from Pomona College and an M.B.A. from the University of
California, Los Angeles.
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The two candidates receiving the highest number of affirmative votes
cast at the meeting will be elected directors of the Company.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE
IN FAVOR OF EACH NAMED NOMINEE
Directors Continuing in Office Until the 1997 Annual Meeting
Richard M. Brooks
Mr. Brooks, age 67, has been a director of the Company since 1987. He
is currently an independent financial consultant. From 1987 to 1990, Mr. Brooks
served as President of SFA Management Corporation, the managing general partner
of St. Francis Associates, an investment partnership. He currently serves as a
director of Longs Drug Store Corporation, Granite Construction Incorporated and
the Western Farm Credit Bank, a private company. Mr. Brooks holds a B.S. from
Yale University and an M.B.A. from the University of California, Berkeley.
William G. Howard, Jr.
Dr. Howard, age 54, has been a director of the Company since December
1992. Since 1990, he has been an independent consulting engineer in
microelectronics and technology-based business planning. From 1987 to 1990, Dr.
Howard served as Senior Fellow of the National Academy of Engineering and, prior
to that time, held various technical and management positions with Motorola,
Inc., most recently as Senior Vice President and Director of Research and
Development. He is a member of the National Academy of Engineering and a fellow
of the Institute of Electrical and Electronics Engineers and of the American
Association for the Advancement of Science. Dr. Howard also serves as a director
of Ramtron International Corporation, and Sandia Corporation, a wholly-owned
subsidiary of Martin Marietta Corporation. Dr. Howard holds a B.E.E. and an M.S.
from Cornell University and a Ph.D. in electrical engineering and computer
sciences from the University of California, Berkeley.
Peter G. Paraskos
Mr. Paraskos, age 67, has served as a director of the Company since
1990. He also served as President and Chief Executive Officer of the Company
from July 1990 until his retirement on September 30, 1995, when he became a
consultant to the Company. He also served as President and Chief Executive
Officer of BEI Systron Donner Company, a wholly-owned subsidiary of the Company,
from July 1990 to April 1994, when it was reorganized into Sensors & Systems.
Mr. Paraskos joined the Company following the Company's acquisition of
substantially all of the assets of four divisions of Systron Donner Corporation
("Systron Donner"), a manufacturer of avionics and aerospace sensors and
subsystems. From 1986 to July 1990, Mr. Paraskos served as President and Chief
Executive Officer of Systron Donner and served in positions as Executive Vice
President and Chief Operating Officer and in general management of Systron
Donner from 1983 to 1986. Mr. Paraskos holds two degrees in engineering from
Columbia University and served in the Marine Corps as an infantry officer,
fighter pilot and test pilot. He is a member of the Board of Nominations of the
Aviation Hall of Fame and a life member of the Society of Experimental Test
Pilots.
Directors Continuing in Office Until 1998 Annual Meeting
Charles Crocker
Mr. Crocker, age 56, a founder of the Company, has served as Chairman
of the Board of Directors of the Company since October 1974, and has served as
President and Chief Executive Officer of the Company since October 1995. Mr.
Crocker is currently President of Crocker Capital, an investment company, and
served as President of a predecessor company, Crocker Capital Corporation, a
Small Business Investment Company, from 1970 to 1985. He also served as a
general partner of Crocker Associates, a venture capital investment partnership,
from 1970 to 1990. He currently serves as a director of Fiduciary Trust Company
International, KeraVision, Inc., Superconductor Technologies Inc. and Pope &
Talbot, Inc. Mr. Crocker holds a B.S. from Stanford University and an M.B.A.
from the University of California, Berkeley.
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George S. Brown
Mr. Brown, age 74, a founder of the Company, has served as a director
of the Company since 1974. Mr. Brown served as President and Chief Executive
Officer of the Company from 1974 until his retirement from that position in
1990, when he became a consultant to the Company. Prior to co-founding the
Company, Mr. Brown served from 1971 until 1974 as Executive Vice President and
General Manager of Baldwin Electronics, Inc., a subsidiary of D.H. Baldwin
Company and the predecessor of the Company. Mr. Brown holds a B.S.E.E. from the
University of Oklahoma.
Board Committees and Meetings
During the fiscal year ended September 30, 1995, the Board of Directors
held four meetings. The Board has an Audit Committee and a Compensation
Committee, but does not have a Nominating Committee or any committee performing
a similar function.
The Audit Committee meets with the Company's independent accountants at
least annually to review the results of the annual audit and to discuss the
financial statements; recommends to the Board the independent accountants to be
retained; receives and considers the accountants' comments as to controls,
adequacy of staff and management performance and procedures in connection with
audit and financial controls; and periodically reviews the results of the
Company's internal audit program and responses by management. During fiscal
1995, the Audit Committee was composed of five directors: Mr. Brooks, Chairman
of the Committee, and Messrs. Crocker, Howard, Giroir and Michael P.W. Stone,
who passed away in May 1995. The Audit Committee met three times during fiscal
1995.
The Compensation Committee makes recommendations concerning salaries
and incentive compensation, awards stock options and restricted stock to
eligible executives, employees and consultants under the Company's stock option
plans and restricted stock plan, administers the Company's employee stock
purchase plan, stock option plans and restricted stock plan, and otherwise
determines compensation levels and performs such other functions regarding
compensation as the Board may delegate. During fiscal 1995, the Compensation
Committee was composed of three non-employee directors: Mr. Brown, Chairman of
the Committee, and Messrs. Brooks and Giroir. The Compensation Committee met one
time during fiscal 1995.
During fiscal 1995, all directors except Mr. Giroir attended at least
75% of the aggregate of the meetings of the Board and of the committees on which
he served during the period for which he was a director or committee member. Mr.
Giroir attended three of the four regular meetings of the Board and two of the
three meetings of the Audit Committee.
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Proposal 2
Ratification Of Selection Of Independent Public Accountants
The Board of Directors has selected Ernst & Young LLP as the Company's
independent public accountants for the fiscal year ending September 28, 1996.
Ernst & Young LLP (including its predecessor, Ernst & Whinney) has audited the
Company's financial statements since 1975. A representative of Ernst & Young LLP
is expected to be present at the Annual Meeting, will have an opportunity to
make a statement if they so desire and will be available to respond to
appropriate questions.
Stockholder ratification of the selection of Ernst & Young LLP as the
Company's independent public accountants is not required by the Company's
By-Laws or otherwise. However, the Board is submitting the selection of Ernst &
Young LLP to the stockholders for ratification as a matter of good corporate
practice. If the stockholders fail to ratify the selection, the Audit Committee
and the Board will reconsider whether or not to retain that firm. Even if the
selection is ratified, the Audit Committee and the Board at its discretion may
direct the appointment of a different independent accounting firm at any time
during the year if it determines that such a change would be in the best
interests of the Company and its stockholders.
The affirmative vote of the holders of a majority of the shares
represented and entitled to vote at the meeting will be required to ratify the
selection of Ernst & Young LLP as the Company's independent public accountants
for the fiscal year ending September 28, 1996.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE
IN FAVOR OF PROPOSAL 2
5
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SECURITY OWNERSHIP OF
CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding the
ownership of the Company's Common Stock as of January 8, 1996 by: (i) each
director; (ii) each of the executive officers named in the Summary Compensation
Table and employed by the Company in that capacity on January 8, 1996; (iii) all
executive officers and directors of the Company as a group; and (iv) all those
known by the Company to be beneficial owners of more than five percent of its
Common Stock.
Beneficial Ownership(1)
-----------------------
Number of Percent of
Beneficial Owner Shares Total(2)
- -------------------------------------------------- --------- ----------
Mr. Charles Crocker(3)............................ 1,557,904 22.7%
One Post Street
Suite 2500
San Francisco, CA
Michael N. Taglich(4)............................. 789,913 11.5%
100 Wall Street
New York, NY
Brinson Partners, Inc.(5)......................... 627,100 9.1%
209 S. LaSalle Street
Chicago, IL
So Gen International Fund, Inc.(6)................ 412,300 6.0%
1221 Avenue of the Americas
8th Floor
New York, NY 10020
Kennedy Capital Management........................ 374,000 5.4%
425 N. New Ballas Road
Suite 181
St. Louis, MO
Dimensional Fund Advisors, Inc.(7)................ 347,400 5.1%
1299 Ocean Avenue
Penthouse
Santa Monica, CA 90402-1005
Mr. Richard M. Brooks(8).......................... 10,000 *
Mr. George S. Brown(8)(9)......................... 130,752 1.9%
Mr. Robert R. Corr(8)(10)......................... 28,200 *
Mr. C. Joseph Giroir, Jr.(8)...................... 10,000 *
Dr. William G. Howard, Jr(8)...................... 0 *
Mr. Peter G. Paraskos(8)(11)...................... 96,603 1.4%
Dr. Lawrence A. Wan(8)............................ 34,250 *
Mr. Gary D. Wrench(8)............................. 114,419 1.6%
All executive officers and directors
as a group (9 persons)(12) 1,982,128 27.7%
---------
- ----------
* Less than one percent.
(1) This table is based upon information supplied by officers, directors
and principal stockholders of the Company and upon any Schedules 13D or
13G filed with the Securities and Exchange Commission (the
"Commission"). Unless otherwise indicated in the footnotes to this
table and subject to community property laws where applicable, the
Company believes that each of the stockholders named in this table has
sole voting and investment power with respect to the shares indicated
as beneficially owned.
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(2) Applicable percentages are based on 6,877,872 shares outstanding on
January 8, 1996, adjusted as required by rules promulgated by the
Commission. Outstanding shares do not include 2,440,372 shares held as
Treasury Stock as of January 8, 1996.
(3) Includes 400,000 shares held by Charles Crocker as trustee for his
adult children, as to which Mr. Crocker disclaims beneficial ownership.
Also includes 54,936 shares held in a trust of which Mr. Crocker is
beneficiary and sole trustee. Mr. Crocker, acting alone, has the power
to vote and dispose of the shares in each of these trusts.
(4) Represents 13,050 shares held by Michael N. Taglich, who has the sole
power to vote and dispose of such shares, and 776,853 shares held by
Taglich Brothers, D'Amadeo, Wagner & Company, Incorporated with respect
to which Mr. Taglich shares power to vote and dispose.
(5) Represents shares held by Brinson Partners, Inc. ("Partners") which has
the sole power to vote and dispose of the shares held by it and shares
held by Brinson Trust Company ("Trust") which has the sole power to
vote and dispose of the shares held by it. Trust is a wholly-owned
subsidiary of Partners which is a wholly-owned subsidiary of Brinson
Holdings, Inc. ("Holdings"). Holdings may be deemed to share the power
to vote and dispose of all shares held by Partners and Trust, and
Partners may be deemed to share the power to vote and dispose of all
shares held by itself or Trust. Therefore, both Holdings and Partners
each may be deemed a beneficial owner of all the shares held by
Partners and Trust.
(6) So Gen International Fund, Inc. shares with Societe Generale Asset
Management Corp. the power to vote and dispose of all shares held by
it.
(7) Represents shares held by Dimensional Fund Advisors, Inc., DFA
Investment Dimensions Group Inc. and The DFA Investment Trust Company.
Officers of Dimensional Fund Advisors, Inc. have sole power to vote and
dispose of shares beneficially owned by it, including shares held by
DFA Investment Dimensions Group Inc. and The DFA Investment Trust
Company.
(8) Includes shares which certain officers and directors have the right to
acquire within 60 days after the date of this table pursuant to
outstanding options as follows: Mr. Brooks, 10,000 shares; Mr. Brown,
69,624 shares; Mr. Corr, 16,000 shares; Mr. Giroir, 10,000 shares; Mr.
Paraskos, 55,234 shares; Dr. Wan, 20,000 shares; Mr. Wrench, 92,000
shares; and all executive officers and directors as a group, 272,858
shares. Also includes shares which certain officers and directors have
the right to vote pursuant to unvested portions of restricted stock
awards as follows: Mr. Corr, 8,140 shares; Mr. Paraskos, 21,369 shares;
Dr. Wan, 11,041 shares; Mr. Wrench, 13,506 shares; and all executive
officers and directors as a group, 54,056 shares.
(9) Includes 61,128 shares held in a revocable trust of which Mr. Brown and
his wife, Mildred S. Brown, are beneficiaries and sole trustees. Mr.
and Mrs. Brown, acting alone, each has the power to vote and dispose of
such shares.
(10) Includes 1,200 shares held in joint tenancy by Mr. Corr and his wife
Wendy A. Corr. Mr. and Mrs. Corr have shared power to vote and dispose
of such shares.
(11) Includes 20,000 shares held jointly by Mr. Paraskos and his wife, Mary
Paraskos. Mr. and Mrs. Paraskos have shared power to vote and dispose
of such shares.
(12) Includes the shares described in the Notes above.
Compliance with Section 16(a) of the Securities Exchange Act of 1934.
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), requires the Company's directors and executive officers, and
persons who own more than ten percent of the Company's Common Stock, to file
with the Commission initial reports of ownership and reports of changes in
ownership of Common Stock of the Company. Officers, directors and greater than
ten percent stockholders are required by the Commission's regulations to furnish
the Company with copies of all Section 16(a) forms they file.
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To the Company's knowledge, based solely on a review of the copies of
such reports furnished to the Company and written representations that no other
reports were required, during the fiscal year ended September 30, 1995, the
Company's officers, directors and greater than ten percent beneficial owners
complied with all applicable Section 16(a) filing requirements.
EXECUTIVE COMPENSATION
Compensation of Directors
During fiscal 1995, each non-employee director of the Company received
a monthly fee of $1,000, with the exception of George Brown (who serves as a
consultant to the Company). Each non-employee director of the Company received a
fee of $500 for each Board meeting attended and for each committee meeting
attended by committee members and a fee of $250 for each telephone conference
Board meeting in which such director participated. In the fiscal year ended
September 30, 1995, the total compensation paid to non-employee directors for
services as directors was $48,000. The members of the Board of Directors are
also eligible for reimbursement for their expenses incurred in connection with
attendance at Board meetings in accordance with Company policy.
Mr. Brown provides consulting services to the Company pursuant to an
agreement under which he is paid a retainer of $3,000 per month and a fee of
$750 per day of service. In the fiscal year ended September 30, 1995, the
Company paid Mr. Brown $48,375 under the agreement.
Dr. Howard provides consulting services to the Company pursuant to an
agreement under which he is paid $1,000 per day of service in addition to his
monthly fee of $1,000. In the fiscal year ended September 30, 1995, the Company
paid Dr. Howard $9,000 under the agreement.
On September 30, 1995, the Company and Mr. Paraskos entered into a
consulting agreement pursuant to which Mr. Paraskos will receive, for consulting
services provided to the Company, $8,333.33 per month for a term of one-year.
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Compensation of Executive Officers
Summary of Compensation
<TABLE>
The following table shows, for the fiscal years ended September 30,
1995, October 1, 1994 and October 2, 1993, compensation awarded or paid to or
earned by the Company's Chief Executive Officer and its four other most highly
compensated executive officers for fiscal 1995 (the "Named Executive Officers"):
Summary Compensation Table
<CAPTION>
Long Term
Annual Compensation
Compensation(1) Awards
------------------------ -------------
Restricted
Stock All Other
Name and Salary(2) Bonus Awards(3)(4) Compensation(5)
Principal Position Year ($) ($) ($) ($)
- --------------------------------------- ---- --------- ----- ------------- ------------
<S> <C> <C> <C> <C> <C>
Mr. Peter G. Paraskos(6)............... 1995 198,038 0 0 14,878
President and 1994 342,150 0 0 14,372
Chief Executive Officer 1993 342,150 0 0 12,990
0 0
Mr. Gary D. Wrench(7).................. 1995 264,000 0 0 4,223
Senior Vice President and 1994 246,000 0 0 5,314
Chief Financial Officer 1993 228,000 0 0 4,435
Mr. Charles Crocker.................... 1995 195,150 0 0 3,240
Chairman of the Board 1994 195,150 0 0 3,830
1993 195,150 0 0 4,068
Dr. Lawrence A. Wan ................... 1995 182,100 45,000 15,000 6,920
Vice President, 1994 187,100 0 10,247 6,631
Corporate Technology 1993 182,100 15,000 0 3,537
Mr. Robert R. Corr..................... 1995 139,600 12,000 7,875 3,635
Treasurer and Controller 1994 132,600 8,000 6,958 3,235
1993 124,875 15,000 18,125 2,842
</TABLE>
- ----------
(1) As permitted by rules promulgated by the Commission, no amounts are
shown for "Other Annual Compensation" because no Named Executive
Officer received "perquisites" in an amount exceeding the lesser of 10%
of bonus plus salary or $50,000.
(2) Includes annual cash payments designated as automobile allowances,
which did not exceed $11,400 for any individual in any year; also
includes amounts earned but deferred at the election of the Named
Executive Officer pursuant to the Company's Retirement Savings Plan.
(3) Represents the dollar value of shares awarded, calculated by
multiplying the market value based on the closing sales price on the
date of grant by the number of shares awarded. At September 30, 1995,
the aggregate holdings and value (based on the closing sales price at
fiscal year end 1995 of the Company's Common Stock as reported on the
Nasdaq National Market multiplied by the number of shares held) of
restricted stock of the Named Executive Officers was as follows: Peter
G. Paraskos, 20,669 shares, valued at $149,850; Gary D. Wrench, 10,919
shares, valued at $79,163; Lawrence A. Wan, 10,250 shares, valued at
$74,313; Robert Corr, 9,000 shares, valued at $65,250. The restrictions
on awards of restricted stock lapse with respect to 15% of the total
number of shares per year on the first, second, third, fourth and fifth
anniversaries of the date of grant and with respect to the remaining
shares subject to such award on the sixth anniversary of the date of
grant. Dividends are paid on shares of restricted stock when, as and if
the Board declares dividends on the Common Stock of the Company.
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(4) During the past three fiscal years, the Company did not grant any stock
options or issue any stock appreciation rights to any Named Executive
Officer.
(5) Includes $2,852, $2,655, $2,150, $2,796 and $2,854 paid in fiscal 1995,
$1,826, $3,936, $2,602, $2,790 and $2,471 paid in fiscal 1994 and
$4,390, $3,319, $795, $2,978 and $2,143 paid in fiscal 1993 to Messrs.
Paraskos, Wrench, Crocker, Wan and Corr, respectively, as a normal
contribution pursuant to the Company's Retirement Savings Plan. The
remaining sum for each Named Executive Officer is attributable to
premiums paid by the Company for group term life insurance.
(6) Mr. Paraskos served as President and Chief Executive Officer during
fiscal 1995, after which he retired from such positions.
(7) Mr. Wrench has served as Senior Vice President and Chief Financial
Officer of the Company since July 1993. Mr. Wrench served as Vice
President of the Company from 1985 to July 1993.
Stock Option Grants and Exercises
The Company grants options to its executive officers and key employees under its
1987 Incentive Stock Option Plan (the "1987 Plan") and 1987 Supplemental Stock
Option Plan (the "Supplemental Plan") (collectively, the "Option Plans"). As of
January 8, 1996, options to purchase a total of 638,395 shares had been granted
and were outstanding under the Option Plans and options to purchase 344,975
shares remained available for grant thereunder. During the fiscal year ended
September 30, 1995, there were no stock options granted to the Named Executive
Officers. The Company has not issued any stock appreciation rights. The
following table shows, for fiscal 1995, certain information regarding options
exercised, and held at year end, by the Named Executive Officers.
Aggregated Option Exercises in Last Fiscal Year, and FY-End Option Values(1)
Number of Securities Value of Unexercised In-the-
Underlying Unexercised Money Options at
Options at FY-End (#) FY-End ($)
Name Execisable/Unexercisable(2) Exercisable/Unexercisable(3)
--------------------------- ----------------------------
Mr. Paraskos.......... 55,234 / 0 $241,373 / 0
Mr. Wrench............ 96,000 / 0 $293,500 / 0
Mr. Crocker........... 0 / 0 0 / 0
Dr. Wan............... 20,000 / 0 $87,400 / 0
Mr. Corr.............. 16,000 / 0 $32,500 / 0
- ----------
(1) Mr. Paraskos exercised an option to purchase 100 shares of the Common
Stock. None of the other Named Executive Officers exercised any stock
options.
(2) Includes both "in-the-money" and "out-of-the-money" options.
(3) The fair market value of the underlying shares on the last day of the
fiscal year less the exercise price.
Employment Agreements
The employment arrangements between the Company and Mr. Wrench, Senior
Vice President, Chief Financial Officer and a director of the Company, provide
that if Mr. Wrench is terminated by the Company, he will receive from the
Company his then full-time current salary for twelve months after such
termination.
10
<PAGE>
Compensation Committee Interlocks and Insider Participation
As noted above, the Compensation Committee consists of Messrs. Brown,
Brooks and Giroir. Mr. Brown retired in July 1990 as President of the Company
and continues to serve as a consultant to the Company. Mr. Giroir served as
Corporate Secretary of the Company until February 1995 for which he received no
compensation in addition to that received as director's fees.
Report of the Compensation Committee of the Board of Directors
on Executive Compensation(1)
The Compensation Committee is composed of three non-employee directors.
The Committee is responsible for, among other things, setting the compensation
of executive officers, including any stock-based awards to such individuals
under the Company's 1987 Plan, Supplemental Plan and 1992 Restricted Stock Plan
(collectively, the "Plans"). The current members of the Committee are Messrs.
Brown, Brooks and Giroir. Mr. Brown retired in July 1990 as President of the
Company and continues to serve as a consultant to the Company.
The Committee seeks to compensate executive officers in a manner
designed to achieve the primary goal of the Company's stockholders: increased
stockholder value. In furtherance of this goal, the Committee determines a
compensation package that takes into account both competitive and performance
factors. Annual compensation of Company executives is comprised of salary and
bonus, an approach consistent with the compensation programs of most electronics
companies. A substantial portion of the cash compensation of each executive
officer is contingent upon the Company's performance. Bonuses, therefore, may be
substantial, may vary significantly for an individual from year to year, and may
vary significantly among the executive officers. Another significant component
of compensation of executive officers is restricted stock grants which vest at
approximately 15% per annum over a six year period. In the past, incentive stock
options also were a significant part of the compensation of some of the
executive officers.
The Committee determined salaries for fiscal 1995 in November 1994 for
all executive officers. In adjusting the base salary of the executive officers,
the Compensation Committee examines both competitive and qualitative factors
relating to corporate and individual performance. In connection with its
examination of competitive factors, the Committee reviewed an independent survey
of base salaries paid by other electronics companies of comparable size. In many
instances, assessment of qualitative factors necessarily involves a subjective
assessment by the Committee. In determining salary adjustments for executive
officers (other than Mr. Paraskos) for fiscal 1995, the Committee relied
primarily on the evaluation and recommendations of Mr. Crocker and Mr. Paraskos
of each officer's responsibilities for fiscal 1995 and performance during fiscal
1994. For fiscal 1995, the Committee increased the base compensation of Mr. Corr
by 5.3% and Mr. Wrench by 7.3%. Based on the Committee's review of competitive
factors and performance, the base compensation for the remaining executive
officers was not increased.
The Company has a Management Incentive Bonus Plan under which members
of management are eligible to receive cash bonuses based on the achievement of
specific operating results established at the beginning of the fiscal year. In
November 1995, the Committee evaluated operating results for fiscal 1995 against
the established targets. Because such targets had not been achieved, the
Committee determined not to award any management incentive bonuses to executive
officers with respect to fiscal 1995. However, the Committee did award a special
performance bonus, outside of the Management Incentive Bonus Plan, of $12,000 to
Mr. Corr and $45,000 to Dr. Wan for their individual achievements during fiscal
1995.
The Company uses the Plans to further align the interests of
stockholders and management by creating common incentives related to the
possession by management of a substantial economic interest in the long-term
appreciation of the Company's stock. In determining the size of a restricted
stock award or an option to be granted to an executive officer, the Committee
takes into account the officer's position, level of responsibility within the
Company, the officer's existing equity holdings, the potential reward to the
officer if the stock price appreciates in the public market, the incentives to
retain the officer's services to the Company, the competitiveness of the
officer's overall compensation arrangements and the performance of the officer.
Based on a review of this mix of factors, during fiscal 1995 the Committee made
no grants of stock options to any executive officers, but awarded, in November
1995, restricted stock grants to Mr. Wrench (7,500 shares), Dr. Wan (4,000
shares) and Mr. Corr (2,000 shares). In connection with his retirement, Mr.
Paraskos was granted a restricted stock award of 10,000 shares of Common Stock.
11
<PAGE>
In fiscal 1995, Mr. Paraskos made a voluntary decision to reduce his
salary by approximately 40% in anticipation of his future retirement. In
general, the factors used in determining whether Mr. Paraskos receives an option
or a restricted stock award are similar to those applied to other executive
officers with a particular focus on consistent, positive long-term performance
of the Company. In light of the performance of the Company during fiscal 1994,
Mr. Paraskos did not receive a restricted stock award or an option for such
period. As noted above, neither Mr. Paraskos nor any other executive officer
received a management incentive bonus with respect to fiscal 1995.
Section 162(m) of the Internal Revenue Code (the "Code") limits the
Company to a deduction for federal income tax purposes of no more than $1
million of compensation paid to certain Named Executive Officers in a taxable
year. Compensation above $1 million may be deducted if it is "performance-based
compensation" within the meaning of the Code. The Committee has not yet
established a policy for determining which forms of incentive compensation
awarded to its Named Executive Officers shall be designed to qualify as
"performance-based compensation."
George S. Brown Richard M. Brooks C. Joseph Giroir, Jr.
- ----------
(1) This Section is not "soliciting material," is not deemed "filed" with
the Commission and is not to be incorporated by reference in any filing
of the Company under the Securities Act of 1933, as amended (the
"Securities Act"), or the Exchange Act, whether made before or after
the date hereof and irrespective of any general incorporation language
in any such filing.
Performance Measurement Comparison(1)
The following graph shows the value of an investment of $100 on
September 28, 1990 in cash of (i) the Company's Common Stock, (ii) the Center
for Research in Securities Prices ("CRSP") Total Return Index for the Nasdaq
Stock Market (U.S. Companies) and (iii) the CRSP Total Return Industry Index for
Nasdaq Non-Financial Companies. All values assume reinvestment of the full
amount of all dividends and are calculated as of the last trading day of the
applicable fiscal year of the Company(2):
Comparison of 5 Year Cumulative Total Return on Investment
(The following descriptive data is supplied in accordance with Rule 304(d) of
Regulation S-T)
- --------------------------------------------------------------------------------
1990 1991 1992 1993 1994 1995
- --------------------------------------------------------------------------------
BEI Electronics, Inc. $100.00 $125.80 $105.50 $119.30 $73.30 $107.70
- --------------------------------------------------------------------------------
NASDAQ U.S. Companies $100.00 $156.60 $172.80 $230.90 $232.90 $321.40
- --------------------------------------------------------------------------------
NASDAQ Non-Financial
Companies $100.00 $155.90 $161.60 $215.80 $214.60 $295.80
- --------------------------------------------------------------------------------
12
<PAGE>
----------
(1) This Section is not "soliciting material," is not deemed "filed" with
the Commission and is not to be incorporated by reference in any filing
of the Company under the Securities Act or the Exchange Act, whether
made before or after the date hereof and irrespective of any general
incorporation language in any such filing.
(2) Fiscal year ending on the Saturday nearest September 30.
CERTAIN TRANSACTIONS
The Company's By-Laws provide that the Company will indemnify its
directors and executive officers and may indemnify its other officers, employees
and other agents to the extent not prohibited by Delaware law. Under the
Company's By-Laws, indemnified parties are entitled to indemnification for
negligence, gross negligence and otherwise to the fullest extent permitted by
law. The By-Laws also require the Company to advance litigation expenses in the
case of stockholder derivative actions or other actions, against an undertaking
by the indemnified party to repay such advances if it is ultimately determined
that the indemnified party is not entitled to indemnification.
Pursuant to his employment agreement, Mr. Paraskos will continue to be
covered under the Company's medical benefits plan and will receive certain other
benefits from the Company not to exceed $3,000 annually.
OTHER MATTERS
The Board of Directors knows of no other matters that will be presented
for consideration at the Annual Meeting. If any other matters are properly
brought before the meeting, it is the intention of the persons named in the
accompanying proxy to vote on such matters in accordance with their best
judgment.
By Order of the Board of Directors
/s/ Robert R. Corr
Robert R. Corr
Corporate Secretary
January 24, 1996
A copy of the Company's Annual Report to the Securities and Exchange Commission
on Form 10-K for the fiscal year ended September 30, 1995 is available without
charge upon written request to: Investor Relations, BEI Electronics, Inc., One
Post Street, Suite 2500, San Francisco, CA 94104.
13
<PAGE>
APPENDIX A
FORM OF PROXY
[LOGO]
BEI ELECTRONICS, INC.
PROXY SOLICITED BY THE BOARD OF DIRECTORS
FOR ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON FEBRUARY 29, 1996
The undersigned hereby appoints Charles Crocker and Gary D. Wrench, and
each of them, as attorneys and proxies of the undersigned, with full power of
substitution, to vote all of the shares of stock of BEI Electronics, Inc. which
the undersigned may be entitled to vote at the Annual Meeting of Stockholders of
BEI Electronics, Inc. to be held at BEI Systron Donner Inertial Division at 2700
Systron Drive, Concord, California on Thursday, February 29, 1996 at 1:30 p.m.,
local time, and at any adjournment or postponement thereof, with all powers that
the undersigned would possess if personally present, upon and in respect of the
following matters and in accordance with the following instructions, with
discretionary authority as to any and all other matters that may properly come
before the meeting.
UNLESS A CONTRARY DIRECTION IS INDICATED, THIS PROXY WILL BE VOTED FOR
ALL NOMINEES LISTED IN PROPOSAL 1 AND FOR PROPOSAL 2 AS MORE SPECIFICALLY
DESCRIBED IN THE PROXY STATEMENT. IF SPECIFIC INSTRUCTIONS ARE INDICATED, THIS
PROXY WILL BE VOTED IN ACCORDANCE THEREWITH.
(Continued, and to be marked, dated and signed, on the other side)
<PAGE>
/X/ Please mark
your votes
as this.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE NOMINEES FOR DIRECTOR LISTED
BELOW.
WITHHOLD
Proposal 1: FOR FOR ALL Proposal 2: FOR AGAINST ABSTAIN
To elect two / / / / To ratify the / / / / / /
directors to hold selection of
office until the 1999 Annual Ernst & Young LLP as independent public
Meeting of Stockholders. accountants of the Company for its fiscal
year ending September 28, 1996.
Nominees: C. Joseph Giroir, Jr.
and Gary D. Wrench.
To withhold authority to vote for Please sign exactly as your name appears
any nominee(s) write such hereon. If the stock is registered in the
nominee(s); name(s) below. names of two or more persons, each should
sign. Executors, administrators, trustees,
- --------------------------------- guardians and attorneys-in-fact should add
their titles. If signer is a corporation,
please give full corporate name and have a
duly authorized officer sign, stating
title. If signer is a partnership, please
sign in partnership name by authorized
person.
I PLAN TO ATTEND THE MEETING / /
COMMENTS/ADDRESS CHANGE
Please mark this box if you have / /
written comments/address change
on the reverse side.
Signature(s) Date
--------------------------------------------------- -----------
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.
