SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(X) Filed by the Registrant
( ) Filed by a Party other than the Registrant
Check the appropriate box:
(X) Preliminary Proxy Statement
( ) Confidential, for Use of the Commission Only (as permitted by
Rule 14a-b(e)(2))
( ) Definitive Proxy Statement
( ) Definitive Additional Materials
( ) Soliciting Material Pursuant to (section mark)240.14a-11(c) or
(section mark)240.14a-12
TESSCO Technologies Incorporated
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement If Other Than Registrant)
PAYMENT OF FILING FEE (Check the appropriate box):
(X) $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2).
( ) $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: *
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
(Set forth the amount on which the filing fee is calculated and state how
it was determined)
( ) Fee previously paid 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:
<PAGE>
TESSCO Technologies Incorporated
34 Loveton Circle
Sparks, Maryland 21152-5100
June 27, 1996
Dear Fellow TESSCO Shareholder:
You are cordially invited to attend the annual meeting of shareholders
of TESSCO Technologies Incorporated (the "Company"), which will be held at the
Company's corporate headquarters, 34 Loveton Circle, Sparks, Maryland, on July
16, 1996 at 2:00 p.m., local time. Holders of the Company's common stock as of
May 17, 1996 are entitled to vote at the meeting.
The matters proposed for consideration at the meeting are the election
of two directors, the approval of an amendment to the Company's 1994 Stock and
Incentive Plan, an amendment to the Certificate of Incorporation to increase the
authorized common stock and the ratification of the appointment of Arthur
Andersen LLP as the Company's independent public accountants. The accompanying
Notice of Meeting and Proxy Statement discuss these matters in further detail.
We urge you to review this information carefully.
Your Board of Directors unanimously believes that the election of the
nominees as directors and the approval of the other matters are in the best
interests of the Company and its shareholders and, accordingly, recommends a
vote FOR Items 1, 2, 3 and 4 on the enclosed proxy card. After reviewing the
enclosed materials, please complete the proxy card and return it using the
enclosed envelope. If you decide to attend the meeting, you may vote in person
even if you have previously sent in a proxy card.
In addition to the formal business to be transacted, management will
make a presentation on developments during the past fiscal year and respond to
questions of interest to shareholders.
On behalf of the Board of Directors and all of us at TESSCO, I
appreciate your continued support.
Sincerely yours,
Robert B. Barnhill, Jr.
Chairman of the Board, President and
Chief Executive Officer
<PAGE>
TESSCO Technologies Incorporated
34 Loveton Circle
Sparks, Maryland 21152-5100
- -------------------------------------------------------------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON
July 16, 1996
- -------------------------------------------------------------------------------
To the Shareholders of TESSCO Technologies Incorporated:
NOTICE IS HEREBY GIVEN that the 1996 Annual Meeting of
Shareholders (the "Annual Meeting") of TESSCO Technologies Incorporated, a
Delaware corporation (the "Company"), will be held at the Company's corporate
headquarters, 34 Loveton Circle, Sparks, Maryland, on July 16, 1996 at 2:00
p.m., local time, for the following purposes:
1. To elect two directors for a three year term ending
in 1999.
2. To amend the Company's 1994 Stock and Incentive
Plan to increase the number of shares authorized for issuance thereunder.
3. To amend the Certificate of Incorporation to
increase the number of authorized shares of common stock.
4. To ratify the selection of Arthur Andersen LLP as
the Company's independent public accountants.
5. To act upon any other matter which may properly
come before the Annual Meeting or any adjournment thereof.
The Board of Directors of the Company has fixed the close of
business on May 17, 1996 as the record date for determining shareholders of the
Company entitled to notice of and to vote at the Annual Meeting. A list of
shareholders as of the record date will be available for inspection by
shareholders at the Company's corporate headquarters during normal business
hours for a period of ten days prior to the Annual Meeting.
Your attention is directed to the attached Proxy Statement and
to the enclosed Annual Report of the Company for the fiscal year ended March 29,
1996.
By Order of the Board of Directors.
Janet W. Barnhill,
Secretary
Sparks, Maryland
June 27, 1996
EVEN IF YOU PLAN TO ATTEND THE MEETING, PLEASE COMPLETE, SIGN AND DATE THE
ENCLOSED PROXY AND RETURN IT PROMPTLY IN THE ENVELOPE PROVIDED. IF YOU ATTEND
THE MEETING, YOU MAY REVOKE YOUR PROXY AND VOTE IN PERSON.
2
<PAGE>
TESSCO Technologies Incorporated
34 Loveton Circle
Sparks, Maryland 21152-5100
--------------------------------------
PROXY STATEMENT
--------------------------------------
INFORMATION CONCERNING SOLICITATION AND VOTING
General
The enclosed proxy is being furnished to shareholders of
TESSCO Technologies Incorporated, a Delaware corporation (the "Company"), in
connection with the solicitation by the Board of Directors of the Company of
proxies for use at the Annual Meeting of Shareholders (the "Annual Meeting") to
be held at the Company's corporate headquarters, 34 Loveton Circle, Sparks,
Maryland, on July 16, 1996 at 2:00 p.m., local time, and at any adjournments
thereof.
Solicitation
The solicitation is being made primarily by the use of the
mails, but directors, officers and employees may also engage in the solicitation
of proxies by telephone. The cost of soliciting proxies will be borne by the
Company, and no compensation will be paid by the Company in connection with the
solicitation of proxies, except that the Company may reimburse brokers,
custodians, nominees and other recordholders for their reasonable out-of-pocket
expenses in forwarding proxy material to beneficial owners.
This Proxy Statement and the accompanying form of proxy are
being sent to shareholders on or about June 27, 1996.
Revocation of Proxies
A proxy may be revoked at any time prior to its exercise by
the filing of a written notice of revocation with the Secretary of the Company,
by delivering to the Company a duly executed proxy bearing a later date, or by
attending the Annual Meeting and voting in person. However, if you are a
shareholder whose shares are not registered in your own name, you will need
additional documentation from your record holder to vote personally at the
Annual Meeting.
3
<PAGE>
Voting Rights and Outstanding Shares
The close of business on May 17, 1996 has been fixed by the
Board of Directors of the Company as the record date (the "Record Date") for
determining the shareholders of the Company entitled to notice of and to vote at
the Annual Meeting. On the Record Date, the Company had outstanding 4,227,897
shares of common stock, $0.01 par value per share (the "Common Stock"). Each
share of Common Stock entitles the holder thereof to one vote on each matter to
be voted upon at the Annual Meeting. There is no cumulative voting for the
election of directors.
The presence, in person or by proxy, of at least a majority of
the total number of shares of Common Stock entitled to vote is necessary to
constitute a quorum at the Annual Meeting. In the event there are not sufficient
votes for a quorum or to approve any proposal at the Annual Meeting, the Annual
Meeting may be adjourned in order to permit the further solicitation of proxies.
All outstanding shares of the Company's Common Stock
represented by properly executed and unrevoked proxies received in the
accompanying form in time for the Annual Meeting will be voted. A shareholder
may, with respect to the election of directors (i) vote for the election of the
named director nominees, (ii) withhold authority to vote for all such director
nominees, or (iii) vote for the election of all such director nominees other
than any nominee with respect to whom the shareholder withholds authority to
vote by striking a line through such nominee's name on the proxy. A shareholder
may, with respect to each other matter specified in the notice of meeting (i)
vote "FOR" the matter, (ii) vote "AGAINST" the matter, or (iii) "ABSTAIN" from
voting on the matter. Shares will be voted as instructed in the accompanying
proxy on each matter submitted to shareholders. If no instructions are given,
the shares will be voted FOR the election of the named director nominees, FOR
the approval of the amendment to the 1994 Stock and Incentive Plan, FOR the
approval of the amendment to the Certificate of Incorporation and FOR the
ratification of the appointment of Arthur Andersen LLP as the Company's
independent public accountants.
A proxy submitted by a shareholder may indicate that all or a
portion of the shares represented by such proxy are not being voted by such
shareholder with respect to a particular matter. This could occur, for example,
when a broker is not permitted to vote Common Stock held in street name on
certain matters in the absence of instructions from the beneficial owner of the
Common Stock. The shares subject to any such proxy which are not being voted
with respect to a particular matter (the "non-voted shares") will be considered
shares not present and entitled to vote on such matter, although such shares may
be considered present and entitled to vote for other purposes and will count for
purposes of determining the presence of a quorum.
4
<PAGE>
The affirmative vote of a plurality of the shares of Common
Stock present in person or by proxy at the Annual Meeting and entitled to vote
on the election of directors is required to elect directors. Accordingly, if a
quorum is present at the Annual Meeting, the two persons receiving the greatest
number of votes will be elected to serve as directors. Therefore, withholding
authority to vote for a director(s) and non-voted shares with respect to the
election of directors will not affect the outcome of the election of directors.
If a quorum is present at the Annual Meeting, approval of the amendment to the
1994 Stock and Incentive Plan requires the affirmative vote of a majority of the
shares of Common Stock present in person or represented by proxy at the Annual
Meeting and entitled to vote on such matter. Under Delaware law, abstentions are
generally considered as shares entitled to vote and thus have the same effect as
a vote against such matter. Non-voted shares with respect to a matter will not
be considered as entitled to vote on such matter and thus will not affect the
determination of whether such matter is approved.
The affirmative vote of the holders of a majority of the
outstanding Common Stock entitled to vote on the proposal at the Annual Meeting
is required for the adoption of the amendment to the Certificate of
Incorporation. Abstentions and non-voted shares will not be counted as having
voted on such matter.
The Board of Directors knows of no additional matters that
will be presented for consideration at the Annual Meeting. Execution of a proxy,
however, confers on the designated proxyholders discretionary authority to vote
the shares in accordance with their best judgment on such other business, if
any, that may properly come before the Annual Meeting or any adjournment
thereof. Proxies solicited hereby will be tabulated by inspectors of election
designated by the Board, who will not be employees or directors of the Company
or any of its affiliates.
5
<PAGE>
PROPOSALS TO BE VOTED ON AT THE MEETING
PROPOSAL 1. Election of Directors
The Company's By-laws provide that the Board of Directors is
divided into three classes, each class consisting, as nearly as possible, of
one-third of the total number of directors, and with each class having a three
year term. Each year the directors in one class are elected to serve for a term
of three years. The Board of Directors is presently composed of six members. One
class of directors, consisting of Robert B. Barnhill, Jr. and Benn R. Konsynski,
has a term of office expiring at the Annual Meeting, or until their successors
are elected and qualified. Each of Messrs. Barnhill and Konsynski has been
nominated for a three year term expiring at the Annual Meeting of Shareholders
in 1999 and until their successors are elected and qualified.
The persons named in the enclosed proxy intend to vote
properly executed and returned proxies FOR the election of all nominees proposed
by the Board of Directors unless authority to vote is withheld. In the event
that any nominee is unable or unwilling to serve, the persons named in the proxy
will vote for such substitute nominee or nominees as they, in their discretion,
shall determine. The Board of Directors has no reason to believe that any
nominee named herein will be unable or unwilling to serve.
Set forth below is information concerning the nominees for
election and those directors whose term continues beyond the date of the Annual
Meeting.
Nominees for Director for a Three Year Term Expiring at the 1999 Annual Meeting.
Robert B. Barnhill, Jr., age 52, has served as President
and Chief Executive Officer of the Company since 1975, as a director since
1967, and as Chairman of the Board since November 1993. He is the husband
of Janet W. Barnhill, Secretary of the Company. Mr. Barnhill is a director
of Polk Audio, Inc. and Provident Bankshares Corporation.
Benn R. Konsynski, Ph.D., age 45, has been a director of the
Company since November 1993. He has been the George S. Craft Professor of
Business Administration for Decision and Information Analysis at the Goizueta
Business School of Emory University since April 1992. From 1987 to April 1992,
Dr. Konsynski was a professor at the School of Business of Harvard University.
He has been a consultant to the Company since 1989.
6
<PAGE>
Directors Continuing in Office.
Directors whose term will expire at the 1998 Annual Meeting:
Jerome C. Eppler, age 72, has been a director of the Company
since 1985. He is a partner of Eppler & Company, a private financial advisor.
Since March 1995, Mr. Eppler has also been an owner of Olympic Capital Partners,
an investment banking firm.
Dennis J. Shaughnessy, age 49, has been a director of the
Company since 1989. He has served as Managing Director of Grotech Capital
Group, Inc. since 1989. From 1985 to 1989, Mr. Shaughnessy served as
President and Chief Executive Officer of CRI International, Inc., an oil
services company. Mr. Shaughnessy also currently serves on the Boards of
Forensic Technologies Incorporated and Secure Computing Corporation.
Directors whose term will expire at the 1997 Annual Meeting:
Martin L. Grass, age 42, has been a director of the Company
since November 1993. He has served as Chairman and Chief Operating Officer of
Rite Aid Corporation, the nation's largest drug store chain, since March 1995.
From 1989 through 1995 Mr. Grass served as President and Chief Operating Officer
of Rite Aid, and he has been a director of Rite Aid since 1982. Mr. Grass has
also served as Vice Chairman, Executive Vice President and Treasurer of Super
Rite Corporation, a food wholesaler and supermarket operator from 1989 through
1995. Mr. Grass is a director of both Baltimore Gas & Electric Company and
Mercantile Bankshares Corporation.
Morton F. Zifferer, Jr., age 48, has been a director of the
Company since November 1993. He has served as Chairman, President and Chief
Executive Officer of New Standard Corporation, a metal products manufacturer,
since 1983.
Board Committees and Meetings
The Board of Directors has an Audit Committee consisting
of Messrs. Eppler, Konsynski and Zifferer, and a Compensation Committee
consisting of Messrs. Grass, Shaughnessy and Zifferer. The Board of
Directors does not have a nominating committee.
The Audit Committee is primarily concerned with the
effectiveness of the audits of the Company by the Company's independent public
accountants. Its duties include recommending the selection of independent
accountants, reviewing the scope of audits conducted by them, as well as the
results of their audits, and reviewing the organization and scope of the
Company's internal system of accounting and financial controls. The Audit
Committee met three times during fiscal 1996.
7
<PAGE>
The Compensation Committee is responsible for the overall
administration of the Company's compensation policies and practices, including
the recommendation of compensation for officers and employees of the Company and
for matters relating to compensation plans and arrangements. In addition, the
Compensation Committee approves awards under and administers the Company's
Employee Incentive Stock Option Plan and 1994 Stock and Incentive Plan. The
Compensation Committee met four times during fiscal 1996
The Board of Directors met four times during fiscal 1996. No
director has attended fewer than 75% of the total number of meetings of the
Board and of the Committees of which he was a member during fiscal 1996.
Director Compensation
Those directors who are not employees of the Company receive a
fee of $1,000 for each Board or committee meeting attended, and a fee of $500
for participating in each telephonic meeting of the Board or any committee
thereof.
PROPOSAL 2. Approval of Amendment No. 1 to 1994 Stock and Incentive Plan
Introduction.
The Company's 1994 Stock and Incentive Plan (the "1994 Plan") was
approved by the Board of Directors in January 1994 and thereafter by the
shareholders. The 1994 Plan provides for the grant or award of stock options,
stock appreciation rights ("SARs"), restricted stock, restricted stock units and
other performance awards, which may or may not be denominated in shares of
Common Stock or other securities (collectively, the "Awards"). Stock options
granted under the 1994 Plan may be either incentive stock options ("ISOs")
pursuant to Section 422 of the Internal Revenue Code of 1986, as amended (the
"Code"), or non-statutory options. The purpose of the 1994 Plan is to attract
and retain outstanding employees and consultants through the incentives of stock
ownership and monetary payments. Regular full-time employees of and consultants
to the Company, including officers but excluding directors who are not officers,
are eligible to receive Awards under the 1994 Plan.
Amendment No. 1 to 1994 Plan
As of May 17, 1996, options covering a total of 271,200 shares of
Common Stock have been issued and remain outstanding under the 1994 Plan. The
Board has approved an amendment to the 1994 Plan to increase the number of
shares reserved for issuance under the plan by 239,500 shares. If the amendment
to the Plan is approved, there will be a total of 300,000 shares available for
future award under the 1994 Plan as of May 17, 1996.
8
<PAGE>
The Board of Directors believes that an increase in the number of
authorized shares reserved under the 1994 Plan is necessary to enable the
Company to attract, retain and motivate qualified executives, consultants and
other key contributors. The Company's approach to attracting and retaining
talented people has included compensation packages that provide incentives
designed to align the interests of such people with those of the shareholders
generally. The Board believes that such a stock option based program has been
extremely important to its efforts to attract and retain qualified people.
During fiscal 1996, the Board granted options exercisable for 148,600 shares of
Common Stock, including 18,000 options granted to the Corporation's Chief
Executive Officer.
The Compensation Committee, with the support of the full Board of
Directors, has emphasized the grant of options with performance-based,
market-driven vesting and exercise provisions. All of the options granted to
executives, consultants and other key contributors during fiscal 1996 contain
such performance-based provisions and the Committee has determined that all
future Awards will have provisions conditioning vesting and exercise on the
achievement of certain predetermined cumulative increases in the market value of
the Common Stock. In general, the options will become exercisable over a
specified period contingent upon the market value of the Common Stock reaching
specified levels of appreciation. In each case the market value must remain at
or above the specified level for at least 30 trading days. Notwithstanding the
foregoing, these options become fully exercisable after eight years, provided
that the individual remains employed by, or associated with, the Company. The
Board of Directors believes that granting performance-based options more closely
aligns a recipient's interest with the Company's stock market performance.
Material Features of the 1994 Plan
The 1994 Plan is administered by the Compensation Committee of the
Board of Directors. Subject to the provisions of the 1994 Plan, the Compensation
Committee has the authority to designate participants, determine the types of
Awards to be granted, the number of shares to be covered by each Award, and any
other terms and conditions of the Awards, including vesting requirements. Awards
shall generally terminate upon the earlier of (a) termination of employment or
other engagement for any reason other than death, retirement or disability, (b)
12 months after the employee's "normal retirement date" as defined in the
Company's Retirement Savings Plan, or (c) 12 months after the date of a
recipient's death with respect to options and SARs to the extent exercisable at
the time of the recipient's death. In the event of retirement, disability or
death, any restriction applicable to a restricted stock award or performance
award shall be removed on a pro rata basis in accordance with the portion of the
restricted period which has expired as of the date of retirement, disability or
death, as applicable. In the event of a recipient's retirement, disability or
death, the Compensation Committee may, in its discretion, remove any restriction
applicable to a performance award.
9
<PAGE>
Although the Compensation Committee determines the prices at which
options and other Awards may be exercised under the 1994 Plan, the exercise
price of an option shall be at least 100% of the fair market value (as
determined under the terms of the 1994 Plan) of a share of Common Stock on the
date of grant. The aggregate number of shares of Common Stock currently
available for Awards under the 1994 Plan is 333,000, of which options for
272,500 shares have been granted as of May 17, 1996. If Amendment No. 1 to the
Plan is approved, a total of 300,0000 shares will be available for future award
under the 1994 Plan as of May 17, 1996. No Awards may be made under the 1994
Plan after April 12, 2004. See "New Benefits Plan Table."
Federal Income Tax Consequences.
The following is a brief summary of the U.S. federal income tax
consequences of awards made under the 1994 Plan.
Stock Options. A participant will not recognize any income upon the
grant of a stock option. A participant will recognize compensation taxable as
ordinary income, subject to income tax withholding, upon exercise of a
non-qualified stock option equal to the excess of the fair market value of the
shares purchased over their exercise price, and the Company will be entitled to
a corresponding deduction. A participant generally will not recognize income
(except for purposes of the alternative minimum tax) upon exercise of an ISO
during employment or within three months after termination of employment. If the
shares acquired by exercise of an ISO are held for the longer of two years from
the date the option was granted and one year from the date it was exercised, any
gain or loss arising from a subsequent disposition of such shares will be taxed
as long-term capital gain or loss, and the Company will not be entitled to any
deduction. If, however, such shares are disposed of within the above-described
period, then in the year of such disposition the participant will recognize
compensation taxable as ordinary income equal to the excess of the lesser of (i)
the amount realized upon such disposition and (ii) the fair market value of such
shares on the date of exercise over the exercise price, and the Company will be
entitled to a corresponding deduction.
SARs. A participant generally will not recognize any taxable income
upon the grant of SARs. A participant will recognize compensation taxable as
ordinary income, subject to income tax withholding, upon exercise of an SAR
equal to the fair market value of any shares delivered and the amount of cash
paid by the Company upon such exercise, and the Company will be entitled to a
corresponding deduction.
Restricted Stock. A participant will not recognize taxable income at
the time of the grant of shares of restricted stock, and the Company will not be
entitled to a tax deduction at such time, unless the participant makes an
election to be taxed at the time restricted stock is granted. If such election
is not made, the participant will recognize taxable
10
<PAGE>
income at the time the restrictions lapse in an amount equal to the excess of
the fair market value of the shares at such time over the amount, if any,
paid for such shares. The amount of ordinary income recognized by a
participant by making the above-described election or upon the lapse of the
restrictions is deductible by the Company as compensation expense, except to
the extent the limit of Section 162(m) of the Code (described below)
applies. In addition, a participant receiving dividends with respect
to restricted stock for which the above-described election has not been
made and prior to the time the restriction lapses, will recognize taxable
compensation (subject to income tax withholding), rather than dividend income,
in an amount equal to the dividends paid and the Company will be entitled to a
corresponding deduction, except to the extent the limit of Section 162(m) of
the Code applies.
Section 162(m) of the Code. Section 162(m) of the Code generally
limits to $1 million the amount that a publicly held corporation is allowed each
year to deduct for the compensation paid to each of the corporation's chief
executive officer and the corporation's four most highly compensated officers.
However, certain types of compensation paid to such executives are not subject
to the $1 million deduction limit. One such type is "performance-based"
compensation. To qualify as performance-based compensation, the following
requirements must be satisfied (i) the performance goals are determined by a
committee consisting solely of two or more "outside directors", (ii) the
material terms under which the compensation is to be paid, including the
performance goals, are disclosed to and approved by a majority of the
corporation's shareholders in a separate vote before payment and (iii) the
committee certifies that the applicable performance goals were satisfied before
payment of any performance-based compensation is made. Based on certain proposed
regulations issued by the United States Department of the Treasury which explain
these requirements, certain compensation under the 1994 Plan, such as that
payable with respect to options, SARs and restricted stock, could be subject to
the $1 million deduction limit under Section 162(m) of the Code.
New Plan Benefits Table
The following table provides certain information with respect to all
options to purchase Common Stock which have been granted during fiscal 1996,
specifying the amounts granted to the Named Executive Officers, all current
executive officers as a group, and all employees, including all current officers
who are not executive officers, as a group. The "Dollar Value" for options
granted represents the positive spread between the exercise price of the options
and the market price of the Common Stock on May 17, 1996:
11
<PAGE>
1994 Plan (1)
Dollar ($) Number of
Name Value (2)(3) Units
Robert B. Barnhill, Jr.......... 153,200 8,000
87,500 10,000
Gerald T. Garland............... 103,750 5,000
Executive Officers
as a Group..................... 2,087,450 107,000
Directors....................... -- --
Non-Executive Officers
and Employees as a Group...... 863,200 41,600
- -----------------------------
(1) None of the options listed in the above table are currently vested or
eligible to be exercised. Such options vest and become first
exercisable no earlier than the second anniversary of their award and
then only upon satisfaction of a performance-based vesting schedule
requiring certain predetermined cumulative appreciation in the market
value of the Common Stock. Notwithstanding, each option will become
exercisable eight years after the date of grant without regard to such
criteria, so long as recipient is still associated with the Company.
(2) Based upon $36.75, the closing sale price of the Common Stock, as
reported on the Nasdaq National Market, on May 17, 1996.
(3) The exercise price of options granted pursuant to the 1994 Plan is
$16.00 for all officers and employees except for Mr. Barnhill, whose
options have exercise prices of $17.60 and $28.00, respectively.
General. The Board of Directors may amend the 1984 Plan or the 1994
Plan in any respect; provided, however, that in order to continue to qualify
under 17 C.F.R. 240.16b-3 of the Exchange Act, shareholder approval shall be
required for any amendment which (i) except in limited circumstances, increases
the maximum number of shares for which options may be granted under the plans,
(ii) reduces the exercise price at which stock options may be granted, or (iii)
extends the period during which options may be granted or exercised beyond the
time originally prescribed.
12
<PAGE>
Unless marked to the contrary, the shares represented by the enclosed
proxy, if properly executed and returned, will be voted FOR the approval of the
amendment to the 1994 Plan to increase by 262,500 the aggregate number of shares
available for grant under the 1994 Plan.
PROPOSAL 3. Increase in Authorized Common Stock
The Board of Directors has approved and recommends to the
shareholders for approval an amendment to the Certificate of Incorporation to
increase the number of shares of authorized Common Stock from 9,500,000 to
15,000,000 shares. The increase in the number of authorized shares of Common
Stock will not affect the equity or interest of any shareholder in the Company
nor will it affect the Company's capital or surplus accounts. The text of the
amendment which would amend the first paragraph of Article FOURTH of the
Certificate of Incorporation, as amended, is set forth in Exhibit A.
Of the 9,500,000 authorized shares of Common Stock, as of May 17, 1996,
4,227,897 shares were outstanding. After the proposed increase in the number of
authorized shares of Common Stock and the amendment to the 1994 Plan, on the
basis of the shares issued as of May 17, 1996, a total of 10,184,570 shares of
Common Stock will be authorized but not issued or subject to reservation.
The Board of Directors is recommending the adoption of the amendment in
order to provide the Company with flexibility for future capital and financing
activities. The additional Common Stock to be authorized by the amendment would
be available for issuance from time to time and without further action on the
part of the shareholders for any proper corporate purpose including, without
limitation, the issuance of Common Stock in public or private sales as a means
of raising necessary working capital, as consideration to be paid by the Company
for the acquisition of other businesses and properties, the issuance of Common
Stock in connection with stock splits or dividends, and issuances under the
Company's compensation plans. The Board does not intend to issue any Common
Stock except on terms which it deems to be in the best interest of the Company
and its shareholders. Depending on the circumstances, any issuance of additional
shares of Common Stock could effectively dilute the shares of Common Stock then
issued and outstanding. The Company has no agreement or commitment concerning
the issuance of any additional authorized shares.
The affirmative vote of the holders of a majority of all the
outstanding shares of Common Stock entitled to vote on the proposal at the
Annual Meeting is required for the adoption of the amendment. Abstentions and
non-voted shares will not be counted as having voted on this Proposal 3.
Unless marked to the contrary, the shares represented by the enclosed
proxy, if properly executed and returned, will be voted FOR the approval of the
amendment to
13
<PAGE>
the Company's Certificate of Incorporation to increase the number of
authorized shares of Common Stock to 15,000,000.
PROPOSAL 4. Ratification of Independent Public Accountants
The Board of Directors has selected the firm of Arthur Andersen LLP
to serve as independent public accountants for the fiscal year ending March 28,
1997, subject to the ratification of such appointment by the shareholders.
Representatives of Arthur Andersen LLP are expected to be present at the Annual
Meeting. They will have the opportunity to make a statement if they desire to do
so and are expected to be available to respond to appropriate questions.
Unless marked to the contrary, the shares represented by the enclosed
proxy, if properly executed and returned, will be voted FOR the ratification of
the appointment of Arthur Andersen LLP as the independent public accountants of
the Company for the fiscal year ending March 28, 1997.
SECURITY OWNERSHIP OF MANAGEMENT AND PRINCIPAL SHAREHOLDERS
The following table sets forth information regarding the
ownership of Common Stock of the Company as of May 17, 1996 by (i) all
shareholders known by the Company to beneficially own more than five percent of
the Common Stock, (ii) each of the directors and nominees for director, and
(iii) all directors and executive officers as a group.
Amount and
Name of Nature of Beneficial Percent
Beneficial Owner Ownership(1) of Class
Directors and
Nominees for Director:
Robert B. Barnhill, Jr. (2) . . . . 1,064,405 24.3
Jerome C. Eppler (3) . . . . . . . 30,300 *
Martin L. Grass . . . . . . . . . . 30,000 *
Benn R. Konsynski, Ph.D . . . . . . 30,000 *
Dennis J. Shaughnessy (4). . . . . 45,000 1.1
Morton F. Zifferer, Jr. . . . . . . 30,000 *
All directors and
executive officers as a
group (11 persons) (5). . . . 1,308,305 29.6
14
<PAGE>
Principal Shareholders:
The Northwestern Mutual Life
Insurance Company (6). . . . 339,900 8.0
GeoCapital Corporation (7). . . . 402,100 9.5
* Less than 1% of the outstanding Common Stock.
(1) Unless otherwise noted, each person exercises sole (or shares with a
spouse or other immediate family member) voting and dispositive power
as to the shares reported. Persons are deemed to beneficially own
shares which they have the right to acquire beneficial ownership of
within 60 days. Shares subject to options exercisable with 60 days are
deemed outstanding for computing the percentage of the outstanding
shares held by the person holding such options, but not for computing
the percentage of shares held by any other person.
(2) Includes 150,000 shares held by Mr. Barnhill's spouse and
children. Also includes 120,000 shares subject to currently
exercisable stock options and 8,450 shares and 27,550 shares subject
to a currently exercisable stock option held by the Company's
Retirement Savings Plan, for which Mr. Barnhill serves as a trustee.
Mr. Barnhill disclaims beneficial ownership over the shares and
options held by the Retirement Savings Plan. Mr. Barnhill's address
is 34 Loveton Circle, Sparks, Maryland 21152.
(3) Includes 300 shares held by Mr. Eppler as trustee of a trust for the
benefit of his daughter and 30,000 shares held by a trust under which
Mr. Eppler is sole beneficiary.
(4) Does not include shares held by Grotech Partners II, L.P., Grotech III
Companion Fund, L.P., Grotech III Pennsylvania Fund, L.P. or Grotech
Partners III, L.P. (collectively, the "Grotech Partnerships"). As a
sole general partner of the Grotech Partnerships, Grotech Capital
Group, Inc. ("GCG") may be deemed to indirectly beneficially own the
shares directly beneficially owned by the Grotech Partnerships by
virtue of its authority to make decisions regarding the voting and
disposition of shares directly beneficially owned by the Grotech
Partnerships. Such decisions are made by the Managing Directors of GCG,
one of which is Mr. Shaughnessy. GCG does not directly beneficially own
any shares of the Company's Common Stock.
(5) Includes (i) 187,150 shares subject to currently exercisable stock
options, and (ii) 27,550 shares subject to a currently exercisable
option held by the Company's Retirement Savings Plan, for which two
executive officers serve as trustees.
(6) Derived from a Schedule 13G filed by Northwestern Mutual Life Insurance
Company ("Northwestern") on February 7, 1996. Northwestern's address is
720 East Wisconsin Avenue, Milwaukee, Wisconsin 53202.
(7) Derived from a Schedule 13G filed by GeoCapital Corporation
("GeoCapital") on February 21, 1996. GeoCapital's address is 767
Fifth Avenue, New York, N.Y. 10153.
15
<PAGE>
EXECUTIVE COMPENSATION AND OTHER INFORMATION
Executive Compensation
The following table summarizes the compensation awarded or paid to, or
earned by the Company's Chief Executive Officer during fiscal 1994, 1995 and
1996 and the other executive officer for whom such reporting is required during
fiscal 1995 and 1996 (the "Named Executive Officers").
Summary Compensation Table
<TABLE>
<CAPTION>
Long-Term
Annual Compensation Compensation
Fiscal All Other
Name and Principal Position Year Salary ($) Bonus (1)($) Options (#) Compensation ($)
- --------------------------- ------- ---------- ------------- ------------ ----------------
<S> <C>
Robert B. Barnhill Jr., 1996 240,000 -- 18,000 13,937(2)
Chairman of the Board, 1995 240,000 25,387 230,000 14,485(2)
President and Chief Executive 1994 230,769 13,206 245,664(3) 759,615(4)
Officer
Gerald T. Garland, 1996 146,731 -- 5,000 1,761(5)
Treasurer and Chief Financial 1995 133,654 20,760 30,000 1,067(5)
Officer
</TABLE>
16
<PAGE>
- -----------------------------
(1) Represents bonuses paid pursuant to the Company's Value Share Program.
(2) Includes (i) premiums in the amount of $12,500 for a life insurance policy
and (ii) $1,985 and $1,437 allocated to Mr. Barnhill's Retirement Savings
Plan account in fiscal 1995 and 1996, respectively. Does not include a
contribution of $40,995 by the Company to a supplemental executive
retirement plan for Mr. Barnhill. See "Employment Agreement."
(3) Includes (i) the reduction in April 1993 of the exercise price of a stock
option to purchase 30,000 shares of Common Stock and (ii) the extension in
September 1993 of the expiration date of options, originally granted in
1987, to purchase 215,664 shares of Common Stock, which options were
exercised in connection with the Company's initial public offering.
(4) Includes (i) a retroactive compensation adjustment of $746,600, (ii)
premiums in the amount of $12,500 for a life insurance policy and (iii)
$515 allocated to Mr. Barnhill's Retirement Savings Plan account.
(5) Represents amounts allocated to the Retirement Savings Plan accounts of Mr.
Garland.
17
<PAGE>
Employment Agreement
In March 1994, the Company entered into an employment agreement with
Mr. Barnhill pursuant to which the Company continued his employment as Chairman
of the Board, President and Chief Executive Officer. Pursuant to the employment
agreement, Mr. Barnhill receives a minimum annual base salary of $240,000, and
is entitled to bonuses calculated in accordance with the Company's incentive
compensation plan. The employment agreement has an initial term of three years,
and unless the Board of Directors notifies Mr. Barnhill otherwise prior to the
end of any calendar year, the term of the agreement automatically renews daily
for succeeding three-year periods.
The employment agreement also provides for the establishment of a
supplemental executive retirement plan, which will provide Mr. Barnhill with a
$75,000 annual pension benefit payable on Mr. Barnhill's retirement, termination
of employment for reasons other than cause (as defined in the employment
agreement) or attainment of age 62. The employment agreement also provides for
(i) a $2,000,000 split-dollar life insurance policy on Mr. Barnhill and his
spouse, who serves as the Company's Secretary, and (ii) a long-term disability
policy providing Mr. Barnhill with a benefit equal to not less than 70% of his
annual base salary.
The employment agreement provides that in the event of the
termination of Mr. Barnhill's employment for certain reasons, including death,
disability or a termination resulting from a change in control of the Company
(as defined in the employment agreement), Mr. Barnhill would be paid when and as
due, the total salary payable to him for the next three years, plus bonuses to
which he would have been entitled had he remained in the employ of the Company
during the three-year period. In addition, Mr. Barnhill would be entitled to
receive the employee benefits he would have received during such three-year
period, or an after-tax payment in an amount equal to the value of such
benefits.
In addition, in January 1996 the Company adopted a stock compensation
program under the 1994 Plan for the Chief Executive Officer, pursuant to which
Mr. Barnhill will receive a grant of options to purchase 10,000 shares of Common
Stock at the end of the second month of each calendar quarter, all of which will
be subject to a performance-based vesting schedule based upon the market value
of the Company's Common Stock meeting or exceeding certain predetermined
cumulative appreciation measures. The options awarded to Mr. Barnhill become
fully exercisable after eight years, provided that Mr. Barnhill is still
employed by the Company. Awards under this program are also subject to the other
terms and conditions typically contained in the 1994 Plan. See "Compensation
Committee Report on Executive Compensation."
18
<PAGE>
Retirement Savings Plan
The Company maintains the Retirement Savings Plan, a profit sharing
plan qualified under Section 401(k) of the Internal Revenue Code (the "Plan"),
that covers substantially all employees. Under the Plan, participants are
permitted to make salary reduction contributions equal to a percentage of annual
salary with matching contributions made by the Company on a discretionary basis.
The Company may make additional discretionary profit sharing contributions. The
Company's contributions to the plan during fiscal 1996 totaled $47,200.
Stock Based Compensation Plans
In addition to the 1994 Plan, the Company maintains the Employee
Incentive Stock Option Plan, as amended (the "1984 Plan"), which provides for
the grant of options to purchase up to an aggregate of 401,250 shares of Common
Stock. As of May 17, 1996, options to purchase 228,825 shares were outstanding
at exercise prices ranging from $3.00 to $30.00. There are no shares available
for grant under the 1984 Plan.
19
<PAGE>
OPTION/SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
Potential Realizable
Value at Assumed
Annual Rate of Stock
Price Appreciation
Individual Grants for Option Term (1)
Number of
Securities Percent of
Underlying Total Options Exercise
Options Granted to or Base
Granted Employees Price Expiration
Name (#) in Fiscal 1996 ($/Share) Date 5% ($) 10% ($)
- ---- --------- -------------- --------- ------------ ------ -------
<S> <C>
Robert B. Barnhill, Jr. 8,000(2) 4.9 $17.60 May 11, 2005 88,548 224,399
10,000(2) 6.2 $28.00 February 24, 2006 176,090 446,248
Gerald T. Garland 5,000(2) 3.1 $16.00 May 11, 2005 50,312 127,499
</TABLE>
- -----------------------------
(1) Value represents gains before income taxes. The dollar amounts
represented are the result of calculations at the 5% and 10% rates set by
the Securities and Exchange Commission ("SEC") and therefore are not
intended to forecast possible future appreciation, if any, of the Common
Stock.
(2) Pursuant to the 1994 Plan, options will become exercisable according to a
performance-based vesting schedule on the second anniversary of the date
of grant or on any anniversary thereafter only if the Common Stock has
achieved certain predetermined cumulative increases in market value.
Notwithstanding, each option will become exercisable eight years after
the date of grant, so long as recipient is still associated with the
Company.
20
<PAGE>
The following table sets forth information with respect to option
exercises by and year-end values during fiscal 1996 for the Named Executive
Officers.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
Value of
Number of Unexercised
Unexercised in-the-Money
Options Options
at Fiscal at Fiscal Year-End
Year-End
Shares _______________ _____________
Acquired
on Value Exercisable/ Exercisable/
Exercise Realized Unexercisable Unexercisable
Name (#) ($) (#) ($) (1)
- ---- ----------- ------------ -------------------- ----------------
<S> <C>
Robert B.
Barnhill, Jr. -- -- 120,000/158,000(2) 2,237,100/2,417,700
Gerald T. 30,000 752,400 10,000/40,000(2) 167,500/774,950
Garland
- ----------------------------
</TABLE>
(1) Value is based on the difference between the stock option exercise price
and the closing price of the Company's Common Stock on the Nasdaq National
Market on March 29, 1996 of $28.75 per share.
(2) Does not include options to purchase 27,550 shares of Common Stock held by
the Company's Retirement Savings Plan, for which Messrs. Barnhill and
Garland serve as trustees.
21
<PAGE>
Compensation Committee Report on Executive Compensation
The Board of Directors has delegated to the Compensation Committee
responsibility for developing and administering programs for compensating the
Company's executive officers. The Committee's compensation recommendations with
respect to salaries and bonuses of executive officers are also approved by the
entire Board. The Committee, which consists of Messrs. Grass, Shaughnessy and
Zifferer, who are not officers or employees of the Company, believes that the
Company's success is attributable in large part to the management and leadership
efforts of its executive officers. The Company's management team has substantial
experience in the distribution industry in general and the wireless
communications industry in particular. Mr. Barnhill, the Chairman of the Board,
President and Chief Executive Officer of the Company, has been instrumental in
the Company's business success and in the success of the Company's initial
public offering in September 1994. The Company and the Compensation Committee
intend to maintain compensation policies, plans and programs that will attract
and retain executive officers who can enhance shareholder value. Generally
speaking, the Compensation Committee seeks to use the same policies and
guidelines in determining the compensation to be paid to its executive officers
as it employs for the Company's other employees, its consultants and other key
contributors to the Company's success.
The Company seeks to design a compensation package which will achieve
the following principal objectives:
(bullet) provide the Company's executives with total compensation that is
sufficiently competitive to attract and retain high quality
people. In general, this involves establishing an individual's
base salary in light of that individual's responsibilities,
experience, personal performance and contribution to the Company's
overall performance. The base salary and performance-based
incentives are designed to establish an individual's total
compensation at a level that competes favorably with the overall
pay levels of companies comparable in size and with similar
business operations to the Company (such companies are referred to
as "comparable companies"), and to reward outstanding performance.
(bullet) link a significant portion of annual compensation to
performance-based incentives. This is done primarily pursuant to
the Company's Value Share Program and the grant of stock options
with performance-based vesting and exercise features. All stock
options granted during fiscal 1996 condition vesting during the
first eight years on the achievement of certain predetermined
cumulative increases in the market value of the Common Stock. The
Board of Directors, upon the recommendation of the Committee, has
determined to continue such performance-based and market-driven
22
<PAGE>
practices in the future in order for an option to vest in whole or
in part during the first eight years after grant. All options will
vest after eight years and will remain exercisable until
expiration, which is ten years after the grant date, provided that
the individual remains employed by, or associated with, the
Company.
(bullet) provide long-term incentives which are consistent with the
Company's strategic goals and the creation of shareholder value.
This is done through the grant of stock options.
(bullet) structure the compensation program to be viewed favorably by the
Company's shareholders, employees, the financial community, and
the general public.
The Revenue Reconciliation Act of 1993 placed limits on the amount of
non-performance-based compensation paid to executive officers that may be
deducted by the Company for federal income tax purposes. The Company intends to
structure compensation programs to minimize the portion of any executive
compensation that is not deductible for federal income tax purposes.
The Committee annually reviews each executive officer's compensation,
including the compensation levels of the Company's Chairman, President and Chief
Executive Officer. When reviewing compensation, the Committee considers
individual and corporate performance, levels of responsibility, prior
experience, breadth of knowledge and competitive pay practices with respect to
salary. The Company's Chief Executive Officer's base compensation level is
determined pursuant to an employment agreement between the Company and the Chief
Executive Officer, effective as of April 1994. Under the employment agreement,
the Chief Executive Officer's base salary was set at $240,000 for fiscal 1995
and 1996, which the Committee believes to be slightly less than base salaries
paid by comparable companies to their chief executive officers. Salaries for the
other Named Executive Officers are established based on the principles discussed
with respect to the Chief Executive Officer.
The bonuses paid to the Named Executive Officers, including the Chief
Executive Officer, are determined pursuant to the Company's Value Share Program.
This program is designed to provide rewards based upon the improvement in the
Company's earnings and other measures. The Value Share Program provides for
specific budgets and goals in several performance areas. A portion of the
bonuses are withheld each quarter and are reduced or eliminated in the event
that future performance does not meet certain budget or goal parameters.
The Company recently adopted a stock compensation program under the
1994 Plan for the Chief Executive Officer. This program provides for quarterly
grants of
23
<PAGE>
options to purchase 10,000 shares of Common Stock to Mr. Barnhill beginning
on February 29, 1996. The options are granted pursuant to the 1994 Plan at an
exercise price equal to at least the fair market value of the Common Stock on
the date of grant and are subject to the other terms and conditions
typically contained in the 1994 Plan. As is the case with other awards under the
1994 Plan, each option will become vested and exercisable only if the market
price of the Common Stock achieves certain predetermined cumulative increases in
value, commencing two years from the date of grant. The Committee believes that
the plan is in the best interests of the Company because it combines the
attributes of a traditional stock option plan with those of a long-term
incentive plan. The program provides such incentives by conditioning vesting on
attainment of significant stock price appreciation; provided that, the options
become fully exercisable after eight years.
In addition to salary and value share awards, under the employment
agreement, in fiscal 1996 Mr. Barnhill received awards of options for 8,000 and
10,000 shares at exercise prices of $17.60 and $28.00 per share, respectively,
which equaled or exceeded the fair market value of a share of Common Stock on
the date of grant. Any vesting of these options occurs over time and is
conditioned upon the achievement of certain predetermined cumulative increases
in the market value of the Common Stock; provided that, these options become
fully exercisable after eight years so long as Mr. Barnhill remains associated
with the Company. See "Proposal 3 -- Amendment No. 1 to the 1994 Plan".
During fiscal 1996, the Committee also granted options to purchase
89,000 shares of Common Stock to other executive officers, all of which
contained performance-based vesting provisions. The awards made to the other
executive officers also was granted to provide further incentives to increase
shareholder value and were deemed by the Committee to be appropriate in light of
the Company's performance during fiscal 1996. In particular, the Committee has
noted that revenues have increased by an average of 23% from fiscal 1993 to
fiscal 1996, with net income increasing by 63% to $1.6 million from fiscal 1995
to fiscal 1996. The Committee intends to continue to recommend stock-based
compensation awards as a significant part of the Company's overall compensation
program.
Compensation Committee
Dennis J. Shaughnessy Martin L. Grass Morton F. Zifferer, Jr.
24
<PAGE>
PERFORMANCE MEASUREMENT COMPARISON
The chart set forth below shows the value of an investment of $100 on
April 3, 1995 in each of the Company's Common Stock, the Russell 2000 index and
a peer group index for the period April 3, 1995 to March 29, 1996. All values
assume reinvestment of the pre-tax value of dividends.
Comparison of Cumulative Total Return
Value of Investment of $100 on April 3, 1995
[performance graph here]
TESSCO Russell 2000 Peers
9/28/94 100.0000 100.0000 100.0000
12/31/94 136.4583 98.4119 124.4149
3/31/95 145.8333 102.5039 128.0465
6/30/95 151.0417 111.4898 138.0658
9/30/95 216.6667 122.0047 152.9318
12/31/95 237.5000 123.4237 140.9496
3/31/96 239.5833 130.0197 151.2117
The peer group consists of the following companies engaged in
retail and/or wholesale product distribution: Premier Industrial Corporation,
Fastenal Co., Cellstar Corporation, Wholesale Cellular USA, Inc., Andrew
Corporation, Viking Office Products, Inc. and Micro Warehouse, Inc. All of
these companies were publicly traded as of March 29, 1996.
Certain Transactions
In September 1993, the Company entered into the Stockholders' Agreement
with Mr. Barnhill, Privest I N.V., Privest II N.V., Centennial Business
Development Fund, Ltd., Grotech Partners II, L.P., Grotech III Companion Fund,
L.P., Grotech III Pennsylvania Fund, L.P. and Grotech Partners III, L.P.
(collectively, the "Former Preferred Stockholders"). Pursuant to the provisions
of the Stockholders' Agreement, the Former Preferred Stockholders converted
shares of preferred stock into an equal number of shares of Common Stock. In
addition, the Former Preferred Stockholders waived the provisions of the
agreements pursuant to which they purchased preferred stock and which had
granted the Former Preferred Stockholders certain approval rights and
registration rights. The Stockholders' Agreement provides that the Former
Preferred Stockholders are entitled to certain piggyback and demand registration
rights with respect to their Common Stock. All fees, costs and expenses incurred
in connection with registration rights under the Stockholders' Agreement, except
for underwriting discounts and selling commissions, will be borne by the
Company.
ADDITIONAL INFORMATION
Compliance with Section 16(a) of the Exchange Act
Section 16(a) of the Exchange Act requires the Company's officers and
directors, and persons who own more than ten percent of a registered class of
the Company's equity securities, to file reports of ownership and changes in
ownership with the SEC and provide the Company with copies of such reports.
25
<PAGE>
The Company has reviewed such reports received by it and written
representations from directors and executive officers. Based solely on such
review, the Company believes that during fiscal year 1996 all filing
requirements were complied with.
Shareholder Proposals for the 1997 Annual Meeting
Any shareholder proposal intended for inclusion in the proxy material
for the 1996 Annual Meeting of Shareholders must be received in writing by the
Company, at the address set forth on the first page of this Proxy Statement, on
or before February 20, 1997. Any such proposal will be subject to 17 C.F.R. ss.
14a-8 of Rules and Regulations of the SEC.
Other Matters
As of the date of this Proxy Statement, the Board of Directors of the
Company knows of no other business which will be presented for consideration at
the Annual Meeting. Execution of a proxy, however, confers on the designated
proxyholders discretionary authority to vote the shares in accordance with their
best judgment on such other business, if any, that may properly come before the
Annual Meeting or any adjournments thereof.
THE COMPANY WILL PROVIDE WITHOUT CHARGE TO EACH PERSON RECEIVING THIS
PROXY STATEMENT, UPON THE WRITTEN REQUEST OF SUCH PERSON, A COPY OF THE
COMPANY'S ANNUAL REPORT ON FORM 10-K, INCLUDING THE FINANCIAL STATEMENTS AND
SCHEDULES THERETO, REQUIRED TO BE FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION FOR THE FISCAL YEAR ENDED MARCH 29, 1996. WRITTEN REQUESTS FOR A COPY
OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K SHOULD BE DIRECTED TO JANET W.
BARNHILL, SECRETARY, 34 LOVETON CIRCLE, SPARKS, MARYLAND 21152-5100.
By Order of the Board of Directors.
Janet W. Barnhill,
Secretary
June 27, 1996
26
<PAGE>
APPENDIX A
PROPOSED AMENDMENT TO THE CERTIFICATE OF INCORPORATION
INCREASING THE NUMBER OF SHARES OF AUTHORIZED COMMON STOCK
Set forth below is the existing text of the first paragraph of Article
Fourth of the Certificate of Incorporation, as amended, which would be stricken
in its entirety and replaced by the proposed amendment:
"FOURTH: The total number of shares of all classes of stock which the
Corporation has authority to issue is ten million (10,000,000) shares,
of which nine million five hundred thousand (9,500,000) shares shall be
Common Stock, par value $0.01, and five hundred thousand (500,000)
shares shall be Preferred Stock, par value $0.01 per share.
Set forth below is the text of the proposed amendment of Article Fourth
of the Certificate of Incorporation:
"FOURTH: The total number of shares of all classes of stock which the
Corporation has authority to issue is fifteen million five hundred
thousand (15,500,000) shares, of which fifteen million (15,000,000)
shares shall be Common Stock, par value $0.01, and five hundred
thousand (500,000) shares shall be Preferred Stock, par value $0.01 per
share.
27
<PAGE>
TESSCO Technologies Incorporated
ANNUAL MEETING OF SHAREHOLDERS, JULY 16, 1996
PROXY SOLICITED BY THE BOARD OF DIRECTORS
The undersigned hereby appoints ROBERT B. BARNHILL, JR. and GERALD T. GARLAND,
and each of them, with full power of substitution to each, as proxy, to vote all
shares which the undersigned is entitled to vote at the Annual Meeting of
Shareholders of TESSCO Technologies Incorporated to be held at 2:00 p.m., local
time, on July 16 1996, and at any adjournments thereof:
1. Election of Directors
<TABLE>
<S> <C>
FOR the election of all nominees listed WITHHOLD AUTHORITY
(except as marked to the contrary below) [ ] to vote for all nominees listed below [ ]
</TABLE>
Robert B. Barnhill, Jr.
Benn R. Konsynski
(To withhold authority to vote for an individual nominee, strike a line
through the nominee's name).
2. The approval of an amendment to the Company's 1994 Stock and Incentive
Plan to increase the number of shares authorized for issuance
thereunder.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
3. The approval of an amendment to the Certificate of Incorporation to
increase the number of shares of authorized Common Stock to 15,000,000
shares.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
4. The ratification of the appointment of Arthur Andersen LLP to serve as
the Company's independent public accountants for the fiscal year
ending March 28, 1997.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
<PAGE>
5. In their discretion, the proxies are authorized to vote upon such other
matters as may properly come before the meeting or any adjournment
thereof.
THIS PROXY WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY THE PERSON SIGNING IT.
IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR THE ELECTION OF THE
NOMINEES INDICATED AND FOR THE OTHER PROPOSALS.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS. IT MAY BE REVOKED
AT ANY TIME PRIOR TO ITS EXERCISE BY SENDING WRITTEN NOTICE TO THE SECRETARY OF
THE COMPANY, BY DELIVERING TO THE COMPANY A DULY EXECUTED PROXY BEARING A LATER
DATE OR BY ATTENDING THE MEETING AND VOTING IN PERSON.
Receipt of notice of the meeting and proxy statement is hereby acknowledged, and
the terms of the notice and statement are hereby incorporated by reference into
this proxy. The undersigned hereby revokes all proxies heretofore given for said
meeting or any adjournment or adjournments thereof.
(Please sign exactly as
your name appears hereon.
Executors, administrators,
guardians, officers signing
for corporations, trustees
and attorneys should give
full title. For joint
owners, both owners should
sign.)
Dated:_______________, 1996
_____________________(SEAL)
_____________________(SEAL)
Please sign, date and
promptly return this proxy
in the enclosed envelope.
No postage is required if
mailed in the United
States.
- 2 -
