UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
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 Pursuant to ss.240.14a-12
THERMODYNETICS, INC.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:___________
(2) Aggregate number of securities to which transaction applies:______________
(3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is
calculated and state how it was determined):______________________________
(4) Proposed maximum aggregate value of transaction: _________________________
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials:
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid: ______________________________________________
(2) Form, Schedule or Registration Statement No.: ________________________
(3) Filing Party: ________________________________________________________
(4) Date Filed: __________________________________________________________
[Thermodynetics logo]
THERMODYNETICS, INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
NOVEMBER 8, 2007
The Annual Meeting of Stockholders of Thermodynetics, Inc. (the "COMPANY")
for the fiscal year ended March 31, 2007 will be held at the Company's principal
offices at 651 Day Hill Road, Windsor, Connecticut 06095 on Thursday, November
8, 2007 at 9:30 A.M. (EST) for the purpose of considering and acting upon the
following matters:
1. Election of four (4) directors (Proposal One).
2. Such other business as may properly come before the meeting or any
adjournments thereof.
Pursuant to the provisions of the By-Laws, the Board of Directors has fixed
the close of business on September 24, 2007 as the record date for determining
the stockholders of the Company entitled to notice of, and to vote at, the
meeting or any adjournment thereof.
Stockholders who do not expect to be present in person at the meeting are
urged to date and sign the enclosed proxy and promptly mail it in the
accompanying postage-paid envelope. A prompt response will avoid the cost to the
Company of additional mailings of proxy solicitations.
By Order of the Board of Directors
THERMODYNETICS, INC.
Robert A. Lerman
PRESIDENT & CEO
September 28, 2007
Windsor, Connecticut 06095
PLEASE COMPLETE AND PROMPTLY RETURN YOUR PROXY IN THE ENCLOSED
ENVELOPE. THIS WILL NOT PREVENT YOU FROM VOTING IN PERSON AT
THE MEETING BUT WILL, HOWEVER, HELP TO ASSURE A QUORUM AND
AVOID ADDED PROXY SOLICITATION COSTS.
[Thermodynetics logo]
THERMODYNETICS, INC.
PROXY STATEMENT
This Proxy Statement is first being mailed to Stockholders on or about
September 28, 2007 in connection with the solicitation of proxies by the Board
of Directors to be used at the Annual Meeting of Stockholders of Thermodynetics,
Inc., a Delaware corporation (the "COMPANY"), to be held on Thursday, November
8, 2007 at the Company's principal offices at 651 Day Hill Road, Windsor,
Connecticut 06095 at 9:30 A.M. (EST), and any adjournments thereof.
Accompanying this Proxy Statement is a Notice of Annual Meeting of
Stockholders, a form of Proxy for such meeting and the Company's Annual Report
for the fiscal year ended March 31, 2007 including financial statements with
respect to such year. All proxies which are properly filled in, signed and
returned to the Company in time will be voted in accordance with the
instructions thereon. Such proxies may be revoked by any stockholder prior to
the exercise thereof and stockholders who are present at the meeting may
withdraw their proxies and vote in person if they so desire. The Board of
Directors has fixed the close of business on September 24, 2007 as the record
date for the determination of stockholders who are entitled to notice of, and to
vote at, the meeting or any adjournment thereof. If no selections are made, the
proxies will be voted FOR the candidates nominated by the Board of Directors.
The expense of preparing, assembling, printing and mailing the form of
proxy and the material used in solicitation of proxies will be borne by the
Company. In addition to the solicitation of proxies by use of the mails, the
Company may utilize the services of some of its officers and regular employees
(who will receive no additional compensation therefore) to solicit proxies
personally, and by telephone and other communication mediums. The Company has
requested banks, brokers and other custodians, nominees and fiduciaries to
forward copies of the proxy material to their principals and to request
authority for the execution of proxies and may reimburse such persons for their
services in doing so.
VOTE REQUIRED, PRINCIPAL STOCKHOLDERS AND STOCKHOLDINGS OF MANAGEMENT - The
presence, in person or by proxy, of the holders of a majority of the outstanding
shares of Common Stock of the Company is necessary to constitute a quorum at the
meeting.
As of the record date, the Company had 4,027,361 shares of its Common Stock
issued and outstanding, the holders of which are entitled to one vote per share.
Shares represented in person or by proxy (including shares which abstain or
do not vote with respect to one or more of the matters presented for stockholder
approval) will be counted for purposes of determining whether a quorum exists at
the meeting.
The affirmative vote of a majority of the votes cast by the holders of
Common Stock present in person or by proxy at the meeting is required for the
election of directors (Proposal One); the four (4) nominees for Director
receiving the largest number of votes cast at the meeting will be elected.
An abstaining vote counts towards establishing a quorum, but its effect on
the actual vote counts differs depending on the subject matter of the vote. In
the election of directors, an abstaining vote is not counted and therefore has
no effect on the election. There are no other proposals to be considered at the
meeting.
A broker non-vote counts towards establishing a quorum. In the proposal for
the election of directors, broker non-votes are not included in the tabulation
of the voting results and therefore do not affect the outcome of the vote. A
broker "non-vote" occurs when a nominee holding shares for a beneficial owner
does not vote on a particular matter because the nominee does not have
discretionary voting power for that particular matter and has not received
instructions from the beneficial owner.
The holders of shares of Common Stock of the Company do not have cumulative
voting rights which means that the holders of more than 50% of such outstanding
shares, voting for the election of directors, can elect all of the directors to
be elected, if they so choose and in such event, the holders of the remaining
shares will not be able to elect any of the Company's directors.
Holders of an aggregate of 4,046,361 shares of the Company's Common Stock
are entitled to notice of and to vote at the Annual Meeting of Stockholders. The
Company's officers and directors have the right to vote an aggregate 1,882,747
shares, including shares held in the Company's 401(k) plan for which three
directors serve as trustees, representing forty-six and five-tenths percent
(46.5%), of all shares which are outstanding and entitled to be voted. The
Company's officers and directors have stated their intentions to vote such
shares FOR Proposal One.
ACTIONS TO BE TAKEN AT THE MEETING
ELECTION OF DIRECTORS
(PROPOSAL ONE)
This proposal before the stockholders at the Annual Meeting is the election
of four (4) directors to the Company's Board of Directors. Directors hold office
for a term of one year and each shall serve until his successor is elected and
is qualified. The shares represented by proxies will be voted in favor of the
election of the nominees named below as directors unless authority to vote for
the election of directors is specifically withheld. The Board of Directors has
no reason to believe that any of the nominees for the office of director will
not be available for election as a director. However, should any of them become
unwilling or unable to serve as a director, it is intended that the individuals
named in the enclosed proxy may vote for the election of such other person as
the Board of Directors may recommend.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR THE ELECTION OF
ALL OF THE NOMINEES.
NOMINEES FOR ELECTION AS DIRECTORS
Nominee Born Position Director Since
-------- ---- -------- --------------
John F. Ferraro 1934 Chairman of the Board and Secretary 1979
Robert A. Lerman 1935 President, Chief Executive Officer
and Director 1979
John J. Hughes 1926 Director 2003
|
Fred H. Samuelson 1931 Director 2003
PRINCIPAL OCCUPATIONS OF DIRECTORS AND NOMINEES DURING THE PAST FIVE YEARS
NOMINEES:
JOHN F. FERRARO holds the degree of Bachelor of Science in Industrial
Engineering, New York University (1962). In 1979, Mr. Ferraro was elected
Secretary and a Director of the Company. Since 1981, Mr. Ferraro has been
Chairman of the Board of the Company. Mr. Ferraro was appointed a Director of
Initio, Inc. in 2003. See "Certain Transactions".
2
ROBERT A. LERMAN holds the degrees of Bachelor of Mechanical Engineering,
College of the City of New York (1957), Master of Science in Mathematics,
Adelphi College (1961), and Master of Science in Electrical Engineering,
University of Connecticut (1964). In 1979, Mr. Lerman was elected Treasurer and
a Director, in 1980 President of the Company and was appointed Chief Executive
Officer in 2002. Mr. Lerman co-authored the text book, NONLINEAR SYSTEMS
DYNAMICS, which was published in 1992 by Van Nostrand Reinhold, New York, New
York. In 1997. In 1998 he became a director of Bio Minerals n.v. In 2002 through
2005 he served as a director of 4uDr, Inc. Mr. Lerman also serves as a
consultant to other companies none of which are competitive with the Company.
See "Certain Transactions".
JOHN J. HUGHES was appointed a Director of the Company in 2003. Mr. Hughes
was the founder, and served from 1970 through 1990 as the president and chief
executive officer of East Windsor Metal Fabricating Inc.; Mr. Hughes continues
to provide services on a consulting basis to that company.
FRED H. SAMUELSON was appointed a Director of the Company in 2003. Mr.
Samuelson holds the degree of Bachelor of Science of Mechanical Engineering,
University of Connecticut (1954) and completed a portion of the masters
curriculum. Mr. Samuelson was the founder, and served from 1982 through 2001 as
the president, of Samuelson Engineering Inc., a cutting tools supplier and
mechanical components design consultant.
CORPORATE GOVERNANCE: BOARD AND COMMITTEES
NOMINATING/CORPORATE GOVERNANCE COMMITTEE. The Nominating/Corporate
Governance Committee, which was formed in fiscal 2004, currently consists of the
full board of directors. The principal responsibilities of the
Nominating/Corporate Governance committee are (i) to make recommendations on the
size and composition of the Board, (ii) to establish criteria for Board
membership and review and recommend potential candidates to the full Board of
Directors, and (iii) to develop and recommend corporate governance principles.
The Nominating/Corporate Governance committee held one (1) meeting as a part of
a regular board meeting during fiscal year ended March 31, 2007 to discuss and
establish corporate governance principles. The Committee has not yet considered
new nominees to the board of directors as it is evaluating the transition with
respect to the reorganization of its board and management which occurred in
connection with the London IPO and stock sale in May 2006. The principles for
seeking new nominees or filling vacancies on the board are outlined in the
Committee's charter which is located on the Company's web site at
www.Thermodynetics.com under Investor Relations.
While the Board of Directors has delegated the selection and initial
evaluation of potential directors to the Nominating/Corporate Governance
Committee, the Board retains final approval of all nominations. The charter
provides that such committee will generally select people who are independent
and diverse in a broad sense; that is people with a variety of backgrounds,
experiences, cultures and skills who will bring individual talents or contribute
to the needs of the Board and the Company. Further, nomination candidates would
be those able to work in a collaborative and collegial fashion with other
directors and senior management, in a manner consistent with the current
operating practices of the Board.
The Nominating/Corporate Governance Committee does not have a policy with
regard to the consideration of any director candidates recommended by security
holders. The Nominating/Corporate Governance Committee believes it is
appropriate for the Company not to have such a policy because of management's
stockholdings in the Company and historically no shareholder nominations of
outside directors have been proffered.
COMPENSATION COMMITTEE. The Compensation Committee was formed in fiscal
2005 and currently consists of Messrs. John J. Hughes and Fred H. Samuelson. The
principal responsibilities of the Compensation Committee are (i) to make
recommendations with respect to executive officers and senior management
compensation and incentive compensation programs; (ii) subject to limitations
set forth in the plans, to administer the Company's stock option plans including
the issuance of stock in connection with the Company's incentive bonus plans;
and (iii) to review management development and succession programs. The
Compensation Committee held no meetings during fiscal year ended March 31, 2007.
The Compensation Committee's charter is located on the Company's web site at
www.Thermodynetics.com under Investor Relations.
3
AUDIT COMMITTEE. The Audit Committee consists of Messrs. John J. Hughes,
and Fred H. Samuelson. The Audit Committee has the responsibility to ascertain
that the Company's financial statements reflect fairly the financial condition
and operating results of the Company and to appraise the accounting and
operating controls. The Audit Committee is to (i) serve as an independent and
objective party to monitor the Company's financial reporting process and
internal control system, (ii) review and appraise the audit efforts of the
Company's independent accountants, (iii) review and confirm the Company's
financial statements contained in filings with the SEC, (iv) review and confirm
matters relating to the examination of the Company by its independent auditors,
(v) review the use and security of the Company's liquid assets through the
review of the Treasurer's function, (vi) reassess its charter annually and
recommend any proposed changes to the Board for approval, and (vii) recommend
the appointment of independent accountants to the Board of Directors for its
consideration and approval. The responsibilities of the Audit Committee are
outlined in a written charter, which is on the Company's website at the Investor
Relations tab, www.thermodynetics.com, and included as Exhibit 99.a to the
Company's annual report on Form 10-Ksb filed July 28, 2005 with the United
States Securities and Exchange Commission (the "COMMISSION"). The Committee held
three (3) meetings during the fiscal year ended March 31, 2007.
During fiscal 2007 the Company did not have an "Audit Committee Financial
Expert" serving on the audit committee because neither of the Audit Committee
members qualified as such under the rules of the Commission. Since 2005, Mr.
David S. Federman has served as a financial expert advisor to the Audit
Committee. Mr. Federman is a certified public accountant and is senior partner
of the accounting firm of Federman, Lalley & Remis. Mr. Federman has experience
in financial and tax matters. Mr. Federman is independent and meets the
requirements to qualify as an Audit Committee Financial Expert; however, Mr.
Federman serves as an advisor to, but is not a member of, the Audit Committee.
DIRECTOR INDEPENDENCE.
The Board has determined that Messrs. John J. Hughes and Fred H. Samuelson
are independent directors of the Company. In making this determination, the
Board used the criteria of applicable NASDAQ rules to determine their
independence. Messrs. Hughes and Samuelson are members of the Company's Audit,
Compensation and Nominating/Corporate Governance Committees and under the
criteria of applicable NASDAQ rules are also independent members of such
Committees. In determining their independence, the Board of Directors did not
consider any transaction, relationship or arrangement under the independence
definition of the NASDAQ rules. Messrs. Lerman and Ferraro are also members of
the Nominating/Corporate Governance Committee but are not independent under the
criteria of the applicable NASDAQ rules as they are officers of the Company.
ATTENDANCE AT MEETINGS
During FY-2007, the Board of Directors held five (5) meetings. All members
of the Board of Directors in FY-2007 attended all of the meetings of the Board
of Directors and the Committees of which they were members.
Directors are expected to attend the Annual Meeting of Stockholders.
However, the Board of Directors recognizes that circumstances may occasionally
preclude attendance by all directors. The Board requires that each director
attend at least of 75% of the aggregate number of meetings of the Board of
Directors and the Committees of which they were members. All of the Company's
directors attended the Company's annual meeting for fiscal 2006.
AUDIT COMMITTEE REPORT
The Audit Committee oversees the Company's financial reporting process on
behalf of the Board of Directors. The Audit Committee members are not
professional accountants or auditors; no member of the Audit Committee is a
financial expert. The Audit Committee certifies that the independent auditor is
"independent" under applicable rules. Their functions are not intended to
duplicate or to certify the activities of management and the independent
auditor.
4
Management has the primary responsibility for the financial statements and
the reporting process including the systems of internal controls. The Audit
Committee discussed with the Company's independent auditors the overall scope
and plans for the audit. The Audit Committee meets with the independent
auditors, with and without management present, to discuss the results of their
examinations, their evaluations of the Company's internal controls, and the
overall quality of the Company's financial reporting.
In fulfilling its oversight responsibilities, the Audit Committee reviewed
and discussed with management the audited financial statements included in the
Annual Report on Form 10-Ksb for the fiscal year ended March 31, 2007, including
a discussion of the acceptability and quality of the accounting principles, the
reasonableness of significant judgments and the clarity of disclosures in the
financial statements.
The Audit Committee reviewed and discussed with the independent auditors,
who are primarily responsible for expressing an opinion on the conformity of
those audited financial statements with generally accepted accounting
principles, their judgments as to the acceptability and quality of the Company's
accounting principles and such other matters as are required to be discussed
with the Audit Committee under U.S. generally accepted auditing standards, and
Public Company Accounting Oversight Board ("PCAOB") Standards. The Audit
Committee and its financial expert advisor has discussed with the independent
auditors their independence from management and the Company (including the
matters in the written disclosures required by Independence Standards Board
Standard No. 1 as adopted by the PCAOB) and considered the compatibility of
non-audit services with the auditors' independence.
In reliance on the reviews and discussions referred to above, the Audit
Committee recommended to the Board of Directors (and the Board approved) that
the audited financial statements be included in the Annual Report on Form 10-Ksb
for the fiscal year ended March 31, 2007 for filing with the SEC. The Audit
Committee and the Board of Directors had recommended, prior to fiscal year end,
the selection of Mahoney Sabol & Co., LLP as the Company's independent auditors
for FY-2007.
Submitted by the following Members of the Audit Committee on August 9th, 2007:
AUDIT COMMITTEE: John J. Hughes, and Fred H. Samuelson
COMMUNICATION WITH DIRECTORS
Stockholders wishing to communicate with the non-management directors of
the Company should send their correspondence to: Board of Directors,
Thermodynetics, Inc., 651 Day Hill Road, Windsor, CT 06095. Stockholders can
also communicate with individual Board members at the same address.
STOCK OWNERSHIP OF DIRECTORS, OFFICERS AND 5% BENEFICIAL OWNERS
The following table sets forth, as of September 7, 2007, the number of
shares of the Company's Common Stock owned beneficially to the knowledge of the
Company, by each beneficial owner of more than 5% of such Common Stock, by each
director, by each officer and by all officers and directors of the Company as a
group. The shares underlying the ISOs held by one officer which are presently
exercisable are deemed beneficially owned. All amounts are reflected on a
post-reverse-split (April 18th, 2005) basis.
5
Name and Address Amount and Nature Percent of
of Beneficial Owner of Beneficial Ownership Class Owned
-------------------------- ----------------------- -----------
Directors and Officers (1)
----------------------
Robert A. Lerman 1,034,133 shs(2) 25.6%
John F. Ferraro 820,614 shs(3) 20.3%
John J. Hughes 14,000 shs 0.3%
Fred H. Samuelson 14,000 shs 0.3%
Directors and Officers
----------------------
All officers and 1,882,747 shs 46.5%
directors as a group
(four persons)
Other 5% Shareholders
---------------------
Turbotec Products, Inc. 401(k) 332,254 shs 8.2%
Retirement Savings Plan
Thermodynetics, Inc. 401(k) 69,296 shs 1.7%
Retirement Savings Plan
|
(1) The address of all officers and directors of TDYT is c/o the Company,
651 Day Hill Road, Windsor, CT 06095.
(2) Includes 45,289 shares held for Mr. Lerman in trust under the TDYT
401(k) Plan; includes 48,905 shares held by the spouse of Mr. Lerman;
excludes the aggregate 69,296 shares held in trust by the trustees of
the TDYT 401(k) Plan for all of the participating employees. Mr.
Lerman transferred 18,000 shares as a gift in 2006. Mr. Lerman sold
33,500 shares in fiscal year ended 2007 under a Rule 10b5-1 sales
plan; an additional 66,500 shares are subject to such sales plan.
(3) Includes 24,007 shares held for Mr. Ferraro in trust under the TDYT
401(k) Plan; excludes the aggregate 69,296 shares held in trust by the
trustees of the 401(k) Plan for all of the participating employees.
REMUNERATION OF EXECUTIVE OFFICERS AND DIRECTORS
The compensation philosophy is to provide employees and management with a
competitive compensation packages and the opportunity for outstanding performers
to earn higher levels of compensation over the long-term when justified by
performance. The key objectives of our executive compensation programs are to
attract, motivate and retain executives who drive our success and industry
leadership.
The following table sets forth on an accrual basis for the most recently
ended fiscal year, the remuneration of each of the Company's officers whose
remuneration exceeded $100,000.
6
SUMMARY COMPENSATION TABLE
-----------------------------------------------------------------------------------------------------------------------------
NAME & PRINCIPAL YEAR SALARY BONUS STOCK OPTION NON-EQUITY NON-QUALIFIED ALL TOTAL
POSITION (1) ($) ($) AWARDS AWARDS INCENTIVE DEFERRED OTHER ($)
($) ($) PLAN COMPEN- COMPENSATION COMPENSATION
SATION EARNINGS ($) ($)
($)
-----------------------------------------------------------------------------------------------------------------------------
ROBERT A. LERMAN(1) 2007 259,375 100,000 0 0 0 0 3,652 362,027
President, CEO &
Director
JOHN F. FERRARO (1) 2007 194,967 0 0 0 0 0 2,328 197,295
Chairman of the
Board, Treasurer
and CFO, Secretary
& Director
|
NOTES:
(1) See (1), (2) and (5) in sub-item (b) Narrative Disclosure to Summary
Compensation Table.
NARRATIVE DISCLOSURE TO SUMMARY COMPENSATION TABLE.
(1) Messrs. Lerman and Ferraro each entered into five-year employment
contracts with the Company effective April 1st, 2004. Each employment
contract provides for a basic annual salary of $180,000 with an annual
increase at April 1st of each year based on increases in the Consumer
Price Index for all Urban Consumers for the New York, New Jersey, and
Connecticut Region. Effective June 1st, 2005, the board increased Mr.
Lerman's base annual salary to $250,000. Each employment contract
requires the Company to provide medical insurance coverage for the
employee as well as $50,000 of group term insurance, and $65,000
annual expense reimbursement of additional insurance of each
employee's selection. In addition, each employment contract contained
a provision providing that in the event of disability, the employee
will receive disability payments equal to the annual salary of the
employee for five years (with proportional reductions in the event of
partial disability); and $6,500 per year for tax planning services.
The contract may be terminated by the employee on 120 days prior
written notice. The contract may also be terminated by the Company in
which event the employee will be paid termination compensation equal
to each employee's then current salary for five years; in the event
there is a change in control of the Company and the employee is
terminated, the employee shall receive twice the amount of termination
compensation which would otherwise be due. Further, the employee may
opt to terminate the employment contract and shall be paid a lump-sum
equal to 12 months' basic salary.
(2) In 2007, 2006, and 2005, Mr. Lerman received cash bonuses of
$100,000, $76,629, and $65,000, respectively. In 2007, 2006, and 2005,
Mr. Ferraro received cash bonuses of $-0-, $76,088, and $63,000,
respectively.
EMPLOYMENT AND OTHER COMPENSATORY ARRANGEMENTS
For the fiscal year ending March 31, 2008, the Company anticipates paying
aggregate direct remuneration (based on current salaries and anticipated
bonuses) of approximately $550,000 to all officers as a group (two persons) of
which Mr. Lerman will be paid approximately $350,000 and Mr. Ferraro will be
paid approximately $200,000.
7
COMPENSATION OF DIRECTORS
During the fiscal year ended March 31, 2007, nonexecutive and nonemployee
directors' compensation was paid as shown in the following table.
DIRECTOR COMPENSATION
-----------------------------------------------------------------------------------------------------
Name Fees Stock Option Non-Equity Nonqualified All Other Total ($)
Earned Award Awards Incentive Deferred Compensation
or Paid ($) ($) Plan Compensation ($)
in Cash Compensa- Earnings ($)
($) tion ($)
-----------------------------------------------------------------------------------------------------
THERMODYNETICS
John J. Hughes (1) $17,500 0 0 0 0 0 $17,500
Fred H. Samuelson (1) $17,500 0 0 0 0 0 $17,500
|
NOTE (1): Each director had deferred $8,500 of compensation from FYE 2005 which
sum had been distributed in FYE 2006.
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
------------------------------------------------------------------------------------------------------------------------------
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR END
------------------------------------------------------------------------------------------------------------------------------
Option Awards Stock Awards
Name Number of Number Equity Option Option Number Market Equity Equity
Securities of Incentive Exercise Expira- of Shares Value of Incentive Incentive
Underlying Securities Plan Price tion or Units Shares Plan Awards: Plan
Unexercised Underlying Awards: ($) Date That Have or Units Number of Awards:
Options Unexercised Number of Not That Have Unearned Market or
(#) Options Securities Vested (#) Not Shares, Units Payout
Exercisable (#) Unex- Underlying Vested ($) or Other Value of
ercisable Unexercised Rights That Unearned
Unearned Have Not Shares,
Options (#) Vested (#) Units or
Other
Rights That
Have Not
Vested ($)
------------------------------------------------------------------------------------------------------------------------------
Robert A. Lerman 0 0 0 0 0 0 0 0 0
John F. Ferraro 0 0 0 0 0 0 0 0 0
|
INCENTIVE STOCK OPTION PLAN
2002 INCENTIVE STOCK OPTION PLAN - On October 22nd, 2002, the Company's
stockholders approved the adoption of the Company's 2002 Incentive Stock Option
Plan (the "2002 ISO PLAN") reserving 500,000 shares (100,000 shares on a
post-split basis) of the Company's Common Stock for issuance pursuant to
incentive stock options ("ISOS") qualified under the U.S. Internal Revenue Code
of 1986 which may be granted under the 2002 ISO Plan at exercise prices at least
equal to 100% of the fair market value of the Common Stock on the date of the
effective date of the grant of the option.
At March 31, 2007 and at June 14, 2007 no ISOs under the 2002 ISO Plan were
outstanding. No options under the 2002 ISO Plan were granted or outstanding in
fiscal year ended March 31, 2007. The 2002 ISO Plan will expire on July 31st,
2012.
NON-QUALIFIED STOCK INCENTIVE PLAN
2002 NON-QUALIFIED STOCK INCENTIVE PLAN - On October 22nd, 2002, the
Company's stockholders approved the adoption of the Company's 2002 Non-Qualified
Stock Incentive Plan ("2002 NQ PLAN") reserving 500,000 shares (100,000 shares
on a post-split basis) of the Company's Common Stock for issuance pursuant to
the 2002 NQ Plan in the form of stock options, stock bonus, or stock
appreciation rights ("SAR"). The purchase price for the exercise of shares
subject to any option shall not be less than 33.33% of the fair market value
("FMV") of the shares of common stock of the Company on the effective date of
the option and in no event shall be less than the par value of the
8
common stock; the value of the shares subject to any bonus shall be equal in
value to a fixed dollar amount and such value shall not be less than 33.33% of
the FMV of the shares of common stock of the Company on the effective date of
the bonus and in no event shall be less than the par value of the common stock;
the value of an SAR award of stock is equal to or less than (as the Board may
determine) the excess of the FMV of one share of stock on the date of the
exercise of the SAR less the FMV of one share of stock on the effective date of
the award, the result of which is multiplied by the number of shares with
respect to which the SAR shall have been exercised.
No stock incentives were issued or outstanding under the 2002 NQ Plan in
fiscal year ended March 31, 2007. The 2002 NQ Plan will expire on December 31,
2012.
OPTION GRANTS IN LAST FISCAL YEAR. No options were granted in the last
fiscal year.
AGGREGATED EXERCISES
AGGREGATED OPTION/SAR EXERCISES AND FISCAL YEAR END OPTION/SAR VALUES - No
options were outstanding at the record date and no options were exercised during
fiscal year ended March 31, 2007 to purchase common stock of the Company. The
aggregated option exercise values at fiscal year-end held by the executive
officers equals zero.
EMPLOYEE RETIREMENT SAVINGS PLANS
EMPLOYEE RETIREMENT SAVINGS PLAN - The Company made no contributions to the
Thermodynetics, Inc. 401(k) Retirement Savings Plan (the "TDYT 401(k) PLAN") for
the plan year ending December 31, 2006 although it has reserved 25,000 shares of
the Company's common stock for its contribution; such shares have not been
allocated or issued as of the date of this report. The aggregate valuation of
such shares equals $18,750. The assets of the TDYT 401(k) Plan are held in trust
for the exclusive benefit of the participants by the trustees of the Plan,
Messrs. Hughes, Samuelson, and Lerman are the trustees. The Company has not yet
determined its contributions to the TDYT 401(k) Plan for the plan year ending
December 31, 2007.
The compensation value of the 401(k) participation for both the TDYT 401(k)
Plan and the TRBO 401(k) Plan received by the below listed officers and
directors is included in the Summary Compensation Table at the column labeled
"All Other Compensation" at Item 10(a) hereof. The following table sets forth
the number of shares of Common Stock contributed to the below referenced persons
or groups of persons during the 401(k) Plan year ended December 31, 2006, Column
(1), and for all years from inception of the Plan through the Plan year ended
December 31, 2006, Column (2). All amounts are reflected on a post-reverse-split
(April 18th, 2005) basis at June 14, 2007.
Shares Contributed by the Company
Name and Held in Trust Under TDYT 401(k) Plan
---- ----------------------------------------
Officers and Directors Column (1) Column (2)
---------------------- ---------- ----------
(Aggregate)
THERMODYNETICS
Robert A. Lerman(z) 0 45,289
John F. Ferraro 0 24,007
John J. Hughes(z) -0- -0-
Fred H. Samuelson(z) -0- -0-
All officers and directors 0 69,296
as a group(z)
(4 persons)
------------------------------
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(z) Trustees of the TDYT 401(k) Plan. Excludes the aggregate shares held
in trust by the trustees of the TDYT 401(k) Plan for all participating
employees.
9
The Turbotec Products, Inc. 401(k) Retirement Savings Plan (the "TRBO
401(k) PLAN") was created in fiscal 2006. Turbotec Products, Inc. is a
wholly-owned subsidiary of Turbotec Products Plc of which the Company owns 56%.
The assets of the TRBO 401(k) Plan are held in trust in the TRBO plan for the
TRBO employees for the exclusive benefit of such participants; it is
administered by the trustees of the Plan, of which two executive officers of
Turbotec Products, Inc. serve as the trustees. During the plan year ending
December 31, 2006 Turbotec changed to a matching cash contribution for its plan
on a "safe harbor" basis under ERISA based on amounts contributed by employees.
The compensation value of the 401(k) participation for the TRBO 401(k) Plan
received by the below listed officers and directors is included in the Summary
Compensation Table at the column labeled "All Other Compensation" at Item 10(a)
hereof. The following table sets forth the number of shares of Common Stock
contributed to the below referenced persons or groups of persons during the
401(k) Plan year ended December 31, 2006, Column (1), and for all years from
inception of the Plan through the Plan year ended December 31, 2006, Column (2).
All amounts are reflected on a post-reverse-split (April 18th, 2005) basis at
June 14, 2007.
Shares Contributed by the Company
Name and Held in Trust Under TRBO 401(k) Plan
---- ----------------------------------------
Column (1) Column (2)
---------- ----------
(Aggregate)
All Trustees as a group(y) 0 46,440
(2 persons)
Total Matching Contribution 0 332,254
to all employees
------------------------------
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(y) Trustees of the TRBO 401(k) Plan. Excludes the aggregate shares held
in trust by the trustees of the TRBO 401(k) Plan for all participating
employees.
OTHER PLANS
The Company does not have any other pension or similar plan. See
"Compensation" herein as to the Company's employment contracts with Messrs.
Lerman and Ferraro which provide for the terms of their compensation and
disability and termination payment provisions.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Based solely on a review of Forms 3 and 4 and amendments thereto furnished
to the Company during FY 2007 and through the date hereof, as well as Forms 5
and amendments thereto furnished to the Company with respect to FY 2007 by the
directors, officers and ten percent beneficial owners of the Company, it is not
aware that any report required to be filed pursuant to Section 16(a) of the
Securities Exchange Act of 1934 by any such person was not filed or was not
filed on a timely basis.
CERTAIN TRANSACTIONS
None of the officers and directors of the Company are currently engaged in
businesses competitive to the business of the Company. During the last fiscal
year, the Company has not been engaged in transaction(s) with any officers,
directors, beneficial holders of more than 5% of its outstanding voting
securities and entities with which they were affiliated, EXCEPT as presented
below.
WITH DIRECTORS AND OFFICERS, AND RELATED PERSONS.
(A) PRIVATE PLACEMENT & LOANS - Two affiliated officer/directors and four
unaffiliated investors entered into subscription agreements with the Company in
the Company's $450,000 private placement offering in May, 2005 whereby $150,000
and $300,000, respectively, $450,000 in the aggregate, was borrowed by the
Company from Messrs. Ferraro and Lerman at an interest rate of 10% with a
maturity date of December 31, 2006. Further, all investors received warrants,
which expire June 30, 2008, to purchase an aggregate of 225,000 shares of common
stock at an exercise price of $1.40 per share. The indebtedness was repaid in
full to the two officers and to the unaffiliated investors in May, 2006.
10
The Company does not have any formal policies and procedures for review,
approval or ratification of related party transactions. In the transaction
reported in (A), the terms of the transaction with Messrs. Ferraro and Lerman
were on the same terms as with unrelated parties who participated in the private
placement offering.
INFORMATION CONCERNING INDEPENDENT REGISTERED PUBLIC ACCOUNTANTS
The firm of Mahoney Sabol & Company, LLP, independent registered public
accountants, 95 Glastonbury Boulevard, Glastonbury, Connecticut 06033, audited
the consolidated financial statements of the Company and its subsidiaries for
the fiscal year ended March 31, 2007. Mahoney Sabol & Company, LLP was first
appointed to serve as the Company's independent registered public accountants on
November 30, 2000. Representatives of such firm are not expected to be present
at the Annual Meeting of Stockholders.
PRINCIPAL ACCOUNTANT FEES AND SERVICES
AUDIT FEES - Aggregate fees for the professional audit services rendered by
Mahoney Sabol & Co., LLP for the audit of the Company's annual financial
statements and review of the financial statements included in the Company's
quarterly reports for the years ended March 31, 2007 and 2006 equaled $48,000
and $48,000, respectively.
AUDIT-RELATED FEES - Fees for the review of the financial statements included in
the Company's quarterly reports for the fiscal years ended March 31, 2007 and
2006 equaled $10,500, and $10,500, respectively.
TAX FEES - Fees for professional services rendered by Mahoney Sabol & Co., LLP
for tax preparation services for the fiscal years ended March 31, 2007 and 2006
equaled $9,000 and $7,000, respectively.
ALL OTHER FEES - All other fees for professional services rendered by Mahoney
Sabol & Co., LLP consisting of accounting services in connection with the
Company's discontinued subsidiary, Vulcan Industries, Inc., the London IPO and
share sale, and other non-audit fees for the fiscal years ended March 31, 2007
and 2006 equaled, in the aggregate, $26,245 and $70,675, respectively.
The Audit Committee evaluated whether providing non-audit services by Mahoney
Sabol & Co., LLP for the fiscal year ended March 31, 2007 is compatible with
maintaining the principal accountant's independence, and concluded it is
independent.
POLICY ON AUDIT COMMITTEE PRE-APPROVAL OF SERVICES OF INDEPENDENT AUDITORS
The audit committee has established policies and procedures regarding
pre-approval of all services provided by our independent auditor. The audit
committee will annually review and pre-approve the services that may be provided
by our independent auditor without obtaining specific pre-approval from the
audit committee. Unless a type of service has received general pre-approval, it
requires specific pre-approval by the audit committee if it is to be provided by
our independent auditor. During the fiscal year ended March 31, 2007, our audit
committee pre-approved all audit and permitted non-audit services that were
provided to us by our independent auditors.
STOCKHOLDER PROPOSALS FOR NEXT ANNUAL MEETING
Under current rules of the Securities and Exchange Commission, stockholders
wishing to submit proposals for inclusion in the Proxy Statement of the Board of
Directors for the 2008 fiscal year end Annual Meeting of Stockholders must
submit such proposals so as to be received by the Company at 651 Day Hill Road,
Windsor, Connecticut 06095 on or before May 31, 2008.
FORM 10-KSB ANNUAL REPORT
A copy of the Company's Annual Report on Form 10-Ksb for the year ended
March 31, 2007 as filed with the Securities and Exchange Commission may be
obtained by any stockholder entitled to vote at the November 8, 2007 Annual
Meeting of Stockholders by addressing a written request to the Secretary,
Thermodynetics, Inc., 651 Day Hill Road, Windsor, Connecticut 06095.
11
OTHER MATTERS
Management does not know of any other matters which are likely to be
brought before the Meeting. However, in the event that any other matters
properly come before the Meeting, the persons named in the enclosed proxy will
vote said proxy in accordance with their judgment on said matters.
By Order of the Board of Directors
THERMODYNETICS, INC.
Robert A. Lerman
PRESIDENT & CEO
Windsor, Connecticut 06095
September 28, 2007
/ FOLD AND DETACH HERE AND READ THE REVERSE SIDE /
PROXY PROXY
THERMODYNETICS, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
Annual Meeting of Stockholders--November 8, 2007
The undersigned hereby appoints John F. Ferraro and Robert A. Lerman, or any one
of them acting in the absence of the other, as attorneys and proxies of the
undersigned with full power of substitution, for and in the name of the
undersigned, to represent the undersigned at the Annual Meeting of Stockholders
of Thermodynetics, Inc., a Delaware corporation, to be held at the Company's
principal offices at 651 Day Hill Road, Windsor, Connecticut 06095 at 9:30 A.M.
(EST) on Thursday, November 8, 2007 and at any adjournments thereof, and to vote
all shares of stock of said Company standing in the name of the undersigned with
all the powers which the undersigned would possess if personally present at such
meeting.
THIS PROXY WILL BE VOTED AS DIRECTED, OR IF NO DIRECTION IS INDICATED, WILL BE
VOTED "FOR" THE PROPOSALS. THIS PROXY MAY BE REVOKED AT ANY TIME PRIOR TO THE
TIME IT IS VOTED AT THE MEETING. PLEASE SIGN AND RETURN THIS PROXY PROMPTLY. NO
POSTAGE IS REQUIRED IF RETURNED IN THE ENCLOSED ENVELOPE AND MAILED IN THE
UNITED STATES.
/ FOLD AND DETACH HERE AND READ THE REVERSE SIDE /
THIS PROXY WILL BE VOTED AS DIRECTED, OR IF NO DIRECTION IS INDICATED, WILL BE
VOTED "FOR" THE PROPOSALS.
PLEASE MARK YOUR VOTES LIKE THIS [X]
1. TO ELECT FOUR (4) DIRECTORS
(PROPOSAL ONE).
NOMINEES:
JOHN F. FERRARO
JOHN J. HUGHES
ROBERT A. LERMAN
FRED H. SAMUELSON
FOR ALL AGAINST ALL FOR ALL, EXCEPT
[ ] [ ] [ ]
AGAINST: __________________
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OTHER MATTERS: The Board of Directors knows of no other matters that would be
presented for consideration at the November 8, 2007 annual meeting. If any other
matters are properly brought before such meeting, it is the intention of the
persons named in the proxy card to vote on such matters in accordance with their
judgment on such matters.
COMPANY ID:
PROXY NUMBER:
ACCOUNT NUMBER:
SIGNATURE:______________ SIGNATURE IF HELD JOINTLY:_______________ DATE:__, 2007
Please sign exactly as name appears on this Proxy. When shares are held by joint
owners, both should sign. When signing as attorney, executor, administrator,
trustee or guardian, please give title as such. If a corporation, please sign in
full corporate name by president or other authorized officer. If a partnership,
please sign in the full partnership name by an authorized partner. If a limited
liability company, please sign in full name of limited liability company by a
manager or authorized member.
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