DEF 14A 1 proxy03.txt 2003 PROXY NOTICE AND STATEMENT SCHEDULE 14A (Rule 14a-101) INFORMATION REQUIRED IN PROXY STATEMENT SCHEDULE 14A INFORMATION Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934 Filed by the registrant {X} Filed by a party other than the registrant { } Check the appropriate box: { } Preliminary proxy statement {X} Definitive proxy statement { } Definitive additional materials { } Soliciting material under Rule 14a-12 { } Confidential, for use of the Commission only (as permitted by Rule 14a-6(e)(2) Sutron Corporation _______________________________________________________________________________ (Name of Registrant as Specified in 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 the table below per Exchange Act Rules 14a-6(i)(1) and 0-11. (1) Title of each class of securities to which transaction applies: __________________________________________________________________________ (2) Aggregate number of securities to which transaction applies: __________________________________________________________________________ (3) Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11. __________________________________________________________________________ (4) Proposed maximum aggregate value of transaction: __________________________________________________________________________ (5) Total fee paid: __________________________________________________________________________ { } Fee paid previously with preliminary materials: __________________________________________________________________________ { } Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fees 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: __________________________________________________________________________ SUTRON CORPORATION 21300 Ridgetop Circle Sterling, Virginia 20166 (703) 406-2800 NOTICE OF ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON MAY 14, 2003 To the Holders of Common Stock of Sutron Corporation, Notice is hereby given that the Annual Meeting of Shareholders of Sutron Corporation (the "Company") will be held at 21300 Ridgetop Circle, Sterling, Virginia, on Wednesday, May 14, 2003, at 4:00 p.m., local time, for the following purposes: (i) To elect five directors to hold office until the next annual election of directors and until their successors shall have been duly elected and qualified; (ii) To approve the appointment of Thompson, Greenspon & Co., P.C. as independent public accountants for the year 2003; and (iii) To transact such other business as may properly come before the meeting and any adjournments thereof. Holders of shares of Common Stock of record at the close of business on Wednesday, March 26, 2003, are entitled to notice of and to vote at the meeting. A Proxy Statement and a Proxy for the meeting are enclosed herewith. We urge you to attend the 2003 Annual Shareholders Meeting. Your vote is important and we would appreciate the prompt return of your signed Proxy in the enclosed envelope. If you attend the meeting in person, you may, if you desire, revoke your Proxy and vote in person. By Order of the Board of Directors, /S/ Daniel W. Farrell Daniel W. Farrell Secretary Sterling, Virginia April 14, 2003 Enclosure --------------------------------------------------------------------- SUTRON CORPORATION 21300 Ridgetop Circle Sterling, Virginia 20166 (703) 406-2800 PROXY STATEMENT The enclosed Proxy is solicited on behalf of the Board of Directors of Sutron Corporation (the "Company") for use at its Annual Meeting of Shareholders to be held on Wednesday, May 14, 2003 at 4:00 p.m., local time, and at any adjournments thereof. The purposes of the meeting are set forth herein and in the accompanying Notice of Annual Meeting of Shareholders. The meeting will be held at the principal executive offices of the Company, 21300 Ridgetop Circle, Sterling, Virginia 20166. After the enclosed Proxy is duly executed and returned, a shareholder may revoke the proxy at any time by written request that is received by the Secretary of the Company prior to the meeting or by voting in person at the meeting or by executing a later dated Proxy. The Proxy is in ballot form so that a specification may be made to vote for, or to withhold authority to vote for, the nominees for election as directors, or any of them, and to indicate whether the shareholder wishes to vote for or against, or abstain from voting upon the other proposal. The holders of shares of Common Stock of record at the close of business on Wednesday, March 26, 2003 are entitled to notice of and to vote at the meeting. On March 26, 2003, the Company had outstanding and entitled to vote 4,289,551 shares of Common Stock, and a majority of such shares, present or represented by proxy, will constitute a quorum. Each share of Common Stock entitles the holder to one vote on each matter to be voted upon at the meeting. Directors are elected by a plurality of the votes cast by the shares entitled to vote in the election at a meeting at which a quorum is present. The affirmative vote of a majority of the shares of Common Stock voting is required for the approval of the appointment of the independent public accountants. This Proxy Statement and the accompanying Proxy will first be mailed or given to shareholders on or about April 14, 2003. PRINCIPAL SHAREHOLDERS The following table sets forth the names and addresses of all persons who beneficially owned, to the knowledge of the Company, more than 5% of the outstanding shares of the Company's Common Stock on March 26, 2003. Name and Address of Number of Shares Percentage Beneficial Owner Beneficially Owned of Class (1) Kenneth W. Whitt 827,000(2) 19.3% 2714 W. Country Club Drive Snowflake, Arizona 85937 Raul S. McQuivey, Ph.D. 813,186(3) 18.9% 11211 Lapham Drive Oakton, Virginia 22121 Thomas N. Keefer, Ph.D. 540,775(4) 12.6% Route #4, Box 403 B Leesburg, Virginia 22075 Daniel W. Farrell 259,660(5) 6.1% 2799 Equus Court Herndon, Virginia 22071 (1) As of March 26, 2003, the Company had 4,289,551 shares of common stock outstanding. In computing the number of shares beneficially owned by a person and the percentage ownership of that person, shares of common stock, which that person could purchase by exercising outstanding options and options which will become exercisable within 60 days of March 26, 2003, are deemed outstanding. Such shares, however, are not deemed outstanding for the purpose of computing the percentage ownership of any other person. (2) The shares are owned by Kenneth W. Whitt and Eva D. Whitt, Mr. Whitt's wife, as Joint Tenants with a Right of Survivorship; Mr. Whitt is deemed the beneficial owner of all the shares since Mr. Whitt shares voting power and investment power over such shares. (3) Includes 719,586 shares owned by Dr. Raul S. McQuivey and Karen T. McQuivey, Dr. McQuivey's wife, as Joint Tenants with a Right of Survivorship; Dr. McQuivey is deemed the beneficial owner of such shares since Dr. McQuivey shares voting power and investment power over such shares. (4) Includes 535,000 shares owned by Dr. Thomas N. Keefer and Sally E. Keefer, Dr. Keefer's wife, as Joint Tenants with a Right of Survivorship; Dr. Keefer is deemed the beneficial owner of such shares since Dr. Keefer shares voting power and investment power over such shares. (5) Includes 214,300 shares owned by Daniel W. Farrell and Jill E. Farrell, Mr. Farrell's wife, as Joint Tenants with a Right of Survivorship; Mr. Farrell is deemed the beneficial owner of such shares since Mr. Farrell shares voting power and investment power over such shares. ELECTION OF DIRECTORS A board of five directors is to be elected at the 2003 Annual Shareholders Meeting. It is intended that the shares represented by the enclosed Proxy will be voted for the election of the five nominees for directors named in the Proxy unless such Proxy is marked to withhold authority. The term of office of each director will be until the next annual election of directors and until a successor is elected and qualified or until the director's earlier death, resignation or removal. All of the nominees have consented to serve if elected. In the event that any nominees for directors should be unavailable, which is not anticipated, the Board of Directors, in its discretion, may designate substitute nominees, in which event Proxies received by the Board of Directors will be voted for such substitute nominees. INFORMATION ABOUT NOMINEES FOR DIRECTORS The following information with respect to each nominee has been furnished to the Company by the respective nominees for director. Raul S. McQuivey, Ph.D., age 64, has served as a Director since 1976, as President, Chief Executive Officer, and Chairman of the Board of Directors since January 1989, and as Chief Operational Officer since September 1980. Dr. McQuivey also served as Executive Vice President from September 1980 to January 1989, Treasurer of the Company from March 1983 to March 1984 and as Secretary from March 1983 until September 1989. Dr. McQuivey earned a B.S. in Civil Engineering from Utah State University in 1961, an M.S. in Civil Engineering (Hydraulics) from Colorado State University in 1963, and a Ph.D. in Civil Engineering (Hydraulics, Hydrology and Fluid Mechanics) from Colorado State University in 1967. He is a Registered Professional Engineer. Thomas N. Keefer, Ph.D., age 58, has served as Vice President, and as Director of the Company, since March 1981. He joined the Company in January 1977, as a Project Engineer and served as the Vice President of the Water Resources and then the Integrated Systems Division From 1981 to 1997. Dr. Keefer has earned three degrees from Colorado State University, a B.S. in Civil Engineering in 1967, an M.S. in Civil Engineering (Hydraulics) in 1969, and a Ph.D. in Civil Engineering (Hydraulics, Hydrology and Fluid Mechanics) in 1971. He is a Registered Professional Engineer. Daniel W. Farrell, age 50, has served as a Director since 1988 and as Vice President of the Company since March 2, 1984 and Secretary since September 1, 1989. Mr. Farrell joined the Company in September 1976 as a staff scientist. He was promoted to the position of Director of Engineering in August 1989. Mr. Farrell received a B.S. in Chemistry from Brigham Young University in 1976. Sidney C. Hooper, age 44, has served as Treasurer of the Company since May 14, 1993. Mr. Hooper joined the Company in August 1989 and was promoted to the position of Controller in January 1990. Prior to joining the Company, Mr. Hooper served as a Senior Accountant with Arthur Andersen & Company. Mr. Hooper received a B.S. in Accounting from Brigham Young University in 1983 and a Master of Accountancy from Brigham Young University in 1984. Robert F. Roberts, Jr., age 52, was the CEO, Chairman and Founder Concepts Automation from 1975 to 1995. Concepts Automation, a computer systems integrator, grew from a one-man operation to employing over 220 people in six offices. Federal and state government agencies and Fortune 1000 companies were the primary clients. Sales in 1995 were in excess of $100 million when the company was sold. Mr. Roberts has served as a Director for Colgan Airways, a regional commuter airline from 1990 to present, as a Principal for Foresight Funding that manages private investments in tax free bonds, real estate and corporate obligations from 1995 to present and as Chairman, Trustee of Wakefield School, a private school that offers a classical curriculum for grades Pre-K to 12 from 1990 to present. Mr. Roberts received an Associates degree in Business Management from Northern Virginia Community College. MANAGEMENT OWNERSHIP OF COMMON STOCK Set forth below is information concerning stock ownership of each director and nominee, and all directors and officers of the Company as a group, as of March 26, 2003. The statements as to securities beneficially owned are, in each instance, based upon information furnished by each individual. As to the shares shown to be beneficially owned, the owner has sole investment and voting power, unless otherwise indicated. Name of Amount of Beneficial Owner Ownership Percent of Class (1) Raul S. McQuivey, Ph.D. 813,186 (2) 18.9% Thomas N. Keefer, Ph.D. 540,775 (3) 12.6% Daniel W. Farrell 259,660 (4) 6.1% Sidney C. Hooper 80,200 (5) 1.9% Robert F. Roberts, Jr. 0 0% All officers and directors as a group (6 in number) 1,693,821 39.5% (1) See Note 2 under "PRINCIPAL SHAREHOLDERS". (2) See Note 3 under "PRINCIPAL SHAREHOLDERS". (3) See Note 4 under "PRINCIPAL SHAREHOLDERS". (4) See Note 4 under "PRINCIPAL SHAREHOLDERS". (5) The shares are owned by Sidney C. Hooper and Malissa C. Hooper, Mr. Hooper's wife, as Joint Tenants with a Right of Survivorship; Mr. Hooper is deemed the beneficial owner of all the shares since Mr. Hooper shares voting power and investment power over such shares. BOARD MEETINGS AND COMMITTEES During the year December 31, 2002, the Board of Directors held four meetings. Each director attended all of the meetings of the Board. EXECUTIVE OFFICERS The Company currently has three executive officers. All three officers, Dr. Raul S. McQuivey, Daniel W. Farrell and Sidney C. Hooper also serve as directorsof the Company. Their offices and business experience are described herein under the heading "INFORMATION ABOUT NOMINEES FOR DIRECTORS." The term of office of all executive officers is until the next annual meeting of the Board of Directors or until the executive officer's earlier death , resignation or removal. EXECUTIVE OFFICERS The following summary compensation table sets forth information concerning the annual and long-term compensation paid by us during the last three completed years to our chief executive officer, and the other most highly compensated executive officers whose total compensation for services in all capacities exceeded $100,000 during such year, whom we refer to as our "Named Executive Officers".
Long Term Compensation Annual Compensation Awards Payouts Other Restricted All Name and Annual Stock LTIP Other Principal Compen-Awards Options/Payouts Position Year Salary Bonus sation (1) SARs(#) ($) ($)(2) Raul McQuivey 2002 $164,317 $3,148 CEO 2001 $156,475 $4,014 2000 152,090 7,233 Daniel Farrell 2002 $136,377 $1,243 Vice President 2001 $132,401 $2,457 2000 128,690 3,916 Sidney Hooper 2002 $114,250 $4,445 Treasurer 2001 $105,951 $9,636 2000 102,391 4,366
(1) As of December 31, 2002, Raul S. McQuivey was the beneficial owner of 813,186 shares of common stock with a market value of $536,703, Daniel W. Farrell was the beneficial owner of 259,660 shares of common stock with a market value of $171,375 and Sidney C. Hooper was the beneficial owner of 80,200 shares of common stock with a market value of $52,932. (2) All other compensation in 2002 consists of the following items:
Mr. McQuivey Mr. Farrell Mr. Hooper Dollar value of auto Allowance relating to Personal use $ 0 $ 858 $4,090 Dollar value of term life insurance premiums 3,148 385 355 Total $3,148 $1,243 $4,445
Option/SAR Grants in Last Fiscal Year The following is a summary of certain information concerning stock options awared to the Company's Named Officers and Thomas N. Keefer, a director, during the last fiscal year.
Potential Realizable Value at Assumed Annual Rates of Stock Price Alternative to (f) Appreciation for and (g): Option Term Grant Date Value Individual Grants Number of % of Total Securities Options/ Underlying SARs Exercise Options/ Granted to of Base SARs Employees in Price Expiration Name Granted (#) Fiscal Year ($/Share) Date 5% ($) 10% ($) Raul S. McQuivey 110,000 32% $.55 10/18/12 $38,048 $96,421 Daniel W. Farrell 90,000 26% $.55 10/18/12 $31,130 $78,890 Sidney C. Hooper 120,000 35% $.55 10/18/12 $41,507 $105,187 Thomas N. Keefer 15,000 4% $.55 10/18/12 $5,188 $13,148
Aggregated Option/SAR Exercises in Last Fiscal Year and Fiscal Year-End Option/SAR Value The Company's Named Officers did not exercise any stock options or freestanding stock appreciation rights (SARs) during the year 2002. Outstanding stock options or SARs at fiscal year end are shown below.
Value of Unexercised Number of Securities In-the- Underlying Unexercised Money Shares Options/SARs Options/SARs at FY- Acquired on Value at FY-End (#) End ($) Name Exercise (#) Realized($) Exercisable/Unexercisable Exercisable/Unexercisable C> Raul McQuivey - - 93,600/110,000 $0/$0 Daniel Farrell - - 40,200/90,000 $0/$0 Sidney Hooper - - 40,200/120,000 $0/$0
Long-Term Incentive Plans - Awards in Last Fiscal Year The Company's Named Officers were not awarded long-term incentive plans during the year 2002. Compensation of Directors The Company has no arrangement by which any of its officers are compensated for their services as directors and, therefore, Mr. Farrell and Mr. Hooper and Drs. McQuivey and Keefer will not receive any additional remuneration for their services as directors. Mr. Roberts will receive compensation for attending board meetings that has not yet been determined. The Company has no plan or arrangement which would result in any executive officer receiving compensation as a result of their resignation, retirement or any other termination of employment with the Company, or from a change in control of the Company or a change in responsibilities following a change in control of the Company. COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT Under the securities laws of the United States, the Company's directors and its executive officers are required to report ownership of the company's Common Stock and any changes in that ownership to the Securities and Exchange Commission. Specific due dates for these reports have been established and the Company is required to disclose in this proxy statement any failure to file by these dates during 2002. To our knowledge, during 2002, Raul S. McQuivey, Daniewl W. Farrell, Thomas N. Keefer and Sidney C. Hooper were subject to the reporting requirement of Section 16(a) and were delinquent in filing a required report on Form 3. RATIFICATION OF THE APPOINTMENT OF INDEPENDENT ACCOUNTANTS Subject to ratification by the shareholders, the Board of Directors has appointed Thompson, Greenspon & Co., P.C. as independent accountants of the Company for the year 20032. Thompson, Greenspon & Co., P.C. has certified the Company's financial statements for all years beginning with 1976. Representatives of Thompson, Greenspon & Co. P.C., will be present at the 2003 Annual Shareholders Meeting and will be afforded an opportunity to make a statement, if they desire, and to respond to appropriate questions from shareholders. THE BOARD OF DIRECTORS FAVORS A VOTE FOR THIS PROPOSAL. Proxies solicited by the Board of Directors will be so voted unless shareholders specify in their Proxies a contrary choice. OTHER BUSINESS WHICH MAY COME BEFORE THE MEETING The enclosed Proxy confers upon the person or persons entitled to vote the shares represented thereby discretionary authority to vote such shares in accordance with their best judgment with respect to other business which may come before the 2002 Annual Shareholders Meeting in addition to the scheduled items of business. As of the date of this Proxy Statement, the Board of Directors knows of no other business which will be presented for consideration at the 2002 Annual Shareholders Meeting. SHAREHOLDERS PROPOSALS Shareholder proposals to be considered for inclusion in the Proxy Statement for the 2004 Annual Shareholders Meeting must be received by the Company no later than December 7, 2003. OTHER INFORMATION A copy of the Company's Annual Report for 2002, which includes financial statements and other information concerning the Company, is included with this Proxy material. Upon the written request by any shareholder entitled to vote at the 2003 Annual Shareholders Meeting, the Company will furnish that person without charge a copy of the Company's Form 10-KSB Annual Report for 2002 which is filed with the Securities and Exchange Commission, including the financial statements and schedules thereto, but excluding the exhibits thereto. The copy of the Form 10-KSB Annual Report will be accompanied by a list briefly describing all the exhibits not contained therein and will indicate that the Company will furnish a copy of any exhibit upon payment of a fee of $.20 per page. Requests should be addressed to Sidney C. Hooper, Treasurer, Sutron Corporation, 21300 Ridgetop Circle, Sterling, Virginia 20166. The Company will bear the cost of preparing this Proxy Statement and the other costs of soliciting Proxies for the 2003 Annual Shareholders Meeting. All solicitations will be made by mail. The Company does not intend to pay any compensation for this solicitation, but may reimburse brokers, and other persons holding stock in their names, for their expenses for sending Proxy material to principals and obtaining their Proxies. YOU ARE ENCOURAGED TO SPECIFY YOUR CHOICES BY MARKING THE APPROPRIATE BOXES ON THE ENCLOSED PROXY. HOWEVER, IT IS NOT NECESSARY TO MARK ANY BOXES IF YOU WISH TO VOTE IN ACCORDANCE WITH THE BOARD OF DIRECTORS' RECOMMENDATIONS; MERELY SIGN, DATE AND RETURN THE PROXY IN THE ENCLOSED ENVELOPE, POSTAGE FOR WHICH HAS BEEN PROVIDED. THE PROXIES CANNOT VOTE YOUR SHARES UNLESS YOU SIGN AND RETURN THE ENCLOSED PROXY. YOUR PROMPT RESPONSE IS HELPFUL AND YOUR COOPERATION WILL BE APPRECIATED. By Order of the Board of Directors, /s/ Daniel W. Farrell Daniel W. Farrell Secretary April 14, 2003 PROXY THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS SUTRON CORPORATION The undersigned hereby appoints Thomas Keefer and Daniel Farrell proxies, each with power to act without the other and with power of substitution, and hereby authorizes them to represent and vote, as designated on the other side, all the shares of stock of Sutron Corporation standing in the name of the undersigned with all powers which the undersigned would possess if present at the Annual Meeting of Stockholders of the Company to be held at 21300 Ridgetop Circle, Sterling, Virginia at 4:00 p.m. on May 14, 2003 or any adjournment thereof. (Continued, and to be marked, dated and signed, on the other side) ------------------------------------------------------------------------------ THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR PROPOSALS 1 AND 2. 1. ELECTION OF DIRECTORS NOMINEES: Daniel Farrell, Sidney Hooper, Thomas Keefer, Raul McQuivey Robert Roberts (INSTRUCTION: To withhold authority to vote for any individual nominee, write that nominee's name in the space provided below. For all nominees listed to the right (except as marked to the contrary) ( ) WITHHOLD AUTHORITY to vote for all nominees listed to the right. ( ) Ratification of Thompson, Greenspon & Co., P.C. as the independent certified public accountants of the corporation. FOR AGAINST ABSTAIN ( ) ( ) ( ) In their discretion, the Proxies are authorized to vote upon such other business as may properly come before the meeting. Please sign exactly as name appears below. When shares are held by joint tenants, both should sign. When signing as attorney, executor, administrator, trustee, or guardian, please give full title as such. If a corporation, please sign in full corporate name by President or other authorized officer. If a partnership, please sign in partnership name by authorized person. Dated: ________________________________________________2003 ______________________________________________________ (Signature) ______________________________________________________ (Signature if held jointly) PLEASE SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED ENVELOPE.