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 (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 Under Rule 14a-12
RCM TECHNOLOGIES, INC.
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(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)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(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):
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(4) Proposed maximum aggregate value of transaction:
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|_| Fee paid previously with preliminary materials:
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|_| 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:
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(2) Form, Schedule or Registration Statement No.:
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RCM Technologies
The Source of Smart Solutions
RCM Technologies, Inc. Solutions:
2500 McClellan Avenue ---------------
Pennsauken, NJ 08109 o Business
---------------
Tel: 856.486.1777 o Technology
Fax: 856.488.8833 ---------------
info@rcmt.com o Resource
www.rcmt.com ---------------
--------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JUNE 17, 2004
--------------------
To Our Stockholders:
The RCM Technologies, Inc. 2004 Annual Meeting of Stockholders will be held
at the offices of Morgan, Lewis & Bockius LLP, 1701 Market Street, Philadelphia,
Pennsylvania, on Thursday, June 17, 2004, at 6:00 p.m. local time.
The purposes of the meeting are to:
1. Elect two Class B directors, each to serve until his term expires
and until his successor is elected and qualified;
2. Ratify our Audit Committee's appointment of Grant Thornton LLP as
our independent auditors for our fiscal year ending December 31, 2004; and
3. Transact such other business as may properly come before the meeting
or any adjournment(s) of the meeting.
We have fixed April 22, 2004 as the record date for determining the
stockholders entitled to vote at the meeting. You are not entitled to notice of,
or to vote at, the meeting if you were not a stockholder of record at the close
of business on that date.
You are cordially invited to attend the meeting. Whether or not you expect
to attend the meeting in person, please sign, date and promptly return the
enclosed proxy to ensure that your shares will be represented at the meeting.
The enclosed envelope requires no postage if mailed within the United States.
Most of our stockholders hold their shares in "street name" through brokers,
banks and other nominees and may choose to vote their shares over the internet
or by telephone instead of using the enclosed proxy card. If you wish to vote
over the internet or by telephone, please follow the instructions on your proxy
card. If you attend the meeting, you may revoke your proxy and vote in person.
By Order of the Board of Directors,
/s/ Stanton Remer
Stanton Remer
Secretary
Pennsauken, New Jersey
April 26, 2004
RCM TECHNOLOGIES, INC.
2500 McClellan Avenue
Suite 350
Pennsauken, New Jersey 08109
--------------------
PROXY STATEMENT
--------------------
ANNUAL MEETING OF STOCKHOLDERS
JUNE 17, 2004
About this Proxy Statement
Our Board of Directors is soliciting proxies to be used at our 2004 Annual
Meeting of Stockholders. The meeting will be held at the offices of Morgan,
Lewis & Bockius LLP, 1701 Market Street, Philadelphia, Pennsylvania on
Thursday, June 17, 2004, at 6:00 p.m. local time. This proxy statement, the
notice of annual meeting and the form of proxy will be mailed to stockholders
beginning on or about April 26, 2004.
VOTING PROCEDURES
Who Can Vote
Only RCM common stockholders at the close of business on the record date,
April 22, 2004, may vote at the annual meeting. You are entitled to cast one
vote for each share of RCM common stock that you owned as of the close of
business on the record date. At the close of business on the record date,
there were 11,310,529 shares of our common stock outstanding.
How You Can Vote
You can vote by:
o marking your proxy card, dating and signing it, and returning it in the
postage-paid envelope we have provided, or
o attending the meeting and voting in person.
How You Can Revoke Your Proxy or Change Your Vote
You can revoke your proxy at any time before it is voted at the meeting by:
o sending a written notice that you have revoked your proxy to our
Secretary, Stanton Remer, at 2500 McClellan Avenue, Suite 350,
Pennsauken, New Jersey 08109;
o submitting a later-dated proxy card, or
o attending the meeting, giving our Secretary written notice of your
revocation and voting your shares.
If a bank, broker or other holder of record holds your shares in its name,
you must obtain a proxy card executed in your favor from the holder of record
to be able to vote your shares at the meeting.
General Information on Voting
A quorum must exist for voting to take place at the meeting. A quorum exists
if holders of a majority of the outstanding shares of our common stock are
present at the meeting in person or are represented by proxy at the meeting.
Shares represented by a proxy marked "abstain" or "withheld" on any matter
will be considered present at the meeting for purposes of determining whether
there is a quorum, but will not be considered as votes FOR or AGAINST that
matter. Shares represented by a proxy as to which there is a "broker non-vote"
(that is, where a broker holding your shares in "street" or "nominee" name
indicates to us on a proxy that you have given the broker the discretionary
authority to vote your shares on some but not all matters), will be considered
present at the meeting for purposes of determining a quorum but will not be
voted on matters as to
which there is a "broker non-vote." Abstentions and "broker non-votes" will
therefore have no effect on the outcome of any vote taken at the meeting.
The director nominee will be elected by a plurality of the votes cast for
the election of directors at the meeting. Thus, the nominee who receives the
most votes will be elected as a director. All other matters to be voted upon
at the meeting must be approved by a majority of the votes cast on those
matters.
Shares that have been properly voted and not revoked will be voted at the
meeting in accordance with the instructions on your proxy card. If you sign
your proxy card but do not mark your choices, Leon Kopyt or Stanton Remer, the
persons named on the enclosed proxy card, will vote the shares represented by
your proxy card:
o FOR the person we nominated for election as director; and
o FOR the ratification of our Audit Committee's appointment of Grant
Thornton LLP as our independent auditors for our fiscal year ending
December 31, 2004.
If any other matters are properly presented at the meeting for
consideration, Mr. Kopyt and Mr. Remer will have the discretion to vote on
those matters for you. Currently, we are not aware of any such matters.
Costs of Solicitation
We will pay for preparing, assembling and mailing this proxy statement. Our
directors, officers and employees may solicit proxies through the mails,
direct communication or otherwise. None of our directors, officers or
employees will receive additional compensation for soliciting proxies. We may
reimburse brokerage firms and other custodians, nominees or fiduciaries for
their reasonable expenses for forwarding proxy and solicitation materials to
stockholders.
2
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS,
DIRECTORS AND MANAGEMENT
Security Ownership of Certain Beneficial Owners
The following table lists the persons we know to be beneficial owners of at
least five percent of our common stock as of March 10, 2004.
Approximate
Percentage
of Outstanding
Name and Address of Beneficial Owner Number of Shares Common Stock
------------------------------------ ---------------- --------------
Columbia Wanger Asset Management, L.P. .... 2,169,000(1) 20.4%
227 West Monroe Street
Suite 3000
Chicago, IL 60606
Heartland Advisors, Inc. .................. 1,510,800(2) 14.2%
789 North Water Street
Milwaukee, WI 53202
FMR Corp. ................................. 1,056,858(3) 9.9%
82 Devonshire Street
Boston, MA 02109
Dimensional Fund Advisors Inc. ............ 805,000(4) 7.6%
1299 Ocean Avenue
11th Floor
Santa Monica, CA 90401
- ---------------
(1) Based on a Schedule 13G, dated February 10, 2004, filed with the
Securities and Exchange Commission (the "Commission") by Columbia Wanger
Asset Management, L.P., a registered investment advisor, on behalf of
itself, its general partner, Columbia Wanger Asset Management, Ltd., and
its clients, WAM Acquisition GP, Inc., Columbia Acorn Investment Trust
and Wanger Advisors Trust. The Schedule 13G states that Columbia Wanger
Asset Management, L.P. and WAM Acquisition GP, Inc. share voting and
dispositive power as to all of these shares. The Schedule 13G also states
that Columbia Acorn Trust has shared voting and dispositive power as to
786,000 of these shares, or 7.4% of our outstanding common stock. The
Schedule 13G also states that Wanger Advisors Trust has shared voting and
dispositive power as to 753,000 of these shares, or 7.1% of our
outstanding common stock.
(2) Based on a Schedule 13G, dated February 12, 2004, filed with the
Commission. The Schedule 13G states that Heartland Advisors, Inc. has
sole voting power as to 1,510,000 of these shares and sole dispositive
power as to all of these shares.
(3) Based on a Schedule 13G, dated February 17, 2004, filed with the
Commission by FMR Corp., a parent holding corporation, on behalf of
itself, Edward C. Johnson III and Abigail P. Johnson. The Schedule 13G
states that Fidelity Management & Research Company, a wholly-owned
subsidiary of FMR Corp. and a registered investment advisor, is the
beneficial owner of all of these shares as a result of acting as
investment adviser to various registered investment companies, including
Fidelity Low Priced Stock Fund which owns 1,056,858 of the shares listed
in the table. FMR Corp. and its chairman, Edward C. Johnson III, through
FMR Corp.'s control of Fidelity Management & Research Company and
Fidelity Low Priced Stock Fund, each have sole dispositive power as to
all of these shares. The Schedule 13G also states that Fidelity Low-
Priced Stock Fund's Board of Trustees has sole voting power as to
1,056,858 shares.
(4) Based on a Schedule 13G, dated February 6, 2004, filed with the
Commission. The Schedule 13G states that Dimensional Fund Advisors, Inc.
has sole voting and investment power as to all of these shares.
Dimensional Fund Advisors, Inc. disclaims beneficial ownership of these
shares.
3
Security Ownership of Management
The following table lists the number of shares of our common stock
beneficially owned, as of March 10, 2004, by each director and director
nominee, each of our executive officers, certain members of our senior
management, and by our directors, nominees and executive officers as a group.
In general, beneficial ownership includes those shares a person has the power
to vote or transfer, as well as shares owned by immediate family members who
live with that person.
Approximate
Percentage
of Outstanding
Name Number of Shares Common Stock
---- ---------------- --------------
Leon Kopyt (1).......................... 491,906 4.3%
Stanton Remer (2)....................... 131,974 1.2%
Brian A. Delle Donne (2)................ 133,748 1.2%
Norman S. Berson (4).................... 56,471 1.0%
Robert B. Kerr (4)...................... 58,471 1.0%
David Gilfor (5)........................ 10,000 *
Dennis Berkey........................... 0 --
Dennis Busel (6)........................ 15,000 *
Rocco Campanelli (7).................... 38,760 *
Kenneth Kutz (8)........................ 30,000 *
Leonard Lufrano(9)...................... 8,379 *
Kevin D. Miller (2)..................... 125,913 1.1%
John Pringle............................ 0 --
All directors and executive officers as
a group (13 persons) (10) ............. 1,100,622 9.4%
- ---------------
* Represents less than one percent of our outstanding common stock.
(1) Includes 100,000 shares issuable upon the exercise of options under our
stock option plans and 28,312 shares as to which Mr. Kopyt has sole
voting power in the election of directors. Mr. Kopyt disclaims beneficial
ownership of these 28,312 shares.
(2) Includes 75,000 shares issuable upon the exercise of options under our
stock option plans.
(3) Includes 100,000 shares issuable upon the exercise of options under our
stock option plans.
(4) Includes 30,000 shares issuable upon the exercise of options under our
stock option plans.
(5) Includes 10,000 shares issuable upon the exercise of options under our
stock option plans.
(6) Includes 15,000 shares issuable upon the exercise of options under our
stock option plans.
(7) Includes 12,000 shares issuable upon the exercise of options under our
stock option plans.
(8) Includes 30,000 shares issuable upon the exercise of options under our
stock option plans.
(9) Mr. Lufrano left the Company as of April 2, 2004.
(10) Includes 477,000 shares issuable upon the exercise of options under our
stock option plans.
Voting Arrangements
On February 5, 1996, we issued and sold 276,625 shares of our common stock to
Limeport Investments, LLC in a private placement transaction. In conjunction
with this transaction, Limeport granted Mr. Kopyt an irrevocable proxy entitling
him to vote those shares solely in connection with the election of our
directors. We believe that, as of March 2, 2004, Limeport beneficially owned
28,312 shares of our common stock.
If Mr. Kopyt ceases to serve as our Chairman, Chief Executive Officer and
President, the Limeport voting arrangement and the proxy granted will
terminate immediately.
4
PROPOSAL 1
------------------------
ELECTION OF DIRECTORS
Our Board of Directors is divided into three classes. Each of the classes B
and C has two directors and class A has one director. Directors are elected to
staggered three-year terms and will serve until their successors have been
elected and qualified.
The terms of our Class B directors, Robert B. Kerr and David Gilfor, expire
at this year's annual meeting. The Class C directors, Leon Kopyt and Stanton
Remer, will serve until the annual meeting in 2005. The Class A director,
Norman S. Berson, will serve until the annual meeting in 2006.
Two Class B directors will be elected at this year's annual meeting to serve
for three-year terms expiring at our annual meeting in 2007. Our Board has
nominated Robert B. Kerr and David Gilfor to serve as Class B directors. Both
Mr. Kerr and Mr. Gilfor have consented to serve a term on our Board of
Directors. The persons named as proxy holders on the enclosed proxy card, Mr.
Kopyt and Mr. Remer, intend to vote FOR the election of Mr. Kerr and Mr.
Gilfor unless you mark a contrary instruction on your proxy card. Unless you
indicate otherwise on your proxy card, if either Mr. Kerr or Mr. Gilfor is
unable to serve as a director at the time of this year's annual meeting, Mr.
Kopyt or Mr. Remer will vote FOR the election of another person that the Board
may nominate in his place.
The Board of Directors has determined that Robert B. Kerr, David Gilfor and
Norman S. Berson are "independent directors" as defined in Marketplace Rule
4200(a)(15) of the National Association of Securities Dealers.
OUR BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF ROBERT B. KERR
AND DAVID GILFOR AS CLASS B DIRECTORS.
Nominees for Election as Director
Class B Director Nominees
Robert B. Kerr, Director since 1994, age 61
Mr. Kerr is a founding partner of Everingham & Kerr, Inc., a merger &
acquisition consulting firm located in Haddon Heights, New Jersey, which has
served small and medium-sized manufacturing, distribution and service
businesses since 1987.
David Gilfor, Director since 2001, age 56
Mr. Gilfor was appointed by the Board of Directors on December 21, 2001 to
fill a board vacancy resulting from the death of Woodrow B. Moats, Jr. Mr.
Gilfor is a member of the information technology department of Goldenberg
Rosenthal, LLP, a regional accounting and consulting firm located in
Jenkintown, Pennsylvania. Previously, Mr. Gilfor was the owner of a computer
networking and distributing firm located in Philadelphia, Pennsylvania.
Current Board Members
Class A Director
Norman S. Berson, Director since 1987, age 77
Mr. Berson is Of Counsel to the law firm of Fineman Krekstein & Harris, P.C.
of Philadelphia, Pennsylvania. Previously, Mr. Berson was a member of the
House of Representatives of the Commonwealth of Pennsylvania for 17 years.
Class C Directors
Leon Kopyt, Director since 1991, age 59
Mr. Kopyt has been our President, Chief Executive Officer and Chairman of
the Board since 1992. Previously, Mr. Kopyt served as our Chief Financial
Officer and Treasurer from 1992 to 1994, and as our Chief Operating Officer
from May 1990 to January 1992.
5
Stanton Remer, Director since 1992, age 54
Mr. Remer has been our Chief Financial Officer, Secretary and Treasurer
since 1994. Previously, Mr. Remer held positions as a Managing Partner of a
northeast regional accounting firm and Chief Financial Officer of Sterling
Supply Corporation. Mr. Remer is a Certified Public Accountant.
DIRECTOR NOMINATIONS
In nominating candidates for election as directors, our Board considers the
skills, experience, character, commitment and diversity of background of each
potential nominee, all in the context of the requirements of the Board at that
point in time. Each candidate should be an individual who has demonstrated
integrity and ethics, has an understanding of the elements relevant to the
success of a publicly-traded company, and has established a record of
professional accomplishment in such candidate's chosen field. Each candidate
also should be prepared to participate in all Board and committee meetings that
he or she attends, and should not have other personal or professional
commitments that might reasonably be expected to interfere with or limit such
candidate's ability to do so. Additionally, in determining whether to recommend
a director for re-election, the director's past attendance at Board and
committee meetings should be considered.
Our Board of Directors has no stated specific, minimum qualifications that
must be met by candidates for election as directors. However, in accordance
with Commission rules and applicable Nasdaq listing standards, at least one
member of the Board of Directors is expected to meet the criteria for an
"audit committee financial expert" as defined by Commission rules, and a
majority of the members of the Board are expected to meet the definition of
"independent director" within the meaning of Commission rules and applicable
Nasdaq listing standards.
Any stockholder of record entitled to vote in the election of directors at
an annual or special meeting of our shareholders may nominate one or more
persons to stand for election to the Board at such meeting in accordance with
the requirements of our bylaws. In order to be considered by our Board of
Directors in connection with the nominations process for our 2005 annual
meeting of shareholders, all such director nominations must be received by our
Corporate Secretary at our principal executive offices by January 18, 2005.
Each such submission must be in writing and must comply with the notice,
information and consent provisions contained in our bylaws. In addition, each
such submission must include any other information required by Regulation 14A
under the Securities Exchange Act of 1934, as amended. All such stockholder
recommendations should be submitted in writing care of Stanton Remer,
Secretary, RCM Technologies, Inc., 2500 McClellan Avenue, Suite 350,
Pennsauken, New Jersey 08109.
Our Board will consider all candidates identified by stockholders through
the processes described above, and will evaluate each of them, including
incumbent directors, based on the same criteria. Our Board will consider
stockholder nominees in substantially the same manner as other nominees. The
consideration of any candidate for director will be based on an assessment of
the individual's background, skills and abilities, together with an assessment
of whether such characteristics qualify the individual to fulfill the needs of
the Board at that time.
6
OUR EXECUTIVE OFFICERS
The following table lists our executive officers as of December 31, 2003 and
certain members of our senior management. Our Board elects our executive
officers annually for terms of one year and may remove any of our executive
officers with or without cause.
Name Age Position
---- --- --------
Executive Officers:
Leon Kopyt............................................ 59 Chairman, Chief Executive Officer,
President and Director
Stanton Remer......................................... 54 Chief Financial Officer, Treasurer,
Secretary and Director
Brian A. Delle Donne.................................. 47 Chief Operating Officer
Senior Management:
Dennis Berkey......................................... 55 Senior Vice President
Dennis Busel.......................................... 39 Regional Vice President
Rocco Campanelli...................................... 53 Executive Vice President
Kenneth Kutz.......................................... 62 Senior Vice President
Leonard Lufrano(1).................................... 53 Executive Vice President
Kevin D. Miller....................................... 37 Senior Vice President
John Pringle.......................................... 51 Senior Vice President
- ---------------
(1) Mr. Lufrano left the Company as of April 2, 2004.
The business experience of Messrs. Kopyt and Remer is summarized in
"Proposal 1 -- Election of Directors."
Brian Delle Donne has been our Chief Operating Officer since June 1999 and
served as our Executive Vice President of Operations from April 1998 to June
1999. Mr. Delle Donne served as President of Knight Facilities Management, a
global planning, engineering and management consulting firm from 1997 to 1998
where he was responsible for strategic outsourcing services. From 1989 to
1995, Mr. Delle Donne served as Senior Vice President of Ogden Projects, Inc.
and as President and Chief Operating Officer of its subsidiary, Ogden
Environmental Services. Mr. Delle Donne currently serves on the Board of
Directors of UMS Group, Inc., a privately held international management
consulting firm providing services to power utilities around the world.
Dennis Berkey has served as a Senior Vice President of RCM since May 1999.
Previously, Mr. Berkey was a founder of Business Support Group of Michigan,
Inc., a business we acquired in 1999. Mr. Berkey has in excess of 17 years of
experience in software development, information systems management, ERP
consulting and related project management.
Dennis Busel has served as Eastern Regional Vice President of RCM since
February 2000. Mr. Busel's primary responsibilities are in the information
technology ("IT") services sector in the North East Region, Mr. Busel has over
18 years experience in the IT services industry including a senior management
role at Robert Half, International where he led the launch of the IT
Consulting Division. He has provided leadership for teams in size ranging from
six to 400 people on a local and national level. Mr. Busel has been
instrumental in establishing service offerings, promoting sales, and directing
the operations and delivery for both resource management and project
organizations.
Rocco Campanelli has served as an Executive Vice President of RCM since June
1999. From September 1995 until June 1999, Mr. Campanelli served as a Senior
Vice President of RCM and our General Manager of Professional Engineering.
Previously, Mr. Campanelli was a Senior Vice President of Operations and
Marketing for Cataract, Inc., a business we acquired in August 1995. From the
time he joined Cataract in 1988 until August 1995, Mr. Campanelli held the
position of Northeast Regional Manager and Vice President of Operations.
7
Kenneth Kutz has served as a Senior Vice President of RCM since January
1997. Mr. Kutz has over 32 years of information technology sales and marketing
experience with International Business Machines, Control Data and Camax
Systems as well as Programming Alternatives of Minnesota, Inc., a business
acquired by RCM in January 1997. Mr. Kutz has managed business units that sold
software, computer services and professional services in the United States,
Canada, Europe and Asia.
Leonard Lufrano became an Executive Vice President of RCM in August 2003 and
prior to August 2003 Mr. Lufrano has served as a Senior Vice President of RCM
since August 1999. From 1995 to July 1999, Mr. Lufrano was President and
Founder of Seaview Consulting, Inc., a business we acquired in August 1999.
Mr. Lufrano previously served as a founding partner of Funaro-Lufrano
Associates, Inc. for the period 1973 to 1994 where his responsibilities
included management, marketing, strategic development and business planning.
Mr. Lufrano left the Company as of April 2, 2004.
Kevin D. Miller has served as a Senior Vice President of RCM since January
1998. Previously, Mr. Miller was a consultant to RCM from July 1997 through
December 1997. From 1996 until July 1997, Mr. Miller served as an Associate in
the corporate finance department of Legg Mason Wood Walker, Incorporated. From
1995 to 1996, Mr. Miller was a business consultant for the Wharton Small
Business Development Center. Mr. Miller previously served as a member of both
the audit and corporate finance groups at Ernst & Young, LLP. Mr. Miller is a
Certified Public Accountant.
John Pringle has served as Western Region Senior Vice President of RCM since
November 2001. Mr. Pringle's primary responsibilities are in the IT services
sector in the Western Region. Mr. Pringle has over 23 years experience in the
IT services industry. Mr. Pringle's experience includes leadership skills
relating to the implementation and establishment of Solutions Practice focused
on Oracle, e-Solutions and system integration.
8
EXECUTIVE COMPENSATION
Summary of Executive Compensation
The following table lists cash and other compensation paid to, or accrued by
us for, our chief executive officer and each of the persons who, based upon
total annual salary and bonus, was one of our other five most highly
compensated executives for our fiscal year ended December 31, 2003. The
information is presented for each individual for our last three fiscal years.
Summary Compensation Table
Long-Term
Annual Compensation Compensation
---------------------------------------- ----------------------------
Awards
Securities
Underlying
Fiscal Other Annual Options/ All Other
Name and Principal Position Year Salary Bonus Compensation(1,2) SARs Compensation(3)
---------------------------------------- ------ -------- -------- ----------------- ---------- ---------------
Leon Kopyt ................................... 2003 $475,000 $100,000 $3,698,068 50,000 $11,119
President and CEO 2002 400,000 100,000 -- -- 11,546
2001 400,000 100,000 -- -- 10,690
Brian A. Delle Donne ......................... 2003 $300,000 $ 50,000 $ 228,811 25,000 $14,113
Chief Operating Officer 2002 300,000 35,000 -- -- 11,738
2001 300,000 50,000 -- -- 10,870
Stanton Remer ................................ 2003 $200,000 $ 50,000 $ 410,045 25,000 $ 815
CFO, Treasurer and Secretary 2002 175,000 35,000 -- -- 182
2001 175,000 35,000 -- -- 4,791
Rocco Campanelli ............................. 2003 $150,000 $151,869 $ 218,416 25,000 $ 5,633
Executive Vice President 2002 150,000 150,000 -- 25,000 5,096
2001 150,000 276,095 -- 37,000 6,317
Leonard Lufrano(4) ........................... 2003 $234,615 $ 60,000 $ 60,875 25,000 $ 5,639
Executive Vice President 2002 200,000 -- -- 20,000 4,413
2001 200,000 -- -- 83,000 4,776
Kevin D. Miller .............................. 2003 $200,000 $ 45,000 $ 325,236 25,000 $ 7,813
Senior Vice President 2002 200,000 30,000 -- -- 1,034
2001 200,000 30,000 -- -- 1,414
- ---------------
(1) During fiscal 2003, 2002 and 2001, certain of the officers named in this
table received personal benefits not reflected in the amounts of their
respective annual salaries or bonuses. The dollar amount of these
benefits did not, for any individual in any fiscal year, exceed the
lesser of $50,000 or 10% of the total annual salary and bonus reported
for that individual in any year.
(2) In order to enhance long-term value for the shareholders of the Company,
reduce the number of options outstanding and improve the Company's
ability to retain and provide incentives to employees and directors, on
September 30, 2003, the Company made a tender offer to exchange stock
options with a strike price of $7.00 or greater for shares of restricted
stock and cash. Upon expiration of the tender offer on November 14, 2003,
option holders who were executive officers named above and participated
in the tender offer received an aggregate of 469,675 shares of restricted
stock having an aggregate value of $3.0 million ($6.30 per share) as well
as cash consideration of $2.0 million, which was equal to 67% of the
value of the restricted common stock. The number of restricted shares
issued to the officers named in this table, and the value thereof, were
as follows: Leon Kopyt: 351,494 ($2,214,412); Brian A. Delle Donne:
21,748 ($137,012); Stanton Remer: 38,974 ($245,536); Rocco Campanelli:
20,760 ($130,788); Leonard Lufrano: 5,786 ($36,452); and Kevin Miller:
30,913 ($194,752). The number of options cancelled with respect to each
named executive was as follows: Leon Kopyt: 750,000; Stanton Remer:
90,000; Brian A. Delle Donne: 50,000; Rocco Campenelli: 47,000; Leonard
Lufrano: 10,000; and Kevin Miller: 69,000.
(Footnotes continued on next page)
9
(Footnotes continued from previous page)
(3) This amount represents (i) premiums we paid in 2003, 2002 and 2001,
respectively, for life and disability insurance on certain of the
officers named in this table as follows: Leon Kopyt: $226, $182 and $164;
Brian A. Delle Donne: $204, $182 and $164; Stanton Remer: $190, $182 and
$3,541; Rocco Campanelli: $184, $182 and $164; Leonard Lufrano: $190,
$223 and $223; and Kevin Miller: $190, $182 and $164 (ii) premiums we
paid in 2003, 2002 and 2001, respectively, for medical insurance on
certain of the officers named in this table as follows: Leon Kopyt:
$10,268, $11,364 and $9,276; Brian A. Delle Donne: $13,284, $11,556 and
$9,456; Stanton Remer: $0, $0 and $0; Rocco Campanelli: $4,824, $4,914
and $4,903; Leonard Lufrano: $4,824, $4,190 and $3,303; and Kevin Miller
$6,998, $852 and $0 respectively; and (iii) matching contributions each
of $625 and $1,250, respectively, that we made during our fiscal years
ended December 31, 2003 and 2001 for each of the officers named in this
table in accordance with RCM's retirement savings plan adopted pursuant
to Section 401(k) of the Internal Revenue Code of 1986, as amended. There
were no matching contributions made by the Company for the year ended
December 31, 2003.
(4) Mr. Lufrano left the Company as of April 2, 2004.
Options Granted to Our Executives in Fiscal 2003
The following table lists information regarding the options to purchase our
common stock we granted to our executive officers and certain members of our
senior management during our fiscal year ended December 31, 2003. During our
fiscal year ended December 31, 2003, we did not grant any other options to any
of our executive officers or members of our senior management listed in the
summary compensation table of this proxy statement. We have never granted any
stock appreciation rights.
Option/SAR Grants in Fiscal 2003
Potential
Realizable
Individual Grants Value at Assumed
------------------------------------------------------- Annual Rates of
Number of % of Total Stock Price
Securities Options/SARs Appreciation
Underlying Granted to Exercise or For Option Term(1)
Options/SARs Employees in Base Price Expiration -------------------
Name Granted Fiscal Year ($/SH) Date 5% 10%
- ---- ------------ ------------ ----------- ---------- -------- --------
Leon Kopyt ...................................... 50,000 22.7% $3.95 8/5/2013 $124,207 $314,764
Stanton Remer ................................... 25,000 11.4% 3.95 8/5/2013 62,103 157,382
Brian A. Delle Donne ............................ 25,000 11.4% 3.95 8/5/2013 62,103 157,382
Rocco Campanelli ................................ 25,000 11.4% 3.95 8/5/2013 62,103 157,382
Leonard Lufrano(2) .............................. 25,000 11.4% 3.95 8/5/2013 62,103 157,382
Kevin D. Miller ................................. 25,000 11.4% 3.95 8/5/2013 62,103 157,382
- ---------------
(1) Potential realizable value is reported net of option exercise price but
before taxes associated with exercise. These amounts represent assumed
rates of appreciation only. Actual gains, if any, on the options are
dependent upon the future performance of our common stock, and the
amounts reflected in the table will not necessarily be achieved.
(2) Mr. Lufrano left the Company as of April 2, 2004.
10
Option Exercises in Fiscal 2003 and Fiscal Year-End Option Values
The following table lists the number of options exercised during our fiscal
year ended December 31, 2003 and the number and value of options held by our
executive officers and certain members of our senior management at the end of
our fiscal year ended December 31, 2003. No other options were exercised
during our fiscal year ended December 31, 2003 by any of our executive
officers or members of our senior management listed in the summary
compensation table of this proxy statement. RCM does not have any outstanding
stock appreciation rights. The values listed relate solely to outstanding
stock options.
Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money
Options/SARs Options/SARs
Shares at Fiscal Year-End(1) at Fiscal Year-End(2)
Acquired Value ----------------------------- -------------------------
Name on Exercise Realized Exercisable Unexercisable Exercisable Unexercised
- ---- ----------- -------- ------------ ------------- ----------- -----------
Leon Kopyt ................................. -- -- 100,000 50,000 $437,000 $171,000
Stanton Remer .............................. -- -- 75,000 25,000 196,500 85,500
Brian A. Delle Donne ....................... -- -- 100,000 25,000 262,000 85,500
Rocco Campanelli ........................... -- -- -- 87,000 -- 306,970
Leonard Lufrano(3) ......................... -- -- -- 128,333 -- 494,465
Kevin D. Miller ............................ -- -- 75,000 25,000 196,500 85,500
- ---------------
(1) As more fully described in footnote (2) to the Summary Compensation
Table, the Company completed a tender offer to exchange certain stock
options with a strike price of $7.00 or greater for shares of restricted
stock and cash. The stock options cancelled in connection with this
tender offer by the above named executives was 1,016,000. The number of
options cancelled with respect to each named executive was as follows:
Leon Kopyt: 750,000; Stanton Remer: 90,000; Brian A. Delle Donne: 50,000;
Rocco Campenelli: 47,000; Leonard Lufrano: 10,000; and Kevin Miller:
69,000.
(2) These values represent the difference between the closing price of our
common stock on The Nasdaq National Market on December 31, 2003 and the
exercise price of each option, multiplied by the number of shares
issuable upon the exercise of each option.
(3) Mr. Lufrano left the Company as of April 2, 2004.
Compensation of Directors
Our employee directors do not receive any compensation for serving on our
Board or its committees, other than the compensation they receive for serving
as employees of RCM.
The Board of Directors has approved a compensation package for non-employee
directors, which became effective in May 2000. Under the arrangement, each
non-employee director receives a retainer fee of $24,000 per year as
compensation for service on the Board. In addition to the retainer fee, each
eligible non-employee director is paid meeting attendance fees of $750 for
each Board Meeting and $300 for each Committee Meeting held on a date other
than the date of a Board Meeting.
All employee and non-employee directors also are eligible to receive options
to purchase our common stock and stock appreciation rights under our stock
option plans.
Employment Agreements
Mr. Kopyt's employment agreement provides for an annual base salary of
$475,000, vacation time and other customary benefits. In addition, the
agreement provides that Mr. Kopyt's annual bonus will be based on our EBITDA,
defined as earnings before interest, taxes, depreciation and amortization.
Mr. Kopyt's employment agreement is for a term of three years and
automatically extends each year for an additional one-year period. This
employment agreement is terminable upon Mr. Kopyt's death or disability, or
for cause, as defined in the agreement.
11
Change in Control and Termination of Employment Arrangements for Mr. Kopyt
Mr. Kopyt has an agreement with us that provides him with benefits upon a
change in control of RCM. Under this agreement, the remaining term of Mr.
Kopyt's employment is extended for five years upon a change in control. If,
during the term of Mr. Kopyt's employment following a change in control, RCM
terminates Mr. Kopyt's employment other than for cause, as defined in the
agreement, or Mr. Kopyt terminates his own employment for good reason, also as
defined in the agreement, the provisions below will apply. The agreement
defines "good reason" as, among other things, a material change in Mr. Kopyt's
salary, title or reporting responsibilities, or a change in RCM's office
location that requires Mr. Kopyt to relocate. This agreement includes the
following provisions, each of which is effective upon Mr. Kopyt's termination
other than for cause or for good reason, in either case following a change in
control:
o RCM must pay to Mr. Kopyt a lump sum equal to the total amount of his
salary and bonus for the remainder of the five-year term.
o RCM must pay to Mr. Kopyt an amount equal to the sum of all penalties
he is assessed (including excise taxes imposed on certain parachute
payments) and taxes he incurs as a result of the benefits he will
receive under the agreement.
Severance Agreement for Mr. Kopyt
On June 10, 2002, the Company entered into a Severance Agreement (the
"Severance Agreement") with Mr. Kopyt. The agreement provides for certain
payments to be made to Mr. Kopyt and for the continuation of Mr. Kopyt's
employee benefits for a specified time after his service with the Company is
terminated other than for cause, as defined in the Severance Agreement.
Amounts payable to Mr. Kopyt under the Severance Agreement would be offset and
reduced by any amounts received by Mr. Kopyt after his termination of
employment under his current employment and termination benefits agreements,
which are supplemented and not superseded by the Severance Agreement.
12
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURNS
The graph below is presented in accordance with Commission
requirements. You should not draw any conclusions from the data in the graph,
because past results do not necessarily predict future stock price performance.
The graph does not represent our forecast of future stock price performance.
The graph below compares our total stockholder return over the
five-year period ended December 31, 2003 to the cumulative total return of two
indices over the same period: Total Return Index for the Nasdaq Stock Market,
referred to in the graph as the Nasdaq Composite, and a peer group of staffing
companies that we selected in good faith. In developing the index, each selected
company is weighted based on its market capitalization measured on December 31,
2003.
Our self-determined peer group consists of the following corporations:
Alternative Resources Corp. Butler International, Inc.
Headway Corporate Resources Inc. Kelly Services, Inc.
MPS Group, Inc. Spherion Corporation
SCB Computer Technology Inc.
The graph assumes that $100 was invested on December 31, 1998 in each
of our common stock, the Nasdaq Composite and the peer group index, and that all
dividends were reinvested.
Comparison of Five-Year Cumulative Total Returns
RCM TECHNOLOGIES, INC.
[GRAPH OMITTED]
Total Return Analysis 1998 1999 2000 2001 2002 2003
- --------------------- ---- ---- ---- ---- ---- ----
RCM Technologies, Inc $100.0 $ 65.1 $ 13.8 $17.7 $14.8 $ 27.8
Nasdaq Composite $100.0 $186.2 $126.8 $97.0 $68.7 $108.2
Peer Group $100.0 $ 90.9 $ 35.8 $39.2 $29.6 $ 46.8
13
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
We believe that, during our fiscal year ended December 31, 2003, our
executive officers and directors made all required filings under Section 16(a)
of the Securities Exchange Act on a timely basis. Our belief is based solely on:
o our review of copies of forms filed pursuant to Section 16(a) and
submitted to us during and with respect to our fiscal year ended
December 31, 2003; and
o representations from the Company's directors, executive officers and
beneficial owners of more than 10% of our Common Stock that they have
complied with all Section 16(a) filing requirements with respect to
2003.
BOARD MEETINGS AND COMMITTEES
Our Board of Directors has an executive committee, an audit committee
and a compensation committee. The committees report their actions to the full
Board at the Board's next regular meeting. The following table shows on which of
our Board's committees each of our directors served, and the number of meetings
held by each of our Board's committees, during our fiscal year ended December
31, 2003.
Committee
-------------------------------------
Board Member Executive Audit Compensation
- ------------ --------- ----- ------------
Leon Kopyt ............................................................. X
Stanton Remer .......................................................... X
Norman S. Berson ....................................................... X
David Gilfor ........................................................... X X
Robert B. Kerr ......................................................... X X
Meetings held in Fiscal 2003* .......................................... 7 5 4
- ------------
* Our Board of Directors held three meetings in our fiscal year ended
December 31, 2003. Each of our directors attended all of those meetings
and all meetings of the committees on which he served. Our Board took
other actions during our fiscal year ended December 31, 2003 by written
consent.
General Duties of Each Committee
The general duties of each committee are as follows:
Executive Committee
o acts on behalf of our Board between meetings of the Board
Audit Committee
o reviews our financial and accounting practices, controls and results,
reviews the scope and services of our auditors and appoints our
independent auditors
o see "Report of the Audit Committee"
Compensation Committee
o determines the compensation of our officers and employees
o administers our stock option plans
Our Board has not established a committee to nominate candidates for
election as directors. Instead, the members of our Board collectively select the
candidates that the Board nominates for election as directors at our annual
meetings of stockholders. Our Board believes that this process is appropriate
given the relatively small size of our Board of Directors. Since we do not have
a nominating committee, our Board of Directors has not adopted a nominating
committee charter.
14
REPORT OF THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS
The following Report of the Compensation Committee and the performance
graph included elsewhere in this proxy statement do not constitute soliciting
material and should not be deemed filed or incorporated by reference into any
other Company filing under the Securities Act of 1933 or the Securities Exchange
Act of 1934, except to the extent the Company specifically incorporates this
Report or the performance graph by reference therein.
This report summarizes the functions and philosophical principles of
the compensation committee, the components of the compensation paid to RCM's
executives and other factors that the compensation committee considers in
determining the compensation of RCM's executives.
Functions of the Committee
The compensation committee's primary functions include:
o reviewing, approving and determining the salaries, bonuses and other
benefits of RCM's directors, executive officers and senior
management,
o recommending to RCM's Board amendments to existing stock option plans
and the adoption of new stock option plans,
o negotiating, reviewing, approving and determining the adoption of, or
amendments to, any compensatory plans, arrangements or agreements
between RCM and its executives, and
o establishing and reviewing management perquisites.
Compensation Philosophy
The Company's compensation program for executives consists of three key
elements:
o a base salary,
o a performance-based annual cash bonus, and
o periodic grants of stock options.
Under this approach, executive compensation involves a high proportion
of pay that is "at risk"- namely, the annual bonus and stock options. The
variable annual bonus also is based, in significant part, on Company
performance. Stock options relate a significant portion of long-term
remuneration directly to stock price appreciation realized by all of the
Company's stockholders. We believe that this three-part approach best serves the
interests of the Company and its stockholders. It enables the Company to meet
the requirements of the highly competitive environment in which we operate while
ensuring that executive officers are compensated in a way that advances both the
short-term and long-term interests of stockholders.
Components of Compensation
The compensation committee generally structures RCM executives'
compensation through a combination of the following:
o Base Salary: As a general rule, the compensation committee
establishes base salaries for RCM's executives based upon the
individual's performance and contribution to RCM. The Committee takes
into account base salaries of executives in comparable positions in
companies similar to RCM. Some of RCM's executives are parties to
employment agreements. The salaries of those executives are based on
their agreements.
o Annual Incentive Compensation: The compensation committee provides
annual incentive awards to RCM's executives to reward their
contributions to RCM. Mr. Kopyt's bonus is based solely on RCM's
EBITDA. Mr. Remer's bonus is determined based on a combination of
EBITDA and certain other factors at the discretion of the chief
executive officer. The bonuses of all other executives are determined
based on RCM's operating income and certain other factors at the
discretion of the chief executive officer, based on the guidelines
established by the compensation committee.
15
o Long-Term Incentive Compensation: The compensation committee
periodically grants stock options and other RCM securities to RCM
executives. The compensation committee intends the grants to be a
significant portion of the total executive compensation. The grants
are designed to align the interests of each RCM executive with those
of the stockholders, and provide each executive with a significant
incentive to manage RCM from the perspective of an owner with an
equity stake in the business. Grants typically permit executives to
acquire RCM's common stock at a fixed price per share (generally, the
market price on the grant date) over a specified period of time
(usually up to ten years). The grants provide a return to the
executive only if the market price of the shares appreciates over the
option term.
The compensation committee bases the size of each executive's option
grant upon the executive's:
o position with RCM,
o potential for future responsibility over the option term,
o performance in recent periods, and
o current holdings of RCM stock and options.
The compensation committee believes that RCM's financial performance is
a better indicator of executive achievement than its stock price. The
compensation committee examines a number of financial indicators in assessing
RCM's performance, including:
o net sales,
o operating income,
o net income, and
o earnings per share
The compensation committee does not base compensation decisions upon
any precise formula or accord any one factor greater weight than the other
factors.
Compensation of Leon Kopyt, RCM's Chief Executive Officer
Leon Kopyt, RCM's Chief Executive Officer, participates in the same
programs as RCM's other executives, and receives compensation based on: the same
factors as RCM's other executives, his employment agreement and a termination
benefits agreement. Mr. Kopyt's overall compensation reflects his degree of
policy and decision-making authority and his level of responsibility with
respect to RCM's strategic direction and financial and operational results. Mr.
Kopyt's compensation for 2003 was determined based on a study of the
compensation of chief executive officers of other companies in the information
technology industry, which have financial and corporate characteristics similar
to those of RCM. Mr. Kopyt's compensation components for RCM's fiscal year ended
December 31, 2003 were as follows:
o Base Salary: Mr. Kopyt received a base salary of $475,000.
o Annual Incentive Compensation: Pursuant to Mr. Kopyt's incentive
compensation arrangement, Mr. Kopyt received a $100,000 bonus for the
fiscal year ended December 31, 2003.
o Long-Term Incentive Compensation: Mr. Kopyt received 50,000 stock
option awards during the fiscal year ended December 31, 2003.
Deductibility Of Executive Compensation
Section 162(m) of the Internal Revenue Code limits the amount of
executive compensation RCM may deduct for federal income tax purposes. In
general, Section 162(m) only allows a publicly held corporation to deduct up to
one million dollars per year of compensation paid to certain executives. The
16
executives whose compensation is subject to limitation under Section 162(m) are
those executives who, as of the close of a corporation's taxable year, are
either the chief executive officer (or an individual acting in such capacity),
or an executive whose compensation is required to be reported to stockholders
under the Securities Exchange Act of 1934 by reason of that executive being
among the four highest compensated officers of a corporation for the taxable
year (other than the chief executive officer). Performance-based compensation is
not, however, subject to this deduction limitation if it meets certain
requirements. One of the requirements is that performance-based compensation be
payable only on the attainment of performance goals that have been approved by a
corporation's stockholders. Compensation attributable to the exercise of options
that are granted with an exercise price at or above the fair market value of the
stock subject to the option under a stockholder-approved stock option plan
meeting certain requirements is also qualified as performance-based
compensation. The compensation committee has generally attempted to structure
the compensation it pays to RCM's executives subject to Section 162(m) so that
compensation that would exceed the one million dollar limitation otherwise
imposed under Section 162(m) will qualify for the exemption noted above for
performance-based compensation.
The Board has determined that both members of the Compensation
Committee are independent, as defined in Marketplace Rule 4200(a)(15) of the
National Association of Securities Dealers.
Respectfully submitted by the members of the compensation committee of
the Board of Directors:
Compensation Committee
David Gilfor
Robert B. Kerr
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Our compensation committee consists of David Gilfor and Robert B. Kerr.
Neither Mr. Gilfor nor Mr. Kerr is or has been an officer or employee of RCM or
any of its subsidiaries.
PROPOSAL 2
------------------------
RATIFICATION OF THE APPOINTMENT OF INDEPENDENT AUDITORS
Our Audit Committee has selected Grant Thornton LLP to act in the
capacity of independent accountants for the current fiscal year. Ratification
and approval by the stockholders will be sought by the Board of Directors for
the selection of Grant Thornton LLP as independent accountants to audit our
accounts and records for the fiscal year ending December 31, 2004, and to
perform other appropriate services. The affirmative vote of a majority of the
outstanding shares of our voting stock is required to ratify the selection of
Grant Thornton LLP. In the event that a majority of the shares voted at the
Annual Meeting do not vote for ratification of the selection of Grant Thornton
LLP, the Audit Committee will reconsider such selection.
The Company expects representatives of Grant Thornton LLP to be present
at the Annual Meeting. They will have an opportunity to make a statement if they
so desire and to respond to questions by stockholders.
Audit Fees. Fees billed to the Company by Grant Thornton LLP during
2003 and 2002 for audit services rendered by Grant Thornton LLP for the audit of
the Company's annual financial statements for such years, for the review of
those financial statements included in the Company's Quarterly Reports on Form
10-Q during such years, and for services that are normally provided by Grant
Thornton LLP in connection with statutory and regulatory filings or engagements,
totaled $139,000 and $112,000, respectively.
Audit-Related Fees. Fees billed to the Company by Grant Thornton LLP
during 2003 and 2002 for audit-related services that were reasonably related to
the performance of the audit or review of the Company's financial statements and
are not reported under the preceding paragraph totaled $22,800 and $7,900,
respectively.
Tax Fees. Fees billed to the Company by Grant Thornton LLP during 2003
and 2002 for professional services rendered for tax compliance, tax advice and
tax planning totaled $17,900 and $17,000, respectively.
All Other Fees. Grant Thornton LLP was engaged by the Company during
2003 to perform certain non-audit services. The aggregate fees billed by Grant
Thornton LLP for those other services during 2003 were $22,800, which consisted
of $12,600 for financial reporting advice and $10,200 related to an audit of the
Company's 401(k) plan.
17
The Audit Committee has considered whether Grant Thornton LLP's
provision of services other than professional services rendered for the audit
and review of our annual financial statements is compatible with maintaining
Grant Thornton LLP's independence, and has determined that it is so compatible.
The Audit Committee has been informed by Grant Thornton LLP that less
than 50 percent of the hours expended on Grant Thornton LLP's engagement to
audit our financial statement for the fiscal year ended December 31, 2003 were
attributed to work performed by persons other than Grant Thornton LLP's
full-time, permanent employees.
The Audit Committee currently approves all engagements of the Company's
accountants to provide both audit and non-audit services, and has not
established formal pre-approval policies or procedures. The Audit Committee did
not approve any non-audit services pursuant to Rule 2-01(c)(7)(i)(C) of
Regulation S-X during 2003.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE RATIFICATION AND
APPROVAL OF THE SELECTION OF GRANT THORNTON LLP AS OUR INDEPENDENT ACCOUNTANTS
FOR FISCAL 2004.
REPORT OF THE AUDIT COMMITTEE
The following Report of the Audit Committee does not constitute
soliciting material and should not be deemed filed or incorporated by reference
into any other Company filing under the Securities Act of 1933 or the Securities
Exchange Act of 1934, except to the extent the Company specifically incorporates
this Report by reference therein.
The Committee met five times during fiscal 2003 to carry out its
responsibilities. The Committee schedules its meeting with a view to ensuring
that it devotes appropriate attention to all its tasks.
As part of its oversight of the Company's financial statements, the
Audit Committee reviewed and discussed with both management and the Company's
outside auditors all financial statements prior to their issuance. Management
advised the Committee in each case that all financial statements were prepared
in accordance with generally accepted accounting principles, and reviewed
significant accounting issues with the Committee. These reviews included
discussion with the outside auditors of matters required to be discussed
pursuant to Statement on Auditing Standards No. 61 (Communication with Audit
Committees).
The Committee also discussed with Grant Thornton LLP matters relating
to its independence, including a review of audit and non-audit fees and the
written disclosures made to the Committee pursuant to Independence Standards
Board Standard No. 1 (Independence Discussions with Audit Committees).
In addition, the Committee reviewed major initiatives and programs
aimed at strengthening the effectiveness of the Company's internal control
structure. As part of this process, the Committee continued to monitor the scope
and adequacy of the Company's internal auditing program, reviewing staffing
levels and steps taken to implement recommended improvements in internal
procedures and controls.
Taking all of these reviews and discussions into account, the Committee
recommended to the Board of Directors that the Board approve the inclusion of
the Company's audited financial statements in the Company's Annual Report on
Form 10-K for the fiscal year ended December 31, 2003 for filing with the
Securities and Exchange Commission.
The Board has determined that all members of the Audit Committee are
independent, as defined in Marketplace Rule 4200(a)(15) of the National
Association of Securities Dealers, and that Robert B. Kerr is an "audit
committee financial expert" as defined by the Commission.
Audit Committee
Robert B. Kerr (Chair)
Norman S. Berson
David Gilfor
18
CORPORATE GOVERNANCE MATTERS
Stockholder Communications with the Board. Stockholders may send
communications to the Board of Directors in writing, addressed to the full Board
of Directors, individual directors or a specific committee of the Board of
Directors, care of Stanton Remer, Secretary, RCM Technologies, Inc., 2500
McClellan Avenue, Suite 350, Pennsauken, New Jersey 08109. In general, all
stockholder communications sent to our Secretary for forwarding to the Board of
Directors, or to specified Board members, will be forwarded in accordance with
the sender's instructions. However, our Secretary reserves the right to not
forward to Board members any abusive, threatening or otherwise inappropriate
materials.
Director Attendance at Annual Meetings. The Company encourages all of
the directors to attend the annual meeting of stockholders. The 2003 Annual
Meeting of Stockholders was attended by all of the directors.
Code of Conduct and Code of Ethics. We have adopted a Code of Conduct
applicable to all of our directors, officers and employees. In addition, we have
adopted a Code of Ethics, within the meaning of applicable Commission rules,
applicable to our Chief Executive Officer, Chief Financial Officer and
Controller. Both our Code of Conduct and Code of Ethics are available free of
charge by sending a written request to Stanton Remer, Secretary, RCM
Technologies, Inc., 2500 McClellan Avenue, Suite 350, Pennsauken, New Jersey
08109. If we make any amendments to either of these Codes (other than technical,
administrative, or other non-substantive amendments), or waive (explicitly or
implicitly) any provision of the Code of Ethics to the benefit of our Chief
Executive Officer, Chief Financial Officer or Controller, we will disclose the
nature of the amendment or waiver, its effective date and to whom it applies in
the investor relations portion of our website at www.rcmt.com, or in a report on
Form 8-K that we file with the Commission.
STOCKHOLDER PROPOSALS
Stockholders may submit proposals to be considered for inclusion in the
proxy materials for our annual meetings. For your proposal to be included in the
proxy materials for our 2005 annual meeting:
o you must submit your proposal in writing to Stanton Remer, Secretary,
RCM Technologies, Inc.,2500 McClellan Avenue, Suite 350, Pennsauken,
New Jersey 08109;
o Mr. Remer must receive your proposal no later than December 27, 2004;
and
o your proposal must comply with the rules and regulations of the
Commission.
If you wish to present a proposal at our 2005 annual meeting but not
have the proposal included in our proxy materials relating to that meeting, you
must notify our Secretary of such proposal. If we do not receive notice of your
proposal by March 12, 2005, the proposal will be deemed "untimely" for the
purposes of Rule 14a-4(c) of the Securities Exchange Act of 1934. If the
proposal is deemed "untimely," the persons named as proxies in next year's proxy
materials will be entitled to vote in their discretion with respect to the
proposal.
By Order of the Board of Directors,
/s/ Stanton Remer
Stanton Remer
Secretary
April 26, 2004
19
ANNEX A
PROXY
RCM TECHNOLOGIES, INC.
2500 McCLELLAN AVENUE
SUITE 350
PENNSAUKEN, NEW JERSEY 08109-4613
THIS PROXY IS SOLICITED ON BEHALF
OF THE BOARD OF DIRECTORS OF THE COMPANY
The undersigned, a stockholder of RCM Technologies, Inc. (the
"Company"), hereby appoints Leon Kopyt and Stanton Remer, and each of them, as
the true and lawful attorneys and proxies of the undersigned, with full power of
substitution, for and in the name of the undersigned, to vote and otherwise act
on behalf of the undersigned at the Annual Meeting of Stockholders of the
Company to be held at the law offices of Morgan, Lewis & Bockius LLP, 1701
Market Street, Philadelphia, Pennsylvania on Thursday, June 17, 2004, at 6:00
p.m. local time, and at any adjournment or adjournments thereof, with respect to
all shares of the Company's Common Stock which the undersigned would be entitled
to vote, with all powers the undersigned would possess if personally present, on
the following matters:
/X/ Please mark votes as in this example.
1. The election of two Class B directors, to serve until the expiration of their
terms and until their successors are elected and qualified or until their
earlier resignation or removal.
Nominees: (01) Robert B. Kerr and (02) David Gilfor
FOR WITHHELD
|__| |__|
|__|
------------------------ ------------------------------
FOR BOTH NOMINEES, EXCEPT AS NOTED ABOVE.
2. Ratification of the appointment by the Board of Directors of Grant Thornton
LLP as independent auditors for the Company for the fiscal year ending December
31, 2004.
FOR AGAINST ABSTAIN
|__| |__| [__]
IN THEIR DISCRETION, THE NAMED PROXIES ARE AUTHORIZED TO VOTE UPON SUCH OTHER
MATTERS AS MAY PROPERLY COME BEFORE THE MEETING OR ANY ADJOURNMENT(S) THEREOF.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED AS DIRECTED BY THE UNDERSIGNED
STOCKHOLDER. IF THE STOCKHOLDER GIVES NO DIRECTION, THE PROXY WILL BE VOTED
"FOR" BOTH NOMINEES FOR DIRECTOR, "FOR" PROPOSAL #2, AND IN THE PROXIES'
DISCRETION ON ANY OTHER MATTERS TO COME BEFORE THE MEETING.
Signature:________________ Date:_____ Signature:________________ Date:______
The undersigned hereby acknowledges receipt of the notice of Annual Meeting, the
proxy statement furnished in connection therewith and the annual report to
stockholders and hereby ratifies all that the said attorneys and proxies may do
by virtue hereof.
PLEASE DATE THIS PROXY AND SIGN ABOVE exactly as your name appears on this
proxy. If more than one person owns the shares, each owner should sign. If you
are signing this proxy as an attorney, administrator, executor, guardian or
trustee, please include your title. If you are signing this proxy on behalf of a
corporation, please include your title.