SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE
SECURITIES EXCHANGE ACT OF 1934 (AMENDMENT NO. )
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Anaren Microwave, Inc.
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(Name of Registrant as Specified in Its Charter)
Anaren Microwave, Inc.
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ANAREN MICROWAVE, INC.
6635 Kirkville Road
East Syracuse, New York 13057
---------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held on November 10, 1997
---------------
To the Holders of the Common Stock
of Anaren Microwave, Inc.:
PLEASE TAKE NOTICE, that the Annual Meeting of Stockholders of Anaren
Microwave, Inc. (the "Company") will be held on November 10, 1997, at 11:00 a.m.
Eastern Standard Time at the Syracuse Marriott, 6302 Carrier Parkway, East
Syracuse, New York 13057, for the following purposes:
(1) To elect seven directors, for the term of one year and until their
successors have been elected and qualified; and
(2) To transact such other business as may be properly brought before the
Meeting.
Stockholders of record as of the close of business on September 26, 1997
will be entitled to notice of and to vote at the Meeting.
Enclosed is the annual report for the fiscal year ended June 30, 1997,
along with a proxy statement and proxy. Stockholders who do not expect to attend
the Meeting are requested to sign and return the proxy in the enclosed envelope.
By Order of the Board of Directors
David M. Ferrara
Secretary
Dated: October 3, 1997
East Syracuse, New York
ANAREN MICROWAVE, INC.
6635 Kirkville Road
East Syracuse, New York 13057
---------------
This Proxy Statement is being mailed on or about October 3, 1997, to the
stockholders of Anaren Microwave, Inc. ("Anaren" or the "Company") entitled to
receive the accompanying Notice of Annual Meeting of Stockholders and is
provided, by order of its Board of Directors, in connection with the
solicitation of proxies to be used at the Annual Meeting of Stockholders (the
"Meeting") of the Company to be held on November 10, 1997 at 11:00 a.m. and at
any adjournment or adjournments thereof, for the purposes set forth in the
Notice.
If the enclosed form of proxy is executed and returned, it may nevertheless
be revoked at any time prior to its exercise by (i) submitting a subsequently
dated proxy; or (ii) by filing written notice of such revocation with the
Secretary of the Meeting. The proposals will be presented by the Board of
Directors of the Company. Where a choice is specified with respect to a
proposal, the shares represented by the proxy will be voted in accordance with
the specifications made. Where a choice is not so specified, the shares
represented by the proxy will be voted to elect the nominees for director named
herein.
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
At the close of business on September 26, 1997, the record date stated in
the accompanying Notice, the Company had outstanding 4,233,442 shares of common
stock, $.01 par value (the "Common Stock"), each of which share is entitled to
one vote with respect to each matter to be voted on at the Meeting. A majority
of the issued and outstanding shares of Common Stock present in person or by
proxy, a total of 2,116,722 shares, will be required to constitute a quorum for
the transaction of business at the Meeting. The Company has no class or series
of voting stock outstanding other than the Common Stock.
Abstentions and broker non-votes (as hereinafter defined) are counted as
present for the purpose of determining the presence or absence of a quorum for
the transaction of business. For the purpose of determining the vote required
for approval of matters to be voted on at the Meeting, shares held by
stockholders who abstain from voting will be treated as being "present" and
"entitled to vote" on the matter and, thus, an abstention has the same legal
effect as a vote against the matter. However, in the case of a broker non-vote
or where a stockholder withholds authority from his proxy to vote the proxy as
to a particular matter, such shares will not be treated as "present" and
"entitled to vote" on the matter. Accordingly, a broker non-vote or the
withholding of a proxy's authority will have no effect on the outcome of the
vote on the matter. A "broker non-vote" refers to shares represented at the
Meeting in person or by proxy by a broker or nominee where such broker or
nominee (i) has not received voting instructions on a particular matter from the
beneficial owner or persons entitled to vote; and (ii) the broker or nominee
does not have the discretionary voting power on such matter.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth certain information with respect to persons
known to the Company to own beneficially more than 5% of the outstanding shares
of Common Stock of the Company, as of September 26, 1997 (except as otherwise
indicated):
Number of Shares
Name and Address of Common Stock Percent
of Beneficial Owner Beneficially Owned(1) of Class
- ----------------- -------------------- --------
Global Securities, Inc.................. 1,307,800 29.26%
P.O. Box 560
Sudbury, MA 01776
Carl W. Gerst, Jr....................... 359,931(2) 8.05
c/o Anaren Microwave, Inc.
6635 Kirkville Road
East Syracuse, NY 13057
Dimensional Fund Advisors Inc........... 239,100(3) 5.35
1299 Ocean Avenue
Santa Monica, CA 90401
- -------------
(1) Except as otherwise indicated, as of September 26, 1997 all of such shares
are owned with sole voting and investment power.
(2) Includes 54,331 shares held in trust for, or owned by, Mr. Gerst's family
and relatives and includes 75,000 shares which Mr. Gerst has the right to
acquire within 60 days pursuant to outstanding stock options.
(3) Dimensional Fund Advisors, Inc. ("Dimensional"), a registered investment
advisor, has reported in a Statement on Schedule 13G, as amended as of
February, 1997 that it is deemed to have beneficial ownership of 239,100
shares of the Company's Common Stock, as of such date, all of which shares
are held in portfolios of DFA Investment Dimensions Group, Inc., a
registered open-end investment company, (the "Fund") or in series of The
DFA Investment Trust Company, a Delaware business trust, (the "Trust"), or
the DFA Group Trust and the DFA Participating Group Trust, investment
vehicles for qualified employee benefit plans, for all of which Dimensional
serves as investment manager. Dimensional has reported to the Company that
it has sole dispositive power with respect to all 239,100 shares and sole
voting power with respect to 159,600 of such shares and Dimensional does
not share voting power or dispositive power with respect to any of the
shares and Dimensional disclaims beneficial ownership of all such shares.
Persons who are officers of Dimensional also serve as officers of the Fund
and the Trust, each an open-end management investment company registered
under the Investment Company Act of 1940. In their capacities as officers
of the Fund and the Trust, these persons vote 41,700 additional shares
which are owned by the Fund and 37,800 shares which are owned by the Trust
(both included in sole dispositive power).
2
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth certain information, as of September 26,
1997, with respect to the beneficial ownership of the Company's Common Stock by
(i) each director and nominee for director who owned beneficially any shares of
Common Stock, (ii) each executive officer of the Company named in the Summary
Compensation Table under "Executive Compensation" below, and (iii) all directors
and executive officers of the Company as a group:
Number of Shares
Name of of Common Stock Percent
Beneficial Owner Beneficially Owned(1) of Class
- --------------- -------------------- --------
Hugh A. Hair............................... 206,800(2) 4.63%
Carl W. Gerst, Jr.......................... 359,931(3) 8.05
Abraham Manber............................. -0- -0-
Lawrence A. Sala........................... 36,200(4) *
Dale F. Eck................................ 10,000(5) *
Herbert I. Corkin.......................... 7,500(6) *
Gert R. Thygesen........................... 35,000(7) *
Joseph E. Porcello......................... 23,990(8) *
Stanley S. Slingerland..................... 41,559(9) *
David Wilemon.............................. -0- -0-
All Directors and Officers
as a Group (9 persons)................... 720,980(10) 16.13%
- ---------------
* Indicates less than 1%
(1) Except as otherwise indicated, as of September 26, 1997, all of such shares
are owned with sole voting and investment power.
(2) Includes 75,000 shares which Mr. Hair has the right to acquire within 60
days pursuant to outstanding stock options and 42,000 shares owned by Mr.
Hair's wife.
(3) Includes 54,331 shares held in trust for, or owned by, Mr. Gerst's family
and relatives and includes 75,000 shares which Mr. Gerst has the right to
acquire within 60 days pursuant to outstanding stock options.
(4) Includes 21,000 shares which Mr. Sala has the right to acquire within 60
days pursuant to outstanding stock options.
(5) Includes 10,000 shares which Mr. Eck has the right to acquire within 60
days pursuant to outstanding stock options.
(6) Does not include 1,307,800 shares owned by Global Securities, Inc.
("Global"), as to which Mr. Corkin, the owner of 24% of the capital stock
of Global, disclaims beneficial ownership.
(7) Includes 20,000 shares which Mr. Thygesen has the right to acquire within
60 days pursuant to outstanding stock options.
(8) Includes 21,000 shares which Mr. Porcello has the right to acquire within
60 days pursuant to outstanding stock options.
(9) Includes 14,000 shares which Mr. Slingerland has the right to acquire
within 60 days pursuant to outstanding stock options.
(10) Includes 236,000 shares which all directors and officers as a group have
the right to acquire within 60 days pursuant to outstanding stock options.
3
ELECTION OF DIRECTORS
Seven directors are to be elected for the ensuing year and until their
successors are elected and qualified. The shares represented by the enclosed
proxy will be voted for the nominees for directors set forth herein who shall
constitute the entire Board of Directors.
If any nominee for director should be unavailable to serve, it is intended
that the persons named in the accompanying form of proxy will vote the shares
represented by such proxy for another person duly nominated by the Board of
Directors in such nominee's stead or if no other person is so nominated, to vote
such shares only for the remaining nominees. All nominees for director set forth
herein have consented to serve, and the Company's Board of Directors believes
they will serve, as directors.
Certain Information Concerning Nominees for Directors
Set forth below is certain information concerning the nominees for election
as directors. The information has been furnished to the Company by such persons:
Name, Age, Nature of First
Positions and Offices Became Principal Occupation, Experience
Held with the Company Director and Other Directorships
- --------------------- --------- ----------------------------------
Hugh A. Hair, 62 ........... 1968 Mr. Hair has been actively engaged
Chairman of the Board in the Company's business since
its founding in 1967. Mr. Hair
served as President of the
Company from its founding until
May 1995 and as Chief Executive
Officer from its founding until
September 1997. Mr. Hair has
served as Chairman of the Board
for more than the past five
years.
Carl W. Gerst, Jr., 60 ..... 1968 Mr. Gerst has been actively
Chief Technical Officer, engaged in the Company's
Treasurer, Vice Chairman business since its founding in
of the Board 1967. Mr. Gerst
served as Executive Vice
President from the Company's
founding until May 1995 when he
became Chief Technical Officer
and Vice Chairman of the Board.
Mr. Gerst has also served as
Treasurer since May, 1992.
Lawrence A. Sala, 34 ....... 1995 Mr. Sala has been President of the
President, Chief Executive Company since May 1995 and has
Officer and Director served as Chief Executive
Officer since September 1997.
Mr. Sala has held various
engineering and management
positions with the Company since
1984 and was most recently, Vice
President of Marketing.
4
Name, Age, Nature of First
Positions and Offices Became Principal Occupation, Experience
Held with the Company Director and Other Directorships
- --------------------- --------- ----------------------------------
Abraham Manber, 68 ......... 1971 Mr. Manber was President of Amtech
Director Patent Licensing Corp. from 1979
until his retirement in March
1993.
Herbert I. Corkin, 75 ...... 1989 Mr. Corkin has been Chairman of
Director the Board of The Entwhistle
Company, a defense contractor,
since 1959. Mr. Corkin also
served as the President of The
Enthwistle Company from 1959
through December 1993 and has
served as its Chief Executive
Officer since December 1993. Mr.
Corkin is also a Director of
Bird, Inc.
Dale F. Eck, 54 ............ 1995 Mr. Eck was Vice President of
Director Finance and Treasurer of The
Entwhistle Company, a defense
contractor, from 1978 until his
retirement in February, 1997.
Mr. Eck has also served as a
Director of The Entwhistle
Company since 1978 and continues
to serve that company in such
capacity. Mr. Eck has provided
consulting services to the
Company since March 1997.
David Wilemon, 60 .......... N/A Dr. Wilemon has been a Professor
Nominee for Director of Marketing and Innovation
Management at the Syracuse
University -- School of
Management since 1966. He has
also served as Director of the
Synder Innovation Management
Program at the University since
1980 and as Co-Director of the
Entrepreneurship and Emerging
Enterprises Program there, since
1993. Dr. Wilemon has also been
a frequent speaker at the
University of Wisconsin --
College of Engineering
Professional Development since
1978.
5
EXECUTIVE COMPENSATION AND OTHER INFORMATION
Summary of Cash and Certain Other Compensation
The following table sets forth certain information with respect to
compensation, received in all capacities in which they served, for each of the
last three fiscal years ended July 1, 1995, June 30, 1996 and June 30, 1997 of
the Company's Chief Executive Officer and each of the four other most
highly-compensated officers during the most recent fiscal year:
Summary Compensation Table
Long Term Compensation
-------------------------
Annual Securities All
Name and Compensation Underlying Other Com-
Principal Salary Options(6) pensation(7)
Position Year ($) (#) ($) Exercisable Unexercisable
- --------- ----- --------- ---------- ------------ ----------- -------------
Hugh A. Hair, ....... 1997 $225,000 0 $12,876 75,000 0
Chairman of the 1996 225,000 0 10,521
Board(1) 1995 225,000 0 9,874
Carl W. Gerst, Jr., . 1997 225,000 0 10,146 75,000 0
Chief Technical 1996 225,000 0 9,086
Officer, Vice 1995 225,000 0 8,363
Chairman and
Treasurer(2)
Lawrence A. Sala, ... 1997 161,827 35,000 10,878 20,000 63,000
President and 1996 128,084 5,000 2,233
Chief Executive 1995 88,195 40,000 1,323
Officer(3)
Gert R. Thygesen, ... 1997 120,462 2,500 2,739 20,000 20,500
Vice President of 1996 115,570 0 2,006
Operations(4) 1995 112,736 30,000 1,691
Joseph E. Porcello, . 1997 92,683 2,500 1,390 21,000 14,500
Vice President of 1996 83,885 0 1,258
Finance(5) 1995 76,752 20,000 1,151
- ------------
(1) Mr. Hair also served as the Company's President until May 1995 and as the
Company's Chief Executive Officer until September 1997.
(2) Mr. Gerst served as the Company's Executive Vice President until May 1995
when he was elected to the position which he currently holds, Chief
Technical Officer.
(3) Mr. Sala served as the Company's Vice President of Marketing until May 1995
when he was elected President. He was named Chief Executive Officer in
September, 1997. Mr. Sala's current annual salary is $180,000.
(4) Mr. Thygesen served as one of the Company's Program Managers from 1990
through 1992 and as the Company's Operations Manager from 1992 until May
1995 when he was elected to the position which he currently holds, Vice
President of Operations.
(5) Mr. Porcello served as the Company's Director of Finance from prior to 1990
until May 1995 when he was elected to the position which he currently
holds, Vice President of Finance.
(6) The table reflects the number of shares which are subject to incentive
stock options granted to Messrs. Sala, Thygesen and Porcello pursuant to
the Company's Incentive Stock Option Plan.
(7) All Other Compensation consists of contributions to the Company's 401(k)
Salary Savings Plan and, with respect to Messrs. Hair, Gerst and Sala
reimbursement for premiums on life insurance policies owned by executive
officers.
6
Fiscal Year Option Grants
The following table sets forth certain information regarding options
granted by the Company during the last fiscal year to the individuals named in
the above compensation table, including information as to potential realizable
value of such options at assumed annual rates of stock price appreciation for
the ten-year terms of the options:
Option Grants In Last Fiscal Year
Individual Grants
---------------------------------------------------
Percent
of Total Potential Realizable Value
Number of Options at Assumed Annual Rates
Securities Granted to of Stock Price Appreciation
Underlying Employees Exercise or for Option Term(1)
Options Fiscal Base Price Expiration ------------------------------
Name Granted Year ($/sh) Date 5%($) 10%($)
------ ---------- ---------- ---------- --------- -------- -------
Hugh A. Hair .......... 0 0% $ 0 N/A $ 0 $ 0
Carl W. Gerst, Jr. .... 0 0 0 N/A 0 0
Lawrence A. Sala ...... 35,000 37 6.828125 11/19/06 150,296 380,880
Gert R. Thygesen ...... 2,500 3 6.828125 11/19/06 10,735 27,206
Joseph E. Porcello .... 2,500 3 6.828125 11/19/06 10,735 27,206
- -----------
(1) Amounts represent hypothetical gains that could be achieved for the
respective options if exercised at the end of the option term. These gains
are based on arbitrarily assumed rates of stock price appreciation of 5%
and 10% compounded annually from the date the respective options are
granted to their expiration date.
Outstanding Unexercised Option Values
The following table sets forth certain information with respect to
unexercised options held by the named executive officers at fiscal year-end:(1)
Fiscal Year End Option Values
------------------------------- Value of
Number of Securities Underlying Unexercised In-the-Money
Unexercised Options at June 30, 1997 Options At June 30, 1997(2)
------------------------------------ ----------------------------
Name Exercisable Unexercisable Exercisable Unexercisable
------ ---------- ------------ ---------- ------------
Hugh A. Hair ........... 75,000 0 $733,125 0
Carl W. Gerst, Jr. ..... 75,000 0 733,125 0
Lawrence A. Sala ....... 21,000 63,000 181,250 466,766
Gert R. Thygesen ....... 20,000 20,500 168,500 180,305
Joseph E. Porcello ..... 21,000 14,500 200,375 125,555
- -----------
(1) No executive officer exercised any options during the Company's last fiscal
year.
(2) Amount represents the difference between the aggregate exercise price of
the options and a $13.25 market price of the underlying common stock on
June 30, 1997.
Pension Plan
The Company maintains a non-contributory Pension Plan for the benefit of
all employees over the age of 23 who have completed one year of service and who
are not covered by any other retirement plan sponsored by a recognized
bargaining unit. The Company pays all amounts required to provide retirement
income benefits. The Pension Plan provides fixed benefits to be paid upon
retirement at a specific age. Pension expense, including amortization of prior
service cost over 30 years, was $131,709 for fiscal 1997.
7
The table below illustrates the estimated aggregate annual benefit that
would be payable to executive officers of the Company who are at least 65 years
of age at retirement, based on the formula in effect after June 30, 1992 and the
Employee Retirement Income Security Act of 1974, as amended ("ERISA") limits on
compensation and benefits after 15, 20, 25, 30 and 35 credited years of service;
for illustration purposes, the table assumes all years of service under the
current Pension Plan formula:
Pension Plan Table
Final
Average Annual Estimated Annual Pension Payable
Compensation Based on Years of Service Indicated
- --------------- ------------------------------------------------------------
15 Years 20 Years 25 Years 30 Years 35 Years
-------- -------- -------- -------- --------
$100,000 ......... $11,250 $15,000 $18,750 $22,600 $26,250
125,000 ......... 14,063 18,750 23,438 28,125 32,813
150,000 ......... 16,875 22,500 28,125 33,750 39,375
175,000 ......... 16,875 22,500 28,125 33,750 39,375
200,000 ......... 16,875 22,500 28,125 33,750 39,375
225,000 ......... 16,875 22,500 28,125 33,750 39,375
250,000 ......... 16,875 22,500 28,125 33,750 39,375
275,000 ......... 16,875 22,500 28,125 33,750 39,375
Under the terms of the Pension Plan, each member who is at least 65 years
of age at his retirement is entitled to a Normal Retirement Benefit (as defined
under the Pension Plan). The compensation used in determining the Pension Plan
benefit for executive officers is based upon their annual salary as shown on the
Summary Compensation Table above. The Normal Retirement Benefit is the aggregate
of:
A. 0.60% of average of highest five consecutive year's compensation from
date of employment to June 30, 1992 multiplied by Benefit Service (as
defined under the Pension Plan) to June 30, 1992; plus
B. 0.75% of compensation for each year of Benefit Service thereafter;
but not less than the accrued benefit under the prior plan at June 30,
1992.
Employees who have attained at least twelve years of service and are at
least 55 years of age can retire and receive a proportionately reduced benefit.
Under ERISA, the maximum annual benefit payable at age 65 is $125,000. The
maximum compensation that could be considered for all participants, including
the Company's executive officers, Messrs. Hair, Gerst, Sala, Thygesen and
Porcello is $160,000 for 1997. These benefit and compensation limits are indexed
to increases in the Consumer Price Index.
The credited years of service as of June 30, 1997 under the Pension Plan
for each of Messrs. Hair and Gerst are 24, and for Messrs. Sala, Thygesen and
Porcello are 12, 16 and 20, respectively.
Change-in-Control Arrangements
The Company has maintained since November, 1988, a plan for severance
compensation to employees after a hostile takeover (the "Severance Plan"). The
Severance Plan defines a hostile takeover to include, among others, the
following events, if not approved by two-thirds of the members of the Board of
Directors in office immediately prior to any such event: (1) the election of
directors not nominated by
8
the Board of Directors; or (2) a business combination, such as a merger. All
full-time employees who had completed at least two years of continuous
employment with the Company on the effective date of the Severance Plan became
participants therein. After the effective date, nonparticipating full-time
employees become participants as they complete two years of continuous full-time
employment with the Company. A severance benefit is payable under the plan if a
participant's employment with the Company terminates, voluntarily or
involuntarily, within two years after a hostile takeover for reasons such as
reduction in compensation, discontinuance of employee benefit plans without
replacement with substantially similar plans, change in duties or status,
certain changes in job location and involuntary termination of employment for
reasons other than just cause. For participants who have completed two but less
than five years, the benefit is equal to the employee's annual compensation
during the year immediately preceding the termination of employment. For
employees who have completed five or more years of continuous full-time
employment, the benefit is equal to two and nine-tenths times the employee's
annual compensation during the 12 months ending on the date of termination of
employment, but may not exceed 2.99 times average annual compensation during the
preceding five years. Annual compensation is defined for purposes of the
Severance Plan as the amount of an employee's wages, salary, bonuses and other
incentive compensation. Benefits are payable in lump sum not less than ten days
after termination of employment.
To date, the Company is not aware of any event which would trigger the
provisions of the Severance Plan.
Compensation of Directors
The Company currently pays each director who is not an operating officer of
the Company $7,500 per year and reimburses each such director for the reasonable
expenses incurred in attending meetings of the Board of Directors.
Certain Agreements with Directors and Executive Officers
The Company has an employment agreement, dated July 1, 1997, with Lawrence
A. Sala, President and (as of September 1997) Chief Executive Officer of the
Company providing for Mr. Sala's employment as President of the Company until
November 30, 2001 or such earlier date as may result pursuant to the terms of
the agreement. The agreement provides for a base annual salary of $180,000 or
such greater amount as the Board of Directors may determine, plus annual
incentive bonuses and participation in certain insurance plans. The agreement
terminates automatically in the event of Mr. Sala's death and the Company may
terminate the agreement for specified cause as defined in the agreement.
The Company's arrangements with Mr. Sala provide that in the event Mr.
Sala's employment with the Company is terminated other than for cause, the
Company will be obligated to pay severance to Mr. Sala in an amount equal to the
greater of (i) two years' base salary plus payments in lieu of incentive bonus
payments in the aggregate amount of $100,000 or (ii) Mr. Sala's base salary for
the balance of the term of the agreement. In addition, the Company must defray
certain costs associated with obtaining new employment and relocation in
connection with such termination.
In the event that Mr. Sala's employment continues for the entire term of
the agreement and the Company and Mr, Sala are unable to negotiate a new
employment agreement, the Company will be obligated to pay severance to Mr. Sala
in an amount equal to two years' base salary at such date plus payments in lieu
of incentive bonus payments in the aggregate amount of $100,000.
9
The Company has a consulting arrangement with Dale F. Eck, pursuant to
which Mr. Eck has agreed to provide financial and management consulting services
to the Company for a period of five years from March 1, 1997. The agreement
provides that Mr. Eck shall devote up to two days per month to the Company and
shall receive a monthly fee of $1,666.66 plus reimbursement of reasonable
business expenses incurred in activities undertaken on behalf of the Company.
The agreement is terminable by either party upon twelve months' prior notice.
Compensation Committee Interlocks and Insider Participation
During the fiscal year ended June 30, 1997, the Company's Compensation
Committee consisted of Herbert I. Corkin, Dale F. Eck and Abraham Manber.
Board Compensation Committee Report on Executive Compensation
The Compensation Committee (the "Committee") of the Board of Directors
consists of three outside directors who are not executive officers of the
Company. The Committee reviews and determines executive compensation for the
Company's five executive officers on an annual basis. The Committee has
implemented an executive compensation philosophy that seeks to relate executive
compensation to corporate performance, individual performance and creation of
shareholder value. Historically, this has been achieved through compensation
programs which focus on both short- and long-term results.
In accordance with the Committee's executive compensation philosophy, the
major components of executive compensation have been base salary and stock
option grants. Option grants had been made pursuant to the Company's former
Incentive Stock Option Plan which expired pursuant to its terms in October 1991,
and may be made in the future pursuant to the Incentive Stock Option Plan which
was adopted by the Board of Directors on May 15, 1995 and approved by the
Stockholders of the Company at the 1995 Annual Meeting of Stockholders held on
December 6, 1995.
Salaries for executive officers are based on current individual and
organizational performance, affordability and competitive market trends. For
purposes of informing the Committee of competitive trends within the electronics
industry, the compensation data from the American Electronics Association
Compensation Survey is made available to the Committee. The salary trend data
used represents companies with similar sales volume within the electronics
industry, and the Company's executive officer salary ranges are positioned
between the median and the high end of the survey data.
The Company's former Chief Executive Officer, Hugh A. Hair, and Chief
Technical Officer, Carl W. Gerst, Jr., have received the same compensation in
fiscal year 1997 as in the prior fiscal period.
The Company's President, Vice President of Operations and Vice President of
Finance, who were elected to their respective offices by the Board of Directors
in May 1995, received increases in compensation in fiscal year 1997 in
recognition of their additional responsibilities and respective contributions to
the Company's recent growth in the wireless communications market as well as in
the radar and satellite communications markets.
Section 162(m) ("Section 162") of the Internal Revenue Code of 1986, as
amended (the "Code"), generally limits federal income tax deductions for
compensation paid after 1993 to the chief executive officer and the four other
most highly compensated officers of a company to $1 million per year, but
contains an exception for performance-based compensation that satisfies certain
conditions. The Company
10
has not adopted an absolute policy regarding Section 162 as it does not
anticipate its executive compensation to reach such levels in the foreseeable
future. Nevertheless, the Company is studying the implications of Section 162 on
its compensation programs. In making compensation decisions, the Company will
consider the net cost of compensation to it and whether it is practicable and
consistent with other compensation objectives to qualify the Company's incentive
compensation under the applicable exemption of Section 162. The Company
recognizes that deductibility of compensation payments must be one among a
number of factors used in ascertaining appropriate levels or modes of
compensation, and that the Company will make its compensation decisions based
upon an overall determination of what it believes to be in the best interests of
its stockholders.
The members of the Compensation Committee:
Abraham Manber Herbert I. Corkin
Dale F. Eck
11
Performance Graph
The following performance graph compares the total stockholder return of
the Company's Common Stock to The NASDAQ National Stock Market-US Index and the
NASDAQ Electronics Components Index. The graph assumes that $100 was invested in
the Company's Common Stock and each Index on June 30, 1997 and that all
dividends were reinvested.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN*
AMONG ANAREN, THE NASDAQ STOCK MARKET-US INDEX
AND THE NASDAQ ELECTRONICS COMPONENTS INDEX
[The following information was depicted as a line graph in the printed material]
Anaren Nasdaq Nasdaq
Microwave, Electronic Stock
Inc Components Market (U.S.)
---------- ---------- -------------
1992..................... 100 100 100
1993..................... 119 172 126
1994..................... 154 190 127
1995..................... 385 391 169
1996..................... 415 414 218
1997..................... 815 679 265
- ----------
* $100 INVESTED ON 6/30/92 IN STOCK OR INDEX - INCLUDING REINVESTMENT OF
DIVIDENDS. FISCAL YEAR ENDING JUNE 30.
Notwithstanding anything set forth in any of the Company's previous filings
under the Securities Act of 1933 or the Securities Exchange Act of 1934 which
might incorporate future filings, including this Proxy Statement, in whole or in
part, the preceding performance graph and the report of the Compensation
Committee shall not be deemed incorporated by reference into any such filings.
12
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Based solely upon the Company's review of copies of reports received by the
Company pursuant to Section 16(a) of the Securities Exchange Act of 1934, and
the written representations of its incumbent directors and officers and
beneficial owners of more than 10% of the Company's Common Stock, the Company
believes that, for the fiscal year ended June 30, 1997, its officers, directors
and the beneficial owner of more than 10% of the Common Stock complied with the
filing requirements under Section 16(a) of the Securities Exchange Act of 1934,
with the exception that one such report, covering the issuance of options
pursuant to the Company's Incentive Stock Option Plan to each of Messrs. Sala,
Thygesen and Porcello, in each case, was not timely filed. When these oversights
were discovered the appropriate reports were filed.
RELATIONSHIP WITH INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
During the fiscal year ended June 30, 1997, KPMG Peat Marwick, the
Company's independent accountant, was retained by the Board of Directors to
perform the annual examination of the consolidated financial statements of the
Company and its subsidiaries. The Board also retained KPMG Peat Marwick to
provide assistance in the preparation of federal income and state franchise tax
returns.
The independent certified public accountants selected by management to
audit the Company's books and records for the current fiscal year is the firm of
KPMG Peat Marwick, 113 South Salina Street, Syracuse, New York, which firm has
been the Company's principal accountants for the past 25 years. It is
anticipated that a representative of KPMG Peat Marwick will be present at the
Annual Meeting of Stockholders and will have an opportunity to make a statement
and to answer questions of stockholders.
BOARD MEETINGS AND COMMITTEES
During the Company's last fiscal year, the Board of Directors of the
Company held five meetings. No current director attended fewer than 75% of the
aggregate number of meetings.
The Company's Board of Directors has a Compensation Committee, which is
made up of Board members Abraham Manber, Herbert I. Corkin and Dale F. Eck. The
function of the Compensation Committee is to recommend to the Board of Directors
competitive compensation plans for officers and key employees. During the fiscal
year ended June 30, 1997, the Compensation Committee held one meeting.
The Company's Audit Committee consists of Abraham Manber, Dale F. Eck and
Herbert Corkin. The Audit Committee held one meeting during the last fiscal
year. The function of the Audit Committee is to review the Company's annual
audit with the Company's independent accountant. The Company has not appointed a
nominating committee of the Board of Directors.
MISCELLANEOUS
Other Matters
As of the date of this Proxy Statement, management has no knowledge of any
business which will be presented for consideration at the Meeting other than
that described herein. Should any other matter properly come before the Meeting,
it is the intention of the persons named in the accompanying proxy to vote such
proxy in accordance with their best judgment.
13
Solicitation of Proxies
The entire expense of preparing, assembling and mailing the proxy
statement, form of proxy and other material used in the solicitation of proxies
will be paid by the Company. In addition to the solicitation of proxies by mail,
arrangement may be made with brokerage houses and other custodians, nominees and
fiduciaries to send proxy material to their principals, and the Company will
reimburse them for expenses in so doing. To the extent necessary to insure
sufficient representation, officers and regular employees of the Company may
request, without additional compensation, therefor, the return of proxies
personally by telephone or telegram. The extent to which this will be necessary
depends entirely on how promptly proxies are received and stockholders are urged
to send their proxies without delay.
STOCKHOLDER PROPOSALS
In order for a stockholder proposal to be considered for inclusion in the
Company's Proxy Statement relating to the 1998 Annual Meeting of Stockholders
such proposal must be received by the Company by June 6, 1998.
David M. Ferrara
Secretary
Date: October 3, 1997
Syracuse, New York
14
PROXY ANAREN MICROWAVE, INC. PROXY
6635 Kirkville Road
East Syracuse, New York 13057
THIS IS YOUR PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
ANAREN MICROWAVE, INC.
The undersigned hereby (1) acknowledges receipt of the notice of the Annual
Meeting of Stockholders of Anaren Microwave, Inc. (the "Company") to be held at
the Syracuse Marriott, 6302 Carrier Parkway, East Syracuse, New York on Monday,
November 10, 1997 at 11:00 A.M., local time and of the Proxy Statement in
connection therewith and (2) appoints Hugh A. Hair and Lawrence A. Sala and each
of them as proxies, each with the power to appoint his substitute, and hereby
authorizes them to represent and to vote, as designated below, all of the shares
of common stock, $.01 par value, of Anaren Microwave, Inc. held of record by the
undersigned on September 26, 1997 at the Annual Meeting of Stockholders, or any
adjournment thereof. If any nominee for director should be unavailable to serve,
it is intended that all of the shares will be voted for such substitute nominee
as may be determined by the Board of Directors. The undersigned directs that
this Proxy be voted as follows:
PROPOSAL 1:
ELECTION OF DIRECTORS FOR all nominees |_| WITHHOLD AUTHORITY |_|
listed below to vote for all
(except as marked nominees listed below.
to the contrary).
Nominees: Hugh A. Hair, Carl W. Gerst, Jr., Abraham Manber, Lawrence A. Sala,
Herbert I. Corkin, Dale F. Eck and David Wilemon.
(Instruction: To withhold authority to vote for any individual nominee, strike a
line through that nominee's name in the above list.)
In their discretion the proxies are authorized to vote upon such other business
as may properly come before the Meeting or any adjournment thereof.
(Continued and to be dated and signed on the reverse.)
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL
BE VOTED FOR THE ELECTION OF THE NOMINEES FOR DIRECTOR.
IMPORTANT. Please sign exactly as name appears on this card. Each joint owner
should sign. Executors, administrators, trustees, etc. should give
full title.
SIGNATURES:
Dated:________________________________, 1997
____________________________________________
Signature
____________________________________________
Please Print Name Here
____________________________________________
Signature
____________________________________________
Please Print Name Here
PLEASE MARK, SIGN, DATE AND RETURN THIS
PROXY PROMPTLY USING THE ENCLOSED ENVELOPE.
NO POSTAGE IS REQUIRED.