<PAGE> 1
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:
<TABLE>
<S> <C>
/ / Preliminary Proxy Statement / / Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
</TABLE>
Conceptronic, Inc.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/ / $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (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:
/x/ 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> 2
CONCEPTRONIC, INC.
6 POST ROAD
PORTSMOUTH, NEW HAMPSHIRE 03801
----------------------------------------
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD NOVEMBER 15, 1996
-----------------------------------------
To the Stockholders of Conceptronic, Inc.:
NOTICE IS HEREBY GIVEN that a Special Meeting of Stockholders (the
"Meeting") of Conceptronic, Inc. (the "Company") will be held on November 15,
1996 at 10:00 a.m., local time, at the offices of the Company, located at 6 Post
Road, Portsmouth, New Hampshire 03801 for the following purposes:
1. To amend the Company's Certificate of Incorporation,
as amended, to increase the number of authorized
shares of the Company's Common Stock from 4,000,000
to 15,000,000.
2. To amend the Conceptronic, Inc. 1991 Stock Option
Plan to increase the number of shares of the
Company's Common Stock issuable thereunder from
225,000 to 625,000.
3. To transact such other business as may properly come
before the Meeting or any adjournment or postponement
thereof.
Only holders of record of outstanding shares of Common Stock of the
Company at the close of business on October 14, 1996 will be entitled to notice
of, and to vote at, the Meeting or any adjournment or postponement thereof.
By Order of the Board of Directors
William D. Gray
Secretary, Treasurer and
Chief Financial Officer
Portsmouth New Hampshire
October 15, 1996
YOUR VOTE IS IMPORTANT. TO VOTE YOUR SHARES, PLEASE MARK, SIGN AND DATE THE
ENCLOSED PROXY CARD AND MAIL IT PROMPTLY IN THE ENCLOSED RETURN ENVELOPE, WHICH
REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES.
<PAGE> 3
CONCEPTRONIC, INC.
6 POST ROAD
PORTSMOUTH NEW HAMPSHIRE 03801
----------------------------------
PROXY STATEMENT FOR SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD NOVEMBER 15, 1996
-----------------------------------
INTRODUCTION
This Proxy Statement is being furnished to stockholders of
Conceptronic, Inc., a Delaware corporation (the "Company"), in connection with
the solicitation of proxies by the Board of Directors of the Company for use at
a Special Meeting of Stockholders to be held on Thursday, November 15, 1996, at
10:00 a.m., local time, at the Company's offices located at 6 Post Road,
Portsmouth, New Hampshire 03801 and any adjournment or postponement thereof (the
"Meeting").
At the Meeting, stockholders will be asked to consider and vote upon
two proposals: (1) the amendment of the Company's Certificate of Incorporation
to increase the number of authorized shares of the Company's Common Stock, par
value $.01 per share (the "Common Stock"), from 4,000,000 to 15,000,000
("Proposal Number One") and (2) the amendment of the Conceptronic, Inc. 1991
Stock Option Plan (the "Stock Option Plan") to increase the number of shares of
Common Stock issuable thereunder from 225,000 to 625,000 ("Proposal Number
Two").
This Proxy Statement is dated October 15, 1996 and is first being
mailed to stockholders along with the related form of proxy on or about October
15, 1996.
If a proxy in the accompanying form is properly executed and returned
to the Company in time for the Meeting and is not revoked prior to the time it
is exercised, the shares represented by the proxy will be voted in accordance
with the directions specified therein for the matters listed on the proxy card.
Unless the proxy specifies that it is to be voted against or is an abstention on
a listed matter, proxies will be voted FOR Proposal Number One and FOR Proposal
Number Two and otherwise in the discretion of the proxy holders as to any other
matter that may come before the Meeting.
Abstentions and broker non-votes are counted for purposes of
determining the number of shares represented at the Meeting. Broker non-votes
occur when a broker nominee, holding shares in street name for the beneficial
owner thereof, has not received voting instructions from the beneficial owner
and does not have discretionary authority to vote. Under applicable Delaware
law, the amendment to the Company's Certificate of Incorporation requires the
approval of a majority of the outstanding shares. ACCORDINGLY, ABSTENTIONS,
BROKER NON-VOTES OR THE FAILURE TO EITHER RETURN A PROXY OR TO ATTEND THE
MEETING WILL EACH HAVE THE SAME EFFECT AS A VOTE AGAINST PROPOSAL NUMBER ONE.
The amendment to the Stock Option Plan requires the affirmative vote of a
majority of the shares of Common Stock present in person or represented by proxy
and voting on the amendment to the Stock Option Plan. ACCORDINGLY, ABSTENTIONS,
BROKER NON-VOTES OR THE FAILURE TO EITHER RETURN A PROXY OR TO ATTEND THE
MEETING WILL BE DEEMED NOT TO HAVE VOTED ON PROPOSAL NUMBER TWO.
REVOCABILITY OF PROXY
Any stockholder of the Company who has given a proxy has the power to
revoke the proxy at any time before it is voted either (i) by filing a written
revocation or a duly executed proxy bearing a later date with William D. Gray,
Secretary, Treasurer and Chief Financial Officer of the Company, at
Conceptronic, Inc., 6 Post Road, Portsmouth, New Hampshire 03801, or (ii) by
appearing at the Meeting and voting in person. Attendance at the Meeting will
not in and of itself constitute the revocation of a proxy. Voting by those
present during the Meeting will be by ballot.
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<PAGE> 4
RECORD DATE, OUTSTANDING SECURITIES AND VOTES REQUIRED
The Board of Directors of the Company has fixed the close of business
on October 14, 1996 as the record date (the "Record Date") for determining
holders of outstanding shares of Common Stock who are entitled to notice of and
to vote at the Meeting. As of the Record Date, there were approximately 46
stockholders of record and 1,700,000 shares of Common Stock issued and
outstanding, each of which shares is entitled to one vote.
The approval of Proposal Number One requires the affirmative vote of a
majority of the outstanding shares of Common Stock. The approval of Proposal
Number Two requires the affirmative vote of a majority of the shares of Common
Stock present in person or represented by proxy and voting on Proposal Number
Two at the Meeting.
The officers and directors of the Company will vote the shares of
Common Stock beneficially owned or controlled by them (representing
approximately 35% of the shares of Common Stock issued and outstanding) in favor
of Proposal Number One and Proposal Number Two.
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<PAGE> 5
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information with regard to the
beneficial ownership of the Common Stock of the Company as of October 14, 1996
by (i) each stockholder who is known by the Company to beneficially own in
excess of 5% of the outstanding shares of Common Stock, (ii) each director,
(iii) the Company's Chief Executive Officer and (iv) the directors and all
executive officers as a group.
<TABLE>
<CAPTION>
Number of Shares of
Name and Address Common Stock Percent of
of Beneficial Owner(1) Beneficially Owned Class (2)
- ---------------------- ------------------ ---------
<S> <C> <C>
Garry A. Prime 298,848(3) 17.20%
Rainer H. Bosselmann(4) 0 0
Daniel J. McCarthy 10,000(5) less than 1%
Richard S. Perkins, Jr 49,000(6) 2.88%
William A. Barker 0 0
James D. Gerson 569,363(7)(8) 32.88%
John A. Rolls 0 0
Sontek Industries, Inc.
20 Pond Park Road 251,348 14.79%
Hingham, MA 02043
All Directors and Executive
Officers as a group 686,863(6)(7)(8)(9) 38.39%
(8 persons)
</TABLE>
(1) The address for Messrs. Prime, Bosselmann, Barker, Gerson, McCarthy,
Perkins and Rolls is c/o Conceptronic, Inc., 6 Post Road, Portsmouth,
New Hampshire 03801.
(2) Pursuant to the rules of the Securities and Exchange Commission, shares
of Common Stock which an individual or group has a right to acquire
within 60 days pursuant to the exercise of options or warrants are
deemed to be outstanding for the purpose of computing the percentage
ownership of that individual or group, but are not deemed to be
outstanding for the purpose of computing the percentage ownership of
any other person shown in the table.
(3) Includes 251,348 shares of Common Stock owned by Sontek Industries,
Inc., of which Mr. Prime is President, Director and a significant
shareholder. Includes options to purchase 37,500 shares of Common Stock
which are presently exercisable.
(4) Mr. Bosselmann has agreed to purchase 666,670 shares of Class A Common
Stock, for a purchase price of $2,000,010, in the Offering described
below under "PROPOSAL NUMBER ONE - Background - Private Offering."
(5) Includes options to purchase 10,000 shares of Common Stock which are
presently exercisable.
(6) Includes 37,000 shares of Common Stock held of record by Mr. Perkins'
wife, in which Mr. Perkins disclaims any beneficial interest.
(7) Excludes 3,000 shares of Common Stock held of record by Mr. Gerson's
wife, as custodian for two minor children, in which Mr. Gerson
disclaims any beneficial interest.
- 3 -
<PAGE> 6
(8) Includes 31,667 shares of Common Stock underlying a currently
exercisable warrant and 251,348 shares of Common Stock held by Sontek
Industries, Inc., of which Mr. Gerson is Chairman of the Board and a
significant shareholder.
(9) Includes options to purchase 57,500 shares of Common Stock which are
presently exercisable.
- 4 -
<PAGE> 7
PROPOSAL NUMBER ONE
AMENDMENT TO CERTIFICATE
OF INCORPORATION TO INCREASE THE NUMBER OF
AUTHORIZED SHARES OF COMMON STOCK
THE PROPOSAL
The Certificate of Incorporation of the Company (the "Certificate")
currently authorizes the issuance of a total of 4,000,000 shares of Common
Stock. The Certificate permits the issuance of one or more classes of Common
Stock, subject to the discretion of the Company's Board of Directors. On October
14, 1996, the record date, 1,700,000 shares of Common Stock were issued and
outstanding and 145,000 shares were reserved for issuance under stock options
granted under the Stock Option Plan, leaving 2,155,000 authorized shares
available for future issuance.
The Company currently plans to pursue a private placement of equity
securities, as discussed below. In order to accomplish the offering and for the
other reasons also discussed below, the Company is seeking to amend the
Certificate to increase the number of authorized shares of the Company's Common
Stock from 4,000,000 to 15,000,000.
BACKGROUND
Management of the Company has determined that there may be significant
unrealized value in its Forced Conveyorized Oven product line. The Company has
made significant investments in that product line in recent years, and the
product line represents a substantial majority of the Company's business. In
order to attempt to realize the underlying value of the Forced Conveyorized Oven
product line, management of the Company has decided to either (i) consider the
sale of the product line and use the proceeds, along with the proceeds of the
proposed equity offering discussed below, to make business acquisitions and/or
investments or (ii) raise additional capital which could, in part, be used to
promote the growth of the product line through increased marketing and product
development as well as make business acquisitions and/or investments.
PRIVATE OFFERING. The Company currently plans to seek capital by means
of a private offering (the "Offering") of its equity securities. It is currently
contemplated that the Offering would consist of the issuance by the Company to
potential investors of between 3,333,333 and 4,000,000 shares of a new class of
Common Stock ("Class A Common Stock"). The Class A Common Stock would be
identical to the Common Stock in all respects and would have the same powers,
preferences, rights, qualifications and limitations as the Common Stock, except
that the Class A Common stock would have no voting rights with respect to the
approval of any potential sale of the Company's product lines or the election of
members of the Company's Board of Directors. As described below, the Class A
Common Stock will be converted into Common Stock in the future. After
conversion, all shares of Common Stock will have equal voting rights on all
matters submitted to a vote of stockholders. The Class A Common Stock will be
offered at a price of $3.00 per share. On October 7, 1996, the closing bid and
asked price of the Company's Common Stock was $3.75 and $4.75, respectively, on
the Nasdaq SmallCap Market.
As discussed below, the Company is currently contemplating the sale of
its Forced Conveyorized Oven product line and/or its Rework Systems product line
(the sale of either or both product lines is referred to herein as the "Sale").
In the event the Sale is consummated, the capital received by the Company from
the issuance of the Class A Common Stock would be used to pursue acquisitions or
enter into transactions which management believes would diversify the business
of the Company and would provide the potential for growth and profit. In the
event the Sale is not consummated, the capital received by the Company from the
issuance of the Class A Common Stock may be used to promote the growth of the
Forced Conveyorized Oven product line through increased marketing and product
development, in addition to the purposes set forth above. As of the date hereof,
the Company has not identified any specific acquisitions and/or investments that
are probable of consummation.
The shares of Class A Common Stock will be converted into shares of the
Company's Common Stock on the date which is six months from the date of issuance
of the Class A Common Stock (the "Conversion Date"). At the Company's option,
the Conversion Date may be extended for a period of not more than two months if,
on
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<PAGE> 8
the originally scheduled Conversion Date, the Company has entered into a
definitive agreement for, but has not consummated, the Sale.
On the Conversion Date, each share of Class A Common Stock shall be
converted into one share of Common Stock. Notwithstanding the foregoing, in the
event that the Company consummates the Sale on or prior to the Conversion Date
(as it may be extended by the Company as provided above), the conversion rate
shall be adjusted so that each share of Class A Common Stock shall be converted
into that number of shares of Common Stock of the Company equal to $3.00 divided
by the greater of (i) $3.00 or (ii) the net book value per share of the Common
Stock of the Company as of the last day of the fiscal quarter immediately
preceding the Conversion Date adjusted to (a) reflect the Sale (including all
transaction costs and taxes paid or payable with respect thereto) and (b) not
give effect to any outstanding Class A Common Stock or the proceeds of the
Offering, all as determined in accordance with generally accepted accounting
principles, consistently applied. Under no circumstances will each share of
Class A Common Stock be converted into more than one share of Common Stock.
Additionally, the Company will use its best reasonable efforts to
register for resale the Common Stock issued with respect to the conversion of
the Class A Common Stock under the Securities Act of 1933, as amended, and to
list those shares on the over-the-counter market on the Nasdaq SmallCap Market.
The Company has engaged Winslow, Evans & Crocker, Inc. (the "Agent") to
act as the exclusive placement agent in connection with the Offering. The Agent
has engaged Holding Capital Group, Inc. (the "Consultant") to act as a
consultant with respect to the Offering. As discussed below, a principal of the
Consultant is the Chairman of the Board and Chief Executive Officer of the
Company. The Company has agreed to pay a fee to the Agent and the Consultant of
an aggregate of (i) $200,000 plus (ii) warrants (the "Warrants") to purchase
100,000 shares of Common Stock. The Warrants will be exercisable for four years
at $3.00 per share of Common Stock. If and to the extent that fewer than
4,000,000 shares of Class A Common Stock are sold in the Offering, the cash
payment and the Warrants will be reduced on a pro rata basis.
PROPOSED SALE. The Company is currently contemplating the sale of its
Forced Conveyorized Oven product line and/or its Rework Systems product line.
However, no definitive agreement has been entered into as of the date hereof and
there can be no assurance that any sale or other disposition will be
consummated. A sale by the Company of its Forced Conveyorized Oven product line
and/or its Rework Systems product line would require the approval of the
Company's stockholders at a future meeting of stockholders. The net proceeds
received by the Company from the sale of its Forced Conveyorized Oven product
line and/or its Rework Systems product line would be used to pursue acquisitions
or enter into transactions which management believes provide the potential for
growth and profit. As of the date hereof, the Company has not identified any
specific acquisitions and/or investments that are probable of consummation.
RECENT EVENTS. Upon the commencement of the private offering described
above, Rainer H. Bosselmann has joined the Company and replaced Garry A. Prime
as Chairman of the Company's Board of Directors and Chief Executive Officer. Mr.
Prime continues to be Vice-Chairman and a director of the Company. From and
after the consummation of the Offering of Class A Common Stock, Mr. Bosselmann
will receive an annual salary of $100,000 plus five-year options to purchase
150,000 shares of Common Stock at $3.00 per share, which options vest after one
year. In addition, Mr. Bosselmann will receive the right to designate one
additional nominee to the Company's Board of Directors. Mr. Bosselmann has
agreed to purchase 666,670 shares of Class A Common Stock, for a purchase price
of $2,000,010, in the Offering. If the Offering of Class A Common Stock is not
consummated, Mr. Bosselmann has agreed to resign as an officer and director of
the Company.
Mr. Bosselmann is 53 years old. From 1996 through the present, Mr.
Bosselmann has served as a principal of Holding Capital Group, Inc., a firm
engaged in mid-market acquisitions and investments. From 1991 through 1995, Mr.
Bosselmann served as the President of Jupiter National, Inc. ("JPI"), a business
development company traded on the American Stock Exchange. During his tenure at
JPI, Mr. Bosselmann led a management team that recapitalized JPI and engaged in
a series of financings, investments and acquisitions. Prior to joining JPI, Mr.
Bosselmann served as the Chairman of Brawley Cathers Capital, an investment
banking company based in Toronto, Canada. Mr. Bosselmann was also formerly Vice
Chairman of Johnston Industries, Inc., a publicly owned diversified textile
manufacturer, and Redlaw Industries, Inc. and Galtaco Inc., both of which are
publicly-held holding companies. Mr. Bosselmann is a past director of Zoll
Medical Corporation and numerous private companies.
- 6 -
<PAGE> 9
DESCRIPTION OF PROPOSED AMENDMENT
On October 3, 1996 the Board of Directors unanimously adopted a
resolution, subject to stockholder approval, proposing and declaring the
advisability of an amendment to Section 4 of the Certificate which would effect
an increase in the number of authorized shares of Common Stock from 4,000,000 to
15,000,000. To become effective, the amendment must also be adopted by the
stockholders of the Company. The resolution amending Section 4 of the Company's
Certificate to increase the number of authorized shares of the Company's Common
Stock is set forth on Exhibit A to this Proxy Statement.
At this time the Company has no specific plans, arrangements or
understandings to use any of the additional shares for any purpose other than
the proposed private offering of equity securities discussed above.
REASONS FOR PROPOSED AMENDMENT
The Board of Directors considers the proposed increase in the number of
authorized shares desirable because it would permit the Board to pursue the
private Offering of Class A Common Stock and it would give the Board the
necessary flexibility to issue Common Stock in the future in connection with
acquisitions and other transactions which management believes would provide the
potential for growth and profit and for other general corporate purposes. With
the limited number of shares currently available, it is impractical for the
Company to evaluate or seek to consummate business acquisitions or other
transactions which, if they could be accomplished, might enhance stockholder
value. Additional authorized shares could be used to raise cash through sales of
stock to public and private investors. If additional shares are available,
transactions dependent upon the issuance of additional shares would be less
likely to be undermined by delays and uncertainties occasioned by the need to
obtain prior stockholder authorization. The ability to issue shares, as deemed
in the Company's best interests by the Board, will also permit the Company to
avoid the expenses which are incurred in holding special stockholders' meetings
in the future.
The Board of Directors has, subject to approval of the proposed
Certificate amendment by the Company's stockholders, authorized the private
Offering of Class A Common Stock discussed above. The private Offering of Class
A Common Stock could not be effected without an increase in the number of
authorized shares of Common Stock. The Board of Directors believes that the
contemplated private Offering of Class A Common Stock could enable the Company
to have the financial resources to consummate business acquisitions or other
transactions which could enhance stockholder value. Furthermore, the proceeds
received from an issuance will generate cash which could be used to strengthen
the Company's existing operations with a view towards maximizing stockholder
value.
CERTAIN EFFECTS OF THE PROPOSED AMENDMENT
The issuance of additional shares of Common Stock by the Company may
potentially have an anti-takeover effect by making it more difficult to obtain
stockholder approval of various actions, such as a merger or removal of
management.
The amendment to the Certificate, if approved, could strengthen the
position of management and might make the removal of management more difficult,
even if removal would be generally beneficial to the Company's stockholders. The
authorization to issue the additional shares of Common Stock would provide
management with a capacity to negate the efforts of unfriendly tender offerors
through the issuance of securities to others who are friendly or desirable to
management.
The proposed amendment to the Certificate is not the result of
management's knowledge of any specific effort to accumulate the Company's
securities or to obtain control of the Company by means of a merger, tender
offer, proxy solicitation in opposition to management or otherwise. The Company
is not submitting this proposal to enable it to frustrate any efforts by another
party to acquire a controlling interest or to seek Board representation.
The submission of the proposed amendment to the Certificate is not a
part of any plan by the Company's management to adopt a series of amendments to
the Company's Certificate or Bylaws (the "Bylaws") so as to render the takeover
of the Company more difficult. Management is not aware of the existence of any
provisions in the Certificate or Bylaws having an anti-takeover effect. Those
documents do not contain any provisions which would impose any burden in excess
of requirements imposed by Delaware law upon potential tender offerors or others
seeking a takeover of the Company.
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<PAGE> 10
VOTE REQUIRED
As discussed above, to become effective the amendment must be adopted
by the Board of Directors and the stockholders. The Board already has adopted
the amendment. Under Delaware law and the Company's Certificate, the amendment
must be approved by the affirmative vote of the holders of a majority of the
outstanding shares of Common Stock entitled to vote at the Meeting.
THE OFFICERS AND DIRECTORS OF THE COMPANY WILL VOTE THE SHARES OF
COMMON STOCK BENEFICIALLY OWNED OR CONTROLLED BY THEM (REPRESENTING
APPROXIMATELY 35% OF THE SHARES OF COMMON STOCK ISSUED AND OUTSTANDING) IN FAVOR
OF THE PROPOSED AMENDMENT TO THE COMPANY'S CERTIFICATE OF INCORPORATION.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE "FOR" THE
APPROVAL OF THE AMENDMENT TO THE COMPANY'S CERTIFICATE OF INCORPORATION
INCREASING THE NUMBER OF AUTHORIZED SHARES OF COMMON STOCK TO 15,000,000.
- 8 -
<PAGE> 11
PROPOSAL NUMBER TWO
AMENDMENT TO STOCK OPTION PLAN
On October 3, 1996, the Board of Directors adopted a resolution, subject
to stockholder approval, to amend the Stock Option Plan to increase the number
of shares issuable thereunder from 225,000 to 625,000.
The Board of Directors believes that stock options are valuable tools for
the recruitment, retention and motivation of qualified employees, including
officers, and other persons who can contribute materially to the Company's
success. As of October 14, 1996, only 80,000 of the 225,000 shares currently
available for issuance under the Stock Option Plan remained available for
issuance pursuant to new option grants. Upon the consummation of the private
equity offering discussed above, Rainer H. Bosselmann will become entitled to
receive options to purchase 150,000 shares of Common Stock. In addition, the
Company may add management and non-management employees as a result of future
business acquisitions or otherwise. The Board of Directors believes that it is
important to have additional shares available under the Stock Option Plan to
provide adequate incentives to the Company's workforce.
The material features of the Stock Option Plan, including the proposed
amendment, are outlined below. The following summary is qualified in its
entirety by reference to the full text of the Stock Option Plan, a copy of which
has been filed with the Securities and Exchange Commission.
PURPOSE
The purpose of the Stock Option Plan is to continue to provide an
incentive to employees, directors, consultants and others who are in a position
to contribute materially to the long term success of the Company, to increase
such person's interest in the Company's welfare and to aid in retaining
individuals with outstanding ability.
ADMINISTRATION
The Plan is administered by the Board of Directors of the Company.
ELIGIBILITY
The Stock Option Plan currently provides for the grant to employees,
officers, directors and consultants of options to purchase up to 225,000 shares
of Common Stock. The proposed amendment would increase the number of shares
issuable upon exercise of options to 625,000. Options may be either "incentive
stock options" within the meaning of Section 422 of the Internal Revenue Code of
1986, as amended (the "Code"), or non-qualified options. Incentive stock options
may be granted only to employees of the Company (including directors who are
employees), while non-qualified options may be issued to directors (whether or
not an employee), consultants and other non-employees of the Company. The Board
of Directors of the Company has the authority to determine those individuals who
shall receive options, the time period during which the options may be partially
or fully exercised, the number of shares of Common Stock that may be purchased
under each option and the option price.
TERMS OF OPTIONS
The per share exercise price of the Common Stock subject to an incentive
stock option may not be less than the fair market value of the Common Stock on
the date the option is granted. The per share exercise price of the Common Stock
subject to a non-qualified option may be established by the Board of Directors
of the Company. The aggregate fair market value (determined as of the date the
option is granted) of the Common Stock that first becomes exercisable by any
employee in any one calendar year pursuant to the exercise of incentive stock
options may not exceed $100,000. No person who owns, directly or indirectly, at
the time of the granting of an incentive stock option to him, 10% or more of the
total combined voting power of all classes of stock of the Company (a "10%
Stockholder") shall be eligible to receive any incentive stock options under the
Plan unless the option price is at least 110% of the fair market value of the
Common Stock subject to the option, determined on the date of grant.
- 9 -
<PAGE> 12
Options under the Plan must be granted no later than June 22, 2001.
Incentive stock options granted under the Plan cannot be exercised more than ten
years from the date of grant except that incentive stock options issued to a 10%
Stockholder are limited to five year terms. All options granted under the Plan
provide for the payment of the exercise price in cash or by delivery to the
Company of shares of Common Stock already owned by the optionee having a fair
market value equal to the exercise price of the options being exercised, or by a
combination of those methods of payment. Therefore, an optionee may be able to
tender shares of Common Stock to purchase additional shares of Common Stock and
may theoretically exercise all of his stock options with no additional
investment other than his original shares.
TRANSFERABILITY
No stock option may be transferred by an optionee other than by will or
the laws of descent and distribution, and, during the lifetime of an optionee,
the option will be exercisable only by him or her.
TERMINATION OF EMPLOYMENT
In the event of termination of employment of an optionee other than by
death, the option shall be exercisable only to the extent of the purchase rights
which have accrued as of the date of termination, provided that the Board of
Directors may determine that such accrued purchase rights shall be deemed to
include additional shares of Common Stock covered by the option and, provided
further, that unless the Board of Directors shall otherwise provide, the
remaining purchase rights shall terminate upon the earlier of the expiration of
the original term or three months after the termination. Upon termination of
employment of an optionee by reason of permanent total disability, his or her
option remains exercisable for one year thereafter to the extent it was
exercisable on the date of such termination.
In the event any options expire or terminate unexercised as to any shares
covered thereby, the shares shall become available once again for the granting
of other options under the Stock Option Plan.
AMENDMENT
The Board of Directors may at any time suspend or terminate the Stock
Option Plan. The Board may also amend the Stock Option Plan at any time
provided, however, that no such amendment, without the approval of the
stockholders, shall increase the maximum number of shares which may be awarded
under the Stock Option Plan, modify the maximum term or minimum price of options
granted under the Stock Option Plan, modify the term of the Stock Option Plan or
change the eligibility requirements of the Stock Option Plan.
FEDERAL INCOME TAX INFORMATION
Options granted under the Stock Option Plan may be either "incentive stock
options," as defined in Section 422 of the Code, or nonstatutory options.
If an option granted under the Stock Option Plan is an incentive stock
option, the optionee will recognize no income upon grant of the incentive stock
option and incur no tax liability due to the exercise unless the optionee is
subject to the alternative minimum tax. The Company will not be allowed a
deduction for federal income tax purposes as a result of the exercise of an
incentive stock option regardless of the applicability of the alternative
minimum tax. Upon the sale or exchange of the shares at least two years after
grant of the option and one year after transfer of the shares to the optionee by
the Company, any gain will be treated as long-term capital gain. If these
holding periods are not satisfied, the optionee will recognize ordinary income
equal to the difference between the exercise price and the lower of the fair
market value of the stock at the date of the option exercise or the sale of the
stock. The Company will be entitled to a deduction in the same amount as the
ordinary income recognized by the optionee. Any gain recognized on such a
premature disposition of the shares in excess of the amount treated as ordinary
income will be characterized as capital gain. Currently, the tax rate on net
capital gain (net long-term capital gain minus net short-term capital loss) is
capped at 28%. Capital losses are allowed in full against capital gains plus
$3,000 of other income.
All other options which do not qualify as incentive stock options are
referred to as nonstatutory options. An optionee will not recognize any taxable
income at the time he is granted a nonstatutory option. However, upon its
exercise, the optionee will recognize ordinary income for tax purposes measured
by the then fair market value of
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the shares over the option price. The income recognized by an optionee who is
also an employee of the Company will be subject to tax withholding by the
Company by payment in cash or out of the current earnings paid to the optionee.
Upon resale of such shares by the optionee, any difference between the sales
price and the exercise price, to the extent not recognized as ordinary income as
provided above, will be treated as capital gain or loss. Currently, the tax rate
on net capital gain (net long-term capital gain minus net short-term capital
loss) is capped at 28%. Capital losses are allowed in full against capital gains
plus $3,000 of other income.
The Company will be entitled to a tax deduction in the same amount as the
ordinary income recognized by the optionee with respect to shares acquired upon
exercise of a nonstatutory option.
The foregoing is only a summary of the effect of federal income taxation
upon the optionee and the Company with respect to the grant and exercise of
options under the Stock Option Plan, does not purport to be complete and
references should be made to the applicable provisions of the Code. In addition,
this summary does not discuss the income tax laws of any municipality, state or
foreign country in which an optionee may reside.
THE OFFICERS AND DIRECTORS OF THE COMPANY WILL VOTE THE SHARES OF COMMON
STOCK BENEFICIALLY OWNED OR CONTROLLED BY THEM (REPRESENTING APPROXIMATELY 35%
OF THE SHARES OF COMMON STOCK ISSUED AND OUTSTANDING) IN FAVOR OF THE PROPOSED
AMENDMENT TO THE COMPANY'S STOCK OPTION PLAN.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE "FOR" THE
APPROVAL OF THE AMENDMENT TO THE STOCK OPTION PLAN TO INCREASE THE NUMBER OF
AUTHORIZED SHARES OF COMMON STOCK ISSUABLE THEREUNDER TO 625,000.
STOCKHOLDER PROPOSALS
In order to be considered for inclusion in the Proxy Statement relating to
the 1997 Annual Meeting, any proposal by a record holder of Common Stock must be
received by the Company at its principal offices in Portsmouth, New Hampshire on
or before January 6, 1997. A proponent of such a proposal must comply with the
proxy rules under the Securities Exchange Act of 1934, as amended.
SOLICITATION
All costs and expenses associated with soliciting proxies will be borne by
the Company. In addition to the use of the mails, proxies may be solicited by
the directors, officers and employees of the Company by personal interview,
telephone or telegram. Directors, officers and employees will not be
additionally compensated for such solicitation but may be reimbursed for their
out-of-pocket expenses. Arrangements will also be made with custodians, nominees
and fiduciaries for the forwarding of solicitation material to the beneficial
owners of Common Stock and the Company will reimburse custodians, nominees and
fiduciaries for their reasonable out-of-pocket expenses incurred in connection
therewith.
OTHER MATTERS
As of the date of this Proxy Statement, the Board of Directors is not
aware of any other business or matters to be presented for consideration at the
Meeting other than as set forth in the Notice of Meeting attached to this Proxy
Statement. However, if any other business shall come before the Meeting or any
adjournment or postponement thereof and be voted upon, the enclosed proxy shall
be deemed to confer discretionary authority on the individuals named to vote the
shares represented by the proxy as to any such matters.
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<PAGE> 14
EXHIBIT A
RESOLUTION AUTHORIZING THE AMENDMENT
OF THE COMPANY'S
CERTIFICATE OF INCORPORATION
RESOLVED, that the Company increase the number of authorized shares of Common
Stock, $.01 par value per share, from 4,000,000 to 15,000,000 by amending
Section 4 of the Company's Certificate of Incorporation as follows:
The first sentence of Section 4 is hereby amended to read in its entirety
as follows:
4. The total number of shares of stock which the Corporation shall have
authority to issue is sixteen million (16,000,000), consisting of fifteen
million (15,000,000) shares of Common Stock, $.01 par value per share, and
one million (1,000,000) shares of Preferred Stock, $.01 par value per
share.
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<PAGE> 15
PROXY CONCEPTRONIC, INC. PROXY
PROXY FOR SPECIAL MEETING OF STOCKHOLDERS NOVEMBER 15, 1996
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints William D. Gray and Garry A.
Prime, and each of them, attorneys with full power of substitution, to vote as
directed below all shares of Common Stock of Conceptronic, Inc. registered in
the name of the undersigned, or which the undersigned may be entitled to vote,
at the Special Meeting of Stockholders to be held at the Company's offices
located at 6 Post Road, Portsmouth, New Hampshire 03801, on November 15, 1996,
10:00 a.m. and at any adjournment or postponement thereof.
1. Approval of the Amendment to the Conceptronic, Inc. Certificate of
Incorporation.
/ / FOR / / AGAINST / / ABSTAIN
2. Approval of the Amendment to the Conceptronic, Inc. 1991 Stock Option
Plan.
/ / FOR / / AGAINST / / ABSTAIN
3. As such proxies may in their discretion determine in respect of any
other business properly to come before said meeting (the Board of Directors
knowing of no such other business).
The directors recommend a vote FOR items 1 and 2.
(Continued on reverse side)
<PAGE> 16
(Continued from other side)
UNLESS THE STOCKHOLDER DIRECTS OTHERWISE, THIS PROXY WILL BE VOTED FOR ITEMS 1
AND 2 AS PROPOSED.
PLEASE DATE, SIGN AND RETURN TO _____________________________.
(Please sign in the same form as name appears hereon. Dated _____________, 1996
Executors and other fiduciaries should indicate
their titles. If signed on behalf of a corporation, ___________________________
give title of officer signing).
_________________________________________
Signature of Stockholder(s)
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS FOR THE SPECIAL
MEETING OF STOCKHOLDERS TO BE HELD NOVEMBER 15, 1996.
