155
NORTHBORO
ROAD, SOUTHBOROUGH, MASSACHUSETTS 01772
TELEPHONE
(508) 281-5510
NOTICE
OF ANNUAL MEETING OF STOCKHOLDERS
Notice is hereby given that the annual
meeting of the stockholders of Tech/Ops Sevcon, Inc., a Delaware corporation,
will be held at the offices of Edwards Angell Palmer & Dodge LLP, 20th
Floor, 111 Huntington Avenue at Prudential Center, Boston, Massachusetts, at
5:00 p.m. on Tuesday, January 27, 2009, for the following purposes:
1.
|
To
elect as directors the two persons named in the Company’s proxy statement
for the meeting,
each to hold office for a term of three years.
|
|
2.
|
To
transact such other business as may properly come before the
meeting.
|
Only stockholders of record at the
close of business on December 12, 2008 are entitled to notice of the meeting or
to vote thereat.
IT
IS IMPORTANT THAT YOUR SHARES BE REPRESENTED AT THE MEETING. THEREFORE, WHETHER
OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE COMPLETE YOUR PROXY AND RETURN IT
IN THE ENCLOSED ENVELOPE, WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED
STATES. IF YOU ATTEND THE MEETING AND WISH TO VOTE IN PERSON, YOUR PROXY WILL
NOT BE USED.
By order of the Board of
Directors,
MATTHEW C. DALLETT
Secretary
Dated
December 29, 2008
PROXY
STATEMENT
Approximate
Date of Mailing: December 29, 2008
INFORMATION
CONCERNING THE PROXY SOLICITATION
The enclosed proxy is solicited by and
on behalf of the Board of Directors of Tech/Ops Sevcon, Inc. (the “Company”) for
use at the annual meeting of stockholders of the Company to be held on Tuesday,
January 27, 2009, at 5:00 p.m. at the offices of Edwards Angell Palmer &
Dodge LLP, 20th Floor, 111 Huntington Avenue at Prudential Center, Boston,
Massachusetts, or any adjournments or postponements thereof. It is subject to
revocation at any time prior to the exercise thereof by giving written notice to
the Company, by submission of a later dated proxy or by voting in person at the
meeting. The costs of solicitation, including the preparation, assembly and
mailing of proxy statements, notices and proxies, will be paid by the Company.
Such solicitation will be made by mail and in addition may be made by the
officers and employees of the Company personally or by telephone or e-mail.
Forms of proxies and proxy material will also be distributed, at the expense of
the Company, through brokers, custodians and other similar parties to beneficial
owners.
On December 12, 2008, the Company had
outstanding 3,276,322 shares of Common Stock, $.10 par value, which is its only
class of stock outstanding and entitled to vote at the meeting. Stockholders of
record at the close of business on December 12, 2008 will be entitled to vote at
the meeting. With respect to all matters which will come before the meeting,
each stockholder may cast one vote for each share registered in his name on the
record date. The shares represented by every proxy received will be voted, and
where a choice has been specified, the shares will be voted in accordance with
the specification so made. If no choice has been specified on the proxy, the
shares will be voted FOR the election of the nominees as directors.
BENEFICIAL
OWNERSHIP OF COMMON STOCK
The following table provides
information as to the ownership of the Company’s Common Stock as of December 12,
2008 by (i) persons known to the Company to be the beneficial owners of more
than 5% of the Company’s outstanding Common Stock, (ii) the executive officers
named in the Summary Compensation Table below, and (iii) all current executive
officers and directors of the Company as a group. Beneficial ownership by
individual directors and nominees for director is shown in the table on pages 4
and 5 below.
Name
and Address
Of Beneficial Owner
|
Amount
Beneficially
Owned (1)
|
Percent
of Class
|
|
|
|
Mario
J. Gabelli/GGCP, Inc./GAMCO Investors, Inc.
One Corporate
Center
Rye, NY
10580-1435
|
608,100
(2)
|
18.6%
|
|
|
|
Dr.
Marvin G. Schorr
330 Beacon Street
Boston, MA 02116
|
362,278
|
11.1%
|
|
|
|
Wachovia
Corporation
Wachovia
Securities LLC (4)
One Wachovia Center
Charlotte, NC
28288-0137
|
273,729
|
8.4%
|
|
|
|
Bernard
F. Start
Dotland Grange
Hexham, NE46 2JY, United
Kingdom
|
240,477
|
7.3%
|
|
|
|
Name
and Address
Of Beneficial Owner
|
Amount
Beneficially
Owned (1)
|
Percent
of Class
|
|
|
|
Paul
D. Sonkin/Hummingbird Management LLC/Hummingbird Capital, LLC
(5)
460 Park Avenue, 12th
Floor
New York, New York
10022
|
211,925
|
6.5%
|
|
|
|
Matthew
Boyle
Tech/Ops Sevcon,
Inc.
155 Northboro Road
Southborough, MA
01772
|
58,400
(3)
|
1.8%
|
|
|
|
Paul
N. Farquhar
Tech/Ops Sevcon,
Inc.
155 Northboro Road
Southborough, MA
01772
|
17,000
|
(#)
|
|
|
|
All
current executive officers and
directors as a group (8
persons)
|
804,135
(3)
|
24.5%
|
(#)
|
Less
than 1%
|
(1)
|
Unless
otherwise indicated, each owner has sole voting and investment power with
respect to the shares listed or shares that power with his
spouse.
|
|
|
(2)
|
As
reported on Schedule 13D/A filed with the Securities and Exchange
Commission (“SEC”) on November 4, 2008, each of Mr. Gabelli, GGCP, Inc.
and GAMCO Investors, Inc. is the beneficial owner of the shares shown,
which are held in investment advisory accounts of various subsidiaries of
GAMCO Investors, Inc. As reported in that Schedule 13D/A, and based
on information subsequently received by the Company, GAMCO Asset
Management, Inc., a subsidiary of GAMCO Investors, Inc., has sole voting
and investment power with respect to 368,100 of such shares (11.2% of
the class), and Gabelli Funds, LLC, a subsidiary of GAMCO Investors, Inc.,
has sole voting and investment power with respect to 200,000 of such
shares (6.1% of the class). Teton Advisors, Inc., of which GAMCO
Investors, Inc. is the largest shareholder, has sole voting and investment
power with respect to 40,000 of such shares (1.2% of the
class).
|
|
|
(3)
|
Includes the following shares subject to
stock options exercisable within sixty days: Mr. Boyle (22,000), all
current executive officers and directors as a group
(24,500).
|
|
|
(4)
|
As
reported on Schedule 13G/A filed with the SEC on February 4, 2008 and
based on information subsequently received by the Company. As
reported in that Schedule 13G/A, the shares shown are held by
Wachovia Securities LLC, an investment adviser subsidiary of
Wachovia Corporation.
|
|
|
(5)
|
As
reported on Schedule 13D/A filed with the SEC on May 7, 2007, Mr. Sonkin
is the managing member and control person of Hummingbird Management, LLC
and of Hummingbird Capital, LLC, which are the investment manager and
general partner, respectively, of two investment funds that hold the
shares shown. Hummingbird Management, LLC and Hummingbird Capital, LLC
each disclaims beneficial ownership of such
shares.
|
ELECTION
OF DIRECTORS
Board
of Directors and Nominees for Election
The Company’s Board of Directors has
fixed the number of directors at seven. Members of the Board of Directors are
divided into three classes serving staggered three-year terms. The terms of two
of the Company’s current directors, Paul B. Rosenberg and Bernard F. Start,
expire at the annual meeting. Based on the recommendation of its Nominating and
Governance Committee, the Board has nominated Messrs. Rosenberg and Start for
re-election to new three-year terms. Each nominee has consented to serve if
elected, and the Company is not presently aware of any reason that would prevent
any nominee from serving as a director. If a nominee should become unavailable
for election, the proxies will be voted for another nominee selected by the
Board.
Pursuant to the Company’s by-laws,
directors will be elected by a plurality of the votes properly cast at the
annual meeting. Abstentions, votes withheld and broker non-votes will not be
treated as votes cast and will not affect the outcome of the
election.
The following table contains
information on the nominees for election at the annual meeting and each other
person whose term of office as a director will continue after the meeting. The
nominees for election at the meeting are indicated by an asterisk.
Name
|
Term
Expires
|
Business
Experience
During
Past
Five
Years
and Other Directorships
|
Has
Been
a
Director
of
the
Company
or
its
Predecessor
Tech/Ops,
Inc.
Since
|
No.
of
Common
Shares
of
the Company
Beneficially
Owned and Percent
of Class (†)
|
|
|
|
|
|
Matthew
Boyle (3)
Age
– 46
|
2011
|
President
and Chief Executive Officer of the Company since November 1997. Vice
President and Chief Operating Officer of the Company from November 1996 to
November 1997.
|
1997
|
58,400
(1.8%)(1)
|
Maarten
D. Hemsley (4)(5)
Age
– 59
|
2010
|
Chief
Financial Officer (until August 2007) and a director since 1988 of
Sterling Construction Company, Inc., a NASDAQ listed Texas-based civil
construction company. Senior fund manager at North Atlantic Value LLP,
part of the J. O. Hambro Capital Management Group, London, England, since
2001. President of Bryanston Management Ltd., a specialized financial
services company, since 1993. Director of a number of UK privately-held
companies.
|
2003
|
10,500
(#)(2)
|
*Paul
B. Rosenberg (4)(6)
Age
– 76
|
2009
|
Former
Treasurer of the Company.
|
1988
|
92,480
(2.8%)
|
|
|
|
|
|
Name
|
Term
Expires
|
Business
Experience
During
Past
Five
Years
and Other Directorships
|
Has
Been
a
Director
of
the
Company
or
its
Predecessor
Tech/Ops,
Inc.
Since
|
No.
of
Common
Shares
of
the Company
Beneficially
Owned and Percent
of Class (†)
|
|
|
|
|
|
Dr.
Marvin G. Schorr (3)(5)(6)
Age
– 83
|
2010
|
Chairman
of the Company’s Board of Directors from January 1988 until January 2005.
Prior to that, Chairman of the Board of Directors and President of
Tech/Ops, Inc., the Company’s predecessor. Also a director emeritus of
Brooks Automation, Inc.
|
1951
|
362,278
(11.1%)
|
*Bernard
F. Start
Age
– 70
|
2009
|
Vice-Chairman
of the Board since November 1997. President and Chief Executive Officer of
the Company from January 1988 to November 1997.
|
1988
|
240,477
(7.3%)
|
David
R. A. Steadman (3)(4)(6)
Age
– 71
|
2010
|
Chairman
of the Company’s Board of Directors since January 2005. President of
Atlantic Management Associates, Inc., a management services firm, since
1988. Director of Aavid Thermal Technologies, Inc., a director of Sterling
Construction Company, Inc. and a director of several privately held
companies.
|
1997
|
15,000
(#)
|
Paul
O. Stump (4)(5)
Age
– 56
|
2011
|
Former
President and Chief Executive Officer of Telequip
Corporation.
|
2005
|
8,000
(#)
|
†
|
Unless
otherwise indicated, each person has sole voting and investment power with
respect to the shares listed or shares that power with his
spouse.
|
(#)
|
Less
than 1%
|
(1)
|
Includes 22,000 shares
subject to stock options exercisable within sixty days.
|
(2)
|
Includes 2,500 shares
subject to stock options exercisable within sixty days.
|
(3)
|
Member
of the Executive Committee.
|
(4)
|
Member
of the Audit Committee.
|
(5)
|
Member
of the Compensation Committee.
|
(6)
|
Member
of the Nominating and Governance Committee.
|
Director
Independence
The Board has determined that all
directors, other than Mr. Boyle, are independent under the NASDAQ Capital Market
rules, based on information known to the Company and on the annual questionnaire
completed by each director. The Company may from time to time have arms-length
commercial dealings with companies of which its directors may be officers and/or
directors. To the Company’s knowledge, during fiscal 2008, there were no such
dealings and none of the independent directors had any other business,
financial, family or other type of relationship with the Company or its
management other than as a director and stockholder.
Board Meetings
During the fiscal year ended September
30, 2008, the Board of Directors held a total of seven meetings. The Board
regularly holds meetings at which only independent directors are present. All
Board members are expected to attend the annual meeting of stockholders, subject
to special circumstances. All of the Board members attended the annual meeting
of stockholders in 2008. During the fiscal year ended September 30, 2008, Mr.
Start attended 71% of all meetings of the Board.
Communications
to the Board
Stockholders may communicate with the
Board of Directors by mailing a communication to the entire Board or to one or
more individual directors, in care of the Corporate Secretary, Tech/Ops Sevcon,
Inc., 155 Northboro Road, Southborough, Massachusetts 01772. All communications
from stockholders to Board members (other than communications soliciting the
purchase of products and services) will be promptly relayed to the Board members
to whom the communications are addressed.
Committees
of the Board
The Board of Directors has an Audit
Committee, a Compensation Committee and a Nominating and Governance Committee,
all the members of which are independent, as defined by Securities and Exchange
Commission rules and NASDAQ Capital Market listing standards, as applicable. In
addition to the meetings described below, the members of each committee
communicate regularly amongst themselves and with management on Company
matters.
Each of the Audit Committee, the
Compensation Committee and the Nominating and Governance Committee operates
under a written charter that is available on the Company’s web site:
www.techopssevcon.com.
Audit
Committee. The
Audit Committee is composed of four directors. The Board has determined that at
least one of the members of the Committee, Mr. Rosenberg, is an “audit committee
financial expert,” as defined by the Securities and Exchange Commission. The
Committee selects, evaluates and oversees the Company’s independent auditors,
approves any engagement of the independent auditors to perform non-audit
services, and oversees the Company’s internal accounting and financial controls.
It reviews the audited financial statements and discusses them, as well as the
adequacy and quality of the Company’s financial reporting principles and
procedures, with management and the auditors together and in separate executive
sessions. It also reviews and approves related person transactions. The Audit
Committee met six times during the fiscal year ended September 30, 2008. The
Committee’s report appears on page 11.
Compensation
Committee. The
Compensation Committee is composed of
three directors. Generally all compensation and
fringe benefit programs of the Company are
subject to the review and approval of the Committee, which also reviews
and determines the base salary and
incentive compensation of the executive
officers and a group of senior
managers, as well as grants of equity
compensation to all employees. The Chief Executive Officer provides a detailed
performance assessment and compensation recommendation for each executive
officer (other than himself), which the Committee considers in making its
decisions. The Compensation Committee usually makes annual equity grants to
executives in its December meeting each year. Other compensation decisions are
made throughout the year as circumstances
warrant. All
compensation actions taken by the Committee are reported to the full Board of
Directors, and are subject to the approval
of the Board, excluding
management. The Committee did not use the services of any
compensation consultants during the past fiscal year.
The
Committee also reviews and makes recommendations to the Board on director
compensation and equity awards,
on policies and programs for the
development of management personnel, as well as management structure and
organization. The Compensation
Committee met once during the fiscal year ended September 30,
2008.
Nominating and
Governance Committee. The Nominating and
Governance Committee is composed of three directors. It considers nominations to
the Board and recommends to the Board of Directors’ action related to Board
composition, size and effectiveness and management succession plans for the
positions of Chairman of the Board and Chief Executive Officer. The Nominating
and Governance Committee met once during the fiscal year ended September 30,
2008.
Director
Nominations
In identifying potential candidates and
selecting nominees for directors, the Nominating and Governance Committee does
not foreclose any sources. The Committee reviews candidates recommended by
stockholders in the same manner and using the same general criteria as
candidates recruited by the Committee or recommended by the Board.
The Nominating and Governance Committee
does not rely on a fixed set of qualifications for director nominees. The
Committee’s primary objective for director nominees is to create a Board with a
broad range of skills and attributes that is aligned with the Company’s
strategic needs.
The minimum qualifications for director
nominees are that they:
a)
|
be
able to dedicate time and resources sufficient for the diligent
performance of the duties required of a member of the Board,
|
b)
|
not
hold positions or interests that conflict with their responsibilities to
the Company,
|
c)
|
comply
with any other minimum qualifications for either individual directors or
the Board as a whole mandated by applicable laws or
regulations.
|
Additionally, at least a majority of
members of the Board of Directors must qualify as independent directors in
accordance with NASDAQ Capital Market independence rules.
The Nominating and Governance
Committee’s process for evaluating nominees for director, including nominees
recommended by stockholders, is to consider their skills, character and
professional ethics, judgment, leadership experience, business experience and
acumen, familiarity with relevant industry issues, national and international
experience, and other relevant criteria as they may contribute to the Company’s
success. This evaluation is performed in light of the Committee’s views as to
what skill set and other characteristics would most complement those of the
current directors, including the diversity, age, skills and experience of the
Board as a whole.
In order to recommend a candidate for
consideration by the Nominating and Governance Committee, a stockholder must
provide the Committee with the candidate's name, background and relationship
with the proposing stockholder, a brief statement outlining the reasons the
candidate would be an effective director of the Company and information relevant
to the considerations described above. Such information should be sent to the
Nominating and Governance Committee of Tech/Ops Sevcon, Inc., 155 Northboro
Road, Southborough, Massachusetts 01772, Attention: Corporate Secretary. The Committee may seek
further information from or about the candidate, or the stockholder making the
recommendation, including information about all business and other relationships
between the candidate and the stockholder.
Director
Compensation
Directors of the Company (except Mr.
Boyle) are each paid $18,000 per year for their services. Mr. Steadman, the
Chairman of the Board of Directors, and each committee chairman, Mr. Rosenberg
(Chairman of the Audit Committee), Mr. Hemsley (Chairman of the Compensation
Committee) and Dr. Schorr (Chairman of the Nominating and Governance Committee)
receives an additional $3,000 per year for their duties as Chair of the relevant
committee.
Consistent
with past practice, the Compensation Committee
granted 2,000 shares of restricted stock to each of the non-employee directors
on January 22, 2008. Restricted shares may not be sold, assigned,
transferred, pledged or otherwise disposed of by the recipient until they vest.
Such restricted shares will fully vest the day before the 2009 annual meeting of
stockholders or, if earlier, upon the recipient’s death or disability or upon a
change in control of the Company. If the recipient’s service as a director of
the Company is terminated for any reason other than the recipient’s death or
disability, any unvested shares will be forfeited and returned to the
Company, unless the Committee
determines otherwise in its discretion.
The following table shows compensation
paid to all non-employee directors who served during fiscal 2008:
Name
|
Fees
Earned or Paid in Cash
($)
|
Stock
Awards
($)(1)(2)
|
Option
Awards
($)(1)(2)
|
Total($)
|
Maarten
D. Hemsley
|
21,000
|
13,903
|
1,580
|
36,483
|
Paul
B. Rosenberg(3)
|
21,000
|
13,903
|
-
|
34.903
|
Marvin
G. Schorr
|
21,000
|
13,903
|
-
|
34,903
|
Bernard
F. Start
|
18,000
|
13,903
|
-
|
31,903
|
David
R.A. Steadman
|
21,000
|
13,903
|
-
|
31,903
|
Paul
O. Stump
|
18,000
|
13,903
|
-
|
31,903
|
(1)
|
Represents
the compensation expense incurred by the Company relating to restricted
stock awards and stock options held by the director during fiscal 2008,
determined in accordance with FAS 123(R) using the assumptions described
in Note (1) E to the Company’s Financial Statements included in the fiscal
2008 Form 10-K, which assumed that there would be no forfeitures of
awards.
|
(2)
|
As
of September 30, 2008, the non-employee directors held restricted stock
and options as follows:
|
|
Restricted
Stock
|
Outstanding
Options
|
Name
|
#
Shares
|
# Shares
|
# Shares Vested
|
Maarten
D. Hemsley
|
2,000
|
5,000
|
2,500
|
Paul
B. Rosenberg
|
2,000
|
-
|
-
|
Marvin
G. Schorr
|
2,000
|
-
|
-
|
Bernard
F. Start
|
2,000
|
-
|
-
|
David
R.A. Steadman
|
2,000
|
-
|
-
|
Paul
O. Stump
|
2,000
|
-
|
-
|
(3)
|
Mr.
Rosenberg is a participant in the Company’s Directors Retirement Plan,
which was terminated in 1997. The change in value of his accumulated
benefit under the Plan in 2008 was
$1,440.
|
Stock
Ownership Policy
In 2004, the Board adopted Equity Compensation
Guidelines in which it established a target level of stock ownership for
directors of twice the level of annual cash compensation. Grants of restricted
stock will be intended in part to assist in reaching these levels of ownership
over time. Shares held by members of a person’s immediate family or a trust for
his or their sole benefit may be counted towards the ownership requirement. Each
director is required to refrain from selling Company stock acquired as
restricted stock (other than to make required tax payments related to a grant)
if the value, based on current market price, of his Company stock after the sale
would be below his designated ownership level. The Compensation Committee has discretion to make exceptions in
extraordinary circumstances where not contrary to Company goals, such as cases
of significant personal hardship.
EXECUTIVE
COMPENSATION
Compensation
Tables
The following tables provide
information for the last fiscal year concerning the compensation of each of the
executive officers of the Company whose total compensation exceeded $100,000 in
the most recent fiscal year.
Fiscal
2008 Summary Compensation Table
Name
and Principal Position
|
Year
|
|
Salary
($)(1)
|
|
|
Bonus
($)(1)
|
|
|
Stock
Awards
($)(2)
|
|
|
Option
Awards
($)(2)
|
|
|
All
Other
Compensation
($)(1)
|
|
|
Total
($)
|
|
Matthew
Boyle
President
& Chief Executive Officer
|
2008
|
|
$ |
290,172 |
|
|
$ |
- |
|
|
$ |
33,525 |
|
|
$ |
11,954 |
|
|
$ |
12,434 |
|
|
$ |
348,085 |
|
2007
|
|
$ |
279,308 |
|
|
$ |
71,668 |
|
|
$ |
32,283 |
|
|
$ |
13,232 |
|
|
$ |
1,575 |
|
|
$ |
398,006 |
|
Paul
N Farquhar
Vice
President and Chief Financial Officer
|
2008
|
|
$ |
183,017 |
|
|
$ |
- |
|
|
$ |
23,899 |
|
|
$ |
- |
|
|
$ |
6,519 |
|
|
$ |
213,435 |
|
2007
|
|
$ |
90,578 |
|
|
$ |
25,247 |
|
|
$ |
10,588 |
|
|
$ |
- |
|
|
$ |
882 |
|
|
$ |
127,295 |
|
Paul
A. McPartlin
Former
Vice President and Chief Financial Officer
|
2008
|
|
$ |
63,456 |
|
|
$ |
- |
|
|
$ |
11,894 |
|
|
$ |
2,401 |
|
|
$ |
56,643 |
(3) |
|
$ |
134,394 |
|
2007
|
|
$ |
180,927 |
|
|
$ |
29,938 |
|
|
$ |
5,662 |
|
|
$ |
2,049 |
|
|
$ |
3,003 |
|
|
$ |
221,579 |
|
(1)
|
Messrs.
Boyle, Farquhar and McPartlin are residents of the United Kingdom and
receive their cash compensation in British Pounds. The amounts shown in
the table were determined using the exchange rates (ranging from $1.78 to
$2.05 per
Pound during FY2008) in force on the respective payment dates. The
following table sets out their cash compensation as actually paid in
British Pounds (£):
|
|
Year
|
|
Salary
(£)(1)
|
|
|
Bonus
(£)(1)
|
|
|
All
Other
Compensation
(£)
|
|
Mr.
Boyle
|
2008
|
|
£ |
147,450 |
|
|
£ |
- |
|
|
£ |
6,879 |
|
2007
|
|
£ |
141,100 |
|
|
£ |
35,183 |
|
|
£ |
804 |
|
Mr.
Farquhar
|
2008
|
|
£ |
93,000 |
|
|
£ |
- |
|
|
£ |
3,592 |
|
2007
|
|
£ |
45,000 |
|
|
£ |
12,394 |
|
|
£ |
434 |
|
Mr.
McPartlin
|
2008
|
|
£ |
31,458 |
|
|
£ |
- |
|
|
£ |
28,608 |
|
2007
|
|
£ |
91,375 |
|
|
£ |
14,697 |
|
|
£ |
1,532 |
|
(2)
|
The
amounts shown in these columns do not reflect compensation actually
received by the executive officer. Instead, they represent the
compensation expense incurred by the Company relating to restricted stock
awards and stock options, respectively, held by the officer during fiscal
2008. These amounts are determined in accordance with FAS 123(R) using the
assumptions described in Note (1) E to the Company’s financial statements
included in the fiscal 2008 Form 10-K, except that no forfeitures of
awards have been assumed.
|
(3)
|
Mr.
McPartlin retired as Vice President and Chief Financial Officer of the
Company effective January 22, 2008. This amount includes accrued vacation
pay ($9,603) and a contractual long service award ($36,935) paid in
connection with his retirement.
|
The amount shown for Mr. McPartlin of
$11,894 in the stock awards column includes $9,970 attributable to the Board’s
acceleration of vesting 2,000 shares of restricted stock upon Mr. McPartlin’s
retirement after 32 years of service.
|
Outstanding
Equity Awards at Fiscal 2008
Year-End
|
|
Option
Awards
|
Stock
Awards
|
Name
|
Number
of
Securities
Underlying Unexercised Options (#)
Exercisable
|
Number
of Securities Underlying Unexercised Options (#)
Unexercisable
|
Option
Exercise Price ($)
|
Option
Expiration Date
|
Number
of Shares that Have Not Vested (#)
|
Market
Value of Shares that Have Not Vested ($)(†)
|
Matthew
Boyle
Matthew
Boyle
Matthew
Boyle
Matthew
Boyle
Matthew
Boyle
|
8,000
6,000
6,000
|
2,000
(1)
4,000
(2)
10,000
(3)
|
$10.63
$
9.60
$
4.37
|
Nov
1, 2009
Nov
6, 2011
Apr
30, 2013
|
6,000
(4)
9,000
(5)
|
$
25,800
$
38,700
|
Paul
N. Farquhar
|
|
|
|
|
15,000
(6)
|
$
64,500
|
(†)
|
Based
on the closing sale price ($4.30) of the Common Stock on September 30,
2008, the last trading day of the fiscal year.
|
(1)
|
The
shares subject to this option vest at 1,000 shares per year, beginning on
November 1, 2008.
|
(2)
|
The
shares subject to this option vest at 1,000 shares per year, beginning on
November 6, 2008.
|
(3)
|
The
shares subject to this option vest at 2,000 shares per year, beginning on
April 30, 2009.
|
(4)
|
These
shares of restricted stock vest as to 3,000 shares per year on the third
business day after the Company publicly announces its financial results
for fiscal 2008 and the earlier of November 21, 2009, or the third
business day after the Company publicly announces its financial results
for fiscal 2009.
|
(5)
|
These
shares of restricted stock vest as to 3,000 shares per year on the third
business day after the Company publicly announces its financial results
for fiscal 2008 and 2009 and the earlier of December 5, 2010, or the third
business day after the Company publicly announces its financial results
for fiscal 2010.
|
(6)
|
These
shares of restricted stock vest as to 3,000 shares per year on the third
business day after the Company publicly announces its financial results
for fiscal 2008, 2009, 2010, 2011, and the earlier of December 3, 2012, or
the third business day after the Company publicly announces its financial
results for fiscal 2012.
|
The executive officers participate in
the Company’s U.K. Retirement Plan, a defined benefit plan, under which benefits
at retirement (normally, age 65) are based upon 1/60th of final U.K. - base
salary (as defined in the Plan) for each year of service, subject to a maximum
of 2/3rds of final U.K. - base salary. The employee contributes 6% of base
salary, with the balance of the cost being met by the Company. Benefits under
the U.K. Retirement Plan are computed solely on the U.K. base salary of
participants, exclusive of bonuses, incentive and other compensation, and are
not reduced on account of U.K. Social Security entitlement. The compensation of
Messrs. Boyle, McPartlin, and Farquhar is entirely U.K. based. A spouse’s
pension of 50% of the employee’s pension is payable beginning at the death of
the employee either before or during retirement. Pension payments escalate by at
least 3% per year, compounded, and at a higher rate in certain circumstances. In
connection with Mr. McPartlin’s retirement, he received an amount of £904,701
($1,791,308 at the exchange rate in effect when received) from the Company’s UK
pension plan; this amount included the repayment of Mr. McPartlin’s
contributions to the pension plan as well as Company-provided benefits and
earnings from both, thereon.
Potential
Payments upon Termination or Change in Control
Upon a change in control of the
Company, whether or not the officer’s employment is terminated, vesting of
shares of restricted stock and unvested stock options held by each officer would
accelerate. (For this purpose, a "change in control" means a change in control
of the Company that would be required by SEC rules to be reported in the
Company’s proxy statement, including the acquisition by any person of beneficial
ownership of securities of the Company representing 25% or more of the combined
voting power of the Company's then outstanding securities.) The value of this
accelerated vesting for each officer, assuming that a change of control had
occurred on September 30, 2008, would have been as follows: Mr. Boyle ($64,500)
and Mr. Farquhar ($64,500). These amounts consist of (i) the value of the shares
of restricted stock for which vesting accelerated, based on the $4.30 closing
sale price of the Company’s Common Stock on September 30, 2008, plus (ii) the
difference between the exercise prices of the options for which vesting
accelerated and $4.30, multiplied by the respective numbers of option shares.
Pursuant to their employment contracts, each of Mr. Boyle and Mr. Farquhar would
be entitled to a minimum of 3 months pay on termination of employment. This
amounts to £37,250 ($66,417 at the exchange rate in effect on September 30,
2008) for Mr. Boyle and £23,500 ($41,901) for Mr. Farquhar. The Company has no
other arrangements with any executive officer to provide any other severance or
benefits upon termination of employment or a change in control.
AUDIT
COMMITTEE REPORT
In the course of its oversight of the
Company’s financial reporting process, the Audit Committee of the Board of
Directors has (i) reviewed and discussed with management the Company’s audited
financial statements for the fiscal year ended September 30, 2008, (ii)
discussed with Vitale, Caturano & Company, Ltd. (“Vitale, Caturano”), the
Company’s independent auditors, the matters required to be discussed by
Statement on Accounting Standard No. 61, Communication with Audit
Committees, and (iii) received the written disclosures and the letter
from Vitale, Caturano required by applicable requirements of the Public Company
Accounting Oversight Board regarding Vitale, Caturano’s communications with the
Audit Committee concerning independence, and discussed with Vitale, Caturano its
independence.
Based on the foregoing review and
discussions, the Committee recommended to the Board of Directors that the
audited financial statements for the year ended September 30, 2008 be included
in the Company’s Annual Report on Form 10-K for filing with the Securities and
Exchange Commission.
Members of the Audit
Committee
Paul B. Rosenberg,
Chairman
Maarten D.
Hemsley
David R. A.
Steadman
Paul O.
Stump
AUDITORS
The Audit Committee of the Board of
Directors appointed Vitale, Caturano, which is an independent member of Baker
Tilly International, as the Company’s independent registered public accounting
firm to conduct the audit of the Company’s financial statements for fiscal 2008
and to provide audit and certain non-audit services during fiscal 2009.
Representatives of Vitale, Caturano are expected to be present at the meeting
with an opportunity to make a statement if they desire to do so and are expected
to be available to respond to appropriate questions.
The fees billed by Company’s principal
accountant for each of the last two fiscal years are set out below. They include
fees billed by independent Baker Tilly International members in the United
Kingdom and France relating to the United Kingdom and French subsidiaries of the
Company.
|
|
(in
thousands)
|
|
|
|
2008
|
|
|
2007
|
|
Audit
fees
|
|
$ |
173 |
|
|
$ |
165 |
|
Audit-related
fees
|
|
|
6 |
|
|
|
6 |
|
Tax
fees
|
|
|
29 |
|
|
|
23 |
|
All
other fees
|
|
|
10 |
|
|
|
11 |
|
Total
|
|
$ |
218 |
|
|
$ |
205 |
|
The audit-related fees in fiscal 2008
and fiscal 2007 relate to the audit of the pension plan for the Company’s UK
subsidiary. The tax fees for both years are for the filing of the Company’s tax
returns in both the United States and the United Kingdom and in both years also
include fees for tax advice on employee benefits. The other fees disclosed above
are for advice in relation to indirect taxes and employment taxes.
All of the above fees were approved by
the Audit Committee before the respective engagements were undertaken. The Company has not
adopted pre-approval policies and procedures relating to non-audit
services.
TRANSACTIONS
WITH RELATED PERSONS
During
fiscal 2008, no related person transactions requiring disclosure in the proxy
statement were identified or submitted to the Audit Committee for
approval.
DEADLINE
FOR STOCKHOLDER PROPOSALS FOR 2010 ANNUAL MEETING;
ADVANCE NOTICE PROVISIONS FOR
STOCKHOLDER PROPOSALS AND
NOMINATIONS
In order for a stockholder proposal to
be considered for inclusion in the Company’s proxy materials for the annual
meeting in 2010, it must be received by the Company at 155 Northboro Road,
Southborough, Massachusetts 01772, Attention: Treasurer, no later than August
29, 2009.
The by-laws of the Company provide that
in order for a stockholder to bring business before or propose director
nominations at an annual meeting, the stockholder must give written notice to
the Secretary or other specified officer of the Company not less than 50 days
nor more than 75 days prior to the meeting, except that if notice thereof is
mailed to stockholders or publicly disclosed less than 65 days in advance, the
notice given by the stockholder must be received not later than the 15th day
following the day on which the notice of such annual meeting date was mailed or
public disclosure made, whichever occurs first. The notice must contain
specified information about the proposed business or each nominee and the
stockholder making the proposal or nomination.
The 2010 annual meeting of stockholders
will be held on January 26, 2010.
SECTION
16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities
Exchange Act of 1934 requires our directors, executive officers and persons
owning more than 10% of our registered equity securities to file with the
Securities and Exchange Commission reports of their initial ownership and of
changes in their ownership of our Common Stock and to provide us with copies of
all Section 16(a) reports they file.
Based on a review of the reports filed
by such persons with respect to our last fiscal year, the Company believes that
all its executive officers and directors have complied with the Section 16(a)
filing requirements.
OTHER
BUSINESS
The Board of Directors does not know of
any business that will come before the meeting except the matters described in
the notice. If other business is properly presented for consideration at the
meeting, the enclosed proxy authorizes the persons named therein to vote the
shares in their discretion.
Dated
December 29, 2008
PROXY
TECH/OPS
SEVCON, INC.
Proxy
Solicited by the Board of Directors for Annual Meeting of Stockholders to be
held January 27, 2009
The
undersigned, revoking all prior proxies, appoints Marvin G. Schorr, Paul N.
Farquhar and Matthew C. Dallett and each of them, the attorneys and proxies of
the undersigned, with power of substitution, to vote all the shares of Tech/Ops
Sevcon, Inc. which the undersigned is entitled to vote at the Annual Meeting of
Stockholders to be held January 27, 2009 at the offices of Edwards Angell Palmer
& Dodge LLP, 20th Floor, 111 Huntington Avenue at Prudential Center, Boston,
Massachusetts at 5:00 p. m. and at any adjournments thereof.
Please complete, sign and date on
reverse side and mail in enclosed envelope.
PLEASE
SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE. PLEASE MARK YOUR
VOTE IN BLUE OR BLACK INK AS SHOWN HERE x
|
1. Election
of Directors for three-year terms:
|
This
proxy will be voted FOR all nominees for Director if no contrary
instructions are given. The proxies are authorized to vote in their
discretion upon other business that may properly come before the
meeting.
|
o FOR ALL
NOMINEES
|
|
o WITHHOLD
AUTHORITY
FOR ALL
NOMINEES
|
|
o FOR
ALL
EXCEPT NOMINEES:
(See instructions
below) O Rosenberg
O Start
|
|
|
|
INSTRUCTIONS: To withhold authority
for any individual nominee(s) mark “FOR ALL EXCEPT” and fill in the circle
next to each nominee you wish to withhold, as shown here: ●
|
|
|
|
To change the address on your
account, please check the box at right and indicate your new address in
the address space above. Please note that changes to the registered
name(s) on the account may not be submitted via this method. o
|
|
Signature
of
Stockholder: Date : Signature
of Stockholder: Date:
Note:
Please sign exactly as your name or names appear on this Proxy. When shares are
held jointly, each holder should sign. When signing as executor, administrator,
attorney, trustee or guardian, please give full title as such. If the signer is
a corporation, please sign full corporate name by duly authorized officer,
giving full title as such. If signer is a partnership, please sign in
partnership name by authorized person.