<PAGE>
SCHEDULE 14C INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(c) OF THE SECURITIES EXCHANGE ACT OF 1934
Check the appropriate box:
[_] Preliminary Information Statement [_] Confidential, for Use of the
Commission Only (as permitted
by Rule 14c-5(d)(2))
[X] Definitive Information Statement
LECROY CORPORATION
- - --------------------------------------------------------------------------------
(Name of Registrant As Specified In Charter)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), or 14c-5(g).
[_] Fee computed on table below per Exchange Act Rules 14c-5(g) 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:
Notes:
<PAGE>
LECROY CORPORATION
NOTICE OF THE ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD OCTOBER 28, 1996
Chestnut Ridge, New York
September 27, 1996
To the Stockholders of
LeCroy Corporation:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of LeCroy
Corporation will be held at the KPMG Center for Leadership Development, 3
Chestnut Ridge Road, Montvale, N.J., on Monday, October 28, 1996 at 10:00
a.m., local time, for the following purposes:
1. To elect one director to serve for a three-year term and until his
successor is duly elected and qualified.
2. To consider and act upon any other matters which may properly come
before the meeting or any adjournment thereof.
Stockholders of record at the close of business on September 23, 1996 will
be entitled to notice of and vote at the meeting or any adjournment thereof.
By Order of the Board of Directors
John C. Maag
Secretary
IF YOU ARE UNABLE TO BE PRESENT AT THE MEETING, YOU ARE REQUESTED TO
COMPLETE, DATE, AND SIGN THE ENCLOSED PROXY AND RETURN IT PROMPTLY IN THE
ENCLOSED ENVELOPE.
<PAGE>
LECROY CORPORATION
----------------
PROXY STATEMENT
SOLICITATION, VOTING AND REVOCABILITY OF PROXIES
This proxy statement and the accompanying Notice of Annual Meeting and form
of proxy are being furnished to the holders of the Common Stock of LeCroy
Corporation (the "Company") in connection with the solicitation by the Board
of Directors of the Company of proxies to be used at the Annual Meeting of
Stockholders to be held on October 28, 1996 at 10:00 a.m., local time, to be
held at the KPMG Center for Leadership Development, 3 Chestnut Ridge Road,
Montvale, N.J., and at any adjournments thereof. The close of business
September 23, 1996 is the record date for the determination of stockholders
entitled to notice of and to vote at the Annual Meeting.
As of the close of business on September 23, 1996, the Company had
outstanding 5,487,041 shares of Common Stock, $.01 par value. Each share of
Common Stock is entitled to one vote on all matters presented at the Annual
Meeting. Any stockholder giving a proxy for the meeting may revoke it prior to
the voting thereof on any matter (without affecting, however, any vote taken
prior to revocation) by written notice to the Secretary of the Company, by
submission of another proxy bearing a later date, or by appearing and voting
in person at the Annual Meeting. A stockholder may also be represented by
another person present at the meeting by executing a form of proxy designating
such person to act on the stockholders' behalf. Each unrevoked proxy card
properly executed and received prior to the close of the meeting will be voted
as indicated. Where specific instructions are not indicated, the proxy will be
voted FOR the election of all directors as indicated.
The Company's Annual Report on Form 10-K for the fiscal year ended June 30,
1996, containing the financial statements and notes thereto, is being mailed
to stockholders concurrently with this statement.
The Board of Directors knows of no matters, other than those stated above,
to be presented for consideration at the Annual Meeting. If, however, any
other matters properly come before the Annual Meeting or any adjournments
thereof, it is the intention of the persons named in the enclosed proxy to
vote any such proxy in accordance with their judgment on any such matters. The
persons named in the enclosed proxy may also, if a quorum is not present, vote
such proxy to adjourn the Annual Meeting from time to time.
PROPOSAL NO. 1--ELECTION OF DIRECTORS
The Company has a classified Board of Directors consisting of three classes.
At each Annual Meeting, a class of directors is elected for a full term of
three years to succeed those whose terms are expiring. All of the Company's
directors are listed below with their principal occupations for the last five
years.
At the Annual Meeting, one Director is to be elected in Class I, to hold
office for three years or until his respective successor is elected and
qualified. The remaining Directors will continue to serve as set forth below.
It is intended that the shares represented by the enclosed proxy will be voted
for the election of the nominee named below.
Should such nominee be unable or unwilling to accept nomination or election,
it is intended that the accompanying proxy will be voted for such other person
as may be nominated by the Board of Directors.
<PAGE>
The nominee has been previously elected by stockholders. The Board of
Directors has no reason to believe that the nominee will be unavailable to
serve if elected.
The following sets forth certain information furnished to the Company by the
nominee and each Director continuing to serve.
NOMINEE FOR ELECTION AS CLASS I DIRECTOR FOR A THREE YEAR TERM EXPIRING AT THE
1999 ANNUAL MEETING
<TABLE>
<CAPTION>
DIRECTOR, YEAR FIRST ELECTED PRINCIPAL OCCUPATIONS, BUSINESS AND
AS DIRECTOR AGE DIRECTORSHIPS
---------------------------- --- -----------------------------------
<C> <C> <S>
Lutz P. Henckels............ 55 President and Chief Executive Officer of the
1993 Company since July 1993; Consultant to
Company from January 1993 to July 1993;
President of U.S. Operations of Racal-Redac,
Inc. from May 1989 to January 1993. Mr.
Henckels is also a director of IKOS
Corporation.
</TABLE>
CLASS II DIRECTORS CONTINUING IN OFFICE WHOSE TERMS EXPIRE
AT THE 1997 ANNUAL MEETING
<TABLE>
<CAPTION>
DIRECTOR, YEAR FIRST ELECTED PRINCIPAL OCCUPATIONS, BUSINESS AND
AS DIRECTOR AGE DIRECTORSHIPS
---------------------------- --- -----------------------------------
<C> <C> <S>
Douglas A. Kingsley......... 34 Vice President of Advent International
1995 Corporation, a venture capital firm, since
January 1996; Investment Manager of Advent
International Corporation from September
1990 to December 1995.
William G. Scheerer......... 58 Infrastructure Operations Vice President at
1995 Lucent Technologies, a telecommunications
software company, since March 1996; Quality,
Engineering, Software and Technologies
(QUEST) Vice President at AT&T Bell
Laboratories from May 1990 to February 1996.
Mr. Scheerer is also a director of GenRad,
Inc.
</TABLE>
CLASS III DIRECTORS CONTINUING IN OFFICE WHOSE TERMS EXPIRE
AT THE 1998 ANNUAL MEETING
<TABLE>
<CAPTION>
DIRECTOR, YEAR FIRST ELECTED PRINCIPAL OCCUPATIONS, BUSINESS AND
AS DIRECTOR AGE DIRECTORSHIPS
---------------------------- --- -----------------------------------
<C> <C> <S>
Walter O. LeCroy, Jr........ 61 Founder of the Company; Chairman of the
1964 Board of LeCroy Corporation since 1964.
Robert E. Anderson.......... 55 President of Omniken, Inc., a private
1995 consulting firm, since September 1993;
President and Chief Executive Officer of
GenRad, Inc., a manufacturer of electronic
test systems, from 1988 to September 1993
and as Chairman in 1993. Mr. Anderson is
also a director of TCN at MIT, National
Association of Corporate Directors (New
England), Indian Hill Arts, Inc. and several
private companies.
</TABLE>
2
<PAGE>
ADDITIONAL INFORMATION RELATING TO THE BOARD OF DIRECTORS
ATTENDANCE AT BOARD AND COMMITTEE MEETINGS
During fiscal year 1996, the Board of Directors held 11 meetings. During
that fiscal year, each director attended 75% or more of the aggregate of (i)
the meetings of the Board of Directors and (ii) the meetings of the committees
on which such director served that were held during the period in which he was
a director.
COMMITTEES OF THE BOARD
The Company's Board of Directors has a Compensation Committee and an Audit
Committee. The responsibilities of these committees of the Company's Board of
Directors are described as follows.
Compensation Committee. The Compensation Committee during fiscal 1996
consisted of Messrs. Robert E. Anderson, Douglas A. Kingsley and William G.
Scheerer, each of whom is an independent director. Such committee reviews the
Company's executive compensation and benefit policies and administers the
Amended and Restated 1993 Stock Incentive Plan. The Compensation Committee met
3 times during fiscal year 1996.
Audit Committee. The Audit Committee during fiscal 1996 consisted of Messrs.
Robert E. Anderson, Douglas A. Kingsley and William G. Scheerer. This
committee recommends to the Board of Directors the appointment of the
independent public accountants, reviews the scope and budget for the annual
audit, and reviews the results of the examination of the Company's financial
statements by the independent public accountants. The Audit Committee met 4
times during fiscal year 1996.
Compensation of Directors.
The Company's directors receive cash compensation of $2,000 for each Board
of Directors meeting attended, but directors do not receive any additional
cash compensation for service on the Board, telephone meetings of the Board,
or any committee thereof, or for attendance at committee meetings.
3
<PAGE>
PRINCIPAL STOCKHOLDERS AND MANAGEMENT OWNERSHIP
The following table sets forth certain information regarding beneficial
ownership of the Common Stock as of July 31, 1996 by (i) each person or group
who is known by the Company to own beneficially more than five percent (5%) of
the issued and outstanding Common Stock, (ii) each director and nominee for
director of the Company, (iii) each named executive officer described in the
section of this Proxy Statement captioned "Executive Compensation," and (iv)
all directors and executive officers of the Company as a group. Except as
otherwise indicated below, to the knowledge of the Company, all persons listed
below have sole voting and investment power with respect to their shares of
Common Stock shown as of July 31, 1996, except to the extent authority is
shared by spouses under applicable law.
<TABLE>
<CAPTION>
AMOUNT &
NATURE OF
BENEFICIAL PERCENT OF
NAME OF BENEFICIAL OWNER OWNERSHIP CLASS
------------------------ ---------- ----------
<S> <C> <C>
Advent International Group(1)............................. 1,339,675 22.1%
101 Federal Street
Boston, Massachusetts 02110
Walter O. LeCroy, Jr.(2).................................. 857,731 15.8
c/o LeCroy Corporation
700 Chestnut Ridge Road
Chestnut Ridge, New York 10977
LeCroy Corporation ESOT(3)................................ 577,843 10.6
c/o Cole Taylor Bank
850 West Jackson Boulevard
Chicago, Illinois 60607
State of Wisconsin Investment Board....................... 399,500 7.4
P.O. Box 7842
Madison, Wisconsin 53707
Lutz P. Henckels(4)....................................... 190,101 3.4
Raymond Chevalley(5)...................................... 70,886 1.3
Thomas H. Reslewic(6)..................................... 44,533 *
Werner H. Brokatzky(7).................................... 26,013 *
Robert E. Anderson(8)..................................... 5,227 *
William G. Scheerer(8).................................... 4,427 *
Douglas A. Kingsley(9).................................... 4,227 *
All executive officers and directors as a group
(11 persons)(10)......................................... 1,286,943 22.7%
</TABLE>
- - --------
* Less than 1% of the outstanding Common Stock.
(1) Consists of shares of Common Stock held by the following funds advised or
managed by Advent International Corporation: Global Private Equity II
Limited Partnership (1,108,696 shares, including 521,739 shares issuable
upon conversion of presently exercisable warrants), Golden Gate
Development and Investment Limited Partnership (229,130 shares, including
107,826 shares issuable upon conversion of presently exercisable warrants)
and Advent International Investors II Limited Partnership (1,849 shares,
including 870 shares issuable upon conversion of presently exercisable
warrants). Douglas A. Kingsley, a director of the Company, is a Vice
President of Advent International Corporation.
(2) Includes 103,342 shares of Common Stock held by the ESOT and allocated to
the account of Mr. LeCroy and an aggregate of 42,500 shares held in
certain trusts for the benefit of Mr. LeCroy's family members. Mr. LeCroy
disclaims beneficial ownership of the 42,500 shares held in such trusts.
4
<PAGE>
(3) Shares of Common Stock shown in this table as beneficially owned by each
greater-than-5% stockholder, executive officer and director of the Company
include shares of Common Stock held by the ESOT and allocated to the
accounts of such person. As of July 31, 1996, the respective numbers of
shares of Common Stock held by the ESOT and allocated to the accounts of
such executive officers, directors and other persons were as follows: Mr.
LeCroy (103,342 shares), Mr. Henckels (2,057 shares), Mr. Reslewic (2,490
shares), Mr. Cake (11,581 shares), Mr. Migliozzi (5,192 shares), Mr.
Confessore (641 shares) and Mr. Mueller (6,242 shares).
(4) Includes 2,057 shares of Common Stock held by the ESOT and allocated to
the account of Mr. Henckels, 106,472 shares of Common Stock issuable upon
exercise of presently exercisable options and an aggregate of 62,211
shares held in certain trusts for the benefit of Mr. Henckels's minor
children. Mr. Henckels disclaims beneficial ownership of the 62,211 shares
held in such trusts.
(5) Includes 23,478 shares of Common Stock issuable upon exercise of presently
exercisable options.
(6) Includes 2,490 shares of Common Stock held by the ESOT and allocated to
the account of Mr. Reslewic and 41,304 shares of Common Stock issuable
upon exercise of presently exercisable options.
(7) Includes 3,261 shares of Common Stock issuable upon exercise of presently
exercisable options.
(8) Includes 4,227 shares of Common Stock issuable upon exercise of presently
exercisable options.
(9) Includes 4,227 shares of Common Stock issuable upon exercise of presently
exercisable options. Mr. Kingsley is a Vice President of Advent
International Corporation, a greater-than-5% stockholder. See Note 1
above.
(10) Includes an aggregate of 131,547 shares of Common Stock held by the ESOT
and allocated to the accounts of the directors and executive officers.
Includes an aggregate of 237,824 shares of Common Stock issuable upon
exercise of certain presently exercisable options.
EXECUTIVE COMPENSATION AND OTHER INFORMATION
The following table sets forth information with respect to all compensation
awarded to, earned by, or paid to (i) the Chief Executive Officer of the
Company and (ii) the four highest compensated executive officers at the end of
fiscal 1996 (collectively, the "Named Executive Officers").
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION
COMPENSATION AWARDS
-------------------- ------------
(a) (b) (c) (d) (e) (f)
SECURITIES
NAME AND PRINCIPAL UNDERLYING ALL OTHER
POSITION YEAR SALARY($) BONUS($) OPTIONS(#) COMPENSATION($)
------------------ ---- --------- -------- ------------ ---------------
<S> <C> <C> <C> <C> <C>
Walter O. LeCroy, Jr.... 1996 305,000 -- -- 10,180(2)(4)
Chairman of the Board
of Directors
Lutz P. Henckels........ 1996 300,000 114,900 12,500 17,080(2)(4)
Chief Executive Officer
and President
Raymond Chevalley....... 1996 354,266(1) -- 8,750 28,269(1)(2)(3)
Vice President--
Operations (Geneva)
Werner H. Brokatzky..... 1996 248,040(1) -- 5,000 28,034(1)(2)(3)
Vice President--Finance
(Geneva)
Thomas H. Reslewic...... 1996 247,594 -- 20,000 15,280(2)(4)
Vice President--Sales
and Marketing
</TABLE>
- - --------
5
<PAGE>
(1) Dollar amount reflects the conversion of compensation amounts from Swiss
francs to United States dollars using the average exchange rate during
fiscal 1996.
(2) Includes the value of Company-provided automobile.
(3) Includes $15,615 for Mr. Chevalley and $10,953 for Mr. Brokatzky
representing the Company's payment to the subsidiary defined contribution
plan in fiscal 1996.
(4) Includes estimated amounts of $6,280, respectively, allocated to Messrs.
LeCroy, Henckels and Reslewic to be paid to their individual 401(k)
account or as a direct cash payment, resulting from the Company's decision
to cease contributions to the Employee Stock Ownership Plan.
The following table sets forth information concerning the exercise of stock
options during fiscal year 1996 by each of the named executive officers and
the fiscal year-end value of unexercised options.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION
VALUES
<TABLE>
<CAPTION>
(a) (b) (c) (d) (e)
VALUE OF
UNEXERCISABLE
NUMBER OF IN-THE-MONEY
OPTIONS AT FISCAL OPTIONS AT FISCAL
YEAR-END (#) YEAR-END (2)($)
SHARES VALUE ------------------ ----------------------
ACQUIRED ON REALIZED (1) EXERCISABLE/ EXERCISABLE/
NAME EXERCISE (#) ($) UNEXERCISABLE UNEXERCISABLE
---- ------------ ------------ ------------------ ----------------------
<S> <C> <C> <C> <C> <C> <C>
Walter O. LeCroy, Jr. .. -- -- -- --
Lutz P. Henckels........ -- -- 106,472/ 127,594 $1,455,472/ $1,626,460
Raymond Chevalley....... 20,000 193,400 18,044/ 35,923 246,661/ 408,642
Werner H. Brokatzky..... 22,826 220,727 -- / 21,304 -- / 244,126
Thomas H. Reslewic...... -- -- 30,435/ 59,130 416,046/ 619,907
</TABLE>
- - --------
(1) Calculated on the basis of the fair market value of the Common Stock on
the date of exercise, less the option exercise price.
(2) Calculated on the basis of the fair market value of the Common Stock on
June 30, 1996 ($20.00), less the option exercise price.
The following table sets forth information concerning individual grants of
stock options made during fiscal year 1996 to each of the named executive
officers.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS GRANT DATE VALUE
----------------- -----------------
(a) (b) (c) (d) (e) (f)
POTENTIAL
REALIZABLE VALUE
AT ASSUMED ANNUAL
RATES OF STOCK
NUMBER OF PRICE
SECURITIES PERCENT OF TOTAL APPRECIATION FOR
UNDERLYING OPTIONS GRANTED EXERCISE OR OPTION TERM
OPTIONS TO EMPLOYEES IN BASE PRICE EXPIRATION -----------------
NAME GRANTED(#) FISCAL YEAR ($/SHARE) DATE 5%($) 10%($)
---- ----------------- ---------------- ----------- ---------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Walter O. LeCroy, Jr. .. -- -- -- -- -- --
Lutz P. Henckels........ 12,500 3.8 15.75 12/22/05 $123,814 $313,768
Raymond Chevalley....... 8,750 2.7 15.75 12/22/05 86,670 219,638
Werner H. Brokatzky..... 5,000 1.5 15.75 12/22/05 49,525 125,507
Thomas H. Reslewic...... 20,000 6.1 15.75 12/22/05 198,102 502,029
</TABLE>
- - --------
Options described in this table were issued under the Company's Amended and
Restated 1993 Stock Incentive Plan, and consist primarily of options other
than incentive stock options, as permitted by such Plan. The options
6
<PAGE>
have a term of ten years from the date of grant, were issued with an exercise
price equal to the fair market value of a share of common stock at the time of
grant, and permit exercise of the options on the first anniversary of the date
of grant with the exception of 15,000 option shares issued to Thomas Reslewic,
which permit exercise of one fourth of the options on the first, second, third
and fourth anniversaries of the date of grant, respectively. The purchase
price upon exercise of an option may be paid either in cash or, if the option
permits, in shares of Company common stock already owned, or a combination
thereof. If the employment of a member of the management group, which includes
the five individuals described in this table, terminates by reason of early
retirement, his vested options may thereafter be exercised in full if
permitted by the Board of Directors, or otherwise only to the extent they were
exercisable at time of early retirement for three months from the date of
termination or the stated period of the option, whichever is shorter. On death
of an optionee, the vested options are exercisable for twelve months from the
date of death, or the expiration of the option period, whichever is shorter.
Transactions involving Directors.
Douglas A. Kingsley, a director of the Company, is a Vice President with
Advent International Corporation ("Advent"), a greater-than 5% stockholder of
the Company. As a condition in the Series B Financing transaction on March 28,
1995 between Advent and LeCroy, Advent agreed to increase the original cash
consideration paid for the Series B Preferred Stock by 15% to Walter O.
LeCroy, Jr., Chairman of the Board of Directors, upon achieving a return
greater than three times its original investment. Mr. LeCroy could receive up
to $376,155 from Advent and certain other investors if all common shares and
converted warrants held by Advent achieve a return greater than three times
their original investment, pursuant to the shareholder agreement dated March
25, 1995 between LeCroy, Walter O. LeCroy, Jr. and the investors named therein
filed as Exhibit 10.8 to Form S-1 Registration Statement No. 33-95620.
The Company has adopted a policy that all transactions between the Company
and its officers, directors and affiliates must be on terms no less favorable
to the Company than those that could be obtained from unrelated third parties
and must be approved by a majority of the disinterested members of the Board
of Directors.
EMPLOYMENT AGREEMENTS
Mr. Lutz Henckels and the Company have entered into an employment agreement
providing for his services as President and Chief Executive Officer of the
Company. The contract commenced August 23, 1993. The contract will immediately
terminate if Mr. Henckels voluntarily leaves the employment of the Company.
Mr. Henckels is currently being paid compensation at the annual rate of
$300,000, and he will receive an annual cash bonus of up to $150,000 if the
Company achieves certain financial targets for the fiscal year ended June 30,
1997.
Mr. Joseph Migliozzi and the Company have entered into an employment
agreement providing for his services as Vice President--High Energy Physics of
the Company. The contract commenced August 23, 1993. The contract will
immediately terminate if Mr. Migliozzi voluntarily leaves the employment of
the Company. Mr. Migliozzi is currently being paid compensation at the annual
rate of $148,600.
7
<PAGE>
SUMMARY OF COMPENSATION PLANS
Summarized below is a brief description of each of the compensation plans
indicated.
(a) AMENDED AND RESTATED 1993 STOCK INCENTIVE PLAN
In July 1995, the Company's Board of Directors and stockholders approved the
Company's Amended and Restated LeCroy Corporation 1993 Stock Incentive Plan
(the "Amended 1993 Plan"), which provides for the grant of incentive stock
options, nonqualified stock options and restricted stock awards to employees
(including officers and employee directors).
The Amended 1993 Plan is administered by the Compensation Committee of the
Board of Directors, which has the authority to determine which eligible
individuals are to receive options or restricted stock awards, the terms of
such options or awards, the status of such options as incentive or
nonqualified stock options under the federal income tax laws, including the
number of shares, exercise or purchase prices and times at which the options
become and remain exercisable or restricted stock vests and the time, manner
and form of payment upon exercise of an option. Options must be exercised no
more than three months following termination of employment, except in the
event that termination is due to death or disability, in which case the option
is exercisable for a maximum of twelve months after such termination.
In the event the Company is acquired by merger, consolidation or asset sale,
options granted under the Amended 1993 Plan will accelerate to the extent not
assumed by the acquiring entity. The Compensation Committee also has
discretion to provide for the acceleration of one or more outstanding options
under the Amended 1993 Plan and the vesting of unvested shares held as
restricted stock awards upon the occurrence of certain changes in control.
Such accelerated vesting may be conditioned upon subsequent termination of the
affected optionee's service.
The Compensation Committee has the authority to effect, from time to time,
the cancellation of outstanding options under the Amended 1993 Plan in return
for the grant of new options for the same or a different number of options
shares with an exercise price per share based upon the fair market value of
the Common Stock on the new grant date.
The Board may amend or modify the Amended 1993 Plan at any time subject to
the rights of holders of outstanding options on the date of amendment or
modification, except stockholder approval is required for any such amendment
that would change the eligibility requirements of the Amended 1993 Plan,
extend the term of the Amended 1993 Plan or increase the number of shares
subject to grant as options or restricted stock awards under the Amended 1993
Plan. The Amended 1993 Plan will terminate on January 4, 2003.
(b) 1995 NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN
In July 1995, the Company's Board of Directors and stockholders approved the
1995 Non-Employee Director Stock Option Plan (the "Director Option Plan").
Under the Director Option Plan, each director who is not also an employee of
the Company received upon adoption of the plan or will receive upon his or her
later initial election to the Board of Directors an option to purchase that
number of shares of Common Stock equal to the quotient of $100,000 divided by
the fair market value of the Common Stock on the date of grant, provided, that
the number of shares so determined shall be reduced in proportion to the
number of whole months, if any, by which the optionee's remaining term of
service as a director is less than 36 months. Additionally, after a director's
initial grant, such director will receive, upon and as of each date on which
such director is reelected as
8
<PAGE>
a director of the Company, an option to purchase that number of shares of
Common Stock equal to the quotient of $100,000 divided by the fair market
value of the Common Stock on the date of grant, provided, that the number of
shares so determined shall be reduced in proportion to the number of whole
months, if any, by which the term of service as a director for which the
optionee is then being reelected is less than 36 months.
Options are granted under the plan at an exercise price equal to the fair
market value of the Common Stock on the date of grant, vest ratably on a
monthly basis over the optionee's remaining term of service as a director and
have a term not exceeding ten years. Options are exercisable to the extent
vested only while the optionee is serving as a director of the Company or
within three months after the optionee ceases to serve as a director of the
Company (except that if a director dies or becomes disabled while he or she is
serving as a director of the Company, the option is exercisable for a maximum
of one year after the optionee ceases to be a director, or at the end of the
option period, whichever comes first).
(c) 1995 EMPLOYEE STOCK PURCHASE PLAN
In July 1995, the Company's Board of Directors and stockholders approved the
1995 Employee Stock Purchase Plan (the "Stock Purchase Plan"), which enables
eligible employees to acquire shares of the Company's Common Stock through
payroll deductions. The Stock Purchase Plan is intended to qualify as an
"employee stock purchase plan" under Section 423 of the Internal Revenue Code
of 1986, as amended. The initial offering period ended on April 30, 1996. The
second offering period commenced on May 1, 1996 and will end on October 31,
1996. Subsequent offerings under the Stock Purchase Plan are planned to
commence on May 1 and November 1 of each year and end on October 31 and April
30 of each year, respectively. During each offering period, an eligible
employee may select a rate of payroll deduction of 1% to 10% of his or her
compensation up to an aggregate payroll deduction not to exceed $12,500 in any
offering period. The purchase price for the Company's Common Stock purchased
under the Stock Purchase Plan is 85% of the lesser of the fair market value of
the shares on the first day or the last day of the offering period.
(d) EMPLOYEE STOCK OWNERSHIP PLAN
The Company maintains the LeCroy Corporation Employee Stock Ownership Plan
(the "ESOP"), which was adopted by the Board of Directors effective as of July
1, 1987, for the benefit of all eligible employees. The ESOP is a stock bonus
plan qualified under Section 401(a) of the Internal Revenue Code of 1986, as
amended (the "Code"). The ESOP is designed to provide participating employees
with a stock ownership interest in the Company. The Company retains the right
to amend or terminate the ESOP at any time.
The assets of the ESOP are invested primarily in Common Stock and are held
in trust by the LeCroy Corporation Employee Stock Ownership Trust (the "ESOT")
pursuant to a trust agreement (the "Trust Agreement"). The Board of Trustees
of the ESOT (the "Trustee") is appointed by the Board of Directors. Under the
Trust Agreement, the Trustee holds legal title to all assets of the ESOT. Cole
Taylor Bank currently serves as the Trustee. The Trustee of the ESOT has the
authority to manage and control the ESOP, including the investment and
administration of ESOP assets.
Each employee of the Company's United States operations becomes eligible to
participate in the ESOP on the July 1st or January 1st following his
attainment of age 20 1/2 and completion of six months of service (regardless
of the number of hours worked). As of June 30, 1996, the ESOP had 226 employee
participants. ESOP participation is automatically conferred on all eligible
United States employees and is non-contributory for all eligible employees.
9
<PAGE>
An ESOP participant becomes fully vested in his ESOP accounts after the
earliest to occur of (1) total and permanent disability; (2) death; (3) the
later of attaining age 65 or the fifth anniversary of the date he first became
an ESOP participant; or (4) completion of five years of credited service.
Unvested ESOP accounts of terminated employees are forfeited and reallocated
among the remaining participants' ESOP accounts.
Individual accounts are maintained under the ESOP for participating
employees. Company contributions (and forfeitures) are allocated to a
participant's account in the ratio that his total compensation for the year
plus his compensation above the maximum taxable wage base under the Social
Security Act for the year bears to the total amounts of compensation and
excess compensation for all participants. Compensation in excess of $150,000
per year (adjusted for cost of living increases) is not taken into
consideration for this purpose.
A participant is allocated a share of Company contributions (and
forfeitures) only for a Plan year in which he is credited with at least 1000
hours of service and is employed on June 30th. A participant is also entitled
to share in such allocations for the Plan year of his retirement (after
attaining the later of age 65 or the fifth anniversary of the date he first
became an ESOP participant, or after attaining age 55 with at least ten years
of credited service), disability or death, without regard to his hours of
service for such year.
The ESOP provides that ESOP participants are entitled to direct the Trustee
as to the voting of shares of Common Stock allocated to their ESOP accounts on
all issues presented for a vote of stockholders, regardless of whether or not
they are vested. If an ESOP participant does not give any instructions, the
shares allocated to his ESOP account will not be voted. The Trustee has the
right to vote any shares of Common Stock that are unallocated in the ESOP. All
shares of Common Stock held by the ESOP are currently allocated to
participants' ESOP accounts. In the event of a tender offer, subject to the
approval of the Board of Directors of the Company, the Trustee would decide
whether to tender shares of Common Stock allocated to participants' ESOP
accounts.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors is comprised solely of
independent, Non-Employee Directors. The Compensation Committee reviews and
approves all compensation plans, benefit programs, and perquisites for
executives and other employees. The Compensation Committee sets the salary of
the Chief Executive Officer (CEO), sets relative relationships between the CEO
salary and salary of other key executives, and recommends to the Board the
compensation program for Directors. The Compensation Committee reviews and
approves management recommendations for stock option grants under the
Company's stock option plan. The Compensation Committee periodically reviews
the job performance of the Chief Executive Officer.
The Company's executive compensation program has been designed to attract
and retain exceptional executives who seek a long-term association with the
Company and who enjoy the challenge of pay for performance. The basic program
consists of two cash compensation components: base salary and a performance
based annual bonus. A third component, ownership-linked stock options, is used
for executive retention, to attract new key people, to recognize
accomplishments under individually tailored business growth programs, and to
align the long-term interests of eligible executives with those of the
stockholders.
Base salary for the CEO is set annually taking into consideration Company
sales and profit growth, overall job performance, and mid-range pay levels for
CEOs of corporations of a similar size. The Committee utilizes, as a
reference, up-to-date information on compensation practices of other companies
from several independent sources. Base salary is then set so as to represent
no more than 70% of total attainable compensation, the balance of which is
fully contingent upon the achievement of both qualitative and quantitative
levels of performance and stockholder return. Mr. Henckel's base salary is
$300,000. His prior increase as Chief Executive Officer of the
10
<PAGE>
Company was on July 1, 1995. Mr. Henckels base salary is considered to be at
approximately the median base compensation level paid to chief executive
officers of corporations of a similar size and complexity to the Company.
The Company's pay for performance annual bonus program is a significant
cash-based compensation component for senior executives of the Company.
Executives in this program earn a bonus set by specific performance levels in
areas applicable to their individual business unit. The plan is designed to
reward efficient, profitable performance with the highest payout. The intent
is to encourage management decisions that will provide the best financial
results for the Company. For fiscal year 1996, Mr. Henckel's bonus, earned as
a result of current year performance measurements, was $114,900 and represents
approximately 38.3% of his current base salary. This compares to fiscal year
1995 when his bonus was $75,000 and represented 35.6% of his base salary.
The third compensation component is an ownership-linked stock option
program, which provides long-term incentives to executives that are aligned
with the interests of the Company's stockholders. Stock options, granted at
market price, typically vest annually in 25% increments over four years. A
longer term perspective is established by sequential grants. The program is
designed to encourage senior executives to be long-term stockholders and to
have owner concern and care for the Company as a whole. The intent of the
option program is to provide an executive with the opportunity for financial
gain which is larger than the cumulative annual bonuses but which takes much
longer to achieve; and which requires meaningful long-term growth in the
market price of the Company's Common Stock for the gain to be realized.
The size and frequency of option grants are based on level of
responsibility, performance of the Company as a whole and the executive's
personal performance. Annually, both financial and non-financial specific
goals are set aimed at building future marketplace strengths and achieving
corporate success factors. Other option grants may be made based upon
management's specific recommendations, and review and approval by the
Compensation Committee. Grants are made from a Compensation Committee defined
pool of shares. In fiscal year 1996, Mr. Henckels was granted an option to
purchase 12,500 shares of common stock.
Section 162(m) of the Internal Revenue Code ("the Code"), which became
effective on January 1, 1994, generally limits the Company's ability to deduct
compensation expense in excess of $1 million paid to the Company's Chief
Executive Officer or other executive officers named in the Summary
Compensation Table contained in this proxy statement. The Committee's policy
with respect to Section 162(m) is to make every reasonable effort to insure
that compensation is deductible to the extent permitted while simultaneously
providing Company executives with appropriate rewards for their performance.
Towards this end, the Company's Amended and Restated 1993 Stock Incentive Plan
has been drafted in a manner that will qualify stock options as performance-
related compensation not subject to the cap on deductibility imposed by
Section 162(m).
Douglas A. Kingsley, Chairman
Robert E. Anderson
William G. Scheerer
11
<PAGE>
COMPARISON OF NINE MONTH CUMULATIVE TOTAL RETURN FOR THE YEAR ENDED JUNE 30,
1996
[GRAPH APPEARS HERE]
LECROY CORPORATION NASDAQ STOCK MARKET-US S & P TECHNOLOGY SECTOR
------------------ ---------------------- -----------------------
10/6/95 100 100 100
6/96 167 115 112
12
<PAGE>
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the Company's executive officers and directors and persons who own more than
10% of outstanding shares of the Company's Common Stock to file certain
reports on Securities and Exchange Commission Forms 3, 4, and 5 with respect
to their beneficial ownership of the Company's equity securities.
Based solely upon a review of Forms 3 and 4 furnished to the Company
pursuant to Securities and Exchange Commission Rule 16a-3(e) during its fiscal
year ended June 30, 1996, Forms 5 furnished to the Company with respect to
such fiscal year, and certain written representations furnished to the
Company, it appears that the following persons made late filings during the
year: Brian V. Cake, an executive officer of the Company, filed a Form 4 in
August 1996, reporting four transactions that should have been reported in
June 1996; Raymond Chevalley, an executive officer of the Company, filed a
Form 4 in August 1996, reporting six transactions that should have been
reported in June 1996; Mr. Joseph J. Migliozzi, an executive officer of the
Company, filed a Form 5 in August 1996, reporting one transaction that should
have been reported in a Form 4 in May 1996.
SELECTION OF AUDITORS
The Board of Directors has selected the accounting firm of Ernst & Young LLP
to serve as the Company's principal accountant for the fiscal year ending June
30, 1997. Ernst & Young LLP acted as principal accountant for the fiscal year
ended June 30, 1996. A representative of Ernst & Young LLP will be present at
the Annual Meeting, available to respond to appropriate questions.
PROPOSALS BY STOCKHOLDERS
In order for a proposal of a stockholder to be included in the Board of
Director's proxy statement for the Company's 1997 Annual Meeting, it must be
received at the principal executive office of the Company on or before June 1,
1997, pursuant to Rule 14a-8 under the Exchange Act. Such a proposal must
comply with the requirements as to form and substance established by the
Securities and Exchange Commission in order to be included in the proxy
statement.
VOTING AND SOLICITATION OF PROXIES
The persons named in the enclosed proxy will vote as directed in the proxy,
and in the absence of such direction will vote for the election of the
applicable nominee for Director named herein and for each of the proposals
described herein. The presence, either in person or by duly executed proxy, of
the holders of a majority of outstanding shares of Common Stock entitled to
vote at a meeting is necessary to constitute a quorum. Shares that reflect
abstentions or "broker non-votes" (i.e., shares held by brokers that are
represented at the meeting but as to which such brokers have not received
instructions from the beneficial owners and, with respect to one or more but
not all issues, such brokers do not have discretionary voting power to vote
such shares) will be counted for purposes of determining whether a quorum is
present for the transaction of business at the meeting but will not be counted
as votes on any proposals at the meeting. Accordingly, with respect to
Proposal 1, Election of a Class of Directors, abstentions and broker non-votes
will have no impact on the outcome of the vote.
The cost of soliciting proxies will be borne by the Company. The
solicitation of proxies by mail may be followed by solicitation of certain
stockholders by officers, Directors, or employees of the Company by telephone
or in person.
13
<PAGE>
OTHER MATTERS
The Board of Directors of the Company is not aware of any other matters
which may come before the meeting. It is the intention of the persons named in
the enclosed proxy to vote the proxy in accordance with their best judgment if
any other matters should properly come before the meeting, including voting
for election of a Director in place of any person named in the proxy who may
not be available for election.
REGARDLESS OF WHETHER YOU PLAN TO BE PRESENT AT THE MEETING, IT WOULD BE
APPRECIATED IF YOU WOULD COMPLETE, DATE, AND SIGN THE ENCLOSED PROXY AND
RETURN IT PROMPTLY IN THE ENCLOSED ENVELOPE. IF YOU ATTEND THE MEETING AND
WISH TO VOTE IN PERSON, YOUR PROXY WILL NOT BE USED.
Chestnut Ridge, New York
September 27, 1996
14
<PAGE>
LECROY CORPORATION
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
The undersigned stockholder of LeCroy Corporation hereby appoints each
of Walter O. LeCroy, Jr., Lutz P. Henckels and John C. Maag, as the
undersigned's attorney-in-fact and proxy, with full powers of substitution and
resubstitution, and hereby authorizes each of them, acting individually, to vote
in the name and on behalf of the undersigned all shares of the Common Stock of
LeCroy Corporation that the undersigned may be entitled to vote at the Annual
Meeting of Stockholders of LeCroy Corporation to be held on Monday, October 28,
1996, and at any adjournment or postponement thereof, with all powers that the
undersigned would have if personally present.
WHEN PROPERLY EXECUTED THIS PROXY WILL BE VOTED AS SPECIFIED BUT IF NO
SPECIFICATION IS MADE IT WILL BE VOTED FOR PROPOSAL 1, THE ELECTION OF THE
NOMINEE LISTED ON THE REVERSE SIDE AND IN THE DISCRETION OF THE PERSONS NAMED AS
PROXIES AS TO SUCH OTHER MATTERS AS MAY PROPERLY COME BEFORE THE MEETING AND ANY
ADJOURNMENTS OR POSTPONEMENTS THEREOF.
PLEASE DATE AND SIGN ON REVERSE SIDE AND MAIL YOUR PROXY CARD PROMPTLY
IN THE ENCLOSED ENVELOPE.
- - --------------------------------------------------------------------------------
The Board of Directors recommends a vote FOR Proposal 1,
1. To fix the number of Directors at five and to select a Director for a term
expiring in 1999 (as set forth in the Proxy Statement).
Nominee: Lutz P. Henckels FOR THE WITHHELD FROM
NOMINEE THE NOMINEE
[ ] [ ]
MARK HERE FOR ADDRESS [ ] MARK HERE IF YOU PLAN [ ]
CHANGE AND NOTE BELOW TO ATTEND THE MEETING
Sign exactly as name appears in stencil. When signing as Executor,
Administrator, Trustee, or Guardian, etc., please add full title. This proxy
votes all shares held in all capacities.
Signature:___________ Date:___________ Signature:___________ Date:___________
