<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 Section 240.14a-11(c) or Section 240.14a-12
CHICAGO MINIATURE LAMP, 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] No fee required.
[_] 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:
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(2) Aggregate number of securities to which transaction applies:
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(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):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[_] 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.:
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(3) Filing Party:
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(4) Date Filed:
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Notes:
<PAGE>
[LOGO] CHICAGO MINIATURE LAMP, INC.
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD DECEMBER 17, 1996
To the Shareholders of Chicago Miniature Lamp, Inc.:
NOTICE IS HEREBY GIVEN that a Special Meeting of Shareholders of Chicago
Miniature Lamp, Inc. (the "Company") will be held at the offices of CML
Fiberoptics, Inc., 45 Bartlett Street, Marlborough, Massachusetts on December
17, 1996, at 11:00 a.m., local time, for the following purposes:
1. To consider and act upon a proposal to amend the Certificate of
Incorporation of the Company to increase the authorized number of shares of
Common Stock of the Company from 20,000,000 to 100,000,000;
2. To consider and act upon a proposal to amend the Company's 1995
Incentive and Non-Statutory Stock Option Plan to increase the number of
shares issuable pursuant to the exercise of options granted under said plan
from 450,000 to 1,000,000 shares of the Common Stock of the Company; and
3. To transact any other business as may properly come before the meeting
or any postponement or adjournment thereof.
Shareholders of record at the close of business on November 19, 1996, will
be entitled to vote at this meeting or any postponement or adjournment
thereof. Information relating to the matters to be considered and voted on at
the Special Meeting is set forth in the proxy statement accompanying this
Notice.
By Order of the Board of Directors,
/s/ Ronald S. Goldstein
Ronald S. Goldstein
Secretary
Canton, Massachusetts
November 20, 1996
IF YOU DO NOT EXPECT TO ATTEND THE MEETING IN PERSON, PLEASE VOTE ON THE
MATTERS TO BE CONSIDERED AT THE MEETING BY COMPLETING THE ENCLOSED PROXY AND
MAILING IT PROMPTLY IN THE ENCLOSED ENVELOPE.
<PAGE>
CHICAGO MINIATURE LAMP, INC.
500 Chapman Street
Canton, Massachusetts 02021
PROXY STATEMENT
This proxy statement is furnished in connection with the solicitation of
proxies on behalf of the Board of Directors of CHICAGO MINIATURE LAMP, INC.
(the "Company") to be voted at the Special Meeting of Shareholders to be held
at the offices of CML Fiberoptics, Inc., 45 Bartlett Street, Marlborough,
Massachusetts on December 17, 1996 (the "Meeting") at 11:00 a.m., local time,
or any postponement or adjournment thereof.
This Proxy Statement and the enclosed proxy are being sent to shareholders
commencing on or about November 20, 1996.
Solicitation will be primarily by mail but may also be made by personal
interview or by telephone, in each case by officers and regular employees of
the Company who will not be additionally compensated therefor. The Company
will request persons such as brokers, nominees and fiduciaries, holding stock
in their names for others, or holding stock for others who have the right to
give voting instructions, to forward proxy material to their principals and
request authority for the execution of the proxy. The total cost of soliciting
proxies will be borne by the Company.
VOTING
Holders of record at the close of business on November 19, 1996 (the "Record
Date") of Common Stock, par value $.01 per share, of the Company ("Common
Stock") will be entitled to vote at the Meeting.
On the Record Date, there were 19,457,249 shares of Common Stock
outstanding. Each share of Common Stock outstanding on the Record Date will be
entitled to one vote at the Meeting. A majority of the outstanding shares of
Common Stock entitled to vote at the Meeting will constitute a quorum at the
Meeting. The affirmative vote of the holders of a majority of the outstanding
shares of Common Stock entitled to vote at the Meeting is necessary for the
approval of the amendment to the Certificate of Incorporation to increase the
authorized number of shares, while only the affirmative vote of the holders of
a majority of the votes present in person or by proxy at the Meeting is
necessary for approval of the amendment to the Company's Stock Option Plan to
increase the number of shares issuable thereunder.
Proxies in the enclosed form are solicited by the Board of Directors of the
Company in order to provide every shareholder an opportunity to vote on all
matters scheduled to come before the Meeting, whether or not the shareholder
attends in person. If proxies in the enclosed form are properly executed and
returned, the shares represented thereby will be voted at the Meeting in
accordance with the shareholder's directions. In the absence of specific
directions, properly executed proxies will be voted "FOR" the Amendment to the
Certificate of Incorporation of the Company to increase the authorized number
of shares of Common Stock and "FOR" the amendment of the Company's 1995 Stock
Option Plan. A shareholder who submits a proxy may revoke it at any time prior
to the voting of the proxy by written notice to the Secretary of the Company
or by attending the Meeting and voting such shareholder's shares in person.
<PAGE>
SECURITY OWNERSHIP OF PRINCIPAL
SHAREHOLDERS AND MANAGEMENT
The following table sets forth information with respect to the beneficial
ownership of the Common Stock of the Company as of October 31, 1996 by (i)
each person who is known by the Company to be the beneficial owner of more
than 5% of the Company's outstanding shares of Common Stock, (ii) each
director and executive officer of the Company, and (iii) all directors and
executive officers of the Company as a group.
<TABLE>
<CAPTION>
AMOUNT OF
BENEFICIAL
OWNERSHIP PERCENT OF
NAME AND ADDRESS OF BENEFICIAL OWNER(1) (# SHARES) CLASS
- - --------------------------------------- ---------- ----------
<S> <C> <C>
Frank M. Ward (2),....................................... 10,106,850 51.9%
individually and as trustee
500 Chapman Street
Canton, MA 02021
Ronald S. Goldstein (3).................................. 110,757 *
Donald J. MacCrindle (4)................................. 25,100 *
Richard F. Parenti (5)................................... 23,200 *
Thomas I. Kanaya......................................... 69,149 *
Michael J. Giani (6)..................................... 27,000 *
Werner A. Arnold......................................... 165,000 *
Donald S. Dewsnap........................................ 13,950 *
Richard E. Ingram........................................ 12,000 *
All directors and executive officers as a group (9 per-
sons)................................................... 10,553,006 54.2%
</TABLE>
- - --------
* Less than 1%
(1) The address of the Company's directors and officers is Chicago Miniature
Lamp, Inc., 500 Chapman Street, Canton, Massachusetts 02021.
(2) Includes 8,255,820 shares beneficially owned by Frank M. Ward and Eileen
M. Ward as joint tenants with right of survivorship and 1,851,030 shares
deemed to be beneficially owned by Frank M. Ward, as trustee under certain
trust agreements for each of his five children dated May 23, 1995 (the
"Trust Agreements"). The Trust Agreements terminate upon each child
reaching the age of 35 (the first of such trusts will terminate in 2005).
(3) Reflects 75,000 shares issuable upon the exercise of presently exercisable
stock options beneficially owned by Mr. Goldstein and granted pursuant to
the Company's Stock Option Plan.
(4) Reflects 5,000 shares issuable upon the exercise of presently exercisable
stock options beneficially owned by Mr. MacCrindle and granted pursuant to
the Company's Stock Option Plan.
(5) Reflects 5,000 shares issuable upon the exercise of presently exercisable
stock options beneficially owned by Mr. Parenti and granted pursuant to
the Company's Stock Option Plan.
(6) Reflects 24,000 shares issuable upon the exercise of presently exercisable
stock options beneficially owned by Mr. Giani and granted pursuant to the
Company's Stock Option Plan.
EXECUTIVE COMPENSATION
The following table sets forth the total compensation paid or accrued by the
Company for services rendered during the most recently completed fiscal year
ended December 3, 1995, and the two preceding fiscal years of the Company by
the Chief Executive Officer of the Company and each of the other most highly
compensated executive officers of the Company whose total cash compensation
for the year ended December 3, 1995, exceeded $100,000.
2
<PAGE>
Summary Compensation Table
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
---------------------
ANNUAL COMPENSATION AWARDS
------------------- ---------------------
NAME AND SECURITIES UNDERLYING
PRINCIPAL POSITION YEAR (SALARY) ($) OPTIONS (#)
- - ------------------ ---- ------------------- ---------------------
<S> <C> <C> <C>
Frank M. Ward
President and Chief Ex-
ecutive Officer....... 1995 $ 360,000 --
1994(1) $2,000,000 --
1993(2) $3,251,000 --
Donald J. MacCrindle
Executive Vice Presi-
dent.................. 1995 $ 112,538 30,000
1994(1) $ 73,957 --
1993(2) $ 75,000 --
</TABLE>
- - --------
(1) For the nine month period ended November 27, 1994. (Fiscal year was
changed.)
(2) For the fiscal year ended February 27, 1994.
In December 1994, the Company entered into a three year employment agreement
with Mr. Ward. The agreement provided for a salary of $360,000, $420,000 and
$480,000 for fiscal years 1995 through 1997, respectively. At the request of
Mr. Ward, the employment agreement has been amended to reduce his salary to
$250,000 for each of the fiscal years 1996 and 1997. The agreement also
provides for the reimbursement of Mr. Ward's reasonable and necessary expenses
in carrying out his duties as Chief Executive Officer, including an automobile
and related expenses. Under the agreement, Mr. Ward is also entitled to
receive all employee benefits under any retirement, pension, profit-sharing,
insurance and other plans which are in effect or which may be later adopted.
In the event of any disability that renders Mr. Ward incapable of performing
his normal duties with the Company that continues for a period of one year,
the Company may, at its option, terminate the employment contract.
In connection with the acquisition of W. Albrecht GmbH u. Co. KG and certain
other entities, the Company entered into three-year employment agreements with
Mr. Werner A. Arnold and Mr. Daniel S. Savocchia. After the first three-year
term, the agreements can be extended annually for additional one-year terms.
Mr. Arnold will be paid an annual salary of DM 225,000 and has received stock
options to purchase an aggregate of 75,000 shares of Common Stock, which
options have an exercise price of $24.33 per share and vest at the rate of 20%
per year commencing May 30, 1997. Mr. Savocchia will be paid an annual salary
of $100,000 and will receive a car allowance of $450 per month. Mr. Savocchia
has received stock options to purchase an aggregate of 30,000 shares of Common
Stock, which options have an exercise price of $24.33 per share and vest at
the rate of 20% per year commencing May 30, 1997. The agreement with Mr.
Arnold also provides for reimbursement of reasonable and necessary business
expenses. Under the employment agreements, Messrs. Arnold and Savocchia are
entitled to receive all employee benefits, rights and privileges under any
retirement, pension, profit-sharing, insurance, hospital or other plans that
may now be in effect or that may be later adopted. In the event of disability
that renders either Mr. Arnold or Savocchia incapable of performing his normal
duties for a period of six consecutive months, the Company may terminate such
employee's employment by giving him notice in writing. In the event of such
termination, Mr. Savocchia is entitled to (i) his then-current salary for the
six-month period commencing with such disability or (ii) the unexpired term of
his employment, whichever is less. Each employment agreement is also
terminable by either party for cause. The agreements also contain non-compete
clauses that prohibit Messrs. Arnold and Savocchia from competing with the
Company for a period of five years following termination of their employment
with the Company.
3
<PAGE>
Option Grants in Last Fiscal Year
During the fiscal year ended December 3, 1995, the Company granted options
to the executive officers shown in the Summary Compensation Table as follows:
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT ASSUMED
ANNUAL RATES OF STOCK
PRICE APPRECIATION
INDIVIDUAL GRANTS FOR OPTION TERM (1)
------------------------------------------ ----------------------
NUMBER OF % OF TOTAL
SECURITIES OPTIONS
UNDERLYING GRANTED TO EXERCISE
OPTIONS EMPLOYEES PRICE(2) EXPIRATION
NAME GRANTED(#) IN YEAR ($/SHARE) DATE 5%($) 10%($)
---- ---------- ---------- --------- ---------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C>
Frank M. Ward........... -- -- -- -- --
Donald J. MacCrindle.... 15,000 4.35% $ 8.33 6/13/05(3) $ 78,600 $ 199,200
15,000 4.35% $10.75 8/10/05(4) $ 101,400 $ 257,100
</TABLE>
- - --------
(1) Potential realizable value is presented net of the option exercise price
but before any federal or state income taxes associated with exercise.
These amounts represent certain assumed rates of appreciation set by the
Commission. Actual gains are dependent on the future performance of the
Common Stock and the option holder's continued employment throughout the
vesting period. The amounts reflected in the table may not necessarily be
achieved.
(2) All options were granted at an exercise price equal to the fair market
value of the Company's Common Stock on the date of grant.
(3) Options vest at the rate of 33.33% per year for each of the first three
years after grant and terminate ten years from the date of grant.
(4) Options all vested on date of grant and terminate ten years from date of
grant.
Aggregated Option Exercises in Last Fiscal Year
and Year-End Option Values
<TABLE>
<CAPTION>
VALUE OF
NUMBER NUMBER OF UNEXERCISED
OF SHARES SECURITIES UNDERLYING IN-THE-MONEY
ACQUIRED VALUE UNEXERCISED OPTIONS AT OPTIONS AT
NAME ON EXERCISE REALIZED YEAR-END YEAR-END ($)(1)
---- ----------- -------- ---------------------- ---------------------
<S> <C> <C> <C> <C>
Frank M. Ward........... -- -- -- --
Donald J. MacCrindle.... -- -- 15,000 $42,450 Exercisable
15,000 $78,750 Unexercisable
</TABLE>
- - --------
(1) Calculated based on the last reported sales price of $13.58 per share of
Common Stock as reported on the Nasdaq National Market on December 3,
1995.
STOCK OPTION PLAN
Under the Company's Stock Option Plan (the "Plan"), 750,000 shares of Common
Stock were reserved for issuance upon exercise of stock options. On October 9,
1996, the number of shares reserved for issuance upon exercise of stock
options under the Plan was reduced to 450,000. The Plan is designed as a means
to retain and motivate key employees. The Stock Option Committee administers
and interprets the Plan. Options may be
4
<PAGE>
granted to all eligible employees of the Company, including officers and
others who perform services for the Company. As of December 3, 1995, there
were 345,000 shares underlying unexercised options granted under the Plan. As
of November 19, 1996, there remained 5,202 shares available for future grant.
The Plan provides for the granting of both incentive stock options (as
defined in Section 422 of the Internal Revenue Code) and nonqualified stock
options. Options are granted under the Plan on such terms and at such prices
as recommended by the Stock Option Committee and approved by the Board of
Directors, except that the per share exercise price of incentive stock options
cannot be less than the fair market value of the Common Stock on the date of
grant. Each option is exercisable after the period or periods specified in the
option agreement, but no option may be exercisable after the expiration of ten
years from the date of grant. Options granted under the Plan are not
transferable other than by will or by the laws of descent and distribution.
Compensation Committee Interlocks And Insider Participation
Prior to the creation of the Compensation Committee on March 27, 1995,
decisions on executive compensation were made by the Company's Chief Executive
Officer, Frank M. Ward. During the entire period from the beginning of fiscal
1995 through March 27, 1995, Mr. Ward was employed under the employment
agreement described under the summary compensation table and Mr. Ward did not
participate in any executive compensation decisions affecting himself,
although he did request that his salary be reduced to $250,000 for fiscal
years 1996 and 1997.
Directors' Compensation
Directors who are not employees of the Company receive annually a fee of
$10,000 in addition to reimbursement for out-of-pocket expenses.
PROPOSAL TO AMEND THE COMPANY'S
CERTIFICATE OF INCORPORATION TO
INCREASE AUTHORIZED COMMON SHARES
Introduction
Currently, the Company's Restated Certificate of Incorporation authorizes
the issuance of 20,000,000 shares of Common Stock, $.01 par value, and
5,000,000 shares of Preferred Stock, $.01 par value. As of November 19, 1996,
19,457,249 shares of Common Stock were issued and outstanding and 444,798
shares were reserved for issuance upon the exercise of outstanding options.
Accordingly, on November 19, 1996, if all outstanding options were exercised,
there would only be 97,953 shares of Common Stock available for issuance by
the Company. No shares of Preferred Stock have been issued by the Company.
Amendment
On November 1, 1996, the Board of Directors approved an increase in the
authorized number of shares of Common Stock from 20,000,000 to 100,000,000
shares, subject to shareholder approval. The action of the Board of Directors
was in the form of resolutions setting forth (i) the proposed amendment to the
first sentence of Article IV of the Company's Restated Certificate of
Incorporation, (ii) the advisability of the amendment; and (iii) calling for
submission of the amendment for approval by the shareholders at the Meeting.
5
<PAGE>
The following is the text of the first sentence of Article IV of the
Restated Certificate of Incorporation of the Company, as proposed to be
amended:
The aggregate number of the authorized shares, itemized by class,
series, if any, and par value within a class, is as follows:
<TABLE>
<CAPTION>
CLASS NUMBER OF SHARES SERIES PAR VALUE
----- ---------------- ------ ---------
<S> <C> <C> <C>
Common..................................... 100,000,000 N/A $.01
Preferred.................................. 5,000,000 N/A $.01
Total Number of Shares Authorized:......... 105,000,000
Total Authorized Capital:.................. $1,050,000
</TABLE>
Purpose And Effect Of Proposed Amendment
The Board of Directors believes that it is necessary and desirable to
increase the number of shares of Common Stock that the Company is authorized
to issue to give the Company additional flexibility to raise equity capital,
adopt additional employee benefit plans or reserve additional shares for
issuance under such plans and make acquisitions through the use of stock. The
Board of Directors has no immediate plans, understandings, agreements or
commitments to issue additional Common Stock for any of these purposes, except
as permitted or required by the Company's existing employee benefit plans. The
Board of Directors believes that the proposed increase in the authorized
shares would make it unnecessary to hold a special shareholders' meeting in
the future for the purpose of authorizing an increase in the authorized Common
Stock should the Company decide to use its shares for one or more of such
previously mentioned purposes. No additional action or authorization by the
Company's shareholders would be necessary prior to the issuance of such
additional shares, unless required by applicable law or the rules of The
Nasdaq National Market.
Under the Company's Restated Certificate of Incorporation, the Company's
shareholders do not have preemptive rights with respect to the Common Stock.
Thus, should the Board of Directors elect to issue additional shares of Common
Stock, existing shareholders would not have any preferential rights to
purchase such shares. In addition, if the Board of Directors elects to issue
additional shares of Common Stock, such issuance could have a dilutive effect
on the shareholdings of current shareholders.
The proposed amendment to increase the authorized number of shares of Common
Stock could, under certain circumstances, have an anti-takeover effect,
although this is not the intention of this proposal. In the event of a hostile
attempt to take over the Company, it might be possible for the Company to try
to impede such an attempt by issuing shares of the Common Stock through a
"private placement" to a friendly party, thereby diluting the voting power of
the other outstanding shares and increasing the potential cost to acquire
control of the Company. The overall effect, therefore, could be to discourage
unsolicited takeover attempts. By potentially discouraging initiation of any
such unsolicited takeover attempt, the proposed amendment may limit the
opportunity for the Company's shareholders to dispose of their shares at the
higher price generally available in takeover attempts or that may be available
under a merger proposal. The proposed amendment may have the effect of
permitting the Company's current management, including the current Board of
Directors, to retain its position and place it in a better position to resist
changes that shareholders may wish to make if they are dissatisfied with the
conduct of the Company's business.
Proposed Resolutions
Resolutions in substantially the following form will be submitted to the
shareholders at the Meeting:
"RESOLVED, that the Company's authorized shares of Common Stock be
increased from 20,000,000 shares to 100,000,000 shares and that the
Company's Restated Certificate of Incorporation be amended to reflect
said increase.
6
<PAGE>
RESOLVED FURTHER, that appropriate officers of the Company be, and
the same are, hereby authorized, empowered and directed in the name on
behalf of the Company to take such action and execute such documents as
may be deemed necessary or desirable to carry out the intent and
purpose of the foregoing resolution."
Recommendation Of The Board
The Board of Directors recommends a vote "FOR" the proposal to amend the
Company's Certificate of Incorporation to increase the number of authorized
shares of Common Stock from 20,000,000 to 100,000,000. The affirmative vote of
the holders of a majority of the outstanding shares of Common Stock entitled
to vote at the Meeting, assuming a quorum is present, is necessary for
approval. Unless a contrary choice is specified, proxies solicited by the
Board of Directors will be voted FOR approval of such increase.
PROPOSAL TO AMEND THE
1995 INCENTIVE AND
NON-STATUTORY STOCK OPTION PLAN
The Company maintains a stock option plan, the 1995 Incentive and Non-
Statutory Stock Option Plan (the "Plan") under which incentive and non-
qualified options may be granted to employees, directors and certain key
affiliates. Under the Plan, options may be granted at not less than the fair
market value on the date of grant. Options may be subject to a vesting
schedule and expire ten years after grant.
The 1995 Plan originally reserved 750,000 shares of the Company's Common
Stock for issuance thereunder. Due to the limited number of authorized shares
of Common Stock available to the Company, on October 9, 1996, the Board of
Directors decreased the number of shares reserved for issuance under the Plan
to 450,000. As of November 19, 1996, 444,798 of the 450,000 options authorized
are outstanding. The Company has in the past utilized and wishes in the future
to utilize the Plan to attract, maintain and develop management by encouraging
ownership of the Company's Common Stock by key employees, directors and
others.
Options under the Plan are either "incentive options" ("ISOs") under Section
422A of the Internal Revenue Code of 1986, as amended, or "non-qualified stock
options" ("NQOs") which are not intended to so qualify.
On November 1, 1996, the Board of Directors approved and recommends to the
shareholders that they approve a proposal to amend the Company's Plan to
increase the number of shares of Common Stock available for grant under the
Plan from 450,000 to 1,000,000, an increase of 550,000 shares of Common Stock.
The proposed amendment will cause Section 3.1 of the Plan to be replaced with
the following revised Section 3.1:
3.1 Shares Subject to Plan. The stock subject to the options granted
under the Plan shall be shares of the Company's authorized but unissued
common stock, par value $.01 per share ("Common Stock"). The total
number of shares that may be issued pursuant to options granted under
the Plan shall not exceed 1,000,000 shares of Common Stock.
The proposed amendment to the Plan will be adopted upon receiving the
affirmative vote of holders of a majority of the shares present or represented
by proxy at the Meeting. Proxies will be voted in accordance with the
specifications marked thereon and, if no specification is made, will be voted
"FOR" adoption of the proposed amendment to the Plan. Prior to the Meeting,
there are not sufficient authorized shares to reserve 1,000,000 shares for the
Plan, and consequently, if the proposal to increase the authorized number of
shares of Common Stock of the Company from 20,000,000 to 100,000,000 is not
adopted, the proposal to amend the Plan will be withdrawn.
7
<PAGE>
Except for such amendment, if approved by holders of a majority of the
shares present in person or represented by proxy at the Meeting, the Plan will
remain unchanged. The following is a summary of the provisions of the Plan.
This summary is qualified in its entirety by reference to the Plan, a copy of
which may be obtained from the Company.
Summary Description Of The Stock Option Plan
The Plan is administered by the Board of Directors of the Company and the
Stock Option Committee (the "Committee") appointed by the Board of Directors.
Upon the recommendation of the Committee, the Board is authorized to grant
incentive stock options to officers and other key executive and management
employees of the Company. The current members of the Committee appointed by
the Board of Directors are Donald S. Dewsnap and Richard E. Ingram. The
Committee establishes rules and regulations for the operation of the Plan,
selects persons to receive options, determines the option price for shares
subject to each option, and determines the number of shares subject to grants.
If there is a stock split, stock dividend, or other relevant change
affecting the Company's shares, appropriate adjustments would be made in the
number of shares that could be issued in the future and in the number of
shares and price under all outstanding grants made before the event. Future
options may also cover such shares as may cease to be under option by reason
of total or partial expiration, termination or voluntary surrender of an
option.
The aggregate fair market value (determined at the time an option is
granted) of the Common Stock with respect to which ISOs are exercisable for
the first time by any person during any calendar year under the Plan shall not
exceed $100,000.
The vesting period for options granted under the Plan are set forth in an
option agreement entered into with the optionee. ISOs granted to an optionee
terminate 90 days after retirement. In the event of death or disability, all
vested options expire 180 days from the date of death or termination of
employment due to disability.
Unless otherwise provided in any option, each outstanding option shall
become immediately fully exercisable in the event of: (i) a change of control
of the Company, (ii) a merger, consolidation, reorganization or dissolution in
which the Company does not survive, or (iii) the sale, release, exchange or
disposition of substantially all the property and assets of the Company.
Stock Options
The Board of Directors and the Committee may grant options qualifying as
ISOs under the Internal Revenue Code of 1986, as amended, or as NQOs. The
Committee determines the duration of each option; however, the term of an
option cannot exceed ten (10) years from the date of grant and cannot exceed
five (5) years in the case of a greater than 10% shareholder. The option price
for an ISO is the fair market value of a share of the Company's Common Stock
on the date of grant, whereas the option price for an NQO may be more or less
than the fair market value on the date of grant. The grantee can pay the
option price in cash, or if permitted, by delivering to the Company shares of
Common Stock owned by the grantee that have a fair market value equal to the
option price. Shares cannot be issued or transferred upon the exercise of an
option until the option price is paid in full.
Information as to the amount of options received during the last fiscal year
by the executive officers of the Company with an annual compensation greater
than $100,000 is set forth under "Options Granted in Last Fiscal Year"
appearing on page 4. In addition to those options, during the last fiscal year
ended December 3, 1995, the Company granted options to purchase 315,000 shares
of Common Stock to employees of the Company. No options were granted to non-
employees of the Company. As of the date of this Proxy Statement, neither the
Committee nor the Board of Directors has approved any awards of options under
the Plan in excess of the number of shares currently available for issuance
under the Plan. Neither the number nor value of future option awards to be
received by or allocated to particular participants or groups of participants
is presently determinable.
At October 31, 1996, the market value per share of Common Stock was $29.75.
8
<PAGE>
Federal Income Tax Consequences
The holder of an ISO does not realize taxable income upon the grant or upon
the exercise of the option (although the option spread is an item of tax
preference income potentially subject to the alternative minimum tax). If the
stock acquired upon exercise of the option is sold or otherwise disposed of
within two years from the option grant date or within one year from the
exercise date then, in general, gain realized on the sale is treated as
ordinary income to the extent of the option spread at the exercise date, and
the Company receives a corresponding deduction. Any remaining gain is treated
as capital gain. If the stock is held for at least two years from the grant
date and one year from the exercise date, then gain or loss realized upon the
sale will be capital gain or loss and the Company will not be entitled to a
deduction. A special basis adjustment applies to reduce the gain for
alternative minimum tax purposes.
An optionee does not realize taxable income upon the grant of an NQO if the
exercise price is equal to the fair market value. If the exercise price is
less than the fair market value, the optionee will realize income equal to the
difference between the exercise price and the fair market value. An optionee
who receives an NQO realizes income upon exercise of the NQO in an amount
equal to the difference between the exercise price and the market value on the
date of exercise. The Company is entitled to a deduction at the same time and
in a corresponding amount.
In general, if an optionee delivers previously-owned shares in payment of
the exercise price of an option, no gain or loss will be recognized on the
exchange of the previously-owned shares for an equivalent number of newly
issued shares. However, if the previously-owned shares delivered in payment of
the exercise price were acquired pursuant to the exercise of an ISO and if the
requisite option holding periods are not satisfied (see above), then the
optionee will realize ordinary income on the delivery of the previously-owned
shares as in the case of any other "early" disposition of option-acquired
shares.
Recommendation Of The Board
The Board of Directors recommends a vote "FOR" the proposal to amend the
Company's Stock Option Plan to increase the number of shares of Common Stock
available for grant from 450,000 to 1,000,000. The affirmative vote of the
holders of a majority of shares of Common Stock present in person or by proxy
at the Meeting, assuming a quorum is present, is necessary for approval.
Unless a contrary choice is specified, proxies solicited by the Board of
Directors will be voted FOR approval of such increase.
OTHER MATTERS
Management knows of no matter to be brought before the meeting which is not
referred to in the Notice of Meeting. If any other matters properly come
before the meeting, it is intended that the shares represented by proxy will
be voted with respect thereto in accordance with the judgment of the persons
named therein or their substitutes.
By Order of the Board of Directors
/s/ Ronald S. Goldstein
Ronald S. Goldstein
Secretary
November 20, 1996
9
<PAGE>
Proxy Card Front
[X] PLEASE MARK YOUR VOTES AS IN THIS EXAMPLE.
1. TO CONSIDER and act upon a proposal to amend the Certificate of
Incorporation of the Company to increase the authorized number of
shares of Common Stock of the Company from 20,000,000 to 100,000,000
FOR AGAINST ABSTAIN
[_] [_] [_]
2. TO CONSIDER and act upon a proposal to amend the Company's 1995
Incentive and Non-Statutory Stock Option Plan to increase the number
of shares issuable pursuant to the exercise of options granted under
said plan from 450,000 to 1,000,000 shares of Common Stock of the
Company.
FOR AGAINST ABSTAIN
[_] [_] [_]
3. TO TRANSACT such other business as may properly come before the
meeting or any postponement or adjournment thereof.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED
HEREBY BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY
WILL BE VOTED FOR EACH OF THE PROPOSALS SET FORTH ABOVE.
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY USING THE
ENCLOSED ENVELOPE.
SIGNATURE ______________________________________ DATE ___________________
SIGNATURE ______________________________________ DATE ___________________
Note: Please sign exactly as name appears above. When shares are held by
joint tenants, both should sign. When signing as attorney, executor,
administrator or trustee or guardian, please give full title as such. If a
corporation, please sign in full corporate name by President or other
authorized officer. If a partnership, please sign in partnership name by
authorized persons.
<PAGE>
Proxy Card Back
CHICAGO MINIATURE LAMP, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Frank M. Ward or Ronald S. Goldstein, as
Proxy for the undersigned, to vote all shares of Common Stock of the undersigned
in Chicago Miniature Lamp, Inc. with all the powers that the undersigned would
have if personally present, at the Special Meeting of Shareholders of Chicago
Miniature Lamp, Inc. to be held at the offices of CML Fiberoptics, Inc., 45
Bartlett Street, Marlborough, Massachusetts on December 17, 1996, at 11:00 a.m.,
local time, and at any postponement or adjournment thereof.
(TO BE SIGNED ON REVERSE SIDE)
