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 22, 1998
Mason N. Carter
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 American Stock Exchange
(Telephone: (212) 306-1000), 86 Trinity Place (one block West of Broadway), New
York, NY 10006, on Wednesday, May 20, 1998 at 10:00 a.m. 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
1997, 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,
Mason N. Carter
Chairman of the Board
<PAGE>
MERRIMAC INDUSTRIES, INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
May 20, 1998
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 American Stock Exchange, 86
Trinity Place (one block West of Broadway), New York, NY 10006, on Monday, May
20, 1998, at 10:00 a.m. Eastern Daylight Time, for the following purposes:
(1) to elect a Board of six 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; and
(3) 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,
1998 are entitled to notice of and to vote at the Meeting.
By Order of the Board of Directors,
ROBERT V. CONDON
Secretary
West Caldwell, New Jersey
April 22, 1998
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 1998 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 22, 1998.
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, 1998 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
1,577,834 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.
<PAGE>
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; and (2) the appointment of independent accountants.
The appointment of the Company's independent accountants 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. 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.
Stockholder Proposals for the 1999 Annual Meeting
In order to be included in the proxy statement and proxy card relating
to the 1999 Annual Meeting of Stockholders, stockholder proposals must be
received by the Secretary of the Company at the above address no later than
December 18, 1998.
<PAGE>
ITEM 1. ELECTION OF DIRECTORS
Nominees
At the Meeting it is proposed to elect six 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 Mason N. Carter, Albert H.
Cohen, Joel H. Goldberg, Frederick J. Gumm, Eugene W. Niemiec and Arthur A.
Oliner. Other than Messrs. Goldberg and Gumm, who were appointed to the
Company's Board of Directors in November 1997, all of the nominees have been
previously elected by the stockholders. If no contrary indication is made,
proxies in the accompanying form are to be voted for such nominees or, in the
event any such nominee is not a candidate or is unable to serve as a director at
the time of the election (which is not now expected), for any nominee who shall
be designated by the Board of Directors to fill such vacancy, unless the Board
of Directors shall determine to reduce the number of directors pursuant to the
By-laws.
Voting
At the close of business on March 31, 1998, the Company had outstanding
and entitled to vote 1,577,834 shares of Common Stock. 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, 1998
with respect to each director.
Name and Other Positions Director of the
With the Company Age Company Since
Mason N. Carter
Chairman of the Board,
President and
Chief Executive Officer 52 1995
Eugene W. Niemiec
Vice Chairman and
Chief Technology Officer 58 1990
Albert H. Cohen 65 1997
Joel H. Goldberg 54 1997
Frederick J. Gumm 55 1997
Arthur A. Oliner 76 1961
<PAGE>
Business Experience of Directors During Past Five Years
Mr. Carter was elected to the additional position of Chairman of the
Board on July 24, 1997. He has served as President and Chief Executive Officer
of the Company since December 16, 1996. From 1994 to 1996 he was President of
the Products and Systems Group of Datatec Industries, Inc., Fairfield, New
Jersey, a leading provider of data network implementation services. He was
President and Chief Executive Officer of Kentile, Inc., Chicago, Illinois, a
manufacturer of resilient flooring, prior thereto.
Mr. Niemiec has been Vice Chairman and Chief Technology Officer of
the Company since December 16, 1996. From September 1994 to December 1996 he
held the offices of President, Chief Executive Officer and Chief Operating
Officer of the Company. He was President and Chief Operating Officer of the
Company prior thereto.
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.
Dr. Goldberg has been Chairman and Chief Executive Officer of Career
Consultants, Inc., a management consulting firm, and SK Associates, an
outplacement firm, located in Union, New Jersey since 1972. He is a director of
Phillips-Van Heusen Corporation, Marcal Paper Company and Modell's, Inc., an
advisor to the New Jersey Sports and Exposition Authority and on the Advisory
Council for Sports Management of Seton Hall University. He is a consultant to
the New York Giants and the New Jersey Nets professional sports teams.
Mr. Gumm has been Chairman and Chief Executive Officer of Frederick
Gumm Chemical Company, a specialty chemical business based in Kearny, New Jersey
since 1970. He is Chairman of the Board of Monarch Bank, a privately-held
financial institution, and is Chairman of the Board of Nicro, a privately-held
metal finishing company in Mexico City, Mexico. He also is Chairman of Yeagers
Scholars at Marshall University.
Dr. Oliner has been Professor Emeritus of Electrophysics at Polytechnic
University (formerly Polytechnic Institute of Brooklyn) since 1990, was head of
its Electrical Engineering Department for eight years, and was the Director of
its Microwave Research Institute from 1967 to 1982. He was elected a member of
the National Academy of Engineering and a Fellow of the IEEE, the AAAS, and the
British IEE. Dr. Oliner is the author of three books and has received many
awards. He has been an engineering consultant for such companies as IBM, Boeing,
Raytheon, Hughes and Rockwell.
The Board of Directors has a Stock Option Committee, Stock Purchase
Plan Committee, Audit Committee, Compensation Committee, Management Committee
and Nominating Committee.
The Stock Option Committee, which currently consists of Messrs. Cohen
and Oliner, non-employee Directors, administers the 1997 Long-Term Incentive
Plan ("LTIP"), the 1993 Stock Option Plan and the 1983 Key Employees Stock
Option Plan and determines the recipients and terms of the options awarded
thereunder. Committee members are currently eligible to participate in the 1993
Stock Option Plan. The Stock Purchase Plan Committee, which currently consists
of Messrs. Cohen and
<PAGE>
Oliner, administers the Stock Purchase Plan of the Company. During fiscal 1997
the Stock Option Committee met four times and the Stock Purchase Plan Committee
met once.
Messrs. Cohen and Oliner currently serve on the Audit Committee, the
function of which is to review the Company's annual audit with the Company's
independent accountants. During fiscal 1997 the Audit Committee met twice.
Messrs. Cohen, Goldberg and Oliner, non-employee Directors, currently
serve on the Compensation Committee. The Compensation Committee reviews
compensation of all executive officers of the Company. The Compensation
Committee determines compensation levels based on individual performance and
responsibility, as well as overall corporate performance. The predominant
components of executive compensation have been base salary and stock option
grants. When corporate goals are achieved, executive officers as well as other
key employees are awarded bonuses. During fiscal 1997 the Compensation Committee
met three times.
Messrs. Carter and Cohen serve on the Management Committee. The
Management Committee determines strategic business direction for the Company and
evaluates the impact of current changes in the business environment in which the
Company operates. During fiscal 1997 the Management Committee met once.
Messrs. Carter, Niemiec and Oliner currently serve on the Nominating
Committee. 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 1997 the Nominating Committee held three meetings.
During the fiscal year that ended on January 3, 1998, the Board of
Directors held fourteen meetings including six 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, 1998
with respect to each executive officer (other than those listed as Directors).
Name and Position With the Company Age
Robert V. Condon
Vice President, Finance, Chief Financial Officer,
Treasurer and Secretary 51
Richard E. Dec
Vice President, Marketing 54
Brian R. Dornan
Vice President, Research and Development 49
Reynold K. Green
Vice President, Sales 39
Jacob Lin
Vice President, Operations 49
Business Experience of Executive Officers During Past Five Years
Mr. Condon has been Vice President, Finance and Chief Financial Officer
("CFO") since joining the Company in March 1996 and was appointed Treasurer and
Secretary in January 1997. Prior to joining the Company, he was with Berkeley
Educational Services as Vice President, Finance, Treasurer and 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. Dec has been Vice President, Marketing since joining the Company in
March 1997. Prior to joining the Company, he was with Kinley & Manbeck, Inc. a
business process re-engineering and systems implementation consulting company as
Vice President of Business Development from April 1996 to March 1997. From 1995
to March 1996, he was National Account Manager, Product and Systems Group for
Datatec Industries, Inc. From 1993 to 1994, he was Vice President of Product
Development for Kentile, Inc., a manufacturer of resilient flooring.
Mr. Dornan, effective October 1996, was appointed Group Vice President
of Technology and Engineering of the Company and was appointed Vice President,
Research and Development of the Company in February 1998. He had been Group Vice
President of Manufacturing since 1986.
Mr. Green, effective March 1997, was appointed Vice President, Sales of
the Company and from April 1996 to March 1997 he was Vice President of
Manufacturing of the Company. He was a member of the Board of Directors of the
Company from April 1996 to May 1997, and did not seek re-election to the Board.
Over the past 5 years, Mr. Green held positions of Director of Manufacturing,
National Sales Manager and Director of Quality Control and High-Reliability
Services at the Company.
Mr. Lin has been Vice President, Operations since joining the Company
in March 1997. Prior to joining the Company, he was with Don Aux Associates, a
change implementation consulting organization, as Project Manager, from 1996 to
March 1997. From 1992 to 1996 he was with Gemini Consulting as a senior
consultant responsible for re-engineering.
<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
1997 and the four other most highly compensated executive officers serving at
the end of the last fiscal year.
<TABLE>
<CAPTION>
Summary Compensation Table
Annual Compensation Long-Term Compensation
------------------- --------------------------------
Awards Payouts
-------------------------------
Securities All Other
Underlying Compensation
Name and Principal Position(s) Year Salary ($) Bonus ($) Options/SARs (#) ($)(1)(2)(3)(4)
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Mason N. Carter 1997 200,014 39,000 - 27,916
Chairman, President and 1996 7,692 - 66,500 23,500
Chief Executive Officer
(5)(6)
Eugene W. Niemiec 1997 180,003 10,000 - 21,165
Vice Chairman and 1996 180,003 - 50,000 8,607
Chief Technology Officer (5) 1995 160,179 30,000 15,000 13,365
President, Chief Executive
Officer and
Chief Operating Officer
John Z. Blahosky 1997 150,010 - - 15,600
Vice President, Special Projects 1996 150,010 - - 8,607
Executive Vice President (7) 1995 141,096 15,000 15,000 12,225
Robert V. Condon 1997 140,005 19,000 - 16,708
Vice President, Finance and 1996 108,078 - 10,000 14,267
Chief Financial Officer,
Treasurer and Secretary (8)
Jacob Lin 1997 112,584 27,000 10,000 13,054
Vice President, Operations (9)
</TABLE>
(1) Includes matching 401(k) amounts and discretionary amounts contributed
by the Company during 1997 to the accounts of the named executive
officers pursuant to the Company's Savings and Investment Plan in the
following amounts: Mr. Carter - $9,515; Mr. Niemiec - $9,996; Mr.
Blahosky - $9,600; Mr. Condon - $9,169; and Mr. Lin - $6,054.
<PAGE>
(2) Includes Director and consultation fees of $23,500 paid to Mr. Carter
during 1996 prior to becoming an officer of the Company.
(3) Includes contractual automobile allowances to Mr. Carter and Mr.
Niemiec of $8,400 each and to Mr. Blahosky of $6,000 during 1997.
(4) Includes compensation for vacation earned but not taken during 1997 in
the following amounts: Mr. Carter - $10,001; Mr. Niemiec - $2,769; Mr.
Condon - $7,539; and Mr. Lin - $7,000. Includes compensation for
vacation earned but not taken during 1996 to Mr. Condon - $8,077.
(5) On December 16, 1996, Mr. Carter became President and Chief Executive
Officer and Mr. Niemiec became Vice Chairman and Chief Technology
Officer. In connection therewith, each received options to purchase
50,000 shares of Common Stock.
(6) At December 28, 1996, the Company had accrued salary of $7,692 for Mr.
Carter. His annual salary was $200,000.
(7) Mr. Blahosky retired on February 28, 1998. Pursuant to a consulting
agreement with the Company which commenced March 1, 1998, Mr. Blahosky
received a distribution of an insurance policy valued at approximately
$44,000, and will receive payments of $24,000 annually for three years.
(8) Mr. Condon joined the Company in March 1996.
(9) Mr. Lin joined the Company in March 1997.
The following table sets forth information concerning individual grants
of stock options made during fiscal 1997 to each of the named executive
officers.
<TABLE>
<CAPTION>
Option/SAR Grants in Last Fiscal Year
(Individual Grants)
- ----------------------- ----------------------------- --------------------------- ------------------ -------------
Number of Securities % of Total Options/SARs
Underlying Options/SARs Granted to Employees in Exercise Price Expiration
Name Granted (#) Fiscal Year or Base ($/Sh) Date
- ----------------------- ----------------------------- --------------------------- ------------------ -------------
<S> <C> <C> <C> <C>
Jacob Lin 10,000 19.27% 11.00 3/21/07
</TABLE>
<PAGE>
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.
<TABLE>
<CAPTION>
Aggregated Option/SAR Exercises in Last Fiscal Year
and FY-End Option/SAR Values
Value of Unexercised
Number of Securities In-the-Money
Underlying Unexercised Options/SARs
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- 38,000 (1) 52,750
30,000 (2) 26,250
Eugene W. Niemiec -0- -0- 37,000 (1) 77,500
30,000 (2) 26,250
John Z. Blahosky 16,500 146,250 - -
Robert V. Condon -0- -0- 10,000 (1) 17,500
Jacob Lin -0- -0- 10,000 (1) 17,500
</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 $12.75 market price of the underlying common stock on January
3, 1998.
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
<PAGE>
on December 31, 1999 and renews from year-to-year thereafter unless otherwise
terminated pursuant to the terms of the agreement. The agreement also provides
that, if not renewed at the end of the term, the Company shall continue to pay
Mr. Niemiec his then-current base salary for a period of eighteen months as a
severance payment. Thereafter, Mr. Niemiec will serve as a consultant to the
Company for ten years for a fee of $90,000 per year and shall continue to be
eligible to participate in certain of the Company's benefit plans.
In January 1998, the Company entered into Severance Agreements with the
named executive officers (other than Mr. Carter). The Severance Agreements
provide, among other things, that if an executive is terminated by the Company
without cause or the executive resigns for "good reason" (as such terms as
defined therein) within one year following a "change in control" (as defined
therein) the Company is obligated to pay to the executive officer over a 12
month period two times his "annual base salary" (as defined therein) and to
continue to provide health insurance benefits for two years.
Certain Relationships and Related Transactions
On April 24, 1997, the Company extended a loan to Mr. Mason N. Carter,
the President and Chief Executive Officer of the Company, to be used for the
purpose of purchasing 10,000 shares of Common Stock of the Company. The loan is
for the principal amount of $105,000 and bears a variable interest rate which
was 8.5% during the initial twelve-month period. Interest accrues annually and
the first principal payment of $25,000 is due on April 24, 1998 with accrued
interest. Payment of the loan is secured by the pledge of the shares of Common
Stock purchased by Mr. Carter with the proceeds of the loan, as collateral for
the repayment of the loan, pursuant to a pledge agreement between Mr. Carter and
the Company.
Compensation of Directors
Directors who are not employees of the Company are paid a monthly fee
of $1,500 and $500 for each meeting of the Board of Directors attended. The
Directors are also reimbursed reasonable travel expenses incurred in attending
Directors meetings. In addition, pursuant to the 1993 Stock Option Plan, each
non-employee Director is granted an immediately exercisable option to purchase
1,500 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 is at the fair market value on the date of grant.
Mr. Charles F. Huber II resigned as Chairman of the Board and as a
member of the Board of Directors on July 24, 1997 and the Board elected Mr.
Carter as his successor. The Company entered into a one-year consulting
agreement with Mr. Huber which provides for the payment of $60,000 annually and
which ends July 1998. In addition, the Board approved the extension of the
exercisability of Mr. Huber's stock options for 26,000 common shares for one
year from the date of his resignation until July 24, 1998.
In connection with the active role that Dr. Oliner has taken in
assisting the Company in further developing its research and development
capabilities and in making himself available to the Chairman for special
technology assignments, the Company entered into a consulting agreement dated as
of January 1, 1998 with Dr. Oliner. The initial term of the agreement ends on
December 31, 1998 and automatically renews for successive 12 month periods
unless terminated pursuant to its terms. The agreement provides for the payment
of $36,000 annually.
<PAGE>
During 1997 Mr. Cohen was paid $4,125 for services provided to the
Company outside his role as a director of the Company. During 1997, the Company
retained the services of Career Consultants, Inc., and SK Associates to perform
executive searches and to provide outplacement services. Dr. Goldberg is the
Chairman and Chief Executive Officer of these companies. The services provided
were substantially completed prior to Dr. Goldberg being elected to the Board of
Directors in November 1997. The total amount paid to these companies was
$37,360.
STOCK OWNERSHIP OF DIRECTORS, EXECUTIVE OFFICERS
AND CERTAIN STOCKHOLDERS
The following table sets forth, as of March 31, 1998, 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,
that was either provided by the person or publicly available from filings made
with the SEC.
Amount and Nature of
Name and Address Beneficial Ownership
of Beneficial Owners (direct except noted) Percent of Class
-------------------- --------------------- ----------------
Charles F. Huber II 156,000 (1) 9.76%
c/o William D. Witter, Inc.
One Citicorp Center
153 East 53rd Street
New York, NY 10022
William D. Witter, Inc. 119,912 7.60%
One Citicorp Center
153 East 53rd Street
New York, NY 10022
Dimensional Fund Advisors Inc. 82,157 5.21%
1299 Ocean Avenue, 11th Floor
Santa Monica, CA 90401
Arthur A. Oliner 179,426 (2) 11.21%
11 Dawes Road
Lexington, MA 02173
Mason N. Carter 61,800 (3) 3.82%
c/o Merrimac Industries, Inc.
41 Fairfield Place
West Caldwell, NJ 07006
<PAGE>
Eugene W. Niemiec 50,052 (4) 3.10%
c/o Merrimac Industries, Inc.
41 Fairfield Place
West Caldwell, NJ 07006
Albert H. Cohen 2,500 (5) .16%
7 Pine Court
Westfield, NJ 07090
Joel H. Goldberg 5,100 .32%
c/o C.C.I. / SK Associates, Inc.
1767 Morris Avenue
Union, NJ 07083
Frederick J. Gumm 2,500 .16%
c/o Frederick Gumm Chemical Co.
538 Forest Street
Kearny, NJ 07032
John Z. Blahosky 8,765 (6) .56%
c/o Merrimac Industries, Inc.
41 Fairfield Place
West Caldwell, NJ 07006
Robert V. Condon 18,387 (7) 1.16%
c/o Merrimac Industries, Inc.
41 Fairfield Place
West Caldwell, NJ 07006
Jacob Lin 11,300 (8) .71%
c/o Merrimac Industries, Inc.
41 Fairfield Place
West Caldwell, NJ 07006
All Directors and
executive officers as a group
(11 persons) 368,241 (9) 21.30%
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(1) Includes 20,000 shares subject to stock options that are exercisable
currently or within 60 days. These amounts are not included in the
totals for all Directors and executive officers as a group. Mr. Huber
is a Managing Director of William D. Witter, Inc., which owns 119,912
shares as to which Mr. Huber disclaims beneficial ownership.
(2) Includes 22,500 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.
(3) Includes 38,000 shares subject to stock options that are exercisable
currently or within 60 days.
<PAGE>
(4) Includes 37,000 shares subject to stock options and 1,243 shares
subject to the Stock Purchase Plan that are exercisable currently or
within 60 days.
(5) Includes 1,500 shares subject to stock options that are exercisable
currently or within 60 days.
(6) This amount is not included in the totals for all Directors and
executive officers as a group.
(7) Includes 10,000 shares subject to stock options and 1,387 shares
subject to the Stock Purchase Plan that are exercisable currently or
within 60 days.
(8) Includes 10,000 shares subject to stock options that are exercisable
currently or within 60 days.
(9) Includes 147,000 shares subject to stock options and 3,720 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 January 3, 1998, Section
16(a) filing requirements applicable to its officers, directors and greater than
ten-percent stockholders were complied with except that Mr. Huber, a former
director and officer, did not file a Form 5.
ITEM 2. APPROVAL OF APPOINTMENT OF INDEPENDENT ACCOUNTANTS
The Board of Directors has, subject to ratification by the
stockholders, reappointed Arthur Andersen LLP as independent accountants for the
current fiscal year ending January 2, 1999. The Audit Committee of the Board of
Directors approved the retention of Arthur Andersen LLP to replace J. H. Cohn
LLP in 1997 (who have audited the accounts of the Company since 1994) and Arthur
Andersen LLP has audited the accounts of the Company for fiscal year 1997.
The decision to replace J.H. Cohn LLP with Arthur Andersen LLP as the
Company's independent accountants was approved by the Audit Committee in 1997.
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):
<PAGE>
"RESOLVED, that the appointment by the Board of Directors of Arthur
Andersen LLP as independent accountants for this Company for the fiscal
year 1998 be and it is hereby approved, ratified and confirmed."
Representatives of Arthur Andersen LLP have been invited and are
expected to attend the Meeting, will have an opportunity to make a statement if
they desire to do so, and will be available to answer questions that may be
asked by stockholders.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ITEM 2.
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 1997 ANNUAL REPORT
ON FORM 10-KSB FILED WITH THE SEC MAY OBTAIN A COPY (EXCLUDING EXHIBITS) WITHOUT
CHARGE BY ADDRESSING A REQUEST TO:
SECRETARY
MERRIMAC INDUSTRIES, INC.
P.O. BOX 986
WEST CALDWELL, NJ 07007-0986
EXHIBITS ALSO MAY BE REQUESTED, BUT A 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 at: 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 22, 1998
<PAGE>
Exhibit A
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 Albert H. Cohen and Arthur A. Oliner as
Proxies, each with the power to appoint his substitute, and hereby authorizes
either or both to represent and to vote all shares of Common Stock of Merrimac
Industries, Inc. held of record by the undersigned on March 31, 1998, at the
Annual Meeting (or any adjournment thereof) of Stockholders to be held on May
20, 1998, at the American Stock Exchange, New York, New York at 10:00 A.M. for
the election of nominees M.N. Carter, A.H. Cohen, J.H. Goldberg, F.J. Gumm, E.W.
Niemiec and A.A. Oliner as directors (Item 1) and Item 2 referred to on the
reverse side and described in the Proxy Statement, and on any other business
before the meeting.
PLEASE MARK ON THE REVERSE SIDE, SIGN, DATE AND RETURN THIS
PROXY CARD PROMPTLY USING THE ENCLOSED ENVELOPE.
FOLD AND DETACH HERE
<PAGE>
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE Please mark
MANNER DIRECTED HEREIN. IF NO DIRECTION IS MADE, THIS your votes as
PROXY WILL BE VOTED FOR THE ELECTION OF THE NOMINEES indicated in
OF THE BOARD OF DIRECTORS (ITEM 1) AND FOR ITEM 2. this example [X]
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR all items and SHARES WILL BE SO
VOTED UNLESS YOU OTHERWISE INDICATE:
No.1 Election of Directors Nominees: M.N. Carter, A.H. Cohen, J.H. Goldberg,
F.J. Gumm, E.W. Niemiec, and A.A. Oliner
FOR WITHHOLD (INSTRUCTION: To withhold authority to vote for
all from any individual nominee, write that nominee's name
nominees nominees in the space provided below.)
[ ] [ ] _________________________________________________
No.2 Appointment of Independent
Auditors
FOR AGAINST ABSTAIN
[ ] [ ] [ ] Dated:____________________________, 1998
________________________________________
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.
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FOLD AND DETACH HERE
