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SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(A) of the Securities Exchange Act of 1934
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 Rule 14a-11(c) or Rule 14a-12
REMEC, INC.
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(Name of Registrant as Specified in Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of filing fee (Check the appropriate box):
[X] No Fee Required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
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[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount previously paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing party:
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(4) Date filed:
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[REMEC LOGO]
NOTICE OF ANNUAL MEETING,
PROXY STATEMENT AND PROXY CARD
FOR
ANNUAL MEETING OF SHAREHOLDERS
JUNE 2, 2000
3
(REMEC LOGO)
May 5, 2000
To Our Shareholders:
You are cordially invited to attend the 2000 Annual Meeting of Shareholders
of REMEC, Inc. ("Company") to be held at REMEC's offices located at 9404
Chesapeake Drive, San Diego, California, on Friday, June 2, 2000 at 4:00 p.m.,
Pacific Daylight Savings time. Enclosed are a notice to shareholders, a proxy
statement describing the business to be transacted at the meeting, and a proxy
card for use in voting at the meeting.
At the Annual Meeting, you will be asked to (i) elect nine directors of
REMEC, (ii) approve an amendment to the Company's restated Articles of
Incorporation to increase the number of the Company's authorized shares of
Common Stock, and (iii) act on such other business as may properly come before
the meeting or any adjournment thereof.
It is important that you use this opportunity to take part in the affairs
of your Company by voting on the business to come before this meeting. WHETHER
OR NOT YOU EXPECT TO ATTEND THE MEETING, PLEASE COMPLETE, DATE, SIGN AND
PROMPTLY RETURN THE ACCOMPANYING PROXY CARD IN THE ENCLOSED POSTAGE-PAID
ENVELOPE SO THAT YOUR SHARES MAY BE REPRESENTED AT THE MEETING. Returning the
proxy card does not deprive you of your right to attend the meeting and to vote
your shares in person.
We look forward to seeing you at the meeting.
Sincerely,
/s/ RONALD E. RAGLAND
Ronald E. Ragland
Chairman and Chief Executive Officer
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YOUR VOTE IS IMPORTANT.
PLEASE COMPLETE, DATE, SIGN AND PROMPTLY RETURN THE ENCLOSED PROXY CARD IN
THE ENCLOSED ENVELOPE WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING. IF YOU
ATTEND THE MEETING AND DESIRE TO WITHDRAW YOUR PROXY, YOU MAY VOTE IN PERSON
AND YOUR PROXY WILL BE WITHDRAWN.
9404 Chesapeake Drive - San Diego, CA 92123 - Tel 858-560-1301 - Fax
858-560-0291
4
REMEC, INC.
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NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON JUNE 2, 2000
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TO THE SHAREHOLDERS OF REMEC, INC.:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of REMEC,
Inc. will be held on Friday, June 2, 2000 at 4:00 p.m., Pacific Daylight Savings
time, at REMEC's principal executive offices located at 9404 Chesapeake Drive,
San Diego, California, for the following purposes:
1. To elect nine directors to serve for the ensuing year and until their
successors are elected.
2. To approve an amendment to the Company's restated Articles of
Incorporation to increase the number of the Company's authorized shares
of Common Stock.
3. To transact such other business as may properly come before the meeting
or any adjournments thereof.
The foregoing items of business are more fully described in the Proxy
Statement accompanying this Notice.
Only shareholders of record at the close of business on May 1, 2000 are
entitled to notice of and to vote at the meeting and any adjournments thereof.
All shareholders are cordially invited to attend the meeting in person. Any
shareholder attending the meeting may vote in person even if such shareholder
previously signed and returned a Proxy.
FOR THE BOARD OF DIRECTORS
/s/ RONALD E. RAGLAND
Ronald E. Ragland,
Chairman and Chief Executive Officer
San Diego, California
May 5, 2000
WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING, PLEASE COMPLETE,
DATE AND SIGN THE ENCLOSED PROXY AND MAIL IT PROMPTLY IN THE ENCLOSED
ENVELOPE IN ORDER TO ASSURE REPRESENTATION OF YOUR SHARES.
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REMEC, INC.
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PROXY STATEMENT FOR ANNUAL MEETING OF SHAREHOLDERS
The enclosed Proxy is solicited on behalf of the Board of Directors of
REMEC, Inc. for use at REMEC's Annual Meeting of Shareholders to be held Friday,
June 2, 2000 at 4:00 p.m., Pacific Daylight Savings time, or at any adjournment
or postponement thereof, for the purposes set forth herein and in the
accompanying Notice of Annual Meeting of Shareholders. The Annual Meeting will
be held at REMEC's principal executive offices located at 9404 Chesapeake Drive,
San Diego, California, 92123. The telephone number at that address is (858)
560-1301.
These proxy solicitation materials were mailed on or about May 5, 2000 to
all shareholders entitled to vote at the Annual Meeting.
INFORMATION CONCERNING SOLICITATION AND VOTING
RECORD DATE AND SHARES OUTSTANDING
Shareholders of record at the close of business on May 1, 2000 (the "Record
Date") are entitled to notice of, and to vote at, the Annual Meeting. At the
Record Date, 29,298,907 shares of REMEC's Common Stock were issued, outstanding
and entitled to vote at the Annual Meeting.
REVOCABILITY OF PROXIES
Any proxy given in accordance with this solicitation may be revoked by the
person giving it at any time before its use by delivering to the Secretary of
REMEC a written notice of revocation or a duly executed proxy bearing a later
date or by attending the Annual Meeting and voting in person.
VOTING AND SOLICITATION
Every shareholder voting for the election of directors may exercise
cumulative voting rights and give one candidate a number of votes equal to the
number of directors to be elected multiplied by the number of votes to which the
shareholder's shares are entitled, or distribute such shareholder's votes on the
same principle among as many candidates as the shareholder may select. However,
no shareholder shall be entitled to cumulate votes unless the candidate's name
has been placed in nomination prior to the voting and the shareholder, or any
other shareholder, has given notice at the meeting prior to the voting of the
intention to cumulate votes. On all other matters each share is entitled to one
vote on each proposal or item that comes before the Annual Meeting.
Solicitation of proxies may be made by directors, officers and other
employees of REMEC by personal interview, telephone, facsimile or other method.
No additional compensation will be paid for any such services. Costs of
solicitation, including preparation, assembly, printing and mailing of this
proxy statement, the proxy and any other information furnished to the
shareholders, will be borne by REMEC. REMEC may reimburse the reasonable charges
and expenses of brokerage houses or other nominees or fiduciaries for forwarding
proxy materials to, and obtaining authority to execute proxies from, beneficial
owners for whose account they hold shares of Common Stock.
QUORUM, ABSTENTIONS, AND BROKER NON-VOTES
The required quorum for the transaction of business at the Annual Meeting
is a majority of the shares of Common Stock outstanding on the Record Date.
Abstentions are included in the determination of shares present for quorum
purposes. Because abstentions represent shares entitled to vote, the effect of
an abstention will be the same as a vote against a proposal. If shares are held
in "street name" through a broker or other nominee, the broker or nominee may
not be permitted to exercise voting discretion with respect to certain matters
to be acted upon. If the broker or nominee is not given specific instructions,
shares held in the name of such broker or nominee may not be voted on those
matters and will not be considered as present and entitled to vote with respect
to those matters. Shares represented by such "broker non-votes" will, however,
be counted in determining whether there is a quorum.
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PROPOSAL ONE
ELECTION OF DIRECTORS
NOMINEES
The Bylaws of REMEC provide for a Board consisting of at least seven but
not more than eleven directors, with the size of the Board set at nine as of the
date of the Annual Meeting. Nine directors are to be elected at the Annual
Meeting. Unless otherwise instructed, the proxy holders will vote the proxies
received by them for the nine nominees named below. All of the nominees named
below are presently directors of REMEC. In the event that any nominee is unable
or declines to serve as a director at the time of the Annual Meeting, the
proxies will be voted for any nominee who shall be designated by the present
Board to fill the vacancy. In the event that additional persons are nominated
for election as directors, the proxy holders intend to vote all proxies received
by them in such a manner in accordance with cumulative voting as will ensure the
election of as many of the nominees listed below as possible. In such event, the
specific nominees for whom such votes will be cumulated will be determined by
the proxy holders. The term of office of each person elected as a director will
continue until the next Annual Meeting of Shareholders or until his successor
has been elected and qualified. It is not expected that any nominee will be
unable or will decline to serve as a director.
The names of and certain other information regarding the nominees are set
forth in the table below.
DIRECTOR
NAME AGE POSITION WITH REMEC SINCE
---- --- ------------------- --------
Ronald E. Ragland(3)............ 58 Chairman of the Board and Chief Executive Officer 1983
Errol Ekaireb................... 61 President, Chief Operating Officer and Director 1985
Jack A. Giles................... 58 Executive Vice President, President of REMEC Microwave, Inc. and Director 1984
Denny Morgan.................... 46 Senior Vice President, Chief Engineer and Director 1983
Thomas A. Corcoran(2)........... 55 Director 1996
Mark D. Dankberg(1)............. 44 Director 1999
William H. Gibbs(2)............. 56 Director 1996
Andre R. Horn(1)................ 71 Director 1988
Jeffrey M. Nash(1)(2)(3)........ 52 Director 1988
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(1) Current member of the Audit Committee.
(2) Current member of the Compensation Committee.
(3) Current member of the Nominating Committee.
There is no family relationship between any of the directors or executive
officers of REMEC.
MR. RAGLAND was a founder of REMEC and has served as our Chairman of the
Board and Chief Executive Officer since January 1983. Prior to founding REMEC,
he was General Manager of KW Engineering and held program management positions
with Ford Aerospace Communications Corp., E-Systems, Inc. and United
Telecommunications, Inc. Mr. Ragland was a Captain in the United States Army and
holds a B.S.E.E. degree from Missouri University at Rolla and an M.S.E.E. degree
from St. Louis University.
MR. EKAIREB has served as President and Chief Operating Officer of REMEC
since 1990 and as a director since 1985. Mr. Ekaireb served as Vice President of
REMEC from 1984 to 1987 and as Executive Vice President and Chief Operating
Officer from 1987 to 1990. Prior to joining us, he spent 23 years with Ford
Aerospace Communications Corp. Mr. Ekaireb holds B.S.E.E. and B.S.M.E. degrees
from West Coast University and has completed the University of California, Los
Angeles Executive Program.
MR. GILES joined REMEC in 1984. He was elected as a director in 1984, Vice
President in 1985, Executive Vice President in 1987, President of REMEC
Microwave in 1994 and President of our Defense Group in 1999. Prior to joining
us, he spent approximately 19 years with Texas Instruments in program management
and marketing positions. Mr. Giles holds a B.S.M.E. degree from the University
of Arkansas and is a graduate of Defense Systems Management College.
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MR. MORGAN was a founder of REMEC and has served as Senior Vice President,
Chief Engineer and a director of REMEC since January 1983. Prior to joining us,
he worked with KW Engineering, Micromega, General Dynamics Corporation and
Pacific Aerosystems, Inc. Mr. Morgan holds a B.S.E.E. degree from the
Massachusetts Institute of Technology and was the Four Year Chancellor's Intern
Fellowship Recipient at the University of California, Los Angeles.
MR. CORCORAN was elected a director of REMEC in May 1996. Mr. Corcoran has
been the President and Chief Executive Officer of Allegheny Technologies
Incorporated since October 1999. Prior to that, Mr. Corcoran was a Vice
President and the President and Chief Operating Officer of the Space and
Strategic Missiles sector of Lockheed Martin Corporation from October 1998 to
September 1999. From March 1995 to September 1998, he was the President and
Chief Operating Officer of the Electronics sector of Lockheed Martin. From 1993
to 1995 Mr. Corcoran was President of the Electronics Group of Martin Marietta
Corporation, and from 1983 to 1993 he held various management positions with the
Aerospace segment of General Electric Company. Mr. Corcoran is Chairman of the
Board of Teledyne Technologies, Inc., and a director of Allegheny Technologies
and L-3 Communications Holdings, Inc. Mr. Corcoran is a member of the Board of
Trustees of Worcester Polytechnic Institute, the Board of Trustees of Stevens
Institute of Technology and the Board of Governors of the Electronic Industries
Association.
MR. DANKBERG joined REMEC as a director in September, 1999. Mr. Dankberg
was a founder of, and has served as Chairman of the Board, President and Chief
Executive Officer of ViaSat, Inc. since its inception in May 1986. Mr. Dankberg
also serves as a director of Connected Systems, a privately held company that
develops and manufacturers digital voice messaging systems. Prior to founding
ViaSat, he was Assistant Vice President of M/A-COM Linkabit, a manufacturer of
satellite telecommunications equipment, from 1979 to 1986 and Communications
Engineer for Rockwell International from 1977 to 1979. Mr. Dankberg holds
B.S.E.E. and M.E.E. degrees from Rice University.
MR. GIBBS was elected a director of REMEC in May, 1996. Mr. Gibbs was the
President and Chief Executive Officer of DH Technology, Inc. from November 1985
to January 1998 and was Chairman of the Board of DH Technology, Inc. from March
1987 through October 1997. From August 1983 to November 1985, he held various
positions, including those of President and Chief Operating Officer, with
Computer and Communications Technology, a supplier of rigid disc magnetic
recording heads to the peripheral equipment segment of the computer industry.
Mr. Gibbs is a director of Axihom Transaction Solutions, Inc. and Fargo
Electronic, Inc.
MR. HORN has been a director of REMEC since 1988. Mr. Horn is the retired
Chairman of the Board of Joy Manufacturing Company. From 1985 to 1991, Mr. Horn
served as the Chairman of the Board of Needham & Company, Inc. He currently
holds the honorary position of Chairman Emeritus of Needham & Company, Inc. Mr.
Horn is a director of Western Digital Corporation, a computer equipment
manufacturer, and Varco International, Inc., a manufacturer of petroleum
industry equipment.
DR. NASH has been a director of REMEC since 1988. From 1995 to 1998, he was
the President, Chief Executive Officer and a Director of TransTech Information
Management Systems, Inc. Since 1994, Dr. Nash has been Chairman, Chief Executive
Officer and President of Digital Perceptions, Inc. From 1989 to 1994, he was the
Chief Executive Officer and President of Visqus as well as Conner Technology,
Inc., both subsidiaries of Conner Peripherals, Inc. Dr. Nash is currently a
director of ViaSat, Inc., a manufacturer of satellite communication equipment,
and several private companies, including Prisa Networks, Orincon Corporation,
StoragePoint.Com and Tiernan Communications, Inc.
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BOARD MEETINGS AND COMMITTEES
The Board held a total of ten meetings during the fiscal year ended January
31, 2000. Each Director attended at least 75% of the total number of meetings of
the Board and at least 75% of the total number of meetings held by all
committees of the Board on which he served. REMEC has a standing Audit
Committee, Compensation Committee and Nominating Committee.
The current members of REMEC's Audit Committee are Mr. Dankberg, Mr. Horn
and Dr. Nash. The principal functions of the Audit Committee are to recommend
engagement of REMEC's independent auditors, to consult with REMEC's auditors
concerning the scope of the audit and to review with them the results of their
examination, to review and approve any material accounting policy changes
affecting REMEC's operating results and to review REMEC's financial control
procedures and personnel. The Audit Committee held two meetings during the
fiscal year ended January 31, 2000.
The current members of the Compensation Committee are Mr. Corcoran, Mr.
Gibbs and Dr. Nash. The Compensation Committee determines compensation and
benefits for REMEC's executive officers and administers REMEC's equity incentive
plans. The Compensation Committee held two meetings during the fiscal year ended
January 31, 2000.
The members of the Nominating Committee currently are Mr. Corcoran, Mr.
Gibbs and Dr. Nash. The Nominating Committee reviews potential candidates for
service on the Board. The Nominating Committee did not hold any meetings during
the fiscal year ended January 31, 2000. All the nominees up for election as
directors presently are directors of REMEC and were nominated for re-election by
the Board.
COMPENSATION OF DIRECTORS
Effective June 2, 2000, REMEC's outside directors receive an annual
retainer fee of $6,500 for serving on the Board of Directors, a fee of $1,750
for each Board meeting attended and a fee of $500 for participation in a
telephonic Board meeting. Outside directors also receive a fee of $500 ($750 for
the committee chairman) for each committee meeting attended. Outside directors
are reimbursed for their reasonable travel expenses in attending Board and
committee meetings. Also, under REMEC's 1996 Nonemployee Director Stock Option
Plan, each outside director receives (i) a one-time grant of an option to
purchase 15,000 shares of REMEC's Common Stock upon the election of such person
for the first time to serve as a director and (ii) an annual grant of an option
to purchase 5,250 shares of Common Stock each year in which the director
continues to serve on the Board.
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MANAGEMENT
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following sets forth certain information regarding beneficial ownership
of the Common Stock as of March 31, 2000 (i) by each person who is known by
REMEC to own beneficially more than 5% of the Common Stock, (ii) by each of
REMEC's directors and by each nominee to the Board, (iii) by the Chief Executive
Officer and the four other most highly paid executive officers of REMEC at
fiscal year end (the "Named Executive Officers") and (iv) by all directors and
executive officers as a group.
PERCENTAGE OF
NUMBER OF SHARES
SHARES BENEFICIALLY BENEFICIALLY
BENEFICIAL OWNER OWNED(1) OWNED(1)(2)
---------------- ------------------- --------------
State of Wisconsin Investment Board(3)................. 1,992,000 6.8%
Ronald E. Ragland(4)................................... 874,400 3.0
Errol Ekaireb(5)....................................... 156,374 *
Jack A. Giles(6)....................................... 212,477 *
Joseph T. Lee(7)....................................... 154,547 *
Denny Morgan(8)........................................ 316,968 1.1
James Mongillo(9)...................................... 174,764 *
Thomas A. Corcoran(10)................................. 28,251 *
Mark D. Dankberg(11)................................... 3,352 *
William H. Gibbs(12)................................... 30,124 *
Andre R. Horn(13)...................................... 21,514 *
Jeffrey M. Nash(14).................................... 40,013 *
All directors and executive officers as a group (18
persons)(15)......................................... 3,550,992 11.9%
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* Less than 1% of the outstanding shares of Common Stock.
(1) This table is based upon information supplied by directors, officers and
principal shareholders. Unless otherwise indicated in the footnotes to this
table and subject to community property laws where applicable, each of the
shareholders identified in this table has sole voting and investment power
with respect to the shares shown. Percentage of ownership is based on
29,092,281 shares of Common Stock outstanding as of March 31, 2000.
(2) Shares issuable upon exercise of outstanding options are considered
outstanding for purposes of calculating the percentage of ownership of
Common Stock of the person holding such options, but are not considered
outstanding for computing the percentage of ownership of any other person.
(3) The address of State of Wisconsin Investment Board is P.O. Box 7842,
Madison, WI 53707.
(4) Includes 197,400 shares issuable upon exercise of outstanding options that
are exercisable within 60 days of March 31, 2000 and 23,400 shares held by
Mr. Ragland's minor children.
(5) Includes 68,500 shares issuable upon exercise of outstanding options that
are exercisable within 60 days of March 31, 2000 and 8,000 shares held by
Mr. Ekaireb's spouse.
(6) Includes 28,750 shares issuable upon exercise of outstanding options that
are exercisable within 60 days of March 31, 2000 and 11,625 shares held by
Mr. Giles' spouse.
(7) Includes 69,250 shares issuable upon exercise of outstanding options that
are exercisable within 60 days of March 31, 2000.
(8) Includes 42,000 shares issuable upon exercise of outstanding options that
are exercisable within 60 days of March 31, 2000. All shares beneficially
owned by Mr. Morgan are held in the Morgan Trust, of which Mr. Morgan and
his spouse act as co-trustees.
(9) Includes 16,350 shares issuable upon exercise of outstanding options that
are exercisable within 60 days of March 31, 2000. All shares beneficially
owned by Mr. Mongillo are held in the Mongillo Family Trust, of which Mr.
Mongillo and his spouse act as co-trustees.
(10) Includes 25,124 shares issuable upon exercise of outstanding options that
are exercisable within 60 days of March 31, 2000.
(11) Consists of 3,352 shares issuable upon exercise of outstanding options that
are exercisable within 60 days of March 31, 2000.
(12) Includes 25,124 shares issuable upon exercise of outstanding options that
are exercisable within 60 days of March 31, 2000.
(13) Includes 15,374 shares issuable upon exercise of outstanding options that
are exercisable within 60 days of March 31, 2000.
(14) Includes 15,374 shares issuable upon exercise of outstanding options that
are exercisable within 60 days of March 31, 2000.
(15) Includes 674,888 shares issuable upon exercise of outstanding options that
are exercisable within 60 days of March 31, 2000.
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EXECUTIVE COMPENSATION
Summary Compensation Table. The following table sets forth the total
compensation received by the Chief Executive Officer and the four other most
highly paid executive officers of REMEC for the fiscal years ended January 31,
2000, 1999 and 1998 (the "Named Executive Officers"). None of the Named
Executive Officers earned any bonuses or compensation for the fiscal years other
than as set forth in the table or received any restricted stock awards, stock
appreciation rights or long-term incentive plan payouts.
SUMMARY COMPENSATION TABLE
ANNUAL COMPENSATION
FISCAL ------------------------ ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY($)(1) BONUS($) COMPENSATION($)
--------------------------- ------ ------------ -------- ---------------
Ronald E. Ragland............................ 2000 $372,752 $ -- $ 14,870(2)
Chairman and Chief Executive Officer 1999 346,667 100,000 14,440(3)
1998 320,000 138,980 35,881(4)
Errol Ekaireb................................ 2000 313,757 -- 388,755(5)
President and Chief Operating Officer 1999 288,333 80,000 14,055(6)
1998 254,997 138,980 12,300(7)
Jack A. Giles................................ 2000 268,865 -- 537,055(8)
Executive Vice President 1999 249,333 65,000 13,245(9)
1998 230,667 138,980 82,293(10)
Joseph T. Lee................................ 2000 237,903 -- 11,120(11)
Executive Vice President 1999 225,000 55,000 11,420(12)
1998 210,001 138,980 9,400(13)
James Mongillo(14)........................... 2000 231,314 -- 9,000(15)
Executive Vice President 1999 213,872 16,000 9,300(16)
1998 183,333 30,000 --
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(1) Includes amounts deferred at the option of the officer pursuant to REMEC's
deferred compensation plan for employee directors.
(2) Consists of compensation in the form of an automobile allowance in the
amount of $9,000 and $5,870 in life insurance premiums.
(3) Consists of $9,000 in the form of an automobile allowance, a $300
contribution to the REMEC 401(k) plan and $5,140 in life insurance
premiums.
(4) Consists of $9,000 in the form of an automobile allowance, a $400
contribution to the REMEC 401(k) plan and $26,481 from the exercise of
stock options (the difference between the fair market value on the date of
exercise and the exercise price multiplied by the option shares exercised).
(5) Consists of compensation in the form of an automobile allowance in the
amount of $9,000, $4,755 in life insurance premiums and $375,000 from the
exercise of stock options (the difference between the fair market value on
the date of exercise and the exercise price multiplied by the option shares
exercised).
(6) Consists of $9,000 in the form of an automobile allowance, a $300
contribution to the REMEC 401(k) plan and $4,755 of life insurance
premiums.
(7) Consists of $9,000 in the form of an automobile allowance, a $400
contribution to the REMEC 401(k) plan and $2,900 in life insurance
premiums.
(8) Consists of $9,000 in the form of an automobile allowance, $3,908 in life
insurance premiums and $524,147 from the exercise of stock options (the
difference between the fair market value on the date of exercise and the
exercise price multiplied by the option shares exercised).
(9) Consists of $9,000 in the form of an automobile allowance, a $300
contribution to the REMEC 401(k) plan and $3,945 in life insurance
premiums.
(10) Consists of $9,000 in the form of an automobile allowance, a $400
contribution to the REMEC 401(k) plan, $3,410 in life insurance premiums
and $69,473 from the exercise of stock options (the difference between the
fair market value on the date of exercise and the exercise price multiplied
by the number of option shares exercised).
(11) Consists of compensation in the form of an automobile allowance in the
amount of $9,000 and $2,120 in life insurance premiums.
(12) Consists of $9,000 in the form of an automobile allowance, a $300
contribution to the REMEC 401(k) plan and $2,120 in life insurance
premiums.
(13) Consists of $9,000 in the form of an automobile allowance and a $400
contribution to the REMEC 401(k) plan.
(14) Compensation amounts shown are those paid by REMEC (or its subsidiary)
after Mr. Mongillo became employed by REMEC following its acquisition of
Radian Technology, Inc. in February 1997.
(15) Consists of $9,000 in the form of an automobile allowance.
(16) Consists of $9,000 in the form of an automobile allowance and a $300
contribution to the REMEC 401(k) plan.
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Option Grant Table. The following table sets forth certain information
relating to options to purchase shares of REMEC's Common Stock granted to the
Named Executive Officers granted during the fiscal year ended January 31, 2000.
OPTION GRANTS IN FISCAL 2000
POTENTIAL REALIZABLE
VALUE AT ASSUMED
ANNUAL RATES OF STOCK
NUMBER OF PERCENT OF TOTAL PRICE APPRECIATION FOR
SECURITIES OPTIONS GRANTED TO EXERCISE OR OPTION TERM(2)
UNDERLYING OPTIONS EMPLOYEES IN BASE PRICE EXPIRATION -----------------------
NAME GRANTED(#) FISCAL YEAR PER SHARE(1) DATE 5% 10%
---- ------------------ ------------------ ------------ ---------- --------- -----------
Ronald E. Ragland.... 80,000 8.86% $12.44 6/4/2008 $548,682 $1,351,430
Errol Ekaireb........ 50,000 5.54 12.44 6/4/2008 342,926 844,643
Jack A. Giles........ 35,000 3.88 12.44 6/4/2008 240,048 591,250
Joseph T. Lee........ 25,000 2.77 12.44 6/4/2008 171,463 422,322
James Mongillo....... 40,000 4.43 12.44 6/4/2008 274,341 675,715
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(1) Options were granted at 100% of fair market value on the date of grant.
(2) The dollar amounts set forth under these columns are the result of
calculations of assumed annual rates of stock appreciation of 5% and 10%,
the two assumed rates of stock price appreciation required under the rules
of the Securities and Exchange Commission. The calculations are for the
period beginning on the date of grant of the fiscal 2000 option awards (June
4, 1999) and ending on the date of expiration of such options (June 4,
2008). Based on the assumed annual rates of stock price appreciation of 5%
and 10%, REMEC's projected stock price at the dates of expiration of these
options are as follows: $19.30 and $29.33, respectively. These assumed
annual rates of stock price appreciation are not intended to forecast future
appreciation of REMEC's stock price. Indeed, REMEC's stock price may
increase or decrease in value over the time period set forth above. The
potential realizable value computation also does not take into account
federal or state income tax consequences of option exercises or sales of
appreciated stock.
The 5% and 10% assumed rates of stock price appreciation used to calculate
potential gains to optionees are provided pursuant to the rules of the
Securities and Exchange Commission.
Option Exercise Table. The following table sets forth certain information
relating to options to purchase REMEC's Common Stock exercised by the Named
Executive Officers during the fiscal year ended January 31, 2000.
OPTION VALUES AT JANUARY 31, 2000
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
OPTIONS AT FISCAL IN-THE-MONEY OPTIONS AT
SHARES YEAR-END(#) FISCAL YEAR-END(1)($)
ACQUIRED ON VALUE ---------------------------- ----------------------------
NAME EXERCISE(#) REALIZED($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- ----------- ----------- ------------- ----------- -------------
Ronald E. Ragland.... -- $ -- 197,400 188,000 $798,283 $1,143,750
Errol Ekaireb........ 25,000 375,000 68,500 111,500 302,031 714,844
Jack A. Giles........ 35,500 524,147 28,750 68,750 56,641 432,422
Joseph T. Lee........ -- -- 69,250 55,750 500,080 357,422
James Mongillo....... -- -- 11,850 61,550 13,837 341,510
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(1) Calculated on the basis of the closing price of REMEC's Common Stock on the
Nasdaq National Market on January 31, 2000 ($19.94 per share).
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REPORT OF THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS
The Compensation Committee is comprised of three independent nonemployee
directors. As members of the Compensation Committee, it is our responsibility to
determine the most effective total executive compensation strategy, based upon
the business needs of REMEC and consistent with shareholders' interests, to
administer REMEC's executive compensation plans, programs and policies, to
monitor corporate performance and its relationship to compensation of executive
officers, and to make appropriate recommendations concerning matters of
compensation. We have engaged an outside consulting firm, Towers Perrin, to
review our compensation strategy and to provide us with professional assistance
in determining the most effective strategy.
Compensation Philosophy. The major goals of the compensation program are to
align compensation with the attainment of key business objectives and to enable
REMEC to attract, retain and reward capable executives who can contribute to the
continued success of REMEC. Three key goals form the basis of compensation
decisions for all employees of REMEC:
1. To attract and retain the most highly qualified management and employee
team;
2. To pay competitively compared to similar technology and defense
electronics companies and to provide appropriate reward opportunities
for achieving high levels of performance compared to similar
organizations in the marketplace; and
3. To motivate executives and employees to achieve REMEC's annual and
long-term business goals and encourage behavior toward the fulfillment
of those objectives.
As a result of this philosophy, REMEC's executive compensation program
consists of base salary, bonuses, participation in equity-based incentive plans
(stock option and stock purchase plans) and standard benefits.
Base Salary. The Compensation Committee recognizes the importance of
maintaining compensation practices and levels of compensation competitive with
technology and defense electronics companies in comparable stages of development
and other comparable technology companies in the San Diego area. For external
marketplace comparison purposes, a group of approximately 20 companies operating
in our industry are utilized for determining competitive compensation levels.
Also, the Compensation Committee reviewed compensation information presented in
the April 1999 Executive Compensation Survey for Electronics, Software and
Information Technology Companies prepared by the American Electronics
Association.
Base salary represents the fixed component of the executive compensation
program. Determination of base salary levels is established on an annual review
of marketplace competitiveness with similar technology and defense electronics
companies, and on individual performance. Periodic increases in base salary
relate to individual contributions evaluated against established objectives,
relative marketplace competitiveness levels, length of service, and the
industry's annual competitive pay practice movement.
Bonuses and Stock Plans. REMEC's bonus program is an integral part of the
compensation program and is designed to reward executives for long-term
strategic management and for attaining specific annual performance goals. Each
year a portion of REMEC's pre-tax profits comprise the bonus "pool." The
Compensation Committee determines the bonus amount for the Chief Executive
Officer, the President and the Executive Vice Presidents of REMEC, based on both
attainment by those officers of specific goals, and on overall corporate
performance. The Chief Executive Officer, President and Executive Vice
Presidents determine the bonus amount for the other executive officers and for
all other salaried employees, based on the same criteria. Executive officers of
REMEC are eligible to receive awards under the Equity Incentive Plan, and all
executive officers are eligible to participate in the Employee Stock Purchase
Plan.
Compensation for the Chief Executive Officer. In the fiscal year ended
January 31, 2000, Ronald Ragland was paid a salary of $372,752. Mr. Ragland also
received an automobile allowance of $9,000 and $5,870 in life insurance
premiums. The total compensation paid to Mr. Ragland in the fiscal year ended
January 31, 2000 is approximately the industry median for chief executive
officers of the competitive industry comparative group.
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Summary. The Compensation Committee believes that the compensation of
executives by REMEC is appropriate and competitive with the compensation
provided by other technology and defense electronics companies with which REMEC
competes for executives and employees. The Committee believes its compensation
strategy, principles and practices result in a compensation program tied to
shareholder returns and linked to the achievement of annual and longer-term
financial and operational results of REMEC on behalf of REMEC's shareholders.
The Compensation Committee of the Board of Directors:
- Thomas A. Corcoran
- William H. Gibbs
- Jeffrey M. Nash
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During the fiscal year ended January 31, 2000, no executive officer of
REMEC served on the board of directors or compensation committee of another
company that had an executive officer serve on REMEC's Board of Directors or
Compensation Committee.
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
REMEC's directors and executive officers, and persons who own more than 10% of a
registered class of REMEC's equity securities, to file reports of ownership on
Form 3 and changes in ownership on Form 4 or 5 with the Securities and Exchange
Commission and the National Association of Securities Dealers. Such officers,
directors and 10% shareholders are also required by Securities and Exchange
Commission rules to furnish REMEC with copies of all Section 16(a) forms that
they file. To REMEC's knowledge, based solely upon review of the copies of such
reports and certain representations furnished to it, REMEC's executive officers
and directors complied with all applicable Section 16(a) filing requirements
during the fiscal year ended January 31, 2000, except that Mr. Nicholas J.S.
Randall (Executive Vice President) filed one report late and Mr. David Schmitz
(President of REMEC's subsidiary, REMEC Qbit, Inc.) reported one transaction
late.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Tao Chow, Senior Vice President of REMEC and President and director of
REMEC's wholly owned subsidiary, REMEC CSH, Inc., (i) owns approximately 30% of
the outstanding shares of Excelics Semiconductor, Inc., a supplier to REMEC CSH,
Inc., (ii) owns approximately 45% of the outstanding shares and is a director,
President and Chief Financial Officer of Custom Micro Machining, Inc., a
supplier of machine parts to REMEC CSH, Inc., and (iii) owns approximately 33%
of the outstanding shares and is a director of Applied Thin-Film Products, a
supplier of circuits to REMEC CSH, Inc. REMEC paid approximately $1.2 million to
these suppliers in fiscal 2000 for certain components on terms REMEC believes
are no less favorable than could be obtained with suppliers that did not have a
relationship with REMEC or its management.
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PERFORMANCE GRAPH
The graph set forth below compares the cumulative total shareholder return
on REMEC's Common Stock with the cumulative total return on the Nasdaq Stock
Market U.S. Index and the Nasdaq Electronic Components Index since REMEC's
initial public offering through January 31, 2000, assuming $100 invested in
REMEC's Common Stock at its closing price of $8.50 per share on February 2, 1996
(the date trading in REMEC's stock began) and the reinvestment of all dividends,
if any.
NASDAQ STOCK MARKET U.S. NASDAQ ELECTRONIC
REMEC, INC. INDEX COMPONENTS INDEX
----------- ------------------------ -----------------
2/2/96 100 100 100
8/2/96 171 106 113
1/31/97 306 130 199
8/1/97 551 150 230
1/30/98 454 153 195
7/31/98 135 176 194
1/29/99 353 240 315
7/30/99 222 252 354
1/31/00 352 373 611
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PROPOSAL TWO
APPROVAL OF AMENDMENT TO RESTATED ARTICLES OF INCORPORATION
DESCRIPTION OF THE AMENDMENT
At the Annual Meeting, the shareholders are being asked to approve an
amendment to, and restatement of, the Company's Restated Articles of
Incorporation to increase the number of authorized shares of Common Stock by
70,000,000 shares (the "Amendment"). The Company's restated Articles of
Incorporation currently authorize the issuance of 70,000,000 shares of Common
Stock and 5,000,000 shares of Preferred Stock. In March 2000, the Board of
Directors adopted a resolution approving an amendment to the Restated Articles
of Incorporation to increase the authorized number of shares of Common Stock to
140,000,000 shares, with a par value of one cent ($.01) per share, subject to
shareholder approval. Since the Company's Restated Articles of Incorporation
also authorize 5,000,000 shares of Preferred Stock, the Amendment will have the
effect of increasing the total number of shares of capital stock authorized for
issuance from 75,000,000 to 145,000,000 shares.
PURPOSE AND EFFECT OF THE PROPOSED AMENDMENT
As of March 31, 2000, the Company had approximately 29,092,281 shares of
Common Stock outstanding and no shares of Preferred Stock outstanding, and as of
that date, the Company had approximately 3,164,053 shares of Common Stock
reserved for issuance under options granted pursuant to the Company's stock
option plans.
In addition, to the foregoing, the Board considers it advisable to have
additional authorized, but unissued shares of Common Stock available to allow
the Company to act promptly with respect to possible future financings, possible
stock dividends, possible acquisitions, additional issuances under the Company's
employee benefit plans and for other corporate purposes approved by the Board.
Having additional authorized shares of Common Stock available for issuance in
the future would give the Company greater flexibility and allow shares of Common
Stock to be issued without the expense or delay of a shareholders' meeting,
except as may be required by applicable laws or regulations. Other than for
issuance under the Company's employee benefit plans, the Company has no specific
plans for the issuance of additional shares of Common Stock.
Under the Company's Restated Articles of Incorporation, the Company's
shareholders do not have preemptive rights with respect to the Common Stock.
Thus, should the Board of Directors elect to issue additional shares of Common
Stock, existing shareholders would not have any preferential rights to purchase
such shares. In addition, if the Board of Directors elects to issue additional
shares of Common Stock, such issuance could have a dilutive effect on the
earnings per share, voting power and shareholdings of current shareholders.
The proposed amendment to increase the authorized number of shares of
Common Stock could, under certain circumstances, have an anti-takeover effect,
although this is not the intention of this proposal. In the event of a hostile
takeover attempt to take over control of the Company, it may be possible for the
Company to endeavor to impede the attempt by issuing shares of the Common Stock,
thereby diluting the voting power of the other outstanding shares and increasing
the potential cost to acquire control of the Company. The proposed Amendment,
therefore, may have the effect of discouraging unsolicited takeover attempts. By
potentially discouraging initiation of any such unsolicited takeover attempt,
the proposed Amendment may limit the opportunity for the Company's shareholders
to dispose of their shares at the higher price generally available in takeover
attempts or that may be available under a merger proposal. The proposed
amendment may have the effect of permitting the Company's current management,
including the current Board of Directors, to retain its position, and place it
in a better position to resist changes that shareholders may wish to make if
they are dissatisfied with the conduct of the Company's business. However, the
Board of Directors is not aware of any attempt to take control of the Company
and the Board of Directors has not presented this proposal with the intent that
it be utilized as a type of anti-takeover device.
REQUIRED VOTE
Approval of the Amendment to the Restated Articles of Incorporation will
require the affirmative vote of a majority of the outstanding shares of Common
Stock entitled to vote at the meeting.
THE BOARD OF DIRECTORS RECOMMENDS THE SHAREHOLDERS VOTE FOR
THE AMENDMENT TO THE RESTATED ARTICLES OF INCORPORATION
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INDEPENDENT PUBLIC ACCOUNTANTS
The Board has selected Ernst & Young LLP as independent public accountants
to audit the financial statements of REMEC for the fiscal year to end January
31, 2001. Ernst & Young LLP has been engaged as REMEC's auditors since 1985.
Representatives of Ernst & Young LLP are expected to be present at the Annual
Meeting and will have an opportunity to make a statement if they desire to do
so. The representatives of Ernst & Young LLP also will be available to respond
to questions raised during the meeting.
SHAREHOLDER PROPOSALS
Proposals of shareholders of REMEC which are intended to be presented at
REMEC's 2001 meeting of shareholders must be received by the Secretary of REMEC
no later than January 1, 2001 in order to be included in the proxy soliciting
material relating to that meeting.
2000 ANNUAL REPORTS
REMEC's 2000 Annual Report, including audited financial statements for the
fiscal years ending January 31, 1998, 1999 and 2000, are being forwarded to each
person who is a shareholder of record as of May 1, 2000, together with this
Proxy Statement.
A COPY OF REMEC'S 2000 ANNUAL REPORT ON FORM 10-K IS AVAILABLE WITHOUT
CHARGE TO THOSE SHAREHOLDERS WHO WOULD LIKE MORE DETAILED INFORMATION CONCERNING
REMEC. IF YOU DESIRE A COPY OF THAT DOCUMENT, PLEASE SEND A WRITTEN REQUEST TO
INVESTOR RELATIONS, REMEC, INC., 9404 CHESAPEAKE DRIVE, SAN DIEGO, CALIFORNIA
92123 (TELEPHONE: 858-560-1301).
OTHER MATTERS
REMEC knows of no other matters to be submitted at the Annual Meeting. If
any other matters properly come before the Annual Meeting, it is the intention
of the persons named in the enclosed proxy to vote the shares they represent as
the Board may recommend.
THE BOARD OF DIRECTORS
San Diego, California
May 5, 2000
YOU ARE CORDIALLY INVITED TO ATTEND THE MEETING IN PERSON. WHETHER OR NOT
YOU PLAN TO ATTEND THE MEETING, YOU ARE REQUESTED TO SIGN AND RETURN THE
ACCOMPANYING PROXY IN THE ENCLOSED POSTAGE PAID ENVELOPE.
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PROXY
REMEC, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoint(s) Ronald E. Ragland, Errol Ekaireb and
Michael D. McDonald, or any of them, each with full power of substitution, the
lawful attorneys and proxies of the undersigned to vote as designated below,
and, in their discretion, upon such other business as may properly be presented
to the meeting, all of the shares of REMEC, INC. which the undersigned shall be
entitled to vote at the Annual Meeting of Shareholders to be held on June 2,
2000, and at any adjournments or postponements thereof.
PLEASE COMPLETE, DATE AND SIGN THIS PROXY AND MAIL IT PROMPTLY IN THE ENCLOSED
ENVELOPE TO ASSURE REPRESENTATION OF YOUR SHARES.
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FOLD AND DETACH HERE
18
Please mark
your vote as
indicated in [X]
this example.
FOR WITHHOLD
All nominees AUTHORITY
listed (except as to vote (as to
indicated below) all nominees)
Proposal 1. ELECTION OF DIRECTORS. [ ] [ ]
To elect as directors:
Ronald E. Ragland, Errol Ekaireb, Jack A. Giles,
Denny Morgan, Thomas A. Corcoran, Mark D. Dankberg,
William H. Gibbs, Andre R. Horn and Jeffrey Nash.
To withhold authority to vote for any individual nominee,
write that nominee's name on the line provided below.
___________________________________________
FOR AGAINST ABSTAIN
Proposal 2. APPROVAL OF AMENDMENT TO [ ] [ ] [ ]
RESTATED ARTICLES OF
INCORPORATION
This proxy, when properly executed, will be voted in the manner directed by the
undersigned shareholder. WHEN NO CHOICE IS INDICATED, THIS PROXY WILL BE VOTED
FOR THE NOMINEES AND OTHER PROPOSALS LISTED ABOVE. The proxy holders in their
discretion may cumulate votes for the election of directors. This proxy may be
revoked at any time prior to the time it is voted by any means described in the
accompanying Proxy Statement.
Signature(s)___________________________________________ Dated:____________, 2000
Please date and sign exactly as name(s) appear(s) hereon. If shares are held
jointly, each holder should sign. Please give full title and capacity in which
signing if not signing as an individual.
- --------------------------------------------------------------------------------
FOLD AND DETACH HERE