SCHEDULE 14A INFORMATION14(a) 14(A)
OF THE
SECURITIES EXCHANGE ACT OF 1934 Filed by the RegistrantxFiled by a Party other than the RegistrantoCheck the appropriate box: o Preliminary Proxy Statement (as permitted by Rule 14a-6(e)(2)) o Confidential, Forfor Use of the Commission Only (as permitted by xþ Definitive Proxy Statement Rule 14a-6(e)(2)) o Definitive Additional Materials o Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12§ 240.14a-12NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)(NAME OF PERSON(S) FILING PROXY STATEMENT , IF OTHER THAN THE REGISTRANT) PaymentName of Registrant as Specified In Its Charter)Fee: xPayment of Filing Fee (Check the appropriate box):þ No fee required. o Fee computed on table below per Exchange Act Rules 14a-6(i) (4)(1) and 0-11. (1) Title of each class of securities to which transaction applies: (2) Aggregate number of securities to which transaction applies: (3) Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11:0-11 : (4) Proposed maximum aggregate value of transaction: (5) Total fee paid: o Fee paid previously with preliminary materials:materials. o 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)(4) Date Filed:
20, 2006
To ensure that your vote is recorded promptly, please vote as soon as possible, even if you plan to attend the annual meeting. Most stockholders have three options for submitting their vote: (1) via the Internet, (2) by phone or (3) by mail, using the paper proxy card. For further details, see your proxy card. If you have Internet access,we encourage you to record your vote on the Internet. It is convenient for you, and it also saves your companyCompany significant postage and processing costs.
Torrance, California
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2009.
Director | ||||||||||
Name | Age | Principal Occupation | Since | |||||||
Nominees for Directors Whose Terms Expire in 2006: | ||||||||||
Robert A. Virtue | 70 | Chairman of the Board and Chief Executive Officer of the Company since 1990; President of the Company since August 1982 | 1956 | |||||||
Robert K. Montgomery | 64 | Partner of Gibson, Dunn & Crutcher LLP law firm since 1971 | 2000 | |||||||
Donald A. Patrick | 78 | Vice President and founder of Diversified Business Resources, Inc. (mergers, acquisitions and business consultants) since 1988 | 1983 | |||||||
Continuing Directors Whose Terms Expire in 2004: | ||||||||||
Douglas A. Virtue | 44 | Executive Vice President of the Company since December 1997; previously General Manager of the Torrance Division of the Company | 1992 | |||||||
Evan M. Gruber | 49 | Chairman and Chief Executive Officer of Modtech Holdings, Inc. (modular buildings business) since 1990; he serves on the Board of Directors of Modtech Holdings, Inc., and has previously held directorship positions with Energy and Environmental Research Corporation, J.V. Electronics, Inc., Class Leasing, Inc. and Airmid LLP | 2002 | |||||||
Continuing Directors Whose Terms Expire in 2005: | ||||||||||
Donald S. Friesz | 73 | Vice President Sales and Marketing of the Company from 1982 to February 1996. Mr. Friesz has been retired since 1996 | 1992 | |||||||
Glen D. Parish | 65 | Vice President of the Company since 1999; General Manager of the Conway Division since 1999; previously Vice President of Conway Sales and Marketing | 1999 | |||||||
James R. Wilburn | 70 | Dean of the School of Public Policy, Pepperdine University, since September 1997; previously Dean of the School of Business and Management, Pepperdine University (1982-1994); Professor of Business Strategy, Pepperdine University (1994-1996); director of First Fidelity Thrift since February 1995 | 1986 |
Director | ||||||||||
Name | Age | Principal Occupation | Since | |||||||
Nominees for Directors Whose Terms Expire in 2009: | ||||||||||
Robert A. Virtue | 73 | Chairman of the Board and Chief Executive Officer of the Company since 1990; President of the Company since August 1982. | 1956 | |||||||
Robert K. Montgomery | 67 | Partner of Gibson, Dunn & Crutcher LLP law firm since 1971. | 2000 | |||||||
Donald A. Patrick | 81 | Vice President and founder of Diversified Business Resources, Inc. (mergers, acquisitions and business consultants, 1988-2004). | 1983 | |||||||
Continuing Directors Whose Terms Expire in 2007: | ||||||||||
Douglas A. Virtue | 47 | Executive Vice President of the Company since December 1997; previously General Manager of the Torrance Division of the Company. | 1992 | |||||||
Evan M. Gruber | 52 | Chief Executive Officer and Chairman of the Board of Class Leasing, Inc. since 2004; previously Chief Executive Officer and Chairman of the Board of Modtech Holdings, Inc. | 2002 | |||||||
Albert J. Moyer | 62 | Board member of LaserCard Corporation, Collectors Universe, Inc. and California Amplifier, Inc.; Chief Financial Officer for QAD Inc. (1998-2000); President of the commercial division of the Profit Recovery Group International, Inc. (2000); consultant to QAD Inc. (2000-2002); Chief Financial Officer of Allergan Inc. (1995-1998). | 2004 | |||||||
Continuing Directors Whose Terms Expire in 2008: | ||||||||||
Donald S. Friesz | 76 | Vice President Sales and Marketing of the Company from 1982 to February 1996. Mr. Friesz has been retired since 1996. | 1992 | |||||||
Glen D. Parish | 68 | Vice President of the Company and General Manager of the Conway Division from 1999 to 2004; previously Vice President of Conway Sales and Marketing. Mr. Parish has been retired since 2004. | 1999 | |||||||
James R. Wilburn | 73 | Dean of the School of Public Policy, Pepperdine University, since September 1997; previously Dean of the School of Business and Management, Pepperdine University (1982-1994); Professor of Business Strategy, Pepperdine University (1994-1996); Board member of The Olsen Company since 1990 and Independence Bank since 2004. | 1986 |
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Effective December 31, 2003, the Company froze all future benefit accruals under the pension plan.
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2005. The Compensation Committee acts pursuant to a written charter adopted by the Board of Directors, a copy of which is available to stockholders on our website, at www.virco.com.
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Amount and Nature | |||||||||
of Beneficial | Percent of | ||||||||
Name of Beneficial Owner | Ownership(1) | Class | |||||||
Bruce S. Sherman/ Gregg J. Powers(2) | 1,697,994 | 13.0 | % | ||||||
Dimensional Fund Advisors Inc.(3) | 688,465 | 5.3 | % | ||||||
Robert A. Virtue(4) | 364,915 | 2.8 | % | ||||||
Chairman of the Board of Directors, | |||||||||
President, Chief Executive Officer | |||||||||
Douglas A. Virtue | 554,545 | 4.2 | % | ||||||
Director, Executive Vice President | |||||||||
Donald S. Friesz | 82,065 | (5 | ) | ||||||
Director | |||||||||
Evan M. Gruber | 440 | (5 | ) | ||||||
Director | |||||||||
Robert K. Montgomery | 2,207 | (5 | ) | ||||||
Director | |||||||||
Glen D. Parish | 25,858 | (5 | ) | ||||||
Director, Vice President, General Manager | |||||||||
Donald A. Patrick | 59,955 | (5 | ) | ||||||
Director | |||||||||
James R. Wilburn | 18,755 | (5 | ) | ||||||
Director | |||||||||
Robert E. Dose | 50,175 | (5 | ) | ||||||
Vice President Finance, Secretary, Treasurer | |||||||||
Larry O. Wonder | 31,213 | (5 | ) | ||||||
Vice President, Sales | |||||||||
All executive officers and directors as a group (13 persons) | 1,294,451 | 9.73 | % |
Amount and Nature | ||||||||
of Beneficial | Percent of | |||||||
Name of Beneficial Owner | Ownership(1) | Class | ||||||
Bruce S. Sherman/Gregg J. Powers(2) | 1,436,812 | 10.94 | % | |||||
Nancy Virtue-Cutshall(3) | 911,856 | 6.94 | % | |||||
Rodger Virtue | 713,672 | 5.43 | % | |||||
Kathleen Virtue-Young(4) | 671,137 | 5.11 | % | |||||
Buckhead Capital Management LLC(5) | 666,390 | 5.07 | % | |||||
Robert A. Virtue | 335,380 | 2.55 | % | |||||
Chairman of the Board of Directors, | ||||||||
Chief Executive Officer(6) | ||||||||
Douglas A. Virtue | 569,308 | 4.33 | % | |||||
Director, Executive Vice President | ||||||||
Donald S. Friesz | 62,639 | (7) | ||||||
Director | ||||||||
Evan M. Gruber | 2,500 | (7) | ||||||
Director | ||||||||
Albert J. Moyer | 0 | (7) | ||||||
Director | ||||||||
Robert K. Montgomery | 0 | (7) | ||||||
Director | ||||||||
Glen D. Parish | 26,833 | (7) | ||||||
Director, Former Vice President, General Manager | ||||||||
Donald A. Patrick | 53,068 | (7) | ||||||
Director | ||||||||
James R. Wilburn | 4,778 | (7) | ||||||
Director | ||||||||
Robert E. Dose | 54,503 | (7) | ||||||
Vice President Finance, Secretary, Treasurer | ||||||||
Lori L. Swafford | 26,255 | (7) | ||||||
Vice President, Legal Affairs | ||||||||
Larry O. Wonder | 33,983 | (7) | ||||||
Vice President, Sales | ||||||||
All executive officers and directors as a group (18 persons) | 1,274,616 | (8) | 9.58 | %(8) |
(1) | Except as indicated in the footnotes to this table and pursuant to applicable community property laws, to the knowledge of the Company, the persons named in this table have sole voting and investment power with respect to all shares beneficially owned by them. For purposes of this table, a person is deemed to have “beneficial ownership” as of a given date of any security that such person has the right to acquire within 60 days after such date. Amounts for Messrs. Robert Virtue, Douglas Virtue, Friesz, Gruber, Moyer, Montgomery, Parish, Patrick, |
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Wilburn, Dose, Swafford, Wonder, and all executive officers and directors as a group, include 7,027, 5,658, | ||
(2) | As of February 14, |
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(3) | Includes 327,423 shares held by a trust of | |
(4) | Includes 159,153 shares held by a trust of which Ms. Young is the trustee possessing both voting and dispositive power over these shares. | |
(5) | The data reported is based upon information supplied by AMEXONLINE and reflects the holdings of Buckhead Capital Management LLC as of March 31, 2006. | |
(6) | Does not include | |
Less than 1%. | ||
(8) | Douglas Virtue is Robert Virtue’s son. The total number of shares beneficially owned by Mr. Robert A. Virtue, his brothers Raymond W. Virtue and Richard J. Virtue, his sister, Nancy Virtue-Cutshall, their children and their mother, Mrs. Julian A. Virtue, aggregate 5,991,464 shares or 45.56% of the total shares of Common Stock outstanding. Robert A. Virtue, Richard J. Virtue, Raymond W. Virtue, Nancy Virtue-Cutshall and certain of their respective spouses and children (the “Stockholders”) and the Company have entered into an agreement with respect to certain shares of the Company’s Common Stock received by the Stockholders as gifts from the founder, Julian A. Virtue, including shares received in subsequent stock dividends in respect of such shares. Under the agreement, each Stockholder who proposes to sell any of such shares is required to provide the remaining Stockholders notice of the terms of such proposed sale. Each of the remaining Stockholders is entitled to purchase any or all of such shares on the terms set forth in the notice. The Company may purchase any shares not purchased by such remaining Stockholders on such terms. The agreement also provides for a similar right of first refusal in the event of the death or bankruptcy of a Stockholder, except that the purchase price for the shares is to be based upon the then prevailing sales price of the Company’s Common Stock on the American Stock Exchange. |
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Douglas Virtue is Robert Virtue’s son. The total number of shares beneficially owned by Mr. Robert A. Virtue, his brothers Raymond W. Virtue and Richard J. Virtue, his sister, Nancy Virtue Cutshall, their children and their mother, Mrs. Julian A. Virtue, aggregate 6,705,284 shares or 48% of the total shares of Common Stock outstanding.
Robert A. Virtue, Richard J. Virtue, Raymond W. Virtue, Nancy Virtue Cutshall and certain of their respective spouses and children (the “Stockholders”) and the Company have entered into an agreement with respect to certain shares of the Company’s Common Stock received by the Stockholders as gifts from their father, Julian A. Virtue, including shares received in subsequent stock dividends in respect of such shares. Under the agreement, each Stockholder who proposes to sell any of such shares is required to provide the remaining Stockholders notice of the terms of such proposed sale. Each of the remaining Stockholders is entitled to purchase any or all of such shares on the terms set forth in the notice. The Company may purchase any shares not purchased by such remaining Stockholders on such terms. The agreement also provides for a similar right of first refusal in the event of the death or bankruptcy of a Stockholder, except that the purchase price for the shares is to be based upon the then prevailing sales price of the Company’s Common Stock on the American Stock Exchange.
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Long-Term | |||||||||||||||||||||
Compensation | |||||||||||||||||||||
Annual Compensation | Awards | ||||||||||||||||||||
Securities | |||||||||||||||||||||
Underlying | All Other | ||||||||||||||||||||
Name and Principal Position | Year | Salary(1) | Bonus(4) | Options(3) | Compensation(2) | ||||||||||||||||
Robert A. Virtue | 2002 | $ | 381,461 | $ | — | — | $ | 9,400 | |||||||||||||
Chairman of the Board and | 2001 | 378,163 | — | — | 9,400 | ||||||||||||||||
Chief Executive Officer | 2000 | 406,162 | — | — | 10,000 | ||||||||||||||||
Douglas A. Virtue | 2002 | 202,175 | — | — | 3,900 | ||||||||||||||||
Executive Vice President | 2001 | 199,753 | — | — | 3,900 | ||||||||||||||||
2000 | 199,675 | — | — | 3,900 | |||||||||||||||||
Glen D. Parish | 2002 | 175,407 | — | — | 2,600 | ||||||||||||||||
Vice President, General | 2001 | 181,193 | — | 11,000 | 2,600 | ||||||||||||||||
Manager | 2000 | 177,856 | — | — | 2,800 | ||||||||||||||||
Robert E. Dose | 2002 | 180,825 | — | — | 4,500 | ||||||||||||||||
Vice President, Finance, | 2001 | 180,989 | — | — | 4,500 | ||||||||||||||||
Secretary and Treasurer | 2000 | 172,242 | — | — | 4,900 | ||||||||||||||||
Larry O. Wonder | 2002 | 175,677 | — | — | 3,900 | ||||||||||||||||
Vice President, Sales | 2001 | 185,462 | — | — | 5,900 | ||||||||||||||||
2000 | 160,635 | 116,875 | — | 5,700 |
Long-Term | ||||||||||||||||||||
Annual Compensation | Compensation | |||||||||||||||||||
Restricted | ||||||||||||||||||||
Stock | All Other | |||||||||||||||||||
Name and Principal Position | Year | Salary(1) | Bonus | Awards(2) | Compensation(3) | |||||||||||||||
Robert A. Virtue | 2005 | $ | 421,233 | $ | — | $ | — | $ | — | |||||||||||
Chairman of the Board and | 2004 | 385,811 | — | — | — | |||||||||||||||
Chief Executive Officer | 2003 | 393,923 | — | — | 9,400 | |||||||||||||||
Douglas A. Virtue | 2005 | 222,873 | — | — | — | |||||||||||||||
Executive Vice President | 2004 | 214,903 | — | — | — | |||||||||||||||
2003 | 184,996 | — | — | 3,900 | ||||||||||||||||
Robert E. Dose | 2005 | 222,688 | �� | — | — | — | ||||||||||||||
Vice President, Finance, | 2004 | 216,378 | — | 103,650 | — | |||||||||||||||
Secretary and Treasurer | 2003 | 202,553 | — | — | 4,700 | |||||||||||||||
Lori L. Swafford | 2005 | 205,989 | — | — | — | |||||||||||||||
Vice President, Legal Affairs | 2004 | 197,810 | — | 103,650 | — | |||||||||||||||
2003 | 165,020 | — | — | 2,600 | ||||||||||||||||
Larry O. Wonder | 2005 | 191,985 | — | — | — | |||||||||||||||
Vice President, Sales | 2004 | 203,235 | — | 103,650 | 3,900 | |||||||||||||||
2003 | 189,754 | — | — | 3,900 |
(1) | Excludes compensation in the form of other personal benefits, which, for each of the executive officers, did not exceed the lesser of $50,000 or 10% of the total of annual salary and bonus reported for each year. | |
(2) | Granted pursuant to the Company’s 1997 Stock Incentive Plans. | |
(3) | Consists primarily of amounts representing the value of Company-paid split-dollar premiums under the Management Employees Life Insurance Plan. See “Management Employees Life Insurance Plan” and “Executive Survivorship Life Insurance Plan.” The foregoing amounts represent the actuarial value of the benefit to the executive officers of the current year’s insurance premium paid by the Company in excess of that required to fund the death benefits under the policies. | |
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Number of Unexercised | Value of Unexercised | |||||||||||||||
Options at | In-the-Money Options | |||||||||||||||
Shares Acquired | Value | Fiscal Year-End(2) | at Fiscal Year-End(3) | |||||||||||||
Name | on Exercise(1) | Realized | (Exercisable/Unexercisable) | (Exercisable/Unexercisable) | ||||||||||||
Robert A. Virtue | 78,318 | $ | 591,042 | 7,027/ | — | $ | —/— | |||||||||
Douglas A. Virtue | 26,238 | 169,185 | 5,685/ | — | —/— | |||||||||||
Glen D. Parish | — | — | 21,176/ | — | 13,239/— | |||||||||||
Robert E. Dose | — | — | 44,186/ | 2,928 | 68,599/— | |||||||||||
Larry O. Wonder | 5,000 | 13,502 | 20,831/ | 2,928 | 9,384/— |
Number of Unexercised | Value of Unexercised | |||||||||||||||
Options | In-the-Money Options | |||||||||||||||
Shares Acquired | Value | Fiscal Year-End | at Fiscal Year-End(1) | |||||||||||||
Name | on Exercise | Realized | (Exercisable/Unexercisable) | (Exercisable/Unexercisable) | ||||||||||||
— | $ | — | 7,027 / — | $ | — / — | |||||||||||
— | — | 23,758 / — | — / — | |||||||||||||
Robert E. Dose | — | — | 41,799 / — | 5,988 / — | ||||||||||||
Lori L. Swafford | — | — | 7,027 / — | — / — | ||||||||||||
Larry O. Wonder | — | — | 5,685 / — | 1,019 / — |
(1) | Calculated using closing price on January 31, |
Number of securities | ||||||||||||
remaining available for | ||||||||||||
future issuance under | ||||||||||||
Number of securities to | Weighted-average | equity compensation | ||||||||||
be issued upon exercise | exercise price of | plans (excluding | ||||||||||
of outstanding options, | outstanding options, | securities reflected in | ||||||||||
Plan category | warrants and rights | warrants and rights | column (a)) | |||||||||
(a) | (b) | (c) | ||||||||||
Equity compensation plans approved by security holders | 293,000 | $ | 11.56 | 116,000 | ||||||||
Equity compensation plans not approved by security holders | None | None | None | |||||||||
Total | 293,000 | $ | 11.56 | 116,000 | ||||||||
Retirement benefits provided under the Plan vest 30% after three years of service and fully after ten years of service.
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The estimated annual benefits payable upon
Company’s financial condition allows.
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Years of Service(1)(2) | |||||||||||||
Assumed Average Compensation(3) | 10 | 20 | 30 | ||||||||||
$ 25,000 | $ | 2,260 | $ | 4,520 | $ | 6,780 | |||||||
50,000 | 4,760 | 9,520 | 14,280 | ||||||||||
75,000 | 7,260 | 14,520 | 21,780 | ||||||||||
100,000 | 9,760 | 19,520 | 29,280 | ||||||||||
125,000 | 12,260 | 24,520 | 36,780 | ||||||||||
150,000 | 14,760 | 29,520 | 44,280 | ||||||||||
175,000 | 15,760 | 31,519 | 47,279 |
Years of Service(2) (3) | ||||||||||||
Assumed Average Compensation(1) | 10 | 20 | 30 | |||||||||
$ 25,000 | $ | 2,260 | $ | 4,520 | $ | 6,780 | ||||||
50,000 | 4,760 | 9,520 | 14,280 | |||||||||
75,000 | 7,260 | 14,520 | 21,780 | |||||||||
100,000 | 9,760 | 19,520 | 29,280 | |||||||||
125,000 | 12,260 | 24,520 | 36,780 | |||||||||
150,000 | 14,760 | 29,520 | 44,280 | |||||||||
175,000 | 15,760 | 31,519 | 47,279 |
(1) | Assumed average compensation is based upon regular base compensation before deduction for taxes or group insurance averaged for each year in the plan. | |
(2) | Represents annual retirement benefits payable at normal retirement age. To the extent a participant’s service was rendered prior to February 1, 1964, the effective date of the | |
The benefits shown are for straight-life annuity payments and are not subject to deduction for Social Security or other offset amounts; alternative forms of benefit payments are available under the | ||
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The premiums for the policies are paid partially by the participants pursuant to the formula set forth in the Plan, with the Company paying the remaining portion. The Company is the owner of each participant’s policy and assigns an interest to the participating employee in an amount equal to the excess of the death benefits available under the policy over an amount approximately equal to the aggregate premium payments made by the Company with respect to such participant’s policy. This amount is payable to the participant’s beneficiaries. Upon the first to occur of reaching the age of 65, actual retirement or termination of employment, each participant is entitled to have the Company assign the policy to the participant or his designee, provided that the participant first reimburses the Company for all premiums previously paid by the Company for the policy.
Executive Survivorship Life Insurance Plan
In August 1985, the Board of Directors adopted the Executive Survivorship Life Insurance Plan, which provides special life insurance benefits to a group of management employees selected by the Board. Under this Plan, the Company maintains insurance policies on the lives of the participants and their spouses. Robert A. Virtue is currently the only executive officer participating in the Plan.
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officer.
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last three fiscal years.
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The Audit Committee also reviewed and discussed with management its report on internal control over financial reporting and the related audit performed by the independent auditors which confirmed the effectiveness of the Company’s internal control over financial reporting.
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COMPARISON OF 5-YEAR CUMULATIVE TOTAL RETURNS OF2006.
1998 | 1999 | 2000 | 2001 | 2002 | 2003 | |||||||||||||||||||
VIRCO MFG. CORPORATION | $ | 100.00 | 74.14 | 58.03 | 51.21 | 52.42 | 55.80 | |||||||||||||||||
PEER GROUP | $ | 100.00 | 131.54 | 70.64 | 50.54 | 63.32 | 50.49 | |||||||||||||||||
AMEX MARKET INDEX | $ | 100.00 | 103.61 | 122.10 | 128.31 | 112.83 | 111.17 |
2001 | 2002 | 2003 | 2004 | 2005 | 2006 | |||||||||||||||||||||||||
VIRCO MFG. CORPORATION | 100.00 | 102.36 | 108.96 | 90.44 | 96.60 | 81.71 | ||||||||||||||||||||||||
PEER GROUP | 100.00 | 125.29 | 99.92 | 148.97 | 160.63 | 167.31 | ||||||||||||||||||||||||
AMEX MARKET INDEX | 100.00 | 87.94 | 86.64 | 121.62 | 130.30 | 158.05 | ||||||||||||||||||||||||
Media General Financial Services as being within the “other business and institutional equipment” industry group,CoreData Industry Group 313 — Business Equipment — which are as follows: American Locker Group, Cash Systems, Inc., Champion Industries Inc., Comtrex Systems Corp., Diebold Inc., Dorel Industries Inc. B, Falcon Products Inc., Fiberstars Inc., Franklin Electronic Publishers Incorporated, General Binding Corporation, Genlyte Group Inc., Global Payment Tech Inc., Gradco Systems Inc., Gunther International, Herman Miller Inc., Hon Industries Inc., Hypercom Corporation, Instanet, Inc., International Lottery & Totalizer Systems, Inc., Kimball International, Knape & Vogt Manufacturing Company; Koala Corporation, Kronos Inc., Lipman Electronic Engine, LSI Industries Inc., Mity Enterprises Inc., Moneyflow Systems International, Nam Tai Electronics Inc., Par Technology Corporation, Pitney Bowes Inc., Proquest Company, Reconditioned Systems, Scientific Games Corporation, Steelcase Inc., Techlite Inc., Tidel TechnologiesThomas Industries Inc., Ultradata Systems, Vitacube Systems Holdings, Xerox Corporation, and the Company.
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The aggregate fees billedCommittee has adopted policies and procedures for pre-approving all audit services, audit-related services, tax services and non-audit services performed by Ernst & Young LLP. Specifically, the Audit Committee has pre-approved the use of Ernst & Young LLP for professionaldetailed, specific types of services renderedwithin the following categories: annual audits, quarterly reviews and statutory audits, preparation of certain corporate tax returns, regulatory implementation and compliance and risk assessment guidance. In each case, the Audit Committee has also set specific annual ranges or limits on the amount of each category of services which the Company would obtain from Ernst & Young LLP, which limits and amounts are established periodically by the Audit Committee. Any proposed services exceeding these levels or amounts require specific pre-approval by the Audit Committee. The Audit Committee monitors the performance of all services provided by the independent auditor, to determine whether such services are in compliance with the Company’s pre-approval policies and procedures.
2005 | 2004 | |||||||
Audit Fees | $ | 570,400 | $ | 609,000 | ||||
Audit-Related Fees | 39,000 | 34,500 | ||||||
Tax Fees | 48,620 | 45,250 | ||||||
All Other Fees | — | — | ||||||
Total | $ | 658,020 | $ | 688,750 | ||||
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Financial Information Systems Design and Implementation Fees
During the year ended January 31, 2003, Ernst & Young LLP did not provide the Company with any services related to financial information systems design and implementation.
All Other Fees
The Company estimatesrecommends that the aggregate feesstockholders vote for all otherratification of that appointment. The Company’s Audit Committee has reviewed the professional services renderedprovided by Ernst & Young LLP, as described above, has considered the possible effect of such services on the independence of the firm, and has determined that such services have not affected Ernst & Young LLP’s independence. Notwithstanding this selection, the Audit Committee, in its discretion, may direct the appointment of new auditors at any time during the year ended January 31, 2003 were $79,000. These fees consist mainly of $12,000 relating to pension plan and 401(k) plan audits and $67,000 relating to preparationif the Audit Committee feels that such a change would be in the best interests of the Company’s tax returns. TheCompany and its stockholders. If there is a negative vote on ratification, the Audit Committee will reconsider its selection.
2004 Stockholder Proposal or Nominations. Proposals of stockholders intendedstockholder wishes to be presentedsubmit a proposal for consideration at the 20042007 Annual Meeting of the Stockholders must be received by the Company by January 14, 2004 for inclusionand wants that proposal to appear in the Company’s proxy statement and form of proxy relatingfor that meeting, the proposal must be submitted to Virco’s Corporate Secretary at 2027 Harpers Way, Torrance, California 90501, no later than January 23, 2007. If a stockholder wishes to submit a proposal for consideration at the 2007 Annual Meeting of the Stockholders without including that proposal in the Company’s proxy statement and form of proxy, the Company’s bylaws require the stockholder to provide the Company with written notice of such proposal no less than 120 days in advance of such meeting or, if later, the tenth day following the first public announcement of the date of such meeting.
Such notice should be sent to Virco’s Corporate Secretary at 2027 Harpers Way, Torrance, California 90501.
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THE COMPANY WILL ALSO PROVIDE WITHOUT CHARGE A COPY OF ITS ANNUAL REPORT ON FORM 10-K, INCLUDING FINANCIAL STATEMENTS AND RELATED SCHEDULES, FILED WITH THE SECURITIES AND EXCHANGE COMMISSION UPON REQUEST IN WRITING FROM ANY PERSON WHO WAS HOLDER OF RECORD, OR WHO REPRESENTS IN GOOD FAITH HE/ SHE WAS A BENEFICIAL OWNER, OF COMMON STOCK OF THE COMPANY ON MAY 2, 2003. ANY SUCH REQUEST SHALL BE ADDRESSED TO THE COMPANY AT
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Torrance, California
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APPENDIX A
ORGANIZATION
STATEMENT OF POLICY
The audit committee shall provide assistance to the board of directorsBoard in fulfilling theirits oversight responsibilityresponsibilities to the stockholders potential stockholders, the investment community, and others relating to the Company’s financial statements and the financial reporting process, the systems of internal accounting and financial controls, the annual independent audit of the Company’s financial statements, and the legal compliance and ethics programs as established by management and the board. In so doing, it is the responsibility of the committee to maintain free and open communication between the committee, independent auditors and management of the Company. In discharging its oversight role, the committee is empowered to investigate any matter brought to its attention with full access to all books, records, facilities, and personnel of the Company and the power to retain outside counsel, or other experts for this purpose.
RESPONSIBILITIES AND PROCESSES
The primary responsibility of the audit committee is to oversee the Company’s financial reporting process on behalf of the board and report the results of their activities to the board.
Management is responsible for preparing the Company’s financial statements, and the independent auditors are responsible for auditing those financial statements. The committee in carrying out its responsibilities believes its policies and procedures should remain flexible, in order to best react to changing conditions and circumstances. The committee should take the appropriate actions to set the overall corporate “tone” for quality financial reporting, sound business risk practices, and ethical behavior.
The following shall be the principal recurring processes of the audit committee in carrying out its oversight responsibilities. The processes are set forth as a guide with the understanding that the committee may supplement them as appropriate.
relating to:
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A-1
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A-1
A-2
A-2
PROXY
A-3
(Mark(Mark the corresponding box on the reverse side)-5Fold and detach here.-5
®(ISD)® (ISD). •l View account status •l View payment history for dividends •l View certificate history •l Make address changes •l View book-entry information •l Obtain a duplicate 1099 tax form •l Establish/change your PIN www.melloninvestor.comwww.melloninvestor.com/isd
and follow the instructions shown on this page.
Monday-Friday Eastern Time
for | ||||
SEE REVERSE SIDE |
For Technical Assistance Call 1-877-978-7778 between9am-7pm Monday-Friday Eastern Time
THIS PROXY WILL BE VOTED AS DIRECTED, OR IF NO DIRECTION IS INDICATED,WILL BE VOTED “FOR” THE PROPOSALSTHIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The Board of Directors recommends a vote FOR item 1.
The Board of Directors recommends a vote FOR item 1. | FOR | WITHHELD FOR ALL | ||||||
1. | Election of Directors Nominees: | o | o | |||||
01 | ||||||||
02 | ||||||||
03 | ||||||||
The Board of Directors recommends a vote FOR item 2. | ||||||||
FOR | AGAINST | ABSTAIN | ||||||
2. | Ratification of Appointment of Independent Auditors | o | o | o |
Signature | Signature | Date | ||||||||
24 Hours a Day, 7 Days a WeekInternetTelephone and telephoneInternet voting is available through 11PM Eastern Time
11:59 PM EST the day
prior to annual meeting day.Internettelephone or telephoneInternet vote authorizes the named proxies to vote your shares in the same manner
as if you marked, signed and returned your proxy card.
InternetTelephoneMail
http://www.eproxy.com/www.proxyvoting.com/vir1-800-435-6710
Use the Internet to vote your proxy.
Have your proxy card in hand when
you access the web site. You willbe prompted to enter your controlnumber, located in the box below,to create and submit an electronicballot. OR
Telephone
1-866-540-5760
Use any touch-tone telephone to
vote your proxy. Have your proxy
card in hand when you call. You willbe prompted to enter your controlnumber, located in the box below,and then follow the directions given. OR
Mail
Mark, sign and date
your proxy card
and
return it in the
enclosed postage-paid
envelope.
you do
NOT need to mail back your proxy card.
on the internet at: http://www.virco.com/Pages/set1a.htm