PARLEX CORPORATION 145 Milk Street, Methuen, Massachusetts 01844
November 4, 1996
Dear Stockholder,
I am pleased to invite you to attend Parlex Corporation's annual
meeting. The meeting will be held at 9:30 a.m. on Tuesday, December 3, 1996,
on the eighth floor of the Fleet Bank Building, One Federal Street, Boston,
Massachusetts.
As the accompanying notice and proxy statement describe, the only
actions scheduled for this year's meeting are (1) the election of two
directors each for a term of three years; and (2) the approval of the
Company's 1996 Outside Directors' Stock Option Plan.
IT IS IMPORTANT THAT YOUR SHARES BE REPRESENTED AT THE MEETING.
ACCORDINGLY, PLEASE SIGN, DATE, AND RETURN THE ENCLOSED PROXY AT YOUR
EARLIEST CONVENIENCE.
I look forward to meeting as many of our stockholders as possible and
hope you can be present on December 3rd.
Sincerely,
/s/ HERBERT W. POLLACK
HERBERT W. POLLACK
Chairman of the Board
Parlex Corporation
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To the Stockholders of Parlex Corporation:
The Annual Meeting of Stockholders of Parlex Corporation will be held
on the eighth floor of the Fleet Bank Building, One Federal Street, Boston,
Massachusetts, at 9:30 a.m. on Tuesday, December 3, 1996, for the following
purposes:
1. to elect two Class II members of the Board of Directors to serve
for a period of three years and until their successors are
elected and qualified;
2. to consider and act upon a proposal to approve the Company's 1996
Outside Directors' Stock Option Plan; and
3. to consider and act upon any other matter that properly comes
before the meeting or any adjournment thereof.
By Order of the Board of Directors
/s/ JILL POLLACK KUTCHIN
JILL POLLACK KUTCHIN
Clerk
Methuen, Massachusetts
November 4, 1996
PARLEX CORPORATION
PROXY STATEMENT FOR
ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON
DECEMBER 3, 1996
This statement is furnished in connection with the solicitation of
proxies on behalf of the Board of Directors of Parlex Corporation (the
"Company") for use at the Company's Annual Meeting of Stockholders to be
held on Tuesday, December 3, 1996, notice of which is attached, and at any
adjournment(s) thereof. Persons holding stock for others, such as brokers
and nominees, are being asked to forward proxy solicitation materials to
their principals at the Company's expense. The Company will bear the entire
cost of proxy solicitation.
A stockholder who gives a proxy may revoke it at any time before it is
exercised.
The Board of Directors of the Company has fixed the close of business
on October 18, 1996, as the record date for the determination of
stockholders who are entitled to notice of and to vote at the meeting. At
the close of business on that date, 2,372,659 shares of Common Stock, par
value $.10 per share, were outstanding. Holders of the Common Stock are
entitled to one vote for each share held. The stock transfer books have not
been closed.
This proxy statement and form of proxy will be mailed to stockholders
on or about November 4, 1996. The address of the principal executive offices
of the Company is 145 Milk Street, Methuen, Massachusetts 01844.
ELECTION OF DIRECTORS
The Company's Restated Articles of Organization provide for a Board of
Directors consisting of seven members divided into three classes and elected
by stockholders for staggered terms of three years each. Of the current
total of seven directors, two Class II Directors have terms expiring at the
1996 Annual Meeting, two Class III Directors have terms expiring at the 1997
Annual Meeting and three Class I Directors have terms expiring at the 1998
Annual Meeting. The two directors whose terms expire at the 1996 Annual
Meeting have been nominated by the Board of Directors for election at such
meeting. All of the nominees for director are now Class II members of the
Board of Directors. Each Class II Director elected at the 1996 Annual
Meeting will serve until the 1999 Annual Meeting of Stockholders or Special
Meeting in lieu thereof, and until that director's successor is elected and
qualified.
The individuals named in the enclosed form of proxy will, if so
authorized, vote to elect as Class II Directors the persons named below
under the caption Class II Director Nominees. The management of the Company
is not aware of any reason why the nominees for director would not be able
to serve. If any of the nominees are unable to serve, the individuals named
in the enclosed form of proxy will vote in favor of such other person as the
Board of Directors may at the time recommend. Information regarding these
nominees is set forth below.
Class II Director Nominees
M. Joel Kosheff (age 58).
Mr. Kosheff has been principal of M.J. Kosheff Associates, a financial
consulting firm, since January 1989. He has been a director of the Company
since 1989.
Peter J. Murphy (age 47).
Mr. Murphy has been chief operating officer of the Company since May
1994 and on July 1, 1995 he also became president. He was executive vice
president from May 1994 to July 1995 and vice president and general manager
of the Flexible Circuit Products Division from February 1993 to May 1994.
Mr. Murphy initially served as assistant to the president from December 1992
to February 1993. From 1989 to 1992, he was president of Teledyne Electo-
Mechanisms, a manufacturer of flexible circuits. Mr. Murphy is a director of
Kyzen Corporation. He has been a director of the Company since 1994.
The following persons will continue to be directors of the Company:
Class III Directors
(term of office to expire with the annual meeting of stockholders to be
held in December 1997)
Herbert W. Pollack (age 69).
Mr. Pollack has served as chairman of the board, chief executive
officer and treasurer of the Company since it was founded in 1970. He was
president of the Company from 1970 to July 1, 1995.
Sheldon Buckler (age 65).
Dr. Buckler has been chairman of the board of Commonwealth Energy
System Services since May 1995. He was employed by Polaroid Corporation from
1964 until his retirement as vice chairman of the board of directors in
1994. Dr. Buckler is a director of Aseco Corporation, Cerion Technology
Corporation, Nashua Corporation and Spectrum Information Technologies
Corporation. He has been a director of the Company since February 1995.
Class I Directors
(term of office to expire with the annual meeting of stockholders to be
held in December 1998)
Lester Pollack (age 63).
Mr. Pollack is a managing director of Centre Partners Management LLC
and has been senior managing director of Corporate Advisors, L.P. since
1988, managing director of Lazard Freres & Co. LLC since 1986 and chief
executive officer of Centre Partners L.P. since 1986. He is also a director
of Continental Cablevision, Inc., Polaroid Corporation, Sphere Drake
Holdings, Ltd., SunAmerica, Inc. and Tidewater Inc. Lester Pollack is the
brother of Herbert W. Pollack. He has been a director of the Company since
1970.
Benjamin M. Rabinovici (age 74).
Dr. Rabinovici was president of Tympanium Corporation, a manufacturer
of electronic products, from 1980 to March 1996. He has been a director of
the Company since 1970.
Richard W. Hale (age 58).
Mr. Hale has been president and chief executive officer of Watson
Technologies since 1996. In addition, he has been chairman and chief
executive officer of Hale Industries, Inc. since 1993. From 1980 to 1993, he
was vice president and chief operating officer and a member of the board of
directors of M/A-Com, Inc. He has been a director of the Company since
February 1995.
BOARD OF DIRECTORS MEETINGS AND COMMITTEES OF THE BOARD
The Board of Directors held four meetings during fiscal year 1996.
Each outside director received a $6,000 annual retainer for his services,
plus $1,000 for each directors' meeting he attended. As Chairman of the
Board of Directors, Herbert W. Pollack receives a fee in the amount of
$1,800 per month.
The Board has an Audit Committee and a Compensation Committee but does
not have a nominating committee. All directors attended at least 75% of all
meetings of the Board and committees of the Board on which they served.
During fiscal year 1996, the Audit Committee, of which Messrs.
Buckler, Kosheff and Lester Pollack were members, held two meetings. The
Audit Committee reviews the internal controls of the Company. It meets with
appropriate Company financial personnel as well as the Company's independent
auditors. The Committee reviews the scope and results of the professional
services provided by the Company's independent auditors and the fees charged
for such services and makes such recommendations to the Board as it deems
appropriate, including recommendations as to the appointment of independent
auditors. The Committee is composed entirely of independent outside
directors.
During fiscal year 1996, the Compensation Committee of which Messrs.
Hale, Kosheff and Rabinovici were members, held one meeting. This is the
committee of the Board responsible for establishing the compensation of the
Chief Executive Officer and setting policy for compensation at the senior
levels of the Company, as well as administering various employee stock
option plans. The Committee is composed entirely of independent outside
directors.
In order to continue to attract and retain outside directors of
exceptional ability, the Company maintains the 1989 Outside Directors' Stock
Option Plan (the "Director Plan") for outside directors, currently covering
75,000 shares of Common Stock. Options are granted pursuant to the Director
Plan only to non-employee members of the Board of Directors of the Company.
Each member of the Company's Board of Directors who is neither an employee
nor an officer of the Company who becomes a member of the Board of Directors
for the first time on or after August 22, 1989, will be automatically
granted on the date such membership on the Board of Directors commences,
without further action by the Board, an option to purchase 5,000 shares of
the Company's Common Stock. Each incumbent member of the Company's Board of
Directors who is neither an employee nor an officer of the Company and who
has been a member of the Board of Directors for at least five years shall
receive an automatic grant, without further action by the Board, of an
option to purchase 5,000 shares of the Company's Common Stock. Options
granted under the Director Plan become exercisable in equal installments on
each of the first five anniversaries of the date of the option grant. The
purchase price of stock covered by an option granted under the Director Plan
is 100% of the fair market value of the Company's Common Stock on the date
of grant.
The 1996 Outside Directors' Stock Option Plan was adopted by the Board
of Directors on August 21, 1996, subject to stockholder approval, and
provides for stock option grants on an annual basis. See "PROPOSAL TO
APPROVE THE 1996 OUTSIDE DIRECTORS' STOCK OPTION PLAN" on page 12.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
The following table sets forth certain information regarding the
beneficial ownership of the Company's Common Stock as of October 18, 1996,
by: (i) each person who is known by the Company to own beneficially more
than 5% of the outstanding Common Stock; (ii) each of the Company's
directors and nominees for director; (iii) each of the executive officers
named in the Summary Compensation Table on page 7; and (iv) all directors
and executive officers of the Company as a group.
<TABLE>
Shares of
Common Stock % of Outstanding
Owned Common Stock
Stockholder Beneficially(1) Owned Beneficially
----------- --------------- ------------------
<S> <C> <C>
Herbert W. Pollack(2)(3)(4) 624,160 26.3
c/o Parlex Corporation
145 Milk Street
Methuen, MA 01844
Sandra Pollack 205,667 8.7
c/o Parlex Corporation
145 Milk Street
Methuen, MA 01844
Walter A. Winshall(5) 405,416 17.1
3 Ferndale Road
Weston, MA 02193
Benjamin M. Rabinovici(2)(6) 169,600 7.1
c/o Parlex Corporation
145 Milk Street
Methuen, MA 01844
Peter J. Murphy(2)(3)(7) 31,250 1.3
c/o Parlex Corporation
145 Milk Street
Methuen, MA 01844
Lester Pollack(2)(8) 29,080 1.2
c/o Centre Partners L.P.
One Rockefeller Plaza
New York, NY 10020
M. Joel Kosheff(2)(9) 12,000 *
31 Pier 7
Charlestown, MA 02129
Alfred R. Calvetti(3)(10) 7,436 *
c/o Parlex Corporation
145 Milk Street
Methuen, MA 01844
Sheldon Buckler(2) 2,000 *
200 Dudley Road
Newton Centre, MA 02159
Richard W. Hale(2) 1,000 *
c/o Furnex
17 Foss Road
Lewiston, ME 04240
All directors and officers
as a group (10 persons)(11) 973,409 41.0
- -------------------
<F*> Less than one percent.
<F1> For purposes of this table, any person who directly or indirectly has
or shares voting or investment power with respect to shares of Common
Stock is deemed a beneficial owner of those shares. Thus, more than one
person may be the beneficial owner of particular shares. Each person
listed above is deemed to have sole voting and investment power with
respect to the shares shown, unless otherwise indicated.
<F2> Denotes a director or a director nominee of the Company.
<F3> Denotes an executive officer of the Company.
<F4> The shares shown as owned by Herbert W. Pollack include 205,667 shares,
of which he disclaims beneficial ownership, owned directly by his wife,
Sandra Pollack. The shares shown as owned by Mr. Pollack include 25,000
shares which he has the right to acquire within 60 days of October 18,
1996, by the exercise of stock options granted under the Company's 1989
Employees' Stock Option Plan (the "1989 Option Plan").
<F5> The shares shown as owned by Walter A. Winshall are as reported in a
Statement on Form 5 filed by him with respect to his holdings of Common
Stock as of June, 1996.
<F6> The shares shown as owned by Dr. Rabinovici include 67,600 shares, of
which he disclaims beneficial ownership, owned directly by his wife.
The shares shown as owned by Dr. Rabinovici also include 7,000 shares
which he has the right to acquire within 60 days of October 18, 1996, by
the exercise of stock options granted under the Company's Director Plan.
<F7> The shares shown as owned by Mr. Murphy are shares which he has the
right to acquire within 60 days of October 18, 1996, by the exercise of
stock options granted under the Company's 1989 Option Plan.
<F8> The shares shown as owned by Lester Pollack include 7,000 shares which
he has the right to acquire within 60 days of October 18, 1996, by the
exercise of stock options granted under the Company's Director Plan.
<F9> The shares shown as owned by Mr. Kosheff include 7,000 shares which he
has the right to acquire within 60 days of October 18, 1996, by the
exercise of stock options granted under the Company's Director Plan.
<F10> The shares shown as owned by Mr. Calvetti include 7,436 shares which
he has the right to acquire within 60 days of October 18, 1996, by the
exercise of stock options granted under the Company's 1989 Option Plan
and the 1985 Employees' Non-Qualified Stock Option Plan (the "1985
Option Plan").
<F11> The number of shares shown as beneficially owned by officers and
directors include 89,686 shares which they have the right to acquire
within 60 days of October 18, 1996, by the exercise of stock options.
</TABLE>
EXECUTIVE OFFICERS
The executive officers of the Company, together with a description of
the business experience backgrounds of all of them except Herbert W. Pollack
and Peter J. Murphy (whose backgrounds are described under the caption
Election of Directors) are as follows:
<TABLE>
Name Age Position with the Company
---- --- -------------------------
<S> <C> <S>
Herbert W. Pollack 69 Chairman of the Board of Directors, Chief
Executive Officer and Treasurer
Peter J. Murphy 47 President, Chief Operating Officer
and Director
Alfred R. Calvetti 53 Vice President and General Manager--
Laminated Cable Division
Jill Pollack Kutchin 44 Vice President--Corporate Affairs and
Clerk of the Company
Steven M. Millstein 52 Vice President--Finance
</TABLE>
Mr. Calvetti joined the Company in July 1971 and has served in a
variety of technical and managerial roles. From December 1988 to February
1993, he was divisional vice president and general manager of the Laminated
Cable Division. In February 1993, he became a corporate vice president and
general manager of the Laminated Cable Division.
Ms. Kutchin joined the Company in January 1977 and served as manager--
marketing administration until December 1983, when she became vice
president--corporate affairs. Since November 1980, she has also been clerk
of the Company. Ms. Kutchin is the daughter of Herbert W. Pollack.
Mr. Millstein joined the Company in March 1977, serving initially as
controller and from February 1979 to February 1988 as vice president--
controller. In February 1988, he became vice president--finance.
COMPENSATION OF EXECUTIVE OFFICERS
The following table shows, for the fiscal years ending June 30, 1996,
1995, and 1994, all compensation earned or paid to the Company's Chief
Executive Officer and each of the Company's most highly compensated
executive officers whose total annual salary and bonus exceeded $100,000 in
each year for all services rendered in all capacities to the Company.
SUMMARY COMPENSATION TABLE
<TABLE>
Long-Term
Annual Compensation Compensation
------------------- ------------
Awards
------
Securities Underlying
Name and Stock Options All Other
Principal Position Year Salary($) Bonus($)(1) (Number of Shares) Compensation($)
------------------ ---- --------- ----------- --------------------- ---------------
<S> <C> <C> <C> <C> <C>
Herbert W. Pollack(2)(3) 1996 $218,640 -- -- --
Chairman and Chief 1995 218,640 -- -- --
Executive Officer 1994 218,640 -- 50,000 --
Peter J. Murphy(4) 1996 $175,008 $25,000 -- --
President and Chief 1995 150,000 25,000 -- --
Operating Officer 1994 132,507 -- 25,000 --
Alfred R. Calvetti 1996 $112,186 $46,375 -- --
Vice President and General 1995 100,860 32,118 -- --
Manager--Laminated Cable 1994 95,336 15,000 10,000 --
Division
- -------------------
<F1> Amounts shown were earned in the years indicated. Bonuses are generally
paid in the first quarter of the following fiscal year.
<F2> For a description of the employment agreement between the Company and
Mr. Pollack, see EMPLOYMENT AGREEMENTS below.
<F3> The amounts shown for Mr. Pollack for fiscal years 1996, 1995, and 1994
include a fee as Chairman of the Board of Directors in the amount of
$1,800 per month. The amount shown for fiscal year 1994 includes
deferred compensation in the amount of $3,350 per month.
<F4> For a description of the employment agreement between the Company and
Mr. Murphy, see EMPLOYMENT AGREEMENTS below.
</TABLE>
EMPLOYMENT AGREEMENTS
The Company entered into an employment agreement with Mr. Pollack in
July 1994, for a period of three years ending June 30, 1997, which provides
for current compensation of $8,210 twice a month. The agreement provides for
a death benefit payment equal to 75% of his current compensation for a
period of 24 months after his death. The agreement also provides that the
employee will not own, operate, or manage any business in competition with
that of the Company so long as he is employed by the Company and, in certain
instances, for a one-year period thereafter.
The Company entered into an employment agreement with Mr. Murphy in
June 1996, for a period of three years ending June 30, 1999, which provides
for current compensation of $8,021 twice a month. The agreement provides for
a death benefit payment equal to 75% of his current compensation for a
period of 24 months after his death. The agreement also provides that the
employee will not own, operate, or manage any business in competition with
that of the Company so long as he is employed by the Company and, in certain
instances, for a one-year period thereafter.
The table entitled OPTION GRANTS IN LAST FISCAL YEAR has been
eliminated as a result of there being no option grants in fiscal 1996 to the
named executive officers.
AGGREGATED OPTION EXERCISES IN FISCAL YEAR 1996
AND FISCAL YEAR-END OPTION VALUES
The following table sets forth information relating to the aggregate
exercised and unexercised stock options held by the named executive officers
during fiscal year 1996 and the value of their unexercised stock options as
of June 30, 1996.
<TABLE>
Number of Securities Value of Unexercised
Shares Underlying Unexercised In-The-Money
Acquired Options at 6/30/96(#) Options at 6/30/96($)(1)
on Value --------------------------- ---------------------------
Name Exercise(#) Realized($) Exercisable Unexercisable Exercisable Unexercisable
---- ----------- ----------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Herbert W. Pollack -- -- 25,000(2) 25,000(2) $153,000 $153,000
Chairman and Chief
Executive Officer
Peter J. Murphy -- -- 31,250(2) 18,750(2) $253,125 $140,625
President and Chief
Operating Officer
Alfred R. Calvetti -- -- 7,436(3) 5,814(3) $ 36,475 $ 26,338
Vice President and General
Manager--Laminated Cable
Division
- -------------------
<F1> The "value of unexercised in-the-money options at June 30, 1996" was
calculated by determining the difference between the fair market value
of the underlying Common Stock at June 30, 1996 (closing price of the
Company's Common Stock on the Nasdaq National Market System on June 30,
1996 was $13.00 per share) and the exercise prices of the stock options.
An option is "in-the-money" when the fair market value of the underlying
Common Stock exceeds the exercise price of the option.
<F2> These shares were granted under the 1989 Option Plan.
<F3> These shares were granted under the 1985 Option Plan and the 1989
Option Plan.
</TABLE>
1989 OUTSIDE DIRECTORS' STOCK OPTION PLAN
As of October 18, 1996, there were options to purchase 40,000 shares
of Common Stock outstanding under the Company's 1989 Outside Directors'
Stock Option Plan and 30,000 shares remained available for future grant
under the Director Plan. A more detailed description of the Director Plan is
described above at "BOARD OF DIRECTORS MEETINGS AND COMMITTEES OF THE
BOARD".
The following table shows certain information regarding options to
purchase shares of Common Stock pursuant to the Director Plan:
<TABLE>
Number of Shares
Covered by Options Average Per Share
Granted From Exercise Price of
Name 8/22/89 to 6/30/96 Such Options
---- ------------------ -----------------
<S> <C> <C>
Sheldon Buckler............................... 5,000 $18.50
Richard W. Hale............................... 5,000 $18.50
M. Joel Kosheff............................... 10,000 $ 6.25
Lester Pollack................................ 10,000 $ 6.25
Benjamin Rabinovici........................... 10,000 $ 6.25
All current directors who are not executive
officers as a group (5 persons).............. 40,000 $ 9.31
</TABLE>
REPORT OF THE COMPENSATION COMMITTEE
The Committee
The Compensation Committee (the "Committee") is comprised of Messrs.
Hale, Kosheff and Rabinovici. This is the committee of the Board responsible
for establishing the compensation of the Chief Executive Officer and setting
policy for compensation at the senior levels of the Company, as well as
administering various employee stock option plans. The Committee is composed
entirely of independent outside directors.
Compensation Philosophy
The Committee maintains a philosophy that executive compensation
levels should be competitive and consistent with printed circuit board
industry standards to enable the Company to attract, motivate and retain
executive officers of outstanding ability who are capable of making
significant contributions which are critical to the Company's success. The
Committee believes that such compensation also should be meaningfully
related to both an individual's job performance, as measured by the
achievement of qualitative objectives, and the performance of the Company,
as measured by its profitability, the value created for stockholders and the
realization of the Company's short- and long-term strategic goals. The
Company's compensation policies are designed to attract and retain talented
managers and motivate such managers to enhance the Company's performance,
thereby building value into the Company's business. The Company also seeks
to align the interests of its executives with the long-term interests of
stockholders in the enhancement of stockholder value through stock option
awards that can result in the ownership of the Company's common stock.
At present, compensation of the Company's executive officers is
composed of the following elements: annual base salary, annual performance
incentives in the form of cash bonuses and long-term performance incentives
in the form of stock option awards under the 1985 Option Plan and the 1989
Option Plan.
Base Salary
The Committee's general approach to compensating executive officers is
to pay cash salaries competitive with industry standards based upon the
individual's experience and past and potential contribution to the success
of the Company. In determining industry standards, the Committee compares
compensation levels paid by a self-selected group of printed circuit board
companies that compete in the Company's line of business. Such compensation
information is obtained from various publicly available sources.
The Committee also believes that compensation should be meaningfully
related to the value created by individual executive officers for the
stockholders. Accordingly, the Committee considers the quality of an
individual executive's contribution to the Company's overall profitability
and success in determining the executive's salary. The Committee reviews on
an annual basis the salaries of its executive officers in light of the
foregoing factors. The Company believes that the base salaries of its
executive officers have been at or below the median of the base salaries for
executive officers in the printed circuit board industry.
In fiscal year 1996, Mr. Murphy's annual base salary was increased to
$192,504 in order to bring his salary in line with the competitive salary
range for the position. Mr. Calvetti's annual base salary was increased to
$110,016 in recognition of the continued profitability and performance of
the Laminated Cable Division.
Annual Incentives
The Company has traditionally paid employee performance bonuses once a
year, usually during the first quarter of the following fiscal year for
which the bonus is earned. Bonuses are traditionally based on both
individual performance and Company performance. Except for a particular
incentive bonus arrangement entered into with Mr. Calvetti, the Board has
not utilized any specific formula for determination of bonus amounts. For
fiscal year 1996, Mr. Calvetti received a bonus based upon the achievement
of financial and operating performance objectives as provided in his
incentive bonus arrangement and Mr. Murphy received a bonus in recognition
of his individual performance and the Committee's assessment of his role in
promoting the long-term strategic growth of the Company.
Stock Options
Stock options are used as the primary long-term incentive vehicle. The
Committee believes that reliance upon such incentives is advantageous to the
Company because they foster a long-term commitment by the recipient to the
Company and motivate the employees to seek to improve the long-term market
performance of the Company's stock. Thus, stock option grants provide an
incentive for the executive to manage the Company from the perspective of an
owner with an equity stake in the business. During fiscal year 1996, the
Board did not authorize the grant of stock options to any executive
officers. Stock option grants to executive officers are discretionary and
reflect the relative value of the individual's position as well as the
current performance and continuing contribution of that individual to the
Company. The Board does not utilize any specific formula for determination
of option grants.
Compensation of the Chief Executive Officer
Mr. Pollack has served as Chairman of the Board and Chief Executive
Officer of the Company since it was founded in 1970. As described in the
section above entitled EMPLOYMENT AGREEMENTS, Mr. Pollack entered into a new
employment agreement in July 1994. Mr. Pollack did not receive a salary
increase or a bonus payment in fiscal year 1996.
Benefits
The Company provides medical, life insurance and profit sharing
benefits to the executive officers that generally are available to all
Company employees.
Section 162(m) of the Internal Revenue Code
Section 162(m) of the Internal Revenue Code of 1986 (the "Code")
limits a company's ability to take a deduction for federal tax purposes for
certain compensation paid to its executives. The Company currently expects
that all compensation payable to executive officers during fiscal year 1996
will be deductible by the Company for federal income tax purposes. The
Committee's policy with respect to compensation to be paid to executive
officers is to structure compensation payments to executive officers so as
to be deductible under Section 162(m).
COMPENSATION COMMITTEE
Benjamin M. Rabinovici, Chairman
Richard W. Hale
M. Joel Kosheff
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
In fiscal year 1996, the Compensation Committee members were Benjamin
M. Rabinovici, Richard W. Hale and M. Joel Kosheff, none of whom has ever
been employed by the Company. Further, the Board of Directors is unaware of
any relationship of any member of the Compensation Committee required to be
disclosed under Item 402(j)(3) or 404 of Regulation S-K promulgated by the
Securities and Exchange Commission.
STOCK PERFORMANCE GRAPH
The following Stock Performance Graph compares the cumulative total
shareholder return on the Company's Common Stock for a five year period
(July 1, 1991 to June 30, 1996) with the cumulative total return of the CRSP
Total Return Index for the Nasdaq Stock Market and a group of peer
companies. The companies included in the peer group are Adflex Solutions,
Inc., Altron Incorporated, Hadco Corporation, Merix Corporation and
Sheldahl, Inc. Advance Circuits, Inc. was removed from the group of peer
companies as a result of no longer being listed on the Nasdaq National
Market System. The Performance Graph assumes the investment of $100 on July
1, 1991 in the Company's Common Stock, in the Nasdaq Stock Market companies
and in the peer group and also assumes the reinvestment of all dividends.
The returns for each company in the peer group have been weighted to reflect
stock market capitalization.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN
PARLEX CORPORATION, NASDAQ MARKET INDEX, AND PEER GROUP
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
Parlex $100 $ 72 $156 $153 $256 $325
NASDAQ $100 $120 $151 $153 $204 $261
Peer Group $100 $133 $184 $190 $489 $448
</TABLE>
PROPOSAL TO APPROVE THE
1996 OUTSIDE DIRECTORS' STOCK OPTION PLAN
On August 20, 1996, the Board of Directors unanimously adopted the
1996 Outside Directors' Stock Option Plan (the "Plan"), subject to
stockholder approval. A total of 100,000 shares of Common Stock (subject to
adjustment for capital changes) in the aggregate may be sold under the Plan.
The complete text of the Plan is set forth in Exhibit A to the Proxy
Statement. The Board of Directors believes that stockholder approval of the
Plan will enhance the Company's ability to attract and retain directors of
the highest caliber and will reinforce the mutuality of interest between
members of the Board of Directors and the stockholders of the Company. The
following is a brief summary of the Plan. This summary is qualified in its
entirety by reference to such Exhibit.
Summary of the Plan
The purpose of the Plan is to promote the interests of the Company by
providing an inducement to obtain and retain the services of qualified
persons who are not employees of the Company to serve as members of the
Board of Directors and to demonstrate the Company's appreciation for their
service upon the Company's Board of Directors. The Plan is administered by
the Board of Directors. The Plan authorizes the grant of options for
100,000 shares of Common Stock. Options are granted pursuant to the Plan
only to non-employee members of the Board of Directors of the Company.
Commencing on August 20, 1996, and on the date of each annual meeting of
stockholders thereafter beginning with the 1997 annual meeting of
stockholders, each member of the Company's Board of Directors who is not an
employee of the Company will be granted an option to purchase 1,000 shares
of the Company's Common Stock. In addition to the formula options referred
to above, the Board of Directors may award options on an annual basis to
purchase up to 1,500 shares of the Company's Common Stock to non-employee
members of the Board of Directors in recognition of extraordinary efforts
and contributions to the Board. Except for the specific options referred to
above, no other options shall be granted under the Plan.
The exercise price per share of options granted under the Plan shall
be the closing sale price of a share of the Company's Common Stock on the
date the option is granted as listed on the Nasdaq National Market System.
The Plan requires that options granted thereunder shall expire on a date
which is ten (10) years from the date of option grant. Options granted
under the Plan will become exercisable one (1) year from the date such grant
is made provided there has been approval of the Plan by the stockholders as
described above.
In the event an optionee ceases to be a member of the Board of
Directors of the Company by reason other than death or disability, any
unexercised option granted to such optionee under the Plan shall, to the
extent not then exercisable, immediately terminate and become void, and any
options which are then exercisable but have not been exercised at the time
the optionee so ceases to be member of the Board of Directors may be
exercised, to the extent they are then exercisable, by the optionee within a
period of thirty (30) days following such time the optionee so ceases to be
a member of the Board of Directors, but in no event later than the
expiration date of the option.
In the event an optionee ceases to be a member of the Board of
Directors of the Company by reason of his disability or death, any option
granted under the Plan to such optionee shall be immediately and
automatically accelerated and become fully vested and all unexercised
options shall be exercisable (by the optionee's personal representative,
heir or legatee, in the event of death) during the period ending 180 days
after the date the optionee so ceases to be a member of the Board of
Directors, but in no event later than the expiration date of the option.
Any option granted pursuant to the Plan shall not be assignable or
transferable other than by will or the laws of descent and distribution and
shall be exercisable during the optionee's lifetime only by him. In the
event that the outstanding shares of the Common Stock of the Company are
changed into or exchanged for a different number or kind of shares or other
securities of the Company or of another corporation by reason of any
reorganization, merger, consolidation, recapitalization, reclassification,
or in the event of a stock split, combination of shares or dividends payable
in capital stock, an automatic adjustment shall be made in the number and
kind of shares as to which outstanding options or portions thereof then
unexercised shall be exercisable and in the available shares set forth in
the Plan, to the end that the proportionate interest of the option holder
shall be maintained as before the occurrence of such event. Such adjustment
in outstanding options shall be made without change in the total price
applicable to the unexercised portion of such options and with a
corresponding adjustment in the option price per share.
Federal Income Tax Consequences
All options granted under the Plan will be nonstatutory options for
Federal tax purposes. No income results upon the grant of a nonstatutory
option. When an option holder exercises a nonstatutory option he will
realize ordinary income. Generally such income will be realized at the time
of exercise and in an amount equal to the excess, measured at the time of
exercise, of the then fair market value of the Common Stock over the option
price. The Company will generally be entitled to a deduction for Federal
income tax purposes equal to the amount of ordinary income realized by the
option holder, subject to certain reporting requirements.
Interests of Nominees and Current Directors in Plan
Each of the Company's current directors except Herbert W. Pollack and
Peter J. Murphy (who are both employees of the Company) are Outside
Directors under the Plan ("Outside Directors"). Each of the Outside
Directors (including each nominee for director) has received a grant of
options to purchase 1,000 shares of Common Stock (i.e. 5,000 shares for all
Outside Directors as a group), subject to stockholder approval. The
exercise price for the options granted to the Outside Directors on August
20, 1996 was $10.00 per share, which was equivalent to the closing sale
price of a share of the Company Common Stock as listed on the Nasdaq
National Market System.
Shareholder Voting on the Proposal
Approval of the Plan requires the affirmative vote of stockholders
holding a majority of the Company's shares present (in person or by proxy)
and entitled to vote at the annual meeting or any adjournment thereof. The
Board of Directors recommends a vote FOR the approval of the Plan. If such
approval is not obtained on or before January 1, 1997, any options granted
under such Plan and such Plan itself shall be null and void.
INDEPENDENT AUDITORS
The Board of Directors has selected Deloitte & Touche LLP to be the
independent auditors to audit the consolidated financial statements of the
Company for the fiscal year ending June 30, 1997. Deloitte & Touche LLP has
been regularly employed by the Company for audit of consolidated financial
statements and other purposes since the Company's organization in 1970.
Representatives of Deloitte & Touche LLP expect to be present at the
meeting, and, while they do not plan to make a statement at the meeting,
such representatives will be available to respond to appropriate questions
from stockholders in attendance.
FUTURE STOCKHOLDER PROPOSALS
Any stockholder proposal intended for inclusion in next year's proxy
statement should be sent to
the Clerk of the Company at 145 Milk Street, Methuen, Massachusetts 01844,
and must be received by August 8, 1997.
SECTION 16(a) BENEFICIAL OWNERSHIP
REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's directors and executive officers, and persons who own more than
ten percent of a registered class of the Company's equity securities, to
file with the Securities and Exchange Commission (the "Commission") and the
National Association of Securities Dealers, Inc. initial reports of
ownership and reports of changes in ownership of Common Stock and other
equity securities of the Company. Officers, directors and greater than ten
percent shareholders are required by the Commission's regulations to furnish
the Company with copies of all Section 16(a) forms they file.
To the Company's knowledge, based solely on review of the copies of
such reports furnished to the Company and written representations that no
other reports were required during the fiscal year ended June 30, 1996, all
Section 16(a) filing requirements applicable to its executive officers,
directors and greater than ten percent beneficial owners were complied with.
AVAILABILITY OF FORM 10-K
Copies of the Company's Annual Report on Form 10-K with respect to the
fiscal year ended June 30, 1996 (without exhibits), as filed with the
Securities and Exchange Commission, are available to stockholders free of
charge by writing to: Investor Relations Department, Parlex Corporation, 145
Milk Street, Methuen, Massachusetts 01844.
GENERAL
The enclosed proxy is solicited on behalf of the Company's Board of
Directors. The individuals named in the enclosed proxy will, if so
authorized, vote for the election of directors as set forth above and for
approval of the Company's 1996 Outside Directors' Stock Option Plan. If a
quorum is present (the holders of a majority of the number of shares of
Common Stock issued and outstanding constitute a quorum), the election of
directors and approval of the 1996 Outside Director's Stock Option Plan are
determined by a plurality of the votes cast.
Management of the Company is not aware of any other matter to be
presented for action at the meeting. If any matter other than that described
above does properly come before the meeting, the individuals named in the
enclosed proxy will vote the shares represented thereby in accordance with
their best judgment.
EXHIBIT A
PARLEX CORPORATION
1996 OUTSIDE DIRECTORS' STOCK OPTION PLAN
1. PURPOSE.
This Non-Qualified Stock Option Plan shall be known as the 1996
Outside Directors' Stock Option Plan (the "Plan"). The purpose of the Plan
is to enhance the ability of Parlex Corporation (the "Company") (i) to
attract and retain as Directors of the Company knowledgeable and experienced
persons of the highest caliber who are not employees of the Company, (ii) to
reinforce the mutuality of interests between members of the Board of
Directors and the stockholders of the Company, and (iii) to enable members
of the Board of Directors to participate in the long-term success and growth
of the Company.
2. RIGHTS TO BE GRANTED.
Under this Plan, options (the "Option" or "Options") are granted that
give an optionee the right for a specified time period to purchase a
specified number of shares of Common Stock, par value $0.10, of the Company
(the "Common Stock"). The option price is determined in each instance in
accordance with the terms of this Plan.
3. ADMINISTRATION.
The Plan shall be administered by the Board of Directors (the "Board")
of the Company. The Board shall have authority, not inconsistent with the
express provisions of the Plan (a) to grant Options in accordance with the
Plan to such directors as are eligible to receive Options; (b) to prescribe
the form or forms of instruments evidencing Options and any other
instruments required under the Plan and to change such forms from time to
time; (c) to adopt, amend and rescind rules and regulations for the
administration of the Plan; and (d) to interpret the Plan and decide any
questions and settle all controversies and disputes that may arise in
connection with the Plan. Such determinations of the Board shall be
conclusive and shall bind all parties. Subject to Section 17, the Board
shall also have the authority, both generally and in particular instances,
to waive compliance by a director with any obligation to be performed by him
under an Option and to waive any condition or provision of an Option.
4. STOCK SUBJECT TO PLAN.
Subject to adjustment as provided in Section 16 below, the maximum
number of shares of Common Stock, par value $0.10 per share, reserved and
available for distribution under the Plan shall be 100,000 shares. Such
shares may be authorized and unissued shares or may be shares previously
issued and thereafter reacquired by the Company. If an Option granted under
the Plan shall expire or terminate for any reason without having been
exercised, in whole or in part, the unpurchased shares subject to such
Option shall again be available for subsequent option grants under the Plan.
5. ELIGIBILITY.
Options may be granted pursuant to this Plan only to non-employee
members of the Board of Directors of the Company (an "Outside Director").
6. GRANT OF OPTIONS.
(a) Effective as of August 20, 1996, (the "Initial Grant
Date") and on the date of each annual meeting of stockholders thereafter
beginning with the 1997 Annual Meeting of Stockholders ("Annual Grant
Date"), each person (the "Optionee") who is an Outside Director of the
Company shall automatically be granted, without further action by the Board,
an Option to purchase one thousand (1,000) shares of the Company's Common
Stock. The date upon which each option grant is to be automatically made
hereunder is referred to herein as the "Date of Grant". Anything in this
Plan to the contrary notwithstanding, the effectiveness of this Plan and of
the grant of all Options hereunder is in all respects subject to, and this
Plan and Options granted under it shall be of no force and effect unless and
until, and no Option granted hereunder shall in any way vest or become
exercisable in any respect unless and until, the approval of the Plan by the
affirmative vote of a majority of the Company's shares present (in person or
by proxy) and entitled to vote at a meeting of stockholders at which the
Plan is presented for approval. In the event that such approval as
aforesaid has not been received on or before January 1, 1997, then in such
event this Plan and any options granted hereunder shall be null and void,
and upon the occurrence of such approval as aforesaid, the Plan and such
Options shall be effective as of the date of the Board of Directors'
approval of the Plan.
(b) During the term of the Plan, each member of the Company's
Board of Directors who is not an employee of the Company and becomes a
member of the Board of Directors after August 20, 1996, shall receive, on
the first Annual Grant Date following the date on which he became a member
of the Board, an Option to purchase the number of shares of Common Stock
equal to the product of 1,000 and a fraction, the numerator of which is the
number of days during the year preceding such Annual Grant Date that such
Director served as a member of the Board and the denominator of which is
365.
(c) In addition to the specific option grants referred to in
subsections (a) and (b) above, the Company's Board of Directors may award
Options on an annual basis to purchase up to one thousand five hundred
(1,500) shares of the Company's Common Stock to Outside Directors in
recognition of extraordinary efforts and contributions to the Board. Except
for the specific Options referred to in subsections (a),(b), and (c) above,
no other Options shall be granted under this Plan.
(d) No fractional shares shall be granted under the terms of
this Plan.
(e) If at any time there are insufficient shares available
under the Plan to grant the Options prescribed by this Section 6, the number
of shares for which Options shall be granted shall be prorated equally among
the Outside Directors entitled to receive such Options.
7. FORM OF OPTION AGREEMENT.
Each Option granted under the provisions of this Plan shall be
evidenced by an Option Agreement in such form not inconsistent with the Plan
as may be specified by the Board of Directors.
8. OPTION PRICE.
The purchase price of the stock covered by an Option granted pursuant
to this Plan shall be the Market Price (as defined below) as determined on
the date when the Options are initially granted to the Outside Director.
For purposes of this Plan, the Market Price shall be the closing sale price
of a share of Common Stock as listed on the Nasdaq National Market System on
the date of grant (or the last closing sale price of the next business day
in the event there were no such trades on the date of grant).
9. METHOD OF EXERCISE OF OPTION.
(a) Subject to the terms and conditions of this Plan and the
Option Agreement, an Option granted hereunder shall, to the extent then
exercisable, be exercisable in whole or in part by giving written notice to
the Company, stating the number of shares with respect to which the Option
is being exercised, accompanied by payment in full for such shares, which
payment may be in whole or in part in shares of the Common Stock of the
Company already owned by the person or persons exercising the Option, valued
at the Market Price determined in accordance with the provisions of Section
8; provided, however, that there shall be no such exercise at any one time
as to fewer than one hundred (100) shares or all of the remaining shares
then purchasable by the person or persons exercising the Option, if fewer
than one hundred (100) shares.
(b) In the event of a Change of Control (as defined herein),
all Options outstanding (whether or not then exercisable) as of the date of
such Change in Control shall automatically become vested and fully
exercisable, but in no event shall they be exercised later than the
specified expiration date of the option. For purposes of the Plan, the term
"Change of Control" means the happening of any of the following: (i) when
any "person," as such term is used in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934 (the "Act") (other than the Company or a
subsidiary or any employee benefit plan (including its trustee) of either
the Company or a subsidiary) becomes the "beneficial owner" (as defined in
Rule 13d-3 under the Act), directly or indirectly of securities of the
Company representing 30 percent or more of the combined voting power of the
Company's then outstanding securities; or (ii) the occurrence of a
transaction requiring stockholder approval for the acquisition of the
Company by an entity other than the Company or its subsidiary through
purchase of assets, or by merger, or otherwise; or (iii) if, as a result of,
or in connection with, any tender or exchange offer, merger or other
business combination, sale of assets or contested election, or any
combination of the foregoing transactions, the persons who were directors of
the Company before such transaction shall cease to constitute a majority of
the Board of Directors of the Company or of any successor institution. For
purposes of this Section (i) above, the term "person" shall exclude all
persons who are currently officers or directors of the Company, or spouses,
blood relatives or stepchildren of such officers or directors, and trusts
for the benefit of any such persons, and the estates of any such persons.
10. OPTION PERIOD.
Each Option and all rights thereunder shall expire ten years from the
day on which the Option is granted, subject to earlier termination as
provided in the Plan.
11. EXERCISE OF OPTIONS.
Each Option granted under the Plan shall become exercisable one (1)
year from the date of the grant of such Option. Upon any exercise of an
Option, the Optionee shall specify for which Option or portion thereof he
wishes to exercise up to the full amount which have become exercisable as of
that date. To the extent that an Option is not exercised by an Optionee
when it becomes initially exercisable, it shall not expire but shall be
carried forward and shall be exercisable until the expiration of the
exercise period.
12. NONTRANSFERABILITY OF OPTIONS.
No Option granted under the Plan shall be assignable or transferable
by the person to whom it is granted, either voluntarily or by operation of
law, except by will or the laws of descent and distribution. During the
life of the Optionee, the Option shall be exercisable only by such person.
13. TERMINATION OF OPTION RIGHTS.
(a) In the event an Optionee ceases to be a member of the
Board of Directors of the Company for any reason other than death or
disability, any then unexercised Options granted to such Optionee shall, to
the extent not then exercisable, immediately terminate and become void, and
any Options which are then exercisable but have not been exercised at the
time the Optionee so ceases to be a member of the Board of Directors may be
exercised, to the extent they are then exercisable, by the Optionee within a
period of thirty (30) days following such time the Optionee so ceases to be
a member of the Board of Directors, but in no event later than the
expiration date of the Option.
(b) In the event that an Optionee ceases to be a member of the
Board of Directors of the Company by reason of his or her disability or
death, any Option granted to such Optionee shall be immediately and
automatically accelerated and become fully vested and all unexercised
Options shall be exercisable by the Optionee (or by the Optionee's personal
representative, heir or legatee, in the event of death) during the period
ending one hundred eighty (180) days after the date the Optionee so ceases
to be a member of the Board of Directors, but in no event later than the
expiration date of the Option.
14. GENERAL RESTRICTIONS.
(a) The Company may require any person to whom an Option is
granted, as a condition of exercising such Option, to give written
assurances in substance and form satisfactory to the Company to the effect
that such person is acquiring the Common Stock subject to the Option for his
or her own account for investment and not with any present intention of
selling or otherwise distributing the same, and to such other effects as the
Company deems necessary or appropriate in order to comply with federal and
applicable state securities laws. The certificates for any shares of stock
acquired under the Plan may include any legend which the Company deems
appropriate to reflect any restrictions on transfer.
(b) Each Option shall be subject to the requirement that if,
at any time, counsel to the Company shall determine that the listing,
registration or qualification of the shares subject to such Option upon any
securities exchange or under any state or federal law, or the consent or
approval of any governmental or regulatory body, is necessary as a condition
of, or in connection with, the issuance or purchase of shares thereunder,
such Option may not be exercised, in whole or in part, unless such listing,
registration, qualification, consent or approval shall have been effected or
obtained on conditions acceptable to the Company. Nothing herein shall be
deemed to require the Company to apply for or to obtain such listing,
registration or qualification.
(c) No member of the Board, nor any officer or employee of the
Company acting on behalf of the Board or the Company, shall be personally
liable for any action, determination, or interpretation taken or made in
good faith with respect to the Plan, and all members of the Board and each
and any officer or employee of the Company acting on their behalf shall, to
the extent permitted by law, be fully indemnified and protected by the
Company in respect of any such action, determination or interpretation.
15. RIGHTS AS A STOCKHOLDER AND DIRECTOR.
(a) The holder of an Option shall have no rights as a
stockholder with respect to any shares covered by the Option until the date
of issue of a stock certificate to him for such shares. No adjustment shall
be made for dividends or other rights for which the record date is prior to
the date such stock certificate is issued.
(b) Neither the Plan, nor the granting of an Option nor any
other action taken pursuant to the Plan, shall constitute or be evidence of
any agreement or understanding, express or implied, that the director has a
right to continue as a director for any period of time, or at any particular
rate of compensation.
16. ADJUSTMENTS TO OPTIONS.
In the event that the outstanding shares of Common Stock of the
Company are changed into or exchanged for a different number or kind of
shares or other securities of the Company by reason of any reorganization,
merger, consolidation, recapitalization, or reclassification, or in the
event of a stock split, stock dividend, combination of shares or
subdivision, an automatic adjustment shall be made in the number and kind of
shares as to which outstanding Options or portions thereof then unexercised
shall be exercisable and in the available shares under the Plan, to the end
that the proportionate interest of the option holder shall be maintained as
it existed before the occurrence of such event. Such adjustment to
outstanding Options shall be made without change in the total price
applicable to the unexercised portion of such Options and a corresponding
adjustment in the applicable option price per share shall be made. No such
adjustment shall be made which would, within the meaning of any applicable
provisions of the Act, constitute a modification, extension or renewal of
any option or a grant of additional benefits to the holder of an option.
17. AMENDMENT OF THE PLAN.
The Board of Directors may at any time alter, amend, modify, suspend
or terminate the Plan; provided however, that except as provided in Section
9(b) above, no alteration, amendment, modification, suspension or
termination shall be made, without approval by the affirmative vote of a
majority of the Company's shares present (in person or by proxy) and
entitled to vote at a meeting of stockholders, which would:
(a) increase the maximum number of shares for which Options may
be granted under the Plan;
(b) change the option exercise price (except as provided in
Section 16);
(c) change the designation of the class of persons eligible to
participate in the Plan;
(d) otherwise materially increase benefits accruing to option
holders under the Plan; or
(e) impair the rights of a participant under an Option previously
granted to him, without the participant's consent.
Notwithstanding the foregoing, in no event may the Plan be amended
more than once every six months. It is the intention that the Plan and the
operation thereof qualify for the exemption provisions contained in Rule
16b-3 adopted by the Securities and Exchange Commission under the Act, as
amended, as in effect from time to time or any successor rule ("Rule"). To
the extent that the implementation or operation of any provision hereof does
not comply with the requirements of the Rule as applicable to the Plan, such
provision shall be inoperative or shall be interpreted, to the extent
practicable, to apply in a manner not inconsistent with the requirements of
the Rule.
18. TAXES.
The Company's obligation to deliver shares upon the exercise of any
option granted under the Plan shall be subject to the Optionee's
satisfaction of all applicable federal, state and local income and
employment tax withholding requirements.
19. EFFECTIVE DATE AND DURATION OF THE PLAN.
(a) Effective Date. The effectiveness of this Plan and of the
grant of all options hereunder is in all respects subject to approval by the
Company's stockholders, all as more fully set forth in Section 6 above.
(b) Termination. Unless sooner terminated as provided herein,
the Plan shall terminate upon the date on which all shares available for
issuance under the Plan shall have been issued pursuant to the exercise of
options granted under the Plan.
PARLEX CORPORATION
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Herbert W. Pollack, Steven M. Millstein,
and Jill Pollack Kutchin, and each of them, proxies with full power of
substitution, to vote on behalf of the undersigned at the Annual Meeting
of Stockholders of Parlex Corporation (the "Company") to be held on the
eighth floor of the Fleet Bank Building, One Federal Street, Boston,
Massachusetts on Tuesday, December 3, 1996, at 9:30 a.m. and at any
adjournment(s) thereof, all shares of Common Stock held of record in the
name of the undersigned, hereby granting full power and authority to act
on behalf of the undersigned at said meeting or any adjournment(s)
thereof.
THE SHARES REPRESENTED HEREBY SHALL BE VOTED AS SPECIFIED. IF NO
SPECIFICATION IS MADE, SUCH SHARES SHALL BE VOTED "FOR" THE NOMINEES
PROPOSED FOR ELECTION AS DIRECTORS AS INDICATED IN THE PROXY STATEMENT,
AND "FOR" APPROVAL OF THE COMPANY'S 1996 OUTSIDE DIRECTORS' STOCK OPTION
PLAN.
PLEASE VOTE AND SIGN ON OTHER SIDE AND RETURN PROMPTLY
IN ENCLOSED ENVELOPE.
Please sign this proxy exactly as your name appears on this card. Joint
owners should each sign personally. Trustees and other fiduciaries
should indicate the capacity in which they sign, and where more than one
name appears, a majority must sign. If a corporation, this signature
should be that of an authorized officer who should state his or her
title.
HAS YOUR ADDRESS CHANGED? DO YOU HAVE ANY COMMENTS?
__________________________________ ________________________________
__________________________________ ________________________________
__________________________________ ___________________________PRXCM
[X] PLEASE MARK VOTES AS IN THIS EXAMPLE
(1) to elect two Class II directors to hold office for a term expiring
with the annual stockholders' meeting to be held in 1999 or until their
successors are elected and qualified:
M. Joel Kosheff and Peter J. Murphy
INSTRUCTIONS: To withhold authority to vote for a nominee, mark the "For
All Except" box and strike a line through that nominees name.
For [ ] Withhold [ ] For all Except [ ]
(2) to approve the 1996 Outside Directors' Stock Option Plan.
For [ ] Against [ ] Abstain [ ]
(3) in their discretion, to vote upon such other business as may
properly come before the meeting.
RECORD DATE SHARES:
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| REGISTRATION |
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The undersigned hereby revokes any proxy previously given and
acknowledges receipt of written notice of, and the statement for, the
1996 Annual Meeting of Stockholders and the 1996 Annual Report of the
Company.
Mark box at right if comments or address change has been noted on the
reverse side of this card. [ ]
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Please be sure to sign and date this Proxy. | Date_______________ |
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| __________________________________ ______________________________ |
| Shareholder sign here Co-owner sign here |
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DETACH CARD DETACH CARD
PARLEX CORPORATION
Dear Stockholders:
Please take note of the important information enclosed with this Proxy
Ballot. The issues related to the management of your company requires
your immediate attention and approval. This is discussed in detail in
the enclosed proxy materials.
Your vote counts, and you are strongly encouraged to exercise your right
to vote your shares.
Please mark the boxes on the proxy card to indicate how your shares
shall be voted. Then sign the card, detach it and return your proxy vote
in the enclosed postage paid envelope.
Your vote must be received prior to the Annual Meeting of Stockholders
on December 3, 1996.
Thank you in advance for your prompt consideration of these matters.
Sincerely,
Parlex Corporation
