SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
File No. 0-10772
[X] Filed by the Registrant
[ ] 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-16(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Exchange Act Rule 14a-11 or 14a-12
ESSEX CORPORATION
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11
1) Title of each class of securities to which transaction applies:
N/A
2) Aggregate number of securities to which transaction applies:
N/A
3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11:(1)
N/A
4) Proposed maximum aggregate value of transaction:
N/A
5) Total fee paid:
N/A
[ ] 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 No.
3) Filing party:
4) appointment filed:
(1)Set forth the amount on which the filing fee is calculated and state how it
was determined.
ESSEX CORPORATION
Fellow Stockholder:
You are cordially invited to attend our Annual Meeting of Stockholders
of Essex Corporation to be held at THE GREAT ROOM AT HISTORIC SAVAGE MILL, 8600
FOUNDRY STREET, SAVAGE, MARYLAND on Wednesday, July 23, 2003 at 10:00 a.m. We
invite you to arrive at 9:30 a.m. to visit with Essex Senior Management. A
continental breakfast will be served.
As discussed in this Proxy Statement, the matters to be acted on at the
Annual Meeting are: the election of directors and the ratification of the
appointment of independent auditors. Additionally, there will be a presentation
reviewing the Company's performance in 2002 and 2003. There will also be an
opportunity for stockholders to present questions to management and to a
representative of the Company's independent auditors. We hope you will be able
to attend.
On June 4, 2003, Essex was listed on the American Stock Exchange (Amex)
using the symbol "EYW." We have enclosed a FAQ (Frequently Asked Questions)
sheet concerning the listing. Please let us know if you have additional
questions.
The Company's Annual Report on Form 10-KSB for the fiscal year ended
December 29, 2002, including the financial statements, is enclosed. Such report
and financial statements are not a part of this Proxy Statement.
Whether or not you plan to attend, we hope that your shares of stock
will be represented and voted at the Annual Meeting. You can accomplish this by
completing, signing, dating and promptly returning your proxy in the enclosed
envelope. PLEASE MARK YOUR PROXY CARD CAREFULLY.
YOUR STOCK WILL BE VOTED IN ACCORDANCE WITH THE INSTRUCTIONS YOU HAVE
GIVEN IN YOUR PROXY. IF YOU ARE A STOCKHOLDER OF RECORD AND ARE PRESENT AT THE
ANNUAL MEETING, YOU MAY WITHDRAW YOUR PROXY AND CAST YOUR BALLOT IN PERSON AT
THAT TIME IF YOU SO DESIRE.
Respectfully yours,
/s/ Leonard E. Moodispaw
Leonard E. Moodispaw
PRESIDENT & CHIEF EXECUTIVE OFFICER
Columbia, Maryland
June 25, 2003
ESSEX CORPORATION
9150 Guilford Road
Columbia, Maryland 21046
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
Notice is hereby given that the Annual Meeting of Stockholders of Essex
Corporation (the "Company"), a Virginia corporation, will be held at 10:00 a.m.,
Wednesday, July 23, 2003, at The Great Room at Historic Savage Mill, Savage,
Maryland, for the following purposes:
1. To elect nine (9) directors to serve until the next Annual Meeting of
Stockholders or until their successors are duly elected and qualified;
2. To ratify the appointment of independent auditors; and
3. To transact such other business as may properly come before the Annual
Meeting.
Your attention is directed to the accompanying Proxy Statement for
further information with respect to the matters to be acted upon at the Annual
Meeting.
The Board of Directors has fixed the close of business on June 3, 2003
as the record date for the determination of stockholders entitled to notice of,
and to vote at, the Annual Meeting. The stock transfer books will not be closed.
The approximate date on which the Proxy Statement and form of Proxy are
first sent or given to shareholders is June 25, 2003.
Please indicate your vote, date and sign the enclosed proxy card and
promptly return it in the enclosed pre-addressed envelope. The prompt return of
proxies will assure a quorum and reduce solicitation expenses. If you are a
stockholder of record and are personally present at the Annual Meeting and wish
to vote your shares in person, even after returning your proxy, you still may do
so.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Kimberly J. DeChello
KIMBERLY J. DECHELLO
SECRETARY
Columbia, Maryland
June 25, 2003
ESSEX CORPORATION
9150 Guilford Road
Columbia, Maryland 21046
PROXY STATEMENT FOR ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JULY 23, 2003
The enclosed proxy is furnished to the holders of common stock, no par
value (the "Common Stock"), of Essex Corporation (the "Company") and is
solicited by the Board of Directors of the Company for use at the Annual Meeting
of Stockholders to be held on July 23, 2003 and at any adjournments thereof (the
"Annual Meeting"). The approximate date on which the Notice of Annual Meeting,
Proxy Statement and proxy card are first sent or given to stockholders is June
25, 2003.
The shares represented by all properly executed proxies will be voted
at the Annual Meeting in accordance with instructions thereon. If no
instructions are indicated, the proxy will be voted FOR the nominees for
director listed on the proxy and also listed under the caption "Proposal 1"
herein and FOR ratification of appointment of independent auditors, "Proposal
2". The Company's Board of Directors recommends that the stockholders vote in
favor of each of the proposals. All valid proxies obtained will be voted at the
discretion of the Board of Directors with respect to any other business that may
come before the Annual Meeting.
The Board of Directors has fixed the close of business on June 3, 2003
as the record date (the "Record Date") for the determination of stockholders
entitled to notice of, and to vote at, the Annual Meeting and any adjournment
thereof.
As of the Record Date, there were outstanding 8,920,547 shares of the
Common Stock. Holders of shares of Common Stock of record as of the close of
business on the Record Date will be entitled to vote at the Annual Meeting.
Holders of Common Stock are entitled to one vote on all matters presented at the
meeting for each share held of record. The presence in person or by proxy of
holders of record of at least one-third of the shares outstanding as of the
Record Date shall be required for a quorum to transact business at the Annual
Meeting. If a quorum should not be present, the Annual Meeting may be adjourned
from time to time until a quorum is obtained. The nominees to be selected as
directors named in Proposal 1 must receive a plurality of the votes cast at the
Annual Meeting with respect to Proposal 1. The approval of all other matters to
be considered at the Annual Meeting requires the affirmative vote of a majority
of the votes cast at the Annual Meeting on each specific matter. Abstentions and
broker non-votes will be counted only for the purpose of determining the
existence of a quorum.
Proxies may be revoked before they are voted at the Annual Meeting by
giving written notice of revocation to the Secretary, by submission of a proxy
bearing a later date, or by attending the Annual Meeting in person and voting by
ballot.
The cost of preparing and mailing this Proxy Statement and the
accompanying proxy card will be borne by the Company and the Company will pay
the cost of soliciting proxies. In addition to
1
solicitation by mail, certain officers and regular employees of the Company and
employees of the Company's Transfer Agent may solicit the return of proxies by
telephone, telegram or in person. The Company will also reimburse brokers,
nominees and other fiduciaries for their expenses in forwarding solicitation
materials to the beneficial owners of Common Stock and soliciting them to
execute proxies.
Any document referenced in this Proxy Statement is available without
charge to any stockholder of record upon request. All requests shall be made
either in writing, and directed to the Company at its main office address, 9150
Guilford Road, Columbia, MD 21046, or orally and directed to the Secretary at
301-939-7000.
2
VOTING SECURITIES AND PRINCIPAL HOLDERS
GENERAL
The voting securities of the Company consist of Common Stock. On the
Record Date there were 8,920,547 shares of Common Stock outstanding. Each share
of Common Stock is entitled to one vote on each matter to be acted upon at the
Annual Meeting.
VOTING SECURITIES
The following table and accompanying notes set forth as of the Record
Date information with respect to the beneficial ownership of the Company's
voting securities by (i) each person or group who beneficially owns more than 5%
of the securities, (ii) each of the Directors of the Company (iii) each of the
officers of the Company named in the Summary Compensation Table, and (iv) all
Directors and executive officers of the Company as a group.
Percentage of
Outstanding Shares of
Name and Address of Amount and Nature of Common Stock
Beneficial Owner * Beneficial Ownership (1) Beneficially Owned
----------------------------------- ---------------------------- -------------------------
H. Jeffrey Leonard (2) 1,670,515 18.7
Marie S. Minton (3) 1,614,866 18.1
John G. Hannon (4) 1,549,498 17.0
Terry M. Turpin (5) 475,793 5.2
Leonard E. Moodispaw (6) 422,650 4.6
Joseph R. Kurry, Jr. (7) 213,609 2.4
Matthew S. Bechta (8) 140,137 1.6
Frank E. Manning (9) 124,775 1.4
Craig H. Price (10) 115,978 1.3
Robert W. Hicks (11) 71,700 **
Ray M. Keeler (12) 46,500 **
Arthur L. Money (13) 10,000 **
James P. Gregory (14) 1,614,866 18.1
Harry Letaw, Jr. (15) 669,859 7.5
James A. Katra(16) 470,571 5.3
GEF Optical Investment
Company, LLC ("GEF")(17) 1,614,866 18.1
Global Environment Capital
Co., LLC ("GECC") (17) 1,614,866 18.1
Global Environment Strategic
Technology Partners, L.P.
("GESTP") (17) 1,614,866 18.1
The Hannon Family LLC (18) 1,538,973 16.9
All Directors and Executive
Officers as a Group
(16 persons)(19) 5,383,495 52.3
3
* Except as noted below, all beneficial owners are directors and/or
officers of the Company and can be reached c/o Essex Corporation, 9150
Guilford Road, Columbia, MD 21046.
** Less than 1%.
(1) The shares listed above include options and rights to acquire shares
exercisable within sixty (60) days and shares held of record by the Essex
Corporation Retirement Trust as to which shares the respective
participant has disposition and voting rights. The percentage ownership
is computed based upon the number of shares which would be outstanding if
such options and rights were exercised.
(2) H. Jeffrey Leonard is Chairman of the Board of the Company and a director
of the managing member of GEF. Of the shares of Common Stock shown as
beneficially owned, 55,649 are owned directly by Mr. Leonard. In
addition, 1,614,866 shares of Common Stock may be deemed to be
beneficially owned by Mr. Leonard as described in footnotes (17) and (20)
below. Mr. Leonard's address is c/o GEF, 1225 Eye Street, N.W., Suite
900, Washington, DC 20005.
(3) Marie S. Minton is a Director of the Company and a director of the
managing member of GEF. Ms. Minton may be deemed to be the beneficial
owner of these shares by virtue of the arrangements described in
footnotes (17) and (20) below. Ms. Minton's address is c/o GEF, 1225 Eye
Street, N.W., Suite 900, Washington, DC 20005.
(4) John G. Hannon is a Director of the Company. Of the shares of Common
Stock shown as beneficially owned, 10,525 are owned directly by Mr.
Hannon. In addition, 1,538,973 shares of Common Stock may be deemed to be
beneficially owned by Mr. Hannon as described in footnote (18) below.
(5) Terry M. Turpin is a Director, Senior Vice President and Chief Scientist
of the Company. Of the shares shown as beneficially owned, 197,100
represent presently exercisable rights to acquire Common Stock through
stock options.
(6) Leonard E. Moodispaw is President, Chief Executive Officer and a Director
of the Company. Of the shares shown as beneficially owned, 365,000
represent presently exercisable rights to acquire Common Stock through
stock options.
(7) Joseph R. Kurry, Jr. is Senior Vice President, Treasurer and Chief
Financial Officer of the Company. Of the shares shown as beneficially
owned, 173,500 represent presently exercisable rights to acquire Common
Stock through stock options.
(8) Matthew S. Bechta is Vice President of the Company. Of the shares shown
as beneficially owned, 95,900 represent presently exercisable rights to
acquire Common Stock through stock options.
(9) Mr. Manning is the Chairman Emeritus and a Director of the Company. Of
the shares shown as beneficially owned, 42,000 represent presently
exercisable rights to acquire Common Stock through stock options. Does
not include 37,000 shares of the Company's Common Stock owned of record
and beneficially by Mrs. Eva L. Manning, wife of Mr. Frank E. Manning.
Also does not include 94,500 shares beneficially owned by separate family
trusts of which Mrs. Manning is the sole trustee and over which trusts
she has exclusive voting and dispositive power.
(10)Craig H. Price is Vice President of the Company. Of the shares shown as
beneficially owned, 100,750 represent presently exercisable rights to
acquire Common Stock through stock options.
(11)Robert W. Hicks is a Director of the Company. Of the shares shown as
beneficially owned, 31,500 represent presently exercisable rights to
acquire Common Stock through stock options.
(12)Ray M. Keeler is a Director of the Company. Of the shares shown as
beneficially owned, 32,500 represent presently exercisable rights to
acquire Common Stock through stock options.
(13)Arthur L. Money is a Director of the Company. Of the shares shown as
beneficially owned, 10,000 represent presently exercisable rights to
acquire Common Stock through stock options.
(14)James P. Gregory is a director of the managing member of GEF. Mr. Gregory
may be deemed to be the beneficial owner of these shares by virtue of the
arrangements described in footnotes (17) and (20) below. Mr. Gregory's
address is c/o GEF, 1225 Eye Street, N.W., Suite 900, Washington, DC
20005.
(15)Dr. Harry Letaw, Jr. is the former Chairman of the Board and Chief
Executive Officer of the Company. His address is 1023 Benfield Boulevard,
Millersville, MD 21108.
(16)Prior to its acquisition by Essex, Mr. Katra was Executive Vice President
and Chief Financial Officer and a founding shareholder of our
wholly-owned subsidiary, Sensys Development Laboratories, Inc. ("SDL")
and is currently employed by SDL. Of the shares shown as beneficially
owned, 30,969 are owned jointly by Mr. Katra and his spouse.
4
(17)Consists of 1,330,000 shares of Common Stock directly owned by GEF. Also
consists of (i) 118,200 shares of Common Stock directly owned by GECC and
(ii) 166,666 shares of Common Stock directly owned by GESTP. See footnote
(20) below. GEF is a Delaware limited liability company with its
principal executive offices located at 1225 Eye Street, N.W., Suite 900,
Washington, DC 20005.
(18)Consists of 1,346,666 shares directly held by The Hannon Family LLC and
192,307 exercisable options. Mr. John G. Hannon is the managing person of
this entity.
(19)Of the shares shown as beneficially owned, 1,369,825 represent presently
exercisable rights to acquire Common Stock through stock options.
(20)The Company has been advised that each of GEF, GECC, GESTP, Mr. Leonard,
Ms. Minton and Mr. Gregory may be deemed the beneficial owner of
1,614,866 shares of Common Stock directly held for the account of GEF.
THE BOARD OF DIRECTORS AND COMMITTEES
The Company's Directors generally meet quarterly. Additionally, the
By-Laws provide for special meetings and, as also permitted by Virginia law,
Board action may be taken without a meeting upon unanimous written consent of
all Directors. Board members who are not employed by the Company receive a
maximum of $1,500 for each Board meeting or $750 for each Board Committee
Meeting attended. In 2002 the Board held three meetings; the entire membership
of the Board was present at all of the meetings except one where one director
was absent. Board members who are affiliated with GEF or The Hannon Family LLC
have waived any board fees.
The Board of Directors has three standing Committees: the Audit
Committee, the Ethics Committee and the Compensation Committee. The Audit
Committee is vested with the following duties and powers: (1) to recommend to
the Board the independent public accountants to audit the books and records of
the Company; (2) to review the recommendations of the independent public
accountants with respect to accounting methods and internal controls, and to
advise the Board with respect thereto; (3) to examine the scope and extent of
the audit conducted by the independent public accountants and to advise the
Board with respect thereto; and (4) such other functions and responsibilities as
may be assigned by the Board. Mr. Robert W. Hicks, Mr. Ray M. Keeler and Ms.
Marie S. Minton were members of the Audit Committee and held four meetings in
2002. One member was absent from two of the four meetings.
The Compensation Committee recommends to the Board of Directors
compensation, including incentive compensation, for principal executives of the
Company. Membership during 2002 consisted of Mr. John G. Hannon, Mr. Ray M.
Keeler and Mr. Frank E. Manning. The Committee was consulted on several matters;
however, the Board as a whole discussed all issues concerning compensation. The
Compensation Committee held one meeting in 2002 and all members were present.
5
AUDIT COMMITTEE REPORT
The Audit Committee consists of Messrs. Hicks, Keeler and Ms. Minton.
Messrs. Hicks and Keeler meet the current independence and experience
requirements applicable to small business issuers of Rule 121 of the American
Stock Exchange. The Audit Committee's responsibilities are as described in a
written Charter adopted by the Board of Directors.
In performing its oversight responsibilities, the Audit Committee has
reviewed and discussed the Company's 2002 audited financial statements with the
Company's management. The Audit Committee also has discussed with the
independent auditors, Stegman & Company, the matters required to be discussed by
Statement on Auditing Standards No. 61, COMMUNICATIONS WITH AUDIT COMMITTEES,
which include, among other items, matters related to the conduct of the audit of
the Company's consolidated financial statements.
The Audit Committee has received written disclosures and the letter
from the independent auditors required by the Independence Standards Board
Standard No. 1, INDEPENDENCE DISCUSSIONS WITH AUDIT COMMITTEES (which relates to
the auditor's independence from the corporation and its related entities) and
has discussed with the auditors their independence from the Company.
Based on these reviews and discussions, the Audit Committee recommended
to the Board of Directors that the Company's 2002 audited financial statements
be included in the Company's Annual Report on Form 10-KSB.
The members of the Audit Committee are not professionally engaged in
the practice of accounting or auditing and are not experts in the fields of
accounting or auditing, including in respect of accountant's independence.
Members of the Audit Committee rely without independent verification on the
information provided to them and on the representations made by management and
the independent auditors. Accordingly, the Audit Committee's oversight does not
provide an independent basis to determine that management has maintained
appropriate accounting and financial reporting principles or appropriate
internal controls and procedures designed to assure compliance with accounting
standards and applicable laws and regulations. Furthermore, the Audit
Committee's considerations and discussions do not assure that the audit of the
Company's financial statements has been carried out in accordance with auditing
standards generally accepted in the United States of America, that the financial
statements are presented in accordance with accounting principles generally
accepted in the United States of America or that the Company's independent
auditors are in fact "independent."
Audit Committee
Robert W. Hicks, Chairman
Ray M. Keeler
Marie S. Minton
6
SUMMARY COMPENSATION TABLE
The following table sets forth the aggregate cash compensation paid for
services rendered to the Company during the last three fiscal years by the
Company's Chief Executive Officer and the Company's four other most highly
compensated executive officers who served as such at the end of the last fiscal
year and whose total compensation exceeds $100,000.
==============================================================================================================
LONG-TERM COMPENSATION
ANNUAL COMPENSATION AWARDS
Other Securities
Annual Underlying
Name and Compensation Options/SARs
Principal Position Year Salary($)(1) Bonus ($) ($)(2) (#)
--------------------------------------------------------------------------------------------------------------
Leonard E. Moodispaw 2002 175,032 0 0 30,000
President and CEO 2001 175,032 0 1,616 85,000
2000 136,404 0 0 100,000
Terry M. Turpin 2002 155,064 0 0 20,000
Senior Vice President 2001 155,064 0 4,652 70,000
and Director 2000 134,496 25,000 4,785 52,000
Joseph R. Kurry, Jr. 2002 134,992 0 0 10,000
Treasurer, Senior Vice 2001 134,992 0 4,050 40,000
President and CFO 2000 122,804 15,000 4,134 61,500
Craig H. Price 2002 134,992 0 0 7,500
Vice President 2001 134,992 0 4,050 25,000
2000 114,184 15,000 3,875 27,500
Matthew S. Bechta 2002 130,000 0 0 7,500
Vice President 2001 130,000 0 3,900 25,000
2000 112,840 10,000 3,685 31,000
==============================================================================================================
(1) Includes amounts deferred at the election of the named executive officer
pursuant to Section 401(k) of the Internal Revenue Code ("401(k)").
(2) Represents matching 401(k) contributions made on behalf of the respective
named executive officer pursuant to the Company's Retirement Plan and
Trust. Excludes other perquisites and benefits not exceeding the lesser of
$50,000 or 10% of the named executive officer's total annual salary and
bonus.
7
DEFINED CONTRIBUTION RETIREMENT PLAN
The Company has a qualified defined contribution retirement plan, the
Essex Corporation Retirement Plan and Trust, which includes a 401(k) salary
reduction feature for its employees. The Plan calls for an employer matching
contribution of up to 3% of eligible employee compensation under the salary
reduction feature and a discretionary contribution as determined by the Board of
Directors. The Company made no discretionary contribution to the Retirement Plan
for 1999 - 2002. The total authorized contribution under the matching
contribution feature of the Plan was approximately $78,000 in 2002. All employee
contributions are 100% vested at all times and Company contributions vest based
on length of service. Vested contributions are distributable and benefits are
payable only upon death, disability, retirement or break in service.
Participants may request that their accrued benefits under the Section 401(k)
portion of the Plan be allocated among various investment options established by
the Plan Administrator.
The Company contributions under the Retirement Plan for the persons
referred to in the Summary Compensation Table are included in that Table.
EMPLOYEE INCENTIVE PERFORMANCE AWARD PLAN
The Company has an Employee Incentive Performance Award Plan under
which bonuses are distributed to employees. All employees are eligible to
receive such awards under flexible criteria designed to compensate for superior
division and individual performance during each fiscal year. Awards are
generally recommended annually by management and approved by the Board of
Directors. Such awards may be limited by overall Company performance and the
availability of funds. There was $1000 awarded in 2002 and approximately
$141,000 awarded in 2000, including the $65,000 awarded to persons named in the
Summary Compensation Table.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act") requires the Company's officers and directors, and persons who
own more than ten percent of a registered class of the Company's equity
securities (the "Reporting Persons"), to file reports of ownership and changes
in ownership of equity securities of the Company with the Securities and
Exchange Commission ("SEC"). Officers, directors, and greater than ten percent
shareholders are required by SEC regulations to furnish the Company with copies
of all Section 16(a) forms that they file.
Based solely upon a review of Forms 3 and Forms 4 furnished to the
Company pursuant to Rule 16(a)-3 under the Exchange Act during its most recent
fiscal year and Forms 5 with respect to its most recent fiscal year, the Company
believes that all such forms required to be filed pursuant to Section 16(a) of
the Exchange Act were timely filed by the Reporting Persons during the fiscal
year ended December 29, 2002, other than one filing each by Mr. Gregory, Mr.
Hannon, Mr. Leonard, Ms. Minton and Ms. Pisano.
8
OPTIONS TO PURCHASE SECURITIES
The Company has established Essex Corporation Stock Option and
Appreciation Rights Plans (the "Plans"). These Plans provide for the grant of
options to purchase shares of common stock of the Company, no par value per
share (the "Common Stock"), which qualify as incentive stock options ("Incentive
Options") under Section 422 of the Internal Revenue Code of 1986, as amended
(the "Code"), to persons who are employees, as well as options which do not so
qualify ("Non-Qualified Options") to be issued to employees and persons who are
not employees, including directors and consultants. These Plans also provide for
grants of stock appreciation rights ("SARs") in connection with the grant of
options under these Plans. The exercise price of an Incentive Option under these
Plans may not be less than the "fair market value" of the shares of Common Stock
at the time of grant; the exercise price of Non-Qualified Options and the
appreciation base price of SARs are determined at the discretion of the Board of
Directors except that the SAR appreciation base price may not be less than 50%
of the fair market value of a share of Common Stock on the grant date with
respect to awards to persons who are officers or directors of the Company. These
Plans reserve 1,859,118 shares of Common Stock for issuance. As of June 3, 2003,
there were 334,400 shares available for future grants of options or SARs under
the Plans.
The Company grants non plan non-qualified options from time to time
directly to certain parties. In 2001, the Company issued such options for 85,000
shares to its President and 40,000 to its Chief Financial Officer/Treasurer. In
addition, another 45,000 shares were issued to an employee of the company. There
were no grants of non plan non-qualified options in 2002.
The following table shows for the fiscal year ended December 29, 2002
for the persons named in the Summary Compensation Table, information with
respect to options to purchase Common Stock granted during 2002.
STOCK OPTIONS GRANTS
IN FISCAL YEAR ENDED DECEMBER 29, 2002
NUMBER OF
SECURITIES
UNDERLYING % OF TOTAL OPTIONS/
OPTIONS SARS GRANTED TO EXERCISE OR
GRANTED EMPLOYEES IN BASE PRICE EXPIRATION
NAME (#) FISCAL YEAR ($/SH) DATE
==================================================================================================
Leonard E. Moodispaw 30,000 (1) 25.2 2.36 11/12/12
Terry M. Turpin 20,000 (2) 16.8 2.36 11/12/12
Joseph R. Kurry, Jr. 10,000 (1) 8.4 2.36 11/12/12
Craig H. Price 7,500 (1) 6.3 2.36 11/12/12
Matthew S. Bechta 7,500 (1) 6.3 2.36 11/12/12
(1) Such options became exercisable beginning November 13, 2002.
(2) Such options became exercisable beginning January 1, 2004.
9
The following table shows for the fiscal year ended December 29, 2002
for the persons named in the Summary Compensation Table, information with
respect to option/SAR exercises and fiscal year end values for unexercised
options/SARs.
AGGREGATED OPTION/SAR EXERCISES AND
FISCAL YEAR-END OPTION/SAR VALUES
NUMBER OF SECURITIES VALUE OF
UNDERLYING UNEXERCISED UNEXERCISED
OPTIONS AT IN-THE-MONEY
FY-END (#) OPTIONS AT
FY-END($)(1)
SHARES EXERCISABLE/
ACQUIRED ON VALUE UNEXERCISABLE EXERCISABLE/
NAME EXERCISE (#) REALIZED ($) UNEXERCISABLE
====================================================================================================
Leonard E. Moodispaw --- --- 360,500/15,000 386,925/11,850
Terry M. Turpin --- --- 171,100/28,900 134,120/15,800
Joseph R. Kurry, Jr. 1,000 2,150 168,250/5,000 133,002/3,950
5,750 2,588
Craig H. Price --- --- 102,250/3,750 76,763/2,963
Matthew S. Bechta 3,000 12,420 95,900/3,750 79,695/2,963
(1) Market value of underlying securities based on the closing price of the
Company's Common Stock on December 27, 2002 (last trading day of fiscal
2002) on the OTC Bulletin Board system of $3.15 minus the exercise price.
EQUITY COMPENSATION PLAN INFORMATION
The following table sets forth information as of December 29, 2002 with
respect to compensation plans under which equity securities of the Company are
authorized for issuance.
NUMBER OF SECURITIES TO WEIGHTED AVERAGE EXERCISE NUMBER OF SECURITIES
BE ISSUED UPON EXERCISE PRICE OF OUTSTANDING REMAINING AVAILABLE FOR
OF OUTSTANDING OPTIONS, OPTIONS, WARRANTS AND FUTURE ISSUANCE
PLAN CATEGORY WARRANTS AND RIGHTS RIGHTS [EXCLUDING COLUMN (A)]
(A) (B) (C)
------------------------------- --------------------------- ---------------------------- ---------------------------
EQUITY COMPENSATION PLANS
APPROVED BY SECURITY HOLDERS 1,462,218 $3.41 466,900
EQUITY COMPENSATION PLANS NOT
APPROVED BY SECURITY HOLDERS 436,500 $2.98 47,550
(1)
--------------------------- ---------------------------
TOTAL 1,898,718 514,450
(1) Represents shares of common stock underlying stock options, warrants and
rights issued outside of any formal plan.
10
PROPOSAL 1 -- ELECTION OF DIRECTORS
At the Annual Meeting, nine (9) directors of the Company will be
elected, each to hold office until the next Annual Meeting of Stockholders or
until their respective successors shall have been duly elected and qualified.
Each of the nominees named below has consented to serve if elected. In case any
of the nominees is not a candidate for director at the Annual Meeting, an event
which management does not anticipate, it is intended that the enclosed proxy
will be voted for substitute nominee, if any, designated by the Board of
Directors and nominated by a person named in the proxy, unless the authority to
vote for the management nominee(s) is withheld in the proxy.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR APPROVAL
OF THE ELECTION OF EACH OF THE NOMINEES FOR DIRECTOR.
DIRECTORS
JOHN G. HANNON, age 66, was elected a Director of the Company in
September 2000. Since April 2000 Mr. Hannon has been a private investor and
consultant to technology companies in the expanding optical and information
security sector. From 1979 to March 2000, Mr. Hannon served as the Chief
Executive Officer of Pulse Engineering, Inc. an information security and signals
processing company which was sold in March 2000. Mr. Hannon started his business
career in 1963 after serving in the United States Marine Corps. Since that time,
he has been involved in numerous entrepreneurial ventures. He is a Director of
the Armed Forces Communications and Electronics Association (AFCEA).
ROBERT W. HICKS, age 65, was elected a Director of the Company in
August 1988. He has been an independent consultant since 1986. During this
period he was engaged for three and one-half years by the State of Maryland
Deposit Insurance Fund Corporation, Receiver of several savings and loan
associations, first as an Agent and then as a Special Representative (both
court-approved positions). He was a principal officer and stockholder in Asset
Management & Recovery, Inc., a consulting firm which primarily provided
services, directly and as a subcontractor, to the Resolution Trust Corporation
and law firms engaged by the Resolution Trust Corporation. Mr. Hicks is also a
Director and the Corporate Secretary of the Kirby Lithographic Company, Inc. In
1998, he formed Hicks Little Company, LLC for the purpose of conducting
consulting activity.
RAY M. KEELER, age 72, was elected a Director of the Company in July
1989. Since 1986, he has been an independent consultant to both industry and
government organizations in areas related to national and tactical intelligence
programs. Mr. Keeler served on the Board of Directors of System Engineering and
Development Corporation ("SEDC") from December 1987 through April 1989. From
1988 to November 1995, he was President of CRYTEC, Inc., a service company
providing management, business development and technical support to companies
involved in classified cryptologic projects. Since December 1995, he has been a
consultant to companies involved in national technical intelligence programs.
From 1982 to 1986, Mr. Keeler was Director of Program and Budget for the NSA. He
received a Bachelor of Arts degree from the University of Wisconsin-Madison in
1957.
11
H. JEFFREY LEONARD, age 49, was elected a Director of the Company in
September 2000 and Chairman of the Board in December 2000. Dr. Leonard is the
President and founding shareholder of Global Environment Fund. Dr. Leonard
serves as Chairman of the Investment Committee for GEF's five investment funds.
He has extensive experience in international private equity and project finance
investments, and advanced technology investments in the energy, environmental,
applications software, intelligent systems engineering, biological and medical
fields. Dr. Leonard also serves as a member of the Board of Directors of the
National Cooperative Bank, Measuring and Monitoring Inc., Aurora Flight Sciences
Corp., Athena Technologies, Sorbent Technologies, International Pepsi-Cola
Bottlers Limited and Global Forest Products Company Limited. He has served as an
advisor to the U.S. Office of Technology Assessment and is a member of the Board
of Directors of the National Council for Science and the Environment. Dr.
Leonard received a Bachelor of Arts degree in 1976 from Harvard College, a
Master of Science degree from the London School of Economics in 1978 and a
Doctor of Philosophy degree from Princeton University in 1984. Jeff is Chairman
of the Board of Beacon House, a not-for profit community development and
education organization assisting children and their families in Northeast
Washington, D.C. In 2002, he broke his over-40 personal record in the Baltimore
Marathon with a time of 3 hours and 40 minutes.
FRANK E. MANNING, age 84, Chairman Emeritus, is the founder of the
Company. Mr. Manning has served as a Director of the Company since its
organization in 1969. Mr. Manning has been a special advisor to the CEO for the
past six years. Mr. Manning received a Bachelor of Science degree in Economics
from Franklin and Marshall College in 1942, and a Masters of Letters degree in
Industrial Relations from the University of Pittsburgh in 1946.
MARIE S. MINTON, age 41, was elected a Director of the Company in
December 2000. Ms. Minton is a Managing Director and the Chief Financial Officer
of Global Environment Fund, an international, private equity, investment
management firm. Ms. Minton has been a member of the senior management team of
GEF since 1994. Before joining GEF, Ms. Minton was the Vice President of Finance
for Clean Air Capital Markets Corporation, a boutique investment banking firm.
Prior to that, Ms. Minton was an Audit Manager in the Entrepreneurial Services
Division of Ernst & Young from 1986 through 1993. Ms. Minton graduated from the
University of Virginia in 1986 with a Bachelor of Science degree in Commerce.
She is a member of the Virginia Society and American Institute of Certified
Public Accountants, the Washington Society of Investment Analysts (WSIA) and the
Association for Investment Management and Research. Ms. Minton is a Certified
Public Accountant and a Chartered Financial Analyst. She teaches accounting for
the WSIA CFA education program, is an officer of WSIA, volunteers as a Girl
Scout leader and enjoys riding her horse, Abner, in her free time.
ARTHUR MONEY, age 63, was elected a Director of the Company in January
2003. Mr. Money served as the Assistant Secretary of Defense for Command,
Control, Communication and Intelligence (C3I) from October 1999 to April 2001.
Prior to his Senate confirmation in that role, he was the Senior Civilian
Official, Office of the ASD (C3I) from February 1998. Mr. Money also served as
the Chief Information Officer for the Department of Defense from 1998 to 2001.
From 1996 to 1998, he served as Assistant Secretary of the Air Force for
Research, Development and Acquisition, and as CIO for the Air Force. Prior to
his government service, Mr. Money held senior management positions with ESL
Inc., a subsidiary of TRW, and the TRW Avionics and Surveillance Group. Mr.
Money serves on numerous United States Government Panels, Boards and
Commissions. He additionally serves on
12
many U.S. Company Boards, Advisory Boards and Advisory Groups. Mr. Money
received a Bachelor of Science degree in Mechanical Engineering from San Jose
State University in 1965, a Master of Science degree in Mechanical Engineering
from University of Santa Clara in 1970 and attended the Harvard Executive
Security Program in 1985 and the Program for Senior Executives at the
Massachusetts Institute of Technology in 1988.
LEONARD E. MOODISPAW, age 60, President, Chief Executive Officer and
Director of the Company, rejoined Essex in 1998. He held the office of Chief
Operating Officer until September 2000 when he was elected Chief Executive
Officer. Mr. Moodispaw was an employee and consultant with Essex during 1988 to
1993. From 1988 to 1993, he was President of the former Essex subsidiary, SEDC,
and later served as Essex Chief Administrative Officer and General Counsel. From
April 1994 to April 1998, Mr. Moodispaw was President of ManTech Advanced
Systems International, Inc. (MASI), a subsidiary of ManTech International
Corporation. From 1965 to 1978, Mr. Moodispaw was a senior manager in the
National Security Agency (NSA). Following NSA he was engaged in the private
practice of law. He is the Founder of the Security Affairs Support Association
(SASA) that brings government and industry together to solve problems of mutual
interest. He also serves as a member of the Board of Directors of Griffin
Services, Inc., a subsidiary of Vosper-Thornycroft, a UK Co. He received a
Bachelor of Science degree in Business Administration from the American
University in Washington, D.C. in 1965, a Master of Science degree in Business
Administration from George Washington University in Washington D.C. in 1969 and
Juris Doctor in Law from the University of Baltimore, Maryland in 1977. He
enjoys chocolate and Key West, Florida; is growing older but not up.
TERRY M. TURPIN, age 60, was elected a Director of the Company in
January 1997. He is Senior Vice President and Chief Scientist for the Company,
positions he has held since 1996. He joined Essex through merger with SEDC where
he was Vice President and Chief Scientist from September 1984 through June 1989.
Currently Mr. Turpin is the Chairman of the Industrial Advisory Board for the
Opto-electronic Computing Center at the University of Colorado. From December
1983 to September 1984 he was an independent consultant. From 1963 through
December 1983, Mr. Turpin was employed by the NSA. He was Chief of the Advanced
Processing Technologies Division for ten years. He holds patents for optical
computers and adaptive optical components. Mr. Turpin represented NSA on the
Tri-Service Optical Processing Committee organized by the Under Secretary of
Defense for Research and Engineering. He received a Bachelor of Science degree
in Electrical Engineering from the University of Akron in 1966 and a Master of
Science degree in Electrical Engineering from Catholic University in Washington,
D.C. in 1970.
OFFICERS
MATTHEW S. BECHTA, age 49, was elected Vice President in October 1993.
As Director of the Processing Systems Group, Mr. Bechta is responsible for the
development and delivery of signal processing solutions to government, industry
and commercial customers. Mr. Bechta joined Essex in 1989 with the merger of
Essex and SEDC. As one of the founders of SEDC, he served in various technical
and management capacities since incorporation in 1980. From 1975-1980, Mr.
Bechta was employed by NSA as a systems engineer. Mr. Bechta holds a Master of
Science degree in Computer Science from the Johns Hopkins University and a
Bachelor of Science degree in Electrical Engineering from Spring Garden College,
Pennsylvania. In the off-hours, Matt is a Scouter with Troop 944 in
13
Ellicott City, Vice President of the Centennial High School Boosters, and a
baseball coach with the Columbia Reds, who play in the very competitive
Baltimore Metro League.
GERALD J. DAVIEAU, age 47, joined Essex in 1989 as a result of the
merger of Essex with SEDC, and was elected Vice President in November 1997. Mr.
Davieau, Director of Telecomm Systems Engineering, is responsible for design and
analysis of wireless satellite applications. He is listed on 14 Motorola patents
and 6 patent disclosures from work on Iridium(R) and Teledesic(TM) satellite
programs. Mr. Davieau was employed by SPACECOM in Gaithersburg, Maryland,
1982-1987. He served in the U.S. Army from 1978 to 1982. Mr. Davieau holds a
Bachelor of Science degree in Electrical Engineering from Lehigh University and
a Master of Science degree in Electrical Engineering from the University of
Maryland.
KIMBERLY J. DECHELLO, age 42, joined Essex in May 1987 and has served
in various administrative and management capacities. She was appointed Chief
Administrative Officer in November 1997 and Corporate Secretary in January 1998.
Ms. DeChello is responsible for administration, human resources, investor
relations and industrial insurance. Ms. DeChello received a Master of Science
degree in Human Resources Management in 2000 from the University of Maryland.
Ms. DeChello also holds an Associate of Arts degree in Accounting and a Bachelor
of Science degree in Criminal Justice/Criminology from the University of
Maryland. She enjoys dancing and bird watching. She teaches West Coast Swing
dance classes and competes as a ProAm student. She participates in the
Smithsonian's Neighborhood Nest Watch Program where she assists in catching,
banding and data collection of birds in her backyard.
JOSEPH R. KURRY, JR., age 53, joined Essex Corporation in March 1985.
He is Treasurer and Chief Financial Officer, positions he has held since 1985,
and Senior Vice President. Mr. Kurry was controller of ManTech International
Corporation from December 1979 to March 1985. Mr. Kurry graduated in 1972 from
Georgetown University, in Washington, D.C. and is a Certified Public Accountant.
Mr. Kurry and his wife spend time with their college-age daughters and teenage
son in supporting various sports and school programs for Lehigh University in
Pennsylvania and Gonzaga College High School in Washington, D.C. The family
prefers summer vacations at the shore in Sea Girt, New Jersey.
RUDOLF (RUDY) LISKOVEC, age 51. As Vice President of Essex's Government
Services, Mr. Liskovec provides leadership to Essex technology professionals
that support enterprise-wide, life-cycle engineering and technical services,
application development, systems integration and business process reengineering
to systems of national importance. Mr. Liskovec has twenty-five years of
international management and engineering experience where he has developed a
track record of excellence in organizational development, operational and
engineering management, business development, and systems engineering. Most
recently, Mr. Liskovec has held positions as a Director for General Dynamics and
Executive Vice President for ManTech International. He holds a Master of Science
degree (honors) in Computer Information Systems from Boston University, a
Bachelor of Science degree (Cum Laude) in Computer Science from the University
of Maryland and a Bachelor of Science degree (Summa Cum Laude) in Business
Management from the University of Maryland.
14
CAROLINE S. PISANO, age 36, was a Director of the Company from
September 2000 through January 2003 and now serves as General Counsel and Vice
President of Finance. From August 1996 to March 2000, Ms. Pisano served as the
Chief Financial Officer of Pulse Engineering, Inc., an information security and
signal processing company which was sold in March 2000. From August 1992 to July
1996 Ms. Pisano served as a senior transactional attorney with the law firm of
Wechsler, Selzer, and Gurvitch, Chartered. From June 1988 to August 1990, Ms.
Pisano, a certified public accountant, practiced public accounting and
specialized in high tech and biotech companies. Ms. Pisano received her Juris
Doctor from the Washington College of Law at the American University in
Washington, D.C. Ms. Pisano graduated Magna Cum Laude with a Bachelor of Science
degree in Accounting from the University of Maryland. Although Ms. Pisano is an
attorney and an accountant she likes to follow Jimmy Buffett's advice and "say
what you mean, mean what you say". Ms. Pisano has four children and enjoys
volunteering at her kid's public schools.
CRAIG H. PRICE, age 54, was elected Vice President in October 1993. Dr.
Price, Director of Optical Solutions, is responsible for the development of
products utilizing Essex patented optical technologies. Dr. Price joined Essex
in 1989 as a result of the merger of Essex and SEDC. Dr. Price had joined SEDC
in 1985, with varied assignments in engineering, analysis and advanced
technologies. Previously, he served in numerous technical and project positions
in the U.S. Air Force during the period 1974 - 1985, and he was awarded the
Distinguished Service Medal. Dr. Price holds a Bachelor of Science degree in
Electrical Engineering from Kansas State University, a Master of Science degree
in Electrical Engineering from Purdue University and a Doctor of Philosophy
degree in Electrical Engineering, from Stanford University. He is an avid tennis
player and enjoys vacations with his wife and daughter to warm climates in
winter months.
15
PROPOSAL 2--RATIFICATION OF THE APPOINTMENT OF
INDEPENDENT AUDITORS
The Board of Directors has, upon recommendation of the Audit Committee,
selected Stegman & Company as independent auditors of the Company for the fiscal
year ending December 28, 2003, and has further directed that the selection of
such auditors be submitted for ratification by the stockholders at the Annual
Meeting.
Stegman & Company representatives will be present at the Annual Meeting
to respond to appropriate questions.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR APPROVAL OF THE PROPOSAL TO
RATIFY THE APPOINTMENT OF INDEPENDENT AUDITORS AND, UNLESS MARKED TO
THE CONTRARY, PROXIES RECEIVED FROM STOCKHOLDERS WILL BE VOTED IN
FAVOR OF SUCH RATIFICATION.
RELATIONSHIP WITH INDEPENDENT AUDITORS
AUDIT FEES. The aggregate fees billed by Stegman & Company for
professional services rendered for the audit of the Company's annual financial
statements for the fiscal year ended December 29, 2002 and for the reviews of
the financial statements included in the Company's quarterly reports on Form
10-QSB for that fiscal year were $30,750.
FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES. During
the year ended December 29, 2002, Stegman & Company did not provide the Company
with any services related to financial information systems design and
implementation.
ALL OTHER FEES. The Company estimates that the aggregate fees for all
other services rendered by Stegman & Company during the year ended December 29,
2002 were $7,000. These fees relate principally to preparation of the Company's
tax returns and review of SEC registration statements.
OTHER MATTERS
The Company knows of no other matters to be brought before the Annual
Meeting. If any other matter requiring a vote of the Stockholders is properly
brought before the Annual Meeting, it is the intention of the persons appointed
as proxies to vote with respect to any such matter in accordance with their best
judgment.
16
It is important that proxies be returned promptly. Stockholders,
whether or not they expect to attend the Annual Meeting in person, are urged to
complete, sign and return the accompanying proxy in the enclosed envelope which
requires no postage if mailed in the United States.
STOCKHOLDER PROPOSALS FOR THE 2004 ANNUAL MEETING
All stockholder proposals intended to be presented at the 2004 Annual
Meeting of the Company must be received by the Company not later than February
26, 2004 and must otherwise comply with the rules of the SEC for inclusion in
the Company's proxy statement and form of proxy relating to that meeting.
Proposals should be delivered to Essex Corporation, 9150 Guilford Road,
Columbia, MD 21046, Attention: Corporate Secretary.
Except in the case of proposals made in accordance with Rule 14a-8,
stockholders intending to bring any business before the annual meeting of
shareholders must deliver written notice thereof to the Secretary of the Company
not less than 45 days prior to the anniversary of the date on which the
Corporation first mailed its proxy materials for its immediately preceding
annual meeting of shareholders. The deadline for matters sought to be presented
at the 2004 Annual Meeting is May 11, 2004. If a stockholder gives notice of
such a proposal after the May 11, 2004 deadline, the Company's proxy holders
will be allowed to use their discretionary voting authority to vote against the
stockholder proposal when and if the proposal is raised at the Company's 2004
annual meeting.
ANNUAL REPORT AND FINANCIAL STATEMENTS
A copy of the Company's Annual Report on Form 10-KSB for the fiscal
year ended December 29, 2002 accompanies this Proxy Statement. Such report is
not part of the proxy solicitation materials.
REFERENCE DOCUMENTS
UPON RECEIPT OF A WRITTEN REQUEST, THE COMPANY WILL FURNISH TO ANY
STOCKHOLDER, WITHOUT CHARGE, A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM
10-KSB FOR THE FISCAL YEAR ENDED DECEMBER 29, 2002 AND THE EXHIBITS THERETO
REQUIRED TO BE FILED WITH THE SECURITIES AND EXCHANGE COMMISSION UNDER THE
SECURITIES EXCHANGE ACT OF 1934. SUCH WRITTEN REQUEST SHOULD BE DIRECTED TO THE
SECRETARY, ESSEX CORPORATION, 9150 GUILFORD ROAD, COLUMBIA, MARYLAND 21046. THE
FORM 10-KSB IS NOT PART OF THE PROXY SOLICITATION MATERIALS.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Kimberly J. DeChello
KIMBERLY J. DECHELLO
SECRETARY
17
ANSWERS TO FREQUENTLY ASKED QUESTIONS (FAQ) FOR SHAREHOLDERS ABOUT THE
SWITCH TO THE AMERICAN STOCK EXCHANGE
WHY DID ESSEX SWITCH TO THE AMERICAN STOCK EXCHANGE?
Essex chose the American Stock Exchange because of their demonstrated commitment
to the success of their listed companies, including the use of leading edge
technology to enhance trading reliability and efficiency. The unique nature of
the auction market--liquidity, narrower spreads and lower volatility -- is
ideally suited for Essex now. This listing achieves an important milestone in
our strategy for delivering continued financial success and accelerated growth,
and ensuring our shareholders the stability of a national exchange. The American
Stock Exchange is the right choice for our present size, capitalization, and
strategy; it also provides the visibility, the access, and stability that are of
paramount importance to large institutional investors, analysts, and potential
acquisitions.
WHEN DID THE SWITCH OCCUR?
Essex stock ceased trading on the NASDAQ OTC-BB exchange at the close of trading
on Tuesday, June 3, 2003. It began trading on the American Exchange at the start
of trading the next morning, Wednesday, June 4, 2003.
WHY DID THE TRADING SYMBOL CHANGE?
The old trading symbol ESEX.OB could not be transferred to the American Stock
Exchange. As a result, it was removed from active listing when the switch the
American Exchange occurred. The new trading symbol is EYW on the American Stock
Exchange. The symbol could only be 3 letters, and our choices were quite
limited. We selected EYW, which is also the airport code for Key West, Florida,
to honor the spirit and culture of Key West which is shared by many in the
Company.
AS A SHAREHOLDER, WHAT DO I HAVE TO DO?
You don't have to do anything. As a current shareholder, your shares are
automatically moved to the new stock symbol at the current market price. If you
hold the actual stock certificate, you do not need to replace it. At such time
as you might sell the shares represented on the certificate, they will be
automatically recognized by the transfer agent as Essex stock under the new
symbol on the American Stock Exchange.
HOW WAS THE SHARE PRICE ON OPENING DAY SET FOR THE NEW STOCK SYMBOL?
The share price on opening day was set by the market price as established by the
Exchange, based on the market price at closing the prior trading day.
Attachment
ARE THERE ANY NEW TRADING RESTRICTIONS FOR EMPLOYEES WITH THE NEW LISTING?
No, there are no new trading restrictions for employees with the new listing.
However, employees are still subject to trading blackout periods, as they have
been in the past.
HOW IS THIS DIFFERENT FROM A NEW PUBLIC OFFERING OF STOCK?
This is not a new public offering for the purpose of raising additional capital.
Rather, it is a transfer of all of the outstanding shares from one stock
exchange (NASDAQ OTC-BB) to another (American Exchange). As a result there is no
change to the number of outstanding shares and their ownership.
DOES THE AMERICAN STOCK EXCHANGE OPERATE DIFFERENTLY FROM THE NASQAQ OVER THE
COUNTER - BULLETIN BOARD (OTC-BB) WHERE ESSEX HAS BEEN LISTED?
Yes, the American Exchange is considered an auction system while the NASDAQ
OTC-BB is a regulated quotation service. The American Exchange, which began
operation in 1921, is second only to the New York Stock Exchange as a floor
based exchange. To understand the differences, you should contact an investment
professional. The American Stock Exchange is subject to regulation by the
Securities and Exchange Commission.
WHERE DO I GET MORE INFORMATION ON HOW THE AMERICAN STOCK EXCHANGE WORKS?
The American Stock Exchange has an excellent website at www.amex.com. The
various tabs at this site give you useful information on the history of the
exchange, how it operates, new listings, and much more.
DO I HAVE TO CHANGE BROKERS? WHAT IF I USE AN ONLINE BROKERAGE SERVICE?
Any existing broker or brokerage relationship that you have should be able to
trade your Essex stock, just as you have in the past. This includes online
brokerage services. Trading will be in accordance with the American Stock
Exchange policies and procedures, which are somewhat different than the NASDAQ
OTC-BB Exchange. Your ability to trade Essex stock should be improved since some
brokers would not handle OTC-BB stocks.
WHERE CAN I CHECK THE CURRENT OR HISTORICAL STOCK PRICE?
You should be able to check the stock price using the trading symbol EYW at the
same websites where you used to check ESEX.OB. Once the switch to the American
Stock Exchange is made, it is likely that historical stock price information,
predating the EYW symbol, will not be available on many of the free services.
Most of these systems provide free access to historical information on active
listings under their current trading symbol.
WHAT SHOULD I DO IF I HAVE ADDITIONAL QUESTIONS?
If your questions are about the American Stock Exchange or its operations,
please visit their website or contact an investment professional. If you have
additional questions about your Essex stock or options, please contact Ms. Kim
DeChello by email (dechello@essexcorp.com) or by phone at (301)-953-8835.
Attachment
DIRECTIONS TO THE GREAT ROOM
AT HISTORIC SAVAGE MILL
FROM I-95 MILES
o Take MD-32 East/Fort Meade 1.2
o Take the US-1 North & South exit towards Elkridge/Laurel and
Turn Right (South) onto Rt. 1/Washington Blvd. .5
o Turn Right on Gorman Road (follow Savage Mill signs) .3
o Turn Right on Foundry Street .2
o Turn Left on Baltimore Street .1
o Turn Left on Fair Street and park in The West or "Main" Parking Lot.
(follow sign to right) .1
Park as far down in the parking lot as possible as Savage Mill is at the end of
the lot.
The Great Room is located on Level 2 in the Old Weave Building. From Parking
Lot, walk directly into New Weave Building. You will be on the upper level
(Level 1). Go down stairs and continue straight to Old Weave Building. After
entering Old Weave Building, follow to right and THE GREAT ROOM will be directly
in front of you.
You can find more information at WWW.SAVAGEMILL.COM/DIRECTIONS.HTML or call
301-490-1668.
Addendum A
ESSEX CORPORATION, 9150 GUILFORD ROAD, COLUMBIA, MARYLAND 21046
Board of Directors Proxy for the Annual Meeting of Stockholders
The undersigned hereby appoints Leonard E. Moodispaw, Terry M. Turpin
and Joseph R. Kurry, Jr. proxies with full power of substitution in them to vote
all shares of common stock which the undersigned may be entitled to vote at the
Annual Meeting of Stockholders of Essex Corporation to be held on July 23, 2003
at THE GREAT ROOM AT HISTORIC SAVAGE MILL, 8600 FOUNDRY STREET, SAVAGE, MARYLAND
at 10:00 a.m. (see proxy for further details), and at any adjournment or
adjournments of such meeting, with all powers which the undersigned would
possess if personally present. Without limiting the generality of the foregoing,
said proxies are authorized to vote as follows:
1. Election of Directors
FOR all nominees listed below [ ] WITHHOLD AUTHORITY [ ]
INSTRUCTION: To withhold authority to vote for any individual nominee, strike a
line through the nominee's name in the list below.
JOHN G. HANNON
ROBERT W. HICKS
RAY M. KEELER
H. JEFFREY LEONARD
FRANK E. MANNING
MARIE S. MINTON
ARTHUR L. MONEY
LEONARD E. MOODISPAW
TERRY M. TURPIN
2. Confirm Stegman & Company as independent auditors for the company. (Board of
Directors Favors a Vote FOR Approval.)
APPROVE [ ] DISAPPROVE [ ] ABSTAIN [ ]
3. Act upon such other business as may properly come before the meeting.
EVERY PROPERLY SIGNED PROXY WILL BE VOTED IN ACCORDANCE WITH THE SPECIFICATION
MADE THEREON. IF NOT OTHERWISE SPECIFIED, THIS PROXY WILL BE VOTED FOR THE
ELECTION OF ALL DIRECTOR NOMINEES AND TO APPROVE THE ABOVE STATED PROPOSALS.
Receipt is hereby acknowledged of the Notice of Meeting and Proxy Statement of
Essex Corporation dated June 25, 2003.
I will attend [ ] I will NOT attend the Meeting [ ]
(You may RSVP to dechello@essexcorp.com)
----------------------------- -------
Signature of Stockholder Date
----------------------------- -------
Signature of Stockholder Date
Please sign exactly as your name appears on the envelope in
which this card was mailed. When signing as attorney,
executor, administrator, trustee or guardian, please give
your full title. If shares are held jointly, each holder
should sign.
PLEASE COMPLETE, DATE, SIGN AND MAIL THIS PROXY PROMPTLY IN THE POSTAGE-PREPAID
ENVELOPE.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF ESSEX CORPORATION.