SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the Com-
mission Only (as permitted by
Rule 14a-6 (e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule14a-11(c) or Rule14a-12
Merrimac Industries, 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):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) 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):
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5) Total fee paid:
[ ] 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:
MERRIMAC INDUSTRIES, INC.
41 Fairfield Place
West Caldwell, NJ 07006-6287
Mason N. Carter
Chairman of the Board April 28, 1999
Dear Fellow Shareholder:
You are cordially invited to attend the Annual Meeting of Shareholders
(the "Meeting") of the Company to be held at Chadbourne & Parke LLP, 30
Rockefeller Plaza, 36th Floor, New York, New York, on Thursday, June 10, 1999 at
10:00 a.m. Eastern Daylight Time.
In addition to the routine matters that will be the subject of the
Meeting, you will be asked to consider and vote upon an amendment to the
Company's Certificate of Incorporation that will establish a classified Board of
Directors (the "Classified Board Proposal"). If the Classified Board Proposal is
approved, the Board would be organized into three classes, Class I, Class II and
Class III, with two directors in each class serving staggered terms. Initially,
Class I directors would serve for one year, Class II directors would serve for
two years and Class III directors would serve for three years. Directors elected
to successive classes following the Meeting would serve for three years. The
Classified Board Proposal is further described in the enclosed Proxy Statement.
Additional information about the Meeting and the various matters upon
which shareholders will act is found in the formal Notice of the Meeting and
Proxy Statement on the following pages. The Annual Report to Shareholders for
1998, including financial statements, accompanies this Proxy Statement but does
not constitute a part of the proxy solicitation material.
The Board of Directors has unanimously approved the Classified Board
Proposal, believes the adoption of the proposal is in the best interests of the
Company and its shareholders and recommends that the shareholders vote in favor
of the proposal and for the nominees for director.
Since it is important that your shares be represented at the Meeting,
we urge you to indicate on the enclosed proxy card your choice with respect to
the matters to be voted upon at the Meeting, sign and date the card and return
it promptly in the enclosed envelope. Please do this even if you plan to attend
the Meeting, as the return of a signed proxy will not limit your right to vote
in person but will assure that your vote will be counted in the event your plans
for personal attendance should change.
Sincerely,
/s/ Mason N. Carter
Mason N. Carter
Chairman of the Board
MERRIMAC INDUSTRIES, INC.
41 Fairfield Place
West Caldwell, New Jersey 07006-6287
--------------------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held on June 10, 1999
To The Shareholders of
Merrimac Industries, Inc.
The Annual Meeting of Shareholders (including any adjournment or
postponement thereof, the "Meeting") of Merrimac Industries, Inc. (the
"Company") will be held at Chadbourne & Parke LLP, 30 Rockefeller Plaza, 36th
Floor, New York, New York, on Thursday, June 10, 1999, at 10:00 a.m. Eastern
Daylight Time, for the following purposes:
(1) To elect six members to the Company's Board of Directors. If
the proposal to establish a classified Board of Directors
(Proposal No. 2 below) is approved, the six directors will be
elected to a classified Board of Directors with two directors
being elected for a term of one year, two directors being
elected for a term of two years and two directors being
elected for a term of three years, or until their successors
are duly elected and qualified. If the proposal to establish a
classified Board of Directors is not approved, six directors
will be elected for one-year terms expiring at the Company's
2000 annual meeting of shareholders or until their successors
are duly elected and qualified;
(2) To consider and vote upon a proposed amendment to the
Certificate of Incorporation of the Company providing for the
classification of the Company's Board of Directors into three
classes serving staggered terms;
(3) To ratify and approve the action of the Board of
Directors in appointing Arthur Andersen LLP as independent
auditors for the current fiscal year; and
(4) To transact such other business as may properly come before
the Meeting.
Holders of record of Common Stock, par value $.50 per share, at the
close of business on April 23, 1999, the record date for the Meeting, are
entitled to notice of and to vote at the Meeting.
By Order of the Board of Directors,
/s/ Robert V. Condon
ROBERT V. CONDON
Secretary
West Caldwell, New Jersey
April 28, 1999
PLEASE FILL IN, DATE, SIGN AND MAIL PROMPTLY THE ACCOMPANYING PROXY IN THE
RETURN ENVELOPE FURNISHED FOR THAT PURPOSE, WHETHER OR NOT YOU PLAN TO ATTEND
THE 1999 MEETING.
MERRIMAC INDUSTRIES, INC.
41 Fairfield Place
West Caldwell, New Jersey 07006-6287
PROXY STATEMENT
General information
The Board of Directors of Merrimac Industries, Inc. (the "Company")
solicits all holders of Common Stock, par value $.50 per share, of the Company
to vote by marking, signing, dating and returning their proxies to be voted at
the Annual Meeting of Shareholders (including any adjournment or postponement
thereof, the "Meeting") for the purposes stated in the Notice of Meeting. If the
proxy is properly executed and returned by mail, the shares it represents will
be voted at the Meeting in accordance with the instructions noted thereon. If no
instructions are specified, the shares will be voted for the election of
directors, for the amendment to the Company's Certificate of Incorporation
providing for a classified Board of Directors, for the appointment of Arthur
Andersen LLP as the Company's independent auditors and for such other items of
business that come before the Meeting, in accordance with the Board of
Directors' recommendations as set forth herein. Sending in a signed proxy will
not affect a shareholder's right to attend the Meeting and vote in person. A
proxy may be revoked at any time before it is exercised, and such right is not
limited by or subject to compliance with any specified formal procedure. To
revoke a proxy at the Meeting, however, a shareholder should file a written
notice of revocation with the Secretary of the Company at the Meeting and vote
in person. Presence at the Meeting does not of itself revoke the proxy.
If a shareholder wishes to give a proxy to someone other than the
Company's designees, he or she may cross out the names appearing on the enclosed
proxy, insert the name of such other person, and sign and give the card to that
person for use at the Meeting.
The Proxy Statement and the accompanying form of proxy are first being
mailed to shareholders on or about April 30, 1999.
The cost of solicitation will be paid by the Company. In addition to
the use of the mails, proxies may be solicited by employees of the Company, by
telephone, telegraph, facsimile or in person. The Company has engaged MacKenzie
Partners Inc. to solicit proxies on behalf of the Company. The Company expects
to pay MacKenzie Partners Inc. a fee of approximately $12,500, plus
out-of-pocket expenses, for its services.
Voting rights; votes required for approval
Each holder of Common Stock of record at the close of business on April
23, 1999 (the "Record Date") is entitled to receive notice of and to vote at the
Meeting. At the close of business on the Record Date, there were outstanding and
entitled to vote 1,736,550 shares of Common Stock. Every shareholder of record
on the Record Date is entitled to one vote for each share of Common Stock then
held.
Under Securities and Exchange Commission ("SEC") rules, boxes and a
designated blank space are provided on the proxy card for shareholders to mark
if they wish either to vote "for," "against" or "abstain" on one or more of the
proposals, or to withhold authority to vote for one or more of the Company
nominees for director. New Jersey law and the Company's By-laws require the
presence of a quorum for the Meeting. A quorum is defined as a majority of the
votes entitled to be cast at the Meeting. Votes withheld from director nominees
and abstentions will be counted in determining whether a quorum has been
reached. Broker-dealer non-votes, which are discussed below, are counted for
quorum purposes.
Every shareholder of record on the Record Date is entitled, for each
share held, to one vote on each proposal or item that comes before the Meeting.
In the election of directors (Proposal No. 1), a plurality of the votes cast at
the Meeting at which a quorum is present is sufficient to elect a director. The
approval of the amendment to the Company's Certificate of Incorporation
providing for a classified Board (Proposal No. 2) and the ratification of the
appointment of the Company's independent auditors (Proposal No. 3) will require
the affirmative vote of the holders of a majority of the votes cast at the
Meeting.
For purposes of electing directors (Proposal No. 1), approving the
amendment to the Certificate of Incorporation of the Company (Proposal No. 2)
and appointing the Company's independent auditors (Proposal No. 3), an
abstaining vote and a broker-dealer non-vote (i.e., a share held by a broker or
other nominee who is not empowered to vote on a particular proposal) will not be
treated as a vote cast and will not affect the outcome of Proposals No. 1, No. 2
or No. 3 (unless a quorum is not present).
Shareholder proposals for the 2000 annual meeting; advance notice procedures
In order to be included in the proxy statement and proxy card relating
to the 2000 annual meeting of shareholders, shareholder proposals must be
received by the Secretary of the Company at the above address no later than
January 2, 2000. All proposals must meet the requirements set forth in the rules
and regulations of the SEC in order to be eligible for inclusion in the proxy
statement for the 2000 annual meeting of shareholders.
In addition, the Company's By-laws require a shareholder desiring to
nominate persons for election to the Board of Directors or to propose any matter
for consideration of the shareholders at the 2000 annual meeting to notify the
Secretary of the Company in writing at the above address on or after March 13,
2000 and on or before April 12, 2000.
PROPOSAL 1. ELECTION OF DIRECTORS
Classified board
Under the current Certificate of Incorporation of the Company, all the
members of the Board of Directors of the Company are elected annually and serve
until their successors are duly elected and qualified. If the classified Board
of Directors proposal (Proposal No. 2) to be voted on at the Meeting (the
"Classified Board Proposal") is approved, the directors will be divided into
three classes, Class I, Class II and Class III, and will serve for the terms set
forth next to their names or until their successors have been duly elected and
qualified. The two initial Class I directors will be elected for one year, the
two initial Class II directors will be elected for two years and the two initial
Class III directors will be elected for three years. Thereafter, directors will
be elected to serve for three-year terms or until their successors are duly
elected and qualified. If the Classified Board Proposal is not approved, each
director will serve until the next annual meeting of shareholders or until his
successor has been duly elected and qualified.
Nominees
The Company's nominees for directorships, and the classes which they
are to be members of if the Classified Board Proposal is approved, are
identified below. The persons named in the enclosed form of proxy will vote such
proxy for the election to the Board of Mason N. Carter, Albert H. Cohen, Edward
H. Cohen, Joel H. Goldberg, Eugene W. Niemiec and Arthur A. Oliner. Other than
Edward H. Cohen, who was appointed to the Company's Board of Directors on
October 21, 1998, all of the nominees have been previously elected by the
shareholders. If no contrary indication is made, proxies in the accompanying
form are to be voted for such nominees or, in the event any such nominee is not
a candidate or is unable to serve as a director at the time of the election
(which is not now expected), for any nominee who shall be designated by the
Board of Directors to fill such vacancy, unless the Board of Directors shall
determine to reduce the number of directors pursuant to the By-laws.
Nominee Expiration of Initial Term(1)
------- --------------------------
Class I:
Joel H. Goldberg 2000
Eugene W. Niemiec 2000
Class II:
Edward H. Cohen 2001
Arthur A. Oliner 2001
Class III:
Mason N. Carter 2002
Albert H. Cohen 2002
Voting
Each holder of Common Stock of record on the Record Date is entitled to
one vote for each share of Common Stock then held. Directors are elected by a
plurality of the votes cast.
THE BOARD OF DIRECTORS UNANIMOUSLY
RECOMMENDS A VOTE FOR EACH OF THE NOMINEES.
Information about the Board of Directors
The following table sets forth certain information as of the Record
Date with respect to each director.
Name and Other Positions Director of the
With the Company Age Company
---------------- --- Since
-----
Mason N. Carter
Chairman of the Board, President and
Chief Executive Officer................. 53 1995
- ----------------------
(1) Assuming the Classified Board Proposal is approved.
Name and Other Positions Director of the
With the Company Age Company
---------------- --- Since
-----
Eugene W. Niemiec
Retired Vice Chairman and Chief
Technology Officer...................... 59 1990
Albert H. Cohen........................... 66 1997
Joel H. Goldberg.......................... 55 1997
Arthur A. Oliner.......................... 77 1961
Edward H. Cohen........................... 60 1998(2)
Business experience of directors during past five years
Mason N. Carter was elected to the additional position of Chairman of
the Board on July 24, 1997. He has served as President and Chief Executive
Officer of the Company since December 16, 1996. From 1994 to 1996 he was
President of the Products and Systems Group of Datatec Industries, Inc.,
Fairfield, New Jersey, a leading provider of data network implementation
services. He was President and Chief Executive Officer of Kentile, Inc.,
Chicago, Illinois, a manufacturer of resilient flooring, prior thereto.
Eugene W. Niemiec was Vice Chairman and Chief Technology Officer of the
Company from December 16, 1996 until his retirement on December 31, 1998. From
September 1994 to December 1996 he held the offices of President, Chief
Executive Officer and Chief Operating Officer of the Company. He was President
and Chief Operating Officer of the Company prior thereto.
Albert H. Cohen has been self-employed as a management consultant and
asset (money) manager since 1987. He was the Chairman of the Board and the Chief
Executive Officer of Metex Corporation from 1986 to 1987 and from 1964 to 1986
he was the President and Chief Executive Officer. Metex Corporation is a
manufacturer of industrial and automotive products.
- ----------------------
(2) Edward H. Cohen was appointed to the Board of Directors on October 21, 1998
to fill a vacancy created by the death of Frederick J. Gumm.
Edward H. Cohen, a senior partner at Rosenman & Colin LLP, a law firm,
has been affiliated with such firm since 1963. He is a director of Phillips-Van
Heusen Corporation, Franklin Electronics Publishers, Inc. and Levcor
International, Inc.
Joel H. Goldberg has been Chairman and Chief Executive Officer of
Career Consultants, Inc., a management consulting firm, and SK Associates, an
outplacement firm, located in Union, New Jersey since 1972. He is a director of
Phillips-Van Heusen Corporation, Marcal Paper Company and Modell's, Inc., an
advisor to the New Jersey Sports and Exposition Authority and a member of the
Advisory Council for Sports Management of Seton Hall University. He is also a
consultant to the New York Giants and the New Jersey Nets professional sports
teams.
Arthur A. Oliner has been Professor Emeritus of Electrophysics at
Polytechnic University (formerly Polytechnic Institute of Brooklyn) since 1990,
was head of its Electrical Engineering Department from 1966 until 1974, and was
the director of its Microwave Research Institute from 1967 to 1982. He was
elected a member of the National Academy of Engineering and a Fellow of the
IEEE, the AAAS, and the British IEE. Dr. Oliner is the author of three books and
has received many awards. He has been an engineering consultant for such
companies as IBM, Boeing, Raytheon, Hughes and Rockwell.
There are no family relationships among the directors of the Company.
The Board of Directors has a Stock Option Committee, Stock Purchase
Plan Committee, Audit Committee, Compensation Committee, Management Committee
and Nominating Committee.
The Stock Option Committee, which currently consists of Messrs. A.
Cohen and Oliner, non-employee directors, administers the 1997 Long-Term
Incentive Plan ("LTIP"), the 1993 Stock Option Plan and the 1983 Key Employees
Stock Option Plan and determines the recipients and terms of the options awarded
thereunder. Committee members are currently eligible to participate in the 1993
Stock Option Plan. The Stock Purchase Plan Committee, which also consists of
Messrs. A. Cohen and Oliner, administers the Stock Purchase Plan of the Company.
During fiscal 1998 the Stock Option Committee met three times and the Stock
Purchase Plan Committee did not meet.
Messrs. A. Cohen, E. Cohen and Oliner, non-employee directors,
currently serve on the Audit Committee, the function of which is to review the
Company's annual audit with the Company's independent accountants. During fiscal
1998 the Audit Committee met two times.
Messrs. A. Cohen, Goldberg and Oliner, non-employee directors,
currently serve on the Compensation Committee. The Compensation Committee
reviews compensation
of all executive officers of the Company. The Compensation Committee determines
compensation levels based on individual performance and responsibility, as well
as overall corporate performance. The predominant components of executive
compensation have been base salary and stock option grants. When corporate goals
are achieved, executive officers as well as other key employees may also be
awarded cash bonuses. During fiscal 1998 the Compensation Committee met two
times.
Messrs. Carter and A. Cohen serve on the Management Committee. The
Management Committee determines strategic business direction for the Company and
evaluates the impact of current changes in the business environment in which the
Company operates. During fiscal 1998 the Management Committee met two times.
Messrs. Carter, Niemiec and Oliner currently serve on the Nominating
Committee. Shareholders wishing to recommend persons for consideration by the
Nominating Committee as nominees for election to the Company's Board of
Directors can do so by writing to the Secretary of the Company (within the time
period specified in the Company's By-laws) at 41 Fairfield Place, West Caldwell,
New Jersey 07006, giving each person's name, biographical data and
qualifications. See the description of the advance notice provisions in the
Company's By-laws under the caption "Shareholder proposals for 2000 annual
Meeting; advance notice procedures". Any such recommendation should be
accompanied by a written statement from the person recommended indicating his or
her consent to be considered as a nominee, and if nominated and elected, to
serve as a director. During fiscal 1998 the Nominating Committee held one
meeting.
During the fiscal year that ended on January 2, 1999, the Board of
Directors held eight meetings including one by telephone conference call. Except
for Mr. Gumm who was ill for a portion of fiscal 1998 and died in July of 1998,
each director during fiscal 1998 attended 75% or more of the aggregate of the
total number of meetings of the Board and of the committees on which he served.
Information about executive officers
The following table sets forth certain information as of the Record
Date with respect to each executive officer (other than those listed as
directors).
Name and Position With the Company Age
---------------------------------- ---
Robert V. Condon
Vice President, Finance, Chief Financial Officer,
Treasurer and Secretary................................. 52
Richard E. Dec
Vice President, Marketing............................... 55
Brian R. Dornan
Vice President, Research and Development................ 50
Reynold K. Green
Vice President, Sales................................... 40
James J. Logothetis
Vice President, Advanced Technology..................... 39
Business experience of executive officers during past five years
Mr. Condon has been Vice President, Finance and Chief Financial Officer
since joining the Company in March 1996 and was appointed Treasurer and
Secretary in January 1997. Prior to joining the Company, he was with Berkeley
Educational Services as Vice President, Finance, Treasurer and Chief Financial
Officer from 1995 to February 1996. During 1994 Mr. Condon was involved in
consulting and entrepreneurial activities. From 1989 to 1993, he was Senior Vice
President, Finance and Chief Financial Officer of SCS Communications, a private
holding company.
Mr. Dec has been Vice President, Marketing since joining the Company in
March 1997. Prior to joining the Company, he was with Kinley & Manbeck, Inc. a
business process re-engineering and systems implementation consulting company as
Vice President of Business Development from April 1996 to March 1997. From 1995
to March 1996, he was National Account Manager, Product and Systems Group for
Datatec Industries, Inc. From 1993 to 1994, he was Vice President of Product
Development for Kentile, Inc., a manufacturer of resilient flooring.
Mr. Dornan has been Vice President, Research and Development of the
Company since February 1998 and was Group Vice President of Technology and
Engineering of the Company from October 1996 to February 1998. He had been Group
Vice President of Manufacturing from 1986 to October 1996.
Mr. Green, effective March 1997, was appointed Vice President, Sales of
the Company and from April 1996 to March 1997 he was Vice President of
Manufacturing of
the Company. He was a member of the Board of Directors of the Company from April
1996 to May 1997, and did not seek re-election to the Board. Prior to April
1996, Mr. Green held positions of Director of Manufacturing, National Sales
Manager and Director of Quality Control and High-Reliability Services at the
Company.
Mr. Logothetis was appointed Vice President, Advanced Technology in May
1998 after rejoining the Company in January 1997 as Director, Advanced
Technology. Prior to rejoining the Company, he was a director for
Electromagnetic Technologies, Inc. in 1995 and became Vice President of
Microwave Engineering at such corporation in 1996. From 1984 to 1994, Mr.
Logothetis held various engineering positions at the Company including Group
Manager of IF Engineering.
There are no family relationships among the executive officers of the
Company.
EXECUTIVE COMPENSATION
Compensation summary
The following table sets forth a summary for the last three (3) fiscal
years of the cash and non-cash compensation awarded to, earned by or paid to the
individuals who were (i) the Chief Executive Officer of the Company during
fiscal 1998, (ii) the four other most highly compensated executive officers
serving at the end of the last fiscal year and (iii) any other persons who were
executive officers at any time during 1998 and would have been included under
clause (ii) if they had remained executive officers at January 2, 1999
(collectively, the "named executive officers").
Summary Compensation Table
Annual Compensation Long-Term Compensation
------------------- --------------- --------------------
Awards Payouts
---------------------------------- --------------- --------------------
Securities All Other
Underlying Compensation ($)
Name and Principal Position(s) Year Salary ($) Bonus ($) Options/SARs (4)(5)(6)(7)
(#)(1)(2)(3)
- ---------------------------------------------------------------------------------------------------------------
Mason N. Carter 1998 240,000 - 22,000 49,816
Chairman, President and 1997 200,014 39,000 - 27,916
Chief Executive Officer (2)(3) 1996 7,692 - 73,500 23,500
Robert V. Condon 1998 143,750 - 2,750 13,166
Vice President, Finance and 1997 140,005 19,000 - 16,708
Chief Financial Officer, 1996 108,078 - 11,000 14,267
Treasurer and Secretary (8)
Reynold K. Green 1998 123,500 - - 6,566
Vice President, Sales 1997 108,253 19,000 - 7,890
Vice President, Manufacturing 1996 106,215 - - 8,031
Brian R. Dornan 1998 113,750 5,000 - 3,893
Vice President, Research and 1997 110,011 10,000 - 9,990
Development 1996 110,011 - - 9,410
Vice President, Engineering
Richard E. Dec 1998 113,500 - 2,750 6,462
Vice President, Marketing (9) 1997 80,075 19,000 11,000 8,101
Eugene W. Niemiec 1998 180,003 - - 13,200
Vice Chairman and 1997 180,003 10,000 - 21,165
Chief Technology Officer (2) 1996 180,003 - 55,000 8,607
President, Chief Executive
Officer and
Chief Operating Officer
Jacob Lin 1998 158,986 - 5,500 11,146
Vice President, Operations (10) 1997 112,584 27,000 11,000 13,054
<FN>
(1) The number of securities underlying options and stock appreciation
rights for all prior reporting periods have been restated to reflect
the 10% stock dividend which became effective June 5, 1998.
(2) On December 16, 1996, Mr. Carter became President and Chief Executive
Officer and Mr. Niemiec became Vice Chairman and Chief Technology
Officer. In connection therewith, each received options to purchase
55,000 shares of Common Stock. On December 31, 1998, Mr. Niemiec
retired from his positions as Vice Chairman and Chief Technology
Officer. See the description of the separation agreement between the
Company and Mr. Niemiec under the caption "Employment contracts and
termination of employment in change-in-control arrangements".
(3) At December 28, 1996, the Company had accrued salary of $7,692 for Mr.
Carter. His annual salary was $200,000.
(4) Includes matching 401(k) amounts and discretionary amounts contributed
by the Company during 1998 and 1997 to the accounts of the named
executive officers pursuant to the Company's Savings and Investment
Plan in the following amounts: Mr. Carter - $4,800 and $9,515; Mr.
Condon - $4,800 and $9,196; Mr. Green - $4,258 and $6,621; Mr. Dornan -
$3,893 and $7,028; Mr. Dec - $3,923 and $4,062; Mr. Niemiec - $4,800
and $9,996; and Mr. Lin - $4,800 and $6,054.
(5) Includes director and consultation fees of $23,500 paid to Mr. Carter
during 1996 prior to becoming an officer of the Company. Also includes
a $20,000 signing bonus Mr. Carter received in fiscal 1998 in
connection with the amendment to his employment agreement with the
Company. See the description of Mr. Carter's amended and restated
employment agreement described under the caption "Employment contracts
and termination of employment and change-in-control arrangements".
(6) Includes contractual automobile allowances to Mr. Carter and Mr.
Niemiec of $8,400 each during 1997 and 1998.
(7) Includes compensation for vacation earned but not taken during 1998 in
the following amounts: Mr. Carter - $16,616; Mr. Condon - $8,366; Mr.
Green - $2,308; Mr. Dec - $2,539 and Mr. Lin - $6,346. Includes
compensation for vacation earned but not taken during 1997 in the
following amounts: Mr. Carter - $10,001; Mr. Condon - $7,539; Mr. Green
- $1,269; Mr. Dornan - $2,962; Mr. Dec - $4,039; Mr. Niemiec - $2,769;
and Mr. Lin - $7,001. Includes compensation for vacation earned but not
taken during 1996 to Mr. Condon of $8,077 and Mr. Green of $1,923.
(8) Mr. Condon joined the Company in March 1996.
(9) Mr. Dec joined the Company in March 1997.
(10) Mr. Lin, who joined the Company in March 1997, resigned on December 16,
1998. Pursuant to a separation agreement between the Company and Mr.
Lin, Mr. Lin will receive severance payments totaling $82,500 during
the first six months of 1999.
</FN>
The following table sets forth information concerning individual grants
of stock options made during fiscal 1998 to each of the named executive
officers.
Option/SAR Grants in Last Fiscal Year
(Individual Grants)
- -------------------------- --------------------------- ----------------------------- ----------------- ---------------
Number of Securities % of Total Options/SARs
Underlying Options/SARs Granted to Employees in Exercise Price
Granted (#) Fiscal Year or Base ($/Sh) Expiration
Name Date
- -------------------------- --------------------------- ----------------------------- ----------------- ---------------
Mason N. Carter 22,000 21.06% 11.48 1/08/08
Robert V. Condon 2,750 2.63% 13.02 4/28/08
Richard E. Dec 2,750 2.63% 13.02 4/28/08
Jacob Lin 5,500 5.26% 13.02 4/28/08
The following table sets forth information concerning each exercise of
stock options during fiscal 1998 by each of the named executive officers and the
fiscal year-end value of unexercised options.
Aggregated Option/SAR Exercises in Last Fiscal Year
and FY-End Option/SAR Values
Value of Unexercised
Number of Securities In-the-Money
Underlying Unexercised Options/SARs
Options/SARs at FY-End FY-End($)**
Shares Exercisable(1)/ Exercisable(1)/
Acquired on Value Unexercisable (2)* Unexercisable (2)
Name Exercise Realized($)
--------------------------- ---------------- ----------------- ----------------------------- ------------------------
Mason N. Carter -0- -0- 69,300 (1)
27,500 (2)
Robert V. Condon -0- -0- 13,750 (1)
Reynold K. Green -0- -0- 9,350 (1)
Brian R. Dornan -0- -0- 10,450 (1)
Richard E. Dec -0- -0- 14,060(1)
Eugene W. Niemiec -0- -0- 73,700 (1)
Jacob Lin -0- -0- 16,500 (1)
<FN>
* The vesting of unexercisable options may accelerate upon a change-in-control of the Company.
** Amounts represent difference between the aggregate exercise price of the
options and a $7.00 market price of the underlying Common Stock on January
2, 1999.
</FN>
Employment contracts and termination of
employment and change-in-control arrangements
Mason N. Carter has entered into an amended and restated employment
agreement dated as of January 1, 1998 with the Company pursuant to which Mr.
Carter has agreed to serve as President and Chief Executive Officer of the
Company for a minimum annual salary of $240,000. The initial term of the
agreement ends on December 31, 2002 and automatically renews for successive
12-month periods thereafter unless terminated pursuant to the terms of the
agreement. Upon a change-in-control of the Company, if Mr. Carter is dismissed
without "cause" (as defined in the amended and restated employment agreement)
within 12 months after such change-in-control, the Company has agreed to pay Mr.
Carter the greater of (a) his 12-month salary and benefits (including bonus) or
(b) his salary and benefits from the date of resignation to the end of the then
current term of the agreement.
In January 1998, the Company entered into severance agreements with the
named executive officers (other than Mr. Carter and Mr. Niemiec). The severance
agreements provide, among other things, that if an executive is terminated by
the Company without "cause" or the executive resigns for "good reason" (as such
terms are defined therein) within one year following a "change in control" (as
defined therein) the Company is obligated to pay to the executive officer over a
12 month period two times his "annual base salary" (as defined therein) and to
continue to provide health insurance benefits for two years.
On December 31, 1998, Eugene W. Niemiec retired from the position of
Vice Chairman and Chief Technology Officer of the Company. Pursuant to a
separation agreement between the Company and Mr. Niemiec effective on such date,
Mr. Niemiec agreed to terminate his employment agreement with the Company in all
respects except for certain provisions relating to his options to purchase
55,000 shares of Common Stock, the expiration date of which has been extended
under the separation agreement to December 31, 2003. Under the separation
agreement, Mr. Niemiec received a $337,200 payment from the Company in January
1999 and is scheduled to receive a final payment of $185,500 in January 2000. In
addition, the separation agreement provides Mr. Niemiec and his spouse with
certain ongoing benefits, such as medical insurance coverage, until December
2009. Mr. Niemiec will continue to serve as a director of the Company.
Certain relationships and related transactions
On May 4, 1998, the Company sold 20,000 (22,000 after giving effect to
the 10% stock dividend) shares of Common Stock from its treasury to the
Company's Chairman,
President and Chief Executive Officer, Mason N. Carter, at a
price of $12.75 per share, which approximated the average closing price of the
Company's Common Stock during the first quarter of fiscal 1998. The Company
extended to Mr. Carter a loan of $255,000 in connection with the purchase of
these shares and amended a prior loan to Mr. Carter of $105,000. Mr. Carter has
contractually agreed to restrictions on the resale of these shares.
The new promissory note for a total of $360,000 is due May 4, 2003 and
interest payments (except as described below) are due quarterly, calculated at a
variable interest rate based on the prime rate of the Company's lending bank.
Payment of interest accrued from November 1998 until November 1999, however,
will be deferred until the end of the term of the new promissory note on May 4,
2003. Payment of the loan is secured by the pledge of 33,000 shares of Common
Stock purchased by Mr. Carter with the proceeds of the loans, as collateral for
the repayment of the loan, pursuant to a pledge agreement between Mr. Carter and
the Company.
The Company is a party to a shareholder's agreement dated as of October
30, 1998 with Charles F. Huber II, a former director and Chairman of the Company
who is also a beneficial owner of more than 5% of the Company's Common Stock.
Pursuant to the shareholder's agreement, Mr. Huber provides the Company with
consulting services for a fee of $5,000 per month. The term of the consulting
arrangement expires on October 2001, unless earlier terminated in accordance
with the terms of the shareholder's agreement.
In addition, the shareholder's agreement contains certain provisions
relating to the purchase and sale by Mr. Huber of the capital stock of the
Company and relating to Mr. Huber's ability to vote his Common Stock at his
discretion. Mr. Huber is generally prohibited from acquiring any securities of
the Company without the Company's prior approval and from selling any such
securities to any person or group that would then hold three percent or more of
the outstanding capital stock of the Company. During the term of the
shareholder's agreement, Mr. Huber is also required to vote his shares of Common
Stock as directed by the Board of Directors or the Chief Executive Officer of
the Company.
Compensation of directors
Directors who are not employees of the Company are paid a monthly fee
of $1,500 and $500 for each meeting of the Board of Directors attended. The
directors are also reimbursed reasonable travel expenses incurred in attending
directors meetings. In addition, pursuant to the 1993 Stock Option Plan, each
non-employee director is granted an immediately exercisable option to purchase
1,650 shares of the Common Stock of the Company on the date he is elected to the
Board of Directors, and on each date that he is
re-elected as a director of the Company. Each such grant is at the fair market
value on the date of grant.
In connection with the active role that Dr. Oliner has taken in
assisting the Company in further developing its research and development
capabilities and in making himself available to the Chairman for special
technology assignments, the Company entered into a consulting agreement dated as
of January 1, 1998 with Dr. Oliner. The initial term of the agreement expired on
December 31, 1998 and automatically renews for successive twelve-month periods
unless terminated pursuant to its terms. The agreement provides for the payment
of $36,000 annually.
During 1998 Mr. A. Cohen was paid $7,000 for services provided to the
Company outside his role as a director of the Company. During 1998, the Company
retained the services of Career Consultants, Inc., and SK Associates to perform
executive searches and to provide outplacement services. Dr. Goldberg is the
Chairman and Chief Executive Officer of these companies. The total amount paid
to these companies was $24,875.
STOCK OWNERSHIP OF DIRECTORS, EXECUTIVE OFFICERS
AND CERTAIN SHAREHOLDERS
The following table sets forth, as of the Record Date, information
concerning Common Stock owned by (i) persons known to the Company who are
beneficial owners of more than five percent of the Common Stock of the Company
(ii) each director, director nominee and named executive officer of the Company,
and (iii) all directors, director nominees and executive officers of the Company
as a group, that was either provided by the person or publicly available from
filings made with the SEC.
Amount and Nature of
Name and Address Beneficial Ownership*
of Beneficial Owners (direct except noted) Percent of Class
-------------------- --------------------- ----------------
William D. Witter, Inc. 171,899 9.90%
One Citicorp Center
153 East 53rd Street
New York, NY 10022
Charles F. Huber II 125,700 (1) 7.24%
c/o William D. Witter, Inc.
One Citicorp Center
153 East 53rd Street
New York, NY 10022
Arthur A. Oliner 200,668 (2) 11.38%
11 Dawes Road
Lexington, MA 02173
Mason N. Carter 118,380 (3) 6.56%
c/o Merrimac Industries, Inc.
41 Fairfield Place
West Caldwell, NJ 07006
Eugene W. Niemiec 70,990 (4) 3.96%
66 Skytop Road
Cedar Grove, NJ 07009
Joel H. Goldberg 17,300 (5) .99%
c/o C.C.I. / SK Associates, Inc.
1767 Morris Avenue
Union, NJ 07083
Albert H. Cohen 8,550 (6) .49%
7 Pine Court
Westfield, NJ 07090
Edward H. Cohen 3,650 (7) .21%
c/o Rosenman & Colin LLP
575 Madison Avenue
New York, NY 10022
Robert V. Condon 22,837 (8) 1.30%
c/o Merrimac Industries, Inc.
41 Fairfield Place
West Caldwell, NJ 07006
Brian R. Dornan 17,022 (9) .97%
c/o Merrimac Industries, Inc.
41 Fairfield Place
West Caldwell, NJ 07006
Richard E. Dec 14,448 (10) .83%
c/o Merrimac Industries, Inc.
41 Fairfield Place
West Caldwell, NJ 07006
Reynold K. Green 13,851 (11) .79%
c/o Merrimac Industries, Inc.
41 Fairfield Place
West Caldwell, NJ 07006
All directors and 493,827 (12) 25.28%
executive officers as a group
(11 persons)
<FN>
------------------------------------------------------------------
* "Beneficial Ownership" means the sole or shared voting power to direct
the voting or investment of a security, including securities subject to
options, warrants or other common stock equivalents which are
exercisable within sixty (60) days.
(1) The number of shares of Common Stock in the table is based upon
information provided to the Company by Mr. Huber. These amounts are not
included in the totals for all directors and executive officers as a
group. Mr. Huber, who is a Managing Director of William D. Witter
Associates, an affiliate of William D. Witter, Inc., disclaims
beneficial ownership of the 171,899 shares owned by William D. Witter,
Inc.
(2) Includes 26,400 shares subject to stock options that are exercisable
currently or within 60 days and 9,528 shares owned by Dr. Oliner's wife
as to which he disclaims beneficial ownership. Under the Company's
shareholder rights plan, a total of 25,000 shares of Common Stock and
all shares of Common Stock issued or that would be issuable upon the
exercise of Company options will not be counted as shares beneficially
owned by Dr. Oliner in determining whether Dr. Oliner has become the
beneficial owner of 10% or more of the outstanding shares of Common
Stock for purposes of the rights plan.
(3) Includes 69,300 shares subject to stock options that are exercisable
currently or within 60 days.
(4) Includes 55,000 shares subject to stock options that are exercisable
currently or within 60 days.
(5) Includes 3,300 shares subject to stock options that are exercisable
currently or within 60 days.
(6) Includes 4,950 shares subject to stock options that are exercisable
currently or within 60 days.
(7) Includes 1,650 shares subject to stock options that are exercisable
currently or within 60 days.
(8) Includes 13,750 shares subject to stock options and 1,387 shares
subject to the Stock Purchase Plan that are exercisable currently or
within 60 days.
(9) Includes 10,450 shares subject to stock options and 1,090 subject to
the Stock Purchase Plan that are exercisable currently or within 60
days.
(10) Includes 13,750 shares subject to stock options and 310 shares subject
to the Stock Purchase Plan that are exercisable currently or within 60
days.
(11) Includes 9,350 shares subject to stock options and 621 subject to the
Stock Purchase Plan that are exercisable currently or within 60 days.
(12) Includes 213,400 shares subject to stock options and 3,485 shares
subject to the Stock Purchase Plan that are exercisable currently or
within 60 days.
</FN>
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires the Company's directors and
executive officers, and persons who own more than ten percent of the Company's
common stock, to file with the SEC initial reports of ownership and reports of
changes in ownership of Common Stock. Officers, directors and greater than ten
percent shareholders are required by SEC regulation to furnish the Company with
copies of all Section 16(a) reports they file.
To the Company's knowledge, based solely on its review of the copies of
such reports furnished to the Company and written representations that no other
reports were required, during the fiscal year ended January 2, 1999, Section
16(a) filing requirements applicable to its officers, directors and greater than
ten-percent shareholders were complied with respect to the Company's Common
Stock.
PROPOSAL 2. AMENDMENT TO THE CERTIFICATE OF INCORPORATION PROVIDING
FOR A CLASSIFIED BOARD OF DIRECTORS
The Board of Directors, by a unanimous vote at a meeting of directors
held on March 5, 1999, approved and recommended to the shareholders for approval
at the Meeting a proposal to amend Article III of the Company's Certificate of
Incorporation in its entirety.
Classification of the Board of Directors
The By-laws currently provide that all directors are to be elected to
the Company's Board of Directors annually for a term of one year or until any
such director's successor is duly elected and qualified. The proposed amendment
to Article III of the Company's Certificate of Incorporation would divide the
Board of Directors into three classes: Class I, Class II and Class III. If the
amendment is adopted, all directors will be elected to their class as described
in this Proxy Statement. Initially, the term of the Class I directors would
expire at the next annual meeting in 2000, and the terms of Class II and Class
III directors would expire, at the 2001 and 2002 annual meetings, respectively.
Successors to the directors in each class would then be elected for three year
terms. The amendment would thus have the effect of causing only one class of
directors per year to be elected, with the directors in the other two classes
remaining in office until the elections held in later years. If the amendment is
approved by the shareholders, the Board of Directors will amend the By-laws of
the Company to conform the provisions on the election of directors to the
Certificate of Incorporation, as amended.
If the Classified Board Proposal is approved and the Board nominees are
elected at the Meeting, Class I, consisting of two directors (Joel H. Goldberg
and Eugene W. Niemiec), will be elected for a term expiring at the 2000 annual
shareholders' meeting; Class II, consisting of two directors (Edward H. Cohen
and Arthur A. Oliner), will be elected for a term expiring at the 2001 annual
shareholders' meeting; and Class III, consisting of two directors (Mason N.
Carter and Albert H. Cohen), will be elected for a term expiring at the 2002
annual shareholders' meeting, and in each case, until their respective
successors are duly elected and qualified. At future annual meetings of
shareholders, directors will be elected for full terms of three years to succeed
those directors whose terms are expiring. Any director elected to fill a vacancy
will have the same remaining term as his or her predecessor. In the event the
shareholders do not approve the Classified Board Proposal, the directors elected
at the Meeting will continue to serve until the next annual meeting.
Because the directors will be directly affected by the institution of a
classified Board, they may be deemed to have an interest in the outcome of the
Classified Board Proposal.
Considerations in support of the Classified Board Proposal
The Board of Directors believes that a classified Board would promote
continuity of Board membership and stability of the Company's management and
policies, and would help the Company retain the services of experienced
directors for more than the current one-year term. Such continuity, it is
believed, would facilitate long-range business planning and help create a stable
work environment. Although the Board of Directors is
not aware of, and has not in the past encountered, difficulties with respect to
continuity and stability, the Board of Directors believes a classified Board
would decrease the likelihood of such difficulties in the future. Two annual
elections would, in general, be required to replace a majority of a classified
Board of Directors and effect a forced change in the business of the Company.
In addition, a classified Board would enable the Board of Directors to
protect shareholders against unsolicited attempts to acquire control of the
Company that do not offer an adequate price to all shareholders or are otherwise
not in the best interests of the Company and its shareholders. In recent years,
accumulations by third parties of substantial stock positions in public
companies frequently have been preludes to hostile attempts to take over or
restructure such corporations or to sell all or part of such corporation's
assets or to take other similar extraordinary action. Such actions are often
undertaken by the third party without advance notice to, or consultation with,
management. In many cases, such third parties position themselves through stock
ownership to seek representation on a board of directors in order to increase
the likelihood that they will be able to implement proposed transactions opposed
by the corporation's management. Certain of these proposed transactions, such as
a two-tier tender offer, may not treat all shareholders equally and may unfairly
pressure shareholders into relinquishing their investment in the Company for
less than full value of their shares. If the Company resists the efforts of the
third party to obtain representation on the Board, the third party may commence
a proxy contest to have its nominees elected in place of some or all of the
existing directors. In some cases, a third party may not truly be interested in
taking over the Company, but may seek to use the threat of a proxy fight or a
bid to take over the Company, or both, as a means of obtaining for itself a
special benefit which might not be available to all of the Company's
shareholders.
The Board of Directors believes that an imminent threat of removal in
such situations would curtail its ability to negotiate effectively. Under such
pressure, management could be deprived of the time and information necessary to
evaluate a takeover proposal, to seek and study alternative proposals that may
better serve the interests of the Company's shareholders, and in an appropriate
case, to help achieve a better price in any transaction which may ultimately
occur. If adopted, the classified Board amendment would help assure that the
Board, if confronted by a proposal from a third party that has acquired a
significant block of the Company's Common Stock, will have sufficient time to
review the proposal and take appropriate actions.
Takeovers or changes in management of the Company which are proposed
and effected without prior negotiation with the Company's management are not
necessarily detrimental to the Company and its shareholders. However, the Board
believes that the benefits of seeking to protect its ability to negotiate with
the proponent of an unfriendly or unsolicited proposal to take over or
restructure the Company outweigh the disadvantages
of discouraging such proposals. The Classified Board Proposal is not being
submitted as the result of, and the Board is unaware of, any specific effort by
any persons to obtain control of the Company or to accumulate large amounts of
its Common Stock.
The proposed classified Board amendment is designed, in part, to
encourage a third party seeking to acquire control of the Company to first
consult with the Company's management regarding any proposed business
combination or other transactions involving the Company, so that it may be
studied by the Board and so that the Company's shareholders can have the benefit
of the Board's recommendations in cases where shareholder approval is required.
Although a takeover bid may be made at prices representing premiums over the
then current market price for the securities being sought, the Board believes
that, in a situation where a third party seeks management's cooperation, the
Company's Board will be in a better position to negotiate and encourage
consideration of a broader range of relevant factors, such as the structuring of
the proposed transaction and its tax consequences, including the price to be
paid to shareholders and the form of consideration received, and the underlying
value and prospects of the acquiring corporation. These issues may not otherwise
adequately be addressed by such third party.
Considerations against the Classified Board Proposal
Because the proposed classified Board amendment would make more
difficult or deter a proxy contest or the assumption of control of the Board by
a holder of a substantial block of the Company's Common Stock, it could increase
the likelihood that incumbent members of management will retain their positions.
The classified Board amendment would apply to every election of directors
whether or not a change in the composition of the Board would be beneficial and
whether or not the holders of a majority of the Company's Common Stock believe
that such a change would be desirable. After adoption of the proposed amendment,
shareholders who do not favor the policies of the Board would require at least
two annual meetings of shareholders to replace a majority of the Board.
In addition, the proposed amendment could have the effect of deterring
a third party from making a tender offer for or otherwise acquiring significant
blocks of the Company's Common Stock, even though such an action might increase,
at least temporarily, market prices for the Company's Common Stock. A potential
acquiror may not proceed with a tender offer because it would be unable to
obtain control of the Company's Board of Directors for a period of at least two
years. Consequently, if the Classified Board Proposal is approved, shareholders
of the Company could be deprived of temporary opportunities to sell their shares
at higher market prices. Moreover, by possibly deterring proxy contests or other
acquisitions of substantial blocks of the Common Stock, a classified Board might
have the incidental effect of inhibiting certain
changes in incumbent management, some or all of whom may be replaced in the
course of a change in control.
Additional considerations
On March 5, 1999, the Board of Directors of the Company adopted a
shareholder rights plan, effective March 19, 1999. The rights plan may have
certain anti-takeover effects and may cause substantial dilution to a person or
group that attempts to acquire the Company on terms not approved by the Board of
Directors. The classified Board, together with the shareholder rights plan, are
intended to help ensure that the Board, if confronted by an unsolicited proposal
from a third party to acquire control of the Company, will have sufficient time
to review the proposal, to develop, if deemed appropriate, alternatives to the
proposal and to act in what the Board believes to be in the best interests of
the Company and its shareholders.
The Certificate of Incorporation of the Company currently contains a
merger approval provision that may have an anti-takeover effect. This provision
requires the affirmative vote of the holders of at least 80% of the outstanding
Common Stock for approval of a proposed merger or consolidation of the Company
with any other entity.
Vote required for adoption of a classified Board
Under New Jersey law, the affirmative vote of the holders of a majority
of the votes of the Company's Common Stock cast at the Meeting is required to
adopt a proposed amendment to the Company's Certificate of Incorporation. If the
proposed amendment is approved, the Board will promptly amend the Certificate of
Incorporation by filing a Restated Certificate of Incorporation with Secretary
of State of the State of New Jersey and amend the By-laws of the Company to
reflect the adoption of a classified Board.
As of the Record Date, the Company's directors and executive officers
owned an aggregate of 276,942 shares of Common Stock entitled to vote at the
Meeting. All of the Company's directors and executive officers have advised the
Company that they intend to vote such shares in favor of the Classified Board
Proposal. In addition, pursuant to the voting requirements set forth in a
shareholder's agreement between the Company and Charles F. Huber II, the Board
of Directors has directed Mr. Huber to vote his 125,700 shares of Common Stock
in favor of the Classified Board Proposal. See the description of the
shareholder's agreement between Mr. Huber and the Company under the caption
"Certain relationships and related transactions."
Mr. Huber's shares of Common Stock together with the shares of Common
Stock held by the directors and executive officers of the Company represent 23%
of the outstanding Common Stock as of the Record Date.
Text of proposed amendment
"ARTICLE III
Classified Board of Directors
"The business and affairs of the Company shall be managed by or under
the direction of a Board of Directors consisting of not less than three (3)
directors, the exact number of directors to be determined from time to time
exclusively by the Board of Directors by the affirmative vote of a majority of
the entire Board. The directors shall be divided into three classes, designated
Class I, Class II and Class III. Each class shall consist, as nearly as may be
possible, of one-third of the total number of directors constituting the entire
Board of Directors. At the 1999 Annual Meeting of Shareholders, Class I
directors shall be elected for a one-year term. Class II directors shall be
elected for a two-year term and Class III directors shall be elected for a
three-year term. At each succeeding annual meeting of shareholders beginning in
2000, successors to the class of directors whose term expires at that annual
meeting shall be elected for a three-year term. If the number of directors is
changed, any increase or decrease shall be apportioned among the classes so as
to maintain the number of directors in each class as nearly equal as possible,
and any additional director of any class elected to fill a vacancy resulting
from an increase in such class shall hold office for a term that shall coincide
with the remaining term of that class, but in no case will a decrease in the
number of directors shorten the term of any incumbent director. A director shall
hold office until the annual meeting for the year in which his term expires and
until his successor shall be elected and shall qualify, subject, however, to
prior death, resignation, retirement, disqualification or removal for cause. Any
vacancy occurring on the Board of Directors, including any vacancy resulting
from an increase in the number of directors, may be filled by a majority of the
Board of Directors then in office, although less than a quorum, or by a sole
remaining director. Any director elected to fill a vacancy not resulting from an
increase in the number of directors shall have the same remaining term as that
of his predecessor.
"Notwithstanding anything to the contrary in the foregoing, whenever
the holders of any one or more classes or series of stock issued by the Company
shall have the right, voting separately by class or series, to elect directors
at an annual or special meeting of shareholders, the election, term of office,
filling of vacancies and other features of such directorships shall be governed
by the provisions of this Certificate of Incorporation applicable thereto,
unless expressly provided otherwise by the resolutions of the Board of Directors
providing for the creation of such class or series."
THE BOARD OF DIRECTORS UNANIMOUSLY
RECOMMENDS A VOTE FOR PROPOSAL 2.
PROPOSAL 3. APPROVAL OF APPOINTMENT
OF INDEPENDENT AUDITORS
The Board of Directors has, subject to ratification by the
shareholders, reappointed Arthur Andersen LLP as independent auditors for the
fiscal year beginning January 3, 1999. Arthur Andersen LLP has been the
Company's independent auditors since 1997. The Board of Directors recommends
that the shareholders ratify the appointment of Arthur Andersen LLP, and intends
to introduce at the Meeting the following resolution:
"RESOLVED, that the appointment by the Board of Directors of Arthur
Andersen LLP as independent auditors for this Company for the fiscal
year 1999 be and it is hereby approved, ratified and confirmed."
Representatives of Arthur Andersen LLP have been invited and are
expected to attend the Meeting, will have an opportunity to make a statement if
they desire to do so, and will be available to answer questions that may be
asked by shareholders.
THE BOARD OF DIRECTORS UNANIMOUSLY
RECOMMENDS A VOTE FOR PROPOSAL 3.
OTHER BUSINESS
At the date of this Proxy Statement, the Board of Directors has no
knowledge of any business other than that described above that will be presented
at the Meeting for action by the shareholders. If any other business should
properly come before the Meeting, it is intended that the persons designated as
attorneys and proxies in the enclosed form of proxy will vote all such proxies
as they in their discretion determine.
FORM 10-KSB ANNUAL REPORT
Any shareholder who desires a copy of the Company's 1998 Annual Report
on Form 10-KSB filed with the SEC may obtain a copy (excluding exhibits) without
charge by addressing a request to:
Secretary
Merrimac Industries, Inc.
P.O. Box 986
West Caldwell, NJ 07007-0986
Exhibits also may be requested, but a reasonable charge for the reproduction
cost thereof will be made.
Shareholders may also access the Company's internet web site on the
World Wide Web at: www.merrimacind.com for the Company's financial information.
By Order of the Board of Directors,
/s/ Robert V. Condon
ROBERT V. CONDON
Secretary
April 28, 1999
MERRIMAC INDUSTRIES, INC.
41 Fairfield Place
West Caldwell, New Jersey 07006-6287
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Mason N. Carter and Arthur A. Oliner as
Proxies, each with the power to appoint his substitute, and hereby authorizes
either or both to represent and to vote all shares of Common Stock of Merrimac
Industries, Inc. held of record by the undersigned on April 23, 1999, at the
Annual Meeting (or any adjournment or postponement thereof) of Shareholders to
be held on June 10, 1999, at Chadbourne & Parke LLP, 30 Rockefeller Plaza, 36th
Floor, New York, New York at 10:00 a.m. Eastern Daylight Time for the proposals
and items referred to on the reverse side and described in the Proxy Statement,
and to vote in their discretion on any other business as may properly come
before the Annual Meeting (or any adjournment or postponement thereof).
This proxy when properly executed will be voted in the manner directed
herein. If no direction is made, this proxy will be voted for the election of
the nominees of the Board of Directors listed in proposal 1, for the amendment
to the Company's Certificate of Incorporation providing for a classified Board
of Directors in proposal 2 and for the ratification of the Independent Auditors
in proposal 3.
Please mark on the reverse side, sign, date and return this
proxy card promptly using the enclosed envelope.
- --------------------------------------------------------------------------------
FOLD AND DETACH HERE
Please mark
your votes as ---
indicated in |X|
this example ---
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR PROPOSALS 1, 2 AND 3:
No. 1 Election of Directors Nominees: M.N. Carter, A.H. Cohen, E.H. Cohen,
J.H. Goldberg, E.W. Niemiec,
and A.A. Oliner
FOR WITHHOLD (INSTRUCTION: To withhold authority to vote for
all from any individual nominee, write that nominee's
nominees nominees name in the space provided below.)
--- ---
| | | |
--- --- ------------------------------------------------
No. 2 Amendment to the Company's Certificate of Incorporation providing
for a classified Board of Directors whose members will serve staggered
terms
FOR AGAINST ABSTAIN
--- --- ---
| | | | | |
--- --- ---
No. 3 Ratification of Arthur Andersen LLP as the Company's Independent Auditors
FOR AGAINST ABSTAIN
--- --- ---
| | | | | |
--- --- ---
Dated:___________________________, 1999
_______________________________________
Signature
_______________________________________
Signature
This proxy must be signed exactly as
name appears hereon. When shares are
held by joint tenants, both should
sign. Executors, administrators,
trustees, etc., should give full title
as such. If the signer is a
corporation, please sign full corporate
name by duly authorized officer.
SIGN, DATE AND MAIL YOUR PROXY PROMPTLY
TODAY.
- --------------------------------------------------------------------------------
FOLD AND DETACH HERE