RCM TECHNOLOGIES INC, PRE 14A, 1996-01-16

RCM TECHNOLOGIES INC
PRE 14A, 1996-01-16
HELP SUPPLY SERVICES

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SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934 (Amendment No.)

Filed by the Registrant [X] Filed by a Party other than the Registrant [ ] Check
the appropriate box: [X] Preliminary Proxy Statement [ ] Definitive Proxy
Statement [ ] Definitive Additional Materials [ ] Soliciting Material Pursuant
to ss. 240.14a-11(c) or ss. 240.14a-12

RCM TECHNOLOGIES, INC.
(Name of Registrant as Specified in its Charter)

RCM TECHNOLOGIES, INC.
(Name of Person(s) Filing Proxy Statement)

Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2).
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule 14a-
6(i)(3).
[ ] 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:
..................................................................
4) Proposed maximum aggregate value of transaction:
.................................................................
Set forth the amount on which the filing fee is calculated and state how it was
determined.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
1) Amount previously Paid:
.................................................................
2) Form, Schedule or Registration Statement No.
.................................................................
3) Filing Party:
.................................................................
4) Date Filed:
.................................................................

(added by Exch Act Rel No. 31905, eff 4/26/93.)

<PAGE>

RCM TECHNOLOGIES, INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
MARCH 29, 1996

TO OUR STOCKHOLDERS:

The Annual Meeting of Stockholders (the "Meeting") of RCM
TECHNOLOGIES, INC. (the "Company") will be held on Friday, March 29, 1996 at
6:00 P.M. (prevailing time), at the Philadelphia Marriott Hotel, 1201 Market
Street, Philadelphia, Pennsylvania, for the following purposes:

1. To elect five (5) directors to serve until the expiration
of their respective terms and until their respective successors shall be elected
and qualified.

2. To consider and vote upon a proposal to amend the Articles
of Incorporation to effect a reverse split of the Company's issued and
outstanding Common Stock on the basis that each five (5) shares then outstanding
will be converted into one share (the "Reverse Split").

3. To consider and vote upon an amendment to the Company's
Articles of Incorporation authorizing the Board of Directors to issue up to
5,000,000 shares of Preferred Stock having such rights, privileges, designations
and preferences as may be determined by the Board of Directors.

4. To consider and vote upon an amendment to the Company's
Articles of Incorporation described under the caption "PROPOSAL 4. OTHER
ARTICLES AMENDMENTS" beginning on page __ of the attached Proxy statement.

5. To ratify the appointment of Grant Thornton LLP as independent
auditors for the Company for the fiscal year ending October 31, 1996;

6. To transact such other business as may properly come before the
Meeting or any postponement or adjournment thereof.

The Board of Directors has fixed January 31, 1996, as the record date
for the determination of stockholders entitled to vote at the Meeting. Only
stockholders of record at the close of business on that date will be entitled to
notice of, and to vote at, the Meeting.

YOU ARE CORDIALLY INVITED TO ATTEND THE MEETING IN PERSON.
WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING IN PERSON, YOU ARE URGED TO
SIGN, DATE AND PROMPTLY RETURN THE ENCLOSED PROXY TO ENSURE THAT YOUR SHARES ARE
REPRESENTED AT THE MEETING. STOCKHOLDERS WHO ATTEND THE MEETING MAY VOTE THEIR
SHARES PERSON ALLY, EVEN THOUGH THEY HAVE SENT IN THEIR PROXIES.

By order of the Board of Directors.

Leon Kopyt, President
________, 1996

<PAGE>

PRELIMINARY COPIES

RCM TECHNOLOGIES, INC.

PROXY STATEMENT

ANNUAL MEETING OF STOCKHOLDERS

MARCH 29, 1996

This Statement is furnished to Stockholders by the Board of Directors
of RCM Technologies, Inc. (the "Company") whose principal executive offices are
located at 2500 McClellan Avenue, Suite 350, Pennsauken, New Jersey 08109, in
connection with the solicitation of the accompanying proxy to be voted at the
Annual Meeting of Stockholders of the Company (the "Meeting") to be held on
March 29, 1996 at 6:00 P.M. (prevailing time) at the Philadelphia Marriott
Hotel, 1201 Market Street, Philadelphia, Pennsylvania, and at any postponement
or adjournment thereof. The approximate date on which this Proxy Statement, the
Notice of Meeting and accompanying proxy are first being sent to stockholders is
February 1, 1996.

Sending in a signed proxy will not affect the stockholder's right to
attend the Meeting and vote in person since the proxy is revocable. Any
stockholder giving a proxy has the power to revoke it by, among other methods,
giving written notice to Leon Kopyt, President of the Company, at any time
before the proxy is exercised.

The expense of the proxy solicitation will be borne by the Company. In
addition to solicitation by mail, proxies may be solicited in person or by
telephone, telegraph or teletype by directors, officers or employees of the
Company and its subsidiaries who will receive no additional compensation
therefor. The Company is required to pay the reasonable expenses incurred by
record holders of the Company's Common Stock who are brokers, dealers, banks or
voting trustees, or their nominees, for mailing proxy material and annual
shareholder reports to any beneficial owners of Common Stock of the Company they
hold of record, upon request of such record holders.

A form of proxy is enclosed. If properly executed and received in time
for voting, and not revoked, the enclosed proxy will be voted as indicated in
accordance with the instructions thereon. If no directions to the contrary are
indicated, the persons named in the enclosed proxy will vote all shares of the
Company's Common Stock, FOR each of the matters specified and in accordance with
the judgment of the persons voting the proxies on any matter that may properly
be brought before the Meeting.

Election of Directors will be by a plurality of the votes of the
holders of shares of common stock voting in person or by proxy at the meeting.
Approval of Proposals 2, 3, and 4 will be determined by the affirmative vote of
the holders of a majority of the Company's outstanding common stock.
Ratification of the appointment of the independent auditors shall be by the
affirmative vote of a majority of those shares voted at the meeting. Under
Nevada law abstaining votes are deemed to be present for purposes of determining
whether a quorum is present at a meeting. On any matter voted upon an abstention
will have the same effect as a negative vote.

<PAGE>

The enclosed proxy confers discretionary authority to vote with respect
to any and all of the following matters that may come before the Meeting: (i)
matters which the Company does not know, a reasonable time before the proxy
solicitation, are to be presented at the Meeting; (ii) the election of any
person to any office for which a bona fide nominee is unable to serve or for
good cause will not serve; (iii) matters incident to the conduct of the Meeting.
In connection with such matters, the persons named in the enclosed proxy will
vote in accordance with their best judgment.

VOTING SECURITIES AND PRINCIPAL HOLDERS

The Board of Directors has fixed the close of business on January 31,
1996 as the record date (the "Record Date") for the determination of
stockholders entitled to notice of and to vote at the Meeting. Each stockholder
of record as of the Record Date will be entitled to one vote for each share of
Common Stock, par value $0.05 per share, of the Company (the "Common Shares")
outstanding and held of record by him on that date. At the Record Date, there
were outstanding 15,961,118 Common Shares (excluding treasury shares), all of
which were entitled to vote at the Meeting. The presence at the Meeting of a
majority of the total number of outstanding Common Shares constitutes a quorum.

No person was known to the Company as of the Record Date to be the
beneficial owner of more than five percent of the Company's Common Stock.

PROPOSAL 1
ELECTION OF DIRECTORS

At the Meeting, five directors are to be elected to hold office until
the expiration of their respective terms and until their successors have been
elected and qualified. Directors will be elected by a plurality of the votes of
the holders of shares of Common Stock voting in person or represented by proxy
at the Meeting.

The By-Laws of the Company were amended by the Board of Directors on
January 25, 1995 to provide for three classes of directors whose terms will
expire in consecutive years. The Board determined that establishing staggered
terms was an effective way to provide stability and continuity in the governance
of the Company. Each nominee as a Class A director will be elected to serve a
term expiring at the Annual Meeting in 1997 or until his successor has been
elected and qualified. Each nominee as a Class B director will be elected to
serve a term expiring at the Annual Meeting in 1998 or until his successor has
been elected and qualified. Each nominee as a Class C director will be elected
to serve a term expiring at the Annual Meeting in 1999 or until his successor
has been elected and qualified. The current terms of all incumbent directors
will end at the Meeting.

It is the intention of the persons named in the accompanying proxy to
vote each proxy executed and returned by a stockholder for the election of the
five nominees as directors of the Company, unless authority to do so is withheld
on such proxy. All of the nominees are now directors of the Company. Should any

<PAGE>

candidate for director become unavailable for any reason, such proxies will be
voted for the alternate candidate, if any, chosen by the Board of Directors.
Each nominee has consented to serve if elected and the Company has no reason to
believe that any of the nominees will be unable to serve.

NOMINEES FOR ELECTION TO THE BOARD OF DIRECTORS

Director Age as of Term
Class A Directors since January, 1996 Expires
- ----------------- --------- ----------------- -------

Norman S. Berson 1987 69 1997

Mr. Berson has been a shareholder in the law firm of Fineman & Bach,
P.C., and its predecessors, of Philadelphia, Pennsylvania, since 1981. The
Company has retained Fineman & Bach, P.C. to represent it on various legal
matters. From 1967 to 1982, Mr. Berson was a member of the House of
Representatives of the Commonwealth of Pennsylvania. Mr. Berson has been a
director of the Company since August, 1987.

Director Age as of Term
Class B Directors since January, 1996 Expires
- ----------------- --------- ----------------- -------

Robert B. Kerr 1994 53 1998

Woodrow B. Moats, Jr. 1994 63 1998

Mr. Kerr is a founder and partner of Everingham & Kerr, Inc., a merger
and acquisition consulting firm located in Haddon Heights, New Jersey, which
provides professional intermediary services and other consulting services to
small and middle market manufacturing, distribution and service businesses. From
1974 to 1987 Mr. Kerr was Vice President, Sales, for Shieldalloy Corporation, a
specialty metals producer. Mr. Kerr received a B.S. Mechanical Engineering and a
B.A. Arts and Sciences from Pennsylvania State University in 1965 and an M.B.A.
in Management from Wayne State University in 1970. Mr. Kerr has been a Director
since February, 1994.

Mr. Moats is President of W.B. Moats & Associates, Berwyn,
Pennsylvania, a marketing communications organization specializing in business
to business marketing. From 1975 to 1980 he was Senior Vice President -
Corporate Marketing and Public Relations of National Railway Utilization
Corporation. Mr. Moats is a graduate of the University of Miami, Florida as a
marketing major specializing in advertising. Mr. Moats has been a Director since
February 24, 1994.

Director Age as of Term
Class C Directors since January, 1996 Expires
- ----------------- --------- ------------------ -------

Leon Kopyt 1991 49 1999

Stanton Remer 1992 44 1999

<PAGE>

Mr. Kopyt was elected President on January 23, 1992 and from May 1, 1990 to
that date served as Chief Operating Officer of the Company. His prior positions
with the Company were that of Chief Financial Officer and Treasurer. Mr. Kopyt's
prior experience includes serving as a Board Member of MTS Corporation,
Philadelphia, and Socimi International, Milan, Italy, sister companies which
manufacture transportation and defense products. Mr. Kopyt holds a B.S. degree
in Electrical Engineering and has attended MBA course work at Wharton. Mr. Kopyt
has been a Director since 1991.

Mr. Remer was elected Chief Financial Officer and Treasurer on May 19,
1994. Mr. Remer is a Certified Public Accountant with an MBA in Finance from
Temple University and a B.S. in Textile Science from the Philadelphia College of
Textiles & Science. Mr. Remer has a diverse accounting and financial background.
Prior experiences include Chief Financial Officer for Sterling Supply
Corporation and Managing Partner of a regional accounting firm. Mr. Remer has
been a Director since 1992.

BOARD OF DIRECTORS AND COMMITTEES

During the fiscal year ended October 31, 1995, there were four (4)
meetings of the Board of Directors. The Board of Directors has designated from
among its members an Executive Committee, which consists of Mr. Kopyt and Mr.
Remer; a Compensation Committee, which currently consists of Messrs. Moats and
Kerr; and an Audit Committee, which currently consists of Messrs. Kerr and
Berson. The Executive Committee, which has the authority of the Board of
Directors to manage the business of the Company between formal meetings of the
full Board, did not meet during the fiscal year ended October 31, 1995. The
Compensation Committee, which reviews and recommends salaries for officers and
administers the Company's Incentive Stock Option Plans, held two (2) meetings
during the fiscal year. The Audit Committee, which reviews the Company's
financial and accounting practices and controls, held one (1) meeting during the
fiscal year.

In fiscal year 1995, each director attended at least 75% of the total
number of Board meetings and meetings of committees of which he was a member.

Directors who are in the employ of the Company do not receive any
directors' fees. Directors who are non-salaried receive $750.00 for each
director's meeting they attend and $300.00 for each special committee meeting or
special assignment. Special assignments are duties performed by Board members in
addition to regularly assigned tasks as Board members. Mr. Berson waived all
fees related to his service on the Board. Fineman & Bach, P.C. of which Mr.
Berson is a shareholder, rendered legal services to the Company during 1995.

SECURITY OWNERSHIP OF DIRECTORS AND MANAGEMENT

The following table sets forth as of the Record Date the number of
shares of the Company's Common Stock owned by each director or nominee for
director of the Company, and all directors and officers of the Company as a
group. Unless otherwise indicated, each person set forth below has sole voting
and investment power on the shares reported. In addition, a person is deemed to
have beneficial ownership of the shares that such person has the right to
acquire within sixty (60) days after the Record Date.

<PAGE>

Shares of Common
Stock Beneficially Percent
Name Owned at January, 1996 (1) of Class (2)
- --------------------- ---------------------- --------

Leon Kopyt (3) 461,600 2.9%
Director, President,
Chief Executive Officer

Stanton Remer (5) 165,000 1%
Director, Chief Financial
Officer, Treasurer

Norman S. Berson (4) 50,000 *
Director

Robert B. Kerr (6) 50,000 *
Director

Woodrow B. Moats, Jr. (6) 50,000 *
Director

All Directors and Officers 776,600 4.9%
as a group (5 persons)

* Represents less than 1% of the Company's outstanding Common Stock.

(1) The securities "beneficially owned" by an individual are determined in
accordance with the definition of "beneficial ownership" set forth in
the regulations of the Securities and Exchange Act of 1934 and,
accordingly, may include securities owned by or for, among others, the
wife and/or minor children of the individual and any other relative who
has the same home as such individual, as well as other securities as to
which the individual has or shares voting or investment power.
Beneficial ownership may be disclaimed as to certain of the securities.

(2) 314,000 shares of Common Stock held in treasury were deducted from the
total Common Stock outstanding at January 5, 1996 when computing the
percentage of Common Stock.

<PAGE>

(3) Includes presently exercisable options under the 1986 Plan to purchase
10,000 shares at an exercise price of $3.9688 per share granted on April 24,
1991, exercisable options under the 1986 Plan to purchase 77,000 shares at an
exercise price of $.25 per share granted on April 20, 1993, exercisable options
under the 1992 Plan to purchase 23,000 shares at an exercise price of $.25 per
share granted on April 22, 1993, exercisable options under the 1992 Plan to
purchase 50,000 at an exercise price of $.6875 granted on April 15, 1994,
exercisable options under the 1992 Plan to purchase 100,000 at an exercise price
of $.53125 granted on July 15, 1994, not presently exercisable options under the
1992 Plan to purchase 251,000 shares at an exercise price of $.53125 per share
granted on July 15, 1995.

(4) Includes options under the 1994 Nonemployee Director Stock Option Plan
to purchase 50,000 shares (25,000 shares are not exercisable) at an exercise
price of $.6875 per share granted on May 19, 1994.

(5) Includes exercisable options under the 1992 Plan to purchase 50,000
shares at an exercise price of $.53125 granted on July 15, 1994, and includes
options under the 1994 Nonemployee Director Stock Option Plan to purchase 50,000
shares (25,000 are not exercisable) at an exercise price of $.6875 per share
granted on May 19, 1994 and includes not presently exercisable options under the
1992 Plan to purchase 50,000 shares at an exercise price of $.53125 granted on
July 15, 1995.

(6) Includes options under the 1994 Nonemployee Director Stock Option Plan
to purchase 50,000 shares (40,000 shares are not exercisable) at an exercise
price of $.6875 per share granted on May 19, 1994.

Cataract Voting Agreement

Effective August 31, 1995 the Company completed the acquisition of
Cataract, Inc., a Pennsylvania corporation ("Cataract") pursuant to a Merger
Agreement dated July 31, 1995 (the "Merger Agreement").

Pursuant to the terms of the Merger Agreement, the Cataract
shareholders pledged, pursuant to a certain Pledge Agreement, the Company's
stock they received as part of the merger consideration, approximately 1,561,553
shares, in order to guarantee certain performance criteria of Cataract
established in the Merger Agreement. The Pledge Agreement expires on November
30, 1998, during which time the Company, as pledgee, has the right to exercise
all voting rights with respect to the pledged stock.

The Company intends to vote the pledged stock in favor of Proposals 1
to 5 inclusive.

<PAGE>

Compliance with Section 16(a) of the Exchange Act

Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's executive officers and directors to file initial reports of ownership
and reports of changes of ownership of the Company's securities with the
Securities and Exchange Commission. Executive officers and directors are
required to furnish the Company with copies of all Section 16(a) forms that they
file. Based upon a review of those filings and written representations from the
Company's directors and executive officers, the Company believes that all filing
requirements were satisfied by such persons during the fiscal year ended October
31, 1995.

EXECUTIVE COMPENSATION

The following table sets forth the compensation of the Company's
principal executive officers for the fiscal year ended October 31, 1995. The
Company was not a party to any plans or arrangements providing cash or non-cash
forms of compensation to its principal executive officers, other than as listed
below.

<PAGE>

SUMMARY COMPENSATION TABLE
Long-Term
Annual Compensation Compensation

Securities
Name and Underlying
Principal Fiscal Options All Other
Position Year Salary Bonus SARs (#) Compensation
Compensation

<S> <C> <C> <C> <C> <C>
Leon Kopyt,
President, CEO
(Principal 1995 $249,161 $26,300 201,500 $11,062 (1)
Executive 1994 $209,955 $40,000 150,000 $9,262 (1)
Officer) 1993 $172,536 $17,582 100,000 $7,336 (1)

Stanton Remer
Chief Financial
Officer,
Treasurer
(Principal 1995 $83,078 50,000 $2,345 (1)
Accounting 1994 $36,347 50,000 $2,334 (1)
Officer) (2)
<FN>

(1) Represents premiums paid for life and disability insurance.
(2) Employment commenced May 28, 1994
</FN>
</TABLE>
<TABLE>
<CAPTION>

OPTION GRANTS IN LAST FISCAL YEAR

Potential Realizable Value
of Assumed Annual Rates
of Stock Price Appreciation
Individual Grants for Option Term (2)
----------------- -------------------
Number of
Securities
Number of % of Total
Underlying Options/SARs
Options/ Granted to Exercise
SARs Employees in or Base Expiration
Name Granted(1) Fiscal Year Price ($/Sh) Date 5% 10%
---- ------------ ------------ ------------ ---- ---- ----

<S> <C> <C> <C> <C> <C> <C>
Leon Kopyt 201,500 80.1% $.53125 7/15/05 $67,321 $170,605

Stanton Remer 50,000 19.9% $.53125 7/15/05 $16,705 $42,334
<FN>

(1) Options are exercisable one year from the date of the grant.
Shares received upon exercise of option may not be sold for at
least one year from the date of exercise.
</FN>
</TABLE>

<PAGE>
OPTION EXERCISES AND FISCAL YEAR END OPTION VALUES

Number of Securities Value of Unexercised
Underlying Exercised In-the-Money Options
Options/SARs Options/SARs
at FY-End (#) Shares at FY-End ($)
-------------------- -------------

Shares
Acquired on Value Exercisable/ Exercisable/
Name Exercise (#) Realized Unexercisable Unexercisable
---- ------------ -------- ------------- -------------

Leon Kopyt 0 0 260,000/ $31,250/
201.500 $31,485

Stanton Remer 0 0 75,000/ $ 7,813/
75,000 $ 7,813

(1) Based on the NASDAQ closing asked price of the Company's Common
Stock on October 31, 1995 of $.65625.

Details of number of shares and value of unexercised "in the money options":

Price Price
Name # Shares Option Price 10/31/95 Per Share Total Value
---- -------- ---------- ----------- ---------- -----------

Leon Kopyt 461,500 $.25-$3.97 $.6875 $.156-$.438 $62,735

Stanton Remer 150,000 $.531-$.688 $.6875 $.156 $15,626

Employment Agreement

Pursuant to an Employment Agreement dated April 15, 1994, the Company
has agreed to employ Mr. Kopyt as President and Chief Executive Officer for a
period of two years with a base annual salary of $235,000 and $260,000 per annum
respectively and an annual auto expense allowance of $14,400 for the twelve
months ended April 30, 1995 and 1996, respectively. In addition to the
compensation provided for under the Agreement, Mr. Kopyt is to receive a bonus
based on the consolidated operating profits before taxes for fiscal years ending
October 31, 1994 and 1995 as follows: 1) up to $750,000 - 3% bonus, 2) in excess
of $750,000 - 2% bonus. The bonus earned for fiscal 1994 amounted to $40,500 and
for fiscal 1995 amounted to $26,300.

<PAGE>

Termination Benefits Agreement

The Company has a termination benefits agreement with the President
which grants the right to receive up to 2.99 times the average aggregate annual
compensation as reported for federal income tax purposes for the past five years
plus continuation of certain benefits, and provides for the surrender of stock
options in exchange for the payment by the Company of the difference between the
option price and the share price on the date of change of control (as defined)
within a period of five years thereafter or termination (as defined) whichever
is higher. The maximum contingent liability as of December 31, 1995 for salary
and incentive compensation is approximately $684,500.

Compensation Pursuant to Plans

RCM Technologies, Inc. 401K Retirement Plan

As of October 31, 1995 the Company maintains two 401K plans which
consist of a plan for the eligible employees of Intertec Design, Inc. and a plan
for the eligible employees of Cataract, Inc., both wholly owned subsidiaries of
the Company. Both plans are substantially identical. The 401K Plan is a
profit-sharing plan, including a cash or deferred arrangement pursuant to
Section 401(k) of the Internal Revenue Code of 1986, as amended, sponsored by
the Company for purposes of providing eligible employees an opportunity to defer
compensation and have such deferred amounts contributed to the 401K Plan on a
pre-tax basis, subject to certain limitations. The Company may, in the
discretion of the Board of Directors, make contributions of cash to match
deferrals of compensation by participants.

The 401K Plan permits participants to invest their contributions in one
or more investment options offered by the Plan Administrator. To be eligible to
defer compensation and to receive contributions of the Company, a person must be
an employee of the Company or one of the Company's subsidiaries and must have
completed six months as such an employee and attained the age of 21. The 401K
Plan provides for administration of the 401K Plan by the Company as the
Administrator, acting through its Chief Executive Officer or his delegates.

The Company made no contributions of cash to the 401K Plan to match
deferrals of compensation by participants in the fiscal years ending October 31,
1995, 1994 or 1993. No executive officers contributed to the 401K Plan during
the last three fiscal years. The amounts contributed by all employee
participants, excluding officers, during the period November 1, 1992 to October
31, 1995 totaled $641,298.

<PAGE>

REPORT OF THE COMPENSATION COMMITTEE

The Compensation Committee annually reviews the compensation of the
Company's executive officers, Messrs. Kopyt (Chairman, President and Chief
Executive Officer) and Remer (Chief Financial Officer).

As noted above, Mr. Kopyt has an employment agreement which commenced
April 15, 1994 which provides for base compensation, an auto allowance and a
bonus calculated as a percentage of the Company's consolidated operating profits
before taxes. As of the date of this Report, Mr. Remer does not have an
employment agreement, and his compensation is set annually by the Board based
upon the Compensation Committee's recommendation.

In addition to compensation provided pursuant to their employment
agreements, the executive officers were granted stock options pursuant to the
Company's Incentive Stock Option Plan. Grants of options are intended to be a
significant portion of total executive compensation and are intended to align
the executive's interest with those of the Company's stockholders. In light of
the relatively limited trading volume in the Company's common stock, the
Compensation Committee believes that financial performance is a better indicator
of executive performance than the Company's share price. In assessing such
performance, the Compensation Committee examines a number of financial
indicators, such as net sales, operating income, net income and earnings per
share. However, compensation decision are not based upon any precise formula and
no factor is accorded any greater weight than the other factors.

During the fiscal year ended October 31, 1994, the Company achieved
records in each of the four indicators of financial performance. In light of
these results, the Board, with the Compensation Committee's approval, provided
Mr. Kopyt with an increase in the number of options granted to 201,500 from
150,000 the year before. In addition, Mr. Remer's base salary was increased to
$100,000 per year from the prior level of $80,000.

By the Compensation Committee
Robert B. Kerr
Woodrow B. Moats, Jr.

<PAGE>

Comparison of Five -Year Cumulative Total Returns

The following graph compares the performance of the Company's Common
Stock with the performance of the Standard & Poor's 500 Composite Stock Price
Index ("S&P 500 Index") and a peer group index by measuring the changes in
common stock prices from October 31, 1990, plus assumed reinvested dividends.
The Securities and Exchange Commission's rules require, if a published peer
group does not exist, that a company create a peer group index with which to
compare its stock performance by selecting a group of companies in lines of
business similar to its own. The Company has found no published peer group which
accurately mirrors the Company's business. Accordingly, the Company has created
a special peer group index that includes companies in the principal lines of
business in which the Company does business. The common stocks of the following
companies have been included in the Peer Group Index: Amserv Healthcare, Inc.,
General Employment Enterprises, C.H. Heist Corp., Joule, Inc., National
Technical Systems, Inc., Right Management Consultants, Winston Resources,
Brandon Systems Corp., GTS Duratek, Inc., Keane, Inc., On Assignment, Inc.,
Uniforce Temp Personnel, Inc. and Care Group, Inc. The chart assumes that $100
was invested on October 31, 1990 in the Company's Common Stock, the S&P 500
Index and the peer group index, and that all dividends were reinvested. In
addition, the graph weighs the peer group on the basis of its respective market
capitalization, measured at the beginning of each relevant time period.

[GRAPHIC OMITTED]

Total Return Analysis
<TABLE>
<CAPTION>
10/31/90 10/31/91 10/31/92 10/31/93 10/31/94 10/31/95
-------- -------- -------- -------- -------- --------

<S> <C> <C> <C> <C> <C> <C>
RCM Technologies, Inc $100 $49.12 $7.89 $16.67 $18.42 $19.30
Peer Group $100 $133.16 $109.42 $211.64 $285.25 $375.92
Nasdaq Composite (US) $100 $169.20 $190.79 $245.84 $247.20 $332.07

</TABLE>

<PAGE>

PROPOSAL 2
PROPOSAL TO AMEND
CERTIFICATE OF INCORPORATION
TO EFFECT A 1-FOR-5
REVERSE STOCK SPLIT

Summary of the Proposed Reverse Stock Split

The Board of Directors has unanimously adopted a resolution recommending
the advisability of, and submits to the shareholders for approval, a proposal to
amend the Company's Articles of Incorporation to effect a reverse split of the
Company's Common Stock so that, on the effective date of the Amendment as
hereafter defined, every five (5) outstanding shares of the Company's Common
Stock will automatically be converted into one (1) share of common stock (the
"Reverse Split"). The number of shares issuable upon exercise of outstanding
warrants and stock options and the exercise price therefor, will also be
adjusted to give effect to the Reverse Split. Where fractional shares result
from the Reverse Split the Company will issue such additional fraction of a
share as is necessary to increase the fractional share to a full share.

Except as a result of minor adjustments caused by the issuance of
fractional shares, the Reverse Split will not affect any shareholder's
proportional equity interest in the Company or the relative rights, preferences,
privileges or priorities of any shareholder. The Reverse Stock also will not
affect the number of shares of Common Stock authorized (which will remain at
40,000,000) or their par value. Since the reverse Split will decrease the number
of shares outstanding, the Proposal will increase the number of shares which may
be issued by the Company in the future without shareholder approval, although
the Company has no current plans which would require the Company to increase its
authorized Common Stock.

The Board believes that the Reverse Split is advantageous for several
reasons:

First, the Board believes that the current low per share price of the
Common Stock and the large number of shares outstanding have a negative effect
on the marketability of existing shares and the potential ability of the Company
to raise capital by issuing shares. On January 5, 1996 the bid and asked price
of the Common Stock on NASDAQ were $0.63 and $0.65 respectively. Many stock
brokers are reluctant to deal in low price stocks because of the time consuming
procedures that make the handling of such stocks unattractive from an economic
standpoint. Further, certain institutional investors have internal policies
preventing the purchase of low-priced stocks.

Second, since a broker's commissions on low-priced stocks generally
represent a higher percentage of the gross stock price than commissions on
higher priced stocks, the current share price of the Common Stock can result in
individual shareholders paying transaction costs (commissions, mark-ups,
mark-downs) which are at a higher percentage of the total share value than would
be the case if the Common Stock share price were substantially higher.

Finally, the Board is hopeful that the decrease in the number of shares of
Common Stock outstanding as a consequence of the Reverse Split and the resulting
anticipated increased price level will encourage interest in the Common Stock
and

<PAGE>

possibly promote greater liquidity for the Company's shareholders. Also,
although any increase in the market price of the Common Stock resulting from the
Reverse Split may be proportionately less than the decrease in the number of
shares outstanding, the Reverse Split could result in a higher market price for
the shares that will help overcome the reluctance of brokers and investors
referred to above and help diminish the adverse impact of trading commissions on
the market for the shares.

The proposed amendment to the Articles of Incorporation implementing
proposal 2 is attached hereto as Exhibit "A".

THERE CAN BE NO ASSURANCE, HOWEVER, THAT ANY OF THE FOREGOING WILL OCCUR OR
THAT THE MARKET PRICE FOR THE COMPANY'S COMMON STOCK IMMEDIATELY AFTER THE
EFFECTIVE DATE OF THE REVERSE SPLIT WILL BE FIVE TIMES THE MARKET PRICE BEFORE
THE REVERSE SPLIT OR THAT THE PRICE FOLLOWING THE REVERSE SPLIT WILL EITHER
EXCEED OR REMAIN IN EXCESS OF THE CURRENT MARKET PRICE.

Effective Date

The Amendment will be effective as of the date and time that the Amendment
is filed with the Secretary of State of the State of Nevada in accordance with
the Nevada General Corporation Law (the "Effective Date"). If approved, the
Company plans to file such Amendment as soon as practicable. The Reverse Split
will be effective simultaneously with the Amendment becoming effective.

Exchange of Stock Certificates

As soon as practicable after the effective date of the Amendment, the
Company's transfer agent, American Stock Transfer, will mail transmittal forms
to each holder of record of certificates formerly representing shares of the
Company's Common Stock to be used in forwarding their certificates for surrender
and exchange for certificates representing the number of shares of the Company's
Common Stock such shareholders are entitled to receive as a consequence of the
Reverse Split. After receipt of such transmittal form, each holder should
surrender the certificates formerly representing shares of the Company's Common
Stock and such holder will receive in exchange therefor certificates
representing the number of shares of the Company's Common Stock to which he is
entitled. Such transmittal form will be accompanied by instructions specifying
other details of the exchange. Shareholders should not send in their
certificates until they receive a transmittal form.

After the effective date of the Amendment, each certificate representing
shares of the Company's Common Stock will, until surrendered and exchanged as
described above, be deemed, for all corporate purposes to evidence ownership of
the number of shares of the Company's Common Stock into which the shares
evidenced by such certificate have been converted. Although shareholders are
encouraged to exchange their stock certificates promptly after receipt of the
transmittal form, previously outstanding Company stock certificates will
constitute "good delivery" in connection with sales through a broker or
otherwise, of shares of the Company's Common Stock.
<PAGE>
Federal Income Tax Consequences

The following information is based upon existing law which is subject to
change by legislation, administrative action and judicial discussion and is
necessarily general. Therefore, shareholders are advised to consult with their
tax advisors for more detailed information regarding their individual tax
circumstances. Although the Company has not requested a ruling from the Internal
Revenue Service as to the federal income tax consequences of the Reverse Split,
the Company expects that the federal income tax consequences of the Reverse
Split will be as follows:

(i) The Reverse Split will be a tax-free recapitalization to the Company
and its shareholders.

(ii) The aggregate tax basis of the Common Stock received by a shareholder
pursuant to the Reverse Split will be the same as the aggregate tax basis of
Common Stock held by such shareholder immediately prior to the Reverse Split.

(iii) The holding period of Common Stock received pursuant to the Reverse
Split will include the holding period of Common Stock converted into such Common
Stock, for each person who held Common Stock as a capital asset immediately
prior to the Reverse Split.

(iv) Shareholders will not recognize any gain or loss for federal income
tax purposes as a result of the Reverse Split.

THE BOARD OF DIRECTORS AND MANAGEMENT UNANIMOUSLY RECOMMENDS A VOTE "FOR"
THE PROPOSAL TO APPROVE THE PROPOSED AMENDMENT.

Proxies solicited by the Board of Directors will be voted "For" the
proposal unless the shareholders indicate to the contrary in their proxies.

PROPOSAL NUMBER 3
AUTHORIZATION OF PREFERRED STOCK

The Board of Directors has unanimously adopted a resolution, subject to
approval by the shareholders, authorizing an amendment to the Company's Articles
of Incorporation to authorize the issuance of up to 5,000,000 shares of
Preferred Stock with such rights, privileges, designations and preference as may
be determined by the Board of Directors from time to time. Although the Company
has no present intention to issue any shares of Preferred Stock, the Board of
Directors believes that it is important that the Company have the flexibility to
issue shares of Preferred Stock without further shareholder approval. Dividend
requirements and any redemption, sinking fund or conversion provision pertaining
to shares of the preferred stock, if authorized and issued, may have an adverse
effect on the availability of earnings for distribution to holders of common
stock and for use with respect to other corporate purposes.

The Board believes that the complexity of modern business financing and
possible future transactions require flexibility in a corporation's capital
structure. If the amendment is approved the Board of Directors will have
authority to issue Preferred Stock from time to time for any proper corporate
purpose including acquisitions of other businesses or properties and the raising
of additional capital. Shares of Preferred Stock could be issued publicly or
privately, in one or more series and such series of Preferred Stock could rank

<PAGE>

senior to the Common Stock with respect to, among other things, dividends and
liquidation rights.

Although the Company has no intention to issue shares of Preferred Stock in
a manner which would have an anti-takeover effect or otherwise, it should be
noted that the issuance of Preferred Stock could have an anti-takeover effect
under certain circumstances. Since the voting rights to be accorded to any
series of Preferred Stock remain to be fixed by the Board of Directors, the
holders of Preferred Stock may, if the Board so authorizes, be entitled to vote
separately as a class in connection with approval of certain extraordinary
corporate transactions in circumstances where Nevada law does not require a
class vote, or might be given a disproportionately large number of votes. Such
Preferred Stock could also be convertible into a large number of shares of
Common Stock under certain circumstances or have other terms which might render
the acquisition of a controlling interest in the Company more difficult or more
costly. Moreover, shares of Preferred Stock could be privately placed with
purchasers who might side with the Company's management in opposing a hostile
tender offer or other attempt to obtain control. The issuance of Preferred Stock
as an anti-takeover device might preclude shareholders from taking advantage of
a situation which might be favorable to their interests. The proposed amendment
to the Articles of Incorporation implementing Proposal 3 is attached hereto as
Exhibit "A".

THE BOARD OF DIRECTORS AND MANAGEMENT UNANIMOUSLY RECOMMENDS A VOTE "FOR"
THE PROPOSAL TO APPROVE THE PROPOSED AMENDMENT.

Proxies solicited by the Board of Directors will be voted "For" the proposal
unless the shareholders indicate to the contrary in their proxies.

PROPOSAL 4
OTHER ARTICLES AMENDMENTS

Limitation on Power of Shareholders to Effect Future Bylaws Amendments

The Board of Directors has adopted and submits to the shareholders for
approval an amendment to the Company's Articles of Incorporation which would
provide that the shareholders will have the power to adopt, amend or repeal the
Bylaws of the Company only subject to the procedures applicable to the amendment
of the Articles including any provision of law that requires as a condition of
such action, the consent of the Board of Directors.

The Nevada General Corporation Law (the "GCL") provides in general that
shareholders cannot effect a fundamental change such as an amendment to the
Articles, a merger, consolidation, share exchange, sale of assets or
dissolution, without the approval of the Board. On the other hand under the GCL
shareholders may change the Bylaws without the consent of the Board of
Directors. The proposed amendment to the Articles would provide that, except as
provided in the express terms of any series of the Preferred Stock, the
shareholders will retain the power to adopt, amend or repeal the Bylaws of the
Company but subject to the procedures applicable to the amendment of the
Articles, including any provision of law that requires as a condition to such
action the consent of the Board of Directors.

<PAGE>

The proposed change could result in the Board adopting provisions
regulating or restricting corporate powers, including provisions requiring the
vote of classes or series of shares as a condition to the exercise thereof,
vesting the powers of the Board of Directors in other than the Board and
changing the voting rights of Directors. This change would permit the Board to
adopt, without shareholder approval, provisions which may have anti-takeover
purposes or effects.

The proposed amendment to the Articles of Incorporation implementing
Proposal 4 is attached hereto as Exhibit "B".

Possible Anti-Takeover Effects of Proposal 4 are discussed below. See
"Possible Anti-Takeover Effects of Certain Proposals".

THE BOARD OF DIRECTORS AND MANAGEMENT UNANIMOUSLY RECOMMENDS A VOTE FOR THE
PROPOSAL TO APPROVE THE PROPOSED AMENDMENT.

Proxies solicited by the Board of Directors will be voted "For" the
proposal unless shareholders indicate to the contrary in their proxies.

POSSIBLE ANTI-TAKEOVER EFFECTS
OF CERTAIN PROPOSALS

Effect of Proposals Submitted to the Meeting

If all the proposals submitted to the Meeting are adopted by the
shareholders the existing management of the Company would have available the
following additional defenses against unsolicited takeover bids:

o Authority to issue up to 5,000,000 shares of preferred stock issuable
in series with rights and preferences determined by the Board.

o Limitation on right of shareholders to effect Bylaw amendments.

The above are in addition to existing Bylaw provisions providing defenses
against unsolicited takeover bids:

o Supermajority vote required to call a meeting of shareholders.

o Classification of the Board of Directors.

o Prior notification of nominations to the Board of Directors.

Other Anti-Takeover Provisions of the Nevada GCL

Under the Nevada General Corporation Law (ss.78.411 et seq.), any
"interested stockholder" (Generally, anyone who beneficially owns, directly or
indirectly, 10% or more of the voting power of the Company) is prohibited,
within a three-year period, from engaging in any "combination" with the Company
unless, prior to the interested stockholder becoming such, the Board of
Directors of the Company had approved the acquisition. "Combination" is broadly
defined to include any merger or any other transaction with the interested
stockholder or any affiliate or associate thereof. After the interested
stockholder has satisfied a three-year holding period, combinations may be
permitted if the

<PAGE>

transaction is approved by a majority of the outstanding shares not owned by the
interested stockholder and the transaction meets certain fair price criteria.

In addition, under Nevada General Corporation Law ss.78.138, directors of
Nevada corporations are given wide latitude to resist a change or potential
change in control of the corporation.

Possible Consequences of the Anti-Takeover Effects of Proposals

Your Board of Directors believes that the proposals, to the extent that
they deter unsolicited takeover attempts, will promote conditions of stability
in the business, management and control of the Company, discourage in advance
certain takeover offers or other attempts to accumulate the Company's stock and
encourage anyone contemplating such actions to negotiate with the Company, and
assist the Company in defending against any such action if the Board does not
believe it to be in the best interests of the Company and all of its
shareholders.

A takeover offer often places the target corporation virtually in the
position of making a forced sale, sometimes when the market price of its stock
may be temporarily depressed. The Board believes that frequently the
consideration offered in such a situation, even though it may be in excess of
the then market price, is less than that which could be obtained in a freely
negotiated transaction. Your Board of Directors, in a freely negotiated
transaction, would have the opportunity to seek a suitable partner at a time of
its choosing and to negotiate the most favorable price and terms which reflect
not only current, but also future value of the Company. The Board may also
believe that the takeover offer is not in the best interests of the Company and
its shareholders for additional reasons, such as those exhibited in the large
number of business failures which resulted from overleveraged transactions.
However, the Board may not have adequate time to consider fully the takeover
offer and to determine what actions are in the best interest of the Company and
its shareholders despite the provisions of applicable federal law regarding the
minimum duration of certain takeover offers. Portions of the proposed amendments
attempt to ameliorate the problem inherent in these situations.

Takeover offers or other non-market acquisitions of stock are usually made
at prices above the prevailing market price of the corporation's stock and often
have a corresponding effect on such market price. Accumulation of stock through
market purchases, whether or not for the purpose of acquiring control, may also
support the price of a company's stock at levels higher than otherwise would be
the case. Portions of the proposed amendments may discourage such takeover
offers and purchases, even if holders of a majority of the Company's shares
desire to sell such shares.

The proposed amendments could under certain circumstances be used by
management of the Company to perpetuate itself in control of the Company. In
addition, the proposed amendments could encourage a potential purchase of the
Company to negotiate with the Board of Directors and offer terms acceptable to
it. Such terms might include continuation of the existing management of the
Company or a commitment by the purchaser to provide benefits (such as employment
contracts) not available to shareholders generally.

The Company has not been the subject of any threatened unsolicited takeover
bid and is not aware of any existing takeover threat.

<PAGE>

PROPOSAL 5
RATIFICATION OF APPOINTMENT
OF INDEPENDENT AUDITORS

The Board of Directors has appointed Grant Thornton LLP, independent
certified public accountants, as independent auditors of the Company for the
fiscal year ending October 31, 1996. Although the selection of auditors does not
require ratification, the Board has directed that the appointment of Grant
Thornton LLP be submitted to stockholders for ratification because management
believes this matter is of such significance as to require stockholder
participation. If stockholders do not ratify the appointment, the Board of
Directors will consider the appointment of other independent certified
accountants as auditors for the Company. No representatives of Grant Thornton
LLP are expected to be present at the Meeting.

Report

All stockholders of record as of the Record Date are concurrently being
sent a copy of the Company's Report on Form 10-K for the fiscal year ended
October 31, 1995.

Other Matter

Stockholder proposals regarding the Annual Meeting to be held in 1997 must
be submitted to the Company by December 1, 1996, to receive consideration.

By order of the Board of Directors

Leon Kopyt, President

EXHIBIT "A"

CERTIFICATE OF AMENDMENT
OF
ARTICLES OF INCORPORATION
OF
RCM TECHNOLOGIES, INC.

RESOLVED that Article Fourth of the Articles of Incorporation of this
Corporation be and it is hereby amended by deleting said Article Fourth in
its entirety and in substitution inserting the following:

"FOURTH: (A) The aggregate number of shares which the Corporation
shall have authority to issue shall be 45,000,000 shares of which
40,000,000 shares shall be Common Stock par value $.05 (five cents) per
share and 5,000,000 shares shall be Preferred Stock par value $1.00 per
share.

The Preferred Stock shall be divided into and from time to time may
be issued in classes and in series within any class and the Board of
Directors is hereby authorized to make such division into classes and
series, to determine the number of shares of any such class or series, and
to determine the designation, voting rights, preferences, limitations and
special rights, if any, of the shares of each such class or series.

(B) On the effective date of this Amendment each share of the issued and
outstanding Common Stock of the Corporation shall be and hereby is changed
without further action into 0.20 shares of Common Stock of the Corporation
provided that if such change results in a fractional share then the Corporation
shall issue such additional fraction of a share as is necessary to increase the
fractional share to a full share."

EXHIBIT "B"

CERTIFICATE OF AMENDMENT
OF
ARTICLES OF INCORPORATION
OF
RCM TECHNOLOGIES, INC.

RESOLVED that Article TENTH of the Articles of Incorporation of this
Corporation be and it is hereby amended to add the following:

"TENTH: Except as otherwise provided in the express terms of any
series of the Preferred Stock the shareholders will have the power to
adopt, amend or repeal the Bylaws of the Corporation but subject to the
procedures applicable to amendment of the Articles, including any provision
of law that requires as a condition of such action the consent of the Board
of Directors.

The Board of Directors shall in its discretion have the additional
power to adopt, amend and repeal the Bylaws at any time and from time to
time in a manner that is consistent with these Articles."

RCM TECHNOLOGIES, INC.
2500 McCllelan Avenue
Pennsauken, NJ 08109

This Proxy is Solicited on Behalf of the Board of Directors,

PROXY The undersigned hereby appoints Leon Kopyt and Stanton Remer as
Proxies each with the power to appoint his substitute and hereby
authorizes them to represent and to vote as designated below all the
shares of common stock of RCM Technologies, Inc. held on record by
the undersigned on January 31, 1996 at the annual meeting of
shareholders to be held on March 29, 1996 or any adjournment thereof.

1. ELECTION OF DIRECTORS --- FOR all nominees listed below --- WITHHOLD AUTHORITY
--- (except as marked to the contrary below --- for all nominees listed below

L. Kopyt, S. Remer, R.B. Kerr, W.B. Moats, N.S. Berson

2. PROPOSAL TO EFFECT A REVERSE SPLIT OF THE COMPANY'S ISSUED AND OUTSTANDING COMMON STOCK