SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934.
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[X] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c)
or Rule 14a-12
MICRONETICS WIRELESS, INC.
(Name of Registrant as Specific 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)(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:
[ ] 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:
MICRONETICS WIRELESS, INC.
(a Delaware corporation)
Notice of 2000 Annual Meeting
of Shareholders to be held
at 10:00 A.M. on September 7, 2000
To the Shareholders of
MICRONETICS WIRELESS, INC.:
NOTICE IS HEREBY GIVEN that the 2000 Annual Meeting of
Shareholders (the "Meeting") of MICRONETICS WIRELESS, INC. (the
"Company") will be held on September 7, 2000 at 10:00 A.M. at the
offices of Kalin & Associates, P.C., One Penn Plaza, Suite 1425,
New York, NY 10019 to consider and vote on the following matters
described under the corresponding numbers in the attached Proxy
Statement:
1. Election of three directors;
2. Amendment of the Company's Certificate of Incorporation
(the "Certificate of Incorporation") to increase the
number of shares of Common Stock, par value $.01 per
share, authorized for issuance by the Company from
10,000,000 to 25,000,000;
3. Amendment of the Company's 1996 Stock Option Plan (the
"1996 Plan") increasing the number of shares of Common
Stock for which options are authorized to be granted
under the 1996 Plan from 300,000 to 900,000 shares (the
"Amendment to the 1996 Plan"); and
4. Such other matters as may properly come before the
Meeting.
The Board of Directors has fixed August 7, 2000 at the close
of business, as the record date for the determination of
shareholders entitled to vote at the Meeting, and only holders of
shares of Common Stock of record at the close of business on that
day will be entitled to vote. The stock transfer books of the
Company will not be closed.
A complete list of shareholders entitled to vote at the
Meeting shall be available for examination by any shareholder, for
any purpose germane to the Meeting, during ordinary business hours
from August 25, 2000 until the Meeting at the offices of the
Company. The list will also be available at the Meeting.
Whether or not you expect to be present at the Meeting, please
fill in, date, sign, and return the enclosed Proxy, which is
solicited by management. The Proxy is revocable and will not
affect your vote in person in the event you attend the Meeting.
By Order of the Board of Directors
Donna Hillsgrove,
Secretary
Date: August 9, 2000
Request for additional copies of proxy material and the
Company's Annual Report for its fiscal year ended March 31, 2000
should be addressed to Shareholder Relations, Micronetics Wireless,
Inc., 26 Hampshire Drive, Hudson, NH 03051. This material will be
furnished without charge to any shareholder requesting it.
MICRONETICS WIRELESS, INC.
26 Hampshire Drive
Hudson, NH 03051
Proxy Statement
The enclosed proxy is solicited by the management of
Micronetics Wireless, Inc. (the "Company") in connection with the
2000 Annual Meeting of Shareholders (the "Meeting") to be held on
September 7, 2000 at 10:00 A.M. at the offices of Kalin &
Associates, P.C., One Penn Plaza, Suite 1425, New York, NY 10119
and any adjournment thereof. The Board of Directors has set August
7, 2000 as the record date for the determination of shareholders
entitled to vote at the Meeting. A shareholder executing and
returning a proxy has the power to revoke it at any time before it
is exercised by filing a later proxy with, or other communication
to, the Secretary of the Company or by attending the Meeting and
voting in person.
The proxy will be voted in accordance with your directions as
to:
(1) The election of the three persons listed herein as
directors of the Company;
(2) Amendment of the Company's Certificate of Incorporation
(the "Certificate of Incorporation") to increase the number of
shares of Common Stock, par value $.01 per share, authorized for
issuance by the Company from 10,000,000 to 25,000,000;
(3) Amendment of the Company's 1996 Stock Option Plan (the
"1996 Plan") increasing the number of shares of Common Stock for
which options are authorized to be granted under the 1996 Plan from
300,000 to 900,000 shares (the "Amendment to the 1996 Plan"); and
(4) Such other matters as may properly come before the
Meeting.
In the absence of direction, the proxy will be voted in favor
of management's proposals.
The entire cost of soliciting proxies will be borne by the
Company. The costs of solicitation, which represent an amount
believed to be normally expended for a solicitation relating to an
uncontested election of directors, will include the costs of
supplying necessary additional copies of the solicitation materials
and the Company's Annual Report to Shareholders for its fiscal year
ended March 31, 2000 (the "Annual Report") to beneficial owners of
shares held of record by brokers, dealers, banks, trustees, and
their nominees, including the reasonable expenses of such
recordholders for completing the mailing of such materials and
Annual Reports to such beneficial owners.
Only shareholders of record of the Company's 3,966,067 shares
of Common Stock (the "Common Stock") outstanding at the close of
business on August 7, 2000 will be entitled to vote. Each share of
Common Stock is entitled to one vote. Holders of a majority of the
outstanding shares of Common Stock must be represented in person or
by proxy in order to achieve a quorum. The proxy statement, the
attached notice of meeting, the enclosed form of proxy and the
Annual Report are being mailed to shareholders on or about August
9, 2000. The Company's principal executive offices are located at
26 Hampshire Drive, Hudson, NH 03051 and its telephone number at
that location is (603) 883-2900.
PROPOSAL 1
ELECTION OF DIRECTORS
Three directors are to be elected by a majority of the votes
cast at the Meeting, each to hold office until the next Annual
Meeting of Shareholders and until his or her respective successor
is elected and qualifies. The persons named in the accompanying
proxy have advised management that it is their intention to vote
for the election of the following nominees as directors unless
authority is withheld:
Richard S. Kalin
Barbara Meirisch
David Siegel
Management has no reason to believe that any nominee will be
unable to serve. In the event that any nominee becomes
unavailable, the proxies may be voted for the election of such
person or persons who may be designated by the Board of Directors.
The following table sets forth certain information as to the
persons nominated for election as directors of the Company at the
Meeting:
Position with Director
Name Age the Company Since
Richard S. Kalin 45 Chief Executive Officer, April 1987
Chairman, President,
and Director
Barbara Meirisch 58 Director September 1996
David Siegel 72 Director April 1987
Mr. Richard S. Kalin was appointed Chief Executive Officer in
January 1992 and Chairman of the Board in June 1989. Prior thereto
he had been Secretary and a director of the Company since April
1987. Mr. Kalin is also Secretary and a director of Pentech
International Inc., a manufacturer and distributor of stationery
products. He has also been engaged in the private practice of law
since 1978, and currently is a partner of Kalin & Associates, P.C.,
counsel to the Company.
Ms. Barbara Meirisch has been a director of the Company since
September 1996. Her most recent assignment at AT&T was from
January 1990 to January 1996 as a Director of Public Relations in
Advertising for the Network Wireless Systems Business Unit, where
she had responsibility for developing wireless communication
strategies for domestic and international operations and media
relations. Presently, she is a strategic marketing consultant for
communication companies.
Mr. David Siegel has been a director of the Company since
April 1987. Mr. Siegel is also Chairman of the Board of Directors
of Surge Components, Inc., a distributor of passive electronic
components, and a director of Kent Electronics, Inc., a
manufacturer of cable assemblies and a distributor of electronic
components.
Directors serve until the next annual meeting of stockholders
and until their respective successors are elected and qualify.
During the fiscal year ended March 31, 2000 ("Fiscal 2000"),
the Board of Directors held one meeting and acted five times by
unanimous consent. Ms. Meirish and Messrs. Boe and Siegel comprise
the Compensation Committee and the Audit Committee which did not
meet during Fiscal 2000.
OTHER EXECUTIVE OFFICERS
Mr. David Robbins, 36, was appointed Senior Vice President of
the Company, in March 1999. He has been employed by the Company in
various capacities since February 1992.
Mr. Ralph Marrone, 41, was appointed Vice President of
Micronetics/Equipment in August 1999. Prior thereto, he was
Director of Strategic Marketing at Alpha Electronics, Inc. from
April 1998 to April 1999. Prior to that he held multiple positions
including sales and business development roles at Hewlett Packard
from May 1980 to June 1996.
Ms. Donna Hillsgrove, 51, was appointed Secretary and
Treasurer of the Company in January 1994. Prior to that time she
was Controller of the Company. She has been employed by the
Company since April 1992.
Mr. Stuart Bernstein, 42, was appointed Vice President of
Micronetics/VCO Products in April 2000. Prior to that time, he was
Vice President of Delean, Inc.'s VCO Products Group which was
acquired by the Company last year. Since 1990 until September
1999, he was employed by the Company in various capacities.
Mr. Floyd Parin, 57, President of Microwave and Video Systems
Inc. ("MVS"), a wholly-owned subsidiary of the Company, since
January 1999. Mr. Parin has been President of MVS for the past
five years.
Mr. Mark Goldman, 58, has been Vice President of MVS for more
than the past five years.
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF
1934
Section 16(a) of Securities Exchange Act of 1934 requires the
Company's executive officers and directors, and persons who own
more than ten percent of a registered class of the Company's equity
securities to file reports of ownership and changes in ownership
with the Securities and Exchange Commission. Barbara Meirisch
failed to timely file a Form 4 in connection with her sale of 1,000
shares in January 2000, David Robbins failed to timely file a Form
4 in connection with his sale of 10,000 shares in March 2000 and
Ralph Marrone failed to file a timely Form 4 in connection with his
sale of 2,000 shares in March 2000. All such Form 4's have now
been filed. Except as set forth above, based solely on its review
of the copies of such forms received by it, the Company believes
that during Fiscal 2000 all executive officers, directors and
owners of ten percent of the outstanding shares of Common Stock of
the Company complied with all applicable filing requirements.
EXECUTIVE COMPENSATION
The following table sets forth information relating to the
cash compensation received by the Company's President. None of the
Company's officers, other than its President, had cash compensation
in Fiscal 2000 of more than $100,000 per year. No executive
officer received benefits in excess of ten percent of their cash
compensation.
SUMMARY COMPENSATION TABLE
Long
Other Term
Annual Annual Compen-
Name and Com- Compen- sation/ Other
Principal Fiscal pensation sation Option Compen-
Position Year Salary ($) Bonus ($) Grants sation
Richard 2000 103,092(1) 11,048 50,000(2) 6,736(3)
S. Kalin, 1999 83,668(1) 18,114 55,000 6,456(3)
Chairman 1998 77,816(1) 13,311 57,500(2) 6,446(3)
and
President
(1) Includes $42,000 in legal fees to Kalin & Associates, P.C., of
which Mr. Kalin is a principal in Fiscal 2000, $32,084 of
such fees in Fiscal 1999 and $37,816 of such fees in Fiscal
1998. Does not include $27,500, $30,000 and $30,000 in fees
paid to Makenzie Communications, an advertising agency owned
by Mr. Kalin's wife, during Fiscal 2000, Fiscal 1999 and
Fiscal 1998, respectively.
(2) Includes 7,500 of option grants in Fiscal 1998 to Mr. Kalin's
wife, as to which Mr. Kalin disclaims beneficial ownership.
(3) Includes expenses relating to furnishing Mr. Kalin an
automobile.
EMPLOYMENT AGREEMENTS
In September 1996, Mr. Kalin entered into an employment
agreement (the "Agreement") with the Company which terminates
September 19, 2001, unless terminated earlier. The base salary
commences at $50,000 per annum. As additional compensation, Mr.
Kalin receives three percent of the Company's pre-tax profits up to
the levels reported in the prior fiscal year and five percent of
any such profits in excess of such amount. The Agreement also
provides for a monthly $500 automobile allowance.
In January 1999, Mr. Parin entered into a employment agreement
with MVS providing for annual compensation at the rate of $85,000
per year plus a bonus based on meeting certain metrics. In January
2000, this Agreement was amended to reduce the compensation rate to
$76,000 per year until June 30, 2000 and effective July 1, 2000
until December 31, 2001, it was further amended to become a
consulting agreement providing for annual compensation of $35,000
per year. In January 1999, Mr. Goldman entered into a two year
employment agreement with MVS providing for annual compensation of
$72,000 per year plus a bonus based on meeting certain metrics. In
August 1999, Mr. Marrone entered into a one year employment
agreement with the Company providing for annual compensation of
$105,000 plus a bonus of up to $45,000 if he meets certain metrics.
Each of these agreements includes a covenant not to compete and
provides for the payment of benefits to each of these persons
provided to other similarly situated executives.
STOCK OPTION PLANS
On April 14, 1994, the Company adopted a 1994 Stock Option
Plan (the "1994 Plan") and readopted it on July 18, 1995 pursuant
to which options to purchase up to 300,000 shares of Common Stock
may be granted to employees, consultants, advisors and/or
directors. On January 18, 1996, the Company adopted a 1996 Stock
Option Plan (the "1996 Plan") pursuant to which options to purchase
up to 300,000 shares of Common Stock may be granted to employees,
consultants, advisors and/or directors. In December 1999 and June
2000, the Board of Directors authorized amendments to the 1996 Plan
(subject to shareholder approval) to increase the number of shares
of Common Stock that may be granted under the 1996 Plan to 900,000
shares. Options granted pursuant to the 1994 Plan and 1996 Plan
may be incentive options or non-qualified options as such terms are
defined in the Internal Revenue Code of 1986, as amended (The 1994
Plan and the 1996 Plan are referred to collectively as the
"Plans").
The Plans are administered by the Board of Directors or a
Committee of the Board of Directors (the "Compensation Committee")
which has the authority to determine the persons to whom the
options may be granted, the number of shares of Common Stock to be
covered by each option, the time or times at which the options may
be granted or exercised and for the most part, the terms and
provisions of the options. The exercise price of options granted
under the Plans may not be less than the fair market value of the
shares of Common Stock on the date of grant (110% of such price if
granted to a person owning in excess of ten percent of the
Company's securities). Options granted under the Plans may not be
granted more than ten years from the date of adoption of each
respective Plan, nor may options be exercised more than ten years
from the date of grant.
The following table sets forth certain information with
respect to the named executive officers of the Company who have
been granted options to purchase the Common Stock (except as
otherwise set forth) during Fiscal 2000:
OPTION GRANTS IN FISCAL 2000
Percent of
Total Options
Options Granted in Exercise Expiration
Name Granted Fiscal Year Price ($)(2) Date
Richard S. Kalin 25,000 16.79% 1.625 5/10/03
25,000 1.32 - (3)
Stuart Bernstein(1) 10,000 6.21% 1.41 8/2/04
5,000 1.50 9/10/04
3,500 5.50 12/01/04
Donna Hillsgrove(1) 2,500 9.23% 1.625 5/10/03
25,000 9.44 1/13/05
David Robbins(1) 10,000 3.35% 1.625 5/10/03
(1) Pursuant to 1996 Stock Option Plan
(2) Options were granted at an exercise price equal to the fair market
value of the Common Stock on the date of grant.
(3) Mr. Kalin exercised these options during Fiscal 2000.
AGGREGATED OPTION EXERCISES IN LAST FISCAL
YEAR AND FISCAL YEAR-END (FYE) OPTION VALUES
Number of
Securities Value of
Underlying Unexercised
Unexercised In-the-Money
Shares Options Options
Acquired At FYE (#) At FYE ($)
On Value Exercisable/ Exercisable/
Name Exercise Realized($)(1) Unexercisable Unexercisable(2)
Richard
S. Kalin 45,000 $104,500 175,000/0 $2,261,687/0
Barbara
Meirisch 15,000 $343,125 10,000/0 $130,000/0
(1) Represents fair market value of the Common Stock at the
exercise date minus the exercise price.
(2) Represents fair market value of the Common Stock at March 31,
2000 of $15.00 as reported by NASDAQ, less the exercise price.
COMPENSATION OF DIRECTORS
Directors not employed by the Company have been compensated as
consultants for the time spent on Company matters, including
attendance at directors' and other meetings. During Fiscal 2000,
each non-employee director received $750 as consultant fees.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth as of July the number of shares
of Common Stock held of record or beneficially (i) by each person
who held of record, or was known by the Company to own
beneficially, more than five percent of the outstanding shares of
the Common Stock, (ii) by each director and (iii) by all officers
and directors as a group:
Number of Percent of
Names and Address Shares Owned Outstanding Shares
Richard S. Kalin 1,104,585(1) 26.67%
One Oak Forest Lane
Mendham, NJ 07945
David Siegel 118,270(2) 2.97%
2488 Horace Court
Bellmore, NY 11710
Roy L. Boe 20,000(3) (6)
410 North Cedar Drive
Fairfield, CT 06430
Barbara Meirisch 25,000(4) (6)
17 Woods End Road
West Orange, NJ 07052
All Officers and 1,527,304 36.09%
Directors as a group (1)(2)(3)(4)(5)
(ten persons)
(1) Includes 136,132 shares of Common Stock held in his retirement
accounts and options to purchase an aggregate of 175,000
shares of Common Stock at exercise prices ranging from $1.625
to $2.3125 per share. Also includes 434,100 shares of Common
Stock and options to purchase an aggregate of 1,250 shares of
Common Stock owned by his wife. Also includes 10,000 shares
of Common Stock owned by his minor son.
(2) Includes 33,050 shares of Common Stock owned of record by RJW
Trading Corp., a personal holding company 100% owned by Mr.
Siegel and members of his family, 14,970 shares of Common
Stock held in his retirement account and options to purchase
an aggregate of 15,000 shares of Common Stock exercisable at
prices ranging from $1.50 to $1.875 per share.
(3) Includes options to purchase an aggregate of 10,000 shares of
Common Stock at exercise prices ranging from $1.50 to $2.00
per share.
(4) Includes an option to purchase an aggregate of 10,000 shares
of Common Stock at exercise prices ranging from $1.50 to $2.00
per share.
(5) Includes options to purchase 132,075 shares of Common Stock
that are issuable upon exercise within sixty days at an
average exercise price of approximately $1.67 per share and an
additional 200 shares owned by officers of the Company who are
not also directors.
(6) Less than 1%.
PROPOSAL 2
APPROVAL OF AN AMENDMENT TO THE CERTIFICATE
OF INCORPORATION TO INCREASE THE NUMBER OF
AUTHORIZED SHARES OF COMMON STOCK
The Certificate of Incorporation currently authorizes the
issuance of up to 10,100,000 shares of capital stock, of which
10,000,000 shares are designated Common Stock, par value $.01 per
share, and 100,000 shares are designated preferred stock. In June
2000, the Board of Directors approved an amendment to the
Certificate of Incorporation, pursuant to which, subject to
approval by the shareholders at the Meeting, the number of shares
of Common Stock, par value $.01 per share, authorized for issuance
by the Company thereunder will be increased from 10,000,000 to
25,000,000. The affirmative vote of the holders of at least a
majority of the shares of Common Stock present and entitled to vote
at the Meeting is required to approve the amendment to the
Certificate of Incorporation to increase the number of authorized
shares of Common Stock from 10,000,000 to 25,000,000.
The Board of Directors recommends that the shareholders of the
Company vote their shares for the proposal to amend the Certificate
of Incorporation to increase the number of shares of Common Stock,
par value $.01 per share, authorized for issuance by the Company
from 10,000,000 to 25,000,000. In the absence of instructions to
the contrary, the shares of Common Stock represented by a proxy
delivered to the Board of Directors will be voted FOR the amendment
to the Certificate of Incorporation.
As of July 19, 2000, the Company had issued and outstanding
approximately 3,966,067 shares of Common Stock.
The Board of Directors would like to increase the number of
authorized shares of Common Stock to provide the Company with
flexibility to issue its shares in connection with possible future
actions, such as stock splits, stock dividends, financing,
corporate mergers, acquisitions, use in employee benefit plans or
other corporate purposes. As of the date of this proxy statement,
the Company has no agreements or commitments with respect to the
sale or issuance of such additional shares of Common Stock. The
availability of additional authorized shares would allow the
Company to accomplish the Company's business and financial
objectives in the future without stockholder approval, except as
may be required in particular cases by the Company's charter
documents, applicable law or the rules of any stock exchange or
other system on which the Company's securities may then be listed.
In addition to the more traditional uses described above, the
Company could issue shares of its Common Stock as a defense against
efforts to obtain control of the Company. The Board of Directors
does not intend or view the increase in authorized shares of Common
Stock as an anti-takeover measure, nor is the Company aware of any
proposed or contemplated transaction of this type.
PROPOSAL 3
APPROVAL OF AMENDMENT TO
THE 1996 PLAN
The affirmative vote of the holders of at least a majority of
the shares of Common Stock present and entitled to vote at the
Meeting is required to approve the Amendment to the 1996 Plan to
increase by 600,000 the number of shares of Common Stock for which
options may be granted under the 1996 Plan. Under the 1996 Plan as
currently in effect, options to purchase 300,000 shares of Common
Stock were subject to grant, of which all have been granted. Of
the 600,000 additional shares which the Board of Directors amended
the 1996 Plan to add, subject to shareholder approval, options to
purchase 161,950 shares have been granted. The Board of Directors
recommends that the shareholders of the Company vote their shares
of Common Stock in favor of the Amendment to the 1996 Plan. In the
absence of instructions to the contrary, the shares of Common Stock
represented by a proxy delivered to the Board of Directors will be
voted FOR the Amendment to the 1996 Plan.
The 1996 Plan
In December 1999 and June 2000, the Board of Directors
approved (subject to shareholder approval) amendments to the 1996
Plan to increase the number of shares of Common Stock for which
options could be granted to 900,000. The 1996 Plan is a stock plan
providing for the grant of incentive stock options and nonqualified
stock options to key employees and consultants of the Company and
its subsidiaries. The Company estimates that all of its employees,
consisting of approximately 62 people, are eligible to participate
in the 1996 Plan. The following description of the Plan is a
summary and is qualified in its entirety by reference to the 1996
Plan, a copy of which has been filed as an Exhibit to the Company's
Form S-8 as filed with the Securities and Exchange Commission on
March 17, 1998.
Duration. No option may be granted under the 1996 Plan after
January 17, 2006 (the "Termination Date"). Options granted prior
to the Termination Date, however, may extend beyond such date and
the provisions of the 1996 Plan will continue to apply thereto.
Purpose. The purpose of the 1996 Plan is to attract and
retain eligible participants of outstanding competence and to
encourage their best efforts on behalf of the Company. The Board
of Directors believes that stock options provide performance
incentives to eligible participants to the benefit of the Company
and its shareholders, and recommends approval of the amendment to
the Plan by stockholders.
Administration. The 1996 Plan is administered by the
Compensation Committee or the Board of Directors, itself, which
determines the key employees and consultants eligible to receive
options and the terms thereof, all in a manner consistent with the
1996 Plan. The Compensation Committee or the Board of Directors
has full and final authority to determine the persons to whom, and
the time or times at which, options are granted, the number of
shares subject to each option, the number of options which shall be
treated as incentive stock options, the duration of each option,
appropriate vesting requirements, and other terms and provisions of
each option. The Board of Directors or the Committee also has the
authority to accelerate the vesting of a stock option. In
determining persons who are to receive options, and the number of
shares to be covered by each option, the Compensation Committee or
the Board of Directors considers, among other things, the person's
position, responsibilities, service, accomplishments, and such
person's present and future value to the Company.
Shares Subject to Options. The 1996 Plan had provided that
the total number of shares of Common Stock subject to the grant of
options is 300,000 shares, subject to adjustment under certain
circumstances. Options which terminate or expire unexercised are
available for subsequent grants. In December 1999 and June 2000,
the Board of Directors authorized amendments to the 1996 Plan,
subject to shareholder approval, increasing the number of shares of
Common Stock available for the grant of options under the 1996 Plan
by 600,000 to 900,000. The purpose of the Amendment to the 1996
Plan is to make available for the grant of options a new pool of
600,000 shares of Common Stock of which options covering 161,950
shares of Common Stock have already been granted.
Options. The 1996 Plan provides for the grant of incentive
stock options and nonqualified stock options to key employees and
consultants, as determined by the Board of Directors. The exercise
price of incentive stock options granted under the 1996 Plan shall
be at least 100% of the fair market value of a share of Common
Stock on the date of grant and the exercise price of nonqualified
stock options shall be at least equal to the par value of the
Common Stock. The Board of Directors or the Committee may provide
that options will be exercisable in full at any time or from time
to time during the option term or provide for the exercise thereof
in such installments at such times as the Board of Directors may
determine. Nonqualified stock options shall be exercisable for not
more than ten years and incentive stock options may be exercisable
for up to ten years except as otherwise provided. An option may be
exercised only during the optionee's employment, provided, however,
that if employment terminates as a result of death, disability or
retirement, then options may be exercised for a period of up to one
year, and if employment is terminated by the Company without cause,
then options may be exercised for a period of up to 90 days, in
each case subject to the earlier expiration of the option in
accordance with the terms of its grant. The Board of Directors may
provide that an optionee may pay for shares upon exercise of an
option (i) in cash, (ii) in already-owned shares of Common Stock,
or (iii) by such other medium or by any combination of (i) or (ii),
as authorized by the Board.
Grants to Date. As of August 2000, a total of 461,950 options
have been granted under the 1996 Plan. On July 19, 2000, the
closing price of a share of Common Stock as reported by Nasdaq was
$12.50 and the total value all of the shares of Common Stock which
could be issued pursuant to options granted under the 1996 Plan as
of such date would be approximately $4,826,000.
Adjustments and Amendments of the 1996 Plan. Adjustments to
the 1996 Plan and to outstanding options will be made to reflect
stock dividends, recapitalizations and similar events. The
Committee has the right to amend, suspend or terminate the 1996
Plan at any time; provided, however, that, unless otherwise
required by law or specifically provided in the 1996 Plan, the
rights of a participant with respect to options granted prior to
such amendment, suspension or termination, may not be materially
impaired without the consent of such participant and provided
further that without the approval of the stockholders of the
Company entitled to vote, no amendment may be made which would (i)
increase the aggregate number of shares of Common Stock that may be
issued under the 1996 Plan (except to reflect stock dividend,
recapitalizations, and similar events), (ii) decrease the minimum
purchase price of any option or (iii) extend the maximum option
period. The 1996 Plan is not subject to any of the requirements of
the Employee Retirement Income Security Act of 1974, as amended.
The 1996 Plan is not, nor is it intended to be, qualified under
Section 401(a) of the Code.
Non-Assignability of Options. No option may be assignable or
transferable by the recipient, except by will or by the laws of
descent and distribution. During the lifetime of a recipient,
options may be exercisable only by him or his personal
representative or guardian. No option or interest therein may be
pledged, attached or otherwise encumbered other than in favor of
the Company.
Certain Federal Income Tax Consequences. The rules concerning
the Federal income tax consequences with respect to stock options
granted pursuant to the 1996 Plan are quite technical. Moreover,
the applicable statutory provisions are subject to change, as are
their interpretations and applications which may vary in individual
circumstances. Therefore, the following discussion of tax
consequences is designed to provide a general understanding thereof
as of the date hereof.
Under current federal income tax laws, the grant of an
incentive stock option generally has no income tax consequences for
the optionee or the Company. No taxable income results to the
optionee upon the grant or exercise of an incentive stock option.
However, the amount by which the fair market value of the stock
acquired pursuant to the incentive stock option exceeds the
exercise price is an adjustment item for purposes of Alternative
Minimum Tax. If no disposition of the shares is made within either
two years from the date the incentive stock option was granted or
one year from the date of exercise of the incentive stock option,
any gain or loss realized upon disposition of the shares will be
treated as a long-term capital gain or loss to the optionee. If
the Common Stock is held for more than one year after the date of
exercise, the optionee will be taxed at the lowest rate applicable
to capital gains for such optionee. The Company will not be
entitled to a tax deduction upon such exercise of an incentive
stock option, nor upon a subsequent disposition of the shares
unless such disposition occurs prior to the expiration of the
holding period described above. In general, if the optionee does
not satisfy the foregoing holding periods, any gain equal to the
difference between the exercise price and the fair market value of
the stock upon exercise (or, if a lesser amount, the amount
realized on disposition over the exercise price) will constitute
ordinary income. In the event of such a disposition before the
expiration of the holding period described above, the Company is
entitled to a deduction at that time equal to the amount of
ordinary income recognized by the optionee. Any gain in excess of
the amount recognized by the optionee as ordinary income would be
taxed to the optionee as short-term or long-term capital gain
(depending on the applicable holding period).
An optionee will realize no taxable income upon the grant of
a nonqualified option and the Company will not receive a deduction
at the time of such grant. Upon exercise of a nonqualified stock
option an optionee generally will recognize ordinary income in an
amount equal to the excess of the fair market value of the stock on
the date of exercise over the exercise price. Upon a subsequent
sale of the stock by the optionee, the optionee will recognize
short-term or long-term capital gain or loss depending upon his or
her holding period for the stock. If the Common Stock is held for
more than one year after the date of exercise, the optionee will be
taxed at the lowest rate applicable to capital gains for such
optionee. The Company will generally be allowed a deduction equal
to the amount recognized by the optionee as ordinary income.
In addition: (i) any officers and directors of the Company
subject to Section 16(b) of the Securities Exchange Act of 1934 may
be subject to special tax rules regarding the income tax
consequences concerning their options; (ii) any entitlement to a
tax deduction on the part of the Company is subject to the
applicable Federal tax rules, including, without limitation,
Section 162(m); and (iii) in the event that the exercisability of
an option is accelerated because of a change in control, payments
relating to the options, either alone or together with certain
other payments may constitute parachute payments under Internal
Revenue Code Section 280G, which excess amounts may be subject to
excise tax.
PROPOSAL 4
OTHER MATTERS
The Board of Directors has no knowledge of any other matters
which may come before the Meeting and does not intend to present
any other matters. However, if any other matters shall properly
come before the Meeting or any adjournment thereof, the persons
named as proxies will have discretionary authority to vote the
shares of Common Stock represented by the accompanying proxy in
accordance with their best judgment.
INDEPENDENT CERTIFIED PUBLIC AUDITORS
The Board of Directors has selected Trochiano & Daszkowski LLP
("T & D"), independent certified public accountants, auditors of
the Company's financial statements for FY2000, as the auditors of
the financial statements of the Company for its current fiscal year
ending March 31, 2001. A representative of T & D has been invited
to attend the Meeting, but it is uncertain whether he will attend.
If he does, he will be given the opportunity to make a statement
and to answer questions any shareholder may have.
SHAREHOLDER'S PROPOSALS
Any shareholder of the Company who wishes to present a
proposal to be considered at the next annual meeting of
shareholders of the Company and who wishes to have such proposal
presented in the Company's Proxy Statement for such meeting must
deliver such proposal in writing to the Company at 26 Hampshire
Drive, Hudson, NH 03051 on or before March 30, 2001.
By Order of the Board of Directors
Donna M. Hillsgrove,
Secretary
Dated: August 9, 2000
APPENDIX A
PROXY
MICRONETICS WIRELESS, INC.
26 Hampshire Drive
Hudson, NH 03051
The undersigned, revoking all proxies, hereby appoints Richard
S. Kalin and David Siegel and each of them, proxies with power of
substitution to each, for and in the name of the undersigned to
vote all shares of Common Stock of Micronetics Wireless, Inc. (the
"Company") which the undersigned would be entitled to vote if
present at the Annual Meeting of Shareholders of the Company to be
held on September 7, 2000, at 10:00 A.M. at the offices of Kalin &
Associates, P.C., One Penn Plaza, Suite 1425, New York, NY 10119
and any adjournments thereof, upon the matters set forth in the
Notice of Annual Meeting.
The undersigned acknowledges receipt of the Notice of Annual
Meeting, Proxy Statement and the Company's 2000 Annual Report.
1. ELECTION OF DIRECTORS
FOR all nominees listed WITHHOLD Authority
below (except as marked vote for all nominees
to the contrary below) listed below
(INSTRUCTION: To withhold authority to vote for an individual
nominee, strike a line through such nominee's name in the list
below).
RICHARD S. KALIN, BARBARA MEIRISCH AND DAVID SIEGEL
2. APPROVAL OF THE AMENDMENT TO THE COMPANY'S CERTIFICATE OF
INCORPORATION TO INCREASE THE NUMBER OF SHARES OF COMMON
STOCK, PAR VALUE $.01 PER SHARE, AUTHORIZED FOR ISSUANCE
BY THE COMPANY FROM 10,000,000 TO 25,000,000.
FOR AGAINST ABSTAIN
3. APPROVAL OF THE AMENDMENT OF THE COMPANY'S 1996 STOCK
OPTION PLAN INCREASING THE NUMBER OF SHARES OF COMMON
STOCK FOR WHICH OPTIONS ARE AUTHORIZED TO BE GRANTED
UNDER SUCH PLAN FROM 300,000 TO 900,000 SHARES.
FOR AGAINST ABSTAIN
4. IN THEIR DISCRETION, ON SUCH OTHER MATTERS AS MAY
PROPERLY COME BEFORE THE MEETING.
PLEASE SIGN ON THE REVERSE SIDE AND RETURN THIS PROXY PROMPTLY
IN THE ENCLOSED ENVELOPE.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
and when properly executed will be voted as directed herein. If no
direction is given, this Proxy will be voted FOR Proposals 1, 2 and
3.
Date: , 2000
(Signature)
(Signature, if held jointly)
Where stock is registered in the names
of two or more persons ALL should sign.
Signature(s) should correspond exactly
with the name(s) as shown above. Please
sign, date and return promptly in the
enclosed envelope. No postage need be
affixed if mailed in the United States.
Requests for copies of proxy materials, the Company's Annual
Report for its fiscal year ended March 31, 2000 on Form 10-KSB
should be addressed to Shareholder Relations, Micronetics Wireless,
Inc., 26 Hampshire Drive, Hudson, NH 03051. This material will be
furnished without charge to any shareholder requesting it.