SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES EXCHANGE ACT OF 1934
[ X ] Filed by the Registrant
[ ] 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 Rule 14a-11(c) or Rule 14a-12
MEASUREMENT SPECIALTIES, INC.
(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)(1) and0-11.
(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>
MEASUREMENT SPECIALTIES, INC.
80 LITTLE FALLS ROAD
FAIRFIELD, NEW JERSEY 07004
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON SEPTEMBER 18, 2000
To the Stockholders of Measurement Specialties, Inc.:
You are cordially invited to attend the Annual Meeting of Stockholders of
Measurement Specialties, Inc. (the "Company"), a New Jersey corporation, to be
held at the offices of the American Stock Exchange, 86 Trinity Place, New York,
New York on Monday, September 18, 2000, at 10:00 a.m. local time, for the
following purposes:
1. To elect three members to the Board of Directors of the Company to
serve until their respective successors are elected and qualified;
2. To ratify the selection by the Company of Arthur Andersen, LLP,
independent public accountants, to audit the financial statements of
the Company for the year ending March 31, 2001; and
3. To transact such other matters as may properly come before the
meeting or any adjournment thereof.
Only stockholders of record at the close of business on August 11, 2000 (the
"Record Date") are entitled to notice of and to vote at the meeting.
A proxy statement and proxy are enclosed herewith. If you are unable to attend
the meeting in person you are urged to sign, date, and return the enclosed proxy
promptly in the enclosed addressed envelope which requires no postage if mailed
within the United States. If you attend the meeting in person, you may withdraw
your proxy and vote your shares. Also enclosed herewith is the Company's Annual
Report on Form 10-K, including financial statements for the fiscal year ended
March 31, 2000.
By Order of the Board
of Directors
Damon Germanton, Secretary
Fairfield, New Jersey
August 7, 2000
<PAGE>
PROXY STATEMENT
MEASUREMENT SPECIALTIES, INC.
80 LITTLE FALLS ROAD
FAIRFIELD, NEW JERSEY 07004
INTRODUCTION
This proxy statement is furnished in connection with the solicitation of proxies
for use at the annual meeting ("Annual Meeting") of stockholders of Measurement
Specialties, Inc. (the "Company"), to be held on Monday, September 18, 2000, and
at any adjournments thereof. The accompanying proxy is solicited by the Board
of Directors of the Company and is revocable by the stockholder by notifying the
Company's secretary at any time before it is voted, or by voting in person at
the Annual Meeting. The solicitation will be made by mail and in addition, the
telephone, telegrams, facsimile, and other electronic communication and personal
interviews may be utilized. This proxy statement and accompanying proxy will be
distributed to stockholders beginning on or about August 16, 2000. The
principal executive offices of the Company are located at 80 Little Falls Road,
Fairfield, New Jersey 07004, telephone (973) 808-1819.
OUTSTANDING SHARES AND VOTING RIGHTS
Only stockholders of record at the close of business on August 11, 2000 are
entitled to receive notice of, and vote at the Annual Meeting. As of August 11,
2000, the number and class of stock outstanding and entitled to vote at the
meeting was 4,021,920 shares of common stock, no par value per share ("Common
Stock"). Each share of Common Stock is entitled to one vote on each matter. No
other class of securities will be entitled to vote at the meeting. There are no
cumulative voting rights.
The nominees receiving the highest number of votes cast by the holders of Common
Stock will be elected as directors of the Company. The affirmative vote of at
least a majority of the shares represented and voting at the Annual Meeting at
which a quorum is present (which shares voting affirmatively also constitute at
least a majority of the required quorum) is necessary for approval of Proposal
No. 2. A quorum is representation in person or by proxy at the Annual Meeting
of a majority of the outstanding shares of the Company.
Votes cast by proxy or in person at the Annual Meeting will be tabulated by the
inspectors of election appointed for the meeting, who will also determine
whether or not a quorum is present. The inspectors of election will treat
abstentions, as well as shares represented by proxies submitted by brokers who
indicate that they do not have authority to vote on a particular matter as
shares that are present for purposes of deterring the presence of a quorum, but
as unvoted (i.e., not cast) for purposes of determining their approval of the
particular matter in question.
<PAGE>
PROPOSALS TO SHAREHOLDERS
-------------------------
PROPOSAL NO. 1
ELECTION OF DIRECTORS
Each nominee to the Board of Directors will serve for a term of three (3) years,
or until his earlier resignation, removal from office, death or incapacity.
Unless otherwise specified, the enclosed proxy will be voted in favor of the
election of Joseph R. Mallon Jr., Theodore J. Coburn, and the Hon. Dan J.
Samuel. Information is furnished below with respect to each nominee.
The following information with respect to the principal occupation or employment
of the nominees, the name and principal business of the corporation or other
organization in which such occupation or employment is carried on and other
affiliations and business experience during the past five years has been
furnished to the Company by the respective nominee:
JOSEPH R. MALLON JR., (55) who has served as a Director since April 1, 1992,
became the Company's President, Chief Executive Officer and Chairman of the
Board on April 1, 1995. Mr. Mallon has thirty-five years experience in
electronic sensor and MEMS technology. He is a recognized pioneer in
micromachining (the three-dimensional sculpting of silicon), having published 50
technical papers, and been awarded 40 patents. In October 1985, Mr. Mallon
co-founded NovaSensor, where he served as Co-President and a Director until its
acquisition by Lucas Industries, Inc., a United States subsidiary of Lucas
Industries, UK, in January 1990. From that time until his departure in January
1993, Mr. Mallon was the Executive Vice President, and Director of Lucas
NovaSensor. Thereafter, until joining Measurement Specialties, Mr. Mallon
pursued a graduate program at Stanford University. Mr. Mallon serves on the
Board of Directors of Sepragen Corporation and Sensant Corporation. Mr. Mallon
serves on the Board's Operations Committee.
THE HON. DAN J. SAMUEL, (75) who was elected a Director on October 27, 1994, has
been a business consultant since 1986. Previously, Mr. Samuel served as
President and Chief Executive Officer of Scallop Corporation, the New York
subsidiary of the Royal Dutch/Shell Group of Companies. Mr. Samuel currently
also serves on the Board of Directors of Canadian Overseas Packaging Industries.
Mr. Samuel chairs the Board's Compensation Committee and serves on its Audit and
Governance Committees.
THEODORE JOHN COBURN, (47) was elected to the board on October 20, 1995. Mr.
Coburn is a partner of Brown, Coburn & Co., an investment banking firm (since
1991) and an Education Associate at Harvard University Graduate School of
Education (since 1996). Mr. Coburn is a Director of the Nicholas-Applegate
Fund, Inc. (since 1987), Emerging Germany Fund (since 1991), and Video Update,
Inc. (since 1998). Previously, Mr. Coburn was the Managing Director of the
Global Equity Transactions Group and a member of the Board of Directors of
Prudential Securities (from 1986 to 1991). Mr. Coburn also served as a Managing
Director of Merrill Lynch Capital Markets (from 1983 to 1986). Mr. Coburn
received a BS, University of Virginia, 1975; an MBA, Columbia University, 1978;
a Master of Education, Harvard University, 1993; a Master of Divinity, Harvard
University, 1994; and Certificate of Advanced Studies, Harvard University, 1996.
Mr. Coburn serves on the Board's Audit, Compensation, and Governance Committees.
THE BOARD OF DIRECTORS DEEMS PROPOSAL NO. 1 TO BE IN THE BEST INTERESTS OF THE
COMPANY AND ITS STOCKHOLDERS AND RECOMMENDS A VOTE "FOR" THE ELECTION OF THE
ABOVE-NAMED NOMINEES AS DIRECTORS OF THE COMPANY.
4
<PAGE>
DIRECTORS AND EXECUTIVE OFFICERS
The current executive officers and directors of the Company are set forth below:
<TABLE>
<CAPTION>
NAME AGE POSITIONS AND OFFICES DIRECTOR SINCE
--------------------- --- --------------------------------------- ----------------
<S> <C> <C> <C>
Joseph R. Mallon Jr. 55 Chief Executive Officer, April 1, 1992
Director, and Chairman
Damon Germanton 57 President, Chief Operating Officer, March 5, 1981
Secretary, and Director
John D. Arnold 46 Director June 19, 1995
Theodore Coburn 47 Director October 20, 1995
Steven Petrucelli 48 Director June 15, 1992
Dan Samuel 75 Director October 27, 1994
Mark W. Cappiello 46 Vice President of Sales and Marketing N/A
Kirk J. Dischino 41 Chief Financial Officer, Treasurer, and N/A
Assistant Secretary
</TABLE>
Biographical information about current Directors and Executive Officers follows:
JOSEPH R. MALLON JR., (55) who has served as a Director since April 1, 1992,
became the Company's President, Chief Executive Officer and Chairman of the
Board on April 1, 1995. Mr. Mallon has thirty-five years experience in
electronic sensor and MEMS technology. He is a recognized pioneer in
micromachining (the three-dimensional sculpting of silicon), having published 50
technical papers, and been awarded 40 patents. In October 1985, Mr. Mallon
co-founded NovaSensor, where he served as Co-President and a Director until its
acquisition by Lucas Industries, Inc., a United States subsidiary of Lucas
Industries, UK, in January 1990. From that time until his departure in January
1993, Mr. Mallon was the Executive Vice President, and Director of Lucas
NovaSensor. Thereafter, until joining Measurement Specialties, Mr. Mallon
pursued a graduate program at Stanford University. Mr. Mallon serves on the
Board of Directors of Sepragen Corporation and Sensant Corporation. Mr. Mallon
serves on the Board's Operations Committee.
JOHN D. ARNOLD, (46) was appointed to the Board on June 19, 1995. Mr. Arnold
has been in private law practice since 1989, primarily representing small
technology companies often with significant relationships with Asian investors
and/or manufacturers. Before 1989, Mr. Arnold was employed with the law firm of
Wilson, Sonsini, Goodrich & Rosati in Palo Alto, California and prior thereto
with Foley & Lardner in Milwaukee, Wisconsin. Mr. Arnold serves on the Board's
Compensation, Audit and Governance Committees.
5
<PAGE>
THEODORE JOHN COBURN, (47) was elected to the board on October 20, 1995. Mr.
Coburn is a partner of Brown, Coburn & Co., an investment banking firm (since
1991) and an Education Associate at Harvard University Graduate School of
Education (since 1996). Mr. Coburn is a Director of the Nicholas-Applegate
Fund, Inc. (since 1987), Emerging Germany Fund (since 1991), and Video Update,
Inc. (since 1998). Previously, Mr. Coburn was the Managing Director of the
Global Equity Transactions Group and a member of the Board of Directors of
Prudential Securities (from 1986 to 1991). Mr. Coburn also served as a Managing
Director of Merrill Lynch Capital Markets (from 1983 to 1986). Mr. Coburn
received a BS, University of Virginia, 1975; an MBA, Columbia University, 1978;
a Master of Education, Harvard University, 1993; a Master of Divinity, Harvard
University, 1994; and Certificate of Advanced Studies, Harvard University, 1996.
Mr. Coburn serves on the Board's Audit, Compensation, and Governance Committees.
DAMON GERMANTON, (57) has been a Director and an executive officer since
founding the Company in 1981. Previously, Mr. Germanton obtained sixteen years
experience in military and aerospace applications of micromachined sensor
technology as an engineer and operations manager. In addition to serving as
Chief Operating Officer, Mr. Germanton is the Company's chief technologist and
Managing Director of its Asian operations. Mr. Germanton, who holds seven
patents and a B.S. in Engineering from Fairleigh Dickinson University, serves on
the Board's Operations Committee.
STEVEN P. PETRUCELLI, (48) who was elected a Director on June 15, 1992, consults
in electronic and medical technology and, since 1979, has been an Assistant
Professor at Rutgers University in the Biomedical and Electrical Engineering
Departments. Dr. Petrucelli joined the Company's staff in 1991 and previously
consulted for the Company. Dr. Petrucelli chairs the Board's Operations
Committee and serves on its Audit Committee.
THE HON. DAN J. SAMUEL, (75) who was elected a Director on October 27, 1994, has
been a business consultant since 1986. Previously, Mr. Samuel served as
President and Chief Executive Officer of Scallop Corporation, the New York
subsidiary of the Royal Dutch/Shell Group of Companies. Mr. Samuel currently
also serves on the Board of Directors of Canadian Overseas Packaging Industries.
Mr. Samuel chairs the Board's Compensation Committee and serves on its Audit and
Governance Committees.
MARK W. CAPPIELLO, (46) has served as Vice President of Sales and Marketing
since January 1988. Mr. Cappiello has over twenty-five years experience in
international consumer products marketing, over twenty of which have been in the
scale industry. Mr. Cappiello previously was employed by Terraillon S.A. (a
French manufacturer and distributor of scales and balance products),
Borg-Erickson Corporation, and the Sunbeam Alliance Corporation. Mr. Cappiello
received a B.A. in Business from the University of Connecticut.
KIRK J. DISCHINO, (41) has served as Chief Financial Officer since he joined the
Company in February, 1998. Before joining the Company, Mr. Dischino had been
employed since 1984, by Materials Research Corporation, an international
manufacturer of high technology semiconductor process equipment. He held
various financial positions, ending as Vice President and Controller. Previous
to Materials Research Corporation, Mr. Dischino was employed by Arthur Andersen
& Co. A Certified Public Accountant, Mr. Dischino received a B.S. in Accounting
and Finance from Lehigh University.
6
<PAGE>
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
To the Company's knowledge, based solely on a review of Forms 3, 4 and 5 and
amendments thereto furnished to the Company, there were no late reports required
by Section 16(a) of the Exchange Act, nor were there any transactions that were
not reported on a timely basis, as disclosed in these Forms, during the fiscal
year ended March 31, 2000. To the Company's knowledge, based solely upon review
of such forms or upon written representations that no other reports were
required, there was one known failures to file required Forms on a timely basis.
INFORMATION CONCERNING BOARD MEETINGS
The Board of Directors met five times during the Fiscal 2000. The Company's
Compensation Committee met three times during Fiscal 2000. The Company's Audit
and Operations Committees met once each during Fiscal 2000. Each of the
incumbent directors attended at least 75% of the meetings of the Board and of
those committees on which he served.
INFORMATION CONCERNING COMMITTEES OF THE BOARD
The Board of Directors maintains (i) an Audit Committee consisting of John
Arnold, The Hon. Dan J. Samuel, Steven Petrucelli and Theodore J. Coburn, which
requests and receives information and reports from management, outside counsel
and the Company's independent auditing firm. The Committee utilizes this
information for review and discussion of the auditing, internal control,
financial reporting and compliance activities of the Company and its
subsidiaries; (ii) a Compensation Committee consisting of The Hon. Dan J.
Samuel, John D. Arnold and Theodore J. Coburn. The Compensation Committee
establishes and executes compensation policy and programs for the Company's
executives; (iii) an Operations Committee consisting of Joseph R. Mallon Jr.,
Damon Germanton and Steven P. Petrucelli. The Operations Committee monitors the
operations of the Company and its subsidiaries and makes recommendations to the
Board when necessary; and (iv) a Governance Committee consisting of John D.
Arnold, The Hon. Dan J. Samuel and Theodore J. Coburn. The Governance Committee
is responsible for reviewing the composition of, and procedures used by, the
Board and its Committees and to provide any recommendations as to procedures,
protocol and mission of each as it may deem appropriate. The Board of Directors
does not maintain a nominating committee.
EXECUTIVE COMPENSATION
The following pages contain the Company's Summary Compensation Table and
Aggregated Option/SAR Exercises and Fiscal Year-End Option/SAR Value Table for
the fiscal year ended March 31, 2000, and the Performance Line Graph for the
five years then ended. For the year ended March 31, 2000, no stock options were
granted to officers, none were repriced, nor were there any long-term incentive
plan ("LTIP") awards. The Company has never granted stock appreciation rights,
nor does it have a defined benefit or actuarial pension plan.
7
<PAGE>
The Performance Line Graph includes two peer groups of publicly held companies
with standard industrial classifications ("SIC") appropriate for the Company's
two business segments. The peer group for the Company's consumer products
segment (SIC 3634) consists of Applica Inc., Conair Corporation, Creative
Technologies Corporation, Global-Tech Appliances Inc., Helen of Troy Corporation
Ltd., National Presto Industries Inc., Salton Inc., Sunbeam Corporation, US
Electricar Inc., and Water Pik Technologies Inc. The peer group for the
Company's Sensor products segment (SIC 3823) consists of Alpha Technologies
Group Inc., Angstrom Technologies Inc., BEI Technologies Inc., Biopulse
International Inc., Biosphere Medical Inc., Braintech Inc., Circor International
Inc., Columbia Scientific Industries Corporation, CVD Equipment Corporation,
Cyberoptics Corporation, Electro-Sensors Incorporated, Engineering Measurements
Co., Environmental Tectonics Corporation, Faro Technologies Inc., Fiberchem
Inc., FLIR Systems Inc., Flotek Industries Inc., Gasonics International
Corporation, Haber Inc., Integralvision Inc., Intelligent Controls Inc., K Tron
International Inc., Metrika Systems Corporation, Mikron Instrument Inc., MKS
Instrument Inc., Mocon Inc., PerkinElmer Inc., Pollution Research and Control
Corporation, Research Inc., Rheometrics Scientific Inc., Rudolph Technologies
Inc., Schmitt Industires Inc., Scientific Measurement Systems Inc., Sentex
Sensing Technology Inc., Sepragen Corporation, Startec Inc., Sutron Corporation,
Teradyne Inc., Therma-Wave Inc., Thermedics Detection Inc., TIF Instruments
Inc., Transmation Inc., and Xedar Corporation.
Non-officer Directors receive $1,250 for attendance at each regularly scheduled
Board meeting and a $5,000 annual retainer, paid in two equal semi-annual
installments. Additionally, each non-officer Director is granted an option to
purchase 10,000 common shares at market value for the first year of service and
an option to purchase 5,000 common shares at market value for each succeeding
year of service. Non-officer Directors are paid $500 for attending ($600 for
chairing) each Committee meeting. Non-employee Directors do not receive
retirement or other fringe benefits.
Certain non-officer Directors who render other services to the Company receive
additional compensation. Dr. Petrucelli devoted a substantial portion of his
activities to the Company for an annual salary of $95,000. Additionally, the
Company provided $20,571 in annual support to the gifts and grants program of
the Biomedical Engineering Department at Rutgers University's College of
Engineering, where Dr. Petrucelli also has employment. The Company also
provided part-time employment as an engineer to Dr. Petrucelli's colleague at
the College of Engineering for an annual salary of $50,000. Additional
compensation paid to Mr. Arnold, who serves on the Board's Compensation
Committee, is described below under "Compensation Committee Interlocks and
Insider Participation."
Mr. Mallon, the Company's Chief Executive Officer, President, Chairman of the
Board and a shareholder, is compensated pursuant to an arrangement approved by
the Board in April 1995. The arrangement, effective April 1, 1995, provided for
a minimum annual salary of $100,000 for the year ended March 31, 1996, which the
Board increased to $225,000 for the year ended March 31, 2000. Mr. Mallon's
salary is subject to merit increases and he may receive bonuses, in each case as
recommended by the Board's Compensation Committee. Mr. Mallon receives an
annual automobile allowance of $11,000 and payments in lieu of disability
insurance of $3,343.
Mr. Germanton, the Company's President, Chief Operating Officer, Secretary and a
shareholder, is compensated pursuant to an employment agreement expiring on
March 31, 2000. The agreement provides for a minimum annual salary of $170,000,
which the board increased to $225,000 for the year ending March 31, 2000. Mr.
Germanton's salary is subject to merit increases and he may receive bonuses, in
each case as recommended by the Board's Compensation Committee, and an annual
automobile allowance of $11,000. Additionally, the Company reimburses Mr.
Germanton for certain long-term disability income insurance premiums for which
the Company is not a beneficiary (amounting to $3,343 for Fiscal 2000) and for
overseas living expenses relating to his assignments in China and Hong Kong.
Pursuant to the agreement, the Company would become obligated to pay a severance
benefit of approximately one year's salary, computed based on the average annual
compensation for the latest three years of employment, if the Board were to
decline to renew the agreement.
The Company provides Mr. Cappiello, the Company's Vice President of Sales and
Marketing, and Mr. Dischino, the Company's Chief Financial Officer, an annual
automobile allowance of $11,000.
8
<PAGE>
Certain additional compensation paid to officers is described below under
"Certain Relationships and Related Transactions."
Officers' and Directors' expense reimbursements are reviewed by the Chief
Executive Officer, whose expense reimbursements are reviewed by the Chief
Financial Officer. During Fiscal 2000, the Company did not make any loans to
officers or Directors, nor has the Company guaranteed officers' or Directors'
borrowings.
Officers' retirement benefits consist solely of those provided under the
Company's defined contribution plan, established under section 401(k) of the
Internal Revenue Code, which complies with applicable laws and regulations.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The members of the Compensation Committee for the year ended March 31, 2000 were
Mr. Samuel (Chairman), Mr. Arnold, and Mr. Coburn. The Company has not employed
these Committee members at any time, nor has any member of the Compensation
Committee or the Board been an officer of any for-profit entity whose
compensation committee or board of directors included officers of the Company.
For the year ended March 31, 2000, Mr. Arnold provided legal services to the
Company for fees approximating $15,000.
BOARD COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee's policies are intended to attract and retain
talented executives, motivate attainment of strategic objectives, and align
executives' interests with those of shareholders. Pursuant to the Committee's
recommendations, the Board approves officers' base salaries, salary increases,
bonuses, stock option grants and, where applicable, employment contracts and
severance payments. A significant amount of an officer's yearly compensation is
based upon the Company's performance for the fiscal year and over time.
The Committee seeks to offer competitive compensation packages that are
consistent with market, and industry practices, based on input from the Chief
Executive Officer with reference to a periodic surveys of similar-sized
companies in similar industries. The Fiscal 2000 average base compensation for
the Company's officers is intended to be competitive with salaries paid to
similarly situated executives. The Fiscal 2000 average base salaries of the
Company's officers, excluding the Chief Executive Officer, increased 15 percent
over fiscal 1999 base salaries.
Annual bonus maximums are intended to be competitive with those available to
similarly situated executives and provide for a significant performance
incentive. The Chief Executive Officer recommends awards to the Compensation
Committee with reference to the level of achievement of corporate and individual
objectives. Corporate objectives are measured by sales increases, net income,
and other goals determined annually. Individual objectives are intended to be
objectives that are under the respective officers' direct control. The Board
retains the right to make discretionary adjustments it deems appropriate. Bonus
awards for Fiscal 2000 were approximately $1,134,189 for all employees.
Officers' eligibility for stock option grants, and the frequency and size of
such grants, are intended to be competitive with observed market practices for
similarly situated executives and encourage increased shareholder value. No
stock options were granted to officers for the fiscal year ended March 31, 2000.
The Company's stock option plan complies with applicable laws and regulations,
permitting the Company to deduct for federal income tax purposes the cost of any
compensation arising thereunder relating to Internal Revenue Code section
162(m). At present, the Company has no other compensation programs nor policies
that could give rise to compensation to an officer in excess of $1 million a
year.
9
<PAGE>
With the exception of Mr. Germanton, the Company has no formal executive
severance pay policy. Severance pay and non-monetary severance benefits are
determined as appropriate with reference to observed market practice, length of
service and reason for termination.
The Committee's policies for compensating the Chief Executive Officer are
intended to provide significant annual and long-term performance incentives.
The Committee seeks to provide the Chief Executive Officer with a base salary
which is intended to be competitive with salaries paid to similarly situated
chief executives. The committee recommended the Chief Executive Officer's base
salary be increased from $200,000 to $225,000 for Fiscal 2000. The Chief
Executive Officer's annual bonus maximum, subject to discretionary adjustment,
is set at 40 percent of his base salary, which is intended to provide a
significant annual performance incentive to attain corporate objectives. For
Fiscal 2000, the Committee recommended a bonus of $125,000.
The Board neither rejected, nor did it materially modify, any action or
recommendation of the Committee.
The Honorable Dan J. Samuel, Chairman
John D. Arnold, Member
Theodore J. Coburn, Member
10
<PAGE>
<TABLE>
<CAPTION>
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
Annual Compensation(1) Long Term Compensation
------------------------------------------- ---------------------------
Name and Year ended Other Annual Option All other
Principal Position March 31, Salary Bonus Compensation (2) Awards Compensation (3)
----------------------------------- ---------- ------------- -------- ------------------ ------ ------------------
<S> <C> <C> <C> <C> <C> <C>
Joseph R. Mallon Jr. 2000 $ 225,000 $125,000 $ 14,343 $ 2,000
Chief Executive Officer 1999 200,000 72,000 14,673 2,000
Chairman 1998 190,000 38,000 14,673 2,000
Damon Germanton 2000 225,000 125,000 14,343 2,000
President, Chief 1999 200,000 72,000 14,673 2,000
Operating Officer 1998 190,000 38,000 14,673 2,000
and Secretary
Mark Cappiello 2000 171,500 67,418 11,000 2,000
Vice President of 1999 152,500 41,175 11,000 2,000
Sales & Marketing 1998 145,000 22,000 11,000 2,000
Kirk J. Dischino 2000 161,500 60,291 11,000 2,000
Chief Financial Officer, 1999 135,000 36,450 11,000 1,350
Treasurer, and Asst. Secretary 1998 16,900 5,000 1,375 50,000 0
<FN>
(1) Amounts exclude payments of overseas living expenses relating to Mr. Germanton's China and Hong Kong assignments.
(2) Perquisites did not exceed the lesser of $50,000 or 10% of each officer's salary and bonus. Mr. Mallon's perquisites
consist of an automobile allowance of $11,000 for each year, and $3,343 of payments in lieu of company paid long-
term disability income insurance for Fiscal 2000. Mr. Germanton's perquisites consist of an automobile allowance of
$11,000 for each year and long-term disability income insurance premiums for Mr. Germanton's benefit ($3,343 for
Fiscal 2000). Mr. Cappiello's and Mr. Dischino's perquisites consist an automobile allowance of $11,000 for each
year.
(3) All Other Compensation consists of the Company's annual contributions to a defined contribution plan established
under Section 401(k) of the Internal Revenue Code.
</TABLE>
11
<PAGE>
<TABLE>
<CAPTION>
YEAR END OPTION TABLE. The following table sets forth certain information regarding the stock options
held as of March 31, 2000 by the individuals named in the above Summary Compensation Table.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUE
Securities Value of Unexercised
Underlying Unexercised In-the-Money-Options
at Fiscal Year End(#) at Fiscal Year End (1)
Shares Acquired Value -------------------------- ----------------------------
Name on excise (#) Realized($) Exercisable Unexercisable Exercisable Unexercisable
-------------------- -------------- ----------- ----------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Joseph R. Mallon Jr. -- -- 130,000 24,000 $ 2,667,800 $ 490,440
Damon Germanton -- -- 25,000 -- 515,188 --
Mark Cappiello 150,000 2,536,000 -- -- -- --
Kirk J. Dischino -- -- 20,000 30,000 436,200 654,300
<FN>
(1) Intrinsic value, if any, based on the excess of the closing price of the Common Stock at March 31,
2000 ($25.31) over the exercise price of the options.
</TABLE>
12
<PAGE>
PERFORMANCE CHART
TOTAL SHAREHOLDER RETURNS - DIVIDENDS REINVESTED
FIVE YEARS ENDED MARCH 31, 2000
<TABLE>
<CAPTION>
CUMULATIVE TOTAL RETURN
----------------------------------------------
3/95 3/96 3/97 3/98 3/99 3/00
------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
Measurement Specialties, Inc. 100.00 86.49 86.49 86.49 162.16 547.37
S&P Small Cap 600 100.00 131.19 142.19 209.99 176.76 231.02
Peer Group 1 (SIC 3823) 100.00 108.05 139.39 182.96 205.04 574.79
Peer Group 2 (SIC 3634) 100.00 82.09 135.89 201.02 59.63 67.17
</TABLE>
1995 STOCK OPTION PLAN
The Company's 1995 Stock Option Plan (the "1995 Plan'') and its predecessor plan
provide for the grant of options to employees, directors, officers and
consultants of the Company for the purchase of up to an aggregate of 914,000
shares of Common Stock. The 1995 Plan is administered by the Compensation
Committee of the Board of Directors, which has complete discretion to select
eligible individuals to receive options and to establish the terms of option
grants. The number of shares of Common Stock available for grant under the 1995
Plan is subject to adjustment for changes in capital-ization. At March 31, 2000,
there were 914,000 common shares underlying outstanding options under the 1995
Plan.
1998 STOCK OPTION PLAN
On October 19, 1998 the Board of Directors approved, subject to shareholder
approval prior to October 19, 1999 the 1998 Stock Option Plan (the "1998 Plan").
The 1998 Plan provides for granting of options to purchase up to 750,000 shares
of Common Stock until its expiration on October 19, 2008. Shares issuable under
1998 Plan grants which expire or otherwise terminate without being exercised
become available for later issuance. The aggregate number of shares available
for grants of options under the 1998 Plan as of March 31, 2000 were 645,275 with
of 99,725 shares issuable upon exercise of options at March 31, 2000.
401(K) PLAN
The Company established its Saving Plan for Employees of Measurement
Specialties, Inc. (the "401(k) Plan") effective April 1, 1993. All full time
employees of the Company are eligible to participate in the 401(k) Plan, as
amended, following three months of employment. Subject to certain limitations
imposed by federal tax laws, participants are eligible to contribute up to 15%
of their salary (including bonuses and/or commissions) per annum. Participants'
contributions to the 401(k) Plan may be matched by the Company at a rate
determined annually by the Board of Directors. Each participant immediately
vests in his or her deferred salary contributions, while Company contributions
will vest over five years. In Fiscal 2000 the Company provided aggregate
matching contributions approximating $164,000 for all employees.
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<TABLE>
<CAPTION>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
At July 28, 2000, securities owned by Directors, executive officers and beneficial owners
of more than five percent of each class of the Company's voting securities were:
NAME AND ADDRESS NUMBER OF SHARES PERCENT
TITLE OF CLASS OF BENEFICIAL OWNER BENEFICIALLY OWNED OF CLASS
----------------------------------- ------------------------------ ------------------- ---------
<S> <C> <C> <C>
Common stock, Joseph R. Mallon Jr. 288,000 (1) 6.7%
no par value Measurement Specialties, Inc.
80 Little Falls Road
Fairfield, NJ 07004
John D. Arnold 25,500 (2) (3)
104 Highland Terrace
Woodside, CA 94062
Theodore J. Coburn 9,000 (4) (3)
116 East 68th Street
New York, New York 10021
Damon Germanton 270,161 (5) 6.3%
Measurement Specialties, Inc.
80 Little Falls Road
Fairfield, NJ 07004
Steven P. Petrucelli 60,500 (6) 1.5%
26 North Main Street
Cranbury, NJ 08512
Hon. Dan J. Samuel 23,300 (7) (3)
154 Hillspoint Road
Westport, CT 06880
<FN>
(1) Includes ownership of options, exercisable within 60 days after July 28, 2000, to purchase
154,000 common shares.
(2) Includes ownership of presently exercisable options to purchase 5,000 common shares.
(3) Percentage of shares beneficially owned does not exceed one percent of the class.
(4) Includes ownership of presently exercisable options to purchase 7,500 common shares.
(5) Includes ownership of presently exercisable options to purchase 25,000 common shares;
excludes ownership by Mr. Germanton's daughter of 25,180 common shares, of which Mr.
Germanton disclaims beneficial ownership.
(6) Includes ownership of presently exercisable options to purchase 60,500 common shares.
(7) Includes ownership of presently exercisable options to purchase 12,500 common shares.
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
NAME AND ADDRESS NUMBER OF SHARES PERCENT
TITLE OF CLASS OF BENEFICIAL OWNER BENEFICIALLY OWNED OF CLASS
----------------------------------- ------------------------------ ------------------- ---------
<S> <C> <C> <C>
Common stock, Mark W. Cappiello 92,600 2.3%
no par value Measurement Specialties, Inc.
80 Little Falls Road
Fairfield, NJ 07004
Kirk J. Dischino 22,200 (8) (3)
Measurement Specialties, Inc.
80 Little Falls Road
Fairfield, NJ 07004
Current Officers and Directors
as a group (8 persons) 791,261 (9) 16.5%
<FN>
(8) Includes ownership to exercisable options to purchase 20,000 common shares.
(9) Includes ownership of Messrs. Mallon, Arnold, Coburn, Germanton, Petrucelli, Samuel,
Cappiello, and Dischino of exercisable options, mentioned above, for an aggregate of
284,500 common shares
</TABLE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
JL sublets a residence used by employees in China from Damon Germanton, an
officer and Director, under a month-to-month arrangement. Rent expense for
Fiscal 1999 approximated $ 6,000.
15
<PAGE>
PROPOSAL NO. 2
RATIFICATION OF SELECTION OF AUDITORS
The Board of Directors has appointed the firm of Arthur Andersen, LLP as
independent auditors of the Company for fiscal year 2001 subject to ratification
by the stockholders. Grant Thornton, LLP, had previously served as the
Company's independent auditors since 1992.
Audit services expected to be performed by Arthur Andersen, LLP during fiscal
year 2001 will consist of the audit of financial statements of the Company and
its wholly owned subsidiaries. It is anticipated that a representative of Grant
Thornton, LLP and Arthur Andersen, LLP will be present at the Annual Meeting and
will be given an opportunity to make a statement if he so desires and to respond
to appropriate questions.
During the prior three years ended March 31, 2000, the Company has had no
disagreements with the accountants on matters of accounting principles or
practices, financial statement disclosures or auditing scope or procedure which,
if not resolved to their accountant's satisfaction, would have caused them to
make reference to such matters in their reports.
The affirmative vote of at least a majority of the shares represented and voting
at the Annual Meeting at which a quorum is present (which shares voting
affirmatively also constitute at least a majority of the required quorum) is
necessary for approval of Proposal No. 2. Under New Jersey law, there are no
rights of appraisal or dissenter's rights which arise as a result of a vote to
ratify the selection of auditor's.
THE BOARD OF DIRECTORS DEEMS PROPOSAL NO. 2 TO BE IN THE BEST INTERESTS OF THE
COMPANY AND ITS STOCKHOLDERS AND RECOMMENDS A VOTE "FOR" APPROVAL THEREOF.
16
<PAGE>
STOCKHOLDERS' PROPOSALS
It is anticipated that the Company's 2001 Annual Meeting of Stockholders will be
held in September 2001. Stockholders who seek to present proposals at the
Company's next Annual Meeting of Stockholders must submit their proposals to the
Secretary of the Company on or before May 31, 2001. Pursuant to amended SEC
Rule 14a-4(c)(1), the Company shall exercise discretionary voting authority at
the 2000 Annual Meeting to the extent conferred by proxy with respect to
shareholder proposals as to which notice was received by the Company after July
1, 2000.
GENERAL
Unless contrary instructions are indicated on the proxy, all shares of Common
Stock represented by valid proxies received pursuant to this solicitation (and
not revoked before they are voted) will be voted FOR Proposal Nos. 1 and 2.
The Board of Directors knows of no business other than that set forth above to
be transacted at the meeting, but if other matters requiring a vote of the
stockholders arise, the persons designated as proxies will vote the shares of
Common Stock represented by the proxies in accordance with their judgment on
such matters. If a stockholder specifies a different choice on the proxy, his
or her shares of Common Stock will be voted in accordance with the specification
so made.
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY. WE URGE YOU TO FILL IN, SIGN
AND RETURN THE ACCOMPANYING FORM OF PROXY IN THE PREPAID ENVELOPE PROVIDED, OR
FOLLOW THE INSTRUCTIONS FOR TELEPHONE OR INTERNET VOTING, NO MATTER HOW LARGE OR
SMALL YOUR HOLDINGS MAY BE.
By Order of the Board of Directors,
Damon Germanton, Secretary
Fairfield, New Jersey
August 7, 2000
17
<PAGE>
