<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant / /
Filed by a party other than the Registrant /X/
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/ / Definitive Proxy Statement
/X/ Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
Technical Communications Corporation
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
M. Mahmud Awan, Philip A. Phalon, Robert B. Bregman, William C. Martindale, Jr.
- --------------------------------------------------------------------------------
(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)(1)
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:
------------------------------------------------------------------------
(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>
THE PHALON GROUP
40 SALEM STREET
LYNNFIELD, MA 01940
July 31, 1998
DEAR FELLOW TECHNICAL COMMUNICATIONS STOCKHOLDER:
THE ANNUAL MEETING HAS BEEN RESCHEDULED FOR AUGUST 14, 1998.
THERE IS STILL TIME TO VOTE YOUR GOLD PROXY.
We are writing to bring you up to date about a number of key developments at
Technical Communications. The Annual Meeting, postponed to July 28, 1998, was
called to order and immediately adjourned to August 14, 1998.
When the Meeting is reconvened on August 14, you will have the opportunity
to elect to the Board the Phalon Group nominees, who are standing for election
in opposition to management's candidates. Please refer to our Proxy Statement
which was mailed to you three weeks ago for detailed information about our
director candidates.
ELECT DIRECTORS WHOSE INTERESTS ARE ALIGNED WITH YOURS.
In this election contest, you should ask yourself which group best
represents your interests as an owner of Company stock. The Phalon Group
beneficially owns in excess of 215,000 common shares or about 17% of the
Company.
In stark contrast, the current Board and management collectively own
approximately 36,000 shares, less than 3% of the Company, once you exclude the
generous stock options which they gave themselves. Who best represents your
interests? We think the answer is clear.
DO NOT LET MANAGEMENT GET AWAY WITH ITS
SELF-DEALING ENTRENCHMENT TACTICS.
VOTE YOUR GOLD PROXY TODAY!
SINCE APRIL, MANAGEMENT HAS USED YOUR MONEY TO PAY EXPENSIVE LAWYERS AND
OTHER ADVISORS TO REMAIN ENTRENCHED IN THEIR JOBS, ATTEMPT TO IMPLEMENT A
STAGGERED BOARD, DELAY THE ANNUAL MEETING AND GENERALLY AVOID ACCOUNTABILITY TO
STOCKHOLDERS--THE REAL OWNERS OF THE COMPANY.
Even the continuing threat of contempt of court has not stopped management
from pursuing its agenda. Injunctions, denials of motions, denials of appeals of
those motions and finally, a hearing regarding management's alleged contempt of
court scheduled for August 6 has not deterred management from continuing to
waste your funds to preserve their seats.
<PAGE>
MANAGEMENT IS DESPERATE FOR A STAGGERED BOARD.
You should know that:
- ON MAY 22, 1998, WE SUED THE COMPANY AND ITS DIRECTORS (OTHER THAN PHIL
PHALON) IN MASSACHUSETTS SUPERIOR COURT CLAIMING, AMONG OTHER THINGS, THAT
THE DIRECTORS (i) BREACHED THEIR FIDUCIARY DUTIES BY ENGAGING IN
SELF-DEALING TRANSACTIONS; (ii) ENGAGED IN CONCEALMENT OF ILLEGAL AND
POSSIBLY CRIMINAL CONDUCT; AND (iii) ILLEGALLY ACTED TO ENTRENCH
THEMSELVES BY ATTEMPTING TO STAGGER THE BOARD.
- On June 9, the Superior Court enjoined management from implementing a
staggered board as adopted at the April 30, 1998 meeting of the Board.
- AFTER THE MASSACHUSETTS APPEALS COURT DENIED MANAGEMENT'S APPEAL, IN PART
BECAUSE OF THE "SERIOUS QUESTIONS CONCERNING THE VALIDITY OF THE VOTE", ON
JUNE 24, 1998, MANAGEMENT CONSPIRED TO RE-ADOPT THE VERY SAME RESOLUTIONS,
IN A DIRECT VIOLATION OF THE JUNE 9 ORDER! SERIOUS QUESTIONS STILL EXIST
AS TO WHETHER THE NOTICE FOR THE JUNE 24 ACTION WAS VALID OR WHETHER A
QUORUM WAS PRESENT.
- We filed a new complaint in Superior Court alleging contempt of the June 9
Order. After again denying management's motions to have the court condone
the action of June 24, the court scheduled a hearing on the contempt
complaint.
You should ask yourself why management is so desperate to implement a
staggered Board that it would risk being in contempt. Again, we think the answer
is clear.
MANAGEMENT'S STRATEGY: DELAY, DELAY, DELAY.
Having failed in its attempt to implement a staggered Board:
- Management then sought to delay the Annual Meeting and change the May 29
record date it had initially set, thereby illegally delaying its possible
ouster by several more weeks.
- Management complained, among other things, that it was unable to clear and
mail its proxy materials in time for the July 17 meeting, although the
Phalon Group was able to successfully do so.
- After further legal proceedings, we managed to preserve the May 29 record
date, but permitted management the extra time to clear and distribute its
proxy materials. As we have noted, the meeting will now re-convene on
August 14, 1998.
2
<PAGE>
- Incredibly, management's proxy statement claims that it successfully
implemented a staggered Board and that only two directors will stand for
election on August 14, rather than the entire Board.
IN OUR VIEW, THIS FINAL MANAGEMENT TACTIC, ALONG WITH ALL THE OTHERS, ARE
SIMPLY PERSISTENT AND PERVASIVE MANIPULATIONS OF THE CORPORATE MACHINERY SO THAT
MANAGEMENT CAN CONTINUE ITS PATTERNS OF SELF-DEALING, ITS ARROGANT FLOUTING OF
MASSACHUSETTS CORPORATE LAW AND ITS DELIBERATE FAILURE TO IMPLEMENT SPECIFIC
COURT ORDERS IN ORDER TO USE THE COMPANY AND ITS FUNDS TO ACHIEVE THEIR OWN
PERSONAL AGENDAS.
You do not have to let this continue. Vote for a Board that will be
responsive to the wishes of its stockholders. Please vote your GOLD proxy today.
DO NOT BE FOOLED BY MANAGEMENT'S SELECTIVE
DISCLOSURE IN ITS PROXY MATERIALS.
By now you have probably received management's proxy materials, which in our
view is filled with half-truths, mischaracterizations and selective excerpts
from depositions designed to tarnish our Group and our efforts. Management has
refused to be deposed and answer our questions under oath.
Do not be fooled. Based on its activities over the last several months, it
is clear to us that this management cannot be trusted to give you the whole
truth. We suggest you ignore any proxy materials sent to you by management and
do not vote any WHITE management proxy cards.
Remember--even if you have already signed a WHITE management proxy card, you
have every legal right to change your mind and vote a GOLD Phalon Group card.
Only your latest dated proxy card will count in the election.
TIME IS SHORT. PLEASE VOTE PROMPTLY.
If you have any questions, or need assistance in voting your shares, please
call MacKenzie Partners, Inc., which is assisting the Phalon Group, toll-free at
(800) 322-2885. We must receive your proxy prior to August 14.
We appreciate your continuing support of the Phalon Group and its goals.
Sincerely,
[SIG]
PHILIP A. PHALON
FOR THE PHALON GROUP
3
<PAGE>
THE PHALON GROUP
SUPPLEMENT TO PROXY STATEMENT--DATED JUNE 26, 1998
As you are probably aware, the members of the Phalon Group (Philip A.
Phalon, M. Mahmud Awan, William C. Martindale, Jr. and Robert B. Bregman) are in
the middle of a protracted struggle with the incumbent Directors (other than Mr.
Phalon) of TECHNICAL COMMUNICATIONS CORPORATION (the "Company" or "TCC") to
replace at least a majority of the Directors. Please refer to our Proxy
Statement dated June 26, 1998, which you should have received at least three
weeks ago, for a more detailed description of the Phalon Group's Nominees and
background of this proxy contest. This letter is intended to bring you up to
date on important developments which have occurred since our Proxy Statement was
distributed. Please note that the meeting date for the 1998 Annual Meeting of
Stockholders (the "Annual Meeting") was postponed to July 28, 1998, at which
time, pursuant to court order, it was adjourned to 10:00 A.M. on Friday,
August 14, 1998 at the offices of TCC at 100 Domino Drive, Concord,
Massachusetts.
As described in our Proxy Statement, on June 9, 1998 a Massachusetts
Superior Court Judge ordered that:
"The defendants [TCC, Arnold McCalmont, Herbert A. Lerner, Carl H.
Guild, Robert T. Lessard, Mitchell B. Briskin, Donald Lake and Thomas B.
Peoples] shall be enjoined from implementing the votes taken at the
meeting held on April 30, 1998 adopting the provisions of G.L. c. 156B,
50A and restructuring the terms of the Board of Directors to staggered
terms."
After the Massachusetts Court of Appeals denied the defendants' appeal
(". . . injunctive relief was granted on the basis of a showing of circumstances
which gave rise to serious question concerning the validity of the vote by which
the [defendants] sought to bring themselves within the provisions of Section 50A
. . ."), the defendants conspired to attempt to re-adopt on June 24, 1998 the
exact votes taken on April 30, 1998 (and enjoined by the June 9, 1998 Court
Order) to reinstitute a staggered Board scheme.
On June 29, 1998, Mr. Phalon and Dr. Awan filed a Complaint for Civil
Contempt (the "Contempt Complaint") in Middlesex Superior Court against the
defendants alleging that the action taken on June 24, 1998, even if effective
notwithstanding defective notice and absence of a legal quorum, was a clear and
substantial violation of the terms of June 9, 1998 Order, amounting to contempt
of court, and that the action should be declared null and void. The defendants
filed POST FACTO Motions for Clarification and Reconsideration, as to their
actions of June 24, 1998 and the June 9, 1998 Court Order. The Superior Court
denied the defendants' Motions. The Contempt Complaint is scheduled for a full
hearing on August 6, 1998. You should be aware that if the Court had ruled
favorably on the defendants' Motions, the Contempt Complaint would have been
mooted.
Immediately after the July 2, 1998 hearing on the Motions for Clarification
and Reconsideration and in a continuing attempt to circumvent the Court Order
and thwart the Group's attempts to elect a new Board of Directors, the
defendants purported to conduct another hurriedly called (and improperly
noticed) Board meeting in an effort to change the meeting and record dates of
the Annual Meeting.
Mr. Phalon and Dr. Awan filed a motion in Superior Court seeking to enjoin
the implementation of any votes to change the meeting and record dates.
Following the July 10, 1998 hearing on that motion, the Court entered a
Stipulated Interlocutory Order whereby the date of the Annual Meeting was
initially postponed to July 28, 1998 at which time the meeting would be
adjourned to August 14, 1998. This postponement/adjournment was intended to
permit the defendants more time to conduct a solicitation while preserving the
record date of May 29, 1998.
In their proxy statement, the defendants take the position that the June 24,
1998 action to reinstitute a staggered Board is valid, and thus only two Class I
Directors are to be elected at the Annual Meeting, rather than the entire Board
as contemplated under the June 9, 1998 Order and in our Proxy Statement.
4
<PAGE>
The Phalon Group believes that the June 24, 1998 action is invalid for a variety
of reasons and, moreover, constitutes just another manipulative device employed
by the defendants to continue their self-dealing and illegally avoid their day
of reckoning before the TCC stockholders. However, if the Court does not
invalidate that action following the hearing on the Contempt Complaint, Mr.
Phalon and Dr. Awan, as the designated proxies and attorneys-in-fact for those
TCC stockholders submitting a "Gold Card", intend to vote for themselves as the
two eligible nominees of the Phalon Group, even if another Phalon Group Nominee
receives more votes.
If you are undecided, or have revoked a Gold Proxy by executing and
returning a proxy received from the defendants, please be reminded of the
following chronology:
<TABLE>
<CAPTION>
DATE EVENT
- ------------------------------ ---------------------------------------------------------------------------------
<S> <C>
May 1990 - TCC's Board, including Arnold McCalmont and Herbert Lerner, votes to exempt
TCC from statutorily staggered Board
Aug. 1997 - TCC officers discover improprieties in the handling of certain foreign sales
arrangements
Nov. 1997 - TCC's counsel investigates possible violations of law and cover up by Arnold
McCalmont, James McCalmont and Herbert Lerner
Dec. 1997 - Date for timely filing of TCC Form 10-K passes
Jan. 1998 - TCC's counsel finds that violations of law and fraudulent cover up have
occurred and recommends that Arnold McCalmont and James McCalmont be removed
as officers and directors and make restitution to TCC
- James McCalmont resigns; Arnold McCalmont remains a director; no restitution
made to TCC
- CFO Graham Briggs is fired for refusing to sign Form 10-K. Form 10-K filed one
month late (disclosure: "Minimal at Best")
Feb. 1998 - CEO Roland Gerrard is fired and resigns as a director
- Annual Meeting date under the By-Laws passes without meeting
Mar. 1998 - Statutory date for Annual Meeting passes without meeting
Apr. 1998 - Phalon Group is formed and demand is made that Annual Meeting be held and
stockholder list be disclosed
- McCalmont, Guild, Lerner and Lessard elect as directors their three allies
(Briskin, Lake and Peoples), and vote to adopt a staggered Board scheme
- Annual Meeting noticed for July 17, 1998, with Record Date of May 29, 1998
May 1998 - Phalon and Awan file suit, seeking injunctive relief and copy of TCC's
counsel's report
</TABLE>
5
<PAGE>
<TABLE>
<CAPTION>
DATE EVENT
- ------------------------------ ---------------------------------------------------------------------------------
<S> <C>
Jun. 1998 - Superior Court enjoins staggering of TCC Board
- Appeals Court denies defendants' appeal
- Briskin, Lake, Peoples and Guild readopt April 30, 1998 votes and attempt to
reinstitute staggered Board
- Phalon and Awan file Contempt Complaint
- Phalon Group begins solicitation
- Defendants file post facto Motions for Clarification and Reconsideration
Jul. 1998 - Defendants' Motions denied
- Annual Meeting ordered to be held on July 28, 1998, with Record Date of May
29, 1998
- Annual Meeting adjourned to August 14, 1998
- Defendants seek indemnification agreements from TCC
Aug. 1998 - Contempt Complaint hearing
</TABLE>
The Phalon Group will use public filings and press releases to communicate
the results of the hearing on the Contempt Complaint, to the extent that such
results would have an effect on the actions to be taken at the Annual Meeting.
It should be obvious from the pattern of conduct engaged in by the Company
and its directors (except for Mr. Phalon) that such behavior is and has been an
attempt to use corporate mechanisms which appear superficially valid to, in
fact, accomplish illegal results. The directors have deliberately flouted
Massachusetts law and specific orders of the Massachusetts Courts to attempt to
illegally entrench themselves in order to continue to govern the Company to
accomplish their personal agendas. DO NOT BE FOOLED if you read the Company's
proxy statement: It mischaracterizes conduct, particularly the conduct and
statements of Mr. Phalon and Dr. Awan, and takes events and words completely out
of context.
If you have any questions, please call PHILIP A. PHALON, 40 SALEM STREET,
LYNNFIELD, MASSACHUSETTS 01940, 781-246-9199 or MacKenzie Partners, Inc.
212-929-5500 (collect) or Toll Free 800-322-2881.
YOUR VOTE IS IMPORTANT--VOTE THE GOLD PROXY CARD FOR THE
PHALON GROUP NOMINEES
July 31, 1998
6
