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 Rule 14a-11(c) or Rule 14a-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):
________________________________________________________________
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>
MERRIMAC INDUSTRIES, INC.
41 Fairfield Place
West Caldwell, NJ 07006-6287
April 11, 1997
Charles F. Huber II
Chairman of the Board
Dear Fellow Stockholder:
You are cordially invited to attend the Annual Meeting of Stockholders
(the "Meeting") of the Company to be held at The Princeton Club of New York
(Telephone: 212-596-1200), 15 West 43rd Street (off of Fifth Avenue), New York,
NY 10036, on Monday, May 12, 1997 at 5:30 PM. We look forward to the Meeting as
an opportunity to meet you and to receive your comments and suggestions.
Additional information about the Meeting and the various matters upon
which stockholders will act is found in the formal Notice of the Meeting and
Proxy Statement on the following pages. The Annual Report to Stockholders for
1996, including financial statements, accompanies this Proxy Statement but does
not constitute a part of the proxy solicitation material.
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/ Charles F. Huber II
--------------------------
Charles F. Huber II
Chairman of the Board
<PAGE>
MERRIMAC INDUSTRIES, INC.
_________________________________
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
May 12, 1997
To The Stockholders of
Merrimac Industries, Inc.
The Annual Meeting of Stockholders (the "Meeting") of Merrimac
Industries, Inc. (the "Company") will be held at The Princeton Club of New York,
15 West 43rd Street, (off of Fifth Avenue) New York, NY 10036, on Monday, May
12, 1997, at 5:30 PM, Eastern Daylight Time, for the following purposes:
(1) to elect a Board of five Directors to serve until the next
Annual Meeting of Stockholders and until their successors are
duly elected and qualified;
(2) to ratify and approve the action of the Board of Directors
in appointing Arthur Andersen LLP as independent accountants
for the current fiscal year;
(3) to ratify and approve the action of the Board of Directors
in adopting the 1997 Long-Term Incentive Plan of the Company;
and
(4) to transact such other business as may properly come before the
Meeting.
Holders of Common Stock of record at the close of business on March 31,
1997 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 11, 1997
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 1997 MEETING.
<PAGE>
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 to vote by marking, signing, dating and
returning their proxies to be voted at the Annual Meeting of Stockholders (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 and in accordance with the Board of Directors' recommendations as set
forth herein. Sending in a signed proxy will not affect a stockholder'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. Presence at the Meeting does not of itself
revoke the proxy. If a stockholder 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 stockholders on or about April 11, 1997.
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 expects to pay
compensation for the solicitation of proxies, plus expenses to Corporate
Investor Communications, Inc. ("CIC") to supply brokers and other persons with
proxy materials for forwarding to beneficial holders of Common Stock. The
Company expects to pay CIC a fee of approximately $2,000 for its services. The
Company will also reimburse such brokers and other persons for expenses related
to such forwarding.
Each holder of Common Stock of record at the close of business on March
31, 1997 is entitled to one vote for each share of Common Stock then held. At
the close of business on that date, there were outstanding and entitled to vote
1,515,063 shares of Common Stock.
Under Securities and Exchange Commission ("SEC") rules, boxes and a
designated blank space are provided on the proxy card for stockholders 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 not counted for
quorum purposes.
Assuming a quorum has been reached, a determination must be made as to
the results of the vote on each matter submitted for stockholder approval: (1)
the election of Directors; (2) the appointment of independent accountants; and
(3) the adoption of the 1997 Long-Term Incentive Plan. The appointment of the
Company's independent accountants and the adoption of the 1997 Long-Term
Incentive Plan must be approved by a majority of the votes cast at the Meeting,
while director nominees must receive a plurality of the votes cast at the
Meeting.
Abstentions are not counted in determining the number of votes cast in
connection with the appointment of independent accountants or the approval of
the 1997 Long-Term Incentive Plan. Like abstentions, broker-dealer "non-votes"
on "non-routine" matters are not counted in calculating the number of votes
cast. The American Stock Exchange has advised the Company that the election of
Directors and appointment of accountants are considered "routine" items upon
which broker-dealers holding shares in street name for their customers may vote,
in their discretion, on behalf of any customers who do not furnish voting
instructions within 10 days of the Meeting. However, the proposal to approve the
1997 Long-Term Incentive Plan is a "non-routine" item, which means that brokers
who have received no voting instructions from their customers do not have
discretion to vote on this matter. As discussed above, these broker "non-votes"
will not be treated as votes cast at the Meeting.
Stockholder Proposals for the 1998 Annual Meeting
In order to be included in the proxy statement and proxy card relating
to the 1998 Annual Meeting of Stockholders, stockholder proposals must be
received by the Secretary of the Company at the above address no later than
December 11, 1997.
<PAGE>
ITEM 1. ELECTION OF DIRECTORS
Nominees
At the Meeting it is proposed to elect five directors, each to hold
office until the next Annual Meeting of Stockholders and until his successor is
duly elected and qualified. The persons named in the enclosed form of proxy will
vote such proxy for the election to the Board of Charles F. Huber II, Mason N.
Carter, Eugene W. Niemiec, Arthur A. Oliner and Albert H. Cohen. Other than Mr.
Cohen, all of the nominees have been previously elected by the stockholders.
Voting
At the close of business on March 31, 1997, the Company had outstanding
and entitled to vote 1,515,063 shares of Common Stock (exclusive of 1,074,839
shares held by the Company as treasury shares). Each holder of Common Stock of
record on such 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 March 31, 1997
with respect to each director and nominee.
<TABLE>
<CAPTION>
Name and Other Positions Director of the
With the Company Age Company Since
<S> <C> <C>
Charles F. Huber II
Chairman of the Board.............................. 67 1985
Mason N. Carter
President and Chief Executive Officer.............. 51 1995
Eugene W. Niemiec
Vice Chairman and Chief Technology Officer......... 57 1990
Arthur A. Oliner....................................... 75 1961
Albert H. Cohen ....................................... 64 -
Reynold K. Green
Vice President, Sales ............................. 38 1996 (1)
</TABLE>
(1) Mr. Green is not seeking re-election to the Board. He will, however,
continue to serve as an officer of the Company.
Business Experience of Directors/Director Nominees During Past Five Years
Mr. Huber, on September 9, 1994, was appointed Chairman of Merrimac
Industries, Inc. In addition, he is currently Chairman of Transnational
Industries, Inc., a manufacturing company in Chadds Ford, Pennsylvania and
Director, Vice President, Secretary and Treasurer of Prodo-Pak, Corp., a
manufacturer of packaging machinery, located in Garfield, New Jersey. He has
been a Managing Director of William D. Witter, Inc., an investment banking
organization in New York, New York, since 1981, where he specializes in
leveraged buyouts.
Mr. Carter, on December 16, 1996, was appointed President and Chief
Executive Officer ("CEO"). 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 CEO of
Kentile, Inc., Chicago, Illinois, a manufacturer of resilient flooring from 1992
to 1994. From 1987 to 1992, he was President and CEO of Metex Corporation,
Edison, New Jersey, a manufacturer of industrial and automotive products. He was
a Director of United Capital Corp., Great Neck, New York from 1989 to 1994.
Mr. Niemiec, on December 16, 1996, was elected Vice Chairman and Chief
Technology Officer of the Company. From September 1994 to December 1996 he held
the offices of President, Chief Executive Officer and Chief Operating Officer.
He was President and Chief Operating Officer from 1990 to 1994.
Dr. Oliner is Professor Emeritus of Electrophysics at Polytechnic
University (formerly Polytechnic Institute of Brooklyn), was head of its
Electrical Engineering Department for eight years, and was the Director of its
Microwave Research Institute from 1967 to 1982. He is a member of the National
Academy of Engineering, and a Fellow of the Institute of Electrical and
Electronic Engineers ("IEEE"), the American Association for Advancement of
Science, and the British Institution of Electrical Engineers. Dr. Oliner is the
author of three books and over 200 published papers, and his many awards include
Microwave Career Award, the Microwave Prize of IEEE, and the van der Pol Gold
Medal of the International Union of Radio Science. He has been an engineering
consultant for such companies as IBM, Boeing, Raytheon, Hughes and Rockwell.
Mr. Cohen, since 1987, has been self-employed as a Management
Consultant and Asset (Money) Manager. 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.
Mr. Green, effective March 1997, was appointed Vice President, Sales.
From April 1996 to March 1997 he was Vice President, Manufacturing. Prior
thereto and for the past five years, Mr. Green has held the positions of
Director of Manufacturing, National Sales Manager and Director of Quality
Control and High Reliability Services at the Company.
The Board of Directors has a Stock Option Committee, Stock Purchase
Plan Committee, Audit Committee, Compensation Committee, and Nominating
Committee.
The Stock Option Committee, which currently consists of Messrs. Carter,
Huber and Oliner, administers the 1993 Stock Option Plan and the 1983 Key
Employees Stock Option Plan and determines the recipients and terms of the
options awarded thereunder. The Stock Purchase Plan Committee, which currently
consists of Messrs. Carter, Huber and Oliner, administers the Stock Purchase
Plans of the Company. Committee members are currently eligible to participate in
the 1993 Stock Option Plan. During fiscal 1996 the Stock Option Committee met
twice.
Messrs. Carter, Huber and Oliner currently serve on the Audit
Committee, which was established in April 1983. The function of the Audit
Committee is to review the Company's annual audit with the Company's independent
accountants. During fiscal 1996 the Audit Committee met twice.
Messrs. Huber and Oliner, non-employee Directors, currently serve on
the Compensation Committee, which was established in April 1985. 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 are awarded bonuses. During fiscal 1996
the Compensation Committee met twice.
Messrs. Huber, Niemiec and Oliner currently serve on the Nominating
Committee, which was established in December 1994. Stockholders wishing to
recommend persons for consideration by the Nominating Committee as nominees for
election to the Company Board of Directors, can do so by writing to the
Secretary of the Company at 41 Fairfield Place, West Caldwell, New Jersey 07006,
giving each person's name, biographical data and qualifications. 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 1996 the Nominating
Committee did not meet, but two meetings have been held in 1997.
During the fiscal year that ended on December 28, 1996, the Board of
Directors held thirteen meetings including four by telephone conference call.
Each director during this period attended 75% or more of the aggregate of the
total number of meetings of the Board and of the committees on which he served.
<PAGE>
Information About Executive Officers
The following table sets forth certain information as of March 31, 1997
with respect to each executive officer (other than those listed as Directors).
<TABLE>
<CAPTION>
Name and Position With the Company Age
<S> <C>
John Z. Blahosky
Vice President, Special Projects................................ 65
Robert V. Condon
Vice President, Finance and Chief Financial Officer
Secretary and Treasurer........................................ 50
Brian R. Dornan
Vice President, Technology and Engineering...................... 48
Norman R. Holden
Vice President, Quality Assurance, Control and
Technical Services.............................................. 52
Walter N. Joswick
Vice President, Engineering..................................... 44
Frank J. Macaluso
Controller...................................................... 59
</TABLE>
Business Experience of Executive Officers During Past Five Years
Mr. Blahosky, effective October 1996, was appointed Vice President,
Special Projects. He had been Executive Vice President since 1990.
Mr. Condon has been Vice President, Finance and Chief Financial Officer
("CFO") since joining the Company in March 1996, and was appointed Secretary and
Treasurer in January 1997. Prior to joining the Company he was with Berkeley
Educational Services as Vice President, Finance, Treasurer, and CFO 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 CFO of SCS Communications, a private holding company.
Mr. Dornan, effective October 1996, was appointed Vice President of
Technology and Engineering. He had been Group Vice President of Manufacturing
since 1986.
Mr. Holden, effective October 1996, was appointed Vice President of
Quality Assurance, Control and Technical Services. He had been Director of
Quality since 1991.
Mr. Joswick, effective October 1996, was appointed Vice President of
Engineering. He had been Director of IF Engineering since 1991.
Mr. Macaluso, effective January 1997, was appointed Controller. He had
been Manager of Accounting since 1985.
<PAGE>
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 served as Chief Executive Officer of the Company during fiscal
1996 and the four other most highly compensated executive officers serving at
the end of the last fiscal year.
<TABLE>
Summary Compensation Table
Annual Compensation Long-Term Compensation
Awards Payouts
<CAPTION>
Securities All Other
Underlying Compensation
Name and Principal Position(s) Year Salary ($) Bonus ($) Options/SARs (#) ($) (1) (2)
- -------------------------------------- ------- -------------- ------------ --------------------- -------------------
<S> <C> <C> <C> <C> <C>
Eugene W. Niemiec 1996 180,003 - 50,000 8,607
Vice Chairman 1995 160,179 30,000 15,000 13,365
and Chief Technology Officer(3) 1994 130,426 7,869 - 13,478
President, Chief Executive
Officer and Chief Operating
Officer
John Z. Blahosky 1996 150,010 - - 8,607
Vice President, Special Projects 1995 141,096 15,000 15,000 12,225
Executive Vice President 1994 117,512 7,145 - 12,225
Brian R. Dornan 1996 112,127 - - 7,294
Vice President, Technology and 1995 99,566 15,000 7,500 8,640
Engineering 1994 83,159 5,017 - 8,594
John J. Antonich 1996 110,857 - - 7,221
Vice President, Secretary and 1995 95,755 15,000 - 9,056
Controller 1994 90,033 4,543 - 7,087
(retired December 31, 1996)(5)
Anthony N. Ramsden 1996 107,443 - - 6,973
Vice President, Sales/Marketing 1995 98,731 15,000 10,000 9,338
(resigned March 10, 1997) 1994 91,728 5,248 - 7,254
Mason N. Carter 1996 7,692 - 66,500 23,500
President and
Chief Executive Officer (3)(4)
</TABLE>
(1) Includes amounts contributed by the Company to the accounts of the
named executive officers pursuant to the Company's Savings and
Investment 401(k) Plan and the Company's Profit Sharing Plan.
(2) Includes Director and consultation fees paid to Mr. Carter during 1996.
(3) On December 16, 1996, Mr. Niemiec became Vice Chairman and Chief
Technology Officer and Mr. Carter became President and Chief
Executive Officer. In connection therewith, each received options
to purchase 50,000 shares of Common Stock. (See table below
entitled "Individual Grants").
(4) At December 28, 1996, the Company had accrued salary of $7,692
for Mr. Carter. His annual salary is $200,000.
(5) Pursuant to a retirement agreement with the Company, beginning
in 1997 Mr. Antonich will receive $30,000 annually for ten years.
The following table sets forth information concerning individual grants
of stock options made during fiscal 1996 to each of the named executive
officers.
<TABLE>
Option/SAR Grants in Last Fiscal Year
(Individual Grants)
- ------------------------- ---------------------------- ---------------------------- ----------------- --------------
<CAPTION>
Number of Securities % of Total Options/SARs
Underlying Options/SARs Granted to Employees in Exercise Price Expiration
Name Granted (#) Fiscal Year or Base ($/Sh) Date
- ------------------------- ---------------------------- ---------------------------- ----------------- --------------
<S> <C> <C> <C> <C>
Charles F. Huber II 1,500 .91% 10.50 4/25/01
20,000 12.16% 11.00 9/05/06
------ ------
Totals - Mr. Huber 21,500 13.07%
====== ======
Mason N. Carter 1,500 .91% 10.50 4/25/01
15,000 9.12% 11.00 9/05/06
50,000 30.40% 11.88 12/31/06
------ ------
Totals - Mr. Carter 66,500 40.43%
====== ======
Eugene W. Niemiec 50,000 30.40% 11.88 12/31/06
====== ======
</TABLE>
The following table sets forth information concerning each exercise of
stock options during fiscal 1996 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
<TABLE>
<CAPTION>
Value of Unexercised
Number of Securities In-the-Money
Underlying Unexercised Options/SARs
Shares Options/SARs at FY-End FY-End($)**
Acquired on Value Realized($) Exercisable(1)/ Exercisable(1)/
Name Exercise Unexercisable(2)* Unexercisable(2)
- --------------------------- ----------------- ------------------- ---------------------------- ------------------------
<S> <C> <C> <C> <C>
Mason N. Carter -0- -0- 18,000 (1) 12,750
50,000 (2) -
Eugene W. Niemiec -0- -0- 17,000 (1) 38,750
50,000 (2) -
John J. Antonich 10,000 23,113 - -
John Z. Blahosky -0- -0- 16,500 (1) 38,438
Brian R. Dornan -0- -0- 11,500 (1) 34,875
Reynold K. Green -0- -0- 8,500 (1) 19,375
Anthony N. Ramsden -0- -0- 11,500 (1) 25,938
</TABLE>
* 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 $11.50 market price of the underlying common stock on
December 28, 1996.
Employment Contracts and Termination of
Employment and Change-in-Control Arrangements
On December 19, 1996, Mason N. Carter entered into an employment
agreement 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 $200,000. The initial term of the agreement ends on December 31, 1999 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
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 present term of the agreement.
On December 16, 1996, Eugene W. Niemiec entered into an employment
agreement with the Company pursuant to which Mr. Niemiec has agreed to serve as
Vice Chairman and Chief Technology Officer of the Company for a minimum annual
salary of $180,000. The initial term of the agreement ends on December 31, 1999
and renews from year-to-year thereafter unless otherwise terminated pursuant to
the terms of the agreement. Mr. Niemiec continues to be eligible to participate
in the Company's benefit plans.
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
1,500 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 at the fair market value on the date of grant. In
connection with the active role that Mr. Huber has performed in the affairs of
the Company as Chairman of the Board, the Board has approved the payment of a
$65,000 annual fee effective June 1996. Prior thereto, Mr. Huber's annual fee
was $50,000. Further, in 1996, Messrs. Huber, Oliner and Carter were given a
one-time grant of options to purchase 20,000, 15,000 and 15,000 shares of the
Common Stock of the Company, respectively, pursuant to the Company's Stock
Option Plan for Non-Employee Directors.
STOCK OWNERSHIP OF DIRECTORS, EXECUTIVE OFFICERS
AND CERTAIN STOCKHOLDERS
The following table sets forth, as of March 31, 1997, 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 and Director nominee of the Company, and (iii) all
Directors/Director nominees and executive officers of the Company as a group.
<TABLE>
<CAPTION>
Amount of Nature of
Name and Address Beneficial Ownership
of Beneficial Owners (direct except noted) Percent of Class
<S> <C> <C>
William D. Witter, Inc. 119,912 7.91%
One Citicorp Center
153 East 53rd Street
New York, NY 10022
Kennedy Capital Management, Inc. 98,700 6.51%
425 N. New Ballas Rd., Suite 181
St. Louis, MO 63141
Dimensional Fund Advisors Inc. 82,157 5.42%
1299 Ocean Avenue, 11th Floor
Santa Monica, CA 90401
Arthur A. Oliner 177,926 (1) 11.58%
11 Dawes Road
Lexington, MA 02173
Charles F. Huber II 152,000 (2) 9.87%
c/o William D. Witter, Inc.
One Citicorp Center
153 East 53rd Street
New York, NY 10022
Mason N. Carter 28,400 (3) 1.79%
c/o Merrimac Industries, Inc.
41 Fairfield Place
West Caldwell, NJ 07006
Eugene W. Niemiec 27,368 (4) 1.73%
c/o Merrimac Industries, Inc.
41 Fairfield Place
West Caldwell, NJ 07006
Reynold K. Green 10,618 (5) 0.70%
c/o Merrimac Industries, Inc.
41 Fairfield Place
West Caldwell, NJ 07006
John Z. Blahosky 23,778 (6) 1.55%
c/o Merrimac Industries, Inc.
41 Fairfield Place
West Caldwell, NJ 07006
Brian R. Dornan 16,655 (7) 1.09%
c/o Merrimac Industries, Inc.
41 Fairfield Place
West Caldwell, NJ 07006
John J. Antonich 12,790 (8) 0.84%
29 Navajo Way
Rockaway, NJ 07866
Anthony N. Ramsden 17,076 (9) 1.12%
18 Old Farm Road
North Caldwell, NJ 07006
All Directors/Director nominees and
executive officers as a group
(12 persons) 480,398 (10) 26.83%
-----------------------------------------------------------------------------------------
</TABLE>
(1) Includes 21,000 shares subject to stock options that are exercisable
currently or within 60 days and 8,662 shares owned by Dr. Oliner's wife
as to which he disclaims beneficial ownership.
(2) Includes 24,500 shares subject to stock options that are
exercisable currently or within 60 days. Mr. Huber is a Managing
Director of William D. Witter, Inc., which owns 119,912 shares as
to which Mr. Huber disclaims beneficial ownership.
(3) Includes 18,000 shares subject to stock options that are
exercisable currently or within 60 days.
(4) Includes 17,000 shares subject to stock options and 1,223 shares
subject to the Stock Purchase Plan that are exercisable currently or
within 60 days.
(5) Includes 8,500 shares subject to stock options and 1,485 shares subject
to the Stock Purchase Plan that are exercisable currently or within 60
days.
(6) Includes 16,500 shares subject to stock options and 815 shares
subject to the Stock Purchase Plan that are exercisable currently or
within 60 days.
(7) Includes 11,500 shares subject to stock options and 959 shares
subject to the Stock Purchase Plan that are exercisable currently or
within 60 days.
(8) The amount is based upon reports filed pursuant to Section 16 of the
Securities Exchange Act of 1934, as amended, (the "Exchange Act") as of
March 31, 1997. The amount is not included in the totals for all
Director/Director nominees and executive officers as a group.
(9) Includes 11,500 shares subject to stock options and 710 shares subject
to the Stock Purchase Plan that are exercisable currently or within 60
days. The amounts are not included in the totals for all
Director/Director nominees and executive officers as a group.
(10) Includes 150,062 shares subject to stock options and 5,471 shares
subject to the Stock Purchase Plan that are exercisable currently or
within 60 days.
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 stockholders 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 December 28, 1996, Section
16(a) filing requirements applicable to its officers, directors and greater than
ten-percent stockholders were complied with.
<PAGE>
ITEM 2. APPROVAL OF APPOINTMENT OF INDEPENDENT ACCOUNTANTS
The Board of Directors has, subject to ratification by the
stockholders, appointed Arthur Andersen LLP as independent accountants for the
fiscal year ending January 3, 1998. Arthur Andersen LLP, if approved by the
stockholders, will be replacing J.H. Cohn LLP, who have been auditing the
accounts of the Company since 1994.
The decision to replace J.H. Cohn LLP with Arthur Andersen LLP as the
Company's independent accountants was approved by the Audit Committee. During
the Company's two most recent fiscal years, there had not been any disagreements
with J.H. Cohn LLP on any matter of accounting principles or practices,
financial statement disclosure or auditing scope or procedure, nor have J.H.
Cohn LLP's reports on the Company's financial statements for such years
contained an adverse opinion or disclaimer of opinion, or been modified as to
uncertainty, audit scope, or accounting principles. The Board of Directors
recommends that the stockholders ratify the appointment of Arthur Andersen LLP,
and intends to introduce at the Meeting the following resolution (designated
herein as Item 2):
"RESOLVED, that the appointment by the Board of Directors of
Arthur Andersen LLP as independent accountants for this
Company for the fiscal year 1997 is hereby approved,
ratified and confirmed."
Representatives of J.H. Cohn LLP and Arthur Andersen LLP are not
expected to attend the Meeting, and therefore are not expected to make a
statement or be available to answer questions.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ITEM 2.
<PAGE>
ITEM 3. APPROVAL OF 1997 LONG-TERM INCENTIVE PLAN
The Company's Board of Directors (the "Board") adopted, subject to
approval by the stockholders, the 1997 Long-Term Incentive Plan (the "Long-Term
Incentive Plan"), which would provide for the grant ("Grant") of up to 250,000
shares of the Company's common stock ("Common Stock") (subject to anti-dilution
adjustments, at the sole discretion of the Stock Option Committee) in the form
of discounted stock options ("Employee Options"), Incentive Stock Options,
Non-Qualified Stock Options and Bonus Stock. Grants of Employee Options for up
to 100,000 shares of Common Stock and Grants of Incentive Stock Options,
Non-Qualified Stock Options and Bonus Stock for up to 150,000 shares of Common
Stock may be made. Any shares of Common Stock that may be made subject to
Employee Options may instead be made subject to other awards, but any shares of
Common Stock that may be made subject to awards other than Employee Options may
not be made subject to Employee Options.
Under the Long-Term Incentive Plan, directors who are full-time
employees of the Company (two individuals), including those who are members of
the Stock Option Committee, are eligible to receive only Incentive Stock Options
and Non-Qualified Stock Options. All other full-time employees of the Company
(approximately 130 individuals), are eligible to receive Incentive Stock
Options, Non-Qualified Stock Options and Bonus Stock. However, only full-time
employees who hold positions no more senior than mid-level management
(approximately 120 individuals) are eligible to receive Employee Options.
The Board believes that the use of equity incentives will motivate
employees to strive toward ensuring the Company's long-term growth and success,
thereby enhancing stockholder value. The Board also believes that the
availability of such incentives will be a factor in attracting and retaining
those highly competent individuals upon whose judgment, initiative and
leadership the Company's continuing success in large measure depends.
The Stock Option Committee shall administer the Long-Term Incentive
Plan. The Stock Option Committee may grant Employee Options, Incentive Stock
Options and Non-Qualified Stock Options (collectively, the "Options") and
determine the number of shares of Common Stock to be covered by each Option, the
option price therefor, the term of the Option, and the other conditions and
limitations applicable to the exercise of the Option. The Stock Option Committee
may also grant Bonus Stock and determine the number of shares of Common Stock to
be covered by each grant of Bonus Stock.
As required by the Internal Revenue Code of 1986, as amended (the
"Code"), the option price per share of Common Stock purchasable under an
Incentive Stock Option must be greater than or equal to 100% of the fair market
value of the Common Stock on the date of grant. The Long-Term Incentive Plan
provides that the option price per share of Common Stock purchasable under a
Non-Qualified Stock Option shall be determined by the Stock Option Committee,
and must also be greater than or equal to 100% of the fair market value of the
Common Stock on the date of grant. With respect to the option price per share of
Common Stock subject to grants of Employee Options, the Long-Term Incentive Plan
provides that such price shall be determined by the Stock Option Committee, but
shall be greater than or equal to 50% of the fair market value of the Common
Stock on the date of grant.
Under the Long-Term Incentive Plan, Options are not exercisable for
such period following their date of grant as specified by the Stock Option
Committee at the time of grant, and generally the optionee must be an employee
of the Company at the time of exercise. Specifically, Employee Options are not
exercisable until the Company reaches certain performance targets, which targets
shall be determined by the Stock Option Committee on the date of grant. Options
will generally be forfeited if the optionee terminates employment with the
Company. However, if an optionee retires or is disabled, he or she may, within
three months of retirement, or in the case of disability, within twelve months
of the termination of employment due to disability, exercise any Option that he
or she was entitled to exercise on the date of retirement, and if the optionee
dies while employed by the Company, Options granted to him or her under the
Long-Term Incentive Plan may be exercised in full by his or her heirs, executor
or administrator within twelve months following his or her death. Under the
Long-Term Incentive Plan, no Option may be exercised more than ten years after
its date of grant (or five years in the case of Incentive Stock Options granted
to 10% stockholders). Options granted under the Long-Term Incentive Plan are not
transferable except by will or by the laws of descent and distribution.
Bonus Stock may be granted from time to time by the Stock Option
Committee at no cost to the grantee. The terms of such Bonus Stock, including
the vesting or transferability thereof, shall be established by the Stock Option
Committee.
For Federal income tax purposes, the grant of an Incentive Stock Option
will not result in any immediate tax consequences to the optionee or the
Company. An optionee will not realize taxable income, and the Company will not
be entitled to any deduction, upon the exercise of the Incentive Stock Option if
such optionee was an employee of the Company (or its parent, subsidiary or
successor corporations) at all times from the date the option was granted to the
day three months (or, in the case of an employee who is disabled, one year)
before the date of such exercise. If shares of Common Stock acquired upon the
exercise of an Incentive Stock Option are not disposed of within the later of
(i) two years following the date the option was granted and (ii) one year after
the issue or transfer of the shares to such employee pursuant to exercise of the
option, the difference between the amount realized on any disposition thereafter
and the option price will be treated as long-term capital gain or loss to the
optionee. The excess of the fair market value of the shares at the time of
exercise of the option over the option price will, however, be includable in the
employee's alternative minimum taxable income for purposes of the alternative
minimum tax imposed on such income. If a disposition occurs before the
expiration of the later of the requisite two- or one-year holding periods, then
the lower of (i) any excess of the fair market value of the shares of Common
Stock at the time of exercise of the option over the option price or (ii) if the
disposition is a taxable sale or exchange, the actual gain realized on
disposition, will be taxable to the optionee as ordinary income. In such event
the Company will be entitled to a corresponding deduction from its income. Any
excess of the amount realized by the optionee on disposition over the fair
market value of the shares at the time of exercise will be treated as capital
gain.
If an employee was not an employee of the Company (or its parent,
subsidiary or successor corporation) at all times from the date the option was
granted to the day three months (or, in the case of a disabled employee, one
year) before the date on which an Incentive Stock Option is exercised, such
employee will realize ordinary income in an amount equal to the excess of the
fair market value of the shares at the time of exercise over the option price,
and the Company will be entitled to a deduction in the same amount. Any
difference between the market value used to determine the amount of includable
ordinary income and the price at which the employee may subsequently sell his
shares will be treated as capital gain or loss.
The grant of a Non-Qualified Stock Option (which for tax purposes shall
include Employee Stock Options) will have no immediate tax consequences to the
Company or the employee. If an employee exercises a Non-Qualified Stock Option,
such employee will realize ordinary income measured by the difference between
the option price and the fair market value of the shares on the date exercise,
and the Company will be entitled to a deduction in the same amount. Any
difference between such fair market value and the price at which the employee
may subsequently sell such shares will be treated as capital gain or loss.
Bonus Stock will be treated as restricted stock for tax purposes.
Except as noted below, an employee normally will not realize taxable income upon
grant of Bonus Stock, and the Company will not be entitled to a deduction, until
the termination of restrictions. (For purposes of this discussion, if there are
no restrictions on the Bonus Stock, the date restrictions will be deemed to
terminate will be the date of grant.) Upon such termination, the employee will
realize taxable ordinary income in an amount equal to the fair market value of
the Bonus Stock at that time, plus the amount of any dividends and interest
thereon which are paid to the employee at that time, and the Company will be
entitled to a deduction in the same amount. However, an employee may elect under
Section 83(b) of the Code (within 30 days of the grant of the Bonus Stock) to
realize taxable ordinary income in the year the grant is made in an amount equal
to the fair market value of the shares of Bonus Stock at the time of grant,
determined without regard to the restrictions, and the Company will be entitled
to a deduction in such year in the same amount. Any gain or loss realized by the
employee upon the subsequent disposition of the stock will be capital gain or
loss. If the shares subject to such election are forfeited, the employee will
not be entitled to a deduction, refund or loss in respect of the amount
previously included in taxable income because of the election.
The tax basis of the Bonus Stock will be equal to its fair market value
at the time the restrictions terminate, and its holding period will begin at
that time, except that in the event of an election under Section 83(b), the
holding period will commence at the time of grant and its tax basis will be
equal to the fair market value of the shares on the date of grant, determined
without regard to restrictions. Notwithstanding an election under Section 83(b),
any dividends and interest thereon, on stock for which an election has been made
will not be includable in the employee's taxable income until paid to the
employee upon termination of the restrictions.
Each Grant may be made alone, in addition to or in relation to any
other Grant. The terms of each Grant need not be identical, and the Stock Option
Committee need not treat participants uniformly. Except as otherwise provided by
the Long-Term Incentive Plan or a particular Grant, any determination with
respect to a Grant may be made by the Stock Option Committee at the time of
grant or at any time thereafter. In addition, each Grant shall be evidenced by
an award agreement.
Grants may not be made under the Long-Term Incentive Plan after March
31, 2002, but outstanding Options may extend beyond such date. The number of
shares of Common Stock issuable pursuant to the Long-Term Incentive Plan may not
be changed except by approval of the stockholders or by adjustment in the event
of corporate reorganization or recapitalization or other dilutive event
affecting the Common Stock. The Long-Term Incentive Plan may be amended from
time to time by the Board of Directors or terminated in its entirety, provided
that no Grant may be changed so as to impair the rights of a grantee without the
consent of such grantee.
Common Stock subject to Options which expire or are terminated prior to
exercise will not be available for future Grants under the Long-Term Incentive
Plan. Both treasury shares and authorized but unissued shares may be used to
satisfy Grants under the Long-Term Incentive Plan.
While the amount of Options and/or Bonus Stock that may be awarded to
an eligible participant for any year cannot be determined, the Company believes
that if the Long-Term Incentive Plan had been in effect for 1996, the executive
officers named in the Summary Compensation Table would have received comparable
awards to those shown in the Summary Compensation Table for 1996.
The full text of the Long-Term Incentive Plan is set forth in Exhibit A
to this Proxy Statement, to which reference is hereby made. The foregoing
description of certain features of the Long-Term Incentive Plan is qualified in
its entirety by this reference.
The Board of Directors believes that the approval of the Long-Term
Incentive Plan will allow the Company to attract and retain the highly trained
and motivated individuals on which the future success of the Company depends and
accordingly, urges the stockholders to vote FOR approval of the Long-Term
Incentive Plan. Proxies will be voted in the manner specified therein with
respect to approval and, if no specification is made, in favor of approval.
Approval of the proposed Long-Term Incentive Plan requires the affirmative vote
of the holders of a majority of the votes cast at the Meeting.
The Board of Directors recommends that the stockholders approve the
Long-Term Incentive Plan, and intends to introduce at the Meeting the following
resolution (designated herein as Item 3):
"RESOLVED, that, as conditionally adopted by the Board of Directors,
the 1997 Long-Term Incentive Plan submitted to this Annual Meeting and
as set forth in Exhibit A to the proxy statement accompanying the
notice of this Annual Meeting be and it is hereby approved effective
for 1997 and subsequent years."
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ITEM 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 stockholders. 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 stockholder who desires a copy of the Company's 1996 Annual Report
on Form 10-KSB filed with the Securities and Exchange Commission 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 charge equal to the reproduction
cost thereof will be made.
Stockholders may also access the Company's internet web site on the
World Wide Web as: www.merrimacind.com for this form of financial information.
By Order of the Board of Directors,
/s/ Robert V. Condon
------------------------------
ROBERT V. CONDON
Secretary
April 11, 1997
<PAGE>
Exhibit A
MERRIMAC INDUSTRIES, INC.
LONG-TERM INCENTIVE PLAN
Section 1. Purpose
The purpose of the Merrimac Industries, Inc. Long-Term Incentive Plan
is to attract, retain and motivate employees of exceptional ability by providing
such employees with an equity ownership in the Company commensurate with Company
performance, thereby assisting the Company to achieve its long-range goals and
enabling such employees to participate in the long-term growth of the Company.
Section 2. Definitions
As used in the Plan:
"Act" means the Securities Exchange Act of 1934, as amended.
"Award Agreement" means a writing signed by the Company and the
Participant specifying the terms and conditions of the Award and containing such
other terms and conditions not inconsistent with the provisions of the Plan as
the Committee considers necessary or advisable to achieve the purposes of the
Plan or comply with applicable tax and regulatory laws and accounting
principles.
"Awards" means Employee Options, Incentive Stock Options, Non-
Qualified Stock Options and Bonus Stock.
"Board" means the Board of Directors of the Company.
"Bonus Stock" means shares of Common Stock awarded pursuant to Section
7 hereof.
"Closing Price" means the closing price of a share of Common Stock on
the American Stock Exchange or, if not listed on such exchange, on any other
national exchange on which the Common Stock is listed or on NASDAQ.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time.
"Committee" means the Stock Option Committee of the Board or any
successor committee thereof performing substantially the same duties.
"Company" means Merrimac Industries, Inc. and any present or future
parent or subsidiary corporations (as defined in Section 424 of the Code) or any
successor to such corporations.
"Common Stock" or "Stock" means the Common Stock, $.50 par value, of
the Company.
"Disability" means total disability as determined in accordance with
the Company's long-term disability plan (or, if the Company has no such plan,
its retirement plan) as in effect from time to time.
"Employee Option" means an option to purchase Common Stock awarded
under the Plan at a discount option price determined pursuant to Section 6(b)(i)
hereof, which option is not intended to meet the requirements of Section 422 of
the Code or any successor provision.
"Fair Market Value" means, with respect to Common Stock, the fair
market value as determined by the Committee in good faith or in the manner
established by the Committee from time to time; provided, however, that so long
as the Common Stock is listed on the American Stock Exchange, the Fair Market
Value of Common Stock shall be equal to the Closing Price of Common Stock on the
date such determination is to be made.
"Incentive Stock Option" means an option to purchase shares of Common
Stock awarded under the Plan at an option price determined pursuant to Section
6(b)(ii) hereof, which option is intended to meet the requirements of Section
422 of the Code or any successor provision.
"Non-Qualified Stock Option" means an option to purchase shares of
Common Stock awarded under the Plan at an option price determined pursuant to
Section 6(b)(ii) hereof, which option is not intended to meet the requirements
of Section 422 of the Code or any successor provision.
"Options" means Employee Options, Incentive Stock Options and
Non-Qualified Stock Options.
"Participant" means any individual described in Section 4 hereof who
has been selected by the Committee to receive an Award under the Plan.
"Plan" means the Merrimac Industries, Inc. Long-Term Incentive Plan.
"Retirement" means termination of employment in accordance with the
retirement provisions of any retirement plan maintained by the Company or any of
its subsidiaries.
Section 3. Administration
(a) The Plan shall be administered by the Committee. Among other
things, the Committee shall have the power and authority, subject to the terms
of the Plan, to administer, construe and interpret the Plan, including, without
limitation, to grant Awards, and to determine the individuals in accordance with
Section 4 hereof to whom, the time or times at which, and the terms and
conditions of any Award granted under the Plan.
(b) Subject to the applicable Award Agreements, the Committee shall
have authority to adopt, alter and repeal such administrative rules, guidelines
and practices governing the operation of the Plan as it shall from time to time
consider advisable and to decide all disputes arising in connection with the
Plan. The Committee's decision and interpretations shall be final and binding.
Any action of the Committee with respect to the administration of the Plan shall
be taken pursuant to a majority vote or by the unanimous written consent of its
members.
(c) The Committee may employ such legal counsel, consultants and
agents as it may deem desirable for the administration of the Plan and may rely
upon any opinion received from any such counsel or consultant and any
computation received from any such consultant or agent. The Committee shall keep
minutes of its actions under the Plan.
Section 4. Eligibility
(a) Only full-time employees of the Company not subject to Section
16 of the Act and holding a position no more senior than middle-level management
shall be eligible to receive Employee Options under the Plan.
(b) All full-time employees of the Company, including full-time
employees who serve as officers of the Company, shall be eligible to receive
Incentive Stock Options, Non-Qualified Stock Options and Bonus Stock under the
Plan.
(c) Directors who are full-time employees of the Company, including
those who are members of the Committee, shall be eligible to receive Incentive
Stock Options and Non-Qualified Stock Options.
(d) Subject to the eligibility requirements set forth in Section
4(a), (b) and (c) hereof, the Participants shall be selected from time to time
by the Committee in its sole discretion. Subject to Section 5 hereof, the
Committee shall determine, in its sole discretion, the number of shares to be
covered by the Option or Options or the number of shares of Bonus Stock, as the
case may be, to be granted to a Participant. Awards shall only be granted to
employees while actually employed by the Company or a subsidiary corporation
thereof.
Section 5. Shares of Stock Available for Awards
(a) Up to an aggregate of 250,000 shares of Common Stock may be
made subject to Awards under the Plan. Grants of Employee Options for up to
100,000 shares of Common Stock and grants of Incentive Stock Options, Non-
Qualified Stock Options and Bonus Stock for up to 150,000 shares of Common Stock
may be made. Any shares of Common Stock that may be made subject to Employee
Options may instead be made subject to other Awards, but any shares of Common
Stock that may be made subject to Awards other than Employee Options may not be
made subject to Employee Options.
(b) If any Option in respect of shares of Common Stock expires or
is terminated before exercise or is forfeited for any reason, without a payment
in the form of Common Stock being granted to the Participant, the shares of
Common Stock subject to such Option, to the extent of such expiration,
termination or forfeiture, shall not again be available for grant under the
Plan. Shares of Common Stock issued under the Plan may consist in whole or in
part of authorized but unissued shares or treasury shares.
(c) In the event that the Committee determines, in its sole
discretion, that any stock dividend, extraordinary cash dividend, creation of a
class of equity securities, recapitalization, reclassification, reorganization,
merger, consolidation, split-up, spin-off, combination, exchange of shares,
warrants or rights offering to purchase Common Stock at a price substantially
below fair market value, or other similar transaction affects the Common Stock
such that an adjustment is required in order to preserve the benefits or
potential benefits intended to be granted available under the Plan to
Participants, the Committee shall have the right to adjust equitably any or all
of (i) the number of shares of Common Stock in respect of which Awards may be
granted under the Plan to Participants, (ii) the number and kind of shares
subject to outstanding Options held by Participants, and (iii) the exercise
price of, and the number of shares subject to, any outstanding Options held by
Participants, and if considered appropriate, the Committee may make provision
for a cash payment with respect to any outstanding Options held by a
Participant, provided that the number of shares subject to any Option shall
always be a whole number.
Section 6. Options
(a) Subject to Federal and State statutes then applicable and the
provisions of the Plan, the Committee may grant Options, and determine the
number of shares of Common Stock to be covered by each Option, the option price
therefor, the term of the Option, and the other conditions and limitations
applicable to the exercise of the Option. The terms and conditions of Incentive
Stock Options shall be subject to and comply with Section 422 of the Code, or
any successor provision, and any regulations thereunder. Anything in the Plan to
the contrary notwithstanding, no term of the Plan relating to Incentive Stock
Options shall be interpreted, amended or altered, nor shall any discretion or
authority granted to the Committee under the Plan be so exercised, so as to
disqualify the Plan, or, without the consent of the Participant, any Incentive
Stock Option granted under the Plan pursuant to Section 422 of the Code.
(b) (i) Subject to Section 5(c)(iii) hereof, the option price per
share of Common Stock purchasable under an Employee Option shall be the price
determined by the Committee, which price shall not be less than 50% of the Fair
Market Value of the Common Stock on the date of grant.
(ii) Subject to Section 5(c)(iii) hereof, the option price per
share of Common Stock with respect to Incentive Stock Options and Non-Qualified
Stock Options shall be the price determined by the Committee, which shall be
equal to or greater than, but not less than, the Fair Market Value of the Common
Stock on the date of grant. If the Participant owns or is deemed to own (by
reason of the attribution rules applicable under Section 424(d) of the Code)
more than 10% of the combined voting power of all classes of stock of the
Company or any subsidiary or parent corporation of the Company and an Incentive
Stock Option is granted to such Participant, the option price shall be not less
than 110% of Fair Market Value of the Common Stock on the date of grant.
(c) Subject to Section 6(l) hereof, Employee Options shall not be
exercisable until the Company attains certain performance goals, which goals
shall be determined by the Committee in its sole discretion at the time of
grant.
(d) No Option shall be exercisable more than ten (10) years after
the date the option is granted. If a Participant owns or is deemed to own (by
reason of the attribution rules of Section 424(d) of the Code) more than 10% of
the total combined voting power of all classes of stock of the Company or any
subsidiary or parent corporation of the Company and an Incentive Stock Option is
granted to such Participant, such Option shall not be exercisable after the
expiration of five (5) years from the date of grant.
(e) No shares shall be delivered pursuant to any exercise of an
Option until payment in full of the option price therefor is received by the
Company. Such payment may be made in whole or in part in cash or by certified or
bank check or, to the extent permitted by the Committee at or after the grant of
the Option, by delivery of shares of Common Stock owned by the Participant
valued at their Fair Market Value on the trading day immediately preceding the
date of delivery, or such other lawful consideration as the Committee may
determine.
(f) Unless otherwise determined by the Committee at the time of
grant, in the event a Participant's employment terminates by reason of
Retirement or Disability and such Participant's Options are otherwise
exercisable, any Option granted to such Participant which is then outstanding
may be exercised at any time prior to the expiration of the term of such Option
or within three (3) months in the case of Retirement and twelve (12) months in
case of Disability (or such shorter period as the Committee shall determine at
the time of grant) following the Participant's termination of employment,
whichever period is shorter.
(g) Unless otherwise determined by the Committee at the time of
grant, in the event a Participant's employment is terminated by reason of death
and such Participant's Options are otherwise exercisable, any Option granted to
such Participant which is then outstanding may be exercised by the Participant's
legal representative at any time prior to the expiration date of the term of the
Option or within twelve (12) months (or such shorter period as the Committee
shall determine at the time of grant) following the Participant's termination of
employment, whichever period is shorter.
(h) Unless otherwise determined by the Committee at or after the
time of grant, in the event the employment of the Participant shall terminate
for any reason other than death, Disability, or Retirement, any Option granted
to such Participant which is then outstanding shall be cancelled and shall
terminate.
(i) No Option shall be transferable by the Participant otherwise
than by will or by the laws of descent and distribution, and all Options shall
be exercisable during the Participant's lifetime only by the Participant or the
Participant's duly appointed guardian or personal representative. A Participant
shall notify the Committee in writing in the event that he or she disposes of
Common Stock acquired upon exercise of an Incentive Stock Option within the
two-year period following the date the Incentive Stock Option was granted or
within the one-year period following the date he or she received Common Stock
upon the exercise of an Incentive Stock Option and shall comply with any other
requirements imposed by the Company in order to enable the Company to secure the
related income tax deduction to which it will be entitled in such event under
the Code.
(j) The Committee may at any time accelerate the exercisability of
all or any portion of any Incentive Stock Option or Non-Qualified Stock Option.
(k) The aggregate Fair Market Value of Common Stock first becoming
subject to exercise as an Incentive Stock Option by a Participant who is an
employee during any given calendar year shall not exceed the sum of One Hundred
Thousand Dollars ($100,000.00). Such aggregate Fair Market Value shall be
determined as of the date such Option is granted.
(l) In order to preserve the rights of a Participant under an
Option in the event of a change in control of the Company, the Committee, in its
discretion, may at the time an Option is granted or at any time thereafter, take
one or more of the following actions with respect to any such change of control:
(i) provide for the acceleration of any time period relating to the exercise or
realization of the Option, (ii) provide for the purchase of an Option upon the
Participant's request for an amount of cash or other property that could have
been received upon the exercise or realization of the Option had the Option been
currently exercisable or payable, (iii) adjust the terms of the Option in a
manner determined by the Committee, (iv) cause the Option to be assumed, or new
rights substituted therefor, by another entity, or (v) make such other provision
as the Committee may consider equitable and in the best interests of the
Company.
(m) Subject to the terms of the Plan and the applicable Award
Agreement, the Committee may amend, modify or terminate any outstanding Option
held by a Participant, including substituting therefor another Option of the
same or a different type, changing the date of exercise or realization, and
converting an Incentive Stock Option to a Non-Qualified Stock Option, provided
that the Participant's consent to each action shall be required unless the
Committee determines that the action, taking into account any related action,
would not materially and adversely affect the Participant.
Section 7. Bonus Stock
(a) Subject to Section 4 hereof, the Committee may from time to
time, in its sole discretion, grant Bonus Stock at no cost to the Participant.
(b) Each grant of Bonus Stock shall be evidenced by an Award
Agreement which may contain such terms as the Committee may determine in its
sole discretion, including without limitation, restrictions on transfer and/or
vesting.
Section 8. General Provisions Applicable to Awards
(a) Each Award under the Plan shall be evidenced by an Award
Agreement.
(b) If, and to the extent Federal income tax withholding (and
state and local income tax withholding, if applicable) may be required by the
Company in respect of taxes on income realized by a Participant upon receipt of
Bonus Stock or upon or after exercise of an Option, or upon disposition of the
shares of Common Stock acquired thereby, such income tax withholding may be paid
by such Participant in (1) cash or (2) by electing either (i) to have the
Company withhold a portion of the shares of Common Stock comprising the Bonus
Stock or the shares of Common Stock otherwise issuable upon exercise of the
Option, as the case may be, or (ii) to deliver other shares owned by the
Participant, in either case having a Fair Market Value (on the date that the
amount of tax elected to be withheld is to be determined) of the amount to be
withheld. The Company has no obligation to issue any shares of Common Stock
pursuant to a grant of Bonus Stock or upon exercise of an Option until any
required taxes have been satisfied.
(c) Awards may be granted alone, in addition to or in relation to
any other Award. The terms of each Award need not be identical, and the
Committee need not treat Participants uniformly. Except as otherwise provided by
the Plan or a particular Award Agreement, any determination with respect to an
Award may be granted by the Committee at the time of grant or at any time
thereafter.
Section 9. Miscellaneous
(a) No person shall have any claim or right to be granted an Award,
and the grant of an Award shall not be construed as giving a Participant the
right to continued employment. The Company expressly reserves the right at any
time to dismiss a Participant free from any liability or claim under the Plan,
except as expressly provided in the applicable Award Agreement.
(b) Subject to the provisions of the applicable Award, no
Participant shall have any rights as a shareholder with respect to any shares of
Common Stock to be distributed under the Plan until he or she becomes the holder
thereof.
(c) Notwithstanding anything to the contrary expressed in this
Plan, any provisions hereof that vary from or conflict with any applicable
Federal or State securities laws (including any regulations promulgated
thereunder) shall be deemed to be modified to conform to and comply with such
laws.
(d) Nothing contained in the Plan shall prevent the Company from
adopting other or additional compensation arrangements for its employees.
(e) For purposes of the Plan, the following events shall not be
deemed a termination of employment of a Participant:
(i) a transfer to the employment of the Company from a
subsidiary or from the Company to a subsidiary, or from one subsidiary
to another, or
(ii) an approved leave of absence for military service
or sickness, or for any other purpose approved by the Company, if the
Participant's right to reemployment is guaranteed either by a statute
or by contract or under the policy pursuant to which the leave of
absence was granted or if the Committee otherwise so provides in
writing.
For purposes of the Plan, employees of a subsidiary of the Company
shall be deemed to have terminated their employment on the date on which such
subsidiary ceases to be a subsidiary of the Company.
(f) The Plan shall be effective on the date of adoption by the
Board.
(g) Awards may not be granted under the Plan after March 31, 2002,
but outstanding Options may extend beyond such date.
(h) The Board may amend, suspend or terminate the Plan or any
portion thereof at any time, provided that it shall have no power to change the
terms of any Award theretofore granted under the Plan so as to impair the rights
of a Participant without the consent of the Participant whose rights would be
affected by such change except to the extent, if any, provided in the Plan or in
the applicable Award Agreement.
(i) To the extent that State laws shall not have been preempted by
any laws of the United States, the Plan shall be construed, regulated,
interpreted and administered according to the other laws of the State of New
Jersey.
<PAGE>
The Board of Directors recommends a vote FOR all items and SHARES WILL BE SO
VOTED UNLESS YOU OTHERWISE INDICATE:
No. 1 Election of Nominees: C.F. Huber II, M.N. Carter,
Directors A.H. Cohen, E.W. Niemiec and A.A. Oliner.
FOR Withhold (INSTRUCTION: To withhold authority to vote for
all for all any individual nominee, write that nominee's name
nominees nominees in the space provided below.)
[_] [_]
--------------------------------------------------
No. 2 Appointment of Independent Accountants
FOR AGAINST ABSTAIN
[_] [_] [_]
No. 3 Approval of 1997 Long-Term Incentive Plan
FOR AGAINST ABSTAIN
[_] [_] [_]
Dated:__________ , 1997
________________________
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
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 Charles F. Huber II 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 on record by the undersigned on March 31, 1997,
at the Annual Meeting of Stockholders to be held on May 12, 1997, or any
adjournment thereof as follows:
Please mark on the reverse side, sign, date and return this
proxy card promptly using the enclosed envelope.
FOLD AND DETACH HERE
