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SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. 1)
FILED BY THE REGISTRANT /X/ FILED BY A PARTY OTHER THAN THE REGISTRANT / /
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Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Definitive Proxy Statement
/X/ Definitive Additional Materials
/ / Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
ECC INTERNATIONAL CORP.
(Name of Registrant as Specified In Its Charter)
ECC INTERNATIONAL CORP.
(Name of Person(s) Filing Proxy Statement)
PAYMENT OF FILING FEE (CHECK THE APPROPRIATE BOX):
/ / $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act
Rule 0-11 (Set forth the amount on which the filing fee is calculated and
state how it was determined):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
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ECC INTERNATIONAL CORP.
175 STRAFFORD AVENUE, SUITE 116
WAYNE, PENNSYLVANIA 19087-3377
(610) 687-2600
November 20, 1996
Dear Stockholder:
You should have received the 1996 Proxy Statement of ECC International
Corp. (the "Company"), along with the Company's WHITE proxy card and its 1996
Annual Report. You may also have received proxy materials with a BLUE proxy card
from Michael N. Taglich, a holder of 1,000 shares, relating to two proposals by
Mr. Taglich to be voted upon at the annual meeting of stockholders to be held on
December 3, 1996 (the "Annual Meeting").
After careful consideration, your Board of Directors has concluded that
such stockholder proposals are not in the best interests of the Company or its
stockholders as a whole and unanimously recommends a vote "AGAINST" such
stockholder proposals. Please sign, date and mail the enclosed WHITE proxy card.
This letter, which supplements the Company's proxy statement mailed on
November 14, 1996, addresses certain statements in Mr. Taglich's proxy
materials.
1. In his proxy materials, Mr. Taglich portrays the Company's management
as being unresponsive to his concerns. Mr. Taglich states that he received no
response from me after sending his letter of September 11, 1996. As a factual
matter, Mr. Taglich and I have had several telephone conversations during which
we discussed his intended proposals. Mr. Taglich, however, has been
uncompromising in our discussions.
Most recently, on November 15, 1996, Tom McGrath (a member of our Board)
and I spoke again to Mr. Taglich concerning his proposal to allow the holders of
10% of the Company's outstanding shares to call a special meeting of
stockholders. We offered the Board's proposal of allowing the holders of 30% of
the Company's outstanding shares to call a special meeting of stockholders. Mr.
Taglich refused to accept the Board's proposal, notwithstanding the fact that
our research indicates that of approximately 200 companies among the S&P 500
companies that have addressed in their charter or by-laws the issue of the
ability of stockholders to call a special meeting, the percentage of
stockholders required to call such a meeting ranges from 25% to 100%, with the
majority of such companies providing for between 50% and 80% to call such a
meeting. In addition, of those 200 companies, over 160 have specifically denied
stockholders the right to call a special meeting. Consequently, it is the
Board's opinion that Mr. Taglich's proposal would allow an unusually small
percentage of shares the ability to call a special meeting and subject the
Company to the costs associated therewith. In addition, Mr. Taglich's proxy
statement conveys the impression to our stockholders that the only response he
received from management and the Board was from our counsel, which is
inconsistent with the facts. It has always been and remains the policy of the
Company to be open and receptive to stockholder concerns and to give full
consideration to matters deemed to be important to their interests.
2. The first proposal presented by Mr. Taglich requests that the Company
engage an investment banking firm to seek to effect a sale of the Company. In
his proxy materials, Mr. Taglich states that the Board should not give priority
to the personal interests of the Board members or the officers of the Company.
The Board has not given any priority to the personal interests of its members or
of management. The members of the Board of Directors collectively beneficially
own more than 11% of the Common Stock of the Company and, therefore, personally
share the same interests as all stockholders in seeking to maximize stockholder
value.
As is discussed in the Company's proxy materials, your Board also believes
that the uncertainty associated with seeking a sale of the Company at this time
might jeopardize several potential contracts, both in its training and
simulation business and in its vending business. The Board has been and remains
committed to examine all appropriate means by which to maximize stockholder
value. However, the Board firmly believes that it is inappropriate to operate
under a mandate to sell all or a portion of the Company, as the existence of
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such a mandate alone may adversely affect third parties' decisions on whether to
award contracts to the Company. The Board, therefore, recommends that you vote
AGAINST Mr. Taglich's first proposal, denominated as No. 4 on the Company's
WHITE proxy card.
3. The second proposal presented by Mr. Taglich seeks to amend the By-laws
of the Company to require a special meeting of stockholders to be held no later
than 30 days after written notice from stockholders owning not less than 10% of
the Company's outstanding stock. As is explained in the Company's proxy
materials and above, the Board does not believe that this proposal is in the
best interests of the Company or its stockholders, and has proposed to allow
special meetings of stockholders to be called upon the written application from
the holders of not less than 30% of the Company's outstanding stock.
In his proxy materials, Mr. Taglich claims the Company is being
inconsistent in not supporting the holding of a special meeting no later than 30
days after receiving written notice from the requisite percentage of
stockholders by stating that the Company's proxy materials for the Annual
Meeting are being issued less than 30 days' from the Annual Meeting. In reality,
if the Company were to receive a stockholder request for a special meeting, in
order that its stockholders be meaningfully informed of the items proposed for
consideration and of the Board's views on such issues so that proxies could be
solicited on a fully informed basis, the Company would have to prepare and file
with the Securities and Exchange Commission preliminary proxy materials, wait a
minimum of ten days under Federal law, and then print and mail such materials to
the stockholders. Mr. Taglich's 30-day period simply does not allow the Company
sufficient time to prepare these materials and to inform its stockholders
adequately of the matters proposed to be considered at such a meeting and of the
Company's views thereon. The Board, therefore, recommends that you vote AGAINST
Mr. Taglich's second proposal, denominated as No. 5 on the Company's WHITE proxy
card.
FOR THE FOREGOING REASONS AND THE REASONS SET FORTH IN THE COMPANY'S PROXY
STATEMENT, WE URGE YOU TO VOTE AGAINST THE STOCKHOLDER PROPOSALS. YOU MAY DO SO
BY SIGNING, DATING AND MAILING THE COMPANY'S WHITE PROXY CARD. AN ADDITIONAL
PROXY CARD HAS BEEN ENCLOSED FOR YOUR CONVENIENCE.
On behalf of your Board of Directors, thank you for your continued support.
Sincerely,
/s/ GEORGE W. MURPHY
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GEORGE W. MURPHY
President and Chief Executive
Officer
