SUTRON CORPORATION
21300 Ridgetop Circle
Sterling, Virginia 20166
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON MAY 8, 1996
To the Holders of Common Stock of Sutron Corporation,
Notice is hereby given that the Annual Meeting of Shareholders of
Sutron Corporation (the "Company") will be held at 21300 Ridgetop
Circle, Sterling, Virginia, on Wednesday, May 8, 1996, at 4:00 p.m.,
local time, for the following purposes:
(i) To elect five directors to hold office until the next annual
election of directors and until their successors shall have been duly
elected and qualified;
(ii) To approve the appointment of Thompson, Greenspon & Co.,
P.C. as independent public accountants for the year 1996; and
(iii) To transact such other business as may properly come before
the meeting and any adjournments thereof.
Holders of shares of Common Stock of record at the close of
business on Tuesday, March 12, 1996, are entitled to notice of and to
vote at the meeting.
A Proxy Statement and a Proxy for the meeting are enclosed
herewith. We urge you to attend the 1996 Annual Shareholders Meeting.
Your vote is important and we would appreciate the prompt return of
your signed Proxy in the enclosed envelope. If you attend the meeting
in person, you may, if you desire, revoke your Proxy and vote in
person.
By Order of the Board of Directors,
/S/ Daniel W. Farrell
Daniel W. Farrell
Secretary
Sterling, Virginia
April 10, 1996
Enclosure
SUTRON CORPORATION
21300 Ridgetop Circle
Sterling, Virginia 20166
PROXY STATEMENT
The enclosed Proxy is solicited on behalf of the Board of
Directors of Sutron Corporation (the "Company") for use at its Annual
Meeting of Shareholders to be held on Wednesday, May 8, 1996 at 4:00
p.m., local time, and at any adjournments thereof. The purposes of
the meeting are set forth herein and in the accompanying Notice of
Annual Meeting of Shareholders. The meeting will be held at the
principal executive offices of the Company, 21300 Ridgetop Circle,
Sterling, Virginia 20166.
After the enclosed Proxy is duly executed and returned, a
shareholder may revoke the proxy at any time by written request that
is received by the Secretary of the Company prior to the meeting or by
voting in person at the meeting or by executing a later dated Proxy.
The Proxy is in ballot form so that a specification may be made to
vote for, or to withhold authority to vote for, the nominees for
election as directors, or any of them, and to indicate whether the
shareholder wishes to vote for or against, or abstain from voting upon
the other proposal.
The holders of shares of Common Stock of record at the close of
business on Tuesday, March 12, 1996 are entitled to notice of and to
vote at the meeting. On March 12, 1996, the Company had outstanding
and entitled to vote 4,225,851 shares of Common Stock, and a majority
of such shares, present or represented by proxy, will constitute a
quorum. Each share of Common Stock entitles the holder to one vote on
each matter to be voted upon at the meeting. Directors are elected by
a plurality of the votes cast by the shares entitled to vote in the
election at a meeting at which a quorum is present. The affirmative
vote of a majority of the shares of Common Stock voting is required
for the approval of the appointment of the independent public
accountants. The approximate date on which this Proxy Statement and
the accompanying Proxy will first be sent or given to shareholders is
April 10, 1996.
PRINCIPAL SHAREHOLDERS
As of March 12, 1996 the following persons were known to the
Company to be beneficial owners of more the 5% of the Company's Common
Stock:
Name and Address of Number of Shares Percentage
Beneficial Owner Beneficially Owned of Class
Kenneth W. Whitt 852,000(1) 20.2%
323 Sherwood Drive
Vienna, Virginia 22180
Raul S. McQuivey, Ph.D. 739,586(2) 17.5%
11211 Lapham Drive
Oakton, Virginia 22121
Thomas N. Keefer, Ph.D. 540,775(3) 12.8%
Route #4, Box 403 B
Leesburg, Virginia 22075
Daniel W. Farrell 223,460(4) 5.3%
2799 Equus Court
Herndon, Virginia 22071
(1) The shares are owned by Kenneth W. Whitt and Eva D. Whitt,
Mr. Whitt's wife, as Joint Tenants with a Right of
Survivorship; Mr. Whitt is deemed the beneficial owner of all
the shares since Mr. Whitt shares voting power and investment
power over such shares.
(2) Includes 733,400 shares owned by Dr. Raul S. McQuivey and
Karen T. McQuivey, Dr. McQuivey's wife, as Joint Tenants with a Right
of Survivorship; Dr. McQuivey is deemed the beneficial owner of such
shares since Dr. McQuivey shares voting power and investment power
over such shares.
(3) Includes 535,000 shares owned by Dr. Thomas N. Keefer and
Sally E. Keefer, Dr. Keefer's wife, as Joint Tenants with a Right of
Survivorship; Dr. Keefer is deemed the beneficial owner of such shares
since Dr. Keefer shares voting power and investment power over such
shares.
(4) Includes 218,300 shares owned by Daniel W. Farrell and Jill
E. Farrell, Mr. Farrell's wife, as Joint Tenants with a Right of
Survivorship; Mr. Farrell is deemed the beneficial owner of such
shares since Mr. Farrell shares voting power and investment power over
such shares.
ELECTION OF DIRECTORS
A board of five directors is to be elected at the 1996 Annual
Shareholders Meeting. It is intended that the shares represented by
the enclosed Proxy will be voted for the election of the five nominees
for directors named in the Proxy unless such Proxy is marked to
withhold authority. The term of office of each director will be until
the next annual election of directors and until a successor is elected
and qualified or until the director's earlier death, resignation or
removal. All of the nominees have consented to serve if elected. In
the event that any nominees for directors should be unavailable, which
is not anticipated, the Board of Directors, in its discretion, may
designate substitute nominees, in which event Proxies received by the
Board of Directors will be voted for such substitute nominees.
INFORMATION ABOUT NOMINEES FOR DIRECTORS
The following information with respect to each nominee has been
furnished to the Company by the respective nominees for director.
Raul S. McQuivey, Ph.D., age 57, has served as a Director since
1976, as President, Chief Executive Officer, Chief Financial Officer,
and Chairman of the Board of Directors since January 1989, and as
Chief Operational Officer since September 1980. Dr. McQuivey also
served as Executive Vice President from September 1980 to January
1989, Treasurer of the Company from March 1983 to March 1984 and as
Secretary from March 1983 until September 1989. From January 1976 to
September 1980, he served as Vice President for Environmental and
Water Resources Engineering of the Company. From September 1965 to
December 1975, Dr. McQuivey held various positions with the U.S.
Geological Survey, Department of the Interior, the last of which was
Staff Engineer from August 1974 to December 1975. Dr. McQuivey earned
a B.S. in Civil Engineering from Utah State University in 1961, an
M.S. in Civil Engineering (Hydraulics) from Colorado State University
in 1963, and a Ph.D. in Civil Engineering (Hydraulics, Hydrology and
Fluid Mechanics) from Colorado State University in 1967. He is a
Registered Professional Engineer.
Thomas N. Keefer, Ph.D., age 51, has served as Vice President, and
as Director of the Company, since March 1981. He joined the Company
in January 1977, as a Project Engineer. From August 1971 to January
1976, Dr. Keefer worked for the U.S. Geological Survey in various
positions as a Research Engineer in Hydraulics and Hydrology, the last
of which was a Project Chief at the Gulf Coast Hydroscience Center,
Bay St. Louis, Mississippi, from August 1974 to January 1977. He
served as Chairman of the National Hydraulics Division Awards
Committee of the American Society of Civil Engineers form January 1977
to January 1982. Dr. Keefer has earned three degrees from Colorado
State University, a B.S. in Civil Engineering in 1967, an M.S. in
Civil Engineering (Hydraulics) in 1969, and a Ph.D. in Civil
Engineering (Hydraulics, Hydrology and Fluid Mechanics) in 1971. He
is a Registered Professional Engineer.
Daniel W. Farrell, age 43, has served as a Director since 1988 and
as Vice President of the Company since March 2, 1984 and Secretary
since September 1, 1989. Mr. Farrell joined the Company in September
1976 as a staff scientist. He was promoted to the position of
Director of Engineering in August 1989. Mr. Farrell received a B.S. in
Chemistry from Brigham Young University in 1976.
Glenn A. Conover, age 57, has served as a Director since 1992, as
Vice President of the Company since October 20, 1985 and as Executive
Vice President since January 1, 1996. Mr. Conover joined the Company
in February 1985 and was promoted to the position of Vice President in
October 1985. Prior to joining the Company, Mr. Conover worked as a
Design Engineer, Production and Test Manager, and Sales Manager for
Environmental Systems for the LaBarge Electronics Division of LaBarge
Inc. Mr. Conover pursued courses of study while in the Navy, and at
Oklahoma City University and the Wharton School.
Ronald C. Dodson, age 58, has served as a Director since 1993. He
has served as President of R.C. Dodson & Company, a management
consulting firm, since 1984. Mr. Dodson received a B.A. from Brigham
Young University in 1964 and a M.B.A. from California State University
Long Beach in 1967.
MANAGEMENT OWNERSHIP OF COMMON STOCK
Set forth below is information concerning stock ownership of each
director and nominee, and all directors and officers of the Company as
a group, as of March 12, 1996. The statements as to securities
beneficially owned are, in each instance, based upon information
furnished by each individual. As to the shares shown to be
beneficially owned, the owner has sole investment and voting power,
unless otherwise indicated.
Name of Amount of
Beneficial Owner Ownership Percent of Class
Raul S. McQuivey, Ph.D. 739,586 (1) 17.5%
Thomas N. Keefer, Ph.D. 540,775 (2) 12.8%
Daniel W. Farrell 223,460 (3) 5.3%
Glenn A. Conover 185,508 (4) 4.4%
Sidney C. Hooper 50,000 (5) 1.2%
Ronald C. Dodson 27,500 0.7%
All officers and directors
as a group (6 in number) 1,766,829 41.8%
(1) See Note 2 under "PRINCIPAL SHAREHOLDERS".
(2) See Note 3 under "PRINCIPAL SHAREHOLDERS".
(3) See Note 4 under "PRINCIPAL SHAREHOLDERS".
(4) Includes 175,000 shares owned by Glenn A. Conover and Carol
J. Conover, Mr. Conover's wife, as Joint Tenants with a Right of
Survivorship; Mr. Conover is deemed the beneficial owner of such
shares since Mr. Conover shares voting power and investment power over
such shares.
(5) The shares are owned by Sidney C. Hooper and Malissa C.
Hooper, Mr. Hooper's wife, as Joint Tenants with a Right of
Survivorship; Mr. Hooper is deemed the beneficial owner of all the
shares since Mr. Hooper shares voting power and investment power over
such shares.
BOARD MEETINGS AND COMMITTEES
During the year ended December 31, 1995, the Board of Directors
held two meetings. The Board has not formed any committees.
EXECUTIVE OFFICERS
The Company currently has five executive officers. Four of those
officers, Dr. Raul S. McQuivey, Daniel W. Farrell, Dr. Thomas N.
Keefer, and Glenn A. Conover also serve as directors of the Company.
Their offices and business experience are described herein under the
heading "INFORMATION ABOUT NOMINEES FOR DIRECTORS." The following
information with respect to the remaining officer has been furnished
to the Company by that officer:
Sidney C. Hooper, age 37, has served as Treasurer of the Company
since May 14, 1993. Mr. Hooper joined the Company in August 1989 and
was promoted to the position of Controller in January 1990. Prior to
joining the Company, Mr. Hooper served as a Senior Accountant with
Arthur Andersen & Company. Mr. Hooper received a B.S. in Accounting
from Brigham Young University in 1983 and a Master of Accountancy from
Brigham Young University in 1984.
The term of office of all executive officers is until the next
annual meeting of the Board of Directors or until the executive
officer's earlier death, resignation or removal.
EXECUTIVE COMPENSATION
The following is a summary of certain information concerning
compensation which was awarded, paid to or earned by the Company's
chief executive officer and excecutive vice president during each of
the last three fiscal years. No other executive officers had total
annual salary and bonus in excess $100,000 and, therefore, no
disclosure with respect to them is made.
<TABLE>
<CAPTION>
Long Term Compensation
Annual Compensation Awards Payouts All
Other Restricted Other
Name and Annual Stock LTIP Compen-
Principal Compen- Awards Options/ Payouts sation
Position Year Salary Bonus sation (1) SARs(#) ($) ($)(2)
<S>
<C>
<C>
<C>
<C>
<C>
<C>
<C>
<C>
Raul S. McQuivey
1995
$114,483
(
(
(
(
(
$903
CEO
1994
111,155
(
(
(
(
(
1,018
1993
106,870
$3,206
(
(
(
(
8,483
Glenn A. Conover
1995
$102,486
(
(
(
(
(
$1,175
Executive Vice
1994
99,548
(
(
(
(
(
988
President
1993
95,721
$2,872
(
(
(
(
7,272
</TABLE>
(1) As of December 31, 1995, Raul S. McQuivey held 739,586 shares of
common stock with a market value of $346,681 and Glenn A. Conover held
185,508 shares of common stock with a market value of $86,597.
(2) All other compensation in 1995 consists of the dollar value of
term life insurance premiums in the amount of $903 for Raul S.
McQuivey and $1,175 for Glenn A. Conover.
Option/SAR Grants in Last Fiscal Year
There were no individual grants of stock options and freestanding
stock appreciation rights (SARs) made during the year 1995 to the
Company's chief executive officer or to the Company's executive vice
president.
Aggregated Option/SAR Exercises in Last Fiscal Year
and Fiscal Year-End Option/SAR Value
The Company's chief executive officer and the Company's executive
vice president did not exercise any stock options or freestanding
stock appreciation rights (SARs) during the year 1995 and did not have
any outstanding stock options or SARs at fiscal year end.
Long-Term Incentive Plans - Awards in Last Fiscal Year
The Company's chief executive officer and the Company's executive
vice president were not awarded long-term incentive plans during the
year 1995.
Compensation of Directors
The Company has no arrangement by which any of its officers are
compensated for their services as directors and, therefore, Mr.
Farrell and Mr. Conover and Drs. McQuivey and Keefer will not receive
any additional remuneration for their services as directors. Mr.
Dodson will be reimbursed by the Company for expenses incurred by him
in connection with the performance of his duties as a director of the
Company and will receive $1,000 for each meeting.
The Company has no plan or arrangement which would result in any
executive officer receiving compensation as a result of their
resignation, retirement or any other termination of employment with
the Company, or from a change in control of the Company or a change in
responsibilities following a change in control of the Company.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In 1994, the Company restructured its debt with the bank. An
aspect of the restructuring was that the bank would readvance an
amount not to exceed $100,000 contingent on the Company obtaining
additional funds from the issuance of either debt or equity
securities. The Company obtained $100,000 in additional funds by
issuing promissory notes totaling $100,000 payable on demand to four
officers and directors of the Company. The promissory notes are
summarized below.
Name Relationship Promissory Interest
Note Amount Rate
Raul S. McQuivey Officer/Director $55,000.00 10.75%
Thomas N. Keefer Officer/Director $25,000.00 10.75%
Glenn A. Conover Officer/Director $10,000.00 10.75%
Daniel W. Farrell Officer/Director $10,000.00 10.75%
Repayment of the promissory notes to the four officers and
directors was prohibited until the readvance of the term note was
repaid in full in February, 1995. Repayment was made in full to
Daniel W. Farrell in October 1995 and to Glenn A. Conover in January
1996.
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
Under the securities laws of the United States, the Company's
directors and its executive officers are required to report ownership
of the company's Common Stock and any changes in that ownership to the
Securities and Exchange Commission. Specific due dates for these
reports have been established and the Company is required to disclose
in this proxy statement any failure to file by these dates during
1995. There were two required filings in 1995, both of which were
filed timely. In making this disclosure, the Company has relied on
written representation of its directors and executive officers.
RATIFICATION OF THE APPOINTMENT OF INDEPENDENT ACCOUNTANTS
Subject to ratification by the shareholders, the Board of
Directors has appointed Thompson, Greenspon & Co., P.C. as independent
accountants of the Company for the year 1996. Thompson, Greenspon &
Co., P.C. has certified the Company's financial statements for all
years beginning with 1976. Representatives of Thompson, Greenspon &
Co. P.C., will be present at the 1996 Annual Shareholders Meeting and
will be afforded an opportunity to make a statement, if they desire,
and to respond to appropriate questions from shareholders.
THE BOARD OF DIRECTORS FAVORS A VOTE FOR THIS PROPOSAL. Proxies
solicited by the Board of Directors will be so voted unless
shareholders specify in their Proxies a contrary choice.
OTHER BUSINESS WHICH MAY COME BEFORE THE MEETING
The enclosed Proxy confers upon the person or persons entitled to
vote the shares represented thereby discretionary authority to vote
such shares in accordance with their best judgment with respect to
other business which may come before the 1996 Annual Shareholders
Meeting in addition to the scheduled items of business. As of the
date of this Proxy Statement, the Board of Directors knows of no other
business which will be presented for consideration at the 1996 Annual
Shareholders Meeting.
SHAREHOLDERS PROPOSALS
Shareholder proposals to be considered for inclusion in the Proxy
Statement for the 1997 Annual Shareholders Meeting must be received by
the Company no later than December 10, 1996.
OTHER INFORMATION
A copy of the Company's Annual Report for 1995, which includes
financial statements and other information concerning the Company, is
included with this Proxy material. Upon the written request by any
shareholder entitled to vote at the 1996 Annual Shareholders Meeting,
the Company will furnish that person without charge a copy of the
Company's Form 10-KSB Annual Report for 1995 which is filed with the
Securities and Exchange Commission, including the financial statements
and schedules thereto, but excluding the exhibits thereto. The copy
of the Form 10-KSB Annual Report will be accompanied by a list briefly
describing all the exhibits not contained therein and will indicate
that the Company will furnish a copy of any exhibit upon payment of a
fee of $.20 per page. Requests should be addressed to Raul S.
McQuivey, President, Sutron Corporation, 21300 Ridgetop Circle,
Sterling, Virginia 20166.
The Company will bear the cost of preparing this Proxy Statement
and the other costs of soliciting Proxies for the 1996 Annual
Shareholders Meeting. All solicitations will be made by mail. The
Company does not intend to pay any compensation for this solicitation,
but may reimburse brokers, and other persons holding stock in their
names, for their expenses for sending Proxy material to principals and
obtaining their Proxies.
YOU ARE ENCOURAGED TO SPECIFY YOUR CHOICES BY MARKING THE
APPROPRIATE BOXES ON THE ENCLOSED PROXY. HOWEVER, IT IS NOT NECESSARY
TO MARK ANY BOXES IF YOU WISH TO VOTE IN ACCORDANCE WITH THE BOARD OF
DIRECTORS' RECOMMENDATIONS; MERELY SIGN, DATE AND RETURN THE PROXY IN
THE ENCLOSED ENVELOPE, POSTAGE FOR WHICH HAS BEEN PROVIDED. THE
PROXIES CANNOT VOTE YOUR SHARES UNLESS YOU SIGN AND RETURN THE
ENCLOSED PROXY. YOUR PROMPT RESPONSE IS HELPFUL AND YOUR COOPERATION
WILL BE APPRECIATED.
By Order of the Board of Directors,
/s/ Daniel W. Farrell
Daniel W. Farrell
Secretary
April 10, 1996
