<PAGE>
SCHEDULE 14A
REQUIRED BY RULE 14a-6(m)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934
Filed by the registrant /X/
Filed by a party other than the registrant / /
Check the appropriate box:
/ / Preliminary proxy statement
/X/ Definitive proxy statement
/ / Definitive additional materials
/ / Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
TECH-SYM CORPORATION
(Name of Registrant as Specified in Its Charter)
TECH-SYM CORPORATION
(Name of Person(s) Filing Proxy Statement)
Payment of filing fee (Check the appropriate box):
/X/ $125 per Exchange Act Rule 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 transactions applies:
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:(1)
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
/ / 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 registrations 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:
- --------------------------------------------------------------------------------
(1)Set forth the amount on which the filing fee is calculated and state how it
was determined.
<PAGE>
{LOGO}
TECH-SYM CORPORATION
10500 WESTOFFICE DRIVE
HOUSTON, TEXAS 77042-5391
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
APRIL 26, 1994
To the Stockholders
of Tech-Sym Corporation:
The Annual Meeting of Stockholders of Tech-Sym Corporation will be held in
the Richmond Room of the Adam's Mark Hotel at 2900 Briarpark Drive, Houston,
Texas, on Tuesday, April 26, 1994, at 10:00 o'clock A.M., Houston Time, to vote
on the following proposals:
Proposal 1: The election of nine directors.
Proposal 2: The ratification of the appointment of Price Waterhouse as
independent accountants for the year 1994.
Proposal 3: Approval of an amendment to the Tech-Sym Corporation 1990
Stock Option Plan increasing the maximum number of shares of Common Stock
issuable thereunder from 570,000 to 858,000 shares.
And to vote on all other matters incident to the conduct of the meeting or any
adjournment(s) thereof.
Stockholders of record at the close of business on March 14, 1994, are
entitled to notice of and to vote at the meeting.
All stockholders are cordially invited and urged to attend the meeting. EVEN
IF YOU EXPECT TO ATTEND THE MEETING, YOU ARE REQUESTED TO SIGN, DATE AND RETURN
THE ACCOMPANYING PROXY IN THE ENCLOSED ADDRESSED ENVELOPE. If you should attend,
you may vote in person, if you wish, whether or not you have sent in your proxy.
By Order of the Board of Directors.
J. RANKIN TIPPINS
GENERAL COUNSEL AND
SECRETARY
March 30, 1994
<PAGE>
TECH-SYM CORPORATION
PROXY STATEMENT
SOLICITATION OF PROXIES
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors (the 'Board') of Tech-Sym Corporation (the
'Company') for use at the annual meeting of stockholders of the Company to be
held in the Richmond Room of the Adam's Mark Hotel at 2900 Briarpark Drive,
Houston, Texas, on Tuesday, April 26, 1994, at 10:00 o'clock A.M., Houston Time,
and at any adjournment(s) thereof pursuant to and for the purposes set forth in
the accompanying Notice of Meeting.
The cost of solicitation of these proxies will be borne by the Company,
including the reasonable costs incurred by custodians, nominees, fiduciaries,
and other agents in forwarding the proxy material to their principals. The
Company has engaged Georgeson & Company, Inc., a firm of professional proxy
solicitors, to solicit proxies and will pay such firm a fee of approximately
$6,000, plus expenses for so acting. In addition to such solicitation and the
solicitation made hereby, certain directors, officers, and regular employees of
the Company may solicit proxies by telegraph, telephone, and personal interview.
A proxy will be voted in accordance with the stockholder's instruction or,
if no instruction is indicated, it will be voted in favor of the proposals set
forth in the notice attached hereto. Any stockholder may revoke his or her proxy
at any time prior to its use by a later dated proxy. The proxy also may be
revoked if the stockholder is present at the meeting and elects to vote in
person. It is anticipated that the proxy materials will be first mailed or given
to stockholders on or about March 30, 1994.
STOCKHOLDER PROPOSAL
In order to be considered for inclusion in the Company's proxy statement
relating to the 1995 annual meeting of stockholders, a stockholder proposal must
be received at the Company's principal executive office no later than November
25, 1994.
VOTING SECURITIES
At the close of business on March 14, 1994, the record date for
determination of stockholders entitled to notice of and to vote at the meeting,
there were outstanding 5,764,558 shares of Common Stock (exclusive of 1,277,062
treasury shares), each share being entitled to one vote upon each of the matters
to be voted on at the meeting. There are no other voting securities outstanding.
The holders of a majority of the shares entitled to vote, present in person
or by proxy, shall constitute a quorum at all meetings of stockholders. For
purposes of determining the presence of a quorum, shares entitled to vote
include shares as to which there is an abstention from voting on some or all
matters submitted for voting and include shares as to which a broker will vote
on at least one matter pursuant to discretionary authority of such broker to
vote on such matter pursuant to applicable stock exchange rules. In the absence
of a quorum (2,882,280 shares) at the meeting, either in person or by proxy, the
meeting may be adjourned from time to time without notice other than
announcement at the meeting until a quorum shall be formed.
In conformity with the corporate law of Nevada (the state of the Company's
organization) and the Company's articles of incorporation and bylaws, at any
meeting of stockholders at which a quorum is present, a majority of the shares
entitled to vote, present in person or represented by proxy, shall decide any
matter submitted to such meeting for vote, unless the matter is one upon
<PAGE>
which by law or by express provision of the articles of incorporation or bylaws
the vote of a greater number is required, in which case the vote of such greater
number shall govern and control the decision of such matter. None of the
proposals set forth in this proxy statement require a greater vote than a
majority of shares. For purposes of determining whether a majority has been
obtained with respect to a particular matter, shares as to which there is an
abstention from voting and shares as to which a broker does not have authority
to vote on such matter will not be treated as present and entitled to vote with
respect to such matter.
The following table sets forth as of January 31, 1994, the beneficial
ownership of the Company's Common Stock with respect to each person known by the
Company to be the beneficial owner of more than five percent of the Company's
currently outstanding shares of Common Stock.
NAME AND BUSINESS ADDRESS AMOUNT AND NATURE OF PERCENT
OF BENEFICIAL OWNERS BENEFICIAL OWNERSHIP OF CLASS
Confederation Life Insurance Co.
('Confederation Life')------------- 441,490(a) 7.7%
1 Mount Pleasant Rd.
Toronto, Ontario M4W 1H1
Heine Securities Corporation ('HSC')
and
Michael F. Price------------------- 419,300(b) 7.3%
51 J.F.K. Parkway
Short Hills, New Jersey 07078
The Travelers Inc. (formerly
Primerica Corporation) ('TRV')----- 365,040(c) 6.3%
65 East 55th Street
New York, New York 10022
and
Smith Barney Shearson Inc. ('SBS')
and Smith Barney Shearson
Holdings Inc. ('SBS Holdings')
1345 Avenue of the Americas
New York, New York 10105
Lazard Freres & Co. ('Lazard
Freres')--------------------------- 360,100(d) 6.2%
One Rockfeller Plaza
New York, New York 10020
Dimensional Fund Advisors Inc.
('DFA')---------------------------- 316,900(e) 5.5%
1299 Ocean Avenue, 11th Floor
Santa Monica, California 90401
Sun Bank, N.A., as Trustee of the
Tech-Sym Retirement Plan----------- 351,753(f) 6.1%
Trust Banking Group
Post Office Box 3808
Orlando, Florida 32802
(a) According to a Schedule 13G dated February 10, 1994, and filed with the
Securities and Exchange Commission by Confederation Life, Confederation
Life had shared voting power and shared dispositive power with respect to
all such shares.
(b) According to a Schedule 13G dated February 8, 1994, and filed with the
Securities and Exchange Commission by HSC and its President, Michael F.
Price, HSC had sole voting power and sole dispositive power with respect
to all such shares.
(c) According to a Schedule 13G dated February 10, 1994, and jointly filed
with the Securities and Exchange Commission by SBS, its sole common
stockholder SBS Holdings, and TRV, the sole
(FOOTNOTES CONTINUED ON FOLLOWING PAGE)
2
<PAGE>
stockholder of SBS Holdings, SBS and SBS Holdings had shared voting power
with respect to 177,000 of such shares and shared dispositive power with
respect to 1,000 of such shares. TRV had shared voting power with respect
to 177,700 of such shares and shared dispositive power with respect to
1,700 of such shares. TRV, SBS Holdings and SBS have sole dispositive
power with respect to 363,340 of such shares.
(d) According to a Schedule 13G dated February 14, 1994, and filed with the
Securities and Exchange Commission by Lazard Freres, Lazard Freres had
sole voting power with respect to 345,600 of such shares, shared voting
power with respect to 10,000 of such shares, and sole dipositive power
with respect to all such shares.
(e) According to a Schedule 13G dated February 9, 1994, DFA had sole voting
power with respect to 227,500 of such shares and sole dispositive power
with respect to all such shares. Persons who are officers of DFA also
serve as officers of DFA Investment Dimensions Group Inc. (the 'Fund') and
The Investment Trust Company (the 'Trust'). In their capacities as
officers of the Fund and the Trust, these persons vote 74,700 additional
shares which are owned by the Fund and 14,700 shares which are owned by
the Trust.
(f) According to a financial statement as of January 31, 1994, provided by Sun
Bank, N.A., as Trustee of the Tech-Sym Retirement Plan, the shares are
held for the benefit of employees and former employees of the Company who
participate in the Company's Retirement Plan. Each participant may direct
the Trustee regarding the voting of such shares allocated to the
participant's accounts. The total number of shares indicated does not
include those shares allocated to the accounts of the executive officers
which are included in the table of beneficial ownership by officers and
directors below.
The following table sets forth as of January 31, 1994, the beneficial
ownership of the Company's Common Stock with respect to each director and
nominee for director, each of the executive officers listed in the Summary
Compensation Table below, and all executive officers and directors of the
Company as a group.
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF BENEFICIAL OWNERSHIP
SOLE VOTING OPTIONS
AND EXERCISABLE OTHER
NAME OF INDIVIDUAL INVESTMENT WITHIN BENEFICIAL PERCENT
OR GROUP POWER 60 DAYS OWNERSHIP(A) OF CLASS
<S> <C> <C> <C> <C>
W. L. Creech------------------------- 1,000 2,000 -- *
A. A. Gallotta, Jr.------------------ -- 17,000 -- *
Wendell W. Gamel--------------------- 71,953(b) 13,000 5,165 1.56%
Christopher C. Kraft, Jr.------------ 500 18,000 -- *
Richard F. Miles--------------------- -- -- 504 *
Robert E. Moore---------------------- 24,500 11,000 -- *
Coy J. Scribner---------------------- -- 12,000 4,495 *
Rollin J. Sloan---------------------- -- 12,000 -- *
Joal A. Teresko---------------------- 1,500 21,600 -- *
Ray F. Thompson---------------------- 14,050 10,000 4,354 *
J. Rankin Tippins-------------------- 3,244 5,300 1,824 *
Charles K. Watt---------------------- -- 12,000 -- *
All directors and executive officers
as a group (14 persons)------------ 123,905 141,300 19,516 4.82%
* Less than one percent (1%)
(a) Represents shares allocated to the employee through his participation in
the Tech-Sym Retirement Plan, according to the latest statement for said
plan.
(b) Includes 5,000 shares held in trust for Mr. Gamel's children in which he
disclaims beneficial ownership.
</TABLE>
3
<PAGE>
ELECTION OF DIRECTORS
PROPOSAL 1: THE BOARD OF DIRECTORS BY A UNANIMOUS VOTE NOMINATED AND URGES
YOU TO VOTE FOR THE NINE NOMINEES LISTED BELOW. PROXIES SOLICITED HEREBY WILL BE
SO VOTED UNLESS STOCKHOLDERS SPECIFY OTHERWISE IN THEIR PROXIES. THE AFFIRMATIVE
VOTE OF THE HOLDERS OF A MAJORITY OF THE COMMON STOCK PRESENT IN PERSON OR BY
PROXY AT THE MEETING AND ENTITLED TO VOTE IS REQUIRED FOR APPROVAL OF THIS
PROPOSAL.
The Board recommends the election of the nominees listed below as directors
to hold office until the next annual meeting of stockholders and until their
successors are elected and qualified. Each of such nominees is presently a
member of the Board. If at the time of the 1994 annual meeting of stockholders,
any of such nominees should be unable to serve or is unwilling to serve, the
discretionary authority provided in the Proxy will be used to vote for a
substitute or substitutes designated by the Board of Directors. The Board of
Directors has no reason to believe that any substitute nominee or nominees will
be required.
The Articles of Incorporation provide that the affairs of the Company shall
be conducted by a Board of Directors of not less than three nor more than twenty
members and empower the Board to increase or decrease its size within such
limits. The Board in its discretion and in accordance with such authority has
fixed its size at nine members. No proxy will be voted for a greater number of
persons than the number of nominees named herein. If deemed desirable in the
best interests of the Company, the Board of Directors (pursuant to authority
contained in the Articles of Incorporation) may, subsequent to the annual
meeting of stockholders, increase its size and elect one or more additional
qualified persons to fill the vacancies which then exist pending the next annual
meeting of stockholders.
The nominees, and certain information with respect to each of them, are as
follows:
<TABLE>
<S> <C> <C> <C>
W. L. CREECH Age 66
Director since 1989 Audit Committee Member
Since his retirement from the United States Air Force as a Four Star
General in 1984, General Creech has been an independent business
{Photo} consultant. During his military career spanning more than 37 years,
General Creech held a succession of important posts, including as his
last assignment Commander of the Tactical Air Command USAF. General
Creech also serves as a director of Comarco, Inc., and ESEA Corporation.
A. A. GALLOTTA, JR. Age 61
Director since 1986 Audit Committee Member
Admiral Gallotta has been President of AAG Associates, Inc., a consulting
firm for electronic companies, since 1985, the year that he retired from
the United States Navy as a Rear Admiral. From 1988 to January 1990, he
{Photo} served as President and Director of SWL, Inc., a technical support
contractor to the United States Department of Defense and a subsidiary of
Flow General Corporation. Admiral Gallotta dedicated 23 years of his
naval career to electronic warfare related activities and was Vice
Commander, Naval Electronics System Command, at the time of his
retirement.
4
<PAGE>
WENDELL W. GAMEL
Director since 1966 Age 64
{Photo} Mr. Gamel was first elected President of the Company in 1975. In 1980, he
was elected Chairman of the Board and has continuously served in both
capacities ever since.
CHRISTOPHER C. KRAFT, JR. Director Age 70
since 1983 Compensation Committee Member
Dr. Kraft has been a consultant to the aerospace industry since his
{Photo} retirement as Director of the NASA Johnson Space Center in 1982. He was
Flight Director for all of the Mercury missions and many of the Gemini
missions. He also serves as a director of Panhandle Eastern Corporation
and LifeCell Corporation.
ROBERT E. MOORE Age 68
Director since 1966
Mr. Moore retired as Vice President, Secretary and General Counsel of the
{Photo} Company on December 31, 1990, after serving in such positions for more
than nineteen years. Effective January 1, 1991, he became a consultant to
the Company.
COY J. SCRIBNER Age 62
Director since 1983
From 1972, continuing to the present, Mr. Scribner has been President of
Metric Systems Corporation, a subsidiary of the Company engaged in the
{Photo} business of designing and manufacturing electronic systems primarily used
in defense. He was elected as a Vice President of the Company in 1985 and
also serves as Chairman of Enterprise Electronics Corporation, a
subsidiary of the Company engaged in the business of designing and
manufacturing weather radars.
5
<PAGE>
ROLLIN J. SLOAN Age 73
Director since 1983 Compensation Committee Chairman
Mr. Sloan retired as President of TRAK Microwave Corporation ('TRAK') on
December 31, 1987, an office that he held since 1969. Effective January
{Photo} 1, 1988, he became a consultant to TRAK and was elected Chairman of its
Board of Directors. TRAK, a subsidiary of the Company, is engaged in the
design and manufacture of microwave components.
JOAL A. TERESKO Age 56
Director since 1977 Audit Committee Chairman
Mr. Teresko has been an independent business consultant and Managing
{Photo} Director of Laurel Hill Investments for more than the past five years. He
previously served as Vice President of Kennecott Development Company, a
unit of Kennecott Copper Corporation, and Director of Corporate Develop-
ment for Chemetron Corporation.
CHARLES K. WATT Age 56
Director since 1987 Compensation Committee Member
Since 1988, Dr. Watt has served as President and Chief Executive Officer
of Scientific Research Corporation ('SRC'), a company involved in
scientific research and in which both the Company and Dr. Watt have
equity interests. Effective April of 1990, he was appointed Executive
{Photo} Assistant to the President of Clemson University. Dr. Watt served from
1986 to 1990 as a Laboratory Director and principal research engineer at
Georgia Institute of Technology, which post included broad
responsibilities in management, systems engineering and emerging
technologies research. Dr. Watt is also a consultant to industry on
weapon systems acquisitions and test and evaluation developments.
</TABLE>
The Company has standing audit and compensation committees of the Board of
Directors, but does not have a nominating committee. The audit committee's
functions include making recommendations concerning the engagement of
independent accountants, reviewing with the independent accountants the plan and
results of the auditing engagement, approving professional services provided by
the independent accountants, reviewing the independence of the independent
accountants and reviewing the adequacy of the Company's internal accounting
controls. The compensation committee makes recommendations to the Board as to
compensation to be paid to (i) the officers of the Company, (ii) the chief
executive officers and general managers of subsidiaries and divisions, and (iii)
all employees of the Company and its subsidiaries, regardless of position, whose
compensation exceeds a certain amount. The compensation committee also reviews,
and makes recommendations to the Board with respect to, all incentive
compensation plans proposed for the Company and its subsidiaries. The
compensation committee administers the 1980 Stock Option Plan and the 1990 Stock
Option Plan of the Company and has sole authority to grant options and stock
appreciation rights under the 1990 Stock Option Plan. Options and stock
appreciation rights may no longer be
6
<PAGE>
granted under the 1980 Stock Option Plan. During 1993, the audit committee had
three meetings, the compensation committee had four meetings, and the Board of
Directors had six meetings. All members of the Board of Directors attended 75%
or more of the total number of meetings of the Board and Board committees on
which they served.
DIRECTORS' REMUNERATION
Members of the Board of Directors who are not employees of the Company are
paid a fee of $1,300 for attendance at each Board meeting and a fee of $100 for
attendance at each Board committee meeting. Board members who are employees of
the Company receive a fee of $100 for attendance at each Board meeting. Members
of the Board who are not current or former employees of the Company are also
paid an Annual Director Fee of $14,400.
NONEMPLOYEE DIRECTORS RETIREMENT PLAN
Each Director who is not a present or former officer or employee of the
Company covered by a Company retirement plan or agreement is automatically
covered by the Company's Nonemployee Directors Retirement Plan. Upon his
retirement on or after reaching age 65 or his termination due to disability, a
Director will be entitled to receive from the Company an annual retirement
benefit equal to 65% of the Annual Director Fee in effect prior to his
retirement or disability. If a Director leaves the Board prior to reaching age
65 for reasons other than disability, his retirement benefit will not begin
until he reaches age 65 and, if he has served less than ten years as a director,
his retirement benefit will be reduced by 10% for each such year. No benefits
were payable before January 1, 1994, except in the event of death or disability.
The surviving spouse of a deceased director who was entitled to receive a
retirement benefit under this plan will receive an annual benefit from the
Company, beginning with the director's death, equal to 37 1/2% of the Annual
Director Fee, subject to a reduction of 10% for each year less than 10 served as
a director unless such director was a member of the Board on his date of death
or had been previously terminated due to a disability. The spouse's benefit will
continue for ten years or until the spouse's death, whichever occurs first.
In the event of a change in control of the Company, as defined in the plan,
the retirement benefits become 100% vested regardless of a director's length of
service and are payable in a lump sum.
The Company has contributed certain assets to a trust with a commercial bank
to provide for the payment of the benefits under the plan. The amounts held in
trust remain available to the claims of creditors of the Company in the event of
its bankruptcy or insolvency.
STOCK OPTION PLAN
The Company's 1990 Stock Option Plan provides for the automatic grant of
non-qualified stock options and stock appreciation rights (SARs) to nonemployee
Directors of the Company. An individual who becomes a nonemployee Director shall
be automatically granted options and SARs with respect to 10,000 shares of
Common Stock as of the date such person first becomes a member of the Board of
Directors. Each nonemployee Director shall be automatically granted options and
SARs with respect to an additional 1,000 shares of Common Stock effective as of
the date of each regular annual meeting at which such person is reelected or
continues to serve as a Director. The exercise price of such options and SARs
may not be less than 100% of the fair market value per share of the Common Stock
on the date of grant. The stock options and SARs are exercisable on and after
the first anniversary of the date of grant and have a term of ten years unless
earlier terminated in the event a nonemployee Director ceases to be a member of
the Board for any reason except death, permanent
7
<PAGE>
disability, or retirement. The 1990 Stock Option Plan provides that, upon a
change in control of the Company, all outstanding stock options and SARs would
be immediately exercisable (with certain exceptions).
CONSULTING AND EMPLOYMENT AGREEMENTS
Under a consulting agreement with the Company's subsidiary, TRAK, effective
January 1, 1988, and terminating December 31, 1998, Mr. Rollin J. Sloan, a
Director, who retired as President of TRAK on December 31, 1987, is performing
advisory and consulting services to TRAK and is being compensated therefor in
the annual amount of $70,000. For the year ended December 31, 1993, the Company
paid Mr. Sloan $70,000 under the agreement.
The Company has a consulting agreement with Mr. Robert E. Moore, formerly an
officer and currently a Director of the Company, under which Mr. Moore provides
advisory and consulting services to the Company at an annual compensation of
$9,263. Such agreement was effective on January 1, 1991, and is scheduled to
terminate on December 31, 2000. For the year ended December 31, 1993, Mr. Moore
was paid $9,263 under this agreement. For such year, Mr. Moore was also paid
$69,225 pursuant to a deferred compensation agreement with the Company. Such
agreement provides for the payment of such amount annually during the life of
Mr. Moore and also provides for the payment of a surviving spouse's benefit,
following his death, in an annual amount of $39,937.50 for the lesser of ten
years or the remainder of her life.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Mr. Sloan retired as President of TRAK Microwave Corporation ('TRAK'), a
wholly-owned subsidiary of the Company, on December 31, 1987, an office that he
had held since 1969. Effective January 1, 1988, he became a consultant to TRAK
under a contract terminating on December 31, 1998, and was elected Chairman of
its Board of Directors.
Since September 12, 1988, Dr. Watt has served as President and Chief
Executive Officer of Scientific Research Corporation ('SRC') in which both the
Company and Dr. Watt have equity interests. Mr. Gamel serves on the SRC Board of
Directors which determines the compensation for Dr. Watt.
COMPLIANCE WITH SECTION 16 OF THE EXCHANGE ACT
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors and executive officers and, if any, persons who own more than ten
percent of the Company's common shares to file with the Securities and Exchange
Commission and the New York Stock Exchange reports relating to ownership and
changes in ownership of such common shares. Copies of these reports must also be
furnished to the Company. Based on a review of these reports and on written
representations from the reporting persons that no other reports were required,
the Company believes that all applicable Section 16(a) reporting requirements
were complied with except that Mr. Rollin J. Sloan, a director, was late in
reporting the sale of shares of the Company's Common Stock.
8
<PAGE>
REPORT ON EXECUTIVE COMPENSATION
The Board of Directors has a Compensation Committee comprised of three
nonemployee directors which reviews and recommends to the Board the payment of
(i) compensation to any employee of the Company or its subsidiaries with an
annual salary of $100,000 or more, and (ii) compensation, regardless of amount,
to any division or subsidiary general manager or chief executive officer. In
addition, the Committee reviews and recommends to the Board all incentive
compensation plans including, without limitation, bonus plans, stock option
plans, stock purchase plans, and key employee compensation agreements. The Board
has final approval concerning the Committee's recommendations.
The Compensation Committee also administers the Company's 1980 and 1990
Stock Option Plans and grants stock options and attendant stock appreciation
rights to officers and key employees under the 1990 Stock Option Plan. The Board
does not have any approval or disapproval authority concerning the grants
awarded by the Committee.
The executive compensation policies and practices are designed to provide
competitive levels of compensation that integrate pay with the Company's annual
and long-term performance goals. Compensation of the executive officers of the
Company is primarily comprised of salary, incentive bonus, and stock options. In
addition, all of the executive officers participate in the Company's Section
401(k) Retirement Plan and have entered into Termination Agreements with the
Company. Certain executive officers are also parties to Executive Retirement
Agreements with the Company.
SALARY
The base salaries of the executive officers are established at a level
deemed appropriate to attract and retain qualified executives. In establishing
its recommendations, the Compensation Committee considers the recommendations of
management, the amount of responsibilities of the executive officers, the
salaries of others similarly situated both within and outside of the Company,
the recent performance in the executive's area of responsibility, the relative
performance of other companies in similar businesses, and any changes in the
cost-of-living. The salaries of the executive officers are usually reviewed
annually and the performance of the prior year is evaluated. As a result, the
individual performances in 1992 were considered in establishing the salaries
during 1993.
INCENTIVE BONUS PLANS
The Company and its subsidiaries have incentive bonus plans which provide
for incentive compensation for their officers and key employees. Under the
Company's plan, the aggregate bonus pool from which such awards can be made in
any year cannot exceed 2% of the Company's consolidated earnings before federal
and state income taxes. The apportionment of that part of the Company's bonus
pool paid to the executive officers is determined by the Board of Directors,
pursuant to recommendations of the Compensation Committee, according to levels
of responsibilities and individual performance. No bonus is payable if the
Company fails to earn a profit.
Under the incentive bonus plan for the Company's subsidiaries, directors,
officers, and key employees of each of the subsidiaries are eligible to share in
a bonus pool, calculated separately for each subsidiary, amounting to not less
than 8% and not more than 15% of such subsidiary's annual earnings before state
and federal income taxes. Bonus amounts earned in excess of 8% pre-tax earnings
depend upon the degree by which each subsidiary exceeds certain performance
criteria, such as sales, net profit, and return on investment. The apportionment
of the total amount of the bonus and the recipients thereof are determined by
the senior management of the Company and the respective subsidiary according to
levels of responsibility and individual performance except that
9
<PAGE>
approval of the Board of Directors of the Company, pursuant to recommendations
of the Compensation Committee, is required for an award to (i) any recipient
whose annual salary is equal to or greater than $100,000 and (ii) any division
or subsidiary general manager or chief executive officer, regardless of the
amount of compensation. Executive officers of the Company may also receive
bonuses from the subsidiary bonus pools in their capacities as directors or
officers of the subsidiaries. No bonus is payable if the subsidiary fails to
earn a profit.
The amount of the bonus pool of the Company and of each subsidiary is
subject to reduction by the amount of (i) any bonuses such as year-end holiday
bonuses paid to employees for such year, (ii) the contributions which each such
company would be required to make to the retirement plan, if any, on the total
bonus pool amount for the accounts of its bonus recipients, and (iii) certain
marketing incentives paid to employees for such year.
STOCK OPTION PLAN
The Company's Stock Option Plan is designed to align the long-term interests
of key employees with stockholder interests. The total number of shares
available for grants under the Plan is limited to the amount approved by the
stockholders. The exercise price of such options may not be less than 100% of
the fair market value per share of the Common Stock on the date of the grant.
The employees awarded stock options benefit only when the market price of the
Company's stock increases to the benefit of all stockholders. The Committee does
not routinely or automatically grant stock options to key employees. It has been
the practice to grant stock options to executive officers every three to five
years. The number of options granted to any individual is dependent on the
individual's level of responsibility and ability to influence the performance of
the Company and its subsidiaries.
CEO COMPENSATION
As with the other executive officers, the compensation of Mr. Gamel consists
primarily of salary, incentive bonus, and stock options. Mr. Gamel's salary is
reviewed on an annual basis by the Compensation Committee and the Board of
Directors at the time of the annual election of officers at the Directors'
meeting held in conjunction with the annual stockholders' meeting held in April
of each year. The incentive bonus is determined after the end of each year when
financial results are available. Stock option grants are not automatic nor
awarded on a regular basis.
A major portion of Mr. Gamel's compensation consists of an annual incentive
bonus under the Incentive Bonus Plans described above and, as such, fluctuates
with the annual fortunes of the Company. Due to the Company's reduced earnings
in 1992 compared to 1991, the Committee recommended, and the Board approved, a
reduced incentive bonus for Mr. Gamel for 1992. The Company reported record
levels of sales and earnings for 1993 and, pursuant to the recommendation of the
Committee, the Board approved an increased incentive bonus. The Committee also
granted stock options to Mr. Gamel as stated in the Option/SAR Grants Table.
The foregoing report of the Compensation Committee shall not be deemed
incorporated by reference by any general statement incorporating by reference
this Proxy Statement into any filing under the Securities Act of 1933, as
amended (the 'Securities Act'), or under the Securities Exchange Act of 1934, as
amended (the 'Exchange Act'), except to the extent that the Company specifically
incorporates this information by reference, and shall not otherwise be deemed
filed under such acts.
The foregoing report is given by the following members of the Compensation
Committee.
Rollin J. Sloan Christopher C. Kraft, Jr. Charles K. Watt
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<PAGE>
SUMMARY COMPENSATION TABLE
The Summary Compensation Table shows certain compensation information for
the Chief Executive Officer and the four other most highly compensated executive
officers in 1993 (as the term 'executive officer' is defined for proxy purposes
by the Securities and Exchange Commission) for services rendered in all
capacities during the fiscal years ended December 31, 1993, 1992, and 1991,
except for the category of All Other Compensation which includes information for
1992 and 1993 only. The dollar value of other annual compensation not properly
categorized as salary or bonus, such as perquisites and other personal benefits,
did not exceed the lesser of $50,000 or 10% of the total of annual salary and
bonus for any of the named executive officers in 1992 or 1993.
<TABLE>
SUMMARY COMPENSATION TABLE
<CAPTION>
LONG TERM
ANNUAL COMPENSATION COMPENSATION ALL OTHER
NAME AND SALARY BONUS OPTIONS/SARS COMPENSATION
PRINCIPAL POSITION YEAR ($) ($)(A) (#)(B) ($)(C)
<S> <C> <C> <C> <C> <C>
W. W. Gamel-------------------------- 1993 291,333 192,142 30,000 11,949
Chairman of the Board, President, 1992 273,333 95,000 -0- 11,929
and Chief Executive Officer 1991 253,333 142,032 -0-
C. J. Scribner----------------------- 1993 238,976 119,132 25,000 11,920
President of Metric Systems 1992 238,685 116,000 -0- 11,615
Corporation 1991 204,476 107,000 -0-
R. F. Miles-------------------------- 1993 151,700 145,000 15,000 5,871
President of Syntron, Inc. 1992 143,000 13,521 -0- 5,622
1991 130,000 62,784 -0-
R. F. Thompson----------------------- 1993 146,000 134,000 20,000 11,075
Vice President, Treasurer, and 1992 136,667 79,108 -0- 11,270
Chief Financial Officer 1991 126,667 107,486 -0-
J. R. Tippins------------------------ 1993 112,667 104,594 15,000 7,961
General Counsel and Secretary 1992 105,333 56,346 -0- 8,309
1991 100,000 71,637 -0-
(a) Bonus amounts were earned during the years indicated, but paid in the
first quarter of the following year.
(b) Includes stock appreciation rights (SARs) awarded in tandem with each
stock option.
(c) Each of the amounts in this column are matching contributions by the
Company to the executive officer's account in the Company's Retirement
(401(k)) Plan.
</TABLE>
OPTION/SAR GRANTS TABLE
The following table sets forth information concerning grants of stock
options and stock appreciation rights (SARs) awarded in tandem with each stock
option during 1993 to each of the named executive officers and the potential
realizable value of such options if the market price of the stock appreciates at
the stated rates over the 10 year term of the option.
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<PAGE>
<TABLE>
OPTION/SAR GRANTS IN LAST FISCAL YEAR
<CAPTION>
INDIVIDUAL GRANTS(A)
% OF POTENTIAL
NUMBER OF TOTAL REALIZABLE VALUE AT
SECURITIES OPTIONS ASSUMED ANNUAL
UNDERLYING GRANTED TO EXERCISE RATES OF STOCK PRICE
OPTIONS EMPLOYEES OR BASE APPRECIATION
GRANTED IN FISCAL PRICE EXPIRATION FOR OPTION TERM(B)
NAME (#) YEAR ($/SH) DATE 5% ($) 10% ($)
<S> <C> <C> <C> <C> <C> <C>
W. W. Gamel-------------------------- 30,000 12.7 15.75 6/17/03 297,675 751,275
C. J. Scribner----------------------- 25,000 10.6 15.75 6/17/03 248,063 626,063
R. F. Miles-------------------------- 15,000 6.3 15.75 6/17/03 148,838 375,638
R. F. Thompson----------------------- 20,000 8.4 15.75 6/17/03 198,450 500,850
J. R. Tippins------------------------ 15,000 6.3 15.75 6/17/03 148,838 375,638
(a) According to the shareholder approved 1990 Stock Option Plan, the exercise
price of stock options and stock appreciation rights may not be less than
the market value per share on the date of grant. Options are exercisable
starting twelve months from grant date, with 20% of the shares covered
thereby becoming exercisable at that time and with 20% of the option shares
becoming exercisable every six months thereafter with full vesting occurring
on the third anniversary date.
(b) The dollar amounts under these columns are the result of calculations at the
5% and 10% rates set by Securities and Exchange Commission rules and are not
intended to reflect historical performance or to forecast possible future
appreciation, if any, in the Corporation's stock price. The assumed annual
rates of 5% and 10%, compounded over ten years, would result in the
Company's common stock price increasing from $15.75 per share on the grant
date to $25.6725 and $40.7925, respectively, in the year 2003.
</TABLE>
OPTION/SAR EXERCISES AND YEAR-END VALUE TABLE
The following table summarizes for each of the named executive officers the
number of stock options and stock appreciation rights (SARs), if any, exercised
during the year ended December 31, 1993, the aggregate dollar value realized
upon exercise, the total number of unexercised options and SARs, if any, held at
December 31, 1993, and the aggregate dollar value of in-the-money, unexercised
options and SARs, if any, held at December 31, 1993. Value realized upon
exercise is the difference between the fair market value of the underlying stock
on the exercise date and the exercise or base price of the option or SAR. Value
of the unexercised, in-the-money options or SARs at fiscal year-end is the
difference between its exercise or base price and the fair market value of the
underlying stock on December 31, 1993, which was $21.25 per share. THESE VALUES,
UNLIKE THE AMOUNTS SET FORTH IN THE COLUMN HEADED 'VALUE REALIZED,' HAVE NOT
BEEN, AND MAY NEVER BE REALIZED. THE UNDERLYING OPTIONS OR SARS HAVE NOT BEEN,
AND MAY NOT BE, EXERCISED; AND ACTUAL GAINS, IF ANY, ON EXERCISE WILL DEPEND ON
THE VALUE OF TECH-SYM COMMON STOCK ON THE DATE OF EXERCISE. THERE CAN BE NO
ASSURANCE THAT THESE VALUES WILL BE REALIZED. Unexercisable options are those
which have not yet vested under the vesting schedule in the Company's 1990 Stock
Option Plan.
12
<PAGE>
<TABLE>
AGGREGATED OPTION/SAR EXERCISES
IN LAST FISCAL YEAR AND FY-END
OPTION/SAR VALUES
<CAPTION>
VALUE OF UNEXERCISED,
NUMBER OF UNEXERCISED IN-THE-MONEY
SHARES OPTIONS/SARS OPTIONS/SARS
ACQUIRED ON VALUE AT FY-END(#)(A) AT FY-END($)(B)
NAME EXERCISE(#) REALIZED($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
<S> <C> <C> <C> <C> <C> <C>
W. W. Gamel-------------------------- -0- -0- 13,000 30,000 125,875 165,000
C. J. Scribner----------------------- -0- -0- 12,000 25,000 119,250 137,500
R. F. Miles-------------------------- 1,600 12,600 -0- 15,000 -0- 82,500
R. F. Thompson----------------------- -0- -0- 10,000 20,000 99,375 110,000
J. R. Tippins------------------------ -0- -0- 5,300 15,000 54,288 82,500
(a) Includes stock appreciation rights (SARs) awarded in tandem with each
stock option.
(b) In-the-Money Options/SARs are those where the fair market value of the
underlying security exceeds the exercise or base price of the option or
SAR.
</TABLE>
EXECUTIVE RETIREMENT AGREEMENTS
Of the five named executive officers, Messrs. Gamel and Scribner, both also
Directors of the Company, and Thompson and Tippins are each parties to
retirement agreements with the Company which provide for the payment to each
such officer an annual retirement benefit for the remainder of his life
commencing at his retirement on or after age 65 in an amount equal to 65% of
such executive's highest rate of base salary in effect at any time prior to his
reaching age 61 ('Base Salary'). If such executive voluntarily terminates his
employment prior to age 65, but on or after age 62, he shall commence receiving
his retirement benefit reduced by 1.39% for each full calendar month which his
date of termination precedes his 65th birthday, unless such reduction is waived
by the Board. The applicable Base Salaries to date of Messrs. Gamel, Scribner,
Thompson, and Tippins are $240,000, $231,000, $149,000, and $115,000,
respectively. The agreements further provide for the payment of a surviving
spouse's benefit equal to 37 1/2% of the officer's Base Salary, which is payable
annually upon his death to his surviving spouse, if any, for the lesser of ten
years or the remainder of her life. The Company's obligation under each of the
agreements to pay the retirement benefits terminates if the officer voluntarily
leaves the employ of the Company prior to reaching age 62 (other than due to
death or total and permanent disability) or is terminated for cause. The
benefits remain payable in the event of either the executive's termination of
employment prior to age 62 because of his total and permanent disability or his
termination after reaching age 62, but in both instances are subject to
reduction for their early commencement unless such reduction is waived by the
Board. Under each of the agreements, the surviving spouse's benefit is not
payable if the officer voluntarily leaves the employ of the Company prior to age
62 or is terminated for cause, but is payable if the executive dies while still
in the employ of the Company, or after his termination of employment after
reaching age 62 or after his termination due to a disability. The agreements
also provide the executive with continued Company-provided health benefits after
his retirement.
The Company has contributed certain assets to a trust with a commercial bank
to provide for the payment of the benefits under the retirement agreements. The
amounts held in trust remain available to the claims of creditors of the Company
in the event of its bankruptcy or insolvency.
TERMINATION AGREEMENTS
The Company has entered into Termination Agreements with certain key
employees, including the named executive officers, which provide that if the
employee's employment is terminated during
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<PAGE>
the three-year period following a Change in Control of the Company, as defined
in the agreements, other than for cause or by the employee for other than 'good
reason,' the employee will continue to be paid his base salary, participate in
the Bonus Plan and receive certain other benefits for the remainder of such
three-year period, reduced by any amounts payable to the employee (i) pursuant
to a Retirement Agreement and (ii) from other employment.
STOCK OPTION PLANS
The Company's 1980 Stock Option Plan (the '1980 Option Plan'), which expired
on December 31, 1989, provided for the grant of stock options to purchase up to
450,000 shares of the Company's Common Stock and for the grant of stock
appreciation rights ('SARs') in tandem therewith to key employees of the Company
and its subsidiaries as determined by the Company's stock option plan committee.
Options granted pursuant to the 1980 Option Plan which were outstanding on
December 31, 1989, may be exercised at any time prior to their respective
expiration dates. The 1980 Option Plan provides that effective upon a change in
control of the Company, the stock options and SARs then outstanding would become
vested and exercisable.
The Company's 1990 Stock Option Plan, as amended (the '1990 Option Plan'),
provides for the grant of stock options to purchase shares of the Company's
Common Stock and for the grant of stock appreciation rights ('SARs') in tandem
therewith to (i) key employees of the Company and its subsidiaries as determined
by the Company's compensation committee and (ii) the members of the Board of
Directors of the Company who are not employees of the Company. The maximum
number of shares of Common Stock as to which options or SARs may be granted
under the 1990 Option Plan is 570,000 shares, subject to certain adjustments to
prevent dilution. The exercise price of such options and SARs may not be less
than 100% of the fair market value per share of the Common Stock on the date of
grant. The 1990 Option Plan provides that, upon a change in control of the
Company, all outstanding stock options and SARs would become immediately vested
and exercisable (with certain exceptions).
SHARE INVESTMENT PERFORMANCE
The following graph reflects a comparison of the cumulative total return
(change in stock price plus reinvested dividends) of the Company's Common Stock
from December 31, 1988, through December 31, 1993, with the broad market Media
General Financial Services Composite Market Value Index of over 7,000 publicly
held companies and the peer group of Media General Financial Services Industry
Group 171 Index -- Electronic Equipment Manufacturers (which includes the
Company). The data presented assumes a hypothetical investment of $100 in the
Company's stock and in the underlying stocks of each of the two indices as of
January 1, 1989, and that all dividends were reinvested.
{Linear graph with coordinates indicated in the table below}
1988 1989 1990 1991 1992 1993
Tech-Sym Corporation 100 83.7 79.35 116.3 118.48 184.78
Electronic Equipment Manufacturers 100 110.61 107.58 134.04 177.58 255.87
Composite Market Value 100 124.71 115.96 149.69 155.68 178.71
14
<PAGE>
The foregoing price performance comparisons shall not be deemed incorporated
by reference by any general statement incorporating by reference this Proxy
Statement into any filing under the Securities Act or under the Exchange Act,
except to the extent that the Company specifically incorporates this graph by
reference, and shall not otherwise be deemed filed under such acts.
There can be no assurance that the Company's share performance will continue
into the future with the same or similar trends depicted in the graph above. The
Company will not make or endorse any predictions as to future share performance.
RATIFICATION OF INDEPENDENT ACCOUNTANTS
PROPOSAL 2: THE BOARD OF DIRECTORS HAS UNANIMOUSLY SELECTED PRICE
WATERHOUSE, AND URGES YOU TO VOTE FOR THE RATIFICATION OF THE APPOINTMENT OF
SUCH FIRM, AS INDEPENDENT ACCOUNTANTS OF THE COMPANY FOR THE YEAR 1994. PROXIES
SOLICITED HEREBY WILL BE SO VOTED UNLESS STOCKHOLDERS SPECIFY OTHERWISE IN THEIR
PROXIES. THE AFFIRMATIVE VOTE OF THE HOLDERS OF A MAJORITY OF THE COMMON STOCK
PRESENT IN PERSON OR BY PROXY AT THE MEETING AND ENTITLED TO VOTE IS REQUIRED
FOR APPROVAL OF THIS PROPOSAL.
By action of the Board of Directors, Price Waterhouse has been selected as
independent accountants of the Company for the year ending December 31, 1994,
and the Board of Directors proposes the ratification of such selection. Price
Waterhouse has audited the accounts of the Company since 1967. A representative
of such firm is expected to be present at the annual meeting of stockholders
with the opportunity to make a statement if he desires to do so and will be
available to answer appropriate questions.
15
<PAGE>
APPROVAL OF AN AMENDMENT TO THE TECH-SYM CORPORATION
1990 STOCK OPTION PLAN INCREASING THE MAXIMUM NUMBER
OF SHARES OF COMMON STOCK ISSUABLE THEREUNDER FROM
570,000 TO 858,000 SHARES
PROPOSAL 3: THE BOARD OF DIRECTORS HAS UNANIMOUSLY APPROVED AND URGES YOU
TO VOTE FOR PROPOSAL 3. PROXIES SOLICITED HEREBY WILL BE SO VOTED UNLESS
STOCKHOLDERS SPECIFY OTHERWISE IN THEIR PROXIES. THE AFFIRMATIVE VOTE OF A
MAJORITY OF THE OUTSTANDING SHARES OF COMMON STOCK IS REQUIRED FOR APPROVAL OF
THIS PROSPOSAL.
GENERAL. The Company's 1990 Stock Option Plan (the 'Plan') was adopted by
the Board of Directors of the Company on February 15, 1990, and approved by the
Company's stockholders on April 24, 1990. The Board of Directors of the Company
approved an amendment to the Plan on February 21, 1991, which was approved by
the stockholders on April 30, 1991, increasing the maximum number of shares
issuable under the Plan from 300,000 to 570,000 shares. The Board of Directors
approved a second amendment to the Plan on February 17, 1994, subject to
stockholder approval, increasing the maximum number of shares issuable under the
Plan from 570,000 to 858,000 shares. The purpose of the Plan is to advance the
interests of the Company by providing incentive awards and stock ownership
opportunities to those key employees (including directors who are employees) who
contribute significantly to the performance of the Company and its subsidiaries
and to the members of the Board of Directors of the Company who are not
employees of the Company. In addition, the Plan is intended to enhance the
ability of the Company to attract and retain individuals of superior managerial
ability and to motivate such individuals to exert their best efforts towards
future progress and profitability of the Company. The terms of the Plan are
described below and the Plan, including the proposed amendment, is set forth in
its entirety as Appendix A hereto.
The Plan provides for the grant of stock options to purchase shares of the
Company's Common Stock and for the grant of stock appreciation rights ('SARs')
in tandem therewith to (i) key employees of the Company and its subsidiaries as
determined by the Company's compensation committee and (ii) the members of the
Board of Directors of the Company who are not employees of the Company. The
maximum number of shares of Common Stock as to which options or SARs may be
granted under the Plan, as amended, is 570,000 shares, subject to certain
adjustments to prevent dilution. Upon approval of the second amendment of the
Plan by the Company's stockholders, the maximum number of shares of Common Stock
as to which options or SARs may be granted under the plan will be 858,000
shares, subject to certain adjustments to prevent dilution. Stock options
granted under the Plan to key employees may be either incentive stock options
('ISOs') under the provisions of Section 422 of the Internal Revenue Code of
1986, as amended (the 'Code'), or nonqualified stock options ('NSOs'). Options
granted to nonemployee Directors will be NSOs, as options granted to
nonemployees do not qualify as ISOs.
The Plan is adminstered by the Company's compensation committee, which,
under the terms of the 1990 Option Plan, must consist of three members of the
Board of Directors, none who may be a key employee who is eligible to be, or is,
a participant in the Plan. The compensation committee has complete discretion in
determining the key executives and employees of the Company or its subsidiaries
who shall receive stock options and the number of such options to be granted.
The Plan provides that, in granting options to key employees, the compensation
committee shall take into consideration the contribution an employee has made or
may make to the success of the Company or its subsidiaries and such other
factors as the compensation committee shall determine. As described below, the
Plan provides for the automatic grant of stock options and SARs to nonemployee
Directors of the Company in specified amounts and at specified times. As of
February 15, 1994, 195 key employees and seven nonemployee directors are
eligible to participate in the 1990 Option Plan.
16
<PAGE>
The compensation committee has the discretion to grant a SAR separately or
in tandem with any option granted to a key employee under the Plan, and the
grant of a SAR may be made on or after the date of the grant of an option. A SAR
granted to a key employee entitles such employee to receive shares of Common
Stock, cash or any combination thereof, as determined by the compensation
committee, having an aggregate value equal to the excess of (i) the fair market
value of one share of Common Stock on the date of exercise over the purchase
price per share specified in such SAR, multiplied by (ii) the number of shares
for which the SAR is exercised. A SAR granted to a nonemployee Director entitles
such Director to receive shares of Common Stock and cash having an aggregate
value as determined in the preceding sentence with respect to the number of
shares for which the SAR is exercised, with such aggregate value to be
automatically paid one-half in cash and one-half in shares of Common Stock. No
fractional shares of Common Stock shall be issued upon the exercise of a SAR (or
upon the exercise of an option granted pursuant to the Plan). SARs are subject
to such terms and conditions, not inconsistent with the Plan, as the
compensation committee may impose. Any SAR granted under the Plan that relates
to a specific option is only exercisable to the extent that the related option
is exercisable.
The term of each stock option or SAR granted to a key employee shall be
determined by the compensation committee on the date of grant, subject to the
limitations that (i) all such options and SARs will expire no later than ten
years from the date of grant and (ii) the exercise price of such options and
SARs may not be less than 100% of the fair market value per share of the Common
Stock on the date of grant. In the event that the employment of a key employee
shall terminate for reasons other than retirement with the consent of the
Company, permanent disability or death, such employee's options and related SARs
shall be exercisable only within three months after such termination and only to
the extent that such options and SARs were exercisable immediately prior to such
termination of employment. If such termination is due to retirement or permanent
disability, the key employee may exercise options and SARs in full at any time
during the remaining term provided therefor at the time of grant. Upon the
termination of employment of a key employee by reason of death, such employee's
options, to the extent then exercisable, may be exercised for a period of one
year after the date of the employee's death, but no more than ten years after
the date an option was granted.
The Plan provides for the automatic grant of stock options and SARs to
nonemployee Directors of the Company. Each option granted to a nonemployee
Director is a NSO and is accompanied by a SAR for the entire number of shares
subject to such option. Each nonemployee Director was granted options and SARs
with respect to 10,000 shares of Common Stock on February 15, 1990. The grant of
such options under the Plan was approved by the stockholders of the Company on
April 24, 1990. An individual who later becomes a nonemployee Director shall be
automatically granted an option and SAR with respect to 10,000 shares of Common
Stock as of the date such person becomes a member of the Board of Directors.
Commencing with the regular annual meeting of stockholders of the Company in
1991, each nonemployee Director is automatically granted an option and SAR with
respect to an additional 1,000 shares of Common Stock effective as of the date
of each regular annual meeting at which such person is reelected or continues to
serve as a Director.
Options and SARs granted to a nonemployee Director under the Plan have an
exercise price equal to the market value of the Common Stock on the date of
grant, are exercisable commencing one year after the date of grant and have a 10
year term. In the event of termination of service of a nonemployee Director,
options and SARs held by such nonemployee Director will be exercisable only
within 12 months after termination of service and only to the same extent they
were exercisable on the date of termination, except that, if the termination is
due to death, permanent disability or retirement pursuant to a Company policy,
all options and SARs held by such nonemployee Director shall be exercisable in
full during the remaining term provided therefor at the time of grant.
17
<PAGE>
The Plan permits the Company to allow an optionee, upon exercise of an
option, to satisfy any applicable federal income tax requirements in the form of
either cash or, at the discretion of the compensation committee, shares of
Common Stock, including shares issuable upon exercise of such option.
The Plan provides that upon a change of control of the Company (i)
outstanding stock options and SARs would become immediately vested and
exercisable (with certain exceptions) and (ii) upon exercise of an option or
SAR, the optionee would receive cash based on the spread between the exercise
price of such option or SAR and the premium price, if any, paid for the Common
Stock in connection with such change of control. A change of control shall be
deemed to occur if a person or group acquires 25% or more of the Company's
voting securities, the Directors of the Company at the beginning of any two year
period cease to constitute a majority of the Board of Directors during such
period for any reason, the stockholders of the Company approve a merger or
consolidation of the Company with any other company (with certain exceptions),
the stockholders of the Company approve an agreement for the sale, exchange or
disposition by the Company of all or a substantial portion of the Company's
assets or the stockholders of the Company adopt a plan of complete liquidation
of the Company.
The Board of Directors of the Company may amend, suspend or terminate the
Plan at any time, except that any amendment that would (i) increase the maximum
number of shares that may be issued under options granted pursuant to the Plan,
(ii) change the class of employees eligible to receive grants under the Plan,
(iii) extend beyond 10 years the term of any option or SAR, (iv) extend the term
of the Plan or (v) change the operation of grants to nonemployee Directors
requires stockholder approval unless, in each case, such approval is not
required to meet the requirements of Rule 16b-3 under the Securities Exchange
Act of 1934, as amended (the 'Exchange Act'). Unless the term of the Plan is
extended or earlier terminated, the Plan will terminate on December 31, 1999.
FEDERAL INCOME TAXES. As a general rule, no income will be recognized by an
employee upon the grant of either ISO's and NSOs or by a nonemployee Director
upon the grant of a NSO. Upon the exercise of a NSO, the optionee will be
treated as receiving compensation income in an amount equal to the excess of the
fair market value of the shares at the time of exercise over the option price
paid for the shares, and the Company may claim a deduction for compensation paid
in the same amount and at the same time as compensation is taxable to the
optionee, provided the Company makes the proper tax withholding with respect to
the exercise by an employee. Upon a subsequent disposition of the shares, any
difference between the fair market value of the shares at the time of exercise
and the amount realized on the disposition would be eligible for treatment as
long-term capital gain or loss if the shares were held for more than twelve
months. The exercise of an ISO (which may not be granted to a nonemployee
Director), on the other hand, does not subject the optionee to federal income
tax; however, the 'spread' upon the exercise of an ISO is an item of adjustment
for purposes of the alternative minimum tax. If the optionee holds the shares of
Common Stock received upon the exercise of an ISO for the requisite holding
period, gain on the disposition of such shares is treated as long-term capital
gain. If a disposition of such shares is made in a taxable transaction before
expiration of the holding period, a portion of the gain on disposition will be
treated as ordinary income and the balance as long-term or short-term capital
gain, depending on the length of time the shares were held. The Company is
allowed a deduction in the year of disposition of shares received upon exercise
of an ISO only to the extent the amount of any gain is taxable to the optionee
as ordinary income.
An optionee who receives a SAR will not recognize any taxable income upon
receipt of the SAR, but upon exercise of the SAR, the fair market value of the
shares of Common Stock (or the cash in lieu of shares of Common Stock) received
must be treated as ordinary income by the optionee for that year. Under such
circumstances, the Company will, in general, be entitled to a deduction equal to
the
18
<PAGE>
amount taxable to the optionee as ordinary income. If the optionee receives
shares of Common Stock upon the exercise of a SAR and thereafter disposes of
such shares in a taxable transaction, the difference between any amount realized
on such disposition and the amount treated as ordinary income upon the exercise
of the SAR will be treated as a capital gain or loss (provided the shares of
Common Stock were held as a capital asset on the date of disposition), which
will be a long or short-term capital gain or loss depending on the holding
period of the shares of Common Stock, and taxed at the same rate as ordinary
income.
The exercise of a NSO by, or the payment of a SAR with common stock to, a
nonemployee Director or an employee subject to the provisions of Section 16(b)
of the Exchange Act will be a taxable event on the date of such exercise or
payment.
LIMITATION OF AMENDMENTS. The proposed amendment to the Plan includes an
addition to Section 12 which limits the number of amendments to the provisions
regarding options and SARs granted to nonemployee Directors to no more than one
every six months. This amendment was deemed necessary to comply with official
interpretations of Rule 16b-3, as revised, adopted by the Securities and
Exchange Commission under the Exchange Act.
OTHER MATTERS
The Board of Directors of the Company knows of no business to be presented
at the annual meeting other than that stated in the notice of such meeting. In
the event, however, that other matters properly come before the meeting or any
adjournment thereof, it is intended that the persons named in the accompanying
Proxy and acting thereunder will vote in accordance with their best judgment.
Regardless of the number of shares owned by you, it is important that they
be represented at the meeting, and you are respectfully requested to sign, date
and return the accompanying Proxy at your earliest convenience.
ANNUAL REPORT
The annual report to stockholders, including consolidated financial
statements for the years ended December 31, 1993 and 1992, has been mailed to
all stockholders.
FORM 10-K REPORT
UPON THE WRITTEN REQUEST OF EACH STOCKHOLDER SOLICITED HEREBY, ADDRESSED TO
THE COMPANY, ATTENTION: J. RANKIN TIPPINS, SECRETARY, 10500 WESTOFFICE DRIVE,
HOUSTON, TEXAS 77042, THE COMPANY WILL PROVIDE WITHOUT CHARGE A COPY OF ITS
ANNUAL REPORT ON FORM 10-K, INCLUDING THE FINANCIAL STATEMENTS AND SCHEDULES
THERETO, REQUIRED TO BE FILED WITH THE SECURITIES AND EXCHANGE COMMISSION
PURSUANT TO RULE 13A-1 UNDER THE SECURITIES EXCHANGE ACT OF 1934 FOR THE YEAR
ENDED DECEMBER 31, 1993. ANY BENEFICIAL OWNER MAKING SUCH A REQUEST MUST SET
FORTH THEREIN A GOOD-FAITH REPRESENTATION THAT AS OF MARCH 14, 1994, HE OR SHE
WAS A BENEFICIAL OWNER OF THE COMPANY'S SECURITIES ENTITLED TO VOTE AT THE
ANNUAL MEETING OF STOCKHOLDERS.
By Order of the Board of Directors.
J. RANKIN TIPPINS
GENERAL COUNSEL AND SECRETARY
March 30, 1994
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APPENDIX A
TECH-SYM CORPORATION
1990 STOCK OPTION PLAN
1. PURPOSE
The purpose of the Tech-Sym Corporation 1990 Stock Option Plan (the 'Plan')
is to advance the interests of Tech-Sym Corporation (the 'Company') and its
Subsidiaries (as defined below) by providing incentive awards and stock
ownership opportunities to those key employees (including officers and directors
who are employees) who contribute significantly to the performance of the
Company and its Subsidiaries ('Key Employees') and stock ownership opportunities
to the members of the Board of Directors of the Company (the 'Board') who are
not employees of the Company or a Subsidiary ('Nonemployee Directors'). In
addition, the Plan is intended to enhance the ability of the Company and its
Subsidiaries to attract and retain individuals of superior managerial ability
and to motivate such individuals to exert their best efforts towards future
progress and profitability of the Company and its Subsidiaries.
For purposes of the Plan, a Subsidiary shall be any corporation in which the
Company has a direct or indirect ownership interest of 50% or more of the total
combined voting power of all classes of stock in such corporation.
2. ADMINISTRATION AND INTERPRETATION
a. ADMINISTRATION. The Plan shall be administered by a committee (the
'Committee') consisting of not less than three members of the Board appointed by
and serving at the pleasure of the Board; provided that each member shall be a
'disinterested person' within the meaning of paragraph (d)(3) of Rule 16b-3
which has been adopted by the Securities and Exchange Commission under the
Securities Exchange Act of 1934, as such Rule or its equivalent is in effect
from time to time. The Board may from time to time appoint members of the
Committee in substitution for or in addition to members previously appointed and
may fill vacancies, however caused, in the Committee. The Committee may
prescribe, amend and rescind rules and regulations for the administration of the
Plan and shall have the full power and authority to construe and interpret the
Plan. A majority of the members of the Committee shall constitute a quorum and
the acts of a majority of the members present at a meeting or the acts of a
majority of the members evidenced in writing shall be the acts of the Committee.
The Committee may correct any defect or any omission or reconcile any
inconsistency of the Plan or in any award or grant made hereunder in the manner
and to the extent it shall deem desirable.
The Committee shall have the full and exclusive right to grant all Options
and SARs (both as defined below), other than the automatic grant of Options and
SARs to Nonemployee Directors as provided in Section 5 below. In granting
Options or SARs, the Committee shall take into consideration the contribution
the employee has made or may make to the success of the Company or its
Subsidiaries and such other considerations as the Committee shall determine. The
Committee shall also have the authority to consult with and receive
recommendations from officers and other employees of the Company and its
Subsidiaries with regard to these matters. In no event shall any employee, his
legal representatives, heirs, legatees, distributees, or successors have any
right to participate in the Plan, except to such extent, if any, as the
Committee shall determine.
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The Committee may from time to time in granting Options or SARs under the
Plan prescribe such other terms and conditions concerning such Options or SARs
as it deems appropriate, provided that such terms and conditions are not more
favorable to the Key Employee than those expressly set forth in the Plan.
The day-to-day administration of the Plan may be carried out by such
officers and employees of the Company and its Subsidiaries as shall be
designated from time to time by Committee.
b. INTERPRETATION. The interpretation and construction by the Committee of
any provisions of the Plan or of any award or grant under the Plan and any
determination by the Committee under any provision of the Plan or any such award
or grant shall be final and conclusive for all purposes.
c. LIMITATION ON LIABILITY. Neither the Committee nor any member thereof
shall be liable for any act, omission, interpretation, construction or
determination made in connection with the Plan in good faith, and the members of
the Committee shall be entitled to indemnification and reimbursement by the
Company in respect of any claim, loss, damage or expense (including counsel
fees) arising therefrom to the full extent permitted by law and under any
directors and officers liability insurance coverage that may be in effect from
time to time.
3. SHARES SUBJECT TO AWARDS UNDER THE PLAN
a. LIMITATION ON NUMBER OF SHARES. The shares subject to grants of Options
and SARs shall be shares of the Company's authorized but unissued common stock,
par value $.10 per share, and shares, if any, of such common stock that are
issued but not outstanding and held as treasury stock by the Company ('Common
Stock'). Subject to adjustment as hereinafter provided, the aggregate number of
shares of Common Stock as to which Options and/or SARs may be granted under the
Plan shall not exceed 858,000 shares.
Shares of Common Stock ceasing to be subject to an Option or SAR because of
the exercise of such Option or SAR shall no longer be subject to any further
grant under the Plan. If any outstanding Option or SAR, in whole or in part,
expires or terminates unexercised or is cancelled for any reason prior to
January 1, 2000, the shares of Common Stock allocable to the unexercised,
terminated, cancelled or forfeited portion of such Option or SAR may again be
made the subject of grants under the Plan.
b. ADJUSTMENTS OF AGGREGATE NUMBER OF SHARES. The aggregate number of
shares of Common Stock stated in Section 3(a) shall be subject to appropriate
adjustment, from time to time, in accordance with the provisions of Section 6
hereof. In the event of a change in the Common Stock of the Company that is
limited to a change in the designation thereof to 'Capital Stock' or other
similar designation, or to a change in the par value thereof, or from par value
to no par value, without increase or decrease in the number of issued shares,
the shares resulting from any such change shall be deemed to be Common Stock
within the meaning of the Plan.
4. ELIGIBILITY
The individuals eligible to receive Options and/or SARs under the Plan shall
be those Key Employees as the Committee form time to time shall determine. In
addition, each Nonemployee Director shall automatically receive Options and SARs
under the Plan as provided in Section 5 below.
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5. STOCK OPTIONS AND STOCK APPRECIATION RIGHTS
a. GRANTS OF OPTIONS.
(1) IN GENERAL. Options granted under the Plan may be either
'Incentive Stock Options' or 'Non-qualified Stock Options' (both as defined
below and collectively referred to as 'Options'), or both. Options granted
under the Plan shall be of such type and for such number of shares of Common
Stock, subject to such terms and conditions as the Committee shall
designate.
The Committee may grant Incentive Stock Options and/or Non-qualified
Stock Options to Key Employees at any time and from time to time before
January 1, 2000.
(2) INCENTIVE STOCK OPTIONS. The term 'Incentive Stock Option' shall
mean an Option, or portion thereof, that is intended to qualify as an
incentive stock option under Section 422A of the Internal Revenue Code of
1986, as amended (the 'Code').
(3) NON-QUALIFIED STOCK OPTIONS. The term 'Non-qualified Stock Option'
shall mean any Option, or portion thereof, that is not an Incentive Stock
Option. Except as specifically provided herein, the provisions of this Plan
shall apply in the same manner to Incentive Stock Options and to
Non-qualified Stock Options.
b. GRANTS TO STOCK APPRECIATION RIGHTS.
(1) IN GENERAL. The term stock appreciation right or 'SAR' shall mean
the right to receive from the Company an amount equal to the Market Value
Per Share (as defined in Section 5c.(4) below) on the exercise date, over
the Market Value Per Share on the date of grant, multiplied by the total
number of shares of Common Stock for which the SAR is exercised. The amount
payable by the Company upon the exercise of a SAR may be paid in cash or in
shares of Common Stock or in any combination thereof as the Committee in its
sole discretion shall determine, but no fractional shares shall be issuable
pursuant to any SAR.
SARs may be granted by the Committee to any Key Employee at any time and
from time to time before January 1, 2000. A SAR may, but need not, relate to
a specific Option granted under this Plan. If a SAR relates to a specific
Option, it may be granted either concurrently with the Option or at any time
prior to the exercise, termination, cancellation or expiration of such
Option.
(2) LIMITATIONS ON SARS. The Committee may fix such waiting periods,
exercise dates or other limitations as it shall deem appropriate with
respect to SARs granted under the Plan; provided, however, that each SAR
granted hereunder shall be exercisable only upon consent of the Committee;
and provided further, that a SAR that relates to a specific Option shall be
exercisable only when and to the extent that the Option to which it relates
is exercisable.
c. TERMS OF OPTIONS AND SARS. Options and SARs granted pursuant to this
Plan shall be evidenced by stock option agreements and/or SAR agreements
respectively (collectively referred to herein as 'agreements') that shall comply
with and be subject to the following terms and conditions and may contain such
other provisions, consistent with this Plan, as the Committee shall deem
advisable. SARs that relate to a specific Option, however, may be evidenced by
stock option agreements or agreements amending and/or forming a part of the
stock option agreements to which such SARs relate. Reference herein to
agreements shall include, to the extent applicable, any amendments to such
agreements.
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(1) PAYMENT OF OPTION EXERCISE PRICE. Upon exercise of an Option, the full
option exercise price for the shares with respect to which the Option is being
exercised shall be payable to the Company (i) in cash or by check payable and
acceptable to the Company or (ii) subject to the approval of the Committee, (a)
by tendering to the Company shares of Common Stock owned by the optionee having
an aggregate Market Value Per Share as of the date of exercise and tender that
is not greater than the full option exercise price for the shares with respect
to which the Option is being exercised and by paying any remaining amount of the
option exercise price as provided in (i) above (provided that the Committee may,
upon confirming that the optionee owns the number of shares being tendered,
authorize the issuance of a new certificate for the number of shares being
acquired pursuant to the exercise of the Option less the number of shares being
tendered upon the exercise and return to the optionee (or not require surrender
of) the certificate for the shares being tendered upon the exercise) or (b) by
the optionee delivering to the Company a properly executed exercise notice
together with irrevocable instructions to a broker to promptly deliver to the
Company cash or a check payable and acceptable to the Company to pay the option
exercise price; provided that in the event the optionee chooses to pay the
option exercise price as provided in (ii)(b) above, the optionee and the broker
shall comply with such procedures and enter into such agreements of indemnity
and other agreements as the Committee shall prescribe as a condition of such
payment procedure. Payment instruments will be received subject to collection.
(2) NUMBER OF SHARES. Each agreement shall state the total number of
shares of Common Stock that are subject to the Option and/or SAR.
(3) EXERCISE PRICE. The exercise price for each Option and SAR shall be
fixed by the Committee at the date of grant, but in no event may such exercise
price per share be less than the Market Value Per Share (as defined below) on
the date of the grant of the Option or SAR.
(4) MARKET VALUE PER SHARE. The Market Value Per Share as of any
particular date shall be determined by any fair and reasonable means determined
by the Committee, which may include, if the Common Stock is listed for trading
on the New York Stock Exchange, the closing price published in the WALL STREET
JOURNAL reports of New York Stock Exchange -- Composite Transactions for the day
of the grant, or if no trade of the Common Stock shall have been reported for
such date, the closing price which is published in the WALL STREET JOURNAL
reports of the New York Stock Exchange -- Composite Transactions for the next
day prior thereto on which a trade of the Common Stock was so reported.
(5) TERM. The term of each Option and/or SAR shall be determined by the
Committee at the date of grant; provided, however, that each Option and/or SAR
shall, notwithstanding anything in the Plan or an agreement to the contrary,
expire ten years from the date the Option or SAR is granted or, if earlier, the
date specified in the agreement at the date of grant of such Option or SAR.
(6) DATE OF EXERCISE. In the discretion of the Committee, each agreement
may contain a provision not inconsistent with Section 8 hereof stating that the
Option and/or SAR granted therein may not be exercised in whole or in part for a
period or periods of time specified in such agreement, subject to Section 8, and
except as so specified therein, any Option or SAR may be exercised in whole at
any time or in part from time to time during its term. The Committee may,
however, at any time, in its sole discretion amend any outstanding Option or SAR
to accelerate the time that such Option or SAR shall be exercisable or to
provide that the time for exercising such Option or SAR shall be accelerated
upon the occurrence of a specified event.
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(7) TERMINATION OF EMPLOYMENT. In the event that an individual's
employment with the Company and its Subsidiaries shall terminate, for
reasons other than (i) retirement with the consent of the Company or the
individual's employing Subsidiary, as the case may be, ('retirement'), (ii)
permanent disability or (iii) death, the individual's Options and/or SARs
shall be exercisable by him, subject to subsections (5) and (6) above, only
within three months after such termination, but only to the extent the
Option and/or SAR was exercisable immediately prior to such termination of
employment.
If, however, any termination of employment is due to retirement or
permanent disability, the individual shall have the right after such
termination of employment, subject to the provisions of subsections (5) and
(6) above, to exercise any outstanding Option and/or SAR in full at any time
during the remaining term is provided therefor in the related agreements.
Whether any termination of employment is due to retirement or permanent
disability shall be determined by the Committee.
If an individual shall die while entitled to exercise an Option and/or
SAR, the individual's estate, personal representative or beneficiary, as the
case may be, shall have the right, subject to the provisions of subsections
(5) and (6) above, to exercise such Option and/or SAR at any time within 12
months from the date of the optionee's death, to the extent that the
optionee was entitled to exercise the same on the day immediately prior to
the optionee's death.
d. EFFECT OF EXERCISE OF OPTIONS AND SARS. The right of an individual to
exercise an Option or SAR shall terminate to the extent that such Option or SAR
is exercised and, to the extent that a SAR relates to a specific Option, the
exercise of the SAR shall terminate a corresponding portion of the related
Option and, conversely, to the extent that such optionee exercises the related
Option, a corresponding portion of such SAR shall terminate.
e. OPTIONS AND SARS GRANTED BY OTHER CORPORATIONS. Options and SARs may be
granted under the Plan from time to time in substitution for stock options and
stock appreciation rights held by employees of corporations who become Key
Employees as a result of a merger or consolidation of the employer corporation
with the Company or a Subsidiary, or the acquisition by the Company or a
Subsidiary of assets of the employer corporation, or the acquisition by the
Company or a Subsidiary of stock of the employer corporation, with the result
that such employer corporation becomes a Subsidiary.
f. OPTIONS AND SARS GRANTED TO NONEMPLOYEE DIRECTORS. Options and SARs
granted to Nonemployee Directors shall be subject to all provisions and terms of
this Plan otherwise applicable thereto, except that notwithstanding such other
provisions and terms of this Plan to the contrary, all Options and SARs granted
to Nonemployee Directors shall be subject to the following provisions:
(1) TYPE AND TERMS OF AWARDS. Each Option granted to a Nonemployee
Director shall be a Non-qualified Stock Option and shall be automatically
accompanied by a SAR for the entire number of shares subject to the Option.
The agreement with respect to each such grant shall provide that the
accompanying SAR, if and to the extent exercised, shall be automatically
paid one-half in cash and one-half in shares of Common Stock except that no
fractional shares of Common Stock shall be issued. All Options and SARs
granted to Directors shall have an exercise price equal to the Market Value
Per Share on the date of grant, shall become exercisable on and after the
first anniversary of the date of grant (except as provided in Section 8) and
shall have a term of ten years unless earlier terminated as provided in (3)
below.
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(2) GRANTING OF AWARDS. Each Nonemployee Director serving on February 15,
1990 shall be granted, effective as of such date, Options and SARs with respect
to 10,000 shares of Common Stock; provided that such grant shall be subject to
(a) the approval of the Plan by the shareholders of the Company at their 1990
annual meeting and (b) the surrender for cancellation of options previously
granted by the Company to such Nonemployee Director covering a number of shares
of Common Stock equal to the lesser of (i) 10,000 shares or (ii) the total
number of shares subject to such previously granted options. Individuals who
later become Nonemployee Directors shall be automatically granted Options and
SARs with respect to 10,000 shares of Common Stock effective as of the date on
which they become a member of the Board. Commencing with the regular annual
meeting of shareholders of the Company in 1991, each Nonemployee Director shall
be automatically granted Options and SARs with respect to an additional 1,000
shares of Common Stock effective as of the date of each regular annual meeting
at which he is re-elected or continues to serve as a Director.
(3) TERMINATION OF SERVICE. In the event that a Nonemployee Director
ceases to be a member of the Board, Options and SARs then held by such
individual shall be exercisable, subject to subsections c.(5) and (6) above,
only within 12 months after such termination of service and only to the same
extent that such Options and SARs were exercisable on the date of such
termination; provided, however, that if the termination is due to the death,
permanent disability or retirement of the individual pursuant to a Company
policy, all Options and SARs held by such Nonemployee Director shall be
exercisable after the date of such termination of service in full at any time
during the remaining term provided therefor in the related agreements, subject
to subsections c.(5) and (6) above.
6. RECAPITALIZATION
The aggregate number of shares stated in Section 3a, the number of shares of
Common Stock to which each outstanding Option and SAR relates, and the exercise
price in respect of each such Option and SAR shall be adjusted in an equitable
manner determined by the Committee, in its sole discretion and without liability
to any person, in the event of (i) a subdivision or consolidation of shares of
Common Stock or other capital adjustments, (ii) the payment of a stock dividend
or a recapitalization or (iii) a 'corporate transaction', as such term is
defined in Treasury Regulation ^ 1.425-1(a)(1)(ii), or any other transaction
which, in the opinion of the Committee, is similar to a 'corporate transaction',
as defined by the said Treasury Regulations as in effect on January 1, 1990,
including, without limitation, any spin-off or other distribution to the
security holders of the Company of securities or property of the Company or a
Subsidiary. The Committee may exercise its discretion to make any such
adjustments on an optionee-by-optionee basis and with respect to all or only
some of the Options or SARs held by an optionee.
7. MERGER OR CONSOLIDATION
Except as otherwise provided in Section 8 below, after a merger of one or
more corporations into the Company in which the Company shall survive, or after
a consolidation of the Company and one or more corporations, in which the
resulting corporation remains, as an independent, publicly-owned corporation, an
optionee shall, at the same cost, be entitled upon the exercise of an Option or
SAR to receive (subject to any required action by stockholders and the
discretion of the Committee as to the payment of cash with respect to a SAR)
such stock, cash and/or securities of the surviving or resulting corporation as
the board of directors of such corporation, in its sole discretion and without
liability to any person, shall determine to be equivalent, as nearly as
practicable, to the nearest whole number
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and class of shares of Common Stock or other securities that were then subject
to such Option or SAR and such shares of stock or other securities shall, after
such merger or consolidation, be deemed to be shares of Common Stock for all
purposes of the Plan and any agreement.
8. CHANGE IN CONTROL
In the event of a Change in Control (as defined below), then,
notwithstanding any other term of this Plan or any agreement to the contrary,
any and all outstanding Options and SARs not fully vested shall automatically
vest in full and, except as provided below with respect to a person subject to
Section 16 of the Securities Exchange Act of 1934, as amended (the 'Exchange
Act'), be immediately exercisable. The date on which such accelerated vesting
and immediate exercisability shall occur (the 'Acceleration Date') shall be the
date of the occurrence of the Change in Control.
A 'Change in Control' shall be deemed to have occurred if:
(a) any 'person,' as such term is used in Section 13(d) and 14(d) of the
Exchange Act (other than the Company, any trustee or other fiduciary holding
securities under an employee benefit plan of the Company, or any company
owned, directly or indirectly, by the stockholders of the Company in
substantially the same proportions as their ownership of stock of the
Company) together with its 'Affiliates' and 'Associates', as such term is
defined in Rule 12b-2 of the Exchange Act, is or becomes the 'beneficial
owner' (as defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of securities of the Company representing 25% or more of the
combined voting power of the Company's then outstanding securities;
(b) during any period of two consecutive years (not including any period
prior to the effective date of this Plan), individuals who at the beginning
of such period constitute the Board, and any new director (other than a
director designated by a person who has entered into an agreement with the
Company to effect a transaction described in clause (a), (c) or (d) of this
definition) whose election by the Board or nomination for election by the
Company's stockholders was approved by a vote of at least two-thirds of the
directors then still in office who either were directors at the beginning of
the period or whose election or nomination for election was previously so
approved, cease for any reason to constitute at least a majority thereof;
(c) the stockholders of the Company approve a merger or consolidation of
the Company with any other company other than (i) a merger or consolidation
which would result in the voting securities of the Company outstanding
immediately prior thereto continuing to represent (either by remaining
outstanding or by being converted into voting securities of the surviving
entity) more than 80% of the combined voting power of the voting securities
of the Company (or such surviving entity) outstanding immediately after such
merger or consolidation, or (ii) a merger or consolidation effected to
implement a recapitalization of the Company (or similar transaction) in
which no 'person' (as hereinabove defined) acquires more than 25% of the
combined voting power of the Company's then outstanding securities; or
(d) the stockholders of the Company adopt a plan of complete liquidation
of the Company or approve an agreement for the sale, exchange or disposition
by the Company of all or a significant portion of the Company's assets. For
purposes of this clause (d), the term 'the sale, exchange or disposition by
the Company of all or a significant portion of the Company's assets' shall
mean a sale or other disposition transaction or series of related
transactions involving assets of the Company or any Subsidiary (including
the stock of any Subsidiary) in which the value of the assets or stock being
sold or otherwise disposed of (as measured by the purchase price being
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paid therefor or by such other method as the Board determines is appropriate
in a case where there is no readily ascertainable purchase price)
constitutes more than 25% of the fair market value of the Company (as
hereinafter defined). For purposes of the preceding sentence, the 'fair
market value of the Company' shall be the aggregate market value of the
outstanding shares of common stock of the Company (on a fully diluted basis)
plus the aggregate market value of the Company's other outstanding equity
securities. The aggregate market value of the shares of common stock of the
Company shall be determined by multiplying the number of shares of the
Company's common stock (on a fully diluted basis) outstanding on the date of
the execution and delivery of a definitive agreement with respect to the
transaction or series of related transactions (the 'Transaction Date') by
the average closing price of the shares of common stock of the Company for
the ten trading days immediately preceding the Transaction Date. The
aggregate market value of any other equity securities of the Company shall
be determined in a manner similar to that prescribed in the immediately
preceding sentence for determining the aggregate market value of the shares
of common stock of the Company or by such other method as the Board shall
determine is appropriate.
Notwithstanding the foregoing, however, a Change in Control shall not be
deemed to have occurred if, prior to the time a Change in Control would
otherwise be deemed to have occurred pursuant to the above provisions, the Board
determines otherwise.
If during the 60-day period following any such Acceleration Date or, with
respect to an Option or SAR granted to an officer or director subject to Section
16(b) of the Exchange Act, the 60-day period following the earlier of the date
that Section 16(b) of the Exchange Act ceases to apply to such person or six
months following the date of grant of such Option or SAR (but not to exceed the
remaining term of such Option or SAR), a participant (or beneficiary thereof)
elects to exercise an Option or SAR, the holder shall receive in cash whichever
of the following amounts is applicable:
(i) with respect to an acquisition of Common Stock described in clause
(a) of the definition of Change of Control, an amount equal to the
Acquisition Spread (as defined below);
(ii) with respect to a change in composition of the Board described in
clause (b) of the definition of Change in Control, an amount equal to the
Spread (as defined below); or
(iii) with respect to stockholder approval of an agreement or adoption
of a plan described in clause (c) or (d) or the definition of Change in
Control, an amount equal to the Merger Spread (as defined below).
Notwithstanding the foregoing provisions of this Section 8, in the case of an
exercise in respect of an Incentive Stock Option, the holder may not receive an
amount in excess of the maximum amount that will enable such option to continue
to qualify as an Incentive Stock Option.
As used in this Section 8, the following terms shall have the meaning
indicated:
(1) The term 'Acquisition Price Per Share' shall mean the greater of (i)
the highest price paid by a person (or an Affiliate or Associate thereof)
for any share of Common Stock acquired prior to, but in connection with, a
Change in Control described in clause (a) of the definition of a Change in
Control or (ii) the highest Market Value Per Share for any day during the
60-day period ending on the date the Option or SAR is exercised.
(2) The term 'Acquisition Spread' shall mean an amount equal to the
product obtained by multiplying (i) the excess of (A) the Acquisition Price
Per Share over (B) the price per share of
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Common Stock at which the Option or SAR is exercisable, by (ii) the number
of shares of Common Stock with respect to which such Option or SAR is being
exercised.
(3) The term 'Merger Price Per Share' shall mean the greater of (i) the
fixed or formula price for the acquisition of shares of Common Stock
specified in such agreement or adoption, if such fixed or formula price is
determinable on the date on which such Option or SAR is exercised, and (ii)
the highest Market Value Per Share for any day during the 60-day period
ending on the date on which such Option or SAR is exercised.
(4) The term 'Merger Spread' shall mean an amount equal to the product
obtained by multiplying (i) the excess of (A) the Merger Price Per Share
over (B) the price per share of Common Stock at which the Option or SAR is
exercisable, by (ii) the number of shares of Common Stock with respect to
which such Option or SAR is being exercised.
(5) The term 'Spread' shall mean an amount equal to the product obtained
by multiplying (i) the excess of (A) the highest Market Value Per Share for
any day during the 60-day period ending on the date the Option or SAR is
exercised over (B) the price per share of Common Stock at which the Option
or SAR is exercisable, by (ii) the number of shares of Common Stock with
respect to which the Option or SAR is being exercised.
The Company intends that this Section 8 shall comply with the requirements
of Rule 16b-3 and any future rules promulgated in substitution therefor ('the
Rule') under the Exchange Act during the term of the Plan. Should any provision
of this Section 8 not be necessary to comply with the requirements of the Rule
or should any additional provisions be necessary for this Section 8 to comply
with the requirements of the Rule, the Board may amend the Plan to add to or
modify the provisions of the Plan accordingly.
9. EMPLOYEE'S AGREEMENT
If, at the time of the exercise of any Option or SAR, in the opinion of
counsel for the Company, it is necessary or desirable, in order to comply with
any then applicable laws or regulations relating to the sale of securities, for
the individual exercising the Option or SAR to agree to hold any shares issued
to the individual for investment and without intention to resell or distribute
the same and for the individual to agree to dispose of such shares only in
compliance with such laws and regulations, the individual will, upon the request
of the Company, execute and deliver to the Company a further agreement to such
effect.
10. WITHHOLDING FOR TAXES
Any cash payment under the Plan shall be reduced by any amounts required to
be withheld or paid with respect thereto under all present or future federal,
state and local tax and other laws and regulations that may be in effect as of
the date of each such payment ('Tax Amounts'). Any issuance of Common Stock
pursuant to the exercise of an Option or other distribution of Common Stock
under the Plan shall not be made until appropriate arrangements have been made
for the payment of any amounts that may be required to be withheld or paid with
respect thereto. Such arrangements may, at the discretion of the Committee,
include allowing the optionee to tender to the Company shares of Common Stock
owned by optionee, or to request the Company to withhold a portion of the shares
of Common Stock being acquired pursuant to the exercise or otherwise distributed
to optionee, which have a Market Value Per Share as of the date of such
exercise, tender or withholding that is not
A-9
<PAGE>
greater than the sum of all Tax Amounts, together with payment of any remaining
portion of all Tax Amounts in cash or by check payable and acceptable to the
Company.
11. TERMINATION OF AUTHORITY TO GRANT AWARDS
No Options or SARs may be granted pursuant to this Plan after December 31,
1999.
12. AMENDMENT AND TERMINATION
The Board may from time to time and at any time alter, amend, suspend,
discontinue or terminate this Plan and any grants hereunder; provided, however,
that no such action of the Board may, without the approval of the stockholders
of the Company, alter the provisions of the Plan so as to (i) increase the
maximum number of shares of Common Stock that may be subject to grants and
distributed in the payment of exercises under the Plan (except as provided in
Section 3b); (ii) change the class of employees eligible to receive grants under
the Plan; (iii) extend beyond ten years the maximum terms of Options or SARs
granted under the Plan or extend the term of the Plan; or (iv) change the
operation of Section 5f., concerning automatic grants to Nonemployee Directors,
unless, in each case, such approval is not required to meet the requirements of
the Rule. Section 5f. may not be amended more than once every six months, other
than to comport with changes in the Internal Revenue Code, the Employee
Retirement Income Security Act or the rules thereunder.
13. PREEMPTION BY APPLICABLE LAWS AND REGULATIONS
Anything in the Plan or any agreement entered into pursuant to the Plan to
the contrary notwithstanding, if, at any time specified herein or therein for
the making of any determination, the issuance or other distribution of shares of
Common Stock, or the payment of consideration to an employee as a result of the
exercise of any SAR, as the case may be, any law, regulation or requirement of
any governmental authority having jurisdiction in the premises shall require
either the Company or the employee (or the employee's beneficiary), as the case
may be, to take any action in connection with any such determination, the shares
then to be issued or distributed, or such payment, as the case may be, shall be
deferred until such action shall have been taken.
14. CHANGE IN CONTROL LIMITATION
Notwithstanding any other provision in the Plan, to the extent that the
acceleration of exercisability of an Option or SAR under this Plan following a
Change in Control, when aggregated with other payments or benefits to the
participant, whether or not payable pursuant to this Plan, would, as determined
by tax counsel selected by the Company, result in 'excess parachute payments'
(as defined in Section 280G of the Code) such parachute payments or benefits
provided to a participant under this Plan shall be reduced to the extent
necessary so that no portion thereof shall be subject to the excise tax imposed
by Section 4999 of the Code, but only if, by reason of such reduction, the
participant's net after tax benefit shall exceed the net after tax benefit if
such reduction were not made. 'Net after tax benefit' shall mean the sum of (i)
all payments and benefits which a participant receives or is then entitled to
receive that would constitute a 'parachute payment' within the meaning of
Section 280G of the Code, less (ii) the amount of federal income taxes payable
with respect to the payments and benefits described in (i) above calculated at
the maximum marginal income tax rate for the year in which such payments and
benefits shall be paid to the participant (based upon the rate for such year as
set forth in the Code at the time of the first payment of the foregoing), less
(iii) the amount of excise taxes imposed with respect to the payments and
benefits described in (i) above by Section 4999 of the Code.
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<PAGE>
15. MISCELLANEOUS
a. NO EMPLOYMENT CONTRACT. Nothing contained in the Plan shall be
construed as conferring upon any employee the right to continue in the employ of
the Company or any Subsidiary.
b. EMPLOYMENT WITH SUBSIDIARIES. Employment by the Company for the purpose
of this Plan shall be deemed to include employment by, and to continue during
any period in which an employee is in the employment of, any Subsidiary.
c. NO RIGHTS AS A STOCKHOLDER. A participant shall have no rights as a
stockholder with respect to shares covered by such participant's Option or SAR
until the date of the issuance of shares to the participant pursuant thereto. No
adjustment will be made for dividends or other distributions or rights for which
the record date is prior to the date of such issuance.
d. NO RIGHT TO CORPORATE ASSETS. Nothing contained in the Plan shall be
construed as giving any participant, such participant's beneficiaries or any
other person, any equity or other interest of any kind, in any assets of the
Company or any Subsidiary or creating a trust of any kind or a fiduciary
relationship of any kind between the Company or a Subsidiary and any such
person.
e. NO RESTRICTION ON CORPORATE ACTION. Nothing contained in the Plan shall
be construed to prevent the Company or any Subsidiary from taking any corporate
action that is deemed by the Company or such Subsidiary to be appropriate or in
its best interest, whether or not such action would have an adverse effect on
the Plan or any grant made under the Plan. No participant, beneficiary or other
person shall have any claim against the Company or any Subsidiary as a result of
any such action.
f. NON-ASSIGNABILITY. A participant shall not have the power or right to
sell, exchange, pledge, transfer, assign or otherwise encumber or dispose of
such participant's interest in any grant under the Plan nor shall such interest
be subject to seizure for the payment of a participant's debts, judgments,
alimony, or separate maintenance or be transferable by operation of law in the
event of a participant's bankruptcy or insolvency and to the extent any such
interest arising under the Plan is awarded to a spouse pursuant to any divorce
proceeding, such interest shall be deemed to be terminated and forfeited
notwithstanding any vesting provisions or other terms herein or in the agreement
evidencing such award.
g. APPLICATION OF FUNDS. The proceeds received by the Company from the
sale of shares pursuant to the Plan will be used for general corporate purposes.
h. SALE OF SUBSIDIARY OR ASSETS. In the event a Key Employee ceases to be
employed by the Company or a Subsidiary as a result of a sale or other
disposition by the Company or a Subsidiary or all or part of the business
operations of the Company or a Subsidiary, the Committee, in its sole
discretion, may accelerate the exercisability of any grant under the Plan, in
whole or in part, as it deems appropriate.
i. GOVERNING LAW; CONSTRUCTION. All rights and obligations under the Plan
shall be governed by, and the Plan shall be construed in accordance with, the
laws of the State of Texas without regard to the principles of conflicts of
laws. Titles and headings to Sections herein are for purposes of reference only,
and shall in no way limit, define or otherwise affect the meaning or
interpretation of any provisions of the Plan.
Amended: February 17, 1994.
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<PAGE>
Graphic and Image Information Appendix
Photographs of the Director Nominees appear adjacent to each Nominee's summary
of qualifications on pages 4 and 5.
A performance graph showing five year cumulative total return among the Company,
the broad market Media General Financial Services Composite Market Value Index
and the peer group of Media General Financial Services Industry Group 171
Index -- Electronic Equipment Manufacturers (which includes the Company)
appears on page 14. The coordinates used in the graph also appear on page 14.
<PAGE>
PROXY TECH-SYM CORPORATION PROXY
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
The undersigned hereby appoint(s) WENDELL W. GAMEL, ROBERT E. MOORE and J.
RANKIN TIPPINS, or any of them, lawful attorneys and proxies of the undersigned
to vote as Proxy at the Annual Stockholders' Meeting of Tech-Sym Corporation
(herein the 'Company') to be held on April 26, 1994, and any adjournment(s)
thereof, according to the number of votes owned by the undersigned as follows:
THE BOARD OF DIRECTORS RECOMMENDS A VOTE 'FOR' PROPOSALS NUMBERED 1, 2 AND 3.
<TABLE>
<S> <C> <C>
PROPOSAL 1. The Election of Directors: FOR nominees listed below WITHHOLD AUTHORITY
(except as marked to vote for all nominees
to the contrary below) listed below
</TABLE>
W. Creech, A. Gallotta, W. Gamel, C. Kraft, R. Moore, C.
Scribner, R. Sloan, J. Teresko, C. Watt
INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL
NOMINEE, WRITE THAT NOMINEE'S NAME HERE:
PROPOSAL 2: Ratification of the appointment of Price Waterhouse as the
independent accountants of the Company.
/ / FOR / / AGAINST / / ABSTAIN
PROPOSAL 3: To approve an amendment to the Tech-Sym Corporation 1990 Stock
Option Plan increasing the maximum number of shares of Common Stock
issuable thereunder from 570,000 to 858,000 shares.
/ / FOR / / AGAINST / / ABSTAIN
(continued and to be signed on other side)
In accordance with their discretion, said Attorneys and Proxies are authorized
to vote upon such other matters or proposals not known at the time of
solicitation of this proxy which may properly come before the meeting.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY
THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED
FOR PROPOSALS 1, 2 AND 3. ANY PRIOR PROXY IS HEREBY REVOKED.
Dated: , 1994
Signature
(Signature if held jointly)
Please sign exactly as your name
appears at the left. When shares
are held by joint tenants, both
should sign. When signing as
attorney, executor, administrator,
trustee or guardian, please give
full title as such. If a
corporation, please sign in full
corporate name by president or
other authorized person. If a
partnership, please sign in
partnership name by authorized
person.
PLEASE MARK, SIGN, DATE, AND RETURN THIS PROXY CARD
PROMPTLY, USING THE ENCLOSED ENVELOPE. THANK YOU.
