<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<TABLE>
<S> <C>
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
</TABLE>
Cybex Computer Products 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)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
(5) Total fee paid:
------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials:
----------------------------------------------------------------------------
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------------------
(3) Filing Party:
------------------------------------------------------------------------
(4) Date Filed:
------------------------------------------------------------------------
<PAGE> 2
Cybex Logo
4991 CORPORATE DRIVE
HUNTSVILLE, ALABAMA 35805
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To be held July 27, 1999
TO THE SHAREHOLDERS:
The annual meeting of shareholders of Cybex Computer Products Corporation
(the "Company") will be held at the Holiday Inn, Research Park, 5903 University
Drive, N.W., Huntsville, Alabama 35806, on the 27th day of July, 1999, at 10:30
a.m. (local time), for the following purposes:
(1) To elect a Board of Directors to serve until the next annual
meeting or until their successors are duly elected;
(2) To vote upon an Amendment to the Amended and Restated Articles of
Incorporation of the Company to increase the authorized Common Stock of the
Company to 50,000,000 shares of Common Stock, par value $.001 per share;
(3) To consider and vote upon a proposal to ratify the engagement of
the accounting firm of PricewaterhouseCoopers LLP as independent auditors
for the current fiscal year; and
(4) To transact such other business as may properly come before the
meeting or any adjournment thereof.
We hope you will attend the meeting and take an active part in it. Details
concerning those matters to come before the meeting are set forth in the
accompanying proxy statement for your inspection. Whether you plan to attend the
meeting or not, please execute the enclosed proxy and return it in the return
envelope which is enclosed for your convenience.
The annual report of the Company for the fiscal year ended March 31, 1999,
is enclosed. We hope you will find it informative.
Pursuant to a resolution adopted by the Board of Directors of the Company,
the close of business on June 14, 1999, has been fixed as the date for
determination of shareholders entitled to notice of this meeting and to vote at
the meeting.
By Order of the Board of Directors
/s/ Remigius G. Shatas
Remigius G. Shatas
Secretary
Huntsville, Alabama
June 23, 1999.
<PAGE> 3
CYBEX COMPUTER PRODUCTS CORPORATION
4991 CORPORATE DRIVE
HUNTSVILLE, ALABAMA 35805
ANNUAL MEETING OF SHAREHOLDERS
JULY 27, 1999
PROXY STATEMENT
INTRODUCTION
GENERAL
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Cybex Computer Products Corporation (the
"Company") to be voted at the annual meeting of shareholders to be held at the
Holiday Inn, Research Park, 5903 University Drive, N.W., Huntsville, Alabama
35806, on July 27, 1999 at 10:30 a.m. (local time) for the purposes set forth in
the accompanying notice, and at any adjournment thereof. This Proxy Statement
and the accompanying form of proxy are first being mailed or given to
shareholders on or about June 23, 1999.
If the enclosed proxy is properly executed, returned and not revoked, it
will be voted in accordance with the instructions given by the shareholder, and
if no instructions are given, will be voted (a) FOR the election as directors of
the nominees as listed and described in this Proxy Statement, (b) FOR the
Amendment to the Amended and Restated Articles of Incorporation of the Company
increasing the authorized Common Stock of the Company to 50,000,000 shares of
Common Stock, par value $.001 per share; (c) FOR the ratification of the
engagement of the firm of PricewaterhouseCoopers LLP as independent auditors for
the current fiscal year, and (d) FOR the recommendations of the Board of
Directors on any other proposal that may properly come before the meeting. The
persons named as proxies in the enclosed form of proxy were selected by the
Company's Board of Directors.
Please sign and return the proxy in the enclosed return envelope so the
Common Stock you own will be voted in accordance with your wishes. Proxies may
be solicited by personal interview, telephone or mail. Banks, brokerage houses
and other custodians, nominees or fiduciaries will be requested to forward
soliciting materials to their principals and to obtain authorization for the
execution of proxies, and will be reimbursed for their reasonable out-of-pocket
expenses incurred in that process. The Company will bear the cost of the
solicitation of proxies, which is expected to be nominal.
PROXY IS REVOCABLE
If, after you send in your proxy you desire to revoke your proxy for any
reason, you may do so by giving notification of such intent to Douglas E.
Pritchett, the Assistant Secretary of the Company, in writing at any time prior
to the commencement of the annual meeting. Also, your proxy may be revoked by
submitting a later-dated proxy or by attending the meeting and voting in person.
Unmarked proxies received by the Company will be voted in favor of each of the
proposals herein specified and as directed by the attorneys-in-fact as to any
other matter which may come before the meeting.
DATE OF RECORD
The close of business on June 14, 1999, has been fixed as the record date
for the purpose of determining the shareholders entitled to notice of and to
vote at the annual meeting. Each share of Common Stock is entitled to one vote
on all matters.
<PAGE> 4
DISSENTERS' RIGHTS OF APPRAISAL
There are no dissenters' rights of appraisal in connection with any vote of
shareholders to be taken at the 1999 Annual Meeting of Shareholders.
OUTSTANDING SECURITIES
As of the close of business on June 14, 1999, the Company had authorized
25,000,000 shares of common stock, par value $.001 per share (the "Common
Stock"), of which 12,746,401 were issued and outstanding and entitled to vote.
The Common Stock is the Company's only outstanding voting stock.
BUSINESS TO BE CONSIDERED AT THE ANNUAL MEETING OF SHAREHOLDERS
It is expected that the following business will be considered and action
taken thereon at the annual meeting:
(1) The election of a Board of Directors to serve until the next annual
meeting or until their successors are duly elected;
(2) A proposal to amend the Amended and Restated Articles of
Incorporation of the Company to increase the authorized Common Stock
of the Company to 50,000,000 shares of Common Stock, par value $.001
per share;
(3) A proposal to ratify the engagement of the accounting firm of
PricewaterhouseCoopers LLP as independent auditors for the current
fiscal year; and
(4) The transacting of such other business as may properly come before
the meeting or any adjournment thereof.
SHAREHOLDERS LIST
A complete list of the shareholders entitled to vote at the annual meeting
of shareholders to be held on July 27, 1999, will be available for inspection
during normal business hours at the principal office of the Company for a period
of at least 10 days prior to the meeting, upon written request to the Company by
a shareholder, and at all times during the annual meeting at the place of the
meeting.
ELECTION OF BOARD OF DIRECTORS
INTRODUCTION
A Board of Directors consisting of no less than three and no more than 15
persons is authorized by the Company's Bylaws. The present Board of Directors
consists of seven (7) members, six of whom are nominees for election to the
Board of Directors at this meeting. Oscar L. Pierce has elected to retire from
the Board of Directors. As provided in the Company's Bylaws and in view of Mr.
Pierce's retirement, the Board of Directors has fixed at six (6) the number of
members to serve on the Board of Directors from and after the date of the Annual
Meeting.
All of the present Directors were elected to the Board of Directors of the
Company during 1998 by the shareholders, except John R. Cooper who was appointed
to the Board of Directors in November 1998 to fill a vacancy created when the
Board of Directors increased its size from six (6) members to seven (7) members.
Each nominee for the Board of Directors has expressed the willingness to serve
as a Director during the coming year. Each Director elected to the Board of
Directors at this meeting will serve for a term of one year or until a successor
is duly elected and qualified.
Proxies cannot be voted for a greater number of persons than the number of
nominees named. The six nominees receiving the highest number of votes at the
annual meeting will be elected as directors. Unless a proxy shall specify
otherwise, the persons named in the proxy shall vote the shares covered thereby
for the nominees designated by the Board of Directors listed below. If any
nominee becomes unavailable for election,
2
<PAGE> 5
the current Board of Directors will determine how the proxies will be voted.
Abstentions and broker non-votes will not affect the tally of votes cast in the
election. A non-vote occurs when a broker, or other fiduciary, holding shares
for a beneficial owner votes on one proposal but lacks authority from the owners
to vote on another proposal.
NOMINEES
The following table sets forth certain information with respect to the six
nominees for Director of the Company:
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION AND DIRECTOR
NAME AGE ALL POSITIONS WITH THE COMPANY SINCE
---- --- ------------------------------ --------
<S> <C> <C> <C>
Stephen F. Thornton 59 Chairman of the Board, President and Chief 1984
Executive Officer and Director
Remigius G. Shatas 51 Executive Vice President -- Special Projects and 1981
Secretary and Director
Doyle C. Weeks 53 Executive Vice President -- Group Operations and 1998
Business Development and Director
Douglas E. Pritchett 43 Senior Vice President -- Finance, Chief Financial 1995
Officer, Treasurer and Assistant Secretary and
Director
David S. Butler 57 Director 1984
John R. Cooper 51 Director 1998
</TABLE>
Stephen F. Thornton has been Chairman of the Board of the Company since
1987 and President and Chief Executive Officer of the Company since 1984. From
1981 to 1984, Mr. Thornton was President of Schiller Industries, an ultra
precision machining, specialty cable and laser scanning company in the aerospace
industry.
Remigius G. Shatas has been Executive Vice President -- Special Projects
and Secretary of the Company since April 1999. Mr. Shatas served as Executive
Vice President -- Technology and Acquisitions and Secretary of the Company from
April 1997 to April 1999, as Senior Vice President, Chief Technical Officer and
Secretary of the Company from 1995 to 1997 and as Chief Technical Officer,
Secretary and Treasurer of the Company from 1984 to 1995.
Doyle C. Weeks has been Executive Vice President -- Group Operations and
Business Development of the Company since August 1998. Mr. Weeks served as
Senior Vice President -- Finance, Chief Financial Officer, and Treasurer of the
Company from 1995 to August 1998 and as Assistant Secretary of the Company
during 1998. Prior to joining the Company, Mr. Weeks served as Vice
President -- Finance, Chief Financial Officer and Treasurer of Phoenix
Microsystems, Inc. from 1985 to 1994 and a member of the Board of Phoenix
Microsystems, Inc. during 1994.
Douglas E. Pritchett has been Senior Vice President -- Finance, Chief
Financial Officer, Treasurer and Assistant Secretary of the Company since
September 1998. Prior to joining the Company as an executive officer, Mr.
Pritchett was Chief Financial Officer of Barber Dairies, Inc. from 1992 to 1998
and a Partner with Coopers & Lybrand L.L.P. (predecessor of
PricewaterhouseCoopers LLP) from 1987 to 1992.
David S. Butler has served as President of Electronic Manufacturer's
Agents, a manufacturer's representative, since 1974.
John R. Cooper has been Vice President -- Finance and Chief Financial
Officer of ADTRAN, Inc., a company that designs, develops, manufactures, markets
and services a broad range of high-speed digital transmission products utilized
by telephone companies and corporate end-users to implement advanced digital
data services over existing telephone networks, since 1996. Mr. Cooper was
President of Sauty Group from 1995 to 1996 and a Partner with Coopers & Lybrand
L.L.P. (predecessor of PricewaterhouseCoopers LLP) from 1991 to 1995.
3
<PAGE> 6
MEETINGS OF THE BOARD OF DIRECTORS AND COMMITTEES
General. The Board of Directors held four meetings during Fiscal 1999.
Each incumbent Director attended at least 75% of the aggregate of (i) the total
number of meetings of the Board of Directors and (ii) the total number of
meetings held by all committees of the Board of Directors on which such Director
served.
Audit Committee. The Company has an Audit Committee consisting of David S.
Butler, Oscar L. Pierce and John R. Cooper. Douglas E. Pritchett served as a
member of the Audit Committee during a portion of Fiscal 1999, but resigned upon
accepting employment with the Company. The Audit Committee held two meetings
during Fiscal 1999. The Audit Committee confers with the auditors and determines
the scope of their annual and interim examinations, determines through
discussions with the auditors and otherwise that no restrictions were placed by
management on the scope of the examination or its implementation, inquires into
the effectiveness of the Company's accounting and internal control functions,
reports to the Board of Directors on the results of the committee's activities
and recommends any changes in the appointment of independent auditors which the
committee may deem to be in the best interest of the Company and its
shareholders. No member of the Audit Committee may be an officer or employee of
the Company.
Compensation Committee. The Company has a Compensation Committee
consisting of David S. Butler, Oscar L. Pierce and John R. Cooper. Douglas E.
Pritchett served as a member of the Compensation Committee during a portion of
Fiscal 1999, but resigned upon accepting employment with the Company. The
Compensation Committee held two meetings during Fiscal 1999. The Compensation
Committee establishes the general compensation policy for the Company and has
the responsibility for the approval of increases in directors' fees and for
determining salaries and bonuses paid to executive officers of the Company. The
Compensation Committee also possesses all of the powers of administration under
all of the Company's employee benefit plans, including the Company's 1995
Employee Stock Option Plan, as amended (the "1995 Employee Plan"), the 1998
Employee Stock Incentive Plan and any bonus plans, retirement plans, stock
purchase plans and medical, dental and insurance plans. In connection therewith,
the Compensation Committee determines, subject to the provisions of the
Company's plans, the directors, officers and employees of the Company eligible
to participate in any of the plans, the extent of such participation and the
terms and conditions under which benefits may be vested, received or exercised.
Nominating Committee The Company does not have a Nominating Committee.
COMPENSATION OF DIRECTORS
Directors who are employees of the Company receive no additional
compensation for serving on the Board of Directors. Directors who are not
employees of the Company are paid fees of $5,000 per year. As additional
compensation for serving on the Company's Board of Directors, each non-employee
Director receives an annual grant of options to purchase 2,500 shares of the
Company's Common Stock. The chairman of the Audit Committee is paid an
additional fee of $5,000 per year for serving in such capacity. All Directors
are entitled to reimbursement of travel expenses incurred in attending meetings
of the Board of Directors and the committees thereof on which they serve.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE FOR THE
ELECTION OF ALL OF THE PROPOSED NOMINEES TO THE BOARD OF DIRECTORS.
AMENDMENT TO AMENDED AND RESTATED ARTICLES OF INCORPORATION
TO INCREASE AUTHORIZED COMMON STOCK
At a meeting of the Board of Directors of the Company on May 4, 1999, the
Board of Directors approved an Amendment (the "Amendment") to Section 5.1 of the
Company's Amended and Restated Articles of Incorporation to increase the number
of authorized shares of Common Stock of the Company from 25,000,000 shares to
50,000,000 shares of Common Stock, par value $.001 per share. Such approval was
4
<PAGE> 7
subject to the approval of the Amendment by the holders of a majority of the
outstanding shares of Common Stock.
In connection with such proposal, the following resolution will be
introduced at the Annual Meeting:
RESOLVED, that Section 5.1 of Article 5 of the Amended and
Restated Articles of Incorporation of this Corporation be
amended to read as follows:
"The aggregate number of shares which the Corporation shall
have authority to issue is 55,000,000, comprised of (a)
50,000,000 shares of common stock, with a par value of $.001
per share (the "Common Stock"), and (b) 5,000,000 shares of
preferred stock, with a par value of $.001 per share (the
"Preferred Stock"), constituting a total authorized capital of
all classes of capital stock of $55,000.00."
The Board of Directors recommends that the Company's shareholders approve
the proposed Amendment to the Amended and Restated Articles of Incorporation to
increase the authorized Common Stock of the Company to 50,000,000 shares of
Common Stock, par value $.001 per share, because it considers such proposal to
be in the best long-term and short-term interests of the Company, its
shareholders and its other constituencies. The proposed increase in the number
of shares of authorized Common Stock will ensure that a sufficient number of
shares will be available, if needed, for issuance in connection with any
possible future transactions approved by the Board of Directors, including,
among others, stock splits, stock dividends, acquisitions, financings and other
corporate purposes. The Board of Directors believes that the availability of the
additional shares of Common Stock for such purposes without delay or the
necessity for a special stockholders' meeting (except as may be required by
applicable law or regulatory authorities or by the rules of any stock exchange
on which the Company's securities may then be listed) will be beneficial to the
Company by providing it with the flexibility required to consider and respond to
future business opportunities and needs as they arise. The availability of
additional authorized shares of Common Stock will also enable the Company to act
promptly when the Board of Directors determines that the issuance of additional
shares of Common Stock is advisable. It is possible that shares of Common Stock
may be issued at a time and under circumstances that may increase or decrease
earnings per share and increase or decrease the book value per share of shares
presently held.
Except for issuance in connection with the stock options referred to in
this Proxy Statement, the Company does not have any immediate plans, agreements,
arrangements, commitments or understandings with respect to the issuance of any
of the remaining additional shares of Common Stock which would be authorized by
the proposed Amendment to the Amended and Restated Articles of Incorporation.
Under the Amended and Restated Articles of Incorporation, the Company
presently has authority to issue 25,000,000 shares of Common Stock, par value
$.001 per share, of which 12,746,401 shares were issued and outstanding on June
14, 1999. In addition, as of June 14, 1999, approximately 2,574,749 shares of
Common Stock were reserved for issuance under the Company's Stock Option Plans,
under which options to purchase a total of 1,515,282 shares of Common Stock were
outstanding. Approximately 8,509,173 shares were available for issuance on June
14, 1999.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE FOR THE ADOPTION
OF THE AMENDMENT TO THE AMENDED AND RESTATED ARTICLES OF INCORPORATION TO
INCREASE THE AUTHORIZED SHARES OF COMMON STOCK TO 50,000,000 SHARES OF COMMON
STOCK, PAR VALUE $.001 PER SHARE. THE AFFIRMATIVE VOTE OF THE HOLDERS OF A
MAJORITY OF THE OUTSTANDING SHARES OF COMMON STOCK ENTITLED TO VOTE AT THE
ANNUAL MEETING WILL BE NECESSARY FOR THE APPROVAL OF THE AMENDMENT TO THE
AMENDED AND RESTATED ARTICLES OF INCORPORATION.
SELECTION OF AUDITORS
PricewaterhouseCoopers LLP (formerly Coopers & Lybrand L.L.P., which merged
with Price Waterhouse LLP, effective July 1, 1998), 1901 Sixth Avenue North,
1600 AmSouth Harbert Plaza, Birmingham, Alabama 35203, is recommended for
selection as the independent auditors of the Company for the current fiscal
year. Coopers & Lybrand L.L.P. has served as independent auditors of the Company
for the
5
<PAGE> 8
fiscal years ended March 31, 1997 and 1998 and PricewaterhouseCoopers LLP has
performed an audit of the financial statements of the Company for the fiscal
year ended March 31, 1999. Services provided by PricewaterhouseCoopers LLP
include work related to the audit of the annual financial statements of the
Company, reviews of unaudited quarterly financial information and filings with
the Securities and Exchange Commission (the "SEC"), and preparation of state and
federal income tax returns. A representative of PricewaterhouseCoopers LLP is
expected to attend the annual meeting, and will have the opportunity to make a
statement, if he desires, and will be available to respond to appropriate
questions.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE FOR
RATIFICATION OF THE APPOINTMENT.
EXECUTIVE OFFICERS
EXECUTIVE OFFICERS
The following table sets forth certain information with respect to the
Company's executive officers:
<TABLE>
<CAPTION>
OFFICER
NAME AGE PRINCIPAL OCCUPATION SINCE
---- --- -------------------- -------
<S> <C> <C> <C>
Stephen F. Thornton 59 Chairman of the Board, President and Chief Executive 1984
Officer and Director
Remigius G. Shatas 51 Executive Vice President -- Special Projects and 1981
Secretary and Director
Doyle C. Weeks 53 Executive Vice President -- Group Operations and 1995
Business Development and Director
Douglas E. Pritchett 43 Senior Vice President -- Finance, Chief Financial 1998
Officer, Treasurer and Assistant Secretary and Director
R. Byron Driver 58 Senior Vice President -- Operations and Chief Operating 1992
Officer
Christopher L. Thomas 43 Senior Vice President of Engineering 1996
Gary R. Johnson 49 Senior Vice President of Sales and Marketing 1996
</TABLE>
Biographical information for Messrs. Thornton, Shatas, Weeks and Pritchett
is set forth above under the caption "Election of Board of
Directors -- Nominees."
R. Byron Driver has been employed by the Company since 1992 and was elected
Senior Vice President -- Operations and Chief Operating Officer in 1995. From
1985 to 1992, he was Vice President of Astrocom Corporation, a data
communications company. From 1982 to 1985, Mr. Driver was vice president of
Complexx Systems, Inc., which was acquired by Astrocom Corporation in 1985.
Christopher L. Thomas served as the Company's Engineering Product Manager
from February 1995 to March 1996, Vice President of Engineering from March 1996
to April 1997 and currently serves as Senior Vice President of Engineering.
Prior to joining the Company, Mr. Thomas served from 1993 to 1995 as Vice
President of Technology for Max Vision, a company specializing in medical
imaging systems. Mr. Thomas was employed by Intergraph, a graphics workstations
company, from 1978 to 1993.
Gary R. Johnson has been Senior Vice President of Sales and Marketing since
April 1997, was formerly Vice President of Sales Channel Development from March
1996 to March 1997. From May 1986 to February 1996, he was the owner of Sales
and Marketing Solutions, Inc.
6
<PAGE> 9
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information with respect to ownership of
shares of the Company's Common Stock as of May 31, 1999, by (i) each of the
Company's directors; (ii) the Company's chief executive officer ("CEO") and the
four most highly compensated executive officers of the Company other than the
CEO whose total annual salary and bonus exceeded $100,000 in Fiscal 1999
(collectively, the "Named Executive Officers"), (iii) each person known to the
Company to be the beneficial owner of more than five percent of the outstanding
shares of the Common Stock, and (iv) all directors and Named Executive Officers
of the Company as a group. Unless otherwise indicated, each of the shareholders
listed below has sole voting and investment power with respect to the shares
beneficially owned.
<TABLE>
<CAPTION>
COMMON STOCK BENEFICIALLY OWNED
-------------------------------------
NAME NUMBER OF SHARES(1) % OF CLASS
- ---- ------------------- ----------
<S> <C> <C>
Stephen F. Thornton 962,907(2)(12) 7.53%
Remigius G. Shatas 704,390(3) 5.53%
FMR Corporation 743,500 5.84%
82 Devonshire Street
Boston, MA 02109
Gary R. Johnson 55,000(4) *
Oscar L. Pierce 445,575(5)(12) 3.49%
David S. Butler 177,950(6) 1.39%
R. Byron Driver 52,180(7) *
Doyle C. Weeks 53,107(8) *
Douglas E. Pritchett 9,000(9) *
John R. Cooper 7,250(10) *
All executive officers and
directors as a group
(9 persons) 2,467,359(11) 19.10%
</TABLE>
- ---------------
* Less than 1%
(1) The number of shares set forth in the table reflects the 3-for-2 stock
splits effected by the Company on April 28, 1998 and December 15, 1998 as a
50% stock dividend (collectively, the "Stock Splits").
(2) Includes (i) 551,814 shares owned directly by Stephen F. Thornton (of which
53,518 shares are represented by exercisable options); (ii) 219,093 shares
owned by Judy Thornton, his wife; and (iii) 192,000 shares held by the
Thornton Family Limited Partnership, of which Mr. Thornton is a general
partner and as to which he may be deemed to share voting and investment
power.
(3) Includes (i) 423,703 shares owned directly by Remigius G. Shatas (of which
5,726 shares are represented by exercisable options); (ii) 5,062 shares
owned by his wife; (iii) 50,625 shares held by Mr. Shatas's minor child,
(iv) 225,000 shares held by Shatas Partners, Ltd., of which Mr. Shatas is a
general partner and as to which he may be deemed to share voting and
investment power.
(4) Includes 55,000 shares owned directly by Gary R. Johnson (of which 13,750
shares are represented by exercisable options).
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<PAGE> 10
(5) Includes (i) 255,038 shares owned directly by Oscar L. Pierce (of which
22,500 shares are represented by exercisable options); and (ii) 190,537
shares owned by his wife.
(6) Includes (i) 139,082 shares owned directly by David S. Butler (of which
19,375 shares are represented by exercisable options); (ii) 7,500 shares
held by him in his 401(k) Plan; (iii) 150 shares owned by Electronic
Manufacturer's Associates; and (iv) 31,218 shares owned by his wife.
(7) Includes (i) 52,068 shares owned directly by R. Byron Driver (of which
13,500 shares are represented by exercisable options); and (ii) 112 shares
owned by his wife.
(8) Includes (i) 49,395 shares owned directly by Doyle C. Weeks (of which
43,024 shares are represented by exercisable options); and (ii) 3,712
shares held by him in his IRA.
(9) Includes (i) 4,750 shares owned directly by Douglas E. Pritchett (of which
3,750 shares are represented by exercisable options); and (ii) 4,250 shares
held by him in his IRA.
(10) Includes (i) 6,250 shares owned directly by John R. Cooper (all of which
are represented by exercisable options); and (ii) 1,000 shares held by him
in his IRA.
(11) Includes 181,393 shares represented by exercisable options.
(12) Oscar L. Pierce is the brother-in-law of Stephen F. Thornton. These two
individuals beneficially own, in the aggregate, 1,408,482 shares (of which
76,018 shares are represented by exercisable options), constituting
approximately 11% of the total outstanding Common Stock of the Company.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the Company's directors and executive officers, and persons who own more than
10% of the Company's Common Stock, to file with the SEC initial reports of
ownership and reports of changes in ownership of the Common Stock. The executive
officers, directors and greater than 10% stockholders of the Company are
required by SEC rules to furnish the Company with copies of all Section 16(a)
reports they file. There are specific due dates for these reports and the
Company is required to report in this Proxy Statement any failure to file
reports as required during Fiscal 1999. Based upon a review of these filings,
the Company believes that the reporting and filing requirements relating to
ownership of Common Stock were complied with during Fiscal 1999, except that (i)
Robert A. Asprey's Form 4s reporting the gift of 5,060 shares in June 1996 and
the disposition of 22,500 shares in July 1997, respectively, were filed in March
1999; (ii) David S. Butler's Form 4 reporting the acquisition of 496 shares in
December 1995 by Electronic Manufacturer's Agents was filed in February 1999,
(iii) Gary R. Johnson's Form 3 was filed in August 1998 instead of April 1997,
and his Form 4 reporting the disposition of 15,000 shares in November 1998 was
filed in January 1999; and (iv) Christopher L. Thomas's Form 3 was filed in June
1999 instead of April 1997.
EXECUTIVE COMPENSATION
The following table sets forth compensation paid or awarded to the Chief
Executive Officer and each of the Named Executive Officers for all services
rendered to the Company and its subsidiaries in 1997, 1998 and 1999.
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
------------
ANNUAL NO. OF
COMPENSATION SECURITIES
------------------ UNDERLYING ALL OTHER
NAME/POSITION YEAR SALARY BONUS OPTIONS(1) COMPENSATION(2)
- ------------- ---- -------- ------- ------------ ---------------
<S> <C> <C> <C> <C> <C>
Stephen F. Thornton 1999 $185,015 $51,953 45,000 $6,303
Chairman of the Board, Chief Executive 1998 165,150 89,800 33,750 5,055
Officer and President 1997 160,150 32,000 33,750 5,416
</TABLE>
8
<PAGE> 11
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
------------
ANNUAL NO. OF
COMPENSATION SECURITIES
------------------ UNDERLYING ALL OTHER
NAME/POSITION YEAR SALARY BONUS OPTIONS(1) COMPENSATION(2)
- ------------- ---- -------- ------- ------------ ---------------
<S> <C> <C> <C> <C> <C>
Remigius G. Shatas 1999 139,610 42,150 22,500 4,013
Executive Vice President -- Special 1998 139,650 75,921 28,125 3,712
Projects and Secretary 1997 135,150 27,000 28,125 3,159
Doyle C. Weeks 1999 135,857 38,521 45,729 3,604
Executive Vice President -- Group 1998 115,150 97,588 22,500 3,826
Operations and Business Development 1997 105,150 25,500 22,500 2,688
Gary R. Johnson 1999 112,008 52,097 56,250 3,640
Senior Vice President -- Sales and
Marketing 1998 100,150 75,890 0 2,214
1997 90,100 13,287 56,250 1,789
R. Byron Driver 1999 125,010 35,152 22,500 3,355
Senior Vice President -- Operations and 1998 115,150 62,588 22,500 2,092
Chief Operating Officer 1997 105,150 10,500 0 1,610
</TABLE>
- ---------------
(1) The amounts listed in this column represent the number of securities
underlying options after taking into account the Stock Splits.
(2) The amounts listed in this column represent for 1999, 1998 and 1997,
respectively: (i) employer contributions to the Company's 401(k) Retirement
Plan: Stephen F. Thornton, $2,723, $1,843, and $2,573; Remigius G. Shatas,
$2,833, $2,502, and $2,045; Doyle C. Weeks, $2,422, $2,728, and $1,608; Gary
R. Johnson, $2,585, $1,184, and $759; and R. Byron Driver, $2,241, $994, and
$530; and (ii) life insurance premiums: Stephen F. Thornton, $3,036, $2,638,
and $2,269; Remigius G. Shatas, $636, $636, and $540; Doyle C. Weeks, $638,
$524, and $506; Gary R. Johnson, $511, $456, and $456; and R. Byron Driver,
$570, $524, and $506; and (iii) disability insurance premiums: Stephen F.
Thornton, $544, $574, and $574; Remigius G. Shatas, $544, $574, and $574;
Doyle C. Weeks, $544, $574, and $754; Gary R. Johnson, $544, $574, and $574;
and R. Byron Driver, $544, $574, and $574.
Option Grants in Fiscal 1999. The following table sets forth certain
information concerning individual grants of stock options made during Fiscal
1999 to certain of the Named Executive Officers:
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
NUMBER OF VALUE AT ASSUMED
SECURITIES % OF TOTAL RATES OF STOCK
UNDERLYING OPTIONS EXERCISE PRICE APPRECIATION FOR
OPTIONS GRANTED TO OR BASE OPTION TERMS(2)
GRANTED EMPLOYEES IN PRICE EXPIRATION -----------------------
NAME (#)(1) FISCAL YEAR ($/SHARE) DATE 5%($) 10%($)
---- ---------- ------------ --------- ---------- --------- -----------
<S> <C> <C> <C> <C> <C> <C>
Stephen F. Thornton 45,000 6.23% 14.22 4/27/09 402,492 1,019,994
Remigius G. Shatas 22,500 3.11% 14.22 4/27/09 201,246 509,997
Doyle C. Weeks 45,729 6.33% 14.22 4/27/09 409,012 1,036,517
Gary R. Johnson 56,250 7.78% 14.22 4/27/09 503,115 1,274,992
R. Byron Driver 22,500 3.11% 14.22 4/27/09 201,246 509,967
</TABLE>
- ---------------
(1) The amounts listed in this column represent the number of securities
underlying options after taking into account the Stock Splits. All options
outstanding were issued under the Company's 1995 Employee Stock Option Plan.
Options are exercisable 20% per year commencing on the first anniversary of
the grant date.
(2) Based upon the market price on the date of grant and an annual appreciation
at the rate stated of such market price through the expiration date of such
options. The dollar amounts under these columns are the result of
calculations at the 5% and 10% rates set by the Securities and Exchange
Commission and, therefore, are not intended to forecast possible future
appreciation, if any, of the Company's stock price. The Company did not use
an alternative formula for a grant date valuation, as the Company is not
aware
9
<PAGE> 12
of any formula which will determine with reasonable accuracy a present value
based on future unknown or volatile factors.
Option Exercises and Year-End Values. The following table sets forth
certain information concerning the exercise of stock options during Fiscal 1999
by each of the Named Executive Officers and the fiscal year-end value of
unexercised options.
<TABLE>
<CAPTION>
NUMBER OF NUMBER OF VALUE OF VALUE OF
SECURITIES SECURITIES UNEXERCISED UNEXERCISED
UNDERLYING UNDERLYING IN-THE- IN-THE-
SHARES UNEXERCISED UNEXERCISED MONEY MONEY
ACQUIRED VALUE OPTIONS AT OPTIONS AT OPTIONS AT OPTIONS AT
ON EXERCISE REALIZED FY-END(#) FY-END(#) FY-END($) FY-END($)
NAMES (#) ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
----- ----------- --------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Stephen F. Thornton 19,232 156,867 1,018 92,250 10,171 636,824
Remigius G. Shatas 0 0 16,875 61,875 179,571 503,634
Doyle C. Weeks 61,808 1,161,054 18,629 86,229 292,434 612,866
Gary R. Johnson 45,000 804,222 11,250 112,500 131,797 822,969
R. Byron Driver 0 0 4,500 40,500 48,219 276,470
</TABLE>
401(k) Retirement Plan. The Company maintains a retirement plan pursuant
to Section 401(k) of the Code (the "KPlan"), which requires, subject to certain
limited exceptions, three months of service and a minimum of 1,000 hours worked
annually to become a participant in the KPlan. The Company will match 50% of an
employee's contributions up to 6% of the employee's compensation. The Company's
expense for matching contributions totaled $52,623, $58,088 and $86,834 for
Fiscal 1997, Fiscal 1998 and Fiscal 1999, respectively.
The Company may make discretionary contributions to the KPlan in an amount
determined annually by the Board of Directors. The Company elected to make no
discretionary contributions to the KPlan for Fiscal 1997, Fiscal 1998 and Fiscal
1999. Company contributions are allocated to each participant on the basis of
compensation. Participants may make contributions to the KPlan on a payroll
deduction basis, and the Company may make matching contributions on behalf of
each participant. A separate salary reduction account and matching employer
contribution account are maintained for each participant. All accounts are
vested at retirement, death, or disability. Upon any other termination of
employment, matching and discretionary contributions are vested after the fifth
year of service. Subject to certain restrictions and tax penalties, participants
may make early withdrawals from their salary reduction accounts.
The Company also maintains a defined contribution plan (the "Contribution
Plan") for employees of its wholly owned subsidiary, Cybex Computer Products
International, Ltd. ("Cybex International"). The Contribution Plan provides for
employer contributions of 5% of employee base salary and permits voluntary
employee contributions of 5% of base salary. All employee contributions vest
immediately upon contribution, and employer contributions vest ratably over five
years. For Fiscal 1998 and Fiscal 1999, the Company contributed $20,110 and
$33,204, respectively, to the Contribution Plan.
EMPLOYMENT AND CONFIDENTIALITY AGREEMENTS
Employment Agreements. Each of the Named Executive Officers of the
Company, except Gary R. Johnson, is a party to an Employment and Noncompetition
Agreement (collectively, the "Employment Agreements"). Each Employment Agreement
is effective as of April 1, 1995, and has a five-year term that is automatically
extended on April 1 of each year thereafter for one additional year. Under each
Employment Agreement, the employee receives an annual base salary, subject to
annual increases at the discretion of the Compensation Committee (not less than
the annual cost of living increase percentage), and is entitled to receive an
annual bonus at the discretion of the Compensation Committee and to participate
in the Company's 1995 Employee Stock Option Plan and all other benefit programs
generally available to executive officers of the Company.
10
<PAGE> 13
Under the terms of the Employment Agreements, Messrs. Thornton and Shatas
have each agreed that during the term of his employment with the Company and for
a term of 18 months thereafter, he will not compete, without the prior written
consent of the Company, with the Company by engaging in any capacity in any
business which is competitive with the business of the Company. Messrs. Weeks
and Driver have agreed not to compete with the Company for a period of 12 months
after termination of employment with the Company.
Under the terms of the Employment Agreements, the Company may terminate an
executive's employment for "cause," which includes acts of (i) willful
dishonesty, fraud, or deliberate injury or attempted injury to the Company or
(ii) the executive's willful material breach of the Employment Agreement which
has resulted in material injury to the Company, in which event, the executive
shall receive salary, bonus, and other benefits through the date of termination.
Under the terms of the Employment Agreements, if a participating executive is
terminated by the Company without cause, he is entitled to receive his accrued
salary, earned bonus and other benefits through the date of termination. In
addition, Messrs. Thornton and Shatas would each receive severance compensation
equal to his base salary for a period of 18 months following the date of
termination and an amount equal to his average annual bonus during the two years
immediately preceding his termination. Messrs. Weeks and Driver would each
receive severance compensation equal to his base salary for a period of six
months following the date of termination and an amount equal to one-half his
average annual bonus during the two years immediately preceding his termination.
At the executive officer's election, he may receive a lump sum severance amount
equal to the present value of such severance payments (using a discount rate
equal to the 90-day Treasury bill interest rate in effect on the date of
delivery of such election notice). The executive officers are also entitled to
accelerated vesting of any award granted under stock option plans upon
termination without cause.
If a "change-in-control" occurs, each executive officer may terminate his
Employment Agreement and receive the severance compensation described above.
The Company has agreed to indemnify each executive officer under his
Employment Agreement for certain liabilities arising from actions taken by the
executive officer within the scope of his employment.
Confidentiality Agreements. All key employees of the Company, including
the executive officers, have signed nondisclosure agreements pursuant to which
each has agreed not to disclose any of the Company's confidential information
and to assign to the Company any rights he or she may have in any design,
invention, software, process, trade secret, or intellectual property that
relates to or resulted from work performed at the Company.
COMPENSATION COMMITTEE REPORT
Introduction. This report of the Compensation Committee of the Board of
Directors discusses the compensation policies and the basis for the compensation
paid to the Company's executive officers and to Stephen F. Thornton, the
Company's President, Chief Executive Officer and Chairman of the Board, during
the fiscal year ended March 31, 1999.
The Company's policy with respect to executive compensation has been
designed to (i) adequately and fairly compensate executive officers in relation
to their responsibilities, capabilities and contributions to the Company, (ii)
reward executive officers for the achievement of short-term operating goals and
for the enhancement of the long-term shareholder value of the Company; and (iii)
align the interest of executive officers with those of the Company's
shareholders with respect to short-term operating results and long-term
increases in the price of the Company's Common Stock.
The components of compensation paid to executive officers consist of (i)
base salary, (ii) incentive compensation in the form of an annual bonus, (iii)
long-term incentive compensation in the form of options awarded by the Company
under the 1995 Employee Stock Option Plan, (iv) long-term incentive compensation
in the form of options or shares of restricted stock awarded by the Company
under the 1998 Employee Stock Incentive Plan, (v) amounts paid on behalf of
executives under the Company's KPlan and (vi) certain other benefits provided to
executive officers.
11
<PAGE> 14
The Compensation Committee establishes the general compensation policy for
the Company and has the responsibility for approving cash compensation and
increases in compensation paid to executive officers of the Company. The
Compensation Committee also administers the Company's 1995 Employee Stock Option
Plan and the 1998 Employee Stock Incentive Plan (collectively, the "Incentive
Plans"). The Compensation Committee selects the individuals who will receive
awards under the Incentive Plans and determines the timing, pricing and amounts
of options or shares of restricted stock granted under the Incentive Plans, each
in accordance with the terms of the respective Incentive Plan. The Compensation
Committee consists of three non-employee directors of the Company. The Board of
Directors of the Company is responsible for determining annual contributions by
the Company under the Company's KPlan.
The Company's executive compensation program has historically emphasized
the use of incentive based compensation to reward members of senior management
for the achievement of short-term operating goals and for increasing the
long-term shareholder value of the Company, and the Compensation Committee
intends to continue that policy. Annual bonus payments are discretionary and are
related primarily to the operating performance of the Company, in general, and
the executive, in particular. The Company has also utilized stock options in the
past to motivate a substantial number of employees, including the executive
officers, and to reward such employees for increases in the price of the
Company's Common Stock. The Company believes that its compensation policies
reward management when the Company and its shareholders have benefitted from
short-term operating results and long-term increases in the price of the
Company's Common Stock.
Executive officers are rewarded based upon corporate performance, business
unit performance and individual performance. Corporate performance and business
unit performance are evaluated by reviewing the extent to which strategic and
business plan goals are met, including such factors as profitability,
performance relative to competitors, timely product enhancements, new product
introductions and new product acquisitions. Individual performance is evaluated
by reviewing organizational and management development progress against set
objectives and the degree to which teamwork and Company values are fostered.
Compensation Vehicles. The Company has had a long and successful history
of using a simple total compensation program that consists of cash-based and
equity-based compensation. Having a compensation program that allows the Company
to successfully attract and retain key employees permits it to provide useful
products and services to customers, enhance shareholder value, motivate
technological innovation, foster teamwork, and adequately reward employees.
Base Salary. Each year, the Compensation Committee reviews and approves
the base salaries paid by the Company to the executive officers. All of the
Named Executive Officers executed employment agreements with the Company, except
Gary R. Johnson. These employment agreements provide for a base salary for each
executive officer. The Compensation Committee reviewed base salaries of
executive officers of comparable companies and determined that the Company's
executive officers were, for the most part, undercompensated as compared to
their peers. Accordingly, at its meeting on April 23, 1999, the Compensation
Committee approved increases in the base salaries of all executive officers of
the Company for Fiscal 2000 in amounts that the Compensation Committee believed
would provide base salaries commensurate with executive officers performing
comparable services for comparable companies. The Compensation Committee
believes that base salaries earned by the Company's executive officers have
historically been reasonable in relation to the Company's performance.
Annual Bonus. The compensation plan for the Company's executive officers
contemplates consideration of discretionary annual bonuses. The annual bonus is
designed to reward the achievement of short-term operating goals and long-term
increases in shareholder value. The Compensation Committee adopted a bonus
program for senior executive officers of the Company designed to award bonuses
to the senior executives based upon the achievement of certain financial goals.
The bonus program is divided into two elements. The first element is based on
the achievement of certain sales and net income goals. In particular, the bonus
program awards a 10% bonus if a specific revenue target is achieved and an
additional 10% bonus if a specific earnings per share target is achieved,
excluding mergers, acquisitions and reorganizations during the fiscal year. The
12
<PAGE> 15
second element is based on increases in the price of the Company's Common Stock
from the first to the last day of the fiscal year.
On April 23, 1999, the Compensation Committee authorized the payment of
bonuses to its executive officers and staff employees based upon their
respective performance and contribution toward the attainment of the goals of
the Company for Fiscal 1999. During Fiscal 1999, the goals of the Company were
to increase net sales and net income, introduce new products, introduce
enhancements to existing products, expand the Company's customer base, expand
its manufacturing, marketing and distribution facilities in Europe, and increase
international sales. Substantially all of its goals for Fiscal 1999 were
achieved, including the specific revenue and earnings per share targets. The
Compensation Committee evaluated the performance of each executive officer and
concluded that the successful performance of the Company during Fiscal 1999 was
due largely to the efforts of all of the executive officers. The amount of the
bonuses for the executive officers was based on the achievement of the financial
goals by the Company in Fiscal 1999 as set out in the bonus program and bonuses
for other employees were based upon a subjective assessment of the performance
of the Company during Fiscal 1999 and the individual performance of such
employees as compared with the Company's and the employee's goals for the year.
The opportunity for an annual cash bonus reflects the degree to which an
executive contributes to the realization of established short term objectives of
the Company and increasing long-term shareholder value and is intended to be a
substantial incentive for the executive officers to achieve those objectives.
Annual incentives and the combined annual cash compensation are intended to be
competitive with comparable market practices. The Compensation Committee has
established target financial objectives of the Company and the annual incentive
bonuses to be given to the executive officers, relating to the attainment of the
objectives. In 1998, the Compensation Committee determined that a larger
percentage of executive compensation would be in the form of incentive
compensation based on increases in the market price of the Company's Common
Stock. Executive bonuses and incentive compensation for Fiscal 1999 consisted of
two elements. The first element consisted of a twenty percent (20%) cash bonus
to executive officers of the Company for the achievement of certain sales and
net income goals, as outlined above. The second element of the annual cash bonus
was based on increases in the market price of the Common Stock. A cash bonus
equal to two percent (2%) of base salary was paid to each executive officer of
the Company for each five percent (5%) increase in the market price of the
Common Stock at March 31, 1999, as compared to the market price of the Common
Stock at March 31, 1998. Similarly, a reduction in the market price of the
Common Stock would reduce the bonus under the first element by an amount equal
to two percent (2%) of base salary for each five percent (5%) decrease in the
market price of the Common Stock. The price of the Common Stock had appreciated
24% from March 31, 1998 to March 31, 1999. Therefore, the bonus percentage
amount for all elements was 28.0% for Fiscal 1999. The Compensation Committee
approved the payment of bonuses to all Named Executive Officers with the
exception of Gary R. Johnson, whose cash bonus was based on achieving a certain
level of sales. The Compensation Committee is solely responsible for determining
any bonus for Mr. Thornton.
At its meeting on April 23, 1999, the Compensation Committee modified for
Fiscal 2000 the cash bonus program with respect to the element determined by
changes in the price of the Common Stock. For Fiscal 2000, the change in stock
price will be measured by selecting the highest of the lowest reported closing
prices for the Common Stock for each twenty day trading period during Fiscal
2000. If the total bonus earned in Fiscal 2000 via the two elements described
above is less than 30%, the executive officers can earn additional bonuses up to
a maximum total bonus of 30% if the Company's earnings per share ("EPS") exceeds
the specific earnings per share target. For each 1% that actual EPS exceeds
targeted EPS, an additional 2% bonus is earned.
Incentive Compensation. The purpose of the Company's Incentive Plans is to
provide additional incentives to employees to work to maximize shareholder
value. The Company also recognizes that a stock incentive program is a necessary
element of a competitive compensation package for its employees. The Plan
utilizes vesting periods to encourage key employees to continue in the employ of
the Company and thereby acts as a retention device for key employees. The
Company believes that the program encourages employees to maintain a long-term
perspective. The Company grants stock options annually to a broad-based group of
13
<PAGE> 16
the total employee population. For Fiscal 1999, the Company granted options to
purchase 296,979 shares of Common Stock to certain key employees, of which
options to purchase shares were granted to the Named Executive Officers as
follows: 45,000 to Stephen F. Thornton, 22,500 to Remigius G. Shatas, 45,729 to
Doyle C. Weeks, 22,500 to R. Byron Driver, 15,000, and 56,250 to Gary R.
Johnson.
In determining the size of an option award for an executive officer, the
Compensation Committee's primary considerations are the "grant value" of the
award and the performance of the officer measured against the same performance
criteria described above under "Introduction" which is used to determine salary.
In addition to considering the grant value and the officer's performance, the
Committee also considers the number of outstanding unvested options which the
officer holds and the size of previous option awards to that officer. The
Company does not assign specific weights to these items. Options to purchase
shares of the Company's Common Stock are generally at the fair market value of
such shares as reported by the NASDAQ Stock Market on the date of grant. Under
the terms of the Incentive Plans, the Compensation Committee has sole authority,
within the terms of the Incentive Plans, to select the employees who will be
granted options under the Incentive Plans and to determine the timing, pricing
and amount of options awarded. The Compensation Committee has adopted guidelines
with respect to the granting of options under the Plan to employees upon their
promotion to important managerial or supervisory classifications. These
guidelines, which were developed over a number of years, are designed to reward
employees upon promotion to important positions and to provide such employees
with the opportunity to share in increases in the long-term shareholder value of
the Company in amounts that are consistent with their managerial
responsibilities. The Compensation Committee believes that stock options granted
under the Incentive Plans reward executive officers only to the extent that
shareholders have benefitted from increases in the value of the Company's Common
Stock.
CEO Compensation. Stephen F. Thornton has been President and Chief
Executive Officer of the Company since 1984 and Chairman of the Board since
1987. The Compensation Committee used the same compensation policy described
above for all employees to determine Mr. Thornton's Fiscal 1999 compensation. In
setting Mr. Thornton's compensation, the Compensation Committee made an overall
assessment of Mr. Thornton's leadership in achieving the Company's long-term
strategic and business goals. Mr. Thornton's base salary reflects a
consideration of both the Company's performance and Mr. Thornton's individual
performance. The Company does not assign specific weights to these categories.
In April 1999, the Compensation Committee increased Mr. Thornton's base
salary from $185,015 to $250,000 and approved a bonus to Mr. Thornton of $51,953
for Fiscal 1999, which was approximately 28% of base salary. In accordance with
the Company's bonus program for senior executive officers adopted in 1998 by the
Compensation Committee.
Members of the Compensation Committee:
David S. Butler
John R. Cooper
Oscar Leon Pierce
COMPARATIVE PERFORMANCE GRAPH
The following line graph compares the percentage change in the cumulative
total shareholder return on the Company's Common Stock from July 28, 1995, the
completion of the Company's initial public offering, to March 31, 1999, against
the cumulative total return of the NASDAQ Stock Market -- U.S. and the
cumulative total return of a published group index for the NASDAQ Computer
Manufacturer group (the "Peer Group"), provided by the NASDAQ Stock Market. The
graph assumes the investment on July 28, 1995 of $100 in the Company's Common
Stock, the NASDAQ Stock Market -- U.S. and the Peer Group. The cumulative total
return assumes reinvestment of dividends.
14
<PAGE> 17
COMPARISON OF 44 MONTH CUMULATIVE TOTAL RETURN*
AMONG CYBEX COMPUTER PRODUCTS CORPORATION,
THE NASDAQ STOCK MARKET (U.S.) INDEX
AND THE NASDAQ COMPUTER MANUFACTURER INDEX
[GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
CYBEX NASDAQ
COMPUTER STOCK NASDAQ
MEASUREMENT PERIOD PRODUCTS MARKET COMPUTER
(FISCAL YEAR COVERED) CORPORATION (U.S.) MANUFACTURER
<S> <C> <C> <C>
7/28/95 100 100 100
3/31/96 82 110 117
3/31/97 86 122 128
3/31/98 192 185 226
3/31/99 237 250 448
</TABLE>
* $100 invested on July 28, 1995 in stock or on June 30, 1995 in index --
including reinvestment of dividends. Fiscal year ending March 31.
GENERAL INFORMATION
SHAREHOLDERS LIST
A complete list of the Shareholders entitled to vote at the annual meeting
of Shareholders to be held on July 27, 1999, will be available for inspection
during normal business hours at the principal office of the Company for a period
of at least 10 days prior to the meeting, upon written request to the Company by
a Shareholder, and at all times during the annual meeting at the place of the
meeting.
Cybex Computer Products Corporation will provide without charge a copy of
its annual report on Form 10-K, including the financial statements and schedules
thereto, for its fiscal year ended March 31, 1999, to any beneficial owner of
Cybex Computer Products Corporation Common Stock as of June 14, 1999, who
requests in writing a copy of such from its Chief Financial Officer, Douglas E.
Pritchett, c/o Cybex Computer Products Corporation, 4991 Corporate Drive,
Huntsville, Alabama 35805.
SHAREHOLDER PROPOSALS FOR 2000 ANNUAL MEETING
Shareholder proposals to be presented for consideration at the next annual
meeting of Shareholders of the Company must be received by the Company at its
executive offices at 4991 Corporate Drive, Huntsville, Alabama 35805 no later
than June 1, 2000.
15
<PAGE> 18
COUNTING OF VOTES
All matters specified in this Proxy Statement to be voted on at the annual
meeting will be by written ballot. Inspectors of election will be appointed,
among other things, to determine the number of shares outstanding, to determine
the shares represented at the annual meeting, to determine the existence of a
quorum and the authenticity, validity and effect of proxies, to receive votes of
ballots, to hear and determine all challenges and questions in any way arising
in connection with the right to vote, and to count and tabulate all votes and to
determine the result. Each item presented herein to be voted on at the annual
meeting must be approved by the affirmative vote of the holders of the number of
shares described under each such item. The inspectors of election will treat
shares represented by proxies that reflect abstentions as shares that are
present and entitled to vote for purposes of determining the presence of a
quorum. Abstentions, however, do not constitute a vote "for" or "against" any
matter and thus will be disregarded in the calculation of a plurality or of
"votes cast."
Inspectors of election will treat shares referred to as "broker non-votes"
(i.e., shares held by a broker, or other fiduciary, holding shares for a
beneficial owner with authority to vote on one proposal but lacking authority to
vote on another proposal) as shares that are present and entitled to vote for
purposes of determining the presence of a quorum. However, for purposes of
determining the outcome of any matter as to which the broker has physically
indicated on the proxy that it does not have discretionary authority to vote,
those shares will be treated as not present and not entitled to vote with
respect to that matter (even though those shares are considered entitled to vote
for quorum purposes and may be entitled to vote on other matters).
MISCELLANEOUS
The Company will bear the cost of printing, mailing and other expenses in
connection with this solicitation of proxies and will also reimburse brokers and
other persons holding shares in their names or in the names of nominees for
their expenses in forwarding this proxy material to the beneficial owners of
such shares. Certain of the directors, officers and employees of the Company
may, without any additional compensation, solicit proxies in person or by
telephone.
Management of the Company is not aware of any matters other than those
described above which may be presented for action at the meeting. If any other
matters properly come before the meeting, it is intended that the proxies will
be voted with respect thereto in accordance with the judgment of the person or
persons voting such proxies subject to the direction of the Board of Directors.
A copy of the Company's Annual Report has been mailed to all Shareholders
entitled to notice of and to vote at the annual meeting.
INCORPORATION BY REFERENCE
The Consolidated Financial Statements of the Company and Management's
Discussion and Analysis of Financial Conditions and Results of Operations, set
forth in the Company's Annual Report to Shareholders accompanying this Proxy
Statement, are hereby incorporated by reference herein.
CYBEX COMPUTER PRODUCTS CORPORATION
/s/ Remigius G. Shatas
Remigius G. Shatas
Secretary
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<PAGE> 19
CYBEX COMPUTER PRODUCTS CORPORATION
HUNTSVILLE, ALABAMA
THIS PROXY IS SOLICITED ON BEHALF OF THE
BOARD OF DIRECTORS FOR THE ANNUAL MEETING OF
SHAREHOLDERS ON THE 27TH DAY OF JULY, 1999.
The undersigned hereby appoints Stephen F. Thornton and
Remigius G. Shatas, and each of them, each with the power to appoint
his substitute, attorneys with the powers the undersigned would possess
if personally present to vote all of the Common Stock of Cybex Computer
Products Corporation held of record by the undersigned on June 14,
1999, at the annual meeting of the Shareholders to be held on the 27th
day of July, 1999, at the Holiday Inn, Research Park, 5903 University
Dr., N.W., Huntsville, Alabama 35806, at 10:30 A.M. (local time), and
at any adjournments thereof, upon the matters set forth below and
described in the notice and proxy statement for said meeting, copies of
which have been received by the undersigned; and, in their discretion,
upon all other matters which may come before the meeting. Without
otherwise limiting the general authorization hereby given, said
attorneys are instructed to vote as follows on the matters set forth
below:
(1) ELECTION OF DIRECTORS
<TABLE>
<S> <C>
FOR all nominees listed below [ ] WITHHOLD AUTHORITY [ ]
(except as marked to the contrary below) to vote for all nominees
listed below
</TABLE>
INSTRUCTION -- TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL
NOMINEE, STRIKE A LINE THROUGH THE NOMINEE'S NAME IN THE LIST BELOW.
Stephen F. Thornton, Remigius G. Shatas, David S. Butler, John R.
Cooper, Douglas E. Pritchett, Doyle C. Weeks
(2) Proposal to amend the Amended and Restated Articles of
Incorporation of the Company to increase the authorized Common
Stock of the Company to 50,000,000 shares of Common Stock, par
value $.001 per share.
FOR: [ ] AGAINST: [ ] ABSTAIN: [ ]
(3) Proposal to ratify the engagement of the accounting firm of
PricewaterhouseCoopers LLP as independent auditors for the current
fiscal year.
FOR: [ ] AGAINST: [ ] ABSTAIN: [ ]
(4) In their discretion upon such other matters as may properly come
before the meeting.
Please mark your votes as indicated in this example. [X]
The shares represented by this proxy will be voted in accordance with the
specifications made by the undersigned herein. IF NO SPECIFICATION IS MADE, THIS
PROXY WILL BE VOTED IN FAVOR OF ALL OF THE PROPOSALS.
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY IN THE ENCLOSED ENVELOPE AS
SOON AS POSSIBLE, EVEN THOUGH YOU PLAN TO ATTEND THIS MEETING.
To help our preparations for the meeting, please check here if you plan to
attend. [ ]
SIGN HERE EXACTLY AS NAME(S) APPEAR(S) HEREON:
----------------------------------------
Date:
--------------------------------------
----------------------------------------
Date:
--------------------------------------
WHEN SHARES ARE HELD BY JOINT TENANTS, BOTH SHOULD SIGN. WHEN SIGNING AS
ATTORNEY, EXECUTOR, ADMINISTRATOR, 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 PERSON.
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