<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
LECROY CORPORATION
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] 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):
-------------------------------------------------------------------------
(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.:
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(3) Filing Party:
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(4) Date Filed:
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Notes:
<PAGE>
LECROY CORPORATION
NOTICE OF THE ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD OCTOBER 29, 1997
Chestnut Ridge, New York
September 22, 1997
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 Wednesday, October 29, 1997 at 10:00
a.m., local time, for the following purposes:
1. To elect two directors to serve for three-year terms and until their
successors are 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 12, 1997 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
RECORD DATE, SOLICITATION, VOTING AND REVOCABILITY OF PROXIES, VOTING RIGHTS
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 29, 1997 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 adjournment or postponement thereof. The close of
business September 12, 1997 is the record date for the determination of
stockholders entitled to notice of and to vote at the Annual Meeting.
This Proxy Statement and proxies for use at the meeting will be mailed to
stockholders on or about September 22, 1997, and such proxies will be
solicited chiefly by mail, but additional solicitations may be made by
telephone or in person by the officers, directors or regular employees of the
Company. The Company may enlist the assistance of brokerage houses in
soliciting proxies. All solicitation expenses, including costs of preparing,
assembling and mailing proxy material, will be borne by the Company.
A form of proxy for use at the meeting and a return envelope for the proxy
are enclosed. Stockholders may revoke the authority granted by their execution
of proxies at any time before their effective exercise by filing with the
Secretary of the Company a written revocation or a duly executed proxy bearing
a later date or by voting in person at the meeting. Shares represented by
executed and unrevoked proxies will be voted in accordance with the choice or
instructions specified thereon. If no specifications are given, the proxies
intend to vote the shares represented thereby for the election of all
directors as indicated in Proposal No. 1 as set forth in the accompanying
Notice of Annual Meeting of Stockholders and in accordance with their best
judgment on any other matters that may properly come before the meeting.
As of the close of business on September 12, 1997, the Company had
outstanding 6,835,830 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. 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 affirmative vote of the
holders of a plurality of the shares of Common Stock present or represented
and actually voted at the meeting is required for the election of directors.
The Company's Annual Report on Form 10-K for the fiscal year ended June 30,
1997, 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 adjournment or
postponement thereof, it is the intention of the persons named in the enclosed
proxy to vote the shares represented by the 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.
1
<PAGE>
PRINCIPAL STOCKHOLDERS AND MANAGEMENT OWNERSHIP
The following table sets forth certain information regarding beneficial
ownership of the Common Stock as of July 31, 1997 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, 1997, except to the extent authority is
shared by spouses under applicable law.
<TABLE>
<CAPTION>
AMOUNT &
NATURE OF PERCENT
BENEFICIAL OF
NAME OF BENEFICIAL OWNER OWNERSHIP CLASS
------------------------ ---------- -------
<S> <C> <C>
Kopp Investment Advisors, Inc. ............................. 1,007,110 15.0
7701 France Avenue South
Suite 500
Edina, Minnesota 55435
Walter O. LeCroy, Jr.(1).................................... 715,245 10.7
c/o LeCroy Corporation
700 Chestnut Ridge Road
Chestnut Ridge, New York 10977
Pilgrim Baxter & Associates................................. 697,200 10.4
1255 Drummers Lane
Wayne, Pennsylvania 19087
LeCroy Corporation ESOT(2).................................. 459,685 6.8
c/o Cole Taylor Bank
850 West Jackson Boulevard
Chicago, Illinois 60607
HLM Management Co. Inc. .................................... 397,400 5.9
222 Berkley Street, 21st Floor
Boston, Massachusetts 02116
Edgemont Asset Management Corp. ............................ 350,000 5.2
140 East 45th Street, 43rd Floor
New York, New York 10017
Lutz P. Henckels(3)......................................... 251,195 3.7
Thomas H. Reslewic(4)....................................... 48,739 *
Werner H. Brokatzky(5)...................................... 28,774 *
Ronald S. Nersesian(6)...................................... 15,500 *
Robert E. Anderson(7)....................................... 8,851 *
William G. Scheerer(8)...................................... 7,447 *
Douglas A. Kingsley(8)...................................... 7,247 *
All executive officers and directors as a group
(13 persons)(9)............................................ 1,191,509 16.9%
</TABLE>
- --------
*Less than 1% of the outstanding Common Stock.
(1) Includes 103,356 shares of Common Stock held by the ESOT and allocated to
the account of Mr. LeCroy.
2
<PAGE>
(2) 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, 1997, 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 (103,356 shares), Mr. Henckels (2,071 shares) and Mr. Reslewic
(2,504 shares).
(3) Includes 2,071 shares of Common Stock held by the ESOT and allocated to
the account of Mr. Henckels, 166,464 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.
(4) Includes 2,504 shares of Common Stock held by the ESOT and allocated to
the account of Mr. Reslewic and 42,446 shares of Common Stock issuable
upon exercise of presently exercisable options.
(5) Includes 5,760 shares of Common Stock issuable upon exercise of presently
exercisable options.
(6) Includes 15,500 shares of Common Stock issuable upon exercise of presently
exercisable options.
(7) Includes 7,851 shares of Common Stock issuable upon exercise of presently
exercisable options.
(8) Includes 7,247 shares of Common Stock issuable upon exercise of presently
exercisable options.
(9) Includes an aggregate of 126,436 shares of Common Stock held by the ESOT
and allocated to the accounts of the directors and executive officers.
Includes an aggregate of 337,581 shares of Common Stock issuable upon
exercise of certain presently exercisable options.
PROPOSAL NO. 1--ELECTION OF A CLASS 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, two directors are to be elected in Class II, to hold
office for three years or until their respective successors are 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 nominees named below.
Should such nominees be unable or unwilling to accept nomination or
election, it is intended that the accompanying proxy will be voted for such
other persons as may be nominated by the Board of Directors.
The nominees have been previously elected by stockholders. The Board of
Directors has no reason to believe that the nominees will be unavailable to
serve if elected.
"THE BOARD OF DIRECTORS DEEMS PROPOSAL NO. 1 TO BE IN THE BEST INTERESTS OF
THE COMPANY AND ITS STOCKHOLDERS AND RECOMMENDS A VOTE "FOR" ELECTION OF THE
TWO CANDIDATES FOR ELECTION."
3
<PAGE>
INFORMATION REGARDING NOMINEES AND DIRECTORS
The following sets forth certain information with respect to the Nominees
and those Continuing Directors of the Company whose terms expire at the annual
meetings of stockholders in 1998 and 1999.
NOMINEES FOR ELECTION AS CLASS II DIRECTORS FOR A THREE YEAR TERM EXPIRING AT
THE 2000 ANNUAL MEETING
<TABLE>
<CAPTION>
DIRECTOR, YEAR FIRST
ELECTED AS DIRECTOR AGE PRINCIPAL OCCUPATIONS, BUSINESS AND DIRECTORSHIPS
- -------------------- --- -------------------------------------------------
<S> <C> <C>
Douglas A. 35 Vice President of Advent International Corporation, a
Kingsley venture capital firm, since January 1996; Investment
1995 Manager of Advent International Corporation from
September 1990 to December 1995. Mr. Kingsley is also a
director of Lightbridge, Inc.
William G. 59 President of Performance Quest LLC, a private consulting
Scheerer corporation, since January 1997; Infrastructure
1995 Operations Vice President at Lucent Technologies, a
telecommunications software company, from March 1996 to
December 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.
CLASS III DIRECTORS CONTINUING IN OFFICE WHOSE TERMS EXPIRE
AT THE 1998 ANNUAL MEETING
<CAPTION>
DIRECTOR, YEAR FIRST
ELECTED AS DIRECTOR AGE PRINCIPAL OCCUPATIONS, BUSINESS AND DIRECTORSHIPS
- -------------------- --- -------------------------------------------------
<S> <C> <C>
Walter O. 62 Founder of the Company; Chairman of the Board of LeCroy
LeCroy, Jr. Corporation since 1964.
1964
Robert E. 56 President of Omniken, Inc., a private consulting firm,
Anderson since September 1993; President and Chief Executive
1995 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 Technology
Capital Network of MIT, National Association of Corporate
Directors (New England), Indian Arts Hills, Inc. and
several private companies.
CLASS I DIRECTOR CONTINUING IN OFFICE WHOSE TERM EXPIRES
AT THE 1999 ANNUAL MEETING
<CAPTION>
DIRECTOR, YEAR FIRST
ELECTED AS DIRECTOR AGE PRINCIPAL OCCUPATIONS, BUSINESS AND DIRECTORSHIPS
- -------------------- --- -------------------------------------------------
<S> <C> <C>
Lutz P. 56 President and Chief Executive Officer of the Company
Henckels since July 1993; Consultant to Company from January 1993
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>
4
<PAGE>
ADDITIONAL INFORMATION RELATING TO THE BOARD OF DIRECTORS
ATTENDANCE AT BOARD AND COMMITTEE MEETINGS
During fiscal year 1997, the Board of Directors held 17 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 1997
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
seven times during fiscal year 1997.
Audit Committee. The Audit Committee during fiscal 1997 also consisted of
Messrs. Robert E. Anderson, Douglas A. Kingsley and William G. Scheerer, each
of whom is an independent director. 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 four times during fiscal year 1997.
Compensation of Directors.
The Company's directors receive cash compensation of $2,000 for each Board
of Directors meeting attended, but directors do not receive any additional
cash compensation for service on the Board, telephone meetings of the Board,
or any committee thereof, or for attendance at committee meetings.
5
<PAGE>
EXECUTIVE COMPENSATION AND OTHER INFORMATION
The following table sets forth information with respect to all compensation
awarded to, earned by, or paid to (i) the Chief Executive Officer of the
Company, (ii) the four highest compensated executive officers who were serving
as executive officers at the end of fiscal 1997 and (iii) one other person who
served as an executive officer during fiscal 1997, but was not so serving at
the end of fiscal 1997 (collectively, the "Named Executive Officers"):
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
AWARDS
------------
ANNUAL COMPENSATION
----------------------- SECURITIES
NAME AND PRINCIPAL UNDERLYING ALL OTHER
POSITION YEAR SALARY($) BONUS($) OPTIONS(#) COMPENSATION($)
------------------ ---- ---------- --------- ------------ ---------------
<S> <C> <C> <C> <C> <C>
Walter O. LeCroy, Jr.... 1997 305,000 -- -- 10,769(4)(6)
Chairman of the Board
of Directors 1996 305,000 -- -- 10,180(4)(6)
Lutz P. Henckels........ 1997 300,000 165,340 -- 19,829(4)(6)
Chief Executive Officer
and President 1996 300,000 114,900 12,500 17,080(4)(6)
Thomas H. Reslewic...... 1997 302,782 15,000 54,000 19,760(4)(6)
Executive Vice Presi-
dent--Signal Analysis 1996 247,594 7,500 20,000 15,280(4)(6)
Business Group and
Worldwide Sales
Raymond Chevalley(1).... 1997 291,271(3) -- -- 20,893(3)(4)(5)
Vice President--
Worldwide T&M Products 1996 354,266(3) -- 8,750 28,269(3)(4)(5)
Werner H. Brokatzky..... 1997 221,137(3) 10,615 10,000 25,788(3)(4)(5)
Vice President--
Operations (Geneva) 1996 248,040(3) -- 5,000 28,034(3)(4)(5)
Ronald S. Nersesian(2).. 1997 157,308 62,500 20,000 10,692(4)
Senior Vice President--
Worldwide Marketing 1996 40,385 38,300 62,000 2,154(4)
</TABLE>
- --------
(1) Mr. Chevalley's active employment with the Company terminated on April 30,
1997.
(2) Mr. Nersesian's employment with the Company commenced in March 1996.
(3) Dollar amount reflects the conversion of compensation amounts from Swiss
francs to United States dollars using the average exchange rate during
fiscal 1997 and 1996, respectively.
(4) Includes the value of Company-provided automobile.
(5) Includes $9,610 and $15,615 for Mr. Chevalley and $10,558 and $10,953 for
Mr. Brokatzky representing the Company's payment to the subsidiary defined
contribution plan in fiscal 1997 and fiscal 1996, respectively.
(6) Includes estimated amounts of $9,029 and $6,280, respectively, allocated
to Messrs. LeCroy, Henckels and Reslewic to be paid to their individual
401(k) account as a matching contribution by the Company in fiscal 1997
and 1996, respectively.
6
<PAGE>
The following table sets forth information concerning the exercise of stock
options during fiscal year 1997 by each of the named executive officers and
the fiscal year-end value of unexercised options.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION
VALUES
<TABLE>
<CAPTION>
VALUE OF
UNEXERCISED
NUMBER OF IN-THE-MONEY
OPTIONS AT FISCAL OPTIONS AT FISCAL
YEAR-END(#) YEAR-END(2)($)
SHARES VALUE ----------------- ---------------------
ACQUIRED ON REALIZED(1) EXERCISABLE/ EXERCISABLE/
NAME EXERCISE(#) ($) UNEXERCISABLE UNEXERCISABLE
---- ----------- ----------- ----------------- ---------------------
<S> <C> <C> <C> <C>
Walter O. LeCroy, Jr.... -- -- -- --
Lutz P. Henckels........ -- -- 166,464 / 67,602 4,966,873 / 2,064,893
Raymond Chevalley....... 43,098 954,503 -- --
Werner H. Brokatzky..... 14,784 382,942 -- / 16,521 -- / 245,434
Thomas H. Reslewic...... 31,000 686,520 25,576 / 86,989 698,794 / 1,391,424
Ronald S. Nersesian..... -- -- 15,500 / 66,500 311,938 / 1,028,313
</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, 1997 ($36.875), less the applicable option exercise price.
The following table sets forth information concerning individual grants of
stock options made during fiscal year 1997 to each of the named executive
officers.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL
GRANTS GRANT DATE VALUE
---------- ---------------------
POTENTIAL REALIZABLE
VALUE AT ASSUMED
ANNUAL RATES OF
NUMBER OF STOCK PRICE
SECURITIES PERCENT OF TOTAL APPRECIATION FOR
UNDERLYING OPTIONS GRANTED EXERCISE OR OPTION TERM
OPTIONS TO EMPLOYEES IN BASE PRICE EXPIRATION ---------------------
NAME GRANTED(#) FISCAL YEAR ($/SHARE) DATE 5%($) 10%($)
---- ---------- ---------------- ----------- ---------- --------- -----------
<S> <C> <C> <C> <C> <C> <C>
Walter O. LeCroy, Jr.... -- -- -- -- -- --
Lutz P. Henckels........ -- -- -- -- -- --
Raymond Chevalley....... -- -- -- -- -- --
Werner H. Brokatzky..... 10,000 2.2 32.25 02/21/07 202,819 513,982
Thomas H. Reslewic...... 24,000 5.2 22.25 09/20/06 335,830 851,058
30,000 6.5 32.25 02/21/07 608,456 1,541,946
Ronald S. Nersesian..... 20,000 4.3 32.25 02/21/07 405,637 1,027,964
</TABLE>
- --------
Options described in this table were issued under the Company's Amended and
Restated 1993 Stock Incentive Plan, and consist primarily of incentive stock
options, as permitted by such Plan. The options 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
one fourth of the options on the first, second, third
7
<PAGE>
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"). On March 31, 1997 the Company
completed a secondary public offering of its common stock in which Advent,
then a greater-than 5% stockholder of the Company, participated as a selling
stockholder and sold 1,244,950 shares of common stock. 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. On March 31, 1997, Mr. LeCroy received $376,155 from Advent and
certain other investors when common shares and converted warrants held by
Advent achieved 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 AGREEMENT
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
$335,000, and he will receive an annual cash bonus of up to $206,250 if the
Company achieves certain financial targets for the fiscal year ended June 30,
1998.
8
<PAGE>
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
$335,000. His prior increase as Chief Executive Officer of the Company was on
July 1, 1995. Mr. Henckel's 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 1997, Mr. Henckel's bonus, earned as
a result of current year performance measurements, was $165,340 and represents
approximately 55.1% of his current base salary. This compares to fiscal year
1996 when his bonus was $114,900 and represented 38.3% 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 the sequential vesting of options.
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 is fully aligned with stockholder rewards and which
therefore requires meaningful 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
9
<PAGE>
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.
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
10
<PAGE>
COMPARISON OF 21 MONTH CUMULATIVE TOTAL RETURN*
AMONG LECROY CORPORATION, THE NASDAQ STOCK MARKET (U.S.) INDEX
AND THE S & P TECHNOLOGY SECTOR INDEX
[GRAPH APPEARS HERE]
Cumulative Total Return
-----------------------------------
10/06/95 6/96 6/97
LECROY CORPORATION LCRY 100 167 307
NASDAQ STOCK MARKET (U.S.) INAS 100 115 139
S & P TECHNOLOGY SECTOR ITES 100 112 171
*$100 INVESTED ON 10/06/95 IN STOCK OR ON
09/30/95 IN INDEX - INCLUDING REINVESTMENT OF
DIVIDENDS. FISCAL YEAR ENDING JUNE 30.
11
<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, 1997, 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: Thomas H. Reslewic, an executive officer of the Company, filed a Form 4
in September 1997, reporting five transactions that should have been reported
in March 1997; Ronald S. Nersesian, an executive officer of the Company, filed
a Form 4 in September 1997, reporting a transaction that should have been
reported in March 1997; Werner H. Brokatzky, an executive officer of the
Company, filed a Form 4 in September 1997, reporting two transactions that
should have been reported in March 1997; Brian V. Cake, an executive officer
of the Company, filed a Form 4 in September 1997, reporting one transaction
that should have been reported in March 1997; James J. Mueller, an executive
officer of the Company, filed his Form 3 due to be filed July 1, 1996 in
September 1997 and filed a Form 4 in September 1997, reporting four
transactions that should have been reported in May 1997. The Company believes
that these failures to file reports on a timely basis were inadvertent and has
implemented routine procedures designed to periodically remind its officers
and directors of the filing requirements.
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, 1998. Ernst & Young LLP acted as principal accountant for the fiscal year
ended June 30, 1997. A representative of Ernst & Young LLP will be present at
the Annual Meeting; available to respond to appropriate questions and will
have the opportunity to make a statement if he so desires to do so.
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 1998 Annual Meeting, it must be
received at the principal executive office of the Company on or before May 28,
1998, 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.
12
<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 22, 1997
13
<PAGE>
1442-PS-97
<PAGE>
DETACH HERE
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 Wednesday, October
29, 1997, and at any adjournment or postponement thereof, with all powers that
the undersigned would have if personally present.
P
R
O
X
Y
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
NOMINEES 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.
CONTINUED AND TO BE SIGNED ON REVERSE SIDE [SEE REVERSE
SIDE ]
<PAGE>
DETACH HERE
Please mark
[X]votes as in
this example
[The Board of Directors recommends a vote FOR Proposal 1.]
1. To fix the number of Directors at five and to select
Directors for a term expiring in 2000 (as set forth
in the Proxy Statement).
NOMINEES: Douglas A. Kinglsey and William G. Scheerer
[ ]FOR [ ] WITHHELD
BOTH FROM BOTH
NOMINEES NOMINEES
[ ]
---------------------------------------- MARK HERE MARK HERE
For both nominees except as noted above FOR ADDRESS IF YOU PLAN
CHANGE AND [ ] TO ATTEND [ ]
NOTE AT LEFT THE MEETING
Sign exactly as name appears hereon.
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:
-------------------- -------
