SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14 (a) of the
Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant { X }
Filed by the 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 Section 240.14a-11(c) or
Section 240.14a-12
MATEC CORPORATION
---------------------------------------------------------------------
(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>
MATEC CORPORATION
(A DELAWARE CORPORATION)
__________
NOTICE OF SPECIAL IN LIEU OF ANNUAL MEETING OF STOCKHOLDERS
JUNE 18, 1998
__________
TO THE STOCKHOLDERS OF
MATEC CORPORATION
The Special In Lieu Of Annual Meeting of
Stockholders of MATEC Corporation will be held at the
offices of the Company, 75 South Street, Hopkinton,
Massachusetts 01748, on June 18, 1998, at 10:00 A.M. to
consider and vote on the following matters described under
the corresponding numbers in the attached Proxy Statement.
(1) The election of six directors;
(2) Consideration and vote upon a proposal
to reincorporate the Company in Maryland and
cash out certain stockholders; and
(3) Such other matters as may properly
come before the meeting.
The Board of Directors has fixed May 18, 1998, at
the close of business, as the record date for the
determination of stockholders entitled to vote at the
meeting, and only holders of shares of Common Stock of
record at the close of business on that day will be
entitled to vote. The list of such stockholders will be
available for inspection by stockholders during the ten
days prior to the meeting in accordance with Section 219 of
the Delaware General Corporation Law at the offices of the
Company, 75 South Street, Hopkinton, Massachusetts 01748.
Stockholders may make arrangements for such inspection by
contacting the Secretary of MATEC Corporation, 75 South
Street, Hopkinton, Massachusetts 01748. The stock transfer
books of the Company will not be closed.
WHETHER OR NOT YOU EXPECT TO BE PRESENT, PLEASE
FILL IN, SIGN AND MAIL THE ENCLOSED PROXY, WHICH IS
SOLICITED BY THE BOARD OF DIRECTORS. THE PROXY IS
REVOCABLE AND WILL NOT AFFECT YOUR RIGHT TO VOTE IN THE
EVENT YOU ATTEND THE MEETING.
BY ORDER OF THE BOARD OF DIRECTORS
JOHN J. MCARDLE III
Secretary
May 11, 1998
REQUESTS FOR ADDITIONAL COPIES OF THE PROXY
MATERIAL SHOULD BE ADDRESSED TO SECRETARY, MATEC
CORPORATION, 75 SOUTH STREET, HOPKINTON, MASSACHUSETTS
01748.
<PAGE>
MATEC CORPORATION
75 SOUTH STREET
HOPKINTON, MASSACHUSETTS 01748
____________
PROXY STATEMENT
____________
SPECIAL IN LIEU OF
ANNUAL MEETING OF STOCKHOLDERS
JUNE 18, 1998
____________
The enclosed Proxy is solicited by the Board of
Directors of MATEC Corporation (the "Company") in
connection with the Special in Lieu of Annual Meeting of
Stockholders to be held on June 18, 1998. The Board of
Directors has fixed May 18, 1998, at the close of business,
as the record date for the determination of stockholders
entitled to vote at the meeting. Any Proxy received by the
Board of Directors may be revoked, either in writing or in
person, by the record holder of the shares covered thereby,
if such revocation is received by the Company at any time
prior to said Proxy being exercised. It is anticipated
that this Proxy Statement and the enclosed Notice and Proxy
first will be mailed to stockholders of record on or about
May 21, 1998.
All Proxies will be voted in accordance with the
instructions contained therein and if no choice is
specified will be voted in favor of the election as
directors of the persons named herein and for approval of
the proposal to reincorporate the Company in Maryland and
cash out certain stockholders. The Company knows of no
reason why any of the nominees named herein would be unable
to serve. In the event, however, that any such nominee
should prior to the election become unable to serve as a
director, the Proxy will be voted for such substitute
nominee, if any, as the Board of Directors shall propose.
A stockholder who abstains from a vote by
registering an abstention vote will be deemed present at
the meeting for quorum purposes but will not be deemed to
have voted on the particular matter. Similarly, in the
event a nominee holding shares for beneficial owners votes
on certain matters pursuant to discretionary authority or
instructions from beneficial owners, but with respect to
one or more other matters does not receive instructions
from beneficial owners and does not exercise discretionary
authority (a so-called "non-vote"), the shares held by the
nominee will be deemed present at the meeting for quorum
purposes but will not be deemed to have voted on such other
matters. Thus, on the vote for the proposal to elect
directors, where the outcome depends on the votes cast,
abstentions and non-votes will have no effect.
The proposal to reincorporate in Maryland
requires the approval of a majority of the outstanding
shares of Common Stock of the Company. Abstentions as to
such proposal will have the same effect as votes against
such proposal. Broker non-votes will be treated as unvoted
for purposes of determining approval of such proposals and
will not be counted as votes for or against such proposals.
The Annual Report to Stockholders of the Company,
including financial statements for the year ended December
31, 1997, is enclosed herewith.
COMMON STOCK OWNERSHIP OF
CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
All the voting power of the Company is vested in
its Common Stock. As of the close of business on May 11,
1998, 2,758,253 shares of Common Stock, par value $.05 per
share (exclusive of 1,070,642 shares held by the Company as
treasury shares) were outstanding. Each share of Common
Stock (other than the treasury shares) is entitled to one
vote. It is not presently anticipated that the number of
issued and outstanding shares of Common Stock will
significantly change between May 11, 1998 and the record
date.
Set forth in the table below is information
concerning the ownership as of May 11, 1998 of the Common
Stock of the Company by persons who, to the knowledge of
the Board of Directors, own more than 5% of the outstanding
shares of Common Stock of the Company. The table also
shows information concerning beneficial ownership by all
other directors, by each nominee for director, by each of
the executive officers of the Company and by all directors
and executive officers as a group. Unless otherwise
indicated, the beneficial owners have sole voting and
investment power with respect to the shares beneficially
owned.
Name and Address Amount Beneficially Percentage
of Beneficial Owner Owned of Class
- ------------------- ------------------- ----------
Dimensional Fund 149,000(1) 5.4%
Advisors Inc.
1299 Ocean Avenue
11th Floor
Santa Monica, CA 90401
John J. McArdle III 187,962(2)(3) 6.8%
MetroWest Bank
15 Park Street
Framingham, MA 01701
Mary R. and 207,400 7.5%
Emile Vaccari
508 40th Street
Union City, NJ 07087
Robert W. Valpey 204,403(2)(4) 7.4%
Route 25
Box 249
Center Harbor, NH 03226
Ted Valpey,Jr. 727,935(5) 26.4%
P.O. Box 4100
Portsmouth, NH 03801
Other Directors and
Executive Officers
- -------------------
Eli Fleisher 87,000(6) 3.2%
Robert B. Gill 121,300(7) 4.4%
Lawrence Holsborg 114,267 4.1%
Robert W. Muir, Jr. 8,000 less than 1%
Joseph W. Tiberio 25,000 less than 1%
Michael J. Kroll 15,300(8) less than 1%
Directors and Executive 1,286,764(2)(3)(5)-(8) 46.7%
Officers as a Group
(consisting of
8 individuals)
______________________________
(1) Dimensional Fund Advisors Inc., a registered
investment advisor, is deemed to have beneficial
ownership of 149,000 shares of Common Stock of the
Corporation as of December 31, 1997, all of which
shares are held in portfolios of DFA Investment
Dimensions Group Inc., a registered open-end
investment company, or in series of the DFA Investment
Trust Company, a Delaware business trust, or the DFA
Group Trust and DFA Participating Group Trust,
investment vehicles for qualified employee benefit
plans, all of which Dimensional Fund Advisors Inc.
serves as investment manager. Dimensional Fund
Advisors Inc. disclaims beneficial ownership of all
such shares.
(2) Includes 100,000 shares, as to which each of Mr.
Robert Valpey and Mr. McArdle disclaims beneficial
ownership, held by a trust of which each is one of two
trustees.
(3) Includes 25,750 shares owned by Mr. McArdle's wife as
to which he disclaims beneficial ownership.
(4) Includes 2,900 shares owned by Mr. Robert Valpey's
wife as to which he disclaims beneficial ownership and
1,000 shares jointly owned by Mr. Valpey's wife.
(5) 300,000 of such shares are pledged as collateral to a
bank to secure certain indebtedness of Mr. Ted Valpey,
Jr.
(6) Includes 1,500 shares owned by Mr. Fleisher's wife as
to which he disclaims beneficial ownership.
(7) Includes 64,300 shares jointly owned by Mr. Gill's
wife and deposited as collateral by Mr. & Mrs. Gill in
a joint margin account maintained by them with a
registered broker-dealer.
(8) Includes 8,700 shares jointly owned by Mr. Kroll's
wife.
(1) ELECTION OF DIRECTORS
NOMINEES
The Board of Directors has amended the By-Laws of
the Company, effective the date of the 1998 Special In Lieu
of Annual Meeting to decrease the number of directors from
seven to six. Six directors are to be elected at the
Annual Meeting, each to hold office until the next annual
meeting and until his successor is elected and qualified.
Directors are elected by a plurality of the votes cast.
The following table sets forth certain
information furnished to the Company regarding the persons
who are nominees for election as directors of the Company:
Year
First
Principal Occupation Elected
Name of Nominee for Past Five Years Director Age
- --------------- -------------------- -------- ---
Eli Fleisher(d) Investor since 1977 70
prior to 1993.
Lawrence Holsborg(b)(c)(d) Investor since 1986 64
prior to 1993.
John J. McArdle III(a)(b)(c) Employee of Prime 1992 48
Capital Group
(financial
consultants) since
prior to 1993;
President of RSC
Realty Corporation (a
subsidiary of the
Company) since prior
to 1993 and Secretary
of the Company since
prior to 1993; Chief
Executive Officer of
MetroWest Bank since
January 1993; and
President of MetroWest
Bank since January
1993 to April 1998.
Robert W. Muir, Jr.(a)(d) Vice President Corporate 1996 49
Development, Thomas &
Betts Electrical
Supply since October
1997; CEO and
President of
Diamond Communication
Products Inc.
(manufacturer of
poleline hardware)
from prior to 1993 to
July 1997.
Joseph W. Tiberio(a)(b) President, Century 1986 76
Manufacturing Co.,
Inc. (metal stamping)
since prior to 1993;
President Ty-Wood
Corporation (metal
fabrication) since
prior to 1993.
Ted Valpey, Jr. (a)(c) Investor; Chairman of 1980 65
the Company since
prior to 1993 and
Chief Executive
Officer of the
Company from prior
to 1993 to December
21, 1993 and since
April 28, 1997.
_______________________
(a) Member of the Executive Committee
(b) Member of the Audit Committee
(c) Member of the Nominating Committee
(d) Member of the Stock Option-Compensation
Committee.
Each of the above nominees was elected a director
at the last Annual Meeting of Stockholders and has served
continuously since the year he was first elected.
Mr. Robert B. Gill, a director who is not
standing for reelection, is a member of the Executive
Committee.
The Board of Directors held six meetings during
the last fiscal year. During the last fiscal year Robert
B. Gill attended less than 75% of the meetings of the Board
of Directors and committees of which he is a member.
The Stock Option-Compensation Committee of the
Board of Directors recommends to the Board of Directors the
Compensation for the Chairman and the Chief Executive
Officer ("CEO"), approves the compensation recommendations
of the CEO for corporate and executive officers, and
subsidiary presidents and controllers, administers and
approves option grants pursuant to the Company's 1992 Stock
Option Plan, and approves the Company's contributions and
401(k) match under the Company's profit sharing 401(k)
plan. The Stock Option-Compensation Committee held three
meetings during 1997.
The Nominating Committee of the Board of
Directors performs such functions as the selection and
recommendation to the Board of Directors of potential
candidates for nomination as directors. The Nominating
committee held one meeting during 1997. In recommending
to the Board the nominees for election as directors, the
Committee will consider stockholders' recommendations for
director sent to the Nominating Committee, c/o Secretary,
MATEC Corporation, 75 South Street, Hopkinton,
Massachusetts 01748. Stockholders must submit the names of
potential future nominees in writing with a statement of
their qualifications and an indication of the potential
nominee's willingness to serve as a director if nominated
and elected.
The Executive Committee of the Board of Directors
is authorized to exercise all of the authority of the Board
of Directors except that which by law cannot be delegated
by the Board of Directors. The Executive Committee did not
meet during 1997.
The Audit Committee of the Board of Directors
performs the customary functions of such a committee
including recommendation to the directors of the engagement
of independent auditors, the review of the plan and results
of the yearly audit by the independent auditors, the review
of the Company's system of internal controls and procedures
and the investigation, where necessary, into matters
relating to the audit functions. The Audit Committee held
two meetings during 1997.
Except as set forth below none of the directors
or nominees is a director of any company (other than the
Company) which is subject to the reporting requirements of
the Securities Exchange Act of 1934 or which is a
registered investment company under the Investment Company
Act of 1940.
Name of
Director Director of
-------- -----------
John J. McArdle III MetroWest Bank
Ted Valpey, Jr. MetroWest Bank
DIRECTORS COMPENSATION
Each outside director is paid an annual
director's fee of $2,500 plus $750 for each meeting of the
Board of Directors attended. Each outside director who is
a member of a Committee is paid $750 for each Committee
meeting attended and not held on the same day as a meeting
of the Board of Directors. For Committee meetings held on
the same day as meetings of the Board of Directors, each
outside director is paid for attendance at the rate of $350
per Committee meeting.
<PAGE>
EXECUTIVE COMPENSATION
EXECUTIVE COMPENSATION
The Summary Compensation Table below sets forth
compensation information for each of the Company's last
three fiscal years for the CEO and the other executive
officers whose total annual salary for such fiscal year
exceeded $100,000.
SUMMARY COMPENSATION TABLE
Annual Compensation(1)(2)
-------------------------
Name and
Principal All Other
Position Year Salary Bonus Compensation(3)
- --------- ---- ------ ----- ---------------
Ted Valpey, Jr. 1997 $80,000 $25,000 $2,531
(CEO and 1996 80,000 -- 2,446
President since 1995 80,000 -- 2,438
April 28, 1997,
and Chairman)(4)
Robert B. Gill 1997 132,980 -- 130,656
(CEO and 1996 200,000 -- 4,500
President until 1995 200,000 25,000 4,500
April 28, 1997)
Michael J. Kroll 1997 111,500 15,000 3,741
(Vice President 1996 111,500 -- 3,532
and Treasurer) 1995 111,500 -- 3,532
_____________________________
(1) For 1996 and 1995 the Company maintained a Management
Incentive Plan (the "Incentive Plan") which provides
cash payments to key managers of the Company based on
the achievement of defined profit objectives by
various operating units and other transaction and
performance-oriented goals. The Company paid no
amounts to any of the named officers pursuant to the
Incentive Plan in 1996 or 1995.
(2) The above table does not include any amounts for
personal benefits because, in any individual case,
such amounts do not exceed the lesser of $50,000 or
10% of such individual's cash compensation.
(3) Represents amounts allocated under the Company's
Profit Sharing and Savings Plan.
(4) Mr. Valpey was elected CEO on April 28, 1997. He
served as Chairman of the Company for 1995, 1996 and
1997. The amounts set forth in the table with respect
to 1997 includes all amounts paid to Mr. Valpey as
compensation in 1997. The Company has reimbursed Mr.
Valpey since prior to January 1, 1995 at the rate of
$4,000 per month for office, secretarial and other
business expenses. Effective in April 1998 such
reimbursement for office, secretarial and other
business expenses was increased to $5,000 per month.
(5) Mr. Gill ceased to be CEO on April 28, 1997. The
amount set forth in the table under the heading "All
Other Compensation" includes payments in 1997 of
$66,667 in connection with Mr. Gill's termination of
employment, of $60,000 paid in cancellation of options
to purchase 120,000 shares of Common Stock, and of
$3,989 allocated under the Company's Profit Sharing
and Savings Plan. See "CERTAIN TRANSACTIONS".
<PAGE>
OPTION TABLE
The following table sets forth the fiscal year-
end option values with respect to the named officers. No
stock options were exercised by or granted to the named
officers during 1997.
<PAGE>
December 31, 1997
-----------------
Option Values(1)
-------------
Number of Securities Values of Unexercised
Underlying Unexercised In-the-Money Options at
Options at 12/31/97 12/31/97(1)
---------------------- -----------------------
Exercisable Unexercisable Exercisable Unexercisable
----------- ------------- ----------- -------------
Ted Valpey, Jr. -- -- $-- --
Robert B. Gill -- -- $-- --
Michael J. Kroll 1,500 1,000 $ -0- -0-
____________________
(1) The fair market value of the Company's Common Stock at
December 31, 1997 was $4.125 per share. The exercise
price of all exercisable and unexercisable options to
purchase shares held by Mr. Kroll were equal to or in
excess of such fair market value.
CERTAIN TRANSACTIONS
Robert B. Gill, a director of the Company who is
not standing for reelection, ceased to be President and
Chief Executive Officer of the Company on April 28, 1997.
For the period April 28, 1997 until August 5, 1997 he was
President of the Company's wholly owned subsidiary Bergen
Cable Technologies, Inc. Pursuant to a Separation
Agreement between the Company and Mr. Gill, Mr. Gill's
employment by the Company terminated on August 5, 1997. In
connection with such termination, the Company paid Mr. Gill
$100,000 in six equal monthly installments. All such
termination payments paid in 1997 are included in the
Summary Compensation Table. In addition, the Company paid
Mr. Gill $60,000 for cancellation of options to purchase
120,000 shares of Common Stock of the Company.
On April 15, 1998, the Company sold substantially
all the assets excluding real property and plant of its
wholly owned subsidiary, Bergen Cable Technologies, Inc. to
a newly created corporation of which Robert W. Muir, Jr., a
director of the Company, owns 27.12% of the outstanding
capital stock. The real property and plant was sold to a
New Jersey limited liability company of which Mr. Muir owns
a 27.12% membership interest. The purchase price received
consisted of $7,500,000, a subordinated promissory note in
the principal amount of $1,250,000, a 10% stock and
membership interest in the acquiring entities and
assumption of certain liabilities including trade payables.
Because of Mr. Muir's interest in the transaction the
Company retained the firm of O'Conor, Wright Wyman, Inc. to
evaluate the fairness of the transaction to the
stockholders of the Company from a financial point of view.
O'Conor, Wright Wyman, Inc. gave their opinion that the
consideration received was fair to the stockholders of the
Company from a financial point of view. The transaction
was unanimously approved by all directors of the Company
except Mr. Muir who did not vote on approval of the
transaction.
EXECUTIVE COMPENSATION REPORT OF THE
STOCK OPTION-COMPENSATION COMMITTEE
------------------------------------
The Stock-Option Compensation Committee (the
"Committee") of the Board of Directors consists of three
non-employee directors, Eli Fleisher, Lawrence Holsborg and
Robert W. Muir, Jr.
The Committee recommends to the Board of
Directors the compensation for the Chairman and the CEO,
approves the compensation recommendations of the CEO for
corporate and executive officers, and subsidiary presidents
and controllers, administers and approves option grants
pursuant to the Company's 1992 Stock Option Plan, and
approves the Company's contributions and 401(k) match under
the Company's profit sharing 401(k) plan.
COMPENSATION POLICY FOR EXECUTIVE OFFICERS
The Committee's policy is that the Company's
executive officers should be paid a salary commensurate
with their responsibilities, should receive short-term
incentive compensation in the form of a bonus, and should
receive long-term incentive compensation in the form of
stock options.
The policy with respect to salaries of the
executive officers, other than the CEO, is that it should
be in an amount recommended by the CEO, and the current
salary of such executive officer is in the amount so
recommended. The considerations entering into the
determination by the CEO of the salary for the named
executive which he recommended to the Committee in 1997
were his subjective evaluation of the ability and past
performance of the executive and his judgment of his
potential for enhancing the profitability of the Company.
The CEO advised the Committee that, in his subjective
judgment based on his experience and knowledge of the
marketplace, such salary was reasonable and proper in light
of the duties and responsibilities of the executive.
On the recommendation of the Committee, the Board
has adopted the Company's Management Incentive Plan (the
"Plan"). However, for 1997, the Committee recommended that
corporate management, including the executive officers
named in the Summary Compensation Table, not be eligible to
participate in the Plan. The Committee did however
recommend payment of bonuses aggregating $15,000 to Mr.
Kroll.
The Committee's policy generally is to grant
options to executives and other key employees under the
Company's 1992 Stock Option Plan (the "Option Plan") and in
amounts not exceeding the amounts recommended by the
Chairman and the CEO. The recommendations of the Chairman
and the CEO for option grants reflect the subjective
judgment of such officers of the performance of employees
and the potential benefit to the Company from the grant of
this form of incentive compensation. In recommending
option grants the Chairman and CEO, among other things,
consider the amount and terms of options granted in the
past. No options were granted under the Option Plan to
executive officers in the 1997 fiscal year.
Section 162(m) of the Internal Revenue Code,
enacted in 1993, generally disallows a tax deduction to
public companies for compensation over $1,000,000 paid to
the CEO and other named executive officer. Because of the
range of compensation paid to its executive officers, the
Committee has not established any policy regarding annual
compensation to such executive officers in excess of
$1,000,000.
COMPENSATION OF THE CEO IN 1997
On April 28, 1997 Mr. Gill ceased to be CEO and
Mr. Valpey was elected CEO. At the time of his election by
the Board of Directors, the Board determined to continue to
pay Mr. Valpey $80,000 per annum, the amount he had been
receiving as Chairman. On March 4, 1998, the Board of
Directors approved a bonus of $25,000 for the increased
responsibilities Mr. Valpey assumed as CEO during 1997
which amount is included in the Summary Compensation Table.
Eli Fleisher
Lawrence Holsborg
Robert W. Muir, Jr.
Stock Option-Compensation
Committee
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Ted Valpey, Jr. serves on the Compensation
Committee of MetroWest Bank, of which Mr. McArdle is Chief
Executive Officer.
Mr. Holsborg was President of Matec Fiberoptics
Inc., a subsidiary of the Corporation, prior to 1989.
Robert W. Muir, Jr. owns 27.12% of entities which
on April 15, 1998 acquired substantially all the assets of
the Company's subsidiary Bergen Cable Technologies, Inc.
for a purchase price consisting of $7,500,000 cash, a
subordinated promissory note in the principal amount of
$1,250,000, a 10% stock and membership interest in the
acquiring entities and assumption of certain liabilities
including trade payables. The Company received an opinion
from O'Conor, Wright Wyman, Inc. that the consideration
received by the Company's subsidiary was fair to the
stockholders of the Company from a financial point of view.
See "CERTAIN TRANSACTIONS".
<PAGE>
PERFORMANCE GRAPH
The graph below compares the cumulative total
shareholder return on the Company's Common Stock with the
cumulative total return of the American Stock Exchange
Index and a weighted index made up 40% of companies in the
electronic components manufacturing business, 40% of
companies in the fabricated metal products business and 20%
of companies in the laboratory analytical instruments
business, for the five years beginning December 31, 1992
and ending December 31, 1997 (assuming the investment of
$100 on December 31, 1992, and the reinvestment of all
dividends). The Company selected the weighted index
because the companies included therein are engaged in
operations similar to those of the Company's three segments
with the percentages being approximately the same as the
revenues of the segments are of total revenues during the
period since December 31, 1992.
TOTAL SHAREHOLDER RETURN
[Graph]
Base
Period
Dec.92 Dec.93 Dec.94 Dec.95 Dec.96 Dec.97
MATEC CORPORATION 100 110.71 128.57 114.29 96.43 117.86
AMERICAN STOCK EXCHANGE IND 100 119.52 108.63 137.32 146.10 171.48
WEIGHTED PEER INDEX 100 107.85 109.21 141.49 156.66 194.81
<PAGE>
(2) REINCORPORATION OF THE COMPANY IN MARYLAND
AND CASH-OUT OF CERTAIN STOCKHOLDERS
GENERAL
The Board of Directors has approved a proposal (the
"Reincorporation") to change the Company's state of
incorporation from Delaware to Maryland. The
Reincorporation would be accomplished by merging the
Company (the "Merger") into a newly formed Maryland
subsidiary named MATEC Corporation (the "Maryland
Company"), pursuant to an Agreement of Merger and
Recapitalization (the "Merger Agreement") substantially in
the form attached as Exhibit A to this Proxy Statement.
The Maryland Company was incorporated in Maryland on May 6,
1998, specifically for purposes of the Reincorporation and
has conducted no business and has no material assets or
liabilities.
The Maryland Company's principal executive offices
will continue to be located at 75 South Street, Hopkinton,
Massachusetts 01748. The Reincorporation will not result
in any change in the Company's business, management,
policies, assets or liabilities, or result in any changes
in ownership of the Common Stock of the Company ("Common
Stock"), except that holders of less than 100 shares will
be cashed out, as described below.
PURPOSES OF THE REINCORPORATION
There are two purposes of the Reincorporation. First,
in connection with it approximately 1,700 Stockholders who
each own less than 100 shares of the Common Stock will
cease to be Stockholders and will receive cash in lieu of
fractional shares in the Maryland Company. At March 19,
1998, such stockholders owned an aggregate of 35,948
shares, representing 1.3% of the shares outstanding. This
will result in savings in administering stockholder
accounts estimated at $11,500 per year. Second, the
Company will be able to avoid Delaware's annual franchise
tax which for the year ended December 31, 1997, totaled
$11,200. The Company anticipates having to pay the same
amount in franchise taxes for future years if it continues
as a Delaware corporation. As a Maryland corporation, the
Company would not be subject to such annual taxes other
than the property tax filing fee of $100, provided that
Maryland does not alter its current laws.
In addition to cashing out its holders of less than
100 shares and avoiding the annual Delaware franchise tax,
a number of changes will be effected as a result of the
Reincorporation. Such changes are described below under
the headings "Certain Consequences of the Reincorporation"
and "Comparison of Rights of Stockholders of the Company
and Stockholders of the Maryland Company."
In the event this proposal is not adopted, the Company
will continue to operate as a Delaware corporation, the
Company will remain subject to Delaware's annual franchise
tax and the holders of less than 100 shares will continue
as Stockholders of the Company.
CONVERSION OF COMMON STOCK AND
CASH PAYMENT TO HOLDERS OF LESS
THAN 100 SHARES
- -------------------------------
In the Merger, each outstanding share of Common Stock
of the Company will automatically be converted into 1/100th
of a share of the Common Stock of the Maryland Company.
Holders of less than 100 shares will receive cash for their
shares based on the market value of the Company's Common
Stock at the time of the Reincorporation.
THE SHARE OWNERSHIP OF HOLDERS OF 100 SHARES OR MORE
WILL NOT BE AFFECTED BY THE MERGER. The reason is that one
hour after the effectiveness of the Merger, shares of the
Common Stock of the Maryland Corporation (the "Maryland
Common Stock") will be split 100 for 1, so that each holder
of 100 shares or more of the Company's Common Stock will
hold the same number of shares of the Maryland Common
Stock. As to such holders, other than changes due to the
differences between Delaware and Maryland law and certain
differences between the charters of the Company and the
Maryland Company, there will be no changes in the rights,
preferences and privileges of holders of the Common Stock
as a result of the Reincorporation (see "Comparison of
Rights of Stockholders of the Company and Stockholders of
the Maryland Company"). The Maryland Common Stock will be
listed on the American Stock Exchange, Inc. (the "AMEX")
under the same symbol as the Company's Common Stock, MXC.
DESCRIPTION OF THE REINCORPORATION
EFFECTIVE TIME. The Merger will take effect at 6:00
P.M. Eastern Time on June 19, 1998 (the "Effective Time")
or such later time as the Board of Directors may determine.
At the Effective Time, the separate corporate
existence of the Company will cease, and the Maryland
Company will possess all of the rights, property and assets
of the Company and will assume all of its debts,
liabilities and obligations.
EFFECT ON CAPITAL STOCK.
1. Each stockholder who owns of record less than 100
shares of Common Stock immediately prior to the Effective
Time will have only the right to receive cash in lieu of
receiving a fraction of a share, as hereinafter described.
The interest of each such stockholder in the Company will
terminate, and each such stockholder will have no right to
vote as a stockholder or share in the Company's assets,
earnings or profits following the Reincorporation.
2. Each stockholder who owns of record 100 or more
shares of Common Stock immediately prior to the Effective
Time will become stockholders of the Maryland Company
owning 1/100th of the number of shares so owned in the
Company. Effective one hour after the Merger each such
share and fractional share will be split 100 for 1 (the
"Split").
ANY HOLDER OF RECORD OF LESS THAN 100 SHARES OF COMMON
STOCK WHO DESIRES TO RETAIN AN EQUITY INTEREST IN THE
COMPANY AFTER THE MERGER MAY DO SO BY PURCHASING, PRIOR TO
THE MERGER, A SUFFICIENT NUMBER OF SHARES OF COMMON STOCK
SUCH THAT THE TOTAL NUMBER OF SHARES HELD OF RECORD IN HIS
NAME IS EQUAL TO AT LEAST 100. ANY BENEFICIAL OWNER OF
LESS THAN 100 SHARES WHO IS NOT A HOLDER OF RECORD AND WHO
DESIRES TO HAVE HIS SHARES EXCHANGED FOR CASH SHOULD
INSTRUCT HIS BROKER TO TRANSFER HIS SHARES INTO HIS NAME IN
A TIMELY MANNER SUCH THAT SUCH BENEFICIAL OWNER WILL BE A
HOLDER OF RECORD AT THE EFFECTIVE TIME.
CASH PAYMENT IN LIEU OF FRACTIONAL SHARES. The
average daily closing price per share of the Common Stock
on the AMEX for the ten trading days immediately preceding
the date on which the Merger takes effect is hereinafter
called the "Purchase Price." Each stockholder who holds
less than 100 shares of record at the Effective Time will
receive, in lieu of fractional shares, cash in the amount
of the Purchase Price multiplied by the number of shares of
Common Stock held by such stockholder at the Effective Time
(the "Cash Out"). All amounts payable to stockholders will
be subject to applicable state laws relating to abandoned
property. No service charges or brokerage commissions will
be payable by stockholders in connection with the Cash Out.
The Company will pay no interest on cash sums due any such
stockholder pursuant to the Cash Out.
As soon as practical after the Merger, the Company
will mail a letter of transmittal to each such holder of
less than 100 shares of Common Stock for use in
transmitting stock certificates to the Company's Exchange
Agent. The letter of transmittal will contain instructions
for the surrender of such certificate or certificates to
the Exchange Agent in exchange for such stockholder's cash
payment. No cash payment will be made to any such
stockholder until he has surrendered his outstanding
certificate(s), together with the letter of transmittal, to
the Exchange Agent. The Exchange Agent is State Street
Bank and Trust Company, P.O. Box 644, Mail Stop 45-02-64,
Boston, MA 02102-0644, Telephone No. 800-426-5523.
After the Merger and until surrendered, each
outstanding certificate held by a stockholder of record who
held less than 100 shares at the close of business at the
Effective Time will represent only the right to receive the
amount of cash to which the holder is entitled.
CONTINUING STOCKHOLDERS. After the Merger and the
Split, stockholders who immediately prior to the Effective
Time owned 100 shares or more of the Common Stock of the
Company will be stockholders of the Maryland Company owning
the same number of shares until they acquire or dispose of
shares. The stock will be identified by a new CUSIP
number, which will appear on all certificates issued after
the Merger. After the Merger and the Split, each
certificate which immediately prior to the Merger
represented at least 100 shares of Common Stock, until
surrendered and exchanged for a new certificate will be
deemed for all purposes to evidence ownership of the same
number of shares of the Maryland Company. Any stockholder
desiring to receive a new certificate bearing the new CUSIP
number can do so at any time by contacting the Exchange
Agent at the address set forth above for instructions for
surrendering his old certificates.
EFFECT OF CASH OUT. As of March 19, 1998,
approximately 1,700 record holders of Common Stock, or
approximately 59% of the total number of record holders,
owned less than 100 shares of Common Stock. Such
stockholders owned in the aggregate 35,948 shares, being
approximately 1.3% of the outstanding shares of Common
Stock. Assuming a Purchase Price of $4.00 per share, the
cash payments to such holders will total $143,792.
The cost of administering each stockholder's account
and the amount of time spent by management of the Company
in responding to stockholder requests is the same
regardless of the number of shares held in the account.
Accordingly, the cost to the Company of maintaining many
small accounts is disproportionately high when compared
with the total number of shares involved. Management of
the Company believes that it would be beneficial to the
Company and its stockholders as a whole to eliminate the
administrative burden and costs associated with the
accounts containing less than 100 shares of Common Stock.
It is expected that the direct costs of administering
stockholder accounts will be reduced by approximately
$11,500 per year if the Reincorporation is effected.
Since the Company is unable to locate a significant
number of its stockholders with small holdings, it believes
it would be unable to acquire the shares of such stock-
holders by making a tender offer to acquire the shares.
Accordingly, if it is to acquire these shares, the Company
believes it must do so by means of the Reincorporation.
Funds otherwise payable to a stockholder who cannot be
located will be held by the Company until proper claim
therefor is made, subject to applicable escheat laws.
Further, the Reincorporation will enable holders of
record of less than 100 shares to dispose of their
investment at market value and avoid brokerage fees on the
transaction. Stockholders owning a small number of shares
would, if they chose to sell their shares otherwise, likely
incur brokerage fees disproportionately high relative to
the market value of the shares. In some cases,
stockholders might encounter difficulty in finding a broker
willing to handle such small transactions.
CERTAIN CONSEQUENCES OF THE REINCORPORATION
In the discussion below, where the context so requires
the term "Company" shall mean the Maryland Company and the
term "Board of Directors" shall mean the Board of Directors
of the Maryland Company.
MANAGEMENT AFTER THE REINCORPORATION. Immediately
after the Reincorporation, the Board of Directors of the
Maryland Company (the "Maryland Board of Directors") will
be composed of the persons who are Directors of the Company
at the time of the Merger. Each will serve as director of
the Maryland Company until the next Annual Meeting of
Stockholders and until his successor is elected and
qualified.
STOCKHOLDER RIGHTS. Certain differences in
Stockholder rights exist under Delaware General Corporation
Law ("Delaware law") and Maryland General Corporation law
("Maryland law"). These are discussed below under the
caption "Comparison of Rights of Stockholders of the
Company and Stockholders of the Maryland Company".
NUMBER OF SHARES OF STOCK AUTHORIZED AND OUTSTANDING.
The Company's charter authorizes the Company to issue ten
million shares of Common Stock and one million shares of
preferred stock, and the charter of the Maryland Company
also authorizes the issuance of ten million shares of
Common Stock and one million shares of preferred stock.
The number of outstanding shares of Maryland Common Stock
following the Reincorporation and Split will equal the
number of shares of Common Stock of the Company outstanding
immediately prior to the Effective Time less the
approximately 36,000 shares held by holders of less than
100 shares. No shares of preferred stock are outstanding.
SECURITIES LAWS. The Common Stock is registered under
Section 12(b) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), and, as a result, the Company
is subject to the periodic reporting and other requirements
of the Exchange Act. The Common Stock of the Maryland
Company will be registered under the Exchange Act. The
Company has no current intention of terminating such
registration to become a "private" company, and after the
Reincorporation the Maryland Company will be a publicly
held company. It will file with the SEC and provide to its
stockholders the same type of information that the Company
has previously filed and provided. Continuing shareholders
whose stock in the Company is freely tradable will have
freely tradable shares of the Maryland Company.
Shareholders holding restricted securities will be subject
to the same restrictions on transfer as those to which
their present shares of stock in the Company are subject.
FRANCHISE TAX. The Company is subject to Delaware's
annual franchise tax and for the year ended December 31,
1997, the amount of such tax was $11,200. The Company
anticipates having to pay approximately the same amount of
franchise tax each year in the future if it continues as a
Delaware corporation. As a Maryland corporation, the
Maryland Company would not be subject to any such annual
taxes other than the Maryland personal property tax filing
fee of $100, provided that Maryland does not alter its
current laws.
OPTION PLAN. The Company's 1992 Stock Option Plan
(the "Plan") will be continued by the Maryland Company
following the Reincorporation. Approval of the proposed
Reincorporation will constitute approval of the adoption
and assumption of the Plan by the Maryland Company.
OUTSTANDING OPTIONS. All outstanding options and
other rights to acquire shares of Common Stock of the
Company will be converted into options or rights to acquire
shares of the Maryland Company.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES.
CONSEQUENCES TO THE COMPANY. The Reincorporation is
intended to be tax free under the Internal Revenue Code and
no gain or loss will be recognized by the Company or the
Maryland Company as a result of it.
CONSEQUENCES TO STOCKHOLDERS WHO RECEIVE NO CASH AND
CONTINUE TO HOLD COMMON STOCK IMMEDIATELY AFTER THE
EFFECTIVENESS OF THE REINCORPORATION. A stockholder who
continues to hold Common Stock immediately after the
effectiveness of the Reincorporation and who receives no
cash pursuant to the Reincorporation (i) will not recognize
any gain or loss in the Reincorporation and (ii) will have
the same adjusted tax basis and holding period in the
Common Stock as he had in the Common Stock immediately
prior to the Reincorporation.
CONSEQUENCES TO STOCKHOLDERS WHO RECEIVE CASH OF
PURSUANT TO THE REINCORPORATION. A stockholder who
receives cash in lieu of fractional shares in the
Reincorporation generally will recognize capital gain or
loss in an amount equal to the difference between the cash
received in the Reincorporation and his aggregate adjusted
tax basis in the shares of Common Stock disposed of.
If a stockholder who receives cash continues to own
shares beneficially, but not of record, or is treated under
the Internal Revenue Code as constructively owning shares
owned by certain related persons or entities, then under
some circumstances the full amount of the cash received may
be treated as capital gain or ordinary income.
MAXIMUM TAX RATES APPLICABLE TO CAPITAL GAIN. Under
the Taxpayer Relief Act of 1997, net capital gain (i.e.,
generally, capital gain in excess of capital loss)
recognized by an individual upon the sale of a capital
asset that has been held for more than 18 months will
generally be subject to tax at a rate not to exceed 20%.
Net capital gain recognized by an individual from the sale
of a capital asset that has been held for more than 12
months but not for more than 18 months will continue to be
subject to tax at a rate not to exceed 28%, and capital
gain recognized from the sale of a capital asset that has
been held for 12 months or less will continue to be subject
to tax at ordinary income tax rates. In addition, capital
gain recognized by a corporate taxpayer will continue to be
subject to tax at the ordinary income tax rates applicable
to corporations.
The foregoing is only a summary of certain Federal
income tax consequences, and each stockholder is urged to
consult his tax advisor as to the particular Federal,
state, local and foreign tax consequences to him.
ACCOUNTING TREATMENT OF THE MERGER
Upon the effectiveness of the Merger, the financial
accounts of the Maryland Company will become those of the
Company as they were immediately before effectiveness,
except that they as a result of the Cash Out the Common
Stock account will be charged with the portion of the Cash
Out payment equal to the total par value of the eliminated
Common Stock and the balance allocated to the capital
surplus and retained earnings accounts.
APPRAISAL RIGHTS
Delaware law provides that shareholders of a
corporation do not have appraisal rights when a corporation
whose shares are listed on a national securities exchange
merges with a foreign corporation. Consequently, because
the Common Stock is listed on the AMEX, appraisal rights
are not available to shareholders of the Company with
respect to the Reincorporation.
APPROVAL REQUIRED FOR REINCORPORATION
The affirmative vote of a majority of the outstanding
Common Stock entitled to vote on the proposal is required
for approval of the Reincorporation. The Reincorporation
may be abandoned or the Merger Agreement may be amended
(with certain exceptions), either before or after
Stockholder approval has been obtained, if in the opinion
of the Board of Directors circumstances arise that make
such action advisable.
No federal or state regulatory requirements must be
complied with or approval must be obtained in connection
with the proposed transaction.
COMPARISON OF RIGHTS OF STOCKHOLDERS OF THE COMPANY AND
STOCKHOLDERS OF THE MARYLAND COMPANY
GENERAL. The Company is organized as a corporation
under the laws of the State of Delaware and the Maryland
Company is organized as a corporation under the laws of the
State of Maryland. As a Delaware corporation, the Company
is subject to Delaware law and, as a Maryland corporation,
the Maryland Company is subject to Maryland law. The
Company also is governed by its Certificate of
Incorporation (the "Delaware Certificate") and Bylaws. As
a Maryland corporation, the Maryland Company is governed by
Maryland law and by its Articles of Incorporation (the
"Maryland Articles") and Bylaws. A number of differences
between Delaware law and Maryland law and between these
documents are summarized below.
The discussion of the comparative rights of the
shareholders of the Company and the stockholders of the
Maryland Company as set forth below does not purport to be
complete and is subject to and qualified in its entirety by
reference to Delaware law, Maryland law, the Maryland
Articles and the Delaware Certificate. The Maryland
Articles will be substantially in the form attached to this
Proxy Statement. The Delaware Certificate may be obtained
from the Company, without charge, by contacting Michael J.
Kroll, Vice President, MATEC Corporation, 75 South Street,
Hopkinton, Massachusetts 01748.
LIMITATION OF LIABILITY. Pursuant to Delaware law and
the Delaware Certificate, the liability of directors of the
Company to the Company or to any shareholder of the Company
for money damages for breach of fiduciary duty has been
eliminated, except for (i) breach of the directors' duty of
loyalty to the Company or its shareholders, (ii) acts or
omissions not in good faith or which involve intentional
misconduct or a knowing violation of law, (iii) unlawful
dividends or redemptions or purchases of stock, or (iv) any
transaction from which the directors derived an improper
personal benefit. In general, the liability of officers
may not be eliminated or limited under Delaware law.
Pursuant to Maryland law and the Maryland Articles,
the liability of directors and officers of the Maryland
Company to the Maryland Company or to any shareholder of
the Maryland Company for money damages has been eliminated
except for (i) actual receipt of an improper personal
benefit in money, property or service and (ii) active and
deliberate dishonesty established by a final judgment as
being material to the cause of action.
As a result of the Reincorporation, both directors and
officers of the Company may not be liable under Maryland
law for certain actions for which they would have otherwise
been liable under Delaware law; therefore, the likelihood
of payments by the Company pursuant to its indemnification
obligations (which are described below) may be reduced.
There is no pending or, to the Company's knowledge,
threatened litigation to which any of its directors or
officers is or would be a party in which the rights of the
Company or its shareholders would be affected if the
Company already were subject to the provisions of Maryland
law rather than Delaware law.
INDEMNIFICATION OF DIRECTORS AND OFFICERS. The
Delaware Certificate requires the Company, to the fullest
extent permitted by Delaware law, to indemnify every person
who is or was a party or is or was threatened to be made a
party to any action, suit or proceeding, whether civil,
criminal, administrative or investigative, by reason of the
fact that he is or was a director, officer or employee of
the Company or, while a director, officer or employee of
the Company, is or was serving at the request of the
Company as a director, officer, employee, agent or trustee
of another corporation, partnership, joint venture, trust,
employee benefit plan or other enterprise, against all
expense, liability and loss (including attorneys' fees,
judgments, fines and amounts paid in settlement) reasonably
incurred by him in connection with such action, suit or
proceeding.
The Maryland Articles require the Maryland Company to
indemnify its directors and officers to the fullest extent
permitted from time to time by the laws of Maryland.
Maryland law permits a corporation to indemnify its present
and former directors and officers, among others, against
judgments, penalties, fines, settlements and reasonable
expenses actually incurred by them in connection with any
proceeding to which they may be made a party by reason of
their service in those or other capacities unless it is
established that (a) the act or omission of the director or
officer was material to the matter giving rise to the
proceeding and was committed in bad faith or was the result
of active and deliberate dishonesty, (b) the director or
officer actually received an improper personal benefit in
money, property or services, or (c) in the case of any
criminal proceeding, the director or officer had reasonable
cause to believe that the act or omission was unlawful. In
addition, Maryland law requires the Company, as conditions
to advancing expenses, to obtain (i) a written affirmation
by the director or officer of his or her good faith belief
that he or she has met the standard of conduct necessary
for indemnification by the Company as authorized by the
bylaws, and (ii) a written statement by or on his or her
behalf to repay the amount paid or reimbursed by the
Company if it shall ultimately be determined that the
standard of conduct was not met. Under Maryland law,
rights to indemnification and expenses are non-exclusive,
in that they need not be limited to those expressly
provided by statute.
Unlike the Delaware Certificate, which specifically
sets forth most of the conditions and requirements of
indemnification for the Delaware Company without referring
to Delaware law, the Maryland Articles define most of the
conditions and requirements of indemnification for the
Maryland Company by referring to applicable Maryland law;
therefore, the Maryland Company's indemnification
obligations may be modified by future changes in law
without stockholder action. To protect the Maryland
Company's officers and directors, the Maryland Articles
provide that amendment or repeal of the indemnification
provision of the Maryland Articles would be effective on a
prospective basis only and neither repeal nor modification
of such provision would adversely affect rights to
indemnification in effect at the time of any act or
omission that is the subject of a proceeding against an
indemnified person. The indemnification provisions of the
Maryland Articles are intended to apply to proceedings
arising from acts or omissions occurring before or after
their respective adoption or execution. There is presently
no pending or already completed litigation nor, to the best
knowledge of the Company, is there any threatened
litigation to which the expanded nature of the coverage
under the indemnity provision of the Maryland Articles
would apply.
Under Delaware law, the termination of any proceeding
by conviction or upon a plea of nolo contendere or its
equivalent, shall not, of itself, create a presumption that
such person is prohibited from being indemnified. Under
Maryland law, such a termination creates a rebuttable
presumption that such person is not entitled to
indemnification. In addition, Delaware law requires court
approval before there may be any indemnification where the
person seeking indemnification has been found liable to the
corporation. However, indemnification is prohibited under
Maryland law if the person seeking indemnification has been
found liable to the corporation in a proceeding brought by
or in the right of the corporation. In addition, Maryland
law provides that a person adjudged liable on the basis
that personal benefit was improperly received may not be
indemnified by the corporation. Thus, under these
circumstances, Maryland law provides indemnification rights
that are narrower than under Delaware law.
ACTIONS BY WRITTEN CONSENT OF SHAREHOLDERS. Under
both Delaware law and Maryland law, shareholders may act by
written consent in lieu of a shareholder meeting. Delaware
law provides that, unless otherwise provided in the
certificate of incorporation, any action that may be taken
at a shareholder meeting may be taken without a meeting,
without prior notice and without a vote, upon the written
consent of the holders of outstanding stock having not less
than the minimum number of votes that would be necessary to
authorize or take such action at a shareholder meeting at
which all shares entitled to vote were present and voted.
Maryland law provides that any action that may be taken at
a stockholder meeting may be taken without a meeting only
if, among other things, a unanimous written consent setting
forth the matter is signed by each stockholder entitled to
vote on the matter.
Because Maryland law requires the consent of all
stockholders entitled to vote for actions to be taken by
written consent, it will be extremely unlikely that
stockholders of the Maryland Company will be able to take
action by written consent.
INSPECTION OF BOOKS AND RECORDS. Under Delaware law,
any shareholder of the Company may examine the list of
shareholders and any shareholder making a written demand
may inspect any other corporate books and records for any
purpose reasonably related to the shareholder's interest as
a shareholder. Maryland law provides an absolute right of
stockholder inspection for any purpose to individuals who
have been stockholders for more than six (6) months and,
individually or as a group, own at least five percent (5%)
or more of a Maryland corporation's outstanding voting
shares. In addition, any stockholder of a Maryland
corporation has the right to request the corporation to
provide a sworn statement showing all stock and securities
issued and all consideration received by the corporation
within the preceding twelve (12) months. Thus,
stockholders of less than five percent (5%) of the
Company's Common Stock will generally not be able to make
written demand to inspect the books and records of the
Company if the Reincorporation is approved.
AMENDMENT TO BYLAWS. Under Delaware law, the
shareholders may never be divested of the power to adopt,
amend or repeal the bylaws. Such power may also be
conferred upon the board of directors. As permitted by
Maryland law, the power to amend the bylaws of the Maryland
Company is vested exclusively with the board of directors.
FILLING VACANCIES ON THE BOARD OF DIRECTORS. Pursuant
to Maryland law, unless the charter or bylaws provide
otherwise or a classified board system is employed, a
majority of the remaining directors, whether or not
sufficient to constitute a quorum, may appoint a director
to fill a vacancy which results from any cause except an
increase in the number of directors, and any vacancy
resulting from an increase in the number of directors shall
be filled only by a majority vote of the entire board. If
the vacancy is caused by removal of a director by the
stockholders, the successor director may be elected by the
stockholders at the same meeting at which such removal
occurs.
Pursuant to Delaware law, vacancies and newly created
directorships may be filled by a majority of the directors
then in office or a sole remaining director (even though
less than a quorum) unless otherwise provided in the
certificate of incorporation or bylaws. However, Delaware
law also provides that if the directors then in office
constitute less than a majority of the corporation's board
of directors, then, upon application by shareholders
representing at least ten (10%) of outstanding shares
entitled to vote for such directors, the Court of Chancery
may order a shareholder election of directors to be held.
DIVIDENDS AND OTHER DISTRIBUTIONS. Under Delaware
law, dividends may be paid out of the surplus of the
corporation or, if there is no surplus, out of net profits
for the year in which the dividend is declared and/or the
preceding fiscal year. Maryland law allows the payment of
dividends and redemption of stock unless (i) the
corporation would not be able to pay indebtedness that
became due in the ordinary course of business or (ii) the
corporation's total assets would be less than the sum of
the corporation's liabilities plus, unless the charter
would provide otherwise, the amount that would be needed
upon dissolution to satisfy the preferential rights of
those shareholders whose preferential rights upon
dissolution are superior to those receiving the
distribution.
LAWS REGULATING BUSINESS COMBINATIONS. Delaware law
requires that a merger, consolidation, share exchange, or,
in certain circumstances, an asset transfer, or issuance or
reclassification of equity securities (a "business
combination") between a corporation and any person who owns
fifteen percent (15%) or more of the outstanding voting
stock of the corporation may not occur for three (3) years
following the date such person became such an interested
shareholder unless (i) approved by the board of directors
and holders of at least two-thirds (2/3) of the outstanding
voting stock (other than shares controlled by the
interested shareholder), (ii) the board of directors
approved the acquisition of voting stock pursuant to which
such person became an interested shareholder, or (iii) an
exemption is available.
Under Maryland law, business combinations between a
Maryland corporation and any person who, at any time within
the two-year period prior to the date in question, was the
beneficial owner of ten percent (10%) or more of the voting
power of the then-outstanding voting stock of the
corporation (an "Interested Maryland Stockholder") are
prohibited for five (5) years after the most recent date on
which the Interested Maryland Stockholder became an
Interested Maryland Stockholder. Thereafter, unless an
exemption is available, Maryland law provides that any such
business combination must be recommended by the board of
directors of such corporation and approved by the
affirmative vote of at least (a) eighty percent (80%) of
the votes entitled to be cast by holders of outstanding
voting shares of the corporation and (b) sixty-six percent
(66%) of the votes entitled to be cast by outstanding
voting shares of the corporation other than shares held by
the Interested Maryland Stockholder with whom the business
combination is to be effected. Ted Valpey, Jr. owns, and
for more than five (5) years has owned, more than 10% of
the Company's Common Stock and thus will become an
Interested Maryland Stockholder after the Reincorporation.
However, the Articles of Incorporation of the Maryland
Company exempt him from the provisions of this business
combination statute.
The Maryland business combination statue could have
the effect of discouraging offers to acquire the Maryland
Company and of increasing the difficulty of consummating
any such offers.
DISSENTERS' RIGHTS. Under Maryland law, stockholders
have the right to demand and to receive payment of the fair
value of their stock in the event of: (a) a merger or
consolidation, (b) a share exchange, (c) certain sales of
all or substantially all of the assets, (d) a charter
amendment altering contract rights of outstanding stock, as
expressly set forth in the charter, and substantially
adversely affecting the stockholders rights, unless the
right to do so is reserved in the charter, or (e) certain
business combinations with interested stockholders which
are subject to or exempted from Maryland's business
combination statute and in connection with the approval of
voting rights of certain stockholders under Maryland's
control share acquisition statute. However, the right to
demand and receive payment of fair value does not apply to
stock listed on a national securities exchange.
See "Appraisal Rights" above concerning rights of
appraisal in connection with the Reincorporation.
NUMBER OF AUTHORIZED SHARES OF CAPITAL STOCK. The
Delaware Certificate authorizes the issuance of 10,000,000
shares of Common Stock and 1,000,000 shares of preferred
stock. The Maryland Articles also authorize the issuance
of 10,000,000 shares of Common Stock and 1,000,000 shares
of preferred stock.
CLASSIFICATION & RECLASSIFICATION OF UNISSUED STOCK.
Maryland law expressly permits a Maryland corporation's
charter to authorize so-called "blank check" stock which
permits the Board both to classify and/or reclassify the
preferences, conversion rights, voting powers,
restrictions, limitations as to dividends, rights regarding
redemption and liquidation, and other rights of any shares
of unissued stock. If the Board of Directors exercises
this power, Articles Supplementary must be filed with SDAT
prior to the issuance of such securities. This power can
be used not only to classify or initially set the
preferences and other terms of preferred stock as under
Delaware law, but also to change the terms of unissued
common stock or to reclassify unissued common stock as
preferred stock, or vice versa.
Delaware law provides for a similar right for a
Delaware corporation, but only with respect to classifying
(but not reclassifying) the terms of any class or series of
authorized but unissued stock.
Because Maryland law affords greater flexibility in
either classifying or reclassifying the terms of any
unissued stock than does Delaware law, "blank check" stock
of a Maryland corporation can be used as a anti-takeover
defense since it enables the corporation to issue
additional shares with supervoting or other enhanced
rights.
VALIDITY OF THE MARYLAND COMPANY STOCK.
The validity of the Maryland Company Stock will be
passed upon for the Maryland Company by Whiteford, Taylor &
Preston L.L.P., Seven Saint Paul Street, Baltimore,
Maryland 21202-1626.
POSSIBLE DISADVANTAGES.
Despite the belief of the Company's Board of Directors
that the Reincorporation Proposal is in the best interests
of the Company and its shareholders, shareholders should be
aware that Maryland law has generally not received the same
extent of scrutiny and interpretation by the courts as has
Delaware law. Although the corporate law of other states
such as Maryland's has been updated in a number of
significant respects recently to make it an attractive
alternative site for incorporation, Delaware law is still
widely regarded as the most extensive and well-defined body
of corporate law in the United States. Because of
Delaware's prominence as a state of incorporation for many
major corporations, both the legislature and courts in
Delaware have demonstrated an ability and willingness to
act quickly and effectively to meet changing business
needs. Furthermore Delaware corporations are often guided
by the extensive body of court decisions interpreting
Delaware's corporate law.
Maryland law is a modern corporation statute, which
was significantly updated in 1975, and has been further
amended in a number of significant respects to date. The
Company's Board of Directors believes that Maryland law, as
supplemented by its legislative history, will provide MATEC
Corporation with a comprehensive and flexible legal
structure under which to operate. Furthermore, Maryland
courts have referred to the analysis of the Delaware courts
in addressing issues raised by similar provisions of
Maryland law and Delaware law.
RECOMMENDATION OF THE BOARD OF DIRECTORS.
The Board believes that the Reincorporation proposal is
in the best interests of the Company and its Stockholders
and therefore recommends Stockholders vote FOR approval of
the proposal.
A vote FOR the Reincorporation will constitute approval
of (i) the change in the Company's state of incorporation
through a merger of the Company into the Maryland Company,
(ii) the Maryland Articles and (iii) all other aspects of
the Reincorporation.
OTHER MATTERS
The Board of Directors knows of no matters to be
presented at the meeting other than those set forth in the
foregoing Notice of Annual Meeting. If other matters
properly come before the meeting, the persons named on the
accompanying form of proxy intend to vote the shares
subject to such proxies in accordance with their best
judgment.
AUDIT AND RELATED MATTERS
The Board of Directors has selected Deloitte &
Touche, independent certified public accountants, as
auditors of the Company for 1998.
The consolidated financial statements of the
Company and its subsidiaries included in the Annual Report
to Stockholders for the fiscal year ended December 31, 1997
were examined by Deloitte & Touche. Representatives of
Deloitte & Touche are expected to attend the meeting with
the opportunity to make a statement if they desire. It is
expected that such representatives will be available to
respond to appropriate questions from stockholders.
ADDITIONAL INFORMATION
The cost of solicitation of Proxies will be borne
by the Company. If necessary to insure satisfactory
representation at this meeting, Proxies may be solicited to
a limited extent by telephone or personal interview by
officers and employees of the Company. Such solicitation
will be without cost to the Company, except for actual out-
of-pocket communication charges. Brokerage houses, banks,
custodians, nominees and fiduciaries are being requested to
forward the proxy material to beneficial owners and their
reasonable expenses therefor will be reimbursed by the
Company.
STOCKHOLDER'S PROPOSALS
From time to time, stockholders present proposals
which may be proper subjects for inclusion in the Proxy
Statement and for consideration at the annual meeting. To
be considered, proposals must be submitted on a timely
basis. Proposals for the 1999 annual meeting must be
received by the Company no later than January 21, 1999.
JOHN J. MCARDLE III
SECRETARY
MAY 11, 1998
UPON THE WRITTEN REQUEST OF ANY STOCKHOLDER OF
THE COMPANY, THE COMPANY WILL PROVIDE TO SUCH STOCKHOLDER A
COPY OF THE CORPORATION'S ANNUAL REPORT ON FORM 10-K FOR
1997, INCLUDING THE FINANCIAL STATEMENTS AND THE SCHEDULES
THERETO, FILED WITH THE SECURITIES AND EXCHANGE COMMISSION.
ANY SUCH REQUEST SHOULD BE DIRECTED TO SECRETARY, MATEC
CORPORATION, 75 SOUTH STREET, HOPKINTON, MASSACHUSETTS
01748. THERE WILL BE NO CHARGE FOR SUCH REPORT UNLESS ONE
OR MORE EXHIBITS THERETO ARE REQUESTED, IN WHICH CASE THE
CORPORATION'S REASONABLE EXPENSES OF FURNISHING SUCH
EXHIBITS MAY BE CHARGED.
ALL STOCKHOLDERS ARE URGED TO FILL IN, SIGN AND
MAIL THE ENCLOSED PROXY PROMPTLY WHETHER OR NOT YOU EXPECT
TO ATTEND THE MEETING. IF YOU ARE MAILING YOUR PROXY,
KINDLY DO SO SUFFICIENTLY IN ADVANCE OF THE MEETING DATE SO
THAT IT WILL BE RECEIVED IN TIME TO BE COUNTED AT THE
MEETING.
<PAGE>
EXHIBIT A
AGREEMENT OF MERGER
AND
RECAPITALIZATION
THIS AGREEMENT (the "Agreement"), dated as of
June 18, 1998, is by and between MATEC Corporation, a
Delaware corporation (the "Company"), and MATEC
Corporation, a Maryland corporation (the "Maryland
Company").
RECITALS
WHEREAS, the Board of Directors of the Company
and the Board of Directors of the Maryland Company each has
determined that it is in the best interest of their
respective shareholders to effect the merger provided for
herein and thereafter to effect the recapitalization of the
Maryland Company provided for herein, all upon the terms
and subject to the conditions set forth therein,
NOW, THEREFORE, in consideration of the premises,
and of the representations, warranties, covenants and
agreements contained herein, the parties hereto adopt the
plan of reorganization encompassed by this Agreement and
agree as follows:
ARTICLE I
THE MERGER; CLOSING; EFFECTIVE TIME
1.1 The Merger. Subject to the terms and
conditions of this Agreement, at the Effective Time (as
defined in Section 1.2), the Company shall be merged with
and into the Maryland Company and the separate corporate
existence of the Company shall thereupon cease (the
"Merger"). To the extent the Merger constitutes a
transaction for federal income tax purposes, the parties
intend that the Merger qualify as a reorganization
described in Section 368(a)(1)(F) of the Internal Revenue
Code of 1986, as amended. The Maryland Company (sometimes
hereinafter referred to as the "Surviving Entity") shall be
the surviving entity in the Merger and shall continue to be
governed by the laws of the State of Maryland, and its
separate existence with all its rights, privileges,
immunities, powers and franchises shall continue unaffected
by the Merger. The Merger shall have the effects specified
in the General Corporation Law of the State of Delaware
(the "DGCL") and the Maryland General Corporation Law (the
"MGCL").
1.2 Effective Time. Promptly after the
conditions set forth in Section 6.1 shall be fulfilled, and
provided that this Agreement has not been terminated or
abandoned pursuant to Article VII, the Company and the
Maryland Company shall cause a Certificate of Merger (the
"Certificate of Merger") to be executed and filed with the
Secretary of State of Delaware as provided in Section 251
of the DGCL and Articles of Merger (the "Articles of
Merger") to be executed and filed with the State Department
of Assessments and Taxation of Maryland (the "SDAT") as
provided in Section 3-107 of the MGCL. The Merger shall
become effective at 6:00 P.M. Eastern Time on June 19, 1998
(the "Effective Time"), but only if prior to that date such
Certificate of Merger and Articles of Merger have been so
filed.
ARTICLE II
ARTICLES OF INCORPORATION AND BYLAWS
OF THE SURVIVING CORPORATION
2.1 Articles of Incorporation. The Articles of
Incorporation of the Maryland Company in effect at the
Effective Time, as amended by this Agreement, shall be the
Articles of Incorporation of the Surviving Entity, until
duly amended in accordance with the MGCL.
2.2 The Bylaws. The Bylaws of the Maryland
Company in effect at the Effective Time shall be the Bylaws
of the Surviving Entity, until duly amended in accordance
with the terms thereof and the MGCL.
ARTICLE III
DIRECTORS AND OFFICERS
OF THE SURVIVING CORPORATION
Directors and Officers. The directors and
officers of the Company at the Effective Time shall, from
and after the Effective Time, be the directors and
officers, respectively, of the Surviving Entity until their
successors have been duly elected or appointed and
qualified or until their earlier death, resignation or
removal in accordance with the Surviving Entity's Articles
of Incorporation and Bylaws.
ARTICLE IV
EFFECT OF THE MERGER ON CAPITAL STOCK
4.1 Effect on Capital Stock. At the Effective
Time, by virtue of the Merger and without any action on the
part of any holder of capital stock of the Company:
(a) Except as provided in (b) below, each
share of the common stock, par value $0.05 per share, of
the Company ("Company Stock") issued prior to the Effective
Time and not theretofore retired (other than shares held by
the Company) shall be converted into 1/100th of one validly
issued, fully paid and nonassessable share of common stock,
par value $0.05 per share, of the Maryland Company
("Maryland Company Stock"), and each share of Company Stock
held by the Company shall be retired.
(b) Stockholders holding less than 100
shares of Company Stock of record immediately prior to the
Effective Time ("Fractional Holders") shall not receive or
be entitled to any fractional shares of Maryland Company
Stock and, except as set forth in the immediately following
sentence, shall not have any rights as a stockholder of the
Surviving Entity. In lieu of all other rights, Fractional
Holders shall be entitled to receive, upon surrender of the
certificate or certificates evidencing their shares of
Company Stock, the cash value of such shares based on the
average daily closing price per share of the Company Stock
on the American Stock Exchange (the "AMEX") for the 10
trading days immediately preceding the Effective Time,
without interest.
(c) Each issued certificate which
immediately prior to the Effective Time represented at
least 100 shares of Company Stock shall, from and after the
Effective Time and the effectiveness of the amendment of
the Articles of Incorporation of the Maryland Company
referred to in Section 6.1(c) (the "Split"), be deemed for
all purposes to evidence ownership of and represent the
number of shares of Maryland Company Stock which the shares
of Company Stock represented by such certificates have
become as a result of the Merger and the Split, and shall
be so registered on the books and records of the Maryland
Company and its transfer agent.
(d) Each option or other right to purchase
or otherwise acquire shares of Company Stock outstanding
immediately prior to the Effective Time shall, by virtue of
the Merger and the Split and without any action on the part
of the holder of such option or right, be converted into
and become an option or right to purchase or otherwise
acquire the same number of shares of Maryland Company Stock
at the same price per share and upon the same terms and
subject to the same conditions as applicable to such
options or other rights immediately prior to the Effective
Time.
(e) Each share of the Maryland Company Stock
outstanding immediately prior to the Effective Time shall
be canceled and retired, without payment of any
consideration therefor, and resume the status of an
authorized and unissued share of Maryland Company Stock.
ARTICLE V
COVENANTS
5.1 Stock Exchange Listing. The Maryland
Company shall use its best efforts to cause the Maryland
Company Stock to be issued in the Merger and Split to be
approved for listing on the AMEX prior to the Effective
Time subject to official notice of issuance.
ARTICLE VI
CONDITIONS
6.1 Conditions to Each Party's Obligation to
Effect the Merger. The respective obligations of the
Maryland Company and the Company to consummate the Merger
are subject to the fulfillment of each of the following
conditions:
(a) Shareholder Approval. This Agreement
shall have been duly approved by the holders of a majority
of the outstanding shares of Company Stock.
(b) AMEX Listing. The Maryland Company
Stock issuable pursuant to this Agreement shall have been
approved for listing on AMEX upon official notice of
issuance.
(c) The Articles of Incorporation of the
Maryland Company shall have been amended by adding to
Article FOURTH thereof a Paragraph (c) providing as
follows:
"(c) Effective one hour after the
merger of MATEC Corporation (a Delaware
corporation) with and into this Corporation
shall become effective, each issued share of
the common stock, par value five cents
($0.05) per share, of this Corporation and
each fraction thereof is reclassified and
converted into multiple shares on the basis
of 100 shares for each one share."
ARTICLE VII
TERMINATION
7.1 Termination by Mutual Consent. This
Agreement may be terminated and the Merger may be abandoned
at any time prior to the Effective Time, before or after
the approval by holders of the Company Stock, by the mutual
consent of the Board of Directors of the Company and the
Board of Directors of the Maryland Company
7.2 Effect of Termination and Abandonment. In
the event of termination of this Agreement and abandonment
of the Merger pursuant to this Article VII, no party hereto
(or any of its directors or officers) shall have any
liability or further obligation to any other party to this
Agreement.
ARTICLE VIII
MISCELLANEOUS AND GENERAL
8.1 Modification or Amendment. Subject to the
applicable provisions of the DGCL and the MGCL, at any time
prior to the Effective Time, the parties hereto may modify
or amend this Agreement, by written agreement executed and
delivered by duly authorized officers of the respective
parties.
8.2 Waiver of Conditions. The conditions to
each of the parties' obligations to consummate the Merger
are for the sole benefit of such party and may be waived by
such party in whole or in part to the extent permitted by
applicable law.
8.3 Counterparts. For the convenience of the
parties hereto, this Agreement may be executed in any
number of counterparts, each such counterpart being deemed
to be an original instrument, and all such counterparts
shall together constitute the same agreement.
8.4 Headings. The Article, Section and
paragraph headings herein are for convenience of reference
only, do not constitute a part of this Agreement and shall
not be deemed to limit or otherwise affect any of the
provisions hereof.
IN WITNESS WHEREOF, this Agreement has been
duly executed and delivered by the duly authorized officers
of the parties hereto on the date first hereinabove
written.
MATEC CORPORATION
ATTEST:
_________________________ By: _________________________
JOHN J. McARDLE III, TED VALPEY, JR.,
Secretary President
MATEC
ATTEST:
_________________________ By: _________________________
JOHN J. McARDLE III, TED VALPEY, JR.,
Secretary President
<PAGE>
EXHIBIT B
ARTICLES OF INCORPORATION
OF
MATEC CORPORATION
THE UNDERSIGNED, Joan Dacey-Seib, whose mailing
address is c/o Jacobs Persinger & Parker, 77 Water Street,
17th Floor, New York, New York 10005, being at least
eighteen years of age, acting as incorporator, does hereby
form a corporation under the General Laws of the State of
Maryland.
FIRST: The name of the corporation (the
"Corporation") is MATEC Corporation.
SECOND: The purpose of the Corporation is to
engage in any lawful act or activity for which corporations
may be organized under the Maryland General Corporation Law
("MGCL") as now or hereafter in force.
THIRD: The address of the Corporation's
principal office is 75 South Street, Hopkinton,
Massachusetts 01748. The address of the Corporation's
principal office and registered office in the State of
Maryland is National Corporate Research, Ltd. c/o Harbor
City Research, Inc., 201 East Baltimore Street, Suite 630,
Baltimore, Maryland 21202. The name of its registered
agent at that office is National Corporate Research, Ltd.
FOURTH: (a) The total number of shares of
capital stock which the Corporation has authority to issue
is Eleven Million (11,000,000) shares, consisting of ten
million (10,000,000) shares of common stock, par value five
cents ($.05) per share, and One Million (1,000,000) shares
of series preferred stock, par value ten cents ($.10) per
share. The aggregate par value of all authorized shares
having a par value is Six Hundred Thousand dollars
($600,000).
(b) The following is a description of each class
of stock of the Corporation, including any preferences,
conversion and other rights, voting powers, restrictions,
limitations as to dividends and other distributions,
qualifications and terms and conditions of redemption:
1. Common Stock. Subject to the rights of
holders of any series of preferred stock established
pursuant to paragraph 2 of this Article FOURTH, each
share of common stock shall entitle the holder to one
(1) vote per share on all matters upon which
stockholders are entitled to vote, to receive
dividends and other distributions as authorized by the
Board of Directors in accordance with the MGCL and to
all rights of a stockholder pursuant to the MGCL. The
common stock shall have no preferences or preemptive,
conversion or exchange rights. The Board of Directors
may classify or reclassify any unissued shares of
common stock from time to time by setting or changing
the designations, preferences, conversion or other
rights, voting powers, restrictions, limitations as to
dividends and other distributions, qualifications or
terms or conditions of redemption.
2. Series Preferred Stock. The Board of
Directors shall have the power from time to time to
classify or reclassify, in one (1) or more series, any
unissued shares of series preferred stock by setting
or changing the number of shares constituting such
series and the designation, preferences, conversion
and other rights, voting powers, restrictions,
limitations as to dividends and other distributions,
qualifications and terms and conditions of redemption
of such shares and, in such event, the Corporation
shall file for record with the State Department of
Assessments and Taxation of Maryland ("SDAT") Articles
Supplementary in substance and form as prescribed from
time to time by the MGCL.
FIFTH: No holder of shares of capital stock of
the Corporation shall, as such holder, have any preemptive
or other right to purchase or subscribe for any shares of
common stock or any class of capital stock of the
Corporation that the Corporation may issue or sell;
provided, however, that the Board of Directors may, in
authorizing the issuance of stock of any class or series,
confer any preemptive right the Board of Directors may deem
advisable in connection with such issuance, and set the
price and any other terms the Board of Directors, in its
sole discretion, may fix.
SIXTH: The number of directors that will
constitute the entire Board of Directors shall be fixed by,
or in the manner provided in, the Bylaws but shall in no
event be less than three (3) nor more than fifteen (15).
The names of the directors who will serve until the first
annual meeting of stockholders and until their successors
are elected and qualify are Eli Fleisher, Lawrence
Holsborg, John J. McArdle III, Robert W. Muir, Jr., Joseph
W. Tiberio and Ted Valpey, Jr.
SEVENTH: The Board of Directors of the
Corporation is hereby empowered to authorize the issuance
from time to time of shares of its stock of any class,
whether now or hereafter authorized, or securities
convertible into shares of its stock of any class or
classes, whether now or hereafter authorized.
EIGHTH: The liability of the directors and
officers of the Corporation to the Corporation and its
stockholders for money damages is hereby limited to the
fullest extent permitted by the laws of the State of
Maryland now or hereafter in force. No amendment of these
Articles of Incorporation or repeal of any of its
provisions shall limit or eliminate the benefits provided
to directors and officers under this provision with respect
to any act or omission that occurred prior to such
amendment or repeal.
NINTH: The Corporation shall indemnify its
directors, officers, agents and employees as follows: (a)
the Corporation shall indemnify its directors and officers,
whether serving the Corporation, any predecessor of the
Corporation, or at the Corporation's request any other
entity, to the fullest extent required or permitted by the
laws of the State of Maryland now or hereafter in force,
and (b) the Corporation shall indemnify other employees and
agents, whether serving the Corporation, any predecessor of
the Corporation, or at the Corporation's request any other
entity, to such extent as shall be authorized by the Board
of Directors or the Corporation's Bylaws and be permitted
by law. The foregoing rights of indemnification shall not
be exclusive of any other rights to which those seeking
indemnification may be entitled and shall continue as to a
person who has ceased to be a director, officer, agent or
employee and shall inure to the benefit of the heirs,
executors and administrators of such a person. The Board
of Directors may take such action as is necessary to carry
out these indemnification provisions and is expressly
empowered to adopt, approve and amend from time to time
such Bylaws, resolutions or contracts implementing such
provisions or such further indemnification arrangements as
may be permitted by law. No amendment of these Articles of
Incorporation of the Corporation shall limit or eliminate
the right to indemnification provided hereunder with
respect to acts or omissions occurring prior to such
amendment or repeal.
TENTH: Notwithstanding any provision of the
General Laws of the State of Maryland requiring action to
be taken or authorized by the affirmative vote of the
holders of a designated proportion greater than a majority
of the shares of capital stock of the Corporation
outstanding and entitled to vote thereupon, such action
shall, except as otherwise provided in these Articles of
Incorporation, be valid and effective if taken or
authorized by the affirmative vote of the holders of a
majority of the total number of shares of capital stock of
the Corporation outstanding and entitled to vote thereupon
voting together as a single class.
ELEVENTH: Pursuant to the express grant of
authority contained in MGCL Sections 3-702(b) and 2-104(b),
the control share acquisition provisions of Title 3, Subtitle
7 of the MGCL shall not apply with respect to the voting or
any other rights of any shares of the Corporation's capital
stock of every nature, kind and description whatsoever
acquired or otherwise held by any entity, individual or any
other person at anytime whatsoever and the acquisition of
said shares by any such person or entity, as aforesaid, is
hereby generally approved in all respects; provided that,
this election shall be effective only for so long as the
provisions of this Article ELEVENTH remain in full force and
effect and the Corporation expressly reserves the right to
amend, repeal or otherwise alter the same at anytime, in
whole or in part, in accordance with the MGCL and the
Corporation's Articles of Incorporation and Bylaws, as the
same may be amended, supplemented and in effect from time to
time.
TWELFTH: Pursuant to the authority contained
in MGCL Sections 2-104(b) and 3.603(e)(1)(iii), the
Corporation expressly elects that the special voting
requirements of Section 3.602 of the MGCL shall not apply
with respect to any person who became an "interested
stockholder" (as that term is defined in MGCL Section 3-
601(j)) of a corporation which merges with or into this
Corporation more than five (5) years prior to the date of
such merger.
THIRTEENTH: The Corporation reserves the
right to amend, alter or repeal any provision contained in
these Articles of Incorporation in any manner permitted by
The General Laws of the State of Maryland, including any
amendment changing the terms or contract rights, as
expressly set forth in its Charter, of any of its
outstanding stock by classification, reclassification or
otherwise, upon the vote of the holders of a majority of
the shares of capital stock of the Corporation outstanding
and entitled to vote thereon voting together as a single
class.
FOURTEENTH: The duration of the Corporation
shall be perpetual.
IN WITNESS WHEREOF, the undersigned incorporator
of the Corporation who executed the foregoing Articles of
Incorporation hereby acknowledges the same to be her act
and further acknowledges that, to the best of her knowledge
the matters and facts set forth therein are true in all
material respects under the penalties of perjury.
Dated the 1st day of May, 1998.
/s/ Joan Dacey-Seib
--------------------
JOAN DACEY-SEIB
<PAGE>
MATEC CORPORATION
Proxy Solicited by the Board Of Directors for Special in Lieu of
Annual Meeting on June 18, 1998
The undersigned hereby constitutes and appoints TED VALPEY, JR.
and MICHAEL J. KROLL, either one of whom is authorized to act singly,
attorneys and proxies with full power of substitution according to the number of
shares of Common Stock of MATEC Corporation (the "Company") which the
undersigned may be entitled to vote and with all powers which the undersigned
would possess if personally present at the Special In Lieu of Annual Meeting
of its stockholders to be held on June 18, 1998, at the offices of the
Company, 75 South Street, Hopkinton, Massachusetts 01748, and at any
adjournment thereof, on matters properly coming before the Meeting.
Without otherwise limiting the general authorization hereby given, said
attorneys and proxies are instructed to vote as follows on the proposals set
forth on the reverse side and described in the Proxy Statement dated May 11,
1998.
The undersigned acknowledges receipt of the Notice of Special In Lieu
of Annual Meeting and Proxy Statement, each dated May 11, 1998.
UNLESS OTHERWISE SPECIFIED IN THE SPACE PROVIDED, THE
UNDERSIGNED'S VOTE IS TO BE CAST "FOR" THE ELECTION AS DIRECTORS OF THE
PERSONS NAMED IN THE PROXY STATEMENT DATED MAY 11, 1998 AND "FOR" THE
PROPOSAL TO REINCORPORATE IN MARYLAND AND CASH OUT CERTAIN STOCKHOLDERS.
PLEASE VOTE, DATE AND SIGN ON REVERSE AND RETURN PROMPTLY IN THE
ENCLOSED ENVELOPE.
IMPORTANT: In signing this Proxy, please sign your name or names on
the signature lines on the reverse side in the exact form appearing on this
Proxy. When signing as an attorney, executor, administrator, trustee or
guardian, please give your full title as such. EACH JOINT TENANT MUST SIGN.
HAS YOUR ADDRESS CHANGED? DO YOU HAVE ANY COMMENTS?
_________________________________ __________________________________
_________________________________ __________________________________
_________________________________ __________________________________
<PAGE>
(X) PLEASE MARK VOTES
AS IN THIS EXAMPLE
MATEC CORPORATION
RECORD DATE SHARES:
A vote "FOR" Items 1 and 2 is recommended by the Board of Directors.
1. The election of six Directors.
Eli Fleisher Robert W. Muir, Jr. For All With- For All
Lawrence Holsborg Joseph W. Tiberio Nominees hold Except
John J. McArdle III Ted Valpey, Jr. ( ) ( ) ( )
NOTE: If you do not wish your shares voted "For" a particular nominee, mark
the "For All Except" box and strike a line through the name(s) of the
nominee(s). Your shares will be voted for the remaining nomineee(s).
2. Proposal to reincorporate the Company in Maryland and cash out certain
stockholders as described in the Proxy Statement dated May 11, 1998.
For Against Abstain
( ) ( ) ( )
Mark box at right if an address change or comment has been noted ( )
on the reverse side of this card.
Please be sure to sign and date this Proxy. Date:
_____________________ _____________________
Stockholder sign here Co-owner sign here
