TECHNICAL COMMUNICATIONS CORPORATION
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD FEBRUARY 12, 1996
To our Stockholders:
Notice is hereby given that the Annual Meeting of Stockholders
(the "Meeting") of Technical Communications Corporation, a
Massachusetts corporation (the "Company"), will be held at the
Company's offices, 100 Domino Drive, Concord, Massachusetts, at
10:00 a.m. on Monday, February 12, 1996:
1. To elect six Directors to serve for the ensuing year or
until their respective successors have been duly elected and
qualified;
2. To ratify the selection of the firm of Arthur Andersen
LLP as auditors for the Company for the fiscal year ending
September 28, 1996;
3. To consider and act upon a proposal to adopt the 1995
Employee Stock Purchase Plan of the Company; and
4. To consider and act upon such other business and matters
or proposals as may properly come before the Meeting or any
adjournments thereof.
Only stockholders of record on the books of the Company at the
close of business on December 15, 1995, are entitled to notice of
and to vote at the Meeting.
Please sign, date and return the enclosed proxy in the enclosed
envelope at your earliest convenience. If you return your proxy,
you may nevertheless attend the Meeting and vote your shares in
person.
All stockholders are cordially invited to attend the Meeting.
By Order of the Board of
Directors,
Edward E. Hicks
Clerk
Concord, Massachusetts
December 27, 1995
IT IS IMPORTANT THAT YOUR SHARES BE REPRESENTED AT THE MEETING.
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE SIGN, DATE
AND MAIL THE ENCLOSED PROXY IN THE ENCLOSED ENVELOPE, WHICH
REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES.
<PAGE>
TECHNICAL COMMUNICATIONS CORPORATION
PROXY STATEMENT
FOR
ANNUAL MEETING OF STOCKHOLDERS
FEBRUARY 12, 1996
Proxies enclosed with this proxy statement are solicited by and
on behalf of the Board of Directors (the "Board of Directors") of
Technical Communications Corporation, a Massachusetts corporation
(the "Company"), for use at the Annual Meeting of Stockholders
(the "Meeting") to be held at the Company's offices, 100 Domino
Drive, Concord, Massachusetts, at 10:00 a.m. on Monday, February
12, 1996, and at any adjournments thereof.
SHARES OUTSTANDING AND VOTING PROCEDURES
Only holders of record of outstanding shares of the Company's
Common Stock as of the close of business on December 15, 1995,
are entitled to notice of and to vote at the Meeting.
As of December 15, 1995, there are 1,254,426 shares of the
Company's Common Stock outstanding and entitled to vote. The
shares of Common Stock are the only voting securities of the
Company. Stockholders are entitled to cast one vote for each
share held of record.
Participants in the Technical Communications Corporation
Employees' Stock Ownership Plan (the "ESOP") who execute proxies
will have the shares allocated to their accounts voted by the
Trustees of the ESOP as they direct. The ESOP also provides that
the Trustees shall vote any shares allocated to participants'
accounts as to which they have not received voting instructions
(as well as unallocated shares) in the same proportion as shares
in participants' accounts as to which voting instructions are
received. The Trustees of the ESOP have indicated that they
intend to follow these pass-through voting provisions of the ESOP
unless doing so would conflict with the requirements of the
Employee Retirement Income Security Act of 1974, as amended
("ERISA"), including but not limited to the prudence requirements
of ERISA. Participants in the ESOP will receive proxies
applicable to their holdings in the ESOP on which they are to
indicate their voting instructions to the Trustees.
If the enclosed proxy is properly marked, signed, and returned in
time to be voted at the Meeting, and is not subsequently revoked,
the shares represented by proxy will be voted in accordance with
the instructions marked thereon. The proxy is in ballot form so
that a specification may be made (i) to grant or withhold
authority to vote for the election of Directors, (ii) to vote for
or against, or abstain from voting on, the adoption of a stock
purchase plan for employees of the Company, and (iii) to vote for
or against, or abstain from voting on, the ratification of the
firm of Arthur Andersen LLP as the Company's auditors. Signed
proxies returned to the Company and not marked to the contrary
will be voted in favor of each of the proposals set forth in the
proxy. Any stockholder may revoke a proxy at any time prior to
its exercise by filing a later-dated proxy or a written notice of
revocation with the Clerk of the Company. Stockholders attending
the Meeting may also revoke their proxies by voting in person at
the Meeting.
<PAGE>
The Board of Directors knows of no other matter to be presented
at the Meeting. If any other matter should be presented at the
Meeting upon which a vote may be properly taken, shares
represented by all proxies received by Management of the Company
will be voted with respect thereto in accordance with the
judgment of the persons named as attorneys in the proxies.
It is expected that this proxy statement and the accompanying
proxy, and an Annual Report to Stockholders, containing financial
statements for the fiscal year ended September 30, 1995, will be
mailed to stockholders on or about December 28, 1995.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table shows, as of December 15, 1995, the ownership
of Common Stock of the Company by any person or group who is
known to the Company to be the beneficial owner of more than 5%
of the Company's Common Stock outstanding as of such date:
[CAPTION]
<TABLE>
Amount and Nature of
Beneficial Ownership Percent of
Name and Address (Number of Shares) (1) Class (1)
<S> <C> <S> <C> <C> <C> <C>
Lawrence A. Kletter and 171,075 (2) 14% (2)
James A. McCalmont,
Trustees,
Technical Communications
Corporation Employees' Stock
Ownership Trust
100 Domino Drive
Concord, MA 01742
Quest Advisory Corporation 78,600 (3) 6% (3)
1414 Avenue of the Americas
New York NY 10019
</TABLE>
________________________________
(1) Unless otherwise indicated, each of the persons
named in the table has sole voting and investment power
with respect to the shares set forth opposite such
person's name. Information with respect to beneficial
ownership is based upon information furnished by each
stockholder.
(2) Held as Trustees for the ESOP and includes 120,521
shares that are allocated to the participants in the
ESOP as well as 50,554 unallocated shares. Each
participant may direct the Trustees as to the manner in
which shares allocated to his or her account shall be
voted. The ESOP provides that the Trustees shall vote
any shares allocated to participants' accounts as to
which they have not received voting instructions (as
well as unallocated shares) in the same proportion as
shares in participants' accounts as to which voting
instructions are received. Messrs. Kletter and
McCalmont disclaim beneficial ownership of these
171,075 shares, except that James McCalmont does not
disclaim beneficial ownership of 6,325 shares allocated
to James McCalmont under the ESOP.
(3) The nature of Quest Advisory Corporation's
("Quest")ownership as set forth herein is based upon
its Schedule 13F on file with the Securities and
Exchange Commission. Quest in its capacity as
investment advisor may be deemed the beneficial owner
of the 78,600 shares indicated in the above table,
which shares are owned by numerous clients of Quest.
<PAGE>
I. ELECTION OF DIRECTORS
THE BOARD OF DIRECTORS OF THE COMPANY RECOMMENDS A VOTE "FOR" THE
ELECTION AS DIRECTORS OF THE NOMINEES LISTED BELOW.
A. NUMBER OF AND NOMINEES FOR DIRECTORS
The Board of Directors of the Company consists of six persons.
Each director will be elected to hold office until the next
Annual Meeting of Stockholders or until his successor is elected
and qualified. The Board of Directors knows of no reason why any
such nominee should be unable or unwilling to serve, but if such
should be the case, proxies may be voted for the election of some
other person, or for fixing the number of directors as a lesser
number. All nominees are currently directors of the Company.
The following table sets forth the year each nominee first become
a director, the position currently held by each nominee with the
Company, the principal occupation of each of the directors during
the past five years, any other directorships held by such person
in any company subject to the reporting requirements of the
Securities Exchange Act of 1934 or in any company registered as
an investment company under the Investment Company Act of 1940,
the age of each nominee, and the number of shares and percentage
of outstanding Common Stock of the Company beneficially owned by
each nominee and by all directors and officers as a group, as of
December 15, 1995.
[CAPTION]
<TABLE>
Amount and Nature
Positions and of Beneficial
Nominee's Name and Year Offices with Ownership Percent of
First Became a Director the Company Age (# of Shares) Class (1)
<S> <C> <C> <S> <C> <C> <C> <C>
Arnold M. McCalmont (2) Chairman 66 24,856 (3) 2%
1961 of the
Board of
Directors
Lawrence A. Kletter (4) Director 40 3,750 (5) 0%
1988
Herbert A. Lerner (6) 1961 Treasurer, 68 2,086 (7) 0%
Director
James A. McCalmont (8) Director 40 9,895 (9) 1%
1991
Philip A. Phalon (10) 1993 President, 66 --- 0%
Director
Victor Sabella (11) 1994 Director 50 --- 0%
All directors and 52,061 (12) 4%
officers as a group (9 persons)
</TABLE>
_________________________
<PAGE>
(1) Unless otherwise indicated, each of the persons named
in the table has sole voting and investment powers with
respect to the shares set forth opposite such person's
name. With respect to each person or group, percentages
are calculated based on the number of shares beneficially
owned plus shares that may be acquired by such person or
group within sixty days upon the exercise of stock
options.
(2) Arnold M. McCalmont has been a director and Chairman
of the Board of the Company since 1961, and was President
of the Company from 1961 through August 22, 1993.
(3) Includes 1,770 and 80 shares owned by Arnold
McCalmont's adult sons, James (and his wife) and Marc.
Also includes 6,325 shares currently allocated to James
McCalmont under the ESOP, 1,800 shares subject to an
option exercisable by James McCalmont within the next
sixty days, and 9,831 shares currently allocated to
Arnold McCalmont under the ESOP. Excludes 171,075 shares
held by James McCalmont as a Trustee of the ESOP, of
which shares James McCalmont disclaims beneficial
ownership, except that James McCalmont does not disclaim
beneficial ownership of 6,325 shares allocated to James
McCalmont under the ESOP. Arnold McCalmont disclaims
beneficial ownership of the shares owned by his sons
(including shares that may be acquired by his son James
McCalmont within sixty days upon exercise of stock
options or shares that are allocated to his son James
McCalmont under the ESOP).
(4) Lawrence A. Kletter has been an attorney with the
Boston law firm of Posternak, Blankstein & Lund since May
1990. Mr. Kletter has practiced law since his graduation
from Columbia Law School in 1982.
(5) Consists solely of shares subject to options
exercisable within the next sixty days. Excludes 171,075
shares held by the ESOP, which Mr. Kletter, as a trustee
of the ESOP, may be deemed to own beneficially. Mr.
Kletter disclaims beneficial ownership of the 171,075
shares owned by the ESOP.
(6) Herbert A. Lerner has been a director of the Company
since 1961, and Treasurer since 1961, with the exception
of 1987. From 1990 until June 1, 1992, he was a Programs
Business Manager with Raytheon Company. Mr. Lerner is
currently an independent consultant.
(7) Includes 1,800 shares that may be acquired by Mr.
Lerner within sixty days upon exercise of stock options.
With respect to shares now owned by him, Mr. Lerner
shares the voting and investment powers with his wife.
(8) James A. McCalmont was Director of Marketing of the
Company from October 24, 1988 through April 29, 1991, and
has been an employee of the Company since 1975.
(9) Excludes 5,050 and 80 shares owned by his father,
Arnold McCalmont, and his brother, Marc, respectively.
Also excludes 9,831 shares currently allocated to Arnold
McCalmont under the ESOP and 171,075 shares held by James
McCalmont as a Trustee of the ESOP. Includes 6,325
shares currently allocated to James McCalmont under the
ESOP and 1,800 shares that may be acquired by James
McCalmont within sixty days upon exercise of a stock
option. James McCalmont
<PAGE>
disclaims beneficial ownership of the shares owned by
his brother, his father, and the ESOP (including shares
that are allocated to his father Arnold McCalmont under
the ESOP), except for 6,325 shares currently allocated to
him under the ESOP.
(10)Philip A. Phalon was Senior Vice-President for
Corporate Marketing for Raytheon Company from 1983
through September 1990, and is currently an independent
consultant.
(11)Victor Sabella is Vice-President and General Manager
of the Optical Scanning Products Division of General
Scanning Inc. His experience includes senior management
positions with Crosscomm Corporation, Analog Devices Inc.
and Textron Inc.
(12)Includes 17,100 shares that the directors and
officers have the right to acquire within sixty days of
December 15, 1995, by the exercise of stock options.
Also includes an aggregate of 27,855 shares that are
allocated to the accounts of officers under the ESOP.
For a discussion of the voting and investment powers with
respect to such shares, see page 2 and footnote (2) on
page 3.
B. MEETINGS OF THE BOARD OF DIRECTORS AND COMMITTEES
The Board of Directors held five (5) meetings during the twelve
months ended September 30, 1995 ("Fiscal Year 1995"). Each of
the directors attended at least 75% of the aggregate of (a) the
total number of meetings of the Board of Directors he was
eligible to attend, and (b) the total number of meetings of all
committees of the Board of Directors on which he served which
were held during Fiscal Year 1995.
The Audit Committee of the Board, of which Messrs. Kletter,
Lerner and Sabella are members, oversees the accounting and tax
functions of the Company, including matters related to the
appointment and activities of the Company's auditors. The Audit
Committee held four (4) meetings during Fiscal Year 1995.
The Compensation Committee of the Board, of which Messrs. Arnold
McCalmont, James McCalmont, Kletter and Phalon are members, did
not meet during Fiscal Year 1995.
During Fiscal Year 1995, the Company did not have a Nominating
Committee or an Operations Committee.
C. COMPENSATION OF DIRECTORS
Directors who are not regular employees of the Company received a
fee of $1,000.00 for each meeting of the Board of Directors
attended during Fiscal Year 1995. During Fiscal Year 1995,
directors received a fee of $500.00 for each meeting of a
committee of the Board of Directors they attended.
In addition, pursuant to the 1990 Non-Employee Director Stock
Option Plan, adopted by the Board of Directors in August 1990 and
approved by the stockholders at the 1991 Annual Meeting, each
director who is not then an employee, who has attended at least
75% of Board Meetings held during the previous fiscal year, and
who is not otherwise ineligible, will receive
<PAGE>
on the date of each Annual Meeting of Stockholders during the
term of said plan an option to purchase 750 shares of Common
Stock at an exercise price of one hundred percent (100%) of the
fair market value of the Common Stock on the date the option is
granted. Each option has a term of five (5) years from the date
of grant and is exercisable in full or in part at any time or
times after the date of grant until the earlier of the expiration
of such term or sixty days after the optionee ceases to serve as
a direct of the Company. Messrs. Kletter and Phalon, the then
currently eligible directors under the 1990 Non-Employee Director
Stock Option Plan, each received an option to purchase 750 shares
following the 1995 Annual Meeting. Messrs. Kletter, Phalon and
Sabella will each receive a similar option following the 1996
Annual Meeting if elected at this meeting to continue on the
Company's Board of Directors.
D. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
On November 17, 1989, the Company established the Technical
Communications Corporation Employees' Stock Ownership Trust (the
"Trust") for the benefit of its employees. The Trust purchased
190,350 shares of the Company's Common Stock with borrowed funds,
and the Company is a guarantor of the loan.
Lawrence A. Kletter, a director of the Company and a partner in
the law firm of Posternak, Blankstein & Lund (securities law
counsel for the Company) and James A. McCalmont, a director and
employee of the Company, are Trustees of the Trust.
E. EXECUTIVE COMPENSATION AND OTHER INFORMATION
Executive Officers. The following table sets forth the names of
all executive officers of the Company, excluding those who are
also directors, which information is set forth above, the year
each first became an executive officer, the position currently
held by each officer of the Company, the principal occupation of
each officer during the past five years, the age of each officer,
and the number of shares and percentage of outstanding Common
Stock of the Company beneficially owned by each officer as of
December 15, 1995.
[CAPTION]
<TABLE>
Amount and
Nature
Positions and of Beneficial
Name and Year First Office with Ownership Percent of
Became a Director the Company Age (# of Shares)(1) Class (1)
<S> <C> <C> <C> <S> <C> <C> <C> <C> <C>
Roland S. Gerard (2) 1995 President and 45 0 0%
(2) 1995 Chief Executive
Officer
John I. Gill (3) 1985 Vice-President, 56 18,093 (4) 1%
Manufacturing
and Technical
Operations
Graham R. Briggs (5) 1992 Vice-President 56 7,606 (6) 1%
Finance and
Administration
</TABLE>
_________________________
<PAGE>
(1) Unless otherwise indicated, each of the persons
named in the table has sole voting and investment
powers with respect to the shares set forth opposite
such person's name. With respect to each person or
group, percentages are calculated based on the number
of shares outstanding plus shares that such person or
group may acquire within sixty days upon the exercise
of stock options.
(2) Mr. Gerard has been employed by the Company
since June 1995. From January 1994 until April 1995 he
was Corporate Vice President of SFA, Inc., a
manufacturer of data communications equipment. From
January 1992 until January 1994 he was President of SFA
Datacom, Inc., a subsidiary of SFA, Inc. From January
1988 to January 1992 he was a Group Vice President of
SFA, Inc. and President of Plantronics Futurecomms,
Inc. and Frederick Electronics Corp., both subsidiaries
of SFA, Inc.
(3) Mr. Gill has been employed by the Company since
August 1983.
(4) Includes 8,093 shares currently allocated to Mr.
Gill under the ESOP and 5,000 shares that may be
acquired by Mr. Gill within sixty days upon exercise of
stock options.
(5) Mr. Briggs has been employed by the Company since
January 1992. From April 1989 until December 1991, he
was the President of Glanford Limited, a financial
consulting company.
(6) Includes 3,606 shares allocated to Mr. Briggs
under the ESOP and 4,000 shares that may be acquired by
Mr. Briggs within sixty days upon exercise of a stock
option.
Summary of Cash and Certain Other Compensation. The following
tables set forth certain summary information concerning
compensation paid or accrued by the Company during Fiscal Year
1995 to its Chief Executive Officer and the other executive
officers of the Company whose annual compensation during Fiscal
Year 1995 exceeded $100,000 (hereafter referred to as the "named
executive officers"):
<PAGE>
SUMMARY COMPENSATION TABLE
Fiscal Year 1995 Compensation
[CAPTION]
<TABLE>
Fiscal All Other
Name and Principal Position Year Salary Bonus Compensation
<S> <C> <C> <C> <C> <C> <C> <C>
Roland S. Gerard (1) 1995 $35,600 $ --- $ 25,080 (2)
President and Chief
Executive Officer
Philip A. Phalon (3) 1995 $ --- $ --- $ 46,000 (4)
President and Chief
Executive Officer
John I. Gill (5) 1995 $111,660 $ 200 $ 420 (7)
Vice-President, Manufacturing
and Technical Operations,
Executive Vice President
</TABLE>
____________________
(1) Mr. Gerard has been employed by Company as
President since June 12, 1995.
(2) Consists entirely of reimbursed relocation
expenses.
(3) Mr. Phalon was Acting President of the Company
from August 25, 1994 to June 11, 1995.
(4) This amount of $46,000 was paid to Phalon Business
Services, Inc., as payment for Mr. Phalon's services to
the Company.
(5) Mr. Gill has been Vice-President, Manufacturing
and Technical Operations from February 13, 1989 to July
31, 1995, and Executive Vice President since August 1,
1995.
(6) This amount of $200 was paid to Mr. Gill for
services rendered in Fiscal Year 1994.
(7) Represents the Company's contribution for the
account of Mr. Gill under the Company's Profit-Sharing
Plan, a plan qualified under Section 401(k) of the Internal
Revenue Code of 1986, as amended (the "Code"). The
contribution is determined by the Board of Directors in
its sole discretion, but may not exceed 15% of the
Company's net profits before taxes for any given Plan
year, nor certain limits imposed by the Internal
Revenue Code.
Stock Options. The following table sets forth certain
information concerning (i) individual grants of stock options to
each of the named executive officers listed below, and (ii) the
unexercised options held as of September 30, 1995, by the named
executive officers:
<PAGE>
OPTIONS AND GRANTS IN LAST FISCAL YEAR
(INDIVIDUAL GRANTS)
[CAPTION]
<TABLE>
Percent of
Options Total Options
Granted Granted to Excercise or
Number of Employees in Base Price Expiration
Name Shares) Fiscal Year ($ per share) Date
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Roland S. Gerard 100,000 100% $7.50 (1) May 25, 2005
</TABLE>
_________________________
(1) This represents a grant of an option to buy
100,000 shares of Common Stock under the Technical
Communications Corporation 1991 Stock Option Plan,
which is exercisable as follows: (i) 20% on 5/25/96 at
an exercise price of $7.50 per share (the fair market
value on the date of grant), (ii) an additional 20% on
5/25/97 at an exercise price of $8.25 per share, (iii)
an additional 20% on 5/25/98 at an exercise price of
$9.08 per share, (iv) an additional 20% on 5/25/99 at
an exercise price of $9.98 per share, and (v) an
additional 20% on 5/25/2000 at an exercise price of
$10.98 per share.
AGGREGATED FISCAL YEAR-END OPTION VALUES
[CAPTION]
<TABLE>
Value of Unexercised
Number of Unexercised In-the-Money Options
Options at Fiscal Year-end at Fiscal Year-End (1)
Name Exercisable NotExercisable Exercisable Not Exercisable
<S> <C> <C> <C> <C> <C> <S>
John I. Gill 5,000 (2) --- 21,250 ---
Graham R. Briggs 4,000 (3) 6,000 (3) --- ---
</TABLE>
_____________________
(1) Value is based on the difference between the
option exercise price and the fair market value at
November 29, 1995 ($8.25 per share) multiplied by the
number of shares underlying the in-the-money portion of
the option.
(2) This represents an incentive stock option to
purchase 5,000 shares of Common Stock under the
Technical Communications Corporation Incentive Stock
Option Plan granted on 10/21/87, which is exercisable
in full at an option price of $4.00 per share. The
expiration date of this grant is 10/21/97.
(3) This represents a non-qualified option to purchase
10,000 shares of Common Stock under the Technical
Communications Corporation 1991 Stock Option Plan
granted on 2/28/92, which is exercisable at an option
price of $12.75 per share as follows: (i) 20% on
2/27/94, (iii) an additional 20% on 2/27/95, (iv) an
additional 35% on 2/27/96, and (v) an additional 25% on
2/27/97. The expiration date of this grant is 2/28/02.
<PAGE>
Compliance with Section 16(a) of the Securities Exchange Act.
Section 16(a) of the Securities Exchange Act of 1934, as amended,
requires the Company's officers and directors, and persons who
beneficially own more than ten percent of a registered class of
the Company's equity securities, to file reports of ownership and
changes in ownership with the Securities and Exchange Commission.
Officers, directors and greater-than-ten-percent shareholders are
required by regulation to furnish the Company with copies of all
Section 16(a) reports they file. Based solely on the Company's
review of the copies of such forms received and written
representations from certain reporting persons that they were not
required to file, the Company believes that during Fiscal Year
1995, there were no delinquencies in filing Forms 4 in a timely
manner.
II. PROPOSAL TO APPROVE THE 1995 EMPLOYEE STOCK PURCHASE PLAN
On November 15, 1995, the Board of Directors adopted an employee
stock purchase plan (the "Stock Purchase Plan"), subject to
stockholder approval. A total of 100,000 shares of Common Stock
(subject to adjustment for capital changes) in the aggregate may
be granted under the Stock Purchase Plan. The complete text of
the Stock Purchase Plan is attached hereto as Appendix A.
Purpose. The purpose of the Stock Purchase Plan is to
provide incentives to employees of the Company by providing them
with opportunities to purchase stock in the Company pursuant to
options which are intended to constitute options issued pursuant
to an "employee stock purchase plan" within the meaning of
Section 423 of the Code.
Administration. The Stock Purchase Plan is administered by
the Board of Directors of the Company which, in its discretion,
may appoint a committee consisting of not less than three members
of the Board of Directors. The interpretation or construction of
the Stock Purchase Plan by the Board of Directors or of the
committee, if any, shall be final.
Eligible Participants. All employees of the Company or any
of its participating subsidiaries who have completed at least one
year of employment with the Company or any of its subsidiaries
are eligible to receive options to purchase the Company's Common
Stock under the Stock Purchase Plan. In no event, however, may
an employee be granted an option under the Stock Purchase Plan
if, immediately after the option were granted he would be
considered to own or hold options to purchase stock comprising 5%
or more of the Common Stock of the Company. For purposes of the
Plan, the term "employee" does not include employees whose
customary employment is 20 hours or less per week or not more
than five months in any calendar year. In order to comply with
the Code, the Stock Purchase Plan provides that no employee will
be granted an option which permits his rights to purchase Common
Stock under the Stock Purchase Plan to accrue at a rate which
exceeds $25,000 of fair market value of the Company's Common
Stock (determined at the time such option is granted ) for each
calendar year in which such option is outstanding at any time.
Terms of the Plan; Withholding and Exercise. The Stock
Purchase Plan provides for a 12 month "Payment Period" (October 1
through September 30) except during its initial year, during
which the Payment Period is from January 1, 1996 through
September 30, 1996. During the Payment Period, payroll
deductions are accumulated under the Plan for each eligible
employee who has elected to participate in the Stock Purchase
Plan. Deductions may be increased or decreased at an employee's
request only once in any Payment Period. An
<PAGE>
employee may withdraw from the Stock Purchase Plan in whole or in
part at any time prior to the last business day of any Payment
Period, and may not rejoin the Stock Purchase Plan until the
beginning of the next Payment Period.
On the first business day of each Payment Period, each
eligible employee participating in the Stock Purchase Plan is
granted an option to purchase shares of the Common Stock on the
last day of such Payment Period. Each eligible employee who
continues to be a participant in the Stock Purchase Plan will
automatically exercise his option and will purchase the number of
shares which his accumulated payroll deductions on the last day
of such Payment Period will allow him to purchase at the Option
Price (as defined below). Subject to certain limitations, any
unused payroll deductions for a Payment Period will be carried
forward to the next succeeding Payment Period (without interest).
Option Price. The Option Price per share for each Payment
Period will be the lesser of 85% of the market price of the
Common Stock on the first business day of the Payment Period or
85% of the market price of the Common Stock on the last business
day of the Payment Period (subject to adjustment for rounding).
Amendments and Termination of the Plan. The Board of
Directors may amend the Stock Purchase Plan in any respect at any
time, except that, without the prior approval of the
stockholders, (i) the aggregate number of shares of Common Stock
to be offered under the Stock Purchase Plan may not be increased
(other than an increase merely reflecting a change in
capitalization such as a stock dividend or split-up), or (ii) the
class of employees eligible to receive options under the Stock
Purchase Plan may not be changed. The Board may also terminate
the Stock Purchase Plan at any time, and the Stock Purchase Plan
will automatically terminate when all or substantially all of the
unissued shares of capital stock reserved for the purposes of the
Stock Purchase Plan have been purchased.
Non-Assignability. An employee's rights under the Stock
Purchase Plan may not be transferred or assigned. Options
granted to an employee may be exercised only by such employee,
except that in certain limited circumstances options may be
exercised by the legal representative of a disabled or deceased
employee.
Termination of Employee's Rights. An employee's rights
under the Stock Purchase Plan will terminate when he ceases to be
an employee for any reason, except that disability lasting for
not more than 90 days will not be deemed to be a termination of
employment for purposes of the Stock Purchase Plan. In the event
of disability lasting more than 90 days, the employee's rights
under the Stock Purchase Plan will terminate, except that he may
elect to have all accumulated payroll deductions applied to the
purchase of stock under the stock Purchase Plan. Upon
termination of an employee's rights, all accumulated payroll
deductions will be refunded except as noted.
Federal Income Tax Consequences. No taxable income will be
recognized for Federal income tax purposes by a participant in
the Stock Purchase Plan either at the time an option is granted
to him under the Stock Purchase Plan (the first business day of a
Payment Period) or at the time the option is exercised and shares
of stock are purchased (the last business day of the Payment
Period). The participant will be taxed when the stock received
on exercise of the option is sold and any gain realized on the
sale generally will be treated as a long-term capital gain.
<PAGE>
If, however, a participant disposes of stock acquired under
the Stock Purchase Plan within two years from the date of the
grant of the option under which he purchased that stock (a
"disqualifying disposition"), the participant will realize
ordinary income in the year of the disqualifying disposition in
an amount equal to the excess of (i) the fair market value of the
stock at the time of purchase over (ii) the purchase price for
the stock (i.e., 85% of the lesser of the fair market value of
the stock on the first business day or the last business day of
the Payment Period for which the option was granted). The amount
of ordinary income realized by the participant will be added to
his basis in the stock (subject to the disqualifying
disposition), and the participant will recognize a capital gain
or loss (which will be long-term if the stock has been held for
more than one year) in an amount equal to the difference between
the amount realized upon the disqualifying disposition and his
basis in the disposed-of-stock.
If a participant disposes of stock acquired under the Stock
Purchase Plan more than two years after the first business day of
the Payment Period in which the underlying option was granted to
him, the participant will realize ordinary income in the year of
the disposition in an amount equal to the lesser of (i) the
excess of the fair market value of the stock at the time of
disposition over the purchase price for the stock, or (ii) 15% of
the fair market value of the stock at the time the underlying
option was granted. The amount of ordinary income realized by
the participant will be added to his basis in the stock, and any
gain recognized on the disposition in excess of the ordinary
income realized will be long-term capital gain. If the fair
market value at the time of the disposition is less than the
purchase price for the stock, the participant will recognize no
ordinary income and any loss realized on the disposition will be
a long-term capital loss.
If, at the time of a participant's death, he still owns
stock acquired under the Stock Purchase Plan, then, at that time,
he will realize ordinary income in an amount equal to the lesser
of (i) the excess of the fair market value of the stock on the
date of death over the purchase price for the stock, or (ii) 15%
of the fair market value of the stock at the time the underlying
option was granted.
There will be no Federal income tax consequences to the
Company when it grants options under the Stock Purchase Plan or
when those options are exercised. In addition, no Federal income
tax deduction will be allowed to the Company upon the sale or
other disposition by any participant of stock acquired under the
Stock Purchase Plan if the participant has held the stock for
more than two years since the underlying option was granted to
him. (The Company is also allowed no deduction upon the death of
a participant then holding stock acquired under the Stock
Purchase Plan). If, however, a participant disposes of stock
acquired under the Stock Purchase Plan within two years after the
grant of the underlying option, the Company will be entitled to a
deduction in the year of the disposition in an amount equal to
the amount of ordinary income realized by the participant as a
result of the disposition.
No shares of Common Stock have been purchased by employees
under the Stock Purchase Plan since the inception of the Stock
Purchase Plan.
Approval of the Stock Purchase Plan will require the
affirmative vote of stockholders holding a majority of the
Company's shares present in person or by proxy and entitled to
vote at the Annual Meeting. The Board of Directors recommends a
vote FOR the approval of the Stock Purchase Plan. If such
approval is not obtained on or before November 15, 1996, any
<PAGE>
options granted under the Stock Purchase Plan and the Stock
Purchase Plan itself shall be null and void.
III. RATIFICATION OF SELECTION OF AUDITORS
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE RATIFICATION
OF THE SELECTION OF ARTHUR ANDERSEN LLP AS AUDITORS.
The Board of Directors has selected the firm of Arthur Andersen
LLP, independent certified public accountants, to service as
auditors for the fiscal year ending September 29, 1996. Arthur
Andersen LLP served as the Company's auditors for Fiscal Year
1995.
It is expected that a member of the firm of Arthur Andersen LLP
will be present at the Meeting and will be available to respond
to appropriate questions.
IV. OTHER MATTERS
The Board of Directors of the Company is not aware of any matter,
other than those described above, that may come before the
meeting. However, if any matters are properly presented to the
meeting for action, it is intended that the persons named in the
enclosed proxy will vote on such matters in accordance with their
best judgment.
PROPOSALS OF STOCKHOLDERS
It is currently contemplated that the 1997 Annual Meeting of
Stockholders will be held on February 10, 1997. Proposals of
stockholders intended to be present at that annual meeting of
stockholders must be received by the Company at its principal
executive offices no later than August 31, 1996, for inclusion in
the Proxy Statement and Form of Proxy relating to that meeting
and must comply with the applicable requirements of federal
securities laws. In order to curtail controversy as to the date
on which a proposal was received by the Company, it is suggested
that proponents submit their proposals by certified mail, return
receipt requested.
EXPENSES AND SOLICITATION
The cost of the solicitation of proxies will be borne by the
Company. Proxies will be solicited principally through the
mails. Further solicitation of proxies from some stockholders may
be made by directors, officers, and regular employees of the
Company, personally, by telephone, telegraph, or special letter.
No additional compensation, except for reimbursement of
reasonable out-of-pocket expenses, will be paid for any such
further solicitation. In addition, the Company may request
banks, brokers and their custodians, nominees and fiduciaries to
solicit customers of theirs who have shares of the Company
registered in the name of a nominee. The Company will reimburse
any such persons for their reasonable out-of-pocket costs.
ADDITIONAL INFORMATION
The Company will provide, without charge to each stockholder
entitled to a vote at the annual meeting, a copy of the Company's
Annual Report to the Securities and Exchange Commission
<PAGE>
on Form 10-K for the year ending September 30, 1995. A request
for copies of such report should be addressed to the Company at
100 Domino Drive, Concord, Massachusetts 01742, Attention:
Investor Relations.
<PAGE>
APPENDIX A
<PAGE>
TECHNICAL COMMUNICATIONS CORPORATION
1995 EMPLOYEES' STOCK PURCHASE PLAN
1. Purpose of the Plan. The Plan is intended to encourage
ownership of Common Stock by employees of the Company and to
provide additional incentive for employees to promote the success
of the business of the Company by enabling Eligible Employees to
purchase shares of Common Stock at a discount from market value
through a payroll deduction program. Any Eligible Employee who
wishes to participate in the Plan may authorize the Company to
withhold a percentage of his or her Gross Compensation (not to
exceed the maximum percentage specified by the Company) through
payroll deductions, for a specified period of time, and, at the
end of such period, use such accumulated payroll deductions to
purchase shares of Common Stock of the Company. It is intended
that the Plan shall be an "employee stock purchase plan" within
the meaning of Section 423 of the Code.
2. Definitions. As used in the Technical Communications
Corporation Employees' Stock Purchase Plan, the following terms
shall have the meanings respectively assigned to them below:
(a) Beneficiary means the person designated as beneficiary
on the Optionee's Membership Agreement or, if no such beneficiary
is named, the person to whom the Option is transferred by will or
under the applicable laws of descent and distribution.
(b) Board means the Board of Directors of the Company.
(c) Code means the Internal Revenue Code of 1986, as
amended.
(d) Company means Technical Communications Corporation, a
Massachusetts corporation.
(e) Common Stock means the Common Stock, $.01 par value, of
the Company.
(f) Eligible Employee means a person who is eligible under
the provisions of Section 7 to receive an Option as of a
particular Grant Date.
(g) Exercise Date means a date not less than six months and
not more than one year after a Grant Date, as determined by the
Board, on which Options must, if ever, be exercised.
(h) Grant Date means a date specified by the Board on which
Options are to be granted to Eligible Employees.
(i) Gross Compensation means base compensation plus
commissions and overtime pay but without regard to cash bonuses.
(j) Market Value means, as of a particular date, the last
sale price of the Common Stock if such Common Stock is reported
on a stock exchange, or if not so reported, the average of bid
and asked prices of the Common Stock last quoted by NASDAQ in the
over-the-counter market.
(k) Membership Agreement means an agreement whereby an
Optionee authorizes the Company to withhold payroll deductions
from his or her Gross Compensation.
(l) 1934 Act means the Securities Exchange Act of 1934, as
amended.
<PAGE>
(m) Option means an option to purchase Option Shares
granted under the Plan.
(n) Option Shares means shares of Common Stock purchasable
under an Option.
(o) Optionee means an Eligible Employee to whom an Option
is granted.
(p) Plan means this Technical Communications Corporation
1995 Employees' Stock Purchase Plan, as the same may be amended
from time to time.
(q) Rule 16b-3 means Rule 16b-3 promulgated under Section
16 of the 1934 Act, as amended.
(r) Section 16 means Section 16 of the 1934 Act, as
amended.
3. Term of the Plan. The Plan shall become effective on
January 1, 1996 and shall terminate on September 30, 2006, unless
sooner terminated by the Board pursuant to Section 5 hereof.
4. Administration of the Plan. The Plan shall be
administered by the Board, which annually shall determine whether
to grant Options under the Plan, shall specify which dates shall
be Grant Dates and Exercise Dates, and shall fix the respective
maximum percentages of each Optionee's Gross Compensation which
may be withheld for the purpose of purchasing Option Shares,
provided that such percentage shall not exceed ten percent of
such Optionee's Gross Compensation. The Board shall have
authority to interpret the Plan, to prescribe, amend and rescind
rules and regulations relating to the Plan, to determine the
terms of Options granted under the Plan, and to make all other
determinations necessary or advisable for the administration of
the Plan.
The Board may appoint a committee of three or more
directors, who shall each serve at the pleasure of the Board, to
administer the Plan on behalf of the Board, subject to such terms
and conditions as the Board may prescribe. The Board, in its
sole and absolute discretion, may designate any or all of the
functions specified herein regarding administration of the Plan
to such committee.
With respect to an Optionee subject to Section 16 (a
"Section 16 Optionee"), transactions under the Plan are intended
to comply with all applicable conditions of Rule 16b-3 (or its
successors). To the extent any provision of the Plan or action
by the Board with respect to the Plan fails to so comply, it
shall be deemed null and void.
5. Termination and Amendment of Plan. The Board may
terminate or amend the Plan at any time; provided, however, that
no amendment, unless approved by the holders of a majority of the
issued and outstanding shares of Common Stock, shall be effective
if it would cause the Plan to fail to satisfy the requirements of
Rule 16b-3 (or its successors); and, provided further, that (i)
any increase in the aggregate number of shares that may be issued
under the Plan, other than an increase merely reflecting a
capital change referred to in Section 9.8, and (ii) any change in
the designation of corporations whose employees may be offered
Options (other than a change designating as a participating
corporation any corporation that becomes a parent or subsidiary
corporation of the Company, within the meaning of Code Section
424(e) and (f), after the adoption of the Plan), must, in order
to be effective, be approved by a majority of the issued and
outstanding shares of Common Stock. No termination of or
amendment to the Plan may adversely affect the rights of an
Optionee with respect to any Option held by the Optionee as of
the date of such termination or amendment.
6. Shares of Stock Subject to the Plan. No more than an
aggregate of 100,000 shares of Common Stock may be issued or
delivered pursuant to the exercise of Options granted under the
Plan, subject to adjustments made in accordance with Section 9.8.
Option Shares may be either shares of Common Stock which are
authorized but unissued or shares of Common Stock held by the
Company in its treasury. If an
<PAGE>
Option expires or terminates for any reason without having been
exercised in full, the unpurchased Option Shares shall become
available for other Options granted under the Plan. The Company
shall, at all times during which Options are outstanding, reserve
and keep available shares of Common Stock sufficient to satisfy
such Options and shall pay all fees and expenses incurred by the
Company in connection therewith. In the event of any capital
change in the outstanding Common Stock as contemplated by Section
9.8, the number of Option Shares reserved and kept available by
the Company shall be appropriately adjusted.
7. Persons Eligible to Receive Options. Each employee of
the Company shall be granted an Option on each Grant Date on
which such employee meets all of the following requirements:
(a) The employee has completed at least one year of
continuous employment with the Company. Employment shall include
any leave of absence for military service, illness or other bona
fide purpose which does not exceed the longer of 90 days or the
period during which the absent employee's reemployment rights are
guaranteed by statute or contract.
(b) The employee is customarily employed by the Company for
more than 20 hours per week or for more than five months per
calendar year.
(c) The employee will not, immediately after grant of the
Option, own stock possessing five percent or more of the total
combined voting power or value of all classes of stock of the
Company. For purposes of this paragraph (c), the rules of
Section 424(d) of the Code shall apply in determining the stock
ownership of the employee, and stock which the employee may
purchase under outstanding options shall be treated as stock
owned by the employee.
(d) Upon grant of the Option, the employee's rights to
purchase Common Stock under all employee stock purchase plans (as
defined in Section 423(b) of the Code) of the Company will not
accrue at a rate which exceeds $25,000 of fair market value of
the Common Stock (determined as of the Grant Date for such
Option) for each calendar year in which such Option is
outstanding at any time. The accrual of rights to purchase
Common Stock shall be determined in accordance with Section
423(b)(8) of the Code.
8. Dates for Granting Options. Options shall be granted
on each date designated by the Board as a Grant Date.
9. Terms and Conditions of Options.
9.1. General. All Options granted on a particular Grant
Date shall comply with the terms and conditions set forth in
Sections 9.3 through 9.13, and each Option shall be identical
except as to the number of Option Shares, which shall be
determined in accordance with Section 9.2.
9.2. Number of Shares. The maximum number of Option Shares
shall be an amount equal to the amount of the Optionee's Gross
Compensation permitted to be withheld during the period running
from the Grant Date to the Exercise Date, divided by the purchase
price determined in accordance with Section 9.3. The number of
Option Shares shall be further limited by the amount of payroll
deductions actually withheld as of the Exercise Date.
9.3. Purchase Price. For Optionees who are not subject to
Section 16, the purchase price of Option Shares shall be 85
percent of the lesser of (a) the Market Value of the Common Stock
as of the Grant Date, or (b) the Market Value of the Common Stock
as of the Exercise Date. For Section 16 Optionees, the purchase
price of Option Shares shall be 85 percent of the average of (i)
the Market Value of the Common Stock as of the Grant Date and
(ii) the Market Value of the Common Stock as of the Exercise
Date.
9.4. Restrictions on Transfer. Options may not be
transferred otherwise than by will or under the laws of descent
and distribution, or pursuant to a qualified domestic relations
order, as defined by the Code,
<PAGE>
or Title I of the Employee Retirement Income Security Act
("ERISA") or the rules thereunder. An Option may not be
exercised by anyone other than the Optionee during the lifetime
of the Optionee.
9.5. Expiration. Each Option shall expire at the close of
business on the Exercise Date for such Option or on such earlier
date as may result from the operation of Section 9.6.
9.6. Termination of Employment of Optionee. If an Optionee
ceases for any reason, voluntary or involuntary (other than death
or retirement), to be continuously employed by the Company, his
or her Options shall immediately expire, and the Optionee's
accumulated payroll deductions shall be returned by the Company
without interest. For purposes of this Section 9.6, an Optionee
shall be deemed to be employed throughout any leave of absence
for military service, illness or other bona fide purpose which
does not exceed the longer of ninety days or the period during
which the Optionee's reemployment rights are guaranteed by
statute or by contract. If the Optionee does not return to
active employment prior to the termination of such period, his or
her employment shall be deemed to have ended on the 91st day of
such leave of absence.
9.7. Retirement or Death of Optionee. If an Optionee
retires or dies, the Optionee or, in the case of death, his or
her Beneficiary, shall be entitled to withdraw the Optionee's
accumulated payroll deductions pursuant to Section 9.13, or to
purchase Option Shares on the Exercise Date to the extent that
the Optionee would have been so entitled had he or she continued
to be employed by the Company. The number of Option Shares
purchasable shall be limited by the amount of the Optionee's
accumulated payroll deductions as of the date of his or her
retirement or death. Accumulated payroll deductions not
withdrawn or applied to the purchase of Option Shares shall be
delivered by the Company to the Optionee or Beneficiary, as the
case may be, within a reasonable time after the Exercise Date.
9.8. Capital Changes Affecting the Stock. In the event
that, between the Grant Date and the Exercise Date of an Option,
a stock dividend is paid or becomes payable in respect of the
Common Stock or there occurs a split-up or contraction in the
number of shares of Common Stock, the number of Option Shares and
the price to be paid for each Option Share shall be
proportionately adjusted. In the event that, after the Grant
Date, there occurs a reclassification or change of outstanding
shares of Common Stock or a consolidation or merger of the
Company with or into another corporation or a sale or conveyance,
substantially as a whole, of the property of the Company, the
Board may, in its discretion, (i) accelerate the Exercise Date of
any Options outstanding, or (ii) terminate any such outstanding
Options. Unless terminated in accordance with this section,
Optionees shall be entitled on the Exercise Date to receive
shares of stock or other securities equivalent in kind and value
to the shares of Common Stock he or she would have held if he or
she had exercised the Option in full immediately prior to such
reclassification, change, consolidation, merger, sale or
conveyance and had continued to hold such shares (together with
all other shares and securities thereafter issued in respect
thereof) until the Exercise Date. In the event that there is to
occur a recapitalization involving an increase in the par value
of the Common Stock which would result in a par value exceeding
the exercise price under an outstanding Option, the Company shall
notify the Optionee of such proposed recapitalization immediately
upon its being recommended by the Board to the Company's
shareholders, after which the Optionee shall have the right to
exercise his or her Option prior to such recapitalization; if the
Optionee fails to exercise the Option prior to recapitalization,
the exercise price under the Option shall be appropriately
adjusted. In the event that, after the Grant Date, there occurs
a dissolution or liquidation of the Company, except pursuant to a
transaction to which Section 424(a) of the Code applies, each
Option shall terminate, but the Optionee holding such Option
shall have the right to exercise his or her Option prior to such
dissolution or liquidation.
9.9. Payroll Deductions; Withdrawal from Plan Prior to
Exercise Date. Any Eligible Employee who has completed at least
one year of service with the Company, and who wishes to authorize
payroll deductions for the purchase of Option Shares under the
Plan, must complete and return to the personnel department of the
Company at any time on or before the Grant Date a Membership
Agreement indicating the total percentage (which shall be a full
integer between one and ten) of his or her Gross Compensation
which is to be withheld each pay period, not to exceed the
maximum percentage, if any, set by the Board in its discretion.
Payroll
<PAGE>
deductions will commence as of the first Grant Date after receipt
of such Membership Agreement by the personnel department. Prior
to the Exercise Date, each Optionee shall, except as provided by
Section 9.11(d) hereof, be permitted only once to (a) withdraw
all or part of his or her accumulated payroll deductions,
(b) discontinue payroll deductions, or (c) change the percentage
of Gross Compensation withheld.
9.10. Compliance with Rule 16b-3. The purchase of
Option Shares under the Plan by a Section 16 Optionee shall be
exempt from Section 16(b) of the 1934 Act if the Section 16
Optionee complies with the requirements of either subparagraph
(a) or (b) below.
(a) Irrevocable Election. The Section 16 Optionee waives
the right to withdraw from the Plan granted in Section 9.9, and
makes an irrevocable election in the Membership Agreement to
participate in the Plan on the terms and conditions set forth in
the Membership Agreement at least six months prior to the
Exercise Date. Optionees who make such an irrevocable election
may change the terms of such Membership Agreement, but any such
change will not take effect for six months.
(b) Transactional Requirements.
(1) Six-Month Holding Period. The
Section 16 Optionee agrees to hold any Option
Shares purchased under the Plan for at least
six months from the date the Option Price for
such Option Shares was fixed; and
(2) Cessation of Participation. The
Section 16 Optionee who (i) voluntarily de
cides to cease participation in the Plan
(excluding a cessation necessitated by the
limit on stock ownership and accrual
restrictions imposed by the Code) or (ii)
withdraws accumulated payroll deductions
prior to the Exercise Date, may not particip
ate in the Plan again for at least six
months; provided, however, that the following
shall not constitute a cessation of
participation: (x) a decision to increase or
decrease the amount of payroll deductions or
(y) a decision to continue enrollment in the
Plan at a more favorable basis price. A
Section 16 Optionee may not authorize a
nominal amount of payroll deductions to avoid
the penalty for cessation provided for
herein.
9.11. Exercise of Options. On the Exercise Date the
Optionee will be deemed to have exercised his or her Option and
thereby purchased the number of Option Shares purchasable by his
or her accumulated payroll deductions, provided that:
(a) The number of Option Shares shall not exceed the number
of shares the Optionee is entitled to purchase pursuant to
Section 9.2.
(b) If the total number of Option Shares which all
Optionees have been deemed to purchase, together with any Option
Shares already purchased under the Plan, exceeds the total number
of shares of Common Stock subject to the Plan pursuant to
Section 6, the number of Option Shares which each Optionee is
deemed to have purchased shall be decreased PRO RATA based on the
Optionee's accumulated payroll deductions with respect to such
Option Shares in relation to all accumulated payroll deductions
currently being withheld under the Plan with respect to such
Option Shares.
(c) If the number of Option Shares includes a fraction,
such number shall be adjusted to the next smaller whole number
and the purchase price shall be adjusted accordingly.
(d) Notwithstanding the foregoing, any Optionee may notify
the Company's payroll department in writing, not later than two
weeks prior to the Exercise Date, that he or she elects not to
exercise his or her Option in full or in part, and desires to
receive that portion of his or her accumulated payroll deductions
withheld under the Plan and not used to purchase Option Shares in
the form of cash instead of Option Shares.
<PAGE>
As a condition to the exercise of an Option, the Company may
require the person exercising such Option to represent and
warrant at the time of any such exercise that the Option Shares
are being purchased only for investment and without any present
intention to sell or distribute such Option Shares if, in the
opinion of counsel for the Company, such a representation is
required by the Securities Act of 1933, as amended (the "1933
Act"), the 1934 Act, and the rules and regulations promulgated
thereunder.
9.12. Delivery of Stock. Within a reasonable time after
the Exercise Date, the Company shall deliver or cause to be
delivered to each Optionee a certificate or certificates for the
number of Option Shares purchased by such Optionee. If any law
or applicable regulation of the Securities and Exchange
Commission or other body having jurisdiction in the premises
shall require that the Company or the Optionee take any action in
connection with the Option Shares, delivery of the certificate or
certificates for such Option Shares shall be postponed until the
necessary action shall have been completed, which action shall be
taken by the Company at its own expense, without unreasonable
delay. The Optionee shall have no rights as a shareholder in
respect of Option Shares for which he or she has not received a
certificate.
The Company shall have the right to impose restrictions on
the transferability of Option Shares, and to place appropriate
legends on all stock certificates setting forth any such
restrictions on transferability of Option Shares instructing the
transfer agent to notify the Company of any transfer of the
Option Shares. Shares shall not be issued pursuant to the
exercise of an Option unless the exercise of such Option and the
issuance and delivery of such Option Shares pursuant thereto
shall comply with all relevant provisions of law, including,
without limitation, the 1933 Act, the 1934 Act, the rules and
regulations promulgated thereunder, the so-called state "blue
sky" or securities laws, and the requirements of the National
Association of Securities Dealers or of any stock exchange upon
which the Shares may be listed (as the case may be), and shall be
further subject to the approval of counsel for the Company with
respect to such compliance.
9.13. Return of Accumulated Payroll Deductions. In the
event that the Optionee or the Beneficiary
is entitled to the return of accumulated payroll deductions,
whether by reason of voluntary withdrawal, termination of
employment, retirement, death, or in the event that accumulated
payroll deductions exceed the price of Option Shares purchased,
such amount shall be returned without interest within a
reasonable time by the Company to the Optionee or the
Beneficiary, as the case may be.
<PAGE>
TECHNICAL COMMUNICATIONS CORPORATION
100 Domino Drive
Concord, Massachusetts 01742
Telephone: (508) 287-5100
NOTICE OF
ANNUAL MEETING
OF STOCKHOLDERS AND
PROXY STATEMENT
1996
Annual Meeting
of Stockholders
February 12, 1996
<PAGE>
TECHNICAL COMMUNICATIONS CORPORATION
PROXY for Annual Meeting of Stockholders - February 12, 1996
The undersigned hereby appoints ARNOLD M. McCALMONT, HERBERT
A. LERNER and EDWARD E. HICKS, or any one of them, the action of
majority of them voting to be controlling, attorneys of the
undersigned, with full powers of substitution, with all the
powers the undersigned would possess if personally present, to
vote the stock of the undersigned in TECHNICAL COMMUNICATIONS
CORPORATION at the annual meeting of stockholders to be held at
10:00 a.m. on February 12, 1996, and at any adjournments thereof.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS. IT WILL
BE VOTED AS DIRECTED AND IF NO CHOICE IS INDICATED IT WILL BE
VOTED FOR ALL OF THE FOLLOWING MATTERS:
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
1. To fix the number of directors at six.
2. Election of Directors:
Nominees: Arnold M. McCalmont, Lawrence A. Kletter, HerbertA. Lerner,
James A. McCalmont, Philip A. Phalan, Victor Sabella
[ ] FOR all nominees [ ] WITHHOLD from all nominees
FOR, except vote withheld from the following
nominee(s):
___________________________________________________________
3. To adopt the 1995 Employee Stock Purchase Plan.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
<PAGE>
4. To ratify the selection of the firm of Arthur Andersen LLP as
the Company's auditors.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
This proxy when properly executed will be voted in the manner
directed herein by the undersigned stockholder. If no direction
is made, the proxy will be voted for Items 1, 2, 3 and 4.
Please sign exactly as name appears stencilled on this Proxy.
When signing as attorneys, executors, administrators, Trustee or
Guardian, please set forth your full title.
Date:
_____________________________________, 1995
__________________________________________________
(Signature)
__________________________________________________
(Signature)
