SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES EXCHANGE ACT OF 1934
(Amendment No. ______)
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(as permitted by Rule 14a-6(e)(2))
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[ ] Soliciting Material Pursuant toss.240.14a-12
RELM WIRELESS CORPORATION
(Name of Registrant as Specified in Its Charter)
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(Name of Person(s) Filing Proxy Statement if other than the Registrant)
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and 0-11.
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RELM WIRELESS CORPORATION
7100 TECHNOLOGY DRIVE
WEST MELBOURNE, FLORIDA 32904
2003 ANNUAL MEETING OF STOCKHOLDERS
May 6, 2003
Dear Stockholder:
You are cordially invited to attend the 2003 Annual Meeting of
Stockholders of RELM Wireless Corporation which will be held at 9:00 a.m.,
Eastern Time, on Tuesday, May 6, 2003, at the offices of RELM Wireless
Corporation, 7100 Technology Drive, West Melbourne, Florida 32904.
The matters to be presented at the meeting are described in the Notice
of 2003 Annual Meeting of Stockholders and Proxy Statement which accompany this
letter.
We hope you will be able to attend the meeting, but, whatever your
plans, we ask that you please complete, execute and date the enclosed proxy card
and return it in the envelope provided so that your shares will be represented
at the meeting.
We look forward to seeing you at the meeting.
Sincerely,
/s/ David P. Storey
-------------------------------------
David P. Storey
President and Chief Executive Officer
RELM WIRELESS CORPORATION
7100 TECHNOLOGY DRIVE
WEST MELBOURNE, FLORIDA 32904
NOTICE OF 2003 ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON TUESDAY, MAY 6, 2003
The annual meeting of stockholders of RELM Wireless Corporation (the
"Corporation") will be held at 9:00 a.m., Eastern Time, on Tuesday, May 6, 2003,
at the offices of the Corporation, 7100 Technology Drive, West Melbourne,
Florida 32904 for the following purposes:
o To elect six (6) directors to hold office until the annual
meeting of stockholders in 2004 and until their respective
successors are duly elected and qualified;
o To ratify the selection of BDO Seidman, LLP as independent
certified public accountants for the year ending December 31,
2003; and
o To transact such other business properly brought before the
stockholders at the meeting.
This notice, together with the accompanying proxy statement and
enclosed proxy card, will be mailed to stockholders on or about April 18, 2003.
The board of directors has set the close of business on March 10, 2003
as the record date of the meeting. Stockholders of record at the close of
business on March 10, 2003 will be entitled to notice of and to vote at the
annual meeting or any adjournment or continuation of the meeting. Each share of
common stock is entitled to one vote. The proxy card provided with the proxy
statement indicates the number of shares of the Corporation's common stock that
you own and are entitled to vote. A list of stockholders will be available for
inspection at the meeting.
All stockholders are cordially invited to attend the annual meeting.
By Order of the Board of Directors,
/s/ William P. Kelly
---------------------------
William P. Kelly, Secretary
West Melbourne, Florida
April 18, 2003
WHETHER OR NOT YOU EXPECT TO ATTEND THE ANNUAL MEETING, PLEASE
COMPLETE, DATE AND SIGN THE ENCLOSED PROXY AND MAIL IT PROMPTLY IN THE ENCLOSED
ENVELOPE TO ENSURE REPRESENTATION OF YOUR SHARES. NO POSTAGE NEED BE AFFIXED IF
THE PROXY IS MAILED IN THE UNITED STATES.
RELM WIRELESS CORPORATION
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2003 ANNUAL MEETING OF STOCKHOLDERS
MAY 6, 2003
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PROXY STATEMENT
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GENERAL INFORMATION ABOUT THE ANNUAL MEETING AND VOTING
Why did you send me this proxy statement?
We sent you this proxy statement and the enclosed proxy card because
the Company's board of directors is soliciting your proxy to vote at the 2003
Annual Meeting of Stockholders. This proxy statement summarizes the information
you need to know to vote at the annual meeting on May 6, 2003, and at any
adjournment or postponement of the meeting, for the purposes indicated in the
accompanying Notice of 2003 Annual Meeting of Stockholders. However, you do not
need to attend the annual meeting to vote your shares. Instead, you may simply
complete, sign and return the enclosed proxy card.
This proxy statement and the accompanying form of proxy will be mailed
to stockholders on or about April 18, 2003. The annual report which accompanies
the proxy materials is not to be regarded as proxy soliciting material.
Who can vote?
You can vote your shares of common stock if our records show that you
owned the shares at the close of business on March 10, 2003. A total of
8,565,088 shares of common stock can vote at the annual meeting. You get one
vote for each share of common stock you own. The enclosed proxy card shows the
number of shares you can vote.
How do I vote by proxy?
Follow the instructions on the enclosed proxy card to vote on each
proposal to be considered at the annual meeting. Sign and date the proxy card
and mail it back to us in the enclosed envelope. The proxyholders named on the
proxy card will vote your shares as you instruct. If you sign and return the
proxy card but do not vote on a proposal, the proxyholders will vote for you on
that proposal. Unless you instruct otherwise, the proxyholders will vote FOR
each of the six director nominees, and FOR the ratification of BDO Seidman, LLP
as independent certified public accountants.
What if other matters come up at the annual meeting?
The matters described in this proxy statement are the only matters we
know will be voted on at the annual meeting. If other matters are properly
presented at the meeting, the proxyholders will vote your shares as they see
fit.
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Can I change my vote after I return my proxy card?
Yes. At any time before the vote on a proposal, you can change your
vote either by giving our corporate secretary a written notice revoking your
proxy card or by signing, dating and returning to us a new proxy card. We will
honor the proxy card with the latest date.
Can I vote in person at the annual meeting rather than by completing the proxy
card?
Although we encourage you to complete and return the proxy card to
ensure that your vote is counted, you can attend the annual meeting and vote
your shares in person.
What do I do if my shares are held in "street name"?
If your shares are held in the name of your broker or other nominee,
that party should give you instructions for voting your shares.
How are votes counted?
We will hold the annual meeting if holders of a majority of the shares
of common stock entitled to vote either sign and return their proxy cards or
attend the meeting. If you sign and return your proxy card, your shares will be
counted to determine whether we have a quorum even if you abstain or fail to
vote on any of the proposals listed on the proxy card.
Who will count the votes?
American Stock Transfer & Trust Company, RELM's transfer agent, will
tabulate the returned proxy votes by mail and the independent inspector of the
election will tabulate the votes at the meeting. The inspector of election will
treat shares represented by properly signed and returned proxies that reflect
abstentions from voting as shares that are present and entitled to vote for
purposes of determining the presence of a quorum on all matters.
If your shares are held in the name of a broker or nominee, and you do
not tell the broker or nominee how to vote your shares (so-called "broker
non-votes"), the nominee can vote them as it sees fit only on matters that are
deemed to be routine, and not on any other proposal. If a broker indicates on
the proxy that it does not have discretionary authority as to certain shares to
vote on a particular matter, those shares will not be voted on that matter.
However, the inspector of election will treat "broker non-votes" as shares that
are present and entitled to vote for purposes of determining the presence of a
quorum.
Who pays for this proxy solicitation?
We do. In addition to sending you these materials, some of our
employees may contact you by telephone, by mail, or in person. None of these
employees will receive any extra compensation for doing this. We may request
persons holding shares in their names for others to forward soliciting materials
to their principals to obtain authorization for the execution of proxies, and we
will reimburse such persons for their expenses in so doing.
None of the actions to be voted upon at the 2003 Annual Meeting of
Stockholders shall create dissenters' rights under the General Corporation Law
of the State of Nevada.
You are requested, regardless of the number of shares you hold, to sign
the proxy and return it promptly in the enclosed envelope.
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PROPOSAL 1: ELECTION OF DIRECTORS
At the annual meeting, six nominees will be elected as directors. In
accordance with our By-Laws, the board of directors has set the size of the
board at six directors. The directors elected will hold office until the next
annual meeting of stockholders, and until their respective successors are duly
elected and qualified.
NOMINATIONS. At the annual meeting, we will nominate the persons named
in this proxy statement as directors. Although we do not know of any reason why
one of these nominees might not be able to serve, the board of directors will
propose a substitute nominee if any nominee is not available for election. The
proxies will then be voted for such other person as the board of directors may
recommend, unless the board of directors reduces the number of directors. All of
the nominees are currently members of the board of directors of RELM.
GENERAL INFORMATION ABOUT THE NOMINEES. Our board of directors is set
at six persons. Set forth below is certain information concerning the nominees
for election as directors and as our executive officers. The ages listed for the
nominees are as of April 18, 2003. Our directors nominees are:
NAME AGE POSITION
------------------------------------------------------------------------------
Donald F. U. Goebert 66 Chairman of the Board
David P. Storey 50 President, Chief Executive Officer,
and Director
Ralph R. Whitney Jr. (1) 68 Director
James C. Gale (1)(2) 53 Director
George N. Benjamin, III (1)(2) 65 Director
Randolph K. Piechocki (1)(2) 50 Director
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(1) Member of the Audit Committee.
(2) Member of the Compensation Committee.
Each director holds his office until the next annual meeting of
stockholders unless he resigns or is removed or disqualified. Officers are
elected by the board of directors and any number of offices may be held by the
same person.
The business experience of our executive officers and directors is set
forth below:
Donald F. U. Goebert has been our Chairman of the Board (and a director
of our predecessor) since March 1968. He was the President of our predecessor
from March 1968 to October 1988, and our President and Chief Executive Officer
from April 1993 to December 1997. He has been President of Chester County Fund,
Inc., a commercial real estate company, since 1968. Mr. Goebert is a director of
Investors Insurance Group, Inc., a commercial insurance company.
David P. Storey has been our President and Chief Executive Officer
since July 2000, after serving as our Chief Operating Officer from June 1998 to
July 2000. From November 1994 to June 1998, he was Senior Vice President of
Manufacturing of ANTEC Corp., a communications electronics company.
William P. Kelly has been our Executive Vice President - Finance and
Chief Financial Officer since July 1997, and Secretary since June 2000. From
October 1995 to June 1997, he was Vice President and Chief Financial Officer of
our subsidiary, RELM Communications, Inc. From January 1993 to October 1995, he
was the Financial Director of Harris Corp. Semiconductor Sector.
Ralph R. Whitney Jr. has been a director since January 1992. From
January 1971 to January 2002, Mr. Whitney was the President and Chief Executive
Officer of Hammond Kennedy Whitney & Co., Inc., an investment banking company.
From January 2001 to June 2002, Mr. Whitney served as a director of
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IFR Systems, Inc., a manufacturer of test equipment for the military. Since
1971, he was a director of Baldwin Technology Co., Inc., a manufacturer of
printing press equipment, First Technology, PLC, a manufacturer and supplier of
electronic optical sensors, Reinhold Industries, Inc., a manufacturer of
composite components in the aerospace, defense and commercial lighting
industries, and DURA Automotive Systems, Inc., a manufacturer of automobile
windows, seat and door assemblies.
James C. Gale has been a director since October 1993. Since September
1998, Mr. Gale has been a Managing Director of Sanders Morris Harris, an
investment banking company. From 1991 to 1998, Mr. Gale was a Managing Director
of Gruntal & Co., L.L.C., an investment banking and management company. Mr. Gale
is a director of Amarin Corporation plc., a specialty pharmaceutical company.
George N. Benjamin, III has been a director since January 1996. From
August 1999 to October 2001, he has been the President and CEO of Keystone
Networks, Inc. an optical network developer since November, 1999, and was the
President and CEO of BICC Cables Corp., N.A., a manufacturer of electrical wires
and cable, from August 1998 through June 1999. He has been the Consultant and
Partner in Trig Systems, LLC, a management and consulting company, since July
1987. He has been a director of Stonebridge Financial Corp. since January 2001.
Randolph K. Piechocki has been a director since October 2002. He has
served as President of Palco Telecom Service, Inc., a provider of reverse
logistic and warranty fulfillment services, from August 1999 to the present. He
has held senior level management and advisory positions at TxPort, a
manufacturer of carrier class WAN access devices, from October 1997 to August
1999; at Voice Control Systems from July 1997 to October 1997; at American
Mobile Satellite, a wireless service provider, from April 1996 to September
1996.
Our other key employees and their biographies are as follows:
Harold B. Cook, age 57, has been our Vice President of Operations since
July 2000. Mr. Cook joined us in April 1997 as Director of Manufacturing. Prior
to joining us, Mr. Cook held the position of Director of Manufacturing
Operations at Computer Products Incorporated, Fujitsu America Inc., and Ampro
Corporation. Mr. Cook also held operations management positions at Storage
Technology Corporation and Harris Corporation.
Christopher Ramsden, age 48, has been our Vice President of Federal
Sales and Marketing since January 2003. Prior to joining us, Mr. Ramsden served
as the Director of Sales & Marketing for Kenwood Communications from February
2000 to January 2002. He also served in various senior-level sales and marketing
positions with Bell South from August 1990 to February 2000. Mr. Ramsden has
also held sales and marketing positions at Motorola and U.S. West.
VOTE REQUIRED. Under the Nevada General Corporation Law, directors are
elected by the affirmative vote of a plurality of the votes cast for the
respective nominees. Proxies that are marked "Withhold Authority" and broker
non-votes, if any, will not affect the outcome of the election of directors.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE
"FOR" ALL NOMINEES FOR DIRECTOR.
MEETINGS OF THE BOARD OF DIRECTORS. The board of directors held four
meetings during fiscal year 2002, and each of the directors attended at least
seventy-five percent (75%) of the aggregate number of meetings of the board of
directors and committees (if any) on which he served.
COMMITTEES OF THE BOARD OF DIRECTORS. The board of directors has an
Audit Committee and a Compensation Committee. The board of directors does not
have a committee whose functions include
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nominating directors and does not have an executive committee. The following
chart describes the function and membership of each committee and the number of
times it met in 2002.
AUDIT COMMITTEE - 7 MEETINGS
Function Members
----------------------------------------------------------------------------- --------------------------------------
o Recommends independent auditors Randolph K. Piechocki
o Reviews internal financial information Ralph R. Whitney Jr.
o Reviews report of audit and management letter James C. Gale
o Participates in the determination of the adequacy of the internal George N. Benjamin, III
accounting control (Chair)
o Reviews the results of audits with the independent auditors Robert L. MacDonald
o Oversees quarterly and yearly reporting
o Responsible for policies, procedures and other matters relating to
business integrity, ethics and conflicts of interests
o Reviews and approves a charter for the audit committee
Our board of directors adopted a charter for the Audit Committee on June 5,
2000.
COMPENSATION COMMITTEE - 3 MEETINGS
Function Members
----------------------------------------------------------------------------- --------------------------------------
o Reviews and approves compensation and benefit programs James C. Gale
o Establishes and approves compensation of officers and George N. Benjamin, III (Chair)
management employees Randolph K. Piechocki
o Adapts and administers stock option plans
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REPORT OF THE AUDIT COMMITTEE
The Audit Committee oversees the Company's financial reporting process
on behalf of the board of directors. Management has the primary responsibility
for the financial statements and the reporting process including the systems of
internal controls. In fulfilling its oversight responsibilities, the Committee
has reviewed and discussed the audited consolidated financial statements in the
annual report with management including a discussion of the quality, not just
the acceptability, of the accounting principles, the reasonableness of
significant judgments, and the clarity of disclosures in the consolidated
financial statements.
The Committee reviewed and discussed with the independent auditors, who
are responsible for expressing an opinion on the conformity of those
consolidated financial statements with accounting principles generally accepted
in the United States of America, their judgments as to the quality, not just the
acceptability, of the Company's accounting principles and such other matters as
are required to be discussed with the Committee by SAS 61 (codification on
Statements on Auditing Standards, AU 380). In addition, the Committee has
discussed with the independent auditors the auditors' independence from
management and the Company, and the Committee has received the required written
disclosures and the letter from the independent auditors, and has considered the
compatibility of nonaudit services with the auditors' independence.
The Committee discussed with the Company's independent auditors the
overall scope and plans for their audit. The Committee met with the independent
auditors, with and without management present, to discuss the results of their
examination, their evaluation of the Company's internal controls, and the
overall quality of the Company's financial reporting. The Committee held seven
meetings during fiscal year 2002.
In reliance on the reviews and discussions referred to above, the
Committee recommended to the board of directors (and the board has approved)
that the audited consolidated financial statements be included in the Company's
annual report on Form 10-K for the year ended December 31, 2002 for filing with
the Securities and Exchange Commission. The Committee and the board have also
recommended, subject to shareholder approval, the selection of the Company's
independent auditors for the year ending December 31, 2003.
The board has determined that all members of the Audit Committee are
"independent" as that term is defined in Rule 4200(a)(15) of the listing
standards of the National Association of Securities Dealers. The board has
determined that George N. Benjamin, III qualifies as an audit committee
financial expert, and has been designated by the board as the financial expert
serving on our audit committee. Mr. Benjamin is a director independent of our
management.
AUDIT COMMITTEE
George N. Benjamin, III, Chairman
James C. Gale
Robert L. MacDonald
Randolph K. Piechocki
Ralph R. Whitney
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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED STOCKHOLDER MATTERS
The table below shows, as of April 9, 2003, the number of shares of
common stock beneficially owned by:
o each person whom we know beneficially owns more than 5% of the
common stock,
o each director and nominee for director,
o each Named Officer included in the Summary Compensation Table,
and
o all executive officers and directors as a group.
SHARES OF COMMON STOCK
NAME AND ADDRESS OF BENEFICIALLY OWNED(2) PERCENT OF
BENEFICIAL OWNER(1) NUMBER OF SHARES CLASS
------------------- ---------------------- ----------
Austin W. Marxe and David Greenhouse 871,795 (3) 9.3%
Corporate Opportunities Fund, Corporate Opportunities
Fund Institutional, L.P. 2,222,220 (4)(5) 23.0%
Corporate Opportunities Fund, L.P. 347,776 (6) 4.0%
Corporate Opportunities Fund (Institutional), L.P. 1,874,444 (7) 19.8%
SMM Corporate Management, LLC 2,222,220 (8) 23.0%
Sanders Morris Harris Inc. 2,247,220 (9) 23.3%
Donald F.U. Goebert 1,325,355 (10)(11)(12) 15.5%
Ralph R. Whitney, Jr. 55,469 (13) *
Buck Scott 103,000 (13) 1.2%
James C. Gale 2,267,220 (13)(14) 23.4%
George N. Benjamin, III 85,056 (13) 1.0%
Robert L. MacDonald 25,000 (13) 0.3%
David P. Storey 472,500 (13) 5.2%
William P. Kelly 235,000 (13) 2.7%
All executive officers and directors 4,568,250 (10))(11)(12)(13) 43.3%
as a group (8 persons)
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* Less than 1%
(1) The address of each executive officer and each director is c/o RELM
Wireless Corporation, 7100 Technology Drive, West Melbourne, Florida
32904.
(2) Based on 8,565,088 shares of common stock issued and outstanding as of
April 9, 2003. Except as otherwise indicated, the persons named in this
table have sole voting and investment power with respect to all shares
of common stock listed, which include shares of common stock that such
persons have the right to acquire beneficial ownership of within 60
days from April 9, 2003.
(3) As disclosed in the Schedule 13G filed by Austin W. Marxe ("Marxe") and
David M. Greenhouse ("Greenhouse"), dated February 27, 2003, Marxe and
Greenhouse are members of MG Advisers L.L.C., the general partner of
and investment adviser to Special Situations Private Equity Fund, L.P.
("SSPE.") Marxe and Greenhouse have shared voting and dispositive power
over 1,700,000 convertible subordinate promissory notes. These shares
are issuable upon conversion of an 8%
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Convertible Subordinated Promissory Note due December 31, 2004 with a
principal amount of $1,700,000, convertible into 871,795 common shares,
at an exercise price of $1.95, all of which are owned by Special
Situations Private Equity Fund, L.P.
(4) As disclosed in the Schedule 13D filed by Corporate Opportunities Fund,
L.P. ("COF"), Corporate Opportunities Fund (Institutional), L.P.
("COFI") collectively, (the "Funds"), Corporate Opportunities Fund,
L.P., Corporate Opportunities Fund (Institutional), L.P., SMM Corporate
Management, LLC, General Partner of the Funds, Sanders Morris Harris
Inc. ("SMH"), the controlling member of the General Partner, and James
C. Gale ("JCG"), the Chief Investment Officer, a Manager, and Member of
the General Partner, dated February 14, 2003, are deemed to have sole
power to vote or direct the vote and to dispose or to direct the
disposition of the shares, as follows: the Funds: 2,222,220; COF:
347,746; COFI: 1,874,444; SMM: 2,222,220; SMH: 2,247,220; and JCG:
2,267,220. The shares of Common Stock and Warrants were separated on
March 21, 2002. The address of the Funds, SMM, and Gale is 126 East
56th Street, 24th Floor, New York, NY 10022; and of SMH is 600 Travis,
Suite 3100, Houston, TX 77002.
(5) Includes currently exercisable warrants to purchase 1,111,110 shares of
common stock.
(6) Includes currently exercisable warrants to purchase 173,888 shares of
common stock.
(7) Includes currently exercisable warrants to purchase 937,222 shares of
common stock.
(8) Includes shares beneficially owned by COF and COFI.
(9) Includes shares beneficially owned by SMM.
(10) Includes 60,000 shares owned by a partnership controlled by Mr.
Goebert. The address for Mr. Goebert is 400 Willowbrook Lane, West
Chester, PA 19382
(11) Includes 23,366 shares held in a custodial account for our Employee
Stock Purchase Program, of which Mr. Goebert is a custodian, and 789
shares held in a Trust under our 401(k) plan, of which Mr. Goebert is a
Trustee.
(12) Includes 809,154 shares held jointly with his wife, and 3,887 shares
held in the name of his wife.
(13) Share ownership of the following persons includes immediately
exercisable options or warrants (exercisable as of February 12, 2003)
as follows: for Mr. Whitney - 25,000 shares; for Mr. Scott - 40,000;
for Mr. Gale - 1,136,110 shares; for Mr. Benjamin - 53,478 shares; for
Mr. MacDonald - 25,000; for Mr. Storey - 472,500 shares; and for Mr.
Kelly - 235,000 shares.
(14) Mr. Gale and his wife jointly own 20,000 shares of our common stock.
Additionally, Mr. Gale is managing director of SMH, an investment
banking company. Sanders Morris Harris Corporate Management LLC ("SMH
LLC"), an affiliate of SMH, manages two funds which purchased our
common stock in the rights offering which closed in March 2002 as
follows: (i) 173,888 shares are owned by COF; and (ii) 937,222 shares
are owned by COFI. Mr. Gale is Chief Investment Officer of SMH LLC. All
shares are owned directly by the funds. In the rights offering, COF LP
acquired warrants to purchase 173,888 shares which are exercisable
commencing on February 12, 2003, and COFI acquired warrants to purchase
937,222 shares which have become exercisable on February 12, 2003.
8
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Based solely on a review of Forms 3 and 4 furnished to the Company
under Rule 16a-3 promulgated under the Exchange Act, with respect to fiscal
2002, the Company is not aware of any director or officer who failed to file on
a timely basis, as disclosed in such forms, reports required by Section 16(a) of
the Exchange Act during fiscal 2002, except for Messrs. Benjamin, Gale, and
Scott, each of whom failed to file one Form 4 report disclosing one transaction.
COMPENSATION OF MANAGEMENT
The following table sets forth the annual and long term compensation
during each of the last three years paid by us to Messrs. Storey and Kelly, who
served as our President and Chief Executive Officer and Executive Vice President
- Finance, Chief Financial Officer, and Secretary, respectively, during 2002
(each a "Named Officer.") No other executive officer was paid salary and bonus
compensation by us which exceeded $100,000 during 2002.
SUMMARY COMPENSATION TABLE
Long-Term Compensation
Annual Compensation Awards
----------------------------------- -----------------------------
Other Securities
Annual Underlying All Other
Name and Principal Salary Bonus Compensation Compensation Compensation
Position Year ($) ($) ($) Options(#) ($)(1)
--------------------------- ---- ------- ------ ------------ ------------ ------------
David P. Storey 2002 225,014 -- -- -- 5,875
President and 2001 203,486 -- -- 245,000 7,105
Chief Executive Officer 2000 192,385 20,833 -- 55,000 3,000
William P. Kelly 2002 135,013 -- -- -- 4,731
Executive Vice 2001 129,187 -- -- 177,500 4,390
President - Finance, 2000 122,844 20,833 -- 50,000 3,000
Chief Financial Officer and
Secretary
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(1) The amounts shown in the column titled "All Other Compensation" for the
year 2000 include employer contributions to our 401(k) plan, and for
the year 2001 and 2002 include both employer contributions to our
401(k) plan and disability insurance premiums paid by the Company for
the benefit of the Named Officers.
The Named Officers did not receive any other annual compensation not
categorized as salary or bonus except for perquisites and other personal
benefits which in the aggregate did not exceed the lesser of $50,000 or 10% of
the total annual salary and bonus reported for such named officer.
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STOCK OPTION GRANTS
During the last completed fiscal year, there have been no grants of
stock options to the Named Officers.
We do not currently have (and have not previously had) any plan
pursuant to which any stock appreciation rights ("SARs") may be granted.
STOCK OPTION EXERCISES AND HOLDINGS
The following table sets forth information relating to stock options
exercised during 2002 by each of the Named Officers and the number and value of
stock options held on December 31, 2002 by each of them.
AGGREGATE OPTION EXERCISES IN FISCAL YEAR ENDED DECEMBER 31, 2002
AND FISCAL YEAR-END OPTION VALUES
Number of Securities
Underlying Unexercised Value of Unexercised
Shares Value Options at In-the-Money Options at
Acquired on Realized Dec. 31, 2002 (#) Dec. 31, 2002 ($)(1)
Name Exercise (#) ($) Exercisable Unexercisable Exercisable Unexercisable
---------------- ------------ -------- ----------- ------------- ----------- -------------
David P. Storey -- -- 472,500 72,500 -- --
William P. Kelly -- -- 235,000 67,500 -- --
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(1) The total value of unexercised options is based upon the difference
between the last sales price of our common stock on the NASDAQ National
Market System on December 31, 2002, which was $0.49 per share, and the
exercise price of the options, multiplied by the number of shares
underlying the options.
EMPLOYMENT AGREEMENT AND CHANGE IN CONTROL ARRANGEMENTS
We had Post-Termination Benefits Agreements with David P. Storey and
William P. Kelly, our key executives. The agreements provided an incentive for
the executives to remain in our employ should a merger, sale, change in control
or other transaction occur by providing severance compensation if the executives
are terminated within six months following such a change of control or other
transaction. The post-termination agreements also subjected the executives to
general confidentiality and non-disparagement provisions as well as
non-competition and non-solicitation provisions for one year following
termination. The post-termination agreements terminated on October 1, 2002.
DIRECTORS' COMPENSATION
During 2002, we paid to each of our non-employee directors meeting fees of
$1,000 for attendance at each board meeting and $500 for attendance at each
meeting of any committee of the board of directors which was not held in
conjunction with a meeting of the board. In addition, our directors receive a
yearly retainer fee of $8,000. During 2002, we paid $50,000 to Mr. Goebert for
his services as Chairman of the Board. Pursuant to the terms of the 1996
Non-Employee Director Stock Option Plan, each non-employee director also
receives stock options for service as a director. Also, pursuant to the terms of
the Plan, a grant of a stock option for the purchase of 5,000 shares is made to
each non-employee director on the date of each annual meeting of shareholders at
which that person is elected or re-elected as a director (or if the annual
meeting has not been held by June 30 of that year the grant is made as of June
30th of that year to each of the persons qualifying and who has been a
non-employee director for at least three months).
10
Options are granted at an exercise price equal to the fair market value
of our common stock on the date of grant, become fully exercisable eleven months
after the date of grant, or earlier upon a change of control as defined in the
Plan, and expire five years from the date of grant or earlier in the event
service as a director ceases. On June 28, 2002, a grant of stock options for the
purchase of 5,000 shares was made to each of our non-employee directors at an
exercise price of $0.80 per share and on October 8, 2002, a grant of stock
options for the purchase of 5,000 shares was made to our newly elected director
Randolph K. Piechocki at an exercise price of $.61 per share.
REPORT OF COMPENSATION COMMITTEE
GENERAL PHILOSOPHY ON EXECUTIVE COMPENSATION
The Company's compensation program for the Named Officers, as well as
for its other executive officers, is administered by the board of directors with
the advice and counsel of the Compensation Committee of the Board. The members
of the Compensation Committee provide such advice and counsel through their
participation as directors in meetings of the Board and as members of the
Compensation Committee in separate meetings of the Compensation Committee.
During 2002, the Compensation Committee consisted of three outside directors,
George N. Benjamin, III, Chairman, James C. Gale, and Randolph K. Piechocki,
whom are nominees for reelection as directors. The Compensation Committee held
three meetings during 2002.
The Company's officer compensation is composed of base salary,
incentive compensation in the form of an annual cash bonus and discretionary
long-term incentive compensation in the form of stock options. Each officer is
also a participant in medical and life insurance, a non-contributory 401(k) and
other plans which are generally made available to employees of the Company or of
the business units managed by such officer.
The Compensation Committee and the board of directors strive to offer
to the Company's officers a compensation package consisting of base salary and
incentive compensation which will attract, retain, motivate, and reward talented
executives. To achieve their objectives, the Compensation Committee and the
board evaluate the performance of the Company's officers and consider data on
other companies in its industry which are comparable in size, location and
financial performance. The Compensation Committee and the Board intend to base a
significant portion of the compensation of senior executives upon the Company's
financial success so that the Company's officers are rewarded on the same basis
as the Company's stockholders.
As President and Chief Executive Officer, Mr. Storey's annual salary is
$225,014. Consistent with the compensation objectives of the Compensation
Committee and the Board, the use of stock options has also been a material part
of the compensation package for Mr. Storey. In 2002, Mr. Storey did not receive
stock options under the Company's 1997 Stock Option Plan. In 2002, no stock
options were granted to Mr. William P. Kelly or other key employees of RELM and
its subsidiaries.
From time to time, the Board, upon the recommendation of the
Compensation Committee, implements bonus plans or grants discretionary bonus
payments to its executive and other officers based upon performance criteria and
the results of the Company's operations. It is the continuing philosophy of the
Compensation Committee to include corporate goals, stock price, and financial
results measured by return on stockholder equity as determinants of total
executive compensation. No bonuses were paid to executive or other officers in
2002.
11
COMPLIANCE WITH INTERNAL REVENUE CODE SECTION 162(M)
The Internal Revenue Code of 1986, as amended, provides that
publicly-held corporations may not deduct, for federal income tax purposes,
non-performance based compensation for its chief executive officer and certain
other executive officers to the extent that such compensation exceeds $1,000,000
for the executive. The Compensation Committee and the board intend to take such
actions as are appropriate to qualify compensation paid to executives for
deductibility under these recent amendments. In this regard, base salary and
bonus levels are expected to remain well below the $1,000,000 limitation in the
foreseeable future. Options granted under the Company's stock option plans are
designed to constitute performance-based compensation, which would not be
included in calculating compensation for purposes of the $1,000,000 limitation.
COMPENSATION COMMITTEE
George N. Benjamin, III, Chairman
James C. Gale, Director
Randolph K. Piechocki
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During 2002, the Compensation Committee of our board of directors was
composed of independent, outside directors, Messrs. Benjamin (Chairman), Gale,
and Piechocki. As noted above, our compensation program for our executives is
administered by the board of directors with the advice and counsel of the
Compensation Committee. As a result, during 2002, Mr. Storey provided input to
the deliberations by the Compensation Committee and the board concerning
executive compensation. Mr. Storey did not vote as a member of the board in any
board action which affected his own compensation.
Neither of the Compensation Committee members is or has been an officer or
employee of us or any of our subsidiaries. In addition, neither Benjamin, Gale,
nor Piechocki has, or has had, any relationship with us which is required to be
disclosed in this proxy statement. No RELM executive officer currently serves on
the compensation committee or any similar committee of another public company.
12
STOCK PRICE PERFORMANCE GRAPH
[GRAPHIC OMITTED]
COMMON STOCK PERFORMANCE
The graph above compares the five-year cumulative total stockholder
return on our stock with the five-year cumulative total return of the Nasdaq
Stock Index, U.S. ("Nasdaq") and the Nasdaq non-financial stocks index
("Composite"). The comparison covers the five years ended December 31, 2002 and
is based on an assumed $100 investment on December 31, 1997.
---------------------------------------------------------------------------
NASDAQ NFS
NASDAQ COMPOSITE RELM
---------------------------------------------------------------------------
12/31/1997 100 100 100
12/31/1998 140.9898 146.7490 20.2433
12/31/1999 261.4836 287.8086 41.3196
12/31/2000 157.4169 167.7537 5.3682
12/31/2001 124.8859 128.1900 13.8834
12/31/2002 86.3273 83.8478 6.4789
---------------------------------------------------------------------------
13
PROPOSAL 2: RATIFICATION OF THE APPOINTMENT OF BDO SEIDMAN, LLP
AS INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
Upon recommendation of our audit committee, our board of directors
selected BDO Seidman, LLP (BDO) as our independent auditors for the fiscal year
ending December 31, 2003. Although this appointment is not required to be
submitted to a vote of shareholders, we believe that it is of sufficient
importance to seek ratification of this action. Whether the proposal is approved
or defeated, the Board may reconsider its selection of BDO. We are submitting
our selection of independent auditors for ratification at the Annual Meeting.
Representatives of BDO are expected to be present at the annual meeting
and will have the opportunity to make a statement if they so desire, and will be
available to respond to appropriate questions. Ernst & Young LLP (EY) was the
independent certifying accountants previously engaged to audit our financial
statements for the fiscal year ended December 31, 2001. It is not expected that
a representative of EY will be present at the annual meeting. EY's report on our
consolidated financial statements for the fiscal year ended December 31, 2001
did not contain an adverse opinion or disclaimer of opinion, nor were they
qualified or modified as to uncertainty, audit scope or accounting principles.
BDO's report on our consolidated financial statements for the fiscal year ended
December 31, 2002 does not contain an adverse opinion or disclaimer of opinion,
nor were they qualified or modified as to uncertainty, audit scope or accounting
principles. The report contains an explanatory paragraph as to our ability to
continue as a going concern. The report contained no other qualifications.
During our two most recent fiscal years ended December 31, 2001 and December 31,
2002, there were no disagreements with either EY or BDO on any matter of
accounting principles or practices, financial statement disclosure, or auditing
scope or procedure which, if not resolved to EY's and BDO's satisfaction, would
have caused them to make reference to the subject matter in connection with
their report on our consolidated financial statements for such years. We filed a
Current Report on Form 8-K on November 6, 2002, to report the change of
auditors.
The amount of fees billed by our independent auditors and the nature of
the work for which these fees were billed are as follows:
Audit Fees
----------
Aggregate fees billed for BDO's audit of our annual financial
statements for the year ended December 31, 2002 totaled $55,000 and for
E&Y's review of the financial statements included in our Forms 10-Q for
the fiscal year ended December 31, 2002 totaled $23,800.
Financial Information Systems Design and Implementation Fees
------------------------------------------------------------
No fees were incurred or billed for any financial information systems
design and implementation services rendered by E&Y for the fiscal year
ended December 31, 2002.
All Other Fees
--------------
Aggregate fees billed for all other services (Rights Offering) rendered
by E&Y for the fiscal year ended December 31, 2002 totaled $84,680. The
audit committee has determined that all services rendered under "All
Other Fees" have had no impact on our auditor's independence.
VOTE REQUIRED. Pursuant to the Nevada General Corporation law, Proposal
2 will be approved if the number of votes cast in favor of the Proposal exceeds
the number of votes cast against the Proposal. Abstentions and broker non-votes
will have no effect on the outcome.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS
VOTE "FOR" THIS PROPOSAL 2.
14
REPORT TO STOCKHOLDERS
A COPY OF OUR ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED DECEMBER
31, 2002, AND ANY AMENDMENTS THERETO, AS FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION, INCLUDING FINANCIAL STATEMENTS AND SCHEDULES THERETO, WILL BE
FURNISHED WITHOUT CHARGE TO ANY STOCKHOLDER UPON WRITTEN REQUEST TO US AT 7100
TECHNOLOGY DRIVE, WEST MELBOURNE, FLORIDA, ATTENTION: WILLIAM P. KELLY,
EXECUTIVE VICE PRESIDENT - FINANCE, CHIEF FINANCIAL OFFICER AND SECRETARY.
STOCKHOLDER PROPOSALS
A stockholder proposal submitted for inclusion in the proxy statement
and form of proxy for our annual meeting of stockholders to be held in 2004 must
be received by us before December 11, 2003. Notice of a stockholder's proposal
submitted for consideration at the annual meeting of stockholders, which is not
submitted for inclusion in our proxy statement, will be considered untimely on
February 24, 2004, and the persons named in the proxies solicited for the 2004
Annual Meeting of Stockholders may exercise discretionary voting power with
respect to any such proposal. Proposals or notices should be sent to our
executive offices at 7100 Technology Drive, West Melbourne, Florida, Attention:
Secretary.
OTHER MATTERS
The board of directors does not intend to present, and has no knowledge
that others will present, any other business at the annual meeting. If, however,
any other matters are properly brought before the annual meeting, it is intended
that the persons named in the enclosed proxy will vote the shares represented
thereby in accordance with their best judgment.
Kindly date, sign and return the enclosed proxy card.
By Order of the Board of Directors
/s/ David P. Storey
-------------------------------------
David P. Storey
President and Chief Executive Officer
15
RELM WIRELESS CORPORATION
THIS PROXY IS SOLICITED ON BEHALF OF
THE BOARD OF DIRECTORS OF RELM WIRELESS CORPORATION
The undersigned, a holder of common stock of RELM WIRELESS CORPORATION,
hereby constitutes and appoints DAVID P. STOREY and WILLIAM P. KELLY, and each
of them acting individually, as the attorney and proxy of the undersigned, with
full power of substitution, for and in the name and stead of the undersigned, to
attend the Annual Meeting of Stockholders of the Company to be held on Tuesday,
May 6, 2003 at 9:00 a.m., at the offices of RELM Wireless Corporation, 7100
Technology Drive, West Melbourne, Florida, and any adjournment of postponement
thereof, and thereat to vote all shares of RELM's Common Stock which the
undersigned would be entitled to vote if personally present, as follows:
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS INDICATED, THIS PROXY
WILL BE VOTED AS RECOMMENDED BY THE BOARD OF DIRECTORS ON ALL MATTERS TO BE
CONSIDERED AT THE MEETING.
Annual Meeting of Stockholders of
RELM WIRELESS CORPORATION
May 6, 2003
---------------------------------- --------------------
COMPANY NAME
---------------------------------- --------------------
ACCOUNT NUMBER
---------------------------------- --------------------
Please date, sign and mail your proxy
Card in the envelope provided as soon as
Possible.
Please detach and mail in the envelope provided.
[X]
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PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE.
PLEASE MARK YOUR VOTE IN BLUE OR BLACK INK AS SHOWN HERE |X|
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1. ELECTION OF DIRECTORS.
NOMINEES FOR ELECTION AS
DIRECTORS:
[ ] FOR ALL NOMINEES o Donald F. U. Goebert
o David P. Storey
[ ] WITHHOLD AUTHORITY o Ralph R. Whitney, Jr.
FOR ALL NOMINEES o James C. Gale
o George N. Benjamin, III
[ ] FOR ALL EXCEPT o Randolph K. Piechocki
(See instructions below)
INSTRUCTIONS: To withhold authority to vote for any individual nominee(s),
mark "FOR ALL EXCEPT" and fill in the circle next to each
nominee you wish to withhold, as shown here: o
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2. Ratification of BDO Seidman, LLP as independent FOR AGAINST ABSTAIN
certified public accountants for the year ending
December 31, 2003. [ ] [ ] [ ]
The undersigned hereby acknowledges receipt of the notice of annual
meeting and proxy statement of RELM Wireless Corporation.
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To change the address on your account, please check the box at right and
indicate your new address n the address space above. Please note that changes to
the registered name(s) on the account may not be submitted via this method. [ ]
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Signature of Stockholder ________ Date: Signature of Stockholder ________ Date:
Note: This proxy must be signed exactly as the name appears hereon. When
shares are held jointly, each holder should sign. When signing as
executor, administrator, attorney, trustee or guardian, please give
full title as such. If the signer is a corporation, please sign full
corporate name by duly authorized officer, giving full title as such.
If signer is a partnership, please signing partnership name by
authorized person.
[X]