AYDIN CORPORATION
Telephone 700 Dresher Road
(215) 657-7510 P.O. Box 349
FAX Horsham, PA 19044
(215) 657-3830 U.S.A.
Telex
685 1211 AYDIN UW
March 21, 1995
(VIA EDGAR)
SECURITIES & EXCHANGE COMMISSION
450 Fifth Street, N.W.
Washington, D.C. 20549-1004
RE: Definitive Proxy Material
File No. 1-7203
Gentlemen:
We enclose for filing Aydin Corporation's definitive Proxy
Materials (Notice of Annual Meeting, Proxy Statement and Form
of Proxy Card) for the Annual Stockholders Meeting to be held
on April 28, 1995. The filing fee of $125 was paid by Fedwire
on March 17, 1995.
The Proxy Material is first being mailed to stockholders this
date.
The Company intends to file a registration statement (Form S-8)
to register the shares covered by the Individual Non-Qualified
Stock Options and the amended 1994 Incentive Stock Option Plan
as soon as those two proposals are approved by the
stockholders.
Very truly yours,
/s/ Robert A. Clancy
Robert A. Clancy
Secretary and
Corporate Counsel
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 sec240.14a-11(c) or
sec240.14a-12
___________________AYDIN 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] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1),
14a-6(i)(2) or item 22(a)(2) of Schedule 14A.
[ ] $500 per each party to the controversy pursuant to
Exchange Act Rule 14a-6(i)(3).
[ ] Fee computer on table below per Exchange Act Rules 14a-
6(i)(4) and 0-11.
1) Title of each class securities to which transaction
applies:
...................................
2) Aggregate number of securities to which transaction
applies:
...................................
3) Per unit price or other underlying value of transaction
computer 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
the 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:___________________________________________
AYDIN CORPORATION
700 Dresher Road
Horsham, PA 19044
_____________________
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
April 28, 1995
_____________________
TO THE STOCKHOLDERS OF AYDIN CORPORATION:
The Annual Meeting of Stockholders of AYDIN CORPORATION, a
Delaware corporation (the "Company"), will be held on Friday,
April 28, 1995, at 3:00 p.m. local time at the Company's
Corporate Offices, 700 Dresher Road, Horsham, Pennsylvania, for
the following purposes:
1. To elect six Directors, each to hold office for a term of
one year and until his successor has been duly elected;
and
2. To approve the Individual Non-Qualified Stock Options; and
3. To approve an amendment to the 1994 Incentive Stock Option
Plan; and
4. To transact such other business as may properly come
before the Annual Meeting and any adjournment thereof.
The Board of Directors has fixed the close of business on
March 1, 1995, as the record date for the determination of
stockholders entitled to notice of and to vote at the Annual
Meeting.
A copy of the Company's Annual Report for its fiscal year
ended December 31, 1994, is being transmitted herewith.
WHETHER OR NOT YOU EXPECT TO ATTEND THE ANNUAL MEETING IN
PERSON, PLEASE FILL IN, DATE, SIGN AND RETURN THE ENCLOSED FORM
OF PROXY IN THE ENVELOPE PROVIDED.
By Order of the Board of
Directors,
Robert A. Clancy
Secretary
March 21, 1995
AYDIN CORPORATION
____________________
PROXY STATEMENT
____________________
This Proxy Statement and the accompanying form of Proxy, which
are first being mailed to stockholders on March 21, 1995, are
furnished in connection with the solicitation by the Board of
Directors of Aydin Corporation (hereinafter called the "Company")
of proxies to be voted at the Annual Meeting of Stockholders to
be held Friday, April 28, 1995, at 3:00 p.m. local time, and at
any adjournment thereof (hereinafter the "Annual Meeting"). The
Company's principal executive offices are located at
700 Dresher Road, Horsham, Pennsylvania 19044.
Shares represented by proxies in the accompanying form, if
properly signed and returned, will be voted in accordance with
the specifications made thereon by stockholders. Nominees for
Directors shall be elected by a plurality of the votes of the
shares present in person or represented by proxy at the Annual
Meeting and entitled to vote on the election of Directors. Any
proxy not specifying to the contrary will be voted for the
election of the nominees for Directors named below, for the
approval of the Individual Non-Qualified Stock Options (the
"Individual Options"), and for approval of the amendment to the
Company's 1994 Incentive Stock Option Plan (the "1994 Plan").
A stockholder who signs and returns a proxy in the accompanying
form may revoke it at any time before it is voted by giving
written notice thereof to the Secretary of the Company.
The cost of solicitation of proxies in the accompanying form
will be borne by the Company, including expenses in connection
with preparing and mailing this Proxy Statement. Such
solicitation will be made by mail and may also be made on behalf
of the Company by the Company's regular officers and employees,
without additional remuneration, personally or by telephone or
telegram. The Company will also, upon request, reimburse brokers
or persons holding shares in their name or in the names of
nominees for their reasonable expenses in sending proxies and
proxy material to beneficial owners.
As of the close of business on March 1, 1995, the Company had
outstanding 5,001,088 shares of Common Stock, $1.00 par value,
each of which is entitled to one vote. A majority of the
outstanding shares will constitute a quorum at the Annual
Meeting. Abstentions and broker non-votes are counted for
purposes of determining the presence or absence of a quorum for
the transaction of business. Only holders of Common Stock of
record at the close of business on March 1, 1995, will be
entitled to notice of and to vote at the Annual Meeting.
Cumulative voting rights do not exist with respect to the
election of Directors.
With regard to the election of directors, votes may be cast
in favor or withheld; votes that are withheld will be excluded
entirely from the vote and will have no effect. Abstentions may
be specified on the proposals to approve the Individual Options
and the 1994 Plan (but not on the election of directors) and will
be counted as present for purposes of the item on which
abstention is noted. Since the approval of the Individual
Options and the 1994 Plan requires the approval of the holders of
a majority of the outstanding shares represented in person or by
proxy and entitled to vote at the Annual Meeting, abstentions
will have the effect of a negative vote. Under the rules
(page 1)
of the New York Stock Exchange, Inc., brokers who hold shares in
street name for customers have the authority to vote on certain
items when they have not received instructions from beneficial
owners. Brokers that do not receive instructions are entitled to
vote on the election of directors, the Individual Options and the
1994 Plan. Under applicable Delaware law, a broker non-vote will
have the same effect as a vote against approving the Individual
Options and the proposed amendment of the 1994 Plan but will have
no effect on the outcome of the election of directors.
BENEFICIAL OWNERSHIP OF COMMON STOCK
The following table sets forth, as of the dates indicated,
the name and address of each person known by the Company to be
the beneficial owner of more than 5% of the Company's outstanding
voting securities and the percentage of the shares so owned:
Title of Name and Address of Amount and Nature of Percent
Class Beneficial Owner Beneficial Ownership(1) of Class
_____ ___________________ _______________________ ________
Common Stock, Ayhan Hakimoglu 596,453(2)(3) 11.9%
$1.00 par 700 Dresher Road
value Horsham, PA 19044
Common Stock, Victor Posner 334,500(4) 6.7%
$1.00 par 6917 Collins Avenue
value Miami Beach, FL 33141
Common Stock, College Retirement 302,550(5) 6.0%
$1.00 par Equities Fund
value 730 Third Avenue
New York, NY 10017
Common Stock, Oppenheimer Group, Inc. 264,400(6) 5.3%
$1.00 par Oppenheimer Tower
value World Financial Center
New York, NY 10281
______________
<FN>
(1) Based on information furnished by the stockholder.
(2) As of March 1, 1995. Sole voting and investment power.
(3) Includes 5,000 shares which Mr. Hakimoglu may acquire upon
the exercise of options currently exercisable or that will
become exercisable within 60 days.
(4) As of December 29, 1993. Sole voting and investment power.
(5) As of February 10, 1995. Sole voting and investment power.
(6) As of February 1, 1995. Shared voting and investment power.
(page 2)
BENEFICIAL OWNERSHIP BY MANAGEMENT
The following table sets forth, as of March 1, 1995, the
amount and percentage of the Company's outstanding Common Stock,
$1.00 par value, beneficially owned by each Director, the chief
executive officer, the four other most highly compensated
executive officers, as identified in the Summary Compensation
Table herein, and all Directors and executive officers as a
group:
Title of Name of Amount and Nature Percent
Class Beneficial Owner of Ownership (1)(2) of Class
________ ________________ ___________________ ________
Common Stock I. Gary Bard............. 0 -
Dr. Nev A. Gokcen........ 17,000 (4)
Ayhan Hakimoglu.......... 596,453 (3) 11.9%
Donald S. Taylor......... 10,000 (4)
Harry D. Train, II....... 2,000 (4)
John F. Vanderslice...... 14,653 (4)
Gary T. Boswell.......... 5,875 (4)
Demirhan Hakimoglu....... 9,172 (4)
John C. Wong............. 6,750 (4)
All of the above and other
executive officers as a group
(Includes 12 persons).... 674,529 13.3%
_____________________________
<FN>
(1) Based on information furnished by the respective directors
and officers. Each person has sole voting and investment
power with respect to the shares listed, except the shares
of Director Gokcen are held jointly with his spouse.
(2) Includes shares which may be acquired upon the exercise of
options currently exercisable or that will become
exercisable within 60 days as follows: Gokcen - 2,000, A.
Hakimoglu - 5,000, Train - 2,000, Vanderslice - 14,625,
Boswell - 5,875, D. Hakimoglu - 4,501,
Wong - 6,750, and the Group - 53,376.
(3) See footnote "2" to Beneficial Ownership of Common Stock
table above.
(4) Less than 1%.
PROPOSAL 1. ELECTION OF DIRECTORS
Six Directors of the Company are to be elected at the Annual
Meeting. Each Director will serve one year and until his
successor has been duly elected. Unless otherwise instructed, the
proxy holders will vote the proxies received by them for the
election of the nominees listed below, all of whom are currently
Directors of the Company. If any nominee should become
unavailable for any reason, it is intended that votes will be
cast for a substitute nominee designated by the Board of
Directors. The Board of Directors has no reason to believe that
the nominees named will be unable to serve if elected. Any
vacancy occurring on the Board of Directors for any reason may be
filled by a majority of the Directors then in office until the
next annual meeting of stockholders.
The names of the nominees for Director, all of whom are
currently Directors of the Company, and certain information
regarding them are as follows:
(page 3)
Principal Occupation Director
Name Age for Past Five Years Since
____ ___ ____________________ ________
I. Gary Bard 57 Consultant and Private Investor. Chief 1994
Operating Officer of Open Software
Foundation, developer of software and
standards for client server
technologies, from November 1992 to
February 1993, and President of
Integrated Systems Division of
Computer Sciences Corporation, designer
and manufacturer of large turnkey
information systems, from July 1984 to
November 1992.
Dr. Nev A. Gokcen 73 Thermodynamicist with the Department of 1972
the Interior, Bureau of Mines, Albany,
Oregon, which conducts minerals
research and environmental
preservation.
Ayhan Hakimoglu (1) 67 Chairman of the Board of Directors. 1967
President of the Company through
February 1992 and from March 1994
through December 1994.
Dr. Donald S. Taylor 51 President of the Company since January 1995
1995. From 1970 through 1994 held
various positions with Computer Sciences
Corporation, designer and manufacturer
of large turnkey information systems,
the last 13 years as Vice President of
its Integrated Systems Division.
Harry D. Train, II 67 Manager, Hampton Roads Operations 1984
(defense studies and analysis) of
Science Applications International
Corporation (SAIC), Norfolk, Virginia,
since October 1986.
John F. Vanderslice 53 Executive Vice President of the Company, 1994
President of its Vector Division since
1982.
________________________
<FN>
(1) Mr. Hakimoglu may be deemed to be a control person of the
Company. For information regarding his stock ownership, see
Beneficial Ownership of Common Stock table, page 2.
The Company has had an Audit Committee since September 1,
1978; and Directors Bard, Gokcen, and Train are its current
members. Its powers and duties include the following: (1) sole
authority to retain and dismiss both internal and independent
auditors; (2) approval before dissemination of any report which
contains financial data; and (3) consultation with the
independent auditors quarterly and before the Company decides any
material accounting policy. This Committee met four times in
1994.
(page 4)
The Company established an Oversight Committee
April 10, 1992, comprised of its outside Directors, currently
Bard, Gokcen and Train. Its powers and duties include the review
of the Company's policies and procedures and recommendations to
the Board of Directors of those measures this Committee believes
necessary to strengthen and ensure the effectiveness of Company
policies relating to (a) Division and Corporate Officer awareness
of federal laws and regulations affecting government contracts;
(b) compliance of outside consultants and sales representatives
with national and international regulations involving the sale of
Company products; and (c) compliance with federal laws and
regulations applicable to government contract procurement and
performance. This Committee met four times in 1994.
There are no nominating or compensation committees of the
Board of Directors. The Board of Directors met six times in
1994.
During the year ended December 31, 1994, the directors
attended all meetings of the Board of Directors and Committees on
which they served.
Each Director who is not also an employee of the Company
receives an annual director's fee of $7,500, plus $600 for each
meeting which he personally attends ($200 for each meeting in
which he participates by means of conference telephone).
Directors Bard, Gokcen and Train receive no additional fees for
serving on the Audit and Oversight Committees. Directors Bard,
Gokcen and Train have been granted Individual Non-Qualified Stock
Options (the "Individual Options"). Directors Gokcen and Train
were granted their Individual Option on October 26, 1990, to
purchase up to 2,000 shares at $10.50 per share and Director Bard
was granted his Individual Option on October 28, 1994, to
purchase up to 10,000 shares at $10.56 per share (both option
prices were at the per share market value of the Company's Common
Stock on the date of the grants, respectively), 25% exercisable
on the first anniversary of the grant and 25% each year
thereafter on a cumulative basis until the option expires five
years from the date of grant.
COMPENSATION OF EXECUTIVE OFFICERS
The following tabulation sets forth certain information with
respect to compensation paid or earned for services in all
capacities to the Company and its subsidiaries for its fiscal
years ended December 31, 1994, 1993 and 1992, of those persons
who were, at December 31, 1994, (i) the chief executive officer;
and (ii) the four most highly compensated executive officers of
the Company (the "Named Executive Officers"):
Summary Compensation Table
Annual Compensation Long-Term Compensation
Awards
___________________ _______________________
Securities Underlying
Name and Principal Position Year Salary($)(1) Bonus($) Options (#)
___________________________ ____ __________ _____ _______________________
Ayhan Hakimoglu 1994 $ 182,815 -- 20,000 (2)(6)
Chairman of the Board 1993 174,446 -- 10,000 (3)(6)
and Chief Executive Officer 1992 173,269 -- 10,000 (4)(6)
(page 5)
John F. Vanderslice 1994 128,925 $99,598 10,000
Executive Vice President and 1993 123,011 24,552 - 0 -
President, Vector Division 1992 126,521 2,057 - 0 -
Gary T. Boswell 1994 118,633 -- 1,000
Vice President and President, 1993 115,302 -- - 0 -
Computer & Monitor Division 1992 117,418 -- - 0 -
Demirhan Hakimoglu 1994 125,429 6,028 3,000
Vice President and Chief 1993 127,505 3,131 1,000 (5)(6)
Executive Officer, 1992 127,135 27,490 - 0 -
Aydin-Yazilim, A.S.
John C. Wong 1994 113,910 -- - 0 -
Vice President and President, 1993 80,353 -- 15,000
Controls Division 1992 -- -- --
________________________
<FN>
(1) Includes any sums deferred for the individual under the
Company's 401(k) plan.
(2) This total of 20,000 shares includes 5,000 shares granted on
February 25, 1994, that were cancelled and re-priced and
granted on October 28, 1994, at current market price.
(3) Cancelled and re-issued by agreement on October 28, 1994,
and re-priced and granted at current market price.
(4) Cancelled and re-issued by agreement on August 2, 1993, and
re-priced and granted at current market price.
(5) Cancelled and re-issued by agreement on March 28, 1994, and
re-priced and granted at current market price.
(6) All options that are re-issued constitute a new grant and
the optionee must hold the option for one year before the
first 25% becomes exercisable.
OPTION GRANTS IN LAST FISCAL YEAR
Shown below is further information on grants of stock options
pursuant to the Company's 1994 Incentive Plan, the 1984
Non-Qualified Plan or an Individual Non-Qualified Stock Option
during the year ended December 31, 1994, to the Named Executive
Officers.
(page 6)
Number of Potential Realizable Value
Securities Options Value at Assumed
Underlying Granted to Annual Rates of Stock
Options Employees Exercise Price Appreciation
Granted in Price Expiration for Option Term
Name (#)(1) 1994 $/Sh) Date 5%($) 10%($)
Ayhan Hakimoglu 5,000(2) 2.6% (2) $14.37(2) 2-25-99(2) $19,851(2) $ 43,865 (2)
15,000 7.9% 11.62 10-28-99 48,156 106,412
John F. Vanderslice 10,000 5.3% 10.56 10-28-99 29,175 64,470
Gary T. Boswell 1,000 0.5% 13.06 2-25-99 3,608 7,973
Demirhan Hakimoglu 3,000 1.6% 13.06 3-28-99 10,825 23,920
John C. Wong -0- -- -- -- -- --
<FN>
________________________
(1) All options expire five years from date of grant.
Twenty-five percent of the option shares become exercisable
one year from date of grant and an additional 25% each year
thereafter on a cumulative basis. All options were granted
with an exercise price equal to the per share fair market
value on the date of the grant.
(2) This option to purchase 5,000 shares was cancelled and
re-issued at the current market price on October 28, 1994.
The re-priced option for 5,000 shares is included in the
15,000 share total set forth immediately below.
AGGREGATED OPTION EXERCISES AND FISCAL YEAR-END OPTION VALUES
Shown below is information with respect to the year-end value
of unexercised options to purchase the Company's Common Stock
granted in prior years under the Company's 1981, 1983 or 1994
Incentive Plans, the 1984 Non-Qualified Plan or an Individual
Non-Qualified Stock Option to the Named Executive Officers and
held by them at December 31, 1994. No Named Executive Officer
exercised an option during 1994.
Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money Options at
Options at FY-End (#) FY-End ($)(1)
Name Exercisable Unexercisable Exercisable Unexercisable
____ ___________ _____________ ___________ _____________
Ayhan Hakimoglu 5,000 15,000 $ 3,500 $ 9,450
John F. Vanderslice 14,625 10,000 24,716 16,900
Gary T. Boswell 5,625 1,000 9,506 - 0 -
Demirhan Hakimoglu 4,876 3,000 8,240 - 0 -
John C. Wong 3,750 11,250 - 0 - - 0 -
<FN>
________________________
(1) Based on the closing price on December 30, 1994, on the New
York Stock Exchange of $12.25 per share.
TEN-YEAR OPTION REPRICING
On March 28, 1994 the Board of Directors, and on October 28,
1994 the Special Committee of Board of Directors, offered
Demirhan Hakimoglu and Ayhan Hakimoglu, respectively, the
election
(page 7)
to cancel certain stock options having an exercise price that
exceeded the current per share fair market value ($13.06 and
$10.56, respectively) of the Company's stock and receive a new
stock option at that day's mean price. The Board and the Special
Committee stated that the original purpose for granting the
options, i.e., as an incentive for increased effort during their
employment, was lost when the stock option became valueless.
These two Named Executive Officers, shown in the table below,
elected to cancel their prior options and receive new ones at the
then current price.
The foregoing report has been furnished by Messrs. Hakimoglu,
Bard, Gokcen, Taylor, Train and Vanderslice.
Shown below is information with respect to stock options
cancelled and new options granted for the same number of shares
at the new exercise price during the last ten years to an
executive officer of the Company.
Number of Market Price Exercise
Securities of Stock at Price At Length of Original
Underlying Time of Time of Option Term
Options Repricing or Repricing New Remaining at Date of
Repriced or Amendment or Exercise Repricing or
Name Date Amended(#) ($) Amendment($) Price ($) Amendment
____ ____ ___________ ____________ ____________ _________ ____________________
Ayhan Hakimoglu 10-28-94 5,000 $10.56 $14.37 $11.62 4 years-4 months
Chairman and Chief 10-28-94 3,000 10.56 16.31 11.62 3 years-9 months
Executive Officer 10-28-94 7,000 10.56 17.94 11.62 3 years-9 months
8-2-93 7,000 16.31 28.05 17.94 3 years-6 months
8-2-93 3,000 16.31 25.50 16.31 3 years-6 months
Demirhan Hakimoglu 3-28-94 1,000 13.06 15.56 13.06 1 year-11 months
Vice President and CEO 3-28-94 1,000 13.06 16.31 13.06 4 years-4 months
of Aydin-Yazilim, A. . 8-2-93 1,000 16.31 22.69 16.31 2 years-11 months
Palle S. Christensen 11-2-90 25,500 10.56 13.42 10.56 2 years-9 months
Executive Vice President
and President, Aydin
Corporation (West)
John F. Vanderslice 11-2-90 12,000 10.56 14.50 10.56 2 years-1 month
Vice President and 11-2-90 1,500 10.56 14.46 10.56 4 months
President, Vector 11-2-90 3,000 10.56 13.33 10.56 2 years-7 months
Division 5-22-85 2,000 18.56 34.31 18.56 2 years-5 months
Alfred M. Vara 11-2-90 2,000 10.56 15.44 10.56 3 years-2 months
Vice President and 11-2-90 5,000 10.56 14.88 10.56 4 years-5 months
President, Controls 11-2-90 1,200 10.56 14.25 10.56 3 years-7 months
Division
Gary T. Boswell 11-2-90 16,500 10.56 17.50 10.56 1 year-2 months
Vice President and 11-2-90 6,000 10.56 14.50 10.56 2 years
President, Computer
and Monitor Division
Herbert Welber 11-2-90 1,500 10.56 14.50 10.56 2 years-11 months
Controller and 11-2-90 3,000 10.56 13.96 10.56 7 months
Assistant Treasurer
Donald O. Wennerstrom 1-27-88 2,000 24.00 31.81 24.00 4 years-3 months
General Manager, Radar &
EW Division
(page 8)
Gerald S. Mersten 1-27-88 8,000 24.00 34.13 24.00 4 years-8 months
Vice President and
President, Computer
Division
BOARD OF DIRECTORS REPORT ON EXECUTIVE COMPENSATION
The Board of Directors has furnished the following report
on executive compensation dated February 24, 1995:
Under the supervision of the Chairman of the Board of
Directors, the Company has developed and implemented compensation
policies which seek to enhance the profitability of the Company,
and thus stockowner value, by aligning closely the financial
interests of the Company's senior managers with those of its
stockowners. In furtherance of these goals, annual base salaries
are generally set somewhat below competitive levels so that the
Company relies to a large degree on annual bonus arrangements and
stock options to attract and retain corporate officers and other
key employees and to motivate them to perform to the full extent
of their abilities. The bonus arrangements are variable and tied
to corporate and division performance in a manner that encourages
a sharp and continuing focus on building profitability and
stockowner value.
The Company has bonus arrangements based on operating
results with substantially all of its key employees. For
division and major subsidiary presidents (i.e., Messrs.
Vanderslice, Boswell, D. Hakimoglu and Wong and the presidents of
the other five divisions) those bonuses are principally based on
the profitability of their respective division. The specific
bonus formula varies with each division, depending upon its size
and the characteristics of its operations, but generally involves
a percentage (e.g., 0.75% to 7%) of the net profits after
deduction of a threshold figure (e.g., from $0 to $2,000,000),
and a percentage (e.g., 0% to 0.25%) of the increase in sales
volume from the previous year if certain net profit margins are
attained (e.g., 0% to 10%). The bonus for the Chairman is
established by the Board of Directors without reference to any
pre-set formula. Directors who are not also employees of the
Company receive no bonuses.
In the early part of each fiscal year, the Chairman will
prepare an annual salary and bonus arrangement for the Company's
senior executives (other than himself). This salary and bonus
arrangement is developed based on performance judgments as to the
past and expected future contributions of the individual senior
executives. The Board reviews and fixes the base salary and
bonus of the Chief Executive Officer based on similar data and
the Board's assessment of his past performance and its
expectation as to his future contributions in leading the Company
and its businesses. This practice is subjective and not based
upon specific criteria.
In evaluating the performance and setting the compensation
of the Company's senior management, the Chairman, in making his
recommendations to the Board, also takes into account
management's commitment to the long-term success of the Company
and has taken particular note of management's success in
restructuring the Company's businesses to adjust for the decline
in its defense business and in effectively directing the
Company's operations under the difficult economic conditions in
the markets served over the last three years. The $1 million
compensation deduction cap under Section 162(m) of the Internal
Revenue Code was not discussed because the Company's compensation
levels are far below the cap.
At the beginning of each year goals are established for each
division based on its sales growth and operating earnings
potential. Financial goals include sales growth, operating
earnings and cash flow; while strategic goals focus on such
factors as new product development and new business initiatives.
On March 28, 1994 the Board of Directors, and on October 28,
1994 the Special Committee of Board of Directors, offered
Demirhan Hakimoglu and Ayhan Hakimoglu, respectively, the
election to cancel certain stock options having an exercise price
that exceeded the current per share fair market value ($13.06 and
$10.56, respectively) of the Company's stock and receive a new
stock option at that day's mean price. The Board and the Special
Committee stated that the original purpose for granting the
options, i.e., as an incentive for increased effort during their
employment, was lost when the stock option became valueless.
These Named Executive Officers elected to cancel their prior
options and receive new ones at the then current price.
The foregoing report has been furnished by Messrs.
Hakimoglu, Bard, Gokcen, Taylor, Train and Vanderslice.
EMPLOYMENT CONTRACTS AND
TERMINATION OF EMPLOYMENT ARRANGEMENTS
On January 3, 1995, Dr. Donald S. Taylor commenced at will
employment with the Company as President and was elected to the
Board of Directors to fill the term of Dr. Frederick G. Allen who
retired after 22 years. As part of his compensation package, in
addition to his salary, Dr. Taylor will receive an incentive
bonus equal to 3% of the net pretax profit of the combined
Controls, Computer & Monitor and Raytor units (Aydin East), but
not less than $15,000 per quarter for the first eight quarters of
his employment. Further, as an inducement to enter into
employment with the Company, Dr. Taylor was granted (i) an
Individual Non-Qualified Stock Option to purchase within five
years 70,000 shares, exercisable 25% each year starting January
3, 1996 at the option price of $11.56 per share, $.57 below the
fair market value of the shares on the date of grant, and (ii) a
restrictive stock award (the "Award") of 10,000 shares of the
Company's common stock that will vest over a four-year period
(2,500 shares per year commencing January 3, 1996).
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Directors Hakimoglu and Vanderslice, members of the Board
of Directors voting on the compensation recommendations for other
executive officers of the Company were, during the fiscal year,
officers and employees of the Company.
(page 10)
SHAREHOLDER RETURN PERFORMANCE PRESENTATION
Set forth below is a line graph comparing the cumulative
total shareholder return on the Company's Common Stock against
the cumulative total return of the S&P 500 Stock Index and the
S&P High Technology Composite Index for the period of five fiscal
years commencing December 29, 1989, and ended December 31, 1994.
Comparison of Five-Year Cumulative Total Return*
Aydin Common, S&P 500 Stock & S&P High Technology
Composite Indices
COMPARISON OF FIVE YEAR CUMULATIVE RETURN
AMONG AYDIN CORP, S&P 500 INDEX AND S&P HI-TECH COMPOSITE INDEX
Measurement Period Aydin Corp. S&P 500 Index S&P Hi-Tech
(Fiscal Year Composite
Covered) Index
Measurement Pt 12/29/89 $100.00 $100.00 $100.00
FYE 12/31/90 $80.30 $96.87 $102.87
FYE 12/31/91 $142.15 $125.81 $137.21
FYE 12/31/92 $101.93 $134.93 $185.51
FYE 12/31/93 $76.44 $148.01 $242.18
FYE 12/31/94 $78.04 $145.73 $306.96
<FN>
* Assumes $100 invested in Aydin Common Stock and each index
on December 29, 1989, and that all dividends were
reinvested.
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
Section 16(a) of the Securities Exchange Act of 1934
requires the Company's officers and directors, and persons who
own more than ten percent of a registered class of the Company's
equity securities, to file reports of ownership and changes in
ownership of such securities with the Securities and Exchange
Commission and the New York Stock Exchange. Officers, directors
and greater than ten-percent beneficial owners are required by
applicable regulations to furnish the Company with copies of all
Section 16(a) forms they file. The Company is not aware of any
beneficial owner of more than ten percent of its Common Stock
other than its Chairman, Ayhan Hakimoglu.
(page 11)
Based solely upon a review of the copies of the forms
furnished to the Company, or written representations from certain
reporting persons that no Forms 5 were required, the Company
believes that all filing requirements applicable to its officers
and directors were complied with during 1994.
PROPOSALS 2 AND 3 SUMMARY
There will be presented to the meeting two additional
proposals to be voted upon separately: (i) to approve the
Individual Non-Qualified Stock Options (the "Individual Options")
granted to one outside director and three officers of the
Company; and (ii) to amend the 1994 Incentive Stock Option Plan
(the "1994 Plan" or the "Plan") to increase the number of shares
from 100,000 to 150,000 for which options may be granted under
the Plan. Stockholder approval of these two proposals is a
prerequisite to listing the shares on the New York Stock
Exchange.
Shown below is information on the stock options granted to
date under the 1994 Plan and since October 28, 1994 for the
Individual Options to (i) Named Executive Officers; (ii) all
current executive officers as a group ("Executive Group");
(iii) all current Directors who are not executive officers as a
group ("Non-Executive Directors Group"); and (iv) all employees,
including all current officers who are not executive officers
("Non-Executive Officer Employee Group").
NEW PLAN BENEFITS
1994 Incentive Individual
Stock Option Non-Qualified
Plan Shares Option Shares
Name and Position Granted Granted
_________________ ______________ _____________
Ayhan Hakimoglu 20,000 (1) - 0 -
Chairman of the Board and
Chief Executive Officer
John F. Vanderslice - 0 - 10,000
Executive Vice President and
President, Vector Division
Gary T. Boswell 1,000 - 0 -
Vice President and General Manager,
Computer & Monitor Division
Demirhan Hakimoglu 3,000 - 0 -
Vice President and Chief Executive
Officer, Aydin-Yazilim, A. S.
John C. Wong - 0 - - 0 -
Vice President and General Manager,
Controls Division
Executive Group 35,000 (1) 80,000
Non-Executive Director Group - 0 - 10,000
Non-Executive Officer Employee Group 91,400 - 0 -
<FN>
__________________________
(1) This total includes 5,000 shares granted on
February 25, 1994, that were cancelled and re-priced and
granted on October 28, 1994, at current market price.
(page 12)
PROPOSAL 2. APPROVAL OF INDIVIDUAL NON-QUALIFIED STOCK OPTIONS
Background
On October 28, 1994, the Board of Directors granted
Individual Options to Director Bard and executive officers
Vanderslice and LoCasale, each to purchase 10,000 shares of the
Company Common Stock at $10.56 a share, the fair market value of
the shares on the date of grant. On January 3, 1995, the date
Dr. Taylor commenced his employment with the Company and pursuant
to resolutions adopted November 14, 1994 (the "Resolutions"), the
Board of Directors granted Dr. Taylor an Individual Option to
purchase 70,000 shares of the Company's Common Stock at $11.56 a
share, the price established by the Resolutions. On March 7,
1995, the closing price of the Company's Common Stock on the New
York Stock Exchange was $12.50.
The Individual Options
All of the Individual Options provide that no option is
exercisable prior to one year nor after five years from the date
on which the option is granted (the "Option Period"). Unless the
option agreement provides otherwise, 25% of each option granted
is exercisable commencing one year from the date of grant, and an
additional 25% becomes exercisable each year thereafter during
the Option Period on a cumulative basis. As of March 7, 1995,
under all of the Individual Options granted on or after October
28, 1994, there were outstanding options to purchase an aggregate
of 100,000 shares, with expiration dates ranging from October 28,
1999 to January 3, 2000, having an average purchase price of
$11.26.
No Individual Option is assignable or transferrable
otherwise than by will or by the laws of descent and
distribution, and during the lifetime of the optionee the option
is exercisable only by the optionee. If the optionee attempts to
transfer, assign, pledge, hypothecate or otherwise dispose of any
option or any right thereunder, such attempt will be void and of
no effect, and the Company shall have the right to terminate the
options granted as of the date of such purported transfer,
assignment, pledge, hypothecation or other disposition.
An optionee may exercise an option by giving written notice
to the Company specifying the number of shares to be purchased
and by submitting the purchase price of the shares. Payment of
the purchase price under the Individual Options may be made in
cash (including check, bank draft, or money order) or by delivery
to the Company of shares of the Company's Common Stock ("Stock")
already owned by the option holder, or by a combination of cash
and Stock. Any such Stock so delivered shall be valued at its
fair market value (the mean of the high and the low prices on the
principal exchange upon which the Stock is traded) on the trading
date immediately preceding the date of exercise of the option.
Any option not exercised within the period fixed for its exercise
shall terminate and become void and of no effect.
The Company may postpone the issuance and delivery of
shares upon any exercise of an Individual Option until (i) the
admission of such shares to listing on any stock exchange on
which shares of the Company of the same class are then listed;
and (ii) the completion of such registration or other
qualification of such shares under any state or federal law, rule
or regulation as the Company shall determine to be necessary or
advisable. Any person exercising an option shall make such
representations and furnish such information as may in the
opinion of counsel for the Company be appropriate to permit the
Company, in the light of the then existence or non-existence of
an effective registration statement under the Securities Act of
1933 (the "Securities Act") with respect to such shares, to issue
the shares in compliance with the provisions of that or any
comparable act. In the absence of an appropriate registration
statement, the restrictions contained in Rule 144 promulgated
under the Securities Act, as from time to time amended, will
apply to sales of
(page 13)
option shares by persons who may be deemed to be "affiliates" as
defined in Rule 144. An "affiliate" of an issuer is defined in
Rule 144 as a person that directly, or indirectly through one or
more intermediaries, controls, or is controlled by, or is under
common control with, such issuer.
Under the Individual Options, if the employment (or
position as non-employee Director, as the case may be) of any
optionee is terminated, options are exercisable only to the
following extent: (i) if the employment is terminated otherwise
than by death of the optionee, the optionee shall have the right
at any time within thirty (30) days thereafter, but in no event
after the expiration of the Option Period, to exercise the option
with respect to all or any part of the number of shares which the
optionee could have purchased on the date of the termination of
employment; and (ii) if the employment is terminated by the death
of the optionee, the person or persons to whom the optionee's
rights under the option granted shall pass by will or by the
applicable laws of descent and distribution shall have the right
at any time within three months after the optionee's death, but
in no event after the expiration of the Option Period, to
exercise the option with respect to all or any part of the number
of shares which the optionee could have purchased on the date of
death.
The Federal income tax consequences to an employee who
receives or holds an Individual Option will be generally as
follows. An employee will not realize any income at the time the
option is granted. The employee, including a director, officer
or beneficial owner of more than ten percent of the Common Stock
of the Company (hereinafter, a "director, officer or principal
stockholder"), will realize income at the time he exercises any
option in a total amount equal to the sum of (i) in the case of
an option with respect to which the employee uses cash to pay the
option price, the amount by which the fair market value at the
time of issuance of the shares acquired pursuant to the exercise
of an option exceeds the price paid for such shares pursuant to
the exercise of such option; and (ii) in the case of an option
with respect to which an employee uses shares of Common Stock of
the Company which he owns to pay the exercise price, the total
fair market value, at the time of issuance, of the number of
shares issued in excess of the number of shares surrendered upon
such exercise.
If an individual uses shares of Common Stock of the Company
which he owns to pay, in whole or in part, the exercise price for
optioned shares under the Individual Option, (i) the individual's
holding period for the newly issued shares of Common Stock equal
in value and number to the old shares (the "exchanged" shares)
which were surrendered upon the exercise shall include the period
during which the old shares were held; (ii) the employee's basis
in such exchanged shares will be the same as his basis in the old
shares surrendered; and (iii) no gain or loss will be recognized
by the employee on the exchange of the old shares surrendered for
the exchanged shares. The employee's basis in the shares
received over and above the exchanged shares will be equal to
their fair market value at the time the employee realizes income
with respect to such shares.
All income realized upon the exercise of any options will
be taxed at ordinary income rates, and will be subject to Federal
income tax withholding requirements. The Company may claim an
income tax deduction (as compensation paid) for the amount
taxable to an employee (including directors, officers and
principal stockholders) upon the exercise of options, as
described above, in the same year as those amounts are taxable to
the employee. Shares issued pursuant to the exercise of options
generally constitute a capital asset in the hands of an employee
(including a director, officer or principal stockholder), and
will be eligible for capital gain or loss treatment upon any
subsequent disposition. The employee's cost basis will be equal
to the option price plus any amount recognized as ordinary
income. Generally, an employee's (including a director, officer
or principal stockholder) holding period will commence with the
date such shares are issued to the employee by the Company, and
his basis in such shares will equal their fair market value as of
that date.
(page 14)
Approval of this proposal will require the affirmative vote
of the holders of a majority of the shares of the Company's
Common Stock represented in person or by proxy at the Annual
Meeting and is a prerequisite to the listing on the New York
Stock Exchange of the shares issuable upon the exercise of the
options granted pursuant to the Individual Non-Qualified Options.
The Board of Directors recommends a vote FOR this
proposal.
PROPOSAL 3. APPROVAL OF AN AMENDMENT TO THE
1994 INCENTIVE STOCK OPTION PLAN
Background
The Board of Directors unanimously adopted the 1994 Plan
effective as of January 3, 1994 and expiring on December 31,
2003, providing for the grant to officers and key employees of
the Company of incentive stock options to purchase a maximum of
100,000 shares of the Company's Common Stock, $1.00 par value, at
option prices not less than the fair market value of the stock on
the date the option is granted. On October 28, 1994 the Board
amended the Plan, subject to stockholder approval, increasing the
maximum number of shares to be purchased under the Plan from
100,000 to 150,000 shares. As of that date, options totalling
83,450 shares had been granted to 137 employees, leaving only
16,550 shares available for grant in the future. On
March 7, 1995, the closing price of the Company's Common Stock on
the New York Stock Exchange was $12.50. No option is exercisable
prior to one year nor after five years from the date on which the
option is granted (the "Option Period"). Pursuant to the 1994
Plan, unless the Option Agreement provides otherwise, 25% of each
option is exercisable one year from the date of grant, and an
additional 25% becomes exercisable each year thereafter during
the Option Period on a cumulative basis.
The Plan
If the employment of any optionee is terminated, options
are exercisable only to the following extent: (i) if the
employment is terminated for cause or if the optionee voluntarily
quits, the optionee shall have the right at anytime within thirty
(30) days thereafter, but in no event after the expiration of the
Option Period, to exercise the option with respect to all or any
part of the number of shares which the optionee could have
purchased on the date of the termination of employment; (ii) if
the employment is terminated otherwise than for cause,
disability, death, or voluntary resignation, the optionee shall
have the right at any time within three months thereafter, but in
no event after the expiration of the Option Period, to exercise
the option with respect to all or any part of the number of
shares which the optionee could have purchased on the date of the
termination of employment; (iii) if the employment is terminated
by death of the optionee (while employed), or within the three-
month period referred to in subsection (ii) above or within the
twelve-month period referred to in subsection (iv) below, the
person or persons to whom the optionee's rights under the option
granted shall pass by will or by the applicable laws of descent
and distribution shall have the right at any time within three
months after the optionee's death, but in no event after the
expiration of the Option Period, to exercise the option with
respect to all or any part of the number of shares which the
optionee could have purchased on the date of death; (iv) if the
employment is terminated by the disability of the optionee, the
optionee shall have the right at any time within twelve months
thereafter, but in no event after the expiration of the Option
Period, to exercise the option with respect to all or any part of
the number of shares which the optionee could have purchased on
the date of termination of employment.
The optionee may pay for the purchase of the shares under
an option granted pursuant to the 1994 Plan by cash, or by
delivering already owned Company Stock ("Stock"), or by a
(page 15)
combination of cash and Stock. The optionee may not use already
owned Company Stock to purchase shares under an option granted
pursuant to the 1994 Plan if such Stock was acquired by the
optionee pursuant to the exercise of any "Incentive Stock Option"
and the Stock so acquired has not been held by the optionee for
two years from the date the option was granted and one year from
the date of receipt of the Stock upon exercise of the option.
If shares are purchased under an option granted pursuant to
the 1994 Plan, and no disposition of the shares is made by the
optionee within two years from the date the option was granted
nor within one year after receipt of the shares upon exercise of
the option, there is no income recognized by the optionee or
deduction by the Company in the year in which the option is
granted or exercised. If the optionee disposes of shares within
two years of the date an option was granted or within one year of
receipt of the shares pursuant to the 1994 Plan, the optionee
will recognize ordinary income, and the Company will be entitled
to a deduction, in an amount equal to the excess of the fair
market value of the shares on the date of the exercise over the
option price. The excess, if any, of the amount realized upon
disposition of such shares over the fair market value of the
shares on the date of exercise will be long or short term capital
gain, depending upon the holding period of the shares, providing
the optionee holds the shares as a capital asset at the time of
disposition. If such disposition of the shares by the optionee
within two years of the date of grant of the option is a sale or
exchange with respect to which a loss (if sustained) would be
recognized by the optionee, then the amount which is includable
in the gross income of the optionee, and the amount which the
Company would be entitled to as a deduction, shall not exceed the
excess (if any) of the amount realized on the sale or exchange
over the adjusted basis of such shares. If the above mentioned
holding periods are met and the optionee later sells the shares,
assuming they constitute a capital asset in his or her hands, any
amount by which the sale proceeds exceed the option price on the
date of exercise will constitute capital gain, and any amount by
which the sale proceeds are less than the option price on the
date of exercise will constitute capital loss. At the present
time, the shares must be held for one year to constitute capital
assets.
The Board of Directors is authorized to interpret the 1994
Plan, to define the terms used therein, to prescribe, amend, and
rescind rules and regulations for the administration thereof, and
to take such other action in the administration of the 1994 Plan
as it shall deem proper, provided such interpretation shall be in
accordance with Section 422 of the Internal Revenue Code and that
the options granted under the 1994 Plan constitute "Incentive
Stock Options" within the meaning of that Section. Only the
Special Committee of the Board, composed of the three
non-employee Directors, may grant options to officers of the
Company who are also Directors. No Director is permitted to
participate in any determination or action in which such Director
may have a personal interest. To date, under the 1994 Plan as
most recently amended, options totaling 121,400 shares have been
granted to 144 employees, leaving options for 28,600 shares
available for grant in the future. At the date the 1994 Plan was
adopted, approximately 250 employees were eligible to
participate.
Approval of this proposal will require the affirmative vote
of the holders of a majority of the shares of the Company's
Common Stock represented in person or by proxy at the Annual
Meeting and is a prerequisite to the listing on the New York
Stock Exchange of the shares issuable upon the exercise of the
options granted pursuant to the amended 1994 Plan. If the
amended 1994 Plan is not approved by the stockholders, options in
excess of 100,000 shares will be terminated.
The Board of Directors recommends a vote FOR this proposal.
(page 16)
INDEPENDENT AUDITORS
On June 13, 1994, the Audit Committee of the Board of
Directors engaged the services of Grant Thornton LLP as the
Company's independent auditors through March 31, 1997. A
representative of Grant Thornton LLP will attend the Annual
Meeting and will be given an opportunity to make a statement if
he so desires and will be available to respond to appropriate
questions.
The Company's former independent auditors, KPMG Peat
Marwick LLP, were terminated by the Audit Committee
June 13, 1994, due to the fact that agreement on fees to be
charged for the Company's 1994 audit could not be reached. There
were no disagreements with KPMG Peat Marwick LLP in connection
with the audits of the fiscal years ended December 31, 1993 and
1992 and the subsequent interim period preceding the termination
with respect to matters of accounting principles or practices,
financial statement disclosure, or auditing scope and procedures,
which disagreements, if not resolved to their satisfaction, would
have caused KPMG Peat Marwick LLP to make reference to the matter
in their report. Further, the KPMG Peat Marwick LLP reports on
the financial statements of the Company for the years ended
December 31, 1993 and 1992 did not contain any adverse opinion or
disclaimer of opinion and were not qualified or modified as to
uncertainty, audit scope or accounting principles.
THE SUBMISSION OF STOCKHOLDER PROPOSALS
FOR CONSIDERATION AT THE 1996 ANNUAL MEETING
Any stockholder who desires to submit a proposal for
consideration at the 1996 Annual Meeting and who desires that the
proposal be included in the Proxy Statement issued by the Board
of Directors in connection with such Annual Meeting may request
that inclusion by submitting such proposal in writing to the
Secretary of the Company on or before November 21, 1995, in
accordance with Rule 14a-8 of the Securities and Exchange
Commission.
OTHER MATTERS
The Board of Directors does not know of any matters to be
presented for consideration, other than the matters described in
the Notice of Annual Meeting. However, if other matters are
properly presented, it is the intention of the persons named in
the accompanying proxy to vote on such matters in accordance with
their judgment.
By Order of the Board of Directors,
AYHAN HAKIMOGLU
Chairman
March 21, 1995
(page 17)
APPENDIX No. 1 (Form of Proxy Card)
Aydin Corporation AYDIN CORPORATION
700 Dresher Road PROXY FOR
Horsham, PA 19044 ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON APRIL 28, 1995
This Proxy is Solicited on Behalf of the Board of Directors
The undersigned, having received the Notice of Annual
Meeting and Proxy Statement dated March 21, 1995, hereby
constitutes and appoints Ayhan Hakimoglu and Robert A. Clancy,
and each of them acting individually, as the undersigned's
proxies, each with the power to appoint his substitute and
authorizes them to represent the undersigned and to vote all
the shares of common stock of AYDIN CORPORATION held on record
by the undersigned on March 1, 1995, at the Annual Meeting of
Stockholders to be held on April 28, 1995 or any adjournment or
postponement thereof, on the matters set forth on the reverse
side hereof.
THIS PROXY, WHEN PROPERLY EXECUTED AND RETURNED, WILL BE
VOTED IN THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED
STOCKHOLDER. IF NO DIRECTION IS GIVEN, THIS PROXY WILL BE
VOTED FOR THE ELECTION OF THE DIRECTORS RECOMMENDED BY THE
BOARD OF DIRECTORS, FOR PROPOSALS 2 AND 3 AND IN THE DISCRETION
OF THE PROXIES ON ANY OTHER MATTERS THAT MAY PROPERLY COME
BEFORE THE ANNUAL MEETING OR ANY ADJOURNMENT OR POSTPONEMENT
THEREOF.
(Continued and to be signed on the reverse side)
(Side 1)
To Vote for To Withhold 1. Board of Directors recommends and will vote FOR 2. To approve Individual Non-Qualified
all nominees authority to the election of the following as Directors unless Stock Options.
check this box vote for all otherwise directed:
nominees FOR AGAINST ABSTAIN
check this box I.G. Bard, N.A. Gokcen, A. Hakimoglu, D.S. [ ] [ ] [ ]
Taylor, H.D. Train, II and J.F. Vanderslice.
FOR WITHHOLD
To withhold authority to vote for any individual 3. To approve an Amendment to 1994
[ ] [ ] nominee while voting for the remainder, write this Incentive Stock Option Plan.
nominee's name in the space below:
FOR AGAINST ABSTAIN
_______________________________________________ [ ] [ ] [ ]
4. Subject to the limitation described in the Proxy Statement PLEASE SIGN EXACTLY AS NAME APPEARS AT LEFT.
relating to the Annual Meeting of Stockholders, in their
discretion, the proxies or their substitutes are authorized Dated: _____________________, 1995
to vote upon such other matters as may properly come before
the annual meeting or any adjournment or postponement Joint owners should each sign. When signing as attorney,
thereof. The Board of Directors is not presently aware executor, administrator, trustee or guardian, please
of any such other matters. give full title as such. If a corporation, please sign
full corporate name by the president or other authorized
officer. If a partnership, please sign partnership name
by an authorized person.
__________________________________________________
Signature
__________________________________________________
Signature if held jointly
PLEASE MARK, SIGN, DATE AND PROMPTLY RETURN THIS PROXY
CARD USING THE ENCLOSED ENVELOPE
(Side 2)
APPENDIX No. 2 (Individual Non-Qualified Stock Option)
AYDIN CORPORATION
INDIVIDUAL NON-QUALIFIED STOCK OPTION AGREEMENT
THIS AGREEMENT, made on between AYDIN
CORPORATION and its subsidiaries (hereinafter called the
"Company") and (hereinafter called "Optionee").
The Board of Directors of the Company has determined that it
is to the advantage and interest of the Company and its
stockholders to grant the option provided for herein to the
Optionee for their services to the Company and as an incentive
for increased effort in the future, and in consideration of the
mutual convenants herein contained, the parties hereto agree as
follows:
1. Shares Optioned; Time of Exercise; Option Price.
The Company grants to Optionee the right and option to
purchase, on the terms and conditions hereinafter set forth,
all or any part of an aggregate of shares of the
Company's presently authorized but unissued common stock (par
value $1.00) at the purchase price of $ per share,
excerisable at the time and for the number of shares indicated
hereafter.
A. On or after , to and including
, shares.
B. On or after , to and including
, shares.
C. On or after , to and including
, shares.
D. On or after , to and including
, shares.
2. Payment for Delivery of Stock.
The option granted hereunder shall be exercisable by Optionee
from time to time (as hereinabove provided), by delivery of
written notice specifying therein the number of shares which he
has elected to purchase and the payment to the Company of the
purchase price of the shares which Optionee shall then elect to
purchase. Payment is acceptable if it is made either: (i) in
cash (including check, bank draft, or money order); or (ii) by
delivering Company Common Stock ("Stock") already owned by
Optionee; or (iii) by a combination of cash and Stock. The fair
market value of Stock so delivered shall be the mean of the
high and the low prices on the principal Exchange upon which
the Stock is traded on the trading day immediately preceding
the date of exercise.
3. Necessity of Affiliation When Option is Exercised.
The option granted hereby and all rights hereunder to the
extent such rights shall not have been exercised, shall
terminate and become null and void if the Optionee ceases to be
affiliated with the Company (whether by resignation,
retirement, dismissal, disability or otherwise), except that
(a) in the event of the termination of such affiliation for any
reason other than the death of the Optionee, the Optionee may
at any time within a period of thirty (30) days thereafter
exercise the option granted hereby to the extent such option
was exercisable by Optionee on the date of the termination of
such affiliation, and (b) in the event of the death of the
Optionee while affiliated with the Company, the options granted
hereby which would have become exercisable by the Optionee at
time of death may be exercised immediately or any time within
three (3) months after such death by the person or persons to
whom the Optionee's rights under the option granted hereby
shall pass by will or by the applicable laws of descent and
distribution; provided, however, that in no event may the
option granted hereby be exercised to any extent by anyone
after the terminal date specified in Section 1 of this
Agreement. As used herein, the term "affiliation" includes, but
is not limited to employee or director.
4. Nonassignability of Options.
Except as otherwise provided in Section 3 of this Agreement,
the option granted hereunder and the rights and privileges
conferred hereby shall be exercisable only by the Optionee and
shall not be transferable or be assignable, either voluntarily
or by operation of law, by Optionee, in whole or in part, and
if the Optionee shall attempt to make any such transfer or
assignment of the option granted hereunder, or any of the
rights and privileges conferred, such attempt to transfer or
assign shall be void and of no affect, and the Company shall
have the right to terminate this Agreement as of the date of
such purported transfer or assignment.
5. Termination of Optionee
If Optionee is an employee or non-employee Director of the
Company, subject to the terms of any employment contract or
other arrangement to the contrary, the Company shall have the
right to terminate or change the terms of employment of the
Optionee at any time for any reason whatsoever. A leave of
absence or an interruption in service (including an
interruption during military service) authorized or approved by
the Company shall not be deemed a termination of employment for
the purpose of this Section 5.
6. Compliance with Governmental and Other Regulations.
This option shall not be exercisable in whole or in part, and
the Company shall not be obligated to sell any shares of stock
pursuant to the exercise of this option, (a) until this option
has been approved by the shareholders of the Company, and (b)
if such exercise and sale would, in the opinion of counsel for
the Company, require registration of such shares under the
Securities Act of 1933 (or other Federal or State statues
having similar requirements), as it may be in effect at that
time, and the Company shall at such time not desire to so
register such shares. If at any time the Board of Directors of
the Company shall determine in its discretion that the listing
or qualifications of the shares of stock subject to this option
on any securities exchange or under any applicable law, or the
consent or approval of any governmental regulatory body, is
necessary or desirable as a condition of, or in connection with
the issue of shares pursuant to the exercise hereof, this
option may not be exercised in whole or in part unless such
listing, qualification, consent or approval shall have been
effected or obtained free of any conditions not acceptable to
the Company's Board of Directors.
7. Acquisition for Investment; Notification of Disposition.
By accepting this option, Optionee agrees for himself, his
heirs, and legates that any and all shares purchased hereunder
shall be acquired for investment and not for distribution, and
upon the issuance of any or all of the shares subject to the
option granted hereunder, Optionee, his heirs or legates
receiving such shares, shall deliver to the Company a
representation in writing that such shares are being acquired
in good faith for investment and not for distribution. The
Company, at its sole discretion, may take all reasonable steps
(including the affixing of an appropriate legend on
certificates embodying the shares) to assure itself against any
sale or distribution by Optionee not in compliance with the
Federal or State securities laws. In the event that the
Optionee at any time contemplates the disposition (whether by
sale, exchange, gift or other form of transfer) of any shares
of stock acquired pursuant to the exercise of the option
granted hereby, Optionee will first notify the Company of such
proposed disposition and will thereafter cooperate with the
Company in complying with all the applicable requirements of
law which, in the opinion of the Company, must be satisfied
prior to the making of such disposition. In the event that the
Optionee disposes (whether by sale, exchange, gift or any other
transfer) of any shares of stock acquired pursuant to the
exercise of the option granted hereby, within one (1) year
after the transfer of such shares to him upon his exercise of
such option, he will notify the Company in writing within
thirty (30) days after such disposition.
8. Adjustments
In the event that the shares of stock subject to the option
granted hereby shall be changed into or exchanged for a
different number of kinds of shares of stock or other
securities of the Company, or of another corporation (whether
by reason of merger, consolidation, recapitalization,
reclassification, split-up, combination of shares or otherwise)
or if the number of such shares of stock shall be increased
through the payment of a stock dividend, then there shall be
substituted for or added to each share of stock of the Company
theretofore or thereafter subject to this option the number and
kind of shares of stock or other securities into which each
outstanding share of stock of the Company shall be so changed,
or for which each such share shall be exchanged, or to which
each such shall be entitled, as the case may be. This option
shall also be appropriately amended as to price and any other
terms as may be necessary to reflect the foregoing events. In
the event there shall be any other change in the number or
kinds of the outstanding shares of stock of the Company subject
to this option, or of any stock for which it shall have been
exchanged, then if the Company's Board of Directors shall, in
its sole discretion, determine that such change equitably
requires an adjustment in this option, such adjustments shall
be made in accordance with such determination. No fractional
shares will be issued as a result of any adjustment in this
option pursuant to this Section 8, nor shall any cash payment
be made in lieu thereof. To the extent possible, any fractional
shares resulting from such adjustment will be aggregated and
the resulting whole shares added to any shares remaining to be
purchased under this option. Notice of any adjustment shall be
given by the Company to the Optionee and such adjustment
(whether or not such notice is given) shall be final,
effective, binding and conclusive for all purposes hereof.
The Board of Directors shall have the power, in the event of
any merger or consolidation of the Company with or into any
other corporation or company, to amend this option to permit
the exercise of this option prior to the effectiveness of any
such merger or consolidation and to terminate this option as of
such effectiveness. If the Board of Directors of the Company
shall exercise such power, this option shall be deemed to have
been amended to permit the exercise hereof in whole or in part
by the Optionee at any time or from time to time as determined
by the Board of Directors prior to the effectiveness of such
merger or consolidation, and this option shall be deemed to
terminate upon such effectiveness.
9. Rights of Optionee in Stock.
Neither the Optionee nor his executor, administrator, heirs or
legatees shall be or have any rights or privileges of a
shareholder of the Company in respect to the shares issuable
upon exercise of the option granted hereunder, unless and until
certificates representing such shares shall have been issued
and delivered.
10. Notices
Any notice to be given under the terms of this Agreement shall
be addressed to the Company at 700 Dresher Road, P.O. Box 349,
Horsham, PA 19044, and any notice to be given to the Optionee
shall be addressed to him at the address given beneath his
signature hereto, or at such other address as either party may
hereafter designate in writing to the other. Any such notice
shall have been deemed duly given when enclosed in a properly
sealed envelope or wrapper addressed as aforesaid and deposited
(first class postage prepaid) in post office or branch post
office regularly maintained by the United States Government.
11. Effect of Agreement; Execution.
This Agreement shall be binding upon and inure to the benefit
of any successor or successors of the Company.
IN WITNESS WHEREOF, the Company has caused these presents
to be executed on its behalf by its Chairman, to be sealed by
its Corporate seal, attested by its Secretary, and Optionee has
hereunto set his hand the day and year first above written
which is the time of granting of the option hereunder.
ATTESTED: AYDIN CORPORATION
_______________________ By_________________________
Robert A. Clancy Ayhan Hakimoglu
Secretary Chairman
{SEAL)
___________________________
Optionee's Signature
___________________________
___________________________
Optionee's Address (zip code)
APPENDIX No. 3 (1994 Incentive Stock Option Plan)
THE 1994 INCENTIVE STOCK OPTION PLAN
OF AYDIN CORPORATION
150,000 Shares
(Last amended October 28, 1994)
I. Purpose
The purpose of this Plan is to advance the interests of
the Corporation and its shareholders by strengthening the
ability of the Corporation to attract and retain in its employ
key individuals of training, experience and ability and to
furnish additional incentive to officers and valued key
employees upon whose judgement, initiative and efforts the
successful conduct and development of its business largely
depends, by encouraging them to purchase stock in the
Corporation.
II. Definitions
As used in this Plan, "Corporation" means Aydin
Corporation; "Board of Directors" means the Board of Directors
of Aydin Corporation; "employee" includes officers and other
key employees of the Corporation and its subsidiaries but
excludes members of the Board of Directors who are not also
officers or employees of the Corporation; "Stock Option
Committee" (the "Committee") means the Board of Directors;
"Special Committee" means a committee composed of at least
three non-employee Directors that qualify as "disinterested
persons" under Rule 16b-3(d)(3); "Common Stock" means the
Corporation's Common Stock of the par value of $1.00 per share;
"Code" means the Internal Revenue Code of 1986, as amended from
time to time.
III. Eligible Personnel
A. All full-time salaried officers and key employees.
B. An employee who has been granted an option may, if
he is otherwise eligible, be granted an additional
option or options.
IV. Stock Option Committee
A. Subject to the provisions of the Plan, the Committee
shall administer the Plan. It shall have authority
to construe and interpret the Plan, to define the
terms used therein, to prescribe, amend and rescind
rules and regulations for the administration of the
Plan and to take such other action in the
administration of the Plan as it shall deem proper.
The interpretation by the Committee of any provision
of the Plan or of any option agreement entered into
hereunder shall be in accordance with Section 422 of
the Code and Regulations issued thereunder as they
may be amended from time to time, in order that
rights granted hereunder and under said option
agreements shall constitute "Incentive Stock
Options" within the meaning of that Section.
B. A majority of the members of the Committee, or the
Special Committee as the case may be, shall
constitute a quorum and make all determinations,
take all actions and conduct all business. They
shall keep minutes of their respective meetings.
C. Any Committee or Special Committee action may be
taken or determination made without a meeting if all
members of the respective committee shall
individually or collectively consent in writing to
such action or determination. Such written consent
or consents shall be filed with the minutes of the
Corporation.
D. All interpretations, determinations and actions by
the respective committee shall be final, conclusive
and binding upon all parties.
E. No member of the Committee, or Special Committee as
the case may be,shall be liable for any action or
determination made in good faith with respect to the
Plan or any option agreement.
V. Granting of Options
A. The Committee may at any time and from time to time
grant options to eligible employees, to purchase
shares of Common Stock of the Corporation under this
Plan, determining the specific employees to whom
options may be granted, the number of shares to be
subject to each option, the terms and provisions of
the option agreements, and the time or times at
which such options shall be granted, provided,
however, only the Special Committee may grant
options to officers of the Corporation who are also
directors of the Corporation on the date of such
grant.
B. The date of grant shall be the date either committee
takes the necessary action to make the grant;
provided, however, that if the minutes or
appropriate resolutions of the respective committee
provide than an option is to be granted as of a date
in the future, the date of grant shall be such
future date. In any event, the optionee must be an
employee on the date of the grant.
C. No option shall be granted under this Plan after the
close of business on December 31, 2003, but options
theretofore granted may extend beyond that date.
D. The options granted hereunder shall be "Incentive
Stock Options" as that term is used in Section 422
of the Code.
VI. Shares Subject to the Plan
The total number of shares of Common Stock that may be
purchased pursuant to options granted under this Plan shall not
exceed 150,000 subject to adjustment as provided in Section IX
and subject to amendment as provided in Section X. If any
option outstanding hereunder shall expire or terminate for any
reason without having been exercised in full, the unpurchased
shares subject to the option shall again be available for the
grant of options under this Plan. Upon the exercise of an
option outstanding hereunder, the Corporation may reissue
Common Stock held in its treasury or issue authorized but
unissued Common Stock.
VII. Terms of Options
A. Each option granted under the Plan shall include the
following provisions, or terms consistent with the
following provisions:
1. The purchase price (option price) of the shares
subject to option shall be not less than the
fair market value of the stock on the day the
option is granted. Such fair market value shall
be established as the following, in order of
descending preference:
a. Mean between the highest and the lowest
quoted selling prices of the stock on an
exchange.
b. Lacking a. above, the mean between the "bid"
and "asked" prices as provided to the Company
by a legitimate broker.
c. Lacking a. or b. for the date of grant, the
mean between the "bid" and "asked" prices for
the most recent date quoted, as obtained for
the Company by a legitimate broker.
d. Lacking a., b. or c., the last established
determinable price.
2. Except as provided in Section VIII herein, no
option may be exercised unless the optionee is
at the time of such exercise in the employ of
the Corporation or of a subsidiary and shall
have been continuously so employed since the
granting of his option. For the purpose of the
Plan, an employee who is on leave of absence or
who is in the Armed Services or the civilian
employment of the United States will be
considered in the employ of the Corporation or
its subsidiaries to the extent his employment
would be treated as continuing intact under
Sections 421 and 422 of the Code, and the
Regulations thereunder, as amended, from time to
time.
3. No option may be exercised prior to one year nor
after five years from the date of its grant.
Unless the option Agreement provides otherwise,
any time after one year from the date of grant
the employee may exercise his option in
accordance with the following schedule:
After: The optionee may purchase:
One year from date of grant.....25% of the total.
Two years from date of grant....An additional 25% of the total.
Three years from date of grant..An additional 25% of the total.
Four years from date of grant...An additional 25% of the total.
4. Upon each exercise of an option the purchase
price shall be payable in full in cash, (or its
equivalent acceptable to the Corporation), or
Common Stock already owned by the employee, or a
combination of cash and Common Stock.
5. No fractional shares shall be issued under this
Plan or under any option granted hereunder, nor
shall any cash payment be made in lieu thereof.
6. An option shall not be assignable or
transferable by the employee to whom granted
otherwise than by will or by the laws of descent
and distribution, and may be exercised, during
his lifetime, only by such employee.
7. No person shall have the rights and privileges
of a shareholder with respect to shares subject
to or purchased under an option until the date
appearing on the certificates issued upon the
exercise of the option.
B. The aggregate fair market value (determined as of
the date the option is granted) of the stock for
which any employee may be granted options first
exercisable in any calendar year under this Plan and
all other "Incentive Stock Option Plans" of the
Corporation or its subsidiaries, shall not exceed
$100,000.
C. No option under this Plan may be granted to an
employee who, at the time the option is granted,
owns stock possessing more than 10 percent of the
total combined voting power of all classes of stock
of the Corporation or of its subsidiaries, provided,
however, this limitation shall not apply if such
option is granted at an option price of at least 110
percent of the fair market value of the stock on the
date of the grant.
D. Each option granted under this Plan may, but need
not, include other terms and conditions not
inconsistent with the provisions hereof, including a
requirement that the optionee represent at the time
of each exercise of option that the shares purchased
are being acquired for investment and not for
resale.
E. Nothing in this Plan nor in any option granted
hereunder shall confer any rights to continue in the
employ of the Corporation or its subsidiaries or
interfere in any way with the rights of the
Corporation or any subsidiary to terminate the
employee at any time.
VIII. Termination of Employment or Death of Employee
A. If the employment of an optionee is terminated for
cause, or if he voluntarily quits, his option shall
expire forthwith, but he may exercise any options
that are exercisable as of the date of termination
or voluntary quit provided payment for same is
received within 30 days of the termination.
Retirement, including Early Retirement, under any
retirement plan of the Corporation or subsidiary is
not deemed a voluntary quit.
B. If the employment of an optionee terminates for any
reason other than termination for cause, a voluntary
quit, disability or death, the option shall expire
three months thereafter unless by its terms it
expires sooner. During said period, the option may
be exercised in accordance with its terms but only
for the number of shares with respect to which
options could be exercised as of the date of
termination of employment.
C. If an optionee dies while he is employed by the
Corporation or a subsidiary or within the three
month period referred to in Section VIII(B) above or
within the twelve month period referred to in
Section VIII(D) below, during said period, the
option may be exercised by his personal
representatives or the persons to whom his rights
under the option shall pass by will or the laws of
descent and distribution in accordance with terms of
the option but only for that number of shares with
respect to which options could be exercised as of
the date of death. Such exercisable option must be
exercised within three months of death, unless, by
its terms, it expires sooner.
D. If the employment of an optionee terminates by
reason of the optionee's "disability" (within the
meaning of Section 22(e)(3) of the Code), the option
shall expire 12 months thereafter unless by its
terms it expires sooner. During said period, the
option may be exercised in accordance with its terms
but only for the number of shares with respect to
which options could be exercised as of the date of
termination of employment.
E. Notwithstanding the above, an option may not be
exercised after the expiration of five years from
the date the option is granted.
IX. Adjustments Upon Changes in Capitalization
In the event of any recapitalization, stock dividend,
stock split, or combination affecting the stock subject to this
Plan, or in the event of any merger, consolidation, or
reorganization as a result of which the Corporation is the
surviving corporation, the Committee will make appropriate
adjustments in the aggregate number of kind of shares subject
to the Plan, the number of shares that may be granted to any
one employee, and the number of shares and the price per share
subject to outstanding options provided that such options
remain or constitute incentive stock options within the meaning
of Section 422 of the Code. Any such determination of
adjustment shall be final and conclusive upon the parties.
In the event of the dissolution or liquidation of the
Corporation, or in the event of a reorganization, merger, or
consolidation of the Corporation with one or more corporations
as a result of which the Corporation is not the surviving
corporation, or in the event of a sale of substantially all of
the property or stock of the Corporation to another
corporation, the Plan shall terminate; and any option then
outstanding hereunder shall terminate on the effective date of
such transaction; provided, however, that in the event of any
such transaction the Board of Directors may, but need not,
modify all outstanding options so as to make all such options
exercisable in full on a date sufficiently in advance of the
effective date of such transaction to permit the shares
acquired pursuant to any exercise of such options to be issued
before the effective date of such transaction.
X. Amendment and Termination
A. The Board of Directors shall have the power, in its
discretion, to amend, suspend or terminate this Plan
at any time. The Board of Directors shall not have
the power except as may be permitted in Section IX
herein:
1. To change the class of employees eligible to
receive options under the Plan; or
2. To increase the number of shares subject to the
Plan in the aggregate unless such increase is
submitted to the shareholders of the Corporation
for their approval; or
3. To increase the number of shares subject to an
option for any one individual; or
4. To reduce the option price below the fair market
value of the stock (or below the 110% fair
market value when required by Section VII (C)
hereof) at the time the option was granted; or
5. To increase the maximum terms of options
provided herein.
B. The Board of Directors may, with the consent of an
optionee, make such modifications of the terms and
conditions of his option as it shall deem advisable.
XI. Compliance with Rule 16b-3
The provisions of this Plan are intended to comply in all
respects with the provisions of Rule 16b-3 under the Securities
Exchange Act of 1934 and any amendments thereto, and, if this
Plan shall not so comply, whether on the date of adoption or by
reason of any later amendment to or interpretation of Rule 16b-
3, the provisions of this Plan shall be deemed to be
automatically amended so as to bring them into full compliance
with such rule.
XII. Effective Date of Plan
This Plan shall become effective as of January 3, 1994
upon approval of the shareholders of the Corporation and shall
terminate at the close of business on December 31, 2003.