<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<TABLE>
<S> <C>
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
</TABLE>
NORAND CORPORATION
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials:
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE> 2
[LOGO] NORAND CORPORATION
550 SECOND STREET, SOUTHEAST
CEDAR RAPIDS, IOWA 52401
December 23, 1996
Dear Stockholder:
You are cordially invited to attend the 1997 Annual Meeting of Stockholders
of Norand Corporation. This meeting will be held at the Beems Auditorium of the
Cedar Rapids Public Library at 500 First Street, S.E., Cedar Rapids, Iowa, at
11:00 a.m. Cedar Rapids time on Wednesday, January 22, 1997.
The attached Notice of 1997 Annual Meeting of Stockholders and Proxy
Statement describe the matters to be acted upon. The Annual Report for the 1996
fiscal year is enclosed.
We hope you will be able to attend the meeting. However, even if you
anticipate attending in person, we urge you to mark, sign, date, and return the
enclosed proxy card to ensure that your shares will be represented. If you
attend, you will, of course, be entitled to vote in person.
Sincerely,
/s/ N. Robert Hammer
N. ROBERT HAMMER
Chairman, President, and Chief
Executive Officer
<PAGE> 3
[LOGO]
NOTICE OF 1997 ANNUAL MEETING OF STOCKHOLDERS
To the Stockholders of Norand Corporation:
The Annual Meeting of Stockholders of Norand Corporation, a Delaware
corporation (the "Company"), will be held at the Beems Auditorium of the Cedar
Rapids Public Library at 500 First Street, S.E., Cedar Rapids, Iowa, on
Wednesday, January 22, 1997, at 11:00 a.m., Cedar Rapids time, for the following
purposes:
(1) To elect five directors of the Company to hold office until the next
annual meeting of stockholders;
(2) To transact such other business as may properly be presented at the
Annual Meeting or any adjournment thereof.
A proxy statement with respect to the Annual Meeting accompanies and forms
a part of this Notice. The Annual Report of the Company for the fiscal year
ended August 31, 1996, also accompanies this Notice.
The Board of Directors has fixed the close of business on November 25,
1996, as the record date for determining stockholders entitled to notice of, and
to vote at, the Annual Meeting.
By order of the Board of Directors,
/s/ James I. Johnson
JAMES I. JOHNSON
Secretary and General Counsel
Cedar Rapids, Iowa
December 23, 1996
YOUR VOTE IS IMPORTANT
PLEASE MARK, SIGN AND DATE THE ENCLOSED PROXY AND
RETURN IT PROMPTLY IN THE ENCLOSED ENVELOPE WHETHER
OR NOT YOU EXPECT TO ATTEND THE ANNUAL MEETING.
<PAGE> 4
NORAND CORPORATION
550 SECOND STREET, S.E.
CEDAR RAPIDS, IOWA 52401
PROXY STATEMENT
This Proxy Statement is furnished in connection with the solicitation by
the Board of Directors of Norand Corporation, a Delaware corporation (the
"Company"), of proxies for use at the 1997 Annual Meeting of Stockholders of the
Company to be held on Wednesday, January 22, 1997, and any adjournment thereof
(the "Annual Meeting"). This Proxy Statement and accompanying form of proxy are
first being sent to stockholders on or about December 23, 1996.
The Company's common stock, $.01 par value (the "Common Stock"), is the
only issued and outstanding class of stock. Only stockholders of record at the
close of business on November 25, 1996 (the "Record Date"), are entitled to
notice of and to vote at the Annual Meeting. As of the Record Date, the Company
had 7,665,844 shares of Common Stock (each, a "Share") outstanding and entitled
to vote.
VOTING RIGHTS AND PROCEDURES
Shares represented by an effective proxy given by a stockholder will be
voted as directed by the stockholder. If a properly signed proxy form is
returned to the Company and is not marked, it will be voted in accordance with
the recommendation of the Board of Directors on all proposals. A stockholder
giving a proxy may revoke it at any time prior to the voting of the proxy by
giving written notice to the Secretary of the Company, by executing a later
dated proxy or by attending the Annual Meeting and voting in person.
Each Share is entitled to one vote. A majority of the issued and
outstanding Shares entitled to vote at the Annual Meeting, present in person or
represented by proxy, will constitute a quorum at the Annual Meeting.
Abstentions will be treated as Shares that are present and entitled to vote for
purposes of determining the presence of a quorum but as not present or
represented at the Annual Meeting for purposes of determining the approval of
any matter submitted to the stockholders for a vote. If a broker indicates on
the proxy that it does not have discretionary authority as to certain Shares to
vote on a particular matter, those Shares will not be considered as present and
entitled to vote with respect to that matter.
Directors are elected by a plurality of the votes present in person or
represented by proxy at the Annual Meeting and entitled to vote for the election
of directors, provided a quorum is present. Stockholders are not allowed to
cumulate their votes in the election of directors. Shares represented at the
Annual Meeting in person or by proxy but withheld or otherwise not cast for the
election of directors will have no effect on the outcome of the election.
Votes cast by proxy or in person at the Annual Meeting will be tabulated by
the election inspectors appointed for the meeting and such election inspectors
will determine whether or not a quorum is present.
The Board of Directors knows of no matters to be presented at the Annual
Meeting other than those set forth in the Notice of 1997 Annual Meeting of
Stockholders enclosed herewith. However, if any other matters do come before the
meeting, it is intended that the holders of the proxies will vote thereon in
their discretion. Any such other matter will require for its approval the
affirmative vote of the holders of a majority of the Shares present in person or
represented by proxy at the Annual Meeting, provided a quorum is present, or
such greater vote as may be required under the Company's Restated Certificate of
Incorporation, the Company's By-laws or applicable law.
ELECTION OF DIRECTORS
The number of directors of the Company, as determined by the Board of
Directors under Article III of the Company's By-laws, is currently five. Each
director holds office until his or her successor is elected and qualified or
until his or her earlier death, resignation, retirement, disqualification or
removal.
<PAGE> 5
The nominees for whom the enclosed proxy is intended to be voted are set
forth below. Each nominee for election as director currently serves as a
director of the Company. It is not contemplated that any of these nominees will
be unavailable for election, but if such a situation should arise, the proxy
will be voted in accordance with the best judgment of the proxyholder for such
person or persons as may be designated by the Board of Directors unless the
stockholder has directed otherwise.
If a stockholder desires to nominate persons for election as directors at
the next Annual Meeting of Stockholders written notice of such stockholder's
intent to make such a nomination must be given and received by the Secretary of
the Company at the principal executive offices of the Company either by personal
delivery or by United States mail not later than November 13, 1997. Each notice
must describe the nomination in sufficient detail for the nomination to be
summarized on the agenda for the meeting and must set forth: (i) the name and
address, as it appears on the books of the Company, of the stockholder making
the nomination, (ii) a representation that the stockholder is a holder of record
of stock in the Company entitled to vote at the annual meeting of stockholders
and intends to appear in person or by proxy at the meeting to present the
nomination, (iii) a statement of the class and number of shares beneficially
owned by the stockholder, (iv) the name and address of any person to be
nominated, (v) a description of all arrangements or understandings between the
stockholder and each nominee and any other person or persons (naming such person
or persons) pursuant to which the nomination or nominations are to be made by
the stockholder, (vi) such other information regarding such nominee proposed by
such stockholder as would be required to be included in a proxy statement filed
pursuant to the proxy rules of the Securities and Exchange Commission (the
"Commission"), and (vii) the consent of such nominee to serve as a director of
the Company if elected. The presiding officer of the annual meeting of
stockholders will, if the facts warrant, refuse to acknowledge a nomination not
made in compliance with the foregoing procedure, and any such nomination not
properly brought before the meeting will not be considered.
NOMINEES FOR ELECTION AS DIRECTORS
<TABLE>
<CAPTION>
BUSINESS EXPERIENCE DURING THE PAST FIVE YEARS
NAME AGE AND OTHER INFORMATION
---------- --- -----------------------------------------------
<S> <C> <C>
N. Robert Hammer........................ 54 Mr. Hammer has been Chairman, President and
Chief Executive Officer of the Company since
1988. Mr. Hammer received a Bachelor of Science
degree from Columbia University in 1965, and a
Master of Business Administration degree from
Columbia University in 1967.
Keith B. Geeslin........................ 43 Mr. Geeslin has been a director of the Company
since 1988. Mr. Geeslin is a General Partner of
the Sprout Group, a division of DLJ Capital
Corporation, where he has been employed since
1984. In addition, he is a General Partner of
the general partner of a series of investment
funds managed by the Sprout Group. In addition
to the Company, Mr. Geeslin is a director of
Actel Corporation, SDL, Inc., and several
privately-held companies. Mr. Geeslin received
a Bachelor of Science, Electrical Engineering
degree from Stanford University in 1975, a
Master of Arts, Philosophy, Politics and
Economics degree from Oxford University in
1977, and a Master of Science, Engineering-
Economic Systems degree from Stanford
University in 1978.
</TABLE>
2
<PAGE> 6
<TABLE>
<CAPTION>
BUSINESS EXPERIENCE DURING THE PAST FIVE YEARS
NAME AGE AND OTHER INFORMATION
---------- --- -----------------------------------------------
<S> <C> <C>
Charles G. Moore III.................... 53 Mr. Moore has been a director of the Company
since 1988 and Senior Director since January
1996. Since March 1994, Mr. Moore has been
president of Little Diamond Island Enterprises,
a venture capital investment firm. Mr. Moore
was Chairman and Chief Executive Officer of
Digital Communications Associates, Inc., a
manufacturer of hardware and software products
for the personal computer networking
environment, from November 1993 to March 1994.
From January 1982 to June 1993 Mr. Moore was a
General Partner of Welsh, Carson, Anderson &
Stowe, a venture capital investment firm. Mr.
Moore serves on the board of directors of one
privately-held company. Mr. Moore received a
Bachelor of Arts, Mathematics degree from
Dartmouth College in 1965 and Master of Science
and Ph.D., Computer and Communications degrees
from the University of Michigan in 1967 and
1971, respectively. From 1972 to 1975, Mr.
Moore served on the faculty of Cornell
University in the Department of Computer
Science.
Fred W. Wenninger....................... 57 Mr. Wenninger has been a director of the
Company since 1989. Since August 1995, Mr.
Wenninger has served as President and Chief
Executive Officer of Keytronic Corp., a
manufacturer of computer keyboards. From May
1989 to December 1993, Mr. Wenninger was
President and from May 1989 to October 1993 he
was also Chief Executive Officer of Iomega
Corporation, a computer disk drive
manufacturer. Mr. Wenninger is also a director
of Keytronic Corp. and Hach Company. Mr.
Wenninger received a Bachelor of Science,
Physics degree and Master of Science and Ph.D.,
Engineering degrees from Oklahoma State
University in 1959, 1962 and 1964,
respectively.
Hatim A. Tyabji......................... 51 Mr. Tyabji has been a director of the Company
since March 1995. Mr. Tyabji is Chairman,
President and Chief Executive Officer of
VeriFone, Inc., a global provider of
transaction automation solution for the
delivery of electronic payment services; he has
been President and CEO since 1986 and Chairman
since 1992. Mr. Tyabji earned a Bachelor of
Science, Electrical Engineering degree from the
College of Engineering in Porrna, India, in
1967, a Master of Science, Electrical
Engineering degree from the State University of
New York at Buffalo in 1969, and a Master of
Business Administration from Syracuse
University in 1975. Mr. Tyabji is also a
graduate of the Stanford Executive Program.
</TABLE>
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR THE
ELECTION OF EACH NOMINEE FOR DIRECTOR NAMED ABOVE.
3
<PAGE> 7
MEETINGS AND COMMITTEES OF THE BOARD
The Board of Directors has two standing committees: the Audit Committee and
the Compensation Committee. The Board of Directors does not have a Nominating
Committee. During the fiscal year ended August 31, 1996, the Board of Directors
met eight times, the Audit Committee met three times, and the Compensation
Committee met four times. During 1996, all directors attended at least 75% of
the meetings of the Board of Directors and the committees thereof on which they
served.
The duties of the Audit Committee are to review the scope of the annual
audit and interim procedures with the independent auditors; consult with the
auditors during any annual audit or interim procedures on any situation that the
auditors deem advisable for resolution prior to the completion of the audit or
procedures; meet with the auditors to appraise the effectiveness of the audit
effort; determine that no restrictions were placed by management on the scope of
the examination or its implementation; inquire into the effectiveness of the
Company's accounting and internal control functions; review with the auditors
and management any registration statement in connection with the public offering
of securities and such other financial reports as the committee or the Board of
Directors deems advisable; report to the Board of Directors on the results of
the committee's activities; and recommend to the Board of Directors any changes
in the appointment of independent auditors that the committee deems to be in the
best interest of the Company and its stockholders. The members of the Audit
Committee are Messrs. Geeslin and Moore.
The duties of the Compensation Committee are to make recommendations to the
Board of Directors concerning the salaries of the Company's officers; to
exercise the authority of the Board of Directors concerning the Company's
benefit plans, including those plans limited in application to the Company's
officers and senior management; to serve as the administration committee of the
Company's compensation plans; and to advise the Board of Directors on other
compensation and benefit matters. The members of the Compensation Committee are
Messrs. Geeslin, Moore, and Tyabji.
OWNERSHIP OF THE CAPITAL STOCK OF THE COMPANY
The following table sets forth information with respect to the number of
shares of Common Stock beneficially owned by (i) each director of the Company,
(ii) the five executive officers of the Company named in the table under
"Compensation of Directors and Executive Officers--Summary Compensation Table,"
(iii) all directors and executive officers of the Company as a group, and (iv)
based on information available to the Company and a review of statements filed
with the Commission pursuant to Section 13(d) and 13(g) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), each person that owns
beneficially (directly or together with affiliates) more than 5% of the Common
Stock, in each case as of November 8, 1996 (unless otherwise noted). The Company
believes that each individual or entity named has sole investment and voting
power with respect to shares of Common Stock indicated as beneficially owned by
them, except as otherwise noted.
<TABLE>
<CAPTION>
COMMON STOCK
BENEFICIALLY PERCENTAGE
NAME OWNED(1) OWNERSHIP(1)
- ------------------------------------------------------------------ ------------ ------------
<S> <C> <C>
N. Robert Hammer(2)............................................... 286,509 3.74%
Keith B. Geeslin(3)............................................... 9,600 *
Charles G. Moore III(4)........................................... 18,382 *
Fred W. Wenninger(5).............................................. 7,665 *
Hatim A. Tyabji(6)................................................ 1,700 *
Scott D. Mercer(7)................................................ 5,139 *
Alan G. Bunte(8).................................................. 25,842 *
John A. Niemzyk(9)................................................ 8,048 *
Thomas O. Miller(10).............................................. 36,880 *
All directors and executive officers as a group (11
persons) (11)................................................... 407,671 5.32%
Kopp Investment Advisors, Inc.(12)................................ 2,265,014 29.55%
</TABLE>
- ---------------
* Represents less than 1% of the outstanding shares of Common Stock.
4
<PAGE> 8
(1) Calculated pursuant to Rule 13d-3(d) under the Exchange Act. Under Rule
13d-3(d), shares not outstanding which are subject to options, warrants,
rights, or conversion privileges exercisable within 60 days are deemed
outstanding for the purpose of calculating the number and percentage owned
by such person, but not deemed outstanding for the purpose of calculating
the percentage owned by each other person listed.
(2) Includes 125,010 shares of Common Stock issuable upon exercise of options.
Also includes 1,566 shares of Common Stock owned by members of Mr. Hammer's
immediate family that may be deemed to be beneficially owned by Mr. Hammer.
(3) Includes 3,800 shares of Common Stock issuable upon exercise of options.
(4) Includes 8,800 shares of Common Stock issuable upon exercise of options.
(5) Includes 6,065 shares of Common Stock issuable upon exercise of options.
Also includes 100 shares of Common Stock held by Mr. Wenninger's wife that
may be deemed to be beneficially owned by Mr. Wenninger.
(6) Includes 1,700 shares of Common Stock issuable upon exercise of options.
(7) Includes 5,139 shares of Common Stock issuable upon exercise of options.
(8) Includes 21,700 shares of Common Stock issuable upon exercise of options.
(9) Includes 7,470 shares of Common Stock issuable upon exercise of options.
(10) Includes 26,748 shares of Common Stock issuable upon exercise of options.
(11) Includes 218,136 shares of Common Stock issuable upon exercise of options.
(12) Kopp Investment Advisors, Inc. ("Kopp") filed a Schedule 13G with the
Commission indicating beneficial ownership of shares of Common Stock.
According to the Schedule 13G and to information supplied to the Company by
Kopp, (i) Kopp has shared dispositive power with respect to 2,215,014
shares of Common Stock it beneficially owns and sole dispositive power with
respect to 50,000 shares of Common Stock it beneficially owns and (ii) Kopp
has sole voting power with respect to 181,000 shares of Common Stock
beneficially owned. The number of shares beneficially owned by Kopp is
indicated as of October 24, 1996. The address of Kopp is 6600 France Ave.
S., #672, Edina, MN 55435.
Section 16(a) of the Exchange Act requires the Company's directors and
executive officers, and persons who own more than ten percent of a registered
class of the Company's equity securities, to file with the Commission initial
reports of ownership and reports of changes in ownership of Common Stock and
other equity securities of the Company. Officers, directors, and greater than
ten-percent stockholders are required by Commission regulation to furnish the
Company with copies of all Section 16(a) forms they file.
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 Company's 1996 fiscal year all Section 16(a)
filing requirements applicable to its officers, directors, and greater than
ten-percent beneficial owners were complied with except that Mr. John A. Niemzyk
and Mr. Scott D. Mercer each filed one report late.
5
<PAGE> 9
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
SUMMARY COMPENSATION TABLE
The following table sets forth a summary of the annual, long-term, and
other compensation for services rendered to the Company for the fiscal year
ended August 31, 1996, and the prior two fiscal years paid or awarded to those
persons who were, at August 31, 1996: (i) the Company's chief executive officer,
and (ii) the Company's four most highly compensated executive officers other
than the chief executive officer (collectively, including the Company's chief
executive officer, the "Named Executive Officers").
<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
-------------------------------
AWARDS PAYOUTS
ANNUAL COMPENSATION --------------------- -------
-------------------------------- RESTRICTED
OTHER ANNUAL STOCK OPTIONS/ LTIP ALL OTHER
NAME AND SALARY BONUS COMPENSATION AWARDS SARS PAYOUTS COMPENSATION
PRINCIPAL POSITION YEAR ($) ($) ($)(1) ($) (#) ($) ($)
- ---------------------------------- ---- ------- ------- ------------ ---------- -------- ------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
N. Robert Hammer 1996 340,000 -- -- 0 35,100 0 8,269(3)
Chief Executive Officer 1995 313,333 -- -- 0 20,000 (2) 0 7,540(3)
1994 300,000 143,000 -- 0 12,000 0 6,924(3)
Thomas O. Miller 1996 200,000 -- -- 0 22,975 0 5,592(5)
Senior Vice President 1995 160,113 17,341 -- 0 8,500 (4) 0 5,588(5)
1994 141,251 80,000 -- 0 8,800 0 5,546(5)
Scott D. Mercer 1996 152,838 50,760 -- 0 16,760 0 0
Vice President, Norand 1995 93,684 61,260 -- 0 4,700 (6) 0 0
International Corporation 1994 74,448 18,485 -- 0 500 0 0
Alan G. Bunte 1996 139,833 -- -- 0 14,285 0 4,635(8)
Vice President, Strategic Planning 1995 129,833 20,000 -- 0 7,000 (7) 0 5,465(8)
1994 121,500 41,000 -- 0 -- 0 3,657(8)
John A. Niemzyk 1996 133,752 -- -- 0 25,415 0 5,491(10)
Vice President, Operations and 1995 117,153 28,000 -- 0 4,400 (9) 0 4,883(10)
Information Technology and Chief 1994 98,208 26,000 -- 0 1,300 0 4,820(10)
Information Officer
</TABLE>
- ---------------
(1) During the fiscal years covered, no Named Executive Officer received any
other annual compensation in an aggregate amount exceeding the lesser of
either $50,000 or 10% of his total annual salary and bonus reported in the
preceding two columns.
(2) Represents 20,000 options originally authorized pursuant to the Company's
Long-Term Performance Program on March 31, 1995, at an exercise price of
$35.00, and subsequently cancelled and reissued on May 3, 1995, at a
repriced exercise price of $30.25.
(3) Represents the Company's matching contribution to the Company's Section
401(k) deferred compensation plan of $4,750 in 1996, $4,620 in 1995, and
$4,620 in 1994, and represents the value of term life insurance provided in
excess of $50,000 of $3,519 in 1996, $2,920 in 1995, and $2,304 in 1994.
(4) Represents 8,500 options originally authorized pursuant to the Company's
Long-Term Performance Program on March 31, 1995, at an exercise price of
$35.00, and subsequently cancelled and reissued on May 3, 1995, at a
repriced exercise price of $30.25.
(5) Represents the Company's matching contribution to the Company's Section
401(k) deferred compensation plan of $4,724 in 1996, $5,058 in 1995, and
$5,171 in 1994, and represents the value of term life insurance provided in
excess of $50,000 of $867 in 1996, $530 in 1995, and $375 in 1994.
(6) Represents 700 options originally authorized pursuant to the Company's
Long-Term Performance Program on March 31, 1995, at an exercise price of
$35.00, and subsequently cancelled and reissued on May 3, 1995, at a
repriced exercise price of $30.25 plus an additional 4,000 options issued
on May 17, 1995, at an exercise price of $33.00.
(7) Represents 7,000 options originally authorized pursuant to the Company's
Long-Term Performance Program on March 31, 1995, at an exercise price of
$35.00, and subsequently cancelled and reissued on May 3, 1995, at a
repriced exercise price of $30.25.
6
<PAGE> 10
(8) Represents the Company's matching contribution to the Company's 401(k)
deferred compensation plan of $4,219 in 1996, $5,142 in 1995, and $3,453 in
1994, and represents the value of term life insurance provided in excess of
$50,000 of $416 in 1996, $322 in 1995, and $204 in 1994.
(9) Represents 1,400 options originally authorized pursuant to the Company's
Long-Term Performance Program on March 31, 1995, at an exercise price of
$35.00, and subsequently cancelled and reissued on May 3, 1995, at a
repriced exercise price of $30.25 plus an additional 3,000 options issued
on June 12, 1995, at an exercise price of $36.13.
(10) Represents the Company's matching contribution to the Company's 401(k)
deferred compensation plan of $5,198 in 1996, $4,620 in 1995, and $4,620 in
1994, and represents the value of term life insurance provided in excess of
$50,000 of $293 in 1996, $263 in 1995, and $200 in 1994.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
The following table summarizes the grants of stock options awarded to the
Named Executive Officers during the fiscal year ended August 31, 1996, under the
Company's 1989 Stock Option Plan and the Company's Long-Term Performance
Program.
<TABLE>
<CAPTION>
POTENTIAL
REALIZABLE
VALUE AT ASSUMED
ANNUAL RATES OF
INDIVIDUAL GRANTS STOCK PRICE
------------------------------------------------------------ APPRECIATION FOR
% OF TOTAL EXERCISE OPTION TERM(2)
OPTIONS/SARS OPTIONS/SARS PRICE EXPIRATION ------------------
NAME GRANTED(#) GRANTED ($/SH)(1) DATE 5%($) 10%($)
- --------------------------- ------------ ------------ -------------- ---------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
N. Robert Hammer........... 35,100 6.31% 16.50 03/28/06 364,224 923,016
Thomas O. Miller........... 7,500 1.35% 18.00 02/05/06 84,901 215,155
Thomas O. Miller........... 15,475 2.78% 16.50 03/28/06 160,580 406,943
Alan G. Bunte.............. 5,000 0.90% 18.00 02/05/06 56,600 143,437
Alan G. Bunte.............. 9,285 1.67% 16.50 03/28/06 96,348 244,165
Scott D. Mercer............ 10,000 1.80% 18.00 02/05/06 113,201 286,874
Scott D. Mercer............ 6,760 1.22% 16.50 03/28/06 70,147 177,766
John A. Niemzyk............ 20,000 3.60% 13.25 01/24/06 166,657 422,342
John A. Niemzyk............ 5,415 0.97% 16.50 03/28/06 56,190 142,397
</TABLE>
- ---------------
(1) The exercise price equals the last reported sale price of the Common Stock
on the Nasdaq National Market System on the date of grant of the options.
(2) The potential realizable dollar value of a grant is the product of: (a) the
difference between (i) the product of the per-share market price at the time
of the grant and the sum of 1 plus the stock appreciation rate compounded
annually over the term of the option (here, 5% and 10%), and (ii) the
per-share exercise price of the option, and (b) the number of securities
underlying the grant at fiscal year-end.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END
OPTION/SAR VALUES
The following table provides information concerning options exercised by
the Named Executive Officers during the fiscal year ended August 31, 1996, and
the value at August 31, 1996, of unexercised options.
<TABLE>
<CAPTION>
NUMBER OF VALUE($) OF
UNEXERCISED UNEXERCISED IN-THE-
OPTIONS AT MONEY OPTIONS AT
AUGUST 31, 1996 AUGUST 31, 1996
SHARES --------------- -------------------
ACQUIRED ON VALUE EXERCISABLE/ EXERCISABLE/
NAME EXERCISE(#) REALIZED($) UNEXERCISABLE UNEXERCISABLE
- --------------------------------------- ----------- ----------- --------------- -------------------
<S> <C> <C> <C> <C>
N. Robert Hammer....................... 0 0 112,629/69,971 658/12,504
Thomas O. Miller....................... 0 0 23,422/39,153 290/5,513
Alan G. Bunte.......................... 0 0 19,193/20,014 10,033/3,308
Scott D. Mercer........................ 0 0 3,996/19,484 127/2,408
John A. Niemzyk........................ 0 0 5,914/27,245 39,595/67,179
</TABLE>
7
<PAGE> 11
COMPENSATION OF DIRECTORS
Non-employee members of the Board of Directors, except Mr. Moore, receive
an annual fee of $12,000 (payable $3,000 per quarter) as compensation for their
services as directors, a fee of $1,000 for each board meeting attended in person
and $750 for each committee meeting attended in person. Mr. Moore serves as Lead
Director of the Board of Directors. Mr. Moore receives an annual fee of $24,000
(payable $6,000 per quarter) as compensation for his services as Lead Director,
a fee of $2,000 for each board meeting attended in person and $750 for each
committee meeting attended in person. Directors are also reimbursed for
reasonable costs associated with attendance at board and committee meetings.
Non-employee members of the Board of Directors also participate in the
Company's Stock Option Plan for Non-Employee Directors (the "Plan"), which was
adopted by the Board of Directors effective March 16, 1994 (the "Effective
Date"), and approved by the stockholders as of December 16, 1994. Pursuant to
the Plan, each individual who was a non-employee director as of the Effective
Date (Messrs. Geeslin, Moore, and Wenninger) was granted an option to purchase
6,000 shares of Common Stock as of the Effective Date, and each individual who
became a non-employee director after the Effective Date was granted an option to
purchase 5,000 shares of Common Stock as of the date of his initial appointment
as a non-employee director (in each case, the "Initial Grant"). Each
non-employee director who continues as a director is automatically granted an
option to purchase 2,000 shares of Common Stock on each anniversary of his
Initial Grant. In addition, Mr. Moore is automatically granted an additional
option to purchase 2,000 shares of Common Stock on each anniversary of his
Initial Grant. Options awarded under the Plan become exercisable with respect to
one-twentieth of the total shares as of the last day of each quarter anniversary
of the date of the award, with the exception of the options awarded in the
Initial Grant to non-employee directors who became directors after the Effective
Date, which become exercisable with respect to one-fifth of the shares on the
first anniversary date of the award and thereafter as to one-twentieth of the
total shares as of the last day of each quarter anniversary. Each such option
awarded under the Plan bears an exercise price per share of Common Stock equal
to the greater of par value or the fair market value of Common Stock on the date
the option is granted.
EMPLOYMENT CONTRACTS, TERMINATION OF EMPLOYMENT AND CHANGE-IN-CONTROL
ARRANGEMENTS
The Company's employment policy provides that upon termination, with
certain exceptions, each of the Company's vice presidents is entitled to
severance pay in the amount of six months pay plus one additional month's pay
for each year of service to the Company, not to exceed a combined total of 18
months. In the event of a change in control, enhanced severance may be payable
in the event of termination following a change in control on account of certain
events, such as elimination of a position, adverse change in duties or
compensation, or change in job location. The enhanced severance for
vice-presidents is generally equal to two times the employee's annual salary
plus bonus, continuation of employee benefits and outplacement services. The
Company has entered into an employment agreement with each Named Executive
Officer. Each of the agreements contain provisions for payment of a base salary
plus bonus, an automobile allowance and reimbursement of certain expenses
relating to relocating to Cedar Rapids, Iowa. In addition, pursuant to his
employment agreement, Mr. Hammer was granted options for 129,156 shares of
Common Stock vesting over a 55-month period beginning April 18, 1989. Mr. Hammer
is also entitled pursuant to his employment agreement to termination payments of
six months' salary, subject to certain exceptions.
The Company and Mr. Hammer are also parties to a Change in Control Benefit
Agreement pursuant to which Mr. Hammer is entitled to certain benefits in the
event of a change in control. Mr. Hammer may be entitled to accelerate up to
100,000 options upon the occurrence of a change in control, if such acceleration
does not have an adverse effect on the pooling-of-interest method of accounting.
The agreement generally provides that if it is determined that the accelerated
vesting upon a change in control of a stock option awarded to Mr. Hammer on
September 24, 1996 would be subject to the excise tax imposed by section 4999 of
the Code, Mr. Hammer will be entitled to a tax-gross up payment in an amount
equal to the amount of the excise tax attributable to the accelerated vesting of
the option, taxes incurred by Mr. Hammer on the excise tax and any interest or
penalties incurred by Mr. Hammer with respect to such excise tax. Pursuant to
the Company's
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<PAGE> 12
Long-Term Performance Program, Mr. Hammer was awarded 100,000 options at an
exercise price of $16.00 on September 24, 1996.
BOARD OF DIRECTORS COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee approves all of the policies under which
compensation is paid or awarded to the Company's executive officers.
Under the direction of the Compensation Committee, the Company has
implemented compensation practices that seek to enhance the performance of the
Company and increase its value to all stockholders. In order to provide
information on the compensation practices of the Company, the Compensation
Committee has furnished the following report on executive compensation:
Compensation Philosophy
The Compensation Committee has devoted considerable attention to developing
the Company's compensation philosophy which embodies four primary objectives:
1. to provide incentives based on value delivered to the Company's
stockholders and customers;
2. to connect individual executive pay action with performance;
3. to maintain a system of rewards that is competitive with industry
standards; and
4 to attract, motivate, and retain executives of the highest quality.
The Company's compensation programs reflect the Compensation Committee's
commitment to the mission, values, and performance of the Company. Continual
review and refinement of the Company's compensation practices in response to the
changing business environment will serve to reinforce this commitment.
The most important performance yardstick in the Company's compensation
program is the Company's ability to deliver value to stockholders through
appreciation in share price. On an ongoing basis, the Compensation Committee
will test and refine the compensation program to ensure a high correlation
between level of compensation and return to stockholders. The Compensation
Committee measures the correlation between executive compensation and return to
stockholders as a function of Company operating income levels, the performance
of operating divisions, and individual performance. Certain goals are set,
reviewed, and approved by the Chairman and CEO, and weighted. Achievement of
goals triggers executive compensation. Goals include Company operating income
threshold levels, sales levels, business and product strategy development, cycle
time, total project cost, development and implementation of global support
strategies, net contributions margin, expense reduction, and days' sales
outstanding objectives. Achieving desirable stockholder returns over a sustained
period of time requires management's attention to a number of financial and
non-financial strategic elements which enables the Company to focus on the
current and long-term requirements of the customer. The Company's compensation
program, therefore, focuses executives on actions that directly impact
stockholder return in the short-term and long-term and serve the needs of the
Company's customers. The impact of executives' actions is measured in terms of
profit growth, earnings per share, asset management, and strategic product
development and positioning.
The Compensation Committee uses multiple sources of information to evaluate
and establish appropriate compensation practices. While using multiple sources,
the Compensation Committee relies on data from benchmark companies within the
computer/peripherals industry to assess the Company's relative performance and
compensation levels. Benchmark companies were selected by matching multiple
criteria including product lines, markets served, revenue size, revenue source,
and comparable operations. Consistent with the Compensation Committee's
objectives, the Compensation Committee will position its executive compensation
targets competitively with the benchmark companies. Annual executive
compensation will be below, at or above the competitive target depending on
individual and Company performance. Company and individual performance is
measured primarily as a function of Company operating income, with thresholds
set at the beginning of each fiscal year by the Board of Directors, through the
planning and budgeting process.
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<PAGE> 13
The Company's executive compensation program has three components--base
salary, annual incentives, and long-term incentives. Base salary and annual
incentives are primarily designed to reward current and past performance.
Long-term incentives are primarily designed to provide strong incentives for
long-term future performance.
The Compensation Committee strongly believes that incentive compensation
should only be awarded with commensurate performance. The Compensation Committee
has approved compensation plans which include high minimum levels of performance
to ensure that incentives are paid only when truly earned.
Description of Compensation Programs
The following briefly describes the role of each element of compensation:
Base Salary
Base salary will be at levels sufficient to attract and retain qualified
executives. To accomplish these goals, the Compensation Committee has generally
targeted base salaries within a competitive range of average base salaries for
similar positions in benchmark companies within the computer/peripheral
industry. Aggregate base salary increases are intended to parallel increases in
the pay levels of the computer/peripheral industry as a whole. Individual
executive salary increases will strongly reflect the individual's level of
performance as measured against the individual and Company goals discussed above
and, to a lesser extent, trends within the industry which reflect salary and
total compensation trends in a growth industry.
Annual Incentive
The Company's executive annual incentive plan serves to recognize and
reward executives for taking actions that build the value of the Company,
generate competitive total returns to stockholders, and provide value-added
solutions to the Company's customers. The formula for annual incentive awards
recognizes operational and financial goals of significance to the Company.
Payments are made based on a combination of corporate and individual
performance. Achieving a minimal Company operating income goal is a pre-
condition for the awarding of any incentive awards. Individual annual incentive
awards are conditioned on achieving certain pre-set objectives.
Long-Term Incentives
The Company's Long-Term Performance Program serves to reward executive
performance in successfully executing the long-term business strategy and
building stockholder value. The program allows for the awarding of incentive
stock options, non-qualified stock options, and performance restricted stock.
During fiscal year 1996, only stock options were granted to the Company's
executive officers. Participation and target awards are determined by the
Compensation Committee by benchmarking the Company's performance against other
companies within the computer/peripheral industry and against companies
providing similar products and services. Awards are based on performance and
individual responsibility. Criteria include: performance expectations versus
results, significant and strategic contributions towards performance of the
Company, and unique core competencies essential to the achievement of the
Company's business mission. Awards may exceed targets if all criteria are met.
Compensation Administration
The Compensation Committee follows an annual cycle to administer each of
the three components of executive compensation. The integrity of the Company's
compensation program relies on an annual performance evaluation process.
Discussion of CEO Compensation
Consistent with the Company's compensation philosophy, the Compensation
Committee managed Mr. Hammer's total compensation during fiscal year 1996 based
on overall performance of the Company and
10
<PAGE> 14
on relative levels of compensation for CEOs within the benchmark companies in
the computer/peripheral industry. In particular, Mr. Hammer's compensation is
based on achievement of goals relating to earnings per share, profit and revenue
growth, strategic product development and positioning, and asset management.
Mr. Hammer is eligible for an annual incentive award of 50% of his base
salary, provided that the Company achieves certain revenue and operating income
growth thresholds. In fiscal year 1996, Mr. Hammer received no annual incentive
award.
The Compensation Committee took the following fiscal year 1996 compensation
actions for Mr. Hammer:
1. effective September 1, 1995, the Compensation Committee approved a
base salary of $340,000 per year.
2. granted on May 29, 1996, an incentive stock option to purchase
35,100 shares of Common Stock at $16.50 per share. The option will vest
1/20th each quarter through May 29, 2001.
The primary purpose of this grant was to motivate Mr. Hammer to
successfully execute the Company's long-term business strategy and to build
stockholder value.
COMPENSATION COMMITTEE,
Keith B. Geeslin
Charles G. Moore III
Hatim A. Tyabji
11
<PAGE> 15
PERFORMANCE GRAPH
The following line graph compares the Company's cumulative total
stockholder return on its Common Stock since February 2, 1993, the date that the
Common Stock began trading, with the cumulative total return of Standard &
Poor's 500 Composite Stock Price Index and the Standard & Poor's Technology
Sector Index. These comparisons assume the investment of $100 on January 31,
1993, in each index and on February 1, 1993, in the Company's Common Stock and
the reinvestment of dividends.
COMPARISON OF CUMULATIVE TOTAL RETURN
<TABLE>
<CAPTION>
MEASUREMENT PERIOD NORAND COR- S&P HIGH TECH
(FISCAL YEAR COVERED) PORATION S&P 500 COMPOSITE
<S> <C> <C> <C>
2/01/93 100 100 100
2/93 116 101 103
5/93 126 104 108
8/93 152 108 109
11/93 160 108 114
2/94 202 110 126
5/94 237 108 122
8/94 215 113 131
11/94 216 109 133
2/95 253 118 146
5/95 213 130 175
8/95 248 138 199
11/95 95 149 203
2/96 116 159 214
5/96 132 167 232
8/96 109 164 222
</TABLE>
The Board of Directors has selected Arthur Andersen LLP as the independent
accountant of the Company. Representatives of Arthur Andersen LLP will be
present at the Annual Meeting and will be given the opportunity to make a
statement if they desire to do so. They will also be available to respond to
appropriate questions.
PROXY SOLICITATION EXPENSE
The expense of the proxy solicitation will be paid by the Company. In
addition to the solicitation of proxies by use of the mails, solicitation also
may be made by telephone, telegraph or personal interview by directors,
officers, and regular employees of the Company, none of whom will receive
additional compensation for any such solicitation. In addition, the Company may
retain a proxy solicitation firm to assist in the solicitation of proxies for a
fee of approximately $5,000 plus expenses. The Company will, upon request,
reimburse brokers, banks, and similar organizations for out-of-pocket and
reasonable clerical expenses incurred in forwarding proxy material to their
principals.
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<PAGE> 16
STOCKHOLDER PROPOSALS
Proposals of stockholders must be received in writing by the secretary of
the Company at the principal executive offices of the Company no later than
August 15, 1997, in order to be considered for inclusion in the Company's proxy
statement and form of proxy relating to the next annual meeting of stockholders.
The Company anticipates that its next annual meeting of stockholders will
be held in January 1998. If a stockholder desires to submit a proposal for
consideration at the next annual meeting of stockholders, written notice of such
stockholder's intent to make such a proposal must be given and received by the
Secretary of the Company at the principal executive offices of the Company
either by personal delivery or by United States mail not later than November 13,
1997. Each notice must describe the proposal in sufficient detail for the
proposal to be summarized on the agenda for the annual meeting of stockholders
and must set forth: (i) the name and address, as it appears on the books of the
Company, of the stockholder who intends to make the proposal; (ii) a
representation that the stockholder is a holder of record of stock of the
Company entitled to vote at such meeting and intends to appear in person or by
proxy at such meeting to present such proposal; and (iii) the class and number
of shares of the Company which are beneficially owned by the stockholder. In
addition, the notice must set forth the reasons for conducting such proposed
business at the annual meeting of stockholders and any material interest of the
stockholder in such business. The presiding officer of the annual meeting of
stockholders will, if the facts warrant, refuse to acknowledge a proposal not
made in compliance with the foregoing procedure, and any such proposal not
properly brought before the annual meeting of stockholders will not be
considered.
By order of the Board of Directors,
/s/ James I. Johnson
JAMES I. JOHNSON
Secretary and General Counsel
Cedar Rapids, Iowa
December 23, 1996
Each stockholder, whether or not he or she expects to be present in person at
the Annual Meeting, is requested to MARK, SIGN, DATE, and RETURN THE ENCLOSED
PROXY in the accompanying envelope as promptly as possible. A stockholder may
revoke his or her proxy at any time prior to voting.
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<PAGE> 17
[ X ] Please mark
votes as in this
example.
The Board of Directors recommends a vote FOR the nominees as directors.
FOR WITHHELD
1. Election of [ ] [ ] I will Attend [ ]
Directors Meeting
(see reverse side)
Change of
Address
On Reverse Side [ ]
For, except vote withheld from the following nominee(s):
- --------------------------------------------------------
Please sign exactly as name appears hereon. Joint owners should
each sign. When signing as attorney, executor, administrator,
trustee or guardian, please give full title as such.
---------------------------------------------------------------
---------------------------------------------------------------
SIGNATURE(S) DATE
- FOLD AND DETACH HERE -
ANNUAL MEETING OF STOCKHOLDERS
NORAND CORPORATION
BEEMS AUDITORIUM,
CEDAR RAPIDS PUBLIC LIBRARY
500 FIRST STREET, S.E.
CEDAR RAPIDS, IOWA
JANUARY 22, 1997, AT 11:00 AM
P R O X Y
NORAND CORPORATION
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
THE COMPANY FOR THE ANNUAL MEETING ON JANUARY 22, 1997
The undersigned hereby constitutes and appoints James I. Johnson his
true and lawful agent and proxy with full power of substitution to represent
the undersigned at the Annual Meeting of Stockholders of NORAND CORPORATION to
be held at Beems Auditorium of the Cedar Rapids Public Library at 500 First
Street S.E., Cedar Rapids, Iowa, on Wednesday, January 22, 1997, and at any
adjournments thereof, on all matters coming before said meeting.
Election of Directors, Nominees: (change of address/comments)
N. Robert Hammer, Keith B. Geeslin, ---------------------------------------
Charles G. Moore III, Fred W. ---------------------------------------
Wenninger and Hatim A. Tyabji. ---------------------------------------
(If you have written in the above space,
please mark the corresponding box on
the reverse side of this card.)
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS SPECIFIED AND
IN THE DISCRETION OF THE PROXIES ON ALL OTHER MATTERS. IF NOT
OTHERWISE SPECIFIED, SHARES WILL BE VOTED IN ACCORDANCE WITH THE
BOARD OF DIRECTOR'S RECOMMENDATIONS. THE PROXIES CANNOT VOTE
YOUR SHARE UNLESS YOU SIGN AND RETURN THIS CARD.
-----------------
SEE REVERSE
SIDE
-----------------
- FOLD AND DETACH HERE -
