<PAGE> 1
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 sec.240.14a-11(c) or sec.240.14a-12
</TABLE>
CELERITEK, INC.
- --------------------------------------------------------------------------------
(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), or 14a-6(i)(1), or 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 computed on table below per Exchange Act Rules 14a-6(i)(4) 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
CELERITEK, INC.
3236 SCOTT BOULEVARD
SANTA CLARA, CALIFORNIA 95054
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD AUGUST 1, 1996
The Annual Meeting of Shareholders of Celeritek, Inc., a California
corporation (the "Company"), will be held on Thursday, August 1, 1996 at 9:00
a.m. at the offices of the Company located at 3236 Scott Boulevard, Santa Clara,
California 95054.
At the meeting, shareholders will consider and vote upon the following
proposals:
1. To elect a Board of Directors of the Company;
2. To ratify the appointment of Ernst & Young LLP as the Company's
independent auditors for the fiscal year ending March 31, 1997; and
3. To transact such other business as may properly come before the
meeting or any and all postponements or adjournments thereof.
The Board of Directors has fixed the close of business on June 14, 1996
as the record date for the determination of shareholders entitled to notice of
and to vote at the meeting. Accordingly, only shareholders of record at the
close of business on that day will be entitled to vote at the meeting,
notwithstanding any transfer of shares on the books of the Company after that
date.
A Proxy Statement which contains information with respect to the
matters to be voted upon at the meeting and a Proxy card and return envelope are
furnished herewith. Management urges each shareholder to carefully read the
Proxy Statement. If you cannot be present personally at the meeting, you are
requested to complete and sign the Proxy card and return it promptly in the
envelope enclosed for that purpose.
BY ORDER OF THE BOARD OF DIRECTORS
Margaret E. Smith, Assistant Secretary
Santa Clara, California
Dated: July 1, 1996
IT IS DESIRABLE THAT AS MANY OF THE SHAREHOLDERS AS POSSIBLE BE
REPRESENTED AT THE MEETING IN PERSON OR BY PROXY. YOU ARE CORDIALLY INVITED TO
ATTEND IN PERSON. IF YOU ARE UNABLE TO BE PRESENT AT THE MEETING, OR ARE NOT
SURE WHETHER YOU WILL BE, YOU ARE REQUESTED TO SIGN AND RETURN THE ENCLOSED
PROXY PROMPTLY SO THAT YOUR SHARES WILL BE REPRESENTED. SIGNING A PROXY AT THIS
TIME WILL NOT AFFECT YOUR RIGHT TO VOTE IN PERSON SHOULD YOU LATER DECIDE TO
ATTEND THE MEETING.
<PAGE> 3
CELERITEK, INC.
3236 SCOTT BOULEVARD
SANTA CLARA, CALIFORNIA 95054
PROXY STATEMENT
GENERAL
DATE, TIME AND PLACE
This Proxy Statement is furnished to the shareholders of Celeritek,
Inc., a California corporation (the "Company"), in connection with the
solicitation of Proxies by the Board of Directors of the Company for use at the
Annual Meeting of Shareholders to be held at 9:00 a.m. on Thursday, August 1,
1996, and any and all postponements or adjournments thereof. It is anticipated
that this Proxy Statement and the enclosed Proxy card will be sent to such
shareholders on or about July 1, 1996.
PURPOSES OF THE ANNUAL MEETING
The purposes of the Annual Meeting are to (1) elect a Board of
Directors of the Company, (2) ratify the appointment of Ernst & Young LLP as the
Company's independent auditors for the fiscal year ending March 31, 1997 and (3)
transact such other business as may properly come before the meeting or any and
all postponements or adjournments thereof.
PROXY/VOTING INSTRUCTION CARDS AND REVOCABILITY OF PROXIES
When the Proxy in the enclosed form is returned, properly executed, the
shares represented thereby will be voted at the meeting in accordance with the
instructions given by the shareholder. If no instructions are given, the
returned Proxy will be voted in favor of the election of the nominees named
herein as directors and in favor of each of the other proposals. Any
shareholder, including a shareholder personally attending the meeting, may
revoke his or her Proxy at any time prior to its use by filing with the
Secretary of the Company, at the corporate offices at 3236 Scott Boulevard,
Santa Clara, California 95054, a written notice of revocation or a duly executed
Proxy bearing a later date or by voting in person at the Annual Meeting.
RECORD DATE AND SHARE OWNERSHIP
Shareholders of record at the close of business on June 14, 1996 (the
"Record Date") are entitled to notice of and to vote at the meeting. At the
Record Date, 6,952,415 shares of the Company's Common Stock were issued and
outstanding. For information regarding security ownership by management and by
5% shareholders, see "Other Information--Share Ownership by Principal
Shareholders and Management."
<PAGE> 4
VOTING AND SOLICITATION; QUORUM
Each share has one vote. Votes against any such proposal will be
counted for determining the presence or absence of a quorum and will also be
counted as having been voted with respect to the proposal for purposes of
determining whether the requisite majority of voting shares has been obtained,
but will be treated as votes against the proposal.
An automated system administered by the Company's transfer agent
tabulates the proxies received prior to the date of the Annual Meeting. While
there is no definitive statutory or case law authority in California as to the
proper treatment of abstentions in the counting of votes with respect to a
proposal, the Company believes that abstentions should be counted for purposes
of determining both (i) the presence or absence of a quorum for the transaction
of business and (ii) the total number of votes cast with respect to a proposal.
In the absence of controlling precedent to the contrary, the Company intends to
treat abstentions in this manner. Accordingly, abstentions will have the same
effect as a vote against the proposal. Broker non-votes will be counted for
purposes of determining the presence or absence of a quorum for the transaction
of business, but will not be counted for purposes of determining the number of
votes cast with respect to a proposal.
A majority of the outstanding shares constitutes the quorum required to
transact business at the Annual Meeting.
The cost of this solicitation will be borne by the Company. In
addition, the Company may reimburse brokerage firms and other persons
representing beneficial owners of shares for their expenses in forwarding
solicitation material to such beneficial owners. Proxies may also be solicited
by certain of the Company's directors, officers and regular employees, without
additional compensation, personally or by telephone, telegram or facsimile.
SHAREHOLDER PROPOSALS FOR THE NEXT ANNUAL MEETING
Any proposal to be presented at the Company's 1997 Annual Meeting of
Shareholders must be received at the Company's principal office no later than
March 3, 1997 in order to be considered for inclusion in the Company proxy
materials for such meeting. Any such proposals must be submitted in writing and
addressed to the attention of the Company's Corporate Secretary at 3236 Scott
Boulevard, Santa Clara, California 95054.
PROPOSAL NO. ONE
ELECTION OF DIRECTORS
NOMINEES
The Bylaws of the Company provide for a Board of five directors. Unless
otherwise instructed, the proxy holders will vote the proxies received by them
for management's five nominees named below,
-2-
<PAGE> 5
all of whom are presently directors of the Company. In the event that any
nominee of the Company is unable or declines to serve as a director at the time
of the Annual Meeting, the proxies will be voted for any nominee who shall be
designated by the present Board of Directors to fill the vacancy. It is not
expected that any nominee will be unable or will decline to serve as a director.
The term of office of each person elected as a director will continue until the
next Annual Meeting of Shareholders or until his successor has been elected and
qualified.
The names of the nominees, and certain information about them, are set
forth below.
<TABLE>
<CAPTION>
Director
Name Age(1) Since Principal Occupation or Employment
- ----------------------------- ------ -------- -------------------------------------------------
<S> <C> <C> <C>
Tamer Husseini 53 1984 Chairman of the Board, President and Chief Executive
Officer of the Company
Robert C. Mullaley (2) 69 1984 Private investor and consultant
William D. Rasdal (3) 62 1984 Chairman of the Board and Chief Executive Officer of
SymmetriCom, Inc.
Charles P. Waite (3) 66 1984 General Partner of Greylock Ventures Limited
Partnership
William H. Younger, Jr. (2) 46 1984 General Partner of Sutter Hill Ventures
</TABLE>
- -----------------------------
(1) As of the Record Date
(2) Member of the Audit Committee
(3) Member of the Compensation Committee
Mr. Husseini, a founder of the Company, has served as its Chairman of
the Board, President ad Chief Executive Officer since the Company's organization
in 1984. Prior to founding the Company, Mr. Husseini was employed by Granger
Associates, Inc. ("Granger"), a telecommunications company, as Vice President
from 1982 until 1984. Before joining Granger, Mr. Husseini was employed by
Avantek, Inc. ("Avantek"), a manufacturer of integrated circuits and components
for wireless communications applications and now a subsidiary of
Hewlett-Packard, from 1972 until 1982, most recently as General Manager of the
Microwave Transistor Division.
Mr. Mullaley has served on Celeritek's Board of Directors since the
Company's organization in 1984. Since 1982, Mr. Mullaley has worked as a
consultant and private investor. From 1976 until 1982, Mr. Mullaley served as
Vice President and General Manager of Avantek's Telecommunications Division.
Prior to his service with Avantek, Mr. Mullaley spent 24 years with Collins
Radio Company (later acquired by Rockwell International Corporation) where he
held various management positions including Vice President of Operations,
Vice President and Chief Financial Officer and Senior Vice President and
Group Executive.
-3-
<PAGE> 6
Mr. Rasdal has served on Celeritek's Board of Directors since the
Company's organization in 1984. He is currently Chairman of the Board and Chief
Executive Officer of SymmetriCom, Inc. (formerly Silicon General), a position he
has held since 1989. Mr. Rasdal joined SymmetriCom in 1985 as President and
Chief Executive Officer. Prior to his employment with SymmetriCom, Mr. Rasdal
was employed by Granger as President and Chief Operating Officer. Prior to his
employment with Granger, Mr. Rasdal served as Vice President and General Manager
of Avantek's Microwave Integrated Circuit and Semiconductor Operations.
Mr. Waite has served on Celeritek's Board of Directors since the
Company's organization 1984. He is a General Partner of Greylock Ventures
Limited Partnership, a venture capital firm he co-founded in 1965 ("Greylock").
Mr. Waite also serves on the Board of Directors of Teltone Corporation.
Mr. Younger has served on Celeritek's Board of Directors since the
Company's organization in 1984. He is currently a General Partner of Sutter Hill
Ventures, a California Limited Partnership and a venture capital firm ("Sutter
Hill"), where he has been employed since 1981. Mr. Younger also serves on the
Board of Directors of Cor Therapeutics Inc., Forte Software, Inc. and Oasis
HealthCare Holding Corp.
VOTE REQUIRED; RECOMMENDATION OF BOARD OF DIRECTORS
The five candidates receiving the highest number of affirmative votes
of the shares present or represented and entitled to vote for them shall be
elected as directors. THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE
NOMINEES SET FORTH HEREIN.
THE BOARD OF DIRECTORS AND ITS COMMITTEES
The Board of Directors has an Audit Committee and a Compensation
Committee. There is no Nominating Committee or a committee performing the
functions of a nominating committee. The Audit Committee monitors the
performance of the independent auditors, recommends their engagement or
dismissal to the Board of Directors and monitors the Company's internal
financial and accounting organization and financial reporting. The Compensation
Committee recommends executive compensa tion arrangements for action by the
Board as a whole. During the fiscal year ended March 31, 1996 (the "1996 Fiscal
Year"), the Audit Committee held one meeting and the Compensation Committee held
one meeting.
During the 1996 Fiscal Year, there were seven meetings of the Board of
Directors. Each of the Company's present directors attended at least 75% of the
aggregate of (i) the total number of meetings of the Board of Directors and (ii)
the total number of meetings of committees of the Board of Directors on which
such person served during the 1996 Fiscal Year.
-4-
<PAGE> 7
DIRECTOR COMPENSATION
Non-employee directors of the Company are paid $1,500 for each Board
meeting attended. The Company also reimburses its directors for certain expenses
incurred by them in their capacity as directors or in connection with attendance
at Board meetings. In addition, each non-employee director of the Company is
eligible to participate in the Company's Outside Directors' Stock Option Plan
(the "Plan"). Under the terms of the Plan, each non-employee director
automatically receives a nonstatutory option to purchase 6,000 shares of the
Company's Common Stock, (the "First Option Grant") on the later of the
consummation of the Company's initial public offering or the date on which the
optionee first becomes a director of the Company. The vesting of the First
Option Grant is based on continued service as a director at the rate of 25% of
the shares issuable upon exercise of such option per year over a four-year
period. Beginning four years after the First Option Grant, each non-employee
director shall automatically be granted an option to purchase 1,500 additional
shares of Common Stock based on continued service as a director, all of which
option shares vest one year after the date of grant. During the 1996 Fiscal
Year, and in connection with the consummation of the Company's initial public
offering, directors Mullaley, Rasdal, Waite and Younger were each granted an
option to purchase 6,000 shares under the Plan at a per share exercise price of
$7.50.
PROPOSAL NO. TWO
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
OF THE COMPANY
Ernst & Young LLP, Certified Public Accountants, have been the
independent auditors for the Company since 1993 and, upon recommendation of the
Audit Committee, their reappointment as independent auditors for the fiscal year
ending March 31, 1997 has been approved by the Board of Directors, subject to
ratification by the shareholders.
The Company has been advised by Ernst & Young LLP that neither it nor
any of its members has had any relationship with the Company or any of its
affiliates during the past three years other than as independent auditors. The
Company has been advised that a representative of Ernst & Young LLP will be
present at the Annual Meeting, will be available to respond to appropriate
questions, and will be given an opportunity to make a statement if he or she so
desires.
VOTE REQUIRED; RECOMMENDATION OF THE BOARD OF DIRECTORS
Although not required to be submitted for shareholder approval, the
Board of Directors has conditioned its appointment of its independent auditors
upon receiving the affirmative vote of a majority of the shares represented, in
person or by proxy, and voting at the Annual Meeting. In the event the
shareholders do not approve the selection of Ernst & Young LLP, the appointment
of independent auditors will be reconsidered by the Board of Directors. THE
BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" THIS PROPOSAL.
-5-
<PAGE> 8
OTHER INFORMATION
COMPLIANCE WITH SECTION 16 OF THE SECURITIES EXCHANGE ACT OF 1934
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 (10%)
of a registered class of the Company's equity securities, to file certain
reports regarding ownership of, and transactions in, the Company's securities
with the Securities and Exchange Commission (the "SEC"). Such officers,
directors and ten percent (10%) shareholders are also required by SEC rules to
furnish the Company with copies of all Section 16(a) forms that they file.
Based solely on its review of such forms furnished to the Company and
written representations from certain reporting persons, the Company believes
that all filing requirements applicable to the Company's executive officers,
directors and more than ten percent (10%) shareholders were complied with during
the 1996 Fiscal Year.
SHARE OWNERSHIP BY PRINCIPAL SHAREHOLDERS AND MANAGEMENT
The following table sets forth the beneficial ownership of Common Stock
of the Company as of May 31, 1996, by (i) all persons known to the Company to be
the beneficial owners of more than 5% of the Company's Common Stock, (ii) the
Company's Chief Executive Officer, (iii) the four most highly compensated
executive officers other than the Chief Executive Officer, (iv) each director
and (v) all directors and executive officers as a group. A total of 6,951,415
shares of the Company's Common Stock was outstanding as of May 31, 1996.
-6-
<PAGE> 9
<TABLE>
<CAPTION>
Shares Approximate
Beneficially Percent
Name and Address Owned Owned
- ---------------------------- ------------ -----------
<S> <C> <C>
William H. Younger(1)..................................... 1,117,616 16.1%
Sutter Hill Ventures
755 Page Mill Road
Palo Alto, CA 94304
Charles P. Waite(2)....................................... 817,453 11.8%
Greylock Ventures Limited Partnership
One Federal Street
Boston, MA 02110
Venrock Associates(3)..................................... 481,884 6.9%
755 Page Mill Road
Palo Alto, CA 94304
Mayfield V(4)............................................. 333,399 4.8%
Tamer Husseini(5)......................................... 286,650 4.1%
Robert D. Jones(6)........................................ 185,481 2.7%
Gary J. Policky(7)........................................ 142,430 2.0%
Robert C. Mullaley(8)..................................... 81,646 1.2%
Richard G. Finney(9)...................................... 67,171 *
Margaret E. Smith(10)..................................... 48,199 *
William D. Rasdal(11)..................................... 39,572 *
All directors and executive officers
as a group (9 persons)(12)............................. 2,786,218 39.6%
</TABLE>
- -----------------------
* Less than one percent (1%).
(1) Includes 565,134 shares owned by Sutter Hill. Also includes 23,316 shares
beneficially owned or held of record by Mr. William H. Younger, Jr., 22,704
shares of which are held by The Younger Living Trust as to which Mr.
Younger shares vesting and disposition power and 506,462 shares held of
record by four other individuals or their related family entities. These
five individuals are the general partners of a partnership that is the
general partner of Sutter Hill and share voting and investment power with
respect to the shares owned by Sutter Hill. Mr. Younger disclaims
beneficial ownership of shares held by Sutter Hill and individuals and
entities associated with Sutter Hill, except as to the shares held of
record in his name and his proportionate partnership interest in the shares
held of record by Sutter Hill.
(2) Represents 817,453 shares held by Greylock, of which Mr. Waite is a general
partner. Mr. Waite may be deemed to share voting and dispositive power with
regard to such shares. Mr. Waite disclaims beneficial ownership of such
shares except as to those shares in which he has a pecuniary interest.
(3) Includes 149,172 shares owned by Venrock Associates II, L.P. ("Venrock").
There are seven individuals who are general partners of Venrock, none of
whom is an officer or director of the Company. The principals of Venrock
disclaim beneficial ownership of all shares held by all the foregoing funds
except to the extent of their pecuniary interests therein.
(4) There are four individuals who are general partners of the general
partner of Mayfield V, none of whom is an officer or director of the
Company. The principals of Mayfield V disclaim beneficial ownership of
all shares held by all the foregoing funds except to the extent of
their pecuniary interests therein.
(5) Includes options to purchase 22,500 shares of Common Stock exercisable
within 60 days of May 31, 1996.
-7-
<PAGE> 10
(6) Represents 177,981 shares held by The Jones Living Trust as to which Mr.
Jones shares voting and dispositive power and options to purchase 7,500
shares of Common Stock exercisable within 60 days of May 31, 1996.
(7) Includes options to purchase 7,500 shares of Common Stock exercisable
within 60 days of May 31, 1996.
(8) Includes 81,646 shares held by The Mullaley Family Trust as to which Mr.
Mullaley shares voting and dispositive power.
(9) Includes options to purchase 4,584 shares of Common Stock exercisable
within 60 days of May 31, 1996.
(10) Includes options to purchase 35,625 shares of Common Stock exercisable
within 60 days of May 31, 1996.
(11) Includes 32,072 shares held by The Rasdal Family Trust as to which Mr.
Rasdal shares voting and dispositive power.
(12) Includes options to purchase an aggregate of 77,709 shares of Common Stock
exercisable within 60 days of May 31, 1996.
EXECUTIVE OFFICER COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth compensation earned in the last two
fiscal years by (i) the Company's Chief Executive Officer and (ii) the four most
highly compensated executive officers other than the Chief Executive Officer who
were serving as executive officers at the end of the 1996 Fiscal Year (together,
the "Named Officers").
<TABLE>
<CAPTION>
Long Term
Compensation
Annual Compensation Awards
--------------------------- ------------
Securities All Other
Name and Salary Bonus Underlying Compensation
Principal Position Year ($) ($) Options(#) ($)(1)
- ---------------------------- ------ -------- --------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Tamer Husseini 1996 211,106 113,700 30,000 1,881
President and Chief 1995 187,312 17,606 -- 1,813
Executive Officer
- -------------------------------------------------------------------------------------------------------------------
Robert D. Jones 1996 134,716 70,685 10,000 5,499
Vice President 1995 131,624 61,956 -- 5,499
- -------------------------------------------------------------------------------------------------------------------
Richard G. Finney 1996 137,457 25,000 10,000 1,522
Vice President 1995 127,888 8,399 -- 1,501
- -------------------------------------------------------------------------------------------------------------------
Gary J. Policky 1996 147,666 12,000 10,000 1,777
Vice President 1995 143,590 6,213 -- 1,713
- -------------------------------------------------------------------------------------------------------------------
Margaret E. Smith 1996 134,568 25,000 20,000 622
Vice President 1995 102,162 2,633 22,500 605
</TABLE>
- --------------
(1) Represents premiums paid on term life insurance and supplemental
accidental, death and dismemberment insurance.
-8-
<PAGE> 11
OPTION GRANTS IN LAST FISCAL YEAR
The following table sets forth, as to the Named Officers, certain
information relating to stock options granted during the 1996 Fiscal Year.
<TABLE>
<CAPTION>
Potential Realizable
Value at Assumed
Annual Rates of Stock
Price Appreciation
Individual Grants for Option Term(4)
---------------------------------------------------------------- ------------------------
Number of
Securities % of Total
Underlying Options
Options Granted to Exercise or
Granted Employees in Base Price Expiration
Name (#) Fiscal Year(1) ($/Sh)(2) Date(3) 5% ($) 10% ($)
------ ---------- -------------- ----------- ---------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Tamer Husseini 30,000 13.5% 10.00 03/01/06 188,668 478,123
Robert D. Jones 10,000 4.5 10.00 03/01/06 62,889 159,374
Richard G. Finney 10,000 4.5 10.00 03/01/06 62,889 159,374
Gary J. Policky 10,000 4.5 10.00 03/01/06 62,889 159,374
Margaret E. Smith 20,000 9.0 10.00 03/01/06 125,779 318,748
</TABLE>
- --------------
(1) The total number of shares subject to options granted to employees during
the 1996 Fiscal Year was 221,500.
(2) The exercise price is equal to the closing price of the Company's Common
Stock on the date of grant.
(3) Options may terminate before their expiration date if the optionee's status
as an employee or consultant is terminated or upon optionee's death.
(4) The Potential Realizable Value is calculated based on the fair market value
on the date of grant, which is equal to the exercise price of options
granted in the 1996 Fiscal Year, assuming that the stock appreciates in
value from the date of grant until the end of the option term at the annual
rate specified (5% and 10%). Potential Realizable Value is net of the
option exercise price. The assumed rates of appreciation are specified in
rules of the SEC, and do not represent the Company's estimate or projection
of future stock price. Actual gains, if any, resulting from stock option
exercises and Common Stock holdings are dependent on the future performance
of the Common Stock, overall stock market conditions, as well as the option
holders' continued employment through the exercise/vesting period. There
can be no assurance that the amounts reflected in this table will be
achieved.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR END OPTION
VALUES
The following table provides information with respect to option
exercises in the 1996 Fiscal Year by the Named Officers and the value of such
officers' unexercised options at the close of business on March 29, 1996 (the
last trading day prior to the end of the 1996 Fiscal Year).
-9-
<PAGE> 12
<TABLE>
<CAPTION>
Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money Options at
Shares Options at Fiscal Year End(#) Fiscal Year End($)(3)
Acquired on Value ------------------------------- -----------------------------
Name Exercise(#) Realized($)(1) Exercisable(2) Unexercisable Exercisable Unexercisable
- -------------------- ----------- -------------- -------------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Tamer Husseini 15,000 22,500 22,500(4) 30,000 167,355 13,140
Robert D. Jones 0 --- 17,500(5) 10,000 145,165 4,380
Richard G. Finney 15,418 39,378 3,959(6) 15,625 29,447 46,219
Gary J. Policky 0 --- 17,500(7) 10,000 145,165 4,380
Margaret E. Smith 4,500 11,250 38,751(8) 36,250 299,481 129,628
</TABLE>
- --------------
(1) Market value of underlying securities based on the closing price of the
Company's Common Stock on the date of exercise, minus the exercise price.
(2) Options granted under the Company's 1985 Stock Incentive Program are fully
exercisable from their date of grant, whether or not vested. Unvested
shares purchased upon exercise of an option are subject to a repurchase
option in favor of the Company, which repurchase option lapses over time.
(3) Market value of underlying securities based on the closing price of $10.438
of the Company's Common Stock on March 29, 1996, (the last trading day
prior to the end of the Company's 1996 Fiscal Year), minus the exercise
price.
(4) Includes 11,718 vested shares and 10,782 unvested shares as of March 31,
1996.
(5) Includes 13,906 vested shares and 3,594 unvested shares as of March 31,
1996.
(6) Includes 1,562 vested shares and 2,397 unvested shares as of March 31,
1996.
(7) Includes 13,906 vested shares and 3,594 unvested shares as of March 31,
1996.
(8) Includes 27,083 vested shares and 11,668 unvested shares as of March 31,
1996.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Company's Compensation Committee, consisting of directors Charles
P. Waite and William D. Rasdal, reviews and approves compensation and benefits
for the Company's executive officers, and grants options to executive officers
under the Option Plans. No interlocking relationship exists between the
Company's Board of Directors or the compensation committee of any other company,
nor has any such interlocking relationship existed in the past.
CERTAIN TRANSACTIONS
From October 1, 1992 to March 31, 1996, the Company granted incentive
stock options in the following amounts exercisable at the following per share
prices to the Named Officers pursuant to the Company's option plans: Mr.
Husseini, 22,500 shares in February 1994 at $7.00 per share and 30,000 shares in
March 1996 at $10.00 per share; Mr. Jones, 7,500 shares in February 1994 at
$7.00 per share and 10,000 shares in March 1996 at $10.00 per share; Mr. Finney,
5,001 shares in February 1994 at $7.00 per share, 7,500 shares in March 1995 at
$3.00 per share, and 10,000 shares in March 1996 at $10.00 per share; Mr.
Policky, 7,500 shares in February 1994 at $7.00 per share and 10,000 shares in
March 1996 at $10.00 per share; and Ms. Smith, 47,500 shares between January
1994 and March 1995 at exercise prices of $5.00 and $3.00 per share and 20,000
shares in March 1996 at $10.00 per share.
-10-
<PAGE> 13
In March 1995, the Company conducted a stock option repricing program pursuant
to which all options theretofore granted with exercise prices greater than $3.00
per share were exchanged for options with exercise prices of $3.00 per share.
All such options have ten-year terms and vest over a four-year period.
Notwithstanding anything to the contrary set forth in any of the
Company's previous filings under the Securities Act of 1933, as amended, or the
Securities Exchange Act of 1934, as amended, that might incorporate future
filings, including this Proxy Statement, in whole or in part, the following
report and the Performance Graph on page 13 shall not be deemed to be
"soliciting material" or to be "filed" with the Securities and Exchange
Commission, nor shall such information be incorporated by reference into any
further filing under the Securities Act of 1933 or the Securities Exchange Act
of 1934, except to the extent that the Company specifically incorporates it by
reference into any such filing.
COMPENSATION COMMITTEE REPORT
The Compensation Committee of the Board of Directors determines the
compensation of the Company's Chief Executive Officer and its other executive
officers. The Committee is composed entirely of outside directors. In addition
to determining the salary and bonus compensation for all of the Company's
executive officers, the Committee determines the nature and timing of awards and
grants under the Company's Stock Option Plans.
The goals of the compensation program are to align compensation with
the Company's performance and objectives and to attract, retain and reward
executive officers whose contributions are critical to the long-term success of
the Company.
The primary components of the Company's compensation package are
salary, bonuses and stock options.
Salary
The level of base salary for executive officers is set based upon their
scope of responsibility, level of experience and individual performance. The
salary range for each position is reviewed against the Radford Survey (a third
party compensation survey) data for high-tech companies with similar sales
volumes located on the West Coast. Additionally, the Committee takes into
account general business and economic conditions. The Company sets its salary to
be competitive with the marketplace. None of the factors considered is assigned
a specific weight.
Bonuses
The Company's executive bonus plan provides the opportunity for annual
cash bonuses based on accomplishment of specific individual performance
objectives and Company profit objectives. These objectives are set at the
beginning of the fiscal year based on the Company's long-term and short-term
objectives, and performance against these objectives is assessed at the end of
the year.
-11-
<PAGE> 14
Stock options
The Committee believes that the granting of stock options is an
important method of rewarding and motivating management by aligning management's
interests with the Company's shareholders. The Committee also recognizes that a
stock incentive program is a necessary element in a competitive compensation
package. The program utilizes a vesting schedule to encourage key employees of
the Company to continue in the employ of the Company and encourages employees to
maintain a long-term prospective. In determining the size of stock option
grants, the Committee focuses primarily on the Company's performance and the
perceived role of such executive in accomplishing these objectives as well as
the satisfaction of individual performance objectives. The Committee also
considers the number of outstanding unvested options which the officer holds and
the size of previous option awards to that officer. The Committee does not
assign specific weights to these items.
Compensation of the Chief Executive Officer
Mr. Tamer Husseini has been President, Chief Executive Officer and
Chairman of the Board since the founding of the Company in 1984. The Committee
used the same compensation policy described above for all executive officers to
determine Mr. Husseini's 1996 Fiscal Year compensation. In setting both the
cash-based and the equity-based elements of Mr. Husseini's compensation, the
committee considered competitive forces, the Company's performance and Mr.
Husseini's leadership in achieving the Company's long-term strategic goals.
During the 1996 Fiscal Year, Mr. Husseini received a salary of $211,000 and a
bonus of $113,700. During the 1996 Fiscal Year, Mr. Husseini was also granted
options to purchase 30,000 shares of the Company's Common Stock under the 1994
Stock Option Plan. Given the Company's improved financial performance in the
1996 Fiscal Year, its successful transition to commercial markets and the
completion of its initial public offering, the Committee believes Mr. Husseini's
1996 Fiscal Year compensation fairly and sufficiently rewards him for this
performance and will serve to retain him as a key employee on whom the Company
is dependent for its continued success.
Compensation Committee
William D. Rasdal
Charles P. Waite
-12-
<PAGE> 15
COMPARATIVE STOCK PERFORMANCE
The graph below compares the cumulative total shareholders' return on
the Company's Common Stock with the total return on the S & P 500 Index and the
S & P High Technology - Composite Index over the same period for the months of
December 1995 through March 1996 (assuming the investment of $100 in the
Company's Common Stock, the S & P 500 Index and the S & P High Technology
Composite Index, and reinvestment of all dividends). The Company's Common Stock
began trading on the Nasdaq Stock Market on December 20, 1995.
PERFORMANCE GRAPH
CELERITEK, INC.
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN
CELERITEK, INC., S & P 500 INDEX AND
S & P HIGH TECHNOLOGY - COMPOSITE INDEX
TOTAL SHAREHOLDER RETURNS - DIVIDENDS REINVESTED
FISCAL YEAR: MARCH
<TABLE>
<CAPTION>
RETURN
12/20/95 RETURN RETURN RETURN
COMPANY\INDEX NAME 12/31/95 1/31/96 2/29/96 3/31/96
===========================================================================================
<S> <C> <C> <C> <C>
CELERITEK INC 41.67 -15.29 4.17 11.33
S&P 500 INDEX 1.65 3.40 0.93 0.96
HIGH TECH COMPOSITE 0.51 3.16 5.69 -3.09
</TABLE>
<TABLE>
<CAPTION>
INDEXED\CUMULATIVE RETURNS
BASE
PERIOD RETURN RETURN RETURN RETURN
COMPANY\INDEX NAME 12/20/95 12/31/95 1/31/96 2/29/96 3/31/96
===========================================================================================
<S> <C> <C> <C> <C> <C>
CELERITEK INC 100 141.67 120.00 125.00 139.16
S&P 500 INDEX 100 101.65 105.11 106.08 107.10
HIGH TECH COMPOSITE 100 100.51 103.68 109.58 106.20
</TABLE>
-13-
<PAGE> 16
OTHER MATTERS
The Company knows of no other matters to be submitted to the meeting.
If any other matters properly come before the meeting, it is the intention of
the persons named in the enclosed form of Proxy to vote the shares they
represent as the Board of Directors may recommend.
THE BOARD OF DIRECTORS
Dated: July 1, 1996
-14-
<PAGE> 17
DETACH HERE
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
CELERITEK, INC.
1996 ANNUAL MEETING OF SHAREHOLDERS
The undersigned shareholder of Celeritek, Inc., a California
corporation, hereby acknowledges receipt of the Notice of Annual
P Meeting of Shareholders and Proxy Statement, each dated July 1, 1996,
and hereby appoints Tamer Husseini and Margaret E. Smith, and each of
R them, proxies and attorneys-in-fact, with full power to each of
substitution, on behalf and in the name of the undersigned, to
O represent the undersigned at the 1996 Annual Meeting of Shareholders of
Celeritek, Inc. to be held on August 1, 1996 at 9:00 a.m., at the
X offices of the Company, at 3236 Scott Boulevard, Santa Clara,
California 95054 and at any adjournments thereof, and to vote all
Y shares of Common Stock which the undersigned would be entitled to vote
if then and there personally present, on the matters set forth below:
THIS PROXY WILL BE VOTED AS DIRECTED OR, IF NO DIRECTION IS INDICATED,
WILL BE VOTED "FOR" THE ELECTION OF DIRECTORS NAMED HEREIN, "FOR" EACH PROPOSAL
LISTED, AND AS SAID PROXIES DEEM ADVISABLE ON SUCH OTHER MATTERS AS MAY COME
BEFORE THE MEETING. EITHER OF SUCH ATTORNEYS OR SUBSTITUTES SHALL HAVE AND MAY
EXERCISE ALL OF THE POWERS OF SAID ATTORNEYS-IN-FACT HEREUNDER.
------------
CONTINUED, AND TO BE SIGNED, ON THE REVERSE SIDE SEE REVERSE
SIDE
------------
-1-
<PAGE> 18
DETACH HERE
[X] Please mark
votes as in
this example
1. ELECTION OF DIRECTORS:
NOMINEES: Tamer Husseini, Robert C. Mullaley, William D. Rasdal, Charles P.
Waite, William H. Younger, Jr.
FOR WITHHELD
[ ] [ ]
[ ]
---------------------------------------------------------------------
(INSTRUCTION: To withhold authority to vote for any individual
nominee, write their name in the space provided above.)
2. Proposal to ratify the appointment of Ernst & Young LLP as the
independent auditors of the Company for the fiscal year ending March
31, 1997.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
and upon such other matter or matters which may properly come before the meeting
and any adjournment(s) thereof.
(This Proxy should be dated, signed by the share-
holder(s) exactly as his or her name appears hereon, and
returned promptly in the enclosed envelope. Persons
signing in a fiduciary capacity should so indicate. If
shares are held by joint tenants or as community
property, both should sign.)
Signature: Date: Signature: Date:
--------------- -------- -------------- -------
-2-
