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
[ ] Confidential, for use of the Commission only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Sec. 240.14a-11(c) or Sec. 240.14a-12
TECH-SYM CORPORATION
(Name of Registrant as Specified in Its Charter)
_______________________________________________________________________
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of filing fee (Check the appropriate box):
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or Item 22(a)(2) or Schedule 14A.
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
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pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
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Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
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<PAGE>
[LOGO]
TECH-SYM CORPORATION
10500 WESTOFFICE DRIVE
HOUSTON, TEXAS 77042-5391
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
APRIL 30, 1996
To the Stockholders
of Tech-Sym Corporation:
The Annual Meeting of Stockholders of Tech-Sym Corporation will be held
in the Briarpark Room of the Adam's Mark Hotel at 2900 Briarpark Drive at
Westheimer, Houston, Texas, on Tuesday, April 30, 1996, at 10:00 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
LLP as independent accountants for the year 1996.
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 15, 1996, 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 29, 1996
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 Briarpark Room of the Adam's Mark Hotel at 2900 Briarpark Drive at
Westheimer, Houston, Texas, on Tuesday, April 30, 1996, at 10:00 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 29, 1996.
SUBMISSION OF STOCKHOLDER PROPOSALS
In order to be considered for inclusion in the Company's proxy statement
relating to the 1997 annual meeting of stockholders, stockholder proposals
must be received at the Company's principal executive office no later than
November 26, 1996, and must otherwise comply with the requirements of Rule
14a-8 under the Securities Act of 1934, as amended.
VOTING SECURITIES
At the close of business on March 15, 1996, the record date for
determination of stockholders entitled to notice of and to vote at the
meeting, there were outstanding 6,566,751 shares of Common Stock (exclusive of
1,308,600 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 (3,283,376 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 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, 1996, 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
------------------------- -------------------- --------
FMR Corp............................. 679,300(a) 10.34%
82 Devonshire Street
Boston MA 02109-3614
Neuberger & Berman................... 564,600(b) 8.60%
605 Third Avenue
New York NY 10158-3698
Merrill Lynch Trust Company of Texas
as Trustee of the Tech-Sym
Retirement Plan
(the "Trustee").................... 378,539(c) 5.76%
Suite 1150
2121 San Jacinto Street
Dallas, Texas 752015
- ------------
(a) According to an amended Schedule 13G dated February 8, 1996, and filed
with the Securities and Exchange Commission by FMR Corp., FMR had sole
voting power with respect to 14,800 of such shares and sole dispositive
power with respect to all such shares.
(b) According to an amended Schedule 13G dated February 12, 1996, and filed
with the Securities and Exchange Commission by Neuberger & Berman,
Neuberger & Berman had sole voting power with respect to 85,700 of such
shares and shared dispositive power with respect to all such shares.
(c) According to a financial statement as of January 31, 1996, provided by
the Trustee. 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 account. The total number of
shares 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.
2
The following table sets forth as of January 31, 1996, the beneficial
ownership of the Company's Common Stock with respect to each director and
nominee for director, each of the executive officers named in the Summary
Compensation Table below, and all executive officers and directors of the
Company as a group.
AMOUNT AND NATURE OF BENEFICIAL OWNERSHIP
--------------------------------------------
SOLE VOTING OPTIONS
AND EXERCISABLE
NAME OF INDIVIDUAL INVESTMENT WITHIN PERCENT
OR GROUP POWER 60 DAYS OF CLASS
- --------------------------------- ----------- ----------- --------
W. L. Creech..................... 1,000 4,000 *
Michael C. Forrest............... -- -- *
A. A. Gallotta, Jr............... -- 19,000 *
Wendell W. Gamel................. 81,514(a)(b) 33,000 1.74%
Christopher C. Kraft, Jr......... 500 20,000 *
Richard F. Miles................. 819(a) 12,000 *
Robert E. Moore.................. 18,200 13,000 *
Coy J. Scribner.................. 4,837(a) 32,000 *
Rollin J. Sloan.................. -- 14,000 *
Joal A. Teresko.................. 3,400 21,000 *
Ray F. Thompson.................. 18,786(a) 26,000 *
J. Rankin Tippins................ 6,245(a) 16,500 *
Charles K. Watt.................. -- 14,000 *
All directors and executive
officers as a group
(15 persons)................... 147,704 248,900 5.82%
- ------------
* Less than one percent (1%)
(a) Includes shares allocated to the employee through his participation in
the Tech-Sym Retirement Plan.
(b) Includes 5,000 shares held in trust for Mr. Gamel's children in which he
disclaims beneficial ownership.
3
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 1996 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 effective on the date of the 1996
annual meeting of stockholders. The size of the current Board is ten members.
Mr. Rollin J. Sloan, a director since 1983, has attained the age of 75 years
and is therefore ineligible to serve as a director pursuant to the By-laws of
the Company. 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:
W. L. CREECH
Director since 1989 Audit Committee Member Age 68
Since his retirement from the United States Air Force as a Four Star
General in 1984, General Creech has been an independent business
consultant and author. 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.
MICHAEL C. FORREST
Director since 1995 Age 62
Since 1994, Mr. Forrest has served as the Senior Vice President of
Technology and Business Development at Maxus Energy Corporation. Mr.
Forrest joined Maxus in 1992 as Vice Chairman and Chief Operating
Officer and served on its Board from 1992 to 1995, at which time Maxus
was acquired by YPF. Prior to that, Mr. Forrest was president of
Pecten International Co., a subsidiary of Shell U.S.A., and had worked
within the exploration and production divisions of Shell for
thirty-seven years.
4
A. A. GALLOTTA, JR.
Director since 1986 Audit Committee Member Age 63
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 1990, he 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.
WENDELL W. GAMEL
Director since 1966 Age 66
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 since 1983 Compensation Committee Member Age 72
Dr. Kraft has been a consultant to the aerospace industry since his
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 LifeCell Corporation.
ROBERT E. MOORE
Director since 1966 Age 70
Mr. Moore retired as Vice President, Secretary and General Counsel of the
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
Director since 1983 Age 64
From 1972, continuing to the present, Mr. Scribner has been President of
Metric Systems Corporation, a subsidiary of the Company engaged in the
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 information systems.
JOAL A. TERESKO
Director since 1977 Audit Committee Chairman Age 58
Mr. Teresko has been an independent business consultant and Managing
Director of the Laurel Hill Companies for more than the past five years. He
previously served as Vice President of Kennecott Development Company, a
unit of Kennecott Corporation, and Director of Corporate Development for
the former Chemetron Corporation.
CHARLES K. WATT
Director since 1987 Compensation Committee Member Age 58
Since 1988, Dr. Watt has served as Chairman of Scientific Research
Corporation, a company involved in advanced technology products and
services in which both the Company and Dr. Watt have equity interests.
Since April 1990, Professor Watt has been a faculty member and Executive
Assistant to the President at Clemson University. Prior to this
appointment, he served as a laboratory director and faculty member at the
Georgia Institute of Technology and as Director of Defense Test and
Evaluation in the Office of the Secretary of Defense.
5
The Board has standing audit and compensation committees (the "Audit
Committee" and the "Compensation Committee," respectively) that are composed
of directors of the Company. The Board does not have a standing nominating
committee, but considers and selects as a whole directors to fill Board
vacancies that arise between annual meetings of stockholders as well as
nominates candidates for election at such meetings. 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 annual salary 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 granted under the 1980
Stock Option Plan. During 1995, 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 except for committee
chairmen who are paid $250 for attendance at each Board committee meeting
which they chair. 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 $20,000.
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
retirement on or after reaching age 65 or termination of service due to
disability, each such 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 retirement or disability. If a director leaves the Board prior to
reaching age 65 for reasons other than disability, the retirement benefit will
not begin until the director reaches age 65 and, if the director has served
less than ten years as a director, the retirement benefit will be reduced by
10% for each such year.
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 the 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.
6
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 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,
1995, 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 for 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, 1995, 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, 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 Chairman 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.
7
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 Stock 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 Stock. 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 fulfilled.
COMPENSATION COMMITTEE
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 stock
options granted 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. The named 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 with the performance of the prior year taken into account. As a
result, individual performances in 1994 were considered in establishing
salaries during 1995.
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
8
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 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. No
stock options were granted to the named executive officers in 1995.
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.
The Committee determined that a 5% salary increase for Mr. Gamel,
effective May of 1995, was appropriate in light of a 3% cost-of-living
increase, the Company's 7% increase in sales and 20%
9
increase in net income from the prior year, and the 11% increase in the value of
the Company's Common Stock during 1994. The Board of Directors approved the
recommendation of the Committee.
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 financial performance of the Company. Since the Company's
1995 earnings were approximately 7.6% greater than 1994, the Committee
recommended, and the Board approved, a 1995 bonus for Mr. Gamel that was
essentially the same as that awarded for 1994.
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
10
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 1995 (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, 1995,
1994, and 1993. 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 $50,000 or 10% of the total of annual
salary and bonus for any of the named executive officers in any of the years
listed.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
LONG TERM
COMPENSATION
------------
ANNUAL COMPENSATION SECURITIES
-------------------- UNDERLYING ALL OTHER
NAME AND SALARY BONUS OPTIONS/SARS COMPENSATION
PRINCIPAL POSITION YEAR ($) ($)(A) (#)(B) ($)(C)
- ------------------------------------- ----- --------- --------- ------------ ------------
<S> <C> <C> <C> <C> <C>
W. W. Gamel.......................... 1995 325,333 184,000 -0- 8,093
Chairman of the Board, President, and 1994 308,333 186,000 -0- 8,070
Chief Executive Officer 1993 291,333 192,142 30,000 12,549
C. J. Scribner....................... 1995 262,673 65,500 -0- 7,646
President of Metric Systems 1994 250,773 102,107 -0- 9,496
Corporation 1993 238,976 119,932 25,000 12,520
R. F. Thompson....................... 1995 163,167 124,000 -0- 7,425
Vice President, Treasurer, and Chief 1994 154,667 126,000 -0- 7,402
Financial Officer 1993 146,000 134,000 20,000 11,075
R. F. Miles.......................... 1995 183,000 67,920 -0- 5,695
President of Syntron, Inc. 1994 166,000 98,500 -0- 5,678
1993 151,700 145,650 15,000 5,871
J. R. Tippins........................ 1995 126,000 103,204 -0- 7,087
General Counsel and Secretary 1994 119,400 104,265 -0- 7,087
1993 112,667 104,594 15,000 7,961
</TABLE>
- ------------
(a) Incentive 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. The amounts for Messrs. Gamel and Scribner each include
$600 each year for attending Board meetings.
11
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, 1995, the aggregate dollar value
realized upon exercise, the total number of unexercised options and SARs, if
any, held at December 31, 1995, and the aggregate dollar value of
in-the-money, unexercised options and SARs, if any, held at December 31, 1995.
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, 1995, which was
$31.625 per share. THESE VALUES, UNLIKE THE AMOUNTS SET FORTH IN THE COLUMN
HEADED 'VALUE REALIZED,' HAVE NOT BEEN, AND MAY NEVER BE REALIZED. THE
UNDERLYING OPTIONS OR SARS HAVE NOT BEEN, AND MAY NOT BE, EXERCISED; AND
ACTUAL GAINS, IF ANY, ON EXERCISE WILL DEPEND ON THE VALUE OF TECH-SYM COMMON
STOCK ON THE DATE OF EXERCISE. THERE CAN BE NO ASSURANCE THAT THESE VALUES
WILL BE REALIZED. Unexercisable options are those which have not yet vested
under the vesting schedule in the Company's 1990 Stock Option Plan.
<TABLE>
<CAPTION>
AGGREGATED OPTION/SAR EXERCISES
IN 1995 AND FY-END
OPTION/SAR VALUES
NUMBER OF SECURITIES VALUE OF UNEXERCISED,
UNDERLYING UNEXERCISED IN-THE-MONEY
OPTIONS/SARS OPTIONS/SARS
SHARES AT FY-END(#)(A) AT FY-END($)(B)
ACQUIRED ON VALUE ---------------------------- ----------------------------
NAME EXERCISE(#) REALIZED($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ------------------------------------- ----------- ----------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
W. W. Gamel.......................... 4,000 62,500 33,000 6,000 573,750 95,250
C. J. Scribner....................... -0- -0- 32,000 5,000 561,250 79,375
R. F. Thompson....................... -0- -0- 26,000 4,000 457,125 63,500
R. F. Miles.......................... -0- -0- 12,000 3,000 190,500 47,625
J. R. Tippins........................ -0- -0- 16,500 3,000 286,875 47,625
</TABLE>
- ------------
(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.
EXECUTIVE RETIREMENT AGREEMENTS
The executive officers named in the Summary Compensation Table 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, Miles and Tippins are $240,000,
$231,000, $166,000, $195,000, and $128,200, 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
12
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 benefits under the
agreements are completely vested except for those contained in the agreement
with Mr. Miles which provides for 50% vesting after ten years of continuous
employment with an additional 10% each year thereafter until fully vested.
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 executive officers named in the Summary Compensation
Table, which provide that if the employee's employment is terminated during
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. 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 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 858,000 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).
13
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, 1990, through December 31, 1995, with the cumulative
total returns reflected in the Media General Financial Services Composite
Market Value Index (a broad market index which includes over 7,000 publicly
held companies) and the Media General Financial Services Industry Group 171
Index -- Electronic Equipment Manufacturers (a market index reflecting
performance of the Company's peers and 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, 1991, and
that all dividends were reinvested.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN
[LINEAR GRAPH PLOTTED FROM DATA IN TABLE BELOW]
<TABLE>
<CAPTION>
COMPANY 1990 1991 1992 1993 1994 1995
- ---------------------------------- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
TECH-SYM CORPORATION 100 146.58 149.32 232.88 257.53 346.58
ELECTRONIC EQUIPMENT MANUFACTURERS 100 124.59 165.07 237.84 263.98 363.82
COMPOSITE MARKET VALUE 100 129.09 134.25 154.11 152.83 198.15
</TABLE>
ASSUMES $100 INVESTED ON JAN. 1, 1991
ASSUMES DIVIDENDS REINVESTED
FISCAL YEAR ENDING DEC. 31, 1995
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.
14
RATIFICATION OF INDEPENDENT ACCOUNTANTS
PROPOSAL 2: THE BOARD OF DIRECTORS HAS UNANIMOUSLY SELECTED PRICE
WATERHOUSE LLP, AND URGES YOU TO VOTE FOR THE RATIFICATION OF THE APPOINTMENT
OF SUCH FIRM, AS INDEPENDENT ACCOUNTANTS OF THE COMPANY FOR THE YEAR 1996.
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 LLP has been
selected as independent accountants of the Company for the year ending
December 31, 1996, and the Board of Directors proposes the ratification of
such selection. Price Waterhouse LLP 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.
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, 1995 and 1994, 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, SUITE 200, HOUSTON, TEXAS 77042-5391, 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, 1995.
By Order of the Board of Directors.
J. RANKIN TIPPINS
GENERAL COUNSEL AND SECRETARY
March 29, 1996
15
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 30, 1996, 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 AND 2.
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
W. Creech, M. Forrest, A. Gallotta, W. Gamel, C. Kraft, R. Moore,
C. Scribner, 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 LLP as the
independent accountants of the Company.
[ ] 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 AND 2. ANY PRIOR PROXY IS HEREBY REVOKED.
Dated: _________________, 1996
------------------------------
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.
