SCHEDULE 14A
(Section 14(a))
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of
1934
Filed by the Registrant [X] Filed by a Party other than the Registrant [ ] Check
the appropriate box:
[ ] Preliminary Proxy Statement [ ] 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 14(a)-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)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
Common Stock (no par value)
- --------------------------------------------------------------------------------
(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 this filing.
(1) Amount Previously Paid:
- --------------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
- --------------------------------------------------------------------------------
(3) Filing Party
- --------------------------------------------------------------------------------
(4) Date Filed:
- --------------------------------------------------------------------------------
<PAGE>
LOGO
September 23, 1998
Dear Stockholder:
You are cordially invited to attend the 1998 Annual Meeting of
Stockholders of SPACEHAB, Incorporated (the "Company") to be held at 1595 Spring
Hill Road, Vienna, Virginia on October 20, 1998 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 (i) to elect 12 directors to the
Company's Board of Directors, each for a one-year term expiring at the 1999
Annual Meeting of Stockholders and (ii) 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,
/s/ Shelley A. Harrison
DR. SHELLEY A. HARRISON
Chairman and Chief Executive Officer
<PAGE>
LOGO
NOTICE OF 1998 ANNUAL MEETING OF STOCKHOLDERS
To the Stockholders of SPACEHAB, Incorporated:
The 1998 Annual Meeting of Stockholders (the "Annual Meeting") of
SPACEHAB, Incorporated (the "Company") will be held at 1595 Spring Hill Road,
Vienna, Virginia on October 20, 1998 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
1999 Annual Meeting of Stockholders;
2. To ratify the appointment of KPMG Peat Marwick LLP as
independent public accountants for the Company; and
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, 1998 also accompanies this Notice.
The Board of Directors has fixed the close of business on September
4, 1998 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,
/s/ William S. Dawson
William S. Dawson
Corporate Secretary
Vienna, Virginia
September 23, 1998
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>
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 1998 Annual Meeting of Stockholders on October 20, 1998 (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 24, 1998.
Voting Securities
The Board of Directors has fixed the close of business on September
4, 1998 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 11,168,161 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 William S. Dawson, are named as
proxies on the proxy card accompanying this Proxy Statement. Dr. Harrison is
Chairman of the Board of Directors and Chief Executive Officer and Mr. Dawson
is General Counsel and Corporate Secretary. 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
Because 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-half 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 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, 1999.
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 60) has served as a director of the Company since
April 1992. Mr. Aihara is currently Executive Vice President of Mitsubishi
Corporation, a position he assumed in April 1998. Since 1994 he has served as
group executive to the Information Systems and Services Group, overseeing the
company's activities in the aerospace, telecommunications, multimedia and
computer sectors. He has also been a director of Mitsubishi Corporation since
1992. Prior responsibilities include a four-year term as General Manager of the
Aerospace Division, responsible for all of the company's aerospace activities.
He also spent six years working at the New York headquarters of Mitsubishi
International Corporation, the U.S. arm of Mitsubishi Corporation. From
September 1995 through May 1998 Mr. Aihara served as a special member of the
Space Activities Commission, the highest level body within the Japanese
government overseeing space activities, on the Sub-Committee for Space
Environment Utilization to help develop a new long range plan for Japanese space
activities.
Robert A. Citron
Mr. Citron (age 65) 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 the co-founder of Kistler Aerospace Corporation, a
Seattle-based space technology company and Executive Director of the
Foundation for the Future of Bellevue, Washington.
Dr. Edward E. David, Jr.
Dr. David (age 73) has served as a director of the Company since
August 1993. Dr. David is currently the President of Edward E. David, 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 Aqua Search, Intermagnetics General
Corp., Medjet, Protein Polymer Technologies Inc., International Media
Research Foundation, Inter-Vu, and Kenan Systems Corporation. Mr. David is
also Vice-President and Principal of the Washington Advisory Group.
Dr. Shelley A. Harrison
Dr. Harrison (age 55) 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., Asymetrix Learning Systems, Inc., Globecomm Systems Inc. and
several privately held high technology portfolio companies.
Dr. Shi H. Huang
Dr. Huang (age 72) 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 34 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 79) has served as a director of the Company since
October 1996, and served as President of the Company from April 1996 until
January 1998. Prior to assuming his position as President, Mr. Lee served as the
Company's Vice President-Operations beginning in November 1987. Mr. Lee is
currently Chairman of ASTROTECH Space Operations, Inc., a subsidiary of the
Company and Special Advisor to SPACEHAB's Chief Executive Officer. Before
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, Program Director
of the Apollo/Soyuz Project, and Apollo Mission Director for Apollo flights 12
through 17 to the moon.
Gordon S. Macklin
Mr. Macklin (age 70) has served as a director of the Company
since October 1996. Mr. Macklin was Chairman of White River Corporation from
1993-1998. 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. Mr. Macklin is a director, trustee, or
managing general partner, as the case may be, of 49 of the investment
companies in the Franklin/Templeton Group, and a director of Fund American
Enterprises Holdings, Inc., MCI Communications Corporation, MedImmune, Inc.
(biotechnology), and Real 3-D (software).
Dr. Brad M. Meslin
Dr. Meslin (age 39) 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., an international aerospace and defense management consulting firm.
Dr. Udo Pollvogt
Dr. Pollvogt (age 60) has served as a director of the Company
since August 1993. Dr. Pollvogt is currently Executive Vice President for
Government Relations of Daimler-Benz Aerospace. 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 70) 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 62) 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 Orbital Sciences Corporation
("Orbital Sciences"), which he joined following his service as NASA's Deputy
Administrator from 1989 to 1991. Prior to that time, 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.
Giuseppe Viriglio
Mr. Viriglio (age 51) has served as a director of the Company
since November 1997. Mr. Viriglio is the Chief Executive Officer of Alenia
Spazio, S.p.A ("Alenia Spazio"). Prior to assuming his duties as Chief
Executive Officer of Alenia Spazio, Mr. Viriglio was its Deputy General
Manager from 1991-1994 and its General Manager in 1994 and 1995.
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 1998, there were three meetings of the Board of
Directors (including regularly scheduled and special meetings). During fiscal
year 1998, each of the following three 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. Shi H. Huang and
Giuseppe Viriglio.
Committees of the Board of Directors
The Committees of the Board of Directors consist of the Executive
Committee, the Audit Committee and the Compensation Committee. The Board of
Directors does not have a Nominating Committee. Information concerning the
committees is set forth below.
The Executive Committee is responsible for all matters which
arise between regular meetings of
the Board of Directors and has all the powers and authority of the Board,
except as such powers and authority may be limited by the Company's by-laws
or applicable statutes. The Executive Committee currently consists of Dr.
Harrison (Chairman), Mr. Lee, Mr. Macklin, Dr. Meslin, Mr. Reeser and Mr.
Thompson. During fiscal 1998, the Executive Committee met ten times.
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. Macklin (Chairman), Dr. Meslin and Mr.
Thompson. During fiscal 1998, the Audit Committee met once.
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, the Director's Plan and the 1997 Employee Stock
Purchase Plan in accordance with the terms and conditions set forth therein.
The Compensation Committee currently consists of Mr. Thompson (Chairman), Dr.
David and Dr. Harrison. During fiscal 1998, the Compensation Committee met
three 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
The Company pays each non-employee director a $10,000 annual
retainer to serve on the Board of Directors and a fee of $500 per day for each
meeting attended. In addition, all directors are reimbursed for expenses
incurred in connection with their attendance at meetings. The Company also has
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, as
currently in effect, options to purchase an aggregate of more than 25,000 shares
of Common Stock. In October 1997 the non-employee directors received a one-time
grant of 10,000 options.
Executive Officers Who Are Not Nominees
Set forth below is a summary of the background and business
experience of the executive officers of the Company who are not nominees for
director.
David A. Rossi
Mr. Rossi (age 41) has served as the Company's President since
January 1998. Mr. Rossi was Senior Vice President-Business Development
from February 1991 through January 1998. Prior to joining the Company, Mr.
Rossi held several positions at Orbital Sciences, a publicly held space
technology company, including Director of Business Development.
Margaret E. Grayson
Ms. Grayson (age 51) has served as the Company's Chief Financial
Officer since September 1994 and as the Company's Treasurer since September
1995. Prior to joining the Company, Ms. Grayson served as Chief Financial
Officer of CD Radio, Inc., a satellite-based mobile customized radio service,
from September 1993 to September 1994, and Vice President of Finance and
Treasurer of Standard Technology, Inc., a systems integrator and manufacturer,
from August 1990 to September 1993.
John M. Lounge
Mr. Lounge (age 52) has served as the Company's Vice President-
Flight Systems Development since 1996. Prior to assuming his current
responsibilities, Mr. Lounge served as the Company's Mir Program Manager since
August 1995 and served as the Company's Director of Flight Operations since June
1991. Prior to joining the Company, Mr. Lounge was an astronaut and flew on
three Space Shuttle missions. Prior to joining NASA in 1978, Mr. Lounge served
nine years of active duty in the U.S. Navy in a variety of assignments,
including flying 100 combat missions in Southeast Asia as a Naval Flight Officer
in the F4 Phantom.
M. Dale Steffey
Mr. Steffey (age 63) has served as the Company's Vice President-
Engineering and Integration since September 1995 and manager of the Company's
payload processing facility since July 1991. From 1957 to 1991, Mr. Steffey held
numerous senior executive positions with McDonnell Douglas, including Delta
Launch Director, Delta Base Manager, Spacelab Program Manager, Director of
Huntsville Operations, Director of Space Station Ground Operations, and Vice
President-Deputy General Manager of Kennedy Space Center Operations.
George Baker
Mr. Baker (age 53) is President of ASTROTECH Space Operations,
and a Vice President of SPACEHAB. SPACEHAB acquired ASTROTECH Space
Operations in 1997. Mr. Baker has been with ASTROTECH since 1984, following
a 20-year career at NASA where he was involved with the Delta and Space
Shuttle launch programs.
Michael Kearney
Mr. Kearney (age 54) has served as the Company's Vice President
for Marketing and Sales since January 1998. Previously, Mr. Kearney was Vice
President for Business Development, a position he held since joining the
Company in 1994. From 1991 through 1994 he held several positions at
McDonnell Douglas. Prior to that Mr. Kearney served for 25 years as a U.S.
Navy Aeronautical Engineering Officer. Mr. Kearney flew Navy fighter
aircraft both in combat and in a production acceptance role.
William S. Dawson
Mr. Dawson (age 43) has served as the Company's General Counsel
since April 1996 and as the Company's Secretary since January 1997. Prior to
joining the Company, Mr. Dawson practiced corporate and government contract law
in the Washington D.C. office of the national law firm of Seyfarth, Shaw,
Fairweather and Geraldson, and from January 1992 to March 1996 served as Deputy
General Counsel of Government Technology Services, Inc., the largest reseller of
computer products to the Federal government.
W.T. Short
Mr. Short (age 65) is President of Johnson Engineering Corporation
("JE") and a Vice President of SPACEHAB. JE became a wholly owned subsidiary of
SPACEHAB on July 1, 1998. Mr. Short has been the President, Chief Operating
Officer and one of the principal owners of JE since November 1994. He began his
career in the aerospace industry in 1959 after serving for three years as a
pilot in the USAF. He was a senior manager for North American Aviation on the
Apollo Program, a division Vice President with Rockwell International in the
early days of the Space Shuttle Program, and has been the President and owner of
several successful engineering service companies.
PROPOSAL 2 - APPOINTMENT OF INDEPENDENT AUDITORS
The Audit Committee of the Board of Directors has approved the
appointment of KPMG Peat Marwick LLP as independent public accountants for
fiscal 1999, 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, 1999.
Security Ownership of Certain Beneficial Owners and Management
The following table sets forth at June 30, 1998, 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:
Beneficial Ownership
Amount and Nature of
Beneficial Percentage
Ownership of Class(1)
Name and Address of Beneficial Owners:
Zesiger Capital Group LLC........................ 1,226,456(2) 11.0%
State of Wisconsin Investment Board.............. 1,087,000(3) 9.7%
Franklin Resources Inc........................... 1,018,340(4) 8.8%
Pecks Management Partners, Ltd................... 917,425(5) 7.6%
SPACEHAB Taiwan, Inc............................. 791,666(6) 7.1%
Mitsubishi Corporation........................... 614,582(7) 5.5%
Non-Employee Directors:
Hironori Aihara.................................. 4,166(8) *
Robert A. Citron................................. 59,166(9) *
Dr. Edward E. David, Jr.......................... 10,166(10) *
Dr. Shi H. Huang................................. 129,851(11) 1.1%
Gordon S. Macklin................................ 50,000(12) *
Dr. Brad M. Meslin............................... 64,091(13) *
Dr. Udo Pollvogt................................. 9,166(14) *
Alvin L. Reeser.................................. 88,291(15) *
James R. Thompson................................ 14,166(16) *
Giuseppe Viriglio................................ 0(17) *
Named Executive Officers:
Dr. Shelley A. Harrison.......................... 642,305(18) 5.5%
Chester M. Lee................................... 208,453(19) 1.8%
David A. Rossi................................... 77,669(20) *
Margaret E. Grayson.............................. 47,890(21) *
John M. Lounge................................... 67,408(22) *
M. Dale Steffey.................................. 63,652(23) *
All Directors and Executive Officers
as a Group (19 persons)...................... 2,366,074 19.1%
- ----------
* Indicates beneficial ownership of less than 1% of the outstanding shares
of Common Stock
(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 number and percentage owned
by each other person listed. As of June 30, 1998, the Company had
11,168,16133 shares of Common Stock outstanding.
(2) Represents 1,266,456 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 shares of Common Stock held by it.
ZCG's address is 320 Park Avenue, New York, New York 10022.
(3) Includes an aggregate of 1,087,000 shares of Common Stock held by State of
Wisconsin Investment Board in discretionary accounts for the benefit of
its clients. Its address is P.O. Box 7842, Madison, Wisconsin 53707.
(4) Includes 440,340 shares of Common Stock that would result upon the
conversion of 6,000,000 Convertible Bond Units held by Franklin Advisory
Services, Inc. and Franklin Advisors, Inc., subsidiaries of Franklin
Resources, Inc. ("FRI"). FRI disclaims beneficial ownership of all shares
of Common Stock and Convertible Bond Units held by it. FRI's address is
777 Mariners Island Blvd., P.O. Box 7777, San Mateo, CA 94403.
(5) Represents 917,425 shares of Common Stock that would result upon the
conversion of 12,500,000 Convertible Bond Units held in Peck Management
Partners, Ltd. ("PMP") accounts for the benefit of investment advisory
clients. PMP's address is One Rockefeller Plaza, Suite 900, New York, NY
10020.
(6) 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.
(7) Represents 614,582 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.
(8) Represents options to purchase 4,166 shares of Common Stock. Excludes
614,582 shares of Common Stock held by Mitsubishi Corporation and its
affiliates. Mr. Aihara is currently Executive Vice President of Mitsubishi
Corporation. Mr. Aihara disclaims beneficial ownership of all shares of
Common Stock held by Mitsubishi Corporation and its affiliates.
(9) Includes options to purchase 5,000 shares of Common Stock.
(10) Includes options to purchase 9,166 shares of Common Stock.
(11) Includes (i) options to purchase 9,166 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. Excludes 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.
(12) Represents (i) 25,000 shares of Common Stock held in the Gordon S. Macklin
Family Trust, and (ii) options to purchase 25,000 shares of Common Stock.
(13) Represents (i) 23,335 shares of Common Stock; (ii) 1,537 shares of Common
Stock held in the CSP Associates, Inc. ("CSP") Profit Sharing Plan & Trust
for the benefit of Dr. Meslin; (iii) 11,678 shares of Common Stock held by
CSP, of which Dr. Meslin is the managing director; (iv) warrants to
purchase 18,375 shares of Common Stock; and (v) options to purchase 9,166
shares of Common Stock.
(14) Includes options to purchase 9,166 shares of Common Stock.
(15) Includes options to purchase 87,291 shares of Common Stock.
(16) Represent options to purchase 9,166 shares of Common Stock.
(17) Excludes 145,000 shares of Common Stock held by Alenia Spazio, for whom
Mr. Viriglio serves as CEO. Mr. Viriglio disclaims beneficial ownership of
all shares of Common Stock held by Alenia Spazio.
(18) Includes (i) 14,338 shares of Common Stock; (ii) options to purchase
474,844 shares of Common Stock; (iii) options held by Poly Ventures
Associates, Inc. to purchase 70,832 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.
(19) Includes options to purchase 204,856 shares of Common Stock and 742 shares
of Common Stock purchased through the Company's 1997 Employee Stock
Purchase Plan.
(20) Includes options to purchase 66,820 shares of Common Stock and 849 shares
of Common Stock purchased through the Company's 1997 Employee Stock
Purchase Plan.
(21) Includes options to purchase 46,193 shares of Common Stock and 697 shares
of Common Stock purchased through the Company's 1997 Employee Stock
Purchase Plan.
(22) Includes options to purchase 64,014 shares of Common Stock and 1,394
shares of Common Stock purchased through the Company's 1997 Employee Stock
Purchase Plan.
(23) Includes options to purchase 62,652 shares of Common Stock.
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
five other most highly compensated executive officers other than the Chief
Executive Officer (collectively, the "Named Executive Officers").
ANNUAL COMPENSATION
LONG-TERM
COMPENSATION
- --------------------------------------------------------------------------------
Securities Other
Name and Fiscal Salary ($) Bonus($) Underlying Annual
Principal Position Year Options/SARsComp. ($)(1)
- --------------------------------------------------------------------------------
Dr. Shelley A. Harrison 1998 281,250 160,000 91,000 --
Chairman and Chief 1997 264,107 116,875 322,700 --
Executive Officer(2) 1996(3) 8,546 35,117 420,000 125,685(4)
Chester M. Lee 1998 189,377 67,016 31,000 --
Chairman-Astrotech(5) 1997 200,000 75,000 186,865 --
1996(3) 109,375 31,945 110,416 --
David A. Rossi(7) 1998 188,075 94,000 11,000 --
President 1997 159,167 40,000 82,863 --
1996(3) 112,500 32,625 29,166 --
M. Dale Steffey 1998 170,267 51,360 11,000 --
Vice President - 1997 157,083 40,000 65,364 53,422(6)
Engineering 1996(3) 108,800 28,638 -- --
and Integration
John M. Lounge 1998 170,267 61,360 11,000 --
Vice President - 1997 160,000 40,000 63,383 --
Flight 1996(3) 98,059 28,638 25,000 --
Systems Development
Margaret E. Grayson 1998 170,267 51,360 11,000 --
Vice President of 1997 157,083 57,450 65,000 --
Finance(CFO), Treasurer 1996(3) 93,750 28,638 -- --
and Assistant Secretary
- ----------
(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 $50,000
or 10% of the total of salary and bonus reported for him or her in the two
preceding columns.
(2) Dr. Harrison assumed the position of Chief Executive Officer on April 10,
1996.
(3) Fiscal year 1996 compensation figures are for a short fiscal year, from
October 1, 1995 through June 30, 1996.
(4) Represents the amount paid by the Company to Poly Ventures Associates,
L.P. for Dr. Harrison's services to the Company for the period from
October 1, 1995 to June 18, 1996. Harrison is a general partner of Poly
Ventures Associates, L.P.
(5) Mr. Lee assumed the position of Chairman-Astrotech on January 15, 1998.
Prior to such date Mr. Lee served as the President from April 10, 1996
through January 14, 1998. Prior to that Mr. Lee served as the Company's
Vice President - Operations.
(6) Represents payout for accrued vacation paid March 17, 1997
(7) Mr. Rossi assumed the position of President on January 15, 1998. Prior to
such date Mr. Rossi served as the Senior Vice President Business
Development.
Option Grants in Fiscal 1997
The following table sets forth information relating to the grant of
stock options by the Company during fiscal year 1998 to the Named Executive
Officers under the Company's Stock Incentive Plan. The Company did not grant any
stock appreciation rights ("SARs") in fiscal year 1998.
Individual Grants
% of Total Potential Realizable
Number Options Exercise Value at Assumed
of Granted to Price Annual Rates of
Securities Employees Per Expiration Stock Price
Name Underlying Fiscal Share Date Appreciation For
Options 1998 ($/sh) Option Term(1)
(#)
5% 10%
Dr. Shelley A. 91,000(2) 35.3% 11.000 (2) $444,439 $1,056,509
Harrison
Chester M. Lee 31,000(3) 12.0% 11.000 (4) $151,402 $359,910
David A. Rossi 11,000(5) 4.3% 11.000 (4) $ 53,723 $127,710
John M. Lounge 11,000(5) 4.3% 11.000 (4) $ 53,723 $127,710
Margaret E. 11,000(5) 4.3% 11.000 (4) $ 53,723 $127,710
Grayson
M. Dale Steffey 11,000(5) 4.3% 11.000 (4) $ 53,723 $127,710
- ----------
(1) The indicated dollar amounts are the result of calculations based on the
exercise price of the options and assume five and ten percent appreciation
rates set by the Securities and Exchange Commission and, therefore, are
not intended to forecast possible future appreciation, if any, of the
Company's stock price.
(2) Represents 31,000 options which vest ratably over a four-year period
commencing on October 21, 1998 and expire ratably over a four-year period
commencing October 21, 2004. Represents 60,000 options which vest on
October 21, 1997 and expire on October 21, 2002.
(3) Represents 31,000 options which vest ratably over a four-year period
commencing on October 21, 1998.
(4) The options expire ratably over a four-year period commencing October 21,
2004.
(5) Represents 11,000 options which vest ratably over a four-year period
commencing on October 21, 1998.
Aggregated Option Exercises in Fiscal 1998 and Fiscal Year End Values
The following table sets forth the number of shares covered by stock
options held by the Named Executive Officers at June 30, 1998, and also shows
the value of "in-the-money" options (market price of the Company's stock less
the exercise price) at that date. Except as listed in the table, no other Named
Executive Officer exercised any Company stock options or beneficially owned
unexercised Company stock options.
Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money Options at
Options at June 30, 1998 June 30, 1998(1)
(#) ($)
Name Exercisable Unexercisable Exercisable Unexercisable
Dr. Shelley A. Harrison 467,094 54,250 $1,547,488 $ 79,833
Chester M. Lee 197,106 70,525 $ 710,089 $160,198
David A. Rossi 64,070 53,462 $ 193,313 $197,308
John M. Lounge 64,014 35,368 $ 192,052 $126,522
Margaret E. Grayson 43,443 44,525 $ 149,222 $153,136
M. Dale Steffey 62,652 27,711 $ 185,931 $ 88,712
- ----------
(1) Based on the difference between the closing market price on June 30, 1998
for the Common Stock, which was $11.563 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.
Employment Agreements
On April 1, 1997, the Company entered into an employment agreement
with Dr. Harrison (the "Harrison Employment Agreement"). The Harrison Employment
Agreement provides that Dr. Harrison will serve the Company as Chief Executive
Officer for a term of three years, subject to earlier termination as provided in
the Harrison Employment Agreement. The Harrison Employment Agreement sets forth
a minimum base salary for Dr. Harrison of $275,000, $300,000 and $325,000 for
the first year, second year and third year, respectively, of the Harrison
Employment Agreement. Dr. Harrison is entitled to participate in the employee
benefit plans of the Company and is eligible for the grant of stock options, in
the sole discretion of the Compensation Committee, under the Company's Stock
Incentive Plan. In addition, pursuant to the Harrison Employment Agreement, the
Company agreed to grant 60,000 additional options to Dr. Harrison in October
1997. The Harrison Employment Agreement includes provisions that are effective
upon termination of employment of Dr. Harrison under certain circumstances.
Pursuant to the Harrison Employment Agreement, Dr. Harrison is entitled to
continuation of his base salary and medical coverage and certain other benefits
for eighteen months following a termination of employment by the Company other
than for "cause" or a "material breach" (each as defined in the Harrison
Employment Agreement). On January 15, 1998 the Company amended the Harrison
Employment Agreement to extend its term through March 31, 2002 and to extend
compensation and benefits on termination from eighteen to thirty months
following a termination of employment by the Company other than for "cause" or a
"material breach" (each as defined in the Harrison Employment Agreement).
On January 15, 1998, the Company's wholly owned subsidiary, Astrotech,
entered into an employment agreement with Mr. Lee (the "Lee Employment
Agreement"). The Lee Employment Agreement rescinds and replaces the employment
agreement between the Company and Mr. Lee entered into on December 21, 1995. The
Lee Employment Agreement provides that Mr. Lee will serve as the Chairman of
Astrotech and a Special Advisor to the Company's Chief Executive Officer for a
term of one year, subject to automatic annual renewal for one-year terms
thereafter. The Lee Employment Agreement sets forth a minimum base salary during
the term of the Lee Employment Agreement ($150,000 per year), subject to
increase at the sole discretion of the Compensation Committee of the Board of
Directors. Mr. Lee is also eligible to receive, at the sole discretion of the
Compensation Committee, an annual performance-based bonus. Mr. Lee is entitled
to participate in the employee benefit plans of the Company and is eligible for
the grant of stock options, in the sole discretion of the Compensation
Committee, under the Company's Stock Incentive Plan.
On January 15, 1998, the Company entered into an employment
agreement with Mr. Rossi (the "Rossi Employment Agreement"). The Rossi
Employment Agreement rescinds and replaces the employment agreement between the
Company and Mr. Rossi entered into on December 21, 1995. The Rossi Employment
Agreement provides that Mr. Rossi will serve as the President and Chief
Operating Officer for a term of three years, subject to automatic annual renewal
for one-year terms thereafter. The Rossi Employment Agreement sets forth a
minimum base salary during the term of the Rossi Employment Agreement ($210,000
per year), subject to increase at the sole discretion of the Compensation
Committee of the Board of Directors. Mr. Rossi is also eligible to receive, at
the sole discretion of the Compensation Committee, an annual performance-based
bonus. Mr. Rossi is entitled to participate in the employee benefit plans of the
Company and is eligible for the grant of stock options, in the sole discretion
of the Compensation Committee, under the Company's Stock Incentive Plan. The
Rossi Employment Agreement includes provisions that are effective upon the
termination of employment of Mr. Rossi under certain circumstances. In general,
Mr. Rossi is entitled to continuation of his 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 Rossi Employment Agreement).
On April 10, 1997, the Company entered into an employment agreement
with Mr. Lounge (the "Lounge Employment Agreement"). The Lounge Employment
Agreement provides that Mr. Lounge will serve the Company as Vice
President-Operations for a term of three years, subject to earlier termination
as provided in the Lounge Employment Agreement. The Lounge Employment Agreement
sets forth a minimum base salary during the term of the Lounge Employment
Agreement ($125,000 per year), subject to increase at the sole discretion of the
Compensation Committee of the Board of Directors. Mr. Lounge is also eligible to
receive, at the sole discretion of the Compensation Committee, an annual
performance-based bonus. Mr. Lounge is entitled to participate in the employee
benefit plans of the Company and is eligible for the grant of stock options, in
the sole discretion of the Compensation Committee, under the Company's Stock
Incentive Plan. The Lounge Employment Agreement includes provisions that are
effective upon the termination of employment of Mr. Lounge under certain
circumstances. In general, Mr. Lounge is entitled to continuation of his 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 Lounge Employment Agreement).
The Company has entered into employment agreements (the "Vice
Presidents' Employment Agreements") with Ms. Grayson and Mr. Steffey on December
21, 1995. The Vice Presidents' Employment Agreements provide that the officers
will serve the Company in the respective offices listed under Executive Officers
who are not Nominees, for a term of three years, subject to earlier termination
as provided in the Vice Presidents' Employment Agreements. The Vice Presidents'
Employment Agreements set forth the minimum base salary of each officer during
the term of the Vice Presidents' Employment Agreements ($125,000 for Ms. Grayson
and $125,000 for Mr. Steffey), 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 Vice Presidents' Employment 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 their 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 Vice
Presidents' Employment Agreements).
The Harrison Employment Agreement, the Lee Employment Agreement, the
Rossi Employment Agreement, the Lounge Employment Agreement, and the Vice
Presidents' Employment 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 twelve months following termination
of employment under the Harrison Employment Agreement and six months following
termination of employment under the Lee Employment Agreement, the Rossi
Employment Agreement, the Lounge Employment Agreement and the Vice Presidents'
Employment Agreements.
Indemnification Agreements
The Company has entered into indemnification agreements with each of
its directors, Named Executive Officers and with certain other officers and
senior managers. The agreements provide that the Company shall indemnify and
hold harmless each indemnitee from liabilities incurred as a result of such
indemnitee's status as a director, officer or employee of the Company, subject
to certain limitations.
Certain Transactions
Consulting Agreements
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. The initial duration of the CSP Consulting Agreement was from August
14, 1995 through February 14, 1996, subject to extension. As of August 18, 1997,
the CSP Consulting Agreement was extended to June 30, 1998, with a value not to
exceed $150,000 in the aggregate for such period. During the extended period of
the CSP Consulting Agreement, CSP agreed to focus its efforts on acquisition and
joint venture assistance and development. The CSP Consulting Agreement provides
for a success fee and reimbursement for the actual and reasonable expenses
incurred by CSP 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. The CSP Consulting Agreement ended on June 30, 1998
and has not been renewed.
On August 15, 1997, the Company entered into a new 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 grant of immediately
exercisable options to purchase 10,000 shares of Common Stock at an exercise
price per share of $10.125. The Macklin Consulting Agreement is terminable by
either party thereto upon three days notice. The Macklin Consulting Agreement
ended on August 15, 1998 and has not been renewed.
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
non-employee directors, James R. Thompson (Chairman) and Dr. Edward E. David,
Jr., 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 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 1998, 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 and option grant levels at the end of fiscal year 1998.
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 of 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 aerospace and similar 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 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 1998 Chief
Executive Officer ("CEO") compensation on the policies described above.
Dr. Shelley A. Harrison served as Chairman and CEO of the Company
throughout the fiscal year. During fiscal 1998, Dr. Harrison received a
total of $441,250 for his services. Dr. Harrison's compensation level for
fiscal 1998 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 Tax 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 1998 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
1998, 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
Dr. Edward E. David, Jr.
Dr. Shelley A. Harrison
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*
[GRAPH OMITTED]
SPACEHAB, Inc. NASDAQ Dow Jones
U.S. Company Aerospace/Defense
Index Index
12/22/95 $100.00 $100.00 $100.00
6/30/96 $91.70 $113.80 $113.50
6/30/97 $80.70 $138.40 $138.70
6/30/98 $96.39 $182.54 $145.55
- --------
* 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.
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.
The Company believes that during fiscal year 1998, all Section 16(a)
filing requirements were satisfied on a timely basis, except for one late Form 4
filed by Mr. Robert Citron . The Company believes that the late filing noted
above was inadvertent.
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 1999 Annual Meeting of Stockholders, it must be
received in writing by the Company on or before May 25, 1999 at its principal
office, 1595 Spring Hill Road, Suite 360, 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, 1998, is being mailed
herewith to all stockholders of record on the Record Date.
By Order of the Board of Directors,
/s/ William S. Dawson
William S. Dawson
Corporate Secretary
Vienna, Virginia
September 23, 1998
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.
<PAGE>
SPACEHAB, INCORPORATED
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
P ANNUAL MEETING OF STOCKHOLDERS - OCTOBER 20, 1998
R The undersigned hereby appoints Dr. Shelley A. Harrison and William S.
Dawson, and each of them, as proxies of the undersigned, each with full
O power to act without the other and with full power of substitution and
re-substitution, to vote all the shares of Common Stock of SPACEHAB,
X Incorporated that the undersigned is entitled to vote at the Annual Meeting
of Stockholders to be held on October 20, 1998, at 10:00 a.m. (local time),
Y and at any postponements or adjournments thereof, with all the powers the
undersigned would have if personally present, as follows:
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.
FOR all nominees listed below (except as marked to the contrary
below). |_|
WITHHOLD AUTHORITY to vote for all nominees listed below. |_|
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 Giuseppe Viriglio
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 1999.
|_| FOR |_| AGAINST |_| ABSTAIN
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 ALL NOMINEES IN ITEM 1 AND FOR
PROPOSAL 2.
Dated......................, 1998
.............................................................................
..............................................................................
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
