MIKROS SYSTEMS CORPORATION
3490 U.S. Route #1, Bldg. #5
Princeton, NJ 08540
(609) 987-1513
April 21, 1997
SECURITIES AND EXCHANGE COMMISSION
450 5th Street, NW
Judiciary Plaza
Washington, DC 20549
ATTENTION: Filing Desk
RE: MIKROS SYSTEMS CORPORATION/PRELIMINARY PROXY MATERIALS
Dear Sir or Madam:
Pursuant to Rule 14a-6 under the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), on behalf of Mikros Systems Corporation, a Delaware
corporation (the "Corporation"), we enclose herewith for filing the
preliminary proxy materials, which include a Schedule 14A, letter to
stockholders, the Notice of Annual Meeting of Stockholders, the Proxy Statement
and the form of Proxy Card to be furnished to stockholders of the Corporation
in connection with the Corporation's upcoming 1997 Annual Meeting of
Stockholders. The Company aniticipates mailing the definitive proxy materials
to shareholders on or about May 10, 1997.
Kindly direct any comments or questions you may have concerning the enclosures
to the undersigned at (609) 987-1513.
Very truly yours,
/s/ Patricia A. Bird
- --------------------
Patricia A. Bird
Corporate Secretary
Enc.
<PAGE>
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:
X Preliminary Proxy Statement Confidential, for Use of the
- --- --- Commission Only (as permitted by
Rule 14a-6(e)(2)
Definitive Proxy Statement
- ---
Definitive Additional Materials
- ---
Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
- ---
Mikros Systems Corporation
- ------------------------------------------------------------------------------
(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 $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2).
- ---
$500 per each party to the controversy pursuant to Exchange Act Rule 14a
- --- 6(i)(3).
Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
- ---
(1) Title of each class of securities to which transaction applies:
- ----------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- ------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11 (Set foth the amount on which the filing fee is
calculated and state how it was determined):
- ------------------------------------------------------------------------------
<PAGE>
(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:
- ------------------------------------------------------------------------------
<PAGE>
MIKROS SYSTEMS CORPORATION
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
OF THE CORPORATION FOR THE ANNUAL MEETING OF STOCKHOLDERS
The undersigned hereby constitutes and appoints Thomas J. Meaney and
Deborah A. Montagna, and each of them, his or her true and lawful agents and
proxies with full power of substitution in each, to represent and to vote on
behalf of the undersigned all of the shares and warrants of Mikros Systems
Corporation (the "Corporation") which the undersigned is entitled to vote at
the Annual Meeting of Stockholders of the Corporation to be held at the
Corporate Office, 3490 U.S. Route #1, Bldg. #5, Princeton, New Jersey at 11:00
A.M., local time, on Tuesday, June 17, 1997, and at any adjournment or
adjournments thereof, upon the following proposals more fully described in the
notice of and proxy statement for the Meeting (receipt of which is hereby
acknowledged).
This proxy when properly executed will be voted in the manner directed
herein by the undersigned stockholder. If no direction is made, this proxy
will be voted FOR proposals 1, 2, 3 and 4.
1. ELECTION OF DIRECTORS.
Nominees: Joseph R. Burns, William V. Goodwin, F. Joseph Loeper,
Thomas C. Lynch, Thomas J. Meaney, Wayne E. Meyer, Frederick
C. Tecce and John B. Torkelsen.
(Mark one only)
VOTE FOR all the nominees listed above; except vote withheld from the
- ---- following nominees (if any).
VOTE WITHHELD from all nominees.
- ----
(continued and to be signed on reverse side)
2. APPROVAL OF PROPOSAL TO INCREASE THE NUMBER OF AUTHORIZED SHARES OF
COMMON STOCK OF THE COMPANY FROM 25,000,000 to 35,000,000 SHARES.
FOR AGAINST ABSTAIN
- ----- ----- -----
3. APPROVAL OF PROPOSAL TO RATIFY THE APPOINTMENT OF DRUKER, RAHL & FEIN AS
THE INDEPENDENT AUDITORS OF THE CORPORATION FOR THE FISCAL YEAR ENDING
DECEMBER 31, 1997.
FOR AGAINST ABSTAIN
- ----- ----- -----
4. In their discretion, the proxies are authorized to vote upon other
matters as may properly come before the Meeting.
Dated:
----------------------
<PAGE>
This proxy must be signed exactly as name appears hereon.
- ----------------------------------------------- When shares are held by joint
Signature of Securityholder tenants, both should sign.
- ----------------------------------------------- If the signer is a
Signature of Securityholder corporation please sign full
If held jointly corporate name by duly
authorized officer, giving
full title as such.
If a partnership, please sign
in partnership name by
authorized person.
I will will not attend the Meeting.
----- -----
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.
<PAGE>
MIKROS SYSTEMS CORPORATION
3490 U.S. Route 1, Building 5
Princeton, NJ 08540
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held June 17, 1997
The Annual Meeting of Stockholders of MIKROS SYSTEMS CORPORATION, a
Delaware corporation (the "Corporation"), will be held at the Company's
headquarters, 3490 U. S. Route 1, Building 5, Princeton, New Jersey on
Tuesday, June 17, 1997 at 11:00 A.M., local time, for the following purposes:
1) To elect eight directors to serve until the next Annual Meeting of
Stockholders and until their respective successors shall have been duly
elected and qualified;
2) To increase the number of authorized shares of common stock of the
Company from 25,000,000 to 35,000,000 shares;
3) To ratify the appointment of Druker, Rahl & Fein as the independent
auditors of the Corporation for the fiscal year ending December 31,
1997; and
4) To transact such other business as may properly come before the meeting
or any adjournment or adjournments thereof.
Holders of Common Stock, Convertible Preferred Stock, Series B Preferred
Stock, Series C Preferred Stock, Series D Preferred Stock, and Warrants to
purchase Series C Preferred Stock of record at the close of business on April
21, 1997 are entitled to notice of and to vote at the meeting, or any
adjournment or adjournments thereof. A complete list of such stockholders and
warrantholders will be open to the examination of any stockholder or
warrantholder at the Corporation's principal executive offices at 3490 U.S.
Route 1, Building 5, Princeton, New Jersey for a period of 10 days prior to
the meeting. The meeting may be adjourned from time to time without notice
other than by announcement at the meeting.
IT IS IMPORTANT THAT YOUR SHARES BE REPRESENTED REGARDLESS OF THE NUMBER
OF SHARES YOU MAY HOLD. WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING IN
PERSON, PLEASE COMPLETE, DATE AND SIGN THE ENCLOSED PROXY CARD AND MAIL IT
PROMPTLY IN THE ENCLOSED RETURN ENVELOPE. EACH PROXY GRANTED MAY BE REVOKED
BY THE STOCKHOLDER OR WARRANTHOLDER APPOINTING SUCH PROXY AT ANY TIME BEFORE
IT IS VOTED. IF YOU RECEIVE MORE THAN ONE PROXY CARD BECAUSE YOUR SHARES ARE
REGISTERED IN DIFFERENT NAMES OR ADDRESSES OR BECAUSE YOU OWN MORE THAN ONE
CLASS OF STOCK, EACH SUCH PROXY CARD SHOULD BE SIGNED AND RETURNED TO ASSURE
THAT ALL OF YOUR SHARES WILL BE VOTED.
By Order of the Board of Directors
/s/ Patricia A. Bird
------------------------------------
Patricia A. Bird
Princeton, New Jersey Secretary
May 10, 1997
The Corporation's 1996 Annual Report accompanies the Proxy Statement.
<PAGE>
MIKROS SYSTEMS CORPORATION
3490 U.S. Route 1, Building 5
Princeton, NJ 08540
________________________________________
P R O X Y S T A T E M E N T
________________________________________
This Proxy Statement is furnished in connection with the solicitation by
the Board of Directors of Mikros Systems Corporation (the "Company") of
proxies to be voted at the Annual Meeting of Stockholders of the Company to be
held on June 17, 1997 (the "Meeting"), at the Company's Headquarters, 3490
U.S. Route 1, Building 5, Princeton, New Jersey, at 11:00 A.M., local time,
and at any adjournment or adjournments thereof. Holders of record of Common
Stock, $0.01 par value ("Common Stock"), Convertible Preferred Stock, $0.01
par value ("Convertible Preferred Stock"), Series B Preferred Stock, $0.01 par
value ("Series B Stock"), Series C Preferred Stock, $0.01 par value ("Series C
Stock"), Series D Preferred Stock, $0.01 par value ("Series D Stock"), and
warrants to purchase Series C Stock (the "Warrants"), as of the close of
business on April 21, 1997, will be entitled to notice of and to vote at the
Meeting and any adjournment or adjournments thereof. As of that date, there
were (i) 12,440,702 shares of Common Stock; (ii) 755,000 shares of Convertible
Preferred Stock; (iii) 1,131,663 shares of Series B Stock; (iv) 5,000 shares
of Series C Stock; (v) 690,000 shares of Series D Stock; and (vi) Warrants to
purchase 97,500 shares of Series C Stock, issued and outstanding and entitled
to vote. Each share of Common Stock, Convertible Preferred Stock, Series C
Stock, Series D Stock and each Warrant is entitled to one vote on any matter
presented at the Meeting. Each share of Series B Stock is entitled to three
votes on any matter presented at the Meeting. The aggregate number of votes
entitled to be cast at the Meeting is 17,383,191. The holders of all classes
of stock will vote as a single class.
If proxies in the accompanying form are properly executed and returned,
the stock or Warrants represented thereby will be voted in the manner
specified therein. If not otherwise specified, the stock or Warrants
represented by the proxies will be voted (i) FOR the election of the eight
nominees below as Directors; (ii) FOR the increase number of authorized shares
of common stock of the Company from 25,000,000 to 35,000,000 shares; (iii) FOR
the ratification of the appointment of Druker, Rahl & Fein as independent
auditors for the year ending December 31, 1997; and (iv) in the discretion of
the persons named in the enclosed form of proxy, on any other proposals which
may properly come before the Meeting or any adjournment or adjournments
thereof. Any Stockholder or Warrantholder who has submitted a proxy may
revoke it any time before it is voted by written notice addressed to and
received by the Secretary of the Company, by submitting a duly executed proxy
bearing a later date or by electing to vote in person at the Meeting. The
mere presence at the Meeting of the person appointing a proxy does not,
however, revoke the appointment.
The presence, in person or by proxy, of holders of Common Stock,
Convertible Preferred Stock, Series B Stock, Series C Stock, Series D Stock,
and Warrants having a majority of the votes entitled to be cast at the Meeting
shall constitute a quorum. All actions proposed herein may be taken upon the
affirmative vote of Stockholders and Warrantholders possessing a majority of
the voting power represented at the Meeting, provided a quorum is present in
person or by proxy.
<PAGE>
This Proxy Statement, together with the related proxy card, is being
mailed to the Stockholders and Warrantholders of the Company on or about May
10, 1997. The Annual Report to Stockholders of the Company for the year ended
December 31, 1996, including financial statements (the "Annual Report"), is
being mailed concurrently with this Proxy Statement to all Stockholders and
Warrantholders of record as of April 21, 1997. In addition, the Company has
provided brokers, dealers, banks, voting trustees and their nominees, at the
Company's expense, with additional copies of the Annual Report so that such
record holders could supply such material to beneficial owners as of April 21,
1997.
ELECTION OF DIRECTORS
At the Meeting eight Directors are to be elected to hold office until
the next Annual Meeting of Stockholders and until their successors shall have
been elected and qualified.
The number which constitutes the entire Board of Directors of the
Company is eight. As described below, certain debt and equity holders of the
Company have the right to designate 2/7ths of the Board of Directors of the
Company. Proxies cannot be voted for a greater number of persons than the
number of nominees named in this Proxy Statement.
It is the intention of the persons named in the enclosed form of proxy
to vote the stock or Warrants represented thereby, unless otherwise specified
in the proxy, for the election as Directors of the persons whose names and
biographies appear below. All of the persons whose names and biographies
appear below are at present Directors of the Company.
In the event any of the nominees named below should become unavailable
or unable to serve as a director, it is intended that votes will be cast for a
substitute nominee designated by the Board of Directors. The Board of
Directors has no reason to believe that the nominees named will be unable to
serve if elected. Each of the nominees has consented to being named in this
Proxy Statement and to serve if elected.
The nominees for election to the Board of Directors of the Company are
as follows:
Served as a Positions with
Name Age Director Since the Company
- ------------------------------------------------------------------------------
Joseph R. Burns 59 1984 Senior Vice President, Chief
Scientist and Director
William V. Goodwin 72 1991 Director
F. Joseph Loeper 53 1997 Director
Thomas C. Lynch 53 1997 Director
Thomas J. Meaney 62 1986 Chief Executive Officer and
Director
Wayne E. Meyer 71 1988 Director and Chairman of the
Board
<PAGE>
Served as a Positions with
Name Age Director Since the Company
- ------------------------------------------------------------------------------
Frederick C. Tecce 61 1996 Director
John B. Torkelsen 51 1985 Director
The principal occupation and business experience, for at least the past
five years, of each nominee is as follows:
Joseph R. Burns was a Director and President of the Company from May 1984
until July 1986. From July 1986 until December 1986, Dr. Burns was Chairman of
the Company. From January 1987 until April 1988, Dr. Burns was a consultant to
the Company. In April 1988, Dr. Burns became Senior Vice President and Chief
Scientist of the Company as well as a Director.
William V. Goodwin has been a Director of the Company since June 1991. He
is, and has been since 1987, the President of WVG Corporation, a system
engineering management consulting firm. He has provided management consulting
services to the Company and other companies such as General Electric Company,
General Dynamics Corporation, and Martin Marietta Corporation. Prior to his
work with WVG Corporation, he served as Division Vice President and General
Manager of the RCA Missile and Surface Radar Division until his retirement from
RCA in 1987.
F. Joseph Loeper has been a Director of the Company Since February 1997.
He was first elected to the Pennsylvania Senate in 1979 to represent the 26th
Senatorial District and continues to serve in this capacity. He currently
serves as Majority Leader of the State Senate. Senator Loeper also serves as a
member of the Pennsylvania Board of Governors of the State System of Higher
Education and is a Pennsylvania Commissioner on the Delaware River Port
Authority.
Thomas C. Lynch has been a Director of the Company since February 1997.
He serves as Senior Vice President for Safeguard Scientifics, Inc. since
retiring at the rank of Rear Admiral, U.S. Navy in November 1995. Mr. Lynch
serves on the Boards of OAO International, Sanchez Computer Associates, Eastern
Technology Council, Safeguard Scientifics International and Enhanced Vision
Systems Inc.
Thomas J. Meaney has been a Director of the Company since July 1986. From
February 1997 to the present Mr. Meaney has been the Chief Executive Officer.
From July 1986 to February 1997 he served as President. From February 1983 to
his appointment as President of the Company in June 1986, Mr. Meaney was Senior
Vice President and Director of Robotic Vision Systems Incorporated ("RVSI"), a
manufacturer of robotic vision systems. Mr. Meaney served as a Director of
RVSI until 1991 when he resigned from the post. Prior to 1983 and for more
than five years, he was Vice President - Business Development, International of
Norden Systems and President - Norden Systems Canada, both divisions of United
Technologies Corporation and developers of computer and electronic products and
systems.
Wayne E. Meyer has been a Director of the Company since April 1988 and
Chairman of the Board since April 1990. From 1986 to present he has been the
Founder and President of the W.E. Meyer Corporation which provides consulting
and advice to industry, government and academic institutions in matters of
system engineering, project management, strategic planning and military and
electronic designs. He enlisted in the U.S. Navy as an Apprentice Seaman in
1943 and retired in 1985 in the rank of Rear Admiral.
<PAGE>
Frederick C. Tecce has been a Director of the Company since July 1996.
Mr. Tecce has been of Counsel to Pepper, Hamilton and Scheetz since 1993.
Since 1995, he has served as Co-Chairman of the Executive Committee of the
Eastern Technology Council. In 1996, Mr. Tecce was named Chairman of the
Finance Committee of the Pennsylvania Schools Employees Retirement
Systems. Mr. Tecce continues to serve as Chairman of Militran, Inc.
John B. Torkelsen has been a Director of the Company since June 1985 and
has served as Secretary of the Corporation from June 1985 until April 25, 1996.
Mr. Torkelsen has been President of Princeton Venture Research, Inc., a
financial research and consulting firm located in Princeton, New Jersey from
November 1984 to the present. He is also a Director of Voice Control Systems,
Inc., a voice recognition technology company.
None of the Company's Directors or executive officers is related to any
other Director or executive officer of the Company. In connection with the
acquisition of certain debt and equity instruments of the Company from third
parties, Messrs. Burns, Meaney, Meyer, Torkelsen and Tecce (collectively, the
Investors") have the right to designate 2/7ths of the Board of Directors of the
Company. See "Certain Relationships and Related Transactions." There are
currently five members of the Board.
The Board of Directors recommends that Stockholders and Warrantholders
vote FOR each of the nominees for the Board of Directors.
Committees and Meetings of the Board
The Board of Directors has a Compensation Committee which makes
recommendations concerning salaries and incentive compensation for employees of
and consultants to the Company. The current members of the Compensation
Committee are Messrs. Meaney, Goodwin and Torkelsen. The Compensation
Committee was established in December 1992 and held one meeting in 1996. There
were four meetings of the Board of Directors in 1996, not including written
consents of the Directors. Messrs. Meaney, Burns, and Goodwin attended all
four meetings of the Board of Directors in 1996, while Mr. Meyer attended three
meetings and Mr. Torkelsen attended two meetings. Of the two meetings held;
while Mr. Tecce was a Director he attended one such meeting.
Compensation of Directors
In December 1994, the Board of Directors authorized the payment to each
outside Director of $500 for each Board meeting attended in person and $150 for
each Board meeting attended telephonically. See "Certain Relationships and
Related Transactions".
<PAGE>
EXECUTIVE OFFICERS
The following table identifies the current executive officers of the
Company:
Capacities in In Current
Name Age Which Served Position Since
- -------------------------------------------------------------------------------
Thomas J. Meaney 62 Chief Executive Officer
and Director June 1986
Michael A. DiPiano 38 President February 1997
Joseph R. Burns 59 Senior Vice President,
Chief Scientist and Director April 1988
Deborah A. Montagna 45 Executive Vice President,
Chief Operating Officer April 1996
Joseph R. Benek 62 Vice President Finance
and Treasurer June 1992
Patricia A. Bird 30 Secretary April 1996
<PAGE>
EXECUTIVE COMPENSATION
Summary of Compensation in Fiscal 1996, 1995 and 1994
The following Summary Compensation Table sets forth information concerning
compensation for services in all capacities awarded to, earned by or paid to
the Company's Chief Executive Officer and the four most highly compensated
executive officers of the Company whose aggregate cash compensation exceeded
$100,000 (collectively, the "Named Executives") during the years ended December
31, 1994, 1995 and 1996.
SUMMARY COMPENSATION TABLE
Annual Compensation (1)
Name and Principal Position Year Salary ($)
(a) (b) (c)
- -------------------------------------------------------------------------------
Thomas J. Meaney
Chief Executive Officer 1996 $ 140,263
1995 149,550
1994 152,247 (2)
Joseph R. Burns
Senior Vice President
and Chief Scientist 1996 108,012
1995 116,313
1994 118,026 (3)
- --------------------
(1) The costs of certain benefits are not included because they
did not exceed, in the case of each Named Executive, the
lesser of $50,000 or 10% of the total of annual compensation
reported in the above table.
(2) Includes $5,247 of compensation deferred from prior years.
(3) Includes $4,826 of compensation deferred from prior years.
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Common Stock
The following table sets forth certain information, as of
April 21, 1997, with respect to holdings of the Company's Common
Stock by (i) each person known by the Company to be the beneficial
owner of more than 5% of the total number of shares of Common Stock
outstanding as of such date, (ii) each of the nominees (which
includes all current directors and Named Executives), and (iii) all
current directors and officers as a group.
Amount and Nature
of Beneficial Percent
Name of Beneficial Owner Ownership (1) of Class
- -------------------------------------------------------------------------------
(i) Certain Beneficial Owners:
Safeguard Scientifics (Delaware) Inc. 7,371,000 (2) 41.2
800 The Safeguard Building
435 Devon Park Drive
Wayne, PA 19087-1945
Transitions Two, Limited Partnership 2,137,775 (3) 15.1
920 Hopmeadow Street
Simsbury, Connecticut 06070
(ii) Nominees:
Joseph R. Burns 1,113,081 (4) 8.9
William V. Goodwin 98,760 *
F. Joseph Loeper -- --
Thomas C. Lynch -- --
Thomas J. Meaney 1,934,500 (5) 14.9
Wayne E. Meyer 1,133,750 (6) 8.8
Frederick C. Tecce 835,000 (7) 6.8
John B. Torkelsen 1,878,383 (8) 14.1
(iii) All Current Directors and Officers
as a Group (twelve persons) 7,547,726
(4)(5)(6)(7)(8)(9) 51.3
- --------------------
* Less than 1%
(1) Except as otherwise indicated, all shares are beneficially
owned and the sole investment and voting power is held by the
persons named.
<PAGE>
(2) Includes 5,459,000 shares issuable upon exercise of warrants,
and included 504,916 shares of common stock granted by
Safeguard to certain of its employees pursuant to a long-term
incentive plan. Safeguard will continue to exercise voting
rights with respect to these shares until the occurrence of
certain vesting requirements.
(3) Includes 1,750,275 shares issuable upon conversion of Series B Stock.
(4) Includes 14,748 shares issuable upon conversion of Series B
Stock and 100,000 shares issuable upon the exercise of
warrants.
(5) Includes 50,000 shares issuable upon conversion of Convertible
Preferred Stock plus 199,500 shares issuable upon conversion
of Series B Stock and 275,000 shares issuable upon the
exercise of warrants.
(6) Includes 30,000 shares issuable upon conversion of Series B
Stock and 100,000 shares issuable upon the exercise of options
and 318,750 shares issuable upon the exercise of warrants.
(7) Includes 275,000 shares issuable upon the exercise of
warrants.
(8) Includes 130,000 shares held of record by Princeton Venture
Research, Inc., a corporation wholly owned by Mr. Torkelsen.
Also includes 202,500 shares issuable upon conversion of
Convertible Preferred Stock and 695,883 shares issuable upon
conversion of Series B Stock. The Series B Stock is held of
record by Princeton Venture Research, Inc.
(9) Includes shares issuable upon exercise of warrant held by
Directors/Officers not individually owned above.
<PAGE>
Convertible Preferred Stock
The following table sets forth certain information, as of
April 21, 1997, with respect to holdings of the Company's
Convertible Preferred Stock by (i) each person known by the Company
to be the beneficial owner of more than 5% of the total number of
shares of Convertible Preferred Stock outstanding as of such date,
(ii) each of the nominees (which includes all current directors and
Named Executives), and (iii) all current directors and officers as
a group.
Amount and Nature
of Beneficial Percent
Name of Beneficial Owner Ownership (1) of Class
- -------------------------------------------------------------------------------
(i) Certain Beneficial Owners:
Allen & Company
711 Fifth Avenue
New York, New York 10022 50,000 6.6
American Diversified Enterprise, Inc.
711 Fifth Avenue
New York, New York 10022 50,000 6.6
Lazard Brothers & Co., Limited
21 Moorfields
London EC2P 2HT 200,000 26.5
Tektronix Development Company
P.O Box 500
Beaverton, Oregon 97077 200,000 26.5
(ii) Nominees:
Joseph R. Burns -- --
William V. Goodwin -- --
F. Joseph Loeper -- --
Thomas C. Lynch -- --
Thomas J. Meaney 50,000 6.6
Wayne E. Meyer -- --
Frederick C. Tecce -- --
John B. Torkelsen 202,500 26.8
(iii) All Current Directors and Officers
as a Group (twelve persons) 252,500 33.4
- --------------------
(1) Except as otherwise indicated, all shares are beneficially
owned and the sole investment and voting power is held by the
persons named.
<PAGE>
Series B Stock
The following table sets forth certain information, as of
April 21, 1997, with respect to holdings of the Company's Series B
Stock by (i) each person known by the Company to be the beneficial
owner of more than 5% of the total number of shares of Series B
Stock outstanding as of such date, (ii) each of the nominees (which
includes all current directors and Named Executives), and (iii) all
current directors and officers as a group.
Amount and Nature
of Beneficial Percent
Name of Beneficial Owner Ownership (1) of Class
- -------------------------------------------------------------------------------
(i) Certain Beneficial Owners:
The Mercantile & General
Reinsurance Company, PLC
Moorfields House
Moorfields
London EC2Y 9AL 91,342 8.1
Transitions Two, Limited Partnership
920 Hopmeadow Street
Simsbury, Connecticut 06070 583,425 51.6
(ii) Nominees:
Joseph R. Burns 4,916 *
William V. Goodwin -- --
F. Joseph Loeper -- --
Thomas C. Lynch -- --
Thomas J. Meaney 66,500 5.9
Wayne E. Meyer 10,000 *
Frederick C. Tecce -- --
John B. Torkelsen 231,961 (2) 20.5
(iii) All Current Directors and Officers
as a Group (twelve persons) 316,711 28.0
- --------------------
* Less than 1%
(1) Except as otherwise indicated, all shares are beneficially
owned and the sole investment and voting power is held by the
persons named.
(2) Held of record by Princeton Venture Research, Inc., a
corporation wholly owned by Mr. Torkelsen.
<PAGE>
Series C Stock
The following table sets forth certain information, as of April 21, 1997,
with respect to holdings of the Company's Series C Stock by (i) each person
known by the Company to be the beneficial owner of more than 5% of the total
number of shares of Series C Stock outstanding as of such date, (ii) each of
the nominees (which includes all current directors and Named Executives), and
(iii) all current directors and officers as a group.
Amount and Nature
of Beneficial Percent
Name of Beneficial Owner Ownership (1) of Class
- -------------------------------------------------------------------------------
(i) Certain Beneficial Owners:
Transitions Two, Limited Partnership
920 Hopmeadow Street
Simsbury, Connecticut 06070 5,000 100.0
(ii) Nominees:
Joseph R. Burns 19,500 (2) 79.6
William V. Goodwin -- --
F. Joseph Loeper -- --
Thomas C. Lynch -- --
Thomas J. Meaney 19,500 (2) 79.6
Wayne E. Meyer 19,500 (2) 79.6
Frederick C. Tecce 19,500 (2) 79.6
John B. Torkelsen 19,500 (2) 79.6
(iii) All Current Directors and Officers
as a Group (twelve persons) 97,500 (2) 95.1
- --------------------
(1) Except as otherwise indicated, all shares are beneficially
owned and the sole investment and voting power is held by the
persons named.
(2) This number reflects warrants to purchase Series C Stock.
<PAGE>
Series D Stock
The following table sets forth certain information, as of
April 21, 1997, with respect to holdings of the Company's Series D
Stock by (i) each person known by the Company to be the beneficial
owner of more than 5% of the total number of shares of Series D
Stock outstanding as of such date, (ii) each of the nominees (which
includes all current directors and Named Executives), and (iii) all
current directors and officers as a group.
Amount and Nature
of Beneficial Percent
Name of Beneficial Owner Ownership (1) of Class
- -------------------------------------------------------------------------------
(i) Certain Beneficial Owners:
(ii) Nominees:
Joseph R. Burns 138,000 20.0
William V. Goodwin -- --
F. Joseph Loeper -- --
Thomas C. Lynch -- --
Thomas J. Meaney 138,000 20.0
Wayne E. Meyer 138,000 20.0
Frederick C. Tecce 138,000 20.0
John B. Torkelsen 138,000 20.0
(iii) All Current Directors and Officers
as a Group (twelve persons) 690,000 100.0
- --------------------
(1) Except as otherwise indicated, all shares are beneficially
owned and the sole investment and voting power is held by the
persons named.
<PAGE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In a series of transactions consummated on October 27, 1992
and April 27, 1993, Joseph R. Burns, Thomas J. Meaney, Wayne E.
Meyer and John B. Torkelsen, each a Director of the Company, and
Frederick C. Tecce (collectively, the Investors") acquired all of
the loan and equity interests in the Company from certain third
parties. Pursuant to such transactions, each of the Investors
acquired, in consideration of $50,000 each, 20% of (i) 50,000
shares of Common Stock, (ii) promissory notes of the Company in the
aggregate principal amount of $916,875 (collectively, the "Investor
Notes"), (iii) warrants to purchase 97,500 shares of Series C Stock
(the "Series C Warrants"), and (iv) certain other loan and equity
rights in the Company, including the right to designate 2/7ths of
the Board of Directors of the Company. See "Election of
Directors."
In December 1993, the Investors agreed to reduce the amounts
owed by the Company under the Investor Notes, including unpaid
interest, in exchange for shares of capital stock issued by the
Company. In return for a reduction in principal of $416,875 and
accrued interest of $273,125, the Company issued 2,750,000 shares
of Common Stock and 690,000 shares of Series D Stock. The Investor
Notes were modified to provide for 16 quarterly payments of
principal beginning January 1, 1994 and ending October 1, 1997. The
Investors have authorized deferral of all principal payments until
1998. Interest on the unpaid principal balance is payable quarterly
commencing March 31, 1994. As additional consideration for the
modification of such loans, the Company extended the exercise
period for the Series C Warrants until April 25, 1999.
In a series of events from February through May 1996, the
Company raised an aggregate of $641,500 in debt financing pursuant
to the issuance of secured promissory notes.
The promissory notes are for a term of approximately eighteen
months and include an interest rate of 12% on the unpaid balance.
The first interest payment was paid on June 15, 1996 and interest
is due quarterly thereafter. The principal payments will be paid
on the fifteenth of March, June and September 1998. The notes are
secured by the assets of the Corporation. As additional
consideration, warrants for the purchase of common stock were
granted (the number of shares were based on the amount of the
promissory note and equal to five shares to each dollar). The
warrant price is $.01 per share.
The following officers and directors participated in the 1996
financing: Wayne E. Meyer, Thomas J. Meaney, Deborah A. Montagna
and Patricia A. Bird.
On May 31, 1989, the Company retained the servies of W. E.
Meyer Corporation to provide engineering and management consulting
services to the Company. Under the agreement, the Company issued
30,750 shares of Common Stock and $2,619 of cash to the W. E. Meyer
Corporation in 1996 for services rendered. Wayne E. Meyer, a
Director of the Company, is President of W. E. Meyer Corporation.
<PAGE>
On April 15, 1991, the Company retained the services of WVG
Corporation, of which William V. Goodwin, a Director of the
Company, is President, to provide operations management and
technical consulting services. During 1996, the Company issued
23,760 shares of Common Stock for services rendered.
AMENDMENT TO CERTIFICATE OF INCORPORATION
Stockholders are being asked to consider and vote upon a
proposal to amend the Certificate of Incorporation of the Company,
as amended, to increase the number of authorized shares of Common
Stock from 25,000,000 to 35,000,000 to provide the Company with
flexibility to undertake future financings or negotiate potential
acquisition or partnering transaction(s). The Company has no
definitive agreements relating to such transactions. The Board of
Directors believes, however, that the adoption of the proposed
amendment will afford the Company needed flexibility when
negotiating such potential transactions by allowing the Board to
issue additional shares of Common Stock without further stockholder
approval. Under the Company's current capitalization structure,
approximately 14,242,000 shares of Common Stock are reserved for
issuance under outstanding option plans, warrants and convertible
securities. Consequently, the Company is significantly restricted
in its ability to undertake future financings or other potential
transactions.
The increase in the number of authorized shares of Common
Stock is required to permit the issuance of additional shares in
the future for corporate purposes. There are currently no other
plans to issue Common Stock. The rights of the Company's
stockholders will not be affected by the increase in the number of
shares of authorized Common Stock, except to the extent of their
ownership dilution of the Company. Stockholders of the Company are
not entitled to appraisal rights under the Delaware General
Corporation Law.
The Board of Directors has approved such amendment and
recommends its approval by the stockholders of the Company.
The Board of Directors recommends a vote FOR the proposal to
amend the Certificate of Incorporation to increase the number of
authorized shares of Common Stock from 25,000,000 to 35,000,000.
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors of the Company has, subject to
stockholder approval, retained Druker, Rahl & Fein as independent
auditors of the Company. Neither such firm nor any of its members
has any direct or indirect financial interest in or any connection
with the Company in any capacity other than as auditors.
The Board of Directors recommends a vote FOR the ratification
of the appointment of Druker, Rahl & Fein as the independent
auditors of the Company for the fiscal year ending December 31,
1997.
<PAGE>
One or more representatives of Druker, Rahl & Fein is expected
to attend the Meeting and have an opportunity to make a statement
or respond to appropriate questions from stockholders.
STOCKHOLDERS' PROPOSALS
Stockholders deciding to submit proposals for inclusion in the
Company's proxy statement and form of proxy relating to the 1998
Annual Meeting of Stockholders must advise the Secretary of the
Company of such proposals in writing by December 30, 1997.
OTHER MATTERS
The Board of Directors is not aware of any matter to be
presented for action at the Meeting other than the matters referred
to above and does not intend to bring any other matters before the
Meeting. However, if other matters should come before the Meeting,
it is intended that holders of the proxies will vote thereon in
their discretion.
GENERAL
The accompanying proxy is solicited by and on behalf of the
Board of Directors of the Company, whose notice of meeting is
attached to this Proxy Statement, and the entire cost of such
solicitation will be borne by the Company.
In addition to the use of the mails, proxies may be solicited
by personal interview, telephone and telegram by directors,
officers and other employees of the Company who will not be
specially compensated for these services. The Company will also
request that brokers, nominees, custodians and other fiduciaries
forward soliciting materials to the beneficial owners of shares or
Warrants held of record by such brokers, nominees, custodians and
other fiduciaries. The Company will reimburse such persons for
their reasonable expenses in connection therewith.
Certain information contained in this Proxy Statement relating
to the occupations and security holdings of directors and officers
of the Company is based upon information received from the
individual directors and officers.
MIKROS SYSTEMS CORPORATION WILL FURNISH, WITHOUT CHARGE, A
COPY OF ITS REPORT ON FORM 10-K FOR THE YEAR ENDED DECEMBER 31,
1996, INCLUDING FINANCIAL STATEMENTS AND SCHEDULES THERETO BUT NOT
INCLUDING EXHIBITS, TO EACH OF ITS STOCKHOLDERS OR WARRANTHOLDERS
OF RECORD ON APRIL 21, 1997 AND TO EACH BENEFICIAL STOCKHOLDER OR
WARRANTHOLDER ON THAT DATE UPON WRITTEN REQUEST MADE TO THE
SECRETARY OF THE COMPANY. A REASONABLE FEE WILL BE CHARGED FOR
COPIES OF REQUESTED EXHIBITS.
<PAGE>
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The information appearing under the captions "Management's
Discussion and Analysis of Financial Condition and Results of
Operations" and the Company's Balance Sheets as of December 31,
1996 and December 31, 1995 and Statements of Operations and
Shareholders' Equity and Cash Flows for the years ended December
31, 1995, 1995 and 1994 and the independent accountant's report on
such financial statements contained in the Annual Report
accompanying this Proxy Statement are incorporated herein by
reference to such portions of such Annual Report.
PLEASE DATE, SIGN AND RETURN THE PROXY CARD AT YOUR EARLIEST
CONVENIENCE IN THE ENCLOSED RETURN ENVELOPE. A PROMPT RETURN OF
YOUR PROXY CARD WILL BE APPRECIATED AS IT WILL SAVE THE EXPENSE OF
FURTHER MAILINGS.
By Order of the Board of Directors
/s/ Patricia A. Bird
------------------------------------
Patricia A. Bird
Secretary
Princeton, New Jersey
May 10, 1997
