<PAGE>
PRELIMINARY COPIES
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 [_] Confidential, for use of the
Commission only (as permitted by
Rule 14a-6(e)(2))
[_] Definitive proxy statement
[_] Definitive additional materials
[_] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
MEMRY CORPORATION
--------------------------------------------------
(Name of Registrant as Specified in Its Charter)
MEMRY CORPORATION
--------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of filing fee (Check the appropriate box):
[X] $125 per Exchange Act Rule 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:/1/
- --------------------------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
[_] 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 of Schedule and the date of its filing.
1) Amount Previously Paid:
-----------------------------------------------
2) Form, Schedule or Registration Statement No.:
-----------------------------------------------
3) Filing Party:
-----------------------------------------------
4) Date Filed:
-----------------------------------------------
- ----------------------------
/1/Set forth the amount on which the filing fee is calculated and state how it
was determined.
<PAGE>
PRELIMINARY COPIES
MEMRY CORPORATION
57 COMMERCE DRIVE
BROOKFIELD, CONNECTICUT 06804
(203) 740-7311
--------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
--------------------
November 22, 1995
To the Holders of Common Stock and
Series G Preferred Stock of
MEMRY CORPORATION
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders (the "Annual
Meeting") of Memry Corporation (the "Company") will be held at Ramada Inn, Exit
8, I-84, Danbury, Connecticut 06810, on Tuesday, December 19, 1995, at 10:00
a.m., for the following purposes:
1. To elect five persons to the Board of Directors, each to hold office
until the next Annual Meeting of Stockholders and until his respective
successor is elected and qualified.
2. To consider and vote upon an amendment to the Company's Certificate of
Incorporation to increase the number of authorized shares of the
Company's Common Stock from 10,000,000 to 25,000,000.
3. To consider and act upon such other business as may properly come before
the meeting or any adjournment thereof.
The Board of Directors has fixed the close of business on November 20, 1995 as
the record date for the determination of stockholders entitled to notice of, and
to vote at, the Annual Meeting. A list of stockholders entitled to vote at the
Annual Meeting will be available for examination by any stockholder, for any
purpose relevant to the meeting, on and after December 1, 1995, during ordinary
business hours at the Company's principal executive offices located at the
address first set forth above.
<PAGE>
IT IS IMPORTANT THAT YOUR SHARES BE REPRESENTED AT THIS MEETING. PLEASE
COMPLETE, DATE, AND SIGN THE ENCLOSED PROXY AND RETURN IT PROMPTLY IN THE
ENCLOSED STAMPED RETURN ENVELOPE, WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL
MEETING. YOU MAY REVOKE YOUR PROXY IN THE MANNER DESCRIBED IN THE ACCOMPANYING
PROXY STATEMENT AT ANY TIME BEFORE IT HAS BEEN VOTED AT THE ANNUAL MEETING.
By Order of the Board of Directors,
Wendy A. Gavaghan
Secretary
Dated: Brookfield, Connecticut
November 22, 1995
<PAGE>
MEMRY CORPORATION
57 COMMERCE DRIVE
BROOKFIELD, CONNECTICUT 06804
(203) 740-7311
--------------------
PROXY STATEMENT
--------------------
ANNUAL MEETING OF STOCKHOLDERS
TUESDAY, DECEMBER 19, 1995
--------------------
INTRODUCTION
This proxy statement ("Proxy Statement") is being furnished in connection with
the solicitation of proxies by the Board of Directors of Memry Corporation (the
"Company") for use at the Annual Meeting of Stockholders (the "Annual Meeting")
to be held on December 19, 1995 and at any adjournment of that meeting. All
proxies will be voted in accordance with the stockholders' instructions and, if
no choice is specified, the proxies will be voted in favor of the matters set
forth in the accompanying Notice of Annual Meeting.
The Company's Annual Report on Form 10-KSB for the Company's fiscal year ended
June 30, 1995 was mailed to stockholders, along with these proxy materials, on
or about November 22, 1995.
The Annual Meeting of Stockholders of Memry Corporation will be held on
Tuesday, December 19, 1995 at Ramada Inn, Exit 8, I-84, Danbury, Connecticut
06810, at 10:00 a.m. local time.
VOTING RIGHTS AND PROXY INFORMATION
Proxies in the accompanying form are solicited on behalf of and at the
direction of the Board of Directors, which has fixed the close of business of
Monday, November 20, 1995, as the record date (the "Record Date") for the
determination of holders of outstanding shares of the Company's Common Stock and
Series G Preferred Stock entitled to notice of and to vote at the Annual Meeting
or any adjournment(s) thereof. Holders of record of Common Stock and Series G
Preferred Stock at the close of business on November 20, 1995, are entitled to
notice of and to vote at the meeting. As of October 12, 1995, there were issued
and outstanding 8,101,532 shares of the Company's Common Stock, each entitled to
one vote, which were held of record on such date by approximately 1,521 holders,
and 423 shares of the Company's Series G Preferred Stock, the holders of which
are entitled to 4,230,000 votes in the aggregate. Holders of the Series G
Preferred Stock, voting separately as one class, have the exclusive right to
elect one director. However, FirstInvest Holdings, Ltd. ("FirstInvest"), the
holder of 100% of the outstanding shares of the Company's Series G Preferred
Stock, has waived such right to elect one director and therefore, all five
directors shall be elected by a plurality of the voting power of the shares of
the Company's Common Stock and the Series G Preferred Stock present and voting
together as a single class (in other words, the five individuals receiving the
largest number of votes will be elected). The affirmative vote of the holders
of a majority of the voting power of the shares of the Company's Common Stock
and the Series G Preferred Stock voting together as a class is required for the
adoption of the resolution authorizing and
<PAGE>
approving the Capitalization Amendment (as defined below). In addition, because
the adoption of the Capitalization Amendment will increase the number of
authorized shares of Common Stock, the affirmative vote of the holders of a
majority of the outstanding shares of Common Stock will also be required.
Because of these voting requirements, a stockholder who abstains from voting on
the resolution to authorize and approve the Capitalization Amendment would in
effect be voting against such proposal because his shares would be recorded as
having abstained and could not be counted in determining whether the necessary
majority vote had been obtained. Broker non-votes would likewise have the
effect of being counted as a vote against such proposal.
All shares of the Company's Common Stock and Series G Preferred Stock
represented by properly executed proxies will be voted at the Annual Meeting in
accordance with the directions indicated on the proxies unless such proxies have
previously been revoked. To the extent that no direction is indicated, the
shares will be voted FOR the election of all of the Company's nominees as
directors and FOR the adoption of a resolution authorizing and approving the
Capitalization Amendment. See "ELECTION OF DIRECTORS," "THE CAPITALIZATION
AMENDMENT." If any other matters are properly presented at the Annual Meeting
for action, including a question of adjourning the meeting from time to time,
the persons named in the proxies and acting thereunder will have discretion to
vote on such matters in accordance with their best judgment. The Annual Meeting
may be adjourned, and additional proxies solicited, if at the time of the Annual
Meeting the votes necessary to approve the Capitalization Amendment have not
been obtained. Any adjournment of the Annual Meeting would require the
affirmative vote of the holders of at least a majority of the shares of the
Company's Common Stock and Series G Preferred Stock represented and voting as a
single class at the Annual Meeting (regardless of whether such shares
constituted a quorum).
Any stockholder who has executed and returned a proxy has the power to revoke
it at any time before it is voted. A stockholder who wishes to revoke a proxy
can do so by attending the Annual Meeting and voting in person, by executing a
later-dated proxy relating to the same shares or by a writing revoking the proxy
and, in the latter two cases, delivering such later-dated proxy or writing to
the Secretary of the Company prior to the vote at the Annual Meeting. Any
writing intended to revoke a proxy should be sent to the Company at its
principal executive offices, 57 Commerce Drive, Brookfield, Connecticut 06804,
Attention: Wendy A. Gavaghan, Secretary.
In addition to the use of the mail, proxies may be solicited via personal
interview and telephone or telegraph by the directors, officers and regular
employees of the Company. Such persons will receive no additional compensation
for such services. Arrangements will also be made with certain brokerage firms
and certain other custodians, nominees and fiduciaries for the forwarding of
solicitation materials to the beneficial owners of the Company's Common Stock
held of record by such persons, and such brokers, custodians, nominees and
fiduciaries will be reimbursed by the Company for reasonable out-of-pocket
expenses incurred by them in connection therewith.
The stockholders of the Company have no dissenters' approval rights in
connection with any of the proposals.
2
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following tables set forth, as of October 12, 1995, information regarding
beneficial ownership of the Company's Common Stock and Series G Preferred Stock
by (i) each person who is known by the Company to own beneficially more than 5%
of the outstanding Common Stock or Series G Preferred Stock (based on
information furnished to the Company on behalf of such persons or otherwise
known to the Company), (ii) each of the directors of the Company, (iii) each of
the executive officers named in the Annual Compensation table set forth under
"Executive Compensation" below, and (iv) all directors and executive officers as
a group.
COMMON STOCK
<TABLE>
<CAPTION>
Percentage of
Name and Address Amount and Nature of Common Stock
of Beneficial Owner Beneficial Ownership Outstanding (1)
- --------------------------------------- ------------------------ ----------------
<S> <C> <C> <C>
Harbour Holdings Limited Partnership 2,328,401 (2)(3) 27.5%
1281 Main Street
Stamford, Connecticut 06902
Harbour Investment Corporation 2,328,401 (2)(3) 27.5%
1281 Main Street
Stamford, Connecticut 06902
National Trust Company Trustee for 3,798,328 (4) 32.4%
Chrysler Canada Ltd. Pension Fund
21 King Street East
Toronto, Ontario, Canada
Group des Assurances Nationales 994,307 (5) 12.0%
("GAN")
2 Rue Pillet-Will
75009 Paris, France
Connecticut Innovations, Incorporated 508,805 (6) 5.9%
40 Cold Spring Road
Rocky Hill, CT 06067
David A. Gardner 500,000 6.2%
Gardner Capital Corporation
445 Park Avenue
New York, New York 10022
James G. Binch 2,648,401 (7) 30.4%
362 Canoe Hill Road
New Canaan, Connecticut 06840
Nicholas J. Grant 31,684 3.9%
Materials Sciences and
Engineering Department
Massachusetts Institute of Technology
Cambridge, Massachusetts 02139
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
Percentage of
Name and Address Amount and Nature of Common Stock
of Beneficial Owner Beneficial Ownership Outstanding (1)
- --------------------------------------- ------------------------ ----------------
<S> <C> <C> <C>
Jack H. Halperin, Esq. 12,500 *
361 Silver Court
Woodmere, New York 11598
W. Andrew Krusen, Jr. 85,152 (8) 1.1%
Dominion Financial Group
Incorporated
2909 Bay-to-Bay Blvd., Suite 600
Tampa, Florida 33629
John A. Morgan 41,184 (9) *
121 Elderwood Avenue
Pelham, New York 10803
All directors and 2,870,921 (10) 33.0%
executive officers as
a group (7 persons)(10)
</TABLE>
SERIES G PREFERRED STOCK
Percentage of
Name and Address Amount and Nature of Series G Preferred
of Beneficial Owner Beneficial Ownership Stock Outstanding
- --------------------- -------------------- ------------------
FirstInvest Holding 423 (11) 100%
Ltd. Inc.
Ch. des Primeveres 45
1701 Fribourg, Switzerland
___________________________________
* Less than one percent.
(1) In each case where shares subject to options or conversion rights are
included as beneficially owned by an individual or group, the percentage of
all shares owned by such individual or group is calculated as if all such
options or conversion rights had been exercised prior to such calculation.
(2) Mr. Binch is the President, Chief Executive Officer and sole stockholder of
Harbour Investment Corporation, the sole general partner of Harbour
Holdings Limited Partnership. Harbour Holdings Limited Partnership is the
direct owner of
4
<PAGE>
such shares of Common Stock. Mr. Binch is also individually a limited
partner of Harbour Holdings Limited Partnership, with a limited partnership
interest of less than one percent.
(3) Includes 363,636 shares of Common Stock for which the warrants owned by
Harbour Holdings Limited Partnership may be exercised at an exercise price
of $7.40 per share.
(4) Includes 3,610,828 shares of Common Stock for which the warrants owned by
National Trust Company, Trustee for Chrysler Canada Ltd. Pension Fund may
be exercised at a per share price equal to the lesser of (x) $0.65 or (y)
75% of the fair market value (determined by appraisal) of such a share at
the time of exercise, subject to adjustment upon the occurrence of certain
events, which warrants expire on December 31, 1995. The warrants issued to
National enjoy "most favored nation status," meaning that if a more
favorable price and/or terms are offered by the Company to third parties,
such more favorable terms will automatically attach to the warrants held by
National. The warrants also have dilution protection throughout their
term, meaning that the stock and warrants held by National will, throughout
the term of the warrants, represent approximately the same percentage of
ownership as they did as of October 29, 1992.
(5) Includes 101,250 shares of Common Stock for which warrants beneficially
owned by GAN may be exercised at $5.00 per share, which warrants expire on
December 15, 1997, as well as 116,667 shares of Common Stock for which
warrants beneficially owned by GAN may be exercised at $2.00 per share at
any time from and after October 1, 1995 to and including December 15, 1999.
(6) Includes 508,805 shares of Common Stock into which a Convertible
Subordinated Debenture issued by the Company to CII is currently permitted
to be converted. This table does not include any other rights which CII
has to acquire shares of Common Stock pursuant to other securities issued
to it by the Company, as CII does not have the right to exercise such
rights within 60 days of October 12, 1995. See "Proposal No. 2 -
Capitalization Amendment." However, assuming that at such time as CII has
the right to fully exercise and/or convert the CII Securities, (i) the
conversion price with respect to the Debenture is $0.80, (ii) the exercise
price with respect to the Class I Warrants is $0.93, (iii) the exercise
price with respect to the Class II Warrants is $1.19, (iv) the exercise
price with respect to the Class III Warrants is $0.65, and (v) the number
of shares of Common Stock outstanding is the same as the number outstanding
on October 12, 1995, at such time CII would beneficially own 2,935,764
shares of Common Stock, or 26.6% of the Common Stock outstanding.
(7) Includes options to purchase 240,000 shares of the Company's Common Stock
at $4.40 per share directly owned by Mr. Binch. Also includes the
2,328,401 shares of Common Stock (including the 363,636 shares of Common
Stock acquirable upon exercise of warrants owned by Harbour Holdings
Limited Partnership). Mr. Binch is the Chief Executive Officer and sole
stockholder of Harbour Investment Corporation, the sole general partner of
Harbour Holdings Limited Partnership. He is individually a limited partner
of Harbour Holdings Limited Partnership, with a limited partnership
interest of less than one percent.
(8) Includes 47,152 shares of Common Stock owned by Dominion Partners, 20,000
shares of Common Stock owned by 169855 Canada Inc., and 8,000 shares of
Common Stock owned by Krusen-Vogt & Co. Mr. Krusen is the President and a
principal shareholder of Dominion Financial Group, Inc. which is the
managing General Partner of Dominion Partners, President of 169855 Canada
Inc., and a General Partner of Krusen-Vogt & Co.
(9) 1,307 of such shares of Common Stock are owned jointly by Mr. Morgan and
his wife, Deborah Morgan. Another 120 of such shares of Common Stock are
owned solely by Mrs. Morgan, and Mr. Morgan disclaims beneficial ownership
of such 120 shares. Another 10,000 of such shares are owned by a trust for
Annette Morgan for which Mr. Morgan is the trustee.
5
<PAGE>
(10) See preceding footnotes. This group does not include William H. Morton, Jr.
or 50,000 shares of Common Stock issued to him by the Corporation, as Mr.
Morton was not hired, and such shares of Common Stock were not issued to
him, until November 7, 1995, subsequent to the date of this table.
(11) FirstInvest Holding Ltd. Inc. ("FirstInvest") is not currently permitted to
convert any shares of Series G Preferred Stock into shares of Common Stock,
and will not have the right to effect such conversion within 60 days of
October 12, 1995. However, pursuant to the terms of Securities Purchase
Agreements executed between the Company and FirstInvest, the Company is
obligated to (i) convene a meeting of the Company's stockholders as soon as
possible, but in any event prior to the end of 1995, for the purpose of
amending the Company's Certificate of Incorporation to increase the number
of authorized shares of Common Stock from 10,000,000 to 25,000,000, and
(ii) at such meeting, cause such proposed amendment (the "Capitalization
Amendment") to be adopted. From and after the date of the filing of the
Capitalization Amendment with the Delaware Secretary of State, FirstInvest
will be permitted to convert each of its shares of G Preferred into 10,000
shares of Common Stock (which conversion ratio is subject to adjustment.)
PROPOSAL NO. - 1 ELECTION OF DIRECTORS
The Board of Directors of the Company consists of five members. All of the
directors are elected annually and hold office until the next succeeding Annual
Meeting of Stockholders or until their respective successors are duly elected
and qualified. It is intended that the persons named as proxies will vote FOR
the election of the following nominees as directors, all of whom currently are
directors of the Company.
<TABLE>
<CAPTION>
Positions with Director
Name Age the Company Since
- -------------------------- --- ----------------------------- --------
<S> <C> <C> <C>
James G. Binch 48 President, CEO, Treasurer and 1989
Chairman of the Board
Nicholas J. Grant 80 Director 1986
John A. Morgan/1/ 49 Director 1989
W. Andrew Krusen, Jr. 47 Director 1994
Jack Halperin/1/ 49 Director 1994
- ------------------------------------------------------------------------
</TABLE>
/1/ Member of Compensation Committee.
JAMES G. BINCH has been President and Chief Executive Officer of the
Company since December 11, 1991, Chairman of the Board since September 24, 1993
and Treasurer since July 19, 1994. He was the President and a director of
Trinity Capital Corporation, a merchant banking firm, from its inception in June
of 1987 to August 1994. He has been the President, Chief Executive Officer and
the sole shareholder of Harbour Investment Corporation, the general partner of
Harbour Holdings Limited Partnership, an investment management company, since
its inception in June 1992. From 1985 to 1987 he served as President and Chief
Operating Officer of Lummus Crest, Inc., the principal engineering subsidiary of
Combustion Engineering, Inc., with annual revenues of $300,000,000 and
approximately 4,000 employees. From 1980 to 1985, Mr. Binch served as Vice
President, Corporate Strategic Planning for Combustion Engineering, Inc., a
manufacturing and engineering firm. Mr. Binch also serves as a director of
Perkins Paper, Ltd., a public company based in Montreal, and Gulfstar Energy,
Inc., an oil and gas company based in Houston,
6
<PAGE>
Texas. Mr. Binch is a graduate engineer from Princeton University. He also
holds an M.B.A. from the Wharton School of the University of Pennsylvania.
NICHOLAS J. GRANT was a Director of the Massachusetts Institute of
Technology's Center for Materials Science and Engineering from 1968 to 1976, and
has been its Abex Professor in Advanced Materials since 1976. Dr. Grant is a
Fellow of the American Society for Metals, a Fellow of the American Institute of
Mining and Metallurgy, a Fellow of the American Academy of Arts, a Member of the
National Academy of Arts and Sciences, and a member of the National Academy of
Engineering. He has published over 380 technical and scientific articles,
including several books. He is a director of Instron Corp., a producer of
instruments and systems for worldwide materials testing; CGM Corp. and Capital
Development Funds, both mutual funds; and National Forge Co., a producer of high
alloy steel and related components. He is also a director of Engineered
Precision Casting Corp., Kimball Physics Corp. and Capital Growth Management.
JACK H. HALPERIN, ESQ., has practiced corporate and securities law in New
York for more than 20 years. Since 1987 he has been in private practice,
concentrating on international financing transactions. Mr. Halperin holds a
B.A. degree (summa cum laude) from Columbia College and a J.D. from New York
University School of Law, where he was Note-and-Comment Editor of the Law
Review. Mr. Halperin is a director of Alamar Biosciences, Inc., I-Flow
Corporation and Xytronyx, Inc.
W. ANDREW KRUSEN, JR., is a graduate of Princeton University with a
Bachelor's Degree in Geology. Since 1989 he has been President of General Group
Holdings, Inc., a family controlled corporation in real estate development,
construction, leasing and manufacturing. In addition, he is Chairman of the
Board of Directors and a principal shareholder of Dominion Energy and Minerals
Corporation, an oil and gas concern, and a principal shareholder and President
of Dominion Financial Group, Inc., which is a merchant banking operation, and
the Managing General Partner of Dominion Partners. In addition Mr. Krusen is
the President of 169855 Canada Inc. and a General Partner of Krusen-Vogt & Co.
He is a director of Jemison, Inc., Raymond James Trust Company, Morrison
Petroleums, Florida Education Fund, Gulfstar Energy, Inc. and First National
Bank of Tampa.
JOHN A. MORGAN has been a Vice President of Smith Barney, an investment
banking firm, since 1992. Prior to that, Mr. Morgan was a Vice President of
Kidder Peabody & Co. since 1982.
On May 31, 1989, the Board of Directors established Audit, Nominating and
Compensation Committees of the Board of Directors. However, separate Audit and
Nominating Committees were eliminated by the Board as of October 11, 1994, with
the full Board of Directors acting as both the Audit and Nominating Committees
from and after October 11, 1994.
In its role as the Audit Committee, the Board of Directors is authorized
(i) to select the Company's independent auditors, (ii) to review all
recommendations made by such independent auditors with respect to the Company's
accounting methods or internal controls, and (iii) to review the scope of the
audit conducted by such independent auditors.
In its role as the Nominating Committee, the Board of Directors is
authorized (i) to establish criteria and procedures for the election of
directors, (ii) to review the qualifications of candidates proposed for
nomination to the Board, (iii) to recommend, prior to each annual meeting of
stockholders, a slate of directors to be elected at such meeting, and (iv) to
recommend, when appropriate, changes in the structure, size or function of the
Board. The Board will consider nominees recommended by security holders.
Security holders wishing to recommend nominees for election as directors at an
annual meeting should submit such recommendation, together with any relevant
information that they wish the Board to consider, to the Company no later than
120 days prior to such annual meeting of stockholders.
The Compensation Committee, the members of which are Messrs. Morgan and
Halperin, is authorized, subject to review by the entire Board (i) to determine
the compensation of officers and directors of the Company and its subsidiaries,
(ii) to make awards under and oversee the administration of the Company's stock
option plans, and (ii) to review the adequacy of all employee benefit plans and
revise existing plans or develop new plans when appropriate. The Compensation
Committee did not meet during the fiscal year ended June 30, 1995.
7
<PAGE>
The Board of Directors held eight meetings during the fiscal year ended
June 30, 1995. Each incumbent director attended 75% or more of the aggregate of
the total number of meetings of the Board of Directors and the total number of
meetings held by all committees of the Board on which he served.
COMPENSATION OF DIRECTORS
Effective November 14, 1994, directors became entitled to receive
compensation comprised of $500 per Board or committee meeting attended in person
and 10,000 shares of Common Stock per annum, such fee to be paid in arrears on
the last day of each fiscal year of the Company for such completed fiscal year.
The Board has agreed to waive the cash portion of this compensation until the
Company is in a strengthened cash-flow position and better able to pay this fee.
Directors are reimbursed for expenses reasonably incurred in connection with the
performance of their duties.
EXECUTIVE OFFICERS OF THE COMPANY
<TABLE>
<CAPTION>
Name Position Age
- ------------------------ --------------------------------------------- ---
<S> <C> <C>
James G. Binch President, Chief Executive Officer, 48
Treasurer & Chairman
Wendy A. Gavaghan Corporate Controller and Secretary 41
Richard L. Martin Vice President - Memry Technologies Division 57
William H. Morton, Jr. Senior Vice President and Chief
Operating Officer 50
</TABLE>
Executive officers are elected until the next annual meeting of the Board
of Directors and until their respective successors are elected and qualified.
Information with respect to Mr. Binch is set forth above.
WENDY A. GAVAGHAN, age 41, has been Corporate Controller and Secretary of
the Company since September 24, 1993. From 1989 until 1993 Ms. Gavaghan served
as Controller of Trinity Capital Corporation, and Ms. Gavaghan has served as
Controller of Harbour Investment Corporation since its inception in June 1992.
From 1978 to 1985, Ms. Gavaghan served in a number of positions of increasing
responsibility with Champion International Corporation in Stamford, Connecticut.
From 1983 to 1985 she served as Western Regional Administrative Manager for the
Building Products Division in Denver, Colorado. Following the leveraged buyout
of the plywood operations of this division in 1985, Ms. Gavaghan moved to
Cincinnati, Ohio, where she served as Manager of M.I.S. Application Support for
the new U.S. Plywood Corporation until 1988. Ms. Gavaghan holds a B.S. degree
in accounting from Sacred Heart University.
RICHARD L. MARTIN, age 57, has been Vice President-Memry Technologies
Division of the Company since September 24, 1993. Mr. Martin joined the Company
in March 1991 as Director of Engineering. Mr. Martin has nearly 30 years of
experience in product engineering with high precision valves and regulators used
in the semiconductor industry, self-contained breathing equipment and aerospace
systems. Prior to joining the Company, Mr. Martin had served as President of
Martin Technology of Hesperia, California and Technical Director, Product
Management and Development, of the Martin/Carten Division of Harsco Corporation,
which acquired Mr. Martin's company in 1987. He has also worked for Aerojet
General Corporation and Pyronetic Devices, all in California. Mr. Martin has a
B.Sc.M.E. from U.C.L.A.
WILLIAM H. MORTON, JR., age 50, was employed by the Company on November 7,
1995 as Senior Vice President and Chief Operating Officer. In addition, since
1985, Mr. Morton has been Vice President, Aircraft Sales, of Coastal Aviation in
Stamford, Connecticut, a general aviation marketing firm, and since 1986, Mr.
Morton has been the sole stockholder and President of The Risor Corporation in
Stamford, Connecticut, a merchant banking firm. During fiscal year 1995, Mr.
Morton also acted as a consultant to the Company. Mr. Morton holds a B.A.
degree from Middlebury College.
8
<PAGE>
EXECUTIVE COMPENSATION
The following table sets forth for the fiscal years ended June 30, 1995,
1994 and 1993, certain information regarding the total remuneration paid to the
Company's chief executive officer and its next most highly compensated executive
officer. No other executive officer or significant other employee of the
Company received total annual salary and bonus in excess of $100,000 during
fiscal 1995.
Summary Compensation Table
--------------------------
<TABLE>
<CAPTION>
Annual Compensation Long Term Compensation Awards
------------------------------------- -------------------------------
(a) (b) (c) (g)
Shares of Common
Name & Principal Fiscal Stock Underlying
Position Year Salary $ Bonus ($) Options/SARs(#)
------------ ------------ ------------ ------------ -----------------
<S> <C> <C> <C> <C>
James G. Binch, President, 1995 $150,000(1) $ -0- 240,000/0 (2)
Chief Executive Officer 1994 $150,000(1) $210,000(3) - 0 -
& Director 1993 $ 95,000(1) $ -0- - 0 -
Edward J. Murphy, V.P. 1995 $120,000 $ 7,500 10,000/1,000 (4)
of the Company and President 1994 $ 25,000 $ -0- - 0 -
Wright 1993 $ - 0 - $ -0- - 0 -
</TABLE>
- ----------------------------
(1) Does not include any amounts which may be deemed to be paid to Mr. Binch by
Harbour Investment Corporation for serving as President of the Company. See
narrative discussion following the tables below.
(2) These options are exercisable in five equal annual installments, commencing
on September 24, 1994.
(3) Mr. Binch's bonus consisted of $50,000 in cash and 80,000 shares of the
Company's Common Stock valued at $2.00 per share.
(4) These options were to vest in two equal annual installments beginning on
January 1, 1995. However, subsequent to fiscal 1995 year end, Mr. Murphy's
employment with the Company and its subsidiary, Wright Machine Corporation,
was terminated. See narrative discussion following the tables below.
Therefore, options exercisable to purchase 5,000 shares of Common Stock
which were to vest on January 1, 1995 have been terminated. In addition,
pursuant to the terms of the Company's Stock Option Plan, the options
exercisable to purchase 5,000 shares of Common Stock which vested on
January 1, 1996 will expire three months from the date of termination of
Mr. Murphy's employment.
------------------------------------------
9
<PAGE>
Option/SAR Grants in Last Fiscal Year
Individual Grants
-----------------
<TABLE>
<CAPTION>
(a) (b) (c) (d) (e)
Number of Shares % of Total
of Common Stock Options/SARs
Underlying Granted to
Options/SARs Employees in Exercise or Base Expiration
Name Granted (#) Fiscal Year(1) Price($/Share) Date
- ------------------ ------------ --------------- ----------------- -----------
<S> <C> <C> <C> <C>
James G. Binch 240,000/0 (2) 55/0% $4.40 9/24/2003
Edward J. Murphy 10,000/1,000 (3) 2.3/11.3% $2.34 7/19/2004
</TABLE>
- ---------------------------
(1) Assumes full vesting of options.
(2) These options are exercisable in five equal annual installments, commencing
on September 24, 1994.
(3) These options vest in two equal annual installments beginning on January 1,
1995.
-----------------------------------------
Aggregated Option/SAR Exercises in Last
Fiscal Year and FY-End Option/SAR Values
----------------------------------------
<TABLE>
<CAPTION>
(a) (d) (e)
Number of Shares
of Common Stock
Underlying Value of Unexercised
Unexercised Options/ In-the-Money Options/
SARs at FY-end (#) SARs at FY-End (#)
Name Exercisable/Unexercisable Exercisable/Unexercisable
- -------------------------- --------------------------- -------------------------
<S> <C> <C>
James G. Binch 240,000 Options Exercisable N/A
Edward J. Murphy 5,000 Options Exercisable N/A
5,000 Options Unexercisable
1,000 SARs Exercisable
</TABLE>
------------------------------------------
10
<PAGE>
Effective September 24, 1993, the Company and James G. Binch entered into a 2-
year employment agreement, which automatically renews for successive 1-year
periods unless or until Mr. Binch or the Company gives notice of its intention
not to renew. Pursuant to said renewal provision, this agreement automatically
renewed for a one-year period effective September 24, 1995. The agreement
entitles Mr. Binch to an annual salary of $150,000 from and after January 1,
1993. The agreement also entitled Mr. Binch to (i) $20,000 as compensation for
services rendered from October 1, 1992, to December 31, 1992, (ii) a bonus of
$50,000 and 80,000 shares of the Company's Common Stock as inducement to enter
into the contract, and (iii) an option to purchase up to 240,000 shares of the
Company's Common Stock at an exercise price of $4.40 per share under and
pursuant to the Memry Corporation Stock Option Plan, subject to the approval of
such Plan by the Company's stockholders (which approval was obtained in the
first quarter of fiscal 1995). The option is exercisable in five equal
installments, commencing on September 24, 1993, and will expire on September 24,
2003. The Agreement also provides that if Mr. Binch's employment is terminated
due to either the failure by the Company to observe or comply with any of the
provisions of such agreement (if such failure has not been cured within 10 days
after written notice of same to the Company), or, at the election of Mr. Binch,
upon a change in control of the Company (and within 6 months of such change in
control), Mr. Binch will be entitled to a lump-sum payment equal to two times
his annual salary at the rate in effect immediately prior to the date of
termination.
Mr. Binch is President, the sole director and the sole stockholder of Harbour
Investment Corporation, a Delaware corporation ("HIC"). HIC is managing general
partner of Harbour Holdings Limited Partnership, a Connecticut limited
partnership ("Harbour") and a significant shareholder of the Company. (See
"Security Ownership of Certain Beneficial Owners and Management"). Pursuant to
Harbour's amended and restated Agreement of Limited Partnership, Harbour
retained HIC to act as its managing general partner, and to perform investment
manager, custodial and administrative services, in consideration of custodial
fees of (i) $465,000 for the period commencing on February 24, 1993, and
continuing through December 31, 1993, and (ii) $350,000 for each of calendar
years 1994 and 1995. One of a number of services performed by HIC for Harbour
is providing the services of Mr. Binch in the capacity of the Company's
President. Because (i) there is no allocation of the annual fee paid by Harbour
to HIC as between providing the services of Mr. Binch as the Company's President
and other services, (ii) HIC does not pay Mr. Binch a salary, and (iii) HIC
incurs numerous expenses in fulfilling its duties to Harbour that must be paid
before it pays either salary or dividends to Mr. Binch, it is impossible to
quantify the amount, if any, that Harbour or HIC could be deemed to be paying
Mr. Binch for serving as President of the Company. Therefore, Mr. Binch's
compensation as set forth in the foregoing compensation table does not include
any such amounts.
Edward J. Murphy's employment with the Company and Wright terminated on
September 22, 1995. Prior to such time, commencing on April 13, 1994, Mr.
Murphy had been Vice President of the Company and President of Wright. The
Company plans to issue to Mr. Murphy 13,000 shares of Common Stock, at an
issuance price of $1.00 per share, pursuant to an agreement reached between the
Company and Mr. Murphy with respect to the termination of his employment.
On November 7, 1995, William H. Morton, Jr. joined the Company as Senior Vice
President and Chief Operating Officer. Mr. Morton's employment agreement
provides for a two-year term of employment, which term automatically renews for
successive one-year periods unless either Mr. Morton or the Company gives
the other notice of his or its intention not to renew such contract. This
agreement entitles Mr. Morton to an annual salary of $150,000. In addition, as
consideration for past services rendered by either Mr. Morton individually or
through The Risor Corporation, this agreement entitles Mr. Morton to 50,000
shares of Common Stock of the Company as well as payment of $50,000 to The Risor
Corporation. This agreement also grants to Mr. Morton options exercisable to
purchase 125,000 shares of Common Stock for an exercise price of $_________,
exercisable in five equal annual installments, terminating on November 7, 2005.
In the event of a change in control of the Company, these options will become
immediately exercisable.
11
<PAGE>
CERTAIN RELATIONSHIPS AND TRANSACTIONS
The original holder of the Company's Series A Preferred Stock and Series B
Preferred Stock (collectively the "Series A and Series B Preferred Stock"),
Harbour Holdings Limited Partnership ("Harbour"), which as of October 12, 1995
was the beneficial owner of more than five percent of the Common Stock, agreed
to permit the Company to defer dividends due on the Series A and Series B
Preferred Stock it held beginning with the first quarter of fiscal 1992, except
to the extent that the Company achieved positive cash flow. The Company was to
accrue any such deferred dividends until such time as they were paid. Harbour
thereafter waived all dividends accruing after June 30, 1993 on the Series A and
Series B Preferred Stock. By letter agreement dated May 22, 1995, Harbour
agreed to accept the issuance of 747,500 shares of Common Stock, valued at $0.80
per share, as payment in full of accrued dividends in the amount of $598,000.
By same letter agreement, Harbour agreed to convert, and simultaneously did
convert, 124 shares of Series A Preferred Stock of the Company and 250 shares of
Series B Preferred Stock of the Company into 424,426 shares of Common Stock and
312,500 shares of Common Stock, respectively. No shares of Series A Preferred
Stock or Series B Preferred Stock remain outstanding.
In April 1994 the Company and Harbour entered into a Securities Exchange
Agreement providing for the exchange by Harbour of 480,000 shares of Common
Stock of the Company owned by Harbour for 480 shares of the Company's Series F
Preferred Stock, which exchange was effected simultaneously with the execution
of such Securities Exchange Agreement. This exchange was necessary in order to
allow the Company to have a sufficient number of authorized, but unissued,
shares of Common Stock to complete certain private placements of the Company's
Common Stock. Upon consummation of the one-for-ten reverse stock split which
the Company effected on August 8, 1994, the Series F Preferred Stock was
converted back into 480,000 shares of Common Stock. No shares of Series F
Preferred Stock remain outstanding. Mr. Binch is the President, Chief Executive
Officer and sole shareholder of Harbour Investment Corporation, the sole general
partner of Harbour. He is also individually a limited partner of Harbour, with
a limited partnership interest of less than one percent.
Pursuant to a Convertible Subordinated Debenture Purchase Agreement, dated as
of December 22, 1994 and amended as of October 12, 1995, the Company issued to
CII the following securities: (i) a Convertible Subordinated Debenture dated
December 22, 1994 from the Company to CII in the principal amount of $763,208
(the "Debenture"), (ii) a warrant dated December 22, 1994 to purchase 508,805
shares of Common Stock at an initial exercise price of $2.15 per share (the
"Class I Warrants"), (iii) a warrant dated December 22, 1994 to purchase 305,283
shares of Common Stock at an initial exercise price of $2.75 per share (the
"Class II Warrants"), and (iv) a warrant dated December 22, 1994 to purchase
100,000 shares of Common Stock at an initial exercise price of $1.00, such
warrant being an amendment and restatement of a warrant previously held by CII
to purchase 10,000 shares of Common Stock at an exercise price of $10.00 per
share. As of October 12, 1995, CII beneficially owned more than five percent of
the Common Stock.
On December 23, 1994, the Company sold to Banque pour L'Industrie Francaise
(ref. GAN) ("GAN") 116,667 shares of Common Stock at a per share purchase price
of $1.50, for an aggregate purchase price of $175,000. GAN was also issued a
warrant to purchase 116,667 additional shares of Common Stock at an exercise
price of $2.00 per share. In addition, on June 5, 1995, the Company sold to GAN
307,690 shares of Common Stock at a per share purchase price of $0.65, for an
aggregate purchase price of $199,998.50. As of October 12, 1995, GAN
beneficially owned more than five percent of the Common Stock.
On June 26, 1995 and July 17, 1995, FirstInvest Holding Ltd. Inc.
("FirstInvest") purchased 193 shares and 230 shares, respectively, of Series G
Preferred Stock ("G Preferred") of the Company at a per share price of $6,500
for an aggregate purchase price of $2,749,500. At the time of this transaction,
FirstInvest was not a holder of any securities of the Company, and such
transaction was negotiated on an arm's length basis. FirstInvest is not
currently permitted to convert any shares of G Preferred into shares of Common
Stock. However, pursuant to the terms of Securities Purchase
12
<PAGE>
Agreements executed between the Company and FirstInvest, the Company is
obligated to (i) convene a meeting of the Company's stockholders as soon as
possible, but in any event prior to the end of 1995, for the purpose of amending
the Company's Certificate of Incorporation to increase the number of authorized
shares of Common Stock from 10,000,000 to 25,000,000, and (ii) at such meeting,
cause such proposed amendment to be adopted. From and after the date of the
filing of a Certificate of Amendment to its Certificate of Incorporation with
the Delaware Secretary of State to effect such amendment, FirstInvest will be
permitted to convert each of its shares of G Preferred into 10,000 shares of
Common Stock (which conversion ratio is subject to adjustment). As of October
12, 1995, FirstInvest beneficially owned more than five percent of the G
Preferred.
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
directors, executive officers and 10% beneficial owners of the Company's Common
Stock to file certain reports concerning their ownership of the Company's equity
securities. Based solely upon a review of Forms 3 and 4 and amendments thereto
furnished to the Company during its most recently completed fiscal year, and
Forms 5 and amendments thereto furnished to the Company with respect to its most
recently completed fiscal year, the directors, officers and beneficial owners of
10% or more of the Registrant's Common Stock which failed to make the requisite
filings on a timely basis are set forth below.
Jack H. Halperin, W. Andrew Krusen, Jr. and John A. Morgan were elected
Directors of the Company on July 19, 1994. None of Messrs. Halperin, Krusen or
Morgan filed a Form 3 with respect to this event. Such Forms 3 should have been
filed with the Commission by July 29, 1994. However, each of Messrs Halperin,
Krusen and Morgan subsequently timely filed, on August 14, 1995, a Form 5 to
report such event. In addition, 10,000 shares were issued to each of Dr. Grant
and Messrs. Halperin, Krusen and Morgan as of June 30, 1995 in consideration of
the services provided by each such individual as a Director. This issuance
should have been reported on a Form 4 for each such person filed with the
Commission by July 10, 1995. However, this issuance was subsequently reported
on a Form 5 for each such person timely filed on August 14, 1995.
With respect to Dr. Grant, in addition to the above-described failure to file
a Form 4, the purchase of 5,000 shares of Common Stock on April 28, 1994 and
15,384 shares of Common Stock on June 22, 1995 should have been reported on
Forms 4 filed with the Commission by May 10, 1994 and July 10, 1995,
respectively. While a Form 5 was not filed by August 14, 1994 to report the
April 28, 1994 transaction, both of these transactions were subsequently
reported on the Form 5 for Dr. Grant timely filed, with respect to the June 22,
1995 purchase, with the Commission on August 14, 1995.
With respect to Mr. Krusen, in addition to the above-described failures to
file a Form 3 and a Form 4, the purchase of 14,286 shares of Common Stock by
Dominion Partners, an entity of which Mr. Krusen is a general partner, on
December 9, 1994 should have been reported on a Form 4 filed with the Commission
by January 10, 1995. However, this transaction was subsequently reported on the
Form 5 for Mr. Krusen timely filed with the Commission on August 14, 1995.
With respect to Mr. Morgan, in addition to the above-described failure to file
a Form 4, (i) the cancellation of options exercisable to purchase 4,000 shares
of Common Stock should have been reported on a Form 5 filed with the Commission
on August 14, 1994, (ii) the purchase on October 2, 1993 of 17,500 shares of
Common Stock should have been reported on a Form 4 filed with the Commission by
November 10, 1993, and (iii) the purchase by a trust as to which Mr. Morgan is a
trustee should have been reported on a Form 4 filed with the Commission by
December 10, 1993. However, all of these transactions were subsequently
reported on the Form 5 for Mr. Morgan filed on August 14, 1995.
Mr. Binch, Harbour Investment Corporation and Harbour Holdings Limited
Partnership failed to file a Form 4 to report the following transactions by
Harbour Holdings Limited Partnership: the conversion on August 8, 1994 of 480
13
<PAGE>
shares of Series F Preferred Stock into 480,000 shares of Common Stock, the
conversion on May 22, 1995 of 124 shares of Series A Preferred Stock into
424,426 shares of Common Stock, the conversion on May 22, 1995 of 250 shares of
Series B Preferred Stock into 312,500 shares of Common Stock and the issuance on
May 22, 1995 of 747,500 shares of Common Stock as payment in full of accrued
dividends with respect to the Series A and Series B Preferred Stock. The
conversion of the Series F Preferred Stock should have been reported on a Form 4
filed with the Commission by September 10, 1994, and the other transactions
should have been reported on a Form 4 filed with the Commission by June 10,
1995. In addition, Mr. Binch failed to file a Form 5 by August 14, 1994 with
respect to the issuance to him on September 23, 1993, subject to subsequent
stockholder approval which was obtained on July 19, 1994, of options exercisable
to purchase 240,000 shares of Common Stock at an exercise price of $4.40 per
share. However, all of these transactions were subsequently reported on a Form
5 filed with the Commission on August 14, 1995, which was timely filed with
respect to all such transactions except the issuance of options to Mr. Binch.
Mr. Binch is the President, Chief Executive Officer and sole shareholder of
Harbour Investment Corporation, the general partner of Harbour Holdings Limited
Partnership.
The Company has not received a Form 3 from Group Des Assurances Nationales
("GAN") reporting its initial acquisition, in March 1990, of more than 10% of
the Company's Common Stock. Furthermore, the Company did not receive a Form 4
to report GAN's purchase on December 23, 1994 of 116,667 shares of Common Stock,
which Form 4 should have been filed with the Commission by January 10, 1995, and
did not receive a Form 4 to report GAN's purchase on June 5, 1995 of 307,690
shares of the Company's Common Stock, which Form 4 should have been filed with
the Commission by July 10, 1995. The Company also has not received a Form 3
from National Trust Company, trustee for Chrysler Canada Ltd. reporting its
initial acquisition, in October 1991, of more than 10% of the Company's Common
Stock.
PROPOSAL NO. 2 - THE CAPITALIZATION AMENDMENT
SUMMARY OF CAPITALIZATION AMENDMENT
The stockholders are being requested to approve a proposal to amend the
Company's Certificate of Incorporation by amending the first paragraph of
Article 4 thereof. The text of the revised first paragraph of Article 4 is as
follows:
4. The total number of shares of all classes of stock which the
Corporation shall have authority to issue is Twenty Five Million One
Hundred Thousand (25,100,000) shares consisting of (a) Twenty Five
Million (25,000,000) shares of common stock of the par value of One Cent
($0.01) per share, and (b) One Hundred Thousand (100,000) shares of
preferred stock of the par value of One Hundred Dollars ($100.00) per
share.
This amendment to the Certificate of Incorporation (the "Capitalization
Amendment") would increase the number of authorized shares of Common Stock from
10,000,000 to 25,000,000. The approval of the Capitalization Amendment will
require the affirmative vote of the holders of a majority of the outstanding
shares of the Company's Common Stock and Series G Preferred Common Stock, voting
together as a single class. In addition, because the adoption of the
Capitalization Amendment would increase the number of authorized shares of
Common Stock, the affirmative vote of the holders of a majority of the
outstanding shares of Common Stock will also be required. The Board of
Directors recommends a vote FOR approval of the Capitalization Amendment.
14
<PAGE>
REASONS FOR AND EFFECT OF INCREASE IN NUMBER OF AUTHORIZED SHARES
The additional authorized shares of Common Stock are needed both to allow for
the full exercise and conversion of all of the Company's current outstanding and
contemplated options, rights and convertible securities, as well as to provide
the Company with future flexibility in effecting equity financings.
As of October 12, 1995, the authorized capital stock of the Company was
10,000,000 shares of Common Stock, par value $0.01 per share, and 100,000 shares
of Preferred Stock, par value $100.00 per share. On such date, 8,101,532 shares
of the Company's Common Stock were issued and outstanding and 423 shares of the
Company's Series G Preferred Stock were issued and outstanding. 1,229,634
shares of the Company's Common Stock were reserved for issuance upon the
exercise of outstanding warrants and 508,805 shares of Common Stock were
reserved for issuance upon the conversion of a Convertible Subordinated
Debenture (the "Debenture") issued to Connecticut Innovations, Incorporated
("CII"). In addition, the Company is obligated to issue an additional 140,000
shares of Common Stock to certain past or current employees and one creditor.
As a result, based on such numbers, only 20,029 shares of the Company's Common
Stock are neither issued nor reserved for any particular purpose. However, the
Company is contractually obligated (i) to issue up to 6,614,015 shares of Common
Stock upon the exercise of outstanding warrants (which would require the
reservation of an additional 5,384,381 shares of Common Stock), (ii) to issue up
to 431,500 shares of Common Stock upon the exercise of outstanding options,
(iii) to provide by December 20, 1995 for the full conversion of securities
issued to CII (the "CII Securities") (which would require the reservation of an
additional 445,205 shares beyond the 508,805 shares of Common Stock already
reserved for conversion of the Debenture (excluding from this number shares of
Common Stock which would need to be reserved for the exercise of warrants issued
to CII, which are dealt with in the preceding clause (i)), and (iv) to provide
by December 31, 1995 for the full conversion of each share of Series G Preferred
Stock outstanding (which would require the reservation of an additional
4,230,000 shares of Common Stock). If the Capitalization Amendment is not
approved, the Company would be unable to fulfill its contractual obligations
with respect to its outstanding warrants, options, Series G Preferred Stock and
the Debenture, and the holders of such securities could have legal recourse
against the Company. Furthermore, with respect to the Debenture, CII would be
entitled to demand payment of the loan evidenced by the Debenture as well as to
demand that the Company purchase all of the Company's securities owned by CII at
a price equal to the greater of (i) that amount which yields to CII a compounded
rate of return of 25% per annum on that portion of the purchase price originally
paid by CII for the CII Securities allocated to securities still held by CII
plus any exercise prices paid to acquire Common Stock, and (ii) the difference
between (x) the product of the current market price on the date on which CII has
demanded such purchase multiplied by the number of shares of Common Stock
included within or acquirable upon the exercise or conversion of all of the CII
Securities minus (y) any exercise prices that would have to be paid.
If the Capitalization Amendment is adopted, the Company's Board of Directors
will promptly reserve (i) an additional 5,384,381 shares of Common Stock for
issuance upon the exercise of all outstanding warrants, including warrants
issued to CII (the reservation of 3,610,828 of which will be terminated upon the
expiration of certain underlying warrants on December 31, 1995), (ii) an
additional 445,205 shares of Common Stock for issuance upon the conversion of
the Debenture, (iii) 600,000 shares of Common Stock for issuance upon the
exercise of options issued or to be issued pursuant to the Company's Stock
Option Plan and (iv) 4,230,000 shares of Common Stock for issuance upon the
conversion of outstanding shares of Series G Preferred Stock.
If the Capitalization Amendment is approved by the Company's stockholders, the
Company would still have, after the above reservations, approximately 4,360,000
authorized, but unissued and unreserved, shares of Common Stock. Thereafter,
subject to the limitations of Delaware law and other applicable laws and
regulations (including those requiring stockholder approval for certain
actions), the Board of Directors will have authority, on behalf of the Company,
to issue all or a portion of such unissued and unreserved shares of Common
Stock, along with additional shares reserved for issuance upon the exercise of
any options or warrants that expire unexercised, without further amendment to
the Certificate
15
<PAGE>
of Incorporation and without further approval of the holders of Common Stock
(although, as long as 230 shares of Series G Preferred Stock remain outstanding,
approval by two thirds of the voting power of the Series G Preferred Stock then
outstanding, voting together as a single class, will be required for the
issuance of such shares, subject to certain limitations). The additional
authorized shares of Common Stock will provide the Company with future
flexibility to raise funds through the sale of common equity. Additional
financing may be required to fund operations if the Company is unable to achieve
and maintain a positive cash flow or to finance any expansion of the Company's
business, and some or all of that financing might best be obtained by the sale
of Common Stock. This would not be possible without an increase in the number
of authorized shares of Common Stock. The Company is not able to accurately
forecast whether additional shares of Common Stock will need to be sold, or how
many, because it is not certain whether additional financing will be required,
or how much, nor what portion of any such financing will consist of sales of
Common Stock, as opposed to loans or sales of Preferred Stock.
If any or all of the outstanding warrants, options or the Debenture are
exercised to purchase or converted into shares of Common Stock, current holders
of shares of Common Stock could have their current ownership of the Company's
Common Stock substantially diluted.
16
<PAGE>
INDEPENDENT AUDITORS
McGladrey & Pullen, LLP ("M&P") have audited the consolidated financial
statements of the Company for the fiscal year ended June 30, 1995. The
selection of M&P was made by the Board of Directors in its capacity as Audit
Committee, which reviewed the professional competence of the firm and its audit
scope. It is expected that a representative of M&P will be present at the
Annual Meeting to respond to appropriate questions of stockholders and to make a
statement if he so desires.
On June 19, 1995, Ernst & Young LLP ("E&Y") resigned as independent auditors
of the Company. A Form 8-K was filed by the Company with the Securities and
Exchange Commission (the "Commission") on June 26, 1995 to report this event.
On September 20, 1995, the Company engaged M&P as its independent auditors. A
Form 8-K was filed by the Company with the Commission on September 27, 1995 to
report this event.
E&Y's reports on the Company's financial statements for each of the two fiscal
years ended June 30, 1994 and 1993 were modified with respect to the existence
of substantial doubt about the ability of the Company to continue as a going
concern. Except as provided in the immediately preceding sentence, said reports
did not contain an adverse opinion or disclaimer of opinion and were not
qualified or modified as to uncertainty, audit scope or accounting principles.
Neither the Company nor anyone on its behalf consulted M&P regarding the
application of accounting principles to a specific completed or contemplated
transaction, or the type of audit opinion that might be rendered on the
Company's financial statements, and no written or oral advice concerning the
same was provided to the Company that was an important factor considered by the
Company in reaching a decision as to any accounting, auditing or financial
reporting issue. Furthermore, in connection with E&Y's audits of the Company's
financial statements for each of the two fiscal years ended June 30, 1993 and
June 30, 1994, respectively, and through the date of the subsequent interim
periods ending June 19, 1995 (the date of E&Y's resignation as the Company's
independent auditors), E&Y and the Company did not have any disagreements on any
matters of accounting principles or practices, financial statement disclosure or
auditing scope and procedures which disagreements, if not resolved to E&Y's
satisfaction, would have caused E&Y to make a reference to the subject matter of
the disagreements in E&Y's report. E&Y has not performed any procedures with
respect to the interim periods after the fiscal year ended June 30, 1994.
17
<PAGE>
STOCKHOLDER PROPOSALS
Stockholder proposals intended to be presented at the Company's 1996 Annual
Meeting of Stockholders, which the Company contemplates holding in December
1996, must be received at the Company's principal executive offices located at
57 Commerce Drive, Brookfield, Connecticut 06804 on or before August 20, 1996
for consideration for inclusion in the Company's Proxy Statement and form of
proxy relating to that meeting.
OTHER MATTERS
As of the date of this Proxy Statement, the Company's management does not know
of any business, other than that mentioned above, which will be presented for
consideration at the Annual Meeting. However, if any other matters should
properly come before the Annual Meeting, it is the intention of the persons
named in the accompanying form of proxy to vote the proxies in accordance with
their judgment on such matters.
EXHIBITS TO ANNUAL REPORT ON FORM 10-KSB
THE COMPANY WILL PROVIDE, AT A CHARGE OF $0.10 PER PAGE TO COVER PHOTOCOPYING
EXPENSES, TO EACH BENEFICIAL HOLDER OF ITS COMMON STOCK ON THE RECORD DATE, UPON
THE WRITTEN REQUEST OF ANY SUCH PERSON, COPIES OF THE EXHIBITS TO THE COMPANY'S
ANNUAL REPORT ON FORM 10-KSB FOR THE FISCAL YEAR ENDED JUNE 30, 1995, AS FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION. ANY SUCH REQUEST SHOULD BE MADE IN
WRITING TO WENDY A. GAVAGHAN, SECRETARY, MEMRY CORPORATION, 57 COMMERCE DRIVE,
BROOKFIELD, CONNECTICUT 06804.
By Order of the Board of Directors
Wendy A. Gavaghan
November 22, 1995
18
<PAGE>
APPENDIX
PRELIMINARY COPIES
MEMRY CORPORATION
PROXY FOR ANNUAL MEETING
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
THE UNDERSIGNED, REVOKING ALL PREVIOUS PROXIES, HEREBY APPOINTS JAMES G. BINCH
AND WENDY A. GAVAGHAN, OR EITHER OF THEM (THE "PROXIES") AS ATTORNEYS AND
PROXIES, EACH WITH FULL POWER OF SUBSTITUTION AND ALL OF THE POWERS WHICH THE
UNDERSIGNED WOULD POSSESS, IF PRESENT IN PERSON, TO REPRESENT AND VOTE, AS
DESIGNATED BELOW, ALL OF THE SHARES OF COMMON STOCK AND/OR SHARES OF SERIES G
PREFERRED STOCK OF MEMRY CORPORATION (THE "COMPANY"), REGISTERED IN THE NAME OF
THE UNDERSIGNED AT THE ANNUAL MEETING OF STOCKHOLDERS OF THE COMPANY TO BE HELD
ON DECEMBER 19, 1995, AND AT ANY ADJOURNMENT THEREOF.
THE SHARES REPRESENTED HEREBY WILL BE VOTED AS DIRECTED BY THIS PROXY. IF NO
DIRECTION IS MADE, THE PROXIES WILL VOTE SUCH SHARES FOR THE ELECTION OF ALL
NOMINEES FOR DIRECTOR LISTED UNDER PROPOSAL 1 AND FOR THE AMENDMENT TO THE
CERTIFICATE OF INCORPORATION DESCRIBED IN PROPOSAL 2, AND SUCH PROXIES WILL VOTE
IN ACCORDANCE WITH THEIR DISCRETION ON SUCH OTHER MATTERS AS MAY PROPERLY COME
BEFORE THE MEETING.
(IMPORTANT - TO BE MARKED, SIGNED AND DATED ON REVERSE SIDE)
<PAGE>
[X] PLEASE MARK YOUR VOTES AS IN THIS EXAMPLE.
1. ELECTION OF DIRECTORS
NOMINEES: JAMES G. BINCH, NICHOLAS J. GRANT, W. ANDREW KRUSEN, JR., JACK H.
HALPERIN, JOHN A. MORGAN.
[_] FOR ALL NOMINEES [_] WITHHELD FROM ALL NOMINEES
FOR, EXCEPT VOTE WITHHELD FROM THE FOLLOWING NOMINEE(S):
[_] ____________________________________
2. PROPOSAL TO AMEND THE COMPANY'S CERTIFICATE OF INCORPORATION TO INCREASE THE
NUMBER OF AUTHORIZED SHARES OF THE COMPANY'S COMMON STOCK FROM 10,000,000 TO
25,000,000.
[_] FOR [_] AGAINST [_] ABSTAIN
3. IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON SUCH OTHER
BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING.
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.
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SIGNATURE OF STOCKHOLDER
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SIGNATURE IF HELD JOINTLY
DATE: __________________________________, 1995
NOTE: PLEASE SIGN EXACTLY AS NAME APPEARS HEREON. WHEN
SHARES ARE HELD BY JOINT TENANTS, BOTH SHOULD SIGN.
EXECUTORS, ADMINISTRATORS, TRUSTEES AND OTHER
FIDUCIARIES SHOULD SO INDICATE WHEN SIGNING. IF A
CORPORATION, PLEASE SIGN IN FULL CORPORATE NAME BY
PRESIDENT, OR OTHER AUTHORIZED OFFICER. IF A
PARTNERSHIP, PLEASE SIGN IN PARTNERSHIP NAME BY
AUTHORIZED PERSON. THIS PROXY MAY BE MAILED,
POSTAGE-FREE, IN THE ENCLOSED ENVELOPE.
