Technical Communications Corporation NEWS RELEASE
100 Domino Drive November 20, 1998
Concord, MA 01742 2892 For Immediate release
(978) 287-5100 Contact: Peter Christiana, Investor Relations
Web Site: www.tccsecure.com
TECHNICAL COMMUNICATIONS CORPORATION ANNOUNCES SETTLEMENT OF
LITIGATION WITH PROXY CONTESTANTS
Newly Constituted Board Committed To Enhancing Long Term Shareholder Value
CONCORD, MA, November 20, 1998 Technical Communications Corporation (NASDAQ:TCCO) today announced the settlement of litigation initiated by Philip Phalon and Dr. Mahmud Awan, which had been pending in Middlesex County, Massachusetts Superior Court since February 1998. Litigation regarding the tabulation of the voting results of the Companys 1998 annual stockholders meeting held August 14, 1998 also has been settled.
In connection with the settlement of these matters, Dr. Awan and David Brown will join the Companys Board of Directors, with Dr. Awan serving as Chairman of the Board. The Companys current Chairman and Chief Executive Officer, Carl H. Guild, Jr., will assume the role of Vice Chairman of the Board and will continue as Chief Executive Officer/President. Current Board members Philip Phalon and Herbert Lerner will resign from the Board, which will now consist of Mr. Guild, Mitchell Briskin, Donald Lake, Thomas Peoples, David Brown, Robert Lessard and Dr. Awan. These changes are effective immediately. The Companys Board will remain classified, with each director serving a "staggered" term and Messrs. Awan and Briskin deemed elected at the August 14 stockholders meeting for a term ending in 2001.
TCC Announce Settlement of Litigation / Page 2
The settlement agreement and standstill agreement executed in connection with the settlement of the above described litigation include provisions requiring among other things (i) that the Company reimburse the Phalon/Awan Groups expenses in payments aggregating $395,000, (ii) the dissolution of the Phalon/ Awan/Martindale/Bregman 13(d) Group, and (iii) that the former proxy contestants abide by certain standstill provisions until October 1, 2000.
"Todays announcement is clearly an excellent result for TCC and its shareholders," said Mr. Guild. "The settlement of this litigation removes a great burden from the Company in terms of expense and management time. Equally as important, TCCs Board has been strengthened by the election of Dr. Awan, an entrepreneur in high technology with wide experience in international commerce. In addition, Mr. David Brown brings a wealth of experience in strategic business planning. The Company can now focus all its efforts on executing its strategy to become the leading supplier of mission-critical security systems worldwide."
Commenting on todays developments, Dr. Awan stated "I am pleased that TCC and my group have reached an agreement that permits the resolution of all disputes and the dismissal of the various lawsuits that have been filed. I am also
pleased to join the Board of TCC and look forward to working with the current Board members to advance the interests of TCC and its shareholders. Although the circumstances have been unusual, I am now confident that the actions of the current board members were taken in good faith with the interests of the corporation and its shareholders paramount in their minds. I look forward to working with these individuals and I have confidence in them and in our ability to ensure that TCC remains a leader in its field."
TCC Announces Settlement of Litigation / Page 3
The Companys Chief Executive Officer Carl Guild stated "TCC is pleased that it has reached an agreement with Dr. Awan and the other members of his group that permits the resolution of all disputes and the dismissal of the various lawsuits that have been filed. We are pleased that Dr. Awan, as Chairman and Mr. Brown, as a director, have agreed to join the Board. The current board accepts Dr. Awans vote of confidence and we look forward to working with him and Mr. Brown to advance the interests of TCC and its shareholders."
About Technical Communications Corporation
Based in Concord, Massachusetts, Technical Communications Corporations products and services provide transmission security for mission-critical networks of governments and corporations around the world. With over 35 years experience, TCC is the trusted supplier where secure data transmission is a critical need.
Matters discussed in this news release, including any discussion of or impact, expressed or implied, on the Companys anticipated operating results and future earnings, including statements about the Companys ability to achieve long term growth and profitability, contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended. The Companys operating results may differ significantly from the results indicated by such forward-looking statements. The Companys operating results may be affected by many factors, including but not limited to, the fulfillment of customer orders, the Companys ability to retain and motivate key technical, sales, marketing and manufacturing personnel, and the possibility of political instability in the Companys foreign markets. These and other risks are detailed from time to time in the Companys filings with the Securities And Exchange Commission.
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