UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
SCHEDULE
14A
Proxy Statement Pursuant to Section 14(a) of
the Securities
Exchange Act of 1934
Filed by the Registrant x
Filed by a Party other than the Registrant o
Check the appropriate box:
o Preliminary Proxy
Statement
o Confidential, for Use of the
Commission Only (as permitted by Rule 14a-6(e)(2))
x Definitive Proxy Statement
o Definitive Additional
Materials
o Soliciting Material Pursuant to
§240.14a-12
Technology
Research
Corporation
(Name of Registrant as Specified In Its Charter)
N/A
(Name of Person(s) Filing Proxy Statement, if other than the
Registrant)
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x No fee required.
o Fee computed on table below per
Exchange Act Rules 14a-6(i)(1) and 0-11.
1) Title of
each class of securities to which transaction applies:
______________________________________________________________________________________________________________________________________________
2) Aggregate
number of securities to which transaction applies:
______________________________________________________________________________________________________________________________________________
3) Per unit
price or other underlying value of transaction computed pursuant to Exchange Act
Rule 0-11 (set forth the amount on which the filing fee is calculated and
state how it was determined):
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paid:
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preliminary materials.
o Check box if any part of the fee
is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing
for which the offsetting fee was paid previously. Identify the previous
filing by registration statement number, or the Form or Schedule and the date of
its filing.
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Party:
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4) Date
Filed:
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TECHNOLOGY RESEARCH CORPORATION
________________________
Notice of Annual Meeting of Shareholders
to be held August 25, 2005
______________________
To the Shareholders of
TECHNOLOGY RESEARCH CORPORATION
You are cordially invited to attend the
Annual Meeting of Shareholders of Technology Research Corporation, a Florida
corporation (the "Company"), which will be held on August 25,
2005, at 2:30 P.M. local time, at the Radisson Hotel and Conference
Center, 12600 Roosevelt Blvd., St. Petersburg, Florida 33716, for the
following purposes:
1. Election of Directors.
2. Ratification of Independent
Registered Public Accounting Firm.
3. To consider and act upon any matters
related to the foregoing purposes and to transact such other business as may
properly be brought before the meeting and at any adjournments thereof.
A Proxy Statement and Board of Directors
Proxy are being mailed with this notice. You are invited to attend the
meeting in person, but if you are unable to do so, the Board of Directors
requests that you sign, date and return the proxy, as promptly as practicable,
by means of the enclosed envelope. If you are present at the meeting and
desire to vote in person, you may revoke the proxy, and if you receive more than
one proxy (because of different addresses of stockholdings), please fill in and
return each proxy to complete your representation.
By
order of the Board of Directors
Robert
S. Wiggins
Chairman
of the Board
Clearwater, Florida
July 11, 2005
Enclosures
TECHNOLOGY RESEARCH CORPORATION
2005 PROXY STATEMENT
TABLE OF CONTENTS
TECHNOLOGY
RESEARCH CORPORATION
5250-140th
Avenue North
Clearwater,
Florida 33760
________________________
________________________
FOR
ANNUAL MEETING OF SHAREHOLDERS
TO
BE HELD August 25, 2005
This Proxy
Statement is being furnished to each holder of record of one or more outstanding
shares of the single class of common capital stock authorized for issuance by
the Articles of Incorporation of Technology Research Corporation (the
"Company"), for his, her or its use in considering whether to
comply with the proxy solicitation being made by the Company's Board of
Directors (the “Board of Directors” or the
“Board”) in connection with the conduct of the 2005 annual
meeting of the Company's shareholders, and of any adjournments or postponements
thereof (the "Meeting"). Each copy of this Proxy
Statement being mailed or otherwise delivered to shareholders is accompanied by
a Proxy card and a Notice of Annual Meeting of Shareholders, and such materials
are being mailed to Company shareholders of record on or about July 11,
2005.
The Meeting
is scheduled to be held on August 25, 2005 at 2:30 P.M. local time, at the
Radisson Hotel and Conference Center, 12600 Roosevelt Blvd., St.
Petersburg, Florida 33716. Only holders of record of the Company's common
voting stock at the close of business on July 1, 2005 (the “Record
Date”) are entitled to receive notice of and to vote at the Meeting.
At the Meeting, such holders will be asked to consider and vote upon the
following proposals:
PROPOSAL
ONE: To elect a board of directors to consist of seven members, each of
whom shall be entitled to serve for a term of one year; and
PROPOSAL
TWO: To ratify the selection by the Board of Directors of KPMG LLP as the
Company's independent registered public accounting firm for the fiscal year
ending
March 31, 2006.
The Company’s
common stock, $.51 par value (the “Common Stock”), is the only
type of security entitled to vote at the Meeting. On the Record Date for
determining shareholders entitled to vote at the Meeting, there were 5,774,875
shares of Common Stock outstanding. Each shareholder of record on the
Record Date is entitled to one vote for each share of Common Stock then
held. Shares of Common Stock may not be voted cumulatively. All
votes cast by proxies returned prior to the conduct of the Meeting will be
tabulated by the Registrar and Transfer Company, the Company’s stock
transfer agent, who will tabulate affirmative and negative votes, abstentions
and broker non-votes. The Company’s Chief Financial Officer will be the
inspector of elections for the Meeting and will determine the validity of the
final vote tabulation, including those shares voted in person or by proxies
submitted or changed during the conduct of the Meeting.
Quorum
Required
The Company’s
Bylaws provide that the holders of a majority of the issued and outstanding
shares of Common Stock (2,887,438), present in person or represented by valid
proxy, shall constitute a quorum for the transaction of business at the Meeting.
Abstentions and broker non-votes will be counted as present for the
purpose of determining the presence of a quorum.
Vote
Required
PROPOSAL ONE:
Directors are elected by a plurality of the affirmative votes cast by
those shares present in person or represented by proxy and entitled to vote at
the Meeting. The seven nominees for director positions receiving the
highest number of affirmative votes will be elected. Abstentions and
broker non-votes will not be counted toward a nominee’s total.
PROPOSAL
TWO: Passage will require an affirmative vote by the holders of a majority
of those shares present in person or represented by proxy, and which are cast
either affirmatively or negatively at the Meeting. As in the case of
Proposal One, abstentions and broker non-votes will not be counted as having
been voted on any such proposal.
The current
directors and executive officers of the Company and their affiliates are
expected to be the beneficial owners, as of the Record Date, of 299,218 shares,
or 5.2%, of the outstanding shares of Common Stock. Each has indicated an
intention to vote in favor of Proposals One and Two.
Voting
of Shares
If your
shares of Common Stock are registered directly in your name with the Company’s
transfer agent, you are considered, with respect to those shares, the
shareholder of record, and these proxy materials are being sent
directly to you by the Company. As the shareholder of record, you
have the right to vote in person at the Meeting or to grant your voting proxy
directly to the Company or another proxy holder. The Company has enclosed
a proxy card for you to use.
If your
shares are held in a brokerage account, or by another nominee, you are
considered the beneficial owner of shares held in street name, and
these proxy materials are being forwarded to you, together with a voting
instruction card, by your broker or other nominee. As the beneficial
owner, you have the right to direct your broker or other nominee how to vote and
are also invited to attend the Meeting. Your broker or other nominee has
enclosed or provided voting instructions for you to use in directing the broker
or other nominee how to vote your shares.
Shares of
Common Stock held in a shareholder’s name as the shareholder of record
may be voted in person at the Meeting. Shares of Common Stock held
beneficially in street name may be voted in person only if you obtain a
legal proxy from the broker or other nominee that holds your shares giving you
the right to vote the shares.
Whether you
hold shares directly as the shareholder of record or beneficially in
street name, you may direct how your shares are voted without attending
the Meeting. If you are a shareholder of record, you may vote by
submitting a proxy. If you hold shares beneficially in street
name, you may vote by submitting voting instructions to your broker or
other nominee.
Whether or
not you are able to attend the Meeting, you are urged to complete and return
your proxy or voting instructions, which are being solicited by the Board of
Directors and which will be voted as you direct on your proxy or voting
instructions when properly completed. In the event no directions are
specified, such proxies and voting instructions will be voted FOR the nominees
for election to the Board of Directors as set forth in Proposal One below, FOR
Proposal Two and in the discretion of the proxy holders as to other matters that
may properly come before the Meeting. You may also revoke or change your
proxy or voting instructions at any time before the Meeting. To revoke
your proxy, please send a written notice of revocation or another signed proxy
with a later date to the Chief Financial Officer of the Company at the Company’s
principal executive offices before the beginning of the Meeting. You may
also automatically revoke your proxy by attending the Meeting and voting in
person. To revoke your voting instructions, please submit new voting
instructions to your broker or other nominee, or, if you have obtained a legal
proxy from your broker or other nominee giving you the right to vote your
shares, by attending the meeting and voting in person. All shares
represented by a valid proxy received prior to the Meeting will be
voted.
Solicitation
of Proxies
As this
solicitation is being made exclusively by the Board of Directors, any costs
incurred in connection therewith, including the costs of preparation, assembly,
printing and mailing of this Proxy Statement, the accompanying Notice of Annual
meeting, and any additional soliciting material furnished to shareholders, will
be borne by the Company. Copies of solicitation material will be furnished
to brokerage houses, fiduciaries and custodians holding shares in their names
that are beneficially owned by others so that they may forward this solicitation
material to such beneficial owners. The Company may reimburse such persons
for their costs of forwarding the solicitation material to such beneficial
owners. All proxies are being solicited by mail in the accompanying form,
but further solicitation following the original mailing may be made by Board
representatives or agents by telephone, telegraph or personal contact with
certain shareholders. No additional compensation will be paid to these
representatives for such services. Except as described above, the Company does
not intend to solicit proxies other than by mail.
WHILE
MANAGEMENT ENCOURAGES YOUR ATTENDANCE AT THE MEETING, HOLDERS OF COMMON STOCK
ARE REQUESTED TO SIGN, DATE AND RETURN PROMPTLY THE ACCOMPANYING PROXY TO THE
COMPANY IN THE ENCLOSED POSTAGE-PAID, ADDRESSED ENVELOPE.
The directors
and executive officers of the Company are as follows:
| Name |
Age |
Position |
| Jerry T. Kendall |
62 |
Director, President and Chief Executive Officer |
|
Raymond
B. Wood |
70 |
Director,
Senior Vice President and Director of
Government Operations and Marketing |
| Scott J. Loucks |
43 |
Vice President of Finance and Chief Financial Officer |
| Robert S. Wiggins |
75 |
Chairman of the Board |
| Gerry Chastelet (1)(2)(3) |
58 |
Director |
| Edmund F. Murphy, Jr. (1)(2)(3) |
76 |
Director |
| Martin L. Poad (1)(2)(3) |
65 |
Director |
| David F. Walker (1)(2)(3) |
51 |
Director |
_______________________________
Footnotes:
1
Member of the Audit Committee.
2
Member of the Compensation Committee.
3
Member of the Nominating Committee.
Certain
Related Biographical Information About Directors and Executive Officers of
the Company.
JERRY T. KENDALL has been the President and a Director of the Company since April 2003 and Chief Executive officer of the Company since August 2004. Mr. Kendall attended Georgia Institute of Technology and Georgia State University receiving his BA in Management in 1967 and his MBA in 1970 from Georgia State University. Mr. Kendall previously served as Executive Vice President, and President of The Americas, for Sensormatic Electronics Corporation, then a $1.1 billion electronics security company. Other prior executive management positions include Senior Vice President of Sales, Marketing and Customer Service for Security Tag Corporation, President of Lasergate Corporation and President, CEO and a member of the Board of Directors of Paradyne Corporation. He also held sales management positions with Inforex, sales positions with IBM and was a financial analyst with the Lockheed Georgia Company. Mr. Kendall also previously served on the Company's Board of Directors for 4 1/2 years in the 1994 - 1998 time frame.
RAYMOND B.
WOOD, a founder of the Company, has been a Director, Senior Vice
President and Director of Government Operations and Marketing of the Company
since its inception in 1981. From 1974 to 1981, he was Manager of Engine
Generator Component Marketing for Square D Company. He was employed by
Electromagnetic Industries, Inc. for 20 years prior to its acquisition by Square
D Company. During this time, he held the position of General Manager of
Electromagnetic Industries of Georgia Inc., the systems manufacturing plant for
military products such as diesel generating systems, generators, controls,
semi-trailers, etc. Previous assignments included service as Project and Design
Engineer for military products produced by Electromagnetic Industries Inc.
Mr. Wood is a charter member of the industries association, Electrical
Generating Systems Association (“EGSA”), has served on its Board of Directors
and has been the Chairman of the Government Liaison Committee for over 25
years. Mr. Wood is also a member of the U.S. Naval Institute. For
over 40 years, he has been involved in design, manufacture and qualification
conformance evaluation for listing by the Department of Defense, marketing and
product application concerning control and measurement of electric power for
Mobile Ground Power Military Engine Generator Systems, and electrical power
controls for Naval Shipboard and Military Armored Tracked Vehicle
application. During such period, Mr. Wood has had extensive contact with
the military procurement, contract administration, engineering and test
qualifying locations, as well as with the government prime contractors to the
Department of Defense. Mr. Wood has served on numerous ad hoc committees
for military engine generator specification review requirements and is
frequently consulted for solutions to problems encountered with military engine
generator systems by both the military and prime contractors to the Department
of Defense.
SCOTT J.
LOUCKS has served the Company in various capacities since March 1985.
Mr. Loucks performed the duties of Information Technology Manager for four
years, Controller for seven years and Vice President of Finance and Chief
Financial Officer since August 1996. Mr. Loucks has a Bachelor of Science
Degree in computer science and a minor degree in mathematics from Florida State
University. Mr. Loucks has also been a Director and the Secretary of the
Company’s Honduran subsidiary, TRC/Honduras S.A. de C.V., since February
1997.
ROBERT S.
WIGGINS has been a Director of the Company and the Chairman of the
Board since March 1988 and Chief Executive officer of the Company from
March 1988 through August 2004. From 1974 to 1987, he was Chairman, Chief
Executive Officer and President of Paradyne Corporation, Largo, Florida, a data
communications company. Mr. Wiggins served as a consultant for Paradyne
from 1987 to March 1988. In addition, he spent three years with GTE
Information Systems Division as a Vice President and 13 years in various sales
and product development managerial positions with IBM Corporation. Mr.
Wiggins earned his MA degree in mathematics from the University
of Florida, and his BA degree from the University of Florida,
majoring in mathematics with a minor in economics.
GERRY
CHASTELET has served as a member of the Board of Directors since
1999. Mr. Chastelet retired from the technology industry in January 2002.
From October 1998 to January 2002, Mr. Chastelet was Chairman of the
Board, Chief Executive Officer, President and a Director of Digital Lightwave,
Inc., a leading provider of optical network test and management products.
From December 1995 to October 1998, Mr. Chastelet was President, Chief
Executive Officer and a Director of Wandel & Goltermann Technologies, Inc.,
a global supplier of communications test and measurement equipment. Prior to
joining Wandel & Goltermann, Mr. Chastelet held senior management positions
with Network Systems Corporation, Gandalf Systems Corporation and Paradyne
Corporation. During his career, he also spent 15 years with the IBM
Corporation in various sales, service, marketing and management positions.
Currently, Mr. Chastelet also serves as a director of Waverider
Communications, Inc. Mr. Chastelet has a degree in Electronic Engineering from
Devry Institute of Technology and is a graduate of the University of Toronto
Executive MBA Program.
EDMUND F.
MURPHY, JR. has served as a member of the Board of Directors since
1988. For many years, Mr. Murphy functioned as the sole owner and Chief
Executive of Murphy Management Consultants, Inc., a Belleair, Florida based
consulting firm. Prior to that activity, Mr. Murphy served as Senior Vice
President of International Marketing for Paradyne Corporation, a Largo, Florida
based, publicly held distributor of data communications equipment.
MARTIN L.
POAD has served as a member of the Board of Directors since 1998.
Mr. Poad is the founder and Chairman of Interlink Communication Systems,
Inc. (ICS), a value-added distribution company for data communications equipment
and internet working products. Mr. Poad has significant expertise in using
the Internet for market development and on-line commerce. Prior to founding ICS,
Mr. Poad had been with the IBM Corporation for 19 years in various sales and
senior management positions. He held a number of senior management
positions with Paradyne Corporation and AT&T Paradyne, including Vice
President of Distribution. Mr. Poad is a graduate of Carnegie-Mellon
University, majoring in industrial management with a minor in mechanical
engineering.
DAVID F.
WALKER has served as a member of the Board of Directors since March
2004. Mr. Walker is the Director of the Accountancy Program and Program
for Social Responsibility and Corporate Reporting at the University of South
Florida St. Petersburg, where he has been employed since 2002. Prior to
joining the University, Mr. Walker was with Arthur Andersen LLP, having served
as a partner in that firm from 1986 through 2002. Mr. Walker currently
serves on the Board of Directors of Chico's FAS,
Inc. (NYSE:CHS), First Advantage Corporation (NASDAQ: FADV) and Paradyne
Networks, Inc. (NASDAQ: PDYN), participating on the Executive, Audit and
Corporate Governance committees of the Chico's Board, chairing the Audit
Committee for both First Advantage and Paradyne, and chairing the Nominating
Committee for Paradyne. Mr. Walker earned the MBA degree from the
University of Chicago Graduate School of Business in accounting, finance and
marketing, and the BA degree from DePauw University with majors in
economics and mathematics and a minor in business administration. Mr.
Walker is also a CPA and a Certified Fraud Examiner.
The members
of the Company's Board of Directors and its executive officers, as well as
persons who own more than ten per cent of the Company’s outstanding shares of
Common Stock, are subject to the reporting requirements of Section 16(a) of the
Exchange Act (“Section 16(a)”), which require them to file with
the Securities and Exchange Commission reports with respect to their ownership
of Common Stock and their transactions therein. Based upon (i) the copies
of Section 16(a) reports that the Company received from such persons for
their fiscal 2005 transactions in the Common Stock and their Common Stock
holdings, and (ii) the written representations received from one or more of such
persons that no annual Form 5 reports were required to be filed by them
for fiscal 2005, the Company believes that all reporting requirements under
Section 16(a) were met in a timely manner by all such persons except the
following Form 4 filings arising from: 1) an 8,333 share stock
option exercised by Mr. Wiggins on April 1, 2004, notice of which
was filed on May 21, 2004, or 34 days late; and 2) a 10,000 share
stock option granted to each of Messrs. Chastelet, Murphy, Poad
and Walker on March 30, 2005, notices of which were filed
on April 7, 2005, or four days late.
During fiscal
2005, the Board of Directors held four meetings and did not act by written
consent in lieu of a meeting on any occasion. During that period, each of
the current directors attended or participated in at least 75% of the aggregate
of (i) the total number of meetings of the Board of Directors and (ii) the total
number of meetings held by all committees of the Board on which he
served.
The Board of
Directors has an Audit Committee, a Compensation Committee and a
Nominating Committee.
Audit
Committee. The Audit Committee of the Board of Directors (the
“Audit Committee”) monitors the integrity of the Company’s
financial statements, the independence and qualifications of the independent
registered public accounting firm, the performance of the Company’s independent
registered public accounting firm and the effectiveness of the Company’s
disclosure controls and procedures and internal controls. It is also
responsible for retaining (subject to shareholder ratification), evaluating,
and, if appropriate, recommending the termination of the Company’s independent
registered public accounting firm. The Audit Committee has been
established in accordance with Section 3(a)(58)(A) of the Securities Exchange
Act of 1934 under a charter approved by the Board, a copy of which has
previously been filed with the Commission and is publicly available.
During fiscal 2005, the Audit Committee held ten meetings and did not
act by written consent in lieu of any meeting. Mr. Walker, an individual
determined by the Board to be an "audit committee financial expert," as defined
in the applicable rules, was chairman, and Messrs. Chastelet, Murphy and Poad
constituted its remaining members. Each member of the Audit Committee is
independent under Commission and NASDAQ rules and listing standards currently in
effect.
Compensation
Committee. The Compensation Committee of the Board of Directors (the
“Compensation Committee”) administers the Company’s Long Term
Incentive Plan and other programs relating to benefits, incentives and
compensation of the Company’s executive officers, reviews the performance of the
Company’s executive officers, reviews and approves executive compensation policy
and objectives, concludes whether Company executives are compensated according
to such standards, makes recommendations to the Board of Directors with respect
to compensation, and carries out the Board’s responsibilities relating to all
forms of executive compensation. The Compensation Committee operates under
a charter approved by the Board, a copy of which has previously been filed with
the Commission and is publicly available. Non-qualified stock options
which are granted to the members of the Compensation Committee are recommended
by the Company’s Chief Executive Officer and approved by the Board of Directors.
During fiscal 2005, the Compensation Committee held four meetings and did
not act by written consent in lieu of any meeting. The chair of the
Compensation Committee was Mr. Murphy and Messrs. Chastelet, Poad and Walker
constituted its remaining members.
Nominating Committee.
The Nominating Committee of the Board of Directors (the
“Nominating Committee”) assists the Board in identifying
individuals qualified to be directors, oversees the composition, structure and
evaluation of the Board. During fiscal 2005, the Nominating Committee
held two meetings and did not act by written consent in lieu of any
meeting. The chair of the Nominating Committee was Mr. Poad and
Messrs. Chastelet, Murphy and Walker constituted its remaining members.
Each member of the Nominating Committee is independent under Commission and
NASDAQ rules and listing standards currently in effect.
Director
Compensation
On March 30,
2005, each non-employee director was granted an option to purchase up to 10,000
shares of Common Stock, and each such option carries an exercise price of $5.17
per share. An annual retainer of $15,000 is paid to each
non-employee director, with an additional $5,000 paid to the Audit Committee
Chairman, and $2,000 to each chairman of a board committee. In addition,
each
non-employee director is paid cash compensation of $1,000 for each Board meeting
and $500 for each telephonic and/or committee meeting.
The Company
does not pay director compensation to any member who constitutes a Company
employee. In fiscal 2005, that policy applied to Messrs. Wiggins, Kendall
and Wood.
Number
and Composition of the Board of Directors
The Company’s
By-Laws provide that its Board of Directors shall consist of not less than three
members and not more than nine members as may be fixed from time to time by
action of the Board of Directors or of the shareholders. The Board
recommends that the exact number of directors not be determined by shareholder
action, thus permitting the Board to increase or decrease the number of
directors during the year and to fill any vacancy, as it deems advisable to do
so.
The Board is
currently comprised of seven members, namely Messrs. Wiggins, Kendall,
Wood, Chastelet, Murphy, Poad and Walker. All seven members of the Board
of Directors have been nominated for reelection and will be presented as
the Board's slate of nominees at the 2005 Annual Meeting.
Biographical information concerning the Board members can be found under
the section entitled Directors, Executive Officers, Promoters and Control
Persons.
Information
Concerning Nominees
Unless
authority is withheld as to one or more of the Board’s designated nominees, the
shares represented by Board of Directors proxies properly executed and timely
received will be voted for the election as Directors of the seven nominees
identified in the preceding paragraph, all of whom presently serve in that
capacity. If any such nominee fails to stand for election for any reason,
the proxy will be voted for a substitute nominee designated by the Board of
Directors. The Board has no reason to believe that any nominee will be
unavailable to serve if elected. Each nominee, if elected, will serve
a one-year term, expiring on the date of the annual meeting of shareholders in
2006.
Recommendation
of the Board of Directors
THE BOARD OF
DIRECTORS RECOMMENDS A VOTE “FOR” EACH OF THE SEVEN NOMINEES IDENTIFIED
ABOVE.
INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM
For the
22nd consecutive year, the Company's Board of Directors has selected
the independent registered public accounting firm of KPMG LLP to perform audit
and related functions with respect to the Company's accounts for its fiscal year
ending March 31, 2006. The Board recommends ratification of its selection.
In the event the shareholders fail to ratify the appointment, the Board of
Directors will reconsider its selection, and even if ratification occurs, the
Board, in its discretion and through the actions of its Audit Committee, may
direct the appointment of a different independent registered public accounting
firm at any time during the fiscal year if it determines that such a change
would be in the best interest of the Company and its shareholders.
One or more
representatives of KPMG LLP will be in attendance at the Meeting to respond to
appropriate shareholder questions and to have an opportunity to make any
statement which they may care to address to the attending
shareholders.
The following
table presents fees for professional audit services rendered by KPMG LLP for the
audit of Technology Research Corporation and subsidiary’s annual financial
statements for the fiscal years ended March 31, 2005 and March 31, 2004, and
fees billed for other services rendered by KPMG LLP during these
periods:
| Fee Category |
Fiscal
2005 |
Fiscal
2004 | |||
| Audit fees | $ |
129,000 |
87,500 | ||
| Audit-related fees |
- |
- | |||
| Tax fees |
54,825 |
16,650 | |||
| All other fees |
1,500 |
- | |||
|
$ |
185,325 |
104,150 | |||
|
|
|
Audit Fees
Consists of fees
billed for professional services rendered for the audit of Technology Research
Corporation and subsidiary’s consolidated financial statements and review of the
interim financial statements included in quarterly reports and services that are
normally provided by KPMG LLP in connection with statutory and regulatory
filings or engagements.
Audit-Related Fees
None.
Tax fees
Consists of fees
billed for professional services for tax compliance, tax advice and tax
planning. These services include assistance regarding federal, state and
international tax compliance and tax planning.
All Other Fees
Consists of fees
billed for a subscription to Accounting Research Online.
Recommendation
of the Board of Directors
THE BOARD OF
DIRECTORS RECOMMENDS A VOTE “FOR” THE RATIFICATION OF THE SELECTION OF KPMG LLP
TO SERVE AS THE COMPANY’S INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR
THE FISCAL YEAR ENDING MARCH 31, 2006.
The following
Summary Compensation Table sets forth for the fiscal years ended March 31, 2005,
2004 and 2003 the compensation earned by the Company’s Chief Executive Officer
and each of the other four most highly compensated executive officers whose
compensation for fiscal 2005 exceeded $100,000 (each a “Named
Officer” and collectively the “Named
Officers”).
|
Long
Term |
All
Other(4) | ||||||
|
Annual
Compensation |
Compensation |
Compensation | |||||
|
Securities |
Restricted |
||||||
|
|
|
|
Other
Annual |
Underlying |
Stock |
||
| Name and Principal Position |
Year |
Salary($) |
Bonus
($) |
Compensation
($) |
Options |
Awards |
|
| Robert S. Wiggins |
2005 |
225,000 |
- |
- |
- |
- |
400 |
| Chairman of the Board |
2004 |
225,000 |
100,000 |
- |
25,000 |
- |
400 |
|
2003 |
225,000 |
15,000 |
- |
- |
- |
400 | |
| Jerry T. Kendall |
2005 |
250,000 |
- |
- |
- |
- |
- |
| President and CEO |
2004 |
191,667 |
38,300 |
- |
100,000 |
- |
- |
|
N/A |
- |
- |
- |
- |
- |
- | |
|
| |||||||
| Raymond B. Wood |
2005 |
150,000 |
105,392 |
- |
- |
- |
400 |
| Senior Vice President and Director of |
2004 |
135,000 |
122,119 |
- |
20,000 |
- |
400 |
| Government Operations |
2003 |
125,000 |
21,700 |
- |
- |
- |
400 |
| Hamze M. Moussa |
2005 |
118,333 |
15,250 |
- |
- |
- |
30,400 |
|
President
and General Manager of |
2004 |
115,000 |
17,000 |
- |
10,000 |
- |
30,400 |
| TRC/Honduras S.A. de C.V. |
2003 |
110,000 |
25,000 |
- |
- |
- |
30,400 |
| Edward A. Schiff |
2005 |
124,167 |
64,597 |
- |
- |
- |
400 |
| Vice President of |
2004 |
115,000 |
42,675 |
- |
15,000 |
- |
400 |
| U.S. Commercial Sales and Marketing |
2003 |
110,000 |
5,000 |
- |
- |
- |
400 |
_______________________________
Footnotes:
4
The amount indicated consists of matching contributions made by the Company to
its 401(k) Plan, and, for Mr. Moussa only, a housing allowance paid for by TRC
Honduras S.A. de C.V., the Company’s Honduran manufacturing
facility.
Stock
Option Grants in Last Fiscal Year
No stock
options were granted in fiscal 2005 to any of the Company's Named
Officers.
Aggregate
Option Exercises in Last Fiscal Year and Fiscal Year-End Option
Values
The following
table sets forth information concerning option exercises in fiscal 2005 and
option holdings as of March 31, 2005 with respect to each of the Named
Officers. No stock appreciation rights were outstanding at the end of that
year:
| Shares | Number of Securities Underlying |
Value
of Unexercisable | ||||
|
|
Acquired on | Value(5) | Unexercised Options | In-the-Money Options(6) | ||
| Name | Exercise | Realized | Exercisable | Unexercisable | Exercisable | Unexercisable |
|
Robert
S. Wiggins |
16,666 |
$ 336,450 |
8,334 |
16,666 |
- |
- |
|
|
||||||
| Jerry T. Kendall |
- |
- |
33,334 |
66,666 |
$
63,467 |
$ 126,933 |
|
Raymond B.
Wood |
5,000 |
$
54,850 |
5,000 |
20,000 |
$ 18,050 |
- |
| Hamze M. Moussa | - | - | 3,334 | 6,666 | - | - |
| Edward A. Schiff | - | - | 15,000 | 60,000 | $ 33,400 | - |
_______________________________
Footnotes:
Footnotes:
5
An individual option holder, upon exercise of an option, does not receive cash
equal to the amount set forth in the Value Realized column of this table.
The amount set forth above reflects the increase in the price of the
Company's Common Stock from the date of grant to the price of the Company's
Common Stock on the option exercise date (i.e. $5.11 per share on March 31,
2005), multiplied by the applicable number of options. No cash is realized
until the shares received upon exercise of an option are sold.
6
Options are "in-the-money" at the fiscal year end if the fair market value of
the underlying securities on such date exceeds the exercise price of the
option. These amounts represent the difference between the exercise price
of such stock options and the closing price of the Company's stock on March 31,
2005.
The Company is
committed to aligning the interests of its Board of Directors and corporate
executives with the interests of stockholders, a key element of appropriate
corporate governance. Accordingly, the Board of Directors has adopted
stock ownership guidelines for members of the Board of Directors and corporate
executives based on the amount of each individual's cash salary or retainer, as
follows:
Directors (non-employee) 2.0 times
annual cash retainer
President and CEO 1.5 times
annual base salary
Other corporate executives 1.0 times annual base
salary
The following table
enumerates, as of July 1, 2005, certain information with respect to shares
beneficially owned by (i) each person known by the Company to be the beneficial
owner of more than five percent (5%) of the Company's outstanding shares of
Common Stock, (ii) each of the Company’s directors and the executive officers
named in the Summary Compensation Table below, and (iii) all current directors
and executive officers as a group:
| Beneficial Owner |
Shares
Beneficially Owned(7) |
Percentage
of Class |
| Bjurman, Barry & Associates, Inc. |
436,000(8) |
7.6% |
| 10100 Santa Monica Blvd., Suite 1200 | ||
| Los Angeles, CA 90067 | ||
| Gruber & McBaine Capital Management LLC |
349,250(9) |
6.1% |
| 50 Osgood Place | ||
| San Francisco, CA 94133 | ||
| Robert S. Wiggins |
284,338(10) |
4.9% |
| Chairman of the Board | ||
| Jerry T. Kendall |
73,333(10) |
1.3% |
| Director, President and Chief Executive Officer | ||
| Scott J. Loucks |
65,705(10) |
1.1% |
| Vice President of Finance and Chief Financial Officer | ||
| Raymond B. Wood |
53,607(10) |
0.9% |
| Director, Senior Vice President of Government Operations and Marketing | ||
| Edmund F. Murphy, Jr. |
30,568(10) |
0.5% |
| Director | ||
| Gerry Chastelet |
25,000(10) |
0.4% |
| Director | ||
| Martin L. Poad |
25,000(10) |
0.4% |
| Director | ||
| David F. Walker |
20,000(10) |
0.4% |
| Director | ||
| All director, officers and 5% beneficial owner as a group (ten persons) |
1,362,801 |
22.5% |
_______________________________
Footnotes:
Footnotes:
7
For purposes of this table, a person or group of persons is deemed to be the
"beneficial owner" of any shares that such person has the right to acquire
within 60 days following July 1, 2005. For purposes of computing the
percentage of outstanding shares held by each person or group of persons named
above on a given date, any security that such person or persons has the right to
acquire within 60 days following July 1, 2005 is deemed to be outstanding, but
is not deemed to be outstanding for the purpose of computing the percentage
ownership of any other person.
8
5% beneficial owner as reported in the stockholder's Schedule 13F with the SEC
on March 31, 2005.
9
5% beneficial owner as reported in the stockholder's Schedule 13G with the SEC
on March 31, 2005.
10
Includes the following shares subject to currently exercisable options held by
Messrs. Wiggins (25,000) Kendall (73,333), Loucks (60,000), Wood (25,000),
Murphy (25,000), Chastelet (25,000), Poad (25,000) and Walker
(20,000).
The
Compensation Committee is composed solely of independent directors as defined
under NASDAQ and Commission rules. The Committee has the authority to
establish the level of base salary payable to the Chief Executive Officer (the
“CEO”) and the other executive officers of the Company and to
administer the Company’s 2000 Long Term Incentive Plan. The Committee
is responsible for approving the individual bonus programs effective for the CEO
and other Company executive officers. The Committee periodically evaluates
the effectiveness of the compensation program in tying Company performance to
executive pay. Additionally, the Committee or the Board of Directors
reviews the compensation benefits offered to any newly hired executive or to an
executive whose scope of responsibility has significantly changed.
General
Compensation Policy. The objective of the Company’s executive
compensation program is to align executive compensation with the Company’s
long-term and short-term business objectives and performance.
Additionally, executive compensation is designed to enable the Company to
attract, retain and motivate qualified executives who are able to contribute to
the long-term success of the Company. The specific strategies relied upon
to guide the Company’s executive compensation decisions include tying some
portion of the executive’s pay to performance and comparing levels of
compensation to those of other companies operating within similar industries so
as to ensure the competitiveness of the Company’s programs. The elements
of each executive compensation plan are base salary, an annual performance-based
cash bonus and equity-based incentive compensation. In June 2005, the
Committee unanimously agreed to present to management an incentive plan more
nearly tailored to performance and to eliminate stock options, which in the
Committee's judgement are not the best vehicle to reward an individual's
performance.
Submitted
by the Compensation Committee
of the Board of Directors
Edmund F. Murphy, Jr.,
Chairman
Gerry
Chastelet, Member
Martin L. Poad, Member
David F. Walker, member
The
foregoing report does not constitute solicitation material and should not be
deemed filed or incorporated by reference into any prior or future Company
filing under the Securities Act of 1933 or the Securities Exchange Act of 1934,
except to the extent the Company specifically incorporates this report by
reference thereto.
No member of
the Company’s Compensation Committee was at any time during the Company’s 2005
fiscal year an officer or employee of, nor was engaged in any related party
transaction with the Company or of any subsidiary thereof, nor did any
interlocking relationship exist (nor does one currently exist) between any
member of the Compensation Committee and the board of directors or any board
committee of any other company which would require disclosure under the
Commission’s executive compensation rules.
Indemnification
The Company’s
Bylaws provide that the Company shall indemnify its directors and officers to
the fullest extent permitted by Florida law, including in circumstances in which
indemnification is otherwise discretionary under such law. The
Company indemnifies its directors and officers so that they will serve
free from undue concern that they will not be indemnified, and have signed
agreements with each of its independent directors contractually obligating the
Company to provide this indemnification to them.
The Company
has adopted a Code of Conduct and Ethics (the "Codes") that applies to all of
its employees as well as its principal executive, financial and accounting
officers. A copy of the Codes can be found at the Company's website
www.trci.net. The Company intends to satisfy the disclosure regarding any
amendments to or waivers from a provision of the Codes that applies to its
principal executive, financial and accounting officers by posting such
information on its website at the address set forth above.
The Audit
Committee of the Board of Directors (the “Committee”) assists
the Board in fulfilling its responsibility for general oversight of the quality
and integrity of the accounting, auditing and financial reporting process and
practices of the Company, and also recommends to the Board of Directors, subject
to shareholder ratification, the selection of the Company’s independent
registered public accounting firm.
Management is
responsible for the Company’s internal controls, while the Company’s independent
registered public accounting firm is responsible for performing an
independent audit of the Company’s consolidated financial statements in
accordance with the standards of the Public Company Accounting Oversight Board
(the “PCAOB”) (United States) and to issue a report thereon. The Committee
is charged with providing service as an independent and objective monitor of the
Company’s financial reporting process, selection of critical accounting
policies, system of internal controls, audit process for compliance with
applicable laws and regulations, and the Company’s standards of business
conduct.
In fulfilling
these responsibilities, the Committee met with both the Company’s management and
its independent registered public accounting firm to review all annual and
quarterly financial statements and to discuss significant accounting policies
and issues prior to the issuance of those statements. Management
represented to the Committee that the Company’s consolidated financial
statements were prepared in accordance with U.S. generally accepted accounting
principles, and the discussions held with the Company’s independent registered
public accounting firm covered those matters required to be discussed by
Statement on Auditing Standards No. 61 (Codification of Statements on Auditing
Standards). During those discussions, the independent registered public
accounting firm provided to the Committee the written disclosures and the
letter required by Independence Standards Board Standard No. 1 (Independence
Discussions with Audit Committees), and the Committee discussed with the
independent registered public accounting firm their independence and whether the
non-audit services provided by them to the Company during fiscal 2005 was
compatible with, or could reasonably be deemed to call into question, that
status.
Each member
of the Committee was and is an independent director as determined by the Board
of Directors, based upon NASDAQ listing rules and the additional independence
requirements imposed by the Commission’s rules. Mr. Walker, an individual
determined by the Board to be an "audit committee financial expert," as defined
in such rules, chaired the Audit Committee in fiscal 2005, and Messrs.
Chastelet, Murphy and Poad constitute its remaining members. Nonetheless,
all Committee members rely without independent verification on the information
provided to them and on the representations made by management and the
independent registered public accounting firm. Accordingly, the
Committee’s oversight does not provide an independent basis to determine that
management has maintained appropriate accounting and financial reporting
principles or internal control and procedures designed to assure compliance with
accounting standards and applicable laws and regulations. Moreover, the
Committee’s considerations and discussions do not ensure that the audit of the
Company’s financial statements has been carried out in accordance with the
standards of the PCAOB (United States) or that the Company’s auditors
are in fact “independent.”
On the basis
of its reviews and discussions and the report of the independent registered
public accounting firm to the Committee, the Committee recommended to the
Board of Directors that the Board approve the inclusion of the Company’s audited
financial statements in the Company’s Annual Report on Form 10-KSB for the
fiscal year ended March 31, 2005, for filing with the Commission, and that KPMG
LLP be selected as the Company’s independent registered public accounting firm
for the Company’s 2006 fiscal year.
Submitted by the
Audit Committee
of the Board of
Directors
David F. Walker,
Chairman
Gerry Chastelet,
Member
Edmund F. Murphy,
Jr., Member
Martin L. Poad,
Member
The foregoing report does not
constitute solicitation material and should not be deemed filed or incorporated
by reference into any prior or future Company filing under the Securities Act of
1933 or the Securities Exchange Act of 1934, except to the extent the Company
specifically incorporates this report by reference thereto.
Audit
Committee Pre-Approval of Audit and Non-Audit
Services
The Audit Committee
pre-approves all audit and permissible non-audit services provided to the
Company by the independent registered public accounting firm. These
services may include audit services, audit-related services, tax services and
other services. The Audit Committee has adopted policies and procedures
for the pre-approval of services provided by the independent registered public
accounting firm. Such policies and procedures provide that management and
the independent registered public accounting firm shall jointly submit to the
Audit Committee a schedule of audit and non-audit services for approval as part
of the annual plan for each fiscal year. In addition, the policies and
procedures provide that the Audit Committee may also pre-approve particular
services not in the annual plan on a case-by-case basis. Management must
provide a detailed description of each proposed service and the projected fees
and costs (or a range of such fees and costs) for the service. The
policies and procedures require management and the independent registered public
accounting firm to provide quarterly updates to the Audit Committee regarding
services rendered to date and services yet to be performed.
As permitted under
the Sarbanes-Oxley Act of 2002, the Audit Committee may delegate pre-approval
authority to one or more of its members, for audit and non-audit services to a
subcommittee consisting of one or more members of the Audit Committee. Any
service pre-approved by a delegate must be reported to the Audit Committee at
the next scheduled quarterly meeting.
A copy of the
Company’s 2005 Annual Report to Stockholders, which includes the Company's Form
10-KSB, as filed with the Commission, for the fiscal year ended March 31,
2005, has been mailed with this Proxy Statement to all shareholders entitled to
notice of and to vote at the Meeting. Such report is not incorporated into
this proxy statement and is not considered proxy solicitation material.
Additional copies of the Company’s Annual Report, and any of its other
Commission filings, may be obtained from the Commission’s website, www.sec.gov,
or by writing to Technology Research Corporation, 5250-140th Avenue North,
Clearwater, Florida 33760, Attention: Scott J. Loucks, Vice President of Finance
and Chief Financial Officer.
Shareholders
who intend to have a proposal considered for inclusion in the Company’s proxy
statement and form of proxy for presentation at the Company’s 2006 annual
meeting of shareholders pursuant to Rule 14a-8 under the Exchange Act must
submit the proposal to the Company at its principal executive offices not later
than March 15, 2006. If next year’s annual meeting of shareholders is
moved to a date more than 30 days before or after the anniversary date of the
Meeting, the deadline for inclusion of proposals in the Company’s proxy
statement and proxy will instead be a reasonable time before the Company begins
to print and mail its proxy materials. Shareholders who intend to present
a proposal at the 2006 annual meeting of shareholders without inclusion of such
proposal in the Company’s proxy materials are required to provide notice of such
proposal to the Company no later than June 1, 2006.
The Board of
Directors has no information that any other matter will be brought before the
Meeting for consideration and vote by the Company’s shareholders. If,
however, any such matter is properly presented, either at the Meeting or as a
result of its postponement or adjournment, it is the intention of the persons
named in the accompanying form of proxy to vote the proxy in accordance with
their best judgment, discretionary authority to do so being included in the
proxy.
By order of the Board of
Directors
Robert S. Wiggins
Chairman of the
Board
Clearwater,
Florida
July 11,
2005
TECHNOLOGY
RESEARCH CORPORATION
PROXY
FOR ANNUAL MEETING OF SHAREHOLDERS-TO BE HELD AUGUST 25,
2005
THIS
PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
Each of
the undersigned, as the owner(s) as of July 1, 2005 of common stock of
Technology Research Corporation, a Florida corporation(the "Company") hereby
appoints Robert S. Wiggins, Chairman of the Board and Scott J. Loucks, Chief
Financial Officer, and each of them, jointly and severally, as attorney-in-fact
and proxy, each with full power of substitution for the limited purpose of
voting all shares of the common stock owned by the undersigned at the Annual
Meeting of Shareholders of the Company to be held at the Radisson Hotel and
Conference Center, 12600 Roosevelt Blvd., St. Petersburg, Florida 33716,
Florida at 2:30 P.M., local time, AUGUST 25, 2005, and at any adjournments
thereof, but only in accordance with the following instructions:
If
you are unable to attend the meeting personally, the Board of Directors requests
that you complete and mail the proxy to insure adequate shareholder
representations at the Meeting. As this proxy is being solicited by the
Board
of
Directors, you are encouraged to contact any member of the incumbent Board if
you have any question concerning this proxy or the matters referenced herein.
|
Comments:
___________________________________________________________________________________________________________________________________
____________________________________________________________________________________________________________________________________
|
(If you
noted any Comments above, please mark corresponding box on the reverse
side.)
(Continued
on reverse side)
TECHNOLOGY
RESEARCH CORPORATION
PLEASE MARK,
SIGN, DATE AND RETURN THIS PROXY
PROMPTLY
USING THE ENCLOSED ENVELOPE.
Election of Directors For
WITHHOLD FOR ALL To withhold authority to vote,
mark "For All Except"
All
All
Except and
write the nominee's number on line below.
1.
Nominees:
o o o ____________________________________________________
01) Robert S. Wiggins 05)
Edmund F. Murphy, Jr.
02) Jerry T.
Kendall 06)
Martin L. Poad
03) Raymond B.
Wood 07)
David F. Walker
04) Gerry Chastelet
Vote on Proposal
For Against
Abstain
2. Approval of KPMG LLP, Independent Registered Public Accounting Firm, as independent registered public accountants of the Company for operating year ending
2. Approval of KPMG LLP, Independent Registered Public Accounting Firm, as independent registered public accountants of the Company for operating year ending
March
31, 2006. o o
o
In accordance
with their best judgment on any other matter that may properly be voted upon at
the meeting.
This proxy,
when properly executed, will be voted in the manner directed herein by the
undersigned shareholder(s).
If none of the
choices
specified in any of the Proposals 1 or 2 shall be marked,
the named
proxy is authorized and directed to vote as described
therein and
in accordance with that certain Proxy
Statement dated JULY 11, 2005.
For comments,
please check this box and write them on the back where indicated. o
If signing in
a fiduciary or representative capacity, please give full title as
such. If
signing as a corporate officer, please give your title and full name of
the
corporation; or if ownership is in more than one name, each additional
owner should
sign.
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