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SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A)
OF THE SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrantþ
Filed by a Party other than the Registrant¨
Check the appropriate box: | ||||
¨ Preliminary Proxy Statement | ¨ | Confidential, for Use of the Commission Only (as | ||
þ Definitive Proxy Statement | permitted by Rule 14a-6(e)(2)) | |||
¨ Definitive Additional Materials | ||||
¨ Soliciting Material Pursuant to §240.14a-12 |
VIRCO MFG. CORPORATION
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
þ | No fee required. | |||
¨ | Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. |
(1) | Title of each class of securities to which transaction applies: |
(2) | Aggregate number of securities to which transaction applies: |
(3) | Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 : |
(4) | Proposed maximum aggregate value of transaction: |
(5) | Total fee paid: |
¨ | Fee paid previously with preliminary materials. |
¨ | Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. | |||
(1) | Amount Previously Paid: |
(2) | Form, Schedule or Registration Statement No.: |
(3) | Filing Party: |
(4) | Date Filed: |
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1. To elect three directors to serve until the 2008 Annual Meeting of Stockholders and until their successors are elected and qualified; | |
2. To ratify the appointment of Ernst & Young LLP as the Company’s independent auditors for fiscal year 2005; and | |
3. To transact such other business as may properly come before the meeting. |
By Order of the Board of Directors | |
/s/Robert E. Dose | |
Robert E. Dose | |
Secretary |
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Director | ||||||||||
Name | Age | Principal Occupation | Since | |||||||
Nominees for Directors Whose Terms Expire in 2008: | ||||||||||
Donald S. Friesz | 75 | Vice President Sales and Marketing of the Company from 1982 to February 1996. Mr. Friesz has been retired since 1996. | 1992 | |||||||
Glen D. Parish | 67 | 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 | 72 | 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 | |||||||
Continuing Directors Whose Terms Expire in 2006: | ||||||||||
Robert A. Virtue | 72 | Chairman of the Board and Chief Executive Officer of the Company since 1990; President of the Company since August 1982. | 1956 | |||||||
Robert K. Montgomery | 66 | Partner of Gibson, Dunn & Crutcher LLP law firm since 1971. | 2000 | |||||||
Donald A. Patrick | 80 | Vice President and founder of Diversified Business Resources, Inc. (mergers, acquisitions and business consultants) since 1988. | 1983 |
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Director | ||||||||||
Name | Age | Principal Occupation | Since | |||||||
Continuing Directors Whose Terms Expire in 2007: | ||||||||||
Douglas A. Virtue | 46 | Executive Vice President of the Company since December 1997; previously General Manager of the Torrance Division of the Company | 1992 | |||||||
Evan M. Gruber | 51 | 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 | 61 | Board member of QAD Inc., 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 |
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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) | 1,606,071 | 12.26 | % | ||||||
Nancy Virtue-Cutshall(3) | 929,896 | 7.10 | % | ||||||
Rodger Virtue | 673,972 | 5.14 | % | ||||||
Kathleen Virtue-Young(4) | 671,076 | 5.12 | % | ||||||
Robert A. Virtue | 333,815 | 2.55 | % | ||||||
Chairman of the Board of Directors, Chief Executive Officer(5) | |||||||||
Douglas A. Virtue | 567,960 | 4.34 | % | ||||||
Director, Executive Vice President | |||||||||
Donald S. Friesz | 75,495 | (6) | |||||||
Director | |||||||||
Evan M. Gruber | 4,020 | (6) | |||||||
Director | |||||||||
Albert J. Moyer | 400 | (6) | |||||||
Director | |||||||||
Robert K. Montgomery | 5,787 | (6) | |||||||
Director | |||||||||
Glen D. Parish | 26,833 | (6) | |||||||
Director, Former Vice President, General Manager | |||||||||
Donald A. Patrick | 63,659 | (6) | |||||||
Director | |||||||||
James R. Wilburn | 21,224 | (6) | |||||||
Director | |||||||||
Robert E. Dose | 52,680 | (6) | |||||||
Vice President Finance, Secretary, Treasurer | |||||||||
Lori L. Swafford | 24,302 | (6) | |||||||
Vice President, Legal Affairs | |||||||||
Larry O. Wonder | 32,293 | (6) | |||||||
Vice President, Sales | |||||||||
All executive officers and directors as a group (19 persons) | 1,310,025 | (7) | 9.66 | %(7) |
(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, Wilburn, Dose, Swafford, Wonder, and all executive officers and |
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directors as a group, include 7,027, 5,658, 8,056, 2,520, 400, 5,787, 5,218, 10,591, 10,591, 41,799, 19,252, 23,758 and 210,832 shares issuable upon exercise of options, respectively, and 13,703, 10,475, 0, 0, 0, 0, 6,384, 0, 0, 5,501, 961, 6,565 and 46,403 shares held under the Company’s 401(k) Plan as of April 22, 2005, respectively. | |
(2) | As of February 14, 2005, according to public filings. Bruce S. Sherman is Chief Executive Officer of Private Capital Management, Inc. (“PCM”) and Gregg J. Powers is President of PCM. In these capacities, Messrs. Sherman and Powers exercise shared dispositive and voting power with respect to 1,606,071 shares held by PCM’s clients and managed by PCM. Mr. Sherman has sole dispositive and voting power with respect to 50,123 shares. Messrs. Sherman and Powers disclaim beneficial ownership for the shares held by PCM’s clients and disclaim the existence of a group. The address for Messrs. Sherman and Powers is 8889 Pelican Bay Blvd., Naples, Florida 34108. |
(3) | Includes 345,463 shares held by a trust of which Ms. Cutshall is the sole trustee. |
(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) | Does not include 1,655,237 shares owned beneficially by Mr. Robert Virtue’s adult children, including Mr. Douglas Virtue, as to which Mr. Robert Virtue disclaims beneficial ownership. |
(6) | Less than 1%. |
(7) | 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 6,170,789 shares or 47.10% 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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Long-Term | |||||||||||||||||||||
Annual Compensation | Compensation | ||||||||||||||||||||
Restricted | |||||||||||||||||||||
Stock | All Other | ||||||||||||||||||||
Name and Principal Position | Year | Salary(1) | Bonus | Awards(2) | Compensation(3) | ||||||||||||||||
Robert A. Virtue | 2004 | $ | 385,811 | $ | — | $ | — | $ | — | ||||||||||||
Chairman of the Board and | 2003 | 393,923 | — | — | 9,400 | ||||||||||||||||
Chief Executive Officer | 2002 | 387,461 | — | — | 9,400 | ||||||||||||||||
Robert E. Dose | 2004 | 216,378 | — | 103,650 | — | ||||||||||||||||
Vice President, Finance, | 2003 | 202,553 | — | — | 4,700 | ||||||||||||||||
Secretary and Treasurer | 2002 | 186,825 | — | — | 4,500 | ||||||||||||||||
Douglas A. Virtue | 2004 | 214,903 | — | — | — | ||||||||||||||||
Executive Vice President | 2003 | 184,996 | — | — | 3,900 | ||||||||||||||||
2002 | 208,175 | — | — | 3,900 | |||||||||||||||||
Larry O. Wonder | 2004 | 203,235 | — | 103,650 | 3,900 | ||||||||||||||||
Vice President, Sales | 2003 | 189,754 | — | — | 3,900 | ||||||||||||||||
2002 | 181,677 | — | — | 3,900 | |||||||||||||||||
Lori L. Swafford | 2004 | 197,810 | — | 103,650 | — | ||||||||||||||||
Vice President, Legal Affairs | 2003 | 165,020 | — | — | 2,600 | ||||||||||||||||
2002 | 167,277 | — | — | 2,600 |
(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. Effective January 2004, the Company terminated the life insurance plan, other than for one employee due to extenuating circumstances. The Company intends to eliminate the plan for active employees altogether prior to January 31, 2006. |
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Number of Unexercised | Value of Unexercised | |||||||||||||||
Options at | In-the-Money Options | |||||||||||||||
Shares Acquired | Value | Fiscal Year-End | at Fiscal Year-End(1) | |||||||||||||
Name | on Exercise | Realized | (Exercisable/Unexercisable) | (Exercisable/Unexercisable) | ||||||||||||
Robert A. Virtue | — | $ | — | 7,027/— | $ | —/ — | ||||||||||
Robert E. Dose | — | — | 41,799/— | 32,295/— | ||||||||||||
Douglas A. Virtue | — | — | 23,758/— | —/ — | ||||||||||||
Larry O. Wonder | — | — | 5,685/— | 5,496/— | ||||||||||||
Lori L. Swafford | — | — | 19,252/— | —/ — |
(1) | Calculated using closing price on January 31, 2005 of $7.85. |
Number of Unexercised | Value of Unexercised | |||||||||||||||
Awards at | Awards at | |||||||||||||||
Shares Acquired | Value | Fiscal Year-End | Fiscal Year-End(1) | |||||||||||||
Name | on Exercise | Realized | (Exercisable/Unexercisable) | (Exercisable/Unexercisable) | ||||||||||||
Robert A. Virtue | — | $ | — | —/— | $ | —/— | ||||||||||
Robert E. Dose | — | — | —/15,000 | —/103,650 | ||||||||||||
Douglas A. Virtue | — | — | —/— | —/— | ||||||||||||
Larry O. Wonder | — | — | —/15,000 | —/103,650 | ||||||||||||
Lori L. Swafford | — | — | —/15,000 | —/103,650 |
(1) | Calculated using closing price on January 31, 2005 of $7.85. |
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 | 368,000 | $ | 11.17 | 120,000 | |||||||||
Equity compensation plans not approved by security holders | None | None | None | ||||||||||
Total | 368,000 | $ | 11.17 | 120,000 |
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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 |
(1) | 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 plan, actual benefits will be slightly lower than the benefits shown in the table. |
(2) | 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 plan. |
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(3) | Assumed average compensation is based upon regular base compensation before deduction for taxes or group insurance averaged for each year in the plan. |
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THE COMPENSATION COMMITTEE OF | |
THE BOARD OF DIRECTORS | |
Donald A. Patrick, Chair | |
Robert K. Montgomery | |
James R. Wilburn |
THE AUDIT COMMITTEE OF | |
THE BOARD OF DIRECTORS | |
Evan M. Gruber, Chair | |
Donald S. Friesz | |
Donald A. Patrick | |
James R. Wilburn |
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2000 | 2001 | 2002 | 2003 | 2004 | 2005 | |||||||||||||||||||
VIRCO MFG. CORPORATION | 100.00 | 88.25 | 90.33 | 96.16 | 79.81 | 85.24 | ||||||||||||||||||
PEER GROUP | 100.00 | 71.54 | 89.63 | 71.48 | 106.57 | 114.91 | ||||||||||||||||||
AMEX MARKET INDEX | 100.00 | 105.08 | 92.41 | 91.05 | 127.50 | 136.92 |
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2004 | 2003 | |||||||
Audit Fees | $ | 609,000 | $ | 286,000 | ||||
Audit-Related Fees | 34,500 | 34,500 | ||||||
Tax Fees | 45,250 | 45,062 | ||||||
All Other Fees | — | — | ||||||
Total | $ | 688,750 | $ | 365,562 | ||||
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By Order of the Board of Directors | |
/s/Robert E. Dose | |
Robert E. Dose | |
Secretary |
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PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
VIRCO MFG. CORPORATION
The undersigned hereby appoints ROBERT A. VIRTUE, DOUGLAS A. VIRTUE and ROBERT E. DOSE, and each of them, with power to act without the other and with power of substitution, as proxies and attorneys-in-fact and hereby authorizes them to represent and vote, as provided on the other side, all the shares of Virco Mfg. Corporation Common Stock which the undersigned is entitled to vote, and, in their discretion, to vote upon such other business as may properly come before the Annual Meeting of Stockholders of the Company to be held June 7, 2005 or any adjournment or postponement thereof, with all powers which the undersigned would possess if present at the Meeting.
(Continued, and to be marked, dated and signed, on the other side)
Address Change/Comments(Mark the corresponding box on the reverse side) | ||
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You can now access your VIRCO MFG. CORPORATION account online.
Access your Virco Mfg. Corporation stockholder account online via Investor ServiceDirect®(ISD).
Mellon Investor Services LLC, agent for Virco Mfg. Corporation, now makes it easy and convenient to get current information on your stockholder account. After a simple and secure process of establishing a Personal Identification Number (PIN), you are ready to log in and access your account to:
• | View account status | |
• | View certificate history | |
• | View book-entry information |
• | View payment history for dividends |
• | Make address changes |
• | Obtain a duplicate 1099 tax form |
• | Establish/change your PIN |
Visit us on the web at http://www.melloninvestor.com
and follow the instructions shown on this page.
For Technical Assistance Call 1-877-978-7778 between 9am-7pm
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Investor ServiceDirect® is a registered trademark of Mellon Investor Services LLC
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THIS PROXY WILL BE VOTED AS DIRECTED, OR IF NO DIRECTION IS INDICATED, WILL BE VOTED “FOR” THE PROPOSALS THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
Mark Here for Address Change or Comments | o | |
SEE REVERSE SIDE |
The Board of Directors recommends | WITHHELD | |||||
a vote FOR item 1. | FOR | FOR ALL | ||||
1. | Election of Directors Nominees: | o | o | |||
01 | Donald S. Friesz | |||||
02 | Glen D. Parish | |||||
03 | James R. Wilburn | |||||
Withheld for the nominees you list below: (Write that nominee’s name in the space provided below.) | ||||||
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 | Dated: |
Vote by Internet or Telephone or Mail
Telephone and Internet voting is available through 11:59 PM EST
the day prior to annual meeting day.
Your telephone or Internet vote authorizes the named proxies to vote your shares in the same manner
as if you marked, signed and returned your proxy card.
Internet http://www.proxyvoting.com/vir Use the Internet to vote your proxy. Have your proxy card in hand when you access the web site. | OR | Telephone 1-866-540-5760 Use any touch-tone telephone to vote your proxy. Have your proxy card in hand when you call. | OR | Mail Mark, sign and date your proxy card and return it in the enclosed postage-paid envelope. |
If you vote your proxy by Internet or by telephone,
you do NOT need to mail back your proxy card.
You can view the Annual Report and Proxy Statement
on the internet at: http://www.virco.com/Pages/set1a.htm