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 240.14a-12
WEGENER CORPORATION
(Name of Registrant as Specified in Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[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:
(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:
WEGENER CORPORATION
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD TUESDAY, JANUARY 20, 2004
To the Stockholders:
The Annual Meeting of Stockholders of WEGENER CORPORATION, a Delaware
corporation, will be held at its home office at 11350 Technology Circle, Duluth,
Georgia 30097, on Tuesday, January 20, 2004 at 7:00 p.m., Eastern Standard Time,
for the following purposes:
(a) To elect one Class II director to hold office until the 2006 Annual
Meeting of Stockholders or until his successor shall have been elected
and qualified;
(b) To elect two Class III directors to hold office until the 2007 Annual
Meeting of Stockholders or until their successors shall have been
elected and qualified;
(c) To consider ratification of the appointment of BDO Seidman, LLP as
auditors for fiscal year 2004; and
(d) To transact such other business as may properly come before the
meeting or any adjournment thereof.
The Board of Directors has fixed December 5, 2003 as the record date for
the determination of stockholders entitled to vote at the Annual Meeting of
Stockholders. Only stockholders of record at the close of business on that date
will be entitled to notice of and to vote at the meeting. The stock transfer
records of Wegener Corporation will not be closed.
A proxy statement and a proxy solicited by the Board of Directors, together
with a copy of the 2003 Annual Report to Stockholders, are enclosed herewith.
Stockholders are cordially invited to attend the Annual Meeting. Whether or not
you expect to attend the meeting in person, you are requested to sign and date
the enclosed proxy and return it as promptly as possible in the accompanying
envelope. If you attend the meeting, you may, if you wish, withdraw your proxy
and vote in person.
By Order of the Board of Directors
J. Elaine Miller
Secretary
Duluth, Georgia
December 15, 2003
PLEASE PROMPTLY COMPLETE AND RETURN THE
ENCLOSED PROXY IN THE ENVELOPE PROVIDED.
WEGENER CORPORATION
11350 TECHNOLOGY CIRCLE
DULUTH, GEORGIA 30097
PROXY STATEMENT
FOR THE ANNUAL MEETING OF STOCKHOLDERS
OF WEGENER CORPORATION
TO BE HELD ON JANUARY 20, 2004
This Proxy Statement is furnished in connection with the solicitation of
proxies to be voted at the Annual Meeting of Stockholders of Wegener Corporation
(the "Company") to be held on Tuesday, January 20, 2004. This Proxy Statement is
first being mailed to stockholders on or about December 15, 2003.
The enclosed proxy is solicited by the Board of Directors of the Company
and will be voted at the Annual Meeting and any adjournment of the meeting. The
proxy may be revoked at any time before it is exercised by delivering a written
revocation to the Secretary of the Company or by voting at the meeting in person
or by delivering to the Secretary of the Company a new proxy properly executed
and bearing a later date. The items enumerated herein constitute the only
business which the Board of Directors intends to present or knows will be
presented at the meeting. However, the proxy confers discretionary authority
upon the persons named therein, or their substitutes, with respect to any other
business which may properly come before the meeting. Abstentions and broker
non-votes will not be counted as votes either in favor of or against the matter
with respect to which the abstention or broker non-vote relates; however, with
respect to any matter other than the election of directors, an abstention or
broker non-vote would have the effect of a vote against the proposal in
question.
The record date for the determination of stockholders entitled to vote at
the Annual Meeting has been set at December 5, 2003. As of December 5, 2003, the
Company had outstanding 12,398,551 shares of common stock, $.01 par value. Each
share is entitled to one vote. A majority of the shares of common stock
outstanding must be present, in person or by proxy, to constitute a quorum.
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information as of December 5, 2003
with respect to ownership of the outstanding common stock of the Company by (i)
all persons known to the Company to own beneficially more than five percent (5%)
of the outstanding common stock of the Company, including their addresses, (ii)
each director, director nominee and executive officer of the Company and (iii)
all directors and executive officers of the Company as a group:
AMOUNT
AND
NATURE OF PERCENT
DIRECTOR BENEFICIAL OF
NAME SINCE OWNERSHIP(1) CLASS
---- ----- --------- -----
Robert A. Placek 1987 1,951,487(2) 15.4%
C. Troy Woodbury, Jr 1989 238,834(3) 1.9%
Joe K. Parks 1992 34,900(4) *
Thomas G. Elliot 1998 30,800(5) *
Wendell H. Bailey 2003 10,000(5) *
Ned L. Mountain 2003 65,436(6) *
David E. Chymiak(7) N/A 1,115,845 9.0%
All executive officers and directors
as a group (6 persons) 2,331,457(8) 18.0%
_____________________
* Less than 1%
(1) Includes stock options currently exercisable or exercisable within 60 days
of the record date.
(2) Includes 29,267 shares held in a 401(k) plan and stock options to purchase
237,150 shares. Mr. Placek's business address is 11350 Technology Circle,
Duluth, Georgia 30097.
(3) Includes 22,759 shares held in a 401(k) plan and 199,575 shares subject to
stock options.
(4) Includes stock options to purchase 33,900 shares.
(5) Represents stock options to purchase common stock.
(6) Includes 6,389 shares held in a 401(k) plan and 50,000 shares subject to
stock options.
(7) The information regarding Mr. Chymiak is based solely on a Schedule 13G
filed by Mr. Chymiak with the Securities and Exchange Commission on October
13, 2003. Mr. Chymiak's address is 1605 E. Iola, Broken Arrow, Oklahoma
74102.
(8) Includes 58,415 shares held in a 401(k) plan and 561,425 shares subject to
stock options.
-2-
AGENDA ITEM ONE
ELECTION OF DIRECTORS
The Company's Board of Directors presently consists of six directors,
elected to staggered three-year terms.
On February 6, 2003, Wendell H. Bailey was elected as a Class II director
following expansion of the Board of Directors from five to six members. The
independent directors of the Company have nominated Mr. Bailey for election by
the stockholders to serve, together with Mr. Placek, as a Class II director for
the remaining Class II term of two years, expiring in January 2006.
On May 15, 2003, Ned L. Mountain, Executive Vice President of Wegener
Communications, Inc. ("WCI"), a subsidiary of the Company, was elected as a
Class III director to fill a vacancy created by the resignation of James H.
Morgan, Jr. during fiscal year 2003.
The terms of Thomas G. Elliot and Ned L. Mountain will expire at the
upcoming Annual Meeting of Stockholders. The independent directors of the
Company have nominated Mr. Elliot and Mr. Mountain for re-election as Class III
directors of the Company to serve for a term of three years, expiring in January
2007. Unless otherwise directed, the proxies will be voted at the meeting for
the election of the foregoing nominees or, in the event of any unforeseen
contingency, for a different person as substitute. Directors are elected by a
plurality of the votes cast by the holders of shares entitled to vote in the
election of directors at a meeting of stockholders at which a quorum is present.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "FOR" THE ELECTION OF THE
FOREGOING NOMINEES.
WENDELL H. BAILEY, age 57, Class II director, has served as a director of
the Company since February 2003. Since 1998, Mr. Bailey has served as Chief
Technologist, Advanced Broadband Technology, of National Broadcasting Company,
Inc. (NBC). From 1981 through 1997, Mr. Bailey served as Vice President, Science
and Technology, of National Cable Television Association (NCTA).
THOMAS G. ELLIOT, age 61, Class III director, has served as a director of
the Company since September 1998 and as Senior Vice President, Technical
Projects, at CableLabs (Cable Television Laboratories, Inc.), a research and
development consortium of cable television system operators representing most of
the cable subscribers in North America, since July 1997. From 1993 to July 1997,
Mr. Elliot served as a Senior Vice President of Telecommunications, Inc.
NED L. MOUNTAIN, age 55, Class III director, has served as a director of
the Company since May 2003. Mr. Mountain has been Executive Vice President of
WCI since March 2002. He served as Senior Vice President of Business Development
of WCI from 1996 to March 2002, and as Vice President European Operations of WCI
in 1994 and 1995. Mr. Mountain held numerous sales and marketing positions with
WCI from 1981 to 1994, and served as Corporate Senior Engineer of UA-Columbia
Cablevision from 1979 to 1981.
The directors whose terms do not expire at the upcoming Annual Meeting are
as follows:
-3-
C. TROY WOODBURY, JR., age 56, Class I director, has served as Treasurer
and Chief Financial Officer of the Company since June 1988, and as a director of
the Company since December 1989. He also has served as Treasurer and Chief
Financial Officer of WCI since September 1992, and as Senior Vice President of
Finance since March 2002. Mr. Woodbury served as Executive Vice President of WCI
from July 1995 to March 2002 and as Chief Operating Officer of WCI from
September 1992 to June 1998. Prior to joining the Company in 1988, Mr. Woodbury
served as Group Controller for Scientific-Atlanta, Inc. from March 1975 to June
1988. His term of office expires in 2005.
JOE K. PARKS, age 68, retired, Class I director, served as Laboratory
Director, Threat Systems Development Laboratory of the Georgia Tech Research
Institute, a department of the Georgia Institute of Technology, from 1980 to
July 1996. The principal business of the Threat Systems Development Laboratory
is to design and manufacture radar systems which simulate enemy threats. Mr.
Parks has served as a director of the Company since May 1992. His term of office
expires in 2005.
ROBERT A. PLACEK, age 65, Class II director, has served as a director of
the Company since August 1987, as Chairman of the Board of Directors since May
1994 and as President and Chief Executive Officer since August 1987. Mr. Placek
served as President of WCI from 1979 to June 1998 and from March 2002 to the
present. He has served as Chairman of the Board and Chief Executive Officer and
a director of WCI since 1979. His term of office expires in 2006.
The Board of Directors has determined that Messrs. Bailey, Elliot and Parks
are independent directors as defined by NASDAQ Rule 4200.
COMMITTEES OF THE BOARD OF DIRECTORS
The Board of Directors has standing Audit, Executive and Compensation, and
Incentive Plan Committees. The Audit Committee is composed of Messrs. Elliot,
Parks and Bailey and held three meetings during the fiscal year ended August 29,
2003. The members of the Audit Committee are independent, as such term is
defined by Rule 4200(a)(14) of the National Association of Securities Dealers'
listing standards. The function of the Audit Committee is to oversee the
accounting and financial reporting processes of the Company and the audits of
the financial statements of the Company, and to perform such other functions as
described in the Audit Committee Charter of the Company. The Audit Committee
considers the scope, approach, effectiveness and recommendations of the audit
performed by the independent accountants; determines and prescribes limits upon
the types of non-audit professional services that may be provided by the
independent accountants without adverse effect on the independence of such
accountants; recommends the appointment of independent accountants; and
considers significant accounting methods adopted or proposed to be adopted.
During the fiscal year ended August 29, 2003, the Executive and
Compensation Committee was composed of Messrs. Placek, Bailey and Elliot and
acted one time by unanimous written consent. The function of the Executive and
Compensation Committee is to recommend to the full Board compensation
arrangements for the Company's senior management and the adoption of any benefit
plans in which officers and directors are eligible to participate.
-4-
In December 2003, Mr. Placek resigned from the Executive and Compensation
Committee in order to comply with new corporate governance regulations
implemented by NASDAQ. Also in December 2003, the Board of Directors established
a Compensation Committee comprised of Messrs. Bailey, Elliot and Parks. This
committee will have responsibility for the compensation arrangements for the
Company's senior management and the adoption of any benefit plans in which
officers and directors are eligible to participate.
The Incentive Plan Committee is composed of Messrs. Bailey and Elliot and
acted five times by unanimous written consent during the fiscal year ended
August 29, 2003. The Incentive Plan Committee is responsible for recommending
the key employees who will receive awards under the 1988 Incentive Plan, the
1989 Directors' Incentive Plan and the 1998 Incentive Plan ("Incentive Plans"),
the award amount or number of shares of stock to be granted, and the terms and
conditions of each award.
The Board of Directors does not presently have a standing nominating
committee. However, the independent members of the Board of Directors nominated
the persons standing for election at the 2004 Annual Meeting.
MEETINGS OF THE BOARD OF DIRECTORS
The Board of Directors of the Company held seven meetings and acted four
times by unanimous written consent during the fiscal year ended August 29, 2003.
During fiscal 2003, each director attended at least 75% of all meetings of the
Board of Directors and Committee(s) on which he served.
AUDIT COMMITTEE REPORT
For the fiscal year ended August 29, 2003, the Audit Committee has reviewed
and discussed the audited financial statements with management, has discussed
with the independent auditors the matters required to be discussed by SAS 61 and
has received the written disclosures and a letter from the independent
accountants required by Independence Standards Board Standard No. 1
(Independence Discussions with Audit Committees). The Audit Committee has
discussed with the independent accountants the independence of the independent
accountants. Based on the foregoing meetings, reviews and discussions, the Audit
Committee recommended to the Board of Directors that the audited financial
statements for fiscal 2003 be included in the Company's Annual Report on Form
10-K for filing with the Securities and Exchange Commission.
This report is submitted by each member of the Company's Audit Committee,
as follows:
THOMAS G. ELLIOT JOE K. PARKS WENDELL H. BAILEY
The Board of Directors of the Company has adopted a revised written charter
for the Audit Committee, a copy of which is included as an appendix to this
Proxy Statement for the 2004 Annual Meeting. The members of the Audit Committee
are independent, as such term is defined by Rule 4200(a)(14) of the National
Association of Securities Dealers' listing standards.
-5-
AUDIT COMMITTEE FINANCIAL EXPERT
The Board of Directors of the Company has determined that the Company does
not presently have an "audit committee financial expert" serving on its Audit
Committee, as such term is currently defined by the Securities and Exchange
Commission ("SEC"). However, the Board of Directors has determined that each
current member of the Audit Committee has past employment experience or
background which results in such individual's financial sophistication as
required by NASDAQ, including, but not limited to, the ability to understand
generally accepted accounting principles ("GAAP"), financial statements and
internal controls and procedures, as well as the ability to assess the general
application of GAAP. Each member of the Audit Committee understands Audit
Committee functions, and the Board of Directors believes that the members of the
Audit Committee possess the requisite knowledge and experience to adequately
perform their duties under the Audit Committee Charter. The Company does not
currently have an audit committee financial expert because its current directors
do not have the specific educational and work experience required by SEC
regulations, which call for experience and training as a principal financial
officer, principal accounting officer, controller, public accountant or auditor,
or experience actively supervising, overseeing or assessing the performance of
such persons. The Company is currently seeking another independent director and
will use its reasonable best efforts to identify a candidate who would meet the
SEC's definition of audit committee financial expert.
CODE OF ETHICS
The Company has adopted a Code of Business Conduct and Ethics which is
applicable to all directors, officers and employees of the Company and its
subsidiaries. A copy of the Company's Code of Business Conduct and Ethics has
been filed with the Securities and Exchange Commission as an exhibit to its
Annual Report on Form 10-K for the year ended August 29, 2003 and such Code is
posted on the Company's website at www.wegener.com.
----------------
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors, certain officers and persons who own more than 10% of the outstanding
common stock of the Company to file with the Securities and Exchange Commission
reports of changes in ownership of the common stock of the Company held by such
persons. Officers, directors and greater than 10% stockholders are also required
to furnish the Company with copies of all forms they file under this regulation.
To the Company's knowledge, based solely on a review of copies of such reports
furnished to the Company and representations that no other reports were
required, during fiscal 2003, all Section 16(a) filing requirements were
complied with by its officers and directors.
-6-
EXECUTIVE COMPENSATION
The following table provides certain summary information concerning
compensation paid or accrued by the Company to or on behalf of the Company's
Chief Executive Officer and each other executive officer of the Company or WCI
whose total annual salary and bonus exceeded $100,000 (the "Named Executive
Officers") for the fiscal years ended August 29, 2003, August 30, 2002 and
August 31, 2001.
SUMMARY COMPENSATION TABLE
Long Term
Compensation
----------------------
Annual Compensation Awards
- --------------------------------------------------------------------------------------------------------------------------------
Name Other Restricted All
and Annual Stock Options/ Other
Principal Fiscal Salary Bonus Compensation Award(s) SARs Compensation
Position Year ($) ($) ($) ($) (#) ($)(a)
- --------------------------------------------------------------------------------------------------------------------------------
Robert A. Placek 2003 179,078 500 -0- -0- -0- 23,428
Chairman of the Board, 2002 179,078 -0- -0- -0- 84,150 22,468
President and Chief 2001 179,078 -0- -0- -0- -0- 22,241
Executive Officer; Director
C. Troy Woodbury, Jr. 2003 131,424 500 -0- -0- -0- 6,373
Treasurer and Chief 2002 131,424 -0- 58,339(b) -0- 89,575 5,413
Financial Officer; 2001 131,424 -0- -0- -0- -0- 5,183
Director
Ned L. Mountain 2003 138,269 500 -0- -0- -0- 3,830
Executive Vice President 2002 110,000 -0- 13,351(c) -0- 20,000 2,750
of WCI 2001 110,000 -0- 40,486(c) -0- -0- 2,750
_________________________
(a) Represents amounts contributed by the Company pursuant to the Company's
401(k) plan and life insurance premiums paid by the Company, as follows:
Insurance
Name Fiscal Year Premiums 401(k) Contributions
---- ----------- -------- --------------------
Robert A. Placek 2003 $17,055 $6,373
2002 17,055 5,413
2001 17,055 5,186
C. Troy Woodbury, Jr. 2003 -0- 6,373
2002 -0- 5,413
2001 -0- 5,183
Ned L. Mountain 2003 -0- 3,830
2002 -0- 2,750
2001 -0- 2,750
(b) Represents cash payment in lieu of vacation.
(c) Represents sales incentive commissions.
-7-
STOCK OPTION PLANS
No options were granted to the Named Executive Officers during the fiscal
year ended August 29, 2003 under the Company's Incentive Plans.
The following table provides certain information concerning each exercise
of stock options under the Company's Incentive Plans during the fiscal year
ended August 29, 2003, by the Named Executive Officers and the fiscal year end
value of unexercised options held by such persons:
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR END OPTION VALUES
Number of Securities Value ($) of
Underlying Unexercised
Unexercised In-the-Money
Options at Fiscal Options at Fiscal
Shares Year End Year End
Acquired Value Exercisable/ Exercisable/
Name on Exercise(#) Realized($) Unexercisable Unexercisable(1)
---- -------------- ----------- ------------- ----------------
Robert A. Placek 0 0 237,150/0 272,187/-
C. Troy Woodbury, Jr. 16,500 11,550 199,575/0 223,277/-
Ned L. Mountain 0 0 50,000/0 43,760/-
______________
(1) The market value of the Company's common stock on August 29, 2003 was $2.43
per share. The actual value, if any, an executive may realize will depend
upon the amount by which the market price of the Company's common stock
exceeds the exercise price when the options are exercised.
EQUITY COMPENSATION PLAN INFORMATION
The following table summarizes information as of August 29, 2003 regarding
the Company's common stock reserved for issuance under the Company's equity
compensation plans.
-8-
Number of Securities
Remaining Available for
Weighted-Average Future Issuance Under
Number of Securities to Exercise Price the Plans (Excluding
be Issued Upon Exercise of Outstanding Securities Reflected in
of Outstanding Options Options Column (a))
Plan Category (a) (b) (c)
- ---------------------------------- ----------------------- ---------------- ----------------------
Equity Compensation Plans Approved 1,228,425 $1.39 972,575
by Security Holders
Equity Compensation Plans 100,000 $5.625 - 0 -
Not Approved by Security
Holders(1)
TOTAL 1,328,425 $1.71 972,575
- ------------------------------------
(1) Represents a compensation arrangement pursuant to an agreement with a third
party to provide a national financial relations program for the Company,
which agreement terminated in fiscal 2001.
RETENTION AGREEMENTS
The Company has not entered into employment agreements with any of its
executive officers. On May 2, 2003, following the approval and recommendation of
a committee of the Board of Directors consisting solely of independent,
non-management directors, Wegener entered into retention agreements with each of
the Named Executive Officers and certain of its other key employees. Under the
agreements with the Named Executive Officers, in the event of a change in
control of Wegener, each such officer will be entitled to receive a cash payment
of 2.5 times his annual salary and continued insurance benefits for a period of
30 months.
COMPENSATION OF DIRECTORS
During fiscal 2003, directors received no cash compensation for their
services. The Board of Directors is currently considering potential compensation
arrangements for non-employee directors. Pursuant to the Company's 1998
Incentive Plan, each non-employee director receives an option to purchase 3,000
shares of Common Stock on the last day of December of each year at an exercise
price equal to the fair market value on such date. These options are exercisable
for ten years. The automatic grant in fiscal 2002 was suspended; however, on
January 21, 2003, each of Messrs. James H. Morgan, Jr. (resigned in fiscal
2003), Elliot and Parks was granted an option to purchase 3,000 shares,
respectively, at an exercise price of $1.09. In addition, on February 7, 2003,
Mr. Bailey was granted an option to purchase 10,000 shares at an exercise price
of $0.91.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION IN COMPENSATION
DECISIONS
During fiscal 2003, the Executive and Compensation Committee was comprised
of Mr. Bailey, Mr. Elliot and Robert A. Placek. Mr. Placek is Chairman of the
Board, President and Chief Executive Officer of the Company. This Committee
acted one time by unanimous written consent during fiscal 2003. See "Report of
the Board of Directors on Executive Compensation."
-9-
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
See "Compensation Committee Interlocks and Insider Participation in
Compensation Decisions" which describes certain business relationships between
the Company and certain of its directors.
Notwithstanding anything to the contrary set forth in any of the Company's
previous filings under the Securities Act of 1933, as amended, or the Securities
Exchange Act of 1934, as amended, that might incorporate future filings,
including this proxy statement, in whole or in part, the Audit Committee Report,
the Report of the Board of Directors on Executive Compensation and the
Stockholder Return Performance Graph shall not be incorporated by reference into
any such filings.
REPORT OF THE BOARD OF DIRECTORS
ON EXECUTIVE COMPENSATION
The Company presently has a Compensation Committee comprised of three
non-employee directors of the Company. However, this report is being made by the
full Board of Directors. See "Executive Compensation."
The Compensation Committee is responsible for the review of the performance
of the Chief Executive Officer as well as the other executive officers of the
Company. The performance of the Chief Executive Officer and the other executive
officers of the Company is reviewed in light of the performance of the Company
and the Company's working capital position and prospects. The Compensation
Committee does not assign relative weights to the factors considered in setting
compensation, but rather considers all factors as a whole. In determining
compensation levels, the Compensation Committee has not set specific performance
targets for officers to attain in order to earn any specific component of
compensation.
The Compensation Committee and the Board of Directors have considered other
companies in the telecommunications industry and reviewed, to the extent such
information was available, the compensation paid to the chief executive officers
and other executive officers of those companies. As a result of such review, the
Board of Directors has concluded that the compensation levels of the Company's
Chief Executive Officer and other executive officers are in the lower range of
compensation paid by comparably situated companies. The Board of Directors
considered the competitiveness of the entire compensation package to its
officers and not only certain items of compensation.
During fiscal 2003, a committee of the Board consisting solely of
independent directors approved the Company entering into retention agreements
with each of the Named Executive Officers and certain of its other employees
pursuant to which the Named Executive Officers will be entitled to receive a
cash payment of 2.5 times his annual salary and continued insurance benefits for
a period of 30 months in the event of a change in control of the Company.
At the present time, the Company maintains its 1998 Incentive Plan for the
purpose of awarding options and other compensation to its directors, executive
officers and other key employees. No stock options were granted to the Named
Executive Officers during fiscal 2003.
-10-
The Company's future compensation policies will be developed in light of
the Company's profitability and with the goal of rewarding members of management
for their contributions to the Company's success.
Robert A. Placek Joe K. Parks
C. Troy Woodbury, Jr. Thomas G. Elliot
Ned L. Mountain Wendell H. Bailey
-11-
STOCKHOLDER RETURN PERFORMANCE GRAPH
Set forth below is a line graph comparing the yearly percentage change in
the cumulative total stockholder return on the Company's common stock against
the cumulative total return of the Nasdaq Stock Market (U.S. Companies) and the
Index for the Nasdaq Telecommunications Stocks for the period of five fiscal
years commencing August 28, 1998 and ending August 29, 2003. The graph assumes
that the value of the investment in the Company's common stock and each index
was $100 on August 28, 1998.
[LINE GRAPH]
CUMULATIVE TOTAL RETURN
---------------------------------------------------------------
8/28/98 9/3/99 9/1/00 8/31/01 8/30/02 8/29/03
WEGENER CORPORATION $100.00 $107.69 $150.03 $44.31 $60.31 $149.54
NASDAQ STOCK MARKET (U.S.) 100.00 176.12 260.70 111.03 81.49 112.25
NASDAQ TELECOMMUNICATIONS 100.00 178.48 196.50 71.94 31.10 47.41
-12-
AGENDA ITEM TWO
APPOINTMENT OF AUDITORS
The firm of BDO Seidman, LLP, independent certified public accountants,
audited the financial statements of the Company for the fiscal year ended August
29, 2003. The Audit Committee of the Board of Directors has selected this same
firm to audit the financial statements of the Company for the current fiscal
year and proposes that the stockholders ratify this selection at the Annual
Meeting. Neither such firm nor any of its members or associates has or has had
during the past year any financial interest in the Company, direct or indirect,
or any relationship with the Company other than in connection with their
professional engagement.
Stockholder ratification of this appointment is not required. Management
has submitted this matter to the stockholders because it believes the
stockholders' views on the matter should be considered, and if the proposal is
not approved, management may reconsider the appointment. Representatives of BDO
Seidman, LLP are expected to be present at the Annual Meeting to respond to
stockholders' questions and will have an opportunity to make any statements they
consider appropriate.
PRINCIPAL ACCOUNTANT FEES AND SERVICES. The following is a summary of the
fees and expenses billed to the Company by BDO Seidman, LLP for professional
services rendered for the fiscal years ended August 29, 2003 and August 30,
2002:
FEE CATEGORY FISCAL 2003 FEES FISCAL 2002 FEES
------------ ---------------- ----------------
Audit Fees.............................$132,348 $103,838
Audit-Related Fees.......................17,587 19,150
Tax Fees.................................15,000 21,480
All Other Fees........................... -- --
Total Fees.............................$164,935 $144,468
AUDIT FEES. Consists of fees billed for professional services rendered for
the audit of the Company's consolidated financial statements and review of the
interim consolidated financial statements included in quarterly reports and
services that are normally provided by BDO Seidman, LLP in connection with
statutory and regulatory filings or engagements.
AUDIT-RELATED FEES. Consists of fees billed for assurance and related
services that are reasonably related to the performance of the audit or review
of the Company's consolidated financial statements and are not reported under
"Audit Fees." These services include consultation on various accounting matters
($8,812), audit of employee benefit plan ($7,500) and meetings ($1,275) in 2003
and consultation on various accounting matters ($12,150) and audit of employee
benefit plan ($7,000) in 2002.
TAX FEES. Consists of fees billed for professional services for tax
compliance, tax advice and tax planning.
ALL OTHER FEES. None.
-13-
AUDIT COMMITTEE PRE-APPROVAL POLICIES AND PROCEDURES
The Audit Committee is developing a pre-approval policy for the audit and
permissible non-audit services to be provided by the independent auditors. These
services may include audit services, audit-related services, tax services and
other services. The pre-approval policy will be detailed as to the particular
service or category of services and will be generally subject to a specific
budget. The independent auditors and management are required periodically to
report to the Audit Committee regarding the extent of services provided by the
independent auditors in accordance with this pre-approval, and the fees for the
services performed to date. The Audit Committee can also pre-approve particular
services on a case-by-case basis.
RECOMMENDATION OF THE BOARD OF DIRECTORS
The Board of Directors recommends that the stockholders vote FOR the
ratification of the appointment of BDO Seidman, LLP to serve as the Company's
independent auditors for the fiscal year ending September 3, 2004.
AVAILABILITY OF ANNUAL REPORT TO STOCKHOLDERS AND
REPORT ON FORM 10-K
Additional information concerning the Company, including financial
statements of the Company, is provided in the Company's 2003 Annual Report to
Stockholders (which includes the Annual Report on Form 10-K) that accompanies
this proxy statement. The Company's Annual Report on Form 10-K for the year
ended August 29, 2003, as filed with the Securities and Exchange Commission, is
available to stockholders who make a written request therefor to Mr. James T.
Traicoff, Controller, at the offices of the Company, 11350 Technology Circle,
Duluth, Georgia 30097. Copies of exhibits filed with that report or referenced
therein will be furnished to stockholders of record upon request and payment of
the Company's expenses in furnishing such documents. These documents and other
information may also be accessed from the Company's website at www.wegener.com.
STOCKHOLDERS' PROPOSALS FOR 2005 ANNUAL MEETING
Stockholders may submit proposals appropriate for stockholder action at the
Company's Annual Meeting consistent with the regulations of the Securities and
Exchange Commission. Proposals by stockholders intended to be presented at the
2005 Annual Meeting must be received by the Company no later than August 12,
2004 in order to be included in the Company's proxy materials for that meeting.
Such proposals should be directed to Wegener Corporation, Attention: Corporate
Secretary, 11350 Technology Circle, Duluth, Georgia 30097. In connection with
the Company's Annual Meeting of Stockholders to be held in 2005, if the Company
does not receive notice of a matter or proposal to be considered by October 26,
2004, then the persons appointed by the Board of Directors to act as the proxies
for such Annual Meeting (named in the form of proxy) will be allowed to use
their discretionary voting authority with respect to any such matter or proposal
at the Annual Meeting, if such matter or proposal is raised at that Annual
Meeting. Any such proposals must comply in all respects with the rules and
regulations of the Securities and Exchange Commission.
-14-
GENERAL
The cost of this proxy solicitation will be paid by the Company.
Solicitations will be made by mail but in some cases may also be made by
telephone or personal call of officers, directors or regular employees of the
Company who will not be specially compensated for such solicitation. The Company
will also pay the cost of supplying necessary additional copies of the
solicitation material and the Company's Annual Report to Stockholders for
beneficial owners of shares held of record by brokers, dealers, banks and voting
trustees and their nominees, and upon request, the Company will pay the
reasonable expenses of record holders for mailing such materials to the
beneficial owners.
Management knows of no other matters to be acted upon at the meeting.
However, if any other matter is lawfully brought before the meeting, the shares
covered by your proxy will be voted thereon in accordance with the best judgment
of the persons acting under such proxy.
In order that your shares may be represented if you do not plan to attend
the meeting, and in order to assure a required quorum, please sign, date and
return your proxy promptly. In the event you are able to attend, we will, if you
request, cancel the proxy.
By Order of the Board of Directors,
J. Elaine Miller
Secretary
December 15, 2003
-15-
APPENDIX
WEGENER CORPORATION
AUDIT COMMITTEE OF THE BOARD OF DIRECTORS
CHARTER
ADOPTED NOVEMBER 12, 2003
I. PURPOSE OF THE AUDIT COMMITTEE
The purpose of the Audit Committee of the Board of Directors of Wegener
Corporation (the "Company") is to oversee the accounting and financial reporting
processes of the Company and the audits of the financial statements of the
Company.
II. COMPOSITION OF THE AUDIT COMMITTEE
The Audit Committee shall be comprised of at least three directors each of
whom is (i) "independent" under the rules of the Nasdaq Stock Market, Inc.,
except as permitted by Nasdaq Rule 4350(d) and the Sarbanes-Oxley Act of 2002,
and the rules promulgated thereunder, (ii) does not accept any consulting,
advisory or other compensatory fee from the Company other than in his or her
capacity as a member of the Board or any committee of the Board, (iii) is not an
"affiliate" of the Company or any subsidiary of the Company, as such term is
defined in Rule 10A-3 under the Securities Exchange Act of 1934, as amended, and
(iv) has not participated in the preparation of the financial statements of the
Company or any subsidiary at any time during the past three years. Members shall
be appointed either by a majority of independent directors or by a nominations
committee composed solely of independent directors.
All members of the Committee must be able to read and understand
fundamental financial statements, including a company's balance sheet, income
statement, and cash flow statement, and the Committee shall have at least one
member who has past employment experience in finance or accounting, requisite
professional certification in accounting, or other comparable experience or
background which results in the member's financial sophistication.
III. MEETINGS OF THE AUDIT COMMITTEE
The Audit Committee shall meet at least once every fiscal quarter, or more
frequently if circumstances dictate, to discuss with management the annual
audited financial statements and quarterly financial statements, as applicable.
The Audit Committee may request any officer or employee of the Company or the
Company's outside counsel or independent auditors to attend a meeting of the
Audit Committee or to meet with any members of, or consultants to, the Audit
Committee. Members of the Audit Committee may participate in a meeting of the
Audit Committee by means of conference call or similar communications equipment
by means of which all persons participating in the meeting can hear each other.
A-1
IV. RESPONSIBILITIES OF THE AUDIT COMMITTEE
To carry out its purpose, the Audit Committee shall have the following
responsibilities:
1. with respect to the independent auditors,
(i) to directly appoint, compensate, retain, oversee, evaluate, and
terminate the independent auditors, who must report directly to
the Audit Committee;
(ii) to pre-approve all audit and non-audit services to be provided by
the independent auditors, or, in its discretion, delegate to one
or more of its members the authority to pre-approve any audit or
non-audit services to be performed by the independent auditors,
provided that any such approvals are presented to the Audit
Committee at its next scheduled meeting;
(iii) to ensure that the independent auditors shall submit to the Audit
Committee annually a formal written statement (the "Auditors'
Statement") describing all relationships between the independent
auditors and the Company, consistent with Independence Standards
Board No. 1;
(iv) to discuss with the independent auditors any relationships or
services disclosed in the Auditors' Statement that may impact the
quality of audit services or the objectivity and independence of
the Company's independent auditors;
(v) to actively engage in dialogue with the independent auditors with
respect to any disclosed relationship or services that may impact
the independence of the auditors;
(vi) to obtain from the independent auditors in connection with any
audit a timely report relating to the Company's annual audited
financial statements describing all critical accounting policies
and practices used, all alternative treatments of financial
information within generally accepted accounting principles that
have been discussed with management, ramifications of the use of
such alternative disclosures and treatments, and the treatment
preferred by the independent auditors, and any material written
communications between the independent auditors and management,
such as any management letter or schedule of unadjusted
differences;
(vii) to obtain from the independent auditors annually a formal written
statement of the fees billed in each of the last two fiscal years
for each of the following categories of services rendered by the
independent auditors: (i) the audit of the Company's annual
financial statements and the reviews of the financial statements
included in the Company's quarterly reports on Form 10-Q or
services that are normally provided by the independent auditors
in connection with statutory and regulatory filings or
engagements; (ii) assurance and related services not included in
clause (i) that are reasonably related to the performance of the
audit or review of the Company's financial statements, in the
aggregate and by each service; (iii) tax compliance, tax advice
and tax planning services, in the aggregate and by each service;
and (iv) all other products and services rendered by the
independent auditors, in the aggregate and by each service;
A-2
(viii) to discuss with management the timing and process for
implementing the rotation of the lead audit partner, the
concurring partner and any other active audit engagement team
partner; and
(ix) to review and approve all related party transactions of the
Company;
2. with respect to financial reporting principles and policies and internal
audit controls and procedures,
(i) to discuss with the independent auditors the matters required to
be disclosed by SAS 61 (Codification of Statements on Auditing
Standards, AU ss. 380), as it may be modified or supplemented;
(ii) to meet with management, the independent auditors and, if
applicable and as appropriate, the director of the internal audit
department:
o to discuss significant accounting and financial reporting
issues, including complex or unusual transactions and
judgments concerning significant changes in the Company's
selection or application of accounting principles, and
recent professional, accounting and regulatory
pronouncements and initiatives, and understand their impact
on the Company's financial statements;
o to discuss the scope and results of the annual audit;
o to discuss the annual audited financial statements, along
with any off-balance sheet structures, including disclosures
made in management's discussion and analysis, and recommend
to the Board of Directors whether they should be included in
the Company's Form 10-K;
o to discuss quarterly financial statements;
o to discuss any significant matters arising from any audit,
including any audit problems or difficulties, whether raised
by management, the internal auditing department or the
independent auditors, relating to the Company's financial
statements;
o to discuss any difficulties the independent auditors
encountered in the course of the audit, including any
restrictions on their activities or access to requested
information and any significant disagreements with
management; and
o to discuss any management or internal control letter issued,
or proposed to be issued, by the independent auditors to the
Company;
(iii) to inquire of the Company's chief executive officer and chief
financial officer as to the existence of any significant
deficiencies in the design or operation of internal controls that
could adversely affect the Company's ability to record, process,
summarize and report financial data, any material weakness in
internal controls, and any fraud, whether or not material, that
involves management or other employees who have a significant
role in the Company's internal controls;
A-3
(iv) to establish procedures for the receipt, retention and treatment
of complaints received by the Company regarding accounting,
internal accounting controls or auditing matters, and for the
confidential, anonymous submission by Company employees of
concerns regarding questionable accounting or auditing matters;
(v) to establish hiring policies for employees or former employees of
the independent auditors; and
(vi) to institute and oversee special investigations as needed;
3. with respect to reporting and recommendations,
(i) to prepare any report or other disclosures or any recommendation
of the Audit Committee, required by the rules of the SEC to be
included in the Company's annual report;
(ii) to review and reassess the adequacy of this Charter at least
annually and recommend any changes to the full Board of
Directors;
(iii) to report its activities to the full Board of Directors on a
regular basis and to make such recommendations with respect to
the above and other matters as the Audit Committee may deem
necessary or appropriate; and
(iv) to prepare and review with the Board an annual performance
evaluation of the Audit Committee, which evaluation must compare
the performance of the Audit Committee with the requirements of
this Charter. The performance evaluation by the Audit Committee
shall be conducted in such manner as the Audit Committee deems
appropriate. The report to the Board may take the form of an oral
report by the chairperson of the Audit Committee or any other
member of the Audit Committee designated by the Audit Committee
to make this report.
V. RESOURCES AND AUTHORITY OF THE AUDIT COMMITTEE
The Audit Committee shall have the authority appropriate to discharge its
duties and responsibilities, including the authority to select, engage, retain,
terminate, and approve the fees and other retention terms of special or
independent counsel and other advisors, as it deems necessary or appropriate to
carry out its duties.
The Audit Committee shall have the appropriate funding, as determined by
the Audit Committee for payment of (i) compensation to the independent auditor
engaged for the purpose of preparing or issuing an audit report or performing
other audit, review or attest services; (ii) compensation to any independent
counsel or advisers employed by the Audit Committee as it deems necessary; and
(iii) ordinary administrative expenses of the Audit Committee that are necessary
or appropriate in carrying out its duties.
A-4
WEGENER CORPORATION
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS FOR USE AT THE
2004 ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON JANUARY 20, 2004 AT 7:00 P.M.,
EASTERN STANDARD TIME.
The undersigned hereby appoints Robert A. Placek and C. Troy Woodbury, Jr.
and each of them, attorneys and proxies with full power to each of substitution,
to vote in the name of and as proxy for the undersigned at the Annual Meeting of
Stockholders of Wegener Corporation (the "Company") to be held on Tuesday,
January 20, 2004 at 7:00 p.m., local time, at the offices of the Company, 11350
Technology Circle, Duluth, Georgia 30097, and at any adjournment thereof,
according to the number of votes that the undersigned would be entitled to cast
if personally present, on the following matters:
(1) To elect the following nominee as a Class II director to serve until the
2006 Annual Meeting of Stockholders and until his successor is elected and
qualified:
Wendell H. Bailey
[ ] FOR the nominee listed above [ ] WITHHOLD AUTHORITY to vote for the
(except as indicated to the nominee
contrary below)
(To withhold authority to vote for any individual nominee(s), write that
nominee's name(s) on the line below:)
----------------------------------------------------------------------
(2) To elect the following nominees as Class III directors to serve until the
2007 Annual Meeting of Stockholders and until their successors are elected
and qualified:
Thomas G. Elliot Ned L. Mountain
[ ] FOR the nominees listed above [ ] WITHHOLD AUTHORITY to vote for the
(except as indicated to the nominee
contrary below)
(To withhold authority to vote for any individual nominee(s), write that
nominee's name(s) on the line below:)
----------------------------------------------------------------------
(3) To ratify the appointment of BDO Seidman, LLP as auditors for the Company
and its subsidiaries for the fiscal year 2004; and
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(4) To transact and to vote in favor of or against such other business as may
properly come before the meeting or any adjournment thereof.
PROPERLY EXECUTED PROXIES WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY THE
UNDERSIGNED. IF NO SUCH DIRECTIONS ARE GIVEN, SUCH PROXIES WILL BE VOTED FOR THE
NOMINEES REFERRED TO IN PARAGRAPHS (1) AND (2), FOR THE PROPOSITION REFERRED TO
IN PARAGRAPH (3), AND IN THE DISCRETION OF THE PROXIES WITH RESPECT TO ANY
MATTERS UNDER PARAGRAPH (4).
The undersigned revokes all prior proxies
to vote the shares covered by this proxy.
-----------------------------------------
Signature
-----------------------------------------
Signature
Date:
------------------------------------
(When signing as attorney, executor,
administrator, trustee or guardian,
please give title as such. If stockholder
is a corporation, corporate name should
be signed by an authorized officer and
the corporate seal affixed. For joint
accounts, each joint owner should sign.)
PLEASE SIGN, DATE AND MAIL THIS PROXY PROMPTLY IN THE ENCLOSED REPLY ENVELOPE
WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES.