SCHEDULE
14A
(Rule
14a-101)
INFORMATION
REQUIRED IN PROXY STATEMENT
SCHEDULE
14A INFORMATION
Proxy
Statement Pursuant to Section 14(a) of the Securities
Exchange
Act of 1934 (Amendment No. ___)
Filed
by
the Registrant [X]
Filed
by
a Party other than the Registrant [ ]
Check
the
appropriate box:
[
] Preliminary Proxy Statement
[
] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[X]
Definitive Proxy Statement
[
] Definitive Additional Materials
[
] Soliciting Material under Rule 14a-12
BLONDER
TONGUE LABORATORIES, INC.
Name
of
the Registrant as Specified In Its Charter
(Name
of
Person(s) Filing Proxy Statement, if other than the Registrant)
Payment
of Filing Fee (Check the appropriate box):
[X]
No
fee required.
[
] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
1.
Title
of each class of securities to which transaction applies:
2.
Aggregate number of securities to which transaction applies:
3.
Per
unit price or other underlying value of transaction computed pursuant to
Exchange Act Rule 0-11 (set forth the amount on which the filing fee is
calculated and state how it was determined):
4.
Proposed maximum aggregate value of transaction:
5.
Total
fee paid:
[
] Fee paid previously with preliminary materials:
_____________________________________________________________________________________________________
[
] Check box if any part of the fee is offset as provided by Exchange Act
Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or
the Form or Schedule and the date of its filing.
1.
Amount
Previously Paid:
2.
Form,
Schedule or Registration Statement No.:
3.
Filing
Party:
4.
Date
Filed:
BLONDER
TONGUE LABORATORIES, INC.
One
Jake Brown Road
Old
Bridge, New Jersey 08857
NOTICE
OF ANNUAL MEETING OF STOCKHOLDERS
To
Be Held May 24, 2006
To
Our
Stockholders:
The
2006
Annual Meeting of Stockholders of Blonder Tongue Laboratories, Inc. (the
“Company”) will be held at the Hilton East Brunswick, Three Tower Center, East
Brunswick, New Jersey 08816, on May 24, 2006, beginning at 10:00 a.m., local
time, for the following purposes:
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1.
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To
elect two Directors constituting Class II of the Board of Directors
to
serve until the 2009 Annual Meeting of Stockholders or until their
successors have been elected and
qualified;
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2.
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To
ratify the appointment of Marcum & Kliegman LLP, certified public
accountants, as the Company’s independent registered public accountants
for the year ending December 31, 2006;
and
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3.
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To
transact such other business as may properly come before the meeting
or
any adjournments thereof. In their discretion, the Proxies are authorized
to vote upon such other business as may properly come before the
Annual
Meeting or any adjournments
thereof.
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A
proxy,
if properly executed and received in time for the voting, will be voted in
the
manner directed therein. If no direction is made, such proxy will be voted
FOR
all proposals therein.
The
Board
of Directors has fixed the close of business on March 31, 2006 as the record
date for determining stockholders entitled to notice of the meeting and to
vote
at such meeting or any adjournments thereof, and only stockholders of record
at
the close of business on March 31, 2006, are entitled to notice of and to vote
at such meeting or any adjournments thereof.
Your
attention is directed to the attached Proxy Statement for further information
regarding each proposal to be made.
You
are
cordially invited to attend the meeting. Whether or not you plan to attend,
you
are urged to complete, date and sign the enclosed proxy and return it promptly.
If you receive more than one form of proxy, it is an indication that your shares
are registered in more than one account, and each such proxy must be completed
and returned if you wish to vote all of your shares eligible to be voted at
the
meeting.
| By Order of the Board of Directors | |
|
|
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Robert J. Pallé, Jr., President, Chief
Operating Officer and
Secretary
|
April
25,
2006
PLEASE
COMPLETE AND RETURN THE PROXY IN THE ENCLOSED ENVELOPE, WHICH REQUIRES NO
POSTAGE IF MAILED IN THE UNITED STATES. IF YOU ATTEND THE MEETING AND DESIRE
TO
VOTE IN PERSON AT THE MEETING, YOUR PROXY WILL BE RETURNED TO YOU UPON WRITTEN
NOTICE TO THE SECRETARY OF THE COMPANY REVOKING YOUR
PROXY.
BLONDER
TONGUE LABORATORIES, INC.
One
Jake Brown Road
Old
Bridge, New Jersey 08857
PROXY
STATEMENT FOR
THE
ANNUAL MEETING OF STOCKHOLDERS
TO
BE HELD ON
MAY
24, 2006
This
Proxy Statement is furnished in connection with the solicitation of proxies
on
behalf of the Board of Directors of Blonder Tongue Laboratories, Inc., a
Delaware corporation (the “Company”), to be voted at the 2006 Annual Meeting of
Stockholders of the Company (the “Annual Meeting”) to be held at the Hilton East
Brunswick, Three Tower Center, East Brunswick, New Jersey 08816 on May 24,
2006,
at 10:00 a.m., local time, and at any adjournment or adjournments
thereof.
All
proxies delivered pursuant to this solicitation are revocable at any time before
they are exercised, by written notice to the Secretary of the Company or by
delivering a later dated proxy. Attendance at the Annual Meeting will not,
without delivery of the written notice described in the immediately preceding
sentence, constitute revocation of a proxy. The mailing address of the principal
executive offices of the Company is One Jake Brown Road, Old Bridge, New Jersey
08857. The Company’s telephone number is (732) 679-4000. This Proxy Statement
and the enclosed form of proxy will be mailed to each stockholder on or about
April 25, 2006, together with the Annual Report on Form 10-K for the year ended
December 31, 2005.
All
properly executed proxies delivered pursuant to this solicitation and not
revoked will be voted at the Annual Meeting in accordance with the directions
given. Regarding the election of Directors to serve until the 2009 Annual
Meeting of Stockholders, in voting by proxy, stockholders may vote in favor
of
all nominees or withhold their votes as to all nominees or withhold their votes
as to specific nominees. With respect to any other proposals to be voted upon,
stockholders may vote in favor of a proposal, against a proposal or may abstain
from voting. Stockholders should specify their choices on the enclosed form
of
proxy. If no specific instructions are given with respect to the matters to
be
acted upon, the shares represented by a signed proxy will be voted FOR the
election of all nominees and FOR ratification of the appointment of Marcum
&
Kliegman LLP as independent registered public accountants for the fiscal year
ending December 31, 2006. Directors will be elected by a plurality of the votes
cast by the holders of the shares of Common Stock voting in person or by proxy
at the Annual Meeting. Thus, abstentions will have no effect on the vote for
election of Directors. Approval of any other matters to come before the Annual
Meeting will require the affirmative vote of the holders of a majority of the
shares of Common Stock of the Company present in person or by proxy at the
Annual Meeting. Abstentions are deemed present for quorum purposes and entitled
to vote and, therefore, will have the effect of a vote against any matter other
than the election of Directors. Broker non-votes occur when a broker or other
nominee holding shares for a beneficial owner does not vote on a proposal
because the beneficial owner has not provided voting instructions and the broker
does not have discretionary authority to vote shares on the matter. Broker
non-votes are not considered to be shares “entitled to vote” (other than for
quorum purposes), will not be included in vote totals and will have no effect
on
the outcome of any matters to be voted upon at the Annual Meeting.
Management
is not aware at the date hereof of any matter to be presented at the Annual
Meeting other than the election of Directors and the other proposals described
in the attached Notice of Annual Meeting of Stockholders. If any other matter
is
properly presented, the persons named in the proxy will vote thereon according
to their best judgment.
The
expense of soliciting proxies for the Annual Meeting, including the cost of
preparing, assembling and mailing the notice, proxy and Proxy Statement, will
be
paid by the Company. The solicitation will be made by use of the mails, through
brokers and banking institutions, and by officers and regular employees of
the
Company. Proxies may be solicited by personal interview, mail, telephone or
facsimile transmission.
Only
owners of record of the common stock, $.001 par value per share, of the Company
(“Common Stock”) at the close of business on March 31, 2006 (the “Record Date”),
are entitled to notice of and to vote at the Annual Meeting or any adjournments
or postponements thereof. Each owner of record on the Record Date is entitled
to
one vote for each share of Common Stock of the Company so held. There is no
cumulative voting. On the Record Date, there were 8,015,406 shares of Common
Stock issued, outstanding and entitled to vote.
PROPOSAL
NO. 1 - ELECTION OF DIRECTORS
The
Company’s Certificate of Incorporation, as amended, provides that the Board
shall consist of between five and eleven members, as determined from time to
time by the Board, divided into three classes as nearly equal in number as
possible. The size of the Board has currently been set at nine directors, with
each class comprised of three directors. The term of the current Class II
Directors expires at the 2006 Annual Meeting, the term of the current Class
III
Directors expires at the 2007 Annual Meeting and the term of the current Class
I
Directors expires at the 2008 Annual Meeting. The successors to each class
of
Directors whose terms expire at an Annual Meeting will be elected to hold office
for a term expiring at the Annual Meeting of Stockholders held in the third
year
following the year of their election.
The
Directors whose terms will expire at the 2006 Annual Meeting of Stockholders
are
Robert J. Pallé, Jr., Gary P. Scharmett and James H. Williams. Mr. Williams has
decided for personal reasons not to stand for reelection as a Class II Director.
The Nominating Committee has recommended and the Board has determined, effective
upon the expiration of Mr. Williams’ term at the 2006 Annual Meeting, to reduce
the size of the Board to eight Directors and eliminate one position from the
Class II Directors. Messrs. Pallé and Scharmett have been recommended for
nomination by the Nominating Committee and nominated by the Board to stand
for
reelection as Directors at the 2006 Annual Meeting of Stockholders, to hold
office until the 2009 Annual Meeting of Stockholders and until their successors
are elected and qualified. Messrs. Pallé and Scharmett have consented to serve
for the new terms, if elected.
Recommendation
of the Board of Directors Concerning the Election of Directors
The
Board of Directors of the Company recommends a vote FOR Robert J. Pallé, Jr. and
Gary P. Scharmett as Class II Directors to hold office until the 2009 Annual
Meeting of Stockholders and until their successors are elected and qualified.
Proxies received by the Board of Directors will be so voted unless stockholders
specify in their proxy a contrary choice.
DIRECTORS
AND EXECUTIVE OFFICERS
Nominee
and Continuing Directors
The
following table sets forth the names and certain information about each of
the
nominees for election as a Director of the Company and the continuing Directors
of the Company:
| Name |
Age
|
Director
Since
|
| Nominees for a three-year term expiring in 2009 (Class II Directors): | ||
| Robert J. Pallé, Jr. |
60
|
1993
|
| Gary P. Scharmett(1) |
50
|
1997
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| Directors not standing for election this year whose terms expire in 2007 (Class III Directors): | ||
| Robert B. Mayer(2)(3)(4) |
74
|
1995
|
| James F. Williams(2) |
48
|
1993
|
| Stephen K. Necessary(5)(6) |
49
|
2004
|
___________
(1) Since
February, 2004, a member of the Nominating Committee of the Board of
Directors.
(2) Since
December, 1995, a member of the Audit Committee of the Board of
Directors.
(3) Since
December, 1995, a member of the Compensation Committee of the Board of
Directors.
(4) Since
April 2004, a member of the Nominating Committee of the Board of
Directors.
(5) Since
May, 2005, a member of the Compensation Committee of the Board of
Directors.
(6) Since
May, 2005, a member of the Nominating Committee of the Board of
Directors.
2
| Directors not standing for election this year whose terms expire in 2008 (Class I Directors): | ||
| John E. Dwight |
70
|
1995
|
| Robert E. Heaton (1)(2) |
76
|
1998
|
| James A. Luksch |
75
|
1988
|
___________
(1) Since May, 1998, a member of the Compensation Committee of the Board of Directors.
(1) Since May, 1998, a member of the Compensation Committee of the Board of Directors.
(2) Since
June, 2000, a member of the Audit Committee of the Board of
Directors.
Set
forth
below is a brief summary of the recent business experience and background of
each nominee, continuing Director and executive officer:
John
E. Dwight
has been
a Director of the Company since December 14, 1995. He was a Senior Vice
President of the Company from September, 1997 through December, 2000. Mr. Dwight
currently serves as Assistant to the President of the Company. From 1992 until
September, 1997, Mr. Dwight served as President of Film Microelectronics, Inc.,
a designer and manufacturer of microelectronic products.
Robert
E. Heaton
has been
a Director of the Company since March, 1998. He also presently serves on the
Board of Directors, Audit Committee, Finance Committee and Executive Committee
of Wheeling-Pittsburgh Steel Corp., the Board of Directors, Audit Committee
and
Finance Committee of Bayou Steel Corp., the Board of Directors and Audit
Committee of PTC Alliance Co., and the Board of Directors of Calstrip Steel
Corp. From April, 1993 through April, 1995, Mr. Heaton served as Vice Chairman
of the Stainless Steel Group of Lukens, Inc. From April, 1981, through April,
1993, Mr. Heaton was President and Chief Executive Officer of Washington Steel
Corporation until it was acquired by Lukens, Inc. Mr. Heaton is a past Chairman
of the Specialty Steel Industry of North America.
James
A. Luksch
has been
the Chief Executive Officer and a Director of the Company since November, 1988.
He became Chairman of the Board in November, 1994. He also served as President
of the Company from November, 1988 until May, 2003.
Robert
B. Mayer
has been
a Director of the Company since December 14, 1995. From 1966 to 1991, he served
in various executive positions, including Director and Regional President of
Norstar Bank, N.A. (formerly known as Liberty National Bank & Trust Co.), a
member of Fleet Financial Group. Mr. Mayer has from time to time served as
a
part-time instructor at State University of New York at Buffalo and is currently
a Director and officer of People, Inc.
Stephen
K. Necessary has
been
a Director of the Company since December, 2004. Since January, 2005, he has
been
Vice President-Video Product Development for Cox Communications, Inc. From
June,
2002 to December, 2004, he served as President of Concurrent Computer
Corporation's Video On Demand Division. From January, 2000 to June, 2002, Mr.
Necessary served as the President, Chief Executive Officer and a Director of
PowerTV, Inc, a software subsidiary of Scientific-Atlanta. From June, 1982
to
February, 1991 and from October, 1995 to December, 1999, he held a number of
positions with Scientific-Atlanta, including Vice President and General Manager
of analog video systems and his final position of Corporate Vice President
and
Vice President of Marketing. From February, 1991 to October, 1995, he was
employed by ANTEC Corporation, where his final position was President of the
products group.
Robert
J. Pallé, Jr.
has been
the President of the Company since May, 2003 and the Chief Operating Officer
and
Secretary of the Company since April, 1989. He became a Director of the Company
in September, 1993. He also served as Executive Vice President from April,
1989
until May, 2003 and as Interim Treasurer from March through April, 2001.
Gary
P. Scharmett
has been
a Director of the Company since December, 1997. Since January, 1989, Mr.
Scharmett has been a partner in the law firm of Stradley, Ronon, Stevens &
Young, LLP, the Company’s outside counsel, and served on the Board of Directors
of that firm from January 2001 until December 2003.
3
James
F. Williams
has been
a Director of the Company since September, 1993. He has also served as the
President and a Director of Ontario Consolidated Leasing, Inc., a heavy
equipment leasing company, since March, 1997. Since April, 1996, Mr. Williams
has also been the Chairman of the Board and Chief Executive Officer of
Integrated Waste Services, Inc. Mr. Williams is the nephew of James H. Williams.
James
H. Williams
has been
a Director of the Company since November, 1988, and served as Chairman of the
Board of the Company from November, 1988 until November, 1994. Mr. Williams’
term as
a
Class II Director will expire at the 2006 Annual Meeting and Mr. Williams has,
for personal reasons, determined not to stand for reelection as a Class II
Director.
Mr.
Williams presently serves as a consultant to the Company under a written
agreement and will continue to provide consulting services to the Company
pursuant to such agreement.
Other
Executive Officers
Eric
S. Skolnik, 41,
has
served as Senior Vice President of the Company since May, 2003 and as Chief
Financial Officer, Treasurer and Assistant Secretary of the Company since May,
2001. He served as Interim Chief Financial Officer of the Company from January,
2001 through April, 2001. He was Corporate Controller of the Company from May,
2000 through January, 2001. From 1994 until May, 2000, Mr. Skolnik worked as
a
certified public accountant with BDO Seidman, LLP, the Company’s former
registered public accountants.
Norman
A. Westcott, 65,
has
served as Senior Vice President - Operational Services of the Company since
October, 1999 and was a Vice President of the Company from July, 1994 until
October, 1999. Mr. Westcott is responsible for material purchasing and
production.
Allen
Horvath, 54,
has
served as Vice President - Manufacturing of the Company since May, 2003. Mr.
Horvath is responsible for the Company’s manufacturing activities. Mr. Horvath
served as the Manufacturing Manager for the Company from 1998 until May 2003.
Since 1976 Mr. Horvath has served the Company in several management positions
in
the areas of Production Testing, Engineering, Quality Control and
Manufacturing.
Kant
Mistry, 65,
has
served as Vice President - Engineering of the Company since May, 2003 and as
Chief Technical Officer of the Company since July, 2000. From October, 1990
to
July, 2000, Mr. Mistry served as the Chief Engineer of the Company.
Emily
M. Nikoo, 40,
has
served as Vice President - Marketing and Technical Services of the Company
since
February, 2004. She was hired by the Company in March, 1995 as a product manager
and has held several supervisory and management positions with the Company.
From
1994 until March, 1995, Ms. Nikoo was the Vice President of Electronic Systems
Advanced Technology, and from 1987 to 1994 she worked as an electrical
engineering and project manager for Lockheed Martin Corporation in its space
systems business segment. Ms. Nikoo is the daughter of James A.
Luksch.
Peter
F. Daly, Jr., 49,
has
served as Vice President - Sales of the Company since April, 2004. Mr. Daly
is
responsible for sales and customer service. Mr. Daly was a co-founder of Lamont
Digital Systems, Inc. where he served as Senior Vice President and Chief
Technology Officer from November, 2000 to November, 2003, during which time
he
oversaw the design, engineering and operation of complex fiber-to-the-home
video, voice and data systems. From January, 1992 to November, 2000, Mr. Daly
served as Vice President and Chief Operating Officer of Campus TeleVideo, a
division of Lamont Digital Systems, Inc.
Director
Independence
The
Board
of Directors has considered the independence of the Company’s directors pursuant
to Section 121A of the Rules of the American Stock Exchange. Based on this
consideration, the Board has determined that Robert B. Mayer, James F. Williams,
Robert E. Heaton, Stephen K. Necessary and Gary P. Scharmett are independent
pursuant to Section 121A.
4
Meetings
of the Board of Directors; Committees
During
the year ended December 31, 2005, there were eleven meetings of the Company’s
Board of Directors and each Director, other than James H. Williams, attended
(either in person or via teleconference) at least 75% of the meetings held.
Mr.
Williams attended eight of the eleven meetings, representing 73% attendance
at
such meetings. The Board of Directors has three standing committees: the
Compensation Committee, the Nominating Committee and the Audit Committee.
Compensation
Committee.
The
Compensation Committee is currently comprised of Robert E. Heaton, Robert B.
Mayer and Stephen K. Necessary, all of whom are non-employee Directors. Mr.
Necessary was elected to the Compensation Committee in May 2005 to replace
James
F. Williams. The Compensation Committee is responsible to determine compensation
for the Company’s executive officers and to administer the Company’s stock
incentive plans, except for the Amended and Restated 1996 Director Option Plan
and the 2005 Director Equity Incentive Plan. This committee held five meetings
during 2005, all of which were attended (either in person or via teleconference)
by each committee member who was serving as a committee member at the time
of
the meeting.
Nominating
Committee.
The
Nominating Committee is currently comprised of Robert B. Mayer, Stephen K.
Necessary and Gary P. Scharmett. Mr. Necessary was elected to the Nominating
Committee in May 2005. The members of the Nominating Committee are independent,
as independence for nominating committee members is defined in the American
Stock Exchange listing standards. The Nominating Committee is responsible for,
among other things, considering and making recommendations to the Board of
Directors concerning the appropriate size of the Board and nominees to stand
for
election or fill vacancies on the Board. In particular, the Nominating Committee
will identify, recruit, consider and recommend candidates to fill positions
on
the Board in accordance with its criteria for Board membership (as such criteria
is generally described below). In searching for qualified director candidates
to
nominate for election at an annual meeting of stockholders, the Nominating
Committee will initially consider nominating the current Directors whose terms
are expiring and shall consider their past performance on the Board, along
with
the criteria for Board membership, in determining whether to nominate them
for
re-election. In connection with nominations for elections at annual meetings
or
to fill vacancies in the Board, the Nominating Committee may solicit the current
members of the Board to identify qualified candidates through their business
and
other organizational networks and may also retain director search firms as
it
determines necessary in its own discretion. The Nominating Committee would
then
consider the potential pool of Director candidates derived from the foregoing
process, select the top candidates to fill the number of openings based on
their
qualifications, the Board’s needs (including the need for independent directors)
and the criteria for Board membership. The Nominating Committee will then
conduct a thorough investigation of the proposed candidates’ backgrounds to
ensure there is no past history that would disqualify such candidates from
serving as Directors of the Company. Those candidates that are selected and
pass
the background investigation will be recommended to the full Board for
nomination.
The
criteria for a nominee to the Board includes, among other things:
| · |
The
highest personal and professional ethics, strength of character,
integrity
and values;
|
| · |
Experience
as a senior manager, chief operating officer or chief executive officer
of
a relatively complex organization or, if in a professional or scientific
capacity, be accustomed to dealing with complex problems, or otherwise
shall have obtained and excelled in a position of
leadership;
|
| · |
Education,
experience, intelligence, independence, fairness, reasoning ability,
practical wisdom, and vision to exercise sound, mature judgments
on a
macro and entrepreneurial basis on matters which relate to the current
and
long-term objectives of the
Company;
|
| · |
Competence
and willingness to learn the Company’s business, and the breadth of
viewpoint and experience necessary for an understanding of the diverse
and
sometimes conflicting interests of stockholders and other
constituencies;
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5
| · |
The
nominee should be of such an age at the time of election to assure
a
minimum of three years of service as a director, and should be free
and
willing to attend regularly scheduled meetings of the Board of Directors
and its committees over a sustained period and otherwise be able
to
contribute a reasonable amount of time to the affairs of the Company
and
its affiliates;
|
| · |
The
stature and capability to represent the Company before the public,
stockholders, and other various individuals and groups that affect
the
Company; and
|
| · |
Willingness
to appraise objectively the performance of management in the interest
of
the stockholders and question management’s assumptions when inquiry is
appropriate.
|
While
the
Nominating Committee does not have a formal charter, the Board adopted
guidelines addressing the purpose and responsibilities of the Nominating
Committee in connection with its formation, which guidelines include procedures
for recruiting, considering and recommending nominees to the Board and criteria
for Board membership. Although the Nominating Committee will not consider any
director candidates recommended by stockholders, the Board believes this is
appropriate as the Company’s certificate of incorporation and bylaws permit
stockholders to directly nominate persons for election as Directors by following
the procedures set forth therein. This committee held four meetings during
2005,
all of which were attended (either in person or via teleconference) by each
committee member who was serving as a committee member at the time of the
meeting.
Audit
Committee.
The
Company has a separately-designated standing Audit Committee established in
accordance with Section 3(a)(58)(A) under the Securities Exchange Act of 1934,
as amended. The Audit Committee is currently comprised of James F. Williams,
Robert B. Mayer and Robert E. Heaton, all of whom are non-employee Directors.
The Audit Committee is responsible to, among other things, oversee the
accounting and financial reporting process and audits of the financial
statements, select, retain or terminate the engagement of independent auditors,
review the plans and results of the audit engagement with the independent
auditors, discuss with the independent auditors all accounting policies and
practices to be used and alternative treatments of financial information
discussed with management, oversee the work of the independent auditors,
evaluate and pre-approve audit and non-audit services provided by the
independent auditors, review the independence of the independent auditors,
assure the regular rotation of the audit partners, consider the range of audit
and non-audit fees and set the compensation of the independent auditors, review
and discuss types of financial and earnings information released to any party,
review with the appropriate parties the certifications required for the
quarterly reports on Form 10-Q and annual reports on Form 10-K, and review
the
adequacy of the Company’s internal accounting controls. This committee held nine
meetings during 2005, all of which were attended (either in person or via
teleconference) by each committee member.
The
members of the Audit Committee are independent, as “independence” for audit
committee members is defined in the American Stock Exchange listing standards.
The Company’s Board of Directors has determined that a member of the Audit
Committee, James F. Williams, qualifies as an “audit committee financial expert”
as defined in Section 401(h) of Regulation S-K promulgated by the Securities
and
Exchange Commission. He is also “independent,” as such term is defined in Item
7(d)(3)(iv)(A) of Schedule 14A under the Securities Exchange Act of 1934, as
amended. The Board of Directors adopted a written charter for the Audit
Committee in June, 2000, which was amended by the Board of Directors in March,
2003 and March, 2004. The Audit Committee reviews and reassesses the charter
for
adequacy on an annual basis, most recently in March, 2006.
Board
Policies Regarding Communications With the Board of Directors and Attendance
at
Annual Meetings
The
Board
of Directors maintains a process for stockholders to communicate with the Board
of Directors. Stockholders wishing to communicate with the Board of Directors,
or any individual member(s) of the Board of Directors, can send a written
communication to the attention of the Board of Directors (or specific individual
director(s), if applicable) at the following address: c/o Corporate Secretary,
One Jake Brown Road, Old Bridge, New Jersey 08857. Any such communication must
state the number of shares beneficially owned by the stockholder making the
communication. The Corporate Secretary will forward such communication to the
full Board of Directors or to any individual director or directors to whom
the
communication is directed unless the communication is unduly hostile,
threatening, illegal or similarly inappropriate, in which case the Corporate
6
Secretary
has the authority to discard the communication or take appropriate legal action
regarding the communication.
While
the
Company does not have a formal written policy regarding Board member attendance
at its Annual Meeting, the Company actively encourages its directors to attend
the Annual Meeting of Stockholders. All directors attended the Company’s 2005
Annual Meeting of Stockholders.
AUDIT
COMMITTEE REPORT
The
Audit
Committee of the Board of Directors has:
| · |
reviewed
and discussed the audited financial statements for the fiscal year
ended
December 31, 2005 with the Company’s
management;
|
| · |
discussed
with the Company’s independent registered public accountants the matters
required to be discussed by Statement on Accounting Standards No.
61, as
the same was in effect on the date of the Company’s financial
statements;
|
| · |
received
the written disclosures and the letter from the Company’s independent
registered public accountants required by Independence Standards
Board
Standard No. 1 (Independence Discussions with Audit Committees),
as the
same was in effect on the date of the Company’s financial statements;
and
|
| · |
discussed
with the Company’s independent registered public accountants their
independence from the Company and its
management.
|
Management
is responsible for the preparation, presentation and integrity of the Company’s
financial statements, the financial reporting process, accounting principles
and
internal controls and procedures designed to assure compliance with accounting
standards and applicable laws and regulations. The Company’s independent
registered public accountants are responsible for performing an independent
audit of the financial statements in accordance with generally accepted auditing
standards and issuing a report thereon. The Audit Committee’s responsibility is
to monitor and oversee these processes. The Audit Committee has relied, without
independent verification, on the information provided to it and on the
representations of management and the independent registered public accountants
that the financial statements have been prepared in conformity with generally
accepted accounting principles.
Based
on
the review and discussions referred to in the items above, the Audit Committee
recommended to the Board of Directors that the audited financial statements
for
the fiscal year ended December 31, 2005 be included in the Company’s Annual
Report on Form 10-K for the fiscal year ended December 31, 2005.
The
Audit
Committee
James
F. Williams,
Chairman
Robert
B.
Mayer
Robert
E.
Heaton
Directors’
Compensation
Each
non-employee Director of the Company (other than James H. Williams) is paid
a
retainer at the annual rate of $15,000, payable quarterly, a fee of $1,000
for
each Board meeting attended in person ($500 if attendance was telephonic) and
a
fee of $600 for each committee meeting attended in person ($300 if attendance
was telephonic or if attending on the same date as a Board meeting). Each
Director is also reimbursed for certain travel, lodging and related expenses
incurred in connection with attendance at Board and committee meetings. During
calendar year 2005, Messrs. Luksch, Pallé and Dwight did not receive any
separate compensation for serving on the Board of Directors or any committees
thereof.
7
Effective
January 1, 2000, the Company enacted a policy requiring each of the Company’s
Directors to maintain an investment in the Company’s Common Stock during his or
her entire tenure as a Director equal to at least $25,000, calculated by taking
the greater of (i) the amount paid for such stock by the Director and (ii)
the
highest fair market value of such stock. Non-employee directors of the Company
are encouraged to purchase Company Common Stock equal to or exceeding one year’s
annual retainer during any three-year period until they meet this
requirement.
In
May,
1998, the stockholders of the Company approved the adoption of the Company’s
Amended and Restated 1996 Director Option Plan, as further amended by approval
of the stockholders in May, 2003 (the “1996 Plan”). The 1996 Plan expired on
January 2, 2006. The 1996 Plan is administered by the Board of Directors. Under
the 1996 Plan, Directors who were not employed by the Company or any subsidiary
of the Company and were not so employed within the six months prior to the
date
of grant were eligible to receive options from time to time to purchase a number
of shares of Common Stock as determined by the Board; provided, however, that
no
Director could be granted options to purchase more than 5,000 shares of Common
Stock in any one calendar year. The exercise price for such shares was the
fair
market value thereof on the date of grant, and the options vest as determined
in
each case by the Board of Directors. Options granted under the 1996 Plan are
generally exercisable over the term of the option, as determined by the Board;
however, no option granted under the 1996 Plan had a term of greater than ten
years from the date of grant. A maximum of 200,000 shares were available to
be
awarded under the 1996 Plan of which 153,000 shares are currently subject to
outstanding awards.
On
February 2, 2005, each of the Company’s non-employee Directors, other than James
H. Williams, was granted an option under the 1996 Plan to purchase 5,000 shares
of Common Stock at an exercise price equal to $3.85 per share.
These
options
vested
on May 31, 2005 and expire on February 1, 2015.
In
May
2005, the stockholders of the Company approved the adoption of the Blonder
Tongue Laboratories, Inc. 2005 Director Equity Incentive Plan (the “Director
Plan”). The Director Plan is administered by the Board of Directors. Under the
Director Plan, Directors who are not currently employed by the Company or any
subsidiary of the Company and who have not been so employed within the past
six
months are eligible to receive equity-based awards from time to time as
determined by the Board. A maximum of 200,000 shares may be awarded under the
Director Plan, and any shares subject to an award which is terminated, canceled,
expired or forfeited for any reason will again be available for the grant of
an
award. Under the Director Plan, eligible Directors may be awarded stock options
to purchase a number of shares of Common Stock (“Stock Options”), stock
appreciation rights to receive the excess, if any, of the fair market value
of a
specified number of shares of Common Stock at the time of exercise over the
grant price (“SARS”) or stock awards at no cost to the Director (“Stock Awards”)
which may be either restricted stock or unrestricted stock. Each grant of a
Stock Option, SAR or Stock Award shall be subject to a written Award Agreement
which shall specify the terms and conditions of the grant as determined by
the
Board of Directors, provided,
however,
that
the exercise price for any Stock Option or SAR granted shall not be less than
the fair market value of the underlying Common Stock on the date of grant.
The
Director Plan expires on February 1, 2015.
On
March
28, 2006, each of the Company’s non-employee Directors, other than James H.
Williams, was granted an option under the Director Plan to purchase 10,000
shares of Common Stock at an exercise price equal to the greater of (i) $1.905
per share (the fair market value of the Company’s Common Stock on March 28,
2006) and (ii) the fair market value of the Company’s Common Stock on the
second
trading day following the date of public disclosure of the Company’s financial
results for the first quarter ending March 31, 2006. These options
vest on
March 28, 2007 and expire on March 27, 2016.
The
Company is party to a consulting and non-competition agreement with James H.
Williams for the purpose of obtaining advice and counseling from Mr. Williams
concerning strategic planning and financial and business matters. Under this
agreement, as amended, Mr. Williams is obligated to make himself available
to
the Company for up to 25 hours per month, in addition to time spent attending
to
his duties as a member of the Board of Directors of the Company. Mr. Williams
is
paid at the rate of $168,525 per year for his services under this agreement,
subject to adjustment on a basis consistent with adjustments to compensation
for
the Company’s senior management. The agreement provides a cap of $200,000 on
payments to be made thereunder during any calendar year. The initial term of
this agreement expired on December 31, 2004 and automatically renews thereafter
for successive one year terms (subject to termination at the end of any renewal
term on at least 90 days’ notice).
8
The
agreement was automatically renewed for a one-year term, expiring December
31,
2006. Payments to Mr. Williams under this consulting agreement are in lieu
of
any other payments in connection with his services as a Director or committee
member, other than the reimbursement of certain travel, lodging and related
expenses incurred in connection with attendance at Board and committee
meetings.
Section
16(a) Beneficial Ownership Reporting Compliance
Section
16(a) of the Securities Exchange Act of 1934 requires the Company’s Directors
and executive officers, and persons who own more than ten percent of the Common
Stock, to file with the Securities and Exchange Commission (the “Commission”)
and the American Stock Exchange, initial reports of ownership and reports of
changes in ownership of Common Stock and other equity securities of the Company.
Officers, Directors and greater than ten percent stockholders (collectively,
“Reporting Persons”) are additionally required to furnish the Company with
copies of all Section 16(a) forms they file.
To
the
Company’s knowledge, based solely on review of the copies of such reports
furnished to the Company and written representations of the Reporting Persons
that no other reports were required with respect to fiscal year 2005, all
Section 16(a) filing requirements applicable to the Reporting Persons were
complied with on a timely basis in fiscal year 2005.
SECURITY
OWNERSHIP OF CERTAIN
BENEFICIAL
OWNERS AND MANAGEMENT
The
following table sets forth certain information regarding beneficial ownership
of
the Company’s Common Stock as of March 15, 2006 by (i) each person who is known
by the Company to beneficially own more than five percent of the Company’s
Common Stock, (ii) each of the Company’s Directors, including nominee Directors,
(iii) each of the executive officers named in the Summary Compensation Table,
and (iv) all executive officers and Directors as a group. Except as otherwise
indicated, the persons named in the table have sole voting and investment power
with respect to all shares beneficially owned, subject to community property
laws where applicable.
|
Name
and Address of
Beneficial
Owner(1)(2)
|
Amount
and Nature of Beneficial
Ownership (1)
|
Percent
of Class
Beneficially
Owned
|
||||||||
|
James
A. Luksch
|
1,224,200
|
(3
|
)
|
15.27
|
%
|
|||||
|
Robert
J. Pallé, Jr.
|
1,203,323
|
(4
|
)
|
15.01
|
%
|
|||||
|
Norman
A. Westcott
|
109,806
|
(5
|
)
|
1.35
|
%
|
|||||
|
Kant
Mistry
|
81,903
|
(6
|
)
|
1.01
|
%
|
|||||
|
Peter
F. Daly
|
18,334
|
(7
|
)
|
|
*
|
|||||
|
John
E. Dwight
|
109,849
|
(8
|
)
|
1.36
|
%
|
|||||
|
James
H. Williams
|
1,525,654
|
(9
|
)
|
19.03
|
%
|
|||||
|
James
F. Williams
|
104,173
|
(9
|
)
|
1.28
|
%
|
|||||
|
Gary
P. Scharmett
|
55,600
|
(10
|
)
|
|
*
|
|||||
|
Robert
B. Mayer
|
40,000
|
(11
|
)
|
|
*
|
|||||
|
Robert
E. Heaton
|
42,500
|
(12
|
)
|
|
*
|
|||||
|
Stephen
K. Necessary
|
5,000
|
(13
|
)
|
|
*
|
|||||
|
All
Directors and executive officers as a group (15 persons)
|
4,702,107
|
54.11
|
%
|
|||||||
|
Blonder
Tongue Telephone, LLC(14)
Resource
Investment Group, LLC
Blonder
Tongue Laboratories, Inc.
H.
Tyler Bell
Douglas
Bell
|
500,000
|
(15
|
)
|
6.24
|
%
|
|||||
|
FMR
Corp.
82
Devonshire
Street
Boston,
Massachusetts 02109
|
459,500
|
(16
|
)
|
5.73
|
%
|
|||||
|
Al
Frank Asset Management, Inc.
32392
Coast
Highway, Suite 260
Laguna
Beach,
California 92651
|
450,946
|
(17
|
)
|
5.63
|
%
|
|||||
9
_______________
*
Less
than
1%
| (1) |
Beneficial
ownership as of March 15, 2006 for each person includes shares subject
to
options held by such person (but not held by any other person) which
are
exercisable within 60 days after such date. Beneficial ownership
is
determined in accordance with the rules of the Commission and generally
includes voting or investment power with respect to securities, which
voting or investment power may be further described in the footnotes
below. This table contains information furnished to the Company by
the
respective stockholders or contained in filings made with the
Commission.
|
| (2) |
Unless
otherwise indicated, the address for each beneficial owner is c/o
Blonder
Tongue Laboratories, Inc., One Jake Brown Road, Old Bridge, NJ
08857.
|
| (3) |
Includes
10,928 shares of Common Stock owned of record by two trusts of which
Mr.
Luksch is the trustee, 9 shares of Common Stock owned of record by
an
estate of which Mr. Luksch is the executor and 40,294 shares of Common
Stock held of record by Mr. Luksch’s spouse, as to which Mr. Luksch
expressly disclaims beneficial
ownership.
|
| (4) |
Includes
200,000 shares of Common Stock owned of record by a limited liability
company of which Mr. Pallé and his wife are the sole
members.
|
| (5) |
Includes
98,000 shares of Common Stock underlying options granted by the
Company.
|
| (6) |
Includes
2,000 shares of Common Stock held jointly by Mr. Mistry and his spouse,
952 shares of Common Stock held jointly by Mr. Mistry’s spouse and child,
951 shares of Common Stock held jointly by Mr. Mistry’s spouse and child,
and 78,000 shares of Common Stock underlying options granted by the
Company.
|
| (7) |
Includes
18,334 shares of Common Stock underlying options granted by the Company.
|
| (8) |
Includes
83,849 shares of Common Stock underlying options granted by the
Company.
|
| (9) |
James
H. Williams has granted to James F. Williams the option to purchase
52,173
shares of Company Common Stock which he owns. These shares are included
in
the beneficial ownership of both Directors. Beneficial ownership
for James
F. Williams also includes 37,000 shares of Common Stock underlying
options
granted by the Company.
|
| (10) |
Includes
47,000 shares of Common Stock underlying options granted by the
Company.
|
| (11) |
Includes
37,000 shares of Common Stock underlying options granted by the Company,
500 shares of Common Stock held of record by Mr. Mayer’s adult son, as to
which Mr. Mayer expressly disclaims beneficial ownership, and 200
shares
of Common Stock held of record by Mr. Mayer’s
spouse.
|
| (12) |
Includes
37,000 shares of Common Stock underlying options granted by the
Company.
|
| (13) |
Includes
5,000 shares of Common Stock underlying options granted by the Company.
|
| (14) |
The
address for the Company is set forth in footnote 2 above, and the
address
for Blonder Tongue Telephone, LLC, Resource Investment Group, LLC,
H.
Tyler Bell and Douglas Bell is c/o Williamstown
Pavilion & Business Park, 1809 North Black Horse Pike, Suite
B3,
Williamstown,
New Jersey 08094.
|
| (15) |
The
Company issued 500,000 shares of Common Stock to Blonder Tongue Telephone,
LLC (“BTT”) in connection with forming its telephony venture. While
economic ownership of BTT is split 50% each by the Company and Resource
Investment Group, LLC (“RIG”), any investment decision with regard to
these 500,000 shares of Common Stock must be made unanimously by
the
Company and RIG. H. Tyler Bell shares voting power over such shares
with
the members of BTT in his capacity as the General Manager of BTT.
RIG is
wholly-owned by Douglas Bell, who is also the Manager of RIG. As
such,
Douglas Bell may also be deemed to be an indirect beneficial owner
of the
500,000 shares of Common Stock. Of the 500,000 shares, one-half (250,000
shares) have been pledged to the Company as collateral to secure
BTT’s
obligation to repay the $1,167,000 cash component of the purchase
price to
the Company. See “Certain Relationships and Related Transactions”
beginning on page
15
for more details.
|
| (16) |
Based
on a Schedule 13G/A filed by FMR Corp. (“FMR”) with the Commission on
February 14, 2006. The Schedule 13G/A discloses that the 459,500
shares of
Common Stock are held directly by Fidelity Low Priced Stock Fund,
that
each of FMR and Edward C. Johnson, 3rd,
Chairman of FMR, have the sole power to dispose of the 459,500 shares
of
Common Stock, and that sole power to vote or direct the voting of
the
459,500 shares of Common Stock is held by the Fidelity Funds’ Board of
Trustees.
|
| (17) |
Based
on a Schedule 13G filed by Al Frank Asset Management, Inc. (“AFAM”) with
the Commission on February 14, 2006. The Schedule 13G discloses that
AFAM
has the sole power to vote 351,685 shares of Common Stock, and the
sole
power to dispose of 450,946 shares of Common
Stock.
|
10
EXECUTIVE
COMPENSATION
Summary
The
following table sets forth certain summary information concerning compensation
paid or accrued for services rendered to the Company in all capacities for
the
year ended December 31, 2005 and the two prior fiscal years with respect to
the
Chief Executive Officer and each of the four other most highly compensated
executive officers of the Company who served as executive officers during 2005
and whose salary plus bonus during 2005 exceeded $100,000.
|
Summary
Compensation Table
|
||||||||||||||||
|
Annual
Compensation
|
LongTerm
Compensation
|
|||||||||||||||
|
Name
and
Principal
Position
|
Year
|
Salary
($)
|
Bonus($)
|
Securities
Underlying
Options(#)
|
All
Other
Compensation($)(1)
|
|||||||||||
| James A. Luksch |
2005
|
383,250
|
---
|
--- |
20,672
|
(2) | ||||||||||
|
Chairman
of the Board and Chief Executive Officer
|
2004
|
|
354,139
|
--- | --- |
22,551
|
(2) | |||||||||
|
2003
|
345,697
|
--- | --- |
20,261
|
(2) | |||||||||||
|
|
|
|||||||||||||||
| Robert J. Pallé, Jr. |
2005
|
300,000
|
--- | --- |
16,724
|
|
||||||||||
|
President,
Chief Operating Officer and Secretary
|
2004
|
298,490
|
|
--- | --- |
16,301
|
||||||||||
|
2003
|
266,950
|
--- | --- |
16,714
|
||||||||||||
|
|
|
|
||||||||||||||
| Norman A. Westcott |
2005
|
146,000
|
|
--- | 15,000 |
7,844
|
||||||||||
|
Senior
Vice President - Operational Services
|
2004
|
143,057
|
--- | --- |
6,113
|
|||||||||||
|
2003
|
137,961
|
--- | --- |
5,829
|
||||||||||||
|
|
||||||||||||||||
| Kant Mistry |
2005
|
157,000
|
--- | 15,000 |
5,343
|
|||||||||||
|
Vice
President - Engineering and Chief Technical Officer
|
2004
|
147,885
|
--- | --- |
5,041
|
|||||||||||
|
2003
|
139,000
|
--- | --- |
4,737
|
||||||||||||
| Peter F. Daly. |
2005
|
175,000
|
--- | 5,000 |
714
|
|||||||||||
|
Vice
President - Sales
|
2004
|
119,808
|
52,900 | 20,000 |
490
|
|||||||||||
|
2003
|
---
|
--- | --- |
---
|
||||||||||||
__________________
| (1) |
Represents
reimbursement of life insurance premiums, matching contributions
paid by
the Company under its 401(k) plan and costs of preparation of individual
tax returns. Amounts paid in 2005 for life insurance were $1,563,
$1,224,
$596, $641 and $714; matching contributions under the Company’s 401(k)
plan were $7,000, $7,000, $4,468, $4,702 and $0; and amounts paid
for
preparation of tax returns were $3,275, $8,500, $2,780, $0 and $0
for
Messrs. Luksch, Pallé, Westcott, Mistry and Daly, respectively. Amounts
paid in 2004 for life insurance were $1,489, $1,163, $571, $604 and
$490;
matching contributions under the Company’s 401(k) plan were $6,500,
$6,500, $4,292, $4,437 and $0; and amounts paid for preparation of
tax
returns were $4,718, $8,638, $1,250, $0 and $0 for Messrs. Luksch,
Pallé,
Westcott, Mistry and Daly, respectively. Amounts paid in 2003 for
life
insurance were $1,412, $1,089, $563, $567 and $0; matching contributions
under the Company’s 401(k) plan were $6,000, $6,000, $4,016, $4,170 and
$0; and amounts paid for preparation of tax returns were $3,225,
$9,625,
$1,250, $0 and $0 for Messrs. Luksch, Pallé, Westcott, Mistry and Daly,
respectively.
|
| (2) |
Includes
the value of below-market interest rate benefit of $8,834, $9,844
and
$9,624 for 2005, 2004 and 2003, respectively, received by Mr. Luksch
in
connection with his indebtedness to the Company as described on page
15
below under the section titled “Certain Relationships and Related
Transactions.” The amount represents the difference between the interest
paid by Mr. Luksch and the interest that would be due on the outstanding
principal at the applicable long-term federal interest rate on January
1,
2005, 2004 and 2003, respectively.
|
11
Stock
Options
The
following table provides information with respect to the named executive
officers concerning options granted to them during fiscal year
2005.
Option
Grants in 2005
|
Number
of
Shares
Underlying
Options
|
Percent
of
Total
Options Granted to Employees in
|
Exercise
or
Base
Price
|
Expiration
|
Potential
Realizable
Value
at Assumed
Annual
Rates of Stock
Price
Appreciation for
Option
Term
|
|||||||||||||||
|
Name
|
Granted
(#)
|
2005(%)
|
($/Sh.)
|
Date
|
5%($)
|
10%($)
|
|||||||||||||
| Norman A. Westcott |
15,000(1)
|
9.4%
|
$3.84
|
03/28/2015
|
2,850
|
5,700
|
|||||||||||||
| Kant Mistry |
15,000(1)
|
9.4%
|
$3.84
|
03/28/2015
|
2,850
|
5,700
|
|||||||||||||
| Peter F. Daly |
5,000(1)
|
3.1%
|
$3.84
|
03/28/2015
|
950
|
1,900
|
|||||||||||||
_______________
(1)
The
options granted vested on May 31, 2005.Option
Exercises and Holdings
The
following table provides information with respect to the named executive
officers concerning the exercise of options during fiscal year 2005 and
unexercised options held as of December 31, 2005.
|
Aggregated
Option Exercises in 2005
and
Option Values as of December 31, 2005
|
|||||||||||||||||||
|
Shares
Acquired
on
Exercise(#)
|
Value
Realized($)
|
Number
of Securities Underlying Unexercised Options at
December
31, 2005(#)
|
Value
of Unexercised In-the-
Money
Options at
December
31, 2005($)(1)
|
||||||||||||||||
|
Name
|
Exercisable
|
Unexercisable
|
Exercisable
|
Unexercisable
|
|||||||||||||||
|
James
A. Luksch
|
---
|
---
|
---
|
---
|
---
|
---
|
|||||||||||||
|
Robert
J. Pallé, Jr.
|
---
|
---
|
---
|
---
|
---
|
---
|
|||||||||||||
|
Norman
A. Westcott
|
---
|
---
|
98,000
|
---
|
---
|
---
|
|||||||||||||
|
Kant
Mistry
|
---
|
---
|
78,000
|
---
|
---
|
---
|
|||||||||||||
|
Peter
F. Daly
|
---
|
---
|
11,667
|
13,333
|
---
|
---
|
|||||||||||||
(1) These
columns represent the difference between the closing market price of the
Company’s Common Stock on December 31, 2005 and the option exercise
price.
Compensation
Committee Interlocks and Insider Participation
The
Compensation Committee of the Board of Directors currently consists of Robert
E.
Heaton, Robert B. Mayer and Stephen K. Necessary. No member of the Compensation
Committee was an officer or employee of the Company during fiscal year 2005.
None of the executive officers of the Company has served on the board of
directors, the compensation committee or any other board committee performing
equivalent functions of any other entity, any of whose officers served either
on
the Board of Directors or the Compensation Committee of the
Company.
REPORT
OF COMPENSATION COMMITTEE
ON
EXECUTIVE COMPENSATION POLICIES
General
The
Company’s executive compensation program is administered by the Compensation
Committee of the Board of Directors. The objective of the Company in setting
executive compensation has been to attract, retain and motivate qualified
executives to manage the Company’s business and affairs so as to foster sales
and earnings growth, achieve significant current profits and maximize
stockholder value. Executive compensation in the aggregate is made up
principally of annual base salary, bonus, awards of stock options under the
Company’s
12
1995
Long
Term Incentive Plan and grants of equity-based and other performance-based
awards under the Blonder Tongue Laboratories, Inc. 2005 Employee Equity
Incentive Plan.
Generally,
annual salary adjustments and bonuses for executive officers other than Messrs.
Luksch and Pallé have been recommended by Mr. Luksch and ultimately determined
by the Compensation Committee. The annual salary adjustments and bonuses for
Messrs. Luksch and Pallé are determined by the Compensation Committee, subject
to Board approval. An annual performance evaluation of each executive officer
is
conducted, upon which a salary adjustment is determined. The performance
evaluation focuses on the executive’s performance during the past year of the
responsibilities of his position, the executive’s improvement in areas where any
deficiencies may have been noted in the past, and the executive’s achievement of
any specific goals and objectives which may have been established for such
executive, including achievement of budget objectives. The Company’s overall
profit for the fiscal year and the executive’s individual contribution to that
profit are also considered. As is typical for most corporations, the assessment
of individual performance contributions is in most cases subjective and not
conditioned upon the achievement of any specific, pre-determined performance
targets.
In
February, 1997, the Compensation Committee implemented the Executive Officer
Bonus Plan (“Executive Bonus Plan”). The Compensation Committee believes that a
combination of base salary, cash bonus awards under the Executive Bonus Plan
and
the award of stock options, restricted stock awards and other performance based
awards will support the short-term and long-term strategic objectives of the
Company and will reward individual performance and the value created for
stockholders. Cash bonus awards under the Executive Bonus Plan are paid to
officers during a particular fiscal year based upon and relating to the
financial performance of the Company during the prior fiscal year. During the
first quarter of each fiscal year of the Company, the Compensation Committee
designates which of the Company’s executive officers are to participate in the
Executive Bonus Plan for that year. The Compensation Committee then establishes
one or more objective performance goals for each participant, together with
a
maximum dollar bonus opportunity for the participant and a formula to determine
bonus payments based on the achievement of the goal(s). In no event may the
bonus for any participant exceed 100% of such participant’s base
salary.
The
performance goals are expressed in terms of (a) one or more corporate or
divisional earnings-based measures (which may be based on net income, operating
income, cash flows, or any combination thereof) and/or (b) one or more corporate
or divisional sales-based measures. Each such goal may be expressed on an
absolute and/or relative basis, may employ comparisons with past performance
of
the Company (including one or more divisions) and/or the current or past
performance of other companies, and in the case of earnings-based measures,
may
employ comparisons to capital, stockholders’ equity and shares outstanding.
Performance goals need not be uniform among participants.
After
the
Company’s financial results for a fiscal year have been determined, the
Compensation Committee certifies the level of performance goal attainment and
the potential bonus payment for each participant. The Compensation Committee
has
full authority to reduce the amount that would otherwise be payable to any
participant for a fiscal year. For 2005, no bonuses were awarded under the
Executive Bonus Plan.
In
addition, from time to time the Company may establish a discretionary bonus
arrangement with one or more of its executive officers, with the receipt of
any
such bonus conditioned upon the attainment of certain performance goals.
Currently there is a bonus arrangement with Peter F. Daly. Mr. Daly is eligible
to receive a bonus under this arrangement based upon the Company achieving
certain sales-based measures. In 2005 Mr. Daly received a bonus based upon
the
attainment of such sales-based measures during 2004. No bonus will be paid
to
Mr. Daly in 2006 in respect of the Company’s performance in 2005.
Compensation
of the Chief Executive Officer
Mr.
Luksch has been Chief Executive Officer of the Company since it commenced
operations in 1988 and served as President of the Company from such date until
May, 2003. His compensation includes the same elements and performance measures
as the compensation of the Company’s other executive officers.
13
Mr.
Luksch’s annual salary, which had been $365,000 since January 2003, was
increased to $383,250 effective January 1, 2005. The
determination of this salary level was based on Mr. Luksch's leadership and
efforts over the prior two years (2003 and 2004) and his vision in seeking
additional sources of revenue in a down market. The amount of the salary was
determined following an analysis of the range of compensation paid to chief
executive officers of similar-sized manufacturing companies located in the
Northeastern United States. Mr. Luksch's compensation, as adjusted, fell within
the middle of the range. Mr. Luksch received no bonus and no stock options
during fiscal year 2005. The Committee believes that Mr. Luksch’s overall
compensation is fair and reasonable. This assessment is a subjective
determination and is not quantitatively related to the Company’s performance.
On
March
28, 2006, Mr. Luksch was granted an option under the 2005 Employee Equity
Incentive Plan to purchase 45,000 shares of Common Stock at an exercise price
equal to the greater of (i) $1.905 per share (the fair market value of the
Company’s Common Stock on March 28, 2006) and (ii) the fair market value of the
Company’s Common Stock on the second
trading day following the date of public disclosure of the Company’s financial
results for the first quarter ending March 31, 2006. This option
vests in
three equal installments on March 28, 2007, 2008 and 2009 and will expire on
March 27, 2016.
The
Compensation
Committee
Robert
B. Mayer,
Chairman
Robert
E.
Heaton
Stephen
K.
Necessary
COMPARATIVE
STOCK PERFORMANCE
The
graph
below compares the cumulative total return during the period from December
31,
2000 to December 31, 2005, for the Company’s Common Stock, the AMEX Stock
Exchange Composite Index (formerly the AMEX Market Value Index) and the Dow
Jones Electrical Components & Equipment Industry Group Index. This graph
assumes the investment of $100 in the Company’s Common Stock, the stock in the
companies presented in the AMEX Stock Exchange Composite Index and the stock
in
the companies comprising the Dow Jones Electrical Components & Equipment
Industry Group Index on January 1, 2000 and the reinvestment of all
dividends.
|
12/31/2000
|
12/31/2001
|
12/31/2002
|
12/31/2003
|
12/31/2004
|
12/31/2005
|
||||||||||||||
|
BDR
|
100.00
|
118.08
|
51.2
|
102.72
|
137.92
|
62.4
|
|||||||||||||
|
AMEX
|
100.00
|
94.41
|
91.83
|
197.56
|
159.56
|
195.95
|
|||||||||||||
|
DJEI
|
100.00
|
70.33
|
41.69
|
68.09
|
62.74
|
63.80
|
|||||||||||||
14
CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS
The
Chief
Executive Officer’s daughter, Emily Nikoo, is the Vice President - Marketing and
Technical Services of the Company. The annual salary for Ms. Nikoo in 2005
was
$137,000. Nezam Nikoo, Ms. Nikoo’s husband and the Chief Executive Officer’s
son-in-law, is Chief Digital Engineer of the Company. The annual salary for
Mr.
Nikoo in 2005 was $134,550.
One
of
the Company’s Directors, Gary P. Scharmett, is a partner at the law firm of
Stradley, Ronon, Stevens & Young, LLP, which serves as the Company’s outside
counsel.
As
of
March 31, 2006, James A. Luksch, Chief Executive Officer and a Director of
the
Company, was indebted to the Company in the amount of $176,089, for which no
interest has been charged. This indebtedness arose from a series of cash
advances to Mr. Luksch, the latest of which was advanced in February, 2002.
The
largest aggregate amount of indebtedness during the 2005 fiscal year was
$200,872. This debt is presently being repaid at the rate of $1,000 per month.
Robert
J.
Pallé, Jr., President and a Director of the Company, lent the Company 100% of
the purchase price of certain used equipment purchased by the Company in October
through November of 2003. The equipment was purchased at a substantial discount
to market price and the Company has sold the equipment. The Company repaid
this
loan in full in July, 2004. Mr. Pallé made the loan to the Company on a
non-recourse basis, secured solely by a security interest in the equipment
purchased by the Company and the proceeds resulting from the sale of the
equipment. In consideration for the extension of credit on a non-recourse basis,
Mr. Pallé received from the Company interest on the outstanding balance at the
margin interest rate he incurred for borrowing the funds from his lenders plus
25% of the gross profit derived from the Company’s resale of such equipment. In
April, 2004, Mr. Pallé acquired $75,000 of used equipment inventory, which was
subsequently sold by him to the Company on a consignment basis. Payment by
the
Company for the goods become due upon the sale thereof by the Company and
collection of the accounts receivable generated by such sales. In connection
with the transaction, the Company agreed to pay Mr. Pallé cost plus 25% of the
gross profit derived from the sale of such inventory. During 2005 Mr. Pallé was
paid $10,000, representing the final amount of Mr. Pallé’s share of gross profit
derived from both the resale of equipment purchased under the loan from Mr.
Pallé and the resale of the consigned goods. As of December 31, 2005, all
amounts due to Mr. Pallé from these transactions were paid.
In
March,
2003, the Company entered into a series of agreements, pursuant to which the
Company acquired a 20% minority interest in NetLinc Communications, LLC
(“NetLinc”) and a 35% minority interest in Blonder Tongue Telephone, LLC
(“BTT”). During September, 2003, the parties restructured the terms of their
business arrangement which included increasing the Company’s economic ownership
in NetLinc from 20% to 50% and in BTT from 35% to 50%, all at no additional
cost
to the Company. The cash portion of the purchase price in the venture was
decreased from $3,500,000 to $1,167,000, and was paid in full by the Company
to
BTT in October, 2003. As the non-cash component of the purchase price, the
Company issued 500,000 shares of Common Stock to BTT, resulting in BTT becoming
the owner of greater than 5% of the outstanding Common Stock of the Company.
One-half of such Common Stock (250,000 shares) has been pledged to the Company
as collateral to secure BTT’s obligation to repay the $1,167,000 cash component
of the purchase price to the Company. Under the restructured arrangement, the
Company pays certain future royalties to NetLinc and BTT upon the sale of
telephony products. During 2005, the total accrued royalties to NetLinc and
BTT
were $1,152 and $29,333, respectively, which will be paid to them by the Company
in 2006. In addition, the Company paid certain expenses of BTT totaling
approximately $68,664 and $98,334 in 2004 and 2003, respectively. Through this
telephony venture, BTT offers primary voice service to MDUs and the Company
offers for sale a line of telephony equipment to complement the voice service.
15
PROPOSAL
NO. 2 - RATIFICATION OF APPOINTMENT
OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTANTS
The
Audit
Committee has selected Marcum & Kliegman LLP to serve as independent
registered public accountants of the Company for the fiscal year ending
December 31, 2006. Marcum & Kliegman LLP has been the Company’s
independent registered public accountants since being engaged by the Company
effective October 24, 2005 to review the Company’s quarterly results for the
third quarter ended September 30, 2005 and to audit its financial statements
as
of and for the year ended December 31, 2005. The engagement of Marcum &
Kliegman LLP was unanimously approved by the Audit Committee of the Company
on
October 13, 2005 and the firm is considered by management of the Company to
be
well qualified. Prior thereto, the Company’s independent registered public
accountant was BDO Seidman, LLP. The Company has been advised by Marcum &
Kliegman LLP that neither it nor any member thereof has any financial interest,
direct or indirect, in the Company or any of its subsidiaries, in any capacity.
One or more representatives of Marcum & Kliegman LLP is expected to be
present at this year’s Annual Meeting of Stockholders with an opportunity to
make a statement if he or she desires to do so and to answer appropriate
questions with respect to that firm’s examination of the Company’s financial
statements and records for the fiscal year ended December 31, 2005.
On
August
26, 2005, the Company received a letter from BDO Seidman, LLP advising the
Company that it was resigning as the Company’s independent registered public
accounting firm. This resignation became effective on October 24, 2005 upon
the
engagement of Marcum & Kliegman LLP. The audit reports issued by BDO
Seidman, LLP on the consolidated financial statements of the Company as of
and
for the years ended December 31, 2004 and 2003 did not contain an adverse
opinion or a disclaimer of opinion, nor were they qualified or modified as
to
uncertainty, audit scope, or accounting principles.
During
the Company’s fiscal years ended December 31, 2004 and 2003 and the subsequent
interim period from January 1, 2005 through October 24, 2005, there were no
disagreements with BDO Seidman, LLP on any matter of accounting principles
or
practices, financial statement disclosure, or auditing scope or procedure,
which
disagreements, if not resolved to the satisfaction of BDO Seidman, LLP, would
have caused it to make reference to the subject matter of the disagreement
in
connection with its report on the Company’s consolidated financial
statements
During
the Company’s fiscal years ended December 31, 2004 and 2003 and the subsequent
interim period from January 1, 2005 through October 24, 2005, there were no
“reportable events” (as defined in Item 304(a)(1)(v) of Regulation S-K) except
those material weaknesses in the Company’s internal controls described in (i)
Item 9A of the Company’s Form 10-K for the fiscal year ended December 31, 2004
related to certain accounting procedures, and (ii) Item 9A of the Company’s Form
10-K/A for the fiscal year ended December 31, 2003 related to reconciliation
and
review of accounts payable and review of slow moving inventories. The Audit
Committee discussed the subject matter of these reportable events with BDO
Seidman, LLP and the Company has authorized BDO Seidman, LLP to respond fully
to
the inquiries of the successor independent registered public accounting firm
regarding the subject matter of each such reportable event.
During
the Company’s fiscal years ended December 31, 2004 and 2003, and for the interim
period through June 30, 2005, neither the Company nor any person acting on
its
behalf has consulted with Marcum & Kliegman, LLP regarding: (i) either the
application of accounting principles to a specified transaction, either
completed or proposed; or the type of audit opinion that might be rendered
on
the Company’s financial statements, and either a written report was provided to
the Company or oral advice was provided that Marcum & Kliegman LLP concluded
was an important factor considered by the Company in reaching a decision as
to
the accounting, auditing or financial reporting issue; or (ii) any matter that
was the subject of a disagreement (as defined in Item 304 (a)(1)(iv) of
Regulation S-K and the instructions to Item 304) or that constituted a
reportable event (as described in Item 304 (a)(1)(v) of Regulation S-K) with
respect to the Company’s financial statements.
Although
the submission of the appointment of Marcum & Kliegman LLP is not required
by the By-Laws of the Company, the Board is submitting it to the stockholders
to
ascertain their views. If the stockholders do not ratify the appointment, the
Audit Committee will not be bound to seek other independent registered public
accountant for 2006, but the selection of other independent registered public
accountants will be considered in future years.
16
Audit
and Other Fees Paid to Marcum & Kliegman LLP
As
discussed above, Marcum & Kliegman LLP was engaged as the Company’s
independent registered public accounting firm effective as of October 24, 2005.
The following table presents fees billed by Marcum & Kliegman LLP for
professional services rendered for the interim period from October 24, 2005
through December 31, 2005.
| Services Rendered |
Interim
Period
October
24 -
December
31, 2005
|
|||
|
|
||||
| Audit Fees | $ | 29,000 | ||
| Audit-Related Fees | $ | -- | ||
| Tax Fees | $ |
--
|
||
| All Other Fees | $ | -- | ||
Audit
and Other Fees Paid to BDO Seidman, LLP
As
discussed above, BDO Seidman, LLP resigned as the Company’s independent
registered public accounting firm effective as of October 24, 2005. The
following table presents fees billed by BDO Seidman, LLP for professional
services rendered in the fiscal year ended December 31, 2004 and the interim
period from January 1, 2005 through October 24, 2005.
| Services Rendered | Interim
Period
January
1 -
October 24,
2005
|
Fiscal
2004
|
|||||
| Audit Fees | $ | 237,500 | $ | 196,463 | |||
| Audit-Related Fees | $ | 36,500 | $ | 35,060 | |||
| Tax Fees | $ | 101,212 | $ | 61,300 | |||
| All Other Fees | $ | -- | $ | -- | |||
Audit
Fees
The
audit
fees are billed for professional services rendered for the audit of the
Company’s annual financial statements, the reviews of the financial statements
included in the Company’s Quarterly Reports on Form 10-Q, consents to
incorporate audited financial statements into registration statements related
to
the Company’s employee benefit plans, and assistance with earnings announcements
on Form 8-K.
Audit-Related
Fees
The
audit-related fees for fiscal years 2004 and 2005 consisted principally of
audits of the Company’s pension and 401(k) plans.
Tax
Fees
Tax
fees
for fiscal years 2004 and 2005 consisted principally of preparing the Company’s
U.S. federal and state income tax returns, preparing tax returns for certain
executive officers of the Company and assisting the Company in the preparation
of certain amended federal returns and carryback claims.
The
Audit
Committee has reviewed the non-audit services currently provided by the
Company’s independent auditors and has considered whether the provision of such
services is compatible with maintaining the independence of such independent
auditors. Based on such review and consideration, the Audit Committee has
17
determined
that the provision of such non-audit services is compatible with maintaining
the
independence of the independent auditors.
Pre-Approval
Policy for Services by Independent Registered Public
Accountants
The
Audit
Committee has implemented pre-approval policies and procedures for the
engagement of the Company’s independent registered public accountants for both
audit and permissible non-audit services. Under these policies and procedures,
all services provided by the independent registered public accountants must
either (i) be approved by the Audit Committee prior to the commencement of
the
services, (ii) relate to assisting the Company with tax audits and appeals
before a taxing authority or be services associated with periodic reports or
registration statements filed by the Company with the Commission, all of which
services are pre-approved by the Audit Commmittee, or (iii) be a de minimis
non-audit service (as described in Rule 2-01(c)(7)(C) of Regulation S-X) that
does not have to be pre-approved as long as management promptly notifies the
Audit Committee of such service and the Audit Committee approves it prior to
the
service being completed. Within these parameters, the Audit Committee annually
approves the scope and fees payable for the year end audit, statutory audits
and
employee benefit plans to be performed by the independent registered public
accountants for the next fiscal year. The Audit Committee has also delegated
pre-approval authority for permissible non-audit services to the Chairman of
the
Audit Committee. Any approvals of non-audit services made by the Chairman of
the
Audit Committee are then reported by him at the next Audit Committee meeting.
All of the services provided by Marcum & Kliegman LLP or BDO Seidman, LLP
during fiscal year 2005 were approved in accordance with the Company’s
pre-approval policies and procedures.
Recommendation
of the Board Concerning the Ratification of Appointment of Independent
Registered Public Accountants
The
Board of Directors of the Company recommends that stockholders vote FOR the
ratification of the appointment of Marcum & Kliegman LLP as the Company’s
independent registered public accountants for the 2006 fiscal year. Proxies
received by the Board of Directors will be so voted unless stockholders specify
in their proxies a contrary choice.
OTHER
BUSINESS
Management
knows of no other matters that will be presented at the Annual Meeting of
Stockholders. However, if any other matter properly comes before the meeting,
or
any adjournment or postponement thereof, it is intended that proxies in the
accompanying form will be voted in accordance with the judgment of the persons
named therein.
STOCKHOLDER
PROPOSALS
Director
Nominations at the 2006 Annual Meeting
The
Company’s bylaws require advanced notice of any stockholder proposal for
nomination for the election of a director. Notice of any such stockholder
proposal must be received by the
Company’s Secretary at One Jake Brown Road, Old Bridge, New Jersey 08857 not
less than sixty (60) days prior to the date of the scheduled annual meeting,
regardless of any postponement, deferrals or adjournments of that meeting to
a
later date, however, if less than seventy (70) days’ notice of the date of the
scheduled annual meeting is given, then to be timely, such notice must be
received not later than the close of business on the tenth (10th)
day
following the date notice of the scheduled annual meeting was mailed.
Accordingly, any stockholder who wishes to have a director nomination considered
at the 2006 Annual Meeting must deliver notice to the Secretary no later than
the close of business on May 5, 2006. Any proposal received after such date
will
be considered untimely.
18
Stockholder
Proposals for Inclusion in 2007 Proxy Statement
Stockholder
proposals intended to be included in the Company’s proxy statement for
presentation at the 2007 Annual Meeting of Stockholders pursuant to Rule 14a-8
of the Securities Exchange Act of 1934, as amended, must be received by the
Company’s Chief Financial Officer at One Jake Brown Road, Old Bridge, New Jersey
08857 on or before December 26, 2006, to be eligible for inclusion in such
proxy
statement.
Shareholder
Proposals for Presentation at the 2007 Annual Meeting
Other
than a proposal for nomination for the election of a director which is subject
to the advance notice requirements described above, if notice of a stockholder
proposal intended to be presented at the 2007 Annual Meeting of Stockholders
is
not received by the Company on or before March 11, 2007 (whether or not the
stockholder wishes the proposal to be included in the proxy statement for such
annual meeting), the Company (through management proxy holders) may exercise
discretionary voting authority on such proposal when and if the proposal is
raised at the annual meeting without any reference to the matter in the proxy
statement.
FORM
10-K
A
COPY OF
THE COMPANY’S ANNUAL REPORT ON FORM 10-K FOR THE FISCAL YEAR ENDED DECEMBER 31,
2005 ACCOMPANIES THIS PROXY STATEMENT. THE COMPANY WILL FURNISH TO EACH PERSON
WHOSE PROXY IS BEING SOLICITED, UPON WRITTEN REQUEST, ANY EXHIBIT DESCRIBED
IN
THE LIST ACCOMPANYING THE FORM 10-K, UPON THE PAYMENT, IN ADVANCE, OF REASONABLE
FEES RELATED TO THE COMPANY’S FURNISHING SUCH EXHIBIT(S). REQUESTS FOR COPIES OF
SUCH EXHIBIT(S) SHOULD BE DIRECTED TO ERIC SKOLNIK, CHIEF FINANCIAL OFFICER,
AT
THE COMPANY’S PRINCIPAL ADDRESS AS SHOWN ON THE COVER PAGE OF THIS PROXY
STATEMENT.
| By Order of the Board of Directors | |
| James A. Luksch | |
| Chairman of the Board and | |
| Chief Executive Officer |
Date:
April 25, 2006
Old
Bridge, New Jersey
19
ANNUAL
MEETING OF STOCKHOLDERS OF
BLONDER
TONGUE LABORATORIES, INC.
May
24, 2006
Please
date, sign and mail
your
proxy card in the
envelope
provided as soon
as
possible.
n
Please
detach
along perforated line and mail in the envelope provided. n
THE
BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR ALL NOMINEES” FOR THE ELECTION OF
DIRECTORS AND “FOR” PROPOSAL 2. PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE
ENCLOSED ENVELOPE. PLEASE MARK YOUR VOTE IN BLUE OR BLACK INK AS SHOWN HERE:
x
|
1.
Election
of two Class II Directors to hold office until the 2009
Annual
Meeting
of Stockholders or until their successors have been elected and
qualified.
|
2.
Proposal
to ratify the appointment of Marcum & Kliegman LLP as the independent
registered public accountants for the fiscal year ending December
31,
2006.
|
FOR AGAINST ABSTAIN
|
|||||||||
|
FOR
ALL NOMINEES
WITHHOLD
AUTHORITY
FOR
ALL NOMINEES
FOR
ALL EXCEPT
(See
instructions below)
|
Nominees:
¡
Robert J. Pallé, Jr.
¡
Gary P. Scharmett
|
In
their discretion, the Proxies are authorized to vote upon such
other
matters as may properly come before the meeting and at any postponements
or adjournments thereof.
|
|||||||||
|
INSTRUCTIONS:
To withhold authority to vote for any individual nominee(s), mark
“FOR
ALL EXCEPT” and fill in the circle
next to each nominee you wish to
withhold,
as shown here: l
|
This
proxy when properly executed will be voted in the manner directed
by the
stockholder. If no direction is made on this Proxy Card, this Proxy
will
be voted FOR the election
of all nominees to serve as Class II Directors, FOR proposal 2
and in
accordance with the instructions of the Board of Directors on all
other
matters which may properly come before the
meeting.
|
||||||||||
|
To
change the address on your account, please check the box at right
and
indicate your new address in the address space below. Please note
that
changes to the registered name(s) on the account may not be submitted
via
this method.
Address:
_______________________________________________________
_______________________________________________________
|
PLEASE
MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY USING THE
ENCLOSED
ENVELOPE.
|
||||||||||
| Signature | Dated: | , 2006 | ||||
|
Signature
if held jointly
|
||||||
|
NOTE:
|
Please
sign exactly as name appears above. When shares are held by
joint tenants,
both stockholders 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. If a partnership, please sign in partnership’s name by
authorized person.
|
|||||
BLONDER
TONGUE LABORATORIES, INC.
One
Jake Brown Road
Old
Bridge, NJ 08857
PROXY
CARD FOR ANNUAL MEETING OF STOCKHOLDERS
MAY
24, 2006
This
Proxy is being solicited on behalf of the Board of
Directors
The
Undersigned hereby appoints James A. Luksch and Robert J. Pallé, Jr., and either
of them (with full power to act alone), as Proxies of the undersigned, each
with
the power to appoint his substitute, and hereby authorizes them to represent
and
to vote, as designated on this Proxy Card, all shares of Common Stock of
Blonder Tongue Laboratories, Inc. (the “Company”) held of record by the
undersigned on the record date of March 31, 2006, at the Annual Meeting of
Stockholders to be held on May 24, 2006 and at any postponements
or adjournments thereof, all as in accordance with the Notice of Annual
Meeting of Stockholders and Proxy Statement furnished with this
Proxy.
(CONTINUED
AND TO BE SIGNED ON REVERSE SIDE)