SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
inTEST 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
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pursuant to Exchange Act Rule 0-11 (set forth the amount on which
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/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act
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number, or the Form or Schedule and the date of its filing.
1. Amount Previously Paid:
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inTEST CORPORATION
2 Pin Oak Lane
Cherry Hill, New Jersey 08003
----------------------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held August 4, 2000
----------------------------------------
NOTICE IS HEREBY GIVEN that the 2000 Annual Meeting of Stockholders of
inTEST Corporation will be held at the Radisson Hotel Mount Laurel, Route 73,
Mount Laurel, New Jersey, on Friday, August 4, 2000, at 10:00 A.M. Eastern
Daylight Time, to consider and vote on the following matters described in the
accompanying Proxy Statement:
1. Election of the members of the Board of Directors to serve until the
next annual meeting of stockholders and until their successors are
duly elected and qualified;
2. Approval of amendments to the 1997 Stock Plan which will (i)
increase the number of shares which may be issued under the 1997
Stock Plan to 1,000,000; and (ii) reduce the number of shares
required to be voted in favor of future amendments affecting
employee eligibility and the number of shares which may be issued
upon exercise of options which may be granted to employees;
3. Ratification of the appointment by the Board of Directors of KPMG
LLP as the independent public accountants for inTEST for the year
ending December 31, 2000; and
4. Such other business as may properly be brought before the meeting or
any adjournment thereof.
The Board of Directors has fixed June 29, 2000, at the close of
business, as the record date for the determination of stockholders entitled
to notice of and to vote at the meeting.
By Order of the Board of Directors,
/s/Hugh T. Regan, Jr.
------------------------------
Hugh T. Regan, Jr.
Secretary
Cherry Hill, New Jersey
July 7, 2000
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YOUR VOTE IS IMPORTANT
Whether or not you plan to attend the meeting, please complete, date,
sign and mail your proxy card promptly in order that the necessary quorum may
be represented at the meeting. The enclosed envelope requires no postage if
mailed in the United States.
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inTEST CORPORATION
2 Pin Oak Lane
Cherry Hill, New Jersey 08003
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PROXY STATEMENT
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ANNUAL MEETING OF STOCKHOLDERS
To Be Held August 4, 2000
------------------------------
This proxy statement and the enclosed proxy card are intended to be sent
or given to stockholders of inTEST Corporation on or about July 7, 2000, in
connection with the solicitation of proxies on behalf of our Board of
Directors for use at the 2000 Annual Meeting of Stockholders, which will be
held on Friday, August 4, 2000, at 10:00 A.M. Eastern Daylight Time, at the
Radisson Hotel Mount Laurel, Route 73, Mount Laurel, New Jersey. Proxies are
solicited to give all stockholders of record at the close of business on June
29, 2000 an opportunity to vote on the matters that come before the meeting.
Shares can be voted only if the stockholder is present in person or is
represented by proxy.
If the enclosed proxy card is properly signed and returned, the shares
represented by the proxy card will be voted and, if the stockholder indicates
a voting choice on the proxy card, the shares will be voted in accordance
with such choice. If the proxy card is signed but no choice is indicated,
the shares represented by the proxy card will be voted "FOR" the election of
the nominees for director listed in this proxy statement, "FOR" the approval
of the amendments to the 1997 Stock Plan and "FOR" the ratification of the
appointment of KPMG LLP as the independent public accountants for inTEST for
the year ending December 31, 2000. Management knows of no business that will
be presented at the meeting other than that which is set forth in this proxy
statement. If any other matter properly comes before the meeting, the
persons named in the accompanying proxy card intend to vote the proxies
(which confer discretionary authority to vote on such matters) in accordance
with their best judgment.
Any stockholder granting a proxy by the execution and delivery of the
enclosed proxy card may revoke it at any time prior to its being voted, by
filing with Hugh T. Regan, Jr., Secretary, an instrument of revocation or a
duly executed proxy card bearing a later date. Attendance at the meeting
will not have the effect of revoking a proxy unless the stockholder attending
the meeting notifies Mr. Regan, in writing, of the revocation of the proxy at
any time prior to the voting of the proxy.
VOTING SECURITIES
On June 1, 2000, there were 8,588,383 shares of our common stock, $0.01
par value, outstanding. We have no other voting securities outstanding. The
stockholders of record on the record date will be entitled to one vote per
share of common stock on each matter submitted to the stockholders at the
meeting.
The presence at the meeting, in person or by proxy, of the holders of a
majority of the common stock entitled to vote at the meeting shall constitute
a quorum for the transaction of business at the meeting. Assuming a quorum
is present, (i) a plurality of the votes cast at the meeting is required for
the election of directors, (ii) the affirmative vote of the holders of a
majority of the outstanding shares of stock on the record date is required to
approve the amendments to the 1997 Stock Plan; and (iii) the affirmative vote
of the holders of a majority of the shares of stock which are present or
represented at the meeting and entitled to vote is required for the
ratification of the appointment of KPMG LLP as the independent public
accountants for the year ending December 31, 2000, as well as for approval of
such other matters as may properly come before the meeting or any adjournment
of the meeting.
If a broker that is a record holder of common stock does not return a
signed proxy, the shares of common stock represented by such proxy will not
be considered present at the meeting and, therefore, will not be counted
towards a quorum. If a broker that is a record holder of common stock does
return a signed proxy, but is not instructed by the beneficial owner to vote
on one or more matters and does not have discretionary voting power with
respect to such matter or matters, the shares of common stock represented by
such proxy will be considered present at the meeting for purposes of
determining the presence of a quorum but will not be voted or considered
entitled to vote for purposes of determining the outcome of the vote on such
matter or matters. With respect to the proposal to approve the amendments to
the 1997 Stock Plan, such broker "non-votes" will have the same effect as a
"no" vote. Abstentions will have no effect on the outcome of the election of
directors and, with respect to the approval of the amendments to the 1997
Stock Plan and to ratify the appointment of our independent public
accountants, abstentions will have the same effect as a "no" vote.
Directors and executive officers who beneficially own approximately
32.7% of our outstanding common stock as of June 1, 2000 are expected to
vote, or direct the voting of their shares, in favor of the election of the
directors whose nomination is described herein, the approval of the
amendments to the 1997 Stock Plan and the ratification of the appointment of
our independent public accountants. In addition, the trustees of the
Temptronic Corporation Equity Participation Trust control the voting of the
452,359 unallocated shares held by the Trust (approximately 5.3% of our
outstanding shares). One of our directors and an officer of our Temptronic
subsidiary are two of the three trustees of the Trust.
VOTING SECURITIES AND PRINCIPAL STOCKHOLDERS
The following table sets forth certain information known to us regarding
the beneficial ownership of our common stock as of June 1, 2000 (except where
otherwise noted) by:
* each of our named executive officers;
* each of our directors;
* all directors and executive officers as a group; and
* each stockholder known by inTEST to own beneficially more than 5% of
our common stock.
Percentage ownership in the following table is based on 8,588,383 shares
of common stock outstanding as of June 1, 2000. We have determined
beneficial ownership in the table in accordance with the rules of the
Securities and Exchange Commission. In computing the number of shares
beneficially owned by any person and the percentage ownership of that person,
we have deemed shares of common stock subject to options or warrants held by
that person that are currently exercisable or will become exercisable within
60 days of June 1, 2000 to be outstanding. However, we have not deemed these
shares to be outstanding for computing the percentage ownership of any other
2
person. To our knowledge, except as set forth in the footnotes below, each
stockholder identified in the table possesses sole voting and investment
power with respect to all shares of common stock shown as beneficially owned
by such stockholder.
Shares
Beneficially Percent
Owned As of of Class
June 1, 2000 (Approx.)
------------- --------
Directors and Named Executive Officers:
- --------------------------------------
Robert E. Matthiessen (1) 62,419 *
Hugh T. Regan, Jr. (2) 28,100 *
Douglas W. Smith (3) 593,750 6.9%
Daniel J. Graham (4) 311,260 3.6%
William M. Stone (5) 16,552 *
Alyn R. Holt (3)(6) 1,576,256 18.4%
Richard O. Endres (7) 129,197 1.5%
Stuart F. Daniels, Ph.D. (8) 17,282 *
Gregory W. Slayton (9) 31,600 *
James J. Greed, Jr. 0 *
All directors and executive officers as a group
(12 individuals) (10) 2,827,093 32.7%
Five Percent Stockholders:
- -------------------------
Temptronic Corporation Equity Participation Trust (3)(11) 665,157 7.7%
FMR Corp. (12) 650,000 7.6%
Hakuto America Holdings, Inc. (13) 647,500 7.5%
Wellington Management Company LLP (14) 604,000 7.0%
Brinson Partners, Inc. (15) 457,815 5.3%
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* Denotes less than one percent of class.
(1) Excludes 62,618 shares owned by Mr. Matthiessen's spouse and 2,000
shares owned by Mr. Matthiessen's emancipated child. Mr. Matthiessen
disclaims beneficial ownership of the shares owned by his spouse and
child.
(2) Includes 22,000 shares subject to options exercisable by July 31, 2000.
(3) The address of the stockholder is: c/o inTEST, 2 Pin Oak Lane, Cherry
Hill, New Jersey 08003.
(4) Excludes 31,000 shares owned by Mr. Graham's spouse, 4,300 shares owned
by Mr. Graham's emancipated child and 1,500 held in trust for the
benefit of Mr. Graham's minor child. Mr. Graham disclaims beneficial
ownership of the shares owned by his spouse and children.
(5) Includes 9,250 shares subject to options exercisable by July 31, 2000
and 2,677 shares held by the employee stock ownership plan for the
benefit of Mr. Stone.
3
(6) Includes 115,000 shares owned by The Holt Charitable Remainder Trust.
Excludes 150,427 shares owned by Mr. Holt's spouse. Mr. Holt disclaims
beneficial ownership of the shares owned by his spouse.
(7) Includes 500 shares held by a corporation of which Mr. Endres is a
stockholder and over which Mr. Endres shares investment control.
Excludes 10,000 shares owned by Mr. Endres' spouse. Mr. Endres
disclaims beneficial ownership of the shares owned by his spouse.
(8) Includes 6,000 shares subject to options exercisable by July 31, 2000.
(9) Includes 3,600 shares owned by The Slayton Family Foundation of which
Mr. Slayton is the president.
(10) Includes 51,250 shares subject to options exercisable by July 31, 2000.
(11) Represents shares of common stock held by the Temptronic Corporation
Equity Participation Trust (Temptronic's employee stock ownership plan)
in a fiduciary capacity for employees of Temptronic. Shares held by
the trust are allocated to employees of Temptronic annually based on
each employee's salary. Temptronic employees' interests in the plan
begin to vest after three years of employment and become fully vested
after seven years of employment. With respect to shares held by the
trust which are allocated to participants, the trustees must vote such
shares in accordance with instructions from the participants. If no
instructions are received, the trustees have a fiduciary duty to vote
such shares in a manner consistent with their duties as fiduciaries
under the Employee Retirement Income and Security Act of 1974, as
amended, or ERISA. With respect to shares held by the trust which are
not allocated to participants, the trustees have the duty to vote such
shares in a manner consistent with their duties as ERISA fiduciaries.
As of June 1, 2000, 212,798 shares held in the plan were allocated to
employees, and 452,359 shares were not yet allocated to employees.
(12) According to a Schedule 13G/A filed with the SEC on February 11, 2000,
as of December 31, 1999, Fidelity Management & Research Company, a
wholly-owned subsidiary of FMR Corp., is the beneficial owner of the
650,000 shares as a result of acting as investment adviser to Fidelity
Low-Priced Stock Fund, an investment company registered under Section 8
of the Investment Company Act of 1940 that owns the 650,000 shares.
The address or principal business office of each of Fidelity Management
& Research, FMR and Fidelity Low-Priced Stock Fund is 82 Devonshire
Street, Boston MA 02109. Edward C. Johnson 3d, Chairman of FMR, and
Abigail P. Johnson, a director of FMR, and other members of the Edward
C. Johnson 3d family and trusts for their benefit, through their
ownership of voting common stock of FMR and the execution of a
stockholders' voting agreement, may be deemed, under the Investment
Company Act of 1940, to form a controlling group with respect to FMR.
Edward C. Johnson 3d, Fidelity Management & Research, FMR (through its
control of Fidelity Management & Research) and Fidelity Low-Priced
Stock Fund each has sole power to dispose of the shares. Neither FMR
nor Edward C. Johnson 3d has the sole power to vote or direct the
voting of the shares owned by Fidelity Low-Priced Stock Fund, which
power resides with, and is directed by, the Board of Trustees of
Fidelity Low-Priced Stock Fund.
4
(14) According to a Schedule 13D filed with the SEC on March 17, 2000, as a
result of the merger with Temptronic, Hakuto America Holdings, Inc., a
former shareholder of Temptronic, became a shareholder of inTEST. The
shares of Temptronic owned by Hakuto America converted into 647,500
shares of inTEST common stock. Hakuto America is a 100% owned
subsidiary of Hakuto Co. Ltd., a Japanese corporation. Hakuto America
serves as the U.S. holding company for certain investments and
operating subsidiaries of Hakuto Co. Ltd., and its principal business
office is 1015 E. State Parkway, Schaumburg, IL 60173.
(15) According to a Schedule 13G/A filed with the SEC on February 11, 2000,
as of December 31, 1999, Wellington Management Company, LLP, in its
capacity as investment adviser, may be deemed to beneficially own the
604,000 shares which are held of record by its clients. Wellington
Management's principal business office is located at 75 State Street,
Boston, MA 02109.
(15) According to a Schedule 13G/A filed with the SEC on February 10, 2000,
as of December 31, 1999, Brinson Partners, Inc., an investment adviser
registered under Section 203 of the Investment Advisors Act of 1940,
and UBS AG, a bank as defined in Section 3(a)(6) of the Exchange Act,
beneficially own the 457,815 shares. Brinson Partners is an indirect
wholly-owned subsidiary of UBS AG. Brinson Partners' principal business
office is located at 209 South LaSalle, Chicago, IL 60604-1295; UBS
AG's principal business office is located at Bahnhofstrasse 45 8021,
Zurich, Switzerland.
ELECTION OF DIRECTORS
Our Bylaws provide that our Board of Directors shall consist of not less
than five (5) directors, as determined by the Board of Directors, and that
each director shall hold office until the next Annual Meeting of Stockholders
and until a successor shall be duly elected and qualified. The present
number of directors constituting the entire Board is nine.
At the meeting, nine directors are to be elected to serve until the 2001
Annual Meeting of Stockholders and until their respective successors have
been elected and qualified. Listed below are the nine nominees for director.
The persons designated as proxies in the accompanying proxy card intend to
vote "FOR" each such nominee, unless a contrary instruction is indicated on
the proxy card. If for any reason any such nominee should become unavailable
for election, the persons designated as proxies in the proxy card may vote
the proxy for the election of a substitute designated by our management,
unless a contrary instruction is given on the proxy card. We have no reason
to believe that any of the nominees will be unable or unwilling to serve if
elected, and all nominees have expressed their intention to serve the entire
term for which election is sought.
The names of the persons presently serving as directors, each of whom
has been nominated for reelection, are listed below, together with their ages
and certain other information as of June 1, 2000:
5
Director
Name Age Since Position
- ---- --- -------- --------
Alyn R. Holt 62 09/17/81 Chairman
Robert E. Matthiessen 55 02/01/97 President, Chief Executive Officer and
Director
Douglas W. Smith 50 08/03/98 Executive Vice President, Chief
Operating Officer and Director
Daniel J. Graham 54 06/01/88 Vice Chairman, Senior Vice President
and Director
William M. Stone 58 03/09/00 President and Chief Executive Officer
of Temptronic Corporation and Director
Richard O. Endres 74 04/01/82 Director
Stuart F. Daniels, Ph.D 59 04/01/97 Director
Gregory W. Slayton 40 08/03/98 Director
James J. Greed, Jr. 61 03/09/00 Director
Biographical and Other Information Regarding inTEST's Directors
Alyn R. Holt is a co-founder of inTEST and has served as Chairman since
inTEST's inception in September 1981. Mr. Holt served as Chief Executive
Officer of inTEST from September 1981 to August 1998.
Robert E. Matthiessen was elected Chief Executive Officer of inTEST in
August 1998. He was elected President and a director of inTEST in February
1997. Mr. Matthiessen served as Chief Operating Officer of inTEST from
December 1997 until August 1998. Prior to that, Mr. Matthiessen served as
Executive Vice President since joining inTEST in October 1984.
Douglas W. Smith was elected Executive Vice President, Chief Operating
Officer and a director of inTEST in August 1998. Mr. Smith founded and
served as President of TestDesign Corporation, a California corporation
engaged in the manufacture of tester interface products, which was acquired
by inTEST in August 1998. Mr. Smith founded TestDesign Corporation in
February 1985.
Daniel J. Graham is a co-founder of inTEST and has served as Senior Vice
President and a director of inTEST since June 1988. Mr. Graham was elected
Vice Chairman of inTEST in October 1998.
William M. Stone has served as a director of inTEST since our
acquisition of Temptronic in March 2000. He also serves as President and
Chief Executive Officer of Temptronic. Mr. Stone joined Temptronic in May
1997 as Director of Engineering and became Senior Vice President and Chief
Operating Officer in October 1998. He was appointed President and Chief
Executive Officer in August 1999 and became a director of Temptronic in
November 1999. From November 1995 to May 1997, Mr. Stone served as Director
of Engineering and Operations for the Technic Equipment Division of Technic
Corporation. From December 1994 to November 1995, he served as Director of
Engineering for Gerber Optical, a subsidiary of Gerber Scientific
Corporation.
6
Richard O. Endres has served as a director of inTEST since April 1982.
Since 1976, he has served as President of VRA, Inc., which provides business
planning and financial services for technology based companies.
Stuart F. Daniels, Ph.D. is a co-founder of inTEST and served as Vice
President and a director in 1982 and was reappointed as a director in April
1997. In March 1996, Dr. Daniels founded The Daniels Group, which is engaged
in technology assessment, protection and commercialization consulting. From
1980 to December 1995, Dr. Daniels held several management positions with
Siemens Corporation and its subsidiaries.
Gregory W. Slayton has served as a director of inTEST since August 1998.
Since December 1997, Mr. Slayton has been the President, Chief Executive
Officer and a director of ClickAction, Inc. (f/k/a MySoftware Company), a
publicly traded company that develops small business software. Additionally,
since June 1997, Mr. Slayton has been Managing Director of Slayton Capital, a
venture capital firm. From December 1995 to July 1997, Mr. Slayton was
President, Chief Operating Officer and a director of ParaGraph International,
a privately held Internet tools company. From December 1995 to March 1996,
Mr. Slayton also served as President and Chief Executive Officer of Velocity,
Inc., a privately held CD-gaming company. Mr. Slayton co-founded Worlds,
Inc., an Internet technology company, in August 1994 and served as its Senior
Vice President and Chief Financial Officer from its inception to November
1995. Mr. Slayton is also a director of Net Creations, Inc., a publicly
traded Internet provider of direct marketing services, and Quantum
Corporation, a publicly traded manufacturer of hard disk drives and related
products.
James J. Greed, Jr. has served as a director of inTEST since our
acquisition of Temptronic in March 2000. From April 1991 to December 1999,
Mr. Greed was President of VLSI Standards, Inc., a leading supplier of
calibration standards to the semiconductor and related industries. Following
his retirement from VLSI, Mr. Greed founded Foothill Technology, a consulting
firm, and has served as its President since its inception. Hakuto Co. Ltd. of
Japan, the parent company of Hakuto America Holdings, Inc., a principal
stockholder of inTEST, is a client of Foothill Technology. From July 1992
through December 1999, Mr. Greed also served on the board of directors of
Semiconductor Equipment and Materials International ("SEMI"), an
international trade association, serving as chairman for the 1996-1997 term
and chairman of its International Standards Committee since 1994. In January
2000, SEMI engaged Mr. Greed to coordinate an effort by semiconductor
equipment manufacturers to develop a coordinated international assessment of,
and response to, the recently published International Technology Roadmap for
Semiconductors.
Agreements Regarding Selection of Nominees for Director
Under the terms of the Amended and Restated Agreement and Plan of Merger
and Reorganization dated as of January 4, 2000, pursuant to which Temptronic
was merged into one of our wholly-owned subsidiaries, we agreed that at the
closing of the merger, Messrs. Greed and Stone would be elected as directors.
We also agreed that, for a period of two years following the closing of the
merger, we will nominate Messrs. Greed and Stone for re-election at each
annual meeting of our stockholders or special meeting held in lieu of an
annual meeting and recommend their re-election.
7
Committees of the Board of Directors
Our Board of Directors has three standing Committees: an Executive
Committee, an Audit Committee and a Compensation Committee. During the year
ended December 31, 1999, the Board of Directors held a total of five
meetings.
The Executive Committee is responsible for those duties delegated to it
by the Board of Directors. The Executive Committee consists of Alyn R. Holt,
Robert E. Matthiessen and Daniel J. Graham. The Executive Committee did not
meet during 1999.
The Audit Committee reviews the results and scope of the audit and other
services provided by our independent auditors. The Audit Committee consists
of Stuart F. Daniels, Ph.D., Richard O. Endres, Gregory W. Slayton and James
J. Greed, Jr. (who joined the Audit Committee In May 2000). The Audit
Committee held two meetings during 1999.
The Compensation Committee makes determinations concerning salaries and
incentive compensation for our executive officers and administers our 1997
Stock Plan with respect to key employees, other option agreements and the
awarding of bonuses. The Compensation Committee consists of Stuart F.
Daniels, Ph.D., Richard O. Endres, Alyn R. Holt, Gregory W. Slayton and
James J. Greed, Jr. (who joined the Compensation Committee in May 2000). The
Compensation Committee held one meeting during 1999.
Each of the directors attended at least 75% of the aggregate number of
meetings of the Board and meetings of any committee of which he is a member
which were held during the time in which he was a director or a committee
member, as applicable.
Director Compensation
We pay non-employee directors a quarterly retainer of $2,500, a fee of
$2,000 per board meeting and a fee of $1,000 per committee meeting that falls
on a day other than a board meeting. In addition, we reimburse non-employee
directors' travel expenses and other costs associated with attending board or
committee meetings. We do not pay additional cash compensation to our
officers for their service as directors. However, officers who serve as
directors of our foreign subsidiaries receive compensation as approved each
year by such subsidiary's Board of Directors. Dr. Daniels provides us with
consulting services relating to intellectual property matters. In connection
with such services, Dr. Daniels was paid fees totaling $66,400 during 1999.
Recommendation
The Board of Directors recommends a vote "FOR" the re-election of each
of the nominees to the Board of Directors named above.
EXECUTIVE OFFICERS OF inTEST
Our executive officers and their ages as of June 1, 2000 are as follows:
8
Name Age Position
- ---- --- --------
Robert E. Matthiessen 55 President, Chief Executive Officer and Director
Hugh T. Regan, Jr. 40 Treasurer, Secretary and Chief Financial Officer
Douglas W. Smith 50 Executive Vice President, Chief Operating
Officer and Director
Daniel J. Graham 54 Vice Chairman, Senior Vice President and
Director
Jack R. Edmunds 59 Vice President of Operations
Jerome R. Bortnem 47 Vice President of Sales and Marketing
William M. Stone 58 President and Chief Executive Officer of
Temptronic Corporation and Director
Alyn R. Holt 62 Chairman
Biographical and Other Information Regarding the Executive Officers of inTEST
Executive officers are appointed by the Board of Directors. Each
executive officer is appointed to serve until the first meeting of the Board
of Directors after the annual meeting of stockholders next succeeding his
election and until his successor is elected and qualified.
Robert E. Matthiessen. See "Election of Directors."
Hugh T. Regan, Jr. has served as inTEST's Treasurer and Chief Financial
Officer since joining inTEST in April 1996 and was elected Secretary in
December 1999. From 1985 to April 1996, Mr. Regan served in various
financial capacities for Value Property Trust, a publicly traded real estate
investment trust, including Vice President of Finance from 1989 to September
1995 and Chief Financial Officer from September 1995 until April 1996.
Douglas W. Smith. See "Election of Directors."
Daniel J. Graham. See "Election of Directors."
Jack R. Edmunds has served as inTEST's Vice President of Operations
since October 1998 and as director of Operations from September 1987 to
October 1998.
Jerome R. Bortnem has served as inTEST's Vice President of Sales and
Marketing since August 1998 and as Western Regional Sales Manager from August
1993 to August 1998.
William M. Stone. See "Election of Directors."
Alyn R. Holt. See "Election of Directors.
EXECUTIVE COMPENSATION
The following table sets forth certain information with respect to the
compensation we paid for services rendered during the years ended December
31, 1999, 1998 and 1997, to our Chairman, Chief Executive Officer and the
four other most highly compensated executive officers in the year ended
December 31, 1999.
9
Summary Compensation Table
Long-Term
Compensation
Annual Compensation Awards
----------------------------------- ------------
Securities
Name and Other Annual Underlying All Other
Principal Position Year Salary Bonus Compensation Options (#) Compensation
------------------ ---- ------ ----- ------------ ---------- ------------
Alyn R. Holt 1999 $251,582 $ -- $ 5,602(1) -- $ 69,011(2)
Chairman 1998 226,238 -- 53,264(1) -- 65,661(2)
1997 198,010 -- 53,675(1) -- 137,117(2)
Robert E. Matthiessen 1999 $181,994 $67,288(3) $ 5,602(4) -- $ 65,654(5)
President, Chief Executive 1998 171,576 -- 5,320(4) -- 53,778(5)
Officer and Director 1997 135,914 -- 8,577(4) -- 6,240(5)
Douglas W. Smith 1999 $155,260 $67,288(3) $ 8,630(6) -- $ 4,998(7)
Executive Vice President, 1998 56,250 -- -- -- 3,874(7)
Chief Operating Officer 1997 -- -- -- -- --
and Director
William M. Stone (9) 1999 $142,193 $15,384 $ 5,227(10) -- $ 13,188(11)
President, Chief Executive 1998 113,166 -- 5,213(10) 46,250(12) 7,674(11)
Officer of Temptronic 1997 55,682 -- 2,961(10) 11,562(13) 2,231(11)
Corporation and Director
Daniel J. Graham 1999 $136,850 $ -- $ 7,882(14) -- $ 6,888(15)
Vice Chairman, Senior Vice 1998 126,704 -- 12,862(14) -- 7,132(15)
President and Director 1997 112,040 -- 19,088(14) -- 32,077(15)
Hugh T. Regan, Jr. 1999 $128,492 $30,000(3) $ 5,602(16) -- $ 5,996(17)
Treasurer, Secretary and 1998 118,974 -- 2,533(16) 50,000(18) 6,240(17)
Chief Financial Officer 1997 95,400 -- 2,348(16) -- 6,240(17)
- ------------------
(1) Includes $5,602, $5,320 and $4,931 for group health insurance in 1999,
1998 and 1997, respectively; $24,059 and $9,728 for company paid
personal travel in 1998 and 1997, respectively; $22,688 for the annual
lease value of an automobile for Alyn R. Holt in 1998 and $30,896 for
the lease of automobiles for Alyn R. and Connie E. Holt in 1997; and
$1,197 and $6,720 for use of company staff time for personal matters in
1998 and 1997, respectively.
(2) Includes $4,636, $4,847 and $4,847 for premiums paid on life insurance
for Mr. Holt in 1999, 1998 and 1997, respectively; $4,750, $4,750 and
$4,750 for matching contributions to Mr. Holt's 401(k) Plan account in
1999, 1998 and 1997, respectively; and $59,625, $56,064 and $127,520
for serving as a director of inTEST Limited and inTEST Kabushiki Kaisha
in 1999, 1998 and 1997, respectively.
(3) Paid in March 2000.
(4) Includes $3,646 for the annual lease value of an automobile for Mr.
Matthiessen in 1997; and $5,602, $5,320 and $4,931 for group health
insurance in 1999, 1998 and 1997, respectively.
10
(5) Includes $1,279, $1,490 and $1,490 for premiums paid on life insurance
for Mr. Matthiessen in 1999, 1998 and 1997, respectively; $4,750,
$4,750 and $4,750 for matching contributions to Mr. Matthiessen's
401(k) Plan account in 1999, 1998 and 1997, respectively; and $59,625
and $47,538 for serving as a director of inTEST Limited and inTEST
Kabushiki Kaisha in 1999 and 1998, respectively.
(6) Represents amount paid for group health insurance in 1999.
(7) Includes $1,248 and $124 for premiums paid on life insurance for Mr.
Smith in 1999 and 1998, respectively; and $3,750 and $3,750 for
matching contributions to Mr. Smith's 401(k) Plan account in 1999 and
1998, respectively.
(8) Represents salary paid from August 3, 1998, the date Mr. Smith was
elected as an officer of inTEST.
(9) Represents salary paid to Mr. Stone by Temptronic Corporation in
periods preceding the acquisition of Temptronic by inTEST.
(10) Includes $5,227, $5,213 and $2,961 for group health insurance for Mr.
Stone in 1999, 1998 and 1997, respectively.
(11) Includes $571, $644 and $485 for premiums paid on life insurance for
Mr. Stone in 1999, 1998 and 1997, respectively; $4,540 and $3,346 for
matching contributions to Mr. Stone's 401(k) Plan account in 1999 and
1998, respectively; and $8,077, $3,684 and $1,746 for the value of
shares of Temptronic Corporation's common stock allocated to Mr.
Stone's account in the Temptronic Equity Participation Plan in 1999,
1998 and 1997, respectively.
(12) Represents options to purchase 50,000 shares of Temptronic Corporation
common stock which were converted to options to purchase 46,250 shares
of inTEST Corporation upon the acquisition of Temptronic by inTEST.
(13) Represents options to purchase 12,500 shares of Temptronic Corporation
common stock which were converted to options to purchase 11,562 shares
of inTEST Corporation upon the acquisition of Temptronic by inTEST.
(14) Includes $5,375 and $10,750 for the annual lease value of an automobile
for Mr. Graham in 1998 and 1997, respectively; and $7,882, $7,487 and
$6,938 for group health insurance in 1999, 1998 and 1997, respectively.
(15) Includes $2,138, $2,382 and $2,382 for premiums paid on life insurance
for Mr. Graham in 1999, 1998 and 1997, respectively; $4,750, $4,750 and
$4,750 for matching contributions to Mr. Graham's 401(k) Plan account
in 1999, 1998 and 1997, respectively; and $24,945 for serving as a
director of inTEST Limited in 1997.
(16) Includes $5,602, $2,533 and $2,348 for group health insurance for Mr.
Regan in 1999, 1998 and 1997, respectively.
(17) Includes $1,246, $1,490 and $1,490 for premiums paid on life insurance
for Mr. Regan in 1999, 1998 and 1997, respectively; and $4,750, $4,750
and $4,750 for matching contributions to Mr. Regan's 401(k) Plan
account in 1999, 1998 and 1997, respectively.
(18) Includes (i) the grant of options to purchase 20,000 shares of common
stock and (ii) the repricing of options to purchase 30,000 shares.
11
Stock Options
We did not grant any stock options during the year ended December 31,
1999 to the named executive officers.
Exercise of Options
The following table sets forth information regarding the exercise of
stock options and the value of any unexercised stock options of each of our
named executive officers who exercised or held options during the fiscal year
ended December 31, 1999:
Aggregated Option Exercises in 1999 and December 31, 1999 Option Values
Number of Shares Value of Unexercised
Underlying Unexercised In-the-Money Options at
Acquired Options at 12/31/99 12/31/99 (1)
on Value -------------------------- --------------------------
Name Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
- ---- -------- -------- ----------- ------------- ----------- -------------
Hugh T. Regan, Jr. 0 $ 0 16,000 34,000 $199,000 $436,000
William M. Stone 4,625(2) 26,200(3) 9,250 43,937 128,945 640,507
- -----------------
(1) Based upon the closing price for inTEST's common stock as reported on
the Nasdaq National Market System on December 31, 1999 of $18.00 less
the exercise price.
(2) Mr. Stone exercised options to purchase 5,000 shares of Temptronic
Corporation on September 29, 1999. Upon the merger of Temptronic and
inTEST, the 5,000 shares of Temptronic Corporation converted to 4,625
shares of inTEST Corporation.
(3) Based upon an independent valuation of $5.25 per share for the common
stock of Temptronic as of September 30, 1999, less the exercise price.
Repricing of Options
The following table sets forth certain information concerning the
repricing of options held by any executive officer during the last ten
completed fiscal years:
12
Ten-Year Option Repricing Table
Length of
Number of Exercise Original
Securities Market Price Price at Option Term
Underlying of Stock at Time of New Remaining
Repriced Time of Repricing Exercise at Date of
Name and Position Date Options Repricing (per share) Price Repricing
- ----------------- ---- ---------- ----------- ----------- --------- -----------
Hugh T. Regan, Jr.,
Treasurer, Secretary
and Chief Financial
Officer 6/30/98 30,000 $6.00 $7.50 $6.00 9 years
Jerome R. Bortnem,
Vice President of
Sales and Marketing 6/30/98 10,000 $6.00 $7.50 $6.00 9 years
Stock Performance Graph
The following graph shows a comparison of cumulative total returns
during the period commencing on June 17, 1997, the date of our initial public
offering, and ending on December 31, 1999, for inTEST, the NASDAQ Market
Composite Index and a composite index (the "Peer Group Index") of public
companies engaged in manufacturing back-end automatic test equipment. The
companies included in the Peer Group Index consist of Aehr Test Systems,
Aetrium, Inc., Aseco Corporation, Cerprobe Corporation, Cohu, Inc., Credence
Systems Corp., Electroglas, Inc., Integrated Measurement Systems, LTX
Corporation, Micro Component Technologies, Inc. and Teradyne, Inc. The
comparison assumes $100 was invested on June 17, 1997, in our common stock
and in each of the foregoing indices and assumes the reinvestment of all
dividends, if any. Although the common stock was offered at $7.50 per share
in the initial public offering, the performance graph must begin with the
closing price of the common stock on the date of the initial public offering,
which was $7.625.
(Graph omitted)
6/17/97 12/31/97 12/31/98 12/31/99
------- -------- -------- --------
inTEST Corporation $100.00 $ 93.33 $110.00 $240.00
NASDAQ Composite Index $100.00 $112.98 $158.44 $286.24
Peer Group Index $100.00 $ 80.77 $ 84.17 $264.47
The historical stock price performance of our common stock is not
necessarily indicative of future performance.
13
Compensation Committee Report on Executive Officer Compensation
The Compensation Committee approves the compensation for all executive
officers of inTEST (also referred to in this report as the "Company") and
acts on such other matters relating to their compensation as it deems
appropriate. During 1999, the members of the Committee were Dr. Daniels and
Messrs. Endres, Holt and Slayton. The Committee also administers, with
respect to key employees, the Company's stock option plan and determines the
participants in such plan and the amount, timing and other terms and
conditions of awards under such plan.
Compensation Philosophy and Objectives. The Committee is committed to
the general principle that overall executive compensation should be
commensurate with the performance by the Company and the individual executive
officers, and that long-term incentives awarded to such executive officers
should be aligned with the interest of the Company's stockholders. The
primary objectives of the Company's executive compensation program are to
attract and retain executive officers who will contribute to the Company's
long-term success, to reward the achievement of desired Company goals, and to
provide compensation opportunities that are linked to the performance of the
Company and that directly link the interests of executive officers with the
interests of stockholders.
The Company's executive compensation program provides a level of
compensation opportunity that is competitive for companies in comparable
industries and of comparable development, complexity and size and consists of
three components: salary, bonus and long-term incentive compensation in the
form of stock options. In determining compensation levels, the Committee
considers a number of factors, including Company performance, both separately
and in relation to other companies within the semiconductor equipment
industry, the individual performance of each executive officer, comparative
compensation surveys concerning compensation levels and stock grants at other
companies, historical compensation levels and stock awards at the Company,
and the overall competitive environment for executive officers and the level
of compensation necessary to attract and retain key executive officeres.
Compensation levels may be greater or less than competitive levels in other
companies within the semiconductor equipment industry based upon factors such
as annual and long-term Company performance and individual performance.
Salary. Base salaries of all executive officers, including the Chief
Executive Officer, are determined by the potential impact of the individual
on the Company and its performance, the skills and experience required by the
position, the individual performance, contribution and potential of the
executive officer and the Company's overall performance. The Company's Chief
Executive Officer proposes to the Committee the salaries of all executive
officers after consideration of the foregoing individual, Company and
industry factors. The Committee considers these recommendations and its own
assessments of these factors in making its final determination of each
executive officer's base salary. Base salaries for executive officers are
evaluated and adjusted annually.
Bonus. In connection with setting the base salary for each executive
officer, the Committee also determines the annual bonus formula or amount
that will be paid to each executive officer. Generally, in 1999, the annual
bonus for executive officers whose efforts had a direct effect on the
Company's profitability was based upon a percentage of pre-tax profits of the
Company. Accordingly, the bonus paid in 1999 for each of the Chief Executive
Officer and the Chief Operating Officer was equal to 1% of consolidated pre-
tax profits.
14
Long-Term Incentive Compensation. The Committee periodically considers
whether to grant awards under the Company's stock option plan to specific
executive officers based on factors including: the executive officer's
position in the Company; his or her performance and responsibilities; the
extent to which he or she already holds an equity stake in the Company;
equity participation levels of comparable executive officers and key
employees at other similar companies; and the executive officer's individual
contribution to the Company's overall performance. The plan does not provide
any formula for weighing these factors, and a decision to grant an award is
primarily based upon a subjective evaluation of the past as well as the
future anticipated performance and responsibilities of the executive officer
in question.
In summary, it is the opinion of the Committee that the executive
compensation program provides the necessary total remuneration package to
align properly the Company's performance and the interests of the Company's
stockholders with competitive and equitable executive compensation in a
balanced and reasonable manner, for both the short and long-term.
Compensation Committee:
Stuart F. Daniels, Ph.D.
Richard O. Endres
James J. Greed, Jr.
Alyn R. Holt
Gregory W. Slayton
Employment Agreement
In connection with the acquisition of Temptronic, we entered into a new
employment agreement with William M. Stone, Temptronic's President and Chief
Executive Officer. The new agreement has a term of three years commencing on
March 9, 2000, the date of the acquisition, and may be extended for
successive annual periods if not terminated earlier in accordance with the
terms of the agreement. The agreement provides that Mr. Stone will serve as
the President and Chief Executive Officer of Temptronic Corporation with a
base salary of $160,000 per annum, which may increase, but not decrease,
annually. Mr. Stone will receive, for each calendar year during the term of
the agreement, a bonus equal to 1% of the pre-tax profit of Temptronic,
fringe benefits and reimbursement for reasonable business expenses. In
addition, we recently agreed to amend Mr. Stone's employment agreement to
recognize Mr. Stone's contribution to Temptronic's return to profitability
and intend to award to Mr. Stone incentive stock options to purchase 60,000
shares of inTEST common stock (vesting over four years) upon approval of the
amendment of the 1997 Stock Plan as described in this proxy statement and to
pay Mr. Stone an additional bonus of $100,000, annually, in 2000 and in each
of the succeeding four calendar years.
Mr. Stone's employment under the agreement may be terminated (i) by him
if he resigns without cause, (ii) by reason of his death or disability, (iii)
by Temptronic without cause or (iv) by Temptronic for cause. If his
employment is terminated by reason of death or disability or by Temptronic
without cause, Mr. Stone will be entitled to base salary and all fringe
benefits for the remainder of the term of the agreement or one year,
whichever is longer, including: (1) all fringe benefits for any period
subsequent to the termination of employment, and (2) continued insurance
coverage for Mr. Stone and his family as broad and as is in effect at the
15
time of the termination, at his expense, until he reaches or would have
reached age 65. In addition, upon such termination, the incentive stock
options to be issued to him upon approval of the proposal to amend the 1997
Stock Plan would immediately vest and the fixed bonus amounts not then paid
will accelerate and become payable within 30 days. If Mr. Stone resigns,
Temptronic will have no further liability to him for salary, bonus or other
compensation or benefits from and after the effective date of his
resignation, other than payment, when calculated, of any bonus to which he
may be entitled which may have accrued through the effective date of
termination. If his employment is terminated for cause, Temptronic will have
no further obligation to Mr. Stone except payment of salary that may have
accrued through the effective date of termination.
Compensation Committee Interlocks and Insider Participation
The Compensation Committee consisted of Dr. Daniels and Messrs. Endres,
Holt and Slayton during 1999. Mr. Holt serves as an executive officer of
inTEST. Dr. Daniels provides us with consulting services relating to
intellectual property matters. In connection with such services, Dr. Daniels
was paid fees totaling $66,400 during 1999.
INTEREST OF CERTAIN PERSONS IN MATTERS TO BE ACTED UPON
If the stockholders approve the amendments to the 1997 Stock Plan
described in this proxy statement, we intend to grant incentive stock options
for the purchase of 60,000 shares of our common stock to William M. Stone, a
nominee for director.
AMENDMENT OF THE 1997 STOCK PLAN
Description of the Amendments
Our Board of Directors has approved two amendments to our 1997 Stock
Plan (also referred to as the "Plan") subject to stockholder approval.
Specifically, the two proposals are as follows:
* the first amendment would increase the maximum number of shares
of common stock for which options and stock awards may be
granted under the Plan from 500,000 shares to 1,000,000 shares
(the "Share Amendment"); and
* the second amendment would reduce the number of shares required
to vote in favor of certain amendments to the Plan in order to
approve such amendments to the Plan in the future so that the
voting requirements are consistent with various legal
requirements to which the Plan is subject (the "Approval
Amendment").
The Board of Directors approved the Share Amendment in order to ensure
that we are able to continue to retain and attract existing and future
directors, officers, key employees and consultants through grants of stock
options or restricted stock awards. Presently, only 500,000 shares are
authorized to be issued pursuant to options or stock awards under the Plan,
and we have awarded stock options for the purchase of up to 495,000 shares.
Approval of the Share Amendment would permit us to grant stock options or
restricted stock awards for up to an additional 500,000 shares.
16
The Board of Directors approved the Approval Amendment in order to
conform the voting requirements of the Plan to current legal requirements.
Presently, any amendment of the Plan which would (i) change the eligibility
of employees or the class of employees eligible to receive options under the
Plan or (ii) increase the maximum number of shares as to which options may be
granted to employees under the Plan (the "Employee Amendments") requires the
affirmative vote of the holders of a majority of the outstanding shares of
common stock to be approved. The Approval Amendment would amend the Plan so
that Employee Amendments could be approved by the holders of less than a
majority of outstanding shares. Rather, Employee Amendments would require
the approval of the holders of that number of shares required under
applicable tax and securities laws and other applicable regulations,
including those of Nasdaq. Under such current requirements, an Employee
Amendment could be approved by the affirmative vote of the holders of a
majority in voting power of the shares of stock that are present in person or
by proxy and entitled to vote on the matter.
Approval of the Amendments
According to the Plan, the Share Amendment requires the approval of the
holders of a majority of the outstanding shares. The Plan does not require
stockholder approval of the Approval Amendment. However, because the
proposal would reduce the voting requirements for future Employee Amendments,
we are submitting this proposal for approval by the holders of the number of
shares which is presently required to approve such Employee Amendments, that
is, a majority of the outstanding shares.
Material Plan Provisions
The following information provides a summary of the Plan as it is
proposed to be amended.
The purpose of the Plan is to promote our overall financial objectives
by motivating those of our directors, officers, key employees and consultants
who are selected to participate in the Plan to achieve long-term growth of
our equity and by retaining the association of those individuals who are
instrumental in achieving this growth. The Plan provides incentives to these
persons to enter into or remain in our service or employ and to devote
themselves to our success by granting to such persons an opportunity to
acquire or increase their interest in our common stock through receipt of (i)
rights ("Options") to acquire shares of our common stock or (ii) awards of
restricted shares of our common stock ("Stock Awards").
The Plan consists of two parts: the Non-Qualified Plan and the Key
Employee Plan. Our directors and consultants are eligible to participate in
the Non-Qualified Plan, and our officers and other key employees are eligible
to participate in the Key Employee Plan. As amended, the Plan will permit
the granting of Options or Stock Awards for up to 1,000,000 shares of our
common stock. All or any portion of such Options and Stock Awards may be
granted to our officers and key employees. Since the Plan's inception, we
have awarded Options to purchase 495,000 shares under the Plan, 10,000 under
the Non-Qualified Plan and 485,000 under the Key Employee Plan. We have not
made any Stock Awards under the Plan.
The Non-Qualified Plan is administered by our Board of Directors, and
the Key Employee Plan is administered by the Compensation Committee of our
Board of Directors (the Board of Directors or the Compensation Committee, as
the case may be, is referred to herein as the "Administrator"). The
17
Administrator has sole discretion to determine when and to whom awards will
be granted, the number of shares covered by each award, the type of award,
and the terms, provisions and kind of consideration payable, if any, with
respect to any award under the Plan, subject to the provisions of the Plan.
In determining the persons to whom awards will be granted and the number of
shares covered by each award, the Administrator may take into account the
duties of the respective persons, their present and potential contribution to
our success and such other factors as the Administrator shall deem relevant.
Options granted under the Key Employee Plan may be "incentive stock
options" ("ISOs"), within the meaning of Section 422 of the Internal Revenue
Code of 1986, as amended (the "Code"), or non-qualified stock options
("NQSOs"). Options granted under the Non-Qualified Plan will be NQSOs. The
exercise price of any Option will be determined by the Administrator, and, in
the case of ISOs, will not be less than 100% of the Fair Market Value (as
defined in the Plan) on the date of grant. In the case of ISOs, certain
limitations will apply with respect to the aggregate value of option shares
which can become exercisable for the first time during any one calendar year,
and certain additional limitations will apply to ISOs granted to persons who,
at the time the option is granted, own more than 10% of the outstanding
voting power of our stock. The Administrator may provide in the option
contract that the payment of the option price may be made in cash, by
delivery of shares of common stock held by the optionee for more than one
year and having a Fair Market Value equal to such option price, by a
combination thereof or by any other method the Administrator may approve.
All Options to the extent not earlier exercised, expire on the earliest
of (i) the last business day immediately preceding the tenth anniversary of
the date of grant, (ii) one year following the optionee's termination of his
or her employment or service (unless such termination is for cause, as
defined in the Plan, in which case any options held by such optionee will
terminate immediately upon a finding that the termination was for cause) or
(iii) a date set by the Administrator upon a finding that a change in the
financial accounting treatment for the Options has been adopted that may have
a material adverse effect on us. In addition, in the event of a Change of
Control, as defined in the Plan, the Administrator may take whatever action
with respect to outstanding options it deems necessary or advisable,
including accelerating the expiration date of any such outstanding option to
a date not earlier than thirty (30) days from the date notice of such
acceleration is given to the respective optionee or terminate any Option that
may not have then vested.
The Plan further provides for the granting of Stock Awards, which are
awards of the Company's common stock, either with or without payment of
consideration therefor. Stock Awards will be subject to such restrictions as
the Administrator determines is appropriate, including, without limitation,
restrictions on the sale or other disposition of the shares of stock so
awarded and our right to reacquire such shares upon termination of the
recipient's employment or service.
Participation in the Plan is at the discretion of the Administrator of
the Plan. Future participation will be based upon determinations which the
Administrator may make in the future, except that, if the proposals to amend
the Plan are approved by the stockholders at the annual meeting, the
Compensation Committee has determined that it will award Options to purchase
60,000 shares to William M. Stone, President and Chief Executive Officer of
Temptronic Corporation. No other such determinations have yet been made, so
it is not possible to state the benefits which may be awarded to any of our
other directors, executive officers or other officers.
18
Recommendation of the Board of Directors
The Board of Directors recommends that the stockholders vote "FOR" the
approval of the amendments to the 1997 Stock Plan as described in this proxy
statement.
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
KPMG LLP has been our independent public accountant since our
incorporation in 1981. Our Board of Directors has selected KPMG LLP as
inTEST's independent certified public accountant for the current year. This
appointment will be submitted to the stockholders for ratification at the
meeting.
A representative of KPMG LLP is expected to be present at the meeting.
He will be given an opportunity to make a statement if he desires and will be
available to respond to questions by stockholders. If the stockholders do not
ratify the selection of this firm, the selection of another firm of
independent certified public accountants will be considered by the Board of
Directors.
The Board of Directors may, in its discretion, direct appointment of a
new accounting firm at any time during the year if the Board believes that
such a change would be in our best interests. No such change is anticipated.
Recommendation
The Board of Directors recommends a vote "FOR" the proposal to ratify
the selection of KPMG LLP as inTEST's independent certified public
accountants.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
We paid fees totaling $66,400 during 1999 for consulting services
relating to intellectual property matters provides to us by Stuart F.
Daniels, Ph.D., one of our directors.
Hakuto Co. Ltd., the parent company of one of our principal
stockholders, distributes some of our products in Japan. During 1999, our
Temptronic subsidiary sold approximately $1.5 million in products to Hakuto
for distribution. At December 31, 1999, Temptronic's accounts receivable
included approximately $200,000 due from Hakuto. All sales to Hakuto were at
market price and on customary terms.
STOCKHOLDER PROPOSALS
Stockholders intending to submit proposals to be included in our proxy
statement for our next annual meeting must send their proposals to Hugh T.
Regan, Jr., Secretary (at 2 Pin Oak Lane, Cherry Hill, New Jersey 08003), not
later than March 9, 2001. These proposals must relate to matters appropriate
for stockholder action and be consistent with regulations of the SEC, and
meet certain other requirements of the rules of the Securities and Exchange
Commission relating to stockholders' proposals in order to be considered for
inclusion in our proxy statement and form of proxy card relating to that
meeting.
19
ANNUAL REPORT
Our Annual Report to Stockholders for the year ended December 31, 1999,
accompanies this proxy statement. The Annual Report to Stockholders does not
constitute a part of the proxy solicitation materials.
ADDITIONAL INFORMATION
inTEST will provide to each person solicited, without charge except for
exhibits, upon the written request of such person, a copy of inTEST's annual
report on Form 10-K, including inTEST's financial statements and financial
statement schedules required to be filed with the Securities and Exchange
Commission for the year ended December 31, 1999. Requests should be directed
to Mr. Hugh T. Regan, Jr., Secretary, inTEST Corporation, 2 Pin Oak Lane,
Cherry Hill, New Jersey 08003.
MISCELLANEOUS
This solicitation is made on behalf of the Board of Directors, and its
cost (including preparing and mailing of the notice, this proxy statement and
the form of proxy card) will be paid by inTEST. We will make arrangements
with brokerage houses and other custodians, nominees and fiduciaries to send
the proxy materials to their principals and will reimburse them for their
reasonable expenses in so doing. To the extent necessary in order to assure
sufficient representation at the meeting, our officers and employees may
solicit the return of proxies by mail, telephone, telegram and personal
interview. We will not pay any compensation in addition to regular salary
and benefits to any such officer or employee for such solicitation. If
necessary, we may engage a proxy solicitor to assist in the solicitation of
proxies from stockholders. We have not entered into an agreement with any
party for such solicitation services as of the date of this proxy statement.
Where information contained in this proxy statement rests peculiarly
within the knowledge of a person other than one of our officers or directors,
we have relied upon information furnished by that other person.
By Order of the Board of Directors,
/s/Hugh T. Regan, Jr.
--------------------------------
Hugh T. Regan, Jr.
Secretary
July 7, 2000
20
APPENDIX A TO PROXY STATEMENT
inTEST CORPORATION
AMENDED AND RESTATED
1997 STOCK PLAN
ARTICLE I
ESTABLISHMENT
1.1 Purpose. The inTEST Corporation 1997 Stock Plan (the "Plan") is
hereby established by inTEST Corporation (the "Company"). The purpose of the
Plan is to promote the overall financial objectives of the Company and its
stockholders by motivating those persons selected to participate in the Plan to
achieve long-term growth in the equity of the Company and by retaining the
association of those individuals who are instrumental in achieving this growth.
The Plan provides additional incentives to officers and other key employees
("Key Employees"), consultants ("Consultants") and members of the Board of
Directors of the Company or its Affiliates, as defined herein ("Directors"), to
enter into or remain in the service or employ of the Company or its Affiliates
and to devote themselves to the Company's success by granting such individuals
an opportunity to acquire or increase their proprietary interest in the Company
through receipt of (i) rights (the "Options") to acquire the Company's Common
Stock, par value $.01 per share (the "Common Stock"), and (ii) awards of shares
of the Common Stock ("Stock Awards").
1.2 Two-Part Plan. The Plan shall be divided into two sub-plans: the
"Key Employee Plan," which will govern benefits for Key Employees, as defined
herein, and the "Non-Qualified Plan," which will govern benefits to Directors
and Consultants. All provisions hereunder which refer to the "Plan" shall
apply to each of the Key Employee Plan and the Non-Qualified Plan.
ARTICLE II
STOCK SUBJECT TO PLAN
2.1 Aggregate Maximum Number. The aggregate maximum number of shares of
the Common Stock for which Options or Stock Awards may be granted under the
Plan, including without limitation, the Key Employee Plan, is 1,000,000 shares
(the "Plan Shares"), which number is subject to adjustment as provided in
Section 7.6. Plan Shares shall be issued from authorized and unissued Common
Stock or Common Stock held in or hereafter acquired for the treasury of the
Company. If any outstanding Option granted under the Plan expires, lapses or
is terminated for any reason, or if pursuant to the terms of a Stock Award the
shares so awarded are forfeited, the Plan Shares allocable to the unexercised
portion of such Option, or such forfeited shares of a Stock Award may again be
the subject of an Option or Stock Award granted pursuant to the Plan.
ARTICLE III
TERM OF PLAN
3.1 Term of Plan. The Plan shall commence on the date of approval of the
Plan by the Board of Directors of the Company ("Effective Date"), but shall
terminate unless the Plan is approved by the stockholders of the Company within
twelve months of such date as set forth in Section 422(b)(1) of the Internal
Revenue Code of 1986, as amended (the "Code"). Any Options granted pursuant to
the Plan prior to approval of the Plan by the stockholders of the Company shall
be subject to such approval and, notwithstanding anything to the contrary
herein or in any Option Document (as defined below), shall not be exercisable
until such approval is obtained. No Option may be granted under the Plan on or
after the date which is ten years after the Effective Date.
ARTICLE IV
ELIGIBILITY
4.1 Eligibility.
(a) Key Employee Plan. Except as herein provided, the persons who
shall be eligible to participate in the Key Employee Plan and be granted awards
of Options or Stock Awards ("Benefits") shall be those Key Employees who shall
be in a position, in the opinion of the Committee, as defined herein, to make
contributions to the growth, management, protection and success of the Company
and its Affiliates. Of those persons described in the preceding sentence, the
Administrator, as herein defined, may, from time to time, select persons to be
granted Benefits and shall determine the terms and conditions with respect
thereto. In making any such selection and in determining the form of the
benefit, the Administrator may give consideration to the person's functions and
responsibilities, the person's contributions to the Company and its Affiliates,
the value of the individual's service to the Company and its Affiliates and
such other factors deemed relevant by the Administrator. The term "Affiliates"
shall mean any corporation in which the Company owns, directly or indirectly,
50 percent or more of the voting stock or capital at the time of the granting
of the Option or Stock Award.
(b) Non-Qualified Plan. NQSOs, as defined herein, and Stock Awards
may be granted to Directors and Consultants pursuant to the Non-Qualified Plan
as herein provided.
ARTICLE V
STOCK OPTIONS
5.1 Key Employee Plan Options. Options granted under the Key Employee
Plan may be either ISOs, as defined herein, or NQSOs. Each Option granted
under the Key Employee Plan is intended to be an incentive stock option ("ISO")
within the meaning of Section 422(b) of the Code for federal income tax
purposes, except to the extent (i) any such ISO grant would exceed the
limitation of subsection 5.3(a) below, (ii) any Option is specifically
designated at the time of grant (the "Grant Date") as not being an ISO (an
Option which is not an ISO, and therefore is a non-qualified option, is
referred to herein as an "NQSO"), or (iii) any Option is granted to a person
who is not an employee of the Company or any Affiliate on the Grant Date.
Under the Key Employee Plan, Options may be granted to Key Employees at such
times, in such amounts, and on such terms and conditions as determined by the
Administrator, in accordance with the terms of the Plan.
5.2 Non-Qualified Plan Options.
Options granted under the Non-Qualified Plan shall be NQSOs. Such
Options may be granted to Directors and Consultants at such times, in such
amounts, and on such terms and conditions as determined by the Administrator in
accordance with the terms of the Plan.
5.3 Terms and Conditions of Options. Options granted pursuant to the
Plan shall be evidenced by written documents ("Option Documents") in such form
as the Administrator shall from time to time approve, subject to the following
terms and conditions. Option Documents may also contain such other terms and
conditions (including vesting schedules for the exercisability of Options)
which the Administrator shall from time to time provide which are not
inconsistent with the terms of the Plan. Persons to whom Options are granted
are hereinafter referred to as "Optionees."
(a) Number of Option Shares. Each Option Document shall state the
number of shares of Common Stock ("Option Shares") to which it pertains. If
the aggregate fair market value of Option Shares with respect to which ISOs are
exercisable for the first time by an Optionee during any calendar year
(determined as of the date the ISO is granted) and any options granted under
other incentive stock option plans of the Company exceed $100,000, the portion
of such options in excess of $100,000 shall be treated as options which are not
ISOs in accordance with Section 422(d) of the Code.
(b) Option Price. Each Option Document shall state the price at
which an Option Share may be purchased (the "Option Price"), which, in the case
of an ISO shall be not less than 100% of the "Fair Market Value" of a share of
the Common Stock on the Grant Date. If the Common Stock is listed on a
national securities exchange or quoted on The Nasdaq Stock Market ("NASDAQ"),
the Fair Market Value is the closing price of the Common Stock on the relevant
date (or, if such date is not a business day or a day on which quotations are
reported, then on the immediately preceding date on which quotations were
reported), as reported by the principal national exchange on which such shares
are traded (in the case of an exchange) or by NASDAQ, as the case may be. If
the Common Stock is not listed on a national securities exchange or quoted on
NASDAQ, the Fair Market Value will be as determined by the Administrator in
good faith. If an ISO is granted to an Optionee who then owns, directly or by
attribution under Section 424(d) of the Code, shares possessing more than ten
percent (10%) of the total combined voting power of all classes of stock of the
Company, then the Option Price shall be not less than One Hundred and Ten
Percent (110%) of the Fair Market Value of an Option Share on the Grant Date.
(c) Medium of Payment. An Optionee shall pay for Options Shares (i)
in cash, (ii) by bank check payable to the order of the Company or (iii) by
such other mode of payment as the Administrator may approve, including payment
through a broker in accordance with procedures permitted by Regulation T of the
Federal Reserve Board. Furthermore, the Administrator may provide in an Option
Document that payment may be made in whole or in part in shares of the Common
Stock held by the Optionee for more than one year. If payment is made in whole
or in part in shares of the Common Stock, then the Optionee shall deliver to
the Company certificates registered in the name of such Optionee representing
shares of Common Stock legally and beneficially owned by such Optionee, free of
all liens, claims and encumbrances of every kind and having a Fair Market Value
on the date of delivery of such notice that is not less than the Option Price
of the Option Shares with respect to which such Option is to be exercised,
accompanied by stock powers duly endorsed in blank by the record holder of the
shares represented by such certificates. If certificates for shares of the
Company's Common Stock delivered to the Company represent a number of shares in
excess ("Excess Shares") of the number of shares required to make payment for
the Option Price of the Option Shares (or the relevant portion thereof) with
respect to which such Option is to be exercised by payment in shares of Common
Stock, the stock certificate issued to the Optionee shall represent the total
of the Option Shares in respect of which payment is so made plus such Excess
Shares. Notwithstanding the foregoing, the Board of Directors, in its sole
discretion, may refuse to accept shares of Common Stock in payment of the
Option Price. In that event, any certificates representing shares of Common
Stock which were delivered to the Company shall be returned to the Optionee
with notice of the refusal of the Board of Directors to accept such shares in
payment of the Option Price. The Board of Directors may impose such
limitations or prohibitions on the use of shares of the Common Stock to
exercise an Option as it deems appropriate, subject to the provisions of the
Plan.
(d) Initial Exercise. The Administrator shall determine the time at
which an Option may first be exercised.
(e) Termination of Options. All Options shall expire at such time
as the Administrator may determine and set forth in the Option Document, which
date shall not be later than the last business date immediately preceding the
tenth anniversary of the Grant Date of such Option (the "Expiration Date"). No
Option may be exercised later than the Expiration Date. Notwithstanding the
foregoing, no Option shall be exercisable after the first to occur of the
following:
(i) In the case of an ISO, five years from the Grant Date if,
on the Grant Date the Optionee owns, directly or by attribution under Section
424(d) of the Code, shares possessing more than ten percent (10%) of the total
combined voting power of all classes of stock of the Company;
(ii) The date set by the Board of Directors of the Company to
be an accelerated expiration date after a finding by the Board of Directors of
the Company that a change in the financial accounting treatment for Options
from that in effect on the date the Plan was adopted materially adversely
affects or, in the determination of the Board of Directors, may materially
adversely affect in the foreseeable future, the Company, provided the Board of
Directors may take whatever other action, including acceleration of any
exercise provisions, it deems necessary should it make the determination
referred to hereinabove;
(iii) Expiration of one year (or such shorter period as the
Administrator may select and set forth in the Option Document) from the date
the Optionee's employment or service with the Company terminates for any reason
other than circumstances described by Subsection (e)(v), below;
(iv) In the event of a "Change in Control" (as defined in
Subsection (f) below), the Administrator can (A) accelerate the Expiration Date
of any Option which has vested provided an Optionee who holds an Option is
given written notice at least thirty (30) days before the date so fixed, (B)
terminate any Option which has not then vested or (C) accelerate the vesting
schedule of any Option; or
(v) In the case of an Option granted under the Key Employee
Plan, a finding by the Committee, after full consideration of the facts
presented on behalf of both the Company and the Optionee, that the Optionee has
been discharged from employment with the Company for Cause. For purposes of
this Section, "Cause" shall mean: (A) a breach by Optionee of his employment
agreement with the Company, (B) a breach of Optionee's duty of loyalty to the
Company, including without limitation any act of dishonesty, embezzlement or
fraud with respect to the Company, (C) the commission by Optionee of a felony,
a crime involving moral turpitude or other act causing material harm to the
Company's standing and reputation, (D) Optionee's continued failure to perform
his duties to the Company or (E) unauthorized disclosure by Optionee of trade
secrets or other confidential information belonging to the Company. In the
event of a finding that the Optionee has been discharged for Cause, in addition
to immediate termination of the Option, the Optionee shall automatically
forfeit all Option Shares for which the Company has not yet delivered the share
certificates upon refund of the Option Price.
(f) Change of Control. In the event of a Change in Control (as
defined below), the Administrator may take whatever action with respect to the
Options outstanding under the Plan it deems necessary or desirable, including,
without limitation, accelerating the Expiration Date in the respective Option
Documents to a date no earlier than thirty (30) days after notice of such
acceleration is given to the Optionee or terminate any Option which has not
then vested. A "Change of Control" shall be deemed to have occurred upon the
earliest to occur of the following events:
(i) The date the stockholders of the Company (or the Board of
Directors, if stockholder action is not required) approve a plan or other
arrangement pursuant to which the Company will be dissolved or liquidated;
(ii) the date the stockholders of the Company (or the Board of
Directors, if stockholder action is not required) approve a definitive
agreement to sell or otherwise dispose of all or substantially all of the
assets of the Company;
(iii) the date the stockholders of the Company (or the Board of
Directors, if stockholder action is not required) and the stockholders of the
other constituent corporation (or its board of directors if stockholder action
is not required) have approved a definitive agreement to merge or consolidate
the Company with or into such other corporation, other than, in either case, a
merger or consolidation of the Company in which holders of shares of the Common
Stock immediately prior to the merger or consolidation will hold at least a
majority of the ownership of common stock of the surviving corporation (and, if
one class of common stock is not the only class of voting securities entitled
to vote on the election of directors of the surviving corporation, a majority
of the voting power of the surviving corporation's voting securities)
immediately after the merger or consolidation, which common stock (and, if
applicable, voting securities) is to be held in substantially the same
proportion as such holders' ownership of Common Stock immediately before the
merger or consolidation; or
(iv) the date any entity, person or group, (within the meaning
of Section 13(d)(3) or Section 14(d)(2) of the Securities and Exchange Act of
1934, as amended (the "Exchange Act")), other than (A) the Company or any of
its Affiliates or any employee benefit plan (or related trust) sponsored or
maintained by the Company or any of its Affiliates or (B) any person who, on
the date the Plan is approved by the stockholders, shall have been the
beneficial owner of at least twenty percent (20%) of the outstanding Common
Stock, shall have become the beneficial owner of, or shall have obtained voting
control over, more than fifty percent (50%) of the outstanding shares of the
Common Stock.
(g) Transfers. No ISO granted under the Plan may be transferred,
except by will or by the laws of descent and distribution. During the lifetime
of the person to whom an ISO is granted, such Option may be exercised only by
such person. No NQSO under the Plan may be transferred, except by will or by
the laws of descent and distribution or pursuant to a qualified domestic
relations order as defined by the Code or Title I of the Employee Retirement
Income Security Act, or the rules thereunder.
(h) Other Provisions. The Option Documents shall contain such other
provisions including, without limitation, additional restrictions upon the
exercise of the Option or additional limitations upon the term of the Option,
as the Administrator shall deem advisable.
(i) Amendment. The Administrator shall have the right to
amend Option Documents issued to such Optionee, subject to the Optionee's
consent if such amendment is not favorable to the Optionee, except that the
consent of the Optionee shall not be required for any amendment made under
Subsection (f) above.
5.4 Exercise.
(a) Notice. No Option shall be deemed to have been exercised prior
to the receipt by the Company of written notice of such exercise and of payment
in full of the Option Price for the Option Shares to be purchased. Each such
notice shall (i) specify the number of Option Shares to be purchased, (ii)
satisfy the securities law requirements set forth in this Section 5.4, and
(iii) in the case of an ISO, state that the Optionee acknowledges that the
Options Shares may not be sold within one year of exercise or two years from
the Grant Date and that the Option must be exercised within three months
following termination of employment, in order to maintain the ISO status of the
Option.
(b) Restricted Stock. Each exercise notice shall (unless the Option
Shares are covered by a then current registration statement or a Notification
under Regulation A under the Securities Act of 1933, as amended (the
"Securities Act")), contain the Optionee's acknowledgment in form and substance
satisfactory to the Company that (i) such Option Shares are being purchased for
investment and not for distribution or resale (other than a distribution or
resale which, in the opinion of counsel satisfactory to the Company, may be
made without violating the registration provisions of the Securities Act); (ii)
the Optionee has been advised and understands that (A) the Option Shares have
not been registered under the Securities Act and are "restricted securities"
within the meaning of Rule 144 under the Securities Act and are subject to
restrictions on transfer and (B) the Company is under no obligation to register
the Option Shares under the Securities Act or to take any action which would
make available to the Optionee any exemption from such registration, (iii) such
Option Shares may not be transferred without compliance with all applicable
federal and state securities laws, and (iv) an appropriate legend referring to
the foregoing restrictions on transfer and any other restrictions imposed under
the Option Documents may be endorsed on the certificates. Notwithstanding the
above, should the Company be advised by counsel that the issuance of Option
Shares upon the exercise of an Option should be delayed pending (A)
registration under federal or state securities laws, (B) the receipt of an
opinion that an appropriate exemption therefrom is available, (C) the listing
or inclusion of the Option Shares on any securities exchange or in an automated
quotation system or (D) the consent or approval of any governmental regulatory
body whose consent or approval is necessary in connection with the issuance of
such Option Shares, the Company may defer the exercise of any Option granted
hereunder until either such event in A, B, C or D has occurred.
(c) Notice of Disqualifying Disposition. An Optionee shall notify
the Administrator if any Option Shares received upon the exercise of an ISO are
sold within one year of exercise or two years from the Grant Date.
ARTICLE VI
STOCK AWARDS
6.1 Grants of Stock Awards. Stock Awards will consist of shares of
Common Stock ("Bonus Shares") transferred to recipients ("Recipient"), either
without payment therefor or with such payment as may be required by the
Administrator, as additional compensation for such Recipient's service to the
Company. Stock Awards shall be subject to such terms and conditions as the
Administrator determines appropriate including, without limitation, re-
strictions on the sale or other disposition of such Bonus Shares and rights of
the Company to reacquire such Bonus Shares upon termination of the Recipient's
employment or service within specified periods.
6.2 Transferability; Legends. Bonus Shares may be transferred only if
(i) the Bonus Shares are securities covered by a then current registration
statement or a Notification under Regulation A under the Securities Act, or
such transfer complies with the requirements of Rule 144 of the Exchange Act;
and (ii) such transfer does not violate any restriction imposed on the Stock
Award. The Bonus Shares may bear a legend referring to (x) the restrictions on
transferability of such Bonus Shares, or (y) if the Recipient is subject to
Section 16 of the Exchange Act at the time the Bonus Shares are issued, the
liability which may arise under Section 16 upon disposition of the Bonus
Shares.
ARTICLE VII
ADMINISTRATION
7.1 Administrator. The Administrator for purposes of the Non-Qualified
Plan and the Key Employee Plan will be as follows:
(a) Non-Qualified Plan. The grant of Options and Stock Awards
pursuant to the Non-Qualified Plan will be administered by the Board of
Directors of the Company. The Board of Directors of the Company may make such
interpretation and construction of the Non-Qualified Plan as necessary from
time to time in its sole discretion, such interpretation and construction of
the Non-Qualified Plan to be final, binding and conclusive.
(b) Key Employee Plan. With respect to the Key Employee Plan, the
Board of Directors shall appoint a committee (the "Committee") composed of two
or more non-employee directors (as the term "non-employee directors" is defined
under Rule 16b-3(b)(3) of the Exchange Act) to operate and administer the Key
Employee Plan. The Committee will administer the grant of Options and Stock
Awards pursuant to the Key Employee Plan.
7.2 Meetings. The Committee shall hold meetings at such times and places
as it may determine. Acts approved at a meeting by a majority of the members
of the Committee or acts approved in writing by the unanimous consent of the
members of the Committee shall be the valid acts of the Committee.
7.3 Discretion of Committee and the Board of Directors. The Committee
shall from time to time at its discretion grant Benefits pursuant to the terms
of the Key Employee Plan and the Board of Directors shall from time to time at
its discretion grant Benefits pursuant to the terms of the Non-Qualified Plan.
The Administrator, as the case may be, shall have plenary authority to
determine the Optionees or Recipients (each a "Participant") to whom and the
times at which Benefits shall be granted, the number of Plan Shares to be
covered by such grants and the price and other terms and conditions thereof,
including a specification with respect to whether an Option is intended to be
an ISO, subject, however, to the express provisions of the Key Employee Plan
and compliance with Rule 16b-3(d) under the Exchange Act. In making such
determinations the Administrator may take into account the nature of the
Participant's services and responsibilities, the Participant's present and
potential contribution to the Company's success and such other factors as it
may deem relevant. The interpretation and construction by the Administrator of
any provision of the Plan or of any benefit granted under it shall be final,
binding and conclusive.
7.4 No Liability. No member of the Board of Directors or the Committee
shall be personally liable for any action or determination with respect to the
Plan or any benefit thereunder, or for any act or omission of any other member
of the Board of Directors or the Committee, including but not limited to the
exercise of any power and discretion given to him under the Plan, except those
resulting from (i) any breach of such person's duty of loyalty to the Company
or its stockholders, (ii) acts or omissions not in good faith or involving
intentional misconduct or a knowing violation of law or (iii) any transaction
from which such person derived an improper personal benefit.
7.5 Indemnification. In addition to such other rights of indemnification
as he may have as a member of the Board of Directors or the Committee, and with
respect to the administration of the Plan and the granting of Benefits
hereunder, each member of the Board of Directors and of the Committee shall be
entitled to be indemnified by the Company to the fullest extent permitted by
applicable law, for all expenses (including but not limited to reasonable
attorneys' fees and expenses), judgments, fines and amounts paid in settlement
reasonably incurred by him in connection with or arising out of any action,
suit or proceeding with respect to the administration of the Plan or the
granting of Benefits hereunder (each a "Proceeding") in which he may be
involved by reason of his being or having been a member of the Board of
Directors or the Committee, whether or not he continues to be such member of
the Board of Directors or the Committee at the time of the incurring of such
expenses; provided however, that such indemnity shall not include any expenses
incurred by such member of the Board of Directors or Committtee in respect of
any matter in which any settlement is effected in an amount in excess of the
amount approved by the Company on the advice of its legal counsel; and provided
further that no right of indemnification under the provisions set forth herein
shall be available to or accessible by any such member of the Administrator
unless within ten (10) days after institution of any such action, suit or
proceeding he shall have offered the Company in writing the opportunity to
handle and defend such action, suit or proceeding at its own expense. The
foregoing right of indemnification shall inure to the benefit of the heirs,
executors or administrators of each such member of the Board of Directors or
the Committee and shall be in addition to all other rights to which such member
of the Board of Directors or the Committee would be entitled to as a matter of
law, contract or otherwise. Expenses (including attorneys' fees) incurred by a
member of the Board of Directors or the Committee in defending any Proceeding
may be paid by the Company in advance of the final disposition of such
Proceeding upon receipt of an undertaking by or such person to repay all
amounts advanced if it should be ultimately be determined that such person is
not entitled to be indemnified under this Article or otherwise, except that no
such advance payment will be required if it is determined by the Board of
Directors that there is a substantial probability that such person will not be
able to repay the advance payments.
7.6 Adjustments on Changes in Common Stock. The aggregate number of
shares of Common Stock as to which Options or Stock Awards may be granted under
the Non-Qualified Plan and the Key Employee Plan, the number of Option Shares
covered by each outstanding Option and the Option Price per Option Share
specified in each outstanding Option shall be appropriately adjusted in the
event of a stock dividend, stock split or other increase or decrease in the
number of issued and outstanding shares of Common Stock resulting from a
subdivision or consolidation of the Common Stock or other capital adjustment
(not including the issuance of Common Stock on the conversion of other
securities of the Company which are convertible into Common Stock) effected
without receipt of consideration by the Company. The Board of Directors shall
have the authority to determine the adjustments to be made under this Section
and any such determination by the Board of Directors shall be final, binding
and conclusive, provided that no adjustment shall be made which will cause an
ISO to lose its status as such.
ARTICLE VIII
MISCELLANEOUS
8.1 Amendment of the Plan. The Board of Directors at any time, and from
time to time, may terminate, suspend, amend or otherwise modify the Plan in
such manner as it may deem advisable. Notwithstanding the foregoing, no
amendment of the Key Employee Plan which would change the eligibility of
employees or the class of employees eligible to receive an Option or increase
the maximum number of shares as to which Options may be granted, will be
effective unless such action is approved by the stockholders of the Company to
the extent stockholder approval is necessary for the Plan to satisfy the
requirements of Section 422 of the Code, Rule 16b-3, any Nasdaq or securities
exchange listing requirements, or other applicable requirements.
8.2 Continued Employment. The grant of an Option pursuant to the Plan
shall not be construed to imply or to constitute evidence of any agreement,
express or implied, on the part of the Company to continue the employment of
the Participant or the service as a member of the Board of Directors, as a
consultant or in any other capacity, whichever the case may be with the Company
or any of its Affiliates.
8.3 Withholding of Taxes. Whenever the Company proposes or is required
to issue or transfer Option Shares or Bonus Shares, the Company shall have the
right to (a) require the recipient or transferee to remit to the Company an
amount sufficient to satisfy any federal, state and/or local withholding tax
requirements prior to the delivery or transfer of any certificate or
certificates for such Option Shares or Bonus Shares, or (b) take whatever
action it deems necessary to protect its interests, including withholding a
portion of such Option Shares or Bonus Shares.
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Amended and restated subject to approval by the stockholders at the 2000 Annual
Meeting.
APPENDIX B TO PROXY STATEMENT
FORM OF PROXY CARD
PROXY
inTEST CORPORATION
ANNUAL MEETING OF STOCKHOLDERS
August 4, 2000
THIS PROXY IS SOLICITED ON BEHALF OF
THE BOARD OF DIRECTORS OF inTEST CORPORATION
The undersigned hereby appoints Robert E. Matthiessen and Alyn R. Holt,
and each of them jointly and severally, as attorneys and proxies of the
undersigned, with full power of substitution, for and in the name, place and
stead of the undersigned, to appear at the Annual Meeting of Stockholders of
inTEST Corporation to be held August 4, 2000, and at any postponement or
adjournment of the Annual Meeting of Stockholders, and to vote, as designated
on the reverse side of this proxy card, all shares of Common Stock of inTEST
Corporation held of record by the undersigned on June 29, 2000, with all the
powers and authority the undersigned would possess if personally present. The
undersigned confers discretionary authority by this proxy as to matters which
may properly come before the meeting or any postponement or adjournment of the
Annual Meeting of Stockholders and which are not known to the Board of
Directors of inTEST Corporation a reasonable time before this solicitation of
proxies.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF THE NINE
NOMINEES TO SERVE AS DIRECTORS, "FOR" THE APPROVAL OF THE AMENDMENT OF THE 1997
STOCK PLAN, AND "FOR" THE RATIFICATION OF THE APPOINTMENT OF KPMG LLP AS OUR
INDEPENDENT PUBLIC ACCOUNTANTS.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED AS SPECIFIED ON THE
REVERSE SIDE OF THIS PROXY CARD. IF NO DIRECTION IS GIVEN WITH RESPECT TO A
PARTICULAR PROPOSAL, THIS PROXY WILL BE VOTED "FOR" SUCH PROPOSAL.
The undersigned hereby acknowledges receipt of the proxy statement
relating to the foregoing proposals.
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD
PROMPTLY USING THE ENCLOSED ENVELOPE.
Please sign exactly as the name appears hereon. When shares are held by
joint tenants, both should sign. When signing as attorney, executor,
administrator, trustee or guardian, please give full title as such. If a
corporation, please sign in full corporate name by president or other
authorized officer and affix corporate seal. If a partnership, please sign
in partnership name by general partner.
Has your address changed? Do you have any comments?
__________________________ ________________________________
__________________________ ________________________________
__________________________ ________________________________
PLEASE MARK VOTES AS IN THIS EXAMPLE [Box with "X"]
inTEST CORPORATION
This Proxy will be voted as directed. If no directions to the contrary
are indicated, the proxies intend to vote for the approval of each proposal.
By signing and returning this proxy the undersigned gives the proxies
discretionary authority regarding any other business which may properly come
before the meeting or any adjournment or postponement of the annual meeting of
stockholders and which is not known to the Board of Directors of inTEST
Corporation a reasonable time before this solicitation of proxies.
MARK BOX AT RIGHT IF AN ADDRESS CHANGE OR
COMMENT HAS BEEN NOTED ON THE REVERSE SIDE OF THIS CARD [Box]
1. ELECTION OF DIRECTORS. (Term to expire at 2001 Annual Meeting).
Nominees: (1) Alyn R. Holt (6) Douglas W. Smith
(2) Robert E. Matthiessen (7) Gregory W. Slayton
(3) Daniel J. Graham (8) James J. Greed, Jr.
(4) Richard O. Endres (9) William M. Stone
(5) Stuart F. Daniels, Ph.D.
[ ] FOR [ ] WITHHOLD [ ] FOR
ALL ALL
NOMINEES EXCEPT
- ---------------------
NOTE: If you do not wish your shares voted "For" a particular nominee, mark
the "For All Except" box and strike a line through the name(s) of the
nominee(s).
2. PROPOSAL TO APPROVE THE AMENDMENTS TO THE 1997 STOCK PLAN (i) to increase
the number of shares of stock which may be issued under the 1997 Stock
Plan to 1,000,000 shares and (ii) reduce the number of shares required to
be voted in favor of future amendments affecting employee eligibility and
the number of shares which may be issued upon exercise of options which
may be granted to employees.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
3. PROPOSAL TO RATIFY THE APPOINTMENT OF KPMG LLP as the independent public
accountants of the Company for the year ending December 31, 2000.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
4. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting and any adjournment
thereof and matters incident to the conduct of the meeting.
PLEASE BE SURE TO SIGN AND DATE THIS PROXY.
___________________________________________________ Date:_______________
Stockholder sign here Co-owner sign here