PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE
SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. )
Filed by the Registrant (X)
Filed by a Party other than the Registrant ( )
Check the appropriate box:
( ) Preliminary Proxy Statement
(X) Definitive Proxy Statement
( ) Definitive Additional Materials
( ) Soliciting Material Pursuant to S240.14a-11(c) or S240.14a-12
AMERICAN TECHNICAL CERAMICS CORP.
---------------------------------------------
(Name of Registrant as Specified In Its Charter)
AMERICAN TECHNICAL CERAMICS CORP.
---------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
(X) $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2).
( ) $500 per each party to the controversy pursuant to Exchange Act
Rule 14a-6(i)(3).
( ) 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:
___________________________________________________________________
2) Aggregate number of securities to which transaction applies:
___________________________________________________________________
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:(1)
___________________________________________________________________
4) Proposed maximum aggregate value of transaction:
___________________________________________________________________
(1) Set forth the amount on which the filing fee is calculated and state how it
was determined.
( ) Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid: ___________________________________________
2) Form Schedule or Registration Statement No.: ______________________
3) Filing Party: _____________________________________________________
4) Date Filed: _____________________________________________________
AMERICAN TECHNICAL CERAMICS CORP.
17 STEPAR PLACE
HUNTINGTON STATION, NEW YORK 11746-2102
-------------------------------------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD NOVEMBER 17, 1995
-------------------------------------------------------
To the Stockholders of
AMERICAN TECHNICAL CERAMICS CORP.
You are hereby notified that the Annual Meeting of Stockholders of
AMERICAN TECHNICAL CERAMICS CORP., a Delaware corporation (the "Company"),
will be held at 2201 Corporate Square Boulevard, Jacksonville, Florida 32216,
on Friday, November 17, 1995, at 10:00 a.m., local time, for the following
purposes:
1. To elect six directors;
2. To ratify the appointment of KPMG Peat Marwick LLP as the independent
public accountants to audit the Company's consolidated financial statements
for the fiscal year ending June 30, 1996; and
3. To transact such other business as may properly come before the
meeting or any adjournment or adjournments thereof.
Only stockholders of record at the close of business on October 16,
1995 are entitled to notice of and to vote at the meeting. A list of
stockholders of the Company as of the record date may be examined by any
stockholder for any purpose germane to the meeting during ordinary business
hours on or after November 7, 1995 at the place of the meeting. The transfer
books of the Company will not be closed.
Your attention is directed to the accompanying Proxy Statement.
By Order of the Board of Directors
Kathleen M. Kelly
Secretary
October 26, 1995
STOCKHOLDERS UNABLE TO ATTEND THE ANNUAL MEETING IN PERSON ARE URGED TO DATE,
SIGN AND MAIL PROMPTLY THE ENCLOSED PROXY CARD IN THE POSTPAID ENVELOPE TO
ASSURE THAT YOUR SHARES ARE REPRESENTED AT THE ANNUAL MEETING. IF YOU ATTEND
THE ANNUAL MEETING, YOU MAY VOTE IN PERSON IF YOU WISH TO DO SO, EVEN THOUGH
YOU HAVE SENT IN YOUR PROXY.
<PAGE>
AMERICAN TECHNICAL CERAMICS CORP.
PROXY STATEMENT
This Proxy Statement is furnished in connection with the solicitation
of proxies by the Board of Directors of AMERICAN TECHNICAL CERAMICS CORP. (the
"Company") to be voted at the Annual Meeting of Stockholders (the "Annual
Meeting") and any adjournment or adjournments thereof. The Annual Meeting will
be held at 10:00 a.m., local time, on Friday, November 17, 1995, at the
Company's facility at 2201 Corporate Square Boulevard, Jacksonville, Florida
32216. The principal executive offices of the Company are located at 17 Stepar
Place, Huntington Station, New York 11746. It is expected that this Proxy
Statement and enclosed proxy card will first be mailed or delivered to
stockholders entitled to notice of and to vote at the Annual Meeting on or
about October 26, 1995.
All proxies received pursuant to this solicitation will be voted,
and, where a choice is specified as to the proposals described in the
foregoing Notice, they will be voted in accordance with that specification.
Stockholders who have executed proxies may revoke them at any time before they
are voted by submitting a later dated proxy or by written notice delivered to
the Secretary of the Company. Personal attendance at the meeting without
submitting a later dated proxy or a written notice of revocation to the
Secretary shall not serve to revoke any proxy.
OUTSTANDING SHARES AND VOTING RIGHTS
Only holders of record of the Company's Common Stock, par value $.01
per share ("Common Stock"), at the close of business on October 16, 1995, will
be entitled to notice of and to vote at the Annual Meeting. As of October 16,
1995, there were 3,873,683 shares of Common Stock issued and outstanding. Each
outstanding share of Common Stock is entitled to one vote on all matters,
which vote may be given in person or by proxy duly authorized in writing.
There are no cumulative voting rights.
Abstentions will have no effect on the outcome of the vote for the
election of directors or the ratification of KPMG Peat Marwick LLP as the
Company's independent public accountants. In the event a broker that is a
record holder of Common Stock of the Company does not return a signed proxy,
the shares of Common Stock represented by such proxy will not be considered
present at the Annual Meeting and, therefore, will not be counted towards a
quorum.
Directors of the Company will be elected by a plurality of the votes
cast by stockholders present and entitled to vote at the meeting. As of
October 16, 1995, 2,389,061 shares of Common Stock (approximately 62% of the
issued and outstanding shares of Common Stock) were held of record and
beneficially by Victor Insetta, who is the President, Chief Executive Officer
and a director of the Company. His shareholdings are sufficient to assure
election of the nominees for election as directors as set forth herein, to
ratify the appointment of KPMG Peat Marwick LLP as the Company's independent
public accountants for the fiscal year ending June 30, 1996, and to take
action on any other matters brought before the Annual Meeting.
2
<PAGE>
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of October 16, 1995, certain
information with respect to the ownership of the Company's Common Stock by (i)
all persons who are known by the Company to be the beneficial owners of more
than 5% of the outstanding shares of Common Stock, (ii) each of the directors
of the Company, (iii) each of the executive officers of the Company listed in
the table under the caption "COMPENSATION OF EXECUTIVE OFFICERS -- Summary
Compensation Table", and (iv) all directors and executive officers of the
Company as a group.
<TABLE>
<CAPTION>
NAME AND ADDRESS AMOUNT AND NATURE OF PERCENT OF
OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP(1) CLASS
- ---------------------------------------- --------------------------- --------------
<S> <C> <C>
VICTOR INSETTA 2,389,061 (2) 61.7%
2201 Corporate Square
Boulevard
Jacksonville, Florida
JOSEPH COLANDREA 205,358 (3) 5.3%
911 South Ocean Boulevard
Boca Raton, Florida
RICHARD MONSORNO 16,680 *
2201 Corporate Square
Boulevard
Jacksonville, Florida
KATHLEEN M. KELLY 15,787 (4) *
One Norden Lane
Huntington Station, New York
CHESTER E. SPENCE 10,500 (5) *
One Norden Lane
Huntington Station, New York
O. JULIAN GARRARD III 1,400 *
3871 Little Lane
Jacksonville, Florida
STUART P. LITT 3,000 *
2 Blenheim Terrace
Farmington, Connecticut
DR. JAMES BIGGERS -- *
1321 Old Boalsburg Road
State College, Pennsylvania
RUBIN BLUMKIN -- *
7720 Hearth Stone Avenue
Boynton Beach, Florida
All executive officers and 2,436,428 (2) 62.9%
directors as a group (8 persons)
</TABLE>
- ---------------
* Less than one percent
3
(1) All shares are beneficially owned, and the sole voting and
investment power over such shares is held, by the persons named,
except to the extent described in the following footnotes.
(2) Does not include (i) 205,358 shares owned by Mr. Colandrea which are
subject to a Restated Shareholders' Agreement, dated April 15, 1985,
among the Company and Messrs. Insetta, Colandrea and Joseph Mezey
(the "Restated Shareholders' Agreement"), and (ii) shares subject to
Voting and Transfer Agreements entered into in connection with
options granted under the Company's Incentive Stock Option Plan.
Pursuant to the Restated Shareholders' Agreement, Messrs. Insetta,
Colandrea and Mezey have agreed that, so long as they own shares of
Common Stock, they will vote their shares for the election of either
three designees of Mr. Insetta (if Mr. Insetta elects not to be a
director) or of Mr. Insetta and two of his designees, and for the
election of Mr. Colandrea (if Mr. Colandrea elects to be a director)
to the Board of Directors of the Company. Mr. Colandrea has waived
his right to be designated as a director indefinitely until written
notice is served to the contrary at least 90 days prior to the next
scheduled annual meeting. No such notice has been given relevant to
the Company's Annual Meeting to be held November 17, 1995. Mr. Mezey
no longer owns shares of Common Stock. The Restated Shareholders'
Agreement will terminate upon the death of Mr. Insetta or at such
time as Mr. Insetta does not own at least 10% of the outstanding
shares of Common Stock. The Restated Shareholders' Agreement also
provides for certain rights of first refusal and registration rights.
For information concerning the Voting and Transfer Agreements
referred to above see "COMPENSATION OF EXECUTIVE OFFICERS --
Incentive Stock Option Plan".
(3) Does not include 2,389,061 shares owned by Mr. Insetta which are
subject to the Restated Shareholders' Agreement. See Note (2) above.
(4) Includes 300 shares owned jointly with Mrs. Kelly's husband.
(5) Includes 500 shares owned jointly with Mr. Spence's wife.
4
<PAGE>
ELECTION OF DIRECTORS
Six directors are to be elected to serve until the next annual
meeting of stockholders or until their respective successors are elected and
qualified. Set forth in the table below is certain information, as of October
16, 1995, with respect to the nominees of the Board of Directors of the
Company for election as directors. All of the nominees are presently directors
of the Company. It is the intention of the persons named in the enclosed proxy
to vote for the election as directors of the persons named in the table below.
If any such nominee should become unavailable for any reason, which the Board
of Directors has no reason to anticipate, the persons named in the enclosed
proxy reserve the right to substitute another person of their choice in his
place.
<TABLE>
<CAPTION>
YEAR FIRST
ELECTED OR
APPOINTED
NAME AND POSITION BUSINESS EXPERIENCE AS A
WITH THE COMPANY AGE DURING THE PAST FIVE YEARS DIRECTOR
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
VICTOR INSETTA 55 President and Chief Executive Officer of the 1966
President, Chief Executive Company for more than five years.
Officer and Director
DR. JAMES V. BIGGERS 67 Retired since January 1990. Prior thereto, 1985
Director Professor of Material Science at
Pennsylvania State University for
more than five years. President
and principal stockholder of
Biggers, Inc., a ceramics
research concern, from 1979 to
present.
RUBIN BLUMKIN 74 Retired since May 1988. Prior thereto, Vice 1984
Director President - Marketing of the Company for more
than five years.
O. JULIAN GARRARD III 50 President of Jay Garrard, P.A., a certified public 1988
Director accounting firm specializing in taxation, for more
than five years.
CHESTER E. SPENCE 56 Vice President - Marketing and Sales of the 1985
Director Company from August 1993 to present. Prior
thereto, Consultant, IBM from
January 1991 to August 1993.
Manager - Account Marketing IBM -
Latin America from 1988 to
December 1990.
STUART P. LITT 54 Associate of OEM Capital, an investment banking 1993
Director firm specializing in the electronics industry, since
December 1992. Consultant to electronics companies
since September 1990. Prior thereto, President of Tech
Systems, a division of Datron Inc., a manufacturer of
microwave and electrical equipment, from January 1989 to
August 1990.
</TABLE>
5
<PAGE>
There are no family relationships between or among any directors or
executive officers of the Company. See footnotes (2) and (3) to the table
under the caption "SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT" for information concerning agreements among certain stockholders
as to the election of directors.
During the fiscal year ended June 30, 1995, the Board of Directors
held three meetings. Dr. Biggers and Mr. Blumkin were unable to attend two of
the three meetings held during the fiscal year. No other member of the Board
of Directors attended fewer than 75% of the meetings held by the Board of
Directors during the fiscal year ended June 30, 1995.
The Board of Directors has created a standing Audit Committee. The
Audit Committee, which held three formal meetings and communicated several
times during the fiscal year ended June 30, 1995, consists of Messrs. Spence,
Garrard and Litt. Among other things, the Audit Committee reviews the scope
and procedures of the audit activities of the independent accountants and
their reports on their examinations. It also reviews reports from the
Company's financial management and independent accountants on compliance with
corporate policies and the adequacy of the Company's internal accounting
controls. Each of Messrs. Spence and Litt attended two of the three meetings
held during the fiscal year ended June 30, 1995. Mr. Garrard attended all three
meetings.
The Board of Directors has also created a Compensation Committee
which currently consists of Messrs. Spence and Garrard. The Compensation
Committee held no meetings during the fiscal year ended June 30, 1995. The
Compensation Committee is authorized, subject of the Certificate of
Incorporation and By-Laws of the Company and the Delaware General Corporation
Law, to exercise all power and authority of the Board of Directors with
respect to the compensation of employees of the Company.
Each of the non-employee directors of the Company receives a fee of
$1,000 plus expenses for each meeting of the Board of Directors and, if a
member of a Committee, each Committee meeting, that he attends.
COMPLIANCE WITH SECTION 16(A) OF SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934, as amended,
requires the Company's officers, directors and persons who own beneficially
more than ten percent of the Company's Common Stock to file with the
Securities Exchange Commission initial reports of beneficial ownership and
reports of changes in beneficial ownership of the Common Stock. Officers,
directors and persons owning more than ten percent of the Common Stock are
required to furnish the Company with copies of all such reports. To the
Company's knowledge, based solely on a review of copies of such reports
furnished to the Company, the Company believes that during the fiscal year
ended June 30, 1995, the only deviations from the Section 16(a) filing
requirements applicable to its officers, directors and persons owning
beneficially more than ten percent of the Common Stock were as follows:
Rubin Blumkin, a director of the Company, inadvertently neglected to
file a Form 4 in connection with the sale of his stock in July 1995, but filed
the form in September 1995. Similarly, O. Julian Garrard, a director of the
Company, inadvertently neglected to file a Form 4 in connection with the
purchase of certain shares of stock in April 1995, but filed the form in
August 1995. Joseph Colandrea, a stockholder of the Company, inadvertently
neglected to file a Form 4 in connection with the sale of certain shares of
stock in April 1995 and May 1995, but filed the forms in June 1995 and July
1995, respectively.
6
<PAGE>
COMPENSATION OF EXECUTIVE OFFICERS
SUMMARY COMPENSATION TABLE
The following table sets forth compensation paid over each of the
last three fiscal years to the President and Chief Executive Officer of the
Company and to each of the other executive officers of the Company whose cash
compensation exceeded $100,000:
<TABLE>
<CAPTION>
FISCAL
NAME AND YEAR ALL OTHER
PRINCIPAL ENDING COMPENSATION
POSITION JUNE 30 SALARY ($) BONUS ($) (1) ($)
----------- ------- ---------- --------- -------------
<S> <C> <C> <C> <C>
VICTOR INSETTA
President, Chief 1995 $254,025 $142,208 $ 5,440 (2)
Executive Officer and 1994 237,825 77,307 4,500 (2)
Director 1993 231,577 75,926 13,366 (2)
RICHARD MONSORNO
Vice President - 1995 123,483 13,962 5,697 (3)
Product Development 1994 115,282 56,547 (4) 3,221 (5)
1993 110,254 7,665 2,894 (5)
KATHLEEN M. KELLY
Vice President - 1995 90,769 13,962 5,231 (6)
Administration and 1994 84,551 56,547 (4) 2,530 (5)
Secretary 1993 73,954 7,665 1,873 (5)
CHESTER E. SPENCE
Vice President - 1995 89,250 71,797 4,516 (7)
Marketing and Sales 1994 74,307 86,143 (4) -0-
1993 N/A N/A N/A
</TABLE>
- -------------------
(1) Includes amounts paid in the applicable fiscal year and amounts earned
for such fiscal year and paid in a subsequent fiscal year.
(2) Includes premium of $9,000 on term life insurance policy for fiscal year
1993. The balance for fiscal year 1993 and the total for fiscal years
1994 and 1995 consist of contributions by the Company to the 401(k)
Savings Plan on behalf of Mr. Insetta. See "COMPENSATION OF EXECUTIVE
OFFICERS -- 401(k) Savings Plan".
(3) Consists of contributions by the Company to the Company's 401(k) Savings
Plan on behalf of Mr. Monsorno of $3,543, and $2,154 of income recorded
as a result of the partial forgiveness of a loan made by the Company to
Mr. Monsorno for the purpose of paying income taxes on the 10,000 share
stock bonus referred to in footnote (4) below.
7
<PAGE>
(4) Represents cash bonuses and the fair market value of (i) a stock
bonus of 5,000 shares of Common Stock granted on July 1, 1993 (based
upon the closing sale price of the Company's Common Stock on the
American Stock Exchange on July 1, 1993 of $2.75), and (ii) a stock
bonus of 10,000 shares of Common Stock granted on April 19, 1994
(based upon the closing sale price of the Company's Common Stock on
the American Stock Exchange on April 1, 1994 of $3.50). The Company
has a right of first refusal to purchase the shares if at any time
the executive elects to transfer them. As of June 30, 1995, the value
of the 15,000 shares of Common Stock issued to the executive pursuant
to these stock bonuses was $189,375 based upon the closing sales
price of the Company's Common Stock on the American Stock Exchange on
such date of $12.625.
(5) See "COMPENSATION OF EXECUTIVE OFFICERS -- 401(k) Savings Plan."
(6) Consists of contributions by the Company to the Company's 401(k)
Savings Plan on behalf of Mrs. Kelly of $3,077, and $2,154 of income
recorded as a result of the partial forgiveness of a loan made by the
Company to Mrs. Kelly for the purpose of paying income taxes on the
10,000 share stock bonus referred to in footnote (4) above.
(7) Consists of contributions by the Company to the Company's 401(k)
Savings Plan on behalf of Mr. Spence of $2,362, and $2,154 of income
recorded as a result of the partial forgiveness of a loan made by the
Company to Mr. Spence for the purpose of paying income taxes on the
10,000 share stock bonus referred to in footnote (4) above.
EMPLOYMENT CONTRACTS
On April 3, 1985, Victor Insetta entered into a five-year employment
agreement with the Company, effective as of March 1, 1985. The agreement has
been extended several times, most recently in February 1993. Currently, the
term of the employment agreement expires on March 1, 1996; the employment
agreement will, however, be renewed automatically for one year periods on
March 1 of every year in the absence of written notice to the contrary by
either party at least 120 days prior to the March 1 renewal date. The
agreement also provides for further increases in Mr. Insetta's base salary by
the Board of Directors from time to time at its sole discretion.
Until it was amended as described below, pursuant to the agreement,
Mr. Insetta was paid a base compensation of $225,000 per annum, and, as
additional annual incentive compensation, an amount equal to 2.5% of the
Company's net income (before such incentive compensation and before income
taxes) up to $5,000,000 and 3% of the Company's net income (before such
incentive compensation and before income taxes) in excess of $5,000,000. The
employment agreement currently provides, among other things, that if there is
a change of control of the Company or if Mr. Insetta's employment is
terminated prior to the scheduled expiration date other than for cause (as
defined in the employment agreement), death, disability, or voluntary
termination apart from a change of control, the Company is required to pay to
Mr. Insetta, in a lump sum payment, the greater of: (i) all of the
compensation due to Mr. Insetta under the employment agreement through the end
of the specified term of the employment agreement, or (ii) three times Mr.
Insetta's average annual compensation under the employment agreement during
the five most recent taxable years prior to the taxable year in which the
termination took place as calculated in accordance with the Section 280G of
the Internal Revenue Code of 1986, as amended (the "Code"). In addition, if
Mr. Insetta voluntarily terminates his employment with the Company, for a
period equal to the lesser of the remaining term of the employment agreement
or one year, Mr. Insetta has agreed that he will not, directly or indirectly,
solicit those persons or entities who are customers of the Company on the
effective date of his termination of employment for the purpose of purchasing
multi-layer capacitors; provided, however, that the foregoing restriction
shall not apply if Mr. Insetta terminates his employment because of a change
of control of the
8
<PAGE>
Company. In addition, Mr. Insetta has agreed for a period of one year
following the termination of his employment (other than termination by the
Company without cause) that he will not divulge to any person any information
which is actually held in confidence by the Company, subject, however, to
certain conditions, including the Company having performed, and continuing to
perform, its obligations under the employment agreement.
In September 1992, Mr. Insetta's annual base salary was increased,
effective October 1, 1992, from $225,000 to $234,000 (a 4% increase, which
increase was consistent with standard increases awarded to other employees at
that time), and his employment agreement was amended to reflect that,
effective commencing with the Company's fiscal year ending June 30, 1993, Mr.
Insetta shall be entitled to incentive compensation equal to 5% of the
Company's net income (before such incentive compensation and before income
taxes). In September 1994, Mr. Insetta's annual base salary was further
increased effective March 1, 1994 from $234,000 to $246,000 (a 5% increase,
which increase again was consistent with standard increases awarded during
that period).
The Company presently maintains a term life insurance policy in the
aggregate amount of $4,000,000 on the life of Mr. Insetta. The Company is
named as the beneficiary of this policy.
INCENTIVE STOCK OPTION PLAN
In April 1985, the Company adopted an Incentive Stock Option Plan
(the "Section 422A Plan") intended to qualify as such under Section 422A of
the Code in order to attract and retain qualified key personnel. The Section
422A Plan has expired and no further options may be granted thereunder. It is
a condition to the exercise of an option under the Section 422A Plan that the
optionee enter into a Voting and Transfer Agreement pursuant to which, among
other things, the optionee will agree to vote the shares of Common Stock
purchased upon exercise of the option for the election as directors of the
Company of certain persons (currently, Victor Insetta and Rubin Blumkin). The
Voting and Transfer Agreement in certain cases also gives the Company a right
of first refusal and Mr. Insetta a right of second refusal to purchase the
shares purchased upon exercise of options. During the fiscal year ended June
30, 1995, no options were granted under the Section 422A Plan. There were
1,990 options exercised during such fiscal year, including options to purchase
246 shares exercised by Mr. Monsorno and options to purchase 87 shares by Mrs.
Kelly as described below. No options have been repriced since the inception of
the Section 422A Plan. There were 778 unexercised in-the-money options on
behalf of various key employees of the Company at June 30, 1995. As of June
30, 1995, June 30, 1994, and June 30, 1993, there were options to purchase
778, 2,768 and 2,768 shares, respectively, outstanding under the Section 422A
Plan. There are currently four employees with options outstanding under
Section 422A Plan.
The following table sets forth information concerning options
exercised by Mr. Monsorno and Mrs. Kelly during the fiscal year ended June 30,
1995. Mr. Monsorno and Mrs. Kelly were the only executive officers named in
the table under the caption "COMPENSATION OF EXECUTIVE OFFICERS -- Summary
Compensation Table" who exercised options during such fiscal year. None of
such executive officers currently holds any options to purchase shares of the
Company's Common Stock.
<TABLE>
<CAPTION>
Number of Shares Acquired
Name on Exercise Value Received
---- ------------------------- --------------
<S> <C> <C>
Richard Monsorno 246 $1,384
Kathleen M. Kelly 87 718
</TABLE>
9
<PAGE>
401(K) SAVINGS PLAN
The Company has a 401(k) Savings Plan covering all employees.
Pursuant to this plan, eligible employees may elect to defer up to 15% of
their eligible gross earnings, but in no event more than $9,240 for the
calendar year 1995. In addition, contributions may be limited by certain other
restrictions under the Code. The Company contributes an amount based upon the
employee's contributions, up to 3% of such employee's gross earnings. Officers
are eligible to participate in this plan in the same manner as are all other
employees. For the fiscal year ended June 30, 1995, the Company's
contributions to this plan were $265,000, including contributions on behalf of
Mr. Insetta, Mr. Monsorno, Mrs. Kelly and Mr. Spence of $5,440, $3,543, $3,077
and $2,362, respectively. See "COMPENSATION OF EXECUTIVE OFFICERS - Summary
Compensation Table".
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
RELATED PARTY LEASES
The Company presently leases certain real property, machinery and
equipment from its principal stockholder, Victor Insetta, and entities
controlled by him ("Related Party Leases"). In the case of each Related Party
Lease of real property, the Company has periodically obtained appraisal
letters indicating that the fixed rentals in effect did not exceed fair market
rentals in the area.
In each Related Party Lease, there is a current term for which fixed
rentals are specified. At the end of each current lease term, except the
current lease term for the New York Property (as hereinafter defined), the
Company has an option to renew the Related Party Lease at fair market rentals
and/or to purchase the property at fair market values, as determined by an
independent appraisal or, in the event of a dispute, by arbitration.
The Company does not intend to lease any additional real property,
machinery or equipment from Mr. Insetta or entities controlled by him other
than renewals of existing leases and improvements and new construction that
may be made to existing leased properties.
FLORIDA FACILITY
The Company's Jacksonville, Florida facility (the "Florida Facility")
is leased by its wholly-owned subsidiary, American Technical Ceramics
(Florida), Inc. ("ATC-Florida"), from V.P.I. Properties Associates ("VPI"), a
limited partnership of which Mr. Insetta is the sole general partner and the
limited partnership interests are owned by members of his family.
The lease is for a term expiring in 2010. Until October 1988, the
base rental under the lease was $13,665 per month (adjusted based upon
improvements made or to be made to the property as described below). In
October 1988, this rental was increased to $21,575 per month (plus such
adjustments as are described below) based on the ratio of the United States
Department of Labor-Consumer Price Index for All Urban Consumers between
October 1980 and October 1988. Such rental (together with additional rent
arising from improvements as described below) will be adjusted upward (but not
downward) again as of October 1995 based upon the ratio of such index between
October 1988 and October 1995.
10
<PAGE>
To the extent that VPI's total expenditures for the real property in
the Florida Facility exceed $1,500,000, the lease provides for an increase in
the monthly rental (when the improvement on which the expenditures are made is
placed in service) based on a formula by which a specified rate is multiplied
by the difference between the cumulative cost of the real property and
$1,500,000. The rate is 10.45% per annum if the expenditure relates to an
improvement placed in service before January 1, 1985. For expenditures on an
improvement placed in service on or after January 1, 1985, the rate is equal
to: (i) 1% per annum above the rate payable by VPI on any permanent mortgage
loan utilized to finance the improvement, or (ii) if no such mortgage loan is
obtained within 12 months after such improvement is placed in service, 1% per
annum above the Standard & Poor's published AA bond rate for the month in
which the improvement is placed in service. As of June 30, 1995, VPI had
expended approximately $2,180,000 for real property and buildings. The
additional rent on the expenditures over $1,500,000 is $7,025 per month,
increasing the total rental to its current rate of $28,600 per month.
The lease also provides for the rental of certain items of personal
property (machinery and equipment) in the Florida Facility for a term of 84
months. The monthly rental for an item is to be determined through the use of
a fixed residual value of 20% of the cost of the item and an interest rate
equal to 10.45% per annum on items of personal property acquired prior to
January 1, 1985, and the weighted average interest rate being paid by
ATC-Florida on institutional loans in the month prior to the month of
acquisition or, if no such rate exists, the Barnett Bank Trust Company, N.A.
("Barnett") prime rate in said month on all items acquired on or after January
1, 1985. ATC-Florida has the right to purchase the items of personal property
at their fair market value or to renew the lease for any such items for two
successive three year terms at fair market rental. ATC-Florida has not yet
determined whether to purchase or lease any particular item of personal
property and has made no payments in respect of any such item since December
1992. It is expected that ATC-Florida will be required to make payments
relating to the use of each item of personal property from December 1992 to
the date the determination to purchase or lease is made.
ATC-Florida is obligated to pay all expenses arising in connection
with the Florida Facility, including all real estate taxes, assessments,
utilities and repairs. The Company, through ATC-Florida, has the right in 1995
and at the end of the lease term to purchase the real property at its fair
market value. The Company has not yet determined whether or not it will
exercise such right at this time.
To finance the development of the Florida Facility, VPI transferred
the Florida Facility to the Jacksonville Port Authority which issued tax
exempt bonds (the "Bonds") in the principal amount of $2,000,000 to Barnett.
The Florida Facility was then sold to VPI under an Installment Sale and
Security Agreement with legal title being retained by Barnett, as trustee for
the holders of the Bonds. Payment of the Bonds is secured by a security
interest in, and lien upon, the real property comprising the Florida Facility
and the machinery and equipment which is located therein which were financed
from the Bond proceeds. In no period is ATC-Florida to pay on account of
rentals for the real and personal property less than the principal of, and
interest on, the Bonds.
In the fiscal year ended June 30, 1995, aggregate rental paid by
ATC-Florida under this lease was $332,733.
11
<PAGE>
NEW YORK PROPERTY
Since July 1976, the Company has leased from Mr. Insetta the land and
building at 15 Stepar Place, Huntington Station, New York (the "New York
Property").
The term of the lease, which was amended in February 1989, extends to
February 28, 1996. The base rent is equal to the annual payments of principal
and interest payable under the mortgage encumbering such property. Current
monthly installments are $37,233. The Company is also responsible for payment
of all real estate taxes and all utilities and repairs relating to the
property. During the fiscal year ended June 30, 1995, the total amount of rent
paid by the Company for this facility was $383,492. In addition, the Company
incurred expenses of $61,685 for real estate taxes, $285,932 for utilities and
$57,902 in leasehold improvements. The base rent reflects an adjustment upward
commencing January 1, 1990 and as of each succeeding calendar year during the
term of the lease, based upon the increase in the Consumer Price Index for All
Urban Consumers (New York City) over the Consumer Price Index for All Urban
Consumers (New York City) for January 1989.
AUDITORS
KPMG Peat Marwick LLP, the independent auditors who have audited the
Company's books and records for the past six years, have been appointed by the
Board of Directors of the Company to audit the books and records of the
Company for the fiscal year ending June 30, 1996. The Board of Directors
recommends that the appointment of such auditors be ratified by the
stockholders. The Board of Directors believes that the selection of an
independent accountant to audit the books and records of the Company prepared
by management is an appropriate matter for stockholder consideration. If the
stockholders do not ratify the selection of KPMG Peat Marwick LLP, the Board
of Directors will consider the selection of another firm of independent
certified public accountants to audit the Company's books and records for the
fiscal year ending June 30, 1996. Representatives of KPMG Peat Marwick LLP are
expected to be present at the Annual Meeting and will have an opportunity to
make a statement if they desire to do so and will be available to respond to
appropriate questions.
The Board of Directors of the Company recommends a vote FOR the
ratification of KPMG Peat Marwick LLP as the Company's auditors for the fiscal
year ending June 30, 1996.
ANNUAL REPORT TO STOCKHOLDERS
The Company will provide to any stockholder of record at the close of
business on October 16, 1995, without charge, upon written request to the
Secretary of the Company, a copy of the Company's Annual Report on Form 10-KSB
for the fiscal year ended June 30, 1995.
12
<PAGE>
STOCKHOLDER PROPOSALS
The Company expects to hold its annual meeting of stockholders for
the fiscal year ending June 30, 1996 in November or December 1996.
Stockholders who intend to present proposals intended to be included in the
Company's Proxy Statement and form of proxy relating to such annual meeting
must submit their proposals in writing to the Secretary of the Company on or
before June 28, 1996.
OTHER MATTERS
Management of the Company knows of no business other than that
referred to in the foregoing Notice of Annual Meeting and Proxy Statement that
may come before the Annual Meeting. However, if other matters properly come
before the Annual Meeting it is the intention of the persons named in the
enclosed proxy to vote thereon in accordance with their judgement.
The entire cost of soliciting management proxies will be borne by the
Company. Proxies will be solicited by mail and may be solicited personally by
directors, officers or regular employees of the Company, who will not be
compensated for such services.
By order of the Board of Directors
Kathleen M. Kelly
Secretary
October 26, 1995
13
APPENDIX
AMERICAN TECHNICAL CERAMICS CORP.
PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Victor Insetta and Kathleen M. Kelly and
each of them, the attorneys and proxies of the undersigned, with power of
substitution, to represent and vote on behalf of the undersigned all the shares
of common stock of American Technical Ceramics Corp., which the undersigned is
entitled to vote at the Annual Meeting of Stockholders of American Technical
Ceramics Corp., to be held at 2201 Corporate Square Boulevard, Jacksonville,
Florida, 32216, on Friday, November 17, 1995 at 10:00 a.m., local time and any
adjournment or adjournments thereof, hereby revoking all proxies heretofore
given with respect to such stock, upon the following proposals more fully
described in the notice of and proxy statement for the Annual Meeting (receipt
whereof is hereby acknowledged).
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL
BE VOTED FOR PROPOSALS 1 AND 2.
Please mark boxes /_/ or /X/ in blue of black ink.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR (1) AND (2).
1. ELECTION OF DIRECTORS
FOR all nominees below WITHHOLD AUTHORITY TO
(except as marked to the vote for all nominees listed below /_/
contrary below) /_/
Victor Insetta, Dr. James V. Biggers, Rubin Blumkin, O. Julian Garrard III,
Chester E. Spence and Stuart P. Litt.
(INSTRUCTION: To withhold authority to vote for any individual nominee write
that nominee's name on space provided below.)
Continued, and to be signed and dated on reverse side.
2. PROPOSAL TO RATIFY THE APPOINTMENT OF KPMG PEAT MARWICK LLP AS THE
INDEPENDENT PUBLIC ACCOUNTANTS OF THE CORPORATION
/_/ FOR /_/ AGAINST /_/ ABSTAIN
3. In their discretion upon such other matters as may properly come before the
Annual Meeting.
I will /_/ will not /_/ attend the Annual Meeting.
Please sign exactly as your names appear below. When shares are held by joint
tenants, both should sign. When signing as attorney, executor, administration,
trustee or guardian, please sign in full title as such. If a corporation, please
sign in full corporate name by President or other authorized officer. If a
partnership, please sign in partnership name by authorized person.
Dated__________________________________, 1995
- ---------------------------------------------
Signature(s)
- ---------------------------------------------
Signature(s)
Please Sign, Date and Return the Proxy Card
Promptly Using the Enclosed Envelope.
