SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. )
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Astro-Med, Inc.
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(Name of Registrant as Specified In Its Charter)
Astro-Med, Inc.
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ASTRO-MED, INC.
ASTRO-MED INDUSTRIAL PARK
600 EAST GREENWICH AVENUE
WEST WARWICK, RHODE ISLAND 02893
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
MAY 20, 199719, 1998
To the Shareholders of
Astro-Med, Inc.:
Notice is hereby given that the 19971998 Annual Meeting of Shareholders of
Astro-Med, Inc. (the "Company") will be held at the offices of the Company,
Astro-Med Industrial Park, 600 East Greenwich Avenue, West Warwick, Rhode
Island on Tuesday May 20, 1997,19, 1998, beginning at 10:00 a.m., for the purpose of
considering and acting upon the following:
(1)Electing five directors to serve until the next annual meeting of
shareholders or until their successors are elected and have qualified.
(2) Acting upon a proposal to approveApproving an increase in the adoptionmaximum number of shares available under
the Company's 1997 Incentive Stock Option Plan by 250,000 shares to 500,000
shares in the aggregate.
(3)Approving the Company's 1998 Non-Qualified Stock Option Plan.
(3) (4)Transacting such other business as may properly come before the
meeting.
The close of business on March 28, 199727, 1998 has been fixed as the record date
for determining shareholders entitled to vote at the Annual Meeting or any
adjournment thereof.
By Order of the Board of Directors
Margaret D. Farrell
Secretary
April 25, 199723, 1998
Kindly fill in, date and sign the enclosed proxy and promptly return it in
the enclosed addressed envelope, which requires no postage if mailed in
the United States. If you are personally present at the meeting, the proxy
will not be used without your consent.
ASTRO-MED, INC.
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
MAY 20, 199719, 1998
SOLICITATION AND REVOCATION OF PROXIES
The accompanying proxy is solicited by the Board of Directors of Astro-Med,
Inc. (herein called the "Company") in connection with the annual meeting of
the shareholders to be held May 20, 1997.19, 1998. The Company will bear the cost of
such solicitation. It is expected that the solicitation of proxies will be
primarily by mail. Proxies may also be solicited personally by regular
employees of the Company at nominal cost. The Company may reimburse brokerage
houses and other custodians, nominees and fiduciaries holding stock for others
in their names, or in those of their nominees, for their reasonable out-of-
pocket expenses in sending proxy material to their principals or beneficial
owners and obtaining their proxies. Any shareholder giving a proxy has the
power to revoke it at any time prior to its exercise, but the revocation of a
proxy will not be effective until notice thereof has been given to the
Secretary of the Company. Every properly signed proxy will be voted in
accordance with the specification made thereon. This proxy statement and the
accompanying proxy are expected to be first sent to shareholders on or about
April 25, 1997.23, 1998.
ELECTION OF DIRECTORS
At the annual meeting, five directors are to be elected to hold office until
the next annual meeting or until their respective successors are elected and
qualified. The persons named in the accompanying proxy, who have been
designated by the Board of Directors, intend to vote, unless otherwise
instructed, for the election to the Board of Directors of the persons named
below, all of whom are now directors of the Company. Certain information
concerning such nominees is set forth below:
NAME AND AGE BUSINESS EXPERIENCE DURING PAST
NAME AND AGE FIVE YEARS DIRECTOR SINCE
------------ ------------------------------------------------------------------------- --------------
Albert W. Ondis (71)....(72)...... Chairman of the Company. 1969
Everett V. Pizzuti (60).(61)... President of the Company. 1985
Jacques V. Hopkins (66).(67)... Former Partner, Hinckley Allen & 1969
Snyder 1969 (Attorneys at Law)
(Retired 1997).
Hermann Viets, Ph.D. (55). President, Milwaukee School of 1988
(54)................... Engineering (since 1991); Dean,
College of Engineering, University of
Rhode Island..
Neil K. Robertson (59)..(60).... Independent investment research 1991
consultant.
AMENDMENT OF THE 1997 INCENTIVE STOCK OPTION PLAN
At the 1997 annual meeting, shareholders approved the 1997 Incentive Stock
Option Plan (the "ISO Plan") and reserved 250,000 shares of common stock for
issuance thereunder.
1
Options have been granted under the ISO Plan as follows:
AVERAGE EXERCISE
GRANTEE NUMBER OF OPTIONS PRICE PER SHARE
- ------- ----------------- ----------------
Albert W. Ondis,............................
Chairman & Chief Executive Officer None N/A
Everett V. Pizzuti,.........................
President & Chief Operating Officer None N/A
Joseph P. O'Connell,........................
Vice President & Treasurer, Chief Financial
Officer 10,000 $8.3125
David M. Gaskill,...........................
Vice President, Research and Development 10,000 $8.3125
All Executive Officers As A Group........... 32,000 $8.3125
The Board of Directors has concluded that it would be advisable to amend the
ISO Plan for the reservation of an additional 250,000 shares for issuance
thereunder pursuant to future option grants. The ISO Plan, as amended to
reflect the above is attached as Exhibit A to this Proxy statement.
Shareholder approval is required for the reservation of additional shares
under the Plan.
The Board of Directors recommends a vote FOR approval of the amendment of
the 1997 Incentive Stock Option Plan (item 2 on the proxy card).
The following is a description of the ISO Plan approved by the shareholders.
Operation of the ISO Plan. The ISO Plan is administered by the Compensation
Committee (the "Committee"). None of the members of such Committee shall be an
officer or other employee of the Company. Awards may be granted to executive
officers and other key employees of the Company and its subsidiaries. The ISO
Plan's eligibility criteria are intended to encompass a group which is
currently estimated at 85 individuals. The Committee bases its selection of
award recipients, and its determination of the number of shares of common
stock to be covered by each award, on the nature of employees' duties and
present and potential contributions to the Company's success and other factors
it deems relevant.
Awards. The ISO Plan provides for the grant of incentive stock options
within the meaning of Section 422 of the Internal Revenue Code of 1986, as
amended (the "Code"). Shares covered by expired or terminated options may be
available for subsequent awards. No options may be granted after May 20, 2007.
The option price of incentive stock options will not be less than the market
price of common stock on the date of grant (or not less than 110% of such
market value in the case of incentive stock options granted to an employee or
officer holding 10% or more of the voting stock of the Company). The aggregate
fair market value (determined as of the grant date) of the stock covered by
options granted under the ISO Plan (and under all other incentive stock option
plans of the Company) which are exercisable for the first time by an employee
during any one calendar year cannot exceed $100,000.
Options are not exercisable unless an employee has been continuously
employed by the Company for at least one year. An option may be exercised by
payment of the option price in cash or, in the discretion of the Committee, in
already owned shares of common stock or a combination thereof.
2
Options will not be transferable otherwise than by will or the laws of
descent and distribution and may be exercised during the holder's lifetime
only by the holder or by the holder's guardian or legal representative (unless
such exercise would disqualify an option as an incentive stock option). Upon
termination of employment of an employee under circumstances acceptable to the
Committee (whose determination is final and conclusive), except by reason of
death or total disability, an option (to the extent otherwise exercisable) may
be exercised at any time within ninety (90) days after the date of
termination. In the case of the total disability of an employee while
employed, any previously granted options (to the extent otherwise exercisable)
may be exercised within a period ending on the earlier of the expiration of
the options or one year after the employee's total disability. In the case of
death of an employee while employed, any options (to the extent otherwise
eligible) may be exercised within a period ending on the earlier of the
expiration of the options or six months after the employee's death.
Under the ISO Plan, the Board of Directors may provide that, in the event it
recommends that the Company sell substantially all of its assets or that the
shareholders sell or exchange their shares or that the Company merge or
consolidate with another corporation or be liquidated or dissolved, that a
holder of any outstanding options must exercise such options by a specified
date (not less than 60 days from the date of any notice to that effect) and
any nonexercised options will expire on such date.
Plan Amendment. The Board of Directors may modify, revise or terminate the
ISO Plan at any time and from time to time, except that no action of the Board
may, unless duly approved by the shareholders, (i) increase the maximum number
of shares subject to the ISO Plan; (ii) change the option price or the manner
of determining the option price; (iii) extend the period within which options
may be granted; (iv) extend the termination date of the ISO Plan; (v) permit
participation by Directors who are not full time officers or employees; or
(vi) change the aggregate $100,000 annual limit described above.
New Plan Benefits. Since awards under the ISO Plan are discretionary, total
awards that may be granted for the current fiscal year are not determinable
until completion of the year.
Anti-Takeover Effects. Unless the Committee determines otherwise, all
outstanding options shall become immediately exercisable upon a Change of
Control Event. A Change of Control Event includes (i) any purchase of common
stock pursuant to a tender offer or exchange offer (other than by the
Company), (ii) a change in 30% or more of the beneficial ownership of the
combined voting securities of the Company, (iii) approval by Company
shareholders of a consolidation, a merger in which the Company does not
survive, or the sale of substantially all of the Company's assets, or (iv) a
change in the composition of a majority of the Company's Board over a two-year
period unless the selection or nomination of each of the new members is
approved by two-thirds of those remaining members of the Board who were
members at the beginning of the two-year period. The provisions of the ISO
Plan permitting acceleration of the exercise of outstanding options may have
an anti-takeover effect.
Federal Income Tax Considerations. Grants of incentive stock options under
the ISO Plan will have no immediate tax consequences to the Company or the
employee. If the employee exercises an incentive stock option and does not
dispose of the acquired shares within two years after the grant of the option
or within one year after the date of the transfer of such shares to him (a
"disqualifying disposition"), he will realize no compensation income, and any
gain or loss that he realizes on his subsequent disposition of such shares
will be treated as long-term capital gain or loss. For purposes of the
alternative minimum tax, however, the amount by which the fair market value of
the acquired shares at the time of exercise exceeds the option price will be
included in alternative minimum taxable income.
3
If an employee makes a disqualifying disposition of shares acquired by the
exercise of an incentive stock option, he will be required to include in
income, as compensation, the lesser of (i) the difference between the option
price and the fair market value of the acquired shares on the exercise date
(or the date on which any substantial risk of forfeiture lapses), and (ii) the
amount of gain realized. In addition, depending upon the amount received as
the result of such disposition, the employee may realize long-term or short-
term capital gain or loss.
The Company will be entitled to a deduction at the same time and in the same
amount as the employee is in receipt of compensation income as a result of a
disqualifying disposition. If there is no disqualifying disposition, no
deduction will be available to the Company.
The exercise of any portion of an option that is accelerated as a result of
a Change of Control Event, may cause payments with respect to such accelerated
options to be treated as "parachute payments" as defined in the Code. Any such
parachute payments may be non-deductible, in whole or in part, and may subject
the employee to a non-deductible 20% federal excise tax on all or a portion of
such payment (in addition to other taxes ordinarily payable).
APPROVAL OF THE 1998 NON-QUALIFIED STOCK OPTION PLAN
The Board of Directors believes that the ability of the Company to grant
non-qualified options to attract key employees and to facilitate the
acquisition of new businesses and technologies is critical to the Company's
growth and success. Currently, there are no non-qualified options available
for grant under the Company's existing option plan. Accordingly, the Board has
adopted the 1998 Non-Qualified Stock Option Plan (the "Non-Qualified Plan") in
the form included with this Proxy Statement as Exhibit B, subject to approval
by the affirmative vote of holders of a majority of the shares of common stock
represented in person or by proxy at the meeting, to provide for the grant of
awards covering a maximum of 400,000 shares of common stock, subject to
adjustment in the event of stock dividends, splits, recapitalizations and
similar transactions.
The Board of Directors recommends a vote FOR approval of the adoption of the
1998 Non-Qualified Stock Option Plan (item 3 on the proxy card).
The following description of the Non-Qualified Plan assumes approval of the
Non-Qualified Plan by the shareholders.
Purpose. The purpose of the Non-Qualified Plan is to attract and retain key
employees of the Company and to motivate them by providing an opportunity to
acquire a proprietary stake in the Company and its future growth.
Operation of the Non-Qualified Plan. The Non-Qualified Plan will be
administered by a committee consisting of at least two members of the Board
appointed by the Board (the "Committee"). None of the members of such
Committee shall be an officer or other employee of the Company. Awards may be
granted to executive officers and other key employees of the Company and its
subsidiaries as well as other individuals who perform services for the Company
and its subsidiaries. The Non-Qualified Plan's eligibility criteria are
intended to encompass a group which is currently estimated at less than 10
individuals. The Compensation Committee will base its selection of award
recipients, and its determination of the number of shares of common stock to
be covered by each award, on the nature of individual's duties and present and
potential contributions to the Company's success and other factors it deems
relevant.
4
Awards. The Non-Qualified Plan provides for the grant of non-qualified stock
options which are not "incentive stock options" within the meaning of Section
422 of the Internal Revenue Code of 1986, as amended (the "Code"). The option
price of options will not be less than 50% of the market price of common stock
on the date of grant. The aggregate number of shares subject to options
granted under the Non-Qualified Plan to any person in any calendar year shall
not exceed 200,000 shares. Shares covered by expired or terminated options may
be available for subsequent awards. No options may be granted more than ten
years after the date of the shareholders' approval of the Non-Qualified Plan.
Options become exercisable as determined by the Committee. The Committee
may, in its discretion, determine as a condition of any option, that all or a
stated percentage of the options shall become exercisable in installments or
otherwise, only after completion of a specified service requirement. The
Committee may also accelerate the exercisability of any option at any time. An
option may be exercised by payment of the option price in cash or, in the
discretion of the Committee, in already owned shares of common stock or a
combination thereof.
Unless the Committee otherwise determines, options will not be transferable
otherwise than by will or the laws of descent and distribution and may be
exercised during the holder's lifetime only by the holder or by the holder's
guardian or legal representative. During holder's lifetime, with the approval
of the Committee and subject to such conditions as the Committee may
prescribe, an optionee may, upon providing written notice to the Company,
elect to transfer any or all such non-qualified stock options to members of
his or her immediate family, or to trusts for the benefit of the optionee
and/or the optionee's immediate family members or to partnerships in which the
optionee and/or such family members are the only partners provided, however,
that no such transfer by any optionee may be made in exchange for
consideration.
Under the Non-Qualified Plan, the Board of Directors may provide that, in
the event it recommends that the Company sell substantially all of its assets
or that the shareholders sell or exchange their shares or that the Company
merge or consolidate with another corporation or be liquidated or dissolved,
that a holder of any outstanding options must exercise such options by a
specified date (not less than 60 days from the date of any notice to that
effect) and any nonexercised options will expire on such date.
Plan Amendment. The Board of Directors may modify, revise or terminate the
Non-Qualified Plan at any time and from time to time, except that no action of
the Board may, unless duly approved by the shareholders, (i) increase the
maximum number of shares subject to the Non-Qualified Plan; (ii) change the
minimum option price; (iii) extend the period within which options may be
granted; (iv) extend the termination date of the Non-Qualified Plan; or (v)
change the class of persons eligible to receive options under the Non-
Qualified Plan.
New Plan Benefits. Since awards under the Non-Qualified Plan are
discretionary, total awards that may be granted for the current fiscal year
are not determinable until completion of the year.
Anti-Takeover Effects. Unless the Committee determines otherwise, all
outstanding options shall become immediately exercisable upon a Change of
Control Event. A Change of Control Event includes (i) any purchase of common
stock pursuant to a tender offer or exchange offer (other than by the
Company), (ii) a change in 30% or more of the beneficial ownership of the
combined voting securities of the Company, (iii) approval by Company
shareholders of a consolidation, a merger in which the Company does not
survive, or the sale of substantially all of the Company's assets, or (iv) a
change in the composition of a majority of the Company's Board over a two-year
period unless the selection or nomination of each of the new members is
approved by two-thirds of those remaining members of the Board who were
members at the beginning of the two-year period.
5
The provisions of the Non-Qualified Plan permitting acceleration of the
exercise of outstanding options may have an anti-takeover effect.
Federal Income Tax Considerations. There will be no federal income tax
consequences to either the optionee or the Company on the grant of a non-
qualified option. Upon the exercise of a non-qualified option, the optionee
has taxable ordinary income equal to the excess of the fair market value of
the shares of common stock received on the exercise date (or the date on which
any substantial risk of forfeiture lapses) over the option price of the
shares. The Company will be entitled to a federal income tax deduction in an
amount equal to such excess. Upon a subsequent sale or taxable exchange of
shares acquired upon exercise of an option, an optionee will recognize long-
term or short-term capital gain or loss equal to the difference between the
amount realized on the sale and the tax basis of such shares.
The exercise of any portion of an option that is accelerated as a result of
a Change of Control Event, may cause payments with respect to such accelerated
options to be treated as "parachute payments" as defined in the Code. Any such
parachute payments may be non-deductible, in whole or in part, and may subject
the employee to a non-deductible 20% federal excise tax on all or a portion of
such payment (in addition to other taxes ordinarily payable).
VOTING AT MEETING
Only shareholders of record at the close of business on March 28, 199727, 1998 will
be entitled to vote at the meeting. On the record date, there were 4,927,6424,784,827
shares of common stock of the Company outstanding. There was no other
outstanding class of voting securities. Each shareholder has one vote for
every share owned.
16
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth as of March 28, 199727, 1998 (except as noted) the
record and beneficial ownership of the Company's outstanding shares of common
stock by each person who is known to the Company to own of record or
beneficially more than 5 percent of such stock, by each director of the
Company, by each executive officer named in the Summary Compensation Table and
by all directors and officers of the Company as a group:
TITLE OF NUMBER OF SHARES PERCENT
OFCLASS NAME OF BENEFICIAL OWNER BENEFICIALLY OWNED OF CLASS
- -------- ------------------------ ------------------ ------------------
Common Stock Albert W. Ondis 1,185,754(1) 24.6%
600 East Greenwich Avenue
West Warwick, Rhode Island........................... 1,288,508(1) 22.4%
Jacqueline B. Ondis, 40 Oak Grove Street, War-
wick, Rhode Island.............................. 416,061(2) 8.4%Island
Common Stock Everett V. Pizzuti 383,100(2) 6.8%
600 East Greenwich Avenue
West Warwick, Rhode Island...................... 354,034(3) 7.0%Island
Common Stock Dimensional Fund Advisors, Inc., 341,051(3) 7.1%
1299 Ocean Avenue
Santa Monica, California................ 326,150(4)California
Common Stock Jacqueline B. Ondis 315,000 6.6%
40 Oak Grove Street
Warwick, Rhode Island
Common Stock Kennedy Capital Management, Inc., 270,390(4) 5.7%
10829 Olive Boulevard
St. Louis, Missouri.................. 268,000(5) 5.4%Missouri
Common Stock David M. Gaskill................................. 125,143(6) 2.4%
Hermann Viets.................................... 62,612(7) 1.3%Gaskill 129,224(5) 2.7%
Common Stock Jacques V. Hopkins............................... 55,582(8) 1.1%
Elias G. Deeb.................................... 38,604(9)Hopkins 90,412(6) 1.9%
Common Stock Hermann Viets 67,712(7) 1.4%
Common Stock A. Eric Bartholomay 26,325(8) *
Common Stock Neil K. Robertson................................ 19,000(10)Robertson 20,000(9) *
Common Stock Joseph P. O'Connell.............................. 5,000(11)O'Connell 12,638(10) *
Common Stock All directors and officers of the 1,955,943(11) 38.0%
Company as a group [11]...................................... 1,823,044(12) 34.9%group(11)
- --------
* Less*Less than 1%
(1) Includes 3,791104,912 shares held by children, 18,00040,000 shares deemed to be
beneficially owned because of exercisable options to acquire shares and
1,9502,087 shares allocated to his account under the Company's Employee Stock
Ownership Plan.
(2) Includes 91,061 shares held as custodian for children.
(3) Includes 4,975 shares held by children, 166,475200,325 shares deemed to be beneficially owned because of
exercisable options to acquire shares and 1,8302,021 shares allocated to his
account under the Company's Employee Stock Ownership Plan.
(4)(3) Dimensional Fund Advisors Inc. ("Dimensional"), a registered investment
advisor, is deemed to have beneficial ownership of the number of shares
shown as of December 31, 1996,1997, all of which shares are held
7
in portfolios of DFA Investment Dimensions Group Inc., a registered open-endopen-
end investment company, or in a series of the DFA Investment Trust Company,
Delaware business trust, or the DFA Group Trust and DFA Participation Group
Trust, investment vehicles for qualified employee benefit plans, toall of
which Dimensional Fund Advisors Inc. serves as investment manager.
Dimensional disclaims beneficial ownership of all such shares.
(5)(4) Kennedy Capital Management, Inc., a registered investment advisor is
deemed to have beneficial ownership of the number of shares shown as of
December 31, 1996.
(6)30, 1997.
(5) Includes 7,500 shares held by Mr. Gaskill's wife, 37,50045,000 shares deemed to
be beneficially owned because of exercisable options to acquire shares and
1,5431,724 shares allocated to his account under the Company's Employee Stock
Ownership Plan.
(7) Includes 112 shares held by Dr. Viets as custodian for a child and 1,000
shares deemed to be beneficially owned because of exercisable options to
acquire shares.
2
(8)(6) Includes 4,250 shares held by Mr. Hopkins' wife, 39,90076,821 shares held as a
trustee of a trust for the benefit of the children of Mr. Ondis, 6,1823,091
shares held as custodian for children of Mr. Ondis, and 1,0002,000 shares
deemed to be beneficially owned because of exercisable options to acquire
shares.
(9)(7) Includes 313112 shares held by Mr. Deeb's wife, 591Dr. Viets as custodian for a child and 2,000
shares held by children,
23,250deemed to be beneficially owned because of exercisable options to
acquire shares.
(8) Includes 25,500 shares deemed to be beneficially owned because of
exercisable options to acquire shares and 1,311825 shares allocated to his
account under the Company's Employee Stock Ownership Plan.
(10)(9) Includes 18,000 shares held by Mr. Robertson as trustee of a living trust
of his and 1,0002,000 shares deemed to be beneficially owned because of
exercisable options to acquire shares.
(11)(10) Includes 5,000 shares deemed to be beneficially owned because of
exercisable options to acquire shares.
(12) Includes 299,97512,500 shares deemed to be beneficially owned because of
exercisable options to acquire shares and 8,640138 shares allocated to his
account under the Company's Employee Stock Ownership Plan.
(11) Includes 357,575 shares deemed to be beneficially owned because of
exercisable options to acquire shares and 8,280 shares allocated to the
accounts of officers under the Company's Employee Stock Ownership Plan.
8
EXECUTIVE COMPENSATION
The following table shows the total annual compensation paid or accrued,
together with other information, for the Chief Executive Officer and each of
the four most highly compensated executive officers of the Company whose total
annual salary and bonus for the fiscal year ended January 31, 19971998 exceeded
$100,000.
SUMMARY COMPENSATION TABLE
SECURITIES
FISCAL YEARS UNDERLYING
NAME AND PRINCIPAL ENDED OPTIONS ALL OTHER
NAME AND PRINCIPAL
POSITION JANUARY 31 SALARY($)(1) GRANTED(#) COMPENSATION($)(2)
- --------------------------------------------- ------------ ------------ ---------- ------------------
Albert W. Ondis......... 1997 $229,020 -- $3,2811998 232,585 25,000 4,975
Chairman, Chief Execu- 1997 229,020 -- 3,281
tive Officer 1996 221,878 -- 3,794
tive Officer 1995 216,687 15,000 5,274
Everett V. Pizzuti...... 1998 210,551 25,000 4,994
President, Chief Oper- 1997 206,629 50,000 3,279
President, Chief Oper-ating Officer 1996 200,257 -- 3,487
ating Officer 1995 192,247 15,000 4,963
David M. Gaskill........ 1997 130,276 7,500 1,628
Vice President, Re- 1996 123,854 -- 2,192
search and Development 1995 119,379 10,000 2,500
Joseph P. O'Connell (3). 1998 157,797 7,500 4,274
Vice President and 1997 125,474 5,000 --
Treasurer, Chief Finan-Fi- 1996 -- -- --
cialnancial Officer
1995David M. Gaskill........ 1998 133,425 7,500 3,072
Vice President, Re- 1997 130,276 7,500 1,628
search and Development 1996 123,854 -- 2,192
A. Eric Bartholomay..... 1998 117,451 14,000 3,952
Vice President, Sales 1997 112,788 5,000 2,637
1996 105,740 -- --
Elias G. Deeb........... 1997 114,323 5,000 2,712
Vice President--Media 1996 108,669 -- 2,686
Products 1995 104,008 7,500 2,8433,108
- --------
(1) ValueAmounts of perquisitesOther Annual Compensation aggregated less than 10% of the total
annual salary and bonus for each individual and accordingly, amounts related to
perquisites have not been included in the summary compensation table.individual.
(2) Amounts of All Other Compensation consist of the Company's annual
contributions, including matching contributions, to the Astro-Med, Inc.
Profit-Sharing Plan and the Astro-Med, Inc. Employee Stock Ownership Plan.
Both of these retirement plans are described below.
(3) Mr. O'Connell became employed by the Company effective March 6, 1996.
3
REPORT ON EXECUTIVE COMPENSATION
Through and includingPrior to the fiscal year ended January 31, 1997,1998, the Board of Directors has
delegated to senior management (the CEO,(CEO, COO, and CFO) the authority to fix
compensation (other than stock options as discussed below)options) for the Company's executiveskey employees.
Commencing with fiscal 1998, such determinations have been made by the
Compensation Committee which is comprised of the Company's three non-employee
directors, Dr. Viets, (Chairman), Mr. Robertson and key employees.Mr. Hopkins. Mr. Ondis
meets with the Compensation Committee to review the compensation program and
make recommendations for senior executive officers. Compensation consists of
twothree principal elements (other than(salary, bonus and stock options): salary and bonus..
EXECUTIVE COMPENSATION PHILOSOPHY. Compensation of the Company's executive
officers should link management initiatives with the actual financial
performance of the Company. Similarly, the compensation should attract, retain
and motivate highly qualified individuals to achieve the Company's business
goals and link their interests with shareholder interests.
9
SALARY. Base salaries for executive officers were established a number of
years ago after reviewing compensation for competitive positions at
manufacturing companies of comparable size and profitability operating in a
similar industry. Base salaries have since been increased at annual rates
which approximate the general rates of increase of compensation for all
employees of the Company and for generally publicized competitive positions
elsewhere in industry.
BONUS. The Company maintains a subjective bonus pool for the purpose of providing
incentives in the form of a quarterly cash bonus to officers and
other key employees of the Company.
Awards are intended to reflect Company profitability, achievement of overall
Company objectives and individual performances, considered both in terms of
effort and results. The size of the bonus pool and of individual awards may
vary, up or down, from year to year. In recent years, an annual bonus pool has been budgeted at approximately
$250,000, but the actual amounts of any bonus payments are determined
quarterly. No bonus payments were made in the last
three fiscal years ended January 31,
1996 or 1997.years.
STOCK OPTIONS. Total executive compensation includes long-term incentives
afforded by stock options. Stock option grants are made by the Stock OptionCompensation
Committee of the Board of Directors (consisting of Mr. Robertson and Dr.
Viets) upon consideration of recommendations made by senior management. The
objectives of option grants are to align the long-term interests of executives
and key employees with shareholder interests,interest, by creating a strong and direct
link between compensation and total shareholder return. In this connection,
grants are intended to enable recipients to develop and maintain significant
long-term stock ownership in the Company. Stock options are the principal
vehicle for the payment of long-term compensation. Grants of stock options
reflect subjective consideration of such matters as other compensation and the
employee's position in the Company and contributions to the Company.
COMPENSATION OF CHIEF EXECUTIVE OFFICER. Mr. Ondis is eligible to
participate in the same executive compensation plans available to other senior
executives. Effective in February 1996,1997, his base salary was increased from
$213,000$219,390 to $219,390,$226,000, representing a 3% increase, deemed consistent with
salary increases, among executives in similarcomparable positions in similar
industries. No bonus orNon-qualified option grants for 25,000 common shares at an
exercise price of $8.44 were made to Mr. Ondis during fiscal year 1997.1998.
DEDUCTIBILITY OF COMPENSATION. Section 162(m) of the Internal Revenue Code
limits the deductibility of compensation paid to a public company's five
highest paid executive officers to the extent any such officer's annual
compensation exceeds $1,000,000, subject to certain exceptions. The Board of
Directors has deferred adopting a policy on this issue as it does not expect
the compensation of these individuals to reach relevant levels in the near
future.
4
CONCLUSION. Through the program described above, the Board of DirectorsCompensation Committee
firmly believes a direct link has been established between the Company's
financial performance, executive compensation and resultant stock price
performance.
Members of the Board:
Albert W. Ondis
Everett V. PizzutiCompensation Committee:
Hermann Viets, Ph.D. (Chair)
Neil K. Robertson Jacques V. Hopkins
Hermann Viets, Ph.D.
Neil K. Robertson
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
As described in the Report on Executive Compensation above, prior to fiscal
year 1998, the full Board of Directors functionsfunctioned as a Compensation Committee.
Mr. Ondis and Mr. Pizzuti are both executive officers of the Company and
members of the Board of Directors.
10
PERFORMANCE GRAPH
Set forth below is a line graph prepared for the Company by Media General
Financial Services to compare the cumulative total return on the Company's
common stock against the cumulative total return of a broad equity market
index and a peer group index for the period of five fiscal years ended January 31,
1997.1998. The peer group is comprised of nearly 171275 companies classified as
electronic equipment manufacturers. The total returns assume $100 invested on
February 1, 19921993 with reinvestment of dividends.
[PERFORMANCE GRAPH CHART APPEARS HERE]
5
LOGO
FISCAL YEARS ENDED JANUARY 31
---------------------------------------
1992 1993 1994 1995 1996 1997 1998
---- ------ ------ ------ ------ ------
Astro-Med, Inc.......................... 100 107.32 82.66 87.33 67.63 62.8877.02 81.37 63.02 58.59 55.98
Industry Index.......................... 100 125.61 181.38 191.07 255.68 417.34144.40 152.12 203.56 332.26 338.18
Broad Market............................ 100 99.66 125.55 118.65 166.13 218.63125.97 119.05 166.69 219.37 258.39
INDEBTEDNESS OF MANAGEMENT
The following information describes loans to directors and executive
officers of the Company whose indebtedness to the Company exceeded $60,000 at
any time during the fiscal year ended January 31, 1997.1998.
LARGEST AMOUNT
OF AMOUNT OF
INDEBTEDNESS INDEBTEDNESS
OUTSTANDING AT OUTSTANDING
NAME ANY TIME AT YEAR END
- ---- -------------- ------------
Albert W. Ondis, Chairman and Director.............. $321,640 $321,640
Everett V. Pizzuti, President and Director.......... 131,624 131,624
The indebtedness is comprised of unsecured non-interest bearing demand notes
for loans made from time to time to the persons named.
11
PROFIT-SHARING PLAN
The Company has a qualified Profit-Sharing Plan which provides retirement
benefits to substantially all employees of the Company and provides for
contributions into a trust fund in such amounts as the Board of Directors may
annually determine. Each eligible employee shares in contributions on the
basis of length of service and relative (limited to $150,000)$160,000) compensation.
In addition, participants are permitted to defer up to 15% of their cash
compensation and make contributions of such deferral to this Plan through
payroll deductions. The Company makes matching contributions equal to 50% of
the first percent of compensation contributed and 25% of the second, third,
fourth and thirdfifth percent. The deferrals are made within the limits prescribed
by Section 401(k) of the Internal Revenue Code.
The Plan provides for the vesting of 100% of contributions made by the
Company to the account of an employee after five years of service.
Contributions by an employee are 100% vested immediately. The Company's
contributions paid or accrued for the fiscal year ended January 31, 19971998
amounted to $185,000.$227,400.
EMPLOYEE STOCK OWNERSHIP PLAN
The Company has an Employee Stock Ownership Plan which provides retirement
benefits to substantially all employees of the Company. Contributions in such
amounts as the Board of Directors may annually determine are allocated among
eligible employees on the basis of relative (limited to $100,000)
compensation. Participants are 100% vested in any and all allocations to their
accounts. Contributions, which may be in cash or stock, are invested by the
Plan's Trustees in shares of common stock of the Company. The Company's
contributions paid or accrued for the fiscal year ended January 31, 19971998
amounted to $100,000.
6
$123,000.
EMPLOYEE STOCK OPTION PLANS
The Company has a Non-Qualified Stock Option Plan adopted in the fiscal year
ended January 31, 1990 under which options for an aggregate of 150,000 shares
of common stock may be granted to officers and key employees of the Company at
an exercise price of not less than 50% of the market price on the date of
grant. Options for an aggregate of 50,000 shares, with an exercise price of
$8.31$8.44 were granted during the fiscal year ended January 31, 1997.1998. Options
granted under this plan for an aggregate of 100,000 shares with exercise
prices ranging from $8.31 to $8.44 per share were outstanding at January 31,
1998. Options were granted subsequent to January 31, 1998 for an aggregate of
50,000 shares with an exercise price of $8.31 per share. No shares remain
available for option grants under this plan.
The Company also has an Incentive Stock Option Plan adopted in the fiscal year
ended January 31, 1990 under which options for an aggregate of 300,000 shares
of common stock were granted to officers and key employees at an exercise
price of not less than 100% of the market price on the date of grant. Options
for an aggregate of 242,60043,000 shares were granted during the fiscal year ended
January 31, 1998. Options granted under this plan for an aggregate of 280,350
shares with exercise prices ranging from $3.33 to $14.30 per share were
outstanding at January 31, 1997.
In addition, the1998. A total of 3,750 shares remain available for
option grants under this plan.
The Company also has an Incentive Stock Option Plan adopted in the fiscal
year ended January 31, 1994 under which options for an aggregate of 250,000
shares of common stock may be granted to officers and key employees at an
exercise price of not less than 100% of the market price on the date of grant.
Options for an aggregate of 96,00066,500 shares were granted during the fiscal year
ended January 31, 1997.1998. Options granted under
12
this plan for an aggregate of 183,000231,500 shares with exercise prices ranging from
$8.31 to $11.28 per share were outstanding at January 31, 1997.1998. Options were
granted subsequent to January 31, 1998 for an aggregate of 10,000 shares with
an exercise price of $8.31 per share. A total of 8,500 shares remain available
for option grants under this plan.
In addition, the Company has an Incentive Stock Option Plan adopted in the
fiscal year ended January 31, 1998 under which options for an aggregate of
250,000 shares of common stock may be granted to officers and key employees at
an exercise price of not less than 100% of the market price on the date of
grant. No options were granted under this plan during the fiscal year ending
January 31, 1998. Options were granted subsequent to January 31, 1998 for an
aggregate of 133,000 shares with an exercise price of $8.31 per share. A total
of 117,000 shares remain available for option grants under this plan.
The following tables present certain information concerning stock options
granted and exercised by each executive officer named in the Summary
Compensation Table during the fiscal year ended January 31, 1997,1998, and the
year-end value of unexercised options held by each of those officers.
AGGREGATED OPTION EXERCISES IN FISCAL YEAR ENDED
JANUARY 31, 19971998 AND OPTIONS HELD AT JANUARY 31, 19971998
SECURITIES UNDERLYING VALUE OF UNEXERCISED
SHARES UNEXERCISED OPTIONS IN-THE-MONEY OPTIONS
SHARESACQUIRED AT FISCAL YEAR END AT FISCAL YEAR END
ACQUIRED
ON VALUE ------------------------- -------------------------
EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
(#) ($)(1) (#) (#) ($)(2) ($)(2)
------------------- -------- ----------- ------------- ----------- -------------
Albert W. Ondis......... -- -- 18,00043,000 -- $ -- $ --
Everett V. Pizzuti...... -- -- 166,475 57,400 289,219200,325 48,550 243,281 --
David M. Gaskill........ -- -- 37,50045,000 -- -- --
Joseph P. O'Connell..... -- -- -- 5,00012,500 -- -- Elias G. Deeb...........--
A. Eric Bartholomay..... -- -- 23,250 -- 13,16725,500 10,000 5,063 --
- --------
(1) Amount represents excess of market value over exercise price on date of
exercise. Income taxes which may have been payable by individual are not
reflected.
(2) Amount represents excess of market value as of January 31, 19971998 over
exercise price.
713
OPTION GRANTS--FISCAL YEAR
ENDED JANUARY 31, 19971998
INDIVIDUAL GRANTS
-----------------------------------------
% OF TOTAL POTENTIAL REALIZABLE VALUE
OPTION OPTIONS GRANTED PER SHARE AT ASSUMED ANNUAL RATES OFGRANT DATE
GRANTS TO EMPLOYEES IN EXERCISE PRICE EXPIRATION STOCK PRICE APPRECIATIONVALUE(1)
NAME (#) FISCAL YEAR ($) DATE FOR OPTION TERM (1)($)
- ---- --------------- --------------- -------------- ---------- ---------------------------
5% ($) 10% ($)
------------- -----------------------
Albert W. Ondis......... 25,000(2) 15.7% 8.44 3/24/07 85,000
Everett V. Pizzuti...... 50,000 (2) 34.2% $8.312525,000(2) 15.7% 8.44 3/11/06 $ 261,384 $ 662,39924/07 85,000
David M. Gaskill........ 7,500 (3) 5.1%7,500(2) 4.7% 8.44 2/27/06 39,809 100,8843/24/07 25,500
Joseph P. O'Connell..... 5,000 (4) 3.4%7,500(3) 4.7% 8.3125 3/11/06 26,138 66,240
Elias G. Deeb........... 5,000 (3) 3.4%24/07 25,500
A. Eric Bartholomay..... 4,000(2) 2.5% 8.44 2/27/06 26,539 67,2563/24/07 13,600
10,000(4) 6.3% 8.50 11/18/07 34,200
- --------
(1) These amountsAmounts represent certain assumed ratesthe fair value of appreciation only. Actual
gains, if any, on stockeach option exercises or stock holdings are dependent
on the future performancegranted and were estimated
as of the stockdate of grant using the Black-Scholes option-pricing model with
the following weighted average assumptions: expected volatility of
34.879%; expected life of 5 years; risk-free interest rate of 5.5%; and
overall market conditions.
There can be no assurance that the amounts reflected in this table will be
achieved.dividend yield of 1.9%.
(2) All options became exercisable on October 11, 1996.24, 1997.
(3) All options became exercisable on September 27, 1996.October 24, 1997 and January 1, 1998.
(4) All options becamebecome exercisable on March 6, 1997.June 18, 1998.
OTHER INFORMATION RELATING TO DIRECTORS
During the fiscal year ended January 31, 1997,1998, the Board of Directors held
four formal meetings. The Board has an Audit Committee consisting of Mr.
Robertson, and Dr. Viets and Mr. Hopkins, whose primary duties and
responsibilities include meeting with the companiesCompany's independent accountants to
review the annual audit scope, the audit of financial statements, the adequacy
of internal controls and other relevant matters. One formal committee meeting
was held during the fiscal year ended January 31, 1997.1998. The Board has no standing nominating,
compensation or similar committee, except for a
Stock OptionCompensation Committee comprised of Mr. Robertson, and Dr. Viets and Mr. Hopkins
which reviews and approves recommendations on executive compensation and
administers the Company's employee stock option plans. The Compensation Committee held
one meeting during the fiscal year ended January 31, 1998. Dr. Viets, Mr.
Robertson, and Mr. Hopkins arehave been paid an annual retainer fee of $3,500
plus $500 for each Board meeting attended.
Those directors who are not also officers and employees of the Company
receive options to purchase common stock under the Company's Non-Employee
Director Stock Option Plan (the "Director Plan") as compensation for their
services to the Company. Under the Director Plan, each non-employee director
received an initial non-qualified option to purchase 1,000 shares of common
stock on May 21, 1996, the date the Company's shareholders approved the
Director Plan. Non-employee directors who are elected after May 21, 1996 will
receive an initial non-qualified option to purchase 1,000 shares of common
stock on the date of the director's initial election to the Board of
Directors. Beginning in 1997, each non-employee director (other than a
director first elected after June 30 of the prior year) receives an annual
non-qualified option to purchase 1,000 shares of common stock as of the first
business day of January of each year. All options have an exercise price equal
to the market price of the common stock on the dateday of the grant and are
exercisable for a term of ten years. Options vest six months after the grant
date, unless automatically accelerated in the event of death, disability, or a
change of control. A total of 30,000 shares have been reserved for issuance
under the Director Plan. Messrs. Hopkins, Robertson and Viets each received
options to acquire 1,000 shares at $8.31 per share on
14
January 2, 1998. Options for an aggregate of 9,000 shares, with an exercise
price ranging from $8.31 to $9.25 per share on May 21, 1996 and 1,000
shareswere outstanding at $8.25 on January 2, 1997.
8
31,
1998.
Directors who are also officers and employees of the Company are not
entitled to receive any compensation in addition to their compensation for
services as officers or employees.
The law firm of Hinckley Allen & Snyder, of which Mr. Hopkins is a retired
partner, provides legal services to the Company.
NoOther than as described under "Indebtedness of Management", no officer,
director or nominee orfor director of the Company or any associate of any of the
foregoing had during the fiscal year ended January 31, 19971998 any material
interest, direct or indirect, in any material transaction or any material
proposed transaction to which the Company was or is to be a party.
1997 INCENTIVE STOCK OPTION PLAN PROPOSAL
On March 24, 1997 the Board of Directors adopted the 1997 Incentive Stock
Option Plan (the "1997 Plan") in the form included with this Proxy Statement
as Annex A, subject to approval by the affirmative vote of holders of a
majority of the shares of common stock represented in person or by proxy at
the meeting, to provide for the grant of awards covering a maximum of 250,000
shares of common stock, subject to adjustment in the event of stock dividends,
splits, recapitalizations and similar transactions. Such shares would
represent approximately 5% of the outstanding common stock.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR APPROVAL OF THE ADOPTION OF THE
1997 PLAN.
The following description of the 1997 Plan assumes approval of the 1997 Plan
by the shareholders.
OPERATION OF THE 1997 PLAN. The 1997 Plan will be administered by a
committee consisting of at least two members of the Board appointed by the
Board (the "Stock Option Committee"). None of the members of such committee
shall be an officer or other employee of the Company. Awards may be granted to
executive officers and other key employees of the Company and its
subsidiaries. The 1997 Plan's eligibility criteria are intended to encompass a
group which is currently estimated at 85 individuals. The Stock Option
Committee will base its selection of award recipients, and its determination
of the number of shares of common stock to be covered by each award, on the
nature of employees' duties and present and potential contributions to the
Company's success and other factors it deems relevant.
AWARDS. The 1997 Plan provides for the grant of incentive stock options
within the meaning of Section 422 of the Internal Revenue Code of 1986, as
amended (the "Code"). Shares covered by expired or terminated options may be
available for subsequent awards. No options may be granted more than ten years
after the date of the shareholders' approval of the 1997 Plan.
The option price of incentive stock options will not be less than the market
price of common stock on the date of grant (or not less than 110% of such
market value in the case of incentive stock options granted to an employee or
officer holding 10% or more of the voting stock of the Company). The aggregate
fair market value (determined as of the grant date) of the stock covered by
options granted under the 1997 Plan (and under all other incentive stock
option plans of the Company) which are exercisable for the first time by an
employee during any one calendar year cannot exceed $100,000.
Options are not exercisable unless an employee has been continuously
employed by the Company for at least one year. An option may be exercised by
payment of the option price in cash or, in the discretion of the Committee, in
already owned shares of common stock or a combination thereof.
9
Options will not be transferable otherwise than by will or the laws of
descent and distribution and may be exercised during the holder's lifetime
only by the holder or by the holder's guardian or legal representative (unless
such exercise would disqualify an option as an incentive stock option). Upon
termination of employment of an employee under circumstances acceptable to the
Stock Option Committee (whose determination is final and conclusive), except
by reason of death or total disability, an option (to the extent otherwise
exercisable) may be exercised at any time within ninety (90) days after the
date of termination. In the case of the total disability of an employee while
employed, any previously granted options (to the extent otherwise exercisable)
may be exercised within a period ending on the earlier of the expiration of
the options or one year after the employee's total disability. In the case of
death of an employee while employed, any options (to the extent otherwise
eligible) may be exercised within a period ending on the earlier of the
expiration of the options or six months after the employee's death.
Under the 1997 Plan, the Board of Directors may provide, in the event it
recommends that the Company sell substantially all of its assets or that the
shareholders sell or exchange their shares or that the Company merge or
consolidate with another corporation or be liquidated or dissolved, that a
holder of any outstanding options must exercise such options by a specified
date (not less than 60 days from the date of any notice to that effect) and
any nonexercised options will expire on such date.
PLAN AMENDMENT. The Board of Directors may modify, revise or terminate the
1997 Plan at any time and from time to time, except that no action of the
Board may, unless duly approved by the shareholders, (i) increase the maximum
number of shares subject to the 1997 Plan; (ii) change the option price or the
manner of determining the option price; (iii) extend the period within which
options may be granted; (iv) extend the termination date of the 1997 Plan; (v)
permit participation by Directors who are not full time officers or employees;
or (vi) change the aggregate $100,000 annual limit described above.
ANTI-TAKEOVER EFFECTS. Unless the Committee determines otherwise, all
outstanding options shall become immediately exercisable upon a Change of
Control Event. A Change of Control Event includes (i) any purchase of common
stock pursuant to a tender offer or exchange offer (other than by the
Company), (ii) the acquisition of 30% or more of the beneficial ownership of
the combined voting securities of the Company by any person or group (as used
in the Securities Exchange Act of 1934), other than the Company or its
subsidiaries or any employee benefit plan of the Company or any current
officer or director of the Company, which person or group did not theretofore
beneficially own 30% or more of the combined voting securities of the Company,
(iii) approval by Company shareholders of a consolidation, a merger in which
the Company does not survive, or the sale of substantially all of the
Company's assets, or (iv) a change in the composition of a majority of the
Company's Board over a two-year period unless the selection or nomination of
each of the new members is approved by two-thirds of those remaining members
of the Board who were members at the beginning of the two-year period. The
provisions of the 1997 Plan permitting acceleration of the exercise of
outstanding options may have an anti-takeover effect.
FEDERAL INCOME TAX CONSIDERATIONS. Grants of incentive stock options under
the 1997 Plan will have no immediate tax consequences to the Company or the
employee. If the employee exercises an incentive stock option and does not
dispose of the acquired shares within two years after the grant of the option
or within one year after the date of the transfer of such shares to him (a
"disqualifying disposition"), he will realize no compensation income, and any
gain or loss that he realizes on his subsequent disposition of such shares
will be treated as long-term capital gain or loss. For purposes of the
alternative minimum tax, however, the amount by which the fair market value of
the acquired shares at the time of exercise exceeds the option price will be
included in alternative minimum taxable income.
10
If the employee makes a disqualifying disposition of shares acquired by the
exercise of an incentive stock option, he will be required to include in
income, as compensation, the lesser of (i) the difference between the
option price and the fair market value of the acquired shares on the exercise
date (or the date on which any substantial risk of forfeiture lapses), and
(ii) the amount of gain realized. In addition, depending upon the amount
received as the result of such disposition, the employee may realize long-term
or short-term capital gain or loss.
The Company will be entitled to a deduction at the same time and in the same
amount as the employee is in receipt of compensation income as a result of a
disqualifying disposition. If there is no disqualifying disposition, no
deduction will be available to the Company.
The exercise of any portion of an option that is accelerated as a result of
a change of control event, may cause payments with respect to such accelerated
options to be treated as "parachute payments" as defined in the Code. Any such
parachute payments may be non-deductible, in whole or in part, and may subject
the employee to a non-deductible 20% federal excise tax on all or a portion of
such payment (in addition to other taxes ordinarily payable).
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
The Company selected Arthur Andersen LLP as independent certified public
accountants to audit the financial statements of the Company for fiscal year
ended January 31, 1997.1998. This firm has audited the Company's financial
statements annually since the fiscal year ended January 31, 1982. Although no
accountants have yet been selected to audit the financial statements of the
Company for the fiscal year ending January 31, 1998,1999, it is expected that
Arthur Andersen LLP will again be selected. It is further expected that a
representative of Arthur Andersen LLP will be present at the annual meeting
with the opportunity to make a statement, if he or she so desires, and that
such representative will be available to respond to appropriate questions.
FINANCIAL REPORTS
A copy of the annual report of the Company for the fiscal year ended January
31, 1997,1998, including the Company's annual report to the Securities and Exchange
Commission on Form 10-K, accompanies this proxy statement. Such report is not
part of this proxy statement.
PROPOSALS FOR 19981999 ANNUAL MEETING
The 19981999 annual meeting of the shareholders of the Company is scheduled to
be held on May 19, 1998.18, 1999. If a shareholder intending to present a proposal at
that meeting wishes to have such a proposal included in the Company's proxy
statement and form of proxy relating to the meeting, the shareholder must
submit the proposal to the Company nonot later than December 31, 1997.1998.
OTHER MATTERS
No business other than that set forth in the attached Notice of Meeting is
expected to come before the annual meeting, but should any other matters
requiring a vote of shareholders arise, including a question of adjourning the
meeting, the persons named in the accompanying proxy will vote thereon
according to their best judgment in the interests of the Company. In the event
any of the nominees for the office of director should withdraw or otherwise
become unavailable for reasons not presently known, the persons named as
proxies will vote for other persons in their place in what they consider the
best interests of the Company.
1115
You are urged to sign and return your proxy promptly to make certain your
shares will be voted at the meeting. You may revoke your proxy at any time
before it is voted.
By order of the Board of Directors
Margaret D. Farrell
Secretary
Dated: April 25, 1997
1223, 1998
16
ANNEXEXHIBIT A
ASTRO-MED, INC.
1997 INCENTIVE STOCK OPTION PLAN
(AS PROPOSED TO BE AMENDED)
1. PURPOSE. The purpose of this 1997 Incentive Stock Option Plan (the "1997
ISO Plan") is to attract and retain key employees of Astro-Med, Inc. (the
"Company") and to provide them with additional incentive for unusual industry
and efficiency by offering an opportunity to acquire a proprietary stake in
the Company and its future growth. It is the view of the Company that this
goal may best be achieved by granting stock options.
2. ADMINISTRATION. (a) The 1997 ISO Plan shall be administered by a
committee of the Board of Directors (the "Board"), consisting of not less than
two members (the "Stock Option"Compensation Committee"). It is the intention of the Company
that so long as the Company has a class of securities registered under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), the 1997 ISO
Plan shall be administered by persons who shall be "disinterested persons"
within the meaning of Rule 16b-3 under the Exchange Act but the authority and
validity of any act taken or not taken by the Stock OptionCompensation Committee shall not
be affected if any person administering the 1997 ISO Plan is not a
disinterested person; and provided, that, with respect to individual
participants who are not subject to Section 16(b) of the Exchange Act, the
Stock OptionCompensation Committee may delegate authority to administer the 1997 ISO Plan
to another committee of directors (the "Employee Committee") which committee
may include directors who are not disinterested persons. Unless the context
otherwise required, the term "Committee" shall refer to both the Stock OptionCompensation
Committee and the Employee Committee.
(b) The Committee shall have plenary authority in its discretion, subject to
and not inconsistent with the express provisions of the 1997 ISO Plan to grant
options, to determine the purchase price of the shares of common stock covered
by each option, the term of each option, the persons to whom, and the time or
times at which options shall be granted, and the number of shares to be
covered by each option; to interpret the 1997 ISO Plan; to prescribe, amend
and rescind rules and regulations relating to the 1997 ISO Plan; to determine
the terms and provisions of the option agreements (which need not be
identical) entered into in connection with awards under the 1997 ISO Plan; and
to make all other determinations deemed necessary or advisable for the
administration of the 1997 ISO Plan. All actions taken and all interpretations
and determinations made by the Committee in good faith shall be final and
binding upon all persons who have received awards, the Company and all other
interested persons. No member or agent of the Committee shall be personally
liable for any action, determination or interpretation taken or made in good
faith with respect to the 1997 ISO Plan or awards made thereunder, and all
members and agents of the Committee shall be fully indemnified and protected
by the Company in respect of any such action, determination or interpretation.
No Committee member shall be liable for any action, determination or
interpretation made in good faith and all members of the Committee shall be
fully indemnified and protected by the Company in respect of any such action,
determination or interpretation.
3. AMOUNT OF STOCK SUBJECT TO PLAN. The amount of stock which may be issued
under options pursuant to the 1997 ISO Plan is twofive hundred fifty thousand (250,000)(500,000)
shares of the Company's $.05 par value common stock (the "common stock"). If
any options terminate or expire for any reason without having been exercised
in full, the shares not purchased under the options may again be subjected to
options granted under the 1997 ISO Plan to the extent not prohibited by Rule
16b-3.
A-1
4. ELIGIBILITY. Key employees of the Company or any subsidiary shall be
eligible to participate in the 1997 ISO Plan, except that directors who are
not full time officers or employees shall not be eligible to participate. Key
employees shall be those employees, including officers, who are deemed by the
Committee to be of primary
A-1
importance in the operation of the Company's
business. The Committee may in its discretion from time to time grant options
to any or all eligible employees to purchase such number of shares as the
Committee shall determine, subject to the limitation that except as
hereinafter provided, no option may be granted hereunder to any employee who,
at the time such option is granted, owns stock possessing more than ten
percent (10%) of the total combined voting power of all classes of stock of
the Company or any subsidiary or parent. The foregoing limitation shall not
apply if, at the time such option is granted, the option price is at least one
hundred ten percent (110%) of the fair market value of the stock subject to
the option and such option by its terms is not exercisable after the
expiration of five (5) years from the date such option is granted, or such
shorter period as may be determined by the Committee, unless sooner terminated
under Paragraph 10 or Paragraph 12 below. Fair market value for this purpose
shall be determined at the time and in the manner set forth in Paragraph 6
below. As used in the 1997 ISO Plan, the term "subsidiary" has the meaning
ascribed to "subsidiary corporation" by (S)424(f) of the Internal Revenue Code
of 1986, as amended (the "Code"), and the term "parent" has the meaning
ascribed to "parent corporation" by (S)424(e) of the Code.
5. AGGREGATE ANNUAL LIMIT. The aggregate fair market value (determined as of
the respective date or dates of grant of an option hereunder) of the stock
with respect to which options granted hereunder granted (and all other incentive stock
option plans of the Company or any subsidiary or parent) are exercisable for
the first time by any employee during any one calendar year shall not exceed
$100,000. In the event that (S)422(d) of the Code is amended to alter the
limitation set forth therein so that, following such amendment, such
limitation shall differ from the limitation set forth herein, then the
limitation of this Paragraph 5 shall be automatically amended to conform to
the limitation of such section of the Code.
6. OPTION PRICE AND PAYMENT. The option price of the shares of common stock
subject to each option will be fixed by the Committee but, subject to the
limitation set forth in Paragraph 4 above, will not be less than one hundred
percent (100%) of fair market value of the common stock determined as of the
date of the granting of the option. Upon the exercise of the option, the
option price may be paid in one or more of the following ways, as the
Committee in its discretion determines: (i) in full in cash; or (ii) by
exchanging other shares of the Company's common stock owned by the owner of
such option. The term "fair market value" shall be deemed to be the mean
between the high and low selling prices on any exchange on which the stock is
listed (or over-the-counter if such stock is not then listed on such
exchange), on the date the option is granted or, if no sale has taken place,
the mean between bid and asked prices on such date. However, if any such
method is inconsistent with any regulations applicable to incentive stock
options heretofore or hereafter adopted by the Commissioner of Internal
Revenue, then the fair market value shall be determined by the Committee in
accordance with such regulations.
7. TERM OF OPTION; EMPLOYMENT REQUIREMENT. (a) Except as provided in the
limitation set forth in Paragraph 4 above, the term of each option shall be
ten (10) years, or such shorter period as may be determined by the Committee,
from the date of grant of the option, unless sooner terminated under the
provisions of Paragraph 10 or Paragraph 12 below. All or part of the shares
may be purchased, subject to the provisions of Paragraph 10 below, at any time
or from time to time during the term of the option. No option shall be granted
after the termination of the 1997 ISO Plan, but options theretofore granted
may be exercised thereafter in accordance with their terms and the provisions
of the 1997 ISO Plan.
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(b) Except as otherwise permitted under Paragraph 10 in the case of death of
the holder of an option, no option will be exercisable unless at the time of
the exercise of the option: (i) the holder thereof has been continuously
employed by the Company, one or more subsidiaries, or both the Company and one
or more
A-2
subsidiaries for a period of at least one year, and (ii) the holder
thereof is still employed by the Company or one or more subsidiaries;
provided, however, that if the holder's employment has terminated not more
than ninety (90) days before the exercise of such option under circumstances
acceptable to the Committee (whose determination in this regard shall be final
and conclusive), then the option will nevertheless be exercisable during the
ninety (90) day period notwithstanding termination of employment; and
provided, further, that if the holder's employment has terminated not more
than one (1) year before the exercise of such option as a result of the holder
becoming disabled (within the meaning of (S)22(e)(3) of the Code), then the
option will nevertheless be exercisable during such one (1) year period.
(c) Military or sick leave not exceeding ninety (90) days will not be deemed
to interrupt or terminate employment for the purposes of this Paragraph 7.
Whether military or sick leave in excess of ninety (90) days or other
authorized leave of absence will be deemed to interrupt or terminate
employment for the purposes of this Paragraph 7 will be determined by the
Committee whose determination shall be final and conclusive.
8. CHANGE OF CONTROL. Unless the Committee determines otherwise, all
outstanding options shall become immediately exercisable upon a Change of
Control Event. A Change of Control Event shall include (i) any purchase of
common stock pursuant to a tender offer or exchange offer (other than by the
Company), (ii) the acquisition of 30% or more of the beneficial ownership of
the combined voting securities of the Company by any person or group (as such
terms are used in Section 13(d) and 14(d) of the Exchange Act), other than the
Company or its subsidiaries or any employee benefit plan of the Company or any
person who was an officer or director of the Company on the effective date of
the 1997 ISO Plan, which person or group did not theretofore beneficially own
30% or more of the combined voting securities of the Company, (iii) approval
by Company shareholders of a consolidation, a merger in which the Company does
not survive, or the sale of substantially all of the Company's assets, or (iv)
a change in the composition of a majority of the Company's Board over a two-
year period unless the selection or nomination of each of the new members is
approved by two-thirds of those remaining members of the Board who were
members at the beginning of the two-year period.
9. OTHER TERMS AND CONDITIONS; WAIVERS. Options will be evidenced by option
agreements in such form and containing such terms and conditions as the
Committee may determine (but not inconsistent with the provisions of the 1997
ISO Plan) including, without being limited to, the following:
(a) Each option will be granted on the condition that the purchase of
stock thereunder will be for investment purposes and not with a view to
resale or distribution, except that such condition will be inoperative if
the stock subject to such option is registered under the Securities Act of
1933, as amended, or if in the opinion of counsel for the Company such
stock may be resold without registration;
(b) No option will be transferable by the holder thereof otherwise than
by will or by the laws of descent and distribution, and such option will be
exercisable during the lifetime of the holder thereof only by the holder;
and
(c) The Committee, in particular cases, before or after the issuance of
stock options under the 1997 ISO Plan, may waive any of the conditions
imposed by the 1997 ISO Plan upon the issuance or exercise of options;
provided, however, that no such waiver shall be made which would cause any
outstanding incentive stock option to fail to qualify as an incentive stock
option within the meaning of (S)422 of the Code.
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10. TERMINATION OF EMPLOYMENT UPON DEATH. In the event an eligible employee
dies while in the employ of the Company or any subsidiary, and at such time
such employee holds options under the 1997 ISO Plan, his or her options shall
end automatically six (6) months after such death, unless sooner ended by
their terms. Prior to the expiration of such six (6) month period, during the
term of such options, the executor or administrator of the estate of such
eligible employee shall have the right to exercise any option previously
granted to such employee hereunder.
11. READJUSTMENT OF STOCK OR RECAPITALIZATION. Upon any recapitalization or
readjustment of the Company's capital stock whereby the character of the
present common stock shall be changed, appropriate adjustments shall be made
so that the stock to be purchased under the 1997 ISO Plan shall be the
equivalent of the present common stock after such readjustment or
recapitalization. In the event of a subdivision or combination of the shares
of common stock, the Board will proportionately adjust the number of shares that
may be optioned and sold to eligible employees and the number of shares which
are the subject of outstanding options and the price therefor. In case of
reclassification or other change in the shares of common stock, such action
will be taken as in the opinion of the Board will be appropriate under the
circumstances. Accordingly, in such cases the maximum number of authorized but
unissued shares, or shares held as treasury stock, which are subject to the
1997 ISO Plan may be adjusted by the Board without shareholder or any other
action.
12. SALE OF ASSETS, STOCK EXCHANGE, ETC. If the Board recommends that the
Company sell substantially all of its assets, or that the holders of
substantially all of the shares of outstanding stock sell or exchange their
shares to or with any person, firm or corporation, or that the Company merge
or consolidate with another corporation, or that the Company be liquidated and
dissolved, then in any such event, the Committee may by notice in writing
mailed or delivered to each holder of an outstanding option set a date (which
date shall be not less than sixty (60) days from the date of mailing or
delivering of such written notice) on or before which such outstanding options
may be exercised, and all such outstanding options which have not been
exercised on or before such date will thereafter expire and be of no further
force and effect.
13. TERM OF THE PLAN. The 1997 ISO Plan shall become effective on the date
of its approval by the shareholders, and subsequent adoption and ratification
by the Board, and shall continue in effect until the expiration of ten (10)
years from the date of such approval by the shareholders unless sooner
terminated as provided herein. The powers of the Committee shall continue in
effect after the termination of the 1997 ISO Plan, until exercise or
expiration of all options then outstanding.
14. AMENDMENT AND TERMINATION. The Board at any time may amend, suspend or
terminate the 1997 ISO Plan. No action of the Board, however, may without the
written consent of the holder, alter or impair any option previously granted
under the 1997 ISO Plan (except pursuant to Paragraph 11 or Paragraph 12 above
or Paragraph 16 below). In addition, except as provided in the 1997 ISO Plan,
no action of the Board may, unless duly approved by the shareholders, (i)
increase the maximum number of shares subject to the 1997 ISO Plan; (ii)
change the option price or the manner of determining the option price; (iii)
extend the period within which options may be granted; (iv) extend the
termination date of the 1997 ISO Plan; (v) permit participation by directors
who are not officers or employees; or (vi) change the aggregate annual limit
provided for under Paragraph 5 above.
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15. OBLIGATION OF THE COMPANY TO ISSUE SHARES. Notwithstanding any other
provision of the 1997 ISO Plan, the Company shall not be obligated to issue
any shares pursuant to any stock option unless or until:
(a) the shares with respect to which the option is being exercised have
been registered under the Securities Act of 1933, as amended, or are exempt
from such registration;
A-4
(b) the prior approval of such sale or issuance has been obtained from
any state regulatory body having jurisdiction; and
(c) in the event the stock has been listed on any stock exchange, the
shares with respect to which the option is being exercised have been duly
listed on such exchange in accordance with the procedure specified
therefor.
16. QUALIFYING AMENDMENTS. Notwithstanding any other provision hereof to the
contrary, the Board shall have the right to amend or modify the terms and
provisions of the 1997 ISO Plan, and any option previously granted under the
1997 ISO Plan may be amended or modified by the Committee, to the extent
necessary to qualify any or all such options for such favorable federal income
tax treatment (including deferral of taxation upon exercise) as may be
afforded employee stock options under (S)422 or any successor provision of the
Code.
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[THIS PAGE IS INTENTIONALLY LEFT BLANK.]
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EXHIBIT B
ASTRO-MED, INC.
1998 NON-QUALIFIED STOCK OPTION PLAN
1. PURPOSE. The purpose of this 1998 Non-Qualified Stock Option Plan (the
"1998 Non-Qualified Plan") is to attract and retain key employees of Astro-
Med, Inc. (the "Company") and to motivate them by providing an opportunity to
acquire a proprietary stake in the Company and its future growth. It is the
view of the Company that this goal may best be achieved by granting stock
options.
2. ADMINISTRATION. (a) The 1998 Non-Qualified Plan shall be administered by
a committee of the Board of Directors (the "Board"), consisting of not less
than two members (the "Compensation Committee"). It is the intention of the
Company that so long as the Company has a class of securities registered under
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), the 1998
Non-Qualified Plan shall be administered by persons who shall be "non-employee
directors" within the meaning of Rule 16b-3 under the Exchange Act but the
authority and validity of any act taken or not taken by the Compensation
Committee shall not be affected if any person administering the 1998 Non-
Qualified Plan is not a non-employee director; and provided, that, with
respect to individual participants who are not subject to Section 16(b) of the
Exchange Act, the Compensation Committee may delegate authority to administer
the 1998 Non-Qualified Plan to another committee of directors (the "Employee
Committee") which committee may include directors who are not non-employee
directors. Unless the context otherwise required, the term "Committee" shall
refer to both the Compensation Committee and the Employee Committee.
(b) The Committee shall have plenary authority in its discretion, subject to
and not inconsistent with the express provisions of the 1998 Non-Qualified
Plan to grant options, to determine the purchase price of the shares of common
stock covered by each option, the term of each option, the persons to whom,
and the time or times at which options shall be granted, and the number of
shares to be covered by each option; to interpret the 1998 Non-Qualified Plan;
to prescribe, amend and rescind rules and regulations relating to the 1998
Non-Qualified Plan; to determine the terms and provisions of the option
agreements (which need not be identical) entered into in connection with
awards under the 1998 Non-Qualified Plan; and to make all other determinations
deemed necessary or advisable for the administration of the 1998 Non-Qualified
Plan. All actions taken and all interpretations and determinations made by the
Committee in good faith shall be final and binding upon all persons who have
received awards, the Company and all other interested persons. No member or
agent of the Committee shall be personally liable for any action,
determination or interpretation taken or made in good faith with respect to
the 1998 Non-Qualified Plan or awards made thereunder, and all members and
agents of the Committee shall be fully indemnified and protected by the
Company in respect of any such action, determination or interpretation. No
Committee member shall be liable for any action, determination or
interpretation made in good faith and all members of the Committee shall be
fully indemnified and protected by the Company in respect of any such action,
determination or interpretation.
3. AMOUNT OF STOCK SUBJECT TO PLAN. The amount of stock which may be issued
under options pursuant to the 1998 Non-Qualified Plan is four hundred thousand
(400,000) shares of the Company's $.05 par value common stock (the "common
stock"). If any options terminate or expire for any reason without having been
exercised in full, the shares not purchased under the options may again be
subjected to options granted under the 1998 Non-Qualified Plan to the extent
not prohibited by Rule 16b-3.
B-1
4. ELIGIBILITY. Key employees of the Company or any subsidiary as well as
consultants or other persons who render services to the Company or any
subsidiary (regardless of whether they are employees) shall be eligible to
participate in the 1998 Non-Qualified Plan, except that directors who are not
full time officers or employees shall not be eligible to participate. Key
employees shall be those employees, including officers, who are deemed by the
Committee to be of primary importance in the operation of the Company's
business. The Committee may in its discretion from time to time grant options
to any or all eligible persons to purchase such number of shares as the
Committee shall determine. As used in the 1998 Non-Qualified Plan, the term
"subsidiary" has the meaning ascribed to "subsidiary corporation" by (S)424(f)
of the Internal Revenue Code of 1986, as amended (the "Code").
5. AGGREGATE ANNUAL LIMIT. The aggregate number of shares of common stock
subject to grant hereunder to any one person during any one calendar year
shall not exceed 200,000 shares.
6. OPTION PRICE AND PAYMENT. The option price of the shares of common stock
subject to each option will be fixed by the Committee but will not be less
than fifty percent (50%) of the fair market value of the common stock
determined as of the date of the granting of the option. Upon the exercise of
the option, the option price may be paid in one or more of the following ways,
as the Committee in its discretion determines: (i) in full in cash, or (ii) by
exchanging other shares of the Company's common stock owned by the owner of
such option. The term "fair market value" shall be deemed to be the mean
between the high and low selling prices on any exchange on which the stock is
listed (or over-the-counter if such stock is not then listed on such
exchange), on the date the option is granted or, if no sale has taken place,
the mean between bid and asked prices on such date.
7. TERM OF OPTION. (a) The term of each option shall be ten (10) years, or
such shorter period as may be determined by the Committee, from the date of
grant of the option, unless sooner terminated in accordance with its terms.
The Committee may, in its sole discretion, determine, as a condition of any
option, that all or a stated percentage of the options shall become
exercisable in installments or otherwise, only after completion of a specified
service requirement and may accelerate the exercisability of any option at any
time. No option shall be granted after the termination of the 1998 Non-
Qualified Plan, but options theretofore granted may be exercised thereafter in
accordance with their terms and the provisions of the 1998 Non-Qualified Plan.
(b) Except as otherwise determined by the Committee or permitted under
Paragraph 10 in the case of death of the holder of an option, in the event the
employment of an employee to whom an option has been granted under the 1998
Non-Qualified Plan shall be terminated (except as set forth in Paragraph 10)
no option will be exercisable unless at the time of the exercise of the option
the holder thereof is still employed by the Company or one or more
subsidiaries; provided, however, that if the holder's employment has
terminated not more than ninety (90) days before the exercise of such option
under circumstances acceptable to the Committee (whose determination in this
regard shall be final and conclusive), then the option will nevertheless be
exercisable during the ninety (90) day period notwithstanding termination of
employment; and provided, further, that if the holder's employment has
terminated not more than one (1) year before the exercise of such option as a
result of the holder becoming disabled (within the meaning of (S)22(e)(3) of
the Code), then the option will nevertheless be exercisable during such one
(1) year period.
(c) Military or sick leave not exceeding ninety (90) days will not be deemed
to interrupt or terminate employment for the purposes of this Paragraph 7.
Whether military or sick leave in excess of ninety (90) days or other
authorized leave of absence will be deemed to interrupt or terminate
employment for the purposes of this Paragraph 7 will be determined by the
Committee whose determination shall be final and conclusive.
B-2
8. CHANGE OF CONTROL. Unless the Committee determines otherwise, all
outstanding options shall become immediately exercisable upon a Change of
Control Event. A Change of Control Event shall include (i) any purchase of
common stock pursuant to a tender offer or exchange offer (other than by the
Company), (ii) the acquisition of 30% or more of the beneficial ownership of
the combined voting securities of the Company by any person or group (as such
terms are used in Section 13(d) and 14(d) of the Exchange Act), other than the
Company or its subsidiaries or any employee benefit plan of the Company or any
person who was an officer or director of the Company on the effective date of
the 1998 Non-Qualified Plan, which person or group did not theretofore
beneficially own 30% or more of the combined voting securities of the Company,
(iii) approval by Company shareholders of a consolidation, a merger in which
the Company does not survive, or the sale of substantially all of the
Company's assets, or (iv) a change in the composition of a majority of the
Company's Board over a two-year period unless the selection or nomination of
each of the new members is approved by two-thirds of those remaining members
of the Board who were members at the beginning of the two-year period.
9. OTHER TERMS AND CONDITIONS; WAIVERS. Options will be evidenced by option
agreements in such form and containing such terms and conditions as the
Committee may determine (but not inconsistent with the provisions of the 1998
Non-Qualified Plan) including, without being limited to, the following:
(a) Each option will be granted on the condition that the purchase of
stock thereunder will be for investment purposes and not with a view to
resale or distribution, except that such condition will be inoperative if
the stock subject to such option is registered under the Securities Act of
1933, as amended, or if in the opinion of counsel for the Company such
stock may be resold without registration;
(b) Unless the Committee otherwise determines, no option will be
transferable by the holder thereof otherwise than by will or by the laws of
descent and distribution, and such option will be exercisable during the
lifetime of the holder thereof only by the holder; provided, however, that
during an optionee's lifetime, with the approval of the Committee and
subject to such conditions as the Committee may prescribe, an optionee may,
upon providing written notice to the Company, elect to transfer any or all
such non-qualified stock options granted under the 1998 Non-Qualified Plan
to members of his or her immediate family, including, but not limited to,
the optionee's spouse, children, grandchildren and the spouses of children
and grandchildren or to trusts for the benefit of the optionee and/or such
immediate family members or to partnerships in which the optionee and/or
such family members are the only partners ("Permitted Transferees");
provided, however, that no such transfer by any optionee may be made in
exchange for consideration; and
(c) The Committee, in particular cases, before or after the issuance of
stock options under the 1998 Non-Qualified Plan, may waive any of the
conditions imposed by the 1998 Non-Qualified Plan upon the issuance or
exercise of options.
10. TERMINATION OF EMPLOYMENT UPON DEATH. In the event an employee to whom
an option has been granted under the 1998 Non-Qualified Plan dies while in the
employ of the Company or any subsidiary, unless the Committee otherwise
determines, his or her options shall end automatically six (6) months after
such death, unless sooner ended by their terms. Prior to the expiration of
such six (6) month period, during the term of such options, the executor or
administrator of the estate of such eligible employee shall have the right to
exercise any option previously granted to such employee hereunder.
11. READJUSTMENT OF STOCK OR RECAPITALIZATION. Upon any recapitalization or
readjustment of the Company's capital stock whereby the character of the
present common stock shall be changed, appropriate
B-3
adjustments shall be made so that the stock to be purchased under the 1998
Non-Qualified Plan shall be the equivalent of the present common stock after
such readjustment or recapitalization. In the event of a subdivision or
combination of the shares of common stock, the Board will proportionately
adjust number of shares that may be optioned and sold to an eligible person
and the number of shares which are the subject of outstanding options and the
price therefor. In case of reclassification or other change in the shares of
common stock, such action will be taken as in the opinion of the Board will be
appropriate under the circumstances. Accordingly, in such cases the maximum
number of authorized but unissued shares, or shares held as treasury stock,
which are subject to the 1998 Non-Qualified Plan may be adjusted by the Board
without shareholder or any other action.
12. SALE OF ASSETS, STOCK EXCHANGE, ETC. If the Board recommends that the
Company sell substantially all of its assets, or that the holders of
substantially all of the shares of outstanding stock sell or exchange their
shares to or with any person, firm or corporation, or that the Company merge
or consolidate with another corporation, or that the Company be liquidated and
dissolved, then in any such event, the Committee may by notice in writing
mailed or delivered to each holder of an outstanding option set a date (which
date shall be not less than sixty (60) days from the date of mailing or
delivering of such written notice) on or before which such outstanding options
may be exercised, and all such outstanding options which have not been
exercised on or before such date will thereafter expire and be of no further
force and effect.
13. TERM OF THE PLAN. The 1998 Non-Qualified Plan shall become effective on
the date of its approval by the shareholders, and subsequent adoption and
ratification by the Board, and shall continue in effect until the expiration
of ten (10) years from the date of such approval by the shareholders unless
sooner terminated as provided herein. The powers of the Committee shall
continue in effect after the termination of the 1998 Non-Qualified Plan, until
exercise or expiration of all options then outstanding.
14. AMENDMENT AND TERMINATION. The Board at any time may amend, suspend or
terminate the 1998 Non-Qualified Plan. No action of the Board, however, may
without the written consent of the holder, alter or impair any option
previously granted under the 1998 Non-Qualified Plan (except pursuant to
Paragraph 11 or Paragraph 12 above). In addition, except as provided in the
1998 Non-Qualified Plan, no action of the Board may, unless duly approved by
the shareholders, (i) increase the maximum number of shares subject to the
1998 Non-Qualified Plan; (ii) change the minimum option price; (iii) extend
the period within which options may be granted; (iv) extend the termination
date of the 1998 Non-Qualified Plan; or (v) change the class of persons
eligible to receive options under the 1998 Non-Qualified Plan.
15. OBLIGATION OF THE COMPANY TO ISSUE SHARES. Notwithstanding any other
provision of the 1998 Non-Qualified Plan, the Company shall not be obligated
to issue any shares pursuant to any stock option unless or until:
(a) the shares with respect to which the option is being exercised have
been registered under the Securities Act of 1933, as amended, or are exempt
from such registration;
(b) the prior approval of such sale or issuance has been obtained from
any state regulatory body having jurisdiction; and
(c) in the event the stock has been listed on any stock exchange, the
shares with respect to which the option is being exercised have been duly
listed on such exchange in accordance with the procedure specified
therefor.
B-4
ASTRO-MED, INC.
ANNUAL MEETING OF SHAREHOLDERS--MAY 20, 199719, 1998
The undersigned, whose signature appears on the reverse side of this proxy,
hereby appoints Albert W. Ondis, Everett V. Pizzuti, Jacques V. Hopkins,
Hermann Viets and Neil K. Robertson, or a majority of such of them as shall be
present, attorneys with power of substitution and with all the powers the
undersigned would possess if personally present, to vote the stock of the
undersigned in ASTRO-MED, INC. at the annual meeting of shareholders to be held
May 20, 1997,19, 1998, in West Warwick, Rhode Island, and at any adjournments thereof,
as follows:
1. ELECTION OF DIRECTORS
FOR all WITHHOLD AUTHORITY to vote for all
nominees nominees listed below ____________________
listed below
(except as
marked to the
contrary
below) _______
Albert W. Ondis, Everett V. Pizzuti, Jacques V. Hopkins, Hermann Viets and Neil
K. Robertson.
(INSTRUCTION: Toto withhold authority to vote for any individual nominee, write
the nominee's name in the space provided below.)
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2. PROPOSAL TO APPROVE THE ADOPTION OF THEApprove an increase in the maximum number of shares available under the
Company's 1997 ASTRO-MED, INC. INCENTIVE STOCK
OPTION PLAN.Incentive Stock Option Plan.
FOR ____ AGAINST ____ ABSTAIN
____
3. Approve the Company's 1998 Non-Qualified Stock Option Plan.
FOR AGAINST ABSTAIN
4. In their discretion, upon such other matters as may properly come before the
meeting.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED FOR THE SPECIFIED NOMINEES IN PROPOSAL 1 AND FOR PROPOSAL 2.PROPOSALS 2 AND 3.
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PLEASE DATE, SIGN AND RETURN THIS PROXY
Dated ____ ,1997______________ , 1998 Signed __________________________________________
_____________________________________________________________________________________
___________________________________________
(Sign exactly as your name appears hereon.
When signing as attorney, executor,
administrator, trustee, guardian or in a
corporate capacity, please give full title
as such. In case of joint tenants or
multiple owners, each party must sign.)
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF THE COMPANY
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