SCHEDULE 14A INFORMATION
Proxy Statement Pursuant To Section 14(A) of the
Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to ss.240.14a-12
THERMODYNETICS, INC.
(Name of Registrant as Specified In Its Charter)
------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is
calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials:
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
------------------------------------------
(2) Form, Schedule or Registration Statement No.:
--------------------
(3) Filing Party:
----------------------------------------------------
(4) Date Filed:
------------------------------------------------------
TDYN Proxy Oct 30, 2003 (PROXY)
[Thermodynetics logo]
THERMODYNETICS, INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
OCTOBER 30, 2003
The Annual Meeting of Stockholders of Thermodynetics, Inc. (the "COMPANY")
for the fiscal year ended March 31, 2003 will be held at the Company's principal
offices at 651 Day Hill Road, Windsor, Connecticut 06095 on Thursday, October
30, 2003 at 9:30 A.M. (EST) for the purpose of considering and acting upon the
following matters:
1. Election of five (5) directors (Proposal One).
2. Such other business as may properly come before the meeting or
any adjournment thereof.
Pursuant to the provisions of the By-Laws, the Board of Directors has fixed
the close of business on September 2, 2003 as the record date for determining
the stockholders of the Company entitled to notice of, and to vote at, the
meeting or any adjournment thereof.
Stockholders who do not expect to be present in person at the meeting are
urged to date and sign the enclosed proxy and promptly mail it in the
accompanying postage-paid envelope. A prompt response will avoid the cost to the
Company of additional mailings of proxy solicitations.
By Order of the Board of Directors
THERMODYNETICS, INC.
Robert A. Lerman
PRESIDENT & CEO
September 9, 2003
Windsor, Connecticut 06095
PLEASE COMPLETE AND PROMPTLY RETURN YOUR PROXY IN THE ENCLOSED
ENVELOPE. THIS WILL NOT PREVENT YOU FROM VOTING IN PERSON AT THE
MEETING BUT WILL, HOWEVER, HELP TO ASSURE A QUORUM AND AVOID ADDED
PROXY SOLICITATION COSTS.
[Thermodynetics logo]
------------------------
THERMODYNETICS, INC.
PROXY STATEMENT
------------------------
This Proxy Statement is first being mailed to Stockholders on or about
September 9, 2003 in connection with the solicitation of proxies by the Board of
Directors to be used at the Annual Meeting of Stockholders of Thermodynetics,
Inc., a Delaware corporation (the "COMPANY"), to be held on Thursday, October
30, 2003 at the Company's principal offices at 651 Day Hill Road, Windsor,
Connecticut 06095 at 9:30 A.M. (EST).
Accompanying this Proxy Statement is a Notice of Annual Meeting of
Stockholders, a form of Proxy for such meeting and the Company's Annual Report
for the fiscal year ended March 31, 2003 including financial statements with
respect to such year. All proxies which are properly filled in, signed and
returned to the Company in time will be voted in accordance with the
instructions thereon. Such proxies may be revoked by any stockholder prior to
the exercise thereof and stockholders who are present at the meeting may
withdraw their proxies and vote in person if they so desire. The Board of
Directors has fixed the close of business on September 2, 2003 as the record
date for the determination of stockholders who are entitled to notice of, and to
vote at the meeting or any adjournment thereof.
The expense of preparing, assembling, printing and mailing the form of
proxy and the material used in solicitation of proxies will be borne by the
Company. In addition to the solicitation of proxies by use of the mails, the
Company may utilize the services of some of its officers and regular employees
(who will receive no additional compensation therefor) to solicit proxies
personally, and by telephone and other communication mediums. The Company has
requested banks, brokers and other custodians, nominees and fiduciaries to
forward copies of the proxy material to their principals and to request
authority for the execution of proxies and may reimburse such persons for their
services in doing so.
VOTE REQUIRED, PRINCIPAL STOCKHOLDERS AND STOCKHOLDINGS OF MANAGEMENT - The
presence, in person or by proxy, of the holders of a majority of the outstanding
shares of Common Stock of the Company is necessary to constitute a quorum at the
meeting. Election of directors (Proposal One) requires the affirmative vote of a
majority of the votes cast by the holders of Common Stock present in person or
by proxy at the meeting.
As of the record date, the Company had 18,226,178 shares of its Common
Stock issued and outstanding, the holders of which are entitled to one vote per
share.
The following table sets forth, as of the record date, the number of shares
of the Company's Common Stock owned beneficially to the knowledge of the
Company, by each beneficial owner of more than 5% of such Common Stock, by each
director, and by all officers and directors of the Company as a group.
Thermodynetics, Inc. Proxy Statement
Page 2
Name and Address(1) Amount and Nature Percent of
of Beneficial Owner of Beneficial Ownership Class Owned
- ------------------- ----------------------- -----------
DIRECTORS AND OFFICERS
Robert A. Lerman 4,439,150 shs (2) 24.4%
John F. Ferraro 4,121,581 shs (2)(6) 22.6%
Anthony C. Mirabella 266,790 shs(3) 1.5%
John J. Hughes 25,000 shs(3) 0.1%
Fred H. Samuelson 25,000 shs(3) 0.1%
Robert I. Lieberman 127,739 shs (4) 0.7%
All officers and 9,005,260 shs (5)(6) 49.4%
directors as a group
(six persons)
OTHER 5% SHAREHOLDERS
None
- ----------
(1) The address of all officers and directors is c/o the Company, 651 Day
Hill Road, Windsor, CT 06095.
(2) Includes 152,008 shares held for Mr. Lerman and 90,419 shares held for
Mr. Ferraro in trust under the Company's 401(k) Plan, respectively;
includes 244,525 shares held by the spouse of Mr. Lerman, and 33,360
shares held by the spouse of Mr. Ferraro, respectively; excludes the
aggregate 1,470,005 shares held in trust by the trustees of the 401(k)
Plan for all of the participating employees.
(3) Excludes the aggregate 1,470,005 shares held in trust by the trustees
of the 401(k) Plan for all of the participating employees.
(4) Includes 16,939 shares held in trust under the Company's 401(k) Plan.
(5) Includes an aggregate 259,366 shares held in trust under the Company's
401(k) Plan for each respective officer's account; excludes the
aggregate 1,470,005 shares held in trust by the trustees of the 401(k)
Plan for all of the participating employees. Includes 244,525 shares
held by the spouse of Mr. Lerman, and 33,360 shares held by the spouse
of Mr. Ferraro.
(6) The John F. Ferraro Defined Benefit Pension Plan and Trust holds
1,370,000 shares; Mr. Ferraro, as Trustee of that pension plan, has
full voting authority over such shares which have been included Mr.
Ferraro's aggregate beneficial ownership calculation.
Holders of an aggregate of 18,226,178 shares of the Company's Common Stock
are entitled to notice of and to vote at the Annual Meeting of Stockholders. The
Company's officers and directors, who have the right to vote an aggregate
9,005,260 shares representing forty-nine and four-tenths of one percent (49.4%)
of all shares which are entitled to be voted, have stated their intentions to
vote their shares FOR Proposal One.
ACTIONS TO BE TAKEN AT THE MEETING
ELECTION OF DIRECTORS
(PROPOSAL ONE)
All directors shall serve until his successor is elected and is qualified.
The shares represented by proxies will be voted in favor of the election of the
nominees named below as directors. Authority to vote for the election of
directors shall be deemed granted by proxy unless specifically withheld. The
Board of Directors has no reason to believe that any of the nominees for the
office of director will not be available for election as a director. However,
should any of them become unwilling or unable to serve as a director, it is
intended that the individuals named in the enclosed proxy may vote for the
election of such other person as the Board of Directors may recommend. The
Company does not have a nominating, an audit or a compensation committee. During
the fiscal year ended March 31,
Thermodynetics, Inc. Proxy Statement
Page 3
2003 the Company's Board of Directors held a total of four (4) meetings and each
of the directors attended at least 75% of the meetings held while a director.
NOMINEES FOR ELECTION AS DIRECTORS
Officer or
Name Age Position Director Since
- ---- --- -------- --------------
Robert A. Lerman 68 President, Chief Executive Officer
and Director 1979
John F. Ferraro 69 Chairman of the Board and Secretary 1979
Anthony C. Mirabella 62 Director 1985
John J. Hughes 76 Director 2003
Fred H. Samuelson 71 Director 2003
Robert I. Lieberman 49 Treasurer and Chief Financial Officer 1986
PRINCIPAL OCCUPATIONS OF DIRECTORS AND NOMINEES DURING THE PAST FIVE YEARS
ROBERT A. LERMAN holds the degrees of Bachelor of Mechanical
Engineering, College of the City of New York (1957), Master of Science in
Mathematics, Adelphi College (1961), and Master of Science in Electrical
Engineering, University of Connecticut (1964). In 1979, Mr. Lerman was elected
Treasurer and a Director and in 1980 President of the Company. Since 1981, Mr.
Lerman has been President and a Director of the Company, and was appointed Chief
Executive Officer in June, 2002. Mr. Lerman co-authored the text book, NONLINEAR
SYSTEMS Dynamics, which was published in 1992 by Van Nostrand Reinhold, New
York, New York. In 1997, Mr. Lerman became President and a Director of Pioneer
Ventures Corp. ("PVC") and a manager of Ventures Management Partners LLC ---
("VMP"), the general partner of Pioneer Ventures Associates Limited Partnership
("PVALP"), a partnership formed ----- for the purpose of providing venture
capital financing to other companies. In 1998, Mr. Lerman became a director of
Initio, Inc., Tristar Corporation, and Energy Brands, Inc.; Mr. Lerman resigned
his position as a director of Tristar and Energy Brands in 2002. Mr. Lerman also
serves as a consultant to other companies none of which are competitive with the
Company. See "Certain Transactions".
JOHN F. FERRARO holds the degree of Bachelor of Science in Industrial
Engineering, New York University (1962). In 1979, Mr. Ferraro was elected
Secretary and a Director of the Company. Since 1981, Mr. Ferraro has been
Chairman of the Board of the Company. In 1997, Mr. Ferraro became Secretary and
a Director of PVC and a manager of VMP, the general partner of PVALP. In 1998
Mr. Ferraro became a director of American Interactive Media, Inc. In 1999 he
became a director of America's Shopping Mall, Inc. Mr. Ferraro became a director
of Fidelity First Financial Corp. serving in 1998, and later in 2000 through May
14, 2003. See "Certain Transactions".
ANTHONY C. MIRABELLA holds the degrees of Bachelor of Mechanical
Engineering, Stevens Institute of Technology (1962) and Master in Business
Administration, Western New England College (1969). He was elected a Director of
the Company in 1985. Mr. Mirabella was employed by Connecticut Natural Gas
Corporation ("CNG") from 1971 to 2000, and last served as a Senior Vice
President of CNG, responsible for the Energy Network, Inc. and its district
heating and cooling operations. Mr. Mirabella has been engaged as a consultant
to the Company at the rate of $750 per day to assist the Company in developing
an overseas HVAC project; no material amounts have accrued or been paid as of
June 10, 2003.
JOHN J. HUGHES was appointed a Director of the Company in March, 2003.
Mr. Hughes was the founder, and served from 1970 through 1990 as the president
and chief executive officer of East Windsor Metal Fabricating Inc. ("EW"); Mr.
Hughes continues to provide services on a consulting basis to EW.
FRED H. SAMUELSON was appointed a Director of the Company in March,
2003. Mr. Samuelson holds the degree of Bachelor of Science of Mechanical
Engineering, University of Connecticut (1954); and completed a portion of the
masters curriculum. Mr. Samuelson was the founder, and served from 1982 through
2001 as the president of Samuelson Engineering Inc., a cutting tools supplier
and mechanical components design consultant.
Thermodynetics, Inc. Proxy Statement
Page 2
EXECUTIVE OFFICERS WHO ARE NOT NOMINEES FOR DIRECTOR
ROBERT I. LIEBERMAN is a certified public accountant. He holds the
degree of Bachelor of Science in Accounting and Business Administration from the
State University of New York (1975). Mr. Lieberman joined the Company as
corporate controller in 1986, in 1987 was elected Controller and Chief Financial
Officer, and in 1992 was elected Treasurer. In 1995 Mr. Lieberman was elected
President of Turbotec Products, Inc., and in 2003 he was elected President of
Vulcan Industries, Inc., both of which are the Company's principal operating
subsidiaries.
CERTAIN RIGHTS TO PROCEEDS
Two of the Company's directors, Messrs. Lerman and Ferraro, currently
own 656,334 shares in which the Company has certain rights to the proceeds to be
received upon the sale of such shares which they received pursuant to 1984 stock
subscription agreements, as amended in 1988, 1994, and 2002. Upon the sale of
any of these shares, the selling director shall pay directly to the Company at
the time of receipt of the net proceeds of such sale, an amount equal to (i)
such net sales proceeds (up to a maximum of $0.40 per share) less (ii) the
purchase price paid by the subscriber for each share sold (approximately $0.21
per-share). The directors retain full voting and dispositive control over these
shares. The Company has no other rights with respect to such shares. On October
22, 2002 the board amended these rights to expire and terminate on January 1,
2004, provided such directors do not sell any shares bearing such proceeds
rights through December 31, 2003.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
At the fiscal year end and through the date hereof, the Company had
not received any reports from any director, officer or principal shareholder
which indicated on the report, or by calculation based on the transaction and
receipt dates, or is not otherwise aware, that any report required to be filed
pursuant to Section 16(a) of the Securities Exchange Act of 1934 was not filed
on a timely basis.
REMUNERATION OF EXECUTIVE OFFICERS AND DIRECTORS
The following table sets forth on an accrual basis for the three most
recent fiscal years, the remuneration of each of the Company's executive
officers whose remuneration exceeded $100,000 and for all officers of the
Company as a group.
SUMMARY COMPENSATION TABLE
Long Term Compensation
Annual -------------------------------------------------
Compensation Awards Payouts Other
--------------------------------------------------------------------------
Company
Fiscal Other Stock Options/ LTIP 401(K)
Name/Position Year Salary/Bonus Compensation Awards SARS Payouts Contrib.
- ------------- ------ ------------ ------------ ------ -------- ------- --------
ROBERT A. LERMAN(1) 2003 $291,750(2) $3,612 $2,500 0 shs $0 $1,927
President, CEO 2002 $193,113(2) $3,612 $9,741 0 shs $0 $967
& Director 2001 $173,207(2) $4,726 $0 0 shs $0 $1,099
JOHN F. FERRARO (1) 2003 $241,249(2) $3,118 $2,500 0 shs $0 $825
Chairman of the Board, 2002 $193,113(2) $3,575 $9,741 0 shs $0 $837
Secretary & Director 2001 $173,207(2) $3,575 $0 0 shs $0 $489
ROBERT I. LIEBERMAN(3) 2003 $161,732(3) $7,263 $2,500 0 shs $0 $0
Treasurer and CFO & 2002 $131,819 $7,238 $0 0 shs $0 $0
President of Turbotec 2001 $127,788 $7,978 $0 0 shs $0 $0
- ----------
(1) Messrs. Lerman and Ferraro entered into five-year employment
contracts with the Company effective April 1, 1996, which agreements
were each extended for an additional five-year term under the
provisions of the 1996 agreements. Each employment contract provides
for a basic salary with an annual increase at April 1st of each year
based on increases in the Consumer Price Index. Each employment
contract requires the Company to provide medical insurance coverage
for the employee as well as $50,000 of group term insurance, and
$1,500,000 of additional life insurance. During the fiscal year ended
March 31, 2003, the
Thermodynetics, Inc. Proxy Statement
Page 5
Company paid $108,909 in net premiums on the two life insurance
policies which provide that upon death or surrender of the policy, the
Company will be repaid by the insurer and/or the insured the greater
of the aggregate net premiums paid by the Company or death benefit
proceeds in excess of $1,500,000. At March 31, 2003, the amount
receivable for premiums paid on the policies was $860,478. In
addition, each employment contract contained a provision providing
that in the event of disability, the employee will receive disability
payments of $100,000 per year for ten years (with proportional
reductions in the event of partial disability); and $6,500 per year
for tax planning services. The contract may be terminated by the
employee on 120 days prior written notice. The contract may also be
terminated by the Company in which event the employee will be paid
termination compensation equal to $100,000 annually for ten years; in
the event there is a change in control of the Company and the employee
is terminated, the employee shall receive twice the amount of
termination compensation which would otherwise be due.
(2) In 2003, 2002, and 2001, Mr. Lerman received cash bonuses of
$75,000, $25,000, and $10,000, respectively. In 2003, 2002, and 2001,
Mr. Ferraro received cash bonuses of $25,000, $25,000, and $10,000,
respectively.
(3) Mr. Lieberman entered into a five year employment contract with
the Company's primary operating subsidiary effective April 1, 1996
which has been renewed on a year-to-year basis. The contract provides
for a base salary and bonus pay based on performance targets
established by the board of directors. The employment contract
requires the Company to provide certain other benefits including life
and disability insurance, subject to a maximum cost per year. The
contract provides termination for "cause" immediately or by the
employee on 90 days prior written notice. The contract also provides
for termination by the Company in which event the employee would be
paid termination compensation for 180 days.
----------
For the fiscal year ending March 31, 2004, the Company anticipates paying
aggregate direct remuneration (based on current salaries and anticipated
bonuses) of approximately $600,000 to all officers as a group (three persons) of
which Messrs. Lerman and Ferraro will each be paid approximately $220,000, Mr.
Lieberman will be paid approximately $160,000.
During the fiscal year ended March 31, 2003, aggregate directors' fees of
$6,000 and stock bonus awards of 75,000 shares valued at an aggregate of $2,500,
were paid to the Company's three directors who are not officers or employees. It
is anticipated that such directors will be paid an aggregate of approximately
$14,000 in directors' fees in the fiscal year ending March 31, 2004. Directors'
fees for each nonemployee director are paid at the rate of $3,000 per annum plus
$500 per meeting or action taken in lieu of a meeting, plus expenses. One
non-employee director has also been engaged as a consultant to the Company at
the rate of $750 per day to assist the Company with developing one particular
overseas project; no material amounts have accrued or been paid as of June 10,
2003.
INCENTIVE STOCK OPTIONS
2002 INCENTIVE STOCK OPTION PLAN - On October 22, 2002, the Company's
stockholders approved the adoption of the Company's 2002 Incentive Stock Option
Plan (the "2002 ISO PLAN") reserving 500,000 shares of the Company's Common
Stock for issuance pursuant to incentive stock options qualified under the U.S.
Internal Revenue Code of 1986 which may be granted under the 2002 ISO Plan at
exercise prices at least equal to 100% of the fair market value of the Common
Stock on the date of the effective date of the grant of the option.
At June 10, 2003 no ISOs under the 2002 ISO Plan were outstanding. No
options under the 2002 ISO Plan were granted in fiscal year ended March 31,
2003. The 2002 ISO Plan will expire on July 31, 2012.
NON-QUALIFIED STOCK INCENTIVE PLAN
2002 NON-QUALIFIED STOCK INCENTIVE PLAN - On October 22, 2002, the
Company's stockholders approved the adoption of the Company's 2002 Non-Qualified
Stock Incentive Plan ("2002 NQ PLAN") reserving 500,000 shares of the Company's
Common Stock for issuance pursuant to the 2002 NQ Plan in the form of stock
options, stock bonus, or stock appreciation rights ("SAR"). The purchase price
for the exercise of shares subject to any option shall not be less than 33.33%
of the fair market value ("FMV") of the shares of common stock of the Company on
the effective date of the option and in no event shall be less than the par
value of the common stock; the value of the shares subject to any bonus shall be
equal in value to a fixed dollar amount and such value shall not be less than
33.33% of the FMV of the shares of common stock of the Company on the effective
date of the bonus and in no event shall be less than the par value of the common
stock; the value of an SAR award of stock is equal to or less than (as the Board
may determine) the excess of the FMV of one share of stock on the date of the
exercise of the SAR less the FMV of one
Thermodynetics, Inc. Proxy Statement
Page 6
share of stock on the effective date of the award, the result of which is
multiplied by the number of shares with respect to which the SAR shall have been
exercised. The 2002 NQ Plan will expire on December 31, 2012.
No stock incentives were issued under the 2002 NQ Plan in fiscal year ended
March 31, 2003.
OPTION GRANTS IN LAST FISCAL YEAR. No options were granted in the last
fiscal year.
AGGREGATED EXERCISES
AGGREGATED OPTION/SAR EXERCISES AND FISCAL YEAR END OPTION/SAR VALUES - No
options were exercised during fiscal year ended March 31, 2003 to purchase
common stock of the Company. An aggregate of 340,228 options expired unexercised
on September 30, 2002. No options are currently outstanding. The aggregated
option exercise values at fiscal year-end held by the executive officers equals
zero.
STOCK BONUSES
MARCH 27, 2003 STOCK BONUSES - On March 4, 2003 the Company's Board of
Directors approved the award of an aggregate of 195,000 shares ("2003 STOCK
BONUS") effective March 27, 2003. The bonuses were valued at a price per share
of $0.033 which equaled one-third of the closing price in the over-the-counter
market on March 27, 2003. Of the total 195,000 shares, the five directors and
one officer of the Company were issued 25,000 shares each, and 45,000 shares
were reserved for issuance to three employees. See also Item 5(d), Item 10(k)
and Item 12.
The compensation values of the stock bonuses received by the named
executive officers and directors of the Company during the last three fiscal
years are reflected in the Summary Compensation Table at the column labeled
"Restricted Stock Awards".
EMPLOYEE RETIREMENT SAVINGS PLAN
The Company has determined its matching contributions to the Thermodynetics,
Inc. 401(k) Retirement Savings Plan (the "401(K) PLAN") for the plan year ending
December 31, 2003 will equal a maximum of 300,000 shares of the Company's common
stock, provided that the value of such grant does not exceed $35,000 at a
one-third valuation of the market price. See Note 16 of Notes to Consolidated
Financial Statements. The assets of the 401(k) Plan are held in trust for the
exclusive benefit of the participants by the trustees of the Plan, Messrs.
Mirabella, Hughes and Samuelson as the trustees.
The compensation value of the 401(k) participation received by the below
listed officers and directors is reflected in the Summary Compensation Table at
the column labeled "Company 401(k) Contribution" at Item 10(a) hereof. The
following table sets forth the number of shares of Common Stock contributed to
the below referenced persons or groups of persons during the 401(k) Plan year
ended December 31, 2002, Column (1), and for all years from inception of the
Plan through Plan year ended December 31, 2002, Column (2).
Shares Contributed by the Company
Name and Held in Trust Under 401(K) Plan
- ---- -----------------------------------
OFFICERS AND DIRECTORS COLUMN (1) COLUMN (2)
- ---------------------- ---------- ----------
(Aggregate)
Robert A. Lerman 35,042 152,008
John F. Ferraro 15,008 90,419
Robert I. Lieberman -0- 16,939
Anthony C. Mirabella(z) -0- -0-
John J. Hughes(z) -0- -0-
Fred H. Samuelson(z) -0- -0-
All officers and directors as a group(z) 50,050 259,366
(6 persons)
Thermodynetics, Inc. Proxy Statement
Page 7
Total Matching Contribution 250,000 1,470,005
to all employees
(35 persons)
- ----------
(z) Trustees of the 401(k) Plan. Excludes the aggregate shares held in
trust by the trustees of the 401(k) Plan for all participating
employees.
OTHER PLANS
The Company does not have any pension or similar plan. See footnotes (1)
and (4) to the cash compensation table as to the Company's employment contracts
with Messrs. Lerman, Ferraro and Lieberman containing disability and termination
payment provisions.
CERTAIN TRANSACTIONS
During the last two (2) fiscal years, the Company has not been engaged in
transaction(s) with any officers, directors, beneficial holders of more than 5%
of its outstanding voting securities and entities with which they were
affiliated, EXCEPT as presented below. None of the officers and directors of the
Company are currently engaged in businesses competitive to the business of the
Company. The Company's transactions with these individuals and entities in the
fiscal year most recently ended are described below.
WITH DIRECTORS AND OFFICERS, AND RELATED PERSONS.
(A) On December 5, 2001 a total of 3,903,068 shares of common stock were
issued to two officers/directors and one director upon the exercise and purchase
of the shares underlying their 1995 stock options. The options had an exercise
price of $0.055 per share, and each had an aggregate purchase price of $214,669.
Messrs. Lerman and Ferraro exercised such stock options and each borrowed
$107,150.01 from the Company to purchase the underlying shares of common stock
on December 5, 2001. Such loans are evidenced by Commercial Promissory Notes
each dated December 5, 2001; such notes bear interest at the variable-rate of
interest published in The Wall Street Journal, Eastern Edition, under the
designation "Money Rates" and shown as the "Prime Rate" or "base rate on
corporate loans at large U.S. money-center commercial banks". The entire
principal balance plus interest of the notes is due on January 15, 2007; the
notes may be prepaid in whole or in part without penalty. The amount owed under
the notes at June 1, 2003 for Mr. Lerman was $70,322, and for Mr. Ferraro was
$70,322.
(B) On March 4, 2003 the Company's Board of Directors approved the award
of an aggregate of 195,000 shares ("2003 STOCK BONUS") effective March 27, 2003.
The bonuses were valued at a price per share of $0.033 which equaled one-third
of the closing price in the over-the-counter market on March 27, 2003. Of the
total 195,000 shares, the five directors and one officer of the Company were
issued 25,000 shares each, and 45,000 shares were reserved for issuance to three
employees. See "Summary Compensation Table", "March 27, 2003 Stock Bonuses".
(C) On October 22, 2002 the board amended certain rights to a portion of the
proceeds of sale of certain shares to expire and terminate on January 1, 2004,
provided such directors do not sell any shares bearing such proceeds rights
through December 31, 2003. See "Certain Rights to Proceeds".
LEGAL PROCEEDINGS
There are no material legal proceedings known or threatened against the
Company.
INFORMATION CONCERNING INDEPENDENT PUBLIC AUDITORS
The firm of Mahoney Sabol & Company, LLP, certified public accountants, One
State Street, 17th floor, Hartford, Connecticut 06103, audited the consolidated
financial statements of the Company and its subsidiaries for the fiscal year
ended March 31, 2003. Mahoney Sabol & Company, LLP was first appointed to serve
as the Company's
Thermodynetics, Inc. Proxy Statement
Page 8
auditors and principal accountant on November 30, 2000. Representatives of such
firm are not expected to be present at the Annual Meeting of Stockholders.
AUDIT AND NON-AUDIT FEES. Fees for professional audit services rendered by
Mahoney Sabol & Company, LLP, for the audit of the Company's annual financial
statements for the year ended March 31, 2003, the reviews of the financial
statements included in the quarterly reports for that fiscal year and for tax
provision preparation assistance, aggregated $34,000. All other fees for
professional services rendered by Mahoney Sabol & Company, LLP consisting of
research and federal and state tax return preparation, tax due diligence, and
miscellaneous tax matters, aggregated $10,000.
STOCKHOLDER PROPOSALS FOR NEXT ANNUAL MEETING
Under current rules of the Securities and Exchange Commission, stockholders
wishing to submit proposals for inclusion in the Proxy Statement of the Board of
directors for the 2003 fiscal year end Annual Meeting of Stockholders must
submit such proposals so as to be received by the Company at 651 Day Hill Road,
Windsor, Connecticut 06095 on or before July 1, 2004.
FORM 10-KSB ANNUAL REPORT
A copy of the Company's Annual Report on Form 10-KSB for the year ended
March 31, 2003 as filed with the Securities and Exchange Commission may be
obtained by any stockholder entitled to vote at the October 30, 2003 Annual
Meeting of Stockholders by addressing a written request to the Secretary,
Thermodynetics, Inc., 651 Day Hill Road, Windsor, Connecticut 06095.
OTHER MATTERS
Management does not know of any other matters which are likely to be
brought before the Meeting. However, in the event that any other matters
properly come before the Meeting, the persons named in the enclosed proxy will
vote said proxy in accordance with their judgment on said matters.
By Order of the Board of Directors
THERMODYNETICS, INC.
Robert A. Lerman
PRESIDENT & CEO
Windsor, Connecticut 06095
September 9, 2003
PROXY THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS PROXY
PLEASE SIGN AND RETURN THIS PROXY PROMPTLY
THERMODYNETICS, INC.
ANNUAL MEETING OF STOCKHOLDERS - OCTOBER 30, 2003
KNOW ALL MEN BY THESE PRESENTS, that the undersigned hereby appoints John
F. Ferraro and Robert A. Lerman, or any one of them acting in the absence of the
other, as attorneys and proxies of the undersigned with full power of
substitution, for and in the name of the undersigned, to represent the
undersigned at the Annual Meeting of Stockholders of Thermodynetics, Inc., a
Delaware corporation, to be held at the Company's principal offices at 651 Day
Hill Road, Windsor, Connecticut 06095 at 9:30 A.M. (EST) on Thursday, October
30, 2003 and at any adjournments thereof, and to vote all shares of stock of
said Company standing in the name of the undersigned with all the powers which
the undersigned would possess if personally present at such meeting. The
undersigned directs that this Proxy be voted as follows:
1. To elect five (5) directors (Proposal One).
Nominees: Robert A. Lerman, John F. Ferraro, Anthony C. Mirabella,
John J. Hughes, Fred H. Samuelson
FOR ALL [ ] FOR ALL, EXCEPT [ ]
AGAINST ALL [ ] LIST OF NOMINEES AGAINST: _______________________
2. In their discretion, on all other matters that may properly come before the
meeting.
AUTHORITY GRANTED [ ] AUTHORITY WITHHELD [ ]
(CONTINUED AND TO BE SIGNED ON OTHER SIDE)
Thermodynetics, Inc. Proxy Statement
Page 2
THIS PROXY WILL BE VOTED AS DIRECTED, BUT IF NO INSTRUCTIONS ARE GIVEN FOR
ANY ITEM, THIS PROXY WILL BE VOTED FOR THAT ITEM. DISCRETIONARY AUTHORITY IS
HEREBY CONFERRED AS TO ALL OTHER MATTERS THAT MAY COME BEFORE THE MEETING.
STOCKHOLDERS WHO ARE PRESENT AT THE MEETING MAY WITHDRAW THEIR PROXY AND VOTE IN
PERSON IF THEY SO DESIRE.
Dated: 2003
-------------------------
-----------------------------------
-----------------------------------
(Signature of Stockholder)
Please sign exactly as name appears
on this Proxy. If shares are
registered in more than one name,
the signatures of all such persons
are required. A corporation should
sign in its full corporate name by
a duly authorized officer, stating
the title. Trustees, guardians,
executors and administrators should
sign in their official capacity,
giving their full title as such. If
a partnership, please sign in the
partnership's name by authorized
person.
PLEASE SIGN AND RETURN THIS PROXY PROMPTLY
NO POSTAGE IS REQUIRED IF RETURNED IN THE ENCLOSED ENVELOPE AND MAILED
IN THE UNITED STATES
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS