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[LOGO]
35 TECHNOLOGY DRIVE
WARREN, NJ 07059
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 28, 1998
TO THE STOCKHOLDERS:
The Annual Meeting of Stockholders of ANADIGICS, Inc., a Delaware
corporation ("ANADIGICS"), will be held on Thursday, May 28, 1998 at 10:00
o'clock a.m. (E.S.T.), at the Somerset Hills Hotel, 200 Liberty Corner Road
(Route 525), Warren, New Jersey 07052, for the purpose of considering and acting
upon the following:
1) The election of three Class III Directors of ANADIGICS to hold office
until 2001.
2) The ratification of Ernst & Young LLP as independent auditors of
ANADIGICS, Inc. for the fiscal year ending December 31, 1998.
3) The transaction of such other business as may properly be brought before
the meeting or any adjournment thereof.
Only stockholders of record at the close of business on April 3, 1998 are
entitled to notice of and to vote at the Annual Meeting of Stockholders and any
adjournment or postponement thereof. Admission to the Annual Meeting will be by
ticket only. If you are a registered stockholder planning to attend the meeting,
please check the appropriate box on the proxy card and retain the bottom portion
of the card as your admission ticket. If your shares are held through an
intermediary such as a bank or broker, follow the instructions in the Proxy
Statement to obtain a ticket. For at least ten (10) days prior to the Annual
Meeting, a list of stockholders entitled to vote at the Annual Meeting will be
open for the examination of any stockholder, for any purpose germane to the
Annual Meeting, during ordinary business hours at the office of ANADIGICS, Inc.
Stockholders are cordially invited to attend the Annual Meeting. However,
whether or not a stockholder plans to attend, each stockholder is urged to sign,
date, and return promptly the enclosed proxy in the accompanying envelope.
The Annual Report, Proxy Statement and Proxy are enclosed with this notice
and were mailed at New York, NY on or about April 28, 1998.
By order of the Board of Directors
John F. Lyons
SECRETARY
IMPORTANT
Please sign, date, and return the enclosed Proxy immediately whether or not
you plan to attend the meeting. A return envelope, which requires no postage if
mailed in the United States, is enclosed for that purpose.
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[LOGO]
35 TECHNOLOGY DRIVE
WARREN, NJ 07059
PROXY STATEMENT FOR
ANNUAL MEETING OF STOCKHOLDERS
SOLICITATION OF PROXIES
This Proxy Statement, which is being mailed to stockholders on or about
April 28, 1998, is furnished in connection with the solicitation by the Board of
Directors of ANADIGICS, Inc., a Delaware corporation ("ANADIGICS" or the
"Company"), of proxies for use at its Annual Meeting of Stockholders TO BE HELD
ON THURSDAY, MAY 28, 1998, AT 10:00 O'CLOCK A.M. (E.S.T.), AT THE SOMERSET HILLS
HOTEL, 200 LIBERTY CORNER ROAD (ROUTE 525), WARREN, NEW JERSEY 07052, and at any
adjournment of the Annual Meeting.
Attendance at the Annual Meeting will be limited to stockholders as of the
record date, their authorized representatives and guest of the Company.
Admission will be by ticket only. For registered stockholders, the bottom
portion of the proxy card enclosed with the Proxy Statement is their Annual
Meeting ticket. Beneficial owners with shares held through an intermediary, such
as a bank or broker, should request tickets in writing from Investor Relations,
ANADIGICS, Inc., 35 Technology Drive, Warren, New Jersey 07059, and include
proof of ownership, such as a bank or brokerage firm account statement or a
letter from the broker, trustee, bank or nominee holding their stock, confirming
beneficial ownership. Stockholders who do not obtain tickets in advance may
obtain them upon verification of ownership at the Registration Desk on the day
of the meeting. Admission to the Annual Meeting will be facilitated if tickets
are obtained in advanced. Tickets may be issued to others at the discretion of
the Company.
At the meeting, stockholders will be asked to elect three Class III
Directors and to ratify the appointment of auditors. Because many of our
stockholders are unable personally to attend the Annual Meeting, the Board of
Directors solicits the enclosed proxy so that each stockholder is given an
opportunity to vote. This proxy enables each stockholder to vote on all matters
which are scheduled to come before the meeting. When the proxy card is returned
properly executed, the stockholder's shares will be voted according to the
stockholder's directions. Stockholders are urged to specify their choices by
marking the appropriate boxes on the enclosed proxy card. If no choice has been
specified, the shares will be voted FOR the election of the Director-nominees
listed below and FOR the ratification of the appointment of Ernst & Young LLP as
independent auditors.
The Board of Directors knows of no other business which will be presented at
the meeting. If, however, other matters are properly presented, the persons
named in the enclosed proxy will vote the shares represented thereby in
accordance with their judgment on such matters.
A proxy may be revoked by giving the Secretary of ANADIGICS, Inc. written
notice of revocation at any time before the voting of the shares represented by
the proxy. A stockholder who attends the meeting may cancel a proxy at the
meeting.
QUORUM AND VOTING RIGHTS
The presence, in person or by proxy, of the holders of a majority of the
issued and outstanding shares of the Company's common stock, par value $.01 per
share, entitled to vote (exclusive of shares held by or for the account of the
Company) is necessary to constitute a quorum at the Annual Meeting of
Stockholders. Abstentions and broker non-votes shall be counted for purposes of
determining whether a quorum is present. The affirmative vote of a plurality of
the shares of Common Stock present in person or
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by proxy at the meeting is required for the election of directors. The
affirmative vote of the holders of a majority of the shares of Common Stock
present in person or by proxy at the meeting is required for the approval
thereof with respect to each of the other matters to be presented at the
meeting. Only holders of record of Common Stock at the close of business on
April 3, 1998 are entitled to notice of and to vote at the Annual Meeting of
Stockholders and any adjournment or postponement thereof.
As of April 3, 1998, the Company had issued and outstanding 14,710,271
shares of Common Stock. Each share of Common Stock entitles the holder to one
vote upon each matter to be voted upon.
PRINCIPAL STOCKHOLDERS
The following tables lists all persons known to be the beneficial owner of
more than 5% of ANADIGICS, Inc. outstanding Common Stock as of March 15, 1998.
<TABLE>
<CAPTION>
% BENEFICIAL
NAME AND ADDRESS NUMBER OF SHARES OWNERSHIP
- ---------------------------------------------------------------------------------- ----------------- ---------------
<S> <C> <C>
Kopp Investment Advisors, Inc..................................................... 940,525(2) 6.4
7701 France Avenue South, Suite 500, Edina, MN 55435
</TABLE>
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(1) As reported by Kopp Investment Advisors, Inc. and related entities on
Schedule 13G filed with the Securities and Exchange Commission dated
February 9, 1998.
INFORMATION REGARDING DIRECTORS, NOMINEES AND EXECUTIVE OFFICERS
BOARD OF DIRECTORS
The Company's bylaws provide that the Board of Directors shall be divided
into three classes designated Class I, Class II and Class III, each class
consisting as nearly as possible of one-third of the total number of Directors
constituting the entire Board of Directors; provided, however, that in no case
will a decrease in the number of Directors shorten the term of any incumbent
Director. The Board of Directors is presently comprised of nine members.
The term of office for each Director in Class III expires at the Annual
Meeting in 1998; the term of office for each Director in Class I expires at the
Annual Meeting in 1999; and the term of office for each Director in Class II
expires at the Annual Meeting in 2000. At each annual meeting of stockholders,
directors will be elected for full terms of three years to succeed those
directors whose terms are expiring.
PROPOSAL I: ELECTION OF DIRECTORS
At the 1998 Annual Meeting, three Directors are to be elected to hold office
until the 2001 Annual Meeting of Stockholders. All of the nominees are currently
serving as Directors.
The Board of Directors has no reason to believe that any nominee will be
unable to serve if elected. If any nominee becomes unavailable for election,
then those shares voted for such nominee will be voted for the election of a
substitute nominee selected by the persons named in the enclosed proxy.
The nominees for Director will be elected if they receive the affirmative
vote of a plurality of the votes of the shares of Common Stock present in person
or by proxy and entitled to vote at the Annual Meeting. Any shares not voted
(whether by abstention, broker non-vote or votes withheld) are not counted as
votes cast for such individuals and will be excluded from the vote.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" EACH OF THE NOMINEES LISTED
BELOW:
2
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NOMINEES FOR TERMS EXPIRING IN 2001
(CLASS III DIRECTORS)
DAVID FELLOWS (AGE 45)
Mr. Fellows has served as a director of the Company since September 1994.
Mr. Fellows has served as Senior Vice President of Engineering and Technology at
Continental Cablevision, Inc., a division of US West Media Group, since 1992.
From 1987 until 1992, Mr. Fellows was employed by Scientific Atlanta's
Transmission Systems Business Division, where he served as President. Mr.
Fellows received his Bachelor Degree in Engineering and Applied Physics from
Harvard College and a Masters Degree in Electrical Engineering from Northeastern
University.
RONALD ROSENZWEIG (AGE 60)
Mr. Rosenzweig, a co-founder of ANADIGICS in 1985, has served as President,
Chief Executive Officer and a director of the Company since its inception and
serves as a director on the board of General Semiconductor. He was co-founder of
MSC. He served as President and CEO of MSC from 1968 to 1983. Mr. Rosenzweig
received his B.Ch.E degree from City College of New York.
LEWIS SOLOMON (AGE 64)
Mr. Solomon has served as a director of the Company since September 1994
and, previously, from 1985 to 1989. Mr. Solomon has been Chairman of G&L
Investments since 1990 in addition to serving as a director on the boards of
Microelectronics Packaging Inc., ICTV Inc., Anacomp Inc., Computer Products Inc.
And Terayon Corporation. Prior to joining G&L Investments, Mr. Solomon was an
Executive Vice President with Alan Patricof Associates from 1983 to 1986, and a
Senior Vice President of General Instrument from 1967 to 1983. Mr. Solomon
received a Bachelor Degree in Physics from St. Joseph's College and a Masters
Degree in Industrial Engineering from Temple University.
The following Directors of the Company will continue to serve in accordance
with their existing terms.
DIRECTORS CONTINUING IN OFFICE UNTIL 1999
(CLASS I DIRECTORS)
CHARLES BURTON (AGE 52)
Mr. Burton has served as a director of the Company since 1990. He is
Managing Director of Philadelphia Ventures Inc., which he joined in 1984. Prior
to 1984 he was a Vice President of CIGNA Corporation. Mr. Burton graduated from
Gettysburg College and received an MBA from the Wharton Graduate School at the
University of Pennsylvania. He is also a director of Membrex, Inc., Microsource,
Inc., Visual Edge Technology, Inc. and several private companies.
BRUNS GRAYSON (AGE 50)
Mr. Grayson has served as a director of the Company since 1985. He is
managing General Partner of Calvert Capital Management Co., which manages ABS
Ventures. Before joining Calvert Capital Management Co., Mr. Grayson was an
associate of Adler & Co. and McKinsey & Co. in New York. He is a director of
Cascade Communications and several private companies. He has a B.A. from
Harvard, an M.A. from Oxford University and a J.D. from the University of
Virginia.
3
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HARRY REIN (AGE 53)
Mr. Rein has served as a director of the Company since 1985. He was a
principal founder of Canaan Venture Partners in 1987 and has served as Managing
General Partner since its inception. From 1979 to 1987, Mr. Rein held various
positions at GE, directing several of GE's lighting businesses as general
manager before becoming President and CEO of GE Venture Capital Corporation. He
is a director of Perceptron, Inc. and several private companies.
DIRECTORS CONTINUING IN OFFICE UNTIL 2000
(CLASS II DIRECTORS)
PAUL BACHOW (AGE 46)
Mr. Bachow has served as a director of the Company since January 1993. He
has been President of Bachow & Associates, Inc. since its formation in December
1989, and its predecessors, Bachow and Elkin Co., Inc. and Paul S. Bachow
Company from December 1985 to December 1989. Mr. Bachow also acts as President
of the general partner of each of Paul S. Bachow Co-Investment Fund, L.P.,
Bachow Investment Partners III, L.P. and Bachtel Cellular Liquidity, L.P. He has
a B.A. from American University, a J.D. from Rutgers University and a Masters
Degree in tax law from New York University, and is a C.P.A. Mr. Bachow serves as
director of Deb Shops, Inc., a publicly traded company, and several private
companies.
GEORGE GILBERT (AGE 63)
Mr. Gilbert, a co-founder of ANADIGICS in 1985, has served as Executive Vice
President, Chief Operating Officer and a director of the Company since its
inception. He was co-founder of Microwave Semiconductor Corporation ("MSC"), a
manufacturer of microwave silicon and GaAs transistors and amplifiers, with Mr.
Rosenzweig and served as Executive Vice President of Semiconductor Operations of
MSC from 1968 to 1983. Mr. Gilbert has a B.S. in Physics from Georgia Tech.
CHARLES HUANG (AGE 50)
Dr. Huang, a co-founder of ANADIGICS in 1985, has served as Executive Vice
President and a director of the Company since its inception. He was director of
GaAs research and development and wafer fabrication services at Avantek from
1980 to 1984. Dr. Huang received his Ph.D.E.E. at the University of California,
Berkeley.
EXECUTIVE OFFICERS OF THE REGISTRANT
The current executive officers of the Company are as follows:
<TABLE>
<CAPTION>
NAME AGE POSITION
- ----------------------------------------------------- --- -----------------------------------------------------
<S> <C> <C>
Ronald Rosenzweig.................................... 60 President, Chief Executive Officer and Director
Charles Huang........................................ 50 Executive Vice President Marketing Research and
Business Development and Director
John F. Lyons........................................ 51 Senior Vice President and Chief Financial Officer
Bruce Diamond........................................ 37 Senior Vice President, Operations
Robert Bayruns....................................... 40 Vice President Business and Advanced Development
James Gilbert........................................ 34 Vice President, Device and Process Engineering
Sheo Khetan.......................................... 48 Vice President Manufacturing
Javed S. Patel....................................... 42 Vice President Sales and Marketing
Phillip Wallace...................................... 41 Vice President Design, Package and Test Engineering
</TABLE>
4
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Set forth below is certain information with respect to the Company's
executive officers. Officers are appointed to serve at the discretion of the
Board of Directors. There are no family relationships between executive officers
or directors of the Company except for Messrs. George Gilbert and James Gilbert,
who are father and son respectively. Information on Mr. Rosenzweig and Dr. Huang
is listed in the Director profile above.
Mr. Lyons joined ANADIGICS in 1987 as Director of Finance, was elected a
Vice President in 1989, and currently serves as Senior Vice President and Chief
Financial Officer. Prior to joining the Company, he served as Manager-Finance
Section for GE's Power Electronic Semiconductor Department from 1984 to 1987.
Mr. Lyons is a graduate of GE's Financial Management Program and has a B.A. in
Economics from Hamline University.
Mr. Diamond joined ANADIGICS in 1997 and currently serves as Senior Vice
President Operations. Prior to joining ANADIGICS, Mr. Diamond was employed by
National Semiconductor Company. Mr. Diamond received his B.S.E.E. from the
University of Illinois.
Mr. Bayruns joined ANADIGICS in 1985 and currently serves as Vice President
Business and Advanced Development. Prior to joining ANADIGICS, Mr. Bayruns was
employed by AT&T Bell Laboratories. Mr. Bayruns received his M.S.E.E. from
Rutgers University.
Mr. James Gilbert joined ANADIGICS in 1997 as Vice President, Device and
Process Engineering. Prior to joining ANADIGICS, Mr. Gilbert was employed by
Motorola Inc, Compound Semiconductor Technologies in Tempe, AZ. Mr. Gilbert
received his B.S.E.E. from Cornell University.
Mr. Khetan joined ANADIGICS in 1985 and currently serves as Vice President
of Manufacturing. Prior to joining ANADIGICS, Mr. Khetan was at Sprague Solid
State Scientific and, prior to that, at General Instrument. Mr. Khetan received
his Bachelor of Science Degree in Engineering from the Indian Institute of
Technology, a Masters of Science from State University of New York, and a
Masters Degree in Business Administration from Temple University.
Mr. Patel joined ANADIGICS in 1986 and currently serves as Vice President of
Sales and Marketing. Prior to joining ANADIGICS, Mr. Patel was employed by Alpha
Industries. From 1979 to 1984, Mr. Patel was a member of the Technical Staff of
RCA-Astroelectronics. Mr. Patel received his Bachelor of Science Degree and
Masters of Science Degree in Engineering from the University of Kansas and a
Masters Degree in Business Administration from Drexel University.
Mr. Wallace joined ANADIGICS in 1985 and currently serves as Vice President
Design, Package and Test Engineering. Prior to joining ANADIGICS, Mr. Wallace
was at the Westinghouse R&D Center in Pittsburgh, PA, and, prior to that, he was
with MSC. Mr. Wallace received his B.S.E.E. and M.Eng. (Electrical) from Cornell
University.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Mr. James Gilbert, Vice President, Device and Process Engineering, is the
son of Mr. George Gilbert, a Director.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Based on the Company's review of copies of all disclosure reports filed by
directors and executive officers of the Company pursuant to Section 16(a) of the
Securities Exchange Act of 1934, as amended, the Company believes that there was
compliance with all filing requirements of Section 16(a) applicable to directors
and executive officers of the Company during the fiscal year, except for the
December 31, 1996 conversion of employee stock purchase plan options with
respect to the following officers (Messrs. Rosenzweig, Gilbert, Huang, Lyons,
Bayruns, Khetan, Patel and Wallace) which were filed February 10, 1997.
5
<PAGE>
STOCK OWNERSHIP OF DIRECTORS AND MANAGEMENT
The following table sets forth as of March 20, 1998 certain information
about stock ownership of each Director and nominee for directorship, the Chief
Executive Officer and the next four most highly compensated executive officers,
and all Directors and executive officers as a group.
<TABLE>
<CAPTION>
COMMON STOCK
BENEFICIALLY % BENEFICIAL
NAME OWNED OWNERSHIP
- --------------------------------------------------------------------------------- ----------------- ---------------
<S> <C> <C>
Paul Bachow...................................................................... 138,430(1) (7)
Charles Burton................................................................... 95,395(1) (7)
David Fellows.................................................................... 34,500(1) (7)
Bruns Grayson.................................................................... 60,135(1) (7)
Harry Rein....................................................................... 217,492(1) 1.5
Lewis Solomon.................................................................... 24,500(1) (7)
Ronald Rosenzweig................................................................ 208,226(2) 1.4
George Gilbert................................................................... 72,913(3) (7)
Charles Huang.................................................................... 302,678(4) 2.0
John F. Lyons.................................................................... 114,322(5) (7)
Javed S. Patel................................................................... 59,762(6) (7)
All Directors and Executive Officers as a group, including 4 officers not named
above.......................................................................... 1,488,258 10.1
</TABLE>
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(1) Includes 34,500 shares of common stock issuable pursuant to options,
exercisable within 60 days.
(2) Includes 96,867 shares of common stock issuable pursuant to options
exercisable within 60 days.
(3) Includes 63,241 shares of common stock issuable pursuant to options
exercisable within 60 days.
(4) Includes 92,491 shares of common stock issuable pursuant to options
exercisable within 60 days.
(5) Includes 54,066 shares of common stock issuable pursuant to options
exercisable within 60 days.
(6) Includes 31,568 shares of common stock issuable pursuant to options
exercisable within 60 days.
(7) Less than 1%.
COMMITTEES OF THE BOARD
The standing committees of the ANADIGICS, Inc. Board of Directors are as
follows:
The Audit Committee is responsible for (i) determining the adequacy of the
Company's internal accounting and financial controls, (ii) reviewing the results
of the audit of the Company performed by the independent public accountants, and
(iii) recommending the selection of independent public accountants. Messrs.
Bachow, Burton and Solomon were members of the Audit Committee during fiscal
1997. The Audit Committee met twice during the 1997 fiscal year.
The Compensation Committee determines matters pertaining to the compensation
of certain executive officers of the Company and administers the Company's stock
option, incentive compensation, and employee stock purchase plans. Messrs.
Grayson and Rein were members of the Compensation Committee during fiscal 1997.
The Compensation Committee met twice during the 1997 fiscal year.
The Executive Committee has authority to act for the Board on most matters
during intervals between Board meetings. The Executive Committee consists of
Messrs. Bachow, Burton, Fellows, Rein, and Rosenzweig. The Executive Committee
met three times during the 1997 fiscal year.
During fiscal 1997, the Board of Directors met six times. Each of the
Directors attended at least 75% of the aggregate of all meetings the Board held.
6
<PAGE>
COMPENSATION AND OTHER TRANSACTIONS WITH DIRECTORS,
NOMINEES, AND EXECUTIVE OFFICERS
SUMMARY COMPENSATION TABLE
Shown below is information concerning the annual compensation for services
in all capacities to the Company for the last three fiscal years of those
persons who were at December 31, 1997 (i) the chief executive officer of the
Company and (ii) the other four most highly compensated officers of the Company
(collectively, the "named executive officers"):
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
AWARDS
ANNUAL COMPENSATION -------------
----------------------------------------- SECURITIES
OTHER ANNUAL UNDERLYING
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS(1) COMPENSATION(2) OPTIONS
- ------------------------------------------------ --------- ---------- ---------- ----------------- -------------
<S> <C> <C> <C> <C> <C>
Ronald Rosenzweig............................... 1997 $ 226,573 $ 198,375 $ 5,231 60,000
Chief Executive Officer 1996 $ 201,500 $ 106,352 6,776 37,500
1995 185,846 157,624 3,978 24,000
George Gilbert.................................. 1997 207,589 159,390 4,989 15,000
Executive Vice President 1996 189,586 92,841 3,024 30,000
1995 174,942 137,387 3,926 24,000
Charles Huang................................... 1997 196,954 151,800 2,553 45,000
Executive Vice President 1996 174,673 85,550 3,783 30,000
1995 161,038 126,435 9,085 24,000
John F. Lyons................................... 1997 158,604 121,440 894 30,000
Senior Vice President 1996 147,875 66,698 1,687 22,500
1995 136,134 98,533 3,640 11,550
Javed S. Patel.................................. 1997 139,731 97,290 90 15,000
Vice President 1996 130,019 58,641 1,081 9,000
1995 120,423 86,681 1,254 8,700
</TABLE>
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(1) Represents bonuses earned in 1997, 1996 or 1995 and payable during 1998,
1997 or 1996, respectively. The bonuses are payable as follows: 40% of each
bonus is payable during the first quarter of the respective year in which
the bonus is paid, and 20% of each such bonus is payable during the second,
third, and fourth quarters of the respective year in which the bonus is
paid. If a named executive officer is not employed with the Company at the
time of such bonus payment, the bonus payment is forfeited except for Mr.
Gilbert in which the 1997 earned bonus was paid in February 1998.
(2) Represents the value of income tax preparation services provided to each of
Messrs. Rosenzweig and Gilbert by the Company's auditors and premiums paid
for medical insurance covering each of the named executive officers.
STOCK OPTIONS AND CERTAIN OTHER COMPENSATION
The following table presents the stock options granted to the named
executive officers in fiscal 1997 under the Company's 1995 Long Term Incentive
and Share Award Plan:
7
<PAGE>
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
PERCENT OF VALUE AT ASSUMED
TOTAL ANNUAL RATES OF
NUMBER OF OPTIONS STOCK PRICE
SECURITIES GRANTED TO APPRECIATION FOR
UNDERLYING EMPLOYEES EXERCISE OPTION TERM
OPTIONS IN FISCAL PRICE $ PER EXPIRATION --------------------------
NAME GRANTED(1) YEAR SHARE(2) DATE 5% 10%
- --------------------------------------------- ----------- --------------- ----------- ---------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Ronald Rosenzweig............................ 60,000 8.9% $ 30.00 1/27/07 $ 1,132,010 $ 2,868,736
George Gilbert............................... 15,000 2.2 30.00 12/31/98 44,338 90,675
Charles Huang................................ 45,000 6.7 30.00 1/27/07 849,008 2,151,552
John F. Lyons................................ 30,000 4.4 30.00 1/27/07 556,005 1,434,368
Javed S. Patel............................... 15,000 2.2 30.00 1/27/07 283,003 717,184
</TABLE>
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(1) One-third of the options become exercisable one year from the date of grant.
Thereafter, two-thirds of the options become exercisable ratably on a
quarterly basis over the following two years.
(2) The exercise price of the stock options was based on the fair market value
of the stock on the date of grant.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION
VALUES
Stock Price at 12/31/97 $30.125
<TABLE>
<CAPTION>
# OF SECURITIES VALUE OF
UNDERLYING UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS AT FY-END OPTIONS AT FY-END
SHARES ACQUIRED VALUE -------------------------- ---------------------------
ON EXERCISE REALIZED $ EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
--------------- ------------ ----------- ------------- ------------ -------------
<S> <C> <C> <C> <C> <C> <C>
Ronald Rosenzweig................. 7,500 $ 295,745 65,616 75,625 $ 1,459,942 $ 254,245
George Gilbert.................... 33,000 1,217,380 63,241 -- 879,208 --
Charles Huang..................... -- -- 68,741 57,500 1,612,536 203,021
John F. Lyons..................... 97 3,299 37,816 39,375 851,228 151,797
Javed S. Patel.................... 9 354 23,817 18,750 567,040 61,094
</TABLE>
COMPENSATION OF DIRECTORS
Non-management Directors receive options under the 1995 Long Term Incentive
and Share Award Plan (the "1995 Plan"). Under the 1995 Plan, a grant of options
to purchase 15,000 shares of Common Stock will automatically be granted on the
date a Director is first elected to the Board with an exercise price per share
equal to 100% of the market value of one share on the date of grant. Each option
so granted will expire ten years after the date of grant and will become
exercisable in three equal installments commencing on the date of grant and
annually thereafter. Commencing January 1, 1996, Directors receive an annual
grant of options to purchase 4,000 shares of Common Stock at the fair market
value as determined on the date of grant, which options will vest on December 31
in the year granted. In addition, each non-management Director receives $5,000
per year plus $500 for each meeting of the Board of Directors, or any of its
Committees attended, and each Director is reimbursed for ordinary expenses
incurred in connection with attendance at such meetings.
8
<PAGE>
COMPENSATION COMMITTEE REPORT
The Compensation Committee establishes and reviews the compensation of the
Company's executive officers. The Compensation Committee of the Board of
Directors consists entirely of non-employee directors.
COMPENSATION PHILOSOPHY. The Company's executive compensation program is
designed to attract and retain key executives who will enhance the performance
of the Company, promote its long-term interest and build stockholders' equity.
The Compensation Committee sought to align total compensation for executive
management with corporate performance. The Company's executive compensation
package generally includes four main components:
1) A base salary which is established at levels considered appropriate
for the duties and scope of responsibilities of each officer's position.
2) A bonus potential which is tied directly to operating income
objectives.
3) A stock option award to increase stock ownership in the Company and
align executive compensation with stockholder interests.
4) Other compensation and employee benefits generally available to all
employees of the Company, such as health insurance and participation in the
Anadigics, Inc. Employee Savings and Protection Plan ( "401(k) Plan").
The Compensation Committee places a particular emphasis on variable,
performance based components, such as the bonus potential and stock option
awards, the value of which could increase or decrease to reflect changes in
corporate and individual performances.
In general, compensation payments in excess of $1.0 million to any of the
named Executive Officers are subject to a limitation on deductibility by the
Company under Section 162(m) of the Internal Revenue Code of 1986, as amended.
The deduction limit does not apply to performance based compensation that
satisfies certain requirements. The Compensation Committee has not yet
determined a policy with regard to Section 162(m); however, no officer of the
Company is expected to earn compensation in excess of $1.0 million in 1998.
CHIEF EXECUTIVE OFFICER COMPENSATION. Mr. Rosenzweig's 1997 compensation
consisted of base salary, bonus, stock options, and executive benefits. Mr.
Rosenzweig's base salary was set in 1997 at $226,573 which the Compensation
Committee determined to be reasonable in view of Mr. Rosenzweig's
responsibility, seniority, and past performance to the Company. Mr. Rosenzweig's
1997 bonus payout of $106,351 was from the 1996 bonus award. The 1997 bonus
award of $198,375 will be paid to Mr. Rosenzweig in 1998 over a quarterly
timetable. The Compensation Committee authorized a grant in fiscal 1997 to Mr.
Rosenzweig of options to purchase 60,000 shares of Common Stock. The
Compensation Committee believes the grant of stock based compensation encourages
long-term performance and aligns management and stockholders interest in the
performance of the Company's Common Stock.
Compensation Committee:
Bruns Grayson
Harry Rein
9
<PAGE>
PERFORMANCE GRAPH
The following graph compares the cumulative total shareholder return on the
Company's Common Stock from the initial public offering date through December
31, 1997 with the cumulative total return on the Nasdaq Stock Market Index and
the Nasdaq Electronic Components Stocks Index (SIC Code 367). The Company is
included in both indexes. The comparison assumes $100 was invested on April 20,
1995 in the Company's Common Stock and in each of the foregoing indices and
assumes reinvestment of dividends. The Company did not declare, nor did it pay
any cash dividends during the comparison period. Notwithstanding any statement
to the contrary in any of the Company's previous or future filings with the
Securities and Exchange Commission, the graph shall not be incorporated by
reference into any such filings.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
ANADIGICS, INC. NASDAQ STOCK MARKET INDEX NASDAQ ELECTRONICS COMPONENTS INDEX
<S> <C> <C> <C>
4/20/95 100 100 100
12/30/95 177 130 124
12/30/96 327 159 215
12/30/97 237 196 225
</TABLE>
PROPOSAL II: APPOINTMENT OF INDEPENDENT AUDITORS
APPOINTMENT OF AUDITORS
Ernst & Young LLP, independent certified public accountants, audited the
financial statements of ANADIGICS, Inc., for the 1997 fiscal year.
Representatives of Ernst & Young LLP are expected to attend the Annual Meeting
of stockholders and will have the opportunity to make a statement if they desire
to do so and are expected to be available to answer appropriate questions. The
Audit Committee and the Board of Directors have selected Ernst & Young LLP as
the independent auditors of the Company for the fiscal year ending December 31,
1998.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" THE RATIFICATION OF
THE APPOINTMENT OF ERNST & YOUNG LLP AS THE INDEPENDENT AUDITORS OF THE COMPANY.
STOCKHOLDER PROPOSALS
Stockholder proposals intended to be presented at the 1999 Annual Meeting of
stockholders must be received by the Company no later than December 28, 1998.
Proposals may be mailed to the Company, to the attention of Secretary, 35
Technology Drive, Warren, NJ 07059.
OTHER MATTERS
The Board of Directors knows of no other business which will be presented at
the meeting. If any other matters properly come before the meeting, the persons
named in the enclosed proxy will vote the shares represented thereby in
accordance with their judgment on such matters.
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