<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(Amendment No. )
Filed by 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 Section 240.14a-1(c) or Section
240.14a-12
Technical Communications 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):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
1) Title of each class of securities to which transaction applies:
_______________________________________________________________
2) Aggregate number of securities to which transaction applies:
_______________________________________________________________
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
_______________________________________________________________
4) Proposed maximum aggregate value of transaction:
_______________________________________________________________
<PAGE>
5) Total fee paid:
_______________________________________________________________
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number,or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
_________________________________________
2) Form, Schedule or Registration Statement No.:
_________________________________________
3) Filing Party:
_________________________________________
4) Date Filed:
_________________________________________
<PAGE>
TECHNICAL COMMUNICATIONS CORPORATION
Notice of Annual Meeting of Stockholders
To Be Held February 10, 1997
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
01742, at 10:00 a.m. on Monday, February 10, 1997:
1. To elect eight (8) Directors to serve for the ensuing
year or until their respective successors have been
duly elected and qualified;
2. To consider and act upon a proposal to approve an
amendment to the 1991 Stock Option Plan of the Company
increasing the number of shares of Common Stock which
may be issued pursuant to said plan from 250,000 shares
to 350,000 shares;
3. To ratify the selection of the firm of Arthur Andersen
LLP as auditors for the Company for the fiscal year
ending September 27, 1997; 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 12, 1996, 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,
/s/ Edward E. Hicks
___________________________________
Edward E. Hicks
Clerk
Concord, Massachusetts
December 31, 1996
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 10, 1997
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
10, 1997, 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 12, 1997,
are entitled to notice of and to vote at the Meeting.
As of December 12, 1996, there were 1,264,496 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 an
amendment to the 1991 Stock Option Plan of the Company increasing
the number of shares of Common Stock authorized for issuance
thereunder 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 28, 1996, will be
mailed to stockholders on or about December 31, 1996.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table shows, as of December 12, 1996, 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:
<TABLE>
<CAPTION>
Amount and Nature of
Beneficial Ownership Percent of
Name and Address (Number of Shares) (1) Class (1)
_____________________________ ______________________ __________
<S> <C> <C>
Lawrence A. Kletter and 147,455 (2) 12% (2)
James A. McCalmont, Trustees,
Technical Communications
Corporation Employees' Stock
Ownership Trust
100 Domino Drive
Concord, MA 01742
Quest Advisory Corporation 124,700 (3) 9.94% (3)
Charles M. Royce
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-
<PAGE>
(2) Held as Trustees for the ESOP and includes 112,146
shares that are allocated to the participants in the
ESOP as well as 35,309 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
147,455 shares, except that James McCalmont does not
disclaim beneficial ownership of 6,577 shares allocated
to James McCalmont under the ESOP.
(3) The nature of ownership of Quest Advisory Corporation
("Quest") and Mr. Charles M. Royce, as set forth
herein, is based upon their Schedule 13G on file with
the Securities and Exchange Commission. Quest in its
capacity as investment advisor may be deemed the
beneficial owner of the 124,700 shares indicated in the
above table, which shares are owned by numerous clients
of Quest. Mr. Royce disclaims beneficial ownership of
the 124,700 shares owned by Quest.
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
____________________________________
It is the intention of the persons named as proxies to vote the
proxies, unless authority to vote is specifically withheld, to
elect as directors the nominees listed below. Each nominee for
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, except for Roland S. Gerard and Robert T.
Lessard, 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
-3-
<PAGE>
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 12, 1996.
<TABLE>
<CAPTION>
Amount and Nature
Nominee's Name and Positions and of Beneficial
Year First Became a Offices with Ownership Percent of
Director the Company Age (# of Shares) (1) Class (1)
___________________ _____________ ___ _________________ __________
<S> <C> <C> <C> <C>
Roland S. Gerard (2) President and 45 26,304 (3) 2%
Chief
Executive
Officer
Lawrence A. Kletter Director 41 2,250 (5) 0%
(4) 1988
Herbert A. Lerner Treasurer, 69 2,736 (7) 0%
(6) Director
1961
Robert T. Lessard 56 0 0%
(8)
Arnold M. McCalmont Chairman of 67 33,319 (10) 1.7%
(9) 1961 the Board of
Directors
James A. McCalmont Director 41 22,647 (12) 2.6%
(11) 1991
Philip A. Phalon President, 67 1,500 (14) 0%
(13) Director
1993
Victor Sabella (15) Director 51 750 (16) 0%
1994
All directors and 97,077 (17) 7.4%
officers as a group
(10 persons)
</TABLE>
_________________________
(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, the number
of shares and 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.
-4-
<PAGE>
(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 Inc., a
subsidiary of SFA, Inc. From January 1988 to January
1992 he was a Group Vice President of Plantronics, Inc.
and President of Plantronics Futurecomms, Inc. and
Frederick Electronics Corp., both subsidiaries of
Plantronics, Inc.
(3) Includes 20,000 shares that may be acquired by Mr.
Gerard within sixty (60) days upon exercise of stock
options, and 1,304 shares currently allocated to Mr.
Gerard under the ESOP.
(4) Lawrence A. Kletter has been a partner at the law firm
of Eckert Seamans Cherin & Mellott since September
1996. For the five years prior to that, he was a
partner with the Boston law firm of Posternak,
Blankstein & Lund. 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
147,455 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 147,455 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 2,550 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) Mr. Lessard was employed in a variety of management
positions from 1966 through December 1995 at the
National Security Agency, Department of Defense. Since
his retirement in December 1995, he has represented the
Director of the National Security Agency on several
special projects.
(9) 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.
-5-
<PAGE>
(10) Includes 14,470 and 80 shares owned by Arnold
McCalmont's adult sons, James (and his wife) and Marc,
respectively. Also includes 6,577 shares currently
allocated to James McCalmont under the ESOP, 1,600
shares subject to an option exercisable by James
McCalmont within the next sixty days, and 10,592 shares
currently allocated to Arnold McCalmont under the ESOP.
Excludes 147,455 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
6,577 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).
(11) 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.
(12) Excludes 80 shares owned by his brother, Marc. Also
excludes 10,592 shares currently allocated to Arnold
McCalmont under the ESOP and 147,455 shares held by
James McCalmont as a Trustee of the ESOP. Includes
6,577 shares currently allocated to James McCalmont
under the ESOP and 1,600 shares that may be acquired by
James McCalmont within sixty days upon exercise of a
stock option. James McCalmont 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 6,577 shares currently allocated to
him under the ESOP.
(13) Philip A. Phalon was Senior Vice-President for
Corporate Marketing for Raytheon Company from 1983
through September 1990, and is currently an independent
consultant.
(14) Includes 1,000 shares that may be acquired by Mr.
Phalon within sixty (60) days upon exercise of stock
options.
(15) 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.
(16) Consists entirely of shares that may be acquired by Mr.
Sabella within 60 days upon exercise of stock options.
-6-
<PAGE>
(17) Includes 39,950 shares that the directors and officers
have the right to acquire within sixty days of December
12, 1996, by the exercise of stock options. Also
includes an aggregate of 31,748 shares that are
allocated to the accounts of officers and directors
under the ESOP. For a discussion of the voting and
investment powers with respect to such shares, see page
1 and footnote (1) on page 3.
A quorum being present, the affirmative vote of the holders of a
plurality of the shares of Common Stock voting in person or by
proxy at the Meeting is required to elect each director. Thus,
abstention or broker non-votes will not be included in the totals
and will have no effect on the outcome of the vote.
B. Meetings of the Board of Directors and Committees
_________________________________________________
The Board of Directors held five (5) meetings during the twelve
months ended September 28, 1996 ("Fiscal Year 1996"). 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 1996.
The Audit Committee of the Board, of which Messrs. Kletter,
Lerner and Sabella are members, held four (4) meetings during
Fiscal Year 1996. The Audit Committee oversees the accounting
and tax functions of the Company, recommends to the Board the
engagement of independent auditors for the year subject to
approval by the stockholders of the Company, reviews with
management and the auditors the plan and scope of the audit
engagement, reviews the annual financial statements of the
Company and any recommended changes or modifications and control
procedures and accounting practices and policies, and monitors
with management and the auditors the Company's system of internal
controls and its accounting and reporting practices.
The Compensation Committee of the Board, of which Messrs.
Kletter, Phalon and Sabella are members, held two (2) meetings
during Fiscal Year 1996. The Compensation Committee reviews and
recommends to the Board compensation for the President, the
Chairman of the Board and outside directors. It also reviews and
recommends the adoption, amendment and implementation of
incentive compensation plans, stock option plans and other
employee benefit plans and programs for the Company and officers
and directors of the Company.
-7-
<PAGE>
During Fiscal Year 1996, 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 they
attended during Fiscal Year 1996. During Fiscal Year 1996,
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 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, Phalon and Sabella, the then currently
eligible directors under the 1990 Non-Employee Director Stock
Option Plan, each received an option to purchase 750 shares
following the 1996 Annual Meeting. Messrs. Kletter, Phalon and
Sabella will each receive a similar option following the 1997
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 Eckert Seamans Cherin & Mellott (securities law
counsel for the Company) and James A. McCalmont, a director and
employee of the Company, are Trustees of the Trust.
During fiscal year 1995, the Company purchased a minority
interest in Net2Net Corporation, prepaid at a discounted rate for
certain products, and entered into a distribution agreement with
Net2Net Corporation. The President of Net2Net is related to
-8-
<PAGE>
Arnold M. McCalmont, the Chairman of the Board of Directors of
the Company, and to James McCalmont, one of the Company's
directors. Arnold and James McCalmont and Herbert Lerner are
also investors in Net2Net Corporation.
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 nominated as 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 12, 1996.
<TABLE>
<CAPTION>
Amount and Nature
Positions and of Beneficial
Name and Year First Offices with Ownership Percent of
Became an Officer the Company Age (# of Shares) (1) Class (1)
___________________ ______________ ___ _________________ __________
<S> <C> <C> <C> <C>
John I. Gill (2) Executive Vice 57 18,973 (3) 1.5%
1985 President
Graham R. Briggs (4) Vice- 57 11,245 (5) .8%
1992 President,
Finance and
Administration
</TABLE>
_________________________
(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, the number
of shares and 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. Gill has been employed by the Company since August
1983.
(3) Includes 8,973 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.
(4) 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.
-9-
<PAGE>
(5) Includes 4,302 shares allocated to Mr. Briggs under the
ESOP and 6,800 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
1996 to its Chief Executive Officer and the other executive
officers of the Company whose annual compensation during Fiscal
Year 1996 exceeded $100,000 (hereafter referred to as the "named
executive officers"):
-10-
<PAGE>
SUMMARY COMPENSATION TABLE
Fiscal Year 1996 Compensation
<TABLE>
<CAPTION>
Name and Principal Fiscal All Other
Position Year Salary Bonus Compensation
____________________ ______ ________ ___________ ____________
<S> <C> <C> <C> <C>
Roland S. Gerard (1) 1996 $125,862 $15,000 (2) $ 3,625 (3)
President and Chief 1995 $ 35,600 $ ----- $25,080 (4)
Executive Officer 1994 $ ------ $ ----- $ -----
John I. Gill (5) 1996 $108,953 $ 1,500 (6) $ 2,209 (3)
Vice-President, 1995 $111,660 $ 200 (6) $ 420 (3)
Manufacturing 1994 $ 99,268 $11,000 (6) $ 695 (3)
and Technical
Operations,
Executive Vice
President
</TABLE>
___________________
(1) Mr. Gerard has been employed by Company as President
since June 12, 1995.
(2) This amount of $15,000 was paid to Mr. Gerard for
services rendered during fiscal year 1995.
(3) Represents the Company's contribution for the account
of the respective executive officer 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.
(4) Consists entirely of reimbursed relocation expenses.
(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) These amounts of $1,500, $200 and $11,000 were paid to
Mr. Gill for services rendered in fiscal years 1995,
1994 and 1993, respectively.
Stock Options.
______________
No stock options were granted to the named executive officers.
The unexercised options held as of September 28, 1996 by the named
executive officers are as follows:
-11-
<PAGE>
AGGREGATED FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
Value of Unexercised
Number of Unexercised In-the-Money Options
Options at Fiscal Year-End at Fiscal Year-End (1)
____________________________ ____________________________
Name Exercisable Not Exercisable Exercisable Not Exercisable
____________ ___________ _______________ ___________ _______________
<S> <C> <C> <C> <C>
Roland S. 20,000 (2) 80,000 $37,500 $28,400
Gerard
John I. Gill 5,000 (3) --- $26,875 ---
Graham R. 6,800 (4) --- --- ---
Briggs
</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 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 follow: (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.
(3) 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.
(4) This represents the unexercised remainder of 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) 10% on 2/27/93, (ii) an additional 10% 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
8/27/96. The expiration date of this grant is 2/28/02.
-12-
<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
1996, there were no delinquencies in filing Forms 4 in a timely
manner.
II. PROPOSAL TO INCREASE THE NUMBER OF SHARES RESERVED UNDER THE
1991 STOCK OPTION PLAN
______________________
The Company has a 1991 Stock Option Plan (the "1991 Stock Option
Plan"), which is available to certain employees and officers of
the Company. The 1991 Stock Option Plan was adopted by the Board
of Directors of the Company on August 15, 1991, and received
stockholder approval on February 10, 1992. The 1991 Stock Option
Plan permits the issuance of non-qualified and incentive stock
options.
On November 20, 1996, the Board of Directors approved an
amendment to the 1991 Stock Option Plan to increase the number of
shares reserved for issuance under the 1991 Stock Option Plan
from 250,000 to 350,000. Management of the Company believes that
this increase is important to permit the Board of Directors to
attract, retain, and motivate present and future key employees,
officers and directors.
There are 23,925 shares of the Company's stock currently
available for issuance under the 1991 Stock Option Plan. The
number of shares of stock authorized and reserved for issuance
under the 1991 Stock Option Plan may be adjusted at the
discretion of the Board of Directors in the case of any
recapitalization, stock dividend, stock split, reclassification
or other change in the Company's structure affecting the stock.
Shares of stock awarded under the 1991 Stock Option Plan may
consist, in whole or in part, of authorized and unissued shares
or treasury shares. All shares of stock subject to an award made
under the 1991 Stock Option Plan which expires, is forfeited, or
otherwise terminates prior to its exercise, will again be
available for future distribution under the 1991 Stock Option
Plan. Any shares issued under the 1991 Stock Option Plan and
later repurchased by the Company shall not become available for
future distribution under the 1991 Stock Option Plan.
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Description of the 1991 Stock Option Plan.
__________________________________________
Purpose.
________
The purposes of the 1991 Stock Option Plan are to enable the
Company to attract, retain, motivate and reward employees, officers
and directors of the Company and its subsidiaries and affiliates,
and to strengthen the mutuality of interests between such persons
and the Company's stockholders by offering them, in consideration
of services rendered, stock incentives ("Awards").
Administration.
_______________
The 1991 Stock Option Plan is administered by the Board of
Directors. Subject to the terms of the 1991 Stock Option Plan,
the Board of Directors has the authority to determine the persons
to whom awards shall be granted (subject to certain eligibility
requirements or grants of incentive stock options), the number of
shares to be covered by each such award, the exercise or purchase
price per share, and other terms and provisions governing the 1991
Stock Option Plan. The interpretation or construction by the Board
of Directors of the 1991 Stock Option Plan or of any award granted
under it is final.
Eligible Participants.
______________________
Subject to certain limitations, awards of non-qualified
stock options under the 1991 Stock Option Plan may be granted
to any employee, officer or director of the Company and its
subsidiaries and affiliates who is responsible for or contributes
to the management, growth and/or profitability of the business of
the Company. As of December 12, 1996, the Company had
approximately 63 employees, 6 of whom are also officers and/or
directors. As of December 12, 1996, there were 3 members of the
Board of Directors who were not employees of the Company. Only
employees of the Company and its subsidiaries may be granted
incentive stock options under the 1991 Stock Option Plan.
Granting of Options.
____________________
Incentive stock options ("ISOs") and non-qualified stock
options ("NQSOs") may be granted under the 1991 Stock Option Plan.
Option Duration.
________________
The term of each stock option will be fixed by the Board of
Directors, provided that no stock option will be exercisable more
than ten (10) years after the date the option is granted. An ISO
granted to a recipient earning more than ten (10%) percent of the
total combined voting power of all classes of stock of the Company
or of any of its subsidiaries shall not be exercisable for more than
five (5) years from the date of grant.
Option Price.
_____________
The option price for any NQSO granted under the 1991 Stock
Option Plan may be equal to, greater than or less than one hundred
(100%) percent of the fair market value of the stock as of the date
of grant. The option price for any ISO granted under the 1991 Stock
Option Plan shall not be (i) less than one hundred (100%) percent of
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<PAGE>
the fair market value of the stock at the date of grant, if granted
to an employee who at the time of grant owns stock possessing ten
(10%) percent or less of the total combined voting power of all
classes of stock of the Company or any of its subsidiaries, or (ii)
less than one hundred ten (110%) percent of the fair market value of
the stock at the date of grant, if granted to an employee who at the
time of grant owns stock possessing more than ten (10%) percent of
the total combined voting power of all classes of stock of the Company
or of any of its subsidiaries.
Exercise of Option and Payment for Stock.
_________________________________________
Stock Options are exercisable at such time or times and subject
to such terms and conditions as shall be determined by the Board of
Directors at or after grant. Subject to certain exceptions, no Stock
Option shall be exercisable prior to the first anniversary of the
granting of the Option. In the case of NQSOs, payment of the
option price may be made by check or note or, if permitted by the
Board of Directors, payment may also be made by delivery of
either unrestricted Stock of the Company having a fair market
value equal to the option price, or restricted or deferred stock.
In the case of an ISO, payment of the option price may be made by
check or note or, if permitted by the Board of Directors, by
delivery of unrestricted Stock of the Company having a fair
market value equal to the option price.
Effect of Termination of Employment, Death or Disability.
_________________________________________________________
If a participant's employment by the Company or any subsidiary or
affiliate is terminated, such participant's Stock Options shall
terminate immediately but may be exercised for the lesser of 30
days or the balance of such Stock Options' term. If a
participant retires or becomes disabled, such participant's Stock
Options will be exercisable for 30 days following the date of
termination, retirement or disability, or until the end of the
option period, whichever is shorter. Upon the death of a
participant, the deceased participant's representative may
exercise the deceased participant's Stock Options for a period of
180 days from the date of the participant's death or the
remainder of the option period, whichever is shorter. Unless
otherwise determined by the Board of directors, the only Stock
Options which are exercisable on the date of termination of
employment, retirement, disability or death may be subsequently
exercised.
Non-Transferability of Options.
_______________________________
Stock Options issued under the 1991 Stock Option Plan are not
transferable except by will or the laws of descent and distribution
or pursuant to a qualified domestic relations order, as defined by
the Internal Revenue Code of 1986, as amended, or Title I of the
Employee Retirement Income Security Act, or the rules thereunder.
All Stock Options are exercisable, during the optionee's lifetime,
only by the optionee.
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<PAGE>
Conclusion and Recommendations.
_______________________________
The Board of Directors believes it is in the interest of the
Company and its stockholders to adopt the proposed amendment to
the 1991 Stock Option Plan. The increase in shares available for
issuance under the 1991 Stock Option Plan will assist the Company
to continue to attract and retain key personnel and to strengthen
the identity of such personnel's interest with those of the
Company's stockholders. A majority of the votes cast by the
holders of the Company's Stock at the Meeting is required to
approve this proposal.
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 serve as
auditors for the fiscal year ending September 27, 1997. Arthur
Andersen LLP served as the Company's auditors for Fiscal Year
1996. A quorum being present, the affirmative vote of the
holders of a majority of the shares of Common Stock voting in
person or by proxy on the appointment of the auditors shall be
required for approval. Thus, abstentions or broker non-votes
will not be included in the totals and will have no effect on the
outcome of the vote.
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 1998 Annual Meeting of
Stockholders will be held on February 9, 1998. 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 20, 1997, for inclusion in
the Proxy Statement and Form of Proxy relating to that meeting
and must comply with the applicable requirements of federal
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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 on Form
10-K for the year ending September 28, 1996. A request for
copies of such report should be addressed to the Company at 100
Domino Drive, Concord, Massachusetts 01742, Attention: Investor
Relations.
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<PAGE>
TECHNICAL COMMUNICATIONS CORPORATION
100 Domino Drive
Concord, Massachusetts 01742-2892
Telephone: (508) 287-5100
NOTICE OF
ANNUAL MEETING
OF STOCKHOLDERS AND
PROXY STATEMENT
1997
Annual Meeting
of Stockholders
February 10, 1997
<PAGE>
TECHNICAL COMMUNICATIONS CORPORATION
Proxy for Annual Meeting of Stockholders -- February 10, 1997
The undersigned hereby appoints ARNOLD M. McCALMONT, HERBERT A.
LERNER and EDWARD E. HICKS, or any one of them, the action of a
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 10, 1997, 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:
1. To fix the number of directors at eight.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
2. Election of directors:
Nominees: Arnold M. McCalmont, Lawrence A. Kletter, Herbert
A. Lerner, Robert T. Lessard, James A. McCalmont,
Philip A. Phalon, Victor Sabella.
[ ] FOR all nominees [ ] WITHHOLD from all nominees
[ ] FOR, except vote withheld from the following nominees:
______________________________________________________
3. To ratify an amendment to the Technical Communications
Corporation 1991 Stock Option Plan to increase the number of
shares reserved for issuance from 250,000 to 350,000:
[ ] FOR [ ] AGAINST [ ] ABSTAIN
4. To ratify the selection of the firm of Arthur Andersen LLP
as the Company's auditors:
[ ] FOR [ ] AGAINST [ ] ABSTAIN
5. In their discretion, the proxies are authorized to vote upon
such other business as may properly come before the meeting.
This proxy, if 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 the name appears stenciled on this Proxy.
When signing as attorneys, executors, administrators, trustee or
guardian, please set forth your full title.
Date:__________________________________, 1997
______________________________________________
(SIGNATURE)
______________________________________________
(SIGNATURE)
