PARLEX CORPORATION 145 Milk Street, Methuen, Massachusetts 01844
October 1, 1997
Dear Stockholder,
I am pleased to invite you to attend a Special Meeting of the
Stockholders of Parlex Corporation. The meeting will be held at 9:30 a.m. on
Monday, October 20, 1997, at the Company's headquarters at 145 Milk Street,
Methuen, Massachusetts.
As the accompanying notice and proxy statement describe, the only
action scheduled for this special meeting is an increase in the number of
shares of authorized common stock of the Company.
IT IS IMPORTANT THAT YOUR SHARES BE REPRESENTED AT THE MEETING.
ACCORDINGLY, PLEASE SIGN, DATE, AND RETURN THE ENCLOSED PROXY AT YOUR
EARLIEST CONVENIENCE.
Sincerely,
Herbert W. Pollack
Chairman of the Board
Parlex Corporation
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
To the Stockholders of Parlex Corporation:
A Special Meeting of the Stockholders of Parlex Corporation will be
held on Monday, October 20, 1997, at 9:30 a.m., at the Company's
headquarters at 145 Milk Street, Methuen, Massachusetts, for the following
purposes:
1. To consider and act upon a proposed amendment to the Company's
Restated Articles of Organization increasing the number of
authorized shares of Common Stock, par value $.10 per share, from
5,000,000 shares to 10,000,000 shares; and
2. To consider and act upon any other matter that properly comes
before the meeting or any adjournment thereof.
The Board of Directors has fixed the close of business on September
24, 1997, as the record date for the meeting. All stockholders of record on
that date are entitled to notice of and to vote at the meeting.
By Order of the Board of Directors
Jill Pollack Kutchin
Clerk
Methuen, Massachusetts
October 1, 1997
PARLEX CORPORATION
PROXY STATEMENT FOR
SPECIAL MEETING OF STOCKHOLDERS TO BE HELD ON
OCTOBER 20, 1997
This Proxy Statement is furnished in connection with the solicitation
of proxies by the Board of Directors of Parlex Corporation (the "Company")
for use at the Special Meeting of Stockholders to be held on October 20,
1997, at the time and place set forth in the notice of the meeting, and at
any adjournments thereof. The approximate date on which this Proxy Statement
and form of proxy are first being sent to stockholders is October 1, 1997.
If the enclosed proxy is properly executed and returned, it will be
voted in the manner directed by the stockholder. If no instructions are
specified with respect to the matter to be acted upon, proxies will be voted
in favor thereof. Any person giving the enclosed form of proxy has the power
to revoke it by voting in person at the meeting, or by giving written notice
of revocation to the Clerk of the Company at any time before the proxy is
exercised.
The holders of a majority in interest of all stock issued,
outstanding, and entitled to vote are required to be present in person or be
represented by proxy at the meeting in order to constitute a quorum for
transaction of business. The affirmative vote of the holders of at least a
majority of the shares of Common Stock outstanding is required to approve
the proposed amendment of the Restated Articles of Organization. Abstentions
are counted as present in determining whether the quorum requirement is
satisfied and have the same effect as a vote against the proposed amendment.
The Company will bear the cost of this solicitation. It is expected
that the solicitation will be made primarily by mail, but regular employees
of the Company (none of whom will receive any extra compensation for their
activities) may also solicit proxies by telephone, facsimile and in person
and arrange for brokerage houses and other custodians, nominees and
fiduciaries to send proxies and proxy materials to their principals at the
expense of the Company.
The Company's principal executive offices are located at 145 Milk
Street, Methuen, Massachusetts 01844, telephone number (978) 685-4341.
RECORD DATE AND VOTING SECURITIES
Only stockholders of record at the close of business on September 24,
1997, are entitled to notice of and to vote at the meeting. At the close of
business on that date, the Company had outstanding and entitled to vote
3,593,310 shares of Common Stock, par value $.10 per share ("Common Stock").
Each outstanding share of the Company's Common Stock entitles the record
holder to one vote.
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 September 24, 1997,
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; (iii) each of the Company's named executive officers as defined
in Item 402(a)(3) of Regulation S-K; and (iv) all directors and executive
officers of the Company as a group.
<TABLE>
<CAPTION>
Shares of
Common Stock % of Outstanding
Owned Common Stock
Stockholder Beneficially(1) Owned Beneficially
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<S> <C> <C>
Herbert W. Pollack(2)(3)(4) 943,889 26.3
c/o Parlex Corporation
145 Milk Street
Methuen, MA 01844
Sandra Pollack 307,600 8.6
c/o Parlex Corporation
145 Milk Street
Methuen, MA 01844
Walter A. Winshall(5) 457,624 13.5
3 Ferndale Road
Weston, MA 02193
Benjamin M. Rabinovici(2)(6) 257,400 7.2
c/o Parlex Corporation
145 Milk Street
Methuen, MA 01844
Peter J. Murphy(2)(3)(7) 60,375 1.7
c/o Parlex Corporation
145 Milk Street
Methuen, MA 01844
Lester Pollack(2)(8) 46,620 1.3
c/o Centre Partners L.P.
One Rockefeller Plaza
New York, NY 10020
M. Joel Kosheff(2)(9) 21,000 *
31 Pier 7
Charlestown, MA 02129
Alfred R. Calvetti(3)(10) 11,250 *
c/o Parlex Corporation
145 Milk Street
Methuen, MA 01844
Steven M. Millstein(3)(11) 8,700 *
c/o Parlex Corporation
145 Milk Street
Methuen, MA 01844
Sheldon Buckler(2)(12) 4,500 *
200 Dudley Road
Newton Centre, MA 02159
Richard W. Hale(2)(13) 3,000 *
c/o Furnex
17 Foss Road
Lewiston, ME 04240
All directors and officers
as a group (10 persons)(14) 1,499,508 41.7
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<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 of the Company.
<F3> Denotes an executive officer of the Company.
<F4> The shares shown as owned by Herbert W. Pollack include 307,600
shares, of which he disclaims beneficial ownership, owned directly by
his wife, Sandra Pollack. The shares shown as owned by Mr. Pollack
include 56,250 shares which he has the right to acquire within 60 days
of September 24, 1997, 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 4 filed by him with respect to his holdings of Common
Stock as of August, 1997.
<F6> The shares shown as owned by Dr. Rabinovici include 101,400 shares,
of which he disclaims beneficial ownership, owned directly by his wife.
The shares shown as owned by Dr. Rabinovici also include 13,500 shares
which he has the right to acquire within 60 days of September 24, 1997,
by the exercise of stock options granted under the Company's 1989
Outside Directors' Stock Option Plan (the "1989 Director Plan") and the
Company's 1996 Outside Directors' Stock Option Plan (the "1996 Director
Plan").
<F7> The shares shown as owned by Mr. Murphy are shares which he has the
right to acquire within 60 days of September 24, 1997, by the exercise
of stock options granted under the Company's 1989 Option Plan.
<F8> The shares shown as owned by Lester Pollack include 13,500 shares
which he has the right to acquire within 60 days of September 24, 1997,
by the exercise of stock options granted under the Company's 1989
Director Plan and the Company's 1996 Director Plan.
<F9> The shares shown as owned by Mr. Kosheff include 13,500 shares which
he has the right to acquire within 60 days of September 24, 1997, by
the exercise of stock options granted under the Company's 1989 Director
Plan and the Company's 1996 Director Plan.
<F10> The shares shown as owned by Mr. Calvetti are shares which he has
the right to acquire within 60 days of September 24, 1997, 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 shares shown as owned by Mr. Millstein include 3,750 shares which
he has the right to acquire within 60 days of September 24, 1997, by the
exercise of stock options granted under the Company's 1989 Option Plan.
<F12> The shares shown as owned by Mr. Buckler include 3,000 shares which
he has the right to acquire within 60 days of September 24, 1997, by the
exercise of stock options granted under the Company's 1989 Director Plan
and the Company's 1996 Director Plan.
<F13> The shares shown as owned by Mr. Hale are shares which he has the
right to acquire within 60 days of September 24, 1997, by the exercise of
stock options granted under the Company's 1989 Director Plan and the
Company's 1996 Director Plan.
<F14> The number of shares shown as beneficially owned by officers and
directors include 180,375 shares which they have the right to acquire within
60 days of September 24, 1997, by the exercise of stock options.
</TABLE>
PROPOSED AMENDMENT TO THE COMPANY'S RESTATED ARTICLES OF
ORGANIZATION TO INCREASE THE NUMBER OF SHARES OF COMMON STOCK
On August 20, 1997, the Board of Directors unanimously adopted a
resolution recommending that the Restated Articles of Organization of the
Company be amended so as to increase the total number of shares of Common
Stock which the Company shall have authority to issue from 5,000,000 shares,
par value $.10 per share, to 10,000,000 shares, par value $.10 per share.
The Board of Directors believes that the adoption of the proposed amendment
would be advantageous to the Company and its stockholders.
The Board of Directors also directed that the proposed amendment be
submitted for action at the Special Meeting of Stockholders to be held on
October 20, 1997.
Increase in Number of Shares of Common Stock. If approved by the
stockholders, the amendment will authorize the Company to issue an
additional 5,000,000 shares of the Company's Common Stock, par value $.10
per share. The Restated Articles of Organization of the Company currently
authorize the issuance of 5,000,000 shares of Common Stock, $.10 par value
per share, and 1,000,000 shares of Preferred Stock, par value $1.00 per
share. As of September 24, 1997, there were a total of 4,267,909 shares of
Common Stock outstanding or reserved for issuance, and 210,000 shares held
by the Company as treasury stock. This total number of shares includes
shares reserved for issuance under the Company's 1985 Option Plan, 1989
Option Plan, 1989 Director Plan and 1996 Director Plan. As of the date of
this Proxy Statement, there are no shares of Preferred Stock issued or
outstanding.
The proposed amendment would increase the number of shares of the
existing class of Common Stock available for issuance by the Company, but
would have no effect upon the terms of the Company's Common Stock or the
rights of holders of such Common Stock. Holders of Common Stock are entitled
to one vote for each share held and have no preemptive or other rights to
subscribe for additional shares from the Company. The authorization of
additional shares of Common Stock will not, by itself, have any effect on
the rights of the holders of existing Common Stock. Depending on the
circumstances, however, issuance of additional shares of Common Stock may
dilute the voting power and equity ownership of existing stockholders.
Issuance of additional shares of Common Stock may also have a dilutive
effect on earnings per share depending upon the specific events associated
with a particular transaction. There are no cumulative voting rights, with
the result that holders of more than 50% of the shares of Common Stock are
able to elect 100% of the class of the Company's directors to be elected at
any annual meeting of stockholders or special meeting in lieu thereof. All
outstanding shares of Common Stock are, and those issuable upon the exercise
of options will be, when issued and fully paid for, validly issued and fully
paid and non-assessable. Holders of Common Stock are entitled to such
dividends as may be declared by the Board of Directors out of funds legally
available therefor. On liquidation, dissolution or winding up of the
Company, the holders of Common Stock are entitled to receive their pro rata
portion of the net assets of the Company remaining after the payment of all
creditors and liquidation preferences, if any.
Appraisal Rights in Respect of the Proposed Amendment. Under the
applicable provisions of the Massachusetts Business Corporation Law, the
Company's stockholders have no appraisal rights with respect to the proposed
amendment.
Recommendation of the Board of Directors. On February 27, 1997, the
Board of Directors of the Company declared a three-for-two split of its
Common Stock effected as a 50% stock dividend payable on April 21, 1997, to
stockholders of record on March 18, 1997. After giving effect to the stock
split, the number of shares of Common Stock available for issuance and not
otherwise reserved was reduced to 732,091 shares. Accordingly, the Board of
Directors believes that the number of authorized shares of Common Stock
should be increased by 5,000,000 to provide sufficient shares for use for
such corporate purposes as may be determined advisable by the Board of
Directors, without further action or authorization by the stockholders. The
Board of Directors is empowered under the Restated Articles of Organization
of the Company to issue shares of authorized stock without further
stockholder approval. Such corporate purposes may include the acquisition of
capital funds through the sale of stock, involvement in joint ventures and
other strategic relationships, the declaration of stock dividends or stock
splits, use in employee benefit plans such as issuance of stock options, the
acquisition of other corporations or properties, and for future capital
needs. In light of the Company's desire to substantially expand its
manufacturing facilities and purchase capital equipment that will increase
its manufacturing capacity and accommodate various new forms of technology
processes, it intends to offer and sell 1,000,000 shares of Common Stock in
an underwritten public offering and has filed a registration statement on
Form S-2 in connection with such offering. To complete this underwritten
public offering at its currently anticipated size, authorization is needed
to increase the number of authorized shares of Common Stock available for
issuance. There can be no assurance, however, that this equity offering will
occur. Except as described above, the Company has no present plans for the
future issuance of authorized shares of common stock. The Board of Directors
will make the determination for future issuance of authorized shares of
Common Stock in the best interests of the stockholders and believes that the
availability of shares would afford the Company flexibility in considering
and implementing any of the corporate transactions enumerated.
The Board of Directors unanimously recommends a vote FOR the proposed
amendment.
DEADLINE FOR SUBMISSION OF STOCKHOLDER PROPOSALS
The Company's next Annual Meeting will be held on December 2, 1997. An
eligible stockholder who desires to have a qualified proposal considered for
inclusion in the proxy statement for that meeting must have given notice to
the Clerk of the terms and content of the proposal no later than August 8,
1997.
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 to approve the proposed Amendment to the Company's Restated
Articles of Organization to increase the total number of shares of Common
Stock which the Company shall have authority to issue from 5,000,000 shares,
par value $.10 per share, to 10,000,000 shares, par value $.10 per share. 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 approval of
the Amendment to the Company's Restated Articles of Organization is
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.
By order of the Board of Directors,
Jill Pollack Kutchin, Clerk
October 1, 1997
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 Special Meeting of Stockholders on
October 20, 1997.
Thank you in advance for your prompt consideration of these matters.
Sincerely,
Parlex Corporation
x PLEASE MARK VOTES AS IN THIS EXAMPLE
(1) To approve the proposed amendment For Against Abstain
to the Restated Articles of Organization
increasing the number of authorized
shares of Common Stock, par value [ ] [ ] [ ]
$.10 per share, from 5,000,000 shares to
10,000,000 shares (the "Amendment").
(2) In their discretion, to vote upon such
other business as may properly
come before the meeting.
Please be sure to sign and The undersigned hereby revokes any proxy
date this Proxy. previously given and acknowledges receipt
Date ___________ of written notice of, and the statement
for, the Special Meeting of Stockholders.
- ------------------------
Stockholder sign here Mark box at right if address change has been
noted on the reverse side of this card [ ]
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Co-owner sign here
PARLEX CORPORATION
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned holder of common stock hereby constitutes and appoints
Herbert W. Pollack, Peter J. Murphy, and Jill Pollack Kutchin, and each of
them, proxies with full power of substitution to each, to represent and vote
all shares of Common Stock of Parlex Corporation (the "Company") standing in
the name of the undersigned at a Special Meeting of Stockholders to be held
at 145 Milk Street, Methuen, Massachusetts, on October 20, 1997, at 9:30
a.m. or any adjournment(s) thereof, hereby granting full power and authority
to act on behalf of the undersigned at said meeting or any adjournment(s)
thereof.
THE SHARES REPRESENTED BY THIS PROXY SHALL BE VOTED AS SPECIFIED ABOVE. IF
NO DIRECTION IS GIVEN AND THE PROXY IS VALIDLY EXECUTED, THE SHARES SHALL BE
VOTED "FOR" APPROVAL OF THE PROPOSED AMENDMENT TO THE COMPANY'S RESTATED
ARTICLES OF ORGANIZATION.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" APPROVAL OF THE PROPOSED
AMENDMENT TO THE COMPANY'S RESTATED ARTICLES OF ORGANIZATION.
- ----------------------------------------------------------------------------
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.
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HAS YOUR ADDRESS CHANGED?
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