Edgar Filing: MEASUREMENT SPECIALTIES INC

SCHEDULE 14A

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES EXCHANGE ACT OF 1934

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MEASUREMENT SPECIALTIES, INC.
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(Name of Registrant as Specified in Its Charter)

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(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)

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MEASUREMENT SPECIALTIES, INC.
710 ROUTE 46 EAST, SUITE 206
FAIRFIELD, NJ 07004
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NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
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Measurement Specialties will hold its Annual Meeting of Shareholders at the
University Club, 54th Street and 5th Avenue, New York, New York, on Monday,
March 3, 2003, at 2:00 p.m. EST. The University Club requires business attire to
attend the meeting. We are holding the meeting for the following purposes:

1. To elect one member of the Board of Directors, whose term is
described in the proxy statement.

2. To ratify the selection of Grant Thornton LLP as our independent
auditors for the fiscal year ending March 31, 2003.

3. To transact such other business as may properly come before the
meeting and any postponement or adjournment thereof.

Holders of record of Measurement Specialties common stock at the close of
business on January 27, 2003 are entitled to vote at the meeting.

It is important that your shares be represented and voted at the meeting.
You can vote your shares by completing and returning a proxy card. Most
shareholders can also vote over the Internet or by telephone. If Internet and
telephone voting are available to you, you can find voting instructions on the
enclosed proxy card. You can revoke a proxy at any time prior to its exercise at
the meeting by following the instructions in the enclosed proxy statement.

By Order of the Board of Directors,
JOHN P. HOPKINS
Chief Financial Officer and Secretary

January 31, 2003

PROXY STATEMENT

We are providing these proxy materials in connection with the solicitation
by the Board of Directors of Measurement Specialties, Inc. of proxies to be
voted at our Annual Meeting of Shareholders, to be held on March 3, 2003, and at
any meeting following postponement or adjournment of the Annual Meeting.

You are cordially invited to attend the Annual Meeting, which will begin at
2:00 p.m. EST. The meeting will be held at the University Club, 54th Street and
5th Avenue, New York, New York. Shareholders will be admitted beginning at 1:00
p.m. EST.

We are first mailing this proxy statement and proxy card (including voting
instructions) on or about January 31, 2003, to persons who were shareholders at
the close of business on January 27, 2003, the record date for the meeting.

Our fiscal year begins on April 1 and ends on March 31. References in this
proxy statement to the year 2002 or fiscal 2002 refer to the 12-month period
from April 1, 2001 through March 31, 2002.

PROXIES AND VOTING PROCEDURES

WHO CAN VOTE?

You are entitled to vote at the Annual Meeting all shares of Measurement
Specialties' common stock that you held as of the close of business on the
record date. Each share of common stock is entitled to one vote with respect to
each matter properly brought before the meeting.

On January 17, 2003, there were 11,912,958 shares of common stock
outstanding.

In accordance with New Jersey law, a list of shareholders entitled to vote
at the meeting will be available at the meeting.

WHO IS THE RECORD HOLDER?

You may own common stock either (1) directly in your name, in which case
you are the record holder of such shares, or (2) indirectly through a broker,
bank or other nominee, in which case such nominee is the record holder.

If your shares are registered directly in your name, we are sending these
proxy materials directly to you. If the record holder of your shares is a
nominee, you will receive proxy materials from such record holder.

HOW DO I VOTE?

Record Holders:

- By Telephone. You can vote your shares by telephone, by calling the
toll-free telephone number on your proxy card. Telephone voting is
available 24 hours a day. If you vote by telephone, you do not need to
return your proxy card. Your vote by telephone must be received by 11:59
p.m. EST, March 2, 2003.

- By Internet. You can also vote on the Internet. The website address for
Internet voting is on your proxy card, and voting is also available 24
hours a day. If you vote by Internet, you do not need to return your
proxy card. Your vote by Internet must be received by 11:59 p.m. EST,
March 2, 2003. Please be aware that if you vote over the Internet, you
may incur costs such as telephone and Internet access charges for which
you will be responsible.

- By Mail. If you choose to vote by mail, mark your proxy, date and sign
it, and return it in the postage-paid envelope provided. Your vote by
mail must be received by the close of voting at the Annual Meeting on
March 3, 2003.

- By Attending the Annual Meeting. If you attend the Annual Meeting, you
can vote your shares in person.

STOCK HELD BY BROKERS, BANKS AND NOMINEES

If your common stock is held by a broker, bank or other nominee, you will
receive instructions from them that you must follow in order to have your shares
voted.

If you plan to attend the Annual Meeting and vote in person, you will need
to contact the broker, bank or other nominee to obtain evidence of your
ownership of common stock on January 27, 2003.

If you hold your shares through a broker, your shares may be voted even if
you do not vote or attend the Annual Meeting. Under the rules of the American
Stock Exchange, member brokers who do not receive instructions from beneficial
owners will be allowed to vote on the election of Directors and the ratification
of auditors.

The method by which you vote will in no way limit your right to vote at the
meeting if you later decide to attend in person.

HOW MANY VOTES ARE REQUIRED?

A quorum is required to transact business at the Annual Meeting. We will
have a quorum and be able to conduct the business of the Annual Meeting if the
holders of a majority of the shares entitled to vote are present at the meeting,
either in person or by proxy.

If a quorum is present, a plurality of votes cast is required to elect
Directors. Thus, a Director may be elected even if the Director receives less
than a majority of the shares represented at the meeting. Proxies cannot be
voted for a greater number of nominees than are named in this Proxy Statement.
To ratify the selection of independent auditors, an affirmative vote of a
majority of the votes cast is required.

HOW ARE VOTES COUNTED?

All shares that have been properly voted, and not revoked, will be voted at
the Annual Meeting in accordance with the instructions given. If you sign and
return your proxy card, but do not specify how you wish your shares to be voted,
your shares represented by that proxy will be voted as recommended by the Board
of Directors: "for" the nominee for Director, and "for" the ratification of the
appointment of Grant Thornton LLP as our independent auditors for fiscal 2003.

Proxies marked as abstaining, and any proxies returned by brokers as
"non-votes" on behalf of shares held in street name because beneficial owners'
discretion has been withheld as to one or more matters to be acted upon at the
Annual Meeting, will be treated as present for purposes of determining whether a
quorum is present at the Annual Meeting. However, any shares not voted as a
result of a marked abstention or a broker non-vote will not be counted as votes
for or against a particular matter. Accordingly, marked abstentions and broker
non-votes will have no effect on the outcome of a vote.

HOW CAN I REVOKE MY PROXY OR CHANGE MY VOTE?

You can revoke your proxy at any time before it is exercised by timely
delivery of a properly executed, later-dated proxy (including an Internet or
telephone vote) or by voting in person at the meeting.

WHO WILL PAY THE EXPENSES OF PROXY DISTRIBUTION?

Measurement Specialties will pay the expenses of the preparation of the
proxy materials and the solicitation of proxies. Proxies may be solicited on
behalf of the company by Directors, officers or employees of the company, who
will receive no additional compensation for soliciting, in person or by
telephone, e-mail or facsimile or other electronic means. In accordance with the
regulations of the Securities and Exchange Commission and the American Stock
Exchange, we will reimburse brokerage firms and other custodians,

nominees and fiduciaries for their expenses incurred in sending proxies and
proxy materials to beneficial owners of Measurement Specialties stock.

ITEM 1 -- ELECTION OF DIRECTORS

The Board of Directors is divided into three classes. One class is elected
each year for a term of three years.

One Director will be elected at this Annual Meeting to serve for a
three-year term expiring at our Annual Meeting in 2005. The Board has nominated
Morton L. Topfer for the position. You can find information about Mr. Topfer
below. Damon Germanton and Steven Petrucelli, who have served as Directors since
1981 and 1992, respectively, and whose terms expire at the Annual Meeting,
declined to stand for re-election.

The persons named in the proxy card will vote such proxy "for" the election
of Mr. Topfer, unless you indicate that your vote should be withheld. If
elected, Mr. Topfer will continue in office until his successor has been duly
elected and qualified, or until the earliest of his death, resignation,
retirement or removal. Mr. Topfer has indicated to the company that he will
serve if elected. We do not anticipate that Mr. Topfer will be unable to stand
for election, but, if that happens, your proxy will be voted in favor of another
person nominated by the Board.

The Board of Directors recommends a vote FOR the election of Mr. Topfer as
Director.

NOMINEE FOR TERM EXPIRING IN 2005

Morton L. Topfer has been a Director since January 2002 and was appointed
Chairman of the Board effective January 31, 2003. Mr. Topfer is Managing
Director of Castletop Capital, L.P. and a member of the Board of Directors of
Dell Computer Corporation. He previously served at Dell as Counselor to the
Chief Executive Officer, from December 1999 to February 2002, and Vice Chairman,
from June 1994 to December 1999. Prior to joining Dell, Mr. Topfer served for 23
years at Motorola, Inc. where he held several executive positions, last serving
as Corporate Executive Vice President and President of the Land Mobile Products
Sector. Mr. Topfer was conferred the Darjah Johan Negeri Penang State Award in
July 1996 by the Governor of Penang for contributions to the development of the
electronics industry in Malaysia. He also serves as a director of Bio Reference
Laboratories. Age 66

DIRECTORS WHOSE TERMS WILL EXPIRE IN 2003

Joseph R. Mallon, Jr. has served as our Chairman of the Board since April
1995 and served as our Chief Executive Officer from April 1995 to June 2002.
From April 1995 to February 1998, Mr. Mallon also served as President. Mr.
Mallon has thirty-eight years of experience in electronic sensor and
micro-electromechanical systems (MEMS) technology and is a named inventor in
forty-one United States patents. From January 1990 to January 1993, Mr. Mallon
was a Director and Executive Vice President of Lucas NovaSensor. In October
1985, Mr. Mallon co-founded NovaSensor, where he served as a Director and
Co-President until its acquisition by Lucas Industries. Mr. Mallon serves as a
Director of Sepragen Corporation and Sensant Corporation. Mr. Mallon is a member
of the Educational Board of Directors of California State University, Hayward.
Mr. Mallon received a B.S. in Science (Physics) from Fairleigh Dickinson
University and an M.B.A. (Management, Marketing and New Ventures) from
California State University, Hayward. Age 57

The Honorable Dan J. Samuel has been a Director since October 1994. Since
1986, Mr. Samuel has been a business consultant and a director of public
companies, as well as of the British-American Educational Foundation and of the
Asian Institute of Technology Foundation. Previously, Mr. Samuel served as
President and Chief Executive Officer of Scallop Corporation, the New York
subsidiary of the Royal Dutch/Shell Group of Companies. Mr. Samuel, who serves
as a Director of Canadian Overseas Packaging Industries, received a B.A. and
M.A. from Oxford University. Age 77

DIRECTORS WHOSE TERMS WILL EXPIRE IN 2004

John D. Arnold has been a Director since June 1995. Mr. Arnold has been in
private law practice since 1988, primarily representing technology companies
with relationships with Asian investors and/or manufacturers. Prior to 1988, Mr.
Arnold was employed with the law firms of Wilson, Sonsini, Goodrich & Rosati in
Palo Alto, California and Foley & Lardner in Milwaukee, Wisconsin. Mr. Arnold
received a B.A. in business administration from the University of Wisconsin and
a J.D. from Stanford Law School. Age 48

Frank D. Guidone has served as Chief Executive Officer since June 2002 and
has been a Director since December 2002. Mr. Guidone has been a Managing
Director/Principal of Corporate Revitalization Partners, a Dallas-based
turnaround/crisis management consultancy firm, since 2000. Mr. Guidone has been
a partner at Four Corners Capital Partners, a boutique private investment firm
of which Mr. Guidone is a co-founder, since 1999. Prior to Four Corners, Mr.
Guidone spent 13 years in management consulting with Andersen Consulting and
George Group, Inc. Mr. Guidone has worked with numerous solvent and insolvent
companies, focusing on operational and financial restructurings. Mr. Guidone
received a B.S. in mechanical engineering from The University of Texas at
Austin. Age 38

ITEM 2 -- RATIFICATION OF INDEPENDENT AUDITORS

APPOINTMENT OF AUDITORS FOR FISCAL 2003

The Audit Committee has appointed Grant Thornton LLP as our independent
auditors for 2003. We are not required to have the shareholders ratify the
selection of Grant Thornton LLP as our independent auditors. We are doing so
because we believe it is a matter of good corporate practice. If the
shareholders do not ratify the selection, the Audit Committee will reconsider
whether or not to retain Grant Thornton LLP but may retain such independent
auditors. Even if the selection is ratified, the Audit Committee, in its
discretion, may change the appointment at any time during the year if it
determines that such a change would be in the best interests of Measurement
Specialties and its shareholders. Representatives of Grant Thornton LLP are
expected to be present at the Annual Meeting with an opportunity to make a
statement if they desire to do so and to be available to respond to appropriate
questions.

The Board of Directors recommends a vote FOR the ratification of the
appointment of Grant Thornton LLP as our independent auditors for fiscal 2003.

CHANGE IN AUDITORS

Effective June 7, 2002, we terminated the engagement of Arthur Andersen LLP
as our independent auditor. The decision to terminate the engagement of Arthur
Andersen was recommended and approved by our Audit Committee and approved by our
Board of Directors.

Arthur Andersen was retained as our independent auditor on September 18,
2000. Arthur Andersen's report on the financial statements of the company for
the year ended March 31, 2001 did not contain an adverse opinion or a disclaimer
of opinion and was not qualified or modified as to uncertainty, audit scope or
accounting principles.

During the fiscal years ended March 31, 2001 and March 31, 2002 and the
interim period between March 31, 2002 and June 7, 2002, there were no
disagreements between the company and Arthur Andersen 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
Arthur Andersen, would have caused it to make reference to the subject matter of
the disagreements in connection with its report. During the fiscal years ended
March 31, 2001 and March 31, 2002 and the interim period between March 31, 2002
and June 7, 2002, there were no reportable events (as defined in Item
304(a)(1)(v) of Regulation S-K promulgated by the Securities and Exchange
Commission).

We provided Arthur Andersen a copy of the foregoing disclosures.

We engaged Grant Thornton LLP as our new independent auditor, effective
June 11, 2002. Grant Thornton LLP previously served as our independent auditor
from 1992 until September 18, 2000. During the

fiscal years ended March 31, 2001 and March 31, 2002 and the interim period
between March 31, 2002 and June 11, 2002, we did not consult with Grant Thornton
LLP regarding (i) the application of accounting principles to a specified
transaction, either completed or proposed, (ii) the type of audit opinion that
might be rendered on the company's financial statements, or (iii) any matter
that was either the subject of a disagreement (as described above) or a
reportable event, except as follows:

- Grant Thornton LLP performed a quarterly review of our Form 10-Q for the
quarter ended June 30, 2000 in accordance with Statement on Auditing
Standard No. 71; and

- Grant Thornton LLP issued a consent to the inclusion of the audit report
for the years ended March 31, 2000 and 1999 included in our Registration
Statement on Form S-1 dated March 29, 2001 (and the Amendments thereto
dated July 12, 2001 and August 1, 2001, respectively) and our
Registration Statement on Form S-8 dated August 1, 2001.

Subsequent to our engagement of Grant Thornton LLP, we restated our
previously issued financial statements for the fiscal year ended March 31, 2001,
and our previously issued financial results for each of the quarterly periods in
the fiscal year ended March 31, 2001 and the first three quarters of the fiscal
year ended March 31, 2002, as described in our Annual Report on Form 10-K for
the fiscal year ended March 31, 2002.

FEES PAID TO OUR INDEPENDENT AUDITORS

AUDIT FEES

The aggregate fees billed by Grant Thornton LLP for professional services
rendered for the audit of our financial statements for fiscal 2002, and the
review of our financial statements for each of the first three quarters in
fiscal 2002, were approximately $2.3 million. These fees include fees billed in
connection with Grant Thornton LLP's reaudit and the restatement of our
financial statements for fiscal 2001, and their related review and the
restatement of our financial results for each of the first three quarters in
fiscal 2001.

FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES

There were no financial information systems design and implementation fees
for fiscal 2002.

ALL OTHER FEES

There were no fees paid to Grant Thornton LLP for fiscal 2002 other than
the audit fees described above.

GOVERNANCE OF THE COMPANY

Pursuant to the New Jersey Business Corporation Act and the company's
by-laws, Measurement Specialties' business, property and affairs are managed by
or under the direction of the Board of Directors. Members of the Board are kept
informed of the company's business through discussions with the Chief Executive
Officer and other officers, by reviewing materials provided to them and by
participating in meetings of the Board and its committees. We currently have
seven members on our Board. Effective March 3, 2003, the size of the Board will
be reduced to five members.

During fiscal 2002, the Board held 16 meetings and the committees held a
total of two meetings. The Nominee for Director attended more than 75% of the
total number of meetings of the Board of Directors and the Board committees of
which he was a member during the period he served as a Director in fiscal 2002.

COMMITTEES OF THE BOARD OF DIRECTORS

During fiscal 2002, the Board of Directors had two standing committees. The
Audit Committee consisted of John D. Arnold (Chairman), Theodore J. Coburn and
The Honorable Dan J. Samuel. Mr. Coburn resigned from the Board on February 21,
2002. Morton L. Topfer was appointed to the Audit Committee in March 2002. The
Compensation Committee consisted of The Honorable Dan J. Samuel (Chairman),
Theodore J. Coburn and John D. Arnold. Mr. Topfer was appointed to the
Compensation Committee in July

2002. During fiscal 2002, the Audit Committee met one time and the Compensation
Committee met one time. The Board of Directors does not maintain a separate
nominating committee. The functions of the Audit Committee and the Compensation
Committee are described in their respective reports, each of which is included
in this proxy statement.

COMPENSATION OF DIRECTORS

Directors who are our employees do not receive additional compensation for
serving on our Board of Directors or on committees of the Board. For fiscal
2002, our outside Directors, that is Directors who are not employees of
Measurement Specialties, each received a cash retainer of $35,000 and an option
to purchase 10,000 shares of our common stock. For fiscal 2003, our outside
Directors each received a cash retainer of $35,000 and an option to purchase
15,000 shares of our common stock.

Outside Directors do not receive retirement or other fringe benefits and do
not receive additional compensation related to committee meetings.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

The members of the Compensation Committee in fiscal 2002 were The Honorable
Dan J. Samuel, John D. Arnold and Theodore J. Coburn. None of the members has
ever been an officer or employee of Measurement Specialties or any of its
subsidiaries, and no "compensation committee interlocks" existed during fiscal
2002.

REPORT OF THE AUDIT COMMITTEE

The Audit Committee is appointed by the Board to assist the Board in
monitoring:

- the integrity of the financial statements of Measurement Specialties,

- the independent auditor's qualifications and independence,

- the performance of Measurement Specialties' independent auditors, and

- the compliance by Measurement Specialties with legal and regulatory
requirements.

We meet with management periodically to consider the adequacy of
Measurement Specialties' internal controls and the objectivity of its financial
reporting. We discuss these matters with Measurement Specialties' independent
auditors and with appropriate company financial personnel.

We regularly meet privately with the independent auditors who have
unrestricted access to the committee.

We select, evaluate and, where appropriate, replace the independent auditor
(subject, if applicable, to shareholder ratification), and review periodically
their performance, fees and independence from management.

Other than Morton L. Topfer, each of the Directors who serves on the
committee is "independent" for purposes of the American Stock Exchange listing
standards. That is, the Board of Directors has determined that neither Mr.
Arnold nor Mr. Samuel has a relationship with Measurement Specialties that may
interfere with his independence from Measurement Specialties and its management.

The Board has determined that Mr. Topfer is not "independent," as defined
under American Stock Exchange listing standards, by reason of the $9.3 million
bridge loan extended to the company in October 2002 by Castletop Capital, L.P.,
a limited partnership controlled by Mr. Topfer. Interest on the promissory note
evidencing the loan accrues at the rate of 7% per annum (subject to a 2%
increase upon the occurrence of an event of default). Castletop Capital, L.P.
also received a warrant to purchase 297,228 shares of our common stock at an
exercise price of $1.64 per share in connection with this transaction.
Applicable American Stock Exchange rules, however, permit us to appoint one
member to our audit committee who is not
6

"independent" if the Board, under exceptional and limited circumstances,
determines that membership on the committee by the individual is required in the
best interests of the company and our shareholders.

The Board believes that Mr. Topfer's financial sophistication and
expertise, together with his extensive business background and experience, have
helped significantly to guide the company through a difficult transition period,
and believes that his continued service on the Audit Committee would strongly
benefit the company and its shareholders. The Board has further determined that
notwithstanding Mr. Topfer's interest in the loan transaction described above,
Mr. Topfer will be able to exercise independent judgment and to perform his
Audit Committee responsibilities in a fair and impartial manner. The Board has
resolved, therefore, that the best interests of the company require that Mr.
Topfer remain as a member of the Audit Committee.

The Board has adopted a written charter setting out the audit related
functions the committee is to perform and, upon its review and reconsideration
of that charter this year has amended and restated the charter to reflect recent
changes in law and applicable SEC and American Stock Exchange regulations. A
copy of the Amended and Restated Audit Committee Charter is attached hereto as
Appendix A.

Management has primary responsibility for the company's financial
statements and the overall reporting process, including the company's system of
internal controls. The independent auditors audit the annual financial
statements prepared by management, express an opinion as to whether those
financial statements fairly present the financial position, results of
operations and cash flows of the company in conformity with accounting
principles generally accepted in the United States and discuss with us any
issues they believe should be raised with us. We monitor these processes,
relying without independent verification on the information provided to us and
on the representations made by management and the independent auditors.

This year, we reviewed Measurement Specialties' audited financial
statements as of and for the fiscal year ended March 31, 2002 and the fiscal
year ended March 31, 2001, and met with both management and Grant Thornton LLP,
Measurement Specialties' independent auditors, to discuss those financial
statements. Management has represented to us that the financial statements were
prepared in accordance with accounting principles generally accepted in the
United States.

We have received from and discussed with Grant Thornton LLP the written
disclosure and the letter required by Independence Standards Board Standard No.
1 (Independence Discussions with Audit Committees). These items relate to that
firm's independence from the company. We also discussed with Grant Thornton LLP
any matters required to be discussed by Statement on Auditing Standards No. 61
(Communication with Audit Committees).

Based on these reviews and discussions, we recommended to the Board that
the company's audited financial statements be included in Measurement
Specialties' annual report on Form 10-K (as amended by Amendment No. 1 thereto
on Form 10-K/A) for the fiscal year ended March 31, 2002.

John D. Arnold (Chairman)
Morton L. Topfer
The Honorable Dan J. Samuel

REPORT OF THE COMPENSATION COMMITTEE
ON EXECUTIVE COMPENSATION

The Compensation Committee's policies are intended to attract and retain
talented executives, motivate attainment of strategic objectives, and align
executives' interests with those of shareholders. Pursuant to the Committee's
recommendations, the Board approves officers' base salaries, salary increases,
bonuses, stock option grants and, where applicable, employment contracts and
severance payments. A significant amount of an officer's yearly compensation is
based upon the company's performance for the fiscal year and over time.

The Committee seeks to offer competitive compensation packages that are
consistent with market and industry practices, based on input from the Chief
Executive Officer with reference to a periodic survey of

similar-sized companies in similar industries. The fiscal 2002 average base
compensation for the company's officers is intended to be competitive with
salaries paid to similarly situated executives. The fiscal 2002 average base
salaries of the company's officers, excluding the Chief Executive Officer,
increased 5.7 percent over fiscal 2001 base salaries.

Annual bonus maximums are intended to be competitive with those available
to similarly situated executives and provide for a significant performance
incentive. The Chief Executive Officer recommends awards to the Compensation
Committee with reference to the level of achievement of corporate and individual
objectives. Corporate objectives are measured by sales increases, net income,
and other goals determined annually. Individual objectives are intended to be
objectives that are under the respective officers' direct control. The Board
retains the right to make discretionary adjustments it deems appropriate. There
were no employee bonus awards for fiscal 2002.

Officers' eligibility for stock option grants, and the frequency and size
of such grants, are intended to be competitive with observed market practices
for similarly situated executives and encourage increased shareholder value. The
company's stock option plan complies with applicable laws and regulations,
permitting the company to deduct for federal income tax purposes the cost of any
compensation arising thereunder relating to Internal Revenue Code section
162(m). At present, the company has no other compensation programs or policies
that could give rise to compensation to an officer in excess of $1 million a
year.

The company has no formal executive severance pay policy. Severance pay and
non-monetary severance benefits are determined as appropriate with reference to
observed market practice, length of service and reason for termination.

The Committee's policies for compensating the Chief Executive Officer are
intended to provide significant annual and long-term performance incentives. The
Committee seeks to provide the Chief Executive Officer with a base salary which
is intended to be competitive with salaries paid to similarly situated chief
executives. The committee recommended that the Chief Executive Officer's base
salary be increased from $260,000 to $275,000 for fiscal 2002. The Chief
Executive Officer's annual bonus maximum, subject to discretionary adjustment,
is set at 40 percent of his base salary, which is intended to provide a
significant annual performance incentive to attain corporate objectives. For
fiscal 2002, the Committee recommended no bonus.

The Board neither rejected, nor did it materially modify, any action or
recommendation of the Committee.

The Honorable Dan J. Samuel, Chairman
John D. Arnold, Member
Morton L. Topfer, Member

EXECUTIVE OFFICERS

Our executive officers as of March 31, 2002 were as follows:

NAME AGE POSITION
---- --- --------

Joseph R. Mallon, Jr........... 57 Chief Executive Officer, Director and Chairman
Damon Germanton................ 60 President, Chief Operating Officer, Secretary and Director
Mark W. Cappiello.............. 49 Vice President of Sales and Marketing
Steven P. Petrucelli........... 50 Chief Technical Officer and Director
Fergal Mulchrone............... 45 Vice President and Chief Executive Officer of Terraillon
Holdings Ltd.

Joseph R. Mallon, currently our Chairman and a Director, has resigned as
Chairman effective January 31, 2003 and will no longer be employed by the
company effective February 4, 2003. Mr. Mallon will, however, continue to serve
as a Director.

We are engaged in a search for a permanent General Manager of our Asian
Operations. As of April 1, 2003, Damon Germanton, who is currently acting in
that capacity, will assume a "special projects" role, reporting directly to the
Chief Executive Officer. In this new role, Mr. Germanton will focus his efforts
on new product development and product design improvements, targeting cost
reductions and quality improvements.

Our continuing executive officers following the resignation of Mr. Mallon
and reassignment of Mr. Germanton are:

NAME AGE POSITION
---- --- --------

Frank D. Guidone............... 38 Chief Executive Officer and Director
John P. Hopkins................ 42 Chief Financial Officer and Secretary
Mark W. Cappiello.............. 49 Vice President and General Manager of the Consumer Products
Division
J. Victor Chatigny............. 52 Vice President and General Manager of the Sensors Division
Steven P. Petrucelli........... 50 Chief Technical Officer

Officers are not appointed for fixed terms. Biographical information for
our current officers who are not also continuing Directors follows:

John P. Hopkins was appointed Chief Financial Officer in July 2002. Prior
to joining Measurement Specialties, he was Vice President, Finance from April
2001, and was Vice President and Controller from January 1999 to March 2001,
with Cambrex Corporation, a provider of scientific products and services to the
life sciences industry. Prior to joining Cambrex, from 1988 to 1998, he held
various senior financial positions with ARCO Chemical Company, a manufacturer
and marketer of specialty chemicals and chemical intermediates. Mr. Hopkins is a
Certified Public Accountant and was an Audit Manager for Coopers & Lybrand prior
to joining ARCO Chemical. Mr. Hopkins holds a B.S. in Accounting from West
Chester University, and an M.B.A. from Villanova University.

Mark W. Cappiello was appointed Vice President and General Manager of our
Consumer Products Division in June 2002. Mr. Cappiello was our Vice President of
Sales and Marketing from January 1988 until June 2002. Mr. Cappiello has over
twenty-five years of experience in international consumer products marketing,
over twenty of which have been in the scale industry. From January 1985 to
October 1987, Mr. Cappiello was employed by Terraillon S.A., a French
manufacturer and distributor of scales and balance products. Mr. Cappiello
received a B.A. in business from the University of Connecticut.

J. Victor Chatigny has been Vice President and General Manager of our
Sensors Division since his appointment in June 2002. Mr. Chatigny joined
Measurement Specialties through our 1998 acquisition of PiezoSensors from AMP
Incorporated, where he served as Director of Sales, Marketing and Research and
Development since 1993. Mr. Chatigny also served in US Army Corps of Engineers
where he was Captain, 11th Engineering Battalion and Commander of the Atomic
Demolition Munition Detachment. He holds B.S. and M.S. degrees in industrial
engineering and management from Clarkson University, and a M.B.A. (finance) from
The American University.

Steven P. Petrucelli, Ph.D. has been a Director since June 1992 and our
Chief Technical Officer since September 2000. Dr. Petrucelli has declined to
stand for re-election to our Board. Dr. Petrucelli is a consultant in electronic
and medical technology and has been an Assistant Professor at Rutgers University
in the Biomedical and Electrical Engineering Departments since 1979. Dr.
Petrucelli received a B.S. in electrical engineering from Lehigh University and
an M.S. and Ph.D. in engineering from Rutgers University.

EXECUTIVE COMPENSATION

Summary Compensation. The following table contains summary information
concerning the annual compensation for the fiscal years ended March 31, 2002,
2001 and 2000 for our chief executive officer and certain other executive
officers whose salary and bonus exceeded $100,000 for the fiscal year ended
March 31, 2002:

LONG-TERM COMPENSATION
ANNUAL COMPENSATION ---------------------------------
-------------------------- NUMBER OF SHARES ALL OTHER
NAME & PRINCIPAL POSITION YEAR SALARY BONUS UNDERLYING OPTIONS COMPENSATION
------------------------- ---- -------- -------- ------------------ ------------

Joseph R. Mallon, Jr................ 2002 $275,000 $ -- -- $18,819(2)
Chief Executive Officer and 2001 260,000 72,800 50,000 19,832
Chairman of the Board(1) 2000 225,000 125,000 -- 16,343
Damon Germanton..................... 2002 275,000 -- -- 17,062(3)
President, Chief Operating 2001 260,000 72,800 50,000 18,040
Officer and Secretary 2000 225,000 125,000 -- 16,343
Mark W. Cappiello................... 2002 210,000 -- -- 17,063(4)
Vice President of Sales 2001 198,000 44,431 30,000 15,885
and Marketing 2000 171,500 67,481 -- 13,000
Kirk Dischino....................... 2002 198,000 -- -- 17,648(6)
Chief Financial Officer(5) 2001 187,000 40,112 30,000 15,922
2000 161,500 60,291 -- 13,000
Steven P. Petrucelli................ 2002 185,000 -- -- 3,881(8)
Chief Technical Officer(7) 2001 174,000 34,800 45,000 3,269
2000 120,000 35,000 -- --
Fergal Mulchrone.................... 2002 129,160 54,900 45,000 26,542(10)
Vice President and Chief Executive
Officer Terraillon Holdings Ltd(9)

---------------

(1) In June 2002, Frank Guidone replaced Mr. Mallon as Chief Executive Officer.

(2) For the fiscal year ended March 31, 2002, includes automobile allowance of
$11,000 and $7,819 in matching contributions by us pursuant to our 401(k)
plan.

(3) For the fiscal year ended March 31, 2002, includes automobile allowance of
$11,000, $2,507 in long-term disability income insurance premiums paid by
us for Mr. Germanton's benefit, and $3,555 in matching contributions by us
pursuant to our 401(k) plan.

(4) For the fiscal year ended March 31, 2002, includes automobile allowance of
$11,000 and $6,063 in matching contributions by us pursuant to our 401(k)
plan.

(5) Mr. Dischino's employment was terminated on February 15, 2002.

(6) For the fiscal year ended March 31, 2002, includes automobile allowance of
$9,625 and $8,023 in matching contributions by us pursuant to our 401(k)
plan.

(7) Dr. Petrucelli became an officer of Measurement Specialties in September
2000.

(8) For fiscal year ended March 31, 2002, includes $3,881 in matching
contributions by us pursuant to our 401(k) plan.

(9) Mr. Mulchrone became an officer of Measurement Specialties in August 2001
and ceased to be an employee of Measurement Specialties upon the sale of
Terraillon in September 2002.

(10) For the fiscal year ended March 31, 2002, includes automobile allowance of
$11,000, living expenses of $12,000 and $ 3,542 in matching contributions
by us pursuant to our 401(k) plan.

Option Grants in Last Fiscal Year to Named Executive Officers. The
following table sets forth information related to the grant of stock options by
us during the year ended March 31, 2002 to executive officers named in the
Summary Compensation Table.

POTENTIAL
REALIZABLE VALUE
INDIVIDUAL GRANTS AT ASSUMED
------------------------------------------------------------- ANNUAL RATES OF
PERCENT OF STOCK PRICE
NUMBER OF TOTAL OPTIONS APPRECIATION FOR
SECURITIES GRANTED TO EXERCISE OPTION TERM($)
UNDERLYING EMPLOYEES IN OR BASE PRICE EXPIRATION -----------------
NAME OPTIONS GRANTED FISCAL YEAR ($/SHARE) DATE 5% 10%
---- --------------- -------------- ------------- ---------- ------- -------

Fergal Mulchrone............ 45,000 20.2 15.80 (1) 25.74 40.98

---------------

(1) These options were cancelled in December 2002 prior to the applicable
expiration dates.

Aggregated Option Exercises and Fiscal Year-End Option Values. The
following table contains information concerning the aggregated option exercises
during the fiscal year ended March 31, 2002 and the value of unexercised options
held as of March 31, 2002 by the executive officers named in the summary
compensation table:

NUMBER OF SHARES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS
SHARES OPTIONS AT MARCH 31, 2002 AT MARCH 31, 2002(1)
ACQUIRED ON VALUE --------------------------- ---------------------------
NAME EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- ---------- ----------- ------------- ----------- -------------

Joseph R. Mallon,
Jr................... -- -- 202,000 40,000 $865,920 --
Damon Germanton........ 30,000 $ 131,400 10,000 40,000 -- --
Mark W. Cappiello...... -- -- 6,000 24,000 -- --
Kirk Dischino.......... 60,000 1,023,000 -- -- -- --
Steven P. Petrucelli... 15,000 218,220 9,000 42,000 -- $29,700
Fergal Mulchrone....... -- -- -- -- -- --

---------------

(1) Value of in-the-money options is based on the excess of the closing price of
our common stock on the American Stock Exchange on February 14, 2002 ($6.95)
over the exercise price of the options, multiplied by the number shares
underlying the options. The trading of our common stock was suspended from
February 15, 2002 until June 5, 2002. Trading of our common stock was
subsequently suspended from July 15, 2002 until November 1, 2002.

EXECUTIVE AGREEMENTS AND RELATED TRANSACTIONS

(A) TRANSACTIONS WITH MANAGEMENT AND OTHERS

In May 2002, we retained Corporate Revitalization Partners (CRP) to conduct
our ongoing operational/financial restructuring efforts. In June 2002, Frank
Guidone, a Managing Director of CRP, became our chief executive officer. As of
January 20, 2003, we have incurred approximately $2.0 million in consulting fees
and expenses to CRP (excluding the success fees described in this paragraph). In
addition to consulting fees based on hours billed by CRP consultants (at hourly
rates that range from $175 to $275 and that are capped at a maximum of 50 hours
per consultant each week), CRP received an aggregate "success fee" of $100,000
and warrants exercisable to purchase an aggregate of 87,720 shares of our common
stock (at an exercise price of $2.28/share) in connection with the successful
negotiation and execution of an extended forbearance agreement with our lenders
and our compliance as of September 30, 2002 with the terms of the forbearance
agreement with our lenders. CRP will earn an additional success fee of $50,000
and a warrant exercisable to purchase 43,860 shares of our common stock (at an
exercise price of $2.28/share) in the event that the company obtains a new line
of credit on or before January 31, 2003.

Mr. Guidone may be deemed to have an indirect beneficial ownership interest
in the warrants issued to CRP.

On September 20, 2002, we paid $1.4 million to Fergal Mulchrone, our Vice
President until September 2002 and Chief Executive Officer of Terraillon at the
time Terraillon was sold to Fukuda. In January 2003, we paid an additional
$157,720 to Mr. Mulchrone upon the release of the escrowed portion of the
proceeds from the sale of Terraillon. These payments (along with the
acceleration of certain vesting provisions applicable to our common stock held
by Mr. Mulchrone and the release of Mr. Mulchrone from certain restrictions on
competition) were made in connection with the settlement of any and all claims
of Mr. Mulchrone against us, including claims for compensation and claims
related to his sale of shares of Terraillon to us in August 2001.

On October 31, 2002, we received a $9.3 million bridge loan from Castletop
Capital, L.P., a limited partnership controlled by Mort Topfer, a Nominee for
Director and current Vice Chairman of our Board of Directors. The proceeds from
this loan were used to repay all our obligations under our term loan and
revolving credit facility. The loan is evidenced by a Senior Secured Note due
January 31, 2003 and does not include a revolving credit facility. Interest on
the note accrues at a rate of 7% per annum (subject to a 2% increase upon the
occurrence of an event of default under the note). Our obligations under the
note are secured by a lien on substantially all of our assets and substantially
all of the assets of IC Sensors. Castletop Capital also received a warrant to
purchase up to 297,228 shares of our common stock for an exercise price equal to
the average closing price of our common stock on the American Stock Exchange for
the first five trading days after October 31, 2002 ($1.64 per share). The
exercise price and number of shares subject to the warrant may be adjusted under
certain circumstances.

In connection with his resignation, we have agreed to make a severance
payment of $225,000 (one year's salary) to Mr. Mallon and to provide continued
medical insurance coverage under our group plan for one year following the date
of his resignation. We have also agreed to extend the exercise period for
certain options held by Mr. Mallon until January 31, 2004, and have agreed to
reimburse Mr. Mallon for up to $25,000 in tuition for continuing business
education.

We sublet a residence used by employees in China from Damon Germanton, an
officer and a Director whose term expires as of the date of the Annual Meeting,
under a month to month arrangement. Rent expense for the fiscal year ended March
31, 2002 was $5,784.

We donated $21,000 in the fiscal year ended March 31, 2002 to the gifts and
grants program of the Biomedical Engineering Department at Rutgers University's
College of Engineering, where Dr. Steven Petrucelli, our Chief Technical Officer
and a Director whose term expires as of the date of the Annual Meeting, is a
professor.

(B) BUSINESS RELATIONSHIPS

We paid approximately $15,000 in legal fees to John Arnold, a Director,
during the fiscal year ended March 31, 2002.

In September 2001, we loaned $125,000 to Steven Petrucelli to cover margin
calls generated by lower market prices of our common stock. At the time, Dr.
Petrucelli was subject to a lockup period related to our August 2001 public
offering that prevented him from selling shares of our common stock to cover the
margin calls. The largest amount outstanding under this loan during fiscal 2002
was $131,000. The loan, which was subsequently memorialized by a promissory note
dated August 1, 2002, accrues interest at a rate of 6% per year. As of January
20, 2003, the principal amount of $120,993 was outstanding under this loan.
Bimonthly payments of principal and interest in the amount of $1,000 are payable
until September 15, 2006. The entire unpaid balance of principal and accrued
interest under the note is due and payable on September 15, 2006.

PERFORMANCE GRAPH

The Performance Line Graph presents our total return to our shareholders
for the period March 31, 1997 to March 31, 2002. Our common stock is compared to
the S&P SmallCap 600 Index and two peer groups. The peer groups comprise of
publicly held companies with standard industrial classifications ("SIC")
appropriate for the company's two business segments. The peer group for the
company's consumer products segment (SIC 3634), as of March 31, 2002, consisted
of Conair Corp., Global-Tech Appliances Inc., National Presto Industries Inc.,
Salton Inc., Sunbeam Corp., and Water Pik Technologies Inc. The peer group for
the company's Sensor products segment (SIC 3823), as of March 31, 2002,
consisted of Aero Systems Engineering Inc., BEI Technologies Inc., Braintech
Inc., Circor International Inc., Electric City Corp., Electro-Sensors Inc.,
Electropure Inc., Environmental Tectonics Corp., Faro Technologies Inc., Flotek
Industries Inc., Haber Inc., Hurco Companies Inc., Intelligent Controls Inc.,
ISCO Inc., K Tron International Inc., K2 Digital Inc., Mikron Instrument Inc.,
MKS Instrument Inc., Perceptron Inc., Pollution Resh and Ctl Cp, PPT Vision
Inc., Qualmark Corp., RFP Express Inc., Robotic Vision Systems Inc., Rudolph
Technologies Inc., Schmitt Industries Inc., Sensar Corp., Sono Tek Corp.,
Startec Inc., Therma-Wave Inc., and Transmation Inc. The information contained
in this graph is not necessarily indicative of our future performance.

[PERFORMANCE GRAPH]

CUMULATIVE TOTAL RETURN
---------------------------------------------------
3/97 3/98 3/99 3/00 3/01 3/02
------ ------ ------ ------ ------ ------

Measurement Specialities, Inc............. 100.00 100.00 187.50 632.83 960.50 347.50
S&P SmallCap 600.......................... 100.00 147.68 124.31 162.47 160.38 221.04
Peer Group (1)............................ 100.00 98.59 49.58 140.89 68.23 88.02
Peer Group (2)............................ 100.00 145.39 36.58 41.39 16.11 18.77

---------------

* $100 invested on 3/31/97 in stock or index-including reinvestment of
dividends. Fiscal year ending March 31.

BENEFICIAL OWNERSHIP OF MEASUREMENT SPECIALTIES COMMON STOCK

The following table shows information regarding the beneficial ownership of
our common shares as of January 17, 2003 for:

- each of our directors;

- each executive officer named in the summary compensation table;

- all directors and executive officers as a group; and

- each person known to us to be the beneficial owner of more than 5% of our
outstanding shares of common stock.

AMOUNT AND NATURE
OF BENEFICIAL
NAME AND ADDRESS OF BENEFICIAL OWNER(1) OWNERSHIP(2) PERCENT(2)
--------------------------------------- ----------------- ----------

DIRECTORS AND EXECUTIVE OFFICERS:
Joseph R. Mallon, Jr.(3).................................... 569,840 4.7
Damon Germanton(4).......................................... 475,292 4.0
Morton L. Topfer(5)......................................... 642,423 5.3
Mark W. Cappiello(6)........................................ 147,200 1.2
Steven P. Petrucelli(7)..................................... 136,000 1.1
Fergal Mulchrone............................................ 117,945 1.0
Dan J. Samuel(8)............................................ 58,600 *
John D. Arnold(9)........................................... 37,000 *
Kirk Dischino............................................... 25,000 *
41 Lockwood Drive Waldwick, NJ 07463
Frank D. Guidone(10)........................................ 99,720 *
All directors and officers as a group (twelve
persons)(11).............................................. 2,371,220 18.8
FIVE PERCENT SHAREHOLDERS:
Wellington Management Company, LLP.......................... 1,135,400 9.5
75 State Street
Boston, MA 02109(12)
George U. Wyper
c/o Wyper Capital Management, L.L.C. ..................... 622,000 5.2
350 Park Avenue, 16th Floor
New York, New York 10022(13)

---------------

* Less than 1%

(1) Unless otherwise indicated, the address of each person is c/o Measurement
Specialties, Inc., 710 Route 46 East, Suite 206, Fairfield, NJ 07004.

(2) Beneficial ownership is determined in accordance with the rules and
regulations of the Securities and Exchange Commission. In computing the
number of shares beneficially owned by a person and the percentage
ownership of that person, shares of common stock subject to options and
warrants held by that person that are currently exercisable or exercisable
within 60 days of the date hereof are deemed outstanding. Such shares,
however, are not deemed outstanding for the purposes of computing the
percentage ownership of any other person. Except as indicated in the
footnotes to this table and pursuant to applicable community property laws,
each stockholder named in the table has sole voting and investment power
with respect to the shares set forth opposite such stockholder's name. The
percentage of beneficial ownership is based on 11,912,958 shares of common
stock outstanding as of January 17, 2003.

(3) Includes options to purchase 164,000 shares.

(4) Includes options to purchase 20,000 shares. Also, includes 125,126 shares
of which Mr. Germanton's children are the record owners. Does not include
92,115 shares that Mr. Germanton gave as gifts to other family members.

(5) Includes options to purchase 10,000 shares. Includes 314,081 shares of our
common stock and warrants to purchase 297,228 shares held by Castletop
Capital, L.P., a private investment company of which Mr. Topfer is a
Managing Director. Mr. Topfer has shared voting and shared investment power
with respect to the shares and warrants held by Castletop Capital.

(6) Includes options to purchase 12,000 shares.

(7) Includes options to purchase 24,000 shares.

(8) Includes options to purchase 32,000 shares.

(9) Includes options to purchase 17,000 shares.

(10) Includes 12,000 shares purchased by Four Corners Capital Partners, LP
(FCCP). Mr. Guidone is a limited partner of FCCP and a member of the
General Partner of FCCP. Mr. Guidone has shared voting and shared
investment power with respect to the shares owned by FCCP. Includes
warrants to purchase up to 87,720 shares of our common stock held by
Corporate Revitalization Partners (CRP), a crisis management firm of which
Mr. Guidone is a Managing Director. Mr. Guidone has shared voting power and
shared dispositive power for the shares held by CRP.

(11) Includes options/warrants to purchase an aggregate of 723,648 shares. In
addition to shares owned by the persons named in the beneficial ownership
table, includes 2,500 shares of our common stock held by John P. Hopkins,
our Chief Financial Officer, and options to purchase 59,700 shares of our
common stock held by J. Victor Chatigny, our Vice President and General
Manager of our Sensors division.

(12) Includes 1,035,400 shares of common stock for which Wellington Management
Company, LLP (WMC), an investment adviser, has shared voting power and
1,135,400 shares for which WMC has shared dispositive power. The shares are
owned of record by WMC's clients. Based solely on the Schedule 13G filed by
WMC on February 12, 2002.

(13) Based solely on the Schedule 13G filed by Mr. Wyper on November 15, 2002.

OTHER MATTERS

The Board of Directors is not aware of any matters other than those set
forth in this proxy statement that will be presented for action at the Annual
Meeting. However, if any other matter should properly come before the meeting,
the persons authorized by the accompanying proxy will vote and act with respect
thereto, in what according to their judgment, is in the interests of Measurement
Specialties and its shareholders.

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

We believe that, under the Securities and Exchange Commission's rules for
reporting of securities transactions by executive officers, directors and
beneficial owners of more than 10% of our common stock, all required reports
during fiscal 2002 were timely filed.

ANNUAL REPORT ON FORM 10-K

In addition to the proxy statement and proxy card, a copy of Measurement
Specialties' annual report on Form 10-K for the fiscal year ended March 31, 2002
and the amendment thereto on Form 10-K/A, which are not part of the proxy
soliciting material, are enclosed. The annual report on Form 10-K is being
furnished to you without the exhibits thereto. Upon your request, the company
will provide you with a copy of the exhibits. You may under some circumstances
be responsible for the company's reasonable expenses in furnishing such
exhibits.

STOCKHOLDER PROPOSALS FOR THE 2003 ANNUAL MEETING

Any stockholder who intends to present a proposal at the 2003 Annual
Meeting of Shareholders must ensure that the proposal is received by the
Secretary at Measurement Specialties Inc., 710 Route 46 East, Suite 206,
Fairfield, NJ 07004, not later than May 23, 2003, if the proposal is submitted
for inclusion in our proxy materials for that meeting pursuant to Rule 14a-8
under the Securities Exchange Act of 1934 or is otherwise submitted.

January 31, 2003

APPENDIX A

AMENDED AND RESTATED AUDIT COMMITTEE CHARTER

A-1

MEASUREMENT SPECIALTIES, INC.

AMENDED AND RESTATED AUDIT COMMITTEE CHARTER

DATE OF ADOPTION: JANUARY 24, 2003

PURPOSE

The Audit Committee is appointed by the Board to assist the Board in
monitoring (1) the integrity of the financial statements of Measurement
Specialties, Inc. (the "Company"), (2) the independent auditor's qualifications
and independence, (3) the performance of the Company's independent auditors, and
(4) the compliance by the Company with legal and regulatory requirements.

The Audit Committee shall prepare the report required by the rules of the
Securities and Exchange Commission (the "Commission") to be included in the
Company's annual proxy statement.

COMMITTEE MEMBERSHIP

The Audit Committee shall consist of no fewer than three members. The
members of the Audit Committee shall meet the independence and experience
requirements of the American Stock Exchange, Section 10A(m)(3) of the Securities
Exchange Act of 1934 (the "Exchange Act") and the rules and regulations of the
Commission. At least one member of the Audit Committee shall be a financial
expert as defined by the Commission.

The members of the Audit Committee shall be appointed by the Board. Audit
Committee members may be replaced by the Board.

MEETINGS

The Audit Committee shall meet as often as it determines, but not less
frequently than quarterly. The Audit Committee shall meet periodically with
management and the independent auditor in separate executive sessions. The Audit
Committee may request any officer or employee of the Company or the Company's
outside counsel or independent auditor to attend a meeting of the Committee or
to meet with any members of, or consultants to, the Committee.

COMMITTEE AUTHORITY AND RESPONSIBILITIES

The Audit Committee shall have the sole authority to select, evaluate and,
where appropriate, replace the independent auditor (subject, if applicable, to
shareholder ratification). The Audit Committee shall be directly responsible for
the compensation and oversight of the work of the independent auditor (including
resolution of disagreements between management and the independent auditor
regarding financial reporting) for the purpose of preparing or issuing an audit
report or related work. The independent auditor shall report directly to the
Audit Committee and shall be accountable to the Audit Committee and the Board.

The Audit Committee shall preapprove all auditing services and permitted
non-audit services (including the fees and terms thereof) to be performed for
the Company by its independent auditor. This preapproval requirement shall be
subject to the de minimis exception for non-audit services described in Section
10A(i)(1)(B) of the Exchange Act if such services are approved by the Audit
Committee prior to the completion of the audit. The Audit Committee may, when
appropriate, form and delegate authority to subcommittees consisting of one or
more members who are independent directors of the Board, including the authority
to grant preapprovals of audit and permitted non-audit services, provided that
decisions of such subcommittee to grant preapprovals shall be presented to the
full Audit Committee at its next scheduled meeting.

The Audit Committee shall have the authority, to the extent it deems
necessary or appropriate, to retain independent legal, accounting or other
advisors. The Company shall provide for appropriate funding, as
A-2

determined by the Audit Committee, for payment of compensation to the
independent auditor for the purpose of rendering or issuing an audit report and
to any advisors employed by the Audit Committee.

The Audit Committee shall make regular reports to the Board. The Audit
Committee shall review and reassess the adequacy of this Charter annually and
recommend any proposed changes to the Board for approval. The Audit Committee
shall annually review the Audit Committee's own performance.

The Audit Committee, to the extent it deems necessary or appropriate,
shall:

FINANCIAL STATEMENT AND DISCLOSURE MATTERS

1. Review and discuss with management and the independent auditor the
annual audited financial statements, including disclosures made in management's
discussion and analysis, and recommend to the Board whether the audited
financial statements should be included in the Company's Form 10-K.

2. Review and discuss with management and the independent auditor the
Company's quarterly financial statements prior to the filing of its Form 10-Q,
including the results of the independent auditor's review of the quarterly
financial statements.

3. Discuss with management and the independent auditor significant
financial reporting issues and judgments made in connection with the preparation
of the Company's financial statements, including any significant changes in the
Company's selection or application of accounting principles, any material issues
as to the adequacy of the Company's internal controls and any special steps
adopted in light of material control deficiencies.

4. Review and discuss quarterly reports from the independent auditors on:

(a) All critical accounting policies and practices to be used.

(b) All alternative treatments of financial information within
generally accepted accounting principles that have been discussed with
management, ramifications of the use of such alternative disclosures and
treatments, and the treatment preferred by the independent auditor.

(c) Other material written communications between the independent
auditor and management, such as any management letter or schedule of
unadjusted differences.

5. Discuss with management the Company's earnings press releases,
including the use of "pro forma" or "adjusted" non-GAAP information, as well as
financial information and earnings guidance provided to analysts and rating
agencies. Such discussion may be done generally (consisting of discussing the
types of information to be disclosed and the types of presentations to be made).

6. Discuss with management and the independent auditor the effect of
regulatory and accounting initiatives as well as off-balance sheet structures on
the Company's financial statements.

7. Discuss with management the Company's major financial risk exposures
and the steps management has taken to monitor and control such exposures,
including the Company's risk assessment and risk management policies.

8. Discuss with the independent auditor the matters required to be
discussed by Statement on Auditing Standards No. 61 relating to the conduct of
the audit, including any difficulties encountered in the course of the audit
work, any restrictions on the scope of activities or access to requested
information, and any significant disagreements with management.

9. Review disclosures made to the Audit Committee by the Company's CEO and
CFO during their certification process for the Form 10-K and Form 10-Q about any
significant deficiencies in the design or operation of internal controls or
material weaknesses therein and any fraud involving management or other
employees who have a significant role in the Company's internal controls.

A-3

OVERSIGHT OF THE COMPANY'S RELATIONSHIP WITH THE INDEPENDENT AUDITOR

10. Review and evaluate the lead partner of the independent auditor team.

11. Obtain and review a report from the independent auditor at least
annually, consistent with Independence Standards Board Standard 1, regarding (a)
the independent auditor's internal quality-control procedures, (b) any material
issues raised by the most recent internal quality-control review, or peer
review, of the firm, or by any inquiry or investigation by governmental or
professional authorities within the preceding five years respecting one or more
independent audits carried out by the firm, (c) any steps taken to deal with any
such issues, and (d) all relationships between the independent auditor and the
Company. Evaluate the qualifications, performance and independence of the
independent auditor (discussing with the independent auditor any disclosed
relationships or services that may have an impact on the objectivity and
independence of the auditor), including considering whether the auditor's
quality controls are adequate and the provision of permitted non-audit services
is compatible with maintaining the auditor's independence, and taking into
account the opinions of management. The Audit Committee shall present its
conclusions with respect to the independent auditor to the Board.

12. Ensure the rotation of the lead (or coordinating) audit partner having
primary responsibility for the audit and the audit partner responsible for
reviewing the audit as required by law. Consider whether, in order to assure
continuing auditor independence, it is appropriate to adopt a policy of rotating
the independent auditing firm on a regular basis.

13. Recommend to the Board policies for the Company's hiring of employees
or former employees of the independent auditor who participated in any capacity
in the audit of the Company.

14. Discuss with the national office of the independent auditor issues on
which they were consulted by the Company's audit team and matters of audit
quality and consistency. Review and approve the audit plan of the independent
auditor.

15. Meet with the independent auditor prior to the audit to discuss the
planning and staffing of the audit.

COMPLIANCE OVERSIGHT RESPONSIBILITIES

16. Obtain from the independent auditor assurance that Section 10A(b) of
the Exchange Act has not been implicated.

17. Obtain reports from management and the independent auditor that the
Company and its subsidiary/ foreign affiliated entities are in conformity with
applicable legal requirements and the Company's Code of Business Conduct and
Ethics. Review reports and disclosures of insider and affiliated party
transactions. Advise the Board with respect to the Company's policies and
procedures regarding compliance with applicable laws and regulations and with
the Company's Code of Business Conduct and Ethics.

18. Establish procedures for the receipt, retention and treatment of
complaints received by the Company regarding accounting, internal accounting
controls or auditing matters, and the confidential, anonymous submission by
employees of concerns regarding questionable accounting or auditing matters.

19. Discuss with management and the independent auditor any correspondence
with regulators or governmental agencies and any published reports which raise
material issues regarding the Company's financial statements or accounting
policies.

20. Discuss with the Company's General Counsel legal matters that may have
a material impact on the financial statements or the Company's compliance
policies.

21. Periodically review and discuss with management the status of
management's implementation of recommendations made by the Audit Committee.

A-4

LIMITATION OF AUDIT COMMITTEE'S ROLE

While the Audit Committee has the responsibilities and powers set forth in
this Charter, it is not the duty of the Audit Committee to plan or conduct
audits or to determine that the Company's financial statements and disclosures
are complete and accurate and are in accordance with generally accepted
accounting principles and applicable rules and regulations. These are the
responsibilities of management and the independent auditor.

A-5

PROXY

MEASUREMENT SPECIALTIES, INC.

Annual Meeting of Shareholders - Monday, March 3, 2003

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS FOR USE AT
THE 2002 ANNUAL MEETING OF SHAREHOLDERS ON MARCH 3, 2003

The shares of common stock of Measurement Specialties, Inc. you are
entitled to vote at the 2002 Annual Meeting of Shareholders will be voted as you
specify.

By signing this proxy, you revoke all prior proxies and appoint Frank D.
Guidone and John P. Hopkins, and each of them, with full power of substitution,
to vote all shares you are entitled to vote on the matters shown on the reverse
side, as directed in this proxy and, IN THEIR DISCRETION, ON ANY OTHER MATTERS
WHICH MAY COME BEFORE THE ANNUAL MEETING AND ALL POSTPONEMENTS AND ADJOURNMENTS.

THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED AS DIRECTED, OR IF NO
DIRECTION IS GIVEN, WILL BE VOTED FOR THE ELECTION OF MORTON L. TOPFER AND FOR
THE RATIFICATION OF THE SELECTION OF GRANT THORNTON LLP AS OUR INDEPENDENT
AUDITORS FOR FISCAL 2003.

(Continued and to be signed on the reverse side)

ANNUAL MEETING OF SHAREHOLDERS OF

MEASUREMENT SPECIALTIES, INC.

Monday, March 3, 2003

PROXY VOTING INSTRUCTIONS

MAIL - Date, sign and mail your proxy card in the envelope provided as soon as
possible.

- OR -

TELEPHONE - Call toll-free 1-800-PROXIES from any touch-tone telephone and
follow the instructions. Have your control number and proxy card available when
you call.

- OR -

INTERNET - Access "www.voteproxy.com" and follow the on-screen instructions.
Have your control number available when you access the web page.

COMPANY NUMBER
-------------------------
ACCOUNT NUMBER
-------------------------
NUMBER OF SHARES
-------------------------
CONTROL NUMBER
-------------------------

* PLEASE DETACH AND MAIL IN THE ENVELOPE PROVIDED
IF YOU ARE NOT VOTING VIA TELEPHONE OR THE INTERNET. *

THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR"
THE ELECTION OF ONE DIRECTOR 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]

FOR WITHHOLD FOR AGAINST ABSTAIN
AUTHORITY

1. To elect Morton L. [ ] [ ] 2. To ratify [ ] [ ] [ ]
Topfer to the the selection
Board of Directors by the company
of the company for of Grant
the term described Thornton LLP,
in the proxy independent
statement. public
accountants,
to audit the
financial
statements of
the company for
the fiscal year
ending March 31,
2003.

SIGN, DATE AND
RETURN PROXY CARD
PROMPTLY USING
THE ENCLOSED
ENVELOPE

To change the address on your
account, please check the box at [ ]
the right and indicate your new
address in the address space
above. Please note that changes
to the registered name(s) on the
account may not be submitted via
this method.

Signature of Shareholder Date:
----------------------------------- --------------
Signature of Shareholder Date:
----------------------------------- --------------

Note: This proxy must be signed exactly as the name appears hereon. When shares
are held jointly, each holder should sign. When signing as executor,
administrator, attorney, trustee or guardian, please give full title as such. If
the signer is a corporation, please sign full corporate name by duly authorized
officer, giving full title as such. If signer is a partnership, please sign in
partnership name by authorized person.