SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
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[ ] | Preliminary Proxy Statement |
[ ] | Confidential, for Use of the Commission Only (as permitted by Rule 4a-6(e)(2)) |
[X] | [X] Definitive Proxy Statement |
[ ] | Definitive Additional Materials |
[ ] | Soliciting Material Pursuant to Rule 240.14a-12 |
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 240.14a-12
Micropac Industries, Inc.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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[ ] | Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. |
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[ ] 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:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed pursuant to Exchange Act rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the
offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.
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4) Date Filed:
PROXY STATEMENT OF
MICROPAC INDUSTRIES, INC.
905 East Walnut Street
Garland, Texas 75040
ANNUAL MEETING OF STOCKHOLDERS
To Be Held At 11:00 A.M., LOCAL TIME ON
March 12, 201510, 2017
Dear Stockholder:
You are invited to attend the Annual Meeting of Stockholders of Micropac Industries, Inc., to be held at The Atrium at the Granville Arts Center, 300 N. Fifth St., Garland, Texas at 11:00 a.m. on March 12, 201510, 2017 for the following purposes:
Proposal 1 - To elect five directors to serve until the next annual meeting of stockholders or until their respective successors are elected and qualified; and
Proposal 2- Advisory Vote on compensation of our named executives; and
To transact such other business that may properly be brought before the meeting or any adjournment thereof.
The Board of Directors has fixed the close of business on January 12, 201510, 2017 as the record date for the meeting. Only stockholders of record at that time are entitled to notice of and to vote at the Annual Meeting or any adjournment thereof.
The enclosed proxy is solicited by the Board of Directors of the Company. Further information regarding the matters to be acted upon at the Annual Meeting is contained in the attached Proxy Statement.
MANAGEMENT HOPES THAT YOU WILL ATTEND THE MEETING IN PERSON. IN ANY EVENT, PLEASE SIGN, DATE, AND RETURN THE ENCLOSED PROXY TO ASSURE THAT YOU ARE REPRESENTED AT THE MEETING. STOCKHOLDERS WHO ATTEND THE MEETING MAY VOTE THEIR STOCK PERSONALLY EVEN THOUGH THEY HAVE SENT IN PROXIES.
| By Order of the Board of Directors |
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| |
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| /s/ Connie Wood |
| CONNIE WOOD, Secretary |
By Order of the Board of Directors
/s/ Richard Hoestery
RICHARD HOESTEREY, Secretary
DATED: February 17, 20159, 2017
MICROPAC INDUSTRIES, INC.
905 EAST WALNUT STREET
GARLAND, TEXAS 75040
PROXY STATEMENT
FOR THE
ANNUAL MEETING OF STOCKHOLDERS
March 12, 201510, 2017
This Proxy Statement is furnished in connection with the solicitation of proxies by the Board of Directors of Micropac Industries, Inc. (the "Company") for use at the Company's Annual Meeting of Stockholders that will be held on March 12, 201510, 2017 at the time and place and for the purposes set forth in the foregoing notice. This Proxy Statement, the foregoing notice and the enclosed proxy are first being sent to stockholders on or about February 17, 2015.9, 2017.
The Company's Annual Report to Stockholders for the fiscal year ended November 30, 20142016 is enclosed.
The Board of Directors does not intend to bring any matter before the meeting except those specifically indicated in the foregoing notice and does not know of anyone else who intends to do so. If any other matters properly come before the meeting, however, the persons named in the enclosed proxy, or their duly constituted substitutes acting at the meeting, will be authorized to vote, or otherwise act thereon in accordance with their judgment on such matters. If the enclosed proxy is executed and returned prior to voting at the meeting, the shares represented thereby will be voted in accordance with the instructions marked thereon. In the absence of instructions, the shares will be voted FOR the election as directors of the Company of the five persons named in the section captioned "Election of Directors.Directors".
Any proxy may be revoked at any time prior to its exercise by notifying the Company's Secretary in writing, by delivering a duly executed proxy bearing a later date, or by attending the meeting and voting in person.
Only holders of record of common stock at the close of business on January 12, 201510, 2017 are entitled to notice of and to vote at the meeting. On that date there were 2,578,315 shares of common stock outstanding, each of which is entitled to one vote in person or by proxy on all matters properly brought before the meeting. Cumulative voting of shares in the election of directors is prohibited.
The presence, in person or by proxy, of the holders of a majority of the outstanding common stock is necessary to constitute a quorum at the meeting. In order to be elected a director, a nominee must receive a plurality of the votes cast at the meeting for the election of directors. Other matters, if any, to be voted on at the meeting require the affirmative vote of a majority of the shares present in person or represented by proxy at the meeting.
PRINCIPAL STOCKHOLDERS AND STOCKHOLDINGS OF MANAGEMENT
The following table shows the number and percentage of shares of the Company's common stock beneficially owned (a) by each person known by the Company to own 5% or more of the outstanding common stock, (b) by each director and nominee, and (c) by all present officers and directors as a group.
Name and Address | Number of Shares | Percent |
of Beneficial Owner | Beneficially Owned | of Class(1) |
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Patrick Cefalu | 0 | 0% |
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Heinz-Werner Hempel (2) (3) (4) | 1,952,577 | 75.7% |
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Richard K. Hoesterey (3) | 0 | 0% |
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Mark King (3) | 14,100 | Less than .6% |
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Eugene Robinson (3) | 0 | 0% |
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Connie Wood (3) | 6,000 | Less than .2% |
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All officers and directors | 1,972,677 | 76.5% |
as a group (6 Persons) | | |
Name and Address | Number of Shares | Percent |
of Beneficial Owner | Beneficially Owned | of Class(1) |
Patrick Cefalu | 0 | 0% |
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Heinz-Werner Hempel(2) (3) (4) | 1,952,577 | 75.7% |
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Mark King (3) | 14,100 | Less than 0.6% |
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Richard K. Hoesterey (3) | 0 | 0% |
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Eugene Robinson (3) | 0 | 0% |
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Christine Dittrich (3) | 0 | 0% |
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All officers and directors | 1,966,677 | 76.3% |
as a group (6 Persons) | | |
_______________________
| (1) | Calculated on the basis of the 2,578,315 outstanding shares. There are no options, warrants, or convertible securities outstanding. |
| (2) | The Company and Mr. Heinz-Werner Hempel are parties to an Ancillary Agreement entered into in March 1987. The Ancillary Agreement primarily obligates the Company to register Mr. Hempel's stock and allows Mr. Hempel to participate in any sale of stock by the Company. |
| (3) | A director of the Company. Each incumbent director has been nominated for reelectionre-election at the Annual Meeting. |
| (4) | Effective October 10, 2007, Mr. Hempel transferred all of the shares of the Company’sCompany's common stock owned by him and consisting of 1,952,577 shares, to a partnership organized under the laws of Germany. This partnership is composed of Mr. Hempel, his son, and his daughter. As the consideration for this transfer, Mr. Hempel received a 99.98% share in this partnership and received the sole voting and management control. His son and daughter each own a 0.01% ownership interest in this partnership. |
PROPOSAL 1 - ELECTION OF DIRECTORS
The Board of Directors has determined that the Board should be composed of five directors and five directors are to be elected at the Meeting to hold office until the next Annual Meeting of Stockholders or until their respective successors are elected and qualified. Proxies solicited hereby will be voted FOR the election of the five nominees named below unless authority is withheld by the stockholder. Messrs. Hempel, King, Robinson, Hoesterey Robinson and Mrs. WoodMs. Dittrich, are currently directors of the Company. All directors participate in the consideration of Director Nominees.
Name | Age | Position with the Company | Director Since |
| | | |
Mark King | 6062 | CEO, President and | |
| | Member of Audit Committee | |
| | and Chairman of the Board | October 2005 |
| | | |
Heinz-Werner Hempel | 8688 | Director and | |
| | Member of Audit Committee | February 1997 |
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Connie WoodChristine DIttrich | 7564 | Secretary, Director and | |
| | Member of Audit Committee | March 2002October 2015 |
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Eugene Robinson | 7577 | Director and | |
| | Member of Audit Committee | October 2008 |
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Richard K. Hoesterey | 7274 | Director and | |
| | Member of Audit Committee | October 2010 |
Mr. King is the current President and Chief Executive of the Company. Prior to November 2002, Mr. King was the President and Chief Operating Officer of Lucas Benning Power Electronics. Mr. King joined the Company in November of 2002, and was elected Chief Executive Officer, President and Director in October 2005.
Mr. Hempel has served as the Chief Operating Officer of Hanseatische Waren-Gesellschaft MBH & Co, KG, Bremen, Germany for over 25 years.
Ms. Wood served as the Company’s Chief Executive Officer and President of the Company from May 2002 until her retirement in October 2005. Prior to that, Ms. Wood was Corporate Vice President of Operations.
Mr. Robinson has 35 years of experience in the electronics industry, including 26 years with Texas Instruments, Inc. and later Raytheon through acquisition. During the past 10 years, Mr. Robinson has been actively engaged consulting with numerous high technology organizations. He has served on several advisory boards for high technology companies and universities.
Mr. Hoesterey is an experienced executive with over 35 years in general management and manufacturing operations management in a variety of industries including high tech electronics, industrial products, and power regulation. He served as the President and Chief Executive Officer of Components Corporation of America from January 2000 to August 2009. In September 2009, he began serving as the President and Chief Executive Officer of R.K. Hoesterey & Associates.
Ms. Dittrich was an Executive Vice President of Raytheon Systems Company and the General Manager of the Sensor and Electronic Systems segment. Before working for Raytheon, Ms. Dittrich was a Senior Vice President of Texas Instruments (TI) Systems Group, a Malcolm Baldrige Quality Award winner, and the General Manager of the Electronic Systems Division. Her prior assignments include TI Systems Group Vice President and Engineering Manager, Software Engineering Director for the defense business, and Senior Member of Technical Staff. She has had senior executive responsibility for product engineering efforts that involve large scale software and hardware development and integration. Ms. Dittrich provided consulting services with a focus on business strategy and operational performance to various technology companies after leaving Raytheon. She became a Visiting Scientist at the Carnegie Mellon University Software Engineering Institute (SEI), a Federally Funded Research and Development Center (FFRDC) and chaired the SEI Board of Advisors for over 10 years. She was a Fellow of the Cutter Business Technical Council and a senior consultant for Cutter Consortium. In addition, she has held membership positions on the Army Science Board, the Department of Defense Software Best Practices - Airlie Software Council and other advisory boards.
Board Meetings and Committees
The Board of Directors held five (5) board meetings during the year ended November 2014.2016. Directors received a fee of $1,500 (other than Mr. King) for each meeting attended during the year ended November 2014.2016. In addition, the Board agreed to pay an annual retainer of $10,000 to Mr. Robinson, Mr. Hoesterey and Ms. Dittrich and $2,500 to Ms. Wood. Ms. Wood,Dittrich, Mr. Hoesterey, and Mr. Robinson attended all of the meetings. Mr. Hempel attended one (1) of the meetings and Ms. Wood attended two (2) of the meetings.
The Audit Committee held four (4) meetings during the year ended November 30, 2014.2016. Members of the Audit Committee received a fee of $750 for each meeting attended during the year ended November 2014.2016. Mr. King did not receive any payments for attending meetings of the Audit Committee. Ms. WoodDittrich, Mr. Hoesterey and Mr. Robinson attended all of the meetings. Mr. Hoesterey attended three (3) of the meetings and Mr. HempelMs. Wood attended one (1) of the meetings.
Director Compensation 2014 | |
| | Director | | | Audit Committee | | | Other fees | | | Total Fees | |
Heinz-Werner Hempel | | $ | 3,000 | | | $ | 750 | | | | - | | | $ | 3,750 | |
Richard K. Hoesterey | | $ | 17,500 | | | $ | 2,250 | | | | - | | | $ | 19,750 | |
Eugene Robinson | | $ | 17,500 | | | $ | 3,000 | | | $ | 1,800 | | | $ | 22,300 | |
Connie Wood | | $ | 17,500 | | | $ | 3,000 | | | | - | | | $ | 20,500 | |
Director Compensation 2016 | |
| | Director | | | Audit Committee | | | Other fees | | | Total Fees | |
Heinz-Werner Hempel | | $ | 1,500 | | | $ | - | | | | - | | | $ | 1,500 | |
Richard K. Hoesterey | | $ | 17,500 | | | $ | 3,000 | | | | - | | | $ | 20,500 | |
Eugene Robinson | | $ | 17,500 | | | $ | 3,000 | | | | - | | | $ | 20,500 | |
Christine Dittrich | | $ | 17,500 | | | $ | 3,000 | | | | - | | | $ | 20,500 | |
Connie Wood | | $ | 5,500 | | | $ | 750 | | | | - | | | $ | 6,250 | |
Mr. King does not receive any Directors compensation.
Ms. Wood resigned effective March 11, 2016.
With the exception of Mr. Hoesterey, Ms. Dittrich, and Mr. Robinson, members of the Audit Committee are not considered independent members under applicable United States statutes.Securities and Exchange Act rules and regualtions.
The Board of Directors does not have a nominating or compensation committee or committees performing similar functions. The Board of Directors formed an Audit Committee on May 13, 2002. The members of the Audit Committee operate pursuant to a charter developed by the Board of Directors.
Section 16(a) Beneficial Owner Reporting Compliance
Section 16(a) of the Exchange Act requires the Company's directors, executive officers, and 10% stockholders to file reports of ownership and reports of change in ownership of the Company's equity securities with the Securities and Exchange Commission. Directors, executive officers, and 10% stockholders are required to furnish the Company with copies of all Section 16(a) forms they file. Based on a review of the copies of such reports furnished, the Company believes that during the fiscal year ended November 30, 2014,2016, the Company's directors, executive officers, and 10% stockholders filed on a timely basis all reports required by Section 16(a) of the Exchange Act.
Code of Ethics
The Company has adopted a code of ethics that applies to the Company’sCompany's chief executive officer and principal financial officer.
In addition, the Company has a Code of Conduct for all employees, officers and directors of the Company.
MANAGEMENT REMUNERATION AND TRANSACTIONS
Remuneration
The following table shows as of November 30, 2014,2016, all cash compensation paid to, or accrued and vested for the account of Mr. Mark King, President and Chief Executive Officer and Mr. Patrick Cefalu, Vice President and Chief Financial Officer. Mr. King and Mr. Cefalu received no non-cash compensation during 2014.2016.
Name and | | | Annual | | | | | | All Other | | | | |
Principal Position | Year | | Salary | | | Bonus | | | Compensation | | | Total | |
| | | | | | | | | (a) | | | | |
Mark King, | 2014 | | $ | 259,354 | | | $ | 18,000 | | | $ | 20,883 | | | $ | 298,237 | |
President and | 2013 | | $ | 256,069 | | | $ | 500 | | | $ | 57,933 | | | $ | 314,502 | |
Chief Executive Officer (1) | 2012 | | $ | 259,358 | | | $ | 21,000 | | | $ | 17,401 | | | $ | 297,759 | |
Name and | | Annual | | All Other | |
Principal Position | Year | Salary | Bonus | Compensation | Total |
| | | | (a) | |
| | | | | |
Mark King, | 2016 | $265,307 | $17,500 | $28,441 | $318,488 |
President and | 2015 | $264,031 | $13,500 | $24,094 | $301,625 |
Chief Executive Officer (1) | 2014 | $259,354 | $18,000 | $20,883 | $298,237 |
| | | | | |
Patrick Cefalu, | 2016 | $156,229 | $17,500 | $16,450 | $190,179 |
Vice President and | 2015 | $155,431 | $13,500 | $16,578 | $185,509 |
Chief Financial Officer | 2014 | $152,466 | $18,000 | $17,746 | $188,212 |
Patrick Cefalu, | 2014 | | $ | 152,466 | | | $ | 18,000 | | | $ | 17,746 | | | $ | 188,212 | |
Vice President and | 2013 | | $ | 150,010 | | | $ | 500 | | | $ | 14,327 | | | $ | 164,837 | |
Chief Financial Officer | 2012 | | $ | 152,054 | | | $ | 21,000 | | | $ | 9,705 | | | $ | 182,759 | |
(a) | Reflects amounts contributed by Micropac Industries, Inc., under Micropac’sMicropac's 401(k) profit sharing plan; unused vacation pay; life insurance premiums paid; and reimbursement for medical expenses under Micropac’sMicropac's Family Medical Reimbursement Plan. |
The Company maintains a Family Medical Reimbursement Plan for the benefit of its executive officers and their dependents. The Plan is funded through a group insurance policy issued by an independent carrier and provides for reimbursement of 100% of all bona fide medical and dental expenses that are not covered by other medical insurance plans. During the fiscal year ended November 30, 2014,2016, Mr. King received $1,230$5,296 and Mr. Cefalu received $3,378,$1,543 which amounts are included in the "All Other Compensation" column shown in the preceding remuneration table.
In July 1984, the Company adopted a Salary Reduction Plan pursuant to Section 401(k) of the Internal Revenue Code. The Plan's benefits are available to all Company employees who are at least 18 years of age and have completed at least six months of service to the Company as of the beginning of a Plan year. Plan participants may elect to defer up to 15% of their total compensation as their contributions, subject to the maximum allowed by the Internal Revenue code 401(k), and the Company matches their contributions up to a maximum of 6% of their total compensation. A participant's benefits vest to the extent of 20% after two years of eligible service and become fully vested at the end of six years. During the fiscal year ended November 30, 2014,2016, the Company made contributions to the Plan for Mr. King in the amount of $15,300$15,900 and for Mr. Cefalu in the amount of $10,227$10,436 which amount is included in the "All Other Compensation" column shown in the preceding remuneration table.