UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN
PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934
Filed by the Registrant ☒
Filed by a Party other than the Registrant ☐
Check the appropriate box:
| | ☐ | Preliminary
proxy statement |
| | | |
| ☐ | Confidential, for use of the Commission only (as permitted by Rule 14a-6(e)(2)) |
| | | |
| | ☑ | Definitive proxy statement |
| ☐ | Definitive additional materials |
| ☐ | Soliciting material under §240.14a-12 |
TECHNICAL COMMUNICATIONS CORPORATION
(Name of Registrant as Specified in Its Charter)
______________________________________________________________
(Name of Person(s) Filing Proxy Statement, if Other
Than the Registrant)
Payment of filing fee (Check the appropriate box):
| ☐ | Fee paid previously with preliminary materials. |
| ☐ | Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-(6)(i)(1) and 0-11. |
TECHNICAL COMMUNICATIONS CORPORATION
Notice Of Annual Meeting Of Stockholders
To Be Held February 13, 2023
To Our Stockholders:
NOTICE IS HEREBY GIVEN that
the 2023 Annual Meeting of Stockholders (the “Meeting”) of Technical Communications Corporation, a Massachusetts corporation
(the “Company”), will be held at 10:00 a.m. (local time) on Monday, February 13, 2023, at the offices of the Company located
at 100 Domino Drive, Concord, Massachusetts 01742, to:
| 1. | Elect one Class II Director to serve on the Board of Directors for a term of three years expiring at the
2026 Annual Meeting of Stockholders; |
| | | |
| | 2. | Hold a stockholder advisory vote on the compensation of the Company’s
named executive officers as disclosed in the proxy statement for the Meeting; |
| | | |
| | 3. | Hold a stockholder advisory vote to determine the frequency of voting
by stockholders on the compensation of our named executive officers; |
| 4. | Ratify the appointment of Stowe & Degon LLC as the independent registered public accounting firm of
the Company for the fiscal year ending September 30, 2023; and |
| 5. | Consider and act upon such other business and matters as may properly come before the Meeting or any adjournments
thereof. |
The Board of Directors knows
of no other matters to be presented at the Meeting. Only stockholders of record of the Company at the close of business on the record
date of December 16, 2022 are entitled to notice of and to vote at the Meeting or any adjournments thereof.
All stockholders are cordially
invited to attend the Meeting. Whether or not you expect to attend the Meeting, please complete, sign, date and return the enclosed proxy
card in the envelope provided at your earliest convenience. If you return your proxy, you may nevertheless attend the Meeting and vote
your shares in person.
A copy of the Company’s
Annual Report on Form 10-K for the fiscal year ended September 24, 2022, which contains financial statements and other information of
interest to stockholders, accompanies this Notice and the attached Proxy Statement.
| |
By Order of the Board of Directors, |
| |
Thomas J. Conte, Secretary |
Concord, Massachusetts
January 11, 2023
It is important that your shares be
represented at the Meeting. Whether or not you plan to attend the Meeting, please promptly complete, sign, date and mail the enclosed
proxy card in the envelope provided, which requires no postage if mailed in the United States.
Important
Notice Regarding the Availability of Proxy Materials
for the Annual Shareholder Meeting to be Held
on February 13, 2023
This Proxy Statement and related
materials are available at the Company’s website at https://www.tccsecure.com/Investors.aspx.
This Proxy Statement relates
to the Company’s 2023 Annual Meeting of Stockholders to be held on Monday, February 13, 2023 at 10:00 a.m. (local time) at the Company’s
offices located at 100 Domino Drive, Concord, Massachusetts 01742.
The matters to be voted upon
at such meeting are:
| (1) | the election of one Class II Director to serve on the Board of Directors for a term of three years expiring
at the 2026 Annual Meeting of Stockholders; |
| (2) | a stockholder advisory vote on the compensation of the Company’s named executive officers as disclosed
in the proxy statement for the meeting; and |
| (3) | a stockholder advisory vote to determine the frequency of voting by stockholders on the compensation of
our named executive officers; |
| (4) | the ratification of Stowe & Degon LLC as the independent registered public accounting firm of the
Company for the fiscal year ending September 30, 2023. |
Stockholders will also consider
and act upon such other business and matters as may properly come before such meeting or any adjournments thereof.
Only stockholders of record
at the close of business on December 16, 2022 are entitled to notice of and to vote at the meeting and any adjournments thereof.
Materials that will be available
electronically at the website identified above include:
| · | the Notice of Annual Meeting of Stockholders; |
| · | the Proxy Statement for the meeting; |
| · | the form of proxy card; and |
| · | the Company’s Annual Report on Form 10-K for the fiscal year ended September 24, 2022. |
If you wish to attend the meeting in person and
need directions, please contact TCC Investor Relations at (978) 287-5100. Instructions on how to complete, sign, date and return the proxy
card are provided on the card, as well as a stockholder’s control/identification number(s).
TECHNICAL COMMUNICATIONS CORPORATION
100 Domino Drive
Concord, MA 01742
PROXY STATEMENT
for the
2023 Annual Meeting of Stockholders
February 13, 2023
This Proxy Statement is being
furnished in connection with the solicitation of proxies by the Board of Directors of Technical Communications Corporation, a Massachusetts
corporation (“TCC” or the “Company”), for use at the Company’s 2023 Annual Meeting of Stockholders and any
adjournments thereof (the “Meeting”), being held at 10:00 a.m. (local time) on Monday, February 13, 2023 at the offices of
the Company, 100 Domino Drive, Concord, Massachusetts 01742.
It is expected that the Notice
of Meeting, this Proxy Statement and the accompanying proxy card, and an Annual Report on Form 10-K for the fiscal year ended September
24, 2022 containing financial statements and other information of interest to stockholders, will be mailed to stockholders on or about
January 11, 2023.
Record Date and Outstanding Shares
Only record holders of shares
of the common stock, par value $0.10 per share, of the Company (the “Common Stock”) as of the close of business on December
16, 2022 (the “Record Date”) are entitled to notice of and to vote at the Meeting.
As of the Record Date, there
were 1,854,403 shares of the Company’s Common Stock outstanding and entitled to vote. The shares of Common Stock are the only voting
securities of the Company. Stockholders are entitled to cast one vote for each share held of record.
Proxies
If the enclosed proxy card
is properly marked, signed, and returned in time to be voted at the Meeting, and is not subsequently revoked, the shares represented will
be voted in accordance with the instructions marked thereon. SIGNED PROXIES RETURNED TO THE COMPANY AND NOT MARKED TO THE CONTRARY WILL
BE VOTED AS RECOMMENDED BY THE BOARD OF DIRECTORS. Thus, proxies not marked to the contrary will be voted:
| · | in favor of the nominee for election to the Board, |
| · | in favor of the compensation of our named executive officers as disclosed in this Proxy Statement;
and |
| · | in favor of ratification of the Company’s independent registered public accounting firm. |
Any stockholder may revoke
a proxy at any time prior to its exercise by signing and delivering a later-dated proxy or a written notice of revocation to the Secretary
of the Company. Stockholders attending the Meeting may also revoke their proxies by voting in person at the Meeting. Attendance at the
Meeting will not itself be deemed to revoke a proxy unless a stockholder gives affirmative notice at the Meeting that such stockholder
intends to revoke the proxy and vote in person.
Quorum and Approval
The presence in person or
by proxy of the holders of a majority in interest of the shares of Common Stock issued and outstanding on the Record Date and entitled
to vote is required to constitute a quorum at the Meeting. The stockholders entitled to vote that are present in person or by proxy at
the Meeting may adjourn the Meeting without additional notice unless a new record date is or must be fixed. At any adjourned Meeting at
which a quorum is present, any business may be transacted that might have been transacted at the Meeting as originally scheduled.
Abstentions and broker non-votes
will count in determining whether a quorum is present at the Meeting and any adjourned Meeting. A broker non-vote occurs if the broker
or other nominee who holds shares represented by a proxy has not received instructions with respect to a particular proposal and does
not have discretionary authority with respect to such proposal. Matters as to which brokers do not have discretionary authority include
the election of directors, even in uncontested elections, and the “say on pay” proposal.
The affirmative vote of a
plurality of the votes cast at the Meeting by the shares entitled to vote thereon is required to elect a director. Abstentions, broker
non-votes and votes withheld will not be included in the totals for director elections, and will have no effect on the outcome of the
vote.
The affirmative vote of the
holders of a majority of the shares of Common Stock voting on the matter shall be required for the stockholder advisory vote on the compensation
of the Company’s named executive officers as disclosed in the Compensation section (including the tables therein) of this
Proxy Statement. Abstentions and broker non-votes will not be included in the totals for the proposal, and will have no effect on the
outcome of the vote.
Lastly, the affirmative vote
of the holders of a majority of the shares of Common Stock voting on the matter is required for the ratification of the selection of the
Company’s independent registered public accounting firm. Abstentions and broker non-votes will not be included in the totals for
the proposal, and will have no effect on the outcome of the vote.
Other Matters
The Board of Directors knows
of no matters to be presented for consideration at the Meeting other than as set forth in this Proxy Statement. If any other matter should
be presented at the Meeting upon which a vote may be properly taken, shares represented by all proxies received by the Company will be
voted with respect thereto in accordance with the judgment of the persons named as proxies and consistent with applicable law.
No director, executive officer
or nominee for director, nor any associate of any of the foregoing, has any substantial interest, direct or indirect, by security holdings
or otherwise, in any matter to be acted upon at the Meeting.
PROPOSAL I. ELECTION OF DIRECTORS
The business corporation statute
of Massachusetts requires, unless a company opts out, that the terms of directors of public companies be staggered by dividing the number
of directors into three groups, as nearly equal in number as possible, with the number of directors subject to such requirement being
fixed by a vote of the board. Pursuant to the statute and the Company’s By-laws, the members of the Company’s Board of Directors
are divided into three classes, designated Class I, Class II and Class III, each serving staggered three-year terms. The term of the Class
II director to be elected at the Meeting expires at the 2026 annual meeting of stockholders; the term of the Class I director expires
at the 2025 annual meeting of stockholders; and the term of the Class III director expires at the 2024 annual meeting of stockholders.
Directors elected by the stockholders
at an annual meeting to succeed those whose terms expire are of the same class as the directors they succeed and are elected for a term
to expire at the third annual meeting of stockholders after their election and until their successors are duly elected and qualified.
Vacancies on the Board, including a vacancy resulting from an enlargement of the Board of Directors, shall be filled by the affirmative
vote of a majority of the remaining directors then in office, even though less than a quorum. Any director so elected holds office for
the remainder of the full term of the class of directors in which the vacancy occurred or the new directorship was created and until the
director’s successor shall have been elected and qualified.
Nominee for Director
One director is to be elected
at the Meeting as the Class II director. The Board of Directors, as recommended by its Compensation, Nominating and Governance Committee,
has nominated Francisco F. Blanco for election as the Company’s Class II Director. Mr. Blanco is currently and has been a director
of the Company since 2011 and has consented to being named in this Proxy Statement and to serve if elected. If elected, the nominee will
hold office until the 2026 Annual Meeting of Stockholders and until his successor is duly elected and qualified. The Board of Directors
knows of no reason why such nominee should be unable or unwilling to serve, but, if such should be the case, proxies may be voted for
the election of some other person.
The affirmative vote of a
plurality of the votes cast at the Meeting by the shares entitled to vote thereon is required to elect a director. Thus, abstentions,
broker non-votes and votes withheld will not be included in the totals and will have no effect on the outcome of the vote.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR”
THE ELECTION OF THE NOMINEE.
Members of the Board of Directors, Nominees
and Executive Officers
The following table sets forth
the name and address of each director, nominee and executive officer of the Company, the year each current director first became a director,
and the age and positions currently held by each such individual with the Company. The following table is as of December 16, 2022.
| Name and Address(1) |
Year First Became
a Director |
Age |
Positions and Offices
with the Company |
| Ralph M. Norwood |
2019 |
79 |
Class I Director |
|
Francisco F. Blanco |
2011 |
80 |
Class II Director |
| Carl H. Guild, Jr. |
1997 |
78 |
Class III Director, Chairman of the
Board, Chief Executive Officer and President
|
| Thomas E. Peoples |
1998 |
74 |
Class III Director
|
| |
|
|
|
| Non-Director Executive Officers |
|
|
|
| Michael P. Malone |
-- |
63 |
Chief Financial Officer, Treasurer and Assistant Secretary |
| (1) | The address of Messrs. Norwood, Blanco, Guild, Peoples and Malone is c/o Technical Communications Corporation,
100 Domino Drive, Concord, Massachusetts 01742. |
Directors and Nominees
Ralph M. Norwood. Mr. Norwood served as
Chief Financial Officer of CPS Technologies Corp. (“CPS”), a Nasdaq-listed manufacturer of electronic components, from 2011
until his retirement in May 2019; in August 2019, Mr. Norwood was elected to the Board of Directors of CPS. He joined CPS from Navigator
Capital Advisors, LLC, a financial consulting company, where he had served as President since he founded the firm in 2006. From 2002 until
2005 he served as Vice President and Chief Financial Officer of SatCon Technology Corporation, a clean energy company headquartered in
Boston, MA. Previously, he served for over 20 years at Polaroid Corporation in various capacities including Vice President and Treasurer,
Vice President and Controller, and Worldwide Manufacturing Controller. Mr. Norwood is also a veteran having served on active duty for
1968-70 as a U.S. Army officer. Mr. Norwood is a CPA and earned a B.S. from the University of New Hampshire and an M.B.A from the Darden
School at the University of Virginia.
Mr. Norwood’s qualifications
for election to and service on the Board of Directors include his significant financial expertise and experience, as well as his experience
in international business. Mr. Norwood’s experience as a financial executive also enhances the ability and functioning of
the Board and in particular the Audit Committee in discharging its responsibilities to assist the Board with overseeing management’s
conduct of TCC’s financial reporting processes.
Francisco F. Blanco.
Mr. Blanco is President and CEO of The Pola Group, LLC, a consulting firm focused on providing advice and assistance, strategic direction
and creative business development solutions for commercial and government clients, where he has worked since 2010. From 2001 to 2010,
Mr. Blanco was Executive Vice President of the Intelligence and National Security Alliance (“INSA”), a member-based non-profit,
non-partisan, public-private organization that works to promote and recognize the highest standards within the national security and intelligence
communities. Prior to joining INSA, Mr. Blanco was employed in a variety of senior management and leadership positions during his 30-year
tenure at the U.S. Department of Defense.
Mr. Blanco’s qualifications
for election to and service on the Board of Directors include his industry experience, his government experience and relationships with
government leaders and agencies, his management and business development skills, and his in-depth understanding of the Company’s
products and their markets.
Carl H. Guild, Jr.
Mr. Guild has been President and Chief Executive Officer of the Company since 1998 and Chairman of the Board of Directors since 2001.
He was also Vice-Chairman of the Board from 1998 to 2001 and Chairman in 1998, and was an independent consultant to the Company from 1997
to 1998. From 1993 to 1997, he was a Senior Vice President with Raytheon Engineers and Constructors, Inc., a former unit of Raytheon Company,
a defense, homeland security and aerospace technology company. Mr. Guild serves as President and Chief Executive Officer of the Company
pursuant to an Employment Agreement (as amended) with the Company, which agreement is summarized under “Employment Agreements”
in the Compensation section below.
Mr. Guild’s qualifications
for election to and service on the Board of Directors include his management and leadership experience and financial acumen, his deep
understanding of the Company’s products, business and industry, including its international operations and customers, and his demonstrated
commitment to TCC and its stockholders.
Thomas E. Peoples.
Mr. Peoples served as President of International Executive Counselors, LLC, a consulting company he established in Virginia between 2005
and 2019. Mr. Peoples was Vice President and Managing Director of The SPECTRUM Group, a Washington, DC area-based consulting firm, from
2004 to February 2015. Between 2001 and 2004, Mr. Peoples was retired. From 1999 to 2001, Mr. Peoples was the Senior Vice President for
International and Washington Operations of Gencorp, Inc., a publicly-held manufacturer of automotive, polymer, aerospace, and defense
products. From 1992 to 1999, Mr. Peoples was a Vice President of Aerojet, a privately-held aerospace and defense contractor. Prior to
1992, Mr. Peoples served as Manager of Business Development for Smart Munitions Programs at Raytheon Company. He served in the U.S. Army
between August 1966 and February 1987, retiring from service as a Lieutenant Colonel. He is also a former Board member and Treasurer of
the National Guard Youth Foundation and was an appointed member of the U.S. Department of Defense Science Board from 2000 to 2002.
Mr. Peoples’s qualifications
for election to and service on the Board of Directors include his management and business experience, his government experience and relationships
with government leaders and agencies, his business development skills and engineering expertise, and his in-depth understanding of the
Company’s products and their markets.
Officers
Michael P. Malone. Mr.
Malone, Chief Financial Officer, Treasurer and Assistant Secretary, joined the Company in 1998 as Director of Finance and Treasurer and
became Chief Financial Officer in 2000. From 1997 to 1998, he was the Controller at Vasca, Inc., a privately-held medical device company.
Prior to 1997, Mr. Malone was with ZOLL Medical Corporation, a publicly-traded medical device and software solutions company, for five
years as its Controller and Treasurer. Mr. Malone and the Company are parties to an Employment Agreement, which agreement is summarized
under “Employment Agreements” in the Compensation section below.
Corporate Governance
Board Composition and Independence;
Meetings
The size of the Board of Directors
is set at four directors. The Board has determined that each current director other than Mr. Guild is an “independent” director
as that term is defined in the rules and regulations of The Nasdaq Stock Market (“Nasdaq”), including Listing Rule 5605, and
Rule 10A-3 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The Company does not utilize any other
definition or criteria for determining the independence of a director or nominee, and no other transactions, relationships, or arrangements
exist to the Board’s knowledge or were considered by the Board in determining any director’s or nominee’s independence.
The Board of Directors held
four meetings during the fiscal year ended September 24, 2022. Each director attended 100% of the aggregate of (a) the total number of
meetings of the Board of Directors he was eligible to attend, and (b) the total number of meetings of all committees of the Board of Directors
on which he served that were held during the Company’s 2022 fiscal year.
Board Structure; Role in
Risk Oversight
The Board currently combines
the role of Chairman of the Board with the role of Chief Executive Officer, with Carl H. Guild, Jr. serving in both capacities since 2001.
The Board believes that combining these roles fosters clear accountability, effective decision-making and alignment on corporate strategy.
The structure allows one person to speak for and lead the Company and avoids duplication of work and confusion about who is in charge.
Given the Company’s historic size and financial results, and the requirement that members of the Board serve staggered terms, the
Board has determined that neither dividing these roles nor designating a lead independent director is necessary or would result in significant
benefits to the Company. The Board believes that its composition and membership – with 75% of its members considered independent
- contribute to, and are currently sufficient for, effective independent oversight and minimize any potential conflicts that may result
from the combination of the CEO and Chairman roles.
The Board of Directors oversees
the business of the Company, including management performance and risk management, to assure that the long-term interests of TCC’s
stockholders are being served. The process to identify, analyze, report and manage risks has been developed informally over time and involves
managers reporting to the Chief Executive Officer and Chief Financial Officer, who in turn report to the Board on the significant risks
facing the Company. Each risk is discussed and quantified when possible and a plan is developed to address and mitigate identified risks.
Each committee of the Board is also responsible for reviewing the risk exposure of the Company related to the committee’s areas
of responsibility and providing input to management and the Board on such risks. The Audit Committee is especially critical in this process,
and such committee’s responsibilities include reviewing risk management and compliance programs and consulting with management and
the Board on risk identification, measurement and mitigation.
Committees
The Board of Directors currently
has two committees, the Audit Committee and the Compensation, Nominating and Governance Committee, each as described below.
Audit Committee
The Audit Committee of the
Board, which currently consists of Messrs. Peoples (Chairman), Blanco and Norwood, held four meetings during fiscal year 2022.
The Audit Committee’s
primary function is to assist the Board of Directors in fulfilling its oversight responsibilities by:
| · | reviewing the financial reports and other financial information of the Company, |
| · | reviewing the Company’s system of internal controls regarding finance and accounting and the Company’s
auditing, accounting and financial reporting processes, |
| · | serving as an independent and objective party to monitor the Company’s financial reporting processes
and internal control systems, |
| · | reviewing and appraising the audit efforts of the Company’s independent registered public accounting
firm, |
| · | reviewing, approving and/or ratifying related person transactions, and |
| · | providing an open avenue of communication among the independent accountants, financial and senior management,
and the Board of Directors. |
The Audit Committee acts pursuant
to an Audit Committee Charter, a copy of which is posted on the Company’s website at https://www.tccsecure.com/Investors.aspx. The
Audit Committee’s charter requires that the committee review and update the charter periodically as conditions dictate. In August
2022, the Audit Committee’s charter was reviewed and affirmed without change.
The Board of Directors has
determined that Mr. Peoples satisfies the definition of “audit committee financial expert” as promulgated by the Securities
and Exchange Commission (the “Commission”) by virtue of his educational and work experience as described above. The Board
of Directors also has determined that Messrs. Peoples, Blanco and Norwood are independent under Nasdaq’s listing standards for directors
and Audit Committee members under Rules 5605(b) and (c).
Compensation, Nominating
and Governance Committee
The Company’s Compensation,
Nominating and Governance Committee (the “Governance Committee”) currently consists of Messrs. Blanco (Chairman), Peoples
and Norwood, and held four meetings during the 2022 fiscal year. As noted above, the Board has determined that each of these individuals
satisfies applicable independence requirements for directors as well as members of such committee under Nasdaq Rules 5605(d) and (e).
The primary function of the
Governance Committee is to assist the Board of Directors in discharging its responsibilities with respect to the Company’s compensation
and benefit programs, the organization and membership of the Board, and corporate governance matters. The Governance Committee’s
goal is to assure that the composition, practices and operation of the Board contribute to value creation and effective representation
of the Company’s stockholders, and to play a leadership role in shaping the Company’s corporate governance.
The Governance Committee acts
pursuant to the Compensation, Nominating and Governance Committee Charter, a copy of which is posted on the Company’s website at
https://www.tccsecure.com/Investors.aspx. The Governance Committee’s charter requires that the committee review and reassess the
adequacy of the charter annually and recommend any proposed changes to the Board for approval. In August 2022, the Governance Committee’s
charter was reviewed and affirmed without change. The Governance Committee must also annually evaluate its own performance.
The Board has approved policies
and procedures for the Governance Committee with respect to the nomination of candidates to the Board and any committees thereof. These
policies and procedures are available on the Company’s website at https://www.tccsecure.com/Investors.aspx and are summarized below,
and have not been materially changed since adoption.
Nomination Policies and
Procedures
The Governance Committee will
accept for consideration any candidate properly recommended by a stockholder; acceptance of a recommendation for consideration does not
imply the committee will nominate or recommend for nomination the proposed candidate.
Stockholders who wish to nominate
qualified candidates to serve as directors must notify the Company in writing, by notice delivered to the attention of the Secretary of
the Company at the address of the Company’s executive offices as set forth in the Company’s periodic reports as filed with
the Commission, of a proposed nominee. Submissions may be by mail, courier or personal delivery. E-mail submissions will not be considered.
In order to ensure meaningful consideration of such candidates, notice must be received not later than 120 calendar days prior to the
first anniversary of the date of the proxy statement for the prior year’s annual meeting of stockholders.
The notice must set forth
as to each proposed nominee:
| · | the nominee’s name, age, business address and, if known, residence address, |
| · | his or her principal occupation or employment and business experience, |
| · | the number of shares of stock of the Company, if any, which are beneficially owned by such nominee, and |
| · | any other information concerning the nominee that must be disclosed as to nominees in proxy solicitations
pursuant to applicable law, including but not limited to any arrangements or agreements regarding the proposed candidate’s nomination,
all relationships between the proposed nominee and the recommending stockholder and the Company, and all transactions between such parties. |
The notice must also set forth
with respect to the stockholder making the nomination the name and address, as they appear on the Company’s books, of such stockholder,
the number of shares of the Company that are owned beneficially or of record by such stockholder, and the time period such shares have
been held.
Submissions received through
this process will be forwarded to the Governance Committee for review. Only those submissions that comply with these procedures and those
nominees who satisfy the qualifications determined by the Governance Committee for directors of the Company will be considered.
When considering candidates,
the Governance Committee strives to achieve a balance of knowledge, experience and accomplishment such that the Board reflects a diversity
of talent, age, skill, expertise and perspective. While there are no set minimum requirements, a candidate should:
| · | be intelligent, thoughtful and analytical, |
| · | possess superior business-related knowledge, skills and experience, |
| · | reflect the highest integrity, ethics and character, and value such qualities in others, |
| · | have excelled in both academic and professional settings, |
| · | demonstrate achievement in his or her chosen field, |
| · | be free of actual or potential conflicts of interest, |
| · | be familiar with regulatory and governance matters, |
| · | have the ability to devote sufficient time to the business and affairs of the Company, and |
| · | demonstrate the capacity and desire to represent, fairly and equally, the best interests of the Company’s
stockholders as a whole. |
In addition to the above criteria
(which may be modified from time to time), the Governance Committee may consider such other factors as it deems in the best interests
of the Company and its stockholders, including a candidate’s independence, financial sophistication and special competencies. The
Governance Committee does not have a formal policy with regard to the consideration of diversity when identifying and evaluating nominees
but diversity may be considered when making nominations, including racial and ethnic diversity, gender, and diversity of personal and
professional experiences, backgrounds, skills and qualifications.
The Governance Committee identifies
potential candidates through referrals and recommendations, including by incumbent directors, management and stockholders, as well as
through business and other organizational networks. The Governance Committee may retain and compensate third parties, including executive
search firms, to identify or evaluate, or assist in identifying or evaluating, potential director nominees.
Current members of the Board
with the requisite skills and experience are considered for re-nomination, balancing the value of the member’s continuity of service
and familiarity with the Company with that of obtaining a new perspective, and considering each individual’s contributions, performance
and level of participation, the current composition of the Board, and the Company’s needs. If any existing members do not want to
continue in service or if it is decided not to re-nominate a director, new candidates are identified in accordance with those skills,
experience and characteristics deemed necessary for new nominees, and are evaluated based on the qualifications set forth above. In every
case, the Governance Committee meets (in person or telephonically) to discuss each candidate, and may require personal interviews before
final approval. Once a slate is selected, the Governance Committee presents it to the full Board.
The Governance Committee does
not currently, and does not intend in the future, to differentiate between or alter the manner in which it evaluates candidates based
on the constituency (including stockholders) that proposed the candidate.
For a description of the Governance
Committee’s role in evaluating and establishing compensation programs, policies and levels for the Company, see the Compensation
Discussion and Analysis and Compensation sections below.
Stockholder Communications and Director
Attendance at Annual Stockholder Meetings
The Board welcomes communications
from stockholders and has adopted a procedure for receiving and addressing such communications. Stockholders may send written communications
to the entire Board or individual directors, addressing them to Technical Communications Corporation, 100 Domino Drive, Concord, MA 01742,
Attention: Chief Financial Officer. All such communications will be forwarded to the full Board of Directors or to any individual director
or directors to whom the communication is directed unless the communication is clearly junk mail or a mass mailing, a business solicitation,
advertisement or job inquiry, or is unduly hostile, threatening, illegal, or similarly inappropriate, in which case the Company has the
authority to discard or take appropriate legal action regarding the communication.
Recognizing that director
attendance at the Company’s annual meetings of stockholders can provide stockholders with an opportunity to communicate with members
of the Board of Directors, it is the policy of the Board of Directors to strongly encourage, but not require, the members of the Board
to attend such meetings. All members of the Board attended the 2022 Annual Meeting of Stockholders.
TCC’s policies regarding
stockholder communications and director attendance (which may be modified from time to time) can be found on the Company’s website
at https://www.tccsecure.com/Investors.aspx.
Delinquent Section 16(a) Reports
Section 16(a) of the Exchange
Act requires the Company’s officers, directors, and persons who beneficially own more than 10% of a registered class of the Company’s
equity securities to file reports of ownership and changes in ownership with the Commission.
Certain Relationships and Related Person
Transactions; Legal Proceedings
Thomas J. Conte, the Company’s
Secretary, is a member of a law firm that provided legal services to the Company. Fees paid to Mr. Conte’s law firm during the Company’s
2022 fiscal year were approximately $53,000. David A. White, the Company’s Former Secretary, is a member of a law firm that provided
legal services to the Company. Fees paid to Mr. White’s law firm during the Company’s 2021 fiscal year were approximately
$72,000.
On August 4, 2022, Carl H.
Guild, Jr., the Company’s CEO, President and Chairman of the Board, made a revolving loan to the Company of up to $1,000,000 to
provide working capital, which loan was evidenced by a demand promissory note bearing interest at a rate of 7.5%. This loan is still outstanding.
On April 7, 2022, Carl H.
Guild, Jr., the Company’s CEO, President and Chairman of the Board, made a revolving loan to the Company of up to $1,000,000 to
provide working capital, which loan was evidenced by a demand promissory note bearing interest at a rate of 7.5%. This loan is still outstanding.
On November 29, 2021, Carl
H. Guild, Jr., the Company’s CEO, President and Chairman of the Board, made a revolving loan to the Company of up to $1,000,000
to provide working capital, which loan was evidenced by a demand promissory note bearing interest at a rate of 7.5%. This loan is still
outstanding.
On May 6, 2021, Carl H. Guild,
Jr., the Company’s CEO, President and Chairman of the Board, made a revolving loan to the Company of $1,000,000 to provide working
capital, which loan was evidenced by a demand promissory note bearing interest at a rate of 6%. This loan is still outstanding.
These four outstanding loans
have an accrued interest balance of $106,490 as of September 24, 2022.
On July 15, 2021 the Company
sold 4,000 shares of unregistered shares of the Company’s common stock at $4.00 per share to Ralph M. Norwood, a member of the Board
of Directors.
There were no other transactions
during fiscal years 2022 or 2021, and there are no currently proposed transactions, to which the Company was or is to be a participant
and in which any related person had or will have a direct or indirect material interest. There are no family relationships among the directors,
executive officers or any nominee therefor, and to the Company’s knowledge no arrangements or understandings exist between any director
or nominee and any other person pursuant to which such director or nominee was or is to be selected as a director or executive officer.
There are no material proceedings
to which a director, executive officer or nominee is a party adverse to the Company or its subsidiary or has a material interest adverse
to the Company or its subsidiary, nor to the Company’s knowledge are there any proceedings or events material to an evaluation of
the ability or integrity of the Company’s directors, nominees or executive officers.
Hedging Policies and Procedures
The Company has not adopted
practices or policies regarding the ability of employees (including officers) or directors, or any of their designees, to purchase financial
instruments or otherwise engage in transactions that hedge or offset (or are designed to hedge or offset) any decrease in the market value
of the Company’s Common Stock or other equity securities.
Code of Ethics
The
Company has a Code of Business Conduct and Ethics, which applies to all of its employees, officers and directors. A copy of this code
can be found on the Company’s website at https://www.tccsecure.com/Investors.aspx.
REPORT OF THE AUDIT COMMITTEE
The following is the report
of the Audit Committee with respect to the Company’s audited financial statements for the fiscal year ended September 24, 2022.
The Audit Committee has reviewed
and discussed the 2022 fiscal year audited financial statements with management. The Audit Committee has also discussed with the Company’s
independent registered public accounting firm for fiscal 2022, Stowe & Degon LLC, the matters required to be discussed by the applicable
requirements of the Public Company Accounting Oversight Board and the U.S. Securities and Exchange Commission; received and reviewed the
written disclosures and the letter from the independent registered public accounting firm required by applicable requirements of the Public
Company Accounting Oversight Board regarding the independent registered public accounting firm’s communications with the Audit Committee
concerning independence; and discussed with the independent registered public accounting firm its independence and any relationships that
may impact its objectivity and independence.
Based upon the review and
discussions referred to above, the Audit Committee recommended to the Board of Directors that the audited financial statements for the
fiscal year ended September 24, 2022 be included in the Company’s Annual Report on Form 10-K for filing with the Securities and
Exchange Commission.
Audit Committee
Thomas E. Peoples (Chair)
Ralph M. Norwood
Francisco F. Blanco
COMPENSATION DISCUSSION AND ANALYSIS
As noted above, one role of
the Compensation, Nominating and Governance Committee of the Board of Directors, comprised solely of non-employee, “independent”
directors, is to assist the Board with discharging its responsibilities relating to the compensation of TCC’s employees, officers
and directors, and the development and administration of the Company’s compensation and benefit programs.
The Governance Committee operates
under a written charter, which is available at https://www.tccsecure.com/Investors.aspx. As set forth in the charter, the committee’s
authority and responsibilities with respect to compensation include:
| · | For executives, to assist with the development of an executive compensation program supportive
of the achievement of the Company’s strategic goals and objectives, to review and approve the goals and objectives relevant to the
compensation of the Chief Executive Officer of the Company, including an annual evaluation of the CEO’s performance and the establishment
of the CEO’s compensation and other material terms of employment, and to review and approve senior management team member compensation; |
| · | For directors, to annually evaluate the appropriate level and form of compensation for members
of the Board and its committees, and to recommend changes to the Board when appropriate; and |
| · | For employees generally, to monitor and review all general compensation strategies and programs
of the Company, including equity incentive and benefit programs. |
The following discussion provides
information about the Company’s compensation plans and programs generally, as well as compensation awarded to, earned by or paid
to our “named executive officers” pursuant to applicable Commission rules and regulations. For additional information, please
see the Compensation section that follows this discussion and analysis.
Compensation Philosophy and Objectives
The philosophy underlying
the Company’s compensation plans is to provide compensation that rewards both individual and organizational performance and align
such compensation with stockholder interests. The Company aims to make executive compensation sensitive to and reflective of the financial
condition and performance of the Company, which is defined in terms of revenue growth and profitability. Compensation also must be competitive,
thereby enabling the Company to attract, retain and motivate highly-qualified individuals who contribute to the Company’s success.
Procedure
Compensation decisions are
made annually and are tied to the Company’s fiscal year-end. For each employee, a performance evaluation is conducted by his or
her supervisor, the results of which are shared with the employee. The evaluation encompasses a review of the employee’s individual
performance over the course of the fiscal year, and includes recognition of the achievement by TCC of its strategic objectives and priorities.
Compensation decisions for non-officer employees are made after the results of the performance evaluations have been considered and an
informal analysis is completed that considers the goals of market competitiveness and enhancement of stockholder value. No upward adjustment
is made to an employee’s compensation if the individual’s performance does not merit, or if the Company’s financial
condition and performance do not support, such an adjustment.
The Governance Committee does
not make individual compensation decisions for non-officer employees. Rather, our Chief Executive Officer sets compensation levels and
presents the aggregate information to the Governance Committee for its information. Bonuses are typically paid in December, and salary
increases are effective October 1 and paid retroactively before the end of the calendar year.
Compensation packages for
our named executive officers are analyzed and discussed individually by the Governance Committee, and decisions are made once the Governance
Committee has obtained all of the information it deems necessary. Information that is considered in making named executive officer compensation
decisions includes information provided to the Governance Committee via presentations made to the committee by the named executive officers
themselves. Such presentations include highlights of achievements and milestones met by the officers in the fiscal year and the results
of each individual’s performance self-evaluation. The Governance Committee also considers the Company’s financial condition
and performance.
The accounting and tax treatment
of compensation decisions generally have not been material factors in determining the amount and type of compensation given to executive
officers, other than to balance the potential cost to the Company with the benefit or value to the executive. The tax and accounting treatment
of different compensation arrangements may play a greater role in the decision-making process in the future. The effects on Section 409A
of the Internal Revenue Code of 1986, as amended (the “Code”) also would be considered when applicable.
The Governance Committee has
not to date employed any compensation consultants to assist it with compensation decisions, although it is authorized by its charter to
do so and reserves the right to engage such consultants when and if deemed necessary or advisable. The Governance Committee also has the
authority to form, and delegate any of its responsibilities to, subcommittees as it deems appropriate, although to date it has not done
so.
Compensation Components
The components of compensation
provided to named executive officers (as well as non-officer employees) typically include base salary, annual discretionary bonuses and
equity incentives. Bonuses and equity incentives have historically been granted in periods during which the Company’s financial
performance have supported such awards. Executive officers have not received these components of compensation when the Company’s
operating results have not been positive and/or the recipients have not achieved specified performance milestones. No bonuses were paid
with respect to fiscal year 2022 or 2021 to any named executive officer due to the financial performance of the Company.
The Company also has in place
retirement and change of control arrangements with its two named executive officers, who participate in the group benefits offered to
all employees, such as medical and life insurance.
Base Salary
Base
salary levels for the Company’s named executive officers are based on an informal review of compensation for competitive positions
in the market and reflect job responsibilities and skills, level of experience, individual performance, judgments as to past and future
contributions to the Company, and the Company’s compensation budget. Specific weight is not given to any particular factor when
establishing base salaries, although most weight is typically given to individual performance. The Company’s practice has been to
review base salaries at the fiscal year-end as noted above, although salaries may be reviewed more frequently if circumstances dictate.
Annual Bonuses
Bonuses, when paid, are designed
to tie awards to individual performance and motivate and reward employees for their contributions to the Company. A number of factors
are considered in determining whether annual bonuses should be paid, most importantly the achievement by the Company of specified financial
objectives and the achievement by the employees of individual objectives. Recognition of individual performance and accomplishment is
based on a subjective analysis of each individual’s performance; recognition of Company performance is based on an evaluation of
specified measures of corporate performance, such as corporate profits and sales order activity.
The Company has an Executive
Bonus Program for the benefit of key management employees – traditionally the Chief Executive Officer and Chief Financial Officer
– and an informal bonus program for all other employees. For named executive officers, an initial plan is set and approved by the
Governance Committee at the beginning of the fiscal year and bonus awards are determined out of such plan at year-end based on Company
and individual performance. For non-officer employees, the budget is established by management, subject to review by the Governance Committee,
at year-end based on the Company’s financial performance during the year, and individual awards are determined through a consultative
process involving an employee’s supervisor and our Chief Executive Officer.
Equity Incentives
As with base salary and bonus
determinations, equity compensation awards are determined on an informal, annual basis. An important objective of this component of compensation
is to strengthen the relationship between the long-term value of the Company’s stock price and the potential financial gain for
employees, as well as retention of personnel. Historically the Company has awarded stock options to its employees and directors as the
equity component of compensation, which provide recipients the opportunity to purchase shares of our Common Stock upon vesting and become
valuable only if the trading price of the Common Stock increases. The recipient is therefore motivated to remain with the Company until
the options vest and motivated to improve individual performance in support of improved Company performance.
In selecting employees eligible
to receive equity compensation grants (whether at the initial hire date or through periodic grants) and determining the size of such grants,
a variety of factors are considered, including the job and responsibility level and past, current and prospective services rendered, or
to be rendered, to the Company by the employee. Determination of the employees eligible to receive awards and the size of such awards
is based on a subjective analysis by the Governance Committee, with input and recommendations from Mr. Guild, of each individual’s
position within the Company, his or her performance, and his or her growth potential and that of the Company.
Equity Plans
The Company currently administers
three plans that provide for the grant of equity incentive compensation to officers, directors and employees.
The Technical Communications
Corporation 2005 Non-Statutory Stock Option Plan, as amended (the “2005 Plan”), was adopted by the Board of Directors in May
2005 and permitted the grant of non-statutory stock options to purchase up to 200,000 shares of Common Stock to employees, directors and
consultants. The stated purpose of the 2005 Plan was to promote the success and interests of the Company and its stockholders by permitting
and encouraging employees, directors and consultants of the Company to obtain a proprietary interest in the Company or its subsidiaries
through the grant of non-statutory options to purchase shares of the Company. Determinations as to recipients of awards, option term,
vesting period and exercise price were made by the Governance Committee in its discretion. As of December 16, 2022, the Company had issued
a total of 208,500 options pursuant to the 2005 Plan. The 2005 Plan expired on May 5, 2015 and no further awards were permitted as of
such date. As of December 16, 2022, options to purchase 17,500 shares granted under the 2005 Plan remained outstanding.
The Technical Communications
Corporation 2010 Equity Incentive Plan (as amended, the “2010 Plan”), which was adopted in July 2010 and expired in July 2020,
provided for the issuance of up to 400,000 shares of Common Stock pursuant to awards of stock options (incentive and non-qualified), stock
appreciation rights, and restricted stock to employees, directors and consultants to the Company. The stated purpose of the 2010 Plan
was to promote the success and interests of the Company and its stockholders by permitting and encouraging participants to obtain a proprietary
interest in the Company through the grant of awards that are consistent with the Company’s goals and that link the personal interests
of participants to those of the Company’s stockholders. The 2010 Plan was further intended to enable the Company to attract, retain
and motivate those whose services were deemed critical to the success of the Company and align the interests of such individuals with
those of the Company. Determinations as to award recipients, duration, price, vesting and performance requirements and other material
terms were made by the Governance Committee, although there were specific requirements as to the price and term of certain awards depending
on the award type and recipient. Following its expiration in July 2020, awards were not able to be granted under the 2010 Plan, although
as of December 16, 2022, options to purchase 119,400 shares granted under the 2010 Plan remained outstanding.
In May 2021, the Board of
Directors approved and adopted the Technical Communications Corporation 2021 Equity Incentive Plan, which was amended and restated in
December 2021 (as amended and restated, the “2021 Equity Plan”), which plan was approved by shareholders at the 2022 Meeting,
as amended. The 2021 Equity Plan currently provides for the issuance of up to 400,000 shares of Common Stock pursuant to awards of stock
options (non-qualified), stock appreciation rights, and restricted stock to employees, directors and consultants to the Company.
The stated purpose of the
2021 Equity Plan is to promote the success and interests of the Company and its stockholders by permitting and encouraging participants
to obtain a proprietary interest in the Company through the grant of awards that are consistent with the Company’s goals and that
link the personal interests of participants to those of the Company’s stockholders. The 2021 Equity Plan is further intended to
enable the Company to attract, retain and motivate those whose services are deemed critical to the success of the Company and align the
interests of such individuals with those of the Company. Determinations as to award recipients, duration, price, vesting and performance
requirements and other material terms are made by the Governance Committee, although there are specific requirements as to the price and
term of certain awards depending on the award type and recipient. If any award under the 2021 Equity Plan is canceled, terminates, expires
or lapses for any reason without having been exercised in full, any shares subject to such award that remain unpurchased are available
for future grant. In addition, any shares retained by the Company upon exercise of an award in order to satisfy the exercise price of
such award, or any withholding taxes due with respect to such exercise, are treated as not issued and shall continue to be available.
At the same time, shares issued under the 2021 Equity Plan and later repurchased by the Company are not available for future grant or
sale. As of December 16, 2022, there were 28,000 outstanding options to purchase shares pursuant to the 2021 Equity Plan.
Retirement,
Severance, Change in Control and Similar Compensation
The Company does not offer
or have in place any formal retirement, severance or similar compensation programs other than its 401(k) plan. Rather, the Company individually
negotiates with those employees for whom retirement, severance or similar compensation is deemed necessary. A description of the severance
arrangements with the Company’s named executive officers follows.
Carl H. Guild, Jr., President
and Chief Executive Officer
Pursuant to his employment
agreement, upon termination of his employment without “cause” by the Company or upon his death or disability, Mr. Guild is
entitled to receive severance pay in an amount equal to the greater of six months’ base salary at the then-current level or the
balance of the term of the agreement, less applicable taxes and other required withholdings and amounts owed to the Company, and including
all health and other benefits to which he had been entitled while employed by the Company at the Company’s expense for at least
six months. If the Company determines not to renew Mr. Guild’s employment agreement, he is entitled to an amount equal to six months’
base salary at the then-current level, less applicable taxes and other required withholdings and amounts owed to the Company, and the
continuation of all health and other benefits to which he had been entitled while employed by the Company at the Company’s expense
for at least six months.
“Cause” is defined
as Mr. Guild’s failure or refusal to perform the services specified in his employment agreement or to carry out any lawful directions
of the Board; conviction of a felony; fraud or embezzlement involving the assets of the Company, its customers, suppliers or affiliates;
gross negligence or willful misconduct; or breach of any term of his employment agreement.
Mr. Guild may terminate his
employment agreement upon prior written notice to the Company. Upon his voluntary termination, he is entitled to severance pay –
defined as his base salary at the then-current level, less applicable taxes and other required withholdings and amounts owed to the Company
– equal to six months if the termination date is on the renewal date of the agreement or the lesser of six months or the balance
of the term of the agreement if the termination date is before such renewal date.
In the event of a change in
control of the Company where Mr. Guild resigns or is terminated without cause by the Company within 24 months after such an event, any
unvested options held shall automatically vest and become immediately exercisable. In addition, Mr. Guild would be entitled to receive
severance pay in an amount equal to 24 months’ base salary at the then-current level, less applicable taxes and other withholdings
and amounts due and plus all accrued and unpaid expenses and vacation time. In the event that any payment to be received pursuant to such
change in control or the value of any acceleration right in any Company stock options held in connection with the change in control of
the Company would be subject to an excise tax pursuant to Section 4999 of the Code, whether in whole or in part as a result of being an
“excess parachute payment” within the meaning of such terms in Section 280G(b) of the Code, the amount payable will be increased
(grossed up) to cover the excise tax liability due under Section 4999 of the Code, if otherwise permitted under the Code.
“Change in control”
is defined as the occurrence of any one of the following: (a) any person or entity, including a “group” as defined in Section
13(d) of the Exchange Act (other than the Company, a wholly-owned subsidiary of the Company, or any employee benefit plan of the Company
or its subsidiaries), becoming the beneficial owner of the Company’s securities having 51% or more of the combined voting power
of the then-outstanding securities of the Company that may be cast for the election of directors of the Company; or (b) as the result
of, or in connection with, any cash tender or exchange offer, merger or other business combination, sale of assets or contested election
or any combination of the foregoing transactions, less than a majority of the combined voting power of the then-outstanding securities
of the Company or any successor corporation or entity entitled to vote generally in the election of directors of the Company or such other
corporation or entity after such transaction, are held in the aggregate by holders of the Company’s securities entitled to vote
generally in the election of directors of the Company immediately prior to such transaction; or (c) the approval of the stockholders of
the Company of a plan of liquidation.
Michael P. Malone, Treasurer
and Chief Financial Officer
Under Mr. Malone’s employment
agreement, the Company has the right, upon written notice, to terminate his employment (a) immediately at any time for “cause”
or (b) at any time without “cause”. Cause is defined as his failure or refusal to perform the services specified in his employment
agreement or to carry out any lawful directions of the Board; conviction of a felony; fraud or embezzlement involving the assets of the
Company, its customers, suppliers or affiliates; gross negligence or willful misconduct; inability for a continuous period of at least
180 days in the aggregate during any 360-day period to perform his duties due to a physical or mental disability incapable of reasonable
accommodation under applicable law; or breach of any term of his employment agreement.
Upon termination of employment
without cause by the Company, Mr. Malone is entitled to receive severance pay in an amount equal to the greater of six months’ base
salary at the then-current level or his base salary for the balance of the term of the agreement. If the Company determines not to renew
Mr. Malone’s employment agreement, he is guaranteed, at the Company’s option, at will employment for six months or severance
pay in an amount equal to six months’ base salary at the then-current level. In either case, such amounts shall be less applicable
taxes and other required withholdings and amounts owed to the Company, plus all accrued but unpaid expenses and vacation time.
In the event of a change in
control of the Company where Mr. Malone resigns or is terminated without cause by the Company within six months after such an event, any
unvested options held shall automatically vest and become immediately exercisable. In addition, Mr. Malone would be entitled to receive
severance pay in an amount equal to six months’ base salary at the then-current level, less applicable taxes and other withholdings
and amounts due and plus all accrued and unpaid expenses and vacation time. In the event that any payment to be received pursuant to such
change in control or the value of any acceleration right in any Company stock options held in connection with the change in control of
the Company would be subject to an excise tax pursuant to Section 4999 of the Code, whether in whole or in part as a result of being an
“excess parachute payment” within the meaning of such terms in Section 280G(b) of the Code, the amount payable to Mr. Malone
will be increased (grossed up) to cover the excise tax liability due under Section 4999 of the Code, if otherwise permitted under the
Code. “Change in control” in Mr. Malone’s employment agreement has the same definition as that found in Mr. Guild’s
agreement, provided above.
No other employees receive
or are entitled to receive any retirement, severance or similar compensation.
Perquisites
and Other Benefits
The
Company generally does not provide its officers with “perks” or similar types of benefits. Messrs. Guild and Malone have life
insurance policies for which the Company pays the premium, and the Company also typically matches up to a certain percentage of their
contributions to the Company’s 401(k) plan. Both of these benefits are generally available to all Company employees, subject to
certain limitations and restrictions. Messrs. Guild and Malone, like other employees, also are entitled to participate in TCC’s
employee benefit plans offering group disability insurance, group medical and hospitalization plans, and retirement and profit-sharing
plans.
Chief Executive Officer Compensation
Mr. Guild has been President
and Chief Executive Officer of the Company since 1998 and Chairman of the Board of Directors since 2001. His base salary for each of fiscal
years 2022 and 2021 was $285,000.
Mr. Guild did not receive
a bonus with respect to the fiscal years ended September 24, 2021 or September 25, 2021 due to the Company’s financial condition
at year-end and the lack of achievement by the Company and Mr. Guild of specified performance milestones for the periods.
In fiscal 2022, the Board
awarded Mr. Guild an option to purchase 7,000 shares of Common Stock for his service as a director, as it did for all other directors.
These non-qualified options were granted on May 13, 2022 under the 2021 Plan at an exercise price of $1.75 per share with a term of 10
years, and vest over a five year period. Mr. Guild did not receive any stock options in fiscal 2021. See “Director Compensation”
in the Compensation section below for more information regarding such director option grants.
See “Retirement, Severance,
Change in Control and Similar Compensation” above for a discussion of the severance payments payable to Mr. Guild under the terms
of his employment agreement.
Chief Financial Officer Compensation
Mr. Malone has been Chief
Financial Officer of the Company since 2000 and Treasurer since 1998. His base salary for each of fiscal years 2022 and 2021 was $160,000.
Mr. Malone did not receive
a bonus with respect to the fiscal years ended September 24, 2022 or September 25, 2021 due to the Company’s financial condition
at year-end and the lack of achievement by the Company and Mr. Malone of specified performance milestones for the periods. Mr. Malone
also was not awarded any stock options or other equity incentives during fiscal years 2022 or 2021.
See “Retirement, Severance,
Change in Control and Similar Compensation” above for a discussion of the severance payments payable to Mr. Malone under the
terms of his employment agreement.
Tax Considerations
Section
162(m) of the Code generally disallows a tax deduction to public companies for compensation over $1,000,000 paid to certain employees,
generally the Chief Executive Officer and the four other most highly compensated executive officers. Qualifying performance-based compensation
is not subject to the deduction limit if certain requirements are met. In fiscal 2022, no compensation paid by the Company was nondeductible
as a result of the $1,000,000 limitation. Furthermore, the Board of Directors believes that, given the general range of salaries and bonuses
for executive officers of the Company, the $1,000,000 threshold of Section 162(m) will not be reached by any executive officer of
the Company in the foreseeable future. Accordingly, the Board has not formulated a policy to address non-qualifying compensation.
Say on Pay Proposal and Vote
As discussed under Proposal
II below, stockholders will have the opportunity to cast their vote on the compensation of TCC’s named executive officers as described
in this Proxy Statement at the Meeting. The advisory vote will not be binding on the Governance Committee or the Board of Directors. However,
the Governance Committee and the Board will review the voting results and any concerns raised by stockholders will be considered when
determining future compensation arrangements and making decisions about future compensation programs and practices. The Board and Governance
Committee also may consult directly with stockholders to better understand any issues and concerns. Stockholders (not including broker
non-votes) have voted in favor of the compensation of the Company’s named executive officers every year since being given the opportunity
to do so. At the Company’s 2011 annual meeting of stockholders and again at the 2017 annual meeting of stockholders, stockholders
voted in favor of including an advisory vote on executive compensation in the Company’s proxy materials every year as recommended
by the Board, which annual vote the Board implemented.
COMPENSATION
Named Executive Officers
The following tables set forth
all plan and non-plan compensation awarded to, earned by or paid to the Chief Executive Officer and Chief Financial Officer of the Company,
who were the only “named executive officers” of the Company during its 2022 fiscal year, for all services rendered by such
officers to the Company and its subsidiary in all capacities for the periods presented.
Summary Compensation Table
|
Name
and
Principal Position |
Year
|
Salary
($)
|
Bonus
($) |
Option
Awards
($) |
All
Other
Compensation
($) |
Total
($) |
|
Carl H. Guild, Jr.
President, Chief Executive Officer and Chairman |
2022 |
$285,006(1) |
--
|
$10,755(2) |
$7,096(3) |
$302,857 |
| |
2021 |
$254,313(1) |
--
|
- |
$7,169(3) |
$261,482 |
| |
|
|
|
|
|
|
|
Michael P. Malone
Chief Financial Officer, Treasurer and Assistant Secretary |
2022 |
$152,245(4) |
--
|
--
|
$7,549(5) |
$159,794 |
| |
2021 |
$142,782(4) |
--
|
--
|
$4,989(5) |
$147,771 |
| (1) | Mr. Guild’s annual base salary was set at $285,000 effective March 1, 2012. As a result of a company
wide furlough between December 2020 and March of 2021 Mr. Guild’s salary was reduced by 40% during that period. |
| (2) | Amount represents an award on May 13, 2022 of a non-qualified option to purchase 7,000 shares of Common
Stock at $1.75 per share, which vests over a five year period and has a 10 year term. Such award was made to Mr. Guild for his service
as a director of the Company. The dollar amount presented includes the aggregate fair value of the award on the date of grant. The fair
value of the option was estimated on the date of grant using the Black-Scholes option pricing model with the following weighted average
assumptions: dividend yield of 0%, expected volatility of 118%, risk-free interest rate of 2.65%, and expected life of 6.5 years. |
| (3) | Includes the Company’s 25% match on the first 6%, and 30% match on the second 6%, of Mr. Guild’s
401(k) contributions for fiscal 2022 and 2021. Also includes life insurance premiums paid by the Company of $504 for each of fiscal years
2022 and 2021, respectively. |
| (4) | Mr. Malone’s annual base salary was set at $160,000 effective March 1, 2012. As a result of a company
wide furlough between December 2020 and March of 2021 Mr. Malone’s salary was reduced by 40% during that period. |
| (5) | Includes the Company’s 25% match on the first 6%, and 30% match on the second 6%, of Mr. Malone’s
401(k) contributions for fiscal 2022 and 2021. Also includes life insurance premiums paid by the Company of $1,008 for each of fiscal
years 2022 and 2021, respectively. |
For further information on
equity incentive awards granted to our named executive officers, see the disclosure below. For more information on compensation generally
and information on severance and change of control rights, see the Compensation Discussion and Analysis section above.
Employment Agreements
Carl H. Guild, Jr.
The Company entered into an
employment agreement with Carl H. Guild, Jr., its President and Chief Executive Officer, effective as of November 19, 1998 and amended
November 8, 2001. The original term of the agreement expired September 30, 2000; the agreement renews automatically thereafter for successive
periods of one year unless earlier terminated or not renewed. Mr. Guild’s agreement contains provisions specifying his annual compensation,
subject to an annual merit review by the Board of Directors. The agreement also provides for performance awards to be paid at the discretion
of the Company’s Board of Directors, based on an assessment of exceptional performance. Mr. Guild’s base salary was set at
$285,000 effective March 1, 2012 and has not changed since such date. No performance awards were earned with respect to fiscal 2022 or
2021.
For a more in-depth discussion
of Mr. Guild’s right to receive annual performance bonuses and his right to severance and change in control payments, see the Compensation
Discussion and Analysis section above. For information on stock options granted to Mr. Guild, see “Outstanding Equity Awards
at Fiscal Year-End” below.
Michael P. Malone
The Company entered into an
employment agreement with Michael P. Malone, its Chief Financial Officer, effective as of February 12, 2001. The original term of the
agreement was 12 months, and the agreement renews automatically for successive periods of one year unless earlier terminated or not renewed.
Mr. Malone’s agreement contains provisions specifying his annual base salary, subject to an annual merit review by the Board of
Directors. The agreement also provides for performance awards to be paid at the discretion of the Company’s Board of Directors,
based on an exceptional performance assessment. Mr. Malone’s base salary was set at $160,000 effective March 1, 2012 and has not
changed since such date. No performance awards were earned with respect to fiscal 2022 or 2021.
For a more in-depth discussion
of Mr. Malone’s right to receive annual performance bonuses and his right to severance and change in control payments, see the Compensation
Discussion and Analysis section above. For information on stock options granted to Mr. Malone, see “Outstanding Equity Awards
at Fiscal Year-End” below.
Outstanding Equity Awards at Fiscal Year-End
The following table sets forth
certain information regarding unexercised options held by our named executive officers outstanding as of the end of the Company’s
2022 fiscal year, which date was September 24, 2022.
| |
Option Awards
|
|
Name
|
Number of Securities Underlying Unexercised
Options
(#) Exercisable
|
Number of Securities Underlying Unexercised
Options
(#) Unexercisable |
Equity Incentive Plan Awards: Number of Securities
Underlying Unexercised Unearned Options
(#) |
Option Exercise
Price
($)
|
Option Expiration
Date
|
| Carl H. Guild, Jr. |
3,500 (1) |
-- |
-- |
4.67 |
02/11/23 |
| |
3,500 (2) |
-- |
-- |
7.65 |
02/12/24 |
| |
3,500 (3) |
-- |
-- |
4.05 |
05/07/25 |
| |
3,500 (4) |
-- |
-- |
2.90 |
02/08/26 |
| |
3,500 (5) |
-- |
-- |
2.50 |
02/13/27 |
| |
2,800 (6) |
700 (6) |
-- |
7.25 |
02/12/28 |
| |
2,100 (7) |
1,400 (7) |
-- |
3.58 |
05/15/29 |
| |
1,400 (8) |
2,100 (8) |
-- |
2.48 |
05/07/30 |
| |
-- (9) |
7,000 (9) |
-- |
1.75 |
04/13/32 |
| |
|
|
|
|
|
| (1) | Granted on February 11, 2013 under the 2005 Plan; options have 10 year term and were fully vested as of
February 11, 2013. |
| (2) | Granted on February 12, 2014 under the 2005 Plan; options have 10 year term and were fully vested as of
February 12, 2014. |
| (3) | Granted on May 7, 2015 under the 2010 Plan; options have 10 year term and vest as to 20% of the shares
on each of the first five anniversaries of the date of grant. |
| (4) | Granted on February 8, 2016 under the 2010 Plan; options have 10 year term and vest as to 20% of the shares
on each of the first five anniversaries of the date of grant. |
| (5) | Granted on February 13, 2017 under the 2010 Plan; options have 10 year term and vest as to 20% of the
shares on each of the first five anniversaries of the date of grant. |
| (6) | Granted on February 12, 2018 under the 2010 Plan; options have 10 year term and vest as to 20% of the
shares on each of the first five anniversaries of the date of grant. |
| (7) | Granted on May 15, 2019 under the 2010 Plan; options have 10 year term and vest as to 20% of the shares
on each of the first five anniversaries of the date of grant. |
| (8) | Granted on May 7, 2020 under the 2010 Plan; options have 10 year term and vest as to 20% of the shares
on each of the first five anniversaries of the date of grant. |
| (9) | Granted on April 13, 2022 under the 2021 Plan; options have 10 year term and vest as to 20% of the shares
on each of the first five anniversaries of the date of grant. |
Equity Incentive Plans
The Company currently administers
three plans that provided for the grant of equity incentive compensation to officers, directors and employees: the Technical Communications
Corporation 2021 Equity Incentive Plan, the Technical Communications Corporation 2010 Equity Incentive Plan and the Technical Communications
Corporation 2005 Non-Statutory Stock Option Plan. On July 29, 2020, the 2010 Plan expired; the 2005 Plan expired in May 2015. As of December
16, 2022, although awards were no longer able to be granted under either of the 2010 Plan and the 2005 Plan, options to purchase 119,400
and 17,500 shares granted under the 2010 Plan and 2005 Plan, respectively, remained outstanding.
In May 2021 the Board adopted
the 2021 Equity Plan, which plan was approved by stockholders at the 2022 Meeting. The 2021 Plan provides for the issuance of awards with
respect to 400,000 shares of Common Stock. As of December 16, 2022, there were 28,000 outstanding options to purchase shares pursuant
to the 2021 Equity Plan.
Generally, these plans provided
for the grant of equity awards to employees, officers, directors and consultants of the Company, in each case in amounts, at prices and
subject to such restrictions and limitations as determined by the Board of Directors or a committee thereof and in compliance with applicable
law, including the Code. For more information about each plan, see “Equity Incentives” in the Compensation Discussion and
Analysis section above.
Grants in Fiscal 2022
There were 28,000 grants to
members of the Board of Directors during fiscal 2022. Included in this grant were the options deferred by the directors in fiscal 2021.
Retirement, Severance and Similar Compensation
No retirement, severance or
similar compensation was paid to any employee during the 2022 fiscal year. For a description of the amounts that may be payable to our
named executive officers upon their resignation, retirement, termination or a change in control, please see “Retirement, Severance,
Change in Control and Similar Compensation” above in the Compensation Discussion and Analysis section. The Company also provides
to all employees a 401(k) tax qualified plan.
Compensation of Directors
The following table sets forth
all compensation paid to the Company’s directors for the fiscal year ended September 24, 2022. Mr. Guild, our President, CEO and
Chairman of the Board of Directors, did not receive any compensation for his service as a director during the 2022 fiscal year other than
the option grant discussed above.
|
Name |
Fees Earned or
Paid in Cash
($)
|
Option Awards
($) |
All Other
Compensation
($) |
Total
($) |
| Thomas E. Peoples |
$30,100(1) |
-(2)
|
- |
$30,100
|
| Francisco F. Blanco |
$24,500(1) |
-(2)
|
- |
$24,500
|
| Ralph M. Norwood |
$24,500(1) |
-(2)
|
- |
$24,500 |
| |
|
|
|
|
| (1) | Includes quarterly stipend and fees paid for Board of Directors and committee meetings attended during
the fiscal year. For Mr. Peoples, also includes quarterly stipend received for serving as Chairman of the Audit Committee. These amounts
include unpaid fees as a result of the members of the Board of Directors electing to defer the fees due for the four quarters of fiscal
2022 and the third and fourth quarters of 2021 fiscal year. Unpaid fees amount to $37,500 for Mr. Peoples and $30,500 for both Mr. Blanco
and Mr. Norwood. |
| (2) | Mr. Peoples had 32,900 options outstanding at the 2022 fiscal year-end, of which 21,700 were fully vested
and exercisable. Mr. Blanco had 35,000 options outstanding at the 2022 fiscal year-end, of which 23,800 were fully vested and exercisable.
Mr. Norwood had 10,500 options outstanding at the 2022 fiscal year-end, of which 1,400 were fully vested and exercisable. The Board of
Directors elected to defer their annual stock option grant for fiscal year 2021. These options were granted to the directors in conjunction
with the Fiscal 2022 grant. |
Board members are entitled
to receive a Board meeting fee of $2,500 per meeting attended (whether in person or via telephone conference, so long as the duration
of the meeting attended exceeds 30 minutes), which fee can be waived. Board members also receive a quarterly stipend of $3,500 for
their service. Members of the Audit Committee are paid $1,000 for each Audit Committee meeting that is not held in connection with a regularly
scheduled Board meeting, and the Audit Committee Chairman receives a quarterly stipend of $1,400 in addition to the stipend he receives
as a director of the Company. Members of the Governance Committee receive $500 for each meeting that is held other than in connection
with a regularly scheduled meeting of the Board of Directors. The Board of Directors elected to defer their fees due for the four quarters
of fiscal 2022 and the third and fourth quarters of the 2021 fiscal year. Unpaid fees amount to $37,300 for Mr. Peoples and $30,300 for
both Mr. Blanco and Mr. Norwood.
Directors are annually granted
options to purchase 3,500 shares of Common Stock at an exercise price equal to the closing price of the Common Stock on the date of grant.
Stock options granted to directors are considered non-qualified and, beginning in fiscal year 2015, vest 20% per year commencing on the
first anniversary of the date of grant; prior director option grants vested immediately. Each grant expires 10 years after the date of
grant, except that if a director ceases to be a director, the option terminates at the earlier of 10 years from the date of grant or three
years from the last day as a director. The Board of Directors elected to defer their annual stock option grant for the fiscal year 2021.
These options were granted to the directors in conjunction with the fiscal 2022 grant.
TCC reimburses members of
the Board of Directors for their reasonable out-of-pocket expenses incurred in attending Board and committee meetings. The Company believes
that members of the Board of Directors received compensation during fiscal year 2022 commensurate with their responsibilities to the Company
and appropriate for a company of TCC’s size and revenues.
PROPOSAL II. STOCKHOLDER ADVISORY VOTE
ON EXECUTIVE COMPENSATION
The Dodd-Frank Wall Street
Reform and Consumer Protection Act (the “Reform Act”) and Section 14A of the Exchange Act entitle stockholders to cast a non-binding,
advisory vote on the compensation of executives as described in a company’s proxy statement, otherwise known as “say on pay”
proposals. The legislation makes clear that these votes do not overrule a Board’s compensation decisions, impose additional fiduciary
duties on the Board, or limit stockholders’ ability to make other compensation-related proposals.
The Company’s guiding
compensation philosophy, as discussed above in Compensation Discussion and Analysis, is to provide compensation that rewards individual
and organizational performance and align such compensation with the interests of long-term stockholders. The Company aims to make executive
compensation sensitive to Company performance, which is defined in terms of revenue growth and profitability. Compensation also must be
competitive, thereby enabling the Company to attract, retain and motivate highly-qualified individuals who contribute to the Company’s
success.
We believe that the Company’s
executive compensation programs have been effective at providing appropriate incentives for the achievement of targeted results, aligning
pay and performance, creating an ownership culture in which award recipients think and act like stockholders, and enabling TCC to attract
and retain some of the most talented executives in the communications security device and system industry.
Revenues for the Company’s
2022 fiscal year were $1,304,000 with a net loss of $2,331,000 or $(1.26) per share. The continued delays in the receipt of certain foreign
and domestic contracts due to the COVID-19 pandemic resulted in lower than expected revenue for fiscal 2022. Major domestic and international
contracts also did not materialize during the fiscal year as expected due to the pandemic and responses thereto, including restrictions
imposed on individuals and businesses by foreign and domestic federal and state governments.
Compensation actions taken
with respect to fiscal 2022 for TCC’s named executive officers reflected the Company’s current and historical results. Specifically,
in recognition of both the Company’s disappointing financial performance and poor individual achievement of performance milestones,
no annual performance bonuses related to company performance were awarded to our CEO or CFO. Stockholders are encouraged to read the Compensation
Discussion and Analysis and Compensation sections of this Proxy Statement for a more detailed discussion of how the Company’s
compensation programs reflect our overarching compensation philosophy and core principles and how such philosophy and principles were
implemented when making compensation decisions for the 2022 fiscal year.
Our Board values constructive
dialogue on compensation and other governance topics, and recognizes the interest that investors have in executive compensation. In response
to the passage of the Reform Act and in recognition of growing support for advisory votes on compensation and our stockholders’
say-on-pay and say-when-on-pay votes, stockholders currently have the opportunity to vote on an advisory resolution concerning the compensation
of our executives on an annual basis.
At the Meeting, stockholders
are being asked to vote on the following resolution:
RESOLVED, that the compensation
paid to the Company’s named executive officers as disclosed in the Compensation section (including the tables and narrative
discussion therein) of this Proxy Statement be hereby APPROVED.
Stockholders will have the
opportunity to vote for or against such resolution, or abstain from voting. The affirmative vote of the holders of a majority of the shares
of Common Stock voting on the matter shall be required to approve the stockholder advisory vote on executive compensation as disclosed
in this Proxy Statement. Abstentions and broker non-votes will not be included in the totals for the proposal, and will have no effect
on the outcome of the vote.
The advisory vote will
not be binding on the Governance Committee or the Board of Directors. However, the Governance Committee and the Board will review
the voting results and any concerns raised by stockholders will be considered when determining future compensation arrangements and making
decisions about future compensation programs and practices. The Board and Governance Committee also may consult directly with stockholders
to better understand any issues and concerns.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR”
THE ADVISORY RESOLUTION APPROVING EXECUTIVE
COMPENSATION.
PROPOSAL III. STOCKHOLDER ADVISORY VOTE TO
DETERMINE
FREQUENCY OF VOTING ON EXECUTIVE COMPENSATION
The Reform Act also enables
our stockholders to vote, on a non-binding, advisory basis, on the frequency of the Company’s say on pay proposals. These proposals,
often referred to as “say when on pay”, permit stockholders to select whether say on pay advisory votes occur every year,
every two years or every three years. Shareholders also must be given the opportunity, at least once every six years, to have a separate
vote to re-determine the frequency of the say on pay vote. At our annual meeting of stockholders in 2011 and again in 2017, shareholders
voted to approve executive compensation on an annual basis. Shareholders are being given the opportunity at the Meeting to select the
frequency of future votes.
TCC’s Board of Directors
and the Governance Committee have considered carefully the advantages and disadvantages of each frequency option, and have determined
to again recommend to stockholders that they vote for an annual vote on executive compensation. The Board believes that having an annual
vote makes compensation more responsive to and reflective of stockholders’ interests and concerns, and decreases the chance that
poor compensation decisions in one year will have a continuing, long-term effect.
Stockholders will have the
opportunity to vote for one of three options with respect to this say when on pay proposal: one year, two years or three years. The option
that receives the plurality of the votes cast at the Meeting shall be considered when determining the frequency of voting by stockholders
on the compensation of our named executive officers. Abstentions and broker non-votes will not be included in the totals for the proposal,
and will have no effect on the outcome of the vote.
The advisory vote will
not be binding on the Governance Committee or the Board of Directors. However, the Governance Committee and the Board will review
the voting results when determining the frequency with which stockholders will vote on executive compensation.
To be clear, stockholders
are choosing the frequency with which stockholders will cast their non-binding, advisory votes on the Company’s executive compensation.
The choices provided to stockholders are one year, two years and three years. Stockholders are voting on the actual frequency of the vote,
not voting to approve or disapprove the Board of Directors’ recommendation as discussed above.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR
ONE YEAR FOR THE FREQUENCY OF THE SAY ON PAY
VOTE.
PROPOSAL
IV. RATIFICATION OF SELECTION OF
Independent
Registered Pubic Accounting Firm
The Audit Committee has selected
the firm of Stowe & Degon LLC (“Stowe & Degon”), independent certified public accountants, to serve as the Company’s
independent registered public accounting firm for the fiscal year ending September 30, 2023. Stowe & Degon acted as the Company’s
independent registered public accounting firm for the Company’s 2022 and 2021 fiscal years.
It is expected that a member
of Stowe & Degon will be present at the Meeting and will be available to respond to appropriate questions and make a statement if
he or she so desires.
Fees
Audit Fees. The aggregate
fees billed by Stowe & Degon for professional services rendered for the audit of the Company’s annual financial statements for
fiscal year 2022 and for the reviews of the financial statements included in the Company’s quarterly reports during fiscal year
2022 were approximately $36,000. There are unbilled audit fees of approximately $75,000 for fiscal year 2022. The aggregate fees billed
by Stowe & Degon for professional services rendered for the audit of the Company’s annual financial statements for fiscal year
2021 and for the reviews of the financial statements included in the Company’s quarterly reports during fiscal year 2021 were approximately
$111,000.
Audit-Related Fees. No
fees were billed by Stowe & Degon for assurance and related services that were reasonably related to the performance of such firm’s
audit or review of the Company’s financial statements for fiscal years 2022 and 2021.
Tax Fees. The aggregate
fees billed by Verdolino & Lowey, P.C. for professional services rendered for tax compliance, tax advice and tax planning for the
Company for the fiscal years 2022 and 2021 were approximately $18,000 and $9,000, respectively.
All Other Fees. No
fees were billed by Stowe & Degon for products or services provided other than those otherwise described above for fiscal years 2022
and 2021.
Pre-Approval Policies
It is the policy of the Audit
Committee to pre-approve the audit and permissible non-audit services performed by the Company’s independent registered public accounting
firm in order to ensure that the provision of such services does not impair such firm’s independence, in appearance or fact. In
fiscal year 2022, the Audit Committee pre-approved all such services performed by Stowe & Degon.
Ratification
Stockholder ratification
of the appointment of the Company’s independent registered public accounting firm is not required by the Company’s By-laws
or otherwise, but is being done as a matter of good corporate governance. If stockholders fail to ratify the selection, the Audit Committee
will reconsider this selection. Even if the selection is ratified, the Audit Committee in its discretion may direct the appointment of
a different independent registered public accounting firm at any time during the year if it determines that such a change would be in
the best interests of the Company and its stockholders.
The affirmative vote of the
holders of a majority of the shares of Common Stock voting on the matter is required for the ratification of the selection of the independent
registered public accounting firm. Abstentions and broker non-votes will not be included in the totals for the proposal, and will have
no effect on the outcome of the vote.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR”
THE RATIFICATION OF THE INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
FOR FISCAL YEAR 2023.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT
The following table shows,
as of December 16, 2022, the beneficial ownership of Common Stock of the Company by (i) any person or group who is known to the Company
to be the beneficial owner of more than 5% of the Company’s Common Stock, (ii) each of TCC’s current directors and nominees,
(iii) each of the Company’s named executive officers, and (iv) all current directors and executive officers of the Company as a
group. As of December 16, 2022, there were 1,854,403 shares of Common Stock outstanding.
|
Name and Address of
Beneficial Owner(1) |
Amount and Nature of
Beneficial Ownership(1) |
Percent of Class |
| |
|
|
| Francisco F. Blanco |
23,800(2) |
1.3%
|
| Carl H. Guild, Jr. |
322,459(3) |
17.2% |
|
Thomas E. Peoples |
26,490(4) |
1.4%
|
| Ralph M. Norwood |
5,400(5) |
0.3%
|
|
Michael P. Malone |
40,127 |
2.2% |
| |
|
|
| All current directors, executive officers and 5% holders as a group (5 persons) |
418,276(6) |
21.7% |
| (1) | Unless otherwise indicated, each of the persons named in the table has sole voting and investment power
with respect to the shares set forth opposite such person’s name. With respect to each person or group, percentages are calculated
based on the number of shares beneficially owned, including shares that may be acquired by such person or group, within 60 days of December
16, 2022, upon the exercise of stock options or other purchase rights, but not the exercise of options or warrants held by any other person.
The address of Messrs. Blanco, Guild, Peoples, Norwood and Malone is c/o Technical Communications Corporation, 100 Domino Drive, Concord,
Massachusetts 01742. |
| (2) | Represents 23,800 shares issuable upon the exercise of stock options. |
| (3) | Includes 24,500 shares issuable upon the exercise of stock options, and 297,959 shares held jointly by
Mr. Guild and his wife. |
| (4) | Includes 21,700 shares issuable upon the exercise of stock options. |
| (5) | Includes 1,400 shares issuable upon the exercise of stock options. |
| (6) | Includes an aggregate 71,400 shares issuable upon the exercise of stock options. |
Change in Control
The Company knows of no arrangements
(including any pledge by any person of securities of TCC) that may result or have resulted in a change in control of the Company.
ADDITIONAL INFORMATION
Other Matters
The Board of Directors of
the Company is not aware of any matter, other than those described above, that may come before the Meeting. However, if any other matters
are properly presented to the Meeting for action, it is intended that the persons named in the enclosed proxy card will vote on such matters
in accordance with their best judgment and applicable law.
Stockholder Proposals for 2024 Annual Meeting
Proposals of stockholders
for inclusion in the Proxy Statement and form of proxy, including director nominees, for the Company’s 2024 Annual Meeting of Stockholders
(which is expected to be held on Monday, February 12, 2024) must be received by the Company at its principal executive offices no later
than September 13, 2023, and must comply with the applicable requirements of federal securities laws and the Company’s nomination
procedures as discussed herein. Stockholder proposals received outside this process will be considered untimely if the Company is not
provided written notice thereof at least 45 days prior to the first anniversary of the date of mailing of this year’s proxy materials,
as set forth on the first page of this Proxy Statement, or November 26, 2023. In order to curtail controversy as to the date on which
the Company received a proposal, it is suggested that proponents submit their proposals by certified mail, return receipt requested.
Expenses and Solicitations
The cost of the solicitation
of proxies will be borne by the Company. Proxies will be solicited principally through the mail. Further solicitation of proxies from
some stockholders may be personally made by directors, officers and regular employees of the Company, by telephone, electronic mail, facsimile
or special letter. No additional compensation, except for reimbursement of reasonable out-of-pocket expenses, will be paid for any such
further solicitation by such individuals.
In addition, the Company may
request banks, brokers, custodians, nominees, and fiduciaries to forward copies of the Company’s proxy materials to those persons
for whom they hold shares to request instructions for voting the proxies. The Company will reimburse any such persons for their reasonable
out-of-pocket costs.
Householding
Certain
stockholders who share the same address may receive only one copy of this Proxy Statement (which includes the Notice of Internet Availability
of Proxy Materials) and the 2022 Annual Report on Form 10-K in accordance with a notice delivered from such stockholders’ bank,
broker or other holder of record, unless the applicable bank, broker or other holder of record received contrary instructions. This practice,
known as “householding,” is designed to reduce printing and postage costs. If you own your shares through a bank, broker or
other holder of record and wish to either stop or begin householding, you may do so, or you may request a separate copy of this Proxy
Statement (which includes the Notice of Internet Availability of Proxy Materials) or the Annual Report, either by contacting your bank,
broker or other holder of record at the telephone number or address provided in the above referenced notice, or by contacting TCC via
telephone at (978) 287-5100 or in writing at Technical Communications Corporation, 100 Domino Drive, Concord, Massachusetts, 01742, Attention:
Investor Relations. The Company will promptly provide separate copies of the requested materials. If you request to begin or stop householding,
you should provide your name, the name of your broker, bank or other record holder, and your account information.
Annual Report on Form 10-K
The Company will provide,
promptly upon written request and without charge to each stockholder entitled to vote at the Meeting, a copy of the Company’s Annual
Report on Form 10-K as filed with the Commission for the fiscal year ended September 24, 2022. A request for copies of such report should
be addressed to the Company at 100 Domino Drive, Concord, Massachusetts 01742, Attention: Investor Relations.
0 TECHNICAL COMMUNICATIONS CORPORATION Proxy for Annual Meeting of Stockholders Date: February 13, 2023 THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS The undersigned hereby appoints CARL H . GUILD, JR . , MICHAEL P . MALONE and THOMAS J . CONTE, and each of them, proxies of the undersigned, with full powers of substitution to each, with all the powers the undersigned would possess if personally present, to vote all of the shares of com - mon stock, $ 0 . 10 par value, of TECHNICAL COMMUNICATIONS CORPORATION, the undersigned is entitled to vote at the Annual Meeting of Stockholders to be held at 10 : 00 a . m . local time on February 13 , 2023 , and at any adjournments thereof . This proxy, if properly executed, will be voted in the manner directed herein by the undersigned stockholder and in the discretion of the proxies named herein on any other business which may properly come before said meeting, all in accor - dance with and as described in the Notice and accompanying Proxy Statement for said meeting, receipt of which is hereby acknowledged . If no direction is made, the proxy will be voted FOR the election of the nominee named in Proposal 1 and FOR Proposals 2 , 4 and 5 , and FOR 1 year for Proposal 3 . Please vote, date and sign on the reverse side, and promptly return in the enclosed envelope . (Continued and to be signed on the reverse side) 14475
ANNUAL MEETING OF STOCKHOLDERS OF TECHNICAL COMMUNICATIONS CORPORATION Date: February 13, 2023 NOTICE OF INTERNET AVAILABILITY OF PROXY MATERIAL : The Notice of Meeting, proxy statement, proxy card and Annual Report for the 2022 fiscal year are available at www.tccsecure.com/investors/proxy - statement - 2022.aspx Signature of Stockholder Date: Note: Please sign exactly as your name or names appear in this Proxy. When shares are held jointly, each holder must 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 a duly authorized officer, giving full title as such. If signer is a partnership, please sign in partnership name by an authorized person. To change the address on your account, please check the box at 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 Stockholder Date : 2. Advisory vote on the compensation of the Company's named executive officers as disclosed in the proxy statement for the meeting. 3 . Advisory vote to determine the frequency of voting by stockholder on the compensation of the company named executive officers . FOR AGAINST ABSTAIN PLEASE COMPLETE, SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE. PLEASE MARK YOUR VOTE IN BLUE OR BLACK INK AS SHOWN HERE x Please complete, sign, date and return your proxy card in the envelope provided as soon as possible. Please detach along perforated line and mail in the envelope provided. 10130403000000000000 8 021323 Francisco F. Blanco. Class II Director FOR THE NOMINEE WITHHOLD AUTHORITY FOR THE NOMINEE 1. Elect one Class II Director to serve on the Board of Directors for a term of three years expiring at the 2026 Annual Meeting of Stockholders. NOMINEE: ONE TWO THREE ABSTAIN YEAR YEARS YEARS FOR AGAINST ABSTAIN 4. Ratify the appointment of Stowe & Degon LLC as independent registered public accounting firm of the company for the fiscal year ending September 30 , 2023 . 5. Consider and act upon such other business and matters as may properly come before the Meeting or any adjournments thereof. The Board of Directors knows of no other matters to be presented at the Meeting. Only stockholders of record of the Company at the close of business on December 16 , 2022 are entitled to notice of and to vote at the Meeting or any adjourn - ments thereof . All stockholders are cordially invited to attend the Meeting. Whether or not you expect to attend the Meeting, please complete, sign, date and return the enclosed proxy card in the envelope provided at your earliest convenience . If you return your proxy, you may nevertheless attend the Meeting and vote your shares in person .
Technical Communications (CE) (USOTC:TCCO)
過去 株価チャート
から 10 2024 まで 11 2024
Technical Communications (CE) (USOTC:TCCO)
過去 株価チャート
から 11 2023 まで 11 2024
