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 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 Section 240.14a-11(c) or
Section 240.14a-12
MATEC CORPORATION
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement if other than the Registrant)
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{ X } No fee required.
{ } Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11.
1) Title of each class of securities to which transaction
applies:
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computed pursuant to Exchange Act Rule 0-11. (Set forth
the amount on which the filing fee is calculated and state
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{ } Check box if any part of the fee is offset as provided by
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and the date of its filing.
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<PAGE>
MATEC CORPORATION
(A Maryland corporation)
__________
NOTICE OF SPECIAL IN LIEU OF ANNUAL MEETING OF STOCKHOLDERS
May 13, 1999
__________
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 May 13, 1999
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) Proposal to approve the Company's 1999 Stock
Option Plan; and
(3) Such other matters as may properly come before the
meeting.
The Board of Directors has fixed April 9, 1999, 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 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
April 5, 1999
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
MAY 13, 1999
____________
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 May 13, 1999. The Board of Directors has fixed April 9,
1999, 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 April 12, 1999.
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 1999 Stock Option
Plan. 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.
For a matter to be considered and voted upon at the
meeting a quorum must be present. The presence, in person or by
proxy, of a majority of all votes entitled to be cast at the
meeting constitutes a quorum. Directors are elected by a
plurality of the votes cast. The approval of all other matters
to be considered at the meeting requires the affirmative vote,
by person or proxy, of a majority of all votes cast at the
meeting. 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 on the vote.
<PAGE>
The Annual Report to Stockholders of the Company,
including financial statements for the year ended December 31,
1998, 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 March 23, 1999,
2,710,648 shares of Common Stock, par value $.05 per share, were
outstanding. Each share of Common Stock 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 March 23, 1999 and the record date.
Set forth in the table below is information concerning
the ownership as of March 23, 1999 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 Percentage
of Beneficial Owner Beneficially Owned of Class
- ------------------- ------------------ ----------
Dimensional Fund 143,400(1) 5.3%
Advisors Inc.
1299 Ocean Avenue
11th Floor
Santa Monica, CA 90401
John J. McArdle III 187,962(2)(3) 6.9%
MetroWest Bank
15 Park Street
Framingham, MA 01701
Mary R. and 207,400 7.7%
Emile Vaccari
508 40th Street
Union City, NJ 07087
Robert W. Valpey 204,403(2)(4) 7.5%
Route 25
Box 249
Center Harbor, NH 03226
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<PAGE>
Name and Address Amount Percentage
of Beneficial Owner Beneficially Owned of Class
- ------------------- ------------------ ----------
Ted Valpey, Jr. 727,935 26.9%
P.O. Box 4100
Portsmouth, NH 03801
Other Directors and
Executive Officers
- -------------------
Eli Fleisher 92,000(5) 3.4%
Lawrence Holsborg 114,267 4.2%
Robert W. Muir, Jr. 26,200 less than 1%
Joseph W. Tiberio 25,000 less than 1%
Michael J. Kroll 16,475(6)(7) less than 1%
Directors and Executive 1,189,839(2)(3)(5)-(7) 43.9%
Officers as a Group
(consisting of
7 individuals)
______________________________
(1) Dimensional Fund Advisors Inc., a registered investment
advisor, is deemed to have beneficial ownership of 143,400
shares of Common Stock of the Company as of December 31,
1998, 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) Includes 1,500 shares owned by Mr. Fleisher's wife as to
which he disclaims beneficial ownership.
(6) Includes 8,700 shares jointly owned by Mr. Kroll's wife.
(7) Includes 1,175 shares issuable upon exercise of currently
exercisable stock options.
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<PAGE>
1. ELECTION OF DIRECTORS
NOMINEES
Six directors are to be elected at the Special In Lieu
of 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 prior to 1994. 1977 71
Lawrence Holsborg(b)(c)(d) Investor since prior to 1994 1986 65
John J. McArdle III(a)(b)(c) Chief Executive Officer of 1992 49
MetroWest Bank since prior to
1994; President of MetroWest
Bank since prior to 1994 to
April 1998; Employee of
Prime Capital Group (financial
consultants) since prior to
1994; President of RSC Realty
Corporation (a subsidiary of
the Company) since prior to
1994 and Secretary of the
Company since prior to 1994.
-4-
<PAGE>
Year
First
Principal Occupation Elected
Name of Nominee for Past Five Years Director Age
- --------------- -------------------- -------- ---
Robert W. Muir, Jr.(a)(d) President of The Diamond Group 1996 50
(investment company) since
August 1998; Vice President
Corporate Development,
Thomas & Betts Electrical
Supply from October 1997 to
August 1998; CEO and
President of Diamond
Communication Products Inc.
(manufacturer of poleline
hardware) from prior to 1994
to July 1997.
Joseph W. Tiberio(a)(b) President, Century Manufacturing 1986 77
Co., Inc. (metal stamping)
since prior to 1994; President,
Ty-Wood Corporation (metal
fabrication) since prior to
1994.
Ted Valpey, Jr. (a)(c) Investor; Chairman of the 1980 66
Company since prior to 1994
and Chief Executive Officer of
the Company 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.
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<PAGE>
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.
The Board of Directors held eight meetings during the
last fiscal year.
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 two meetings during 1998.
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 1998. 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 held one meeting
during 1998.
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
1998.
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
-6-
<PAGE>
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.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
- -------------------------------------------------------
As required by the Securities and Exchange Commission
rules, the Company notes that in 1998 one of its directors,
Robert W. Muir, Jr. filed three delinquent monthly reports
reporting twelve transactions for the purchase of an aggregate
of 8,500 shares of the Common Stock of the Company and that
Michael J. Kroll, Vice President and Treasurer, filed one
delinquent monthly report reporting the purchase of 1,500 shares
of Common Stock through the exercise of stock options.
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 officer 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. 1998 $80,000 -- $3,235
(CEO and 1997 80,000 $25,000 2,531
President since 1996 80,000 -- 2,446
April 28, 1997,
and Chairman)(4)
Michael J. Kroll 1998 111,500 -- 3,847
(Vice President 1997 111,500 15,000 3,741
and Treasurer) 1996 111,500 -- 3,532
-7-
<PAGE>
____________________________
(1) For 1998, 1997 and 1996 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 1998, 1997
or 1996.
(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 401(k) Plan.
(4) Mr. Valpey was elected CEO on April 28, 1997. He served as
Chairman of the Company for 1996, 1997 and 1998. The
amounts set forth in the table with respect to 1997
includes all amounts paid to Mr. Valpey as compensation in
1997. The Company had reimbursed Mr. Valpey since prior to
January 1, 1996 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 $5,000 per month.
OPTION TABLE
- ------------
The following table sets forth exercise activity in
the last fiscal year and the fiscal year-end option values with
respect to the named officers. No stock options were granted to
the named officers during 1998.
AGGREGATED OPTION EXERCISES IN THE FISCAL YEAR
ENDED DECEMBER 31, 1998 AND DECEMBER 31, 1998
OPTION VALUES
Name Shares Acquired On Exercise (#) Value Realized ($) (1)
- ---- ------------------------------- ----------------------
Ted Valpey, Jr. -- --
Michael J. Kroll 1,500 $1,875
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<PAGE>
Number of Securities Values of Unexercised
Underlying Unexercised In-the-Money Options at
Options at 12/31/98 12/31/98(2)
---------------------- -----------------------
Exercisable Unexercisable Exercisable Unexercisable
----------- ------------- ----------- -------------
Ted Valpey, Jr. -- -- -- --
Michael J. Kroll 1,175 294 $975 $244
____________________
(1) Calculated by determining the difference between the
exercise price and the closing price on the day of
exercise.
(2) Calculated by determining the difference between the
exercise price and the closing price on December 31, 1998.
REPRICING OF OPTIONS
- --------------------
On October 28, 1998, the Board of Directors of the
Company voted to adjust the number of shares and the exercise
price of all outstanding stock options to reflect the "partial
liquidation" under Section 302(e) of the Internal Revenue Code
of 1986, as amended ("Code"), which resulted from a special
$1.75 nonrecurring dividend paid to the stockholders in May
1998. The dividend represented a substantial portion of the
proceeds from the sale of the Company's Bergen Cable subsidiary.
The Board concluded that the adjustment was necessary to reflect
the reduction in the value of the shares of the Company as a
result of the dividend distribution. The adjustment was
calculated consistent with Section 424(a) of the Code and the
regulations thereunder based upon the value of the shares of the
Company immediately before and after the ex-dividend date with
respect to the dividend. As a result of the adjustment, Mr.
Kroll's outstanding option for 1,000 shares was increased to
1,469 shares and the outstanding exercise price of $4.25 was
reduced to $2.92 per share.
CERTAIN TRANSACTIONS
- --------------------
On April 15, 1998, substantially all the assets,
excluding real property and plant, of the Company's wholly-owned
subsidiary, Bergen Cable Technologies, Inc. were sold to a newly
organized 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 were sold to a New Jersey limited
liability company in which Mr. Muir holds a 27.12% membership
interest. The purchase price received consisted of $7,500,000
in cash, a 12% subordinated promissory note in the principal
amount of $1,250,000, a 10% stock and membership interest in the
acquiring entities and the assumption by the acquiring entities
of certain liabilities, including trade payables.
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<PAGE>
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 approved by all directors of the
Company except Mr. Muir who abstained from the vote.
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 salary of the executive
officer, 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 1998
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 1998, 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'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 CEO. The
recommendations of the CEO for option grants reflect the
subjective judgment of the CEO of the performance of employees
and the potential benefit to the Company from the grant of this
form of incentive compensation. In
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<PAGE>
recommending option grants the CEO, among other things,
considers the amount and terms of options granted in the past.
No options were granted under the Option Plan to executive
officers in the 1998 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 1998
- -------------------------------
On April 28, 1997 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.
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 in cash, a 12%
subordinated promissory note in the principal amount of
$1,250,000, a 10% stock and membership interest in the acquiring
entities and the assumption by the acquiring entities 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"
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<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, a
peer index ("Peer Group #1") made up of 38 companies in the
electronic components manufacturing business, and a weighted
index ("Peer Group #2") 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, 1993 and ending December 31, 1998
(assuming the investment of $100 on December 31, 1993, and the
reinvestment of all dividends). The Company selected the
weighted index in prior years because the companies included
therein are engaged in operations similar to those of the
Company's three segments prior to 1998 with the percentages
being approximately the same as the revenues of the segments are
of total revenues during the period since December 31, 1993. In
1998 the Company disposed of its operation in the fabricated
metal products business and in the laboratory analytical
instruments business and thus selected an index of companies in
its sole remaining segment, electronic components manufacturing.
TOTAL SHAREHOLDER RETURNS
[GRAPH]
Base
Period
Dec 93 Dec 94 Dec 95 Dec 96 Dec 97 Dec 98
MATEC CORPORATION 100 116.13 103.23 87.10 106.45 141.94
AMERICAN STOCK EXCHANGE IND 100 90.89 114.90 122.24 143.48 144.40
PEER GROUP #1 100 117.07 158.24 170.78 162.41 125.76
PEER GROUP #2 100 101.26 131.19 145.26 180.63 144.94
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<PAGE>
2. APPROVAL OF THE MATEC CORPORATION
1999 STOCK OPTION PLAN
The Board of Directors recommends the approval of the
MATEC Corporation 1999 Stock Option Plan (the "1999 Plan") under
which options to purchase a total of 100,000 shares of the
Company's Common Stock will be made available for grants. The
1992 Stock Option Plan of the Company, will terminate on
December 3, 2002, and at that time no additional options may be
granted under that Plan. Currently there are an aggregate of
46,664 shares of Common Stock subject to outstanding options
under the 1992 Plan and options to purchase 222,636 shares of
Common Stock available for issuance under the 1992 Plan. The
Company is in the process of hiring a new President and COO for
its Valpey-Fisher subsidiary and anticipates that a substantial
member of options under the 1992 Plan will be granted to such
individual. The Board of Directors believes it to be in the
best interest of the Company to adopt the 1999 Plan to have
available sufficient options to attract and retain the services
of valued employees and attract and retain the services of other
individuals of outstanding abilities and specialized skills.
Accordingly, the Board of Directors has adopted the 1999 Plan,
subject to approval by stockholders, and recommends that the
stockholders approve it.
The full text of the 1999 Plan is attached to this
Proxy Statement as Exhibit A. The following is a summary of the
major provisions of the 1999 Plan and is qualified in its
entirety by the full text of the Plan.
PURPOSE OF THE PLAN
- -------------------
The 1999 Plan is intended to expand and improve the
profitability and prosperity of the Company for the benefit of
its stockholders by permitting the Company to grant to officers
and other key employees of, and consultants and advisors to, the
Company and its subsidiaries, options to purchase shares of the
Company's Common Stock.
STOCK SUBJECT TO THE PLAN
- -------------------------
There will be reserved for issuance upon the exercise
of options granted under the 1999 Plan an aggregate of 100,000
shares of Common Stock of the Company, par value $.05 per share.
If any options granted expire or terminate without being
exercised, the shares covered thereby will be added back to the
shares reserved for issuance. The 1999 Plan contains certain
anti-dilution provisions relating to the stock dividends, stock
splits and the like.
ADMINISTRATION OF THE PLAN
- --------------------------
The 1999 Plan will be administered by the Stock
Option-Compensation Committee appointed by the Board of
Directors consisting of members of such Board each of whom shall
be a non-employee director within the meaning of Rule 16b-3
under the Securities Exchange Act of 1934. The Committee will
have the full power to grant options ("Options"), to determine
the persons eligible to receive Options, and to determine the
amount, type and terms and conditions of each Option.
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<PAGE>
The Committee may permit the voluntary surrender of
all or a portion of an Option granted under the 1999 Plan to be
conditioned upon the granting to the participant of a new Option
for the same or a different number of shares as the Option
surrendered, or may require such voluntary surrender as a
condition precedent to a grant of a new Option to such
participant. Such new Option shall be exercisable at the price,
during the period and in accordance with any other terms or
conditions specified by the Committee at the time the new Option
is granted, all determined in accordance with the provisions of
the 1999 Plan without regard to the price, period of exercise,
or any other terms or conditions of the Option surrendered.
ELIGIBILITY
- -----------
Options may be granted to officers and other key
employees, and consultants and advisors to the Company or a
subsidiary of the Company (presently approximately ten in
number). However, members of the Board of Directors who are not
employees of the Corporation or a subsidiary will not be
eligible to participate in the 1999 Plan.
No determination has yet been made, assuming the 1999
Plan is approved, as to the key employees, consultants or
advisors to whom Options will be granted in the future or as to
the total number of officers and other employees, consultants or
advisors who may be selected in the future to receive options
under the 1999 Plan. One or more Options may be granted under
the 1999 Plan to any present or future employee, consultant or
advisor, including officers and directors who are employees of
the Company or one of its subsidiaries.
Both Incentive Stock Options (as defined in the
Internal Revenue Code of 1986) and Non-Qualified Options may be
granted under the 1999 Plan. Incentive Stock Options may be
granted only to officers and other key employees, but Non-
Qualified Options may be granted to officers and employees as
well as to consultants and advisors. The two types of Options
differ primarily in the tax consequences relating to the
exercise and disposition of shares acquired pursuant to the
Options. See "Federal Income Tax Consequences" below.
OPTION PRICE
- ------------
The purchase price of each share of Common Stock under
Options will be established by the Committee, provided, however,
that in the case of an Incentive Stock Option the exercise price
will not be less than the fair market value of the Common Stock
at the time of the grant of such Option.
The exercise price is to be paid in full at the time
of exercise (i) in good funds, or (ii) if the Committee
determines at the time of grant, by delivery of shares of Common
Stock of the Company (valued at their then fair market value),
or (iii) if the Committee determines and subject to any
restrictions or conditions as it deems appropriate, by electing
to have the Company withhold from the shares issuable upon
exercise of the Option such number of shares of Common Stock as
shall have an aggregate fair market value on the date of
exercise equal to the exercise price, or (iv) by a combination
of (i) and (ii) or (i) and (iii) above.
-14-
<PAGE>
The last sale price of the Common Stock of the Company
reported on the American Stock Exchange composite tape on March
30, 1999 was $3.875 per share.
TERM OF OPTION
- --------------
Each Option shall expire on such date as the Committee
shall determine, provided, that in no event shall an option be
exercisable after the expiration of ten (10) years from the
grant thereof.
EXERCISE OF OPTIONS
- -------------------
Each Option shall be exercisable as to all or any part
of the shares subject thereto at such times as the Committee may
determine. The Committee, subsequent to the grant of an Option,
may accelerate the date or dates on which the Option may be
exercisable.
EARLY TERMINATION OF OPTIONS
- ----------------------------
If an optionee voluntarily quits or is discharged for
cause, his or her Options terminate immediately. The estate of
a deceased optionee may exercise the decedent's Options within
three months after the death, to the extent exercisable at the
time of death. If an Optionee is disabled, his or her Options
may be exercised within one year thereafter, to the extent
exercisable at the time of the disability.
AMENDMENTS TO THE PLAN
- ----------------------
The Board of Directors may at any time terminate or
modify or suspend the 1999 Plan, provided that no such
termination, modification or suspension shall adversely affect
any rights or obligations of the participants holding any Option
previously, and further provided that no such modification,
without the approval of the stockholders to the extent such
approval is required by applicable law, regulation or rule,
shall (i) modify the eligibility requirements for participation,
or (ii) increase the maximum number of shares as to which
options may be granted.
FEDERAL INCOME TAX CONSEQUENCES
- -------------------------------
The following is a brief summary of the Federal income
tax aspects of grants under the 1999 Plan. The summary is not
intended to be exhaustive and does not describe state or local
tax consequences.
Upon the grant of a Non-Qualified Option, no income
will be realized by the optionee. Upon exercise, ordinary
income will generally be realized by the optionee in an amount
equal to the difference between the fair market value of the
shares on the date of exercise and the option price, and the
Company will be entitled to a corresponding tax deduction. Upon
disposition of the shares, appreciation or depreciation after
the date of exercise will be treated as short-term or long-term
capital gain or loss to the optionee, depending upon how long
the shares have been held. Generally, the Company is required
to withhold for income and employment tax purposes upon
exercise, or otherwise ensure that the amount of tax required to
be withheld is remitted by the optionee to the Company.
-15-
<PAGE>
No tax consequences result from the grant of an
Incentive Stock Option, or, except as provided below, from its
exercise by the optionee, and the Company is not entitled to any
deduction thereupon. The optionee will realize long-term
capital gain or loss upon the sale of shares, measured by the
difference between the sale price and the option price, provided
the shares are held for more than two years after the grant of
the incentive stock option and one year after the date of
exercise. If the shares are disposed of prior to such time, the
optionee must treat as ordinary income the difference between
the option price and the lesser of the fair market value of the
shares on the exercise date or the amount realized in case of a
sale or exchange. Any remaining gain or loss will be treated as
short-term or long-term capital gain or loss, depending upon how
long the shares have been held. An amount equal to the ordinary
income recognized by the optionee upon such disposition will be
deductible by the Company at such time. For purposes of
calculating the optionee's alternative minimum tax, if any, the
difference between the fair market value of the shares subject
to the incentive stock option determined on the date of exercise
and the option price generally constitutes an item of
adjustment.
If upon the exercise of a Non-Qualified Option or an
Incentive Stock Option all or a portion of the option price is
satisfied either by delivery to the Company of shares previously
acquired by the optionee or by a direction to the Company by the
optionee to withhold shares otherwise issuable upon exercise,
the timing, character and amount of income that will be
recognized by the optionee, and the tax deduction available to
the Company, may be other than as discussed above.
TERM OF THE PLAN
- ----------------
The 1999 Plan will terminate on March 29, 2009 and no
options may be granted under the 1999 Plan after that date.
APPROVAL OF THE 1999 PLAN
- -------------------------
The affirmative vote of the holders of a majority of
the votes cast by holders of the shares of Common Stock of the
Company present and entitled to vote at the meeting is necessary
for the approval of the 1999 Plan.
3. 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 Special In Lieu 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 1999.
-16-
<PAGE>
The consolidated financial statements of the Company
and its subsidiaries included in the Annual Report to
Stockholders for the fiscal year ended December 31, 1998 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 ensure 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 shareholders present proposals which
may be proper subjects for inclusion in the Proxy Statement and
for consideration at an annual meeting. Shareholders who intend
to present proposals at the 2000 Annual Meeting, and who wish to
have such proposals included in the Company's Proxy Statement
for the 2000 Annual Meeting, must be certain that such proposals
are received by the Company's Secretary at the Company's
executive offices, 75 South Street, Hopkinton, Massachusetts
01748, not later than December 7, 1999. Such proposals must
meet the requirements set forth in the rules and regulations of
the Securities and Exchange Commission in order to be eligible
for inclusion in the Proxy Statement. Shareholders who intend
to present a proposal at the 2000 Annual Meeting but who do not
wish to have such proposal included in the Company's Proxy
Statement for such meeting must be certain that notice of such
proposal is received by the Company's Secretary at the Company's
executive offices not later than February 28, 2000.
BY ORDER OF THE BOARD OF DIRECTORS
JOHN J. MCARDLE III
SECRETARY
APRIL 5, 1999
-17-
<PAGE>
UPON THE WRITTEN REQUEST OF ANY STOCKHOLDER OF THE
COMPANY, THE COMPANY WILL PROVIDE TO SUCH STOCKHOLDER A COPY OF
THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR 1998, 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 COMPANY'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.
-18-
<PAGE>
EXHIBIT A
---------
MATEC CORPORATION
1999 STOCK OPTION PLAN
1. PURPOSE
-------
The Plan is intended to expand and improve the
profitability and prosperity of MATEC Corporation for the
benefit of its stockholders by permitting the Corporation to
grant to officers and other key employees of, and consultants
and advisers to, the Corporation and its Subsidiaries, options
to purchase shares of the Corporation's Common Stock. These
grants are intended to provide additional incentive to such
persons by offering them a greater stake in the Corporation's
continued success. The Plan is also intended as a means of
reinforcing the commonality of interest between the
Corporation's stockholders and such persons, and as an aid in
attracting and retaining the services of individuals of
outstanding and specialized skills.
2. DEFINITIONS
-----------
For Plan purposes, except where the context
otherwise indicates, the following terms shall have the meanings
which follow:
(a) "Agreement" shall mean a written instrument
executed and delivered on behalf of the Corporation which
specifies the terms and conditions of a Stock Option granted to
a Participant.
(b) "Beneficiary" shall mean the person or persons
who may be designated by a Participant from time to time in
writing to the Committee, to receive, if the Participant dies,
any Option exercise rights held by the Participant.
(c) "Board" shall mean the Board of Directors of the
Corporation.
(d) "Code" shall mean the Internal Revenue Code of
1986, as it may be amended from time to time, and the rules and
regulations promulgated thereunder.
(e) "Committee" shall mean a Committee of the Board
composed of two or more persons which shall be designated by the
Board to administer the Plan. Each member of the Committee,
while serving as such, shall be a member of the Board and shall
be a "non-employee director" within the meaning of Rule 16b-3
under the Securities Exchange Act of 1934.
<PAGE>
(f) "Common Stock" shall mean the Common Stock of the
Corporation having a par value of $0.05 per share.
(g) "Corporation" shall mean MATEC Corporation, a
Maryland corporation.
(h) "Employee" shall mean any person who is employed
by the Corporation or any Subsidiary corporation.
(i) "Exercise Price" shall mean the per share price
for which a Participant upon exercise of a Stock Option may
purchase a share of Common Stock.
(j) "Fair Market Value" shall mean the value of a
share of Common Stock to be determined by, and in accordance
with procedures established by, the Committee. Such fair market
value shall be deemed conclusive upon the determination of the
Committee made in good faith. The preceding notwithstanding, so
long as the Common Stock is listed on a national stock exchange,
the "Fair Market Value" shall mean with respect to any given
day, the mean between the highest and lowest reported sales
prices of the Common Stock on the principal national stock
exchange on which the Common Stock is listed, or if such
exchange was closed on such day or if it was open but the Common
Stock was not traded on such day, then on the next preceding day
that the Common Stock was traded on such exchange, as reported
by a responsible reporting service.
(k) "Incentive Stock Option" shall mean a Stock
Option which is intended to meet and comply with the terms and
conditions for an "incentive stock option" as set forth in
Section 422 of the Code, or any other form of tax qualified
stock option which may be incorporated and defined in the Code
as it may from time to time be amended.
(l) "Non-Qualified Option" shall mean a Stock Option
which does not meet the requirements of Section 422 of the Code
or the terms of which provide that it will not be treated as an
Incentive Stock Option.
(m) "Participant" shall mean any person who is
granted a Stock Option under the Plan.
(n) "Plan" shall mean the MATEC Corporation 1999
Stock Option Plan as set forth herein and as amended from time
to time.
(o) "Stock Option" or "Option" shall mean a right to
purchase a stated number of shares of Common Stock subject to
such terms and conditions as are set forth in the Plan and an
Agreement.
(p) "Subsidiary corporation" or "Subsidiary" shall
mean any corporation which is a "subsidiary corporation" of the
Corporation as defined in Section 424(f) of the Code.
-2-
<PAGE>
3. ADMINISTRATION
--------------
(a) The Committee shall administer the Plan and,
accordingly, it shall have full power to grant Stock Options
under the plan, to construe and interpret the Plan, and to
establish rules and regulations and perform all other acts it
believes reasonable and proper, including the authority to
delegate responsibilities to others to assist in administering
the Plan.
(b) The determination of those eligible to receive
Stock Options, and the amount, type and terms and conditions of
each Stock Option shall rest in the sole discretion of the
Committee, subject to the provisions of the Plan.
(c) The Committee may permit the voluntary surrender
of all or a portion of any Option granted under the Plan to be
conditioned upon the granting to the Participant of a new Option
for the same or a different number of shares as the Option
surrendered, or may require such voluntary surrender as a
condition precedent to a grant of a new Option to such
Participant. Such new Option shall be exercisable at the price,
during the period and in accordance with any other terms or
conditions specified by the Committee at the time the new Option
is granted, all determined in accordance with the provisions of
the Plan without regard to the price, period of exercise, or any
other terms or conditions of the Option surrendered.
4. COMMON STOCK LIMITS
-------------------
The total number of shares of Common Stock which may
be issued on exercise of Stock Options shall not exceed 100,000
shares, subject to adjustment in accordance with Paragraph 9 of
the Plan. Shares issued under the Plan may be, in whole or in
part, as determined by the Committee, authorized but unissued or
treasury shares of Common Stock. If any Options granted under
the Plan shall expire or terminate without having been
exercised, the shares subject to such Options shall be added
back to the number of shares of Common Stock which may be issued
on exercise of Stock Options.
5. ELIGIBILITY FOR PARTICIPATION
-----------------------------
(a) Consistent with Plan objectives, the following
persons shall be eligible to become Participants in the Plan:
officers and other key Employees and consultants and advisers to
the Corporation or any Subsidiary corporation, provided that
members of the Board who are not Employees shall not be eligible.
(b) The foregoing subparagraph (a) notwithstanding,
Incentive Stock Options shall be granted only to officers and
other key Employees, and no Incentive Stock Options shall be
granted to an Employee who owns more than 10% of the Common
Stock determined in accordance with the provisions of Section
422(b)(6) of the Code, unless the Option meets the requirements
of Section 422(c)(5) of the Code.
(c) Options shall be granted to consultants and
advisers only for bona fide services rendered other than in
connection with the offer or sale of securities.
-3-
<PAGE>
6. STOCK OPTIONS - TERMS AND CONDITIONS
------------------------------------
All Stock Options granted under the Plan shall be
evidenced by Agreements which shall contain such provisions as
shall be required by the Plan together with such other
provisions as the Committee may prescribe, including the
following provisions:
(a) PRICE: The Committee shall establish the Exercise
Price, provided, however, that in the case of an Incentive Stock
Option the Exercise Price shall not be less than the Fair Market
Value of a share of Common Stock on the date of the grant of the
Option.
(b) PERIOD: The Committee shall establish the term of
any Option awarded under the Plan, provided, however, that no
Option shall be exercisable after the expiration of 10 years
from the date of the grant of the Option.
(c) TIME OF EXERCISE: The Committee shall establish
the time or times at which an Option, or portion thereof, shall
be exercisable. The Committee, subsequent to the grant of an
Option, may accelerate the date or dates on which the Option may
be exercisable.
(d) EXERCISE: An Option, or portion thereof, shall be
exercised by delivery or a written notice of exercise to the
Corporation together with payment of the full purchase price of
the shares as to which the Option is exercised ("Purchase
Price"). Payment may be made:
(i) in United States dollars by good check, bank
draft or money order payable to the order of the
Corporation, or
(ii) at the discretion of the Committee by the
transfer to the Corporation of shares of Common Stock owned
by the Participant having an aggregate Fair Market Value on
the date of exercise equal to the Purchase Price or the
portion thereof being so paid, or
(iii) at the discretion of the Committee and
subject to any restrictions or conditions as it deems
appropriate (including any restrictions as may be set forth
in Rule 16b-3 under the Securities Exchange Act of 1934),
by electing to have the Corporation withhold from the
shares issuable upon exercise of the Option such number of
shares of Common Stock as shall have an aggregate Fair
Market Value on the date of exercise equal to the Purchase
Price or the portion thereof being so paid, or
(iv) at the discretion of the Committee by a
combination of (i) and (ii) or (i) and (iii) above.
The Committee shall determine the procedures for the use of
Common Stock in payment of the Purchase Price and may impose
such limitations and prohibitions on such use as it deems
appropriate.
-4-
<PAGE>
(e) SPECIAL RULES FOR INCENTIVE STOCK OPTIONS:
Notwithstanding any other provisions of the Plan, with respect
to Incentive Stock Options granted under the Plan (in addition
to any other provisions specifically made applicable to
Incentive Stock Options), the following provisions will apply:
(i) To the extent that the aggregate Fair Market
Value (determined at the time of grant) of the shares of Common
Stock with respect to which Incentive Stock Options (whether
granted hereunder or pursuant to any other plan of the
Corporation or a Subsidiary) are first exercisable by a
Participant during any calendar year exceeds $100,000 (or such
other limit as may be in effect from time to time under the
Code), such Options shall be treated as Non-Qualified Options.
(ii) Any Participant who disposes of shares of Common
Stock acquired on the exercise of an Incentive Stock Option by
sale or exchange either (a) within two years after the date of
the grant of the Option under which such shares were acquired or
(b) within one year after the acquisition of such shares, shall
notify the Corporation in writing of such disposition and of the
amount realized upon such disposition promptly after the
disposition.
7. TERMINATION OF EMPLOYMENT
-------------------------
If a Participant holding an Option shall cease to be
employed (or in the case of a Participant who is not an
Employee, shall cease to be engaged) by the Corporation or any
Subsidiary corporation by reason of death or any other reason
other than voluntary quitting, discharge for cause or permanent
and total disability as defined in Section 22(e)(3) of the Code
(hereinafter called a "Disability"), as determined by the
Committee, such Participant (or, if applicable, such Participant's Beneficiary
or legal representative) may, but only
within the three months next succeeding such cessation of
employment or engagement, exercise such Option to the extent
that such Participant would have been entitled to do so on the
date of such cessation of employments or engagements. If a
Participant holding an Option voluntarily quits or is discharged
for cause, such Option shall terminate on the date of cessation
of employment or engagement.
8. DISABILITY
----------
If a Participant holding an Option shall cease to be
employed (or, in the case of a Participant who is not an
Employee, shall cease to be engaged) by the Corporation or any
Subsidiary corporation by reason of a Disability, the Option
shall be exercisable by such Participant or such Participant's
duly appointed guardian or other legal representative, to the
extent that such Participant would have been entitled to do so
on the date of such cessation of employment, but only within one
year following such cessation of employment due to said
Disability.
-5-
<PAGE>
9. ADJUSTMENTS
-----------
In the event of a recapitalization, stock split, stock
combination, stock dividend, exchange of shares, or a change in
the corporate structure or shares of the Corporation, or similar
event, the Board of Directors upon recommendation of the
Committee shall make appropriate adjustments in the kind or
number of shares which may be issued upon exercise of Options
and in the kind or number of shares issuable upon exercise of
Options theretofore granted and in the exercise price of such
options.
10. MERGER, CONSOLIDATION OR SALE OF ASSETS
---------------------------------------
If the Corporation shall be a party to a merger or
consolidation or shall sell substantially all its assets, each
outstanding Option shall pertain and apply to the securities
and/or property which a holder of the number of shares of Common
Stock subject to the Option immediately prior to such merger,
consolidation, or sale of assets would be entitled to receive in
such merger, consolidation or sale of assets.
11. AMENDMENT AND TERMINATION OF PLAN
---------------------------------
(a) The Board, without further approval of the
stockholders, may at any time, and from time to time, suspend or
terminate the Plan in whole or in part or amend it from time to
time in such respects as the Board may deem appropriate and in
the best interests of the Corporation; provided, however, that
no such amendment shall be made, without approval of the
stockholders, to the extent such approval is required by
applicable law, regulation or rule, or which would:
(i) modify the eligibility requirements for
participation in the Plan; or
(ii) increase the total number of shares of Common
Stock which may be issued pursuant to Stock Options, except as
is provided for in accordance with Paragraph 9 of the Plan.
(b) No amendment, suspension or termination of this
Plan shall, without the Participant's consent, alter or impair
any of the rights or obligations under any Stock Option
theretofore granted to the Participant under the Plan.
(c) The Board may amend the Plan, subject to the
limitations cited above, in such manner as it deems necessary to
permit the granting of Stock Options meeting the requirements of
future amendments the Plan.
-6-
<PAGE>
12. GOVERNMENT AND OTHER REGULATIONS
--------------------------------
The granting of Stock Options under the Plan and the
obligation of the Corporation to issue or transfer and deliver
shares for Stock Options exercised under the Plan shall be
subject to all applicable laws, regulations, rules and orders
which shall then be in effect.
13. MISCELLANEOUS PROVISIONS
------------------------
(a) RIGHTS TO CONTINUED EMPLOYMENT: No person shall
have any claim or right to be granted a Stock Option under the
Plan, and the grant of an Option under the Plan shall not be
construed as giving any Participant the right to be retained in
the employ of the Corporation or any Subsidiary corporation (or
to be otherwise retained in the case of a Participant who is not
an Employee) and the Corporation expressly reserves the right at
any time to dismiss a Participant with or without cause, free of
any liability or any claim under the Plan, except as provided
herein or in an Agreement.
(b) WHO SHALL EXERCISE: Except as provided by the
Plan, an Incentive Stock Option shall be exercisable during the
lifetime of the Participant to whom it is granted only by such
Participant, and it may be exercised only if such Participant
has been in the continuous employ of the Corporation or any
Subsidiary corporation from the date of grant of the Option to
the date of its exercise.
(c) NON-TRANSFERABILITY: No right or interest of any
Participant in the Plan or an Agreement shall be assignable or
transferable except by will or the laws of descent and
distribution, and no right or interest of any Participant shall
be liable for, or subject to, any lien, obligation or liability
of such Participant; provided that in the discretion of the
Committee a Non-Qualified Option may be made transferable and
assignable on such terms and conditions as the Committee shall
in its discretion determine.
(d) WITHHOLDING TAXES: The Corporation may require a
payment to cover applicable withholding for income and
employment taxes in connection with a Stock Option.
(e) RIGHTS AS STOCKHOLDER: A Participant as such
shall not have any of the rights or privileges of a holder of
Common Stock until such time as shares of Common Stock are
issued or are transferred to the Participant upon exercise of an
Option.
(f) PLAN EXPENSES: Any expenses of administering
this Plan shall be borne by the Corporation.
(g) LEGAL CONSIDERATIONS: The Corporation shall not
be required to issue, transfer or deliver shares of Common Stock
upon exercise of Options until all applicable legal, listing or
registration requirements, as determined by legal counsel, have
been satisfied, and any necessary or appropriate written
representations have been given by the Participant.
-7-
<PAGE>
(h) OTHER PLANS: Nothing contained herein shall
prevent the Corporation from establishing other incentive and
benefit plans in which Participants in the Plan may also
participate.
(i) NO WARRANTY OF TAX EFFECT: Except as may be
contained in any Agreement, no opinion shall be deemed to be
expressed or warranties made as to the effect for federal, state
or local tax purposes of any grants hereunder.
(j) CONSTRUCTION OF PLAN: The validity,
construction, interpretation, administration and effect of the
Plan and of its rules and regulations, and rights relating to
the Plan, shall be determined in accordance with the laws of the
State of Maryland.
14. STOCKHOLDER APPROVAL - TERM OF PLAN
-----------------------------------
Upon approval by the stockholders of the Corporation,
the Plan shall become unconditionally effective as of March 30,
1999. No Option shall be granted after March 29, 2009,
provided, however, that the Plan and all outstanding Options
granted under the Plan prior to such date shall remain in effect
until the applicable Options have expired. If the stockholders
shall not approve the Plan, the Plan shall not be effective and
any and all actions taken prior thereto shall be null and void
or shall, if necessary, be deemed to have been fully rescinded.
-8-
<PAGE>
MATEC CORPORATION
Proxy Solicited by the Board of Directors for
Special in Lieu of Annual Meeting on May 13, 1999
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 May 13, 1999, 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 April 5, 1999.
The undersigned acknowledges receipt of the Notice of Special in Lieu of
Annual Meeting and Proxy Statement, each dated April 5, 1999.
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 APRIL 5, 1999 AND "FOR" THE PROPOSAL TO APPROVE THE 1999
STOCK OPTION PLAN.
PLEASE VOTE, DATE AND SIGN ON REVERSE AND RETURN PROMPTLY IN THE
ENCLOSED ENVELOPE.
HAS YOUR ADDRESS CHANGED? DO YOU HAVE ANY COMMENTS?
_________________________________ __________________________________
_________________________________ __________________________________
_________________________________ __________________________________
<PAGE>
[X] PLEASE MARK VOTES
AS IN THIS EXAMPLE
MATEC CORPORATION
Mark box at right if an address change or comment has been noted [ ]
on the reverse side of this card.
CONTROL NUMBER:
RECORD DATE SHARES:
A Vote "FOR" Items 1 and 2 is recommended by the Board of Directors.
1. The election of six directors. Nominees:
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 that nominee's name. Your
shares will be voted for the remaining nominees.
2. Proposal to approve the 1999 Stock For Against Abstain
Option Plan as described in the [ ] [ ] [ ]
Proxy Statement dated April 5, 1999.
Please be sure to sign and date IMPORTANT: In signing this Proxy,
this Proxy. please sign your name or names in
the box at left in the exact form
Date ________________ appearing on this Proxy. When
signing as an attorney, executor,
administrator, trustee or
guardian, please give your full
_____________________ _____________________ title as such. EACH JOINT TENANT
Stockholder sign here Co-owner sign here MUST SIGN.
DETACH CARD DETACH CARD
