AYDIN CORPORATION
Telephone 700 Dresher Road
(215) 657-7510 P.O. Box 349
FAX Horsham, PA 19044
(215) 657-3830 U.S.A.
March 28, 1996
(VIA EDGAR)
SECURITIES & EXCHANGE COMMISSION
450 Fifth Street, N.W.
Washington, D.C. 20549-1004
RE: Definitive Proxy Material
File No. 1-7203
Gentlemen:
We enclose for filing Aydin Corporation's definitive Proxy
Materials (Notice of Annual Meeting, Proxy Statement and Form
of Proxy Card) for the Annual Stockholders Meeting to be held
on April 26, 1996. The filing fee of $125 was paid by Fedwire
on March 22, 1996.
The Proxy Material is first being mailed to stockholders this
date.
The Company intends to file a registration statement (Form S-8)
to register the shares covered by the Individual Non-Qualified
Stock Options when that proposal is approved by the
stockholders.
Very truly yours,
/s/ Robert A. Clancy
Robert A. Clancy
Secretary and
Corporate Counsel
<PAGE>
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:
[ ] 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 sec240.14a-11(c) or
sec240.14a-12
___________________AYDIN 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] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1),
14a-6(i)(2) or item 22(a)(2) of Schedule 14A.
[ ] $500 per each party to the controversy pursuant to
Exchange Act Rule 14a-6(i)(3).
[ ] Fee computer on table below per Exchange Act Rules 14a-
6(i)(4) and 0-11.
1) Title of each class securities to which transaction
applies:
...................................
2) Aggregate number of securities to which transaction
applies:
...................................
3) Per unit price or other underlying value of transaction
computer 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
the 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>
AYDIN CORPORATION
700 Dresher Road
Horsham, PA 19044
_____________________
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
April 26, 1996
_____________________
TO THE STOCKHOLDERS OF AYDIN CORPORATION:
The Annual Meeting of Stockholders of AYDIN CORPORATION, a
Delaware corporation (the "Company"), will be held on Friday,
April 26, 1996, at 3:00 p.m. local time at the Company's Corporate
Offices, 700 Dresher Road, Horsham, Pennsylvania, for the
following purposes:
1. To elect six Directors, each to hold office for a term
of one year and until his successor has been duly
elected; and
2. To approve the Individual Non-Qualified Stock Options;
and
3. To transact such other business as may properly come
before the Annual Meeting and any adjournment thereof.
The Board of Directors has fixed the close of business on
February 28, 1996, as the record date for the determination of
stockholders entitled to notice of and to vote at the Annual
Meeting.
A copy of the Company's Annual Report for its fiscal year
ended December 31, 1995, is being transmitted herewith.
WHETHER OR NOT YOU EXPECT TO ATTEND THE ANNUAL MEETING IN
PERSON, PLEASE FILL IN, DATE, SIGN AND RETURN THE ENCLOSED FORM OF
PROXY IN THE ENVELOPE PROVIDED.
By Order of the Board of Directors,
Robert A. Clancy
Secretary
March 28, 1996
<PAGE>
AYDIN CORPORATION
____________________
PROXY STATEMENT
____________________
This Proxy Statement and the accompanying form of Proxy,
which are first being mailed to stockholders on March 28, 1996,
are furnished in connection with the solicitation by the Board of
Directors of Aydin Corporation (hereinafter called the "Company")
of proxies to be voted at the Annual Meeting of Stockholders to be
held Friday, April 26, 1996, at 3:00 p.m. local time, and at any
adjournment thereof (hereinafter the "Annual Meeting"). The
Company's principal executive offices are located at
700 Dresher Road, Horsham, Pennsylvania 19044.
Shares represented by proxies in the accompanying form, if
properly signed and returned, will be voted in accordance with the
specifications made thereon by stockholders. Nominees for
Directors shall be elected by a plurality of the votes of the
holders of the shares present in person or represented by proxy at
the Annual Meeting and entitled to vote on the election of
Directors. Any proxy not specifying to the contrary will be voted
for the election of the nominees for Directors named below.
A stockholder who signs and returns a proxy in the accompanying
form may revoke it at any time before it is voted by giving
written notice thereof to the Secretary of the Company.
The cost of solicitation of proxies in the accompanying form
will be borne by the Company, including expenses in connection
with preparing and mailing this Proxy Statement. Such
solicitation will be made by mail and may also be made on behalf
of the Company by the Company's regular officers and employees,
without additional remuneration, personally or by telephone or
telegram. The Company will also, upon request, reimburse brokers
or persons holding shares in their name or in the names of
nominees for their reasonable expenses in sending proxies and
proxy material to beneficial owners.
As of the close of business on February 28, 1996, the Company
had outstanding 5,123,125 shares of Common Stock, $1.00 par value,
each of which is entitled to one vote. A majority of the
outstanding shares will constitute a quorum at the Annual Meeting.
Abstentions and broker non-votes are counted for purposes of
determining the presence or absence of a quorum for the
transaction of business. Only holders of Common Stock of record
at the close of business on February 28, 1996, will be entitled to
notice of and to vote at the Annual Meeting. Cumulative voting
rights do not exist with respect to the election of Directors.
With regard to the election of directors, votes may be cast
in favor or withheld; votes that are withheld will be excluded
entirely from the vote and will have no effect. Under the rules
of the New York Stock Exchange, Inc., brokers who hold shares in
street name for customers have the authority to vote on certain
items when they have not received instructions from beneficial
owners. Brokers that do not receive instructions are entitled to
vote on the election of directors. Under applicable Delaware law,
a broker non-vote will have no effect on the outcome of the
election of directors.
<PAGE>
BENEFICIAL OWNERSHIP OF COMMON STOCK
The following table sets forth, as of the dates indicated, the
name and address of each person known by the Company to be the
beneficial owner of more than 5% of the Company's outstanding voting
securities and the percentage of the shares so owned:
<TABLE>
<CAPTION>
Title of Name and Address of Amount and Nature of Percent
Class Beneficial Owner Beneficial Ownership(1) of Class
____________ ___________________ ______________________ ________
<S> <C> <C> <C>
Common Stock, Ayhan Hakimoglu 596,927(2)(3) 11.7%
$1.00 par 700 Dresher Road
value Horsham, PA 19044
Common Stock, Victor Posner 334,500(4) 6.5%
$1.00 par 6917 Collins Avenue
value Miami Beach, FL 33141
Common Stock, College Retirement 296,650(5) 5.79%
$1.00 par Equities Fund
value 730 Third Avenue
New York, NY 10017
_____________________
<FN>
(1) Based on information furnished by the stockholder.
(2) As of March 1, 1996. Sole voting and investment power.
(3) Includes 3,750 shares which Mr. Hakimoglu may acquire upon the
exercise of options currently exercisable or that will become
exercisable within 60 days.
(4) As of December 29, 1993. Sole voting and investment power.
(5) As of February 1, 1996. Sole voting and investment power.
</TABLE>
BENEFICIAL OWNERSHIP BY MANAGEMENT
The following table sets forth, as of March 1, 1996, the amount
and percentage of the Company's outstanding Common Stock, $1.00 par
value, beneficially owned by each Director, the chief executive
officer, the four other most highly compensated executive officers, as
identified in the Summary Compensation Table herein, and all Directors
and executive officers as a group:
<TABLE>
<CAPTION>
Title of Name of Amount and Nature Percent
Class Beneficial Owner of Ownership(1)(2) of Class
________ _________________ __________________ ________
<S> <C> <C> <C>
Common Stock I. Gary Bard . . . . . . 2,500 (4)
Dr. Nev A. Gokcen . . . 17,000 (4)
Ayhan Hakimoglu . . . . 596,927 (3) 11.7%
Donald S. Taylor . . . . 27,500 (4)
Harry D. Train, II . . . 0 -
John F. Vanderslice . . 2,528 (4)
Demirhan Hakimoglu . . . 5,935 (4)
Mats J. Ofverberg . . . 5,500 (4)
All of the above and other
executive officers as a
group(Includes 10 persons) 663,268 12.9%
_____________________________
<FN>
(1) Based on information furnished by the respective directors and
officers. Each person has sole voting and investment power with
respect to the shares listed, except the shares of Director Gokcen
are held jointly with his spouse.
(page 2)
<PAGE>
(2) Includes shares which may be acquired upon the exercise of options
currently exercisable or that will become exercisable within
60 days as follows: Bard - 2,500, A. Hakimoglu - 3,750,
Taylor - 17,500, Vanderslice - 2,500, D. Hakimoglu - 750,
Ofverberg - 5,500, and the Group - 5,125.
(3) See footnote "2" to Beneficial Ownership of Common Stock table
above.
(4) Less than 1%.
</TABLE>
PROPOSAL 1. ELECTION OF DIRECTORS
Six Directors of the Company are to be elected at the Annual
Meeting. Each Director will serve one year and until his successor has
been duly elected. Unless otherwise instructed, the proxy holders will
vote the proxies received by them for the election of the nominees
listed below, all of whom are currently Directors of the Company. If
any nominee should become unavailable for any reason, it is intended
that votes will be cast for a substitute nominee designated by the
Board of Directors. The Board of Directors has no reason to believe
that the nominees named will be unable to serve if elected. Any
vacancy occurring on the Board of Directors for any reason may be
filled by a majority of the Directors then in office until the next
annual meeting of stockholders.
The names of the nominees for Director, all of whom are currently
Directors of the Company, and certain information regarding them are as
follows:
<TABLE>
<CAPTION>
Name Age Principal Occupation Director
for Past Five Years Since
<S> <C> <C> <C>
I. Gary Bard 58 Vice President and General Manager, Federal 1994
Systems Solutions Integration Division of
Unisys Corporation, providing integration
solutions to the federal, state and local
government marketplace, since October 1995.
Consultant on software development from
February 1993 to October 1995. Chief
Operating Officer of Open Software
Foundation, from November 1992 to February
1993, and President of Integrated Systems
Division of Computer Sciences Corporation,
from July 1984 to November 1992.
Dr. Nev A. Gokcen 74 Retired. Former thermodynamicist with the 1972
Department of the Interior, Bureau of Mines,
Albany, Oregon.
Ayhan Hakimoglu(1) 68 Chairman of the Board of Directors. President 1967
of the Company through February 1992 and
from March 1994 through December 1994.
Dr. Donald S. Taylor 52 President of the Company since January 1995. 1995
From 1970 through 1994 held various positions
with Computer Sciences Corporation, designer
and manufacturer of large turnkey information
systems, the last 13 years as Vice President of
its Integrated Systems Division.
(page 3)
<PAGE>
Harry D. Train, II 68 Manager, Hampton Roads Operations (defense 1984
studies and analysis) of Science Applications
International Corporation (SAIC), Norfolk,
Virginia, since October 1986.
John F. Vanderslice 54 Executive Vice President of the Company, 1994
President of its Vector Division since 1982.
________________________
<FN>
(1) Mr. Hakimoglu may be deemed to be a control person of the Company.
For information regarding his stock ownership, see Beneficial
Ownership of Common Stock table, page 2.
</TABLE>
The Company has had an Audit Committee since September 1, 1978; and
Directors Bard, Gokcen, and Train are its current members. Its powers
and duties include the following: (1) sole authority to retain and
dismiss both internal and independent auditors; (2) approval before
dissemination of any report which contains financial data; and (3)
consultation with the independent auditors quarterly and before the
Company decides any material accounting policy. This Committee met
four times in 1995.
The Company established an Oversight Committee April 10, 1992,
comprised of its outside Directors, currently Bard, Gokcen and Train.
Its powers and duties include the review of the Company's policies and
procedures and recommendations to the Board of Directors of those
measures this Committee believes necessary to strengthen and ensure
the effectiveness of Company policies relating to (a) Division and
Corporate Officer awareness of federal laws and regulations affecting
government contracts; (b) compliance of outside consultants and sales
representatives with national and international regulations involving
the sale of Company products; and (c) compliance with federal laws and
regulations applicable to government contract procurement and
performance. This Committee met four times in 1995.
There are no nominating or compensation committees of the Board of
Directors. The Board of Directors met 5 times in 1995.
During the year ended December 31, 1995, the directors attended at
least 90% of all meetings of the Board of Directors and Committees on
which they served.
Each Director who is not also an employee of the Company receives
an annual director's fee of $7,500, plus $600 for each meeting which
he personally attends ($200 for each meeting in which he participates
by means of conference telephone). Directors Bard, Gokcen and Train
receive no additional fees for serving on the Audit and Oversight
Committees. Directors Bard, Gokcen and Train have been granted
Individual Non-Qualified Stock Options (the "Individual Options").
Directors Gokcen and Train were granted their Individual Option on
July 28, 1995, to purchase up to 1,000 shares at $16.75 per share and
Director Bard was granted his Individual Option on October 28, 1994,
to purchase up to 10,000 shares at $10.56 per share (both option
prices were at the per share market value of the Company's Common
Stock on the respective dates of the grant). Under each of the
Individual Options, 25% of the option shares become exercisable on the
first anniversary of the grant and 25% each year thereafter on a
cumulative basis until the option expires five years from the date of
grant.
(page 4)
<PAGE>
COMPENSATION OF EXECUTIVE OFFICERS
The following tabulation sets forth certain information with
respect to compensation paid or earned for services in all capacities
to the Company and its subsidiaries for its fiscal years ended
December 31, 1995, 1994 and 1993, of those persons who were, at
December 31, 1995, (i) the chief executive officer; and (ii) the four
most highly compensated executive officers of the Company (the "Named
Executive Officers"):
Summary Compensation Table
<TABLE>
<CAPTION>
Annual Compensation Long-Term Compensation Awards
_________________________ _____________________________
Restricted Securities
Stock Underlying
Name and Principal Position Year Salary($)(1) Bonus ($) Award ($) Options (#)
___________________________ ____ ____________ _________ ____________ ___________
<S> <C> <C> <C> <C> <C>
Ayhan Hakimoglu 1995 $185,999 $200,000 (2) -- - 0 -
Chairman of the Board and 1994 182,815 -- -- 20,000 (4)(7)
Chief Executive Officer 1993 174,446 -- -- 10,000 (5)(7)
Donald S. Taylor 1995 $155,952 $60,000 $120,000 (3) 70,000
President of the Company 1994 -- -- -- --
and President, Aydin 1993 -- -- -- --
(East) Division
John F. Vanderslice 1995 $130,000 $113,176 -- - 0 -
Executive Vice President 1994 128,925 99,598 -- 10,000
and President, Vector 1993 123,011 24,552 -- - 0 -
Division
Demirhan Hakimoglu 1995 $137,231 $9,964 -- - 0 -
Vice President and Chief 1994 125,429 6,028 -- 3,000
Executive Officer, Aydin- 1993 127,505 3,131 -- 1,000 (6)(7)
Yazilim, S. A.
Mats J. Ofverberg 1995 $138,173 -- -- - 0 -
Vice President and President, 1994 106,016 (8) -- -- 22,000
Aydin (West) Division 1993 126,302 (8) -- -- - 0 -
<FN>
________________________
(1) Includes any sums deferred for the individual under the Company's 401(k) plan.
(2) Of this total, $100,000 was accrued in 1994.
(3) An award of 10,000 shares on January 3, 1995, valued at the grant date closing price of
$12.00, vesting over a four-year period (2,500 shares per year commencing January 3, 1996).
At year-end 1995, the value of these restricted shares was $151,250.
(4) This total of 20,000 shares includes 5,000 shares granted on February 25, 1994, that were
cancelled and re-priced and granted on October 28, 1994, at the then current market price.
(5) Cancelled and re-issued by agreement on October 28, 1994, and re-priced and granted at the
then current market price.
(6) Cancelled and re-issued by agreement on March 28, 1994, and re-priced and granted at the
then current market price.
(7) All options that are re-issued constitute a new grant and the optionee must hold the option
for one year before the first 25% becomes exercisable.
(8) Not employed by the Company from November 5, 1993 to March 13, 1994.
</TABLE>
OPTION GRANTS IN LAST FISCAL YEAR
Shown below is further information on grants of stock options
pursuant to the Company's 1994 Incentive Plan, the 1984 Non-Qualified
Plan or an Individual Non-Qualified Stock Option during the year ended
December 31, 1995, to the Named Executive Officers.
(page 5)
<PAGE>
<TABLE>
<CAPTION>
Number of % of Total Potential Realizable Value
Securities Options at Assumed Annual Rates of
Underlying Granted to Exercise Stock Price Appreciation for
Name Options Employees Price Expiration Option Term
Granted(#)(1) in 1995 ($/Sh) Date 5% ($) 10% ($)
<S> <C> <C> <C> <C> <C> <C>
Ayhan Hakimoglu - - - - - -
Donald S. Taylor 70,000 73.8% $11.56 1-3-00 $223,300 $494,200
John F. Vanderslice - - - - - -
Demirhan Hakimoglu - - - - - -
Mats J. Ofverberg - - - - - -
<FN>
________________________
(1) All options expire five years from date of grant. Twenty-five
percent of the option shares become exercisable one year from date
of grant and an additional 25% each year thereafter on a
cumulative basis.
AGGREGATED OPTION EXERCISES AND FISCAL YEAR-END OPTION VALUES
Shown below is information with respect to options exercised
during 1995 and the year-end value of unexercised options to purchase
the Company's Common Stock granted in prior years under the Company's
1981, 1983 or 1994 Incentive Plans, the 1984 Non-Qualified Plan or an
Individual Non-Qualified Stock Option to the Named Executive Officers
and held by them at December 31, 1995.
</TABLE>
<TABLE>
<CAPTION>
Shares Number of Unexercised Options Value of Unexercised In-The-Money
Acquired Value Held At December 31, 1995 Options At December 31, 1995 (2)
on Exercise Realized(1) _______________________________ _________________________________
Name (#) ($) Exercisable(#) Unexercisable(#) Exercisable($) Unexercisable($)
___________________ ______ _______ ______________ ________________ ______________ ________________
<S> <C> <C> <C> <C> <C> <C>
Ayhan Hakimoglu 5,000 $28,500 3,750 11,250 $13,144 $ 39,431
Donald S. Taylor - 0 - -- - 0 - 70,000 -- 249,550
John F. Vanderslice 14,625 92,773 2,500 7,500 11,413 34,238
Demirhan Hakimoglu 4,876 18,602 - 0 - 2,250 -- 4,646
Mats J. Ofverberg 5,500 19,733 - 0 - 16,500 -- 34,073
<FN>
________________________
(1) The difference between the closing price of the securities the
date the option was exercised and exercise price of the option.
(2) Based on the closing price on December 29, 1995, on the New York
Stock Exchange of $15.125 per share.
BOARD OF DIRECTORS REPORT ON EXECUTIVE COMPENSATION
The Board of Directors has furnished the following report on
executive compensation dated February 23, 1996:
Under the supervision of the Chairman of the Board of Directors,
the Company has developed and implemented compensation policies which
seek to enhance the profitability of the Company, and thus stockowner
value, by aligning closely the financial interests of the Company's
senior managers with those of its stockowners. In furtherance of
these goals, annual base salaries are generally set somewhat below
competitive levels so that the Company relies to a large degree on
annual bonus arrangements and stock options to attract and retain
corporate officers and other key employees and to motivate them to
perform to the full extent of their abilities. The bonus arrangements
are variable and tied to corporate and division
(page 6)
<PAGE>
performance in a manner that encourages a sharp and continuing focus
on building profitability and stockowner value.
The Company has bonus arrangements based on operating results
with substantially all of its key employees. For division and major
subsidiary presidents (i.e., Messrs. Taylor, Vanderslice, D. Hakimoglu
and Ofverberg and the presidents of the other three divisions) those
bonuses are principally based on the profitability of their respective
division. The specific bonus formula varies with each division,
depending upon its size and the characteristics of its operations, but
generally involves a percentage (e.g., 0.75% to 7%) of the net profits
after deduction of a threshold figure (e.g., from $0 to $2,000,000),
and a percentage (e.g., 0% to 0.25%) of the increase in sales volume
from the previous year if certain net profit margins are attained
(e.g., 0% to 10%). The bonus for the Chairman is established by the
Board of Directors without reference to any pre-set formula.
Directors who are not also employees of the Company receive no
bonuses.
In the early part of each fiscal year, the Chairman will prepare
an annual salary and bonus arrangement for the Company's senior
executives (other than himself). This salary and bonus arrangement is
developed based on performance judgments as to the past and expected
future contributions of the individual senior executives. The Board
reviews and fixes the base salary and bonus of the Chief Executive
Officer based on similar data and the Board's assessment of his past
performance and its expectation as to his future contributions in
leading the Company and its businesses. This practice is subjective
and not based upon specific criteria.
In evaluating the performance and setting the compensation of
the Company's senior management, the Chairman, in making his
recommendations to the Board, also takes into account management's
commitment to the long-term success of the Company and has taken
particular note of management's success in effectively directing the
Company's operations under the difficult economic conditions in the
markets served over the last three years. The $1 million compensation
deduction cap under Section 162(m) of the Internal Revenue Code was
not discussed because the Company's compensation levels are far below
the cap.
At the beginning of each year goals are established for each
division based on its sales growth and operating earnings potential.
Financial goals include sales growth, operating earnings and cash
flow; while strategic goals focus on such factors as new product
development and new business initiatives.
The foregoing report has been furnished by Messrs. Hakimoglu,
Bard, Gokcen, Taylor, Train and Vanderslice.
EMPLOYMENT CONTRACTS AND TERMINATION OF EMPLOYMENT ARRANGEMENTS
On January 3, 1995, Dr. Donald S. Taylor commenced at will
employment with the Company as President and was elected to the Board
of Directors to fill the term of Dr. Frederick G. Allen who retired
after 22 years. As part of his compensation package, in addition to
his salary, Dr. Taylor receives an incentive bonus equal to 3% of the
net pretax profit of the combined Controls, Computer & Monitor and
Raytor units (Aydin East), but not less than $15,000 per quarter for
the first eight quarters of his employment. Further, as an inducement
to enter into employment with the Company, Dr. Taylor was granted
(i) an Individual Non-Qualified Stock Option to purchase within five
years 70,000 shares of the Company's Common Stock, exercisable 25%
each year starting January 3, 1996 at the option price of $11.56 per
share, $.57 below the fair market value of the shares on the date of
grant, and (ii) a restrictive stock award (the "Award") of 10,000
shares of the Company's Common Stock that will vest over a four-year
period (2,500 shares per year commencing January 3, 1996).
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Directors Hakimoglu, Taylor and Vanderslice, members of the Board
of Directors voting on the compensation recommendations for other
executive officers of the Company were, during the fiscal year,
officers and employees of the Company.
(page 7)
<PAGE>
SHAREHOLDER RETURN PERFORMANCE PRESENTATION
Set forth below is a line graph comparing the cumulative total
shareholder return on the Company's Common Stock against the
cumulative total return of the S&P 500 Stock Index and the S&P High
Technology Composite Index for the period of five fiscal years
commencing December 31, 1990, and ended December 29, 1995.
</TABLE>
<TABLE>
Comparison of Five-Year Cumulative Total Return*
Aydin Common, S&P 500 Stock & S&P High Technology
Composite Indices
<CAPTION>
Measurement Period Aydin Corp. S&P 500 Index S&P Hi-Tech
(Fiscal Year Composite
Covered) Index
<S> <C> <C> <C>
Measurement Pt 12/31/90 $100.00 $100.00 $100.00
FYE 12/31/91 $117.01 $130.00 $114.08
FYE 12/31/92 $126.93 $139.67 $118.79
FYE 12/31/93 $ 95.19 $153.53 $146.13
FYE 12/31/94 $ 97.18 $155.50 $170.31
FYE 12/29/95 $119.99 $213.21 $245.30
<FN>
* Assumes $100 invested in Aydin Common Stock and each index on
December 29, 1990, and that all dividends were reinvested.
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's officers and directors, and persons who own more than ten
percent of a registered class of the Company's equity securities, to
file reports of ownership and changes in ownership of such securities
with the Securities and Exchange Commission and the New York Stock
Exchange. Officers, directors and greater than ten-percent beneficial
owners are required by applicable regulations to furnish the Company
with copies of all Section 16(a) forms they file. The Company is not
aware of any beneficial owner of more than ten percent of its Common
Stock other than its Chairman, Ayhan Hakimoglu.
(page 8)
<PAGE>
Based solely upon a review of the copies of the forms furnished
to the Company, or written representations from certain reporting
persons that no Form 5 reports were required, the Company believes
that all filing requirements applicable to its officers and directors
were complied with during 1995.
PROPOSAL 2. APPROVAL OF INDIVIDUAL NON-QUALIFIED STOCK OPTIONS
On July 28, 1995, the Board of Directors granted Individual
Non-Qualified Stock Options (the "Individual Options") to Director's
Gokcen and Train, each to purchase 1,000 shares of the Company Common
Stock at $16.75 a share, the fair market value of the shares on the
date of grant. On March 19, 1996, the closing price of the Company's
Common Stock on the New York Stock Exchange was $15.00.
Both of the Individual Options provide that no option is
exercisable prior to one year nor after five years from the date on
which the option is granted (the "Option Period"). The option
agreement provides that 25% of each option granted is exercisable
commencing one year from the date of grant, and an additional 25%
becomes exercisable each year thereafter during the Option Period on a
cumulative basis.
No Individual Option is assignable or transferrable otherwise
than by will or by the laws of descent and distribution, and during
the lifetime of the optionee the option is exercisable only by the
optionee. If the optionee attempts to transfer, assign, pledge,
hypothecate or otherwise dispose of any option or any right
thereunder, such attempt will be void and of no effect, and the
Company shall have the right to terminate the options granted as of
the date of such purported transfer, assignment, pledge, hypothecation
or other disposition.
An optionee may exercise an option by giving written notice to
the Company specifying the number of shares to be purchased and by
submitting the purchase price of the shares. Payment of the purchase
price under the Individual Options may be made in cash (including
check, bank draft, or money order) or by delivery to the Company of
shares of the Company's Common Stock ("Shares") already owned by the
option holder, or by a combination of cash and Shares. Any such
Shares so delivered shall be valued at their fair market value (the
mean of the high and the low prices on the principal exchange upon
which the Shares are traded) on the trading date immediately preceding
the date of exercise of the option. Any option not exercised within
the period fixed for its exercise shall terminate and become void and
of no effect.
The Company may postpone the issuance and delivery of shares
upon any exercise of an Individual Option until (i) the admission of
such shares to listing on any stock exchange on which shares of the
Company of the same class are then listed; and (ii) the completion of
such registration or other qualification of such shares under any
state or federal law, rule or regulation as the Company shall
determine to be necessary or advisable. Any person exercising an
option shall make such representations and furnish such information as
may in the opinion of counsel for the Company be appropriate to permit
the Company, in the light of the then existence or non-existence of an
effective registration statement under the Securities Act of 1933 (the
"Securities Act") with respect to such shares, to issue the shares in
compliance with the provisions of that or any comparable act. In the
absence of an appropriate registration statement, the restrictions
contained in Rule 144 promulgated under the Securities Act, as from
time to time amended, will apply to sales of option shares by persons
who may be deemed to be "affiliates" as defined in Rule 144. An
"affiliate" of an issuer is defined in Rule 144 as a person that
directly, or indirectly through one or more intermediaries, controls,
or is controlled by, or is under common control with, such issuer.
Under the Individual Options, if the position as non-employee
Director of any optionee is terminated, options are exercisable only
to the following extent: (i) if the directorship is terminated
otherwise than by death of the optionee, the optionee shall have the
right at any time within thirty (30) days thereafter, but in no event
after the expiration of the Option Period, to exercise the option with
respect to all or any part of the number of shares which the optionee
could have purchased on the date of the termination of the
directorship; and (ii) if the directorship is terminated by the death
of the optionee, the person or persons to whom the optionee's rights
under the option granted shall pass by will or by the applicable laws
of descent and distribution shall have the right at any time within
three months after the optionee's death, but in no event after the
expiration of the Option Period, to exercise the option with respect
to all or any part of the number of shares which the optionee could
have purchased on the date of death.
(page 9)
<PAGE>
The federal income tax consequences to a non-employee director
who receives or holds an Individual Option will be generally as
follows. The director will not realize any income at the time the
option is granted. The director will realize income at the time he
exercises any option in a total amount equal to the sum of (i) in the
case of an option with respect to which the director uses cash to pay
the option price, the amount by which the fair market value at the
time of issuance of the shares acquired pursuant to the exercise of an
option exceeds the price paid for such shares pursuant to the exercise
of such option; and (ii) in the case of an option with respect to
which a director uses Shares which he owns to pay the exercise price,
the total fair market value, at the time of issuance, of the number of
shares issued in excess of the number of Shares surrendered upon such
exercise.
If a director uses Shares which he owns to pay, in whole or in
part, the exercise price for optioned shares under the Individual
Option, (i) the individual's holding period for the newly issued
shares of Common Stock equal in value and number to the Shares which
were surrendered upon the exercise shall include the period during
which the Shares were held; (ii) the director's basis in such
exchanged shares will be the same as his basis in the Shares
surrendered; and (iii) no gain or loss will be recognized by the
director on the exchange of the Shares surrendered for the exchanged
shares. The director's basis in the shares received over and above
the exchanged shares will be equal to their fair market value at the
time the director realizes income with respect to such shares.
All income realized upon the exercise of any options will be
taxed at ordinary income rates. The Company may claim an income tax
deduction (as compensation paid) for the amount taxable to the
directors upon the exercise of options, as described above, in the
same year as those amounts are taxable to the director. Shares issued
pursuant to the exercise of options generally constitute a capital
asset in the hands of a director and will be eligible for capital gain
or loss treatment upon any subsequent disposition. The director's
cost basis will be equal to the option price plus any amount
recognized as ordinary income. Generally, the holding period will
commence with the date such shares are issued to the director by the
Company, and his basis in such shares will equal their fair market
value as of that date.
Approval of this proposal will require the affirmative vote of
the holders of a majority of the shares of the Company's Common Stock
represented in person or by proxy at the Annual Meeting and is a
prerequisite to the listing on the New York Stock Exchange of the
shares issuable upon the exercise of the options granted pursuant to
the Individual Non-Qualified Options.
The Board of Directors recommends a vote FOR this proposal.
INDEPENDENT AUDITORS
On June 13, 1994, the Audit Committee of the Board of Directors
engaged the services of Grant Thornton LLP as the Company's
independent auditors through March 31, 1997. A representative of
Grant Thornton LLP will attend the Annual Meeting and will be given an
opportunity to make a statement if he so desires and will be available
to respond to appropriate questions.
The Company's former independent auditors, KPMG Peat
Marwick LLP, were terminated by the Audit Committee June 13, 1994, due
to the fact that agreement on fees to be charged for the Company's
1994 audit could not be reached. There were no disagreements with
KPMG Peat Marwick LLP in connection with the audits of the fiscal year
ended December 31, 1993 and the subsequent interim period preceding
the termination with respect to matters of accounting principles or
practices, financial statement disclosure, or auditing scope and
procedures, which disagreements, if not resolved to their
satisfaction, would have caused KPMG Peat Marwick LLP to make
reference to the matter in their report. Further, the KPMG Peat
Marwick LLP reports on the financial statements of the Company for the
year ended December 31, 1993 did not contain any adverse opinion or
disclaimer of opinion and were not qualified or modified as to
uncertainty, audit scope or accounting principles.
(page 10)
<PAGE>
THE SUBMISSION OF STOCKHOLDER PROPOSALS
FOR CONSIDERATION AT THE 1997 ANNUAL MEETING
Any stockholder who desires to submit a proposal for
consideration at the 1997 Annual Meeting and who desires that the
proposal be included in the Proxy Statement issued by the Board of
Directors in connection with such Annual Meeting may request that
inclusion by submitting such proposal in writing to the Secretary of
the Company on or before November 27, 1996, in accordance with Rule
14a-8 of the Securities and Exchange Commission.
OTHER MATTERS
The Board of Directors does not know of any matters to be
presented for consideration, other than the matters described in the
Notice of Annual Meeting. However, if other matters are properly
presented, it is the intention of the persons named in the
accompanying proxy to vote on such matters in accordance with their
judgment.
By Order of the Board of Directors,
AYHAN HAKIMOGLU
Chairman
March 28, 1996
(page 11)
<PAGE>
APPENDIX No. 1 (Form of Proxy Card)
Aydin Corporation AYDIN CORPORATION
700 Dresher Road PROXY FOR
Horsham, PA 19044 ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON APRIL 26, 1996
This Proxy is Solicited on Behalf of the Board of Directors
The undersigned, having received the Notice of Annual Meeting and
Proxy Statement dated March 28, 1996, hereby constitutes and appoints
Ayhan Hakimoglu and Robert A. Clancy, and each of them acting
individually, as the undersigned's proxies, each with the power to
appoint his substitute and authorizes them to represent the
undersigned and to vote all the shares of common stock of AYDIN
CORPORATION held on record by the undersigned on February 28, 1996, at
the Annual Meeting of Stockholders to be held on April 26, 1996 or any
adjournment or postponement thereof, on the matters set forth on the
reverse side hereof.
THIS PROXY, WHEN PROPERLY EXECUTED AND RETURNED, WILL BE VOTED IN
THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED STOCKHOLDER. IF NO
DIRECTION IS GIVEN, THIS PROXY WILL BE VOTED FOR THE ELECTION OF THE
DIRECTORS RECOMMENDED BY THE BOARD OF DIRECTORS, FOR PROPOSAL 2 AND IN
THE DISCRETION OF THE PROXIES ON ANY OTHER MATTERS THAT MAY PROPERLY
COME BEFORE THE ANNUAL MEETING OR ANY ADJOURNMENT OR POSTPONEMENT
THEREOF.
(Continued and to be signed on the reverse side)
(Side 1)
<PAGE>
(Form of Proxy - Side 2)
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<S> <C> <C> <C>
To Vote for To Withhold 1. Board of Directors recommends and will vote 2. To approve Individual
all nominees authority to FOR the election of the following as Directors Non-Qualified Stock
check this box vote for all unless otherwise directed: Options.
nominees FOR AGAINST ABSTAIN
check this box I.G. Bard, N.A. Gokcen, A. Hakimoglu, D.S. [ ] [ ] [ ]
Taylor, H.D. Train, II and J.F. Vanderslice.
FOR WITHHOLD
To withhold authority to vote for any individual
[ ] [ ] nominee while voting for the remainder, write
this nominee's name in the space below:
_______________________________________________
3. Subject to the limitation described in the Proxy PLEASE SIGN EXACTLY AS NAME APPEARS AT LEFT.
Statement relating to the Annual Meeting of Stockholders,
in their discretion, the proxies or their substitutes Dated: _____________________, 1996
are authorized to vote upon such other matters as may
properly come before the annual meeting or any adjournment Joint owners should each sign. When signing
or postponement thereof. The Board of Directors is not as attorney, executor, administrator, trustee
presently aware of any such other matters. or guardian, please give full title as such.
If a corporation, please sign full corporate
name by the president or other authorized
officer. If a partnership, please sign
partnership name by an authorized person.
____________________________________________
Signature
______________________________________________
Signature if held jointly
PLEASE MARK, SIGN, DATE AND PROMPTLY RETURN
THIS PROXY CARD USING THE ENCLOSED ENVELOPE
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