<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only
(as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-12
Merrimac Industries, Inc.
--------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[ ] 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:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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<PAGE> 2
MERRIMAC INDUSTRIES, INC.
41 FAIRFIELD PLACE
WEST CALDWELL, NEW JERSEY 07006-6287
Mason N. Carter December 19, 2000
Chairman of the Board
Dear Fellow Shareholder:
We are pleased to invite you to attend a Special Meeting of Shareholders of
Merrimac Industries, Inc. to be held at the Company's offices at 41 Fairfield
Place, West Caldwell, New Jersey on January 23, 2001 at 10:00 a.m. local time.
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE TAKE THE TIME TO VOTE YOUR
SHARES TODAY.
Your Board of Directors has been considering steps that can be taken to
better position Merrimac for future challenges as the Company continues to grow.
AFTER CAREFUL CONSIDERATION AND WITH ADVICE OF THE COMPANY'S COUNSEL AND
INVESTMENT BANKERS, YOUR BOARD UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS APPROVE
A PROPOSAL TO REINCORPORATE THE COMPANY FROM NEW JERSEY TO DELAWARE BY MERGING
THE COMPANY INTO A DELAWARE SUBSIDIARY TO BE NAMED MERRIMAC INDUSTRIES, INC.
WHEN THE MERGER BECOMES EFFECTIVE. As I am sure you are aware, the value of your
Merrimac shares has more than doubled since the beginning of the year. Your
Board believes that reincorporating in Delaware, considering the Company's
recent significant growth, is a logical progression and in the best interests of
shareholders.
As a result of the reincorporation merger, the Company would have authority
to issue 21 million shares of capital stock, of which up to 1 million shares may
be preferred stock. The Company is currently authorized to issue 5 million
shares of common stock. The Board of Directors believes that, given the current
size of the Company and its business, it would be appropriate and desirable that
the Company have the greater financial flexibility afforded by this increase in
authorized capital stock.
THIS PROPOSAL REQUIRES THE APPROVAL OF 80% OF THE OUTSTANDING SHARES
ENTITLED TO VOTE AT THE MEETING. THEREFORE, A NON-VOTE OR AN ABSTENTION WILL BE
THE SAME AS A VOTE AGAINST THE PROPOSAL.
We urge you to read the enclosed proxy material that further explains the
proposal and to take the time to vote your proxy FOR the proposal. REGARDLESS OF
THE NUMBER OF SHARES YOU HOLD, EVERY VOTE COUNTS. FOR YOUR CONVENIENCE, WE HAVE
MADE ARRANGEMENTS TO ALLOW YOU TO EASILY VOTE YOUR SHARES BY TELEPHONE OR THE
INTERNET IN ADDITION TO BY MAIL. Simply follow the enclosed instructions and
vote your shares today.
If you have any questions or require assistance, please call our proxy
solicitor, MacKenzie Partners, Inc., at (800) 322-2885 (TOLL FREE) or (212)
929-5500 (CALL COLLECT).
On behalf of your Board of Directors, I thank you for your support and urge
you to vote FOR approval of the proposal.
I would like to take this opportunity to wish you and your family a happy
holiday season and a healthy and prosperous New Year.
Very truly yours,
/s/ Mason N. Carter
Mason N. Carter
Chairman of the Board
<PAGE> 3
MERRIMAC INDUSTRIES, INC.
41 FAIRFIELD PLACE
WEST CALDWELL, NEW JERSEY 07006-6287
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON JANUARY 23, 2001
To the Shareholders of
Merrimac Industries, Inc.:
NOTICE IS HEREBY GIVEN that a special meeting of the shareholders (the
"Special Meeting") of MERRIMAC INDUSTRIES, INC. (the "Company") will be held at
the offices of the Company, 41 Fairfield Place, West Caldwell, New Jersey, on
January 23, 2001, at 10:00 a.m. (local time) for the following purpose:
- To consider and vote upon a proposal to merge the Company into Merrimac
Industries, Inc. (Delaware), a newly-formed Delaware subsidiary, which
would be the surviving entity in such merger, in order to change the
Company's state of incorporation from New Jersey to Delaware.
The Board of Directors has unanimously approved the merger and the
transactions related thereto, believes the merger and the change of the state of
incorporation is in the best interests of the Company and its shareholders and
recommends that you vote FOR the proposal.
Holders of record of Common Stock, par value $0.50 per share, at the close
of business on December 8, 2000, the record date for the Special Meeting, are
entitled to notice of and to vote at the Special Meeting.
You are cordially invited to attend the Special Meeting. Because it is
important that your shares be represented at the Special Meeting, we urge you to
indicate on the enclosed proxy card your choice with respect to the matters to
be voted upon at the Special Meeting, sign and date the card and return it
promptly in the enclosed envelope. Please do this even if you plan to attend the
Special 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.
If you have any questions about the Special Meeting or would like to
receive additional copies of the proxy statement or the proxy card, you should
contact our proxy solicitor:
MACKENZIE PARTNERS, INC.
156 FIFTH AVENUE
NEW YORK, NEW YORK 10010
(800) 322-2885 (CALL TOLL FREE)
(212) 929-5500 (CALL COLLECT)
(212) 929-0308 (FACSIMILE)
[email protected] (E-MAIL)
Very truly yours,
/s/ Mason N. Carter
Mason N. Carter
Chairman of the Board
<PAGE> 4
MERRIMAC INDUSTRIES, INC.
41 FAIRFIELD PLACE
WEST CALDWELL, NEW JERSEY 07006-6287
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
PROXY STATEMENT
This proxy statement (the "Proxy Statement") is furnished in connection
with the solicitation of proxies by the Board of Directors of MERRIMAC
INDUSTRIES, INC. (the "Company") for use at the special meeting of the
shareholders of the Company (the "Special Meeting") to be held on January 23,
2001 at 10:00 a.m. (local time) at the offices of the Company, 41 Fairfield
Place, West Caldwell, New Jersey, for the purpose of considering and voting on
the proposal to change the state of incorporation to Delaware, as more fully
described in the accompanying Notice of Special Meeting. The approximate date on
which this Proxy Statement and the accompanying form of proxy are first being
sent or given to shareholders is December 19, 2000.
It is expected that the solicitation will be primarily by mail, but proxies
also may be solicited personally or by telephone by officers and employees of
the Company who will not receive additional compensation for such solicitation.
The cost of solicitation of proxies will be borne directly by the Company. The
Company expects to pay compensation for the solicitation of proxies, plus
expenses, to MacKenzie Partners, Inc. to supply brokers and other persons with
proxy materials for forwarding to beneficial holders of common stock of the
Company. The Company expects to pay MacKenzie Partners, Inc. a fee of
approximately $10,000 for its services. The Company will also reimburse such
brokers and other persons for expenses related to such forwarding.
The form of proxy forwarded to shareholders with the Notice of Special
Meeting confers discretionary authority upon the proxy nominees with respect to
the matters identified in the Notice of Special Meeting. The form of proxy
allows the shareholder to specify that the shares registered in his/her name may
vote for or vote against or abstain from voting on the proposed merger of the
Company into its newly-formed, wholly-owned Delaware subsidiary, which would
have the effect of changing the Company's state of incorporation from New Jersey
to Delaware (the "Reincorporation Merger").
The shares represented by proxies solicited hereby will be voted for or
voted against or withheld from voting (abstention), in each case, in accordance
with the specifications made by the shareholders giving such proxy.
Under Securities and Exchange Commission ("SEC") rules, boxes and a
designated blank space are provided on the proxy card for shareholders to mark
if they wish either to vote "for," "against" or "abstain" on the proposal. New
Jersey law and the Company's By-laws require the presence of a quorum for the
Special Meeting. A quorum is defined as a majority of the votes entitled to be
cast at the Special Meeting. FOR VOTING PURPOSES, ABSTENTIONS WILL BE COUNTED
FOR THE PURPOSE OF ESTABLISHING A QUORUM AND WILL HAVE THE SAME EFFECT AS VOTES
"AGAINST" THE PROPOSAL.
Under the rules of the American Stock Exchange (the "AMEX"), broker-dealer
"non-votes" on "non-routine" matters are not counted in calculating the number
of votes cast in connection with the approval of the proposal. The broker-dealer
non-votes will be counted, however, for the purpose of establishing a quorum.
The proposal to approve an Agreement and Plan of Merger resulting in the
Reincorporation Merger and to approve the related change of the state of
incorporation from New Jersey to Delaware is a "non-routine" item under the AMEX
rules, 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 Special
Meeting and thus will have the same effect as votes "against" the proposal.
Proxies given by shareholders for use at the Special Meeting may be revoked
at any time prior to their use. In addition to revocation in any manner
permitted by law, a proxy may be revoked in any one of the following ways:
(a) by signing a form of proxy bearing a later date and depositing it
with the Secretary of the Company prior to the closing of the polls at the
Special Meeting;
<PAGE> 5
(b) as to any matter on which a vote has not already been cast
pursuant to the authority conferred by such proxy, by signing written
notice of revocation and delivering it to either the Secretary or the
Chairman of the Special Meeting prior to the closing of the polls at the
Special Meeting;
(c) by attending the Special Meeting in person and personally voting
the shares represented by the proxy; or
(d) by an instrument in writing executed by the shareholder or by
his/her attorney authorized in writing, or, if the shareholder is a
corporation, under its corporate seal, or by an officer or attorney thereof
duly authorized, and deposited either at the head office of the Company at
any time up to and including the last business day preceding the day of the
Special Meeting, or any adjournment thereof, at which the proxy is to be
used, or with the Chairman of such meeting on the day of the Special
Meeting, or any adjournment thereof, and upon either of such deposits the
proxy is revoked.
The authorized capital of the Company consists of 5,000,000 common shares,
par value $0.50 (the "Common Shares").
Every holder of record at the close of business on December 8, 2000 (the
"Record Date") is entitled to receive notice of and to vote at the Special
Meeting. At the close of business on the Record Date, 2,593,711 Common Shares
were issued and outstanding. Every shareholder of record on the Record Date is
entitled to one vote for each Common Share then held. The approval of the
holders of record of at least 80% of the outstanding Common Shares of the
Company entitled to vote thereon is required to approve the Reincorporation
Merger.
STOCK OWNERSHIP OF DIRECTORS, EXECUTIVE OFFICERS
AND CERTAIN SHAREHOLDERS
The following table sets forth, as of the Record Date, information
concerning Common Stock owned by (i) persons known to the Company who are
beneficial owners of more than five percent of the Common Stock of the Company,
(ii) each director and named executive officer of the Company, and (iii) all
directors 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:
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF
BENEFICIAL OWNERSHIP+
(DIRECT EXCEPT AS PERCENT OF
NAME AND ADDRESS OF BENEFICIAL OWNERS NOTED) CLASS
------------------------------------- --------------------- ----------
<S> <C> <C>
Ericsson Holding International, B.V. ....................... 575,000(1) 21.35%
c/o Lawrence F. Lyles
740 East Campbell Road
Richardson, TX 75081
Adam Smith group............................................ 409,800(2) 14.64%
c/o Adam Smith Capital
Management, L.L.C.
101 East 52nd Street
New York, NY 10022
William D. Witter, Inc. .................................... 278,499 10.74%
One Citicorp Center
153 East 53rd Street
New York, NY 10022
Charles F. Huber II......................................... 130,000(3) 5.01%
c/o William D. Witter, Inc.
One Citicorp Center
153 East 53rd Street
New York, NY 10022
Arthur A. Oliner............................................ 200,668(4) 7.66%
11 Dawes Road
Lexington, MA 02173
</TABLE>
2
<PAGE> 6
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF
BENEFICIAL OWNERSHIP+
(DIRECT EXCEPT AS PERCENT OF
NAME AND ADDRESS OF BENEFICIAL OWNERS NOTED) CLASS
------------------------------------- --------------------- ----------
<S> <C> <C>
Mason N. Carter............................................. 161,280(5) 5.95%
c/o Merrimac Industries, Inc.
41 Fairfield Place
West Caldwell, NJ 07006
Joel H. Goldberg............................................ 50,600(6) 1.94%
c/o C.C.I./SK Associates, Inc.
1767 Morris Avenue
Union, NJ 07083
Albert H. Cohen............................................. 16,850(7) *
51 Primrose Circle
Princeton, NJ 08540
Edward H. Cohen............................................. 23,950(8) *
c/o Rosenman & Colin LLP
575 Madison Avenue
New York, NY 10022
Joseph B. Fuller............................................ 9,650(9) *
c/o Monitor Company
Two Canal Park
Cambridge, MA 02141
Robert V. Condon............................................ 19,966(10) *
c/o Merrimac Industries, Inc.
41 Fairfield Place
West Caldwell, NJ 07006
James J. Logothetis......................................... 22,479(11) *
c/o Merrimac Industries, Inc.
41 Fairfield Place
West Caldwell, NJ 07006
Brian R. Dornan............................................. 17,496(12) *
c/o Merrimac Industries, Inc.
41 Fairfield Place
West Caldwell, NJ 07006
Reynold K. Green............................................ 19,368(13) *
c/o Merrimac Industries, Inc.
41 Fairfield Place
West Caldwell, NJ 07006
All directors and executive officers as a group (18 627,666(14) 21.56%
persons)..................................................
</TABLE>
---------------
+ "Beneficial Ownership" means the sole or shared voting power to direct the
voting or investment of a security, including securities subject to
options, warrants or other common stock equivalents which are exercisable
within sixty (60) days.
* The percentage of shares beneficially owned does not exceed 1% of the
class.
(1) Includes 100,000 shares deliverable upon exercise of warrants at a purchase
price of $21.25 per share. All such warrants are presently exercisable.
(2) Includes 204,900 shares deliverable upon exercise of warrants at a purchase
price of $21.25 per share. All such warrants are presently exercisable. The
Adam Smith group includes Adam Smith Capital Management L.L.C., Adam Smith
Investment Partners, L.P., Adam Smith Investments, Ltd., Diamond Capital
Management Inc., Richard Grossman, Richard and Ana Grossman JTWROS and Orin
Hirschman.
(3) The number of shares of Common Stock in the table is based upon information
provided to the Company by Mr. Huber. These amounts are not included in the
totals for all directors and executive officers as a group. Mr. Huber, who
is a Managing Director of William D. Witter Associates, an affiliate
3
<PAGE> 7
of William D. Witter, Inc., disclaims beneficial ownership of the 238,299
shares owned by William D. Witter, Inc.
The Company is a party to a shareholder's agreement dated as of October
30, 1998 with Mr. Huber. The shareholder's agreement contains certain
provisions relating to the purchase and sale by Mr. Huber of the capital
stock of the Company and relating to Mr. Huber's ability to vote his
Common Stock. Mr. Huber is generally prohibited from acquiring any
securities of the Company without the Company's prior approval and from
selling any such securities to any person or group that would then hold
three percent or more of the outstanding capital stock of the Company.
During the term of the shareholder's agreement, Mr. Huber is also required
to vote his shares of Common Stock as directed by the Board of Directors
or the Chief Executive Officer of the Company.
(4) Includes 26,400 shares subject to stock options that are exercisable
currently or within 60 days and 9,528 shares owned by Dr. Oliner's wife as
to which he disclaims beneficial ownership.
(5) Includes 110,150 shares subject to stock options that are exercisable
currently or within 60 days.
(6) Includes 17,600 shares subject to stock options that are exercisable
currently or within 60 days.
(7) Includes 8,250 shares subject to stock options that are exercisable
currently or within 60 days.
(8) Includes 9,950 shares subject to stock options that are exercisable
currently or within 60 days.
(9) Includes 5,650 shares subject to stock options that are exercisable
currently or within 60 days.
(10) Includes 13,750 shares subject to stock options that are exercisable
currently or within 60 days.
(11) Includes 20,000 shares subject to stock options and 695 shares subject to
the 1995 Stock Purchase Plan that are exercisable currently or within 60
days.
(12) Includes 12,450 shares subject to stock options and 1,932 subject to the
1995 Stock Purchase Plan that are exercisable currently or within 60 days.
(13) Includes 12,850 shares subject to stock options and 2,017 shares subject to
the 1995 Stock Purchase Plan that are exercisable currently or within 60
days.
(14) Includes 308,985 shares subject to stock options and 8,756 shares subject
to the 1995 Stock Purchase Plan that are exercisable currently or within 60
days.
4
<PAGE> 8
PROPOSAL 1:
CHANGE THE STATE OF INCORPORATION OF THE COMPANY
FROM NEW JERSEY TO DELAWARE
INTRODUCTION
The principal change to be effected as a result of this proposal and the
Reincorporation Merger is the change in the Company's state of incorporation,
which will result in certain other changes in the Company's Certificate of
Incorporation and By-Laws. These changes are discussed below and are embodied in
the Agreement and Plan of Merger (the "Reincorporation Merger Agreement")
between the Company and Merrimac-Delaware, Inc. ("Merrimac DE"), the Company's
wholly-owned Delaware subsidiary. The Board of Directors believes that the best
interests of the Company and its shareholders will be served by adopting and
approving the Reincorporation Merger Agreement and, accordingly, the
Reincorporation Merger.
PRINCIPAL REASONS FOR THE REINCORPORATION MERGER AGREEMENT
For many years, Delaware has followed a policy of encouraging incorporation
in that state and, in furtherance of that policy, has adopted comprehensive,
modern and adaptable corporate laws which are periodically updated and revised
to meet changing business needs. Delaware courts have developed considerable
expertise in dealing with corporate legal issues and a substantial body of case
law has developed construing Delaware law and establishing public policy with
respect to Delaware corporations. The relative clarity and predictability of
Delaware corporate law presented in the numerous precedents decided by the
Delaware courts should be of great advantage to the Company by allowing it to
make corporate decisions and take actions with increased confidence of what the
outcome and consequences of those decisions and actions will be under the
General Corporation Law of the State of Delaware. Further, the Delaware
Secretary of State's office is staffed with experienced regulators recognized
for their efficient and business-sensitive approach to administering the state's
business laws and regulations. As a result of these and other factors, many
major corporations have chosen Delaware for their initial domicile or have
subsequently reincorporated in Delaware in a manner similar to that proposed by
the Company.
Consequently, the Board of Directors believes that the activities of the
Company, both present and contemplated, can be better managed if the corporate
affairs of the Company are governed by Delaware law. It should be noted,
however, that shareholders in some instances have fewer rights and hence less
protection under Delaware law than under New Jersey law. See the discussion
under the heading "Comparison of Stockholder Rights Under the New Jersey
Business Corporation Act and the Delaware General Corporation Law," below.
The Company's Board of Directors has unanimously approved, subject to
stockholder approval, a proposal to change the Company's state of incorporation
from New Jersey to Delaware by means of the Reincorporation Merger of the
Company with and into Merrimac DE as set forth in the Reincorporation Merger
Agreement. The principal office of Merrimac DE will be the same as the Company's
present principal office, 41 Fairfield Place, West Caldwell, New Jersey
07006-6287. If the shareholders approve the Reincorporation Merger Agreement,
Merrimac DE will be the surviving corporation in the Reincorporation Merger. As
a consequence of the Reincorporation Merger, the state law applicable to the
Company's corporate affairs will change from New Jersey to Delaware, which will
also result in certain differences in shareholders' rights.
The following discussion summarizes certain aspects of the Reincorporation
Merger Agreement, including certain material differences between New Jersey law
and Delaware law. This summary does not purport to be a complete description of
the Reincorporation Merger Agreement or the differences between shareholders'
rights under New Jersey law and Delaware law and is qualified in its entirety by
reference to (1) the Reincorporation Merger Agreement attached hereto as Annex I
(2) the certificate of incorporation of Merrimac DE attached hereto as Annex II,
and (3) the by-laws of Merrimac DE attached hereto as Annex III. Copies of the
Company's present certificate of incorporation, as amended, and by-laws are
5
<PAGE> 9
available for inspection at the Company's principal office, and copies will be
sent to shareholders on request, without charge.
Approval of the Reincorporation Merger Agreement by the shareholders will
constitute approval of the Reincorporation Merger. Pursuant to the terms of the
Reincorporation Merger Agreement, Merrimac DE's certificate of incorporation and
by-laws will replace the Company's certificate of incorporation and by-laws as
the charter documents affecting corporate governance and shareholders' rights.
For a description of certain differences between the Company's certificate of
incorporation and by-laws and Merrimac DE's certificate of incorporation and
by-laws, see "Comparison of Certain Charter Document Provisions," below.
The approval of the Reincorporation Merger Agreement will affect certain
rights of the Company's shareholders. Accordingly, shareholders are urged to
carefully read the Proxy Statement and its annexes.
PRINCIPAL FEATURES OF THE REINCORPORATION MERGER
Upon the approval of the Reincorporation Merger by the Company's
shareholders, the Company's Board of Directors shall, as promptly as
practicable, cause the Reincorporation Merger to be consummated (the date of the
consummation of the Reincorporation Merger is hereinafter referred to as the
"Effective Date").
Upon the consummation of the Reincorporation Merger, the separate existence
of the Company will cease, and Merrimac DE, to the extent permitted by law, will
succeed to all business, properties, assets and liabilities of the Company. Each
Common Share of the Company issued and outstanding immediately prior to the
consummation of the merger will, by virtue of the Reincorporation Merger, be
converted into one Common Share of Merrimac DE. Upon the consummation of the
Reorganization Merger, stock certificates which immediately prior to the
Reincorporation Merger represented common stock of the Company, including Common
Shares held in the treasury of the Company, will be deemed for all purposes to
represent the same number of shares of Merrimac DE common stock. Stockholders
will not be required to exchange their existing stock certificates for stock
certificates of Merrimac DE. However, following the Reincorporation Merger, if
any stock certificates of the Company are submitted to Merrimac DE or to its
transfer agent for transfer, or if any stockholder so requests, a new stock
certificate representing the subject Merrimac DE shares will be delivered to the
transferee or holder of such shares. Upon the request of any stockholder,
Merrimac DE will, without charge, furnish such holder a statement of the powers,
designations, preferences and relative, participating, optional, or other
special rights of each class of stock or series thereof that Merrimac DE is
authorized to issue, and of the qualifications, limitations or restrictions of
such preferences and/or rights. This exchange of securities will be exempt from
the registration requirements of the federal securities laws.
Approval of the Reincorporation Merger Agreement will not result in any
change in the business, management, assets or liabilities of the Company. The
directors and officers of the Company will be the directors and officers of
Merrimac DE following the Reincorporation Merger. On the Effective Date, the
Merrimac DE common stock will be listed on the American Stock Exchange, where
the Common Shares of the Company are currently listed. The Company's transfer
agent will consider the delivery of existing stock certificates representing
Common Shares of the Company as constituting "good delivery" of shares of
Merrimac DE common stock in transactions subsequent to the Reincorporation
Merger.
Pursuant to the terms of the Reincorporation Merger Agreement, each option
and warrant to purchase Common Shares of the Company outstanding immediately
prior to the consummation of the Reincorporation Merger will become an option or
warrant to purchase Merrimac DE common stock, subject to the same terms and
conditions as set forth in the agreement pursuant to which such option or
warrant was granted. All employee benefit plans and other agreements and
arrangements of the Company will be continued by Merrimac DE upon the same terms
and subject to the same conditions as currently in effect.
In accordance with generally accepted accounting principles, the Company
expects that following the Reincorporation Merger the assets and liabilities of
the Company will be carried forward at their recorded historical book values.
6
<PAGE> 10
In accordance with the Reincorporation Merger Agreement, all agreements and
obligations of the Company will be assumed by, and become obligations of,
Merrimac DE, upon the Effective Date of the Reincorporation Merger.
The Reincorporation Merger does not require the approval of any federal or
state regulatory agency, nor does the transfer of any of the Company's existing
permits or licenses to Merrimac DE require the consent of any such regulatory
agency.
While it is anticipated that, if approved by the shareholders, the
Reincorporation Merger will become effective as promptly as practicable after
such approval, the Reincorporation Merger Agreement does provide that the Merger
may be abandoned by the mutual consent of the board of directors of both the
Company and Merrimac DE prior to the Effective Date, either before or after
stockholder approval. In addition, the Reincorporation Merger Agreement may be
amended prior to the Effective Date of the Reincorporation Merger, either before
or after stockholder approval, to the fullest extent permitted by applicable
law.
COMPARISON OF CERTAIN CHARTER DOCUMENT PROVISIONS
Merrimac DE's certificate of incorporation and by-laws are generally
similar to the Company's certificate of incorporation and by-laws, but there are
some differences. Some of these changes, such as the change in the number of
authorized common shares and authorization of preferred stock, do not reflect
differences between New Jersey and Delaware law, but have been determined by the
Company's board of directors to be desirable. Other differences are primarily
the result of differences between Delaware law and New Jersey law. Significant
provisions and certain important similarities and differences are discussed
below.
INCREASE IN AUTHORIZED CAPITALIZATION
Following the Reincorporation Merger, Merrimac DE would have authority to
issue 21 million shares of capital stock, of which up to 1 million shares may be
preferred stock. The Company is currently authorized to issue 5 million shares
of common stock. The Board of Directors believes that, given the current size of
the Company and its business, it would be appropriate and desirable that the
Company have the greater financial flexibility afforded by this increase in
authorized capital stock.
RIGHT OF DIRECTORS TO DETERMINE TERMS OF PREFERRED STOCK
New Jersey and Delaware law are similar with respect to the manner in which
directors may determine the terms of a series of preferred stock and the terms
which may be so fixed. Under both Delaware law and New Jersey law, the
certificate of incorporation may authorize the directors to fix the terms of a
series of preferred stock and provide for different voting or other rights
between series of preferred stock. Merrimac DE's certificate of incorporation
permits the board of directors to exercise broad discretion in prescribing the
terms and rights of a series of preferred stock.
NO PREEMPTIVE RIGHTS
Under both New Jersey and Delaware law, shareholders have preemptive rights
to purchase shares only if the certificate of incorporation so provides. The
Company's certificate of incorporation and Merrimac DE's certificate of
incorporation do not provide shareholders with preemptive rights.
BOARD OF DIRECTORS; COMMITTEES
Under New Jersey law, a board of directors may consist of one or more
members as provided in the by-laws and subject to any provision contained in the
certificate of incorporation. The participation of directors with a majority
vote will constitute a quorum for the transaction of business unless the
certificate of incorporation or the by-laws provide otherwise. However, in no
event will the quorum be less than one-third of the votes of the board. The
Company's certificate of incorporation provides that there can be no fewer than
three directors and that the exact number of directors is determined from time
to time exclusively by the Board of Directors by the affirmative vote of a
majority of the entire Board. The current number of directors is
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six. The directors are divided into three classes, designated Class I, Class II
and Class III. At the 1999 Annual Meeting of Shareholders, Class I directors
were elected for a one-year term, Class II directors were elected for a two-year
term and Class III directors were elected for a three-year term. At each
succeeding annual meeting of shareholders, successors to the class of directors
whose term expires at that annual meeting will be elected for a three-year term.
If the number of directors is changed, any increase or decrease shall be
apportioned among the classes so as to maintain the number of directors in each
class as nearly equal as possible, and any additional director of any class
elected to fill a vacancy resulting from an increase in such class will hold
office for a term that shall coincide with the remaining term of that class. In
no case will a decrease in the number of directors shorten the term of any
incumbent director. A director holds office until the annual meeting for the
year in which his term expires and until his successor is elected and qualified,
subject, however, to prior death, resignation, retirement, disqualification or
removal for cause.
Under Delaware law, a board of directors of a corporation may consist of
one or more members as provided in the by-laws, unless the certificate of
incorporation fixes the number of directors. A majority of the total number of
directors will constitute a quorum for the transaction of business unless the
certificate of incorporation or the by-laws require a greater number. The
by-laws may provide that a smaller percentage can constitute a quorum; however,
a quorum may not be less than one-third of the number of directors. Merrimac
DE's by-laws provide that the number of directors of Merrimac DE will be not
less than three, with the exact number to be determined exclusively by the Board
of Directors from time to time. At the Effective Date of the Reincorporation
Merger, Merrimac DE will have the same six directors divided into three classes,
as the Company. Each director will hold office until the annual meeting of the
shareholders for the year in which his term expires (and would have expired if
he had continued to be a director of the Company) and until his successor is
elected and qualified, or until such director's prior death, resignation,
disqualification or removal for cause.
Under the Company's by-laws, special meetings of the Board of Directors may
be called by the chairman of the Board of Directors, the president or by
one-third or more in number of the directors. Merrimac DE's by-laws contain an
equivalent provision. Pursuant to the Company's by-laws, a majority of the
directors then in office (but not less than one-third of the total number of
directors constituting the full Board of Directors) constitutes a quorum for the
transaction of business by the board of directors, and an act by a majority of
the quorum of directors constitutes an act of the Board of Directors. Merrimac
DE's by-laws contain an equivalent provision.
New Jersey law allows the board of directors, by resolution adopted by a
majority of the entire board, to designate an executive committee or other
committee or committees, each consisting of one or more members, with the power
and authority (to the extent permitted by law) to act on behalf of the entire
board if the certificate or by-laws so provides. The Company's by-laws provide
that the Company's Board of Directors may determine the extent to which each
committee designated by the Board (each committee to consist of three or more
directors) shall have and may exercise the powers of the Board of Directors in
the management of the business and affairs of the Company. Delaware law gives a
board of directors broad authority to establish committees. Under Merrimac DE's
by-laws, the board of directors of Merrimac DE may designate one or more
committees, each committee to consist of one or more directors. Any such
committee, to the extent provided in the resolution of the Board of Directors,
shall have and may exercise all the powers and authority of the board in the
management of the business and affairs of Merrimac DE, except that no committee
shall have the power or authority in reference to (1) approving or adopting, or
recommending to the shareholders, any action or matter expressly required by the
Delaware General Corporation Law (the "DGCL") to be submitted to shareholders
for approval, or (2) adopting, amending or repealing any by-law of Merrimac DE.
CUMULATIVE VOTING
Neither the Company's nor Merrimac DE's certificate of incorporation and
by-laws provide for cumulative voting in the election of directors. Therefore
the shareholders of a majority of the voting power of Merrimac DE will be
entitled to elect all of the class of directors of Merrimac DE up for
re-election at any annual meeting.
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NEWLY CREATED DIRECTORSHIPS AND VACANCIES
New Jersey law permits any vacancy, however caused, to be filled by a
majority vote of the remaining directors. Similarly, the Company's by-laws
provide that vacancies, however caused, including vacancies resulting from any
increase in the authorized number of directors, may be filled by a majority of
the Board of Directors then in office (even if less than a quorum) or by a sole
remaining director.
Delaware law specifically provides that, unless otherwise provided in a
corporation's certificate of incorporation or by-laws, vacancies and newly
created directorships may be filled by a majority vote of directors, even if
less than a quorum, or by a sole remaining director. Delaware law also permits a
corporation to reserve exclusively to the Board of Directors the power to fill
Board vacancies. Merrimac DE's certificate of incorporation and by-laws provide
that any vacancies created on the Board of Directors may be filled only by a
majority of directors then in office (even if less than a quorum) or by a sole
remaining director.
REMOVAL OF DIRECTORS
Under New Jersey law, directors may be removed, subject to certain
qualifications, for cause or, unless otherwise provided in the certificate of
incorporation, without cause by an affirmative vote of shareholders entitled to
vote for the election of directors. The Company's certificate of incorporation
provides that directors may not be removed by the shareholders without cause.
Under Delaware law, directors may be removed by the shareholders, subject
to certain qualifications, with or without cause, by an affirmative vote of a
majority of the shares entitled to vote for the election of directors. If a
corporation has a classified board of directors, unless its certificate of
incorporation provides otherwise, shareholders can remove a director only for
cause. Merrimac DE's certificate of incorporation provides that no director may
be removed without cause by the shareholders.
DIRECTOR LIABILITY AND INDEMNIFICATION OF OFFICERS AND DIRECTORS
Both New Jersey law and Delaware law contain provisions and limitations
regarding directors' liability and regarding indemnification by a corporation of
its officers, directors and employees.
New Jersey law permits a New Jersey corporation to include a provision in
its certificate of incorporation which eliminates or limits the personal
liability of a director or officer to a corporation or its shareholders for
monetary damages for breach of fiduciary duties as a director or officer.
However, no such provision may eliminate or limit the liability of a director or
officer for any breach of duty based upon an act or omission (1) in breach of
the director's or officer's duty of loyalty to the corporation or its
shareholders, (2) not in good faith or involving a knowing violation of law, or
(3) resulting in receipt by such person of an improper personal benefit. Under
New Jersey law, corporations are also permitted to indemnify directors in
certain circumstances and required to indemnify directors under certain
circumstances. Under New Jersey law, a director, officer, employee or agent may,
in general, be indemnified by the corporation if he has acted in good faith and
in a manner he reasonably believed to be in, or not opposed to, the best
interests of the corporation and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct was unlawful. In
addition, under New Jersey law, corporations must indemnify a director to the
extent the director has been successful on the merits or otherwise. The
Company's certificate of incorporation limits liability of a director or an
officer to the Company in accordance with New Jersey law. The Company's by-laws
require the Company, to the extent permitted by law, to defend and indemnify its
directors and officers.
Delaware law permits a corporation to include a provision in its
certificate of incorporation, which is included in Merrimac DE's certificate of
incorporation, which eliminates or limits the personal liability of a director
to the corporation or its shareholders for monetary damages for breach of
fiduciary duty. However, no such provision may eliminate or limit the liability
of a director (1) in the case of a breach of the director's duty of loyalty to
the corporation or its shareholders, (2) for acts or omissions not in good faith
or which involve intentional misconduct or a knowing violation of law, (3) for
the unlawful payment of dividends or unlawful stock purchase or redemption or
other violations of Section 174 of the DGCL, or (iv) for any transaction from
which the director derived an improper personal benefit. Under Delaware law, a
corporation has the power to
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indemnify its directors, officers, employees and agents against judgments,
settlements and expenses in any litigation or other proceeding, except a
proceeding by, or in the right of, the corporation, if the person acted in good
faith and in a manner he reasonably believed to be in or not opposed to the best
interests of the corporation, and, with respect to a criminal proceeding, had no
reasonable cause to believe his conduct was unlawful. The indemnification
provisions of Delaware law require indemnification of a present or former
director or officer to the extent that he has been successful on the merits or
otherwise in defense of any action or claim. Delaware law also permits
indemnification of expenses in a suit by, or in the right of, the corporation if
the person acted in good faith and in a manner he reasonably believed to be in
or not opposed to the best interests of the corporation, subject to court
approval if the person is adjudged liable. The Merrimac DE by-laws generally
require Merrimac DE to indemnify and advance litigation expenses to its
directors and officers to the extent permitted by Delaware law.
COMPARISON OF SHAREHOLDER RIGHTS UNDER THE NEW JERSEY BUSINESS CORPORATION ACT
AND THE DELAWARE GENERAL CORPORATION LAW
Following the reincorporation, the rights of shareholders of the Company
will no longer be governed by New Jersey law. The following summarizes certain
material differences between the rights of a shareholder of a New Jersey
corporation and the rights of a stockholder of a Delaware corporation.
AMENDMENT OF CERTIFICATE OF INCORPORATION
New Jersey law provides that an amendment to a corporation's certificate of
incorporation may be made by board action alone in regard to certain actions
(for example, an amendment to effect a share dividend). Other amendments to the
certificate of incorporation require the action of the board with the approval
of shareholders holding a majority of the voting stock entitled to vote thereon,
unless the corporation's certificate of incorporation requires a greater
percentage. The Company's certificate of incorporation does not require such
greater percentage.
Delaware law requires the approval of shareholders holding a majority of
the voting power of the outstanding stock of the corporation (and, if
applicable, a majority of the outstanding stock of each class or series entitled
to vote separately thereon) to amend the corporation's certificate of
incorporation, unless a higher vote is specified in the certificate of
incorporation. Merrimac DE's certificate of incorporation does not require a
higher vote.
AMENDMENTS TO BY-LAWS
New Jersey law provides that a Board of Directors has the power to make,
alter and repeal a corporation's by-laws, unless such power is reserved to the
corporation's shareholders in the corporation's certificate of incorporation.
The Company's by-laws state that they may be amended or repealed by vote of a
majority of the stock outstanding at the time entitled to vote in the election
of directors. The by-laws may also be amended or repealed by the Board of
Directors by vote of a majority of the entire Board of Directors, but any
by-laws adopted by the Board of Directors may be amended or repealed by the
shareholders entitled to vote thereon as therein provided.
Under Delaware law, the shareholders of a Delaware corporation and, if the
certificate of incorporation so provides, the board of directors, have the power
to adopt, amend or repeal a corporation's by-laws. Under Merrimac DE's
certificate of incorporation the board of directors is expressly authorized to
adopt, amend or repeal Merrimac DE's by-laws, which may also be adopted, amended
or repealed by vote of the holders of 80% of all outstanding shares.
SHAREHOLDER PROPOSALS
Neither Delaware nor New Jersey law explicitly require that shareholder
proposals be the subject of an advance notice to shareholders. The Company's
by-laws provide that for nominations or other business to be properly brought
before an annual meeting by a shareholder, the shareholder must have given
timely notice thereof in writing to the Secretary of the Company and such other
business must otherwise be a proper matter
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for shareholder action. To be timely, a shareholder's notice shall be delivered
to the Secretary at the principal executive offices of the Company not later
than the close of business on the 60th day nor earlier than the close of
business on the 90th day prior to the first anniversary of the preceding year's
annual meeting; provided, however, that in the event that the date of the annual
meeting is more than 30 days before or more than 60 days after such anniversary
date, notice by the shareholder to be timely must be so delivered not earlier
than the close of business on the 90th day prior to such annual meeting and not
later than the close of business on the later of the 60th day prior to such
annual meeting or the 10th day following the day on which public announcement of
the date of such meeting is first made by the Company. Merrimac DE's by-laws
contain the same provisions with respect to advance notice of shareholder
proposals as the Company's by-laws.
SPECIAL MEETINGS OF SHAREHOLDERS
New Jersey law provides that a special meeting of shareholders may be
called by the president or the board of directors or any stockholder, director,
officer or other person as may be provided in the by-laws. Upon application of
the holder or holders of not less than 10% of all the shares entitled to vote at
a meeting, the Superior Court of New Jersey, for good cause shown, may order
that a special meeting be called. The Company's by-laws provide that special
meetings may be called by the president, a majority of the Board of Directors or
upon a request of the holders of not less than a majority of the outstanding
stock entitled to vote at such special meeting.
Delaware law provides that only the board of directors or such person or
persons as may be authorized by the certificate of incorporation or by-laws may
call special meetings of the shareholders. Merrimac DE's by-laws provide that
the Chairman of the Board, the President, the Board of Directors or the holders
of a majority of the outstanding stock entitled to vote may call a special
meeting of shareholders.
ANTI-TAKEOVER PROVISIONS
New Jersey law provides that any person making an offer to purchase in
excess of 10% (or such amount which, when aggregated with such person's present
holdings, exceeds 10% of any class of equity securities) of any corporation or
other issuer of securities organized under the laws of New Jersey must, 20 days
before the offer is made, file a disclosure statement with the target company
and with the Bureau of Securities of the Division of Consumer Affairs of the New
Jersey Department of Law and Public Safety (the "Bureau"). The takeover bid may
not proceed until after the receipt by the filing party of the Bureau's
permission. Such permission may not be denied unless the Bureau, after a public
hearing, finds that (1) the financial condition of the offeror is such as to
jeopardize the financial stability of the target company or prejudice the
interests of any employees or security holders who are unaffiliated with the
offeror, (2) the terms of the offer are unfair or inequitable to the security
holders of the target company, (3) the plans and proposals which the offeror has
to make any material change in the target company's, business, corporate
structure, or management are not in the interest of the target company's
remaining security holders or employees, (4) the competence, experience and
integrity of those persons who would control the operation of the target company
are such that it would not be in the interest of the target company's remaining
security holders or employees to permit the takeover, or (5) the terms of the
takeover bid do not comply with the provisions of Chapter 10A of the New Jersey
Business Corporation Act (the "NJBCA").
Chapter 10A was added to the NJBCA in 1986 to protect shareholders and
other corporate "constituents." It generally provides that no resident domestic
corporation shall engage in any business combination with any interested
stockholder for a period of five years following that interested stockholder's
stock acquisition date unless the business combination is approved by the board
of directors prior to that stock acquisition date. An "interested stockholder"
is any person (other than the resident domestic corporation or its subsidiary)
that (1) is the beneficial owner directly or indirectly of 10% or more of the
voting power of the outstanding voting stock of the resident domestic
corporation or (2) is an affiliate or associate of that resident domestic
corporation and, at any time within the five year period immediately prior to
the date in question, was a beneficial owner, directly or indirectly, of 10% or
more of the voting power of the then outstanding stock of that resident
corporation. A "beneficial owner" of stock is a person that, individually or
with or through any of its affiliates or associates (1) beneficially owns that
stock, directly or indirectly, (2) has the right to acquire
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or vote that stock, or (3) has any agreement, arrangement or understanding for
the purpose of acquiring, holding, voting or disposing of that stock with any
other beneficial owner thereof. An "affiliate" of a beneficial owner is a person
that directly or indirectly, through one or more intermediaries, controls, or is
controlled by, or is under common control with, the beneficial owner.
Accordingly, the NJBCA gives the Company's board of directors a veto power over
any "business combination" proposed by one who directly or indirectly acquires
10% or more of the Company's voting stock. The New Jersey definition of
"business combinations" includes any merger or consolidation.
With the exception of certain excluded categories of transactions, a
"business combination" is prohibited unless any one of the following three
conditions are satisfied: (1) the board of directors of the resident domestic
corporation must approve the business combination prior to the stock acquisition
date of the interested stockholder; (2) the holders of two-thirds of the voting
stock of the resident domestic corporation not beneficially owned by the
interested stockholder must approve the business combination by affirmative vote
at a meeting called for that purpose; or (3) (a) the shareholders of the
resident domestic corporation must receive the higher of (i) the highest price
paid for any shares of common stock of the resident domestic corporation paid by
the interested stockholder during the five years preceding the announcement date
or the date the interested stockholder became such, whichever is higher, or (ii)
the market value of the resident domestic corporation's common stock on the
announcement date or the interested stockholder's stock acquisition date,
whichever yields a higher price, plus, in either case, interest compounded
annually, (b) the holder of stock other than common stock receives the higher of
a similarly determined price or the highest preferential amount per share to
which the holders of such shares are entitled if there is a liquidation,
dissolution or winding up of the resident domestic corporation, plus any
preferential dividends to which they would be entitled that are not included in
the preferential amount, (c) the consideration to the shareholders is paid in
cash or in the same form that the interested stockholder used to acquire the
largest block of stock that he acquired, (d) the holders of all outstanding
stock not owned by the interested stockholder received the consideration
required by the preceding paragraphs in the business combination, and (e) the
interested stockholder did not become the beneficial owner of any additional
shares of stock of the resident domestic corporation between his stock
acquisition date and the date of consummation of the business combination,
except (i) as part of the transaction that resulted in his becoming an
interested stockholder, (ii) by virtue of proportionate stock splits, dividends
or distributions not themselves constituting a business combination, (iii)
through a business combination meeting the conditions of paragraph (c) above, or
(iv) through purchase at a price that would have satisfied the requirements of
paragraphs (a), (b) and (c), above.
Delaware's anti-takeover provision, embodied in Section 203 of the DGCL,
provides that if a person acquires 15% or more of a corporation's voting stock
(thereby becoming an "interested stockholder") that person may not engage in a
wide range of transactions ("business combinations") with the corporation for a
period of three years following the date the person became an interested
stockholder unless (1) the board of directors approved either the business
combination or the transaction that resulted in the person acquiring such voting
stock prior to that acquisition date, (2) upon consummation of the transaction
which resulted in the person becoming an interested stockholder, that person
owned at least 85% of the corporation's voting stock outstanding at the time the
transaction commenced (excluding shares owned by officers and directors and
shares owned by employee stock plans in which participants do not have the right
to determine confidentially whether shares will be tendered in a tender or
exchange offer), or (3) the business combination is approved by the board of
directors and authorized by the affirmative vote (at an annual or special
meeting and not by written consent) of at least 66 2/3% of the outstanding
voting stock not owned by the interested stockholder. To determine whether a
stockholder is the "owner" of 15% or more of a corporation's voting stock under
Section 203, ownership is defined broadly to include beneficial ownership and
other indicia of control. A Delaware "business combination" is also defined
broadly as including (1) mergers and sales or other dispositions of 10% or more
of the assets of a corporation with or to an interested stockholder, (2) certain
transactions resulting in the issuance or transfer to the interested stockholder
of any stock of the corporation or its subsidiaries, (3) certain transactions
that would result in increasing the proportionate share of the stock of the
corporation or its subsidiaries owned by the interested stockholder, and (4)
receipt in certain instances by the interested stockholder of the benefit
(except proportionately as a stockholder) of any loans, advances, guarantees,
pledges or other financial benefits.
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The restrictions on interested shareholders under Section 203 of the DGCL
do not apply under certain circumstances, including without limitation, the
following: (1) the corporation does not have a class of voting stock that is
listed on a national securities exchange, quoted on the NASDAQ Stock Market or
held of record by more than 2,000 shareholders; or (2) if the business
combination is proposed before the consummation or abandonment of and subsequent
to the earlier of the public announcement or the required notice of the proposed
transaction which (a) constitutes one of the transactions described in Section
203; (b) is with or by a person who either was not an interested stockholder
during the previous three years or who became an interested stockholder with the
approval of the corporation's board of directors; and (c) is approved or not
opposed by a majority of the members of the board of directors then in office
(but not less than one) who were directors before any person becoming an
interested stockholder during the previous three years or were recommended for
election or elected to succeed such directors by a majority of such directors.
Merrimac DE's common stock will be listed on the AMEX, a national stock
exchange, and, since Merrimac DE's certificate of incorporation does not provide
otherwise, will be subject to Section 203 of the DGCL.
Ericsson Holding International, B.V. ("Ericsson"), a current shareholder of
the Company owning as of the Record Date approximately 18.3% of the Company's
outstanding Common Shares, is currently precluded by New Jersey law from
acquiring from the Company additional Common Shares or other equity securities
in the Company. If the Company is reincorporated in Delaware, Ericsson will not
be similarly restricted by Delaware law. Ericsson is not currently precluded
under New Jersey law, and would not be precluded under Delaware law, from
acquiring additional common shares and other equity securities of the Company
from third parties or in open market transactions.
MERGERS, ACQUISITIONS AND OTHER TRANSACTIONS
In addition to the anti-takeover provisions discussed above, New Jersey law
provides that the sale of substantially all of a corporation's assets, through
mergers, consolidations, and any acquisitions which involve the issuance of
additional voting shares, such that the number of additional voting shares
issued exceeds 40% of the voting shares outstanding prior to the transaction,
must be approved by a majority of the shares (or, if applicable, a majority of
each class or series of shares) entitled to vote thereon. Under Delaware law,
mergers and consolidations require the approval of a majority of the shares
outstanding and entitled to vote thereon. Similarly, a sale of substantially all
of a Delaware corporation's assets must be approved by a majority of such shares
outstanding and entitled to vote thereon. However, Delaware law does not require
stockholder approval for acquisitions, whether or not additional shares are
issued to effectuate the transaction, so long as the corporation has sufficient
available shares. Delaware law allows a board of directors to issue additional
shares of stock, up to the amount authorized in a corporation's certificate of
incorporation, unless the certificate of incorporation otherwise provides, and
Merrimac DE's certificate of incorporation does not otherwise so provide.
DISSOLUTION
Both New Jersey and Delaware law provide that a corporation may be
dissolved voluntarily by (1) the written consent of all its shareholders or (2)
the adoption by the corporation's board of directors of a resolution
recommending that the corporation be dissolved and submission of the resolution
to a meeting of shareholders at which meeting the resolution is adopted. New
Jersey law requires that to effect a dissolution by consent of shareholders, all
shareholders entitled to vote thereon must sign and file a certificate of
dissolution. If dissolution is pursuant to the action of the board and
shareholders, the affirmative vote of the majority of votes cast (assuming that
the number of votes cast constitutes a quorum) by the shareholders entitled to
vote thereon is necessary. Delaware law provides for two means of dissolving a
company. The board may adopt a resolution dissolving the company subject to the
approval of the holders of a majority of the shares entitled to vote thereon, or
the shareholders may act without a board recommendation if all the shareholders
entitled to vote thereon consent in writing to the dissolution.
DIVIDENDS
New Jersey law prohibits a corporation from making a distribution to its
shareholders if, after giving effect to such distribution, the corporation would
be unable to pay its debts as they become due in the usual
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course of business or the corporation's total assets would be less than its
total liabilities. Delaware law permits a corporation to pay dividends from any
surplus, or, if a corporation does not have a surplus, provides that a dividend
may be paid from any net profits from the fiscal year in which the dividend is
paid or from the preceding fiscal year (unless the payment would reduce capital
below the amount of capital represented by all classes of shares having a
preference upon the distribution of assets).
ACTION WITHOUT A MEETING
Under New Jersey law, most actions which may be taken by shareholders at a
meeting may be taken without a meeting if all the shareholders entitled to vote
thereon give their written consent. However, if stockholder approval is required
to effectuate a merger, consolidation, acquisition or sale of assets, the
transaction may also be effectuated if all of the shareholders entitled to vote
concur in writing and all other shareholders are provided with advance notice
conforming to statutory requirements. Delaware law provides that, unless
otherwise provided by the certificate of incorporation, any action which may be
taken at a meeting of shareholders may be taken without a meeting, without prior
notice and without a vote, if the holders of stock having not less than the
minimum number of votes otherwise required to approve such action consent in
writing. Merrimac DE's certificate of incorporation does not allow Merrimac DE's
shareholders to act by written consent.
TRANSACTIONS WITH DIRECTORS
Delaware law provides that a contract or transaction between a corporation
and one or more of its directors or officers or an entity in which one or more
of its directors or officers has an interest is not void or voidable solely for
that reason if: (1) the material facts of the interest and the contract or
transaction are disclosed or known to the board or committee so deciding and the
contract or transaction is authorized in good faith by a majority vote of the
disinterested directors so acting, even if the number of disinterested directors
is less than a quorum; (2) such material facts are disclosed to the shareholders
and the shareholders approve the contract or transaction in good faith; or (3)
the contract or transaction is fair as to the corporation. New Jersey law
includes a similar provision governing transactions between a corporation and
one or more directors or entities in which a director has an interest.
LOANS TO DIRECTORS/OFFICERS/EMPLOYEES
New Jersey law allows a corporation to lend money to, or guaranty an
obligation of, any director, officer or employee of the corporation or any
subsidiary whenever the directors determine that the action may reasonably be
expected to benefit the corporation. However, a director who votes for the
action may be held jointly and severally liable if the loan or guaranty is made
contrary to the provisions of New Jersey law. Delaware law permits a corporation
to lend money to, or to guarantee an obligation of, an officer or other employee
of the corporation or any of its subsidiaries, including an officer or employee
who is also a director of the corporation or of its subsidiaries, whenever such
loan or guarantee may, in the judgment of the directors, reasonably be expected
to benefit the corporation.
APPRAISAL RIGHTS
Under New Jersey law, dissenting shareholders who comply with certain
procedures are entitled to appraisal rights in a merger, consolidation or sale,
lease, exchange or other disposition of all or substantially all of the assets
of a corporation not in the usual or regular course of business. However,
appraisal rights are not provided, unless the certificate of incorporation
provides otherwise, when (1) the shares to vote on such transaction are listed
on a national securities exchange or held of record by not less than 1,000
holders (or shareholders receive in such transaction cash and/or securities
which are listed on a national securities exchange or held of record by not less
than 1,000 shareholders) or (2) no vote of the corporation's shareholders is
required for the proposed transaction. As a result, the shareholders of the
Company will not have appraisal rights in connection with the proposed
reorganization merger.
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Under Delaware law, dissenting shareholders who follow prescribed statutory
procedures are entitled to appraisal rights in certain mergers or
consolidations. Except in connection with certain so-called "short-form mergers"
(a merger of a corporation with its 90% or more owned subsidiary), such
appraisal rights are not provided when (1) the shares of the corporation are
listed on a national securities exchange or designated as a national market
system security by the NASD or held of record by more than 2,000 shareholders
and shareholders receive in the merger shares of the surviving corporation or of
any other corporation the shares of which are listed on a national securities
exchange or designated as a national market system security by the NASD, or held
of record by more than 2,000 shareholders or (2) the corporation is the
surviving corporation and no vote of its shareholders is required for the
merger.
REPURCHASES OF STOCK
New Jersey law prohibits a corporation from repurchasing or redeeming its
shares if (1) after giving effect to the repurchase or redemption, the
corporation would be unable to pay its debts as they become due in the usual
course of business or the corporation's total assets would be less than its
total liabilities, (2) after giving effect to the repurchase or redemption, the
corporation would have no equity outstanding, (3) the redemption or repurchase
price exceeded that specified in the securities acquired, or (4) the repurchase
or redemption is contrary to any restrictions contained in the corporation's
certificate of incorporation. Under Delaware law, a corporation may repurchase
or redeem its shares only if the purchase does not impair its capital. However,
a corporation may redeem preferred stock from capital if such shares will be
retired upon redemption and the capital of the corporation is thereupon reduced
in accordance with the applicable provisions of the DGCL, and may similarly
redeem common stock from capital if no preferred stock is outstanding.
FEDERAL INCOME TAX CONSEQUENCES OF THE REINCORPORATION MERGER
The Company will not request a ruling from the United States Internal
Revenue Service about the federal income tax consequences of the Reincorporation
Merger. However, the Company believes that the Reincorporation Merger will
constitute a reorganization under Section 368 of the Internal Revenue Code, as
amended (the "Code"). Consequently, holders of the Common Shares will not
recognize any gain or loss for federal income tax purposes from the conversion
of their Common Shares into common shares of Merrimac DE. For federal income tax
purposes, a holder's aggregate basis in the shares of Merrimac DE received in
the Reincorporation Merger will equal the holder's aggregate basis in the Common
Shares converted therefor and such holder's holding period for the Merrimac DE
common shares received in the Reincorporation Merger will include his holding
period in the Common Shares converted therefor.
Likewise, the Company will not recognize any gain or loss for federal
income tax purposes upon the transfer of its property to Merrimac DE pursuant to
the Reincorporation Merger. In addition, Merrimac DE will succeed to and take
into account of the earnings and profits, accounting methods, and other tax
attributes of the Company specified in Section 381(c) of the Code.
Holders of Common Shares should consult their own tax advisors as to the
application and effect of state, local and foreign income and other tax laws on
the conversion of their Common Shares into shares of the common stock of
Merrimac DE pursuant to the Reincorporation Merger.
VOTE NEEDED FOR APPROVAL
A vote for the Reincorporation Merger Agreement will constitute specific
shareholder approval for the adoption of the Reincorporation Merger and all
other transactions related to the Reincorporation Merger.
The Board of Directors of the Company recommends that shareholders vote
"FOR" the approval of the Reincorporation Merger Agreement.
Under New Jersey law, the holders of shares entitled to cast a majority of
the votes at a meeting shall constitute a quorum at such meeting, and, unless a
corporation's certificate of incorporation contains a greater voting
requirement, a plan of merger for companies organized after December 31, 1968
(which includes the
15
<PAGE> 19
Company) must be approved by the affirmative vote of a majority of the votes
cast by the holders of Common Shares of the Company entitled to vote thereon.
The Company's certificate of incorporation requires for any proposed merger or
consolidation of the Company with any other entity the approval of the holders
of record of 80% of the outstanding Common Shares of the Company entitled to
vote thereon. All executive officers and directors of the Company, who together
own or have the right to vote 757,666 Common Shares, or 26.02% of the Company's
outstanding Common Shares, have indicated that they will vote FOR the
Reorganization Merger Agreement.
16
<PAGE> 20
ANNEX I
AGREEMENT AND PLAN OF MERGER
This Agreement and Plan of Merger (the "Merger Agreement") is made as of
December 18, 2000, by and between Merrimac Industries, Inc., a New Jersey
corporation ("Merrimac NJ") and Merrimac-Delaware, Inc., a Delaware corporation
("Merrimac DE"). Merrimac NJ and/or Merrimac DE, when reference is made to the
entity irrespective of the state of incorporation, is sometimes herein referred
to as the "Company."
W I T N E S S E T H:
WHEREAS, Merrimac NJ is a corporation duly organized and existing under the
laws of the State of New Jersey;
WHEREAS, Merrimac DE is a corporation duly organized and existing under the
laws of the State of Delaware;
WHEREAS, as of the date of this Merger Agreement, Merrimac NJ has authority
to issue 5,000,000 shares of common stock, par value $.50 per share, of which
2,593,711 shares are issued and outstanding;
WHEREAS, as of the date of this Merger Agreement, Merrimac DE has authority
to issue 20,000,000 shares of common stock, par value $.01 per share, and
1,000,000 shares of preferred stock, par value $.01 per share, of which 100
shares of common stock and no shares of preferred stock are issued and
outstanding and owned by Merrimac NJ;
WHEREAS, the respective Boards of Directors of Merrimac NJ and Merrimac DE
have determined that, for the purpose of effecting the reincorporation of
Merrimac NJ in the State of Delaware, it is advisable and to their advantage and
the advantage of their respective shareholders that Merrimac NJ merge with and
into Merrimac DE as permitted by the New Jersey Business Corporation Act (the
"NJBCA") and the General Corporation Law of the State of Delaware (the "DGCL")
and upon the terms and conditions herein provided;
WHEREAS, as a result of the Merger (as defined below), each share of common
stock of Merrimac NJ issued and outstanding immediately prior to the Merger will
be converted into a share of common stock of Merrimac DE;
WHEREAS, it is intended that the Merger will qualify as a reorganization
within the meaning of Section 368 of the Internal Revenue Code of 1986, as
amended, and the rules and regulations promulgated thereunder; and
WHEREAS, the respective Boards of Directors of Merrimac NJ and Merrimac DE
have approved this Merger Agreement and have directed that this Merger Agreement
be submitted to the vote of their respective stockholders.
NOW, THEREFORE, the parties do hereby adopt the plan of reorganization
encompassed by this Merger Agreement and do hereby agree that Merrimac NJ shall
merge with and into Merrimac DE on the following terms, conditions and other
provisions:
I. TERMS AND CONDITIONS
1.1 Merger. Subject to approval of the shareholders of Merrimac NJ,
Merrimac NJ shall be merged with and into Merrimac DE (the "Merger") in
accordance with the applicable provisions of the NJBCA and the DGCL. Merrimac DE
shall be the surviving corporation of the Merger and shall continue to be
governed by the laws of the State of Delaware.
1.2 Effective Date. The Merger shall be effective upon the filing of a
Certificate of Merger with each of the Secretary of State of the State of
Delaware and the Secretary of State of the State of New Jersey, which
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<PAGE> 21
filings shall be made as soon as practicable after all required shareholder
approvals have been obtained. The time of such effectiveness shall hereinafter
be referred to as the "Effective Date."
1.3 Succession. Upon the Effective Date, Merrimac DE shall succeed to all
of the rights, privileges, debts, liabilities, powers and property of Merrimac
NJ in the manner of and as more fully set forth under the applicable provisions
of the DGCL. All rights of creditors of Merrimac NJ and all liens upon any
property of Merrimac NJ shall be preserved unimpaired, and all debts,
liabilities and duties of Merrimac NJ shall attach to Merrimac DE and may be
enforced against it to the same extent as if said debts, liabilities and duties
had been incurred or contracted by it.
1.4 Common Stock of Merrimac NJ. Upon the Effective Date, by virtue of the
Merger and without any action on the part of the holder thereof, each share of
common stock, par value $.50 per share, of Merrimac NJ outstanding immediately
prior thereto shall be changed and converted into one fully paid and non-
assessable share of the common stock of Merrimac DE, par value $.01 per share.
1.5 Common Stock of Merrimac DE. Upon the Effective Date, by virtue of the
Merger and without any action on the part of the holder thereof, the 100 shares
of common stock, par value $.01 per share, of Merrimac DE outstanding
immediately prior thereto shall be canceled and returned to the status of
authorized but unissued shares.
1.6 Stock Certificates. Upon and after the Effective Date, all of the
outstanding certificates which prior to that time represented shares of common
stock, par value $.50 per share, of Merrimac NJ shall be deemed for all purposes
to evidence ownership of and to represent the shares of common stock, par value
$.01 per share, of Merrimac DE into which the shares of Merrimac NJ represented
by such certificates have been converted as herein provided. The registered
owner on the books and records of Merrimac DE or its transfer agent of any such
outstanding stock certificate shall, until such certificate shall have been
surrendered for transfer or conversion or otherwise accounted for to Merrimac DE
or its transfer agent, have and be entitled to exercise any voting and other
rights with respect to, and to receive any dividend and other distributions
upon, the shares of Merrimac DE evidenced by such outstanding certificate as
above provided.
1.7 Options. Upon the Effective Date, (a) Merrimac DE will assume and
continue all of Merrimac NJ's stock option plans, including but not limited to
its 1993 Stock Option Plan, 1996 Stock Option Plan for Non-Employee Directors
and 1997 Long-Term Incentive Plan, and the outstanding and unexercised portions
of all options and rights to buy common stock, par value $.50 per share, of
Merrimac NJ shall become options or rights for the same number of shares of
common stock, par value $.01 per share, of Merrimac DE, with no other changes in
the terms and conditions of such options or rights, including exercise prices,
and effective upon the Effective Date, Merrimac DE hereby assumes the
outstanding and unexercised portions of such options and rights and the
obligations of Merrimac NJ with respect thereto and (b) one share of Merrimac DE
common stock shall be reserved for issuance under the stock option plans of
Merrimac DE from and after the Effective Date for each one full share of common
stock of Merrimac NJ reserved for issuance under the stock option plans of
Merrimac NJ immediately prior to the Effective Date.
1.8 Other Employee Benefit Plans. Upon the Effective Date, Merrimac DE
will assume all obligations of Merrimac NJ under any and all employee benefit
plans in effect as of the Effective Date or with respect to which employee
rights or accrued benefits are outstanding as of the Effective Date.
1.9 Rights Plan. Upon the Effective Date, Merrimac DE will assume and
continue all obligations of Merrimac NJ and will assume all rights outstanding
under the Rights Agreement dated as of March 9, 1999, as amended, between
Merrimac NJ and ChaseMellon Shareholder Services, L.L.C., as Rights Agent.
II. CHARTER DOCUMENTS, DIRECTORS AND OFFICERS
2.1 Certificate of Incorporation and By-laws. The Certificate of
Incorporation of Merrimac DE in effect on the Effective Date (a copy of which is
attached hereto and incorporated herein by this reference), shall continue to be
the Certificate of Incorporation of Merrimac DE; provided, however, that on and
after the Effective Date the name of Merrimac DE shall be changed to "Merrimac
Industries, Inc." The By-laws of Merrimac DE in effect on the Effective Date
shall continue to be the By-laws of Merrimac DE.
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<PAGE> 22
2.2 Directors. The directors of Merrimac NJ in office immediately prior to
the Effective Date shall be the directors of Merrimac DE on and after the
Effective Date. Such directors of Merrimac DE shall hold office in the classes
and for the terms as in effect immediately prior to the Effective Date, and
until their successors are elected and qualified or their prior resignation,
removal or death.
2.3 Officers. The officers of Merrimac NJ shall be the officers of
Merrimac DE upon the Effective Date and shall serve until their successors are
elected and qualified or their prior resignation, removal or death.
III. MISCELLANEOUS
3.1 Further Assurances. From time to time, as and when required by
Merrimac DE or by its successors and assigns, there shall be executed and
delivered on behalf of Merrimac NJ such deeds and other instruments, and there
shall be taken or caused to be taken by it such further and other action as
shall be appropriate or necessary in order to vest or perfect, or to conform of
record or otherwise, in Merrimac DE the title to and possession of all the
property, interests, assets, rights, privileges, immunities, powers, franchises,
and authority of Merrimac NJ, and otherwise to carry out the purposes of this
Merger Agreement, and the officers and directors of Merrimac DE are fully
authorized in the name of and on behalf of Merrimac NJ or otherwise to take any
and all such action and to execute and deliver any and all such deeds and other
instruments.
3.2 Amendments. At any time before or after approval by the stockholders
of Merrimac NJ, this Merger Agreement may be amended in any manner as may be
determined in the judgment of the respective Boards of Directors of Merrimac NJ
and Merrimac DE to be necessary, desirable or expedient in order to clarify the
intention of the parties hereto or to effect or facilitate the purposes and
intent of this Merger Agreement.
3.3 Abandonment. At any time before the Effective Date, this Merger
Agreement may be terminated and the Merger may be abandoned by the Board of
Directors of either Merrimac NJ or Merrimac DE or both, notwithstanding the
approval of this Merger Agreement by the stockholders of Merrimac NJ.
3.4 Counterparts. In order to facilitate the filing and recording of this
Merger Agreement, the same may be executed in any number of counterparts, each
of which shall be deemed to be an original.
3.5 Governing Law. This Agreement shall be governed by the laws of the
State of Delaware, excluding applicable conflict-of-laws principles, except to
the extent the laws of the State of New Jersey must be applied pursuant to the
relevant conflict-of-laws principles.
3.6 Headings. The headings of various sections herein are inserted for
convenience or reference only and are not intended to be a part of or to affect
the meaning or interpretation of this Merger Agreement.
I-3
<PAGE> 23
IN WITNESS WHEREOF, this Merger Agreement, having first been duly approved
by the Boards of Directors of Merrimac NJ and Merrimac DE, is hereby executed on
behalf of each said corporation.
MERRIMAC INDUSTRIES, INC.,
a New Jersey corporation
By: /s/ MASON N. CARTER
------------------------------------
Name: Mason N. Carter
Title:Chairman, President and Chief
Executive Officer
MERRIMAC-DELAWARE, INC.,
a Delaware corporation
By: /s/ ROBERT V. CONDON
------------------------------------
Name: Robert V. Condon
Title:Vice President, Finance and
Chief Financial Officer
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<PAGE> 24
ANNEX II
CERTIFICATE OF INCORPORATION OF
MERRIMAC-DELAWARE, INC.
FIRST: The name of the Corporation is Merrimac-Delaware, Inc.
SECOND: The address of the Corporation's registered office in the State of
Delaware is 2711 Centerville Road #400, Wilmington, County of New Castle,
Delaware 19808. The name of the Corporation's registered agent at such address
is Corporation Service Company.
THIRD: The nature of the business or purposes to be conducted or promoted
are to engage in any lawful act or activity for which corporations may be
organized under the General Corporation Law of the State of Delaware.
FOURTH: A. The total number of shares of all classes of stock that the
Corporation shall have authority to issue is Twenty One Million (21,000,000),
consisting of Twenty Million (20,000,000) shares of common stock, par value One
Cent ($.01) per share (the "Common Stock") and One Million (1,000,000) shares of
preferred stock, par value One Cent ($.01) per share (the "Preferred Stock").
B. The board of directors is authorized, subject to any limitations
prescribed by law, to provide for the issuance of shares of Preferred Stock in
series, and by filing a certificate pursuant to the applicable law of the State
of Delaware (such certificate being hereinafter referred to as a "Preferred
Stock Designation"), to establish from time to time the number of shares to be
included in each such series, and to fix the designation, powers, preferences,
and rights of the shares of each such series and any qualifications, limitations
or restrictions thereof. The number of authorized shares of the Preferred Stock
may be increased or decreased (but not below the number of shares thereof then
outstanding) by the affirmative vote of the holders of a majority of the Common
Stock, without a vote of the holders of the Preferred Stock, or of any series
thereof, unless a vote of any such holders is required pursuant to the terms of
any Preferred Stock Designation.
C. Each outstanding share of Common Stock shall entitle the holder thereof
to one vote on each matter properly submitted to the stockholders of the
Corporation for their vote; provided, however, that, except as otherwise
required by law, holders of Common Stock shall not be entitled to vote on any
amendment to this Certificate of Incorporation (including any Certificate of
Designations relating to any series of Preferred Stock) that relates solely to
the terms of one or more outstanding series of Preferred Stock if the holders of
such affected series are entitled, either separately or together as a class with
the holders of one or more other such series, to vote thereon by law or pursuant
to this Certificate of Incorporation (including any Certificate of Designations
relating to any series of Preferred Stock).
FIFTH: A. The business and affairs of the Corporation shall be managed by
or under the direction of the Board of Directors. In addition to the powers and
authority expressly conferred upon them by statute or by this Certificate of
Incorporation or the By-laws of the Corporation, the directors are hereby
empowered to exercise all such powers and do all such acts and things as may be
exercised or done by the Corporation.
B. The Board of Directors is expressly authorized to adopt, amend or repeal
the By-laws of the Corporation. Any adoption, amendment, or repeal of the
By-laws of the Corporation by the Board of Directors shall require the approval
of a majority of the Whole Board. The stockholders shall also have power to
adopt, amend or repeal the By-laws of the Corporation; provided, however, that,
in addition to any vote of the holders of any class or series of stock of the
Corporation required by law or by this Certificate of Incorporation, the
affirmative vote of the holders of at least eighty percent (80%) of the voting
power of all of the then-outstanding shares of the capital stock of the
Corporation entitled to vote generally in the election of directors, voting
together as a single class, shall be required to adopt, amend or repeal any
provision of the By-laws of the Corporation. For purposes of this Certificate of
Incorporation, the term "Whole Board" shall mean the total number of authorized
directors, whether or not there exist any vacancies in previously authorized
directorships.
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<PAGE> 25
SIXTH: Meetings of stockholders shall be held at such place, within or
without the State of Delaware, as may be designated by or in the manner provided
in the By-laws, or, if not so designated or provided, at the registered office
of the Corporation in the State of Delaware. Elections of directors need not be
by written ballot unless and to the extent that the By-laws so provide.
SEVENTH: No director of the Corporation shall be personally liable to the
Corporation or its stockholders for monetary damages for breach of fiduciary
duty as a director; provided, however, that the foregoing clause shall not apply
to any liability of a director to the extent provided by applicable law (i) for
any breach of the director's duty of loyalty to the Corporation or its
stockholders, (ii) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (iii) under Section 174 of
the Delaware General Corporation Law or (iv) for any transaction from which the
director derived an improper personal benefit. If the Delaware General
Corporation Law is amended to authorize corporate action further eliminating or
limiting the personal liability of directors, then the liability of directors of
the Corporation shall be eliminated or limited to the fullest extent permitted
by the Delaware General Corporation Law, as so amended.
Neither the amendment nor repeal of this Article SEVENTH, nor the adoption
of any provision of this Certificate of Incorporation inconsistent with this
Article SEVENTH, shall adversely affect any right or protection of a director of
the Corporation existing at the time of such amendment, repeal or adoption of an
inconsistent provision.
EIGHTH: A. Subject to the rights of the holders of any series of Preferred
Stock to elect additional directors under specified circumstances, the number of
directors shall be fixed from time to time exclusively by the Board of Directors
pursuant to a resolution adopted by the affirmative vote of a majority of the
Whole Board, provided that the number of directors of the Corporation shall not
be less than three (3). If the number of directors is at any time reduced by the
Board of Directors, in no case shall such a reduction shorten the term of any
incumbent director. The directors, other than those who may be elected by the
holders of any series of Preferred Stock under specified circumstances, shall be
divided into three classes, designated Class I, Class II and Class III, with the
term of office of Class I to expire at the Corporation's first annual meeting of
stockholders, the term of office of Class II to expire at the Corporation's
second annual meeting of stockholders and the term of office of Class III to
expire at the Corporation's third annual meeting of stockholders. At each annual
meeting of stockholders, directors elected to succeed those directors whose
terms expire shall be elected for a term of office to expire at the third
succeeding annual meeting of stockholders after their election. A director shall
hold office until the annual meeting for the year in which his term expires and
until his successor shall be elected and shall qualify, subject, however, to
prior death, resignation, retirement, disqualification or removal for cause.
Subject to the rights of the holders of any series of the Preferred Stock then
outstanding, any vacancy occurring of the Board of Directors, including any
vacancy resulting from an increase in the authorized number of directors, shall
only be filled by a majority of the Board of Directors then in office, although
less than a quorum (and not by stockholders), or by a sole remaining director.
Any director elected to fill a vacancy not resulting from an increase in the
number of directors shall have the same remaining term as that of his
predecessor.
Notwithstanding anything to the contrary in the foregoing, whenever the
holders of any one or more classes or series of stock issued by the Corporation
shall have the right, voting separately by class or series, to elect directors
at an annual or special meeting of stockholders, the election, term of office,
filling of vacancies and other features of such directorships shall be governed
by the provisions of this Certificate of Incorporation (including any Preferred
Stock Designation) applicable thereto, unless expressly provided otherwise by
the resolutions of the Board of Directors providing for the creation of such
class or series.
B. Advance notice of stockholder nominations for the elections of directors
and of business to be brought by stockholders before any meeting of the
stockholders of the Corporation shall be given in the manner provided by the
By-laws of the Corporation.
C. Subject to the rights of the holders of any series of the Preferred
Stock then outstanding, any director, or the entire Board of Directors, may be
removed from office at any time, but only for cause and only by the affirmative
vote of the holders of at least a majority of the voting power of all of the
then outstanding shares of
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<PAGE> 26
capital stock of the Corporation entitled to vote generally in the election of
directors, voting together as a single class.
NINTH: The Board of Directors is expressly authorized to cause the
Corporation to issue rights pursuant to Section 157 of the Delaware General
Corporation Law, including issuance of any such rights to the stockholders, and,
in that connection, to enter into any agreements necessary or convenient for
such issuance, and to enter into other agreements necessary and convenient to
the conduct of the business of the corporation.
TENTH: Any action permitted or required to be taken by the stockholders of
the Corporation must be effected at a duly called annual or special meeting of
stockholders and may not be effected by any consent in writing by stockholders.
ELEVENTH: The Corporation reserves the right to amend, alter or repeal any
provision contained in this Certificate of Incorporation in the manner now or
hereafter prescribed by the laws of the State of Delaware, and all rights of
stockholders herein are granted subject to this reservation.
TWELFTH: The name and mailing address of the sole incorporator are as
follows:
<TABLE>
<CAPTION>
NAME MAILING ADDRESS
---- ---------------
<S> <C>
Maksim Goldman........................... Chadbourne & Parke LLP
30 Rockefeller Plaza
New York, New York 10112
</TABLE>
THE UNDERSIGNED, being the sole incorporator above named, for the purpose
of forming a corporation pursuant to the General Corporation Law of the State of
Delaware, has signed this instrument this 14th day of December, 2000.
/s/ MAKSIM GOLDMAN
--------------------------------------
Maksim Goldman
Sole Incorporator
II-3
<PAGE> 27
ANNEX III
MERRIMAC-DELAWARE, INC.
BY-LAWS
ARTICLE I
STOCKHOLDERS
Section 1. Annual Meeting.
(1) An annual meeting of the stockholders, for the election of directors to
succeed those whose terms expire and for the transaction of such other business
as may properly come before the meeting, shall be held at such place, on such
date, and at such time as the Board of Directors shall each year fix, which date
shall be within thirteen (13) months of the last annual meeting of stockholders.
(2) Nominations of persons for election to the Board of Directors and the
proposal of business to be transacted by the stockholders may be made at an
annual meeting of stockholders (a) pursuant to the Corporation's notice with
respect to such meeting, (b) by or at the direction of the Board of Directors or
(c) by any stockholder of record of the Corporation who was a stockholder of
record at the time of the giving of the notice provided for in the following
paragraph, who is entitled to vote at the meeting and who has complied with the
notice procedures set forth in this section.
(3) For nominations or other business to be properly brought before an
annual meeting by a stockholder pursuant to clause (c) of the foregoing
paragraph, (1) the stockholder must have given timely notice thereof in writing
to the Secretary of the Corporation, (2) such business must be a proper matter
for stockholder action under the General Corporation Law of the State of
Delaware, (3) if the stockholder, or the beneficial owner on whose behalf any
such proposal or nomination is made, has provided the Corporation with a
Solicitation Notice, as that term is defined in subclause (c)(iii) of this
paragraph, such stockholder or beneficial owner must, in the case of a proposal,
have delivered a proxy statement and form of proxy to holders of at least the
percentage of the Corporation's voting shares required under applicable law to
carry any such proposal, or, in the case of a nomination or nominations, have
delivered a proxy statement and form of proxy to holders of a percentage of the
Corporation's voting shares reasonably believed by such stockholder or
beneficial holder to be sufficient to elect the nominee or nominees proposed to
be nominated by such stockholder, and must, in either case, have included in
such materials the Solicitation Notice and (4) if no Solicitation Notice
relating thereto has been timely provided pursuant to this section, the
stockholder or beneficial owner proposing such business or nomination must not
have solicited a number of proxies sufficient to have required the delivery of
such a Solicitation Notice under this section. To be timely, a stockholder's
notice shall be delivered to the Secretary at the principal executive offices of
the Corporation not later than the close of business on the 60th day nor earlier
than the close of business on the 90th day prior to the first anniversary (the
"Anniversary") of the preceding year's annual meeting of stockholders; provided,
however, that if the date of the annual meeting is advanced more than 30 days
prior to or delayed by more than 60 days after the anniversary of the preceding
year's annual meeting, notice by the stockholder to be timely must be so
delivered not earlier than the close of business on the 90th day prior to such
annual meeting and not later than the close of business on the later of (i) the
60th day prior to such annual meeting or (ii) the 10th day following the day on
which public announcement of the date of such meeting is first made by the
Corporation. Such stockholder's notice shall set forth (a) as to each person
whom the stockholder proposes to nominate for election or reelection as a
director all information relating to such person as would be required to be
disclosed in solicitations of proxies for the election of such nominees as
directors pursuant to Regulation 14A under the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), and such person's written consent to serve as a
director if elected; (b) as to any other business that the stockholder proposes
to bring before the meeting, a brief description of such business, the reasons
for conducting such business at the meeting and any material interest in such
business of such stockholder and the beneficial owner, if any, on whose behalf
the proposal is made; (c) as to the stockholder giving the notice and the
beneficial owner, if any, on whose behalf the nomination or proposal is made (i)
the name and address of such stockholder, as they appear on the
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<PAGE> 28
Corporation's books, and of such beneficial owner, (ii) the class and number of
shares of the Corporation that are owned beneficially and of record by such
stockholder and such beneficial owner, and (iii) whether either such stockholder
or beneficial owner intends to deliver a proxy statement and form of proxy to
holders of, in the case of a proposal, at least the percentage of the
Corporation's voting shares required under applicable law to carry the proposal
or, in the case of a nomination or nominations, a sufficient number of holders
of the Corporation's voting shares to elect such nominee or nominees (an
affirmative statement of such intent, a "Solicitation Notice").
(4) Notwithstanding anything in the second sentence of the third paragraph
of this Section 1 to the contrary, in the event that the number of directors to
be elected to the Board of Directors is increased and there is no public
announcement naming all of the nominees for director or specifying the size of
the increased Board of Directors made by the Corporation at least 55 days prior
to the Anniversary, a stockholder's notice required by this Bylaw shall also be
considered timely, but only with respect to nominees for any new positions
created by such increase, if it shall be delivered to the Secretary at the
principal executive offices of the Corporation not later than the close of
business on the 10th day following the day on which such public announcement is
first made by the Corporation.
(5) Only persons nominated in accordance with the procedures set forth in
this Section 1 shall be eligible to serve as directors and only such business
shall be conducted at an annual meeting of stockholders as shall have been
brought before the meeting in accordance with the procedures set forth in this
section. The chairman of the meeting shall have the power and the duty to
determine whether a nomination or any business proposed to be brought before the
meeting has been made in accordance with the procedures set forth in these
By-laws and, if any proposed nomination or business is not in compliance with
these By-laws, to declare that such defectively proposed business or nomination
shall not be presented for stockholder action at the meeting and shall be
disregarded.
(6) For purposes of these By-laws, "public announcement" shall mean
disclosure in a press release reported by the Dow Jones News Service, Associated
Press or a comparable national news service or in a document publicly filed by
the Corporation with the Securities and Exchange Commission pursuant to Section
13, 14 or 15(d) of the Exchange Act.
(7) Notwithstanding the foregoing provisions of this Section 1, a
stockholder shall also comply with all applicable requirements of the Exchange
Act and the rules and regulations thereunder with respect to matters set forth
in this Section 1. Nothing in this Section 1 shall be deemed to affect any
rights of stockholders to request inclusion of proposals in the Corporation's
proxy statement pursuant to Rule 14a-8 under the Exchange Act.
Section 2. Special Meetings.
(1) Special meetings of the stockholders, other than those required by
statute, may be called at any time by the Chairman of the Board, the President
or by the Board of Directors acting pursuant to a resolution adopted by a
majority of the directors then in office. It shall also be a duty of the
Chairman of the Board or, in his or her absence, of the President or, in his or
her absence, of any Vice President, to call such special meetings whenever so
requested in writing by stockholders owing a majority of the shares of capital
stock entitled to vote at such meeting. The Board of Directors may postpone or
reschedule any previously scheduled special meeting.
(2) Only such business shall be conducted at a special meeting of
stockholders as shall have been brought before the meeting pursuant to the
Corporation's notice of meeting. Nominations of persons for election to the
Board of Directors may be made at a special meeting of stockholders at which
directors are to be elected pursuant to the Corporation's notice of meeting (a)
by or at the direction of the Board of Directors or (b) by any stockholder of
record of the Corporation who is a stockholder of record at the time of giving
of notice provided for in this paragraph, who shall be entitled to vote at the
meeting and who complies with the notice procedures set forth in Section 1 of
this Article I. Nominations by stockholders of persons for election to the Board
of Directors may be made at such a special meeting of stockholders if the
stockholder's notice required by the third paragraph of Section 1 of this
Article I shall be delivered to the Secretary at the principal
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executive offices of the Corporation not earlier than the close of business on
the 90th day prior to such special meeting and not later than the close of
business on the later of (i) the 60th day prior to such special meeting or (ii)
the 10th day following the day on which public announcement is first made by the
Corporation of the date of the special meeting and of the nominees proposed by
the Board of Directors to be elected at such meeting.
(3) Notwithstanding the foregoing provisions of this Section 2, a
stockholder shall also comply with all applicable requirements of the Exchange
Act and the rules and regulations thereunder with respect to matters set forth
in this Section 2. Nothing in this Section 2 shall be deemed to affect any
rights of stockholders to request inclusion of proposals in the Corporation's
proxy statement pursuant to Rule 14a-8 under the Exchange Act.
Section 3. Notice of Meetings.
Notice of the place, if any, date, and time of all meetings of the
stockholders, and the means of remote communications, if any, by which
stockholders and proxyholders may be deemed to be present in person and vote at
such meeting, shall be given, not less than ten (10) nor more than sixty (60)
days before the date on which the meeting is to be held, to each stockholder
entitled to vote at such meeting, except as otherwise provided herein or
required by law (meaning, here and hereinafter, as required from time to time by
the Delaware General Corporation Law or the Certificate of Incorporation of the
Corporation).
When a meeting is adjourned to another time or place, notice need not be
given of the adjourned meeting if the time and place, if any, thereof, and the
means of remote communications, if any, by which stockholders and proxyholders
may be deemed to be present in person and vote at such adjourned meeting are
announced at the meeting at which the adjournment is taken; provided, however,
that if the date of any adjourned meeting is more than thirty (30) days after
the date for which the meeting was originally noticed, or if a new record date
is fixed for the adjourned meeting, notice of the place, if any, date, and time
of the adjourned meeting and the means of remote communications, if any, by
which stockholders and proxyholders may be deemed to be present in person and
vote at such adjourned meeting, shall be given in conformity herewith. At any
adjourned meeting, any business may be transacted which might have been
transacted at the original meeting.
Section 4. Quorum.
At any meeting of the stockholders, the holders of a majority of all of the
shares of the stock entitled to vote at the meeting, present in person or by
proxy, shall constitute a quorum for all purposes, unless or except to the
extent that the presence of a larger number may be required by law. Where a
separate vote by a class or classes or series is required, a majority of the
shares of such class or classes or series present in person or represented by
proxy shall constitute a quorum entitled to take action with respect to that
vote on that matter.
If a quorum shall fail to attend any meeting, the chairman of the meeting
may adjourn the meeting to another place, if any, date, or time.
Section 5. Organization.
Such person as the Board of Directors may have designated or, in the
absence of such a person, the Chairman of the Board or, in his or her absence,
the President of the Corporation or, in his or her absence, such person as may
be chosen by the holders of a majority of the shares entitled to vote who are
present, in person or by proxy, shall call to order any meeting of the
stockholders and act as chairman of the meeting. In the absence of the Secretary
of the Corporation, the secretary of the meeting shall be such person as the
chairman of the meeting appoints.
Section 6. Conduct of Business.
The chairman of any meeting of stockholders shall determine the order of
business and the procedure at the meeting, including such regulation of the
manner of voting and the conduct of discussion as seem to him or her in order.
The chairman shall have the power to adjourn the meeting to another place, if
any, date and time. The date and time of the opening and closing of the polls
for each matter upon which the stockholders will vote at the meeting shall be
announced at the meeting.
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Section 7. Proxies and Voting.
At any meeting of the stockholders, every stockholder entitled to vote may
vote in person or by proxy authorized by an instrument in writing or by a
transmission permitted by law filed in accordance with the procedure established
for the meeting. Any copy, facsimile telecommunication or other reliable
reproduction of the writing or transmission created pursuant to this paragraph
may be substituted or used in lieu of the original writing or transmission for
any and all purposes for which the original writing or transmission could be
used, provided that such copy, facsimile telecommunication or other reproduction
shall be a complete reproduction of the entire original writing or transmission.
The Corporation may, and to the extent required by law, shall, in advance
of any meeting of stockholders, appoint one or more inspectors to act at the
meeting and make a written report thereof. The Corporation may designate one or
more alternate inspectors to replace any inspector who fails to act. If no
inspector or alternate is able to act at a meeting of stockholders, the person
presiding at the meeting may, and to the extent required by law, shall, appoint
one or more inspectors to act at the meeting. Each inspector, before entering
upon the discharge of his or her duties, shall take and sign an oath faithfully
to execute the duties of inspector with strict impartiality and according to the
best of his or her ability. Every vote taken by ballots shall be counted by a
duly appointed inspector or inspectors. On request of the chairman of the
meeting, the inspectors shall produce a report in writing of any challenge,
question or matter determined by them and execute a certificate with respect to
any fact found by them.
All elections shall be determined by a plurality of the votes cast, and
except as otherwise required by law, all other matters shall be determined by a
majority of the votes cast affirmatively or negatively.
Section 8. Stock List.
A complete list of stockholders entitled to vote at any meeting of
stockholders, arranged in alphabetical order for each class of stock and showing
the address of each such stockholder and the number of shares registered in his
or her name, shall be open to the examination of any such stockholder for a
period of at least 10 days prior to the meeting in the manner provided by law.
The stock list shall also be open to the examination of any stockholder
during the whole time of the meeting as provided by law. This list shall
conclusively determine the identity of the stockholders entitled to examine such
list and entitled to vote at the meeting and the number of shares held by each
of them.
ARTICLE II
BOARD OF DIRECTORS
Section 1. Number, Election and Term of Directors.
Subject to the rights of the holders of any series of preferred stock to
elect directors under specified circumstances, the number of directors shall be
fixed from time to time exclusively by the Board of Directors pursuant to a
resolution adopted by a majority of the Whole Board, provided that the number of
directors of the Corporation shall not be less than three (3). For purposes of
these By-laws, the term "Whole Board" shall mean the total number of authorized
directors, whether or not there exist any vacancies in previously authorized
directorships. The directors, other than those who may be elected by the holders
of any series of preferred stock under specified circumstances, shall be
divided, with respect to the time for which they severally hold office, into
three classes, designated Class I, Class II and Class III, with the term of
office of Class I to expire at the Corporation's first annual meeting of
stockholders, the term of office of Class II to expire at the Corporation's
second annual meeting of stockholders and the term of office of Class III to
expire at the Corporation's third annual meeting of stockholders, with each
director to hold office until his or her successor shall have been duly elected
and qualified. At each annual meeting of stockholders, (i) directors elected to
succeed those directors whose terms then expire shall be elected for a term of
office to expire at the third succeeding annual meeting of stockholders after
their election, with each director to hold office until his or her successor
shall have been duly elected and qualified, and (ii) if authorized by a
resolution of the Board
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of Directors, directors may be elected to fill any vacancy on the Board of
Directors, regardless of how such vacancy shall have been created.
Section 2. Newly Created Directorships and Vacancies.
Subject to the rights of the holders of any series of preferred stock then
outstanding, newly created directorships resulting from any increase in the
authorized number of directors or any vacancies in the Board of Directors
resulting from death, resignation, retirement, disqualification, removal from
office or other cause shall, unless otherwise required by law or by resolution
of the Board of Directors, be filled only by a majority vote of the directors
then in office, though less than a quorum (and not by stockholders), or by a
sole remaining director, and directors so chosen shall hold office for a term
expiring at the annual meeting of stockholders at which the term of office of
the class to which they have been elected expires and until such director's
successor shall have been duly elected and qualified. No decrease in the number
of authorized directors shall shorten the term of any incumbent director.
Section 3. Regular Meetings.
Regular meetings of the Board of Directors shall be held at such place or
places, on such date or dates, and at such time or times as shall have been
established by the Board of Directors and publicized among all directors. A
notice of each regular meeting shall not be required.
Section 4. Special Meetings.
Special meetings of the Board of Directors may be called by the Chairman of
the Board, the President or by a one-third or more of the Whole Board and shall
be held at such place, on such date, and at such time as they or he or she shall
fix. Notice of the place, date, and time of each such special meeting shall be
given to each director by whom it is not waived by mailing written notice not
less than forty-eight (48) hours before the meeting or by telephone or by
telegraphing or telexing or by facsimile or electronic transmission of the same
not less than twenty-four (24) hours before the meeting. Unless otherwise
indicated in the notice thereof, any and all business may be transacted at a
special meeting.
Section 5. Quorum.
At any meeting of the Board of Directors, a majority of the directors then
in office shall constitute a quorum for all purposes; provided that a quorum
shall not be less than one-third of the number of directors constituting the
Whole Board. If a quorum shall fail to attend any meeting, a majority of those
present may adjourn the meeting to another place, date, or time, without further
notice or waiver thereof.
Section 6. Participation in Meetings By Conference Telephone.
Members of the Board of Directors, or of any committee thereof, may
participate in a meeting of such Board of Directors or committee by means of
conference telephone or other communications equipment by means of which all
persons participating in the meeting can hear each other and such participation
shall constitute presence in person at such meeting.
Section 7. Conduct of Business.
At any meeting of the Board of Directors, business shall be transacted in
such order and manner as the Board of Directors may from time to time determine,
and all matters shall be determined by the vote of a majority of the directors
present, except as otherwise provided herein or required by law. Action may be
taken by the Board of Directors without a meeting if all members thereof consent
thereto in writing or by electronic transmission, and the writing or writings or
electronic transmission or transmissions are filed with the minutes of
proceedings of the Board of Directors. Such filing shall be in paper form if the
minutes are maintained in paper form and shall be in electronic form if the
minutes are maintained in electronic form.
Section 8. Compensation of Directors.
Unless otherwise restricted by the certificate of incorporation, the Board
of Directors shall have the authority to fix the compensation of the directors.
The directors may be paid their expenses, if any, of attendance at each meeting
of the Board of Directors and may be paid a fixed sum for attendance at each
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meeting of the Board of Directors or paid a stated salary or paid other
compensation as director. No such payment shall preclude any director from
serving the Corporation in any other capacity and receiving compensation
therefor. Members of special or standing committees may be allowed compensation
for attending committee meetings.
ARTICLE III
COMMITTEES
Section 1. Committees of the Board of Directors.
The Board of Directors may from time to time designate committees of the
Board of Directors, with such lawfully delegable powers and duties as it thereby
confers, to serve at the pleasure of the Board of Directors and shall, for those
committees and any others provided for herein, elect a director or directors to
serve as the member or members, designating, if it desires, other directors as
alternate members who may replace any absent or disqualified member at any
meeting of the committee. In the absence or disqualification of any member of
any committee and any alternate member in his or her place, the member or
members of the committee present at the meeting and not disqualified from
voting, whether or not he or she or they constitute a quorum, may by unanimous
vote appoint another member of the Board of Directors to act at the meeting in
the place of the absent or disqualified member.
Section 2. Conduct of Business.
Each committee may determine the procedural rules for meeting and
conducting its business and shall act in accordance therewith, except as
otherwise provided herein or required by law. Adequate provision shall be made
for notice to members of all meetings; one-third ( 1/3) of the members shall
constitute a quorum (unless a committee consists of less than three (3)
directors, in which case one (1) director shall constitute a quorum); and all
matters shall be determined by a majority vote of the members present. Action
may be taken by any committee without a meeting if all members thereof consent
thereto in writing or by electronic transmission, and the writing or writings or
electronic transmission or transmissions are filed with the minutes of the
proceedings of such committee. Such filing shall be in paper form if the minutes
are maintained in paper form and shall be in electronic form if the minutes are
maintained in electronic form.
Section 3. Powers.
Any committee, to the extent provided in the resolution of the Board of
Directors, shall have and may exercise all the powers and authority of the board
in the management of the business and affairs of the Corporation, except that no
committee shall have the power or authority in reference to (i) approving or
adopting, or recommending to the stockholders, any action or matter expressly
required by the Delaware General Corporation Law to be submitted to stockholders
for approval or (ii) adopting, amending or repealing any By-law of the
Corporation.
ARTICLE IV
OFFICERS
Section 1. Generally.
The officers of the Corporation shall consist of a Chairman of the Board, a
President, one or more Vice Presidents, a Secretary, a Treasurer and such other
officers as may from time to time be appointed by the Board of Directors.
Officers shall be elected by the Board of Directors, which shall consider that
subject at its first meeting after every annual meeting of stockholders or may
be elected as otherwise provided herein. Each officer shall hold office until
his or her successor is elected and qualified or until his or her earlier
resignation or removal. Any number of offices may be held by the same person.
The salaries of officers elected by the Board of Directors shall be fixed from
time to time by the Board of Directors or by such officers as may be designated
by resolution of the Board of Directors.
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Section 2. Chairman of the Board.
The Chairman of the Board shall have such duties and powers as shall be
designated from time to time by the Board of Directors. Unless the Board of
Directors specifies otherwise, the Chairman of the Board (or, if there is none,
the chief executive officer) shall preside, or designate a person who shall
preside, at all meetings of the stockholders and the Board of Directors.
Section 3. President.
Unless the Board of Directors specifies otherwise, the President shall be
the chief executive officer of the Corporation and, subject to the control of
the directors, shall have general charge and supervision of the business and
affairs of the Corporation.
Section 4. Vice President.
Each Vice President shall have such powers and duties as may be delegated
to him or her by the Board of Directors or by the President. One (1) or more
Vice Presidents may be designated Executive Vice President or Senior Vice
President. In the event of the President's absence or disability, one (1) or
more Vice Presidents shall be designated by the Board of Directors to perform
the duties and exercise the powers of the President.
Section 5. Treasurer and Assistant Treasurers.
The Treasurer shall be the chief financial officer of the Corporation and
shall be in charge of its books of account, accounting records and accounting
procedures. He or she shall be responsible for the verification of all of the
assets of the Corporation and the preparation of all tax returns and other
financial reports to governmental agencies by the Corporation. He or she shall
also have the care and custody of the funds and securities of the Corporation,
sign checks, drafts, notes and orders for the payment of money, pay out and
dispose of the funds and securities of the Corporation and in general perform
the duties customary to the office of Treasurer. The Treasurer may have such
additional duties and powers as may be designated from time to time by the Board
of Directors or the President. He or she shall be responsible to and shall
report to the Board of Directors but, in the ordinary conduct of the
Corporation's business, shall be under the supervision of the President or such
other officer as the Board of Directors shall designate.
The Corporation may have one (1) or more Assistant Treasurers. Any
Assistant Treasurer shall have such duties and powers as shall be designated
from time to time by the Board of Directors, the President or the Treasurer.
Section 6. Secretary and Assistant Secretaries.
The Secretary shall (a) keep the minutes of the meetings of the Board of
Directors, the stockholders and any committee designated by the Board of
Directors; (b) see that all required notices of meetings of the directors,
stockholders and members of such committees are duly given in accordance with
the provisions of these By-laws or affix and attest the same to all instruments
requiring the seal when authorized by the Board of Directors or the President.
He or she shall also have charge of the corporate records and such books and
papers as the Board of Directors may specify from time to time and shall perform
all other duties incident to the office of Secretary or which may be assigned to
him or her from time to time by the Board of Directors or the President. In the
absence of the Secretary from any meeting, an assistant secretary, or if there
be none or he or she is absent, a temporary secretary chosen at the meeting,
shall record the proceedings thereof. Unless a transfer agent has been
appointed, the Secretary shall keep or cause to be kept the stock and transfer
records of the Corporation, which shall contain the names and record addresses
of all stockholders and the number of shares registered in the name of each
stockholder. He or she shall have such other duties and powers as may from time
to time be designated by the Board of Directors or the President.
The Corporation may have one (1) or more Assistant Secretaries. Any
Assistant Secretary shall have such duties and powers as shall be designated
from time to time by the Board of Directors, the President or the Secretary.
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Section 7. Delegation of Authority.
The Board of Directors may from time to time delegate the powers or duties
of any officer to any other officers or agents, notwithstanding any provision
hereof.
Section 8. Removal.
Any officer of the Corporation may be removed at any time, with or without
cause, by the Board of Directors.
Section 9. Action with Respect to Securities of Other Corporations.
Unless otherwise directed by the Board of Directors, the President or any
officer of the Corporation authorized by the President shall have power to vote
and otherwise act on behalf of the Corporation, in person or by proxy, at any
meeting of stockholders of or with respect to any action of stockholders of any
other Corporation in which this Corporation may hold securities and otherwise to
exercise any and all rights and powers which this Corporation may possess by
reason of its ownership of securities in such other Corporation.
ARTICLE V
STOCK
Section 1. Certificates of Stock.
Each stockholder shall be entitled to a certificate signed by, or in the
name of the Corporation by, the Chairman of the Board, the President or a Vice
President, and by the Secretary or an Assistant Secretary, or the Treasurer or
an Assistant Treasurer, certifying the number of shares owned by him or her. Any
or all of the signatures on the certificate may be by facsimile.
Section 2. Transfers of Stock.
Transfers of stock shall be made only upon the transfer books of the
Corporation kept at an office of the Corporation or by transfer agents
designated to transfer shares of the stock of the Corporation. Except where a
certificate is issued in accordance with Section 4 of Article V of these
By-laws, an outstanding certificate for the number of shares involved shall be
surrendered for cancellation before a new certificate is issued therefor.
Section 3. Record Date.
In order that the Corporation may determine the stockholders entitled to
notice of or to vote at any meeting of stockholders, or to receive payment of
any dividend or other distribution or allotment of any rights or to exercise any
rights in respect of any change, conversion or exchange of stock or for the
purpose of any other lawful action, the Board of Directors may, except as
otherwise required by law, fix a record date, which record date shall not
precede the date on which the resolution fixing the record date is adopted and
which record date shall not be more than sixty (60) nor less than ten (10) days
before the date of any meeting of stockholders, nor more than sixty (60) days
prior to the time for such other action as hereinbefore described; provided,
however, that if no record date is fixed by the Board of Directors, the record
date for determining stockholders entitled to notice of or to vote at a meeting
of stockholders shall be at the close of business on the day next preceding the
day on which notice is given or, if notice is waived, at the close of business
on the day next preceding the day on which the meeting is held, and, for
determining stockholders entitled to receive payment of any dividend or other
distribution or allotment of rights or to exercise any rights of change,
conversion or exchange of stock or for any other purpose, the record date shall
be at the close of business on the day on which the Board of Directors adopts a
resolution relating thereto.
A determination of stockholders of record entitled to notice of or to vote
at a meeting of stockholders shall apply to any adjournment of the meeting;
provided, however, that the Board of Directors may fix a new record date for the
adjourned meeting.
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Section 4. Lost, Stolen or Destroyed Certificates.
In the event of the loss, theft or destruction of any certificate of stock,
another may be issued in its place pursuant to such regulations as the Board of
Directors may establish concerning proof of such loss, theft or destruction and
concerning the giving of a satisfactory bond or bonds of indemnity.
Section 5. Regulations.
The issue, transfer, conversion and registration of certificates of stock
shall be governed by such other regulations as the Board of Directors may
establish.
ARTICLE VI
NOTICES
Section 1. Notices.
If mailed, notice to stockholders shall be deemed given when deposited in
the mail, postage prepaid, directed to the stockholder at such stockholder's
address as it appears on the records of the Corporation. Without limiting the
manner by which notice otherwise may be given effectively to stockholders, any
notice to stockholders may be given by electronic transmission in the manner
provided in Section 232 of the Delaware General Corporation Law.
Section 2. Waivers.
A written waiver of any notice, signed by a stockholder or director, or
waiver by electronic transmission by such person, whether given before or after
the time of the event for which notice is to be given, shall be deemed
equivalent to the notice required to be given to such person. Neither the
business nor the purpose of any meeting need be specified in such a waiver.
Attendance at any meeting shall constitute waiver of notice except attendance
for the sole purpose of objecting to the timeliness of notice.
ARTICLE VII
MISCELLANEOUS
Section 1. Facsimile Signatures.
In addition to the provisions for use of facsimile signatures elsewhere
specifically authorized in these By-laws, facsimile signatures of any officer or
officers of the Corporation may be used whenever and as authorized by the Board
of Directors or a committee thereof.
Section 2. Corporate Seal.
The Board of Directors may provide a suitable seal, containing the name of
the Corporation, which seal shall be in the charge of the Secretary. If and when
so directed by the Board of Directors or a committee thereof, duplicates of the
seal may be kept and used by the Treasurer or by an Assistant Secretary or
Assistant Treasurer.
Section 3. Reliance upon Books, Reports and Records.
Each director, each member of any committee designated by the Board of
Directors, and each officer of the Corporation shall, in the performance of his
or her duties, be fully protected in relying in good faith upon the books of
account or other records of the Corporation and upon such information, opinions,
reports or statements presented to the Corporation by any of its officers or
employees, or committees of the Board of Directors so designated, or by any
other person as to matters which such director or committee member reasonably
believes are within such other person's professional or expert competence and
who has been selected with reasonable care by or on behalf of the Corporation.
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Section 4. Fiscal Year.
The fiscal year of the Corporation shall be the 52 -week or 53 -week period
beginning on or about the 1st day of January and ending on the Saturday closest
to the 31st day of December, or such other period as may be fixed by the Board
of Directors.
Section 5. Time Periods.
In applying any provision of these By-laws which requires that an act be
done or not be done a specified number of days prior to an event or that an act
be done during a period of a specified number of days prior to an event,
calendar days shall be used, the day of the doing of the act shall be excluded,
and the day of the event shall be included.
Section 6. Resignations and Removals.
Any director or officer may resign at any time by delivering his
resignation in writing to the Chairman of the Board, the President, or the
Secretary or to a meeting of the Board of Directors. Such resignation shall be
effective upon receipt unless specified to be effective at some other time, and
without, in either case, the necessity of its being accepted unless the
resignation shall so state. Subject to the rights of the holders of any series
of the preferred stock then outstanding, a director (including persons elected
by directors to fill vacancies in the Board) may be removed from office at any
time, but only for cause and by the vote of the holders of at least a majority
of the shares issued and outstanding and entitled to vote in the election of
directors, voting together as a single class. The Board of Directors may at any
time remove any officer either with or without cause. The Board of Directors may
at any time terminate or modify the authority of any agent. No director or
officer resigning and (except where a right to receive compensation shall be
expressly provided in a duly authorized written agreement with the Corporation)
no director or officer removed shall have any right to any compensation as such
director or officer for any period following his resignation or removal, or, to
the fullest extent permitted by law, any right to damages on account of such
removal, whether his compensation be by the month or by the year or otherwise;
unless, in the case of a resignation, the directors, or, in the case of removal,
the body acting on the removal, shall in their or its discretion provide for
compensation.
Section 7. Vacancies.
If any office of any officer of the Corporation elected by the Board of
Directors becomes vacant, the directors may elect a successor by vote of a
majority of the directors then in office. If the office of any other officer
becomes vacant, any person or body empowered to elect or appoint that officer
may elect or appoint a successor. Each such successor shall hold office of the
unexpired term, and in the case of the Chairman, the President, the Treasurer
and the Secretary, until his or her successor is chosen and qualified or in each
case until he or she sooner dies, resigns, is removed or becomes disqualified.
Any vacancy of a directorship shall be filled as specified in Article II of
these By-laws.
ARTICLE VIII
INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 1. Right to Indemnification.
Each person who was or is made a party or is threatened to be made a party
to or is otherwise involved in any action, suit or proceeding, whether civil,
criminal, administrative or investigative (hereinafter a "proceeding"), by
reason of the fact that he or she is or was a director or an officer of the
Corporation or is or was serving at the request of the Corporation as a
director, officer or trustee of another corporation or of a partnership, joint
venture, trust or other enterprise, including service with respect to an
employee benefit plan (hereinafter an "indemnitee"), whether the basis of such
proceeding is alleged action in an official capacity as a director, officer or
trustee or in any other capacity while serving as a director, officer or
trustee, shall be indemnified and held harmless by the Corporation to the
fullest extent authorized by the Delaware General Corporation Law, as the same
exists or may hereafter be amended (but, in the case of any such amendment,
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only to the extent that such amendment permits the Corporation to provide
broader indemnification rights than such law permitted the Corporation to
provide prior to such amendment), against all expense, liability and loss
(including attorneys' fees, judgments, fines, ERISA excise taxes or penalties
and amounts paid in settlement) reasonably incurred or suffered by such
indemnitee in connection therewith; provided, however, that, except as provided
in Section 3 of this ARTICLE VIII with respect to proceedings to enforce rights
to indemnification, the Corporation shall indemnify any such indemnitee in
connection with a proceeding (or part thereof) initiated by such indemnitee only
if such proceeding (or part thereof) was authorized by the Board of Directors of
the Corporation.
Section 2. Right to Advancement of Expenses.
In addition to the right to indemnification conferred in Section 1 of this
ARTICLE VIII, an indemnitee shall also have the right to be paid by the
Corporation the expenses (including attorney's fees) incurred in defending any
such proceeding in advance of its final disposition (hereinafter an "advancement
of expenses"); provided, however, that, if the Delaware General Corporation Law
requires, an advancement of expenses incurred by an indemnitee in his or her
capacity as a director or officer (and not in any other capacity in which
service was or is rendered by such indemnitee, including, without limitation,
service to an employee benefit plan) shall be made only upon delivery to the
Corporation of an undertaking (hereinafter an "undertaking"), by or on behalf of
such indemnitee, to repay all amounts so advanced if it shall ultimately be
determined by final judicial decision from which there is no further right to
appeal (hereinafter a "final adjudication") that such indemnitee is not entitled
to be indemnified for such expenses under this Section 2 or otherwise.
Section 3. Right of Indemnitee to Bring Suit.
If a claim under Section 1 or 2 of this ARTICLE VIII is not paid in full by
the Corporation within sixty (60) days after a written claim has been received
by the Corporation, except in the case of a claim for an advancement of
expenses, in which case the applicable period shall be twenty (20) days, the
indemnitee may at any time thereafter bring suit against the Corporation to
recover the unpaid amount of the claim. If successful in whole or in part in any
such suit, or in a suit brought by the Corporation to recover an advancement of
expenses pursuant to the terms of an undertaking, the indemnitee shall be
entitled to be paid also the expense of prosecuting or defending such suit. In
(i) any suit brought by the indemnitee to enforce a right to indemnification
hereunder (but not in a suit brought by the indemnitee to enforce a right to an
advancement of expenses) it shall be a defense that, and (ii) in any suit
brought by the Corporation to recover an advancement of expenses pursuant to the
terms of an undertaking, the Corporation shall be entitled to recover such
expenses upon a final adjudication that, the indemnitee has not met any
applicable standard for indemnification set forth in the Delaware General
Corporation Law. Neither the failure of the Corporation (including its directors
who are not parties to such action, a committee of such directors, independent
legal counsel, or its stockholders) to have made a determination prior to the
commencement of such suit that indemnification of the indemnitee is proper in
the circumstances because the indemnitee has met the applicable standard of
conduct set forth in the Delaware General Corporation Law, nor an actual
determination by the Corporation (including its directors who are not parties to
such action, a committee of such directors, independent legal counsel, or its
stockholders) that the indemnitee has not met such applicable standard of
conduct, shall create a presumption that the indemnitee has not met the
applicable standard of conduct or, in the case of such a suit brought by the
indemnitee, be a defense to such suit. In any suit brought by the indemnitee to
enforce a right to indemnification or to an advancement of expenses hereunder,
or brought by the Corporation to recover an advancement of expenses pursuant to
the terms of an undertaking, the burden of proving that the indemnitee is not
entitled to be indemnified, or to such advancement of expenses, under this
ARTICLE VIII or otherwise shall be on the Corporation.
Section 4. Non-Exclusivity of Rights.
The rights to indemnification and to the advancement of expenses conferred
in this ARTICLE VIII shall not be exclusive of any other right which any person
may have or hereafter acquire under any statute, the Corporation's Certificate
of Incorporation, By-laws, agreement, vote of stockholders or directors or
otherwise.
III-11
<PAGE> 38
Section 5. Insurance.
The Corporation may maintain insurance, at its expense, to protect itself
and any director, officer, employee or agent of the Corporation or another
corporation, partnership, joint venture, trust or other enterprise against any
expense, liability or loss, whether or not the Corporation would have the power
to indemnify such person against such expense, liability or loss under the
Delaware General Corporation Law.
Section 6. Indemnification of Employees and Agents of the Corporation.
The Corporation may, to the extent authorized from time to time by the
Board of Directors, grant rights to indemnification and to the advancement of
expenses to any employee or agent of the Corporation to the fullest extent of
the provisions of this Article with respect to the indemnification and
advancement of expenses of directors and officers of the Corporation.
Section 7. Nature of Rights.
The rights conferred upon indemnitees in this ARTICLE VIII shall be
contract rights and such rights shall continue as to an indemnitee who has
ceased to be a director, officer or trustee and shall inure to the benefit of
the indemnitee's heirs, executors and administrators. Any amendment, alteration
or repeal of this ARTICLE VIII that adversely affects any right of an indemnitee
or its successors shall be prospective only and shall not limit or eliminate any
such right with respect to any proceeding involving any occurrence or alleged
occurrence of any action or omission to act that took place prior to such
amendment or repeal.
ARTICLE IX
AMENDMENTS
In furtherance and not in limitation of the powers conferred by law, the
Board of Directors is expressly authorized to adopt, amend and repeal these
By-laws subject to the power of the holders of capital stock of the Corporation
to adopt, amend or repeal the By-laws; provided, however, that, with respect to
the power of holders of capital stock to adopt, amend and repeal By-laws of the
Corporation, notwithstanding any other provision of these By-laws or any
provision of law which might otherwise permit a lesser vote or no vote, but in
addition to any affirmative vote of the holders of any particular class or
series of the capital stock of the Corporation required by law, these By-laws or
any preferred stock, the affirmative vote of the holders of at least eighty
percent (80%) of the voting power of all of the then-outstanding shares entitled
to vote generally in the election of directors, voting together as a single
class, shall be required to adopt, amend or repeal any provision of these
By-laws.
III-12
<PAGE> 39
MERRIMAC INDUSTRIES, INC.
41 FAIRFIELD PLACE
WEST CALDWELL, NEW JERSEY 07006-6287
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Mason N. Carter and Arthur A. Oliner as
Proxies, each with the power to appoint his substitute, and hereby authorizes
either or both to represent and to vote all shares of Common Stock of Merrimac
Industries, Inc. held of record by the undersigned on December 8, 2000, at the
Special Meeting (or any adjournment or postponement thereof) of Shareholders to
be held on January 23, 2001, at Merrimac Industries, Inc., 41 Fairfield Place,
West Caldwell, New Jersey, at 10:00 a.m. Eastern Standard Time for the proposal
referred to on the reverse side and described in the Proxy Statement.
This proxy when properly executed will be voted in the manner directed
herein. If no direction is made, this proxy will be voted for the approval of
the Agreement and Plan of Merger attached as Annex I to the Proxy Statement,
and the transactions related thereto, as described in the Proxy Statement in
proposal 1.
PLEASE MARK ON THE REVERSE SIDE, SIGN, DATE AND RETURN THIS
PROXY CARD PROMPTLY USING THE ENCLOSED ENVELOPE.
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-- FOLD AND DETACH HERE --
<PAGE> 40
Please mark
your vote as
Indicated in
the example [X]
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR PROPOSAL 1:
No. 1 Approval of Agreement and Plan of Merger attached as Annex I to the Proxy
Statement, and the transactions related thereto, as described in the Proxy
Statement.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
Dated:_____________________, 200_
_________________________________
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 --
|------------------------------------------------------------------------------|
| VOTE BY TELEPHONE OR INTERNET |
| QUICK * * * EASY * * * IMMEDIATE |
|------------------------------------------------------------------------------|
YOUR VOTE IS IMPORTANT!--YOU CAN VOTE IN ONE OF THREE WAYS:
1. TO VOTE BY PHONE: Call toll-free 1-800-840-1208 on a touch tone telephone 24
hours a day -- 7 days a week.
There is NO CHARGE to you for this call. -- Have your proxy card in hand.
You will be asked to enter a Control Number, which is located in the box in the
lower right hand corner of this form.
OPTION 1: To vote as the Board of Directors recommends on proposal
No. 1 press 1
When asked, please confirm by Pressing 1.
OPTION 2: Proposal 1 - To vote FOR proposal No. 1 press 1; AGAINST press 9;
ABSTAIN press 0.
2. VOTE BY INTERNET: Follow the instructions at our Website Address:
http://www.eproxy.com/mrm
or
3. VOTE BY PROXY: Mark, sign and date your proxy card and return promptly
in the enclosed envelope.
NOTE: If you vote by Internet or telephone, THERE IS NO NEED TO MAIL BACK
your Proxy Card.
THANK YOU FOR VOTING.
