8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of The Securities Exchange Act of 1934

Date of Report: May 13, 2014

VIRCO MFG. CORPORATION

(Exact name of registrant as specified in its charter)

Delaware	001-8777	95-1613718
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

2027 Harpers Way
Torrance, California	90501
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (310) 533-0474

Not Applicable

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

TABLE OF CONTENTS

VIRCO 8-K

Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

Departure of Directors

As part of a Board reconstitution plan, William Beer, Donald Friesz, Glen Parish, Thomas Schulte and James Wilburn each delivered a letter resigning from the Board of Directors (the “Board”) of Virco Mfg. Corporation (the “Company”) effective May 7, 2014. A copy of each letter of resignation is attached hereto as Exhibits 99.01 through 99.05. In addition, Robert Montgomery announced his resignation effective no later than the commencement of the Company’s 2014 Annual Meeting of the Stockholders.

Election of Directors

On May 7, 2014, the Board appointed Robert Lind and Donald Rudkin to fill two vacancies on the Board, effective immediately. Mr. Lind will serve as a Class I director with a term expiring at the 2014 Annual Meeting of Stockholders or until the election and qualification of his successor. Mr. Rudkin will serve as a Class II director with a term expiring at the 2015 Annual Meeting of Stockholders or until the election and qualification of his successor. There was no arrangement or understanding between Mr. Lind or Mr. Rudkin and any other persons pursuant to which Mr. Lind or Mr. Rudkin was selected as a director. Mr. Lind and Mr. Rudkin will each serve on the Audit, Compensation and Corporate Governance and Nominating Committees of the Board.

As non-employee directors, Mr. Lind and Mr. Rudkin will each receive the standard compensation amounts payable to non-employee directors of the Company, as described in the Company’s 2013 Proxy Statement, filed with the Securities and Exchange Commission on May 28, 2013.

D&O Coverage Agreements

On May 7, 2014, the Company entered into agreements with each of the resigning directors who resigned effective as of such date. These agreements provide that the Company will continue coverage for such director, to the extent available on the terms set forth therein, under its existing D&O liability policy for a period of five years.

The description of the D&O coverage agreements set forth in this Item 5.02 is not complete and is qualified in its entirety by reference to the full text of the form of D&O coverage agreement between the Company and each of such directors, which is filed as Exhibit 10.01 to this Current Report on Form 8-K and is incorporated herein by reference.

Item 5.03 Amendments to Articles of Incorporation or Bylaws; Changes in Fiscal Year.

On May 7, 2014, the Board approved an amendment to the Company’s Bylaws to reduce the size of the board to five members following the resignation of the directors effective on May 7, 2014 and the appointment of Messrs. Lind and Rudkin.

The summary of the amendment to the Company’s Bylaws is qualified in its entirety by reference to the full text of the amendment, which is filed as Exhibit 3.01 to this Current Report on Form 8-K and is incorporated herein by reference.

Item 7.01 Regulation FD Disclosure.

On May 12, 2014, the Company issued the press release attached hereto as Exhibit 99.06.

A copy of the press release is attached hereto as Exhibit 99.06 and incorporated herein by reference. The information in this Current Report, including Exhibit 99.06 hereto, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and shall not be incorporated by reference into any registration statement or other document pursuant to the Securities Act of 1933, as amended. The information set forth in Item 7.01 of this Current Report on Form 8-K shall not be deemed an admission as to the materiality of any information in this Current Report on Form 8-K that is required to be disclosed solely to satisfy the requirements of Regulation FD.

Item 9.01. Financial Statements and Exhibits

(d) Exhibits

Exhibit Number	Description
3.01	Amendment to the Bylaws of the Company
10.01	Form of Agreement with resigning Directors
99.01	Resignation letter of William Beer
99.02	Resignation letter of Donald Friesz
99.03	Resignation letter of Glen Parish
99.04	Resignation letter of Thomas Schulte
99.05	Resignation letter of James Wilburn
99.06	Press Release, dated May 12, 2014

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	VIRCO MFG. CORPORATION
Dated: May 13, 2014	By:	/s/ Robert A. Virtue
		Robert A. Virtue
		Chief Executive Officer and
		Chairman of the Board of Directors

Exhibit Index

Exhibit Number	Description
3.01	Amendment to the Bylaws of the Company
10.01	Form of Agreement with resigning Directors
99.01	Resignation letter of William Beer
99.02	Resignation letter of Donald Friesz
99.03	Resignation letter of Glen Parish
99.04	Resignation letter of Thomas Schulte
99.05	Resignation letter of James Wilburn
99.06	Press Release, dated May 12, 2014

EX-3.01

Exhibit 3.01

Amendment to the Bylaws of Virco Mfg. Corporation

Section 2.01 of the Bylaws is amended to read as follows:

“Number of Directors. The authorized number of directors of the Corporation shall be five, and such authorized number shall not be changed except by a Bylaw or amendment thereof duly adopted by the stockholders in accordance with the Certificate of Incorporation or by a majority of the Whole Board amending this Section 2.01. For purposes of these Bylaws, the term “Whole Board” shall mean the total number of authorized directors whether or not there exist any vacancies in previously authorized directorships.”

EX-10.01

Exhibit 10.01

AGREEMENT

This Agreement (the “Agreement”) is made and entered into as of May 7, 2014 between Virco Mfg. Corporation, a Delaware corporation (the “Company”) and                     (“Resigning Director”).

A. Resigning Director has tendered his resignation as a member of the Board of Directors of the Company (the “Board”) effective May 7, 2014.

B. In connection with such resignation, the Company desires to provide Resigning Director with continuing coverage under the Company’s D&O policy for the period he was a member of the Board to the extent available on the terms set forth herein

NOW, THEREFORE, the parties agree as follows:

1. For a period of five (5) years from the date hereof (the “Term”), to the extent that the Company maintains an insurance policy or policies providing liability insurance for directors and officers of the Company, Resigning Director shall be covered by such policy or policies in accordance with its or their terms to the maximum extent of the coverage available under such policy or policies.

2. During the Term, the Company will use commercially reasonable best efforts to maintain its existing liability insurance policy for directors and officers or a similar policy or policies with substantially the same coverage and limits as the existing liability policy; provided, however, the Company shall not be required to maintain such insurance at premiums in excess of 125% of the aggregate annual amount paid by the Company for the last annual premium year prior to the date hereof.

3. This Agreement shall be governed and construed and enforced in accordance with the internal laws of the State of Delaware without reference to any conflict of law or choice of law principles of such state that might apply the law of another jurisdiction.

4. No modification to any provision contained in this Agreement shall be binding upon any party unless made in writing and signed by both parties.

5. If any provision of this Agreement is held to be unenforceable for any reason, the remaining parts of the Agreement shall remain in full force and effect.

6. Each party has fully considered this Agreement. Each party acknowledges that no agreements other than as set forth in this Agreement have been made to induce this Agreement.

7. In the event that either party should bring any action to enforce any term of this Agreement, the party who does not prevail in any such action shall pay all the reasonable attorneys’ fees and costs incurred by the other party because of the action.

8. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which shall constitute one and the same agreement.

ACCEPTED AND AGREED TO:
“Company”
Virco Mfg. Corporation, a Delaware corporation
By:		Date: May 7, 2014
Name:	Robert A. Virtue
Title:	Chairman and Chief Executive Officer
“Resigning Director”
[Typed Name]
		Date: May 7, 2014

EX-99.01

Exhibit 99.01

Resignation letter of William Beer

To the Board of Directors of Virco Mfg. Corporation:
I am resigning from the Board of Directors, as Lead Outside Director and as a member of the Audit Committee, the Compensation Committee and the Governance and Nominating Committee effective at the end of business on May 7, 2014.
In the spring of 2013, the outside Directors determined by a vote of 7-0 that a change of leadership of the company was required. Initially, Management agreed to certain of the changes.
Management was successful in changing the minds of three Directors who originally agreed that a change was necessary. Two of these Directors are prior executives of the company and the third is a personal friend of the Chairman/CEO.
At that time, it became apparent to me that the Board was controlled by an inside group of Directors. This realization, along with other disagreements, led to the resignation of one of the outside Directors in October, 2013. However, I believed that, as Lead Outside Director, I could work with Management to focus our efforts on improving the business performance of the company and to effectively represent the interests of all shareholders.
Instead of working together, the Chairman/CEO used the inside group of Directors to make changes in the structure of the Board and the Corporation’s Bylaws that I do not believe are in the best interest of all Shareholders. I believe these actions were aimed at removing current Board members who do not agree with Management and discouraging disagreement going forward.
Given these circumstances, I do not feel it is possible for me to represent the interests of all shareholders. However, the reconstituted Board plan unanimously adopted by the Board resolves my concerns regarding the independence and objectivity of the Board, and I am submitting my resignation so that this plan can be placed in effect.
Respectfully,
/s/ William L. Beer

EX-99.02

Exhibit 99.02

Resignation letter of Donald Friesz

To: 13105336019 From: restricted Date: 05/07/14 Time: 4:27 PM Page: 01 01/01/1995 01:40 310-377-3471 DON FRIESZ PAGE 01
May 7, 2014
Robert A, Virtue, Chairman
lam resigning from the Board of Directors and as a member of the Governance committee effective today May 7, 2014.
I was employed:by Virco from 2-18-57 until my retirement from the business on 2-15-96 serving in sales and marketing functions. I was first elected to the Board of Directors on 2-18-92.
In my opinion the education business climate which we have experienced the last several years has been our most difficult challenge to date. Even more difficult than labor strikes and natural disasters that have seriously hampered the business in years past. I am confident that under the leadership of Bob Virtue snd his management team we will come thru this period successfully. To accomplish this I believe that the Company must be enabled to concentrate all their time and efforts on maintaining and growing the business.
The Board asked for a Chief Marketing Officer and management hired Jamie Makuuchi. This was a positive move and will also provide additional valuable management resourse for other company.
I will be 85 in August and it has. been my personal plan for some time to retire this year or next- I only retire now because I believe Virco remains in capable hands with management and the new Board. I wish virco and the stockholders evey success.
Donald S. Friesz

EX-99.03

Exhibit 99.03

Resignation letter of Glen Parish

I am resigning from the Board of Directors and a member of the Corporate Governance Committee of Virco Mfg. Corporation effective today, May 7, 2014. In the spring of 2013, the outside directors discussed a potential change of leadership of the company. It was reported to me that management was willing to explore the idea. However, subsequent events, including a vote of stockholders, indicated to me that this course was not in the best interest of the stockholders. Thus, I felt I could not agree with the 4 directors who wanted to assume leadership. In the spring and early summer of 2013, one of these directors, who also counseled the Board on legal issues and was part of the law firm that had been representing the company for over 30 years, had conversations with some of the large stockholders of the company. These stockholders expressly disapproved of their proposal to replace management and assume control; instead, they expressed support for the management team. This did not dissuade the 4 directors. Two of these directors were up for election at the 2013 annual meeting and had a majority of the shares outstanding vote against their election while an inside director received the vote of 75% of the outstanding shares on the same ballot .These 4 directors then fought the adoption by the company of a majority vote policy. My decision to follow the decision of the stockholders created discord with these Board members. At that time I became very concerned that the discord could prevent the Board from acting cooperatively. One of the directors who received a negative stockholder vote ultimately resigned, asserting unfounded and untrue allegations. The other three directors successfully urged that the company not to respond to these allegations. Despite this, I believed that if all the Board members were to focus on the company’s best interests, we could work effectively to promote the stockholder interests. Unfortunately, this was not the result. I was concerned that these Board members were disrupting the governance and distracting from the business of the company. These directors forced months of delay in the filling of the Board vacancy through a deadlock at the governance committee, even though the successful management proposed candidate was universally considered qualified and independent, with no prior ties to the company or management. They asserted votes had occurred in past meetings with no minutes to support them and disagreement about the votes from the other directors. The group also fought against proposals to update policies that were favorable to stockholders and consistent with current best practice that they thought threatened them. At times there were even personal attacks on the integrity and abilities of the remaining directors. Finally, these directors took steps, which in my view were not proper, to challenge the legitimately elected directors of the company. These acts were all opposed by the remaining directors, including the newly elected independent director. This led me to believe that the Board could not effectively represent the interests of the stockholders as a whole under the then existing Board structure. I believe that the reconstituted Board plan unanimously adopted by the Board resolves these concerns, and I am submitting my resignation so that this plan can be placed in effect.
Glen D. Parish
03481-0001 257871.1

EX-99.04

Exhibit 99.04

Resignation letter of Thomas Schulte

To the Board of Directors of Virco Mfg. Corporation:
I am resigning from the Board of Directors and as Chairman of the Audit Committee and as a member of the Governance and Nominating Committee of Virco Manufacturing Corporation effective as of May 7, 2014. In the spring of 2013, the outside directors determined by a vote of 7-0 that a change of leadership of the company was required and management initially agreed to certain of these changes. However, I believe that management was successful in changing the minds of three directors who originally agreed that a change was necessary. Two of these directors are prior long time executives of the company who worked for management and the third is a personal friend of the Chairman/CEO. At that time I became very concerned that the Board was not truly independent and was controlled by an inside group of directors. Nevertheless, I believed that if the Board members were to focus on business matters, we ould unite and work effectively to represent the interests of all shareholders. However, this proved not to be the case. Subsequent to the spring of 2013 management proposed a series of amendments ensuring directors (like myself), who posed a challenge to management, would find their positions eliminated and prospectively only candidates supported by management were likely to be elected. These amendments to the company’s corporate charter were supported and passed by the controlling inside group of directors. I hae since concluded I could not adequately represent the interests of all shareholders under this new Board structure. I believe that the reconstituted Board plan unanimously adopted by the Board resolves my concerns, and I am submitting my resignation so that this plan can be placed in effect.
Respectfully,
Tomas J. Schultd 03481-0001 258229.1

EX-99.05

Exhibit 99.05

Resignation letter of James Wilburn

This is to offer my resignation from the Board of Directors and as Chairman of the Compensation Committee and a member of the Audit Committee and the Governance Committee of VIRCO Mfg. Corporation effective today, May 7, 2014.
The background of my resignation, after over thirty years on the VIRCO board, reflects developments that began in the spring of 2013 when the outside directors, concerned about the continuing financial losses of VIRCO in recent years, considered whether or not it would be in the best interest of the company and its shareholders to explore a transition in the company’s leadership. A delegation of outside directors met with corporate management and reported that management was willing to explore the idea. However, as a result of subsequent events, I arrived very early at a judgment that four outside board members who seemed eager to take over the management of the company were not a viable alternative for the company and there would have been a vacuum of leadership. Several weeks after I arrived at that conclusion, it became obvious that there was a similar concern among the stockholders. In the spring and early summer of 2013, when one of the directors, who also counseled the Board on legal issues and was part of the law firm that has represented the company for over 30 years, had conversations with some of the large stockholders of the company, these stockholders expressly disapproved of their proposal to replace management and instead expressed complete support for the management team. This judgment was substantiated further by the stockholders voting at the annual meeting, indicating a lack of support for two of the directors up for reelection who believed that they should replace the company’s management.
Following the vote of a majority of the shares outstanding against their election (while an inside director received the vote of 75% of the outstanding shares on the same ballot), these two directors and the other two directors attempting to replace management opposed certain attempts at reforming and strengthening governance by fighting against the adoption of a majority vote policy by the company (even though it would have been recognized by those knowledgeable of corporate governance practices as a policy more responsive to the stockholders). Despite these differences of opinion, I continued to believe that if all the Board members were to focus on the company’s best interests, we could work effectively to promote the stockholder interests. Unfortunately, this was not the result, and I became increasingly concerned that the discord would prevent the Board from acting cooperatively. One of the directors who received a negative stockholder vote ultimately resigned, asserting questionable, if not unfounded and untrue allegations. I grew increasingly concerned that the Board members aligned with this person might even be intending to disrupt the governance of the company and distract from its business. These directors forced precious delay in the filling of a Board vacancy, just when the governance committee appeared to be prepared to recommend a candidate, even when the management proposed a candidate universally found to be qualified and independent, with no prior ties to the company or management. There was troubling confusion when votes were assumed or claimed with no contemporaneous minutes and differences of opinion and recollection about past decisions made or actions taken by the governance committee with no minutes to support them, producing disagreement about the votes from the other directors. This block of board

members even fought against proposals to update policies that were favorable to stockholders and consistent with current best practices, leaving a strong impression that they were in opposition to best practices because such updated policies might present a threat to them. At times there were even personal attacks on the integrity and abilities of one or more of the remaining directors, creating a toxic atmosphere. In a surprise move, these board members railroaded an effort to challenge the legitimately elected directors of the company. These acts were all opposed by the remaining directors, including the newly elected independent director, and represented some of the most bizarre behavior that 1 have encountered while serving on at least a dozen corporate boards over the years. As dean of the third largest MBA program in the nation, 1 taught for ten years the capstone course in the school’s Presidential / Key Executive MBA program, a course that included corporate governance. My students included many attorneys, accountants and other senior professional people who had returned to learn how to lead and manage a company since often their narrow training in law or accounting left them without management skills, and sometimes, without a basic personality for leadership. 1 later was recruited by Crystal Cruises to offer classes on their cruises to corporate board members on the newly enacted requirements of Sarbanes-Oxley and other considerations. Throughout that experience, as well as serving on at least a dozen boards myself, I had occasion to deal with a variety of boards where strong willed and capable people learned to voice strong convictions yet work together for the common good of the company, to eventually reach consensus and serve well. However, 1 came to believe that such accord was not possible with the existing combination of board members on the VIRCO board, and that sad conclusion led me to believe that the Board could not effectively represent the interests of the stockholders as a whole under the then existing Board structure. I concluded that the company and its stockholders would be best served with the recruitment of an entirely new board. Finally, I believe that the reconstituted Board plan unanimously adopted by the Board resolves the concerns that have developed. Thus I am submitting my resignation so that this plan can be placed in effect.

2

EX-99.06

Exhibit 99.06

Contact:

Robert A. Virtue, President

Douglas A. Virtue, Executive Vice President

Robert E. Dose, Vice President Finance

Virco Mfg. Corporation

(310) 533-0474

Virco Announces Board Reorganization

Torrance, CA: Virco Mfg. Corporation (NASDAQ: VIRC) announced today that its Board of Directors has unanimously determined to reconstitute itself into a smaller and nimbler structure. As a result, the Board will be reduced in size to 5 members, which is expected to save in excess of $250,000 per year. These savings are in line with the percentage savings achieved by the Company in other areas over the past several years.

To implement this reconfiguration, six current directors have tendered their resignations. They were replaced by two new independent directors, Robert Lind and Donald Rudkin, who join existing new independent director, Michael DiGregorio.

Chairman of the Board and CEO Robert Virtue said: “We have worked diligently through the recent recession to make changes in our organization to maintain our position as the most trusted supplier of furniture and equipment for education, both in America and internationally. I want to personally thank our departing directors for their many years of service.”

Mr. Virtue continued, “As we anticipate a growing recovery in the education market, the agility of our new, leaner Board will help us capitalize on growth opportunities. These directors bring new experience and broad strengths to our current team and I look forward to working with them to the benefit of our customers and stockholders.”

This news release contains “forward-looking statements” as defined by the Private Securities Litigation Reform Act of 1995. These statements include, but are not limited to, statements regarding: business strategies; market demand and product development; economic conditions; the educational furniture industry; international markets; product sourcing; raw material costs; state and municipal bond funding; order rates; shipments; cost control initiatives; operating efficiencies; supply chains; the Company’s domestic factories; new school construction and seasonality. Forward-looking statements are based on current expectations and beliefs about future events or circumstances, and you should not place undue reliance on these statements. Such statements involve known and unknown risks, uncertainties, assumptions and other factors, many of which are out of our control and difficult to forecast. These factors may cause actual results to differ materially from those which are anticipated. Such factors include, but are not limited to: changes in general economic conditions including raw material, energy and freight costs; state and municipal bond funding; state, local and municipal tax receipts; the seasonality of our markets; the markets for school and office furniture generally; the specific markets and customers with which we conduct our principal business; our ability to access cash under our credit facility; and the competitive landscape, including responses of our competitors to changes in our prices. See our Annual Report on Form 10-K for the year ended January 31, 2014, and other materials filed with the Securities and Exchange Commission for a further description of these and other risks and uncertainties applicable to our business. We assume no, and hereby disclaim any, obligation to update any of our forward-looking statements. We nonetheless reserve the right to make such updates from time to time by press release, periodic reports or other methods of public disclosure without the need for specific reference to this press release. No such update shall be deemed to indicate that other statements which are not addressed by such an update remain correct or create an obligation to provide any other updates.