SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the
Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2)
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14(a)-11(c) or
Section 240.14a-12
TENNEY ENGINEERING, INC.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement if other than the
Registrant)
Payment of Filing Fee (Check the appropriate box):
[ ] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-
6(i)(2) or Item 22(a)(2) of Schedule 14A.
[ ] $500 per each party to the controversy pursuant to Exchange Act
Rule 14a-6(i)(3).
[ ] Fee computed on table below per exchange Act Rules 14a-6(i)(4)
and 0-11.
1) Title of each class of securities to which
transaction applies:
2) Aggregate number of securities to which transaction
applies:
3) Per unit price or other underlying value of
transaction computed pursuant to Exchange Act Rule 0-
11 (Set forth the amount on which the filing fee is
calculated and state how it was determined):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
[X] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for which
the offsetting fee was paid previously. Identify the previous
filing by registration statement number, or the Form or
Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
TENNEY ENGINEERING, INC.
PROXY
Proxy Solicited by Board of Directors for Annual Meeting of
Shareholders
The undersigned hereby appoints SAUL S. SCHIFFMAN and ROBERT
S. SCHIFFMAN and each of them, proxies and attorneys, with full
power of substitution at the Annual Meeting of Shareholders of
TENNEY ENGINEERING, INC. (the "Company") to be held at the offices
of the Company, 1090 Springfield Road, Union, New Jersey 07083, at
9:15 a.m. on Friday May 26, 1995, and any adjournment, with
authority to vote all the Common Stock of said Company which the
undersigned is entitled to vote as follows:
1. ELECTION OF 1 DIRECTOR FOR the nominee WITHOUT AUTHORITY
to serve until the listed below (except to vote for the
third annual meeting as marked to the nominee listed
after his election: contrary below) below
Saul S. Schiffman
(INSTRUCTIONS: To withhold authority to vote for any individual
nominee write that nominee's name in the space provided below.)
PLEASE SIGN AND RETURN IN THE ENCLOSED POSTAGE-PAID ENVELOPE
(Continued and to be signed on reverse side)
2. FOR AGAINST ABSTAIN The approval of the 1995
Incentive Stock Option Plan.
3. In their discretion, on such other business as may properly come
before the meeting or any adjournment.
Every properly signed proxy will be voted by the proxies in
accordance with the specifications made thereon. If no
specification is made, it is the intention of the proxies to vote
this proxy FOR the election of Directors and FOR Proposal 2.
Receipt is acknowledged of the Notice of Annual Meeting and
Proxy Statement of the Company dated March 31, 1995.
Dated: , 1995
Signature(s) of Shareholder(s)
Note: Executors, administrators, trustees, and others signing in
a representative capacity should indicate the capacity in which
they sign. If shares are held jointly, EACH holder should sign.
PLEASE SIGN EXACTLY AS NAME APPEARS HEREON.
TENNEY ENGINEERING, INC.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
May 26, 1995
NOTICE IS HEREBY GIVEN, that the Annual Meeting of
Shareholders of Tenney Engineering, Inc., a New Jersey corporation
(the "Company") will be held at the offices of the Company, 1090
Springfield Road, Union, New Jersey 07083 on Friday, May 26, 1995,
at 9:15 a.m., local time, to consider and act upon the following
matters:
1. To elect one (1) Director of the Company to serve
until the third succeeding annual meeting after his election
and until his respective successors are duly elected and
qualified.
2. To consider and act upon the 1995 Incentive Stock
Option Plan annexed as Exhibit A to the accompanying proxy
statement.
3. To transact such other business as may properly come
before the meeting and any and all adjournments thereof.
The Board of Directors has fixed the close of business on
March 31, 1995 as the record date for the determination of
shareholders entitled to notice of and to vote at the meeting and
any adjournments thereof.
You are cordially invited to attend the meeting in person.
Whether or not you plan to attend the meeting, you are urged to
complete, date and sign the enclosed proxy and mail it promptly in
the return envelope provided for this purpose.
By order of the Board of Directors
SAUL S. SCHIFFMAN
Secretary
March 31, 1995
1090 Springfield Road
Union, New Jersey 07083
ALL SHAREHOLDERS ENTITLED TO VOTE AT THE MEETING ARE REQUESTED TO
COMPLETE, SIGN, DATE AND PROMPTLY RETURN THE ACCOMPANYING PROXY TO
TENNEY ENGINEERING, INC., 1090 SPRINGFIELD ROAD, UNION, NEW JERSEY
07083. A RETURN ENVELOPE, WHICH REQUIRES NO POSTAGE IF MAILED IN
THE UNITED STATES, IS ENCLOSED FOR THIS PURPOSE.
TENNEY ENGINEERING, INC.
1090 Springfield Road
Union, New Jersey 07083
Tel. No. (908) 686-7870
PROXY STATEMENT
Annual Meeting of Shareholders
May 26, 1995
This proxy statement is furnished in connection with the
solicitation of proxies by the Board of Directors of Tenney
Engineering, Inc., a New Jersey corporation (the "Company"), for
use at the Annual Meeting of Shareholders to be held at the offices
of the Company, 1090 Springfield Road, Union, New Jersey 07083, on
Friday, May 26, 1995, at 9:15 a.m., local time. The approximate
date on which the form of proxy and this proxy statement are first
being mailed to shareholders is April 10, 1995.
You are requested to complete, sign and date the accompanying
proxy and return it promptly to the Company in the enclosed
envelope. The enclosed proxy may be revoked at any time before it
is exercised, by written notice to the Company bearing a later date
than the proxy, provided said notice is received by the Company
prior to the start of the meeting.
Furthermore, any shareholder attending the meeting may vote in
person whether or not they had previously submitted a proxy. Where
instructions are indicated, proxies will be voted in accordance
therewith. Where no instructions are indicated, proxies will be
voted FOR the nominee for Director set forth below, FOR the
approval of the 1995 Incentive Stock Option Plan, and with regard
to all other matters as recommended by the Board of Directors or,
if no such recommendation is given, in the discretion of the proxy
holders. Election of the directors will require a plurality of the
votes cast at the meeting by the holders of shares entitled to
vote thereon.
The Board of Directors has fixed the close of business on
March 31, 1995, as the record date for the determination of
shareholders who are entitled to notice of and to vote at the
meeting. The presence at the Annual Meeting, in person or by
proxy, of the holders of a majority of the shares outstanding on
March 31, 1995 will constitute a quorum. The Company has
outstanding on March 31, 1995, and entitled to vote with respect to
all matters to be acted upon at the meeting, 3,685,592 shares of
common stock, $.10 par value ("Common Stock"), each of which was
entitled to one vote on all matters to come before the meeting.
The cost of preparing, assembling and mailing this proxy
statement, the notice of meeting and the enclosed proxy is to be
borne by the Company.
In addition to the solicitation of proxies by use of the
mails, the Company may utilize the service of some of the officers
and regular employees of the Company (who will receive no
compensation therefor in addition to their regular salaries) to
solicit proxies personally and by telephone and telegraph. The
Company may request banks, brokers, and other custodians, nominees
and fiduciaries to forward copies of the proxy material to their
principals and to request authority for the execution of proxies.
PRINCIPAL SHAREHOLDERS
As of February 28, 1995, the following have advised the
Company that they are beneficial owners of more than five (5)
percent of the outstanding shares of the Company's Common Stock:
Name and Address of Amount Beneficially Owned Percentage
Beneficial Owner as of February 28, 1995 of Class
Robert S. Schiffman 393,395(1) 10.6%
1090 Springfield Road
Union, New Jersey 07083
(1) Includes 35,000 shares which Mr. Schiffman may purchase under
the 1981 Incentive Stock Option Plan.
PROPOSAL 1
ELECTION OF DIRECTORS
The Company's Certificate of Incorporation classifies the
Board of Directors into three classes, each of which is elected for
a three-year term. One director is to be elected at the annual
meeting, to serve until the 1998 Annual Meeting of the Shareholders
and until his successor is elected and qualified. The Board has
nominated Saul S. Schiffman, a director whose term is expiring, for
re-election to the Company's Board of Directors at the 1995 Annual
Meeting, for a term of three years, to expire at the annual meeting
in 1998 and until his successor is elected and qualified. The term
of the other three directors will continue as indicated below. Mr.
Schiffman was elected to his present term as Director by
shareholders in May 1992. The size of the Board of Directors was
reduced from 5 to 4 on February 1, 1995, when a director resigned.
If such nominee should be unable to serve, an event not now
anticipated, the proxies will be voted for such persons, if any, as
shall be designated by the Board of Directors to replace such
nominee.
A description of the nominee and incumbent directors is
provided below:
Position with the Company Year First
or Principal Occupation Elected
Nominee and Age During the Past Five Years Director
Saul S. Schiffman Vice Chairman of the Board 1945
81 (1)(2)(3) and since July 8, 1994 Secretary
Director Not Standing for Election Whose Term Expires in 1996:
David C. Schiffman Associate Profession of Psych- 1981
55 (2) (3) ology, State University of
New York at New Paltz
Directors not Standing for Election Whose Terms Expire in 1997:
Robert S. Schiffman Chairman of the Board, 1975
51 (1)(2) President and Chief Executive
Officer of the Company
David A. Schuh Self-Employed Real Estate and 1993
55 (3) Insurance Broker
(1) Member of Executive Committee.
(2) Saul S. Schiffman is the father of Robert S. Schiffman and
David C. Schiffman.
(3) Member of Stock Option Committee.
The Company has no standing audit, nominating or compensation
committee or committees performing similar functions.
The Board of Directors held 4 meetings and the Executive
Committee held 6 meetings in 1994. No Director attended fewer than
75% of the Board, and Committee, meetings, of which he was a
member, held during 1994.
Security Ownership of Management
The following table sets forth the information as of February
28, 1995, regarding the beneficial ownership of common stock by
each Director, Nominee for Director and the Chief Executive Officer
of the Company and by all Directors and Executive Officers as a
group.
Amount Percentage
Name Beneficially Owned of Class
Robert S. Schiffman 393,395(1) 10.6%
David a Schuh None N/A
Saul S. Schiffman 107,675 2.9%
David C. Schiffman 179,707 4.9%
All Directors and Officers
as a group 685,777(2) 18.6%
(1) Includes 35,000 shares which Mr. Schiffman may purchase under
the 1981 Incentive Stock Option Plan.
(2) Includes 35,000 shares which all Officers and Directors may
purchase under the 1981 Incentive Stock Option Plan.
EXECUTIVE COMPENSATION
Summary Compensation Table
The following table summarizes the annual and long-term
compensation of the Company's Chief Executive Officer for fiscal
1994, 1993, and 1992. No other executive officer or employee of
the Company received salary and bonus in 1994 in excess of
$100,000.
Annual
Compensation
Name and
Principal Position Year Salary All Other Compensation
Robt. S. Schiffman 1994 $197,200 $4,912
Chairman of the
Board, President
and CEO 1993 200,200 3,536
1992 206,404 3,538
(1) Inclusive of Company-paid life insurance in the amount of
$200,000 for Robert S. Schiffman and dollar value of personal
use of Company-provided automobile.
Employment Agreement
On December 18, 1992, the Company entered into an Employment
Agreement with Robert S. Schiffman for a term ending December 31,
1996, at an annual salary of not less than $200,000. On the same
day, the Company entered into a licensing agreement with a private
company to manufacture certain products under the Company's name
and it agreed to make Mr. Schiffman's services available to the
licensee through the end of 1996. The licensee is obligated to pay
the Company $120,000 per year for approximately 40% of Mr.
Schiffman's time.
Compensation of Directors
During 1994, each Director who was not a employee of the
Company earned an annual fee at the rate of $4,800 ($400 per
month).
Stock Option Information
The Company's 1981 Incentive Stock Option Plan for officers
and key employees expired in 1991 except for then outstanding
options. Robert S. Schiffman holds an option to purchase 35,000
shares on or before October 17, 1996 at a price of $.34375 per
share. Other employees hold options to purchase 22,000 shares on
or before October 17, 1996 at a price of $.3125 per share. No
options were exercised during 1994. The market value of the
Company's stock on December 31, 1994 was less than the option
exercise price. The plan provided that options could be granted
from time to time at a price of not less than 100% of the fair
market value of the common stock as of the date of grant for
officers and employees who own less than 10% of the voting stock of
the Company and 110% of fair market value for those officers and
employees who own more than 10% of the voting stock (affiliate
employees). Options granted were exercisable immediately and
terminate no later than ten years from date of grant (five years
from date of grant for affiliate employees).
PROPOSAL 2
APPROVAL OF 1995 INCENTIVE STOCK OPTION PLAN
At the Annual Meeting, the holders of the Company's Common
Stock will be presented with a proposal to approve the adoption of
the 1995 Incentive Stock Option Plan (the "Plan") described herein.
The Plan was adopted by the Company's Board of Directors on
February 3, 1995, subject to stockholder approval. No options
under the Plan have been granted as of February 28, 1995.
A brief description of the material features of the Plan
follows, but the description is qualified in its entirety by the
terms of the Plan, a copy of which is included as Exhibit A to this
Proxy Statement.
General
The Plan authorizes the granting of "incentive stock options"
(as defined in Section 422 of the Internal Revenue Code of 1986, as
amended, (the "Code")). Options may be granted under the Plan for
a period through January 31, 2005 unless the Plan is earlier
terminated. The Plan may be wholly or partially amended or
otherwise modified, suspended or terminated at any time by the
Board of Directors except that stockholder approval is required to
increase the number of shares that may be issued under the Plan, to
reduce the minimum option price below the fair market value of the
shares when an option is granted, to extend the period during which
an option may be exercised or to modify the Plan in a manner
requiring stockholder approval under Rule 16b-3 of the Securities
and Exchange Commission. The Plan is not subject to the provisions
of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), and is not a qualified Plan under Section 401(a) of the
Code. Proceeds received by the Company from the sale of Common
Stock pursuant to the exercise of options granted under the Plan
will be used for general corporate purposes.
Securities Subject to the Plan
Subject to approval by the holders of the Company's Common
Stock, the aggregate number of shares which may be issued upon
exercise of options granted under the Plan shall not exceed
400,000.
There is no restriction as to the number of options or as to
the maximum number of shares that may be granted to any employee
subject to the following. Options granted under the Plan may be
granted with respect to any number of shares of Common Stock
subject to the limitation that the aggregate fair market value of
such shares with respect to which such options are exercisable for
the first time by an employee during any one calendar year (under
all such plans of the Company, any parent and any subsidiary) shall
not exceed $100,000. For purposes of this paragraph fair market
value of the shares subject to an option shall be determined at the
time an option is granted.
If an option expires or is cancelled without having been fully
exercised, the number of shares as to which such option was not
exercised prior to its expiration or cancellation may again be
optioned under the Plan. The Plan provides for appropriate
adjustments in the number and kind of shares subject to the Plan
and to outstanding options in the event of a stock split, stock
dividend or certain other similar changes in the Company's Common
Stock and in the event of a merger, consolidation or certain other
types of recapitalization.
Administration of the Plan
The Plan provides for administration by a committee
("Committee"), consisting of at least three Directors, appointed
from time to time (and removable) by the Company's Board of
Directors. No person is eligible to serve on the Committee unless
such person is then a "disinterested person" within the meaning of
paragraph (c)(2) of Rule 16b-3. No option may be granted to a
member of the Committee. The current members of the Committee are
Messrs. Saul S. Schiffman, David A. Schiffman and David Schuh.
In additional to administering the Plan, the Committee is also
authorized to interpret the Plan, to adopt such rules for the
administration, interpretation and application of the Plan as are
consistent therewith and to interpret, amend or revoke any such
rules.
Members of the Committee will receive such compensation for
their services as may be determined by the Board. All expenses and
liabilities that the members of the Committee incur in connection
with the administration of the Plan will be borne by the Company.
Eligibility and Participation
Any executive or other key employee of the Company or of any
corporation which is then a subsidiary of the Company (as such
terms are defined in the Plan), including Officers, will be
eligible to be granted options. Directors of the Company are
eligible to be granted options only if they are also employees.
The Committee is authorized to determine which individuals are
key employees, to select from among them the individuals to whom
options are to be granted, to determine the number of shares to be
subject to such options, and to establish the terms and conditions
of the options, consistent with the Plan.
Terms of Options
Exercisability of Options. Options are exercisable at such
times and in such installments (which may be cumulative) as the
Committee may provide in the terms of each individual option.
Generally, options will be exercisable immediately except that no
option granted to an officer will be exercisable during the first
six months after such option is granted.
Options are exercisable in whole or in part by written notice
to the Company, specifying the number of shares being purchased and
accompanied by payment of the purchase price for such shares. The
option exercise price may be paid in cash or by check except that
with the permission of the Committee it may be paid with the
delivery of shares of the Company's Common Stock having a value
equal to the option exercise price or a combination of such shares
and cash. The Committee may, as a condition to the exercise of any
option, require that the optionee deliver such representations and
documents as it deems necessary to effect compliance with
applicable federal and state securities laws and regulations. The
Committee may also take whatever additional action it deems
appropriate to effect such compliance.
Stock Option Agreements: Consideration to the Company. In
consideration of the granting of an option, the employee to whom
such option is granted will agree, in a written stock option
agreement (a "Stock Option Agreement"), to remain in the employ of
the Company, a parent corporation or a subsidiary of the Company,
for a period of at least one year after the option is granted.
Nothing in the Plan or in any Stock Option Agreement will confer
upon any optionee any right to continue in the employ of the
Company, a parent corporation or any subsidiary of the Company, or
will interfere with or restrict in any way the rights of the
Company, a parent corporation or a subsidiary of the Company, to
discharge any optionee at any time for any reason whatsoever, with
or without cause.
Purchase Price of Shares Subject to Options. The price of the
shares of Common Stock subject to each option shall be set by the
Committee; provided, however, that the price per share of an option
shall be not less than 100% of the fair market value of such shares
on the date such option is granted; provided, further, the price
per share shall not be less than 110% of the fair market value of
such shares on the date such option is granted in the case of an
individual then owning (within the meaning of Section 424(d) of the
Code) more than ten percent of the total combined voting power of
all classes of stock of the Company, any subsidiary or any parent
corporation.
Non-Assignability. Options may be transferred only by will or
by the laws of descent and distribution. During a participant's
lifetime, options are exercisable only by the participant.
Expiration of Options. Options granted under the Plan shall
be for a term fixed by the Committee but not longer than ten years,
or five years in the case of an option granted to an optionee
owning 10% or more of the Company's outstanding stock at the date
of grant. Options granted under the Plan may not be exercised
unless the optionee at the time of exercise is an employee of the
company or one of its subsidiaries except in the case of
termination of employment by reason of disability or death in which
case the option may be exercised up to 12 months after such event
but in no case after the original expiration date of the option.
Adjustments upon Change in Capitalization. If the outstanding
shares of Common Stock subject to options are changed into or
exchanged for a different number or kind of shares of the Company
or other securities of the Company by reason of merger,
consolidation, recapitalization, reclassification, stock split-up,
stock dividend or combination of shares, the Board of Directors
will make an appropriate and equitable adjustment in the number and
kind of shares as to which all outstanding options, or portions
thereof then unexercised, will be exercisable, to the end that
after such event the optionee's proportionate interest will be
maintained as before the occurrence of such event.
Transfer Restrictions. Unless otherwise approved in writing
by the Committee, no shares acquired upon exercise of any option by
any officer (as defined in Rule 16a-1(f) of the Securities and
Exchange Commission) may be sold, assigned, pledged, encumbered or
otherwise transferred until at least six months have elapsed from
(but excluding) the date that such option was granted. The
Committee, in its discretion, may impose such other restrictions on
the transferability of the shares purchasable upon the exercise of
an option as it deems appropriate. Any such other restriction
shall be set forth in the respective Stock Option Agreement and may
be referred to on the certificate evidencing such shares. The
Committee may require the employee to give the Company prompt
notice of any disposition of shares of stock, acquired by exercise
of an option, within two years from the date of granting such
option or one year after the transfer of such shares to such
employee.
No Rights as a Stockholder. The holders of options will not
be, nor have any of the rights or privileges of, a stockholder of
the Company as to shares covered by an option until such shares are
issued by the Company and delivered to such holders.
Conformity to Securities Laws. The Plan is intended to
conform to the extent necessary with all provisions of the
Securities Act of 1933, as amended and of the Securities Exchange
Act of 1934, as amended and any and all regulations and rules
promulgated by the Securities and Exchange Commission thereunder,
including without limitation Rule 16b-3. The Plan will be
administered, and options will be granted and may be exercised,
only in such a manner as to conform to such laws, rules and
regulations.
Federal Income Tax Consequences
The following discussion is a general summary of the material
federal income tax consequences to participants in the Plan. The
discussion is based on the Code, regulations thereunder, rulings
and decisions now in effect, all of which are subject to change.
The summary does not discuss all aspects of federal income taxation
that may be relevant to a particular participant in light of such
participant's personal investment circumstances. Also, state and
local income taxes are not discussed and may vary from locality to
locality.
Holders of options will not be considered to have received
taxable income upon either the grant of the option or its exercise.
Upon the sale or other taxable disposition of the shares of the
Common Stock, long-term capital gain will normally be recognized in
the full amount of the difference between the amount realized and
the option exercise price if no disposition of the shares has taken
place within either (a) two years from the date of grant of the
option or (b) one year from the date of transfer of the shares of
the Common stock to the optionee upon exercise. If the shares of
the Common Stock are sold or otherwise disposed of before the end
of the one-year period or the two-year period, the difference
between the option exercise price and the fair market value of the
shares of the Common Stock on the date of the option's exercise
will be taxed as ordinary income; the balance of the gain, if any,
will be taxed as capital gain. If the shares of the Common Stock
are disposed of before the expiration of the one-year period or the
two-year period and the amount realized is less than the fair
market value of the shares at the date of exercise, the optionee's
ordinary income is limited to the amount realized less the option
exercise price paid. The Company will be entitled to a tax
deduction in regard to an option only to the extent the optionee
has ordinary income upon sale or other disposition of the shares of
the Common Stock.
The tax consequences resulting from the exercise of an option
through delivery of already-owned shares of Common Stock are not
completely certain. In published rulings and proposed regulations,
the Internal Revenue Service has taken the position that generally
the employee will recognize no income upon such stock-for-stock
exercise (subject to the discussion above), that, to the extent an
equivalent number of shares is acquired, the employee's basis in
the shares acquired upon such exercise is equal to the employee's
basis in the surrendered shares increased by any compensation
income recognized by the employee, that the employee's basis in any
additional shares acquired upon such exercise is zero, and that any
sale or other disposition of the acquired shares within the one-
year or two-year period described above will be viewed as a
disposition of the shares with the lowest basis first.
The difference between the fair market value of the shares of
Common Stock on the Exercise date and the exercise price of an
incentive stock option is generally deemed to be a "tax preference"
under the alternative minimum tax rules of the Code.
Vote Required
The affirmative vote of a majority of the shares of the
Company's Common Stock represented in person or by proxy and
entitled to vote at the Annual Meeting will be required for
approval of the 1995 Incentive Stock Option Plan. In addition, the
total votes cast must be over 50 percent of the outstanding shares
of Common Stock. For these purposes, abstentions will have the
same effect as a vote against and "broker non-votes" will not be
deemed to be votes cast.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE "FOR"
ADOPTION OF THE 1995 INCENTIVE STOCK OPTION PLAN.
AUDITORS
Zeller Weiss & Kahn have audited the financial statements of
the Company since 1994 and have been selected by the Board of
Directors to audit the Company's financial statements for the year
1995.
SHAREHOLDER PROPOSALS FOR
NEXT ANNUAL MEETING
Shareholders may present proposals which are proper subjects
for consideration at the 1996 Annual Meeting of Shareholders of the
Company for inclusion in its proxy material relating to that
meeting. These proposals should be submitted in writing and
otherwise in the manner specified by Securities and Exchange
Commission rules to Tenney Engineering, Inc., 1090 Springfield
Road, Union, New Jersey 07083. Attention: Secretary. They must
be received by January 31, 1996, in order to be included in the
proxy materials for the 1996 Annual Meeting.
GENERAL INFORMATION AND OTHER MATTERS
Management does not know of any other matters which are likely
to be brought before the meeting. However, in the event that any
other matters properly come before the meeting, the persons named
in the enclosed proxy will vote the proxy in accordance with their
judgment on such matters.
By order of the Board of Directors
By SAUL S. SCHIFFMAN
Secretary
March 31, 1995
1090 Springfield Road
Union, New Jersey 07083
TENNEY ENGINEERING, INC.
1995 INCENTIVE STOCK OPTION PLAN Exhibit A
1. OBJECTIVES OF THE PLAN
Tenney Engineering, Inc. (the "Corporation") hereby
establishes its 1995 Incentive Stock Option Plan (the "Plan") upon
the terms and conditions hereinafter stated. The purpose of the
Plan is intended to encourage ownership of Common Stock of the
Corporation by officers and key employees of the Corporation and
its present and future Subsidiaries, and to provide incentives for
them to put forth maximum efforts for the success of the
Corporation. By extending to officers and key employees the
opportunity to acquire a proprietary interest in the Corporation
and to participate in its success, the Plan may be expected to
benefit the Corporation and its shareholders by making it possible
for the Corporation to attract and retain the best available talent
and by rewarding key management and technical personnel for their
part in increasing the value of the Corporation's shares.
Accordingly, the Corporation will from time to time, on or before
January 31, 2005, grant to such employees as may be selected in the
manner hereinafter provided, options to purchase shares of Common
Stock, $.10 par value, of the Corporation.
2. DEFINITIONS
Unless otherwise required by the context, the following terms
when used in the Plan shall have the meanings set forth in this
Section 2.
(a) Affiliated Employee: An Employee to whom an Option is
granted under the Plan who, at the time of grant of such Option,
owns stock possessing more than 10% of the total combined voting
power of all classes of stock of the Corporation or of its Parent
or Subsidiary inclusive of shares attributed to the Employee by the
provisions of Section 424(d) of the Code or any other Section
thereof.
(b) Board of Directors: The Board of Directors of the
Corporation.
(c) Common Stock: The Common Stock of the Corporation, par
value $.10 per share, or such other class of shares or other
securities as may be applicable pursuant to the adjustment
provisions of Section 4.
(d) Code: The Internal Revenue Code of 1986, as heretofore
or hereafter amended.
(e) Committee: The committee designated to administer the
Plan pursuant to the provisions of Section 3.
(f) Corporation: Tenney Engineering, Inc., a New Jersey
corporation, its successors and assigns.
(g) Employee: A key employee of the Company or a Subsidiary,
including an officer or director who is such a key employee and who
has not attained the age of seventy-five years:
(h) Exchange Act: The Securities Exchange Act of 1934, as
amended.
(i) Fair Market Value: Fair Market Value on any date means
the average of the high and low sales prices of the Common Stock on
such date on the principal national securities exchange on which
such Common Stock is listed or admitted to trading, or if such
Common Stock is not so listed or admitted to trading, the
arithmetic mean of the per share closing bid price and per share
closing asked price on such date as quoted on the National
Association of Securities Dealers Automated Quotation System or
such other market in which such prices are regularly quoted, or, if
there have been no published bid or asked quotations with respect
to the Common Stock on such date, the Fair Market Value shall be
the value established by the Board in good faith and in accordance
with Section 422 of the Code provided, however that if such method
of determining Fair Market Value shall not be consistent with the
regulations of the Secretary of the Treasury or his delegate at the
time applicable to an Incentive Stock Option, Fair Market Value
shall be determined in accordance with such regulations and shall
mean the value as so determined.
(j) Incentive Stock Options: Options intended to meet the
requirements of an Incentive Stock Option as defined in Section 422
of the Code as in effect at the time of the grant of any such
option or any statutory provision that may hereafter replace such
Section.
(k) Officer: An officer of the Corporation as defined in
Rule 16a-1(f) under the Exchange Act as such Rule may be amended in
the future.
(l) Optionee: An Employee to whom an option is granted under
the Plan.
(m) Options: The options granted from time to time under the
Plan.
(n) Parent: Any corporation (other than the Corporation) in
an unbroken chain of corporations ending with the Corporation if,
at the time of granting of the Option, each of the corporations
other than the Corporation owns stock possessing 50% or more of the
total combined voting power of all classes of stock in one of the
other corporations in such chain.
(o) Plan: Tenney Engineering, Inc. 1995 Incentive Stock
Option Plan herein set forth, as the same may from time to time be
amended.
(p) Rule 16b-3: Rule 16b-3 under the Exchange Act as such
Rule may be amended in the future.
(q) Subsidiary: Any corporation (other than the Corporation)
in an unbroken chain of corporations beginning with the Corporation
if, at the time of granting of the Option, each of the corporations
other than the last corporation in the unbroken chain owns stock
possessing 50% or more of the total combined voting power of all
classes of stock in one of the other corporations in such chain.
3. COMMITTEE: INTERPRETATION AND REGULATIONS
(a) The Plan shall be administered by a committee appointed
by the Board of Directors consisting of not less than three
directors of the Corporation. The members of the Committee shall
in the first instance be elected by the Board of Directors at the
meeting of the Board of Directors at which the Plan is approved and
thereafter at the first meeting of the Board of Directors following
each annual meeting of stockholders. The term of each member of
the Committee shall be until his successor is chosen and qualified.
The provisions of the By-Laws of the Corporation pertaining to
resignation or removal of officers and vacancies in the offices
shall apply to members of the Committee. No person appointed to
the Committee shall be eligible, nor have been eligible for one
year prior to appointment, for the grant of a stock option pursuant
to the Plan or any other plan of the Corporation or any of its
affiliates, while serving on the Committee and no person shall be
appointed to or shall serve as a member of the Committee unless at
the time of such appointment and service he shall be a
"disinterested person" as defined in Rule 16b-3 or any other
provision that may replace such Rule and be in effect at such time.
(b) The Committee shall have full power to interpret and
administer the Plan and full authority to act in selecting the
Employees to whom Options will be granted, in determining the
number of shares of Common Stock to be optioned to each such
Employee and the terms and conditions of Options granted under the
Plan and shall have the power to make regulations for carrying out
the Plan and make such changes in such regulations as from time to
time the Committee deems proper. Any interpretation by such
Committee of the terms and provisions of the Plan and the
administration thereof, and all action taken by the Committee,
shall be final, binding and conclusive on the Corporation, its
stockholders, Subsidiaries, all Employees, and upon their
respective legal representatives, successors and assigns, and upon
all other persons claiming under or through any of them.
(c) Members of the Board of Directors and members of the
Committee acting under the Plan shall be fully protected in
replying in good faith upon the advice of counsel and shall incur
no liability except for gross negligence or willful misconduct in
the performance of their duties or as expressly provided by
statute.
(d) The fact that a member of the Board of Directors shall at
the time be, or shall theretofore have been or thereafter may be,
a person who has received or is eligible to receive an Option shall
not disqualify him from taking part in and voting at any time as a
member of the Board of Directors in favor of or against any
amendment or repeal of the Plan.
4. STOCK SUBJECT TO THE PLAN-ADJUSTMENTS
The shares of Common Stock to be issued upon exercise of
Options granted under this Plan shall be made available, at the
discretion of the Board of Directors, either from the authorized
but unissued shares of Common Stock or from shares of Common Stock
reacquired by the Corporation, including shares purchased in the
open market.
Subject to the provisions of the next succeeding paragraph of
this Section 4, the aggregate number of shares of Common Stock for
which Options may be granted under this Plan shall not exceed
400,000 shares.
If, prior to January 31, 2005, an Option granted under this
Plan shall expire or terminate for any reason without having been
exercised in full, the shares subject to such Option to the extent
not purchased by the Optionee shall (unless this Plan shall have
been terminated) become available for option to other Employees.
In the event of a reorganization, recapitalization, stock
split, stock dividend, combination of shares, merger, consolidation
or any other change in the corporate structure of the Corporation
affecting shares of its Common Stock, or a sale by the Corporation
of all or part of its assets, or any distribution to stockholders
other than a cash dividend, the Committee shall recommend and the
Board of Directors shall make appropriate adjustment in the number
and kind of shares authorized by the Plan, in the aggregate and to
any individual Employee, in the number and kind of shares subject
to unexercised Options theretofore granted and in the option price
of such shares in order to prevent substantial dilution or
enlargement of the rights granted to, or available for
participants, in the Plan; provided, however, that all adjustments
made as the results of the foregoing in respect of each Option
shall be made so that such Option shall continue to be an Incentive
Stock Option as defined in Section 422 of the Code, as amended, or
any statutory provision that may hereafter replace such Section, as
in effect at the time. No fractional shares shall be issued and
any fractional shares resulting from adjustments pursuant to this
paragraph shall be eliminated from the respective Option.
5. OPTION PRICE
The purchase price per share of Common Stock under each Option
shall be determined by the Committee, but shall not be less than
100%, or in the case of an Affiliated Employee 110%, of the Fair
Market Value of the Common Stock on the date the Option is granted,
and in no event less than the par value of the Common Stock.
6. ELIGIBILITY OF OPTIONEES: AWARD OF OPTIONS
Options will be granted only to persons who are Employees. No
option may be awarded to any member of the Committee.
Subject to the terms, provisions and conditions of this Plan,
the Committee shall have exclusive jurisdiction (a) to select the
Employees to be granted Options (it being understood that subject
to the limits as to number of shares specified below under this
Plan, more than one Option may be granted to an Employee under this
Plan and options may be granted to an Employee under this and other
stock option plans of the Corporation, concurrently or
sequentially), (b) to determine the number of shares subject to
each Option, (c) to determine the time or times when the Options
will be granted, (d) to determine the option price of the shares
subject to each Option, which price shall be not less than the
minimum specified in Section 5 of the Plan, (e) to determine the
time or times when each Option may be exercised within the limits
stated in this Plan, and (f) to prescribe the form, which shall be
consistent with this Plan, of the instruments evidencing any
Options granted under this Plan. Except as the Committee may
otherwise provide with respect to Options granted to Optionees who
are not Officers, no Option may be exercised in whole or in part
during the first six months after such Option is granted.
Each award of Options shall be evidenced by an Incentive Stock
Option agreement with provisions not inconsistent with the Plan and
as approved by the Committee (which terms and conditions need not
be the same in each case and may be changed from time to time).
The Incentive Stock Option agreement shall contain such terms and
conditions as may be necessary or requisite in the sole opinion of
the Committee to qualify such Options as "Incentive Stock Options"
under Section 422 of the Code. Each provision of the Plan and of
each Incentive Stock Option granted hereunder shall be construed so
that each Option shall be an Incentive Stock Option, as defined in
the Code, and any provision that cannot be so construed shall be
disregarded.
Each Option granted under this Plan shall terminate not later
than ten years, or if granted to an Affiliated Employee, five
years, after the date on which it was granted. The Committee may,
in its discretion, prescribe a shorter period for any individual
Option or Options. Subject to the provisions of Sections 9 and 11
hereof, an Option may only be exercised while the Optionee is an
Employee of the Corporation or a Parent or Subsidiary, or a
corporation or Parent or Subsidiary thereof, issuing or assuming a
stock option in a transaction to which Section 424(a) of the Code
applies.
Options granted under this Plan may be granted with respect to
any number of shares of Common Stock subject to the limitation that
the aggregate Fair Market Value of such shares with respect to
which such options are exercisable for the first time by an
Employee during any one calendar year (under all such plans of the
Corporation, any Parent and any Subsidiary) shall not exceed
$100,000 as provided in Section 422(d) of the Code. For purposes
of this paragraph Fair Market Value of the shares subject to an
Option shall be determined at the time an option is granted.
7. NON-TRANSFERABILITY OF OPTION
No Option granted under this Plan shall be transferable by the
Optionee otherwise than by his last will and testament, or by the
laws of descent and distribution, and such Option shall be
exercisable during his lifetime only by him.
8. EXERCISE OF OPTIONS
A person electing to exercise an Option shall give written
notice to the Secretary of the Corporation of such election and the
number of shares he has elected to purchase, and shall, at the time
of exercise, tender the full cash purchase price of the shares he
has elected to purchase, or with the consent of the Committee
through the delivery of shares of the Corporation's Common Stock
(duly endorsed for transfer and with transfer taxes paid) having a
Fair Market Value (on the tender date) equal to the option price or
a combination thereof, accompanied, if required by the Committee,
by a written representation in form satisfactory to the Committee
that at such time it is his then present intention to acquire the
shares being purchased for investment, and not with a view to, or
for sale in connection with, a distribution thereof. Until the
person electing to exercise his Option has made such payment,
and/or tendered certificates for shares of Common Stock, and has
had issued to him a certificate or certificates for the shares so
purchased, he shall possess none of the rights of a stockholder
with respect to any such share or shares. No holder of an Option
shall have any of the rights of a stockholder with respect to any
shares covered by such Option until he shall become the holder of
record of such shares.
The Committee, in its sole discretion, may establish
procedures whereby an Optionee, subject to the requirements of Rule
16b-3, Regulation T, federal income tax laws, and other federal,
state and local tax and securities laws, can exercise an Option or
a portion thereof without making a direct payment of the option
price to the Corporation. If the Committee so elects to establish
a cashless exercise program, the Committee shall determine, in its
sole discretion, and from time to time, such administrative
procedures and policies as it deems appropriate and such procedures
and policies shall be binding on any Optionee wishing to utilize
the cashless exercise program.
The Corporation shall have the right to deduct from any cash
payment made under the Plan or to the extent permitted by law any
other payment due an Optionee any federal, state or local income,
or other taxes required by law to be withheld with respect to such
payment. Participants shall be required to satisfy any liability
for withholding taxes as a prerequisite to the Corporation's
obligation to deliver shares or securities of the Corporation upon
exercise of a Stock Option.
Any Stock Option may provide by the grant that the recipient
of such award may elect, in accordance with any applicable
regulations, to pay a portion or all of the amount of the required
withholding taxes in shares of Common Stock. In that event, the
Optionee shall authorize the Corporation to withhold, or shall
agree to deliver to the Corporation, shares owned by such Optionee
having a Fair Market Value equal to the amount of withholding tax
liability.
If an Optionee makes a disposition, within the meaning of
Section 424(c) of the Code and regulations promulgated thereunder,
of any Common Stock issued to such Optionee pursuant to the
exercise of an Option within the two-year period commencing on the
day after the date of the grant or within the one-year period
commencing on the day after the date of transfer of such Common
Stock to the Optionee pursuant to such exercise, the Optionee
shall, within ten (10) days of such disposition, notify the
Corporation thereof, by delivery of written notice to the
Corporation at its principal executive office.
9. TERMINATION OF EMPLOYMENT
If and when an Optionee shall cease to be an Employee of the
Corporation or a Parent or subsidiary thereof, or of a corporation
or Parent or Subsidiary thereof issuing or assuming a stock option
in a transaction to which Section 424(a) of the Code applies, any
Option granted to him under this Plan shall terminate, provided
that if the cessation of employment is due to his death or
disability, the option may be exercised during the time and in the
manner provided in Section 11 of this Plan, but not later than the
termination date of the Option, and not to a greater extent than
the Employee would have been entitled to immediately prior to his
cessation of employment or death. Any question as to whether and
when there as been cessation or employment, or permanent and total
disability of an Employee (as defined in Section 11) shall be
determined by the Committee, and its determination of such
questions shall be final.
In the event the Optionee is employed by a Subsidiary of the
Corporation and if (i) such Subsidiary ceases to be a Subsidiary
and (ii) such Optionee is after such date not employed by the
Corporation or a Parent or Subsidiary, then the Option may be
exercised (with respect to all or any part of the unexercised
portion of such Option regardless of the exercise dates provided by
the Option agreement at any time within one month after the
Subsidiary ceased to be a Subsidiary, but in no event after the
expiration of the term of the Option. Nothing in the Plan or in
any Option awarded pursuant to the Plan or in any Option agreement
shall confer upon any Employee the right to continue in the employ
of the Corporation or any Subsidiary or interfere in any way with
the right of the Corporation or any Subsidiary to terminate his
employment at any time for any reason, with or without cause.
10. LEGEND OF STOCK CERTIFICATES
Shares of stock issued on exercise of Options may, in the
discretion of the Committee, be stamped with a legend to the effect
(a) that the shares have not been registered under the Securities
Act of 1933, as amended, and/or (b) that they may not be sold,
transferred, pledged or hypothecated in the absence of an effective
Registration Statement for the shares under the Securities Act of
1933, as amended, or an opinion of counsel to the Corporation that
registration is not required under said Act.
11. DEATH OR DISABILITY OF OPTIONEE
Should an Optionee die while in the employ of the Corporation
or a Parent or Subsidiary any Option theretofore granted to him
under this Plan may be exercised by the Optionee's estate or by the
person designated in such Optionee's last will and testament;
provided the Option is so exercised within twelve (12) months of
such death but not later than the termination date of the Option,
and provided further that the Option may be exercised only if and
to the extent that the Optionee was entitled to exercise it at the
date of his death.
Should an Optionee become permanently and totally disabled, as
defined in Section 105(d)(4) of the Code and regulations
promulgated with respect thereto, while in the employ of the
Corporation or a Parent or Subsidiary any option theretofore
granted to him under the Plan may be exercised by him until the
later of the following dates: (a) three (3) months less one day,
after cessation of employment by the Corporation, a Parent or
Subsidiary or (b) twelve (12) months after he becomes permanently
and totally disabled, provided however no Option may be exercised
later than the termination date of the Option and only if and to
the extent that the Optionee was entitled to exercise it at the
date of the termination of his employment by the Corporation, its
Parent or a Subsidiary.
12. EMPLOYEES' AGREEMENTS TO SERVE
Each Employee granted an Option shall enter into an agreement
with the Corporation or any of its Subsidiaries as may be
designated by the Committee or the Board of Directors, agreeing
that he will remain in the employ of the Corporation or such
Subsidiary or, at the election of the Corporation from time to
time, the Corporation itself, its Parent, or any of its other
Subsidiaries, for a period of at least twelve (12) months after the
date of grant of the Option (provided, however, that in the event
an Employee is granted two options concurrently under this Plan or
under this and any other stock option plan of the Corporation, such
agreement need relate to only one period of employment of at least
12 months) and that he will, during such employment, devote his
full time, energy and skill to the service of the Corporation,
Parent, or such Subsidiary and the promotion of its interests,
subject to vacations, sick leave and other absences in accordance
with the employing corporation's regular policies.
13. AMENDMENTS TO PLAN
The Board of Directors of the Corporation may at any time
terminate or from time to time modify or suspend this Plan,
provided that no such modification without the approval of
stockholders shall:
(a) increase the maximum number of shares as to which Options
may be granted under this Plan subject to adjustment in accordance
with Section 4;
(b) permit the granting of options under this Plan at any
option price less than 100% of the Fair Market Value of the stock
at the date of grant;
(c) permit exercise of an Option unless full payment for the
shares as to which the Option is exercised is made at the time of
purchase;
(d) extend the period during which Option may be exercised or
increase the extent to which Options may be exercised during any
period;
(e) abolish or reduce the powers of the Committee, change
eligibility for membership on the Committee or permit the grant of
Options to members of the Committee; or
(f) change the provisions of this Section 13; or
(g) change any provision requiring Stockholder approval under
Rule 16b-3.
14. MERGER, CONSOLIDATION OR LIQUIDATION
If at any time prior to the termination of an Option, the
Board of Directors of the Corporation resolves (a) to make the
Corporation a party to any merger or consolidation under the terms
of which the Corporation shall not be the surviving company and
which does not provide that the surviving company shall assume the
Option (which shall mean an assumption which complies with and
qualifies under Section 424(a) of the Code) or if the Corporation
shall be the surviving corporation in such merger but such merger
involves an exchange of cash and/or other property for the Common
Stock of the Corporation outstanding immediately prior to the
merger, or (b) to liquidate the Corporation, then, during the
period commencing on the date of mailing the notice to the
stockholders of the Corporation of a meeting of the stockholders to
vote on such proposed merger, consolidation or liquidation, and
ending on the date five days prior to the date specified by the
Board of Directors for the voting by the stockholders on such
proposed merger, consolidation or liquidation, the Option may be
exercised with respect to all or any part of the unexercised
portion of the Option regardless of the exercise dates provided
therein. In the event a merger or consolidation is effected in
which the Corporation is not the surviving company or if it is the
surviving corporation and such merger involves an exchange of cash
and/or other property for the Common Stock of the Corporation
outstanding immediately prior to the merger, each Option granted
under the Plan shall terminate on the date of filing the agreement
of merger or consolidation with the Secretary of State of New
Jersey, except to the extent that it is assumed by the surviving
corporation (but only in those cases where the Corporation is not
the surviving corporation) which shall mean assumed in a
transaction to which Section 424(a) of the Code applies. In the
event of liquidation of the Corporation, the Option shall terminate
two business days prior to the date of filing of a Certificate of
Dissolution of the Corporation with the Secretary of State of New
Jersey, except to the extent it is assumed by another corporation
which shall mean assumed in a transaction to which Section 424(a)
of the Code applies.
15. EFFECTIVENESS OF THE PLAN
The Plan shall be effective on February 3, 1995, the date of
adoption by the Board of Directors, subject to approval of the Plan
by the affirmative vote, either in person or by proxy, of the
holders of a majority of the securities of the Corporation present,
or represented, and entitled to vote at the meeting of stockholders
next following such date, and before January 31, 1996, on a
proposal to approve the Plan, provided a quorum is present.
Options may be granted prior to such Stockholder approval;
provided, however, that such Options shall not be exercisable prior
to the time when the Plan is approved by the Stockholders;
provided, further, that if such approval has not been obtained at
the Stockholders meeting next following February 3, 1995 and before
January 31, 1996, all Options previously granted under the Plan
shall thereupon be cancelled and become null and void. The
Corporation shall take such actions with respect to the Plan as may
be necessary to satisfy the requirements of Rule 16b-3(b).
16. TITLES
Titles are provided herein for convenience only and are not to
serve as a basis for interpretation or construction of the Plan.
17. CONFORMITY TO SECURITIES LAWS
The Plan is intended to conform to the extent necessary with
all provisions of the Securities Act and the Exchange Act and any
and all regulations and rules promulgated by the Securities and
Exchange Commission thereunder, including without limitation Rule
16b-3. Notwithstanding anything herein to the contrary, the Plan
shall be administered, and Options shall be granted and may be
exercised, only in such a manner as to conform to such laws, rules
and regulations. To the extent permitted by applicable law, the
Plan and Options granted hereunder shall be deemed amended to the
extent necessary to conform to such laws, rules and regulations.