SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
Filed by the Registrant [X]
Check the Appropriate Box
[ ] Preliminary Proxy Statement
[X] Definitive Proxy Statement
Tech/Ops Sevcon, Inc.
- ----------------------------------------------------------------
(Name of Registrant as Specified in its Charter
Payment of Filing Fee (Check the appropriate box)
[ ] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14(a)-6(i)(1),
14(a)-6(i)(2) or Item 22(a)(2) of Schedule 14A.
<PAGE>
TECH/OPS SEVCON, INC.
ONE BEACON STREET, BOSTON, MASSACHUSETTS 02108
TELEPHONE (617) 523-2030
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
Notice is hereby given that the annual meeting of the stock-
holders of Tech/Ops Sevcon, Inc., a Delaware corporation, will be
held at the offices of Palmer & Dodge, 24th Floor, One Beacon
Street, Boston, Massachusetts, at 5:00 p.m. on Wednesday, January
22, 1997 for the following purposes:
1. To elect three directors to hold office for a term of
three years and one director to hold office for a term
of one year.
2. To transact such other business as may properly come
before the meeting.
Only stockholders of record at the close of business on De-
cember 12, 1996 are entitled to notice of the meeting or to vote
thereat.
IT IS IMPORTANT THAT YOUR SHARES BE REPRESENTED AT THE MEETING.
THEREFORE, WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE
COMPLETE YOUR PROXY AND RETURN IT IN THE ENCLOSED ENVELOPE, WHICH
REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES. IF YOU AT-
TEND THE MEETING AND WISH TO VOTE IN PERSON, YOUR PROXY WILL NOT
BE USED.
By order of the Board of Directors
David R. Pokross, Jr.
Secretary
Dated December 27, 1996
<PAGE>
PROXY STATEMENT
Approximate Date of Mailing December 27, 1996
INFORMATION CONCERNING THE PROXY SOLICITATION
The enclosed proxy is solicited by and on behalf of the Board of
Directors of Tech/Ops Sevcon, Inc. (the "Company") for use at the
annual meeting of stockholders of the Company to be held on January
22, 1997 at 5:00 p.m. at the offices of Palmer & Dodge, 24th Floor,
One Beacon Street, Boston, Massachusetts, or any adjournments or
postponements thereof. It is subject to revocation at any time prior
to the exercise thereof by giving written notice to the Company, by
submission of a later dated proxy or by voting in person at the
meeting. The costs of solicitation, including the preparation,
assembly and mailing of proxy statements, notices and proxies, will
be paid by the Company. Such solicitation will be made by mail and
in addition may be made by the officers and employees of the Company
personally or by telephone or telegram. Forms of proxies and proxy
material may also be distributed, at the expense of the Company,
through brokers, custodians and other similar parties to the
beneficial owners of the Common Stock.
On December 12, 1996, the Company had outstanding 3,089,532
shares of Common Stock, $.10 par value, which is its only class of
voting stock, held of record by approximately 600 holders.
Stockholders of record at the close of business on December 12, 1996
will be entitled to vote at the meeting. With respect to all matters
which will come before the meeting, each stockholder may cast one
vote for each share registered in his name on the record date. The
shares represented by every proxy received will be voted, and where a
choice has been specified, the shares will be voted in accordance
with the specification so made. If no choice has been specified on
the proxy, the shares will be voted FOR the election of the four
nominees as directors.
BENEFICIAL OWNERSHIP OF COMMON STOCK
The following table provides information as to the the
Company's Common Stock as of December 12, 1996 by (i) persons known
to the Company to be the beneficial owners of more than 5% of the
Company's outstanding Common Stock, (ii) the Chief Executive Officer
of the Company, and (iii) all current executive officers and
directors of the Company as a group. Beneficial ownership by
individual directors is shown in the table on pages 2, 3, and 4
below.
1
<PAGE>
<TABLE>
<CAPTION>
Amount
Name and Address Beneficially Percent
of Beneficial Owner Owned (1) of Class
- ------------------- ------------ --------
<S> <C> <C>
Dr. Marvin G. Schorr. . . . . . . . . . 354,338 11.6%
Tech/Ops Corporation
One Beacon Street
Boston, MA 02108
Bernard F. Start . . .. . . . . . . . . 236,360(2) 7.7%
Tech/Ops Sevcon, Inc.
One Beacon Street
Boston, MA 02108
Dimensional Fund Advisors, Inc. . . .. 193,200(3) 6.4%
1299 Ocean Avenue, Suite 650
Santa Monica, CA 90401
All current executive officers and
directors as a group (8 persons). . . 820,903(4) 26.4%
- ----------------------
</TABLE>
(1) Unless otherwise indicated, each owner has sole voting
and investment power with respect to the shares
listed.
(2) Includes 10,000 shares subject to stock options exer-
cisable within sixty days.
(3) As reported in on Schedule 13G filed with the Secur-
ities and Exchange Commission on February 7, 1996..
(4) Includes 20,000 shares subject to stock options exer-
cisable within sixty days
ELECTION OF DIRECTORS
The Company's Board of Directors has fixed the number of
directors at eight. Members of the Board of Directors are divided
into three classes serving staggered three-year terms. The term of
three of the Company's current directors, Paul B. Rosenberg, Herbert
Roth, Jr., and Bernard F. Start, expires at the annual meeting. They
are the Board's nominees for re-election to a three-year term by the
stockholders at the annual meeting. In addition, the Board has
increased the number of directors and nominated David R. Steadman for
election to a one-year term. The Company is not presently aware of
any reason that would prevent any nominee from serving as a director
if he is elected. If a nominee should become unavailable for elec-
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<PAGE>
tion, the proxies will be voted for another nominee selected by the
Board.
Pursuant to the Company's by-laws, directors will be elected by
a plurality of the votes properly cast at the annual meeting.
Abstentions, votes withheld and broker non-votes will not be treated
as votes cast and will not affect the outcome of the election. A
"broker non-vote" occurs when a broker holding a customer's shares
indicates on the proxy that the broker has not received voting
instructions on a matter from the customer and is barred by
applicable rules from exercising discretionary authority to vote on
the matter.
The following table contains information on the four nominees for
election at the annual meeting and each other person whose term of
office as a director will continue after the meeting. The nominees
for election at the meeting are indicated by an asterisk.
<TABLE>
<CAPTION>
Number
Has Been a of Common
Director Shares of
of the the Company
Owned
Company Benefici-
Business or its Pre- -ally on
Experience decessor Dec. 12
During Past Tech/Ops, 1996 and
Term Five Years and Inc. Percent of
Name Expires Other Directorships Since Class (1)
- ---- ------- ------------------- ----- --------
<S> <C> <C> <C> <C>
Milton. C. 1999 Director, and until 1974 40,000
Lauenstein (2) September 1996, Chairman (1.6%)
Age -- 70 of the Board of Tele-
quip Corporation, Hollis
N.H., a closely-held
electronics manufact-
urer. Mr. Lauenstein
is also a director of
Helix Technology Corp-
oration, Waltham, Mass.,
a manufacturer of
cryogenic equipment.
Harold C. 1998 Oscar Gruss & Son, New 1959 10,200
Mayer Jr. (3) York, N.Y., investments, (0.3%)
Age -- 72 since December 1990.
Previously a partner
of Silberberg, Rosen-
thal & Company, New
York, N.Y. investments.
3
<PAGE>
* Paul B. 1997 Treasurer of the Comp- 1988 83,80
Rosenberg (2) any since 1988. Mr. (2.7%)
Age -- 64 Rosenberg is President
of Tech/Ops Corporation,
Boston, Mass., a cons-
ulting firm, and is a
director of Panatech
Research & Development
Corporation, Albuquerque,
N.M., a diversified manu-
facturing and service
company, and Landauer,
Inc., Glenwood, Ill., a
provider of personnel
dosimetry services.
* Herbert Roth, 1997 Until June 1985, chief 1971 31,000
Jr. (2) (3) executive officer of (1.0%)
Age -- 68 LFE Corp., Waltham,
Mass., a manufacturer
of equipment and systems
for traffic and indust-
rial process control.
Mr. Roth is a director
of Boston Edison Company,
Boston, Mass., a public
utility; Phoenix Life
Insurance Company;
Phoenix Total Return
Fund, Inc., a mutual
fund; Mark IV Industries,
Inc., a diversified man-
ufacturing concern;, and
Landauer, Inc., Glenwood,
Ill., a provider of pers-
onnel dosimetry services.
Dr. Marvin G. 1998 Chairman of the Comp- 1951 354,338
Schorr (3) any's Board of Direct- (11.6%)
Age -- 71 ors since January 1988.
Previously Chairman of
the Board of Directors
of Tech/Ops, Inc., the
Company's predecessor.
Dr. Schorr is Chairman of
Landauer, Inc., Glenwood,
Illinois, a provider of
personnel dosimetry serv-
ices, Chairman of
Helix Technology Corpor-
ation, Mansfield, Mass.,
a manufacturer of
cryogenic equipment,
4
<PAGE>
and Chairman of Tech/Ops
Corporation, Boston, Mass.,
a consulting firm.
* David R. n/a President of Atlantic n/a 0
Steadman Management Associates,
Age -- 59 a management services
firm, since 1988. From
1990 to 1994, Mr. Stead-
man served as President
and Chief Executive Off-
icer of Integra, a hotel
and restaurant company.
Mr. Steadman is Chairman
of the Board of Technology
Service Group, Inc., a man-
ufacturer of high technol-
ogy pay telephone compon-
ents, Wahlco Environmental
Systems, Inc., an envirnon-
mental equipent and service
company, and Telequip Corp-
oration, a closely-held
electronics manufacturer.
Mrs. Steadman is also a dir-
ector of Aavid Thermal
Technologies, Inc., a manu-
facturer of thermal manage-
ment products, Kurzweil
Applied Intelligence, Inc.,
a voice recognition software
company, and Vitronics Corp-
oration, a manufacturer of
reflow soldering ovens.
* Bernard F. 1997 President and Chief 1988 236,360
Start Executive Officer of (7.7%)
Age -- 58 the Company since Jan- (4)
uary 1988; previously
Manager of the electr-
onic controller busi-
ness of Tech/Ops, Inc.,
the Company's predecessor.
C. Vincent 1996 Until May 1991, Chair- 1971 8,000
Vappi (2) (3) man and Chief Executive (0.3%)
Age -- 70 Officer of Vappi & Comp-
any, Inc., Cambridge,
Mass., a general building
contractor. Mr. Vappi
is a director of John
Hancock Mutual Life Ins-
urance Company, Boston,
5
<PAGE>
Mass.; Boston Safe Deposit
and Trust Company, a Mass-
achusetts trust company, and
its parent, Boston Company;
and Landauer, Inc., Glenwood,
Illinois, a provider of
personnel dosimetry serv-
ices.
</TABLE>
- ------------------------------------
(1) Unless otherwise indicated, each director has sole
voting and investment power with respect to the
shares listed.
(2) Member of the Audit Committee.
(3) Member of the Compensation Committee.
(4) Includes 10,000 shares subject to stock options exer-
cisable within sixty days.
During the fiscal year ended September 30, 1996, the Board of
Directors held a total of six meetings. During such year, no
director attended fewer than 75 percent of the aggregate of the total
number of meetings of the Board of Directors and the total number of
meetings held by all committees of the Board on which the director
served.
The Board of Directors has an Audit Committee and a Compensation
Committee. The Audit Committee, which met twice during the fiscal
year ended September 30, 1996, reviews the scope and results of the
external audit, including the audited financial statements, the
auditors' compensation and the adequacy of the Company's internal
financial controls, and recommends the engagement of the Company's
external auditors. The Compensation Committee, which met once last
year, reviews and recommends to the Board the annual salary, bonus,
stock options, and other benefits of the senior executives. The
Board of Directors does not have a nominating committee.
Director Compensation
Mr. Lauenstein, the Chairman of the Audit Committee, and Mr.
Vappi, the Chairman of the Compensation Committee, are each paid
$12,000 a year for their services as directors. The other directors
(except Mr. Start) are paid $11,000 each. The Company maintains a
Directors' Retirement Plan under which a director the sum of whose
age and full years of service as a director of
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<PAGE>
the Company and its predecessor Tech/Ops, Inc. on the date of his
retirement as a director is not less than 70 is entitled to receive
annually a cash retirement benefit. This benefit is equal to a
percentage of the annual base directors' fee in effect at the date of
his retirement determined by multiplying the number of his full years
of service as a director by 2, but not exceeding 50%. The director's
spouse is entitled after his death, if she survives him, to receive
for her life an annual benefit equal to one-half of that amount.
For a period ending December 31, 1998, the Company has agreed to
pay the consulting business owned by Mr. Rosenberg and Dr. Schorr
$100,000 per year. Of this amount, $30,000 is intended to be paid to
Mr. Rosenberg as compensation and $70,000 will be applied toward the
expenses of maintaining an office and support facilities for the
Company's corporate office and for Mr. Rosenberg and Dr. Schorr. Dr.
Schorr will receive no compensation from this payment.
EXECUTIVE COMPENSATION
The following tables provide information concerning the
compensation of the President and Chief Executive Officer of the
Company for services during each of the last three completed fiscal
years and the value of unexercised stock options at the end of such
year. Mr. Start is the only executive officer of the Company whose
total salary and bonus in the most recent fiscal year exceeds
$100,000.
Summary Compensation Table
<TABLE>
<CAPTION>
Fiscal Annual Compensation
Year Salary Bonus
---- ------ -----
<S> <C> <C> <C>
Bernard F. Start.................... 1995 $242,500 $50,000
President & 1995 229,800 85,000
Chief Executive Officer 1994 210,150 50,000
</TABLE>
Fiscal Year-End Option Information
<TABLE>
<CAPTION>
Number of Value of
Unexercised Unexercised In-
Options the-Money Options
at 9/30/96 at 9/30/96
Name (All exercisable) (All exercisable)
---- --------------- ---------------
<S> <C> <C>
Bernard F. Start............. 10,000 $133,000
</TABLE>
7
<PAGE>
Mr. Start did not exercise any stock options and the Company did
not grant him any options during the last fiscal year.
Retirement Plan.
Mr. Start participates in the Company's Retirement Plan, a
defined benefit plan under which benefits are based upon the average
of the annual rates of base salary in effect as of October 1 of each
year for the period of five consecutive years which produces the
highest such average and also based upon years of service as set
forth below. U. S. tax law places limitations on the aggregate
amount payable to an individual under qualified retirement plans.
The following table sets forth information concerning the annual
benefits payable pursuant to the Retirement Plan on a straight-life
annuity basis upon retirement at age 65 for specified compensation
levels (assuming continuation of 1996 fiscal base salary) and years
of service classifications. Benefits under the Retirement Plan are
computed solely on the base salary of participants, exclusive of
bonuses, incentive and other compensation. Benefits under the
Retirement Plan are reduced on account of Social Security entitlement
on the basis of the Internal Revenue Service permitted disparity
rules.
<TABLE>
<CAPTION>
Pension Plan Table
Average Annual Earnings Estimated Annual Pension Based on
on which Years of Service Indicated
Retirement ---------------------------------
Benefits are Based 15 years 20 years 25 years 30 years
--------------------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
$ 150,000 $ 35,600 $ 48,700 $ 61,800 $ 74,900
175,000 42,100 57,400 72,800 88,100
200,000 48,700 66,200 83,700 101,200
225,000 55,300 74,900 94,600 114,300
250,000 61,800 83,700 105,600 127,400
275,000 68,400 92,400 116,500 140,600
300,000 74,900 101,200 127,500 150,000
</TABLE>
Credited years of service at September 30, 1996 were 18 for Mr.
Start. Credited years of service at age 65 would be 26 for Mr.
Start.
Change in Control Agreement.
Mr. Start is party to an agreement providing that in the event
of termination of employment within two years following a Change in
Control of the Company (as defined), not approved by the Company's
Board of Directors, by the Company other than for cause, disability
8
<PAGE>
or retirement, or by Mr. Start for Good Reason (which includes a good
faith determination by him that due to the Change in Control he is
not or believes he will not be able effectively to discharge his
duties), Mr. Start will become entitled to two years' base salary and
average bonuses determined in accordance with the agreement, and
certain other benefits, subject to a limitation on total benefits
which conforms to the limitation on their deductibility imposed by
the federal tax laws. This agreement extends through September 30,
1997 and thereafter from year to year unless terminated by the
Company.
COMPENSATION COMMITTEE REPORT
The Company's compensation program is designed to motivate and
retain employees by encouraging and rewarding performance. The
program is administered by the Compensation Committee of the Board of
Directors (the "Committee"), consisting of three independent
directors who are not employees of the Company. The Committee
regularly reviews and approves generally all compensation and fringe
benefit programs of the Company, and also reviews and determines the
base salary and incentive compensation of the executive officer named
above, as well as stock option grants to all employees. All
compensation actions taken by the Committee are reported to the full
Board of Directors, which, excluding employee directors, approves the
actions of the Committee. The Committee also reviews and makes
recommendations to the Board on policies and programs for the
development of management personnel, as well as management structure
and organization. The Committee administers the Company's Equity
Incentive Plan.
The Company believes that stock options are an important
incentive to motivate executive officers and other key employees for
improved long-term performance of the Company. The Company considers
stock ownership, options currently held and options previously
granted when granting options although there are no specific levels
of ownership for such grants.
The Committee believes that the combination of salary and
incentive compensation is the best method for compensating its
executive officers and senior managers to promote uniform excellence,
long-term commitment and team performance. Management salaries are
determined based upon individual performance, level of responsibility
and experience. The Committee reviews these salaries annually and
measures them against compensation data obtained from published
compensation surveys and surveys that the Committee makes of a group
of peer companies. The Committee believes that the salaries of the
Company's executive officers are in the mid-range of these surveys.
The peer companies are generally of about the same size as the
Company and are in technical, rather than consumer or distribution
fields. The peer companies may include some of the companies
9
<PAGE>
included in the AMEX HiTech Sector Index used in the Performance
Graph. The Company believes that its competitors for executive
talent are not necessarily companies which engage in the same
business as the Company and, therefore, the companies used for
comparative compensation purposes differ from the companies included
in the AMEX HiTech Sector Index.
The recommended base salary and incentive compensation award for
the President is determined each year by the Committee based upon its
subjective assessment of the overall financial performance of the
Company and the performance of the President relative to corporate
objectives and other factors. Mr. Start's base salary during fiscal
1996 increased 5.5% to $242,500 from fiscal 1995. The increase in
Mr. Start's base salary related to the level of responsibility and
accountability of the Chief Executive Officer, as well as external
factors such as inflation and base salary levels in comparable
companies. The bonus awarded to Mr. Start was determined based on
performance relative to budgeted operating income, growth in earnings
per share, the total return to shareholders of the Company relative
to the AMEX Market Value Index and individual performance relative to
stated objectives. Each of these financial measures, none of which
were accorded a predetermined weighting, was met or exceeded, and Mr.
Start achieved substantially all of the personal objectives
established by the Board of Directors during fiscal 1996.
No stock options under the Company's Equity Incentive Plan were
granted during the last fiscal year.
Members of the Compensation Committee
Herbert Roth, Jr.
Harold C. Mayer, Jr.
C. Vincent Vappi, Chairman
10
<PAGE>
PERFORMANCE GRAPH
The following graph compares the cumulative total return (change
in stock price plus reinvested dividends) assuming $100 invested in
the Common Stock of the Company, in the American Stock Exchange
("AMEX") Market Value Index, and in the AMEX HiTech Sector Index
during the period from September 30, 1991 through September 30, 1996.
The comparisons in the following table are historical and are not
intended to forecast or be indicative of possible future performance
of the Common Stock of the Company.
<TABLE>
<CAPTION>
Value of Investment at September 30,
---------------------------------------
1991 1992 1993 1994 1995 1996
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Tech/Ops Sevcon, Inc. $ 100 $ 127 $ 123 $ 198 $ 308 $ 439
AMEX Market Value Index 100 101 123 122 145 153
AMEX HiTech Sector Index 100 90 107 111 148 188
</TABLE>
AUDITORS
Arthur Andersen LLP, One International Place, Boston, Mas-
sachusetts, has served as auditors for the Company and its
predecessor Tech/Ops, Inc. since the latter was formed, and upon
recommendation of the Audit Committee, has been appointed as auditors
for the current year. Representatives of Arthur Andersen LLP are
expected to be present at the meeting with an opportunity to make a
statement if they desire to do so and are expected to be available to
respond to appropriate questions.
DEADLINE FOR STOCKHOLDER PROPOSALS
In order for a stockholder proposal to be considered for
inclusion in the Company's proxy materials for the 1998 annual
meeting, it must be received by the Company at One Beacon Street,
Boston, Massachusetts 02108, Attention: Treasurer, no later than
August 22, 1997.
ADVANCE NOTICE PROVISIONS FOR
STOCKHOLDER PROPOSALS AND NOMINATIONS
The by-laws of the Company provide that in order for a
stockholder to bring business before or propose director nominations
at an annual meeting, the stockholder must give written notice to the
Secretary or other specified officer of the Company not less than 50
days nor more than 75 days prior to the meeting. The notice must
contain specified information about the proposed business or each
nominee and the stockholder making the proposal or nomination. If
the annual meeting is scheduled for a date other than the fourth
11
<PAGE>
Wednesday in January and notice thereof is mailed to stockholders or
publicly disclosed less than 65 days in advance, the notice given by
the stockholder must be received not later than the 15th day
following the day on which the notice of such annual meeting date was
mailed or public disclosure made, whichever occurs first.
OTHER BUSINESS
The Board of Directors does not know of any business which will
come before the meeting except the matters described in the notice.
If other business is properly presented for consideration at the
meeting, the enclosed proxy authorizes the persons named therein to
vote the shares in their discretion.
Dated December 27, 1996
12
<PAGE>
(FORM OF PROXY CARD) Appendix A
TECH/OPS SEVCON, INC.
Proxy Solicited by the Board of Directors for Annual Meeting of
Stockholders to be held January 22, 1997
The undersigned appoints Marvin G. Schorr, Paul B. Rosenberg and
David R. Pokross, Jr. and each of them, the attorneys and proxies of
the undersigned, with power of substitution, to vote all the shares
of Tech/Ops Sevcon, Inc. which the undersigned is entitled to vote at
the Annual Meeting of Stockholders to be held January 22, 1997 at the
offices of Palmer & Dodge, 24th Floor, One Beacon Street, Boston,
Massachusetts at 5:00 p. m. and at any adjournments thereof.
Please complete, sign and date on reverse side
and mail in enclosed envelope
- ----------------------------------------------------------------
_____
\ \ Please mark
\ X \ votes as in
\____\ this example
This proxy will be voted FOR all nominees for Director below if no
contrary instructions are given.
1. ELECTION OF DIRECTORS
Nominees: For three-year terms: Rosenberg, Roth, Start
For a one-year term: Steadman
For All Withheld from
Nominees all nominees
\__\ \__\
\__\_______________________
For all nominees except as MARK HERE FOR ADDRESS
noted above CHANGE AND NOTE AT LEFT
\___\
This proxy should be signed by the
registered holder. Where stock is
registered in the names of more than
one person, all such persons should
13
<PAGE>
sign. When signing as executors,
administrators, trustees, guardians,
etc. please indicate your title
as such.
Signature___________ Date________
Signature___________ Date________
14
