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)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
1) Title of each class of securities to which transaction applies:
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2) Aggregate number of securities to which transaction applies:
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3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
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4) Proposed maximum aggregate value of transaction:
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5) Total fee paid:
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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 Rule
0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
___________________________________________________________________________
2) Form, Schedule or Registration Statement No.:
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3) Filing Party:
___________________________________________________________________________
4) Date Filed:
___________________________________________________________________________
inTEST CORPORATION
2 Pin Oak Lane
Cherry Hill, New Jersey 08003
-------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held May 21, 1998
-------------------------
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of inTEST
Corporation (the "Company") will be held at the Radisson Hotel Mount Laurel,
Route 73, Mount Laurel, New Jersey, on Thursday, May 21, 1998, 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. Ratification of the appointment by the Board of Directors of KPMG Peat
Marwick LLP as the independent public accountants for the Company for the
year ending December 31, 1998.
3. Such other business as may properly be brought before the Meeting or
any adjournment thereof.
The Board of Directors has fixed April 3, 1998, 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, Sr.
-----------------------
Hugh T. Regan, Sr.
Secretary
Cherry Hill, New Jersey
April 23, 1998
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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 May 21, 1998
This Proxy Statement and the enclosed form of proxy card are intended to
be sent or given to stockholders of inTEST Corporation (the "Company") on or
about April 23, 1998, in connection with the solicitation of proxies by the
management of the Company ("Management") on behalf of the Board of Directors of
the Company for use at the Annual Meeting of Stockholders (the "Meeting"),
which will be held on Thursday, May 21, 1998, at 10:00 A.M. Eastern Daylight
Time, at the Radisson Hotel Mount Laurel, Route 73, Mount Laurel, New Jersey.
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 in the proxy card, the shares will be voted in accordance with
the choice. If the proxy card is signed but no specification is made, the
shares represented by the proxy card will be voted "FOR" the election of the
nominees for director listed in this Proxy Statement and "FOR" the ratification
of the appointment of KPMG Peat Marwick LLP as the independent public
accountants for the Company for the year ending December 31, 1998. 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 on such matters in accordance with their best judgment, subject to
contrary stockholder instructions on any specific proxy card.
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 the Secretary of the Company 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 shall notify the Secretary of the Company, in writing, of the
revocation of the proxy at any time prior to the voting of the proxy.
RECORD DATE AND VOTING SECURITIES
The Board of Directors has fixed the close of business on April 3, 1998 as
the record date (the "Record Date") for the determination of the stockholders
of the Company entitled to notice of, and to vote at, the Meeting. At that
date, there were 5,911,034 shares of the Company's common stock, $0.01 par
value (the "Common Stock"). 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. No other voting securities of the Company are
outstanding. The presence at the Meeting, in person or by proxy, of the holders
of a majority of the Common Stock entitled to vote 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 will be required for the
election of directors, and (ii) the affirmative vote of the holders of a
majority in voting power of the shares of stock which are present or
represented at the Meeting and entitled to vote will be required for the
ratification of the appointment of KPMG Peat Marwick LLP as the independent
public accountants for the year ending December 31, 1998, 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 authorized 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 (each such matter, a "broker non-vote"), 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 for such
matter or matters or considered present for purposes of determining the outcome
of the vote on such matter or matters. Abstentions will have no effect on the
outcome of the election of directors and, with respect to the ratification of
the Company's independent public accountants, abstentions will have the same
effect as a "no" vote.
2
VOTING SECURITIES AND PRINCIPAL STOCKHOLDERS
The following table sets forth, as of April 3, 1998, the number and
percentage of shares of the Company's Common Stock (the Company's only
outstanding class of capital stock) which, according to information supplied to
the Company or filed with the Securities and Exchange Commission, are
beneficially owned by: (i) each person who beneficially owns more than 5% of
the Common Stock; (ii) each director and nominee for directorship of the
Company individually; (iii) each of the Named Executive Officers (as that
phrase is defined in the section of this Proxy Statement entitled "Executive
Compensation"); and (iv) all directors and executive officers of the Company as
a group. Unless otherwise indicated, the persons named in the table below have
sole voting and investment power with respect to all Common Stock shown as
beneficially owned by them.
Shares of
Common Stock
Beneficially Owned Percent of
as of Class
Name of Beneficial Owner April 3, 1998 (Approx.)(1)
- ------------------------ -------------------- -------------
Brinson Partners, Inc. (2) .............................................. 490,500 8.2%
FMR Corp. (3) ........................................................... 397,500 6.7%
Alyn R. Holt (4)(5) ..................................................... 1,726,683 29.2%
Richard O. Endres (4)(6) ................................................ 370,295 6.3%
Daniel J. Graham (4)(7) ................................................. 354,960 6.0%
Robert E. Matthiessen (8) ............................................... 129,237 2.2%
Stuart F. Daniels, Ph.D. ................................................ 11,282 *
All directors and executive officers as a group (7 individuals) ......... 2,698,436 45.7%
- ------------
* Denotes less than one percent of class.
(1) The percent of class for any person or group who, as of April 3, 1998,
beneficially owned any shares pursuant to options, warrants or other
rights to purchase shares of the Company's Common Stock ("Rights") which
are exercisable within 60 days of April 3, 1998, is calculated assuming
all such Rights have been exercised in full and adding the number of
shares subject to such Rights to the total number of shares issued and
outstanding on April 3, 1998.
(2) Brinson Partners, Inc. ("BPI") is an investment adviser registered under
Section 203 of the Investment Advisers Act of 1940. Beneficial ownership
of the 490,500 shares (the "Brinson Shares") is also attributed to Brinson
Holdings, Inc. ("BHI"), SBC Holding (USA), Inc. ("SBCUSA") and Swiss Bank
Corporation ("SBC"), each a parent holding company under Rule
13d-1(b)(ii)(G). BPI, BHI, SBCUSA and SBC each has shared voting and
investment power of the Brinson Shares. BPI and BHI's principal business
office is located at 209 South LaSalle, Chicago, IL 60604-1295; SBCUSA's
principal business office is located at 222 Broadway, New York, NY 10038;
and SBC's principal business office is located at Aeschenplatz 6 CH-4002,
Basel, Switzerland.
(3) Fidelity Management & Research Company ("FMRC"), a wholly-owned subsidiary
of FMR Corp. ("FMR") is the beneficial owner of 397,500 shares (the
"Fidelity Shares") of the Common Stock as a result of acting as investment
adviser to various investment companies under Section 8 of the Investment
Company Act of 1940, including Fidelity Low-Priced Stock Fund ("FLPSF"),
owner of the Fidelity Shares. The address or principal business office of
each of FMRC, FMR and FLPSF is 82 Devonshire Street, Boston, MA 02109.
Edward C. Johnson 3d, Chairman of FMR ("ECJohnson"), and Abigail P.
Johnson, 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 shareholders' voting agreement,
may be deemed, under the Investment Company Act of 1940, to form a
controlling group with respect to FMR. ECJohnson, FMR and FLPSF each has
sole power to dispose of the Fidelity Shares. Neither FMR nor ECJohnson
has the sole power to vote or direct the voting of the shares owned by
FLPSF, which power resides with, and is directed by, FLPSF's Board of
Trustees.
3
(4) The address of the stockholder is: c/o the Company, 2 Pin Oak Lane, Cherry
Hill, New Jersey 08003.
(5) Includes 150,427 shares owned by Mr. Holt's spouse. Mr. Holt disclaims
beneficial ownership of the shares owned by his spouse.
(6) Includes 210,598 shares held in a trust for which Mr. Endres is sole
trustee; and 500 shares held by a corporation of which Mr. Endres is a
shareholder and over which Mr. Endres shares investment control.
(7) Includes 15,000 shares owned by Mr. Graham's wife and 1,500 shares owned by
Mr. Graham's child. Mr. Graham disclaims beneficial ownership of the
shares owned by his spouse and child.
(8) Includes 64,618 shares of Common Stock owned by Mr. Matthiessen's wife. Mr.
Matthiessen disclaims beneficial ownership of the shares owned by his
spouse.
ELECTION OF DIRECTORS
The By-laws of the Company provide that the Company's Board of Directors
shall consist of not less than five (5) directors, as determined by the
Company's 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 five.
At the Meeting, five directors are to be elected to serve until the 1999
Annual Meeting of Stockholders and until their respective successors have been
elected and qualified. Listed below are the five 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 stated 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 Management, unless a
contrary instruction is given on the proxy card. Management has 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 of the Company,
each of whom has been nominated for reelection, are listed below, together with
their ages and certain other information as of April 3, 1998:
Name Age Director Since Position
- ---- --- -------------- --------
Alyn R. Holt ...................... 60 09/17/81 Chairman and Chief Executive Officer
Robert E. Matthiessen ............. 53 02/01/97 President, Chief Operating Officer and Director
Daniel J. Graham .................. 52 06/01/88 Senior Vice President and Director
Richard O. Endres ................. 72 04/01/82 Director
Stuart F. Daniels, Ph.D. .......... 57 04/01/97 Director
Certain Biographical and Other Information Regarding the Company's Directors
Alyn R. Holt is a co-founder of the Company and has served as Chairman and
Chief Executive Officer since the Company's inception in September 1981. Mr.
Holt has over 35 years experience in the ATE industry, including various
positions in general management, marketing management and engineering. From
1973 to 1980, Mr. Holt was Manager of the Measurement Systems Division of
Siemens Corporation. From 1966 to 1973, he served in various capacities
including Vice President of Marketing for Computest Corporation, a manufacturer
of ATE for the computer industry. Mr. Holt is a co-inventor on several of the
Company's patents. Mr. Holt holds an M.B.A. from California State University
and a B.S. in Electrical Engineering from South Dakota State University.
Robert E. Matthiessen was elected President, Chief Operating Officer and a
Director of the Company in February 1997. Prior to that, Mr. Matthiessen served
as Executive Vice President since joining the Company in October 1984. He has
over 25 years experience in the ATE industry, including various positions in
general management, marketing management and engineering management. In 1982,
Mr. Matthiessen co-founded a company engaged in the production of video
products for training, advertising and sales, and served as its President from
4
inception to 1984. From 1973 to 1981, he served in various engineering and
marketing management positions with the Measurement Systems Division of Siemens
Corporation. Mr. Matthiessen is a co-inventor on several of the Company's
patents. He studied Electrical Engineering at Drexel University and Business
Administration at Rutgers University.
Daniel J. Graham is a co-founder of the Company and has served as Senior
Vice President and a Director of the Company since June 1988. Prior to that,
Mr. Graham served as Vice President of the Company since the Company's
inception. Mr. Graham has expertise in integrated circuit test technology and
operated his own software consulting firm from 1978 to 1992. He has over 25
years industrial experience involving the development of software and hardware
systems for ATE. Mr. Graham is a past Chairman of the Test Technology Technical
Committee of the Institute of Electrical and Electronic Engineers, Inc. (the
"IEEE") Computer Society. He currently serves as General Chair of the
International Test Conference which is sponsored by the IEEE. He holds an M.S.
in Computer and Information Science Engineering from the University of
Pennsylvania and a B.S. with honors in Electrical Engineering from the Queen's
University of Belfast, Northern Ireland.
Richard O. Endres has served as a Director of the Company since April
1982. Since 1976, he has served as President of VRA, Inc., which provides
business planning and financial services for technology based companies. Mr.
Endres founded Computest Corporation in 1962 and served as its President from
1962 to 1973. Computest was sold to Siemens Corporation in 1973, at which time
Mr. Endres became Group Vice President for Siemens until 1976. From 1948 to
1953, Mr. Endres was engaged in early transistor circuit development and
computer memory research at RCA's David Sarnoff Research Center. Mr. Endres
holds a B.S. in Electrical Engineering from Purdue University.
Stuart F. Daniels, Ph.D. is a co-founder of the Company and served as Vice
President and a Director in 1982 and was reappointed as a Director in April
1997. In 1996, Dr. Daniels founded The Daniels Group, which is engaged in
technology transfer and license consulting. From 1980 to 1995, Dr. Daniels held
several management positions with Siemens Corporation. Dr. Daniels also
co-founded Digital General Corp., an ATE company, in 1969. Dr. Daniels holds a
Ph.D. in Electrical Engineering from Case Western Reserve University, an M.S.
in Electrical Engineering from Case Institute of Technology and a B.S. in
Electrical Engineering from the University of New Hampshire. He is also an
adjunct of the Computer Information Science Department at the New Jersey
Institute of Technology. Dr. Daniels holds two patents in ATE technology.
Committees of the Board of Directors
The Board of Directors has three standing Committees: an Executive
Committee, an Audit Committee and a Compensation Committee. During the year
ended December 31, 1997, the Board of Directors held a total of two meetings.
The Executive Committee is responsible for those duties delegated to it by
the Board of Directors. The current members of the Executive Committee are Alyn
R. Holt, Robert E. Matthiessen and Daniel J. Graham. The Executive Committee
did not meet during the year ended December 31, 1997.
The Audit Committee reviews the results and scope of the audit and other
services provided by the Company's independent auditors. The current members of
the Audit Committee are Stuart F. Daniels, Ph.D. and Richard O. Endres. The
Audit Committee did not meet during the year ended December 31, 1997.
The Compensation Committee makes recommendations concerning salaries and
incentive compensation for employees of the Company and administers the
Company's stock option and bonus plan. The current members of the Compensation
Committee are Stuart F. Daniels, Ph.D., Richard O. Endres and Robert E.
Matthiessen. The Compensation Committee held two meetings during the year ended
December 31, 1997.
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
Non-employee directors are paid 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, non-employee
5
directors are reimbursed travel expenses and other costs associated with
attending board or committee meetings. The Company does not pay additional cash
compensation to officers of the Company for their service as directors of the
Company. However, officers who serve as directors of the Company's foreign
subsidiaries receive compensation as approved each year by such subsidiary's
Board of Directors.
Family Relationships
Hugh T. Regan, Jr., the Chief Financial Officer, is the son of Hugh T.
Regan Sr., Secretary of the Company; there are no other family relationships
between any of the directors or executive officers of the Company.
Recommendation
The Board of Directors recommends a vote "FOR" the reelection of each of
the nominees to the Board of Directors named above.
EXECUTIVE OFFICERS OF THE COMPANY
Name Age Position
- ---- --- --------
Alyn R. Holt ................... 60 Chairman and Chief Executive Officer
Robert E. Matthiessen .......... 53 President, Chief Operating Officer and Director
Daniel J. Graham ............... 52 Senior Vice President and Director
Hugh T. Regan, Jr. ............. 38 Treasurer and Chief Financial Officer
Hugh T. Regan, Sr. ............. 63 Secretary
Certain Biographical and Other Information Regarding the Executive Officers of
the Company
Executive officers are appointed by the Board of Directors of the Company.
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.
Alyn R. Holt. See "Election of Directors."
Robert E. Matthiessen. See "Election of Directors."
Daniel J. Graham. See "Election of Directors."
Hugh T. Regan, Jr. has served as the Company's Treasurer and Chief
Financial Officer since joining the Company in April 1996. From 1989 to 1995,
Mr. Regan was the Vice President of Finance for Value Property Trust, a
publicly traded real estate investment trust (the "Trust"). From 1995 until he
joined the Company, Mr. Regan was the Chief Financial Officer of the Trust. Mr.
Regan holds a B.S. in Accounting and Finance from Rider University and is a
Certified Public Accountant.
Hugh T. Regan, Sr. has served as the Company's Secretary since 1982. Mr.
Regan was Chief Financial Officer of the Company from 1982 to 1996. He has
served as President of his accounting firm, Regan Accounting Services, since
1986. He has over 35 years of financial and general management experience in
the computer, ATE and other industries. From 1979 to 1983, he was Executive
Vice President and Chief Financial Officer of Emery Corporation, a home
furnishings manufacturing company. From 1973 to 1979, he was Vice President of
Finance and Chief Financial Officer of Clarke Corporation, a publicly traded
building products manufacturing company. From 1966 to 1973, he was Controller
for Computest Corporation, an early leader in ATE. Mr. Regan holds a B.S. in
Business Administration and Accounting from LaSalle University.
6
EXECUTIVE COMPENSATION
The following table sets forth certain information with respect to the
compensation paid by the Company for services rendered during the years ended
December 31, 1997, 1996 and 1995, to its Chairman and Chief Executive Officer
and the other executive officers of the Company whose total annual salary and
bonus exceeded $100,000 during the year ended December 31, 1997 (each, a "Named
Executive Officer"):
Summary Compensation Table
Annual Compensation
------------------------------------------
Other annual All other
Name and Principal Position Year Salary Bonus compensation Compensation
- --------------------------- ---- ------ ----- ------------ ------------
Alyn R. Holt .................. 1997 $198,010 $ -- $ 53,675(1) $ 137,117(2)
Chairman and Chief 1996 155,545 55,234 47,693(1) 145,851(2)
Executive Officer 1995 121,300 44,631 19,876(1) 86,557(2)
Robert E. Matthiessen ......... 1997 $135,914 $ -- $ 8,577(3) $ 6,240(4)
President, Chief Operating 1996 97,020 6,750 13,578(3) 5,720(4)
Officer and Director 1995 92,620 -- 14,095(3) 756(4)
Daniel J. Graham .............. 1997 $112,040 -- $ 19,088(5) $ 32,077(6)
Senior Vice President and 1996 105,200 -- 18,943(5) 35,539(6)
Director 1995 100,000 -- 19,376(5) 45,795(6)
- ------------
(1) Includes $30,896 and $39,500 for the annual lease value of automobiles for
Alyn R. and Connie E. Holt in 1997 and 1996, respectively, and $11,250 for
Mr. Holt in 1995; $4,931, $6,793 and $7,426 for group health insurance in
1997, 1996 and 1995, respectively; $9,728 for Company paid personal travel
in 1997; and $6,720 for use of Company staff time for personal matters in
1997.
(2) Includes $4,847, $3,046 and $2,724 for premiums paid on life insurance for
Mr. Holt in 1997, 1996 and 1995, respectively; $4,750 and $4,486 for
matching contribution to Mr. Holt's 401(k) Plan account in 1997 and 1996,
respectively; and $127,520, $138,319 and $83,833 for serving as a director
of inTEST LTD and inTEST KK in 1997, 1996 and 1995, respectively.
(3) Includes $3,646, $8,750 and $8,750 for the annual lease value of an
automobile for Mr. Matthiessen in 1997, 1996 and 1995, respectively; and
$4,931, $4,828 and $5,345 for group health insurance in 1997, 1996 and
1995, respectively.
(4) Includes $1,490, $1,184 and $756 for premiums paid on life insurance for
Mr. Matthiessen in 1997, 1996 and 1995, respectively; and $4,750 and
$4,536 for matching contribution to Mr. Matthiessen's 401(k) Plan account
in 1997 and 1996, respectively.
(5) Includes $10,750, $10,750 and $10,750 for the annual lease value of an
automobile for Mr. Graham in 1997, 1996 and 1995, respectively; and
$6,938, $6,793 and $7,426 for group health insurance in 1997, 1996 and
1995, respectively.
(6) Includes $2,382, $2,107 and $1,436 for premiums paid on life insurance for
Mr. Graham in 1997, 1996 and 1995, respectively; $4,750 and $4,750 for
matching contribution to Mr. Graham's 401(k) Plan account in 1997 and
1996, respectively; and $24,945, $28,682 and $44,359 for serving as a
director of inTEST LTD in 1997 and inTEST LTD and inTEST KK in 1996 and
1995, respectively.
Stock Options
No stock options were granted to, or exercised by, any of the Named
Executive Officers of the Company during the year ended December 31, 1997.
7
Stock Performance Graph
The following graph shows a comparison of cumulative total returns during
the period commencing on June 17, 1997, the date of the Company's initial
public offering, and ending on December 31, 1997, for the Company, the NASDAQ
Market Composite Index and a composite index (the "Peer Group Index") of public
companies engaged in back-end ATE manufacturing. 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 the Company's 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.
[STOCK PERFORMANCE GRAPH OMITTED]
6/17/97 12/31/97
--------- -----------
inTEST CORPORATION ..................... $100 $ 93.33
NASDAQ Market Composite Index .......... $100 $ 113.03
Peer Group Index ....................... $100 $ 80.77
The historical stock price performance of the Company's Common Stock shown
above is not necessarily indicative of future performance.
Compensation Committee Report on Executive Compensation
The Compensation Committee of the Board of Directors (the "Committee")
approves the compensation for all executive officers of the Company and acts on
such other matters relating to their compensation as it deems appropriate. The
Committee consists of at least two non-employee directors and meets at least
once per year. The members of the Committee during 1997 were Dr. Daniels and
Messrs. Endres and Matthiesen. The Committee also administers, with respect to
all eligible recipients, 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
8
individual executive officers, and that long-term incentives awarded to such
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
executives 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 executives and the level of compensation necessary
to attract and retain key executives. 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 and potential of the executive and the
Company's overall performance. Mr. Holt, as the Company's Chairman and Chief
Executive Officer, proposes to the Committee the salaries of all executive
officers based upon a formula related to Company's revenue and operating
profit. The Committee considers these recommendations in connection with the
other aforementioned factors in making its final determination of each
executive's base salary. Base salaries for executives are evaluated and
adjusted annually.
Bonus. The Company also may, from time to time, pay bonuses to executive
officers as part of its executive compensation program.
Long-Term Incentive Compensation. The Committee periodically considers
whether to grant awards under the stock plan to specific executives 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
executives 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
Robert E. Matthiessen
Employment Agreements
There were no employment agreements in effect for executive officers
during the year ended December 31, 1997.
Compensation Committee Interlocks and Insider Participation
During the year ended December 31, 1997, the Compensation Committee
consisted of Dr. Daniels and Messrs. Endres and Matthiessen. Mr. Matthiessen
serves as an executive officer of the Company.
9
CERTAIN TRANSACTIONS
There were no reportable related party financial transactions during the year
ended December 31, 1997.
RATIFICATION OF APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS
KPMG Peat Marwick LLP has been the independent public accountants for the
Company since its incorporation in 1981. KPMG Peat Marwick LLP has been
selected by the Company's Board of Directors as the Company's independent
certified public accountants for the current year. This appointment will be
submitted to the stockholders for ratification at the Meeting. A representative
of KPMG Peat Marwick 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 the best interest of the Company and its stockholders. No
such change is anticipated.
Recommendation
The Board of Directors recommends a vote FOR the proposal to ratify the
selection of KPMG Peat Marwick LLP as the Company's independent certified
public accountants.
EXPECTED VOTE OF DIRECTORS AND OFFICERS
The Company expects that the directors and officers of the Company, who
are the beneficial owners of approximately 45.7% of the outstanding Common
Stock of the Company, will vote, or direct that their shares be voted, in favor
of the election of the directors nominated herein, and the ratification of the
appointment of the Company's independent public accountants.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), requires the Company's officers and directors, and persons who
own more than ten percent of a registered class of the Company's equity
securities, to file reports of the ownership and changes in the ownership of
such securities with the Securities and Exchange Commission ("SEC") and the
Nasdaq Stock Market. Officers, directors and beneficial owners of more than ten
percent of the Company's stock are required by SEC regulation to furnish the
Company with copies of all such forms which they file.
Based solely on the Company's review of such forms received by it, or
written representations from certain reporting persons that no Forms 5 were
required for those persons, the Company believes that all filing requirements
applicable to its officers, directors and persons who own more than ten percent
of the Common Stock were complied with during the year ended December 31, 1997.
STOCKHOLDER PROPOSALS
Stockholders are entitled to submit proposals on matters appropriate for
stockholder action consistent with regulations of the SEC. Should a stockholder
intend to present a proposal at the annual meeting to be held in 1999, it must
be received by the Secretary of the Company (at 2 Pin Oak Lane, Cherry Hill,
New Jersey 08003) not later than December 22, 1998, and meet certain other
requirements of the rules of the SEC relating to stockholders' proposals, in
order to be considered for inclusion in the Company's Proxy Statement and form
of proxy card relating to that meeting.
ANNUAL REPORT
The Company's Annual Report to Stockholders for the year ended December
31, 1997, accompanies this Proxy Statement. The Annual Report to Stockholders
does not constitute a part of the proxy solicitation materials.
10
ADDITIONAL INFORMATION
THE COMPANY WILL PROVIDE TO EACH PERSON SOLICITED, WITHOUT CHARGE EXCEPT
FOR EXHIBITS, UPON THE WRITTEN REQUEST OF SUCH PERSON, A COPY OF THE COMPANY'S
ANNUAL REPORT ON FORM 10-K, INCLUDING THE COMPANY'S FINANCIAL STATEMENTS AND
FINANCIAL STATEMENT SCHEDULES REQUIRED TO BE FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION FOR THE YEAR ENDED DECEMBER 31, 1997. REQUESTS SHOULD BE
DIRECTED TO MR. HUGH T. REGAN, JR., TREASURER AND CHIEF FINANCIAL OFFICER,
inTEST CORPORATION, 2 PIN OAK LANE, CHERRY HILL, NEW JERSEY 08003.
MISCELLANEOUS
This solicitation is made on behalf of the Board of Directors of the
Company, and its cost (including preparing and mailing of the notice, this
Proxy Statement and the form of proxy card) will be paid by the Company. The
Company will also 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, officers
and regular employees of the Company may solicit the return of proxies by mail,
telephone, telegram and personal interview. No compensation in addition to
regular salary and benefits will be paid to any such officer or regular
employee for such solicitation. The Company may engage Corporate Investor
Communications, Inc. ("CIC") to assist in the solicitation of proxies from
stockholders. The Company has not entered into an agreement with CIC for such
solicitation services.
Where information contained in this Proxy Statement rests peculiarly
within the knowledge of a person other than the Company, the Company has relied
upon information furnished by such person.
By Order of the Board of Directors,
/s/ Hugh T. Regan, Sr.
------------------------
Hugh T. Regan, Sr.
Secretary
11
APPENDIX
PROXY
inTEST CORPORATION
ANNUAL MEETING OF STOCKHOLDERS
May 21, 1998
THIS PROXY IS SOLICITED ON BEHALF OF
THE COMPANY'S BOARD OF DIRECTORS
The undersigned hereby appoints Alyn R. Holt and Robert E. Matthiessen,
and each of them jointly and severally, Proxies, with full power of
substitution, 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 April 3, 1998, at the Annual Meeting of Stockholders to be held on May 21,
1998, and any adjournment thereof.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF THE FIVE
NOMINEES TO SERVE AS DIRECTORS AND "FOR" THE RATIFICATION OF THE APPOINTMENT OF
KPMG PEAT MARWICK LLP AS THE COMPANY'S 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.
CONTINUED AND TO BE SIGNED ON REVERSE SIDE OF CARD
1. Election of Directors. (Term to expire at 1999 Annual Meeting).
Nominees: Alyn R. Holt, Robert E. Matthiessen, Daniel J. Graham,
Richard O. Endres, Stuart F. Daniesl, Ph.D.
FOR WITHHELD
ALL FROM ALL
NOMINEES NOMINEES
________________________
INSTRUCTION: To withhold authority to vote for any individual nominee, strike a
line through the nominee's name in the list above.
2. PROPOSAL TO RATIFY APPOINTMENT OF KPMG PEAT MARWICK LLP as the independent
public accountants of the Company for the year ending December 31, 1998.
FOR AGAINST ABSTAIN
3. In their discretion, the Proxies are authorized to vote upon such business
as may properly come before the meeting and any adjournment thereof and
matters incident to the conduct of the meeting.
MARK HERE FOR ADDRESS CHANGE AND NOTE AT LEFT
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.
_______________________________ Date:______________________________
Signature
Dear Stockholder:
Your vote counts, and we strongly encourage you to exercise your right to vote
your shares. To do so, please mark the boxes on the proxy card to indicate how
your shares will be voted. Then sign the card, detach it and return it in the
enclosed envelope. No postage is necessary if mailed in the United States.
Thank you in advance for your prompt completion of these procedures.
Sincerely,
inTEST Corporation
