-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Qfzx30RovKKVbye/cpfSi8GVI4zFmCxKHbHEfprFKpGVkpoRMkmDSb3y7A/TAUCl aE1L++3udETmoO4WjLStKQ== 0000741556-03-000034.txt : 20030716 0000741556-03-000034.hdr.sgml : 20030716 20030716142210 ACCESSION NUMBER: 0000741556-03-000034 CONFORMED SUBMISSION TYPE: DEF 14A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20030331 FILED AS OF DATE: 20030716 EFFECTIVENESS DATE: 20030716 FILER: COMPANY DATA: COMPANY CONFORMED NAME: TECHNOLOGY RESEARCH CORP CENTRAL INDEX KEY: 0000741556 STANDARD INDUSTRIAL CLASSIFICATION: SWITCHGEAR & SWITCHBOARD APPARATUS [3613] IRS NUMBER: 592095002 STATE OF INCORPORATION: FL FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: DEF 14A SEC ACT: 1934 Act SEC FILE NUMBER: 000-13763 FILM NUMBER: 03788986 BUSINESS ADDRESS: STREET 1: 5250 140TH AVE NORTH CITY: CLEARWATER STATE: FL ZIP: 34620 BUSINESS PHONE: 8135350572 MAIL ADDRESS: STREET 1: 5250 140TH AVENUE NORTH CITY: CLEARWATER STATE: FL ZIP: 34620 DEF 14A 1 prxy2003.txt PROXY STATEMENT - FISCAL YEAR 2003 SCHEDULE 14A INFORMATION PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES EXCHANGE ACT OF 1934 Filed by the Registrant [X] Filed by a Party other than the Registrant [ ] Check the appropriate box: [ ] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) [X] Definitive Proxy Statement [ ] Definitive Additional Materials [ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12 Technology Research 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: _____________________________________________________________________ (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: ______________________________________________ TECHNOLOGY RESEARCH CORPORATION Notice of Annual Meeting to Shareholders to be held August 21, 2003 To the Shareholders of TECHNOLOGY RESEARCH CORPORATION You are cordially invited to attend the Annual Meeting of Shareholders of Technology Research Corporation, a Florida corporation (the "Company"), which will be held on August 21, 2003, at 2:30 P.M. local time, at the Hampton Inn, 21030 U.S. 19 North, Clearwater, Florida 33765, Clearwater, Florida, for the following purposes: 1. To elect eight members of the Board of Directors who will be elected to a one-year term of office. 2. To ratify the selection by the Company's Board of Directors of KPMG LLP, Certified Public Accountants, as independent auditors of the Company for its fiscal year ending March 31, 2004. 3. To consider and vote upon a proposal to increase by 300,000 the number of shares to be reserved for future issuance under the Technology Research Corporation 2000 Long Term Incentive Plan. 4. To consider and act upon any matters related to the foregoing purposes and to transact such other business as may properly be brought before the meeting and at any adjournments thereof. A Proxy Statement and Board of Directors Proxy are being mailed with this notice. You are invited to attend the meeting in person, but if you are unable to do so, the Board of Directors requests that you sign, date and return the proxy, as promptly as practicable, by means of the enclosed envelope. If you are present at the meeting and desire to vote in person, you may revoke the proxy, and if you receive more than one proxy (because of different addresses of stockholdings), please fill in and return each proxy to complete your representation. By order of the Board of Directors /s/ Robert S. Wiggins Robert S. Wiggins Chairman of the Board and Chief Executive Officer Clearwater, Florida July 14, 2003 Enclosures TECHNOLOGY RESEARCH CORPORATION 5250 140th Avenue North Clearwater, Florida 33760 _________________________ PROXY STATEMENT _________________________ FOR ANNUAL MEETING OF SHAREHOLDERS TO BE HELD AUGUST 21, 2003 This Proxy Statement is being furnished to each holder of record of one or more outstanding shares of the single class of common capital stock authorized for issuance by the Articles of Incorporation of Technology Research Corporation (the "Company"), for his, her or its use in considering whether to comply with the proxy solicitation being made by the Company's Board of Directors (the "Board of Directors" or the "Board") in connection with the conduct of the 2003 annual meeting of the Company's shareholders, and of any adjournments or postponements thereof (the "Meeting"). Each copy of this Proxy Statement being mailed or otherwise delivered to shareholders is accompanied by a Proxy card and a Notice of Annual Meeting of Shareholders, and such materials are being mailed to Company shareholders of record on or about July 14, 2003. PURPOSE OF THE MEETING The Meeting is scheduled to be held on August 21, 2003 at 2:30 P.M. local time, at the Hampton Inn, 21030 U.S. 19 North, Clearwater, Florida 33765. Only holders of record of the Company's common voting stock at the close of business on July 3, 2003 (the "Record Date") are entitled to receive notice of and to vote at the Meeting. At the Meeting, such holders will be asked to consider and vote upon the following proposals: PROPOSAL ONE: To elect a board of directors to consist of eight members, each of whom shall be entitled to serve for a term of one year; PROPOSAL TWO: To ratify the selection by the Board of Directors of KPMG LLP as the Company's independent auditors for the fiscal year ending March 31, 2004; PROPOSAL THREE: To approve an increase of 300,000 shares of the Company's common stock to be reserved for future issuance under the Company's 2000 Long Term Incentive Plan; and PROPOSAL FOUR: To consider and act upon such other matters as may properly be brought before the Meeting. VOTING RIGHTS AND SOLICITATION OF PROXIES The Company's common stock, $.51 par value (the "Common Stock"), is the only type of security entitled to vote at the Meeting. On the Record Date for determining shareholders entitled to vote at the Meeting, there were 5,448,037 shares of Common Stock outstanding. Each shareholder of record on the Record Date is entitled to one vote for each share of Common Stock then held. Shares of Common Stock may not be voted cumulatively. All votes will be tabulated by the Registrar and Transfer Company, the Company's stock transfer agent, who will tabulate affirmative and negative votes, abstentions and broker non-votes prior to the Meeting. The Company's Chief Financial Officer will be the inspector of elections for the Meeting and determine the validity of the tabulation, including those shares voted or changed at the Meeting. Quorum Required The Company's Bylaws provide that the holders of a majority of the issued and outstanding shares of Common Stock (2,724,019), present in person or represented by valid proxy, shall constitute a quorum for the transaction of business at the Meeting. Abstentions and broker non-votes will be counted as present for the purpose of determining the presence of a quorum. Vote Required 1 PROPOSAL ONE: Directors are elected by a plurality of the affirmative votes cast by those shares present in person or represented by proxy and entitled to vote at the Meeting. The eight nominees for director positions receiving the highest number of affirmative votes will be elected. Abstentions and broker non-votes will not be counted toward a nominee's total. PROPOSALS TWO, THREE and FOUR: Passage of each other proposal to be considered by shareholders will require an affirmative vote by the holders of a majority of those shares present in person or represented by proxy, and which are cast either affirmatively or negatively at the Meeting. As in the case of Proposal One, abstentions and broker non-votes will not be counted as having been voted on any such proposal. The current directors and executive officers of the Company and their affiliates are expected to be the beneficial owners, as of the Record Date, of 657,441 shares (or approximately 12.1% of the outstanding shares) of Common Stock. Each has indicated an intention to vote in favor of Proposals One, Two and Three. Voting of Shares If your shares of Common Stock are registered directly in your name with the Company's transfer agent, you are considered, with respect to those shares, the shareholder of record, and these proxy materials are being sent directly to you by the Company. As the shareholder of record, you have the right to vote in person at the Meeting or to grant your voting proxy directly to the Company or another proxy holder. The Company has enclosed a proxy card for you to use. If your shares are held in a brokerage account, or by another nominee, you are considered the beneficial owner of shares held in street name, and these proxy materials are being forwarded to you, together with a voting instruction card, by your broker or other nominee. As the beneficial owner, you have the right to direct your broker or other nominee how to vote and are also invited to attend the Meeting. Your broker or other nominee has enclosed or provided voting instructions for you to use in directing the broker or other nominee bow to vote your shares. Shares of Common Stock held in a shareholder's name as the shareholder of record may be voted in person at the Meeting. Shares of Common Stock held beneficially in street name may be voted in person only if you obtain a legal proxy from the broker or other nominee that holds your shares giving you the right to vote the shares. Whether you hold shares directly as the shareholder of record or beneficially in street name, you may direct how your shares are voted without attending the Meeting. If you are a shareholder of record, you may vote by submitting a proxy. If you hold shares beneficially in street name, you may vote by submitting voting instructions to your broker or other nominee. Whether or not you are able to attend the Meeting, you are urged to complete and return your proxy or voting instructions, which are being solicited by the Board of Directors and which will be voted as you direct on your proxy or voting instructions when properly completed. In the event no directions are specified, such proxies and voting instructions will be voted FOR the nominees for election to the Board of Directors as set forth in Proposal One below, FOR each of Proposals Two and Three, and in the discretion of the proxy holders as to other matters that may properly come before the Meeting. You may also revoke or change your proxy or voting instructions at any time before the Meeting. To revoke your proxy, please send a written notice of revocation or another signed proxy with a later date to the Chief Financial Officer of the Company at the Company's principal executive offices before the beginning of the Meeting. You may also automatically revoke your proxy by attending the Meeting and voting in person. To revoke your voting instructions, please submit new voting instructions to your broker or other nominee, or, if your have obtained a legal proxy from your broker or other nominee giving you the right to vote your shares, by attending the meeting and voting in person. All shares represented by a valid proxy received prior to the Meeting will be voted. 2 Solicitation of Proxies As this solicitation is being made exclusively by the Board of Directors, any costs incurred in connection therewith, including the costs of preparation, assembly, printing and mailing of this Proxy Statement, the accompanying Notice of Annual meeting, and any additional soliciting material furnished to shareholders, will be borne by the Company. Copies of solicitation material will be furnished to brokerage houses, fiduciaries and custodians holding shares in their names that are beneficially owned by others so that they may forward this solicitation material to such beneficial owners. The Company may reimburse such persons for their costs of forwarding the solicitation material to such beneficial owners. All proxies are being solicited by mail in the accompanying form, but further solicitation following the original mailing may be made by Board representatives or agents by telephone, telegraph or personal contact with certain shareholders. No additional compensation will be paid to these representatives for such services. Except as described above, the Company does not intend to solicit proxies other than by mail. WHILE MANAGEMENT ENCOURAGES YOUR ATTENDANCE AT THE MEETING, HOLDERS OF COMMON STOCK ARE REQUESTED TO SIGN, DATE AND RETURN PROMPTLY THE ACCOMPANYING PROXY TO THE COMPANY IN THE ENCLOSED POSTAGE-PAID, ADDRESSED ENVELOPE. PROPOSAL ONE - ELECTION OF DIRECTORS Number and Composition of the Board of Directors The Company's By-Laws of the Company provide that its Board of Directors shall consist of not less than three members and may be composed of such higher number as may be fixed from time to time by action of the Board of Directors or of the shareholders. The Board recommends that the exact number of directors not be determined by shareholder action, thus permitting the Board to increase or decrease the number of directors during the year and to fill any vacancy, as it deems advisable to do so. The Board is currently comprised of six members. All six members of the Board of Directors will stand for election at the 2003 Annual Meeting. In addition, Jerry T. Kendall and Jack S. Painter, Jr. have been nominated to stand for election to the Board bringing the total number of Board recommended nominees to eight. Information Concerning Nominees Unless authority is withheld as to one or more of the Board's designated nominees, the shares represented by Board of Directors proxies properly executed and timely received will be voted for the election as Directors of the eight nominees named below, six of whom presently serve in that capacity. If any such nominee fails to stand for election for any reason, the proxy will be voted for a substitute nominee designated by the Board of Directors. The Board has no reason to believe that any nominee will be unavailable to serve if elected. The nominees listed below, if elected, will serve a one-year term, expiring on the date of the annual meeting of shareholders in 2004. Certain information with respect to each nominee is hereafter set forth: Year Name Age Position First Elected Robert S. Wiggins 73 Director, Chairman of the Board 1988 Board and Chief Executive Officer Jerry T. Kendall 60 President and Nominated Chief Operating Officer Raymond H. Legatti 71 Director and Senior Vice President 1981 Raymond B. Wood 68 Director, Senior Vice President 1981 and Director of Government Operations and Marketing 3 Gerry Chastelet 56 Director 1999 Edmund F. Murphy, Jr. 74 Director 1988 Jack S. Painter, Jr. 58 Director Nominated Martin L. Poad 63 Director 1998 ROBERT S. WIGGINS has been Chairman of the Board, Chief Executive officer and Director of the Company since March 1988. From 1974 to 1987, he was Chairman, Chief Executive Officer and President of Paradyne Corporation, Largo, Florida, a data communications company. Mr. Wiggins served as a consultant for Paradyne from 1987 to March 1988. In addition, he spent three years with GTE Information Systems Division as a Vice President and 13 years in various sales and product development managerial positions with IBM Corporation. JERRY T. KENDALL attended Georgia Institute of Technology and Georgia State University receiving his BA in Management in 1967 and his MBA in 1970 from Georgia State University. Mr. Kendall most recently served as Executive Vice President, The Americas, for Sensormatic Electronics Corporation, then a $1.1 billion electronics security company. Previous executive management positions include Senior Vice President of Sales, Marketing and Customer Service for Security Tag Corporation, President of Lasergate Corporation and President and Chief Executive Officer of Paradyne Corporation. He also held sales management positions with Inforex, sales positions with IBM and was a financial analyst with the Lockheed Georgia Company. Mr. Kendall also previously served on the Company's Board of Directors for 4 1/2 years in the 1994 - 1998 time frame. RAYMOND H. LEGATTI, a founder of the Company, has been a member of the Board since 1981. Mr. Legatti recently announced his intended retirement from the Company, effective December 31, 2003, and as a result resigned as President to allow Mr. Kendall to assume that position. Mr. Legatti will remain with the Company as Senior Vice President until his retirement and, if elected, as a Director until August 2004. From 1980 to 1981, he served as Corporate Director of Electronic Activity for Square D Company, whose offices are located in Palatine, Illinois. From 1978 to 1980, he served as Manager of Square D operations in Clearwater, Florida. From 1975 to 1978, he served as President of Electromagnetic Industries, Inc., a subsidiary of Square D Company. During the prior 20 years, he was Vice President of Engineering, Director and General Manager of the Electronics Division of Electromagnetic Industries, Inc. which was acquired by Square D Company in 1974. He has served on the Board of Directors of the Building Equipment Division of the National Electrical Manufacturers Association ("NEMA") and was the Technical Representative for NEMA on the National Fire Prevention Association's Committee for Standards for Anesthetizing Locations. He has served as Chairman of the Ground Fault and Health Care sections of NEMA. Mr. Legatti was appointed as Technical Advisor to the United States National Committee of the International Electrotechnical Commission ("IEC") (which establishes International Electrical Standards) SC23E for GFCI technology and also is Chairman of the U.S. Technical advisory groups for IEC SC23E/WG2 and WG7, and serves as the expert delegate on several IEC committees representing the USA. Mr. Legatti is also Chairman of IEC 23E/WG7 Committee for Protective Devices for Battery Powered Vehicles. Mr. Legatti serves on the NEMA Electric Vehicle Council; is a NEMA representative on the Electric Power Research Institute ("EPRI"); is on the Electric Vehicle Infrastructure Working Council ("IWC"); is on Health and Safety and Personnel Protection Committees; serves as a liaison representative between the IWC and the IEC; is a Member of the Task Group for the U. S. Consumer Products Safety Commission Home Electrical Systems Fire Project; is a Member of the Society of Automotive Engineers; and is a Fellow of the Institution of Incorporated Executive Engineers. Mr. Legatti also serves on the Underwriters Laboratories Advisory Committee. Mr. Legatti, English-born and educated, has acquired extensive management experience and expertise in the areas of electrical control and measurement in various environments. His 26 separate United States patents are applied in products in wide use in military engine generator systems, hospital insulated electrical systems, and in electrical safety products that prevent fires and protect against electrocution and electrical shock. On October 12, 1999, Xerox Corporation was issued a patent, which listed Mr. Legatti as a co-inventor for the Modular, Distributed Equipment Leakage Circuit Interrupter. 4 RAYMOND B. WOOD, a founder of the Company, has been a Director, Senior Vice President and Director of Government Operations and Marketing of the Company since its inception in 1981. From 1974 to 1981, he was Manager of Engine Generator Component Marketing for Square D Company. He was employed by Electromagnetic Industries, Inc. for 20 years prior to its acquisition by Square D Company. During this time, he held the position of General Manager of Electromagnetic Industries of Georgia Inc., the systems manufacturing plant for military products such as diesel generating systems, generators, controls, semi-trailers, etc. Previous assignments included service as Project and Design Engineer for military products produced by Electromagnetic Industries Inc. Mr. Wood is a charter member of the industries association, Electrical Generating Systems Association ("EGSA"), has served on its Board of Directors and has been the Chairman of the Government Liaison Committee for over 25 years. Mr. Wood is also a member of the U.S. Naval Institute. For over 40 years, he has been involved in design, manufacture and qualification conformance evaluation for listing by the Department of Defense, marketing and product application concerning control and measurement of electric power for Mobile Ground Power Military Engine Generator Systems, and electrical power controls for Naval Shipboard and Military Armored Tracked Vehicle application. During such period, Mr. Wood has had extensive contact with the military procurement, contract administration, engineering and test qualifying locations, as well as with the government prime contractors to the Department of Defense. Mr. Wood has served on numerous ad hoc committees for military engine generator specification review requirements and is frequently consulted for solutions to problems encountered with military engine generator systems by both the military and prime contractors to the Department of Defense. GERRY CHASTELET was first appointed to membership on the Board of Directors by action of the Board taken as of March 31, 1999. Mr. Chastelet is currently retired. From October 1998 to January 2003, Mr. Chastelet was Chairman of the Board, Chief Executive Officer, President and a Director of Digital Lightwave, Inc., a leading provider of optical network test and management products. Mr. Chastelet is also currently a director of Waverider Communications, Inc. From December 1995 to October 1998, Mr. Chastelet was President, Chief Executive Officer and a Director of Wandel & Goltermann Technologies, Inc., a global supplier of communications test and measurement equipment. Prior to joining Wandel & Goltermann, Mr. Chastelet was Vice President of Sales, Marketing and Service - Americas and Asia Pacific for Network Systems Corporation. He also held senior management positions with Gandalf Systems Corporation and Paradyne Corporation. He spent 15 years with the IBM Corporation in various sales, service, marketing and management positions. Mr.Chastelet has a degree in Electronic Engineering from Devry Institute of Technology and is a graduate of the University of Toronto Executive MBA Program. EDMUND F. MURPHY, JR. has been a member of the Board since 1988. For many years, Mr. Murphy functioned as the sole owner and Chief Executive of Murphy Management Consultants, Inc., a Belleair, Florida based consulting firm. Prior to that activity, Mr. Murphy served as Senior Vice President of International Marketing for Paradyne Corporation, a Largo, Florida based, publicly held distributor of data communications equipment. JACK S. PAINTER, JR. attended Georgia Tech University, receiving his Bachelor of Industrial Engineering degree in 1966 and his MBA in 1968 from the Wharton School of Finance and Commerce. Mr. Painter is currently a consultant and serves on the Boards of Beall's Inc., Raymond James Bank and Colliers Arnold. Previous executive management positions include service as President of Benito Advertising, President of Fahlgren Martin's Florida operations after it merger with Benito Advertising and Vice President of Fawcett McDermott Cavanagh. Mr. Painter was also the founder and interim CEO of The Tampa Bay Partnership, the regional economic development organization for West Central Florida. Mr. Painter was also the transition CEO of the State of Florida's Division of Tourism, which he privatized in 1996 and which has subsequently functioned as Visit Florida, Inc., a marketing company. MARTIN L. POAD has served as a member of the Board of Directors since late 1998. Mr. Poad is the founder, Chairman and Chief Executive Officer of Interlink Communication Systems, Inc. (ICS), a value-added distribution company for data communications equipment and internet working products. Mr. Poad has significant expertise in using the Internet for market development and on-line commerce. ICS has one of the most complete web sites on the Internet. Prior to founding ICS, Mr. Poad had been with the IBM Corporation for 19 years in various sales and senior management positions. He held a number of senior management positions with Paradyne Corporation and AT&T Paradyne, including Vice President of Distribution. Mr. Poad is a graduate of Carnegie-Mellon University, majoring in industrial management with a minor in mechanical engineering. 5 Meetings and Committees of the Board Of Directors The Board of Directors has not appointed a standing nominations committee. Nominees for election to the Board are selected by the incumbent board at a regular meeting thereof. With the exception of Audit and Compensation Committees, no other standing Board Committee has been formed as of the present time. During the fiscal year ended March 31, 2003, the Board of Directors held four meetings and did not act by written consent in lieu of a meeting on any occasion. During that period, each of the current directors attended or participated in at least 75% of the aggregate of (i) the total number of meetings of the Board of Directors and (ii) the total number of meetings held by all committees of the Board on which he served. Audit Committee. During the fiscal year ended March 31, 2003, the Audit Committee of the Board of Directors (the "Audit Committee") held six meetings and did not act by written consent in lieu of any meeting. The Audit Committee reviews, acts upon and reports to the Board of Directors with respect to various auditing and accounting matters, including the adequacy of the Company's internal system of accounting controls; the selection of, fees paid to and performance of the Company's accountants; the scope of the annual audit; and other matters regarding the financial affairs of the Company. Mr. Chastelet chairs the Audit Committee and Messrs. Murphy and Poad constitute its remaining members. Compensation Committee. During the fiscal year ended March 31, 2003, the Compensation Committee of the Board of Directors (the "Compensation Committee") held four meetings and did not act by written consent in lieu of any meeting. The Compensation Committee administers the Company's Long Term Incentive Plan and other plans and programs relating to benefits, incentives and compensation of the Company's executive officers, reviews the performance of the Company's executive officers, and makes recommendations to the Board of Directors with respect to compensation, including salary, cash bonuses and grants of stock options to management employees. Non-qualified stock options which are granted to the members of the Compensation Committee are recommended by the Company's Chief Executive Officer and approved by the Board of Directors. The chair of the Compensation Committee is Mr. Murphy and Messrs. Chastelet and Poad constitute its remaining members. Director Compensation Directors who are also salaried employees of the Company do not receive any additional cash compensation for serving as a director. Non-employee directors receive $500 for each committee meeting and $1,500 for each full board meeting they attend with the Audit Committee Chairman receiving an additional $500 per such meeting. The Company also grants non-qualified stock options and, in some instances, incentive stock options to certain Directors. Recommendation of the Board of Directors THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" EACH OF THE EIGHT NOMINEES LISTED ABOVE. PROPOSAL TWO - RATIFICATION OF SELECTION OF INDEPENDENT AUDITORS For the 20th consecutive year, the Company's Board of Directors has selected the independent certified public accounting firm of KPMG LLP to perform audit and related functions with respect to the Company's accounts for its fiscal year ending March 31, 2004. The Board recommends ratification of its selection. In the event the shareholders fail to ratify the appointment, the Board of Directors will reconsider its selection, and even if ratification occurs, the Board, in its discretion, may direct the appointment of a different independent accounting firm at any time during the fiscal year if it determines that such a change would be in the best interest of the Company and its shareholders. 6 One or more representatives of KPMG LLP will be in attendance at the Meeting to respond to appropriate shareholder questions and to have an opportunity to make any statement which they may care to address to the attending shareholders. Audit Fees Audit fees billed the Company by KPMG LLP for the audit of the Company's annual financial statements for fiscal year 2003 and the review of the quarterly financial statements included in the Company's quarterly reports on Form 10-Q for that fiscal year totaled approximately $82,500. Audit-Related Fees KPMG LLP billed the Company $7,500 during the Company's 2003 fiscal year for the audit of its 401(k) Plan for the period ended December 31, 2001. Financial Information Systems Design and Implementation Fees No financial information systems design and implementation services were provided to the Company by KPMG LLP during the Company's 2003 fiscal year. All Other Fees KPMG LLP also billed the Company $11,390 for income tax preparation for the Company's 2002 tax year. No other fees were billed the Company except as is mentioned herewith. Recommendation of the Board of Directors THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE RATIFICATION OF THE SELECTION OF KPMG LLP TO SERVE AS THE COMPANY'S INDEPENDENT PUBLIC ACCOUNTANTS FOR THE FISCAL YEAR ENDING MARCH 31, 2004. PROPOSAL THREE - TO APPROVE AN INCREASE OF 300,000 SHARES TO BE RESERVED UNDER THE COMPANY'S 2000 LONG TERM INCENTIVE PLAN The Company is asking its shareholders to approve an increase of 300,000 shares to be reserved for future issuance under the Company's 2000 Long Term Incentive Plan (the "Incentive Plan"). The Incentive Plan was originally approved by shareholder action at the annual meeting held in August 2000, and provides for the grant of both tax-qualified "incentive" stock options and non- qualified stock options to acquire shares of Common Stock. The Incentive Plan will remain in effect as long as any awards made thereunder are outstanding. If approved, the proposed increase will raise to 600,000 the total number of shares reserved for issuance under the Plan, and will provide the basis for future long-term compensation awards by means of stock option grants. To date, 298,250 shares of Common Stock have been made the subject of previous option grants. Approval of the increase is believed by management to be critical to the Company's ability to attract and retain highly motivated and qualified employees and directors, particularly in the competitive labor market that currently exists. Recommendation of the Board of Directors THE BOARD OF DIRECTORS BELIEVES THAT APPROVAL OF THE 300,000 SHARE INCREASE IN THE NUMBER OF SHARES TO BE RESERVED FOR FUTURE ISSUANCE UNDER THE 2000 LONG TERM INCENTIVE PLAN IS IN THE BEST INTEREST OF ALL SHAREHOLDERS AND, ACCORDINGLY, RECOMMENDS A VOTE "FOR" SUCH INCREASE. 7 VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF Beneficial Ownership Table The following table enumerates, as of July 3, 2003, certain information with respect to shares beneficially owned by (i) each person known by the Company to be the beneficial owner of more than five percent (5%) of the Company's outstanding shares of Common Stock, (ii) each of the Company's directors and the executive officers named in the Summary Compensation Table below, and (iii) all current directors and executive officers as a group: Shares Percentage Beneficial Owner Beneficially Owned(1) of Class Robert S. Wiggins, 352,638 6.5% Chairman of the Board, Chief Executive Officer and Director Jerry T. Kendall, -0- N/A President and Chief Operating Officer Raymond H. Legatti(2), 177,872 3.3% Senior Vice President and Director Raymond B. Wood,(2) 161,375 3.0% Senior Vice President and Director of Government Operations Gerry Chastelet,(2) 25,000 0.5% Director Edmund F. Murphy, Jr.,(2) 38,568 0.7% Director Martin L. Poad,(2) 25,000 0.5% Director Scott J. Loucks,(2) 18,757 0.3% Vice President and Chief Financial Officer Dimensional Fund Advisors, Inc.(3) 300,300 5.5% 1299 Ocean Avenue, 11th Floor Santa Monica, California 90401 All directors, officers and 5%(2) 1,099,510 19.7% beneficial owner as a group (nine persons) Footnotes: (1) For purposes of this table, a person or group of persons is deemed to be the "beneficial owner" of any shares that such person has the right to acquire within 60 days following July 3, 2003. For purposes of computing the percentage of outstanding shares held by each person or group of persons named above on a given date, any security that such person or persons has the right to acquire within 60 days following July 3, 2003 is deemed to be outstanding, but is not deemed to be outstanding for the purpose of computing the percentage ownership of any other person. (2) Includes the following shares subject to currently exercisable options held by Messrs. Legatti (16,700), Wood (16,700), Chastelet (25,000), Murphy (38,334), Poad (25,000) and Loucks (11,701). (3) 5% beneficial owner as reported in the shareholder's Schedule 13G/A filed with the Securities and Exchange Commission ("SEC") on February 10, 2003. 8 Compliance with Section 16(a) of The Exchange Act The members of the Company's Board of Directors and its executive officers, as well as persons who own more than ten per cent of the Company's outstanding shares of Common Stock are subject to the reporting requirements of Section 16(a) of the Exchange Act ("Section 16(a)"), which require them to file with the Securities and Exchange Commission reports with respect to their ownership of Common Stock and their transactions therein. Based upon (i) the copies of Section 16(a) reports that the Company received from such persons for their fiscal year 2003 transactions in the Common Stock and their Common Stock holdings, and (ii) the written representations received from one or more of such persons that no annual Form 5 reports were required to be filed by them for fiscal year 2003, the Company believes that all reporting requirements under Section 16(a) were met in a timely manner by all such persons except that Form 4 filings arising from stock options, each for 5,000 shares, granted on March 20, 2003, respectively, to Messrs. Chastelet, Murphy and Poad, at an exercise price of $2.33, were filed some eight days after the due date. 9 EXECUTIVE COMPENSATION AND RELATED INFORMATION The following Summary Compensation Table sets forth for the fiscal years ended March 31, 2003, 2002 and 2001 the compensation earned by the Company's Chief Executive Officer and each of the other four most highly compensated executive officers whose compensation for fiscal year 2003 exceeded $100,000 (each a "Named Officer" and collectively the "Named Officers"). Long-Term Annual Compensation Compensation(4) Awards(5) Name and Principal Stock All Other Position Year Salary($) Bonus Options(#) Compensation($) Robert S. Wiggins 2003 225,000 15,000 -0- 400(6) Chairman of the 2002 225,000 -0- 25,000 400(6) Board and CEO 2001 225,000 -0- -0- 400(6) Raymond H. Legatti 2003 125,000 -0- -0- 400(6) Senior Vice President 2002 125,000 -0- 15,000 400(6) 2001 125,000 -0- -0- 400(6) Raymond B. Wood 2003 125,000 21,700 -0- 400(6) Senior Vice President 2002 125,000 -0- 15,000 400(6) and Director of 2001 125,000 -0- -0- 400(6) Government Operations Hamze M. Moussa 2003 110,000 25,000 -0- 30,400(6) President of TRC/ 2002 110,000 20,000 -0- 28,900(6) Honduras S.A. de C.V. 2001 97,500 5,000 10,000 3,400(6) Edward A. Schiff 2003 110,000 5,000 -0- 400(6) Vice President of 2002 100,000 14,000 -0- 400(6) U.S. Commercial Sales 2001 99,583 7,417 15,000 400(6) and Marketing Footnotes: (4) The column for "Other Annual Compensation" has been omitted because there is no compensation required to be reported in such column. The aggregate amount of perquisites and other personal benefits provided to each of the Company's Chairman of the Board and other named executives did not exceed the lesser of $50,000 or 10% of the total of annual salary and bonus of such officer. (5) The columns "Restricted Stock Award" and "LTIP Payouts" have been deleted because the Company does not currently offer either type of awards. (6) The amount indicated consists of a matching contributions made by the Company to its 401(k) Plan, and for Mr. Moussa only, a housing allowance paid for by TRC Honduras S.A. de C.V., the Company's Honduran manufacturing facility. Stock Option Grants in Last Fiscal Year No stock options were granted by the Company during its fiscal year 2003 to any of the Named Officers. 10 Aggregate Option Exercises in Last Fiscal Year and Fiscal Year-End Option Values The following table sets forth information concerning option exercises in fiscal year 2003 and option holdings as of March 31, 2003 with respect to each of the Named Officers. No stock appreciation rights were outstanding at the end of that year. Value of Unexercised Number of In-the- Unexercised Money Options at Options at Fiscal Year- Fiscal Year- End (#) End ($)(8) Shares Acquired on Value Exercisable/ Exercisable/ Name Exercise(#) Realized($)(7) Unexercisable Unexercisable Robert S. Wiggins -0- -0- 8,334/25,000 10,001/28,958(9) Raymond H. Legatti -0- -0- 16,700/10,000 18,578/12,000(9) Raymond B. Wood -0- -0- 16,700/10,000 18,578/12,000(9) Hamze M. Moussa 12,166 12,966 -0- /3,333 -0- /3,113(9) Edward A. Schiff -0- -0- 25,000/55,000 25,465/4,670(9) Footnotes: (7) An individual option holder, upon exercise of an option, does not receive cash equal to the amount set forth in the Value Realized column of this table. The amount set forth above reflects the increase in the price of the Company's Common Stock from the date of grant to the price of the Company's Common Stock on the option exercise date (i.e. $2.70 per share on March 31, 2003), multiplied by the applicable number of options. No cash is realized until the shares received upon exercise of an option are sold. (8) Options are "in-the-money" at the fiscal year end if the fair market value of the underlying securities on such date exceeds the exercise price of the option. (9) These amounts represent the difference between the exercise price of such stock options and the closing price of the Company's stock on March 31, 2003. Compensation Committee Report The Compensation Committee (the "Committee") has the authority to establish the level of base salary payable to the Chief Executive Officer (the "CEO") and the other executive officers of the Company and to administer the Company's 2000 Long Term Incentive plan. In addition, the Committee has the responsibility for approving the individual bonus programs to be in effect for the CEO and the other executive officers. The Committee is comprised of non- employee directors and acts periodically to evaluate the effectiveness of the compensation program in tying Company performance to executive pay. Additionally, the Committee or the Board of Directors is routinely consulted to approve the compensation package of a newly hired executive or of an executive whose scope of responsibility has changed significantly. For the fiscal year ended March 31, 2003, the process utilized by the Committee in determining executive officer compensation levels was based on the subjective judgment of the Committee. Among the factors considered by the Committee were the recommendations of the CEO with respect to the compensation of the Company's key executive officers. However, the Committee made the final compensation decisions concerning such officers. 11 General Compensation Policy. The objective of the Company's executive compensation program is to align executive compensation with the Company's long-term and short-term business objectives and performance. Additionally, executive compensation is designed to enable the Company to attract, retain and motivate qualified executives who are able to contribute to the long-term success of the Company. The specific strategies relied upon to guide the Company's executive compensation decisions include tying some portion of the executive's pay to performance and comparing levels of compensation to those of other companies operating within similar industries so as to ensure the competitiveness of the Company's programs. Submitted by the Compensation Committee of the Board of Directors: Edmund F. Murphy, Jr., Chair Gerry Chastelet Martin L. Poad COMPENSATION COMMITTEE INTERLOCKS AND INSIDER INFORMATION No member of the Company's Compensation Committee was at any time during the Company's fiscal year 2003 an officer or employee of the Company, and no executive officer of the Company served (or serves) as a member of the board of directors or compensation committee of any entity that has one or more executive officers serving as a member of the Company's Board of Directors or Compensation Committee. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS The Company's Bylaws provide that the Company shall indemnify its directors and officers to the fullest extent permitted by Florida law, including in circumstances in which indemnification is otherwise discretionary under such law. AUDIT COMMITTEE REPORT As set forth in more detail in the Audit Committee Charter as adopted by the Board of Directors (a copy of which was attached as Exhibit A to the Company's proxy statement for its 2001 annual meeting of shareholders), the Audit Committee (the "Committee") assists the Board of Directors in fulfilling its responsibility for oversight of the quality and integrity of the accounting, auditing and financial reporting practices of the Company, and also recommends to the Board of Directors, subject to shareholder ratification, the selection of the Company's independent accountants. Management is responsible for the Company's internal controls. The Company's independent auditors are responsible for performing an independent audit of the Company's consolidated financial statements in accordance with generally accepted accounting standards and to issue a report thereon. The Committee has general oversight responsibility with respect to the Company's financial reporting, and reviews the results and scope of the audit and other services provided by the Company's independent accountants. In fulfilling these responsibilities, the Committee met with both the Company's management and its independent accountants to review all financial statements and to discuss significant accounting policies and issues prior to the issuance of those statements. Management represented to the Committee that the Company's consolidated financial statements were prepared in accordance with generally accepted accounting principles, and the discussions held with the Company's independent accountants covered those matters required to be discussed by Statement on Auditing Standards No. 61 (Codification of Statements on Auditing Standards). During those discussions, the accountants provided to the Committee the written disclosures and the letter required by Independence Standards Board Standard No 1 (Independence Discussions with Audit Committees), and the Committee discussed with the accountants their independence and whether the non-audit services provided by them to the Company during fiscal year 2003 was compatible with the accountants' independence. 12 The members of the Committee are not professionally engaged in the practice of auditing or accounting and are not experts in the fields of accounting or auditing, including in respect of auditor independence. Members of the Committee rely without independent verification on the information provided to them and on the representations made by management and the independent accountants. Accordingly, the Committee's oversight does not provide an independent basis to determine that management has maintained appropriate accounting and financial reporting principles or internal control and procedures designed to assure compliance with accounting standards and applicable laws and regulations. Moreover, the Committee's above-referenced considerations and discussions do not ensure that the audit of the Company's financial statements has been carried out in accordance with generally accepted accounting principles or that the Company's auditors are in fact "independent." On the basis of its reviews and discussions and the report of the independent auditors to the Committee, the Committee recommended to the Board of Directors, and the Board has approved, that the audited financial statements be included in the Company's Annual Report on Form 10-K for the fiscal year ended March 31, 2003, as filed with the Securities and Exchange Commission, and that KPMG LLP be selected as the Company's independent auditors for the Company's 2004 fiscal year. Submitted by the Audit Committee of the Board of Directors: Gerry Chastelet, Chair Edmund F. Murphy, Jr. Martin L. Poad FORM 10-K A copy of the 2003 Annual Report to Stockholders, which includes the Company's Form 10-K for the fiscal year ended March 31, 2003, has been mailed with this Proxy Statement to all shareholders entitled to vote at the Annual Meeting. THE COMPANY WILL MAIL, WITHOUT CHARGE, UPON WRITTEN REQUEST, A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K, INCLUDING CONSOLIDATED FINANCIAL STATEMENTS, SCHEDULES, AND LISTS DESCRIBING ALL EXHIBITS THERETO. REQUESTS SHOULD BE ADDRESSED TO TECHNOLOGY RESEARCH CORPORATION, 5250 140th AVENUE NORTH, CLEARWATER, FLORIDA 33760, ATTENTION: SCOTT J. LOUCKS, VICE PRESIDENT OF FINANCE AND CHIEF FINANCIAL OFFICER. SHAREHOLDER PROPOSALS FOR 2004 ANNUAL MEETING Shareholders who intend to have a proposal considered for inclusion in the Company's proxy statement and form of proxy for presentation at the Company's 2004 annual meeting of shareholders pursuant to Rule 14a-8 under the Exchange Act must submit the proposal to the Company at its principal executive offices not later than March 15, 2004. If next year's annual meeting of shareholders is moved to a date more than 30 days before or after the anniversary date of the Meeting, the deadline for inclusion of proposals in the Company's proxy statement and proxy is instead a reasonable time before the Company begins to print and mail its proxy materials. Shareholders who intend to present a proposal at the 2004 annual meeting of shareholders without inclusion of such proposal in the Company's proxy materials are required to provide notice of such proposal to the Company no later than June 1, 2004. 13 OTHER MATTERS The management has no information that any other matter will be brought before the Annual Meeting. If, however, other matters are presented, it is the intention of the persons named in the accompanying form of proxy to vote the proxy in accordance with their best judgment, discretionary authority to do so being included in the proxy. By order of the Board of Directors /s/ Robert S. Wiggins Robert S. Wiggins Chairman of the Board and Chief Executive Officer Clearwater, Florida July 14, 2003 14 TECHNOLOGY RESEARCH CORPORATION PROXY FOR ANNUAL MEETING OF SHAREHOLDERS-TO BE HELD AUGUST 21, 2003 THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS Each of the undersigned, as the owner(s) as of July 3, 2003 of common stock of Technology Research Corporation, a Florida corporation(the "Company") hereby appoints Robert S. Wiggins, Chairman of the Board and Scott J. Loucks, Chief Financial Officer, and each of them, jointly and severally, as attorney-in-fact and proxy, each with full power of substitution for the limited purpose of voting all shares of the common stock owned by the undersigned at the Annual Meeting of Shareholders of the Company to be held at the Hampton Inn, 21030 U.S. 19 North, Clearwater, Florida at 2:30 P.M., local time, August 21, 2003, and at any adjournments thereof, but only in accordance with the following instructions: If you are unable to attend the meeting personally, the Board of Directors requests that you complete and mail the proxy to insure adequate shareholder representations at the Meeting. As this proxy is being solicited by the Board of Directors, you are encouraged to contact any member of the incumbent Board if you have any question concerning this proxy or the matters referenced herein. (Continued on reverse side) TECHNOLOGY RESEARCH CORPORATION PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY PROMPTLY USING THE ENCLOSED ENVELOPE. Election of Directors FOR WITHHOLD FOR ALL To withhold authority to vote, mark "For All Except" ALL ALL EXCEPT and write the nominee's number on line below. 1. Nominees: 01) Robert S. Wiggins, [ ] [ ] [ ] ____________________________________________________ 02) Jerry T. Kendall, 03) Raymond H. Legatti, 04) Raymond B. Wood, 05) Gerry Chastelet, 06) Edmund F. Murphy, Jr., 07) Jack S. Painter, Jr., 08) Martin L. Poad Vote on Proposal FOR AGAINST ABSTAIN 2. Approval of KPMG LLP, Certified Public Accountants, as independent auditors of the Company for operating year ending March 31, 2004. [ ] [ ] [ ] 3. Approval to increase by 300,000 the number of shares to be reserved for future issuance under the Technology Research Corporation 2000 Long Term Incentive Plan. In accordance with their best judgment on any other matter that may properly be voted upon at the meeting. This proxy, when properly executed, will be voted in the manner directed herein by the undersigned shareholder(s). If none of the choices specified in any of the Proposals 1, 2 or 3 shall be marked, the named proxy is authorized and directed to vote as described therein and in accordance with that certain Proxy Statement dated July 14, 2003. If signing in a fiduciary or representative capacity, please give full title as such. If signing as a corporate officer, please give your title and full name of the corporation; or if ownership is in more than one name, each additional owner should sign. ____________________________________ _______ ____________________________________ _______ |____________________________________|_______| |____________________________________|_______| Signature [PLEASE SIGN WITHIN BAX] Date Signature [Joint Owners] Date
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