<PAGE> 1
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [ ]
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 Rule 14a-11(c) or Rule 14a-12
SPACEHAB, INCORPORATED
- --------------------------------------------------------------------------------
(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:
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(2) Form, schedule or registration statement no.:
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(3) Filing party:
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(4) Date filed:
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<PAGE> 2
[LOGO]
September 16, 1996
Dear Stockholder:
You are cordially invited to attend the 1996 Annual Meeting of
Stockholders of SPACEHAB, Incorporated (the "Company") to be held at the
Company's headquarters located at 1595 Spring Hill Road, Vienna, Virginia 22182
on October 22, 1996 at 10:00 a.m. Information about the meeting, the nominees
for directors and the proposals to be considered is presented in the Notice of
Annual Meeting and the Proxy Statement on the following pages.
At the meeting, you will be asked to elect 12 directors to the
Company's Board of Directors, each for a one-year term expiring at the 1997
Annual Meeting of Stockholders, and to ratify the appointment of KPMG Peat
Marwick LLP as independent public accountants for the Company. The Board of
Directors has unanimously approved these proposals and we urge you to vote in
favor of these proposals and such other matters as may be submitted to you for
a vote at the meeting.
Your participation in SPACEHAB's affairs is important,
regardless of the number of shares you hold. To ensure your representation at
the meeting, even if you anticipate attending in person, we urge you to mark,
sign, date and return the enclosed proxy card promptly. If you attend, you
will, of course, be entitled to vote in person.
Thank you for your assistance in returning your proxy card
promptly.
Sincerely,
DR. SHELLEY A. HARRISON
Chairman and Chief Executive Officer
<PAGE> 3
[LOGO]
NOTICE OF 1996 ANNUAL MEETING OF STOCKHOLDERS
To The Stockholders of SPACEHAB, Incorporated:
The 1996 Annual Meeting of Stockholders (the "Annual Meeting")
of SPACEHAB, Incorporated (the "Company") will be held at the Company's
headquarters located at 1595 Spring Hill Road, Vienna, Virginia 22182 on
October 22, 1996 at 10:00 a.m., for the following purposes:
1. To elect 12 directors to the Company's Board of
Directors, each to hold office until their successors
are elected at the 1997 Annual Meeting of
Stockholders;
2. To ratify the appointment of KPMG Peat Marwick LLP as
independent public accountants for the Company;
3. To transact such other business as may properly come
before the meeting and any adjournment thereof.
A proxy statement with respect to the Annual Meeting
accompanies and forms a part of this Notice. The Annual Report of the Company
for the fiscal year ended June 30, 1996 also accompanies this Notice.
The Board of Directors has fixed the close of business on
September 6, 1996 as the record date for determining stockholders entitled to
notice of, and to vote at, the Annual Meeting.
By Order of the Board of Directors,
Nelda Wilbanks
Secretary
Vienna, Virginia
September 16, 1996
YOUR VOTE IS IMPORTANT
PLEASE MARK, SIGN AND DATE THE ENCLOSED PROXY CARD
AND RETURN IT PROMPTLY IN THE ENCLOSED ENVELOPE WHETHER OR
NOT YOU EXPECT TO ATTEND THE ANNUAL MEETING.
<PAGE> 4
SPACEHAB, Incorporated
1595 Spring Hill Road
Suite 360
Vienna, Virginia 22182
PROXY STATEMENT
GENERAL INFORMATION
This Proxy Statement is furnished in connection with the
solicitation by the Board of Directors (the "Board of Directors") of SPACEHAB,
Incorporated, a Washington corporation ("SPACEHAB" or the "Company"), of
proxies to be voted at the 1996 Annual Meeting of Stockholders on October 22,
1996 (the "Annual Meeting"). This Proxy Statement, the accompanying proxy card
and Annual Report to Stockholders are first being mailed to stockholders on or
about September 16, 1996.
VOTING SECURITIES
The Board of Directors has fixed the close of business on
September 6, 1996 as the record date (the "Record Date") for the determination
of stockholders entitled to notice of, and to vote at, the Annual Meeting. As
of the Record Date, the Company had outstanding 11,071,237 shares of common
stock, no par value per share (the "Common Stock"). Holders of Common Stock
are entitled to notice of and to one vote per share of Common Stock owned as of
the Record Date at the Annual Meeting.
PROXIES
Dr. Shelley A. Harrison and Margaret E. Grayson, the persons
named as proxies on the proxy card accompanying this Proxy Statement, were
selected by the Board of Directors of the Company to serve in such capacity.
Dr. Harrison is Chairman of the Board of Directors and Chief Executive Officer
and Ms. Grayson is Vice President of Finance and Treasurer. Each stockholder
giving a proxy has the power to revoke it at any time before the shares it
represents are voted. Revocation of a proxy is effective upon receipt by the
Secretary of the Company of either (i) an instrument revoking the proxy or (ii)
a duly executed proxy bearing a later date. Additionally, a stockholder may
change or revoke a previously executed proxy by voting in person at the Annual
Meeting.
VOTING OF PROXIES
Since many SPACEHAB stockholders are unable to attend the
Company's Annual Meeting, the Board of Directors solicits proxies to give each
stockholder an opportunity to vote on all matters scheduled to come before the
meeting and set forth in this Proxy Statement. Stockholders are urged to read
carefully the material in this Proxy Statement, specify their choice on each
matter by marking the appropriate boxes on the enclosed proxy card, and sign,
date and return the card in the enclosed stamped envelope.
If no choice is specified and the card is properly signed and
returned, the shares will be voted by the persons named as proxies in
accordance with the recommendations of the Board of Directors contained in this
Proxy Statement.
QUORUM; METHOD OF TABULATION
The holders of at least one-third of the Common Stock issued
and outstanding and entitled to vote at the Annual Meeting, if represented in
person or by proxy, will constitute a quorum at the Annual Meeting. Under
applicable law and the Company's Articles of Incorporation and By-Laws, and
assuming that a quorum is present, in the election of directors, the persons
elected will be the persons receiving the greatest number of votes, up to the
number of directors to be elected, of the stockholders present in person or by
proxy and entitled to vote thereon; provided that no stockholder
<PAGE> 5
shall be allowed to cumulate his votes. At the Annual Meeting, the vote of a
majority in interest of the stockholders present in person or by proxy and
entitled to vote thereon is required to ratify the appointment of KPMG Peat
Marwick LLP as the independent public accountants of the Company's financial
statements for the fiscal year ending June 30, 1997.
One or more inspectors of election appointed for the meeting
will tabulate the votes cast in person or by proxy at the Annual Meeting and
will determine whether or not a quorum is present. The inspectors of election
will treat abstentions as shares that are present and entitled to vote for
purposes of determining the presence of a quorum but as unvoted for purposes of
determining the approval of any matter submitted to the stockholders for a
vote. If a broker indicates on a proxy that it does not have discretionary
authority as to certain shares to vote on a particular matter, those shares
will not be considered as present and entitled to vote with respect to that
matter.
PROPOSAL 1 - ELECTION OF DIRECTORS
A Board of 12 directors will be elected at the Annual Meeting.
All directors hold office until the next annual meeting of stockholders or
until their successors are duly elected and qualified. The Company's Articles
of Incorporation authorize the Board of Directors from time to time to
determine the number of its members. Vacancies in unexpired terms and any
additional positions created by board action may be filled by action of the
existing Board of Directors.
The nominees for whom the enclosed proxy is intended to be
voted are set forth below. It is contemplated that all nominees will be
available for election, but if one or more is not, the proxy will be voted in
accordance with the best judgment of the proxyholder for such person or persons
as may be designated by the Board of Directors unless the stockholder has
directed otherwise.
NOMINEES FOR ELECTION AS DIRECTORS:
HIRONORI AIHARA
Mr. Aihara (age 58) has served as a director of the Company
since April 1992. Mr. Aihara has held various executive level positions with
Mitsubishi Corporation, including Managing Director of Information Systems and
Services Group from June 1990 until the present.
ROBERT A. CITRON
Mr. Citron (age 63) founded SPACEHAB in 1983 and was its
Chairman of the Board of Directors, President and Chief Executive Officer from
1983 to 1987. Mr. Citron is currently the President of Kistler Aerospace
Corporation, a Seattle-based space technology company.
DR. EDWARD E. DAVID, JR.
Dr. David (age 71) has served as a director of the Company
since August 1993. Dr. David is currently the President of EED, Inc., advisors
to industry, government and academia on technology, research and innovation.
Dr. David was Science Advisor to President Nixon and Director of the White
House Office of Science and Technology from 1970 to 1973. He has also served
as President of Exxon Research and Engineering Company from 1977 to 1986, and
as Executive Director of Bell Telephone Laboratories from 1950 to 1970. Dr.
David is also a director of California Microwave, Inc., Intermagnetics General
Corporation, and Protein Polymer Technologies Inc.
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<PAGE> 6
DR. SHELLEY A. HARRISON
Dr. Harrison (age 53) has served as the Company's Chief
Executive Officer since April 1996, Chairman of the Board of Directors since
August 1993 and has been a member of the Company's Board of Directors since
1987. Dr. Harrison was a Member of Technical Staff at Bell Telephone
Laboratories and a Professor of Electrical Sciences at the State University of
New York at Stony Brook. In 1973, Dr. Harrison co-founded Symbol Technologies
Inc., the world's leading provider of bar-code laser scanners and portable
terminals where he served as Chairman and Chief Executive Officer until 1982.
As President of Harrison Enterprises from 1982 to 1986, he managed venture
financings and technology start-ups. Since 1987, Dr. Harrison has been a
managing general partner of a high technology venture capital fund, Poly
Ventures, L.P. ("Poly Ventures"). Dr. Harrison is also a director of
NetManage, Inc. and several privately held high technology portfolio companies.
He is Chairman of the New York State Center for Advanced Technology in
Telecommunications and a Trustee of Polytechnic University.
DR. SHI H. HUANG
Dr. Huang (age 70) has served as a director of the Company
since July 1990. Dr. Huang is the Chairman of the Board of Chinfon Global
Corp., a Republic of China on Taiwan-based conglomerate, which operates 28
affiliated companies in such fields as automobile/motorcycle manufacturing,
banking, and trading. Since 1989, Dr. Huang has also served as the Chairman of
SPACEHAB Taiwan, Inc., a corporation organized as an investment vehicle for
certain Company investors from the Republic of China. Except for its ownership
of Common Stock, SPACEHAB Taiwan, Inc. has no other affiliation with the
Company.
CHESTER M. LEE
Mr. Lee (age 77) has served as President of the Company since April
1996. Prior to assuming his current responsibilities, Mr. Lee served as the
Company's Vice President-Operations since November 1987. Prior to joining
SPACEHAB, Mr. Lee worked for NASA for 23 years. His last position at NASA was
Assistant Associate Administrator for Policy, Planning, and Department of
Defense-Affairs in the Office of Space Flight at NASA. While working at NASA,
Mr. Lee held various other senior positions, including Director of Shuttle
Customer Services Division, Director of Space Transportation Utilization
Division, Director of Space Transportation Systems Operations, and Apollo
Mission Director for Apollo flights 12 through 17 to the moon.
GORDON S. MACKLIN
Mr. Macklin (age 68) has been Chairman of White River
Corporation since 1993. From 1987 to 1992, he was Chairman of Hambrecht &
Quist, LLC. Mr. Macklin served as President of The National Association of
Securities Dealers, Inc. from 1970 to 1987, and was formerly a partner and
Member of the Executive Committee of McDonald & Company, an investment banking
firm, from 1950 to 1970. Mr. Macklin is a director, trustee, or managing
general partner, as the case may be, of 53 of the investment companies in the
Franklin/Templeton Group, and a director of Fund American, MCI Communications
Corporation, Fusion Systems Corp., MedImmune, Inc., Source One Mortgage
Services Corp. and Shoppers Express Inc. Mr. Macklin currently serves as a
consultant to the Company.
DR. BRAD M. MESLIN
Dr. Meslin (age 37) has served as a director of the Company
since April 1985 and as a Vice President of the Company from December 1984 to
April 1985. Since 1984, Dr. Meslin has served as Managing Director of CSP
Associates, Inc. ("CSP"), an international aerospace and defense management
consulting firm. Dr. Meslin currently serves as a consultant to the Company.
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<PAGE> 7
DR. UDO POLLVOGT
Dr. Pollvogt (age 58) has served as a director of the Company
since August 1993. Dr. Pollvogt is currently Executive Vice President for
Government Relations of Daimler-Benz. Prior to that, he was the President of
the Space Infrastructure Division of Deutsche Aerospace AG from 1991 to 1995
and Vice President of the Columbus Program of MBB-ERNO Raumfahrnechnik GmbH, an
aerospace corporation, from 1990 to 1991.
ALVIN L. REESER
Mr. Reeser (age 68) has served as a director of the Company
since August 1991. Mr. Reeser was President and Chief Executive Officer of
SPACEHAB from August 1991 until his retirement in October 1994. Prior to
joining SPACEHAB, Mr. Reeser was the Executive Vice President and General
Manager of USBI Co., an aerospace corporation, from March 1987 to August 1991.
JAMES R. THOMPSON
Mr. Thompson (age 60) has served as a director of the Company
since August 1993. Mr. Thompson is a director, Executive Vice President and
General Manager of the Launch Systems Group of OSC, which he joined following
his service as NASA's Deputy Administrator from 1989 to 1991. Prior to that,
Mr. Thompson served as Director of the Marshall Spaceflight Center in
Huntsville, Alabama from September 1986 to July 1989. Mr. Thompson is also a
director of Nichols Research Corporation.
PROF. ERNESTO VALLERANI
Professor Vallerani (age 60) has served as a director of the
Company since July 1990. Professor Vallerani is President and a director of
Alenia Spazio. Professor Vallerani has more than 30 years experience in
international aerospace projects.
STOCKHOLDER AGREEMENTS
Four stockholders of the Company have entered into separate
letter agreements in which each agreed to vote its shares of Common Stock to
elect the nominee proposed by Mitsubishi Corporation. Mr. Aihara is such
nominee.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF
EACH NOMINEE FOR DIRECTOR NAMED ABOVE.
THE BOARD OF DIRECTORS AND ITS COMMITTEES
Board Meetings
In fiscal year 1996(1), there were 4 meetings of the Board of
Directors (including regularly scheduled and special meetings). During fiscal
year 1996, the following five directors of the Company participated in fewer
than 75% of the aggregate number of meetings of the Board of Directors and the
committees thereof on which he served: Hironori Aihara, Dr. Edward E. David,
Jr., Dr. Shi H. Huang, Dr. Udo Pollvogt and Prof. Ernesto Vallerani.
Committees of the Board of Directors
The Committees of the Board of Directors consist of the Audit
Committee, the Compensation Committee and the Executive Committee. The Board
of Directors does not have a Nominating Committee. Information concerning the
committees is set forth below.
- -------------------------
(1) On June 4, 1996, the Company's Board of Directors voted to
change the Company's fiscal year end from September 30 to June 30. As a
result, fiscal year 1996 began on October 1, 1995 and ended on June 30, 1996.
4
<PAGE> 8
The Audit Committee recommends the appointment of a firm of
independent public accountants to audit the Company's financial statements, as
well as oversees the performance, and reviews the scope, of the audit performed
by the Company's independent accountants. The Audit Committee also reviews
audit plans and procedures, changes in accounting policies and the use of the
independent accountants for non-audit services. The Audit Committee currently
consists of Mr. Schuss (Chairman), Dr. Harrison, Dr. Meslin and Mr. Thompson.
During fiscal 1996, the Audit Committee met two times.
The Compensation Committee determines the compensation and
benefits of all officers of the Company and establishes general policies
relating to compensation and benefits of employees of the Company. The
Compensation Committee is also responsible for administering the Company's
Stock Incentive Plan and the Directors' Stock Option Plan in accordance with
the terms and conditions set forth therein. The Compensation Committee
currently consists of Mr. Thompson (Chairman), Mr. Schuss and Dr. Harrison.
During fiscal 1996, the Compensation Committee met four times.
The Executive Committee is responsible for all matters which
arise between regular meetings of the Board of Directors to the extent
permitted by applicable law. The Executive Committee currently consists of Dr.
Harrison (Chairman), Dr. Meslin, Mr. Reeser and Mr. Thompson. During fiscal
1996, the Executive Committee met five times.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Dr. Harrison, the Company's Chairman and Chief Executive
Officer, is a member of the Compensation Committee.
Director Compensation
All directors are reimbursed for expenses incurred in
connection with their attendance at meetings of the Board of Directors and
non-employee directors receive a fee of $500 per day for each meeting of the
Board of Directors they attend. The Company also has a Directors' Stock Option
Plan pursuant to which each member of the Board of Directors who is not an
employee of the Company who is elected or continues as a member of the Board of
Directors is entitled to receive annually options to purchase 5,000 shares of
Common Stock at an exercise price equal to fair market value; provided,
however, that no director may receive under the Directors' Stock Option Plan
options to purchase an aggregate of more than 25,000 shares of Common Stock.
The Company does not pay any additional remuneration to officers of the Company
for serving as directors.
PROPOSAL 2 - APPOINTMENT OF INDEPENDENT AUDITORS
The Audit Committee recommended and the Board of Directors
approved the appointment of KPMG Peat Marwick LLP as independent public
accountants for fiscal 1997, subject to stockholder ratification. The Audit
Committee, in arriving at its recommendation to the Board, reviewed the
performance of KPMG Peat Marwick LLP in prior years as well as the firm's
reputation for integrity and competence in the fields of accounting and
auditing. The Audit Committee has expressed its satisfaction with KPMG Peat
Marwick LLP in these respects.
KPMG Peat Marwick LLP has served as the Company's independent
auditor since 1985. Representatives of KPMG Peat Marwick LLP are expected to
be present at the Annual Meeting and will have the opportunity to make such
statements as they may desire. They are also expected to be available to
respond to appropriate questions from the stockholders present.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE RATIFICATION
OF THE APPOINTMENT OF KPMG PEAT MARWICK LLP AS INDEPENDENT PUBLIC ACCOUNTANTS
OF THE COMPANY FOR THE FISCAL YEAR ENDING JUNE 30, 1997.
5
<PAGE> 9
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth at June 30, 1996, certain
information regarding the beneficial ownership of Common Stock held by (i) each
person known by the Company to own beneficially more than five percent of the
outstanding Common Stock, (ii) each of the Company's directors and director
nominees, (iii) the Named Executive Officers and (iv) all directors and
executive officers of the Company as a group:
<TABLE>
<CAPTION>
Beneficial Ownership
--------------------
Number Percent(1)
of Shares -------
---------
<S> <C> <C>
PRINCIPAL STOCKHOLDERS:
Zesiger Capital Group LLC . . . . . . . . . . . . . . . . . . . . . . . . 1,083,257(2) 9.7%
SPACEHAB Taiwan, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . 791,666(3) 7.2
Mitsubishi Corporation . . . . . . . . . . . . . . . . . . . . . . . . . 639,581(4) 5.8
NON-EMPLOYEE DIRECTORS:
Dr. Shi H. Huang . . . . . . . . . . . . . . . . . . . . . . . . . . . . 924,183(5) 8.3
Alvin L. Reeser . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 115,624(6) 1.0
Hironori Aihara . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,498(7) *
Robert A. Citron . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92,695(8) *
Dr. Edward E. David, Jr. . . . . . . . . . . . . . . . . . . . . . . . . 12,498(9) *
Dr. Brad M. Meslin . . . . . . . . . . . . . . . . . . . . . . . . . . . 45,857(10) *
Dr. Udo Pollvogt . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,498(11) *
Jeffrey Schuss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21,663(12) *
James R. Thompson . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,498(13) *
Prof. Ernesto Vallerani . . . . . . . . . . . . . . . . . . . . . . . . . 12,499(14) *
DIRECTOR NOMINEE:
Gordon S. Macklin . . . . . . . . . . . . . . . . . . . . . . . . . . . . -- --
NAMED EXECUTIVE OFFICERS:
Dr. Shelley A. Harrison . . . . . . . . . . . . . . . . . . . . . . . . . 616,560(15) 5.3
Richard P. Hora** . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41,666(16) *
David A. Rossi . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24,997(17) *
Chester M. Lee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68,345(18) *
Margaret E. Grayson . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,333(19) *
John M. Lounge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45,931(20) *
ALL DIRECTORS AND EXECUTIVE OFFICERS
AS A GROUP (16 PERSONS) . . . . . . . . . . . . . . . . . . . . . . . . 2,112,093 17.8
</TABLE>
- -------------------------
* Indicates beneficial ownership of less than 1% of the outstanding
shares of Common Stock.
** Mr. Hora resigned as Chief Executive Officer, President and as a
director effective April 10, 1996.
(1) Calculated pursuant to Rule 13d-3(d) of the Securities Exchange Act of
1934 (the "Exchange Act"). Under Rule 13d-3(d), shares not
outstanding which are subject to options, warrants, rights or
conversion privileges exercisable within 60 days are deemed
outstanding for the purpose of calculating the number and percentage
owned by such person, but not deemed outstanding for the purpose of
calculating the percentage owned by each other person listed. As of
June 30, 1996, the Company had 11,069,237 shares of Common Stock
outstanding.
(2) Represents (i) immediately exercisable warrants to purchase 103,883
shares of Common Stock and (ii) 979,374 shares of Common Stock held by
Zesiger Capital Group LLC ("ZCG") in discretionary accounts for the
benefit of its clients. ZCG disclaims beneficial ownership of all
warrants and shares of Common Stock held by it. Its address is 320
Park Avenue, New York, New York 10022.
(3) Except for its ownership of shares of Common Stock, SPACEHAB Taiwan,
Inc. has no other affiliation with the Company. Its address is 14th
Floor No. 180, Chang-Shiao E. Road, Sec. 4, Taipei, Taiwan, R.O.C.
(4) Includes an aggregate of 614,582 shares of Common Stock and
immediately exercisable warrants to purchase 24,999 shares of Common
Stock beneficially owned by Mitsubishi Corporation and its affiliates.
The address of Mitsubishi Corporation is 3-1, Marunouchi 2-chome,
Chiyoda-ku, Tokyo, Japan.
(5) Includes: (i) immediately exercisable options to purchase 12,498
shares of Common Stock
6
<PAGE> 10
and 791,666 shares of Common Stock held by SPACEHAB Taiwan, Inc., of
which Dr. Huang is Chairman and shares voting and investment power
with respect to such shares of Common Stock and (ii) 120,019 shares of
Common Stock held by Chinfon Global Corp., of which Dr. Huang is the
Chairman of the Board and retains investment and voting power with
respect to such securities. Dr. Huang's address is c/o SPACEHAB
Taiwan, Inc., 14th Floor No. 180, Chang-Shiao E. Road, Sec. 4, Taipei,
Taiwan, R.O.C.
(6) Represents the aggregate amount of immediately exercisable options to
purchase shares of Common Stock.
(7) Represents immediately exercisable options to purchase 12,498 shares
of Common Stock. Excludes 614,582 shares of Common Stock and
immediately exercisable warrants to purchase 24,999 shares of Common
Stock held by Mitsubishi Corporation and its affiliates. Mr. Aihara
is the Managing Director of Information Systems and Services Group of
Mitsubishi Corporation. Mr. Aihara disclaims beneficial ownership of
all warrants and shares of Common Stock held by Mitsubishi Corporation
and its affiliates.
(8) Includes immediately exercisable options to purchase 12,498 shares of
Common Stock.
(9) Represents immediately exercisable options to purchase 12,498 shares
of Common Stock.
(10) Includes: 1,537 shares of Common Stock held in the CSP Associates,
Inc. ("CSP") Profit Sharing Plan & Trust for the benefit of Dr.
Meslin; (ii) immediately exercisable options to purchase 8,332 shares
of Common Stock held by CSP for the benefit of Dr. Meslin; (iii) 8,487
shares of Common Stock held by CSP, of which Dr. Meslin is the
managing director; and (iv) immediately exercisable options to
purchase 4,166 shares of Common Stock. Dr. Meslin disclaims
beneficial ownership of all shares of Common Stock held by CSP which
are not held for his benefit.
(11) Represents immediately exercisable options to purchase 12,498 shares
of Common Stock.
(12) Includes immediately exercisable options to purchase 12,498 shares of
Common Stock and immediately exercisable warrants to purchase 2,707
shares of Common Stock.
(13) Represents immediately exercisable options to purchase 12,498 shares
of Common Stock.
(14) Includes immediately exercisable options to purchase 12,498 shares of
Common Stock. Excludes an aggregate of 343,416 shares of Common Stock
and Company warrants held by Alenia Spazio, of which Prof. Vallerani
serves as President. Prof. Vallerani disclaims beneficial ownership
of all shares of Common Stock and all warrants held by Alenia Spazio.
(15) Includes: (i) immediately exercisable options to purchase 300,000
shares of Common Stock; (ii) immediately exercisable warrants to
purchase 132,353 shares of Common Stock held by Poly Ventures, of
which Dr. Harrison is a managing general partner and shares voting and
investment power with respect to shares of Common Stock beneficially
owned by Poly Ventures and its affiliates; (iii) 26,918 shares of
Common Stock and immediately exercisable options held by Poly Ventures
Associates, Inc. to purchase 74,998 shares of Common Stock; and (iv)
82,291 shares of Common Stock held by Harrison Enterprises, Inc., of
which Dr. Harrison is a director and officer and retains sole voting
and investment power with respect to such shares.
(16) Represents the aggregate amount of immediately exercisable options to
purchase shares of Common Stock.
(17) Represents immediately exercisable options to purchase 24,997 shares
of Common Stock.
(18) Includes 2,987 shares of Common Stock held in the Chester M. Lee
Revocable Trust, of which Mr. Lee is the sole trustee, and immediately
exercisable warrants and options to purchase 778 and 64,580 shares of
Common Stock, respectively.
(19) Represents immediately exercisable options to purchase 8,333 shares of
Common Stock.
(20) Includes immediately exercisable options to purchase 45,831 shares of
Common Stock.
7
<PAGE> 11
EXECUTIVE COMPENSATION
Summary Compensation Table
The following table summarizes the compensation paid by the
Company for the last three fiscal years to its Chief Executive Officer and the
Company's four other most highly compensated executive officers other than the
Chief Executive Officer (collectively, the "Named Executive Officers").
<TABLE>
<CAPTION>
ANNUAL COMPENSATION LONG-TERM
COMPENSATION
- ----------------------------------------------------------------------------------------------------------
Other Securities
Name and Fiscal Bonus Annual Underlying
Principal Position Year Salary ($) ($) Comp.($)(1) Options/SARs(#)
------------------ ---- ----------- --- ------------ ---------------
<S> <C> <C> <C> <C> <C>
Dr. Shelley A. Harrison . . . 1996(2) 8,546 35,117 125,685(3) 420,000
Chairman and Chief 1995 -- -- -- --
Executive Officer 1994 -- -- -- --
(effective April 10, 1996)
Richard P. Hora . . . . . . . 1996(2) 131,250 -- 97,705(4) --
Former Chief Executive 1995 157,500 23,000 98,000(5) 166,667
Officer and President 1994 -- -- -- --
(resignation effective April
10, 1996)
Chester M. Lee . . . . . . . . 1996(2) 109,375 31,945 -- 110,416
President 1995 112,467 15,000 -- --
1994 108,333 -- -- 27,083
David A. Rossi . . . . . . . . 1996(2) 112,500 32,652 -- 29,166
Senior Vice President - 1995 116,094 50,000 -- --
Business Development 1994 106,250 -- -- 41,666
John M. Lounge 1996(2) 98,059 28,638 -- 25,000
Vice President - Operations 1995 108,900 10,000 -- --
1994 107,375 -- -- 16,666
Margaret E. Grayson . . . . . . 1996(2) 93,750 28,638 -- --
Vice President of Finance 1995 102,708 15,000 -- --
(CFO), Treasurer and 1994 4,166 -- -- 33,332
Assistant Secretary
</TABLE>
- -------------------------
(1) Except as indicated, no executive named in the above table received Other
Annual Compensation in an amount in excess of the lesser of either $50,000
or 10% of the total of salary and bonus reported for him in the two
preceding columns.
(2) Fiscal year 1996 compensation figures are for a short fiscal year, from
October 1, 1995 through June 30, 1996.
(3) Represents the amount paid by the Company to Poly Ventures Associates,
L.P. for Dr. Harrison's
8
<PAGE> 12
services to the Company for the period from October 1, 1995 to June 18,
1996. Dr. Harrison is a general partner of Poly Ventures Associates, L.P.
(4) Represents (i) $58,117 in relocation expenses and (ii) $39,588 in payments
to Mr. Hora following the termination of his employment with the Company.
(5) Represents the amount paid by the Company for relocation expenses incurred
in connection with the commencement of Mr. Hora's employment with the
Company.
Option Grants in Fiscal 1996
The following table sets forth information relating to the
grant of stock options by the Company during fiscal year 1996 to the Named
Executive Officers under the Company's Stock Incentive Plan. The Company did
not grant any stock appreciation rights ("SARs") in fiscal year 1996.
<TABLE>
<CAPTION>
Individual Grants
----------------------------------------------------
% of Total Potential Realizable Value at
Number of Options Exercise Assumed Annual Rates of Stock
Securities Granted to Price Per Price Appreciation for
Underlying Employees in Share Expiration Option Term (1)
Name Options (#) Fiscal 1996 ($/sh) Date 5% 10%
---- ----------- ----------- ------ ---- -- ---
<S> <C> <C> <C> <C> <C> <C>
Dr. Shelley A. Harrison.. 120,000(2) 14.2% 12.00 (3) 587,333 1,374,656
300,000(4) 42.6 14.50 (5) 1,479,416 3,356,290
Chester M. Lee............. 10,416(6) 1.5 12.00 (7) 42,509 96,439
100,000(8) 14.2 14.50 (9) 643,793 1,530,408
David A. Rossi ............. 29,166(10) 4.1 12.00 (11) 155,394 369,398
John M. Lounge............. 25,000(12) 3.5% 14.50 (13) 160,948 382,602
</TABLE>
- -------------------------
(1) The indicated dollar amounts are the result of calculations based on
the exercise price of the options and assume five and ten percent
appreciation rates set by the Securities and Exchange Commission
and, therefore, are not intended to forecast possible future
appreciation, if any, of the Company's stock price.
(2) Represents 120,000 options which vest ratably over a three-year period
commencing on October 11, 1996.
(3) The options expire ratably over a three-year period commencing October
11, 2001.
(4) Represents 300,000 options which vested on the date of grant.
(5) The options expire on April 10, 2001.
(6) Represents 10,416 options which vested on the date of grant.
(7) The options expire on December 21, 2000.
(8) Represents 100,000 options which vest ratably over a four-year period
commencing on April 10, 1997.
(9) The options expire ratably over a four-year period commencing on April
10, 2002.
(10) The options vest ratably over a four-year period commencing on
December 21, 1996.
9
<PAGE> 13
(11) The options expire ratably over a four-year period commencing on
December 21, 2001.
(12) The options vest ratably over a four-year period commencing on April
10, 1997.
(13) The options expire ratably over a four-year period commencing on April
10, 2002.
Aggregated Option Exercises in Fiscal 1996 and Fiscal Year-End Values
The following table sets forth the number of shares covered by
stock options held by the Named Executive Officers at June 30, 1996, and also
shows the value of "in-the-money" options (market price of the Company's stock
less the exercise price) at that date. Except as listed in the table, no other
Named Executive Officer exercised any Company stock options or beneficially
owned unexercised Company stock options.
<TABLE>
<CAPTION>
Number of Securities Value of Unexercised
Underlying Unexercised Options In-the-Money Options
at June 30, 1996 at June 30, 1996(1)
(#) ($)
------------------------------- ----------------------------
Name Exercisable Unexercisable Exercisable Unexercisable
- ------------------------------------------ ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Dr. Shelley A. Harrison . . . . . . . . . 300,000 120,000 0 0
Richard P. Hora . . . . . . . . . . . . . 41,666 0 0 0
Chester M. Lee . . . . . . . . . . . . . 10,416 100,000 0 0
David A. Rossi . . . . . . . . . . . . . 24,997 66,665 0 0
John M. Lounge . . . . . . . . . . . . . 45,831 33,333 0 0
Margaret E. Grayson . . . . . . . . . . . 8,333 24,999 0 0
</TABLE>
- -------------------------
(1) Based on the difference between the closing market price on June 28, 1996
for the Common Stock, which was $11.00 per share, and the option
exercise price. The above valuations may not reflect the actual value
of unexercised options as the value of unexercised options will
fluctuate with market activity.
10
<PAGE> 14
EMPLOYMENT AGREEMENTS
On December 27, 1995, the Company entered into employment
agreements (the "Agreements") with each of Mr. Rossi, Mr. Lee and Ms. Grayson.
The Agreements provide that the officers will serve the Company in the
respective offices listed in the Summary Compensation Table for a term of three
years, subject to earlier termination as provided in the Agreements. The
Agreements set forth the minimum base salary of each officer during the term of
the Agreements ($150,000 for Mr. Rossi; $125,000 for Mr. Lee; and $125,000 for
Ms. Grayson), subject to increase at the sole discretion of the Compensation
Committee of the Board of Directors. Each officer is also eligible to receive,
at the sole discretion of the Compensation Committee, an annual
performance-based bonus. The officers are entitled to participate in the
employee benefit plans of the Company and are eligible for the grant of stock
options, in the sole discretion of the Compensation Committee, under the
Company's Stock Incentive Plan. The Agreements include provisions that are
effective upon the termination of employment of the officers under certain
circumstances. In general, the officers are entitled to continuation of base
salary and medical coverage and certain other benefits for six months following
a termination of employment by the Company other than for "cause" or a
"material breach" (each as defined in the Agreements).
The Agreements include certain restrictive covenants for the
benefit of the Company relating to non-disclosure by the officers of the
Company's confidential business information, the Company's right to inventions
and technical improvements of the officers, and noncompetition by the officers
with the Company's business for a period of six months following termination of
employment.
On December 27, 1995, the Company entered into an employment
agreement with Mr. Hora (the "Hora Employment Agreement"), which provided that
Mr. Hora would serve the Company as President and Chief Executive Officer for a
term of three years, subject to earlier termination as provided in the Hora
Employment Agreement. The Hora Employment Agreement provided for a minimum
base salary of $190,000 annually, subject to increase at the sole discretion of
the Compensation Committee. Under the Hora Employment Agreement, Mr. Hora was
also eligible to receive an annual performance-based bonus at the sole
discretion of the Compensation Committee. The Hora Employment Agreement
included provisions effective upon termination of Mr. Hora's employment under
certain circumstances. In general, the Hora Employment Agreement provided for
the continuation of base salary and medical coverage and certain other benefits
for 12 months following the termination of Mr. Hora's employment by the Company
other than for "cause" or a "material breach" (each as defined in the Hora
Employment Agreement).
The Hora Employment Agreement also included certain
restrictive covenants for the benefit of the Company relating to non-disclosure
by Mr. Hora of the Company's confidential business information, the Company's
right to inventions and technical improvements of Mr. Hora, and noncompetition
by Mr. Hora with the Company's business for a period of 12 months following
termination of employment.
In connection with Mr. Hora's resignation as President and
Chief Executive Officer of the Company on April 10, 1996, the Company agreed to
continue Mr. Hora's base salary and benefits for a period of 12 months.
STOCK INCENTIVE PLAN
In July 1994, the Company adopted a stock incentive plan (the
"Stock Incentive Plan"). Under the Stock Incentive Plan, stock options, stock
appreciation rights, restricted stock and performance shares may be granted for
the purpose of attracting and motivating key employees and consultants to the
Company. In addition, the Stock Incentive Plan permits the extension of loans
by the Company to a participant in connection with the payment of the exercise
price of options, the purchase price of restricted shares or the tax incurred
with respect to any award. Furthermore, the Compensation Committee may provide
for a payment in the form of cash or shares of Common Stock to offset a
participant's tax incurred with respect to the receipt of an award and any such
tax offset payment. The Compensation Committee has all powers with respect to
the administration of the Stock Incentive Plan, including without limitation,
selecting which employees will receive awards and the extent of the award,
determining the terms and conditions of the award, and resolving all questions
arising under the Stock Incentive Plan.
The Stock Incentive Plan provides for the grant of options to
purchase shares of Common Stock that are either "qualified," that is, those
that satisfy the requirements of Section 422 of the Code for incentive stock
options ("ISOs"), or "nonqualified," that is, those that are not intended to
satisfy the requirements of Section 422 of the Code ("NQOs"). Options granted
under the Stock Incentive Plan, in most cases, vest ratably on each of the
first through the fourth anniversaries of the date of grant, and are
exercisable for a period not to exceed ten years from the date of grant.
Pursuant to the terms of the Stock Incentive Plan, ISOs will not be (i) granted
at less than the fair market value of the Common Stock at the time of grant,
(ii) exercisable for more than ten years after the date of grant, (iii) awarded
after July 13, 2004, and (iv) granted to an employee who, at the time the ISO
is granted, beneficially owns more than 10% of the total voting power of the
Company, unless
11
<PAGE> 15
the exercise price is at least 110% of the fair market value at the date of
grant and such option is not exercisable after the expiration of five years
from the date of the award. All awards under the Stock Incentive Plan become
immediately exercisable and fully vested upon a "change of control" of the
Company (as defined therein).
The maximum number of shares of Common Stock reserved for
issuance under the Stock Incentive Plan is 1,250,000 shares (subject to
adjustment for certain events such as stock splits and stock dividends). As of
June 30, 1996, options to purchase 966,322 shares of Common Stock pursuant to
the Stock Incentive Plan were issued and outstanding. Since the inception of
the Stock Incentive Plan, the Compensation Committee has neither granted any
SARs, restricted stock awards or performance share awards, nor made any loans
or tax offset payments. During fiscal 1996, each of the Named Executive
Officers received the number of stock options set forth following his name:
Dr. Shelley A. Harrison (420,000); Richard P. Hora (0); Chester M. Lee
(110,416); David A. Rossi (29,166); John M. Lounge (25,000); and Margaret E.
Grayson (0). An aggregate of 705,000 stock options were granted to Company
employees during fiscal 1996.
DIRECTORS' STOCK OPTION PLAN
In November 1995, the Company adopted a directors' stock
option plan (the "Directors' Plan"), pursuant to which each member of the Board
of Directors who is not an employee of the Company who is elected or continues
as a member of the Board of Directors is entitled to receive annually options
to purchase 5,000 shares of Common Stock at an exercise price equal to fair
market value; provided, however, that no director may receive under the
Directors' Plan options to purchase an aggregate of more than 25,000 shares of
Common Stock. The Compensation Committee of the Board of Directors administers
the Directors' Plan, however, it cannot direct the number, timing or price of
options granted to eligible recipients thereunder.
Each option grant under the Directors' Plan vests after the
first anniversary of the date of grant and expires six years thereafter. The
number of shares of Common Stock related to awards that expire unexercised or
are forfeited, surrendered, terminated or cancelled are available for future
awards under the Directors' Plan. If a director's service on the Board of
Directors terminates for any reason other than death, all vested options may be
exercisable by such director until the earlier of his or her death or the
expiration date of the option grant. In the event of a director's death, any
options which such director was entitled to exercise on the date immediately
preceding his or her death may be exercised by a transferee of such director
for the six month period after the date of the director's death.
The maximum number of shares of Common Stock reserved for
issuance under the Directors' Plan is 250,000 shares (subject to adjustment for
certain events such as stock splits and stock dividends). As of August 31,
1996, the Company had not granted any options under the Directors' Plan. The
first grants will be made in connection with the Annual Meeting of Stockholders
on October 22, 1996.
INDEMNIFICATION AGREEMENTS
The Company has entered into indemnification agreements with
each of its directors, Named Executive Officers (with the exception of John M.
Lounge) and with certain other officers and senior managers. The agreements
provide that the Company shall indemnity and hold harmless each indemnitee from
liabilities incurred as a result of such indemnitee's status as a result of
such indemnitee's status as a director, officer or employee of the Company,
subject to certain limitations.
CERTAIN TRANSACTIONS
On August 7, 1995, the Company and CSP Associates, Inc.
("CSP") entered into a consulting agreement (the "CSP Consulting Agreement"),
whereby CSP agreed to render consulting services to the Company regarding the
Company's initial public offering and the operation and expansion of the
Company's business for an aggregate consulting fee of $99,000. The initial
duration of the CSP Consulting Agreement was from August 14, 1995 through
February 14, 1996. As of February 21, 1996, the CSP Consulting Agreement was
extended to September 30, 1996 for an aggregate fee of $105,000. During the
extended period of the CSP Consulting Agreement, CSP is to focus its efforts on
acquisition and joint venture assistance and development. CSP shall be
entitled to receive a "success fee" under certain circumstances, in an amount
to be determined. The Company is also required to pay CSP for the actual and
reasonable expenses incurred by its personnel in connection with the rendering
of services under the CSP Consulting Agreement. Dr. Meslin, a director of the
Company, is also the Managing Director of CSP.
On August 14, 1996, the Company entered into a consulting
agreement with Gordon S. Macklin (the "Macklin Consulting Agreement"), whereby
Mr. Macklin agreed to render consulting services to the Company in connection
with potential strategic acquisition opportunities and investor relations
support for a monthly retainer fee of $2,000 and the one-time grant of
immediately exercisable options to purchase 10,000 shares of Common Stock at an
exercise price per share of $8.75. The Macklin Consulting Agreement is for a
12
<PAGE> 16
one-year term, commencing on August 14, 1996.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
Compensation of the Company's executives is subject to review
and approval by the Compensation Committee (the "Compensation Committee") of
the Company's Board of Directors. The Compensation Committee consists of two
outside directors James R. Thompson (Chairman) and Jeffrey Schuss, and the
Chairman and Chief Executive Officer of the Company (Dr. Shelley A. Harrison).
Compensation Philosophy.
In determining executive compensation policies, the
Compensation Committee has four primary objectives:
(1) to attract, motivate and retain key executive talent;
(2) to balance the flexibility to reward individuals' skills
with the need to structure compensation for defined roles;
(3) to ensure that executive compensation is competitive with
that of other leading companies in related fields; and
(4) to provide incentives to achieve corporate objectives,
thereby contributing to the overall goal of enhancing
stockholder value.
The Compensation Committee's compensation policies discussed
below are designed to achieve the foregoing objectives. The Compensation
Committee expects to continuously review and refine the Company's compensation
practices as necessary to respond to a changing business environment.
In order to evaluate and establish appropriate compensation
practices, the Company consults multiple sources of information. The
Compensation Committee uses data from benchmark companies within the aerospace
or similar high technology industries to assess the Company's performance and
compensation levels. Benchmark companies are selected according to, among
other factors, the comparability of their operations, product lines, revenues
and markets served. The Compensation Committee seeks to set its executive
compensation levels competitively with the benchmark companies, to the extent
such targets are consistent with the Compensation Committee's objectives.
During fiscal year 1996, the Company retained an independent compensation
consultant to evaluate its compensation practices, and, in particular, salary
and bonus levels. The Company utilized the recommendations of the compensation
consultant's report in setting incentive bonus levels at the end of fiscal year
1996.
Elements of Executive Compensation.
The Company's executive compensation program has three
components: (1) annual cash compensation in the form of base salary and
incentive bonus payments, (2) long-term incentive compensation in the form of
stock options granted under the Company's Stock Incentive Plan and (3) other
compensation and employee benefits generally available to all employees of the
Company, such as health insurance. Annual cash compensation is primarily
designed to reward current performance. Long-term incentives and other
compensation and employee benefits are primarily designed to create performance
incentives over the long term for executive officers and employees.
Base Salary. The base salary for each executive officer is set at a
level deemed sufficient to attract and retain qualified executive officers.
The Compensation Committee has generally determined target base salaries
according to the average base salaries paid by benchmark high technology
companies. Aggregate base salary increases are intended to maintain
compensation levels that are in line with leading companies in related
fields, while individual base salary increases are set to reflect individual
performance levels. The base salaries of certain executive officers are
subject to minimums set forth in individual employment agreements.
Incentive Bonuses. Annual cash bonuses are designed to provide
incentives based on individual contribution to the achievement of the
Company's annual business goals. Bonus payments have generally been
reflective of the Company's performance in achieving revenues, profitability
and other operating and corporate objectives, as well as the scope of an
executive officer's responsibilities. The Compensation Committee makes a
determination as to incentive bonus payments at the end of each year based
on a subjective valuation of the contributions of individual executive
officers to the achievement of the Company's annual business goals. The
award of annual incentive bonuses is based on achieving corporate
13
<PAGE> 17
goals and the amount of individual incentive bonus payments is determined by
percentage ranges established annually by the Compensation Committee.
Long-Term Incentives. The grant of stock options is the Company's
current method for providing long-term incentive compensation to its
employees. The Compensation Committee believes that the use of stock
options attracts and retains qualified personnel for positions of
substantial responsibility and also serves to motivate its executive
officers to promote the success of the Company's business and maximize
stockholder value.
Compensation of Chief Executive Officer.
The Compensation Committee based the fiscal year 1996 Chief
Executive Officer ("CEO") compensation on the policies described above. During
fiscal 1996, two individuals served, at separate times, in the position of CEO,
as described below:
Richard P. Hora served as CEO from October 1, 1995 until his
resignation on April 10, 1996. During fiscal 1996, Mr. Hora received total
compensation of $228,955. Mr. Hora's base salary for fiscal 1996 was
determined pursuant to an employment agreement entered into in December, 1995
between Mr. Hora and the Company in connection with the Company's initial
public offering of its Common Stock. The Compensation Committee deemed that
the level selected for Mr. Hora's base salary plus any bonus/long-term
incentive compensation was consistent with the compensation paid by benchmark
high technology companies, the Company's overall performance, the successful
completion of the Company's initial public offering, and the achievement of
individual performance objectives as evaluated by the Compensation Committee.
No specific weighting was assigned to these factors when Mr. Hora's total
compensation for fiscal 1996 was reviewed.
Dr. Shelley A. Harrison served as Chairman of the Company
throughout the fiscal year and assumed the additional position of CEO,
effective April 10, 1996. During fiscal 1996, Dr. Harrison and an affiliated
partnership received a total of $169,348 for his services. Dr. Harrison's
compensation level for fiscal 1996 was deemed by the Compensation Committee to
be appropriate given Dr. Harrison's qualifications and contribution to meeting
the Company's objectives.
Tax Deductibility of Executive Compensation.
Section 162(m) of the Internal Revenue Code disallows
corporate deductibility for certain compensation paid in excess of $1 million
to the Company's Chief Executive Officer and to each of the four other most
highly paid executive officers of publicly-held companies. "Performance-based
compensation," as defined in Section 162(m), is not subject to the
deductibility limitation provided certain stockholder approval and other
requirements are met. The Company believes that the stock options granted in
fiscal 1996 and prior years satisfied the requirements of federal tax law and
thus compensation recognized in connection with such awards should be fully
deductible. It is the Company's intention to maximize the deductibility of
compensation paid to its officers, to the extent consistent with the best
interests of the Company. During fiscal 1996, the Company did not exceed the
$1 million deductibility cap with respect to any officer covered by Section
162(m).
COMPENSATION COMMITTEE,
James R. Thompson, Chairman
Jeffrey Schuss
Dr. Shelley A. Harrison
14
<PAGE> 18
Notwithstanding any statement to the contrary in any of the
Company's previous or future filings with the Securities and Exchange
Commission, the Report of the Compensation Committee and the accompanying
Performance Graph shall not be deemed to be incorporated by reference as a
result of any general incorporation by reference of this Proxy Statement or any
part thereof into any such filings.
PERFORMANCE GRAPH
Set forth below is a line graph comparing the Company's
cumulative total stockholder return on its Common Stock since December 22,
1995, the date the Common Stock began trading on the Nasdaq National Market (as
measured by dividing the difference between the Company's share price at the
beginning and the end of the measurement period by the share price at the
beginning of the measurement period) with (i) the cumulative total return of
the Nasdaq Stock Market Index of U.S. Companies and (ii) the cumulative total
return of the Dow Jones Aerospace/Defense Index.
COMPARISON OF CUMULATIVE TOTAL RETURN*
<TABLE>
<CAPTION>
NASDAQ Dow Jones
Measurement Period Spacehab, Inc. U.S. Company Aerospace/Defense
Index Index
<S> <C> <C> <C>
12/22/95 $100.00 $100.00 $100.00
06/30/96 $91.70 $113.80 $113.50
</TABLE>
- -------------------------
* Assumes that the value of an investment in the Company's Common Stock,
the Nasdaq Stock Market Index of U.S. Companies and the Dow Jones
Aerospace/Defense Index was $100 on December 22, 1995 and that all
dividends were reinvested.
15
<PAGE> 19
OTHER MATTERS
The Board of Directors of the Company knows of no matters to
be presented at the Annual Meeting other than those described in this Proxy
Statement. In the event that other business properly comes before the meeting,
the persons named as proxies will have discretionary authority to vote the
shares represented by the accompanying proxy in accordance with their own
judgment.
PROXY SOLICITATION EXPENSE
The cost of the solicitation of proxies will be borne by the
Company. In addition to solicitation by mail, directors, officers and
employees of the Company, without receiving any additional compensation, may
solicit proxies personally or by telephone or facsimile. The Company has
retained American Stock Transfer & Trust Company to request brokerage houses,
banks and other custodians or nominees holding stock in their names for others
to forward proxy materials to their customers or principals who are the
beneficial owners of shares and will reimburse them for their expenses in doing
so. The Company does not anticipate that the costs and expenses incurred in
connection with this proxy solicitation will exceed those normally expended for
a proxy solicitation for those matters to be voted on in the Annual Meeting.
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 and executive officers and persons who beneficially own
more than 10% of the Company's Common Stock to file reports of ownership and
changes in ownership with the Securities and Exchange Commission (the "SEC").
Such directors, executive officers and greater than 10% stockholders are
required by SEC regulation to furnish to the Company copies of all Section
16(a) forms they file.
Based solely on the Company's review of copies of such forms
that it received, or written representations from certain reporting persons,
the Company believes that, during fiscal year 1996, all Section 16(a) filing
requirements were satisfied on a timely basis.
DEADLINE FOR SUBMISSION OF STOCKHOLDER
PROPOSALS FOR NEXT YEAR'S ANNUAL MEETING
The proxy rules adopted by the SEC provide that certain
stockholder proposals must be included in the proxy statement for the Company's
Annual Meeting. For a proposal to be considered for inclusion in the Company's
proxy materials for the Company's 1997 Annual Meeting of Stockholders, it must
be received in writing by the Company on or before May 16, 1997 at its
principal office, 1595 Spring Hill Road, Suite 3600, Vienna, Virginia 22182,
Attention: Secretary.
The Company's Annual Report to Stockholders, including the
Company's audited financial statements for the year ended June 30, 1996, is
being mailed herewith to all stockholders of record on the Record Date.
By Order of the Board of Directors,
Nelda Wilbanks
Secretary
Vienna, Virginia
September 16, 1996
Each stockholder, whether or not he or she expects to be present in person at
the Annual Meeting, is requested to MARK, SIGN, DATE and RETURN THE ENCLOSED
PROXY CARD in the accompanying envelope as promptly as possible. A stockholder
may revoke his or her proxy at any time prior to voting.
16
<PAGE> 20
SPACEHAB, INCORPORATED
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
P ANNUAL MEETING OF STOCKHOLDERS -- OCTOBER 22, 1996
R The undersigned hereby appoints Dr. Shelley A. Harrison and Margaret
E. Grayson, and each of them, as proxies of the undersigned, each
with full power to act without the other and with full power of
O substitution and re-substitution, to vote all the shares of Common
Stock of SPACEHAB, Incorporated that the undersigned is entitled
to vote at the Annual Meeting of Stockholders to be held on October
X 22, 1996, at 10:00 a.m. (local time), and at any postponements or
adjournments thereof, with all the powers the undersigned would have
if personally present, as follows:
Y
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE FOLLOWING ITEMS:
(1) To elect to the Board of Directors the following nominees for
the term indicated in the Proxy Statement.
<TABLE>
<CAPTION>
FOR all nominees listed below (except as WITHHOLD AUTHORITY
marked to the contrary below) [ ] to vote for all nominees listed below [ ]
<S> <C> <C>
Dr. Shelley A. Harrison Hironori Aihara Robert A. Citron
Dr. Edward E. David, Jr. Dr. Shi H. Huang Chester M. Lee
Gordon S. Macklin Dr. Brad M. Meslin Dr. Udo Pollvogt
Alvin L. Reeser James R. Thompson Prof. Ernesto Vallerani
</TABLE>
INSTRUCTION: To withhold authority to vote for any individual
nominee, write that nominee's name in the space provided below.
----------------------------------------
(2) Ratification of the appointment by the Board of Directors of
KPMG Peat Marwick LLP as independent public accountants for fiscal
1997.
<TABLE>
<S> <C> <C>
[ ] FOR [ ] AGAINST [ ] ABSTAIN
</TABLE>
In their discretion, the proxies are authorized to vote upon such other
matters as may properly come before the meeting, all in accordance with the
accompanying Notice and Proxy Statement, receipt of which is hereby
acknowledged.
IF THIS PROXY IS PROPERLY EXECUTED AND RETURNED, THE SHARES
REPRESENTED THEREBY WILL BE VOTED. IF A CHOICE IS SPECIFIED BY THE STOCKHOLDER,
THE SHARES WILL BE VOTED ACCORDINGLY. IF NOT OTHERWISE SPECIFIED, THE SHARES
REPRESENTED BY THIS PROXY WILL BE VOTED FOR ITEMS 1 AND 2.
Dated . . . . . . . . . . . . . . . . ., 1996
. . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . .
Sign exactly as name appears hereon. When
signing in a representative capacity, please
give full title. Joint owners (if any)
should each sign.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
