<PAGE>
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE
SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant (X)
Filed by a Party other than the Registrant ( )
Check the appropriate box:
( ) Preliminary Proxy Statement
( ) Confidential, for use of the Commission only (as permitted by
Rule 14a-6(e)(2)
(X) Definitive Proxy Statement
( ) Definitive Additional Materials
( ) Soliciting Material Pursuant to S240.14a-11(c) or S240.14a-12
AMERICAN TECHNICAL CERAMICS CORP.
------------------------------------------------
(Name of Registrant as Specified In Its Charter)
-----------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
(X) No fee required
( ) Fee computed on table below per Exchange Act Rules 14a-6(i)(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: (Set forth the amount on which
the filing fee is calculated and state how it was determined):
-------------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
-------------------------------------------------------------------
5) Total fee paid:
( ) Fee paid previously with preliminary materials.
( ) Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid: ___________________________________________
2) Form Schedule or Registration Statement No.: _____________________
3) Filing Party: _____________________________________________________
4) Date Filed: _____________________________________________________
<PAGE>
AMERICAN TECHNICAL CERAMICS CORP.
17 STEPAR PLACE
HUNTINGTON STATION, NEW YORK 11746
-------------------------------------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD NOVEMBER 19, 1999
-------------------------------------------------------
To the Stockholders of
AMERICAN TECHNICAL CERAMICS CORP.:
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 19, 1999 at 10:00
a.m., Eastern Standard Time, for the following purposes:
1. To elect six directors;
2. To ratify the appointment of KPMG LLP as the independent public
accountants to audit the Company's consolidated financial
statements for the fiscal year ending June 30, 2000; 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 12, 1999,
the record date fixed by the Board of Directors, are entitled to notice of, and
to vote at, the meeting. A complete list of stockholders of the Company as of
the record date will be open to examination by any stockholder for any purpose
germane to the meeting during ordinary business hours on or after November 9,
1999 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.
Stockholders unable to attend the meeting in person are urged to date, sign and
mail promptly the enclosed proxy card in the postpaid envelope to ensure that
your shares are represented at the meeting. If you attend the meeting, you may
vote in person if you wish to do so, even though you have sent in your proxy.
BY ORDER OF THE BOARD OF DIRECTORS
KATHLEEN M. KELLY
Secretary
Huntington Station, New York
October 19, 1999
<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., a
Delaware corporation (the "Company"), to be voted at the Annual Meeting of
Stockholders (the "Annual Meeting") and any adjournment or postponement thereof.
The Annual Meeting will be held at 10:00 a.m., Eastern Standard Time, on Friday,
November 19, 1999, 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 the accompanying 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 19, 1999.
VOTING SECURITIES AND VOTING RIGHTS
Only holders of record of the Company's Common Stock, par value $.01 per
share (the "Common Stock"), at the close of business on October 12, 1999 will be
entitled to notice of, and to vote at, the Annual Meeting. As of October 12,
1999, there were 3,827,034 shares of Common Stock issued and outstanding. A
majority of the outstanding shares of Common Stock present in person or by proxy
shall constitute a quorum at the Annual Meeting. 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.
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 of Annual Meeting of Stockholders, they will be voted in accordance with
that specification. If no specific instructions are given with respect to the
matters to be acted upon, the shares of Common Stock represented by a signed
proxy will be voted FOR all of the Board's nominees for director, FOR the
proposal to ratify the appointment of KPMG LLP as the independent public
accountants to audit the Company's consolidated financial statements for the
fiscal year ending June 30, 2000 and in accordance with the proxy holders' best
judgment as to any other matters as may properly come before the Annual Meeting.
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.
The affirmative vote of the holders of a majority of the shares of Common
Stock present at the Annual Meeting, in person or by proxy, and entitled to vote
is necessary for the election of directors and the ratification of KPMG LLP as
the Company's independent public accountants to audit the Company's consolidated
financial statements for the fiscal year ending June 30, 2000. Accordingly, an
abstention is the equivalent of a vote against the election of any nominee for
election to the Board of Directors of the Company or the proposal to ratify the
appointment of KPMG LLP. 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 considered in determining the presence of a quorum.
Broker non-votes will have no effect on the outcome of the vote for the election
of directors or the ratification of KPMG LLP as the Company's independent
accountants.
As of October 12, 1999, 2,296,515 shares of Common Stock (approximately 60%
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 LLP as the independent public accountants to
audit the Company's consolidated financial statements for the fiscal year ending
June 30, 2000 and to take action on any other matters as may properly come
before the Annual Meeting.
<PAGE>
The Company will bear the entire cost of the solicitation of proxies by the
Board of Directors. Proxies will be solicited by mail, and may be solicited
personally by telephone or facsimile transmission, by directors, officers and
regular employees of the Company, without additional remuneration.
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of October 12, 1999, 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 "Executive Compensation -- Summary Compensation Table," and (iv) all
directors and executive officers of the Company as a group.
Name and Address Amount and Nature of Percent of
of Beneficial Owner Beneficial Ownership(1) Class
- ------------------------------------ ----------------------- -----------------
VICTOR INSETTA 2,296,515 (2) 60.0%
2201 Corporate Square Boulevard
Jacksonville, Florida
JOSEPH COLANDREA 152,300 (3) 4.0%
911 South Ocean Boulevard
Boca Raton, Florida
STUART P. LITT 55,269 (4) 1.4%
One Norden Lane
Huntington Station, New York
RICHARD MONSORNO 50,680 (5) 1.3%
2201 Corporate Square Boulevard
Jacksonville, Florida
KATHLEEN M. KELLY 24,087 (6) *
One Norden Lane
Huntington Station, New York
JUDAH WOLF 14,700 (7) *
2201 Corporate Square Boulevard
Jacksonville, Florida
CHESTER E. SPENCE 13,000 (8) *
269 Windsor Place
Brooklyn, New York
THOMAS J. VOLPE 1,000 *
31 Millbrook Circle
Norwood, New Jersey
O. JULIAN GARRARD III 1,000 *
3871 Little Lane
Jacksonville, Florida
RUBIN BLUMKIN --
7720 Hearth Stone Avenue
Boynton Beach, Florida
All executive officers and 2,608,551(2) 68.2%
directors as a group (12 persons)
* Less than one percent.
- ------------------------------------
(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
<PAGE>
(2) Includes (i) 1,000 shares subject to options which are presently
exercisable, and (ii) 2,000 shares owned by Mr. Insetta's wife, as to which
Mr. Insetta disclaims beneficial ownership. Does not include (i) 152,300
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 a stock option plan which has
expired. 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 relative to the Company's Annual Meeting to be held November 19,
1999. 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. The Voting and
Transfer Agreements referred to above contain provisions requiring the
holders of shares purchased upon the exercise of options granted under said
plan to vote such shares for the election as directors of the Company of
certain persons (currently Victor Insetta and Rubin Blumkin). The Company
has not regularly enforced these provisions.
(3) Does not include 2,275,061 shares owned by Mr. Insetta which are subject to
the Restated Shareholders' Agreement. See Note (2) above. By virtue of such
agreement, Mr. Colandrea may be deemed to beneficially own the shares owned
by Mr. Insetta.
(4) Includes 2,000 shares subject to options which are presently exercisable.
(5) Includes 2,000 shares subject to options which are presently exercisable.
(6) Includes 6,600 shares owned jointly with Mrs. Kelly's husband. Includes
2,000 shares subject to options which are presently exercisable.
(7) Includes 2,000 shares subject to options which are presently exercisable.
(8) Includes 3,000 shares owned jointly with Mr. Spence's wife.
COMPLIANCE WITH SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), 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 and 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. 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, 1999, there were no
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.
3
<PAGE>
PROPOSAL 1
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 12, 1999, with
respect to the nominees of the Board of Directors of the Company for election as
directors and is based on the records of the Company and information provided to
it. All of the nominees are presently directors of the Company. Absent
instructions to the contrary, 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.
THE BOARD OF DIRECTORS OF THE COMPANY RECOMMENDS A VOTE FOR THE ELECTION AS
A DIRECTOR OF THE COMPANY OF EACH OF THE NOMINEES SET FORTH BELOW.
<TABLE>
<CAPTION>
Year First Elected
or Appointed as a
Name Age Business Experience During the Past Five Years Director
- ----------------------------- ----- ---------------------------------------------------------- -----------------
<S> <C> <C> <C>
VICTOR INSETTA 59 President and Chief Executive Officer of the Company and 1966
Director.
RUBIN BLUMKIN (1) (2) 77 Retired since May 1988. Prior thereto, Vice President - 1984
Marketing of the Company.
O. JULIAN GARRARD III (1) (2) 53 Partner of Garrard & Garrard, C.P.A., a certified public 1988
accounting firm specializing in taxation.
CHESTER E. SPENCE 59 Retired since July 1999. Consultant to the Company from 1985
May of 1998 to June of 1999. Prior thereto, Vice
President-Marketing and Sales of the Company from
August 1993 to April 1998.
STUART P. LITT (2) 57 Senior Vice President - Operations of the Company since 1993
September 1996. Prior thereto, associate of OEM Capital,
an investment banking firm specializing in the electronics
industry, since December 1992. Consultant to electronics
companies since September 1990.
THOMAS J. VOLPE 53 Senior Vice President - Financial Operations of the 1999
Interpublic Group of Companies, Inc., an organization of
advertising agencies and communications services companies,
since March 1986.
</TABLE>
(1) Member of Compensation Committee
(2) Member of Audit Committee
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.
BOARD MEETINGS; COMMITTEES OF THE BOARD OF DIRECTORS
During the fiscal year ended June 30, 1999, the Board of Directors held
eight meetings. All of the directors attended all of the meetings held during
the fiscal year ended June 30, 1999, except Mr. Thomas J. Volpe who was
appointed to the Board of Directors on August 4, 1999.
4
<PAGE>
The Board of Directors has created a standing Audit Committee. The Audit
Committee, which held four formal meetings and communicated informally several
times during the fiscal year ended June 30, 1999, currently consists of Messrs.
Blumkin, 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. Blumkin, Garrard, and Litt attended all of the meetings held by the
Audit Committee during the fiscal year ended June 30, 1999.
The Board of Directors has also created a Compensation Committee which
currently consists of Messrs. Blumkin and Garrard. Mr. Blumkin replaced Mr.
Spence as a member of the Compensation Committee on November 20, 1998. The
Compensation Committee is authorized, subject to 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. The Compensation Committee did
not hold a meeting during the fiscal year ended June 30, 1999.
Each of the non-employee directors of the Company receives a fee of $1,000
plus expenses for each meeting, excluding teleconference meetings, of the Board
of Directors and, if a member of a Committee, each Committee meeting, that he
attends.
EXECUTIVE COMPENSATION
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 $100,000 (collectively, the "Named Executive Officers"):
<TABLE>
<CAPTION>
Name and Principal Fiscal Year Restricted All Other
Position Ended June 30 Salary ($) Bonus($)(1) Stock Awards Compensation($)
- ------------------------- ------------- --------- ------------- ------------ ---------------
<S> <C> <C> <C> <C> <C>
VICTOR INSETTA 1999 278,596 174,489 -- 5,159 (4)
President, Chief Executive 1998 273,195 190,480 (2) 190,478 (3) 4,938 (4)
Officer and Director 1997 248,535 281,185 -- 4,796 (4)
STUART LITT 1999 165,000 16,380 236,851 (5)(6) 14,448 (7)
Senior Vice President- 1998 161,689 32,827 196,688 (5) 4,507 (7)
Operations and Director 1997 115,385 24,108 131,063 (5) 42,057 (8)
RICHARD MONSORNO 1999 162,350 16,380 190,525 (9) 6,458 (10)
Senior Vice President- 1998 169,643 32,827 -- 6,740 (10)
Technology 1997 154,122 26,713 -- 6,602 (10)
KATHLEEN M. KELLY 1999 114,349 16,380 -- 5,775 (11)
Vice President- 1998 112,811 32,827 -- 5,883 (11)
Administration and Secretary 1997 103,231 26,713 -- 5,303 (11)
JUDAH WOLF 1999 90,000 81,259 -- 4,691 (13)
Vice President - Thin Film
Operations (12)
</TABLE>
(1) Includes amounts paid in the applicable fiscal year in respect of such
fiscal year and amounts earned for such fiscal year and paid in a
subsequent fiscal year.
(2) Represents the cash portion of the bonus paid to Mr. Insetta in respect of
the fiscal year ended June 30, 1998 pursuant to his employment agreement.
See "Executive Compensation -- Employment Agreements."
5
<PAGE>
(3) Represents the fair market value of the stock portion of the bonus paid to
Mr. Insetta in respect of the fiscal year ended June 30, 1998 pursuant to
his employment agreement which consists of 20,454 shares of Common Stock
(based upon the closing sale price of the Company's Common Stock on the
American Stock Exchange on June 30, 1998 of $9.3125 per share). See
"Executive Compensation -- Employment Agreements."
(4) Consist of contributions by the Company to the 401(k) Savings Plan on
behalf of Mr. Insetta. See "Executive Compensation -- 401(k) Savings Plan."
(5) Includes, with respect to fiscal year 1999, and represents, with the
respect to fiscal years 1998 and 1997, the fair market value of restricted
stock awards aggregating 2,852, 10,417 and 18,000 shares, respectively, of
Common Stock granted to Mr. Litt in fiscal years 1999, 1998 and 1997 in
connection with his employment by the Company based upon the closing sale
prices of the Company's Common Stock on the American Stock Exchange on the
dates of grant (which prices ranged from $9.3125 to $19.875 per share). As
of June 30, 1999, the value of the 31,269 shares of Common Stock issued to
Mr. Litt was $265,787 (based upon the closing sale price of the Company's
Common Stock on the American Stock Exchange on such date of $8.50 per
share). See "Executive Compensation -- Employment Agreements."
(6) Includes the fair market value of two stock bonus awards of 10,000 shares
of Common Stock each granted on March 2, 1999 and June 2, 1999 (based upon
the closing sale prices of the Company's Common Stock on the American Stock
Exchange on March 2, 1999 and June 2, 1999 of $6.625 and $6.9375 per share,
respectively) and payments made on behalf of Mr. Litt in respect of income
taxes on such awards. As of June 30, 1999, the value of the 20,000 shares
of Common Stock issued to Mr. Litt pursuant to these stock bonus awards was
$170,000 (based upon the closing sale price of the Company's Common Stock
on the American Stock Exchange on June 30, 1999 of $8.50 per share).
(7) Consists of contributions by the Company to the Company's 401(k) Savings
Plan on behalf of Mr. Litt of $4,623 and $4,507 for fiscal years 1999 and
1998, respectively, and income recorded for fiscal year 1999 as a result of
the partial forgiveness of a loan made by the Company to Mr. Litt for the
purpose of payment of income taxes on stock grants. See "Executive
Compensation -- 401(k) Savings Plan" and "Executive Compensation --
Employment Agreements."
(8) Consists of relocation expenses paid by the Company on behalf of Mr. Litt.
See "Executive Compensation -- Employment Agreements."
(9) Represents the fair market value of two stock bonus awards of 10,000 shares
of Common Stock each granted on March 2, 1999 and June 2, 1999 (based upon
the closing sale prices of the Company's Common Stock on the American Stock
Exchange on March 2, 1999 and June 2, 1999 of $6.625 and $6.9375 per share,
respectively) and payments made on behalf of Mr. Monsorno in respect of
income taxes on such awards. As of June 30, 1999, the value of the 20,000
shares of Common Stock issued to Mr. Monsorno pursuant to these stock bonus
awards was $170,000 (based upon the closing sale price of the Company's
Common Stock on the American Stock Exchange on June 30, 1999 of $8.50 per
share).
(10) Consists of contributions by the Company to the Company's 401(k) Savings
Plan on behalf of Mr. Monsorno of $4,637, $4,808 and $4,670 for fiscal
years 1999, 1998 and 1997, respectively, and income recorded for fiscal
years 1999, 1998 and 1997 of $1,821, $1,932 and $1,932, respectively, 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 a 10,000 share stock
bonus made to him in April 1994. See "Executive Compensation -- 401(k)
Savings Plan."
(11) Consists of contributions by the Company to the Company's 401(k) Savings
Plan on behalf of Mrs. Kelly of $3,954, $3,951 and $3,371 for fiscal years
1999, 1998 and 1997, respectively, and income recorded for fiscal years
1999, 1998 and 1997 of $1,821, $1,932 and $1,932, respectively, as a result
of the partial forgiveness of a loan made by the Company to Mrs. Kelly for
the purpose of paying income taxes on a 10,000 share stock bonus made to
her in April 1994. See "Executive Compensation -- 401(k) Savings Plan."
6
<PAGE>
(12) Mr. Wolf was appointed Vice President - Thin Film Operations of the Company
on March 3, 1999. The information contained in the table represents the
compensation paid to Mr. Wolf during the full fiscal year in all
capacities. Mr. Wolf was not an executive officer of the Company in fiscal
years 1998 and 1997.
(13) Consists of contributions by the Company to the 401(k) Savings Plan on
behalf of Mr. Wolf. See "Executive Compensation -- 401(k) Savings Plan."
OPTION GRANTS IN LAST FISCAL YEAR
The following table sets forth certain information concerning options
granted to the Named Executive Officers during the fiscal year ended June 30,
1999. All options were granted pursuant to the Company's 1997 Stock Option Plan.
<TABLE>
<CAPTION>
Potential Realizable Value at
Assumed Annual Rates
Individual Grants of Stock Price Appreciation for Option Term
------------------------------------------------------------ --------------------------------------------
Percent of
Number of Total Options
Securities Granted to Exercise of
Underlying Employees in Base Price
Options Granted Fiscal Year ($/Share)(1) Expiration Date 5% 10%
--------------- ----------- ------------ --------------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C>
Victor Insetta 4,000 4.7% $ 8.9375 7/29/2003 $ 9,875 $ 21,825
Victor Insetta 2,000 2.4% $ 8.80 11/20/2003 $ 4,850 $ 10,750
Stuart Litt 2,000 2.4% $ 8.00 11/20/2008 $ 10,075 $ 25,500
Rich Monsorno 2,000 2.4% $ 8.00 11/20/2008 $ 10,075 $ 25,500
Kathy Kelly 2,000 2.4% $ 8.00 11/20/2008 $ 10,075 $ 25,500
Judah Wolf 2,000 2.4% $ 8.00 11/20/2008 $ 10,075 $ 25,500
</TABLE>
(1) All options were granted at an exercise price equal to the fair market
value of the Common Stock on the date of grant, except those granted to
Victor Insetta which were granted at 110% of fair market value.
AGGREGATE OPTION EXERCISES DURING THE
FISCAL YEAR ENDED JUNE 30, 1999
AND FISCAL YEAR-END OPTION VALUES
The following table sets forth certain information concerning the number
and value of shares underlying exercisable and unexercisable stock options as of
June 30, 1999 held by the Named Executive Officers. None of the Named Executive
Officers exercised any options during the fiscal year ended June 30, 1999.
Number of Shares Value of Unexercised
Underlying Unexercised In-the-Money Options at
Options at Fiscal Year End Fiscal Year End(1)
-------------------------- --------------------------
Exercisable Unexercisable Exercisable Unexercisable
----------- -------------- ----------- -------------
Victor Insetta 1,000 5,000 ------ ------
Stuart Litt 2,000 4,000 $ 500 $ 2,000
Kathleen M. Kelly 2,000 4,000 $ 500 $ 2,000
Richard Monsorno 2,000 4,000 $ 500 $ 2,000
Judah Wolf 2,000 4,000 $ 500 $ 2,000
(1) Based upon the closing sale price of the Common Stock on the American Stock
Exchange on June 30, 1999 of $8.50 per share.
7
<PAGE>
EMPLOYMENT AGREEMENTS
Victor Insetta
The Company has entered into an employment agreement with Victor Insetta,
the Company's President and Chief Executive Officer. The term of the agreement
currently expires on March 1, 2000. Pursuant to its terms, the agreement was
automatically renewed for a one-year period beginning on March 1, 1999. In the
absence of written notice to the contrary by either party at least 120 days
prior to March 1 of subsequent years, the Agreement will continue to be
automatically renewed for one-year periods.
Pursuant to the agreement, Mr. Insetta was paid base compensation for the
fiscal year ended June 30, 1999 at the rate of $270,270 per annum through March
1, 1999, and at the rate of $297,297 per annum during the remainder of the
fiscal year. The agreement provides for further increases in Mr. Insetta's base
salary by the Board of Directors from time to time in its sole discretion. The
agreement also provides that, as additional annual compensation, Mr. Insetta is
also entitled to an amount equal to 5% of the Company's net income (before such
incentive compensation and before income taxes). In September 1998, the Company
amended the employment agreement, effective for the fiscal year ended June 30,
1998, to allow the Company, at its option, to pay the additional annual
compensation in stock, cash or a combination thereof, subject to certain
limitations. For the fiscal year ended June 30, 1999, the Company elected to pay
all of Mr. Insetta's additional compensation in cash. For the fiscal year ended
June 30, 1998, the Company elected to pay 50% of Mr. Insetta's additional annual
compensation in cash and 50% in shares of Common Stock. See "Executive
Compensation -- Summary Compensation Table."
The agreement further 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
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, an amount
equal to the greater of (i) all of the compensation due to Mr. Insetta under the
agreement through the end of the then existing term of the agreement, or (ii)
three times Mr. Insetta's average annual compensation under the 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 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
Company. In addition, Mr. Insetta has agreed that, for a period of one year
following the termination of his employment (other than termination by the
Company without cause), 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 agreement.
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.
8
<PAGE>
Stuart Litt
In September 1996, the Company entered into an employment agreement with
Stuart P. Litt, the Company's Senior Vice President - Operations. Pursuant to
the agreement, Mr. Litt was to be employed for a period of three years at an
annual base salary of $150,000. Mr. Litt's annual base salary was increased
effective September 15, 1997 to $165,000. In addition, Mr. Litt received
quarterly cash bonuses equal to one half of one percent of the Company's net
income (before such incentive compensation and before income taxes) pursuant to
the Company 's officer and management employee bonus program. See "Executive
Compensation -- Bonus Programs." The agreement provides that if Mr. Litt's
employment by the Company is terminated at any time after the first three years
of employment, Mr. Litt will be entitled to a severance payment of $100,000. As
of September 1999, the agreement between Mr. Litt and the Company expired (other
than the provision relating to severance). Mr. Litt is currently being employed
by the Company under the principal economic terms of the original agreement, and
it is the current intention of both parties to continue his employment on such
terms.
Pursuant to the agreement, the Board of Directors granted to Mr. Litt a
restricted stock award of 34,000 shares of Common Stock. Pursuant to this award,
Mr. Litt was to receive 24,000 shares in 24 monthly installments of 1,000 shares
on the 15th of each month commencing October 15, 1996, provided he was still
actively employed by the Company on each such date, and an additional 10,000
shares on December 15, 1996, again provided he was still actively employed by
the Company on such date. Through June 30, 1997, Mr. Litt had received 18,000
shares of Common Stock pursuant to this program. Subsequent to May 15, 1997, the
Company and Mr. Litt mutually agreed to terminate the monthly 1,000 share awards
while they discussed alternative structures for future awards.
In August 1997, the Board of Directors and Mr. Litt agreed to amend the
terms of Mr. Litt's restricted stock award program. On August 19, 1997, he was
awarded an additional 2,301 shares of Common Stock and the Company set aside
$11,700 for Mr. Litt to pay a portion of the income taxes payable by him in
respect of such award. Each subsequent month commencing September 1997 through
September 1998, Mr. Litt received a number of shares (rounded to the nearest
whole share) as follows:
Number
Date of Issuance of Shares
---------------- ---------
September 15, 1997 771
October 15, 1997 789
November 17, 1997 768
December 15, 1997 782
January 15, 1998 795
February 16, 1998 764
March 16, 1998 836
April 15, 1998 843
May 15, 1998 867
June 15, 1998 901
July 15, 1998 920
August 15, 1998 939
September 15, 1998 993
------
Total 13,269
======
9
<PAGE>
Judah Wolf
In January 1998, the Company entered into a four year employment agreement
with Judah Wolf, the Company's Vice President - Thin Film Operations. The
agreement provides for annual base compensation of $90,000. In addition Mr. Wolf
receives a quarterly incentive bonus equal to a percentage of the Thin Film
Profit Contribution (as defined in the agreement). The percentage to be applied
to the Thin Film Profit Contribution is 5.0% for calendar year 1998, 4.0%, for
calendar year 1999 and 3.5% for each of calendar years 2000 and 2001. Mr. Wolf
also receives a quarterly bonus pursuant to the Company's officer and management
employee bonus program equal to one half of one percent of the Company's net
income before such incentive compensation and income taxes less an amount equal
to one half of one percent of the Thin Film Profit Contributions. See "Executive
Compensation -- Bonus Programs."
The agreement may be terminated by the Company upon 30 days' notice. If the
agreement is terminated for reasons other than disability or cause, Mr. Wolf is
entitled to severance equal to the lesser of (i) $100,000, or (ii) 60% of his
highest total compensation for any consecutive 12 months during the last 24
months of Mr. Wolf's employment, payable in 24 equal monthly installments.
The agreement includes a provision that allows the Company to purchase
certain ceramic substrate inventory from Mr. Wolf. The Company exercised that
privilege in September 1998 and purchased approximately $200,000 of inventory
from Mr. Wolf in exchange for 12,700 shares of Common Stock (based upon the
closing sale price of the Company's Common Stock on the American Stock Exchange
on September 11, 1998 of $ 7.87 per share) and $100,000 in cash. The fair market
value of such stock on June 30, 1999 was $107,950 (based upon the closing sale
price of the Company's Common Stock on the American Stock Exchange on such date
of $8.50).
1997 STOCK OPTION PLAN
In April 1997, the Company's Board of Directors adopted the 1997 Stock
Option Plan. The 1997 Stock Option Plan was approved by stockholders at the
Company's annual meeting in November 1997. The purpose of the 1997 Stock Option
Plan is to provide a means whereby selected employees, officers, directors,
agents, consultants and independent contractors of the Company or of any parent
or subsidiary thereof, may be granted options to purchase shares of the
Company's Common Stock, in order to attract and retain the services or advice of
such persons and to provide added incentive to them by encouraging stock
ownership in the Company.
The 1997 Stock Option Plan is administered by the Board of Directors of
the Company, except to the extent the Board delegates its authority to a
committee of the Board. The administrator of the 1997 Stock Option Plan is
hereinafter referred to as the "Plan Administrator." The Plan Administrator has
the authority, in its discretion, to determine all matters relating to the
options to be granted under the 1997 Stock Option Plan, including selection of
the individuals to be granted options, the number of shares to be subject to
each option, the exercise price, and all other terms and conditions of the
options, including the designation of such options as incentive stock options or
non-qualified stock options.
The 1997 Stock Option Plan provides for the grant of options to purchase
up to 400,000 shares of Common Stock. If any option granted under the 1997 Stock
Option Plan shall expire, be surrendered, exchanged for another option, canceled
or terminated for any reason without having been exercised in full, the
unpurchased shares subject thereto shall thereupon again be available for
purposes of the 1997 Stock Option Plan.
Options granted under the 1997 Stock Option Plan may be either
"incentive stock options," as defined in Section 422A of the Code, or
"non-qualified stock options." An incentive stock option may be granted only to
any individual who, at the time the option is granted, is an employee of the
Company or any parent or subsidiary of the Company. A non-qualified stock option
may be granted to any director, employee, officer, agent, consultant or
independent contractor of the Company or any parent or subsidiary of the
Company.
10
<PAGE>
The exercise price of an incentive stock option may not be less than the
fair market value per share of the Common Stock on the date of grant (110% of
the fair market value of the Common Stock on such date in the case of incentive
stock options granted to employees who own more than 10% of the total combined
voting power of the Company on the date of grant (any such person, a "10%
Stockholder")), and not less than the par value per share of the Common Stock
with respect to non-qualified stock options.
The term of each stock option granted under the 1997 Stock Option Plan
shall be as established by the Plan Administrator but shall not be more than 10
years from the date of grant (five years in the case of an incentive stock
option granted to a 10% Stockholder). The Plan Administrator may establish a
vesting schedule with respect to any option granted under the 1997 Stock Option
Plan setting forth the time or times at which portions of such option shall
become exercisable.
Payment of the option exercise price shall be made in full at the time
notice of exercise of the option is delivered to the Company and shall be in
cash, bank certified or cashier's check or personal check. The Plan
Administrator can determine at the time the option is granted for incentive
stock options, or at any time before exercise for non-qualified stock options,
that additional forms of payment will be permitted, including delivery of shares
of stock of the Company held by an Optionee having a fair market value equal to
the exercise price, or withholding from the shares that would otherwise be
issued upon exercise of an option that number of shares having a fair market
value equal to the option exercise price.
Options granted under the 1997 Stock Option Plan may not be transferred,
assigned, pledged or hypothecated in any manner (whether by operation of law or
otherwise) other than (i) by will or by the applicable laws of descent and
distribution, (ii) pursuant to a qualified domestic relations order or (iii) as
otherwise determined by the Plan Administrator and set forth in the applicable
Option Agreement. No option shall be exercisable after termination of the
recipient's relationship with the Company or any parent or subsidiary of the
Company unless such termination occurs by reason of retirement with the consent
of the Company or death. In the event of the retirement of a recipient of
options with the consent of the Company, the options or unexercised portions
thereof which were otherwise exercisable on the date of retirement shall expire
unless exercised within a period of three months after the date of retirement.
In the event of the death of a recipient of options while an employee, officer,
director, agent, consultant or independent contractor of the Company or any
parent or subsidiary of the Company or in the event of the death of the
recipient within the three month period following termination of such person's
employment or other association with the Company by reason of retirement with
the consent of the Company, the options which were otherwise exercisable on the
date of such termination shall be exercisable by his or her personal
representatives, heirs, or legatees at any time prior to the expiration of one
year from the date of his or her death. In no event, however, shall an option be
exercisable after ten years from the date it is granted (five years in the case
of an incentive stock option granted to a 10% Stockholder). The Plan
Administrator may, if it determines that to do so would be in the Company's best
interests, provide in a specific case or cases for the exercise of options which
would otherwise terminate upon termination of a recipient's relationship with
the Company for any reason, upon such terms and conditions as the Plan
Administrator determines to be appropriate.
The Board may at any time suspend, amend or terminate the 1997 Stock
Option Plan, provided that, except in certain cases relating to mergers,
consolidations, reorganizations and similar transactions, the approval of the
holders of a majority of the Company's outstanding shares of voting capital
stock present, in person or by proxy, and entitled to vote at any meeting shall
be necessary for the adoption by the Board of any amendment which will: (i)
increase the number of shares which are to be reserved for the issuance upon
exercise of options under the 1997 Stock Option Plan; (ii) permit the granting
of stock options to a class of persons other than those presently permitted to
receive stock options under the 1997 Stock Option Plan; or (iii) require
shareholder approval under applicable law, including Section 16(b) of the
Exchange Act. Unless sooner terminated by the Board, the 1997 Stock Option Plan
shall terminate on April 1, 2007.
11
<PAGE>
As of June 30, 1999, there were seven executive officers, four directors
who are not employees of the Company and 473 employees who were not executive
officers who were eligible to participate in the 1997 Stock Option Plan. As of
June 30, 1999, incentive stock options to purchase 314,500 shares of Common
Stock had been granted to 222 employees at exercise prices ranging from $8.00
per share to $11.25 per share, including options to purchase 30,000 shares
granted to the Named Executive Officers. See "Executive Compensation - Option
Grants in Last Fiscal Year."
BONUS PROGRAM
The Company has a bonus program for officers other than Mr. Insetta and for
certain other management employees pursuant to which such officers and other
employees are eligible to receive quarterly cash bonuses equal to one half of
one percent of the Company's net income (before such bonuses and before income
tax). In the event of a net loss in any quarter, the amount of such net loss is
applied to reduce the bonus payable in future quarters in that fiscal year. In
the fiscal year ended June 30, 1999, the Company paid bonuses aggregating
$59,140 under this program, including bonuses to Mr. Litt, Mr. Monsorno and Mrs.
Kelly of $16,380, $16,380 and $16,380, respectively. See "Executive Compensation
- -- Summary Compensation Table."
Mr. Wolf participates in a modified version of this bonus program as stated
in his employment agreement. In the fiscal year ended June 30, 1999, the Company
paid Mr. Wolf bonuses aggregating $81,259. See "Employment Agreements -- Judah
Wolf" and "Executive Compensation -- Summary Compensation Table."
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 $10,000 for the calendar year 1999. 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, 1999, the Company's contributions to this plan were $371,000,
including contributions on behalf of Mr. Insetta, Mr. Litt, Mr. Monsorno, Mrs.
Kelly and Mr. Wolf of $5,159, $4,623, $4,637, $3,954 and $4,691, respectively.
See "Executive Compensation -- Summary Compensation Table."
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During the fiscal year ended June 30, 1999, the Compensation Committee of
the Board of Directors consisted of Messrs. Garrard and Blumkin. During the
fiscal year ended June 30, 1999, decisions with respect to officers'
compensation were made by the entire Board. See "Executive Compensation --
Report on Executive Compensation." No officer who serves as a director of the
Company participated in matters involving the evaluation of his own performance
or the setting of his own compensation.
REPORT ON EXECUTIVE COMPENSATION
The Board of Directors has established a Compensation Committee which
currently consists of Messrs. Garrard and Blumkin. While the Compensation
Committee has the power and authority of the Board of Directors with respect to
the compensation of employees, the Committee has historically provided
information and assistance to the full Board of Directors of the Company which
has been the body responsible for making decisions with respect to employee
compensation issues. No officer of the Company who serves on the Board of
Directors or on the Compensation Committee participates in matters involving the
evaluation of his own performance or the setting of his own compensation.
The Company seeks to establish compensation plans and policies which are
designed to (i) attract and retain highly qualified employees at all levels,
(ii) provide rewards that are closely linked to the Company's performance, and
(iii) align the interests of the Company's employees with those of its
stockholders through stock ownership.
12
<PAGE>
The Company monitors the compensation paid to various levels of employees on
both a geographic and industry basis. Moreover, the Company has established
bonus compensation programs for virtually all levels of employees pursuant to
which they are rewarded based upon the overall profitability of the Company.
Finally, the Company has over the past several years awarded stock bonuses to
several executive officers and supervisory employees in order to reward them for
their efforts on behalf of the Company and to provide them with a direct stake
in the Company's future. In April 1997, the Board adopted the 1997 Stock Option
Plan in order to expand the universe of individuals who are important to the
Company's success who may be eligible for stock-based compensation.
The base salary of Victor Insetta, the Company's President and Chief
Executive Officer, for fiscal year 1999 was based principally upon his rights
under the employment agreement described above. The agreement, which was entered
into in 1985 and has been amended several times, currently provides for a
minimum base salary of $297,297. This amount was increased from the original
amount of $225,000 to $234,000 effective October 1, 1992, $246,000 effective
March 1, 1994, $270,270 effective May 12, 1997, and to the current amount,
$297,297, effective March 2, 1999. These increases were consistent with cost of
living increases granted to virtually all employees of the Company. The Board
also believed that they were warranted in order to bring Mr. Insetta's base
compensation in line with salaries being paid to other chief executive officers
of similar companies and in recognition of the Company's performance.
Mr. Insetta's employment agreement also entitles him to annual incentive
compensation equal to 5% of the Company's net income (before such incentive
compensation and before income taxes) which for the fiscal year ended June 30,
1999 amounted to $174,489. The Board believes that it is appropriate for the
compensation of the Chief Executive Officer of the Company to be based, in
substantial part, on the Company's overall performance.
In September 1998, Mr. Insetta's employment agreement was further amended
to allow the Company to pay Mr. Insetta's annual incentive compensation in cash,
Common Stock or a combination thereof. The determination of the manner of
payment is made each year by the Board of Directors, in its sole discretion,
subject to certain limitations. For the fiscal year ended June 30, 1998, the
Board (with Mr. Insetta abstaining) elected to pay 50% of Mr. Insetta's annual
incentive compensation in cash and 50% in Common Stock. This was done to
conserve cash and to more closely ally Mr. Insetta's overall compensation to the
performance of the Company's stock. For the fiscal year ended 1999, the Board
(with Mr. Insetta abstaining) elected to pay 100% of Mr. Insetta's annual
incentive compensation in cash. The Board believed this was appropriate in light
of the Company's cash position and the current level of Mr. Insetta's stock
ownership in the Company.
Rubin Blumkin
O. Julian Garrard III
Victor Insetta
Stuart P. Litt
Thomas J. Volpe
Chester E. Spence
October 19, 1999
13
<PAGE>
PERFORMANCE GRAPH
The graph below compares the cumulative total stockholder return on the
Common Stock from July 1, 1994 through June 30, 1999, with the cumulative total
return of the American Stock Exchange Total Return Index and a peer group of
companies selected by the Company. The peer group is composed of ten
publicly-held manufacturers of capacitors and other electronic components,
including the Company. Total cumulative return values were calculated based on
the assumption of $100 invested on July 1, 1994, assuming reinvestment of
dividends. The stock price performance shown on the graph below is not
necessarily indicative of future price performance.
COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN*
AMONG AMERICAN TECHNICAL CERAMICS CORP.,
THE AMEX MARKET VALUE INDEX AND A PEER GROUP
(Graphic Omitted)
o $100 INVESTED ON JULY 1, 1994 IN STOCK
OR INDEX, INCLUDING REINVESTMENT OF
DIVIDENDS. FISCAL YEAR ENDING JUNE 30.
<TABLE>
<CAPTION>
Fiscal Year Ended June 30 Cumulative Year Return
------------------------------------------------
1995 1996 1997 1998 1999
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
American Technical Ceramics Corp. 396 253 459 292 267
Peer Group (1) 153 123 161 108 188
Amex Market Value 118 136 151 177 199
</TABLE>
- ------------------
(1) Includes the Company and Aeroflex, Inc., AVX Corp., California Micro
Devices Corp., Cts Corp., Merrimac Industries, Inc., Micronetics Wireless,
Inc. , Sawtek, Inc.,Vari-1 Company, Inc., and Vishay Intertechnology, Inc
14
<PAGE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
RELATED PARTY LEASES
The Company presently leases certain real property from its President,
Chief Executive Officer and principal stockholder, Victor Insetta, and entities
controlled by him. In the case of each such lease, the Company has periodically
obtained appraisal letters indicating that the fixed rentals in effect did not
exceed fair market rentals in the area. The Company does not intend to lease any
additional real property 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, which was
amended several times, most recently as of September 30, 1998, to reflect the
construction of additional buildings on the premises, is for a term expiring in
2010.
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 Bank Trust
Company, N.A. ("Barnett"). The Florida Facility was then sold to VPI under an
Installment Sale and Security Agreement (the "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.
Under the lease, ATC-Florida is responsible to pay to Barnett, for the
account of VPI, the principal of, premium, if any, and interest on the Bonds,
all expenses of the trustee under the Indenture relating thereto (the
"Indenture") and all other payments required to be made by VPI under the
Agreement or the Indenture. In addition, ATC-Florida is responsible to pay to
VPI, as supplemental rent, annually, the difference between the sum of $461,239
(adjusted upward (but not downward) annually based upon the increase, if any, in
the Consumer Price Index for all Urban Consumers for the last reported month
available on April 1 of each year during the lease compared to such index for
May 1998) and the amount payable to Barnett pursuant to the preceding sentence.
ATC-Florida is also 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 at the end of the lease
term to purchase the Florida Facility at its fair market value and has a right
of first offer to purchase the Florida Facility if VPI elects to sell it in the
interim.
In the fiscal year ended June 30, 1999, the aggregate rental paid by
ATC-Florida under this lease was $512,763. In addition, the Company incurred
expenses of $98,453 for real estate taxes and $237,352 for utilities.
15
<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 lease for the New York Property expired in February 1996. The
Company leased the New York Property on a month-to-month basis on the same terms
as the terms provided in the lease until January 1, 1997 when the lease was
renewed and extended for a five-year term. The lease was amended and restated as
of September 25, 1998. The base rent is based upon the annual payments of
principal and interest payable under the mortgage encumbering such property. The
base rent reflects an adjustment upward commencing January 1, 1990 and as of
each succeeding calendar year 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. Current monthly
installments are $40,710. 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, 1999, the total amount of rent paid by the
Company for this facility was $484,020. In addition, the Company incurred
expenses of $57,563 for real estate taxes, $223,306 for utilities and $13,300
for leasehold improvements.
The Company has the option to purchase the New York Property at any time
during the lease at its fair market value and a right of first offer if Mr.
Insetta elects to sell it in the interim.
INVENTORY
See "Executive Compensation -- Employment Agreements" for information
concerning the purchase by the Company of certain inventories of ceramic
substrate from Judah Wolf, the Company's Vice President - Thin Film Operations.
16
<PAGE>
PROPOSAL 2
RATIFICATION OF INDEPENDENT ACCOUNTANTS
KPMG LLP, the independent public accountants who have audited the Company's
financial statements for the past nine years, have been appointed by the Board
of Directors of the Company to audit the Company's consolidated financial
statements for the fiscal year ending June 30, 2000. The Board of Directors
believes that the selection of an independent accountant to audit the financial
statements of the Company prepared by management is an appropriate matter for
stockholder consideration. If the stockholders do not ratify the selection of
KPMG LLP, the Board of Directors will consider the selection of another firm of
independent certified public accountants to audit the Company's consolidated
financial statements for the fiscal year ending June 30, 2000. Representatives
of KPMG LLP may be present at the Annual Meeting and, if present, 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 LLP AS THE INDEPENDENT PUBLIC ACCOUNTANTS TO AUDIT THE
COMPANY'S CONSOLIDATED FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDING JUNE 30,
2000 WHICH IS DESIGNATED AS PROPOSAL 2 ON THE ENCLOSED PROXY CARD.
ANNUAL REPORT TO STOCKHOLDERS
The Company will provide to any stockholder, without charge, upon written
request to the Secretary of the Company, a copy of the Company's Annual Report
on Form 10-K for the fiscal year ended June 30, 1999.
DEADLINE FOR STOCKHOLDER PROPOSALS FOR 2000 ANNUAL MEETING
The Company expects to hold its annual meeting of stockholders for the
fiscal year ending June 30, 2000 in November or December 2000. 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 30, 2000.
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.
BY ORDER OF THE BOARD OF DIRECTORS
KATHLEEN M. KELLY
Secretary
October 19, 1999
17
<PAGE>
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 19, 1999 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
of which 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 or black ink.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR (1) AND (2).
<TABLE>
<CAPTION>
<S> <C>
1. ELECTION OF DIRECTORS:
FOR ALL NOMINEES LISTED BELOW [ ] WITHHOLD AUTHORITY [ ]
(EXCEPT AS MARKED TO THE CONTRARY BELOW) TO VOTE FOR ALL NOMINEES LISTED BELOW
</TABLE>
Victor Insetta, Rubin Blumkin, O. Julian Garrard III, Stuart P. Litt,
Chester E. Spence, and Thomas J. Volpe
(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.
<PAGE>
2. PROPOSAL TO RATIFY THE APPOINTMENT OF KPMG LLP AS THE INDEPENDENT PUBLIC
ACCOUNTANTS OF THE CORPORATION FOR THE FISCAL YEAR ENDING JUNE 30, 2000.
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, administrator, 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 , 1999
-----------------------------------------------------------------
SIGNATURE(S)
-----------------------------------------------------------------
SIGNATURE(S)
PLEASE SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE
ENCLOSED ENVELOPE.
ATC # 001-897 Rev. B; 9/99
