MEMRY CORP, DEF 14A, 1996-10-28

MEMRY CORP
DEF 14A, 1996-10-28
MACHINE TOOLS, METAL CUTTING TYPES

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<PAGE>

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:

[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to (S)240.14a-11(c) or (S)240.14a-12

MEMRY CORPORATION
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)

- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of filing fee (Check the appropriate box):

[X] No fee required

[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11

1) Title of each class of securities to which transaction applies:

- --------------------------------------------------------------------------------
2) Aggregate number of securities to which transaction applies:

- --------------------------------------------------------------------------------
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it is determined):

- --------------------------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:

- --------------------------------------------------------------------------------
5) Total fee paid:

- --------------------------------------------------------------------------------

[ ] Fee paid previously with preliminary materials.

[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.

1) Amount Previously Paid:
- --------------------------------------------------------------------------------
2) Form, Schedule or Registration Statement No.:
- --------------------------------------------------------------------------------
3) Filing Party:
- --------------------------------------------------------------------------------
4) Date Filed:
- --------------------------------------------------------------------------------

<PAGE>

October 28, 1996

Dear Memry Corporation Stockholder:

We are hopeful many, if not most of you, have seen the news releases issued
by Memry in early July announcing Memry's acquisition of the shape memory alloy
products and components business of Raychem Corporation, based in Menlo Park,
California. Even if you have, we feel it appropriate to more fully advise you of
the major impact of this transaction on your company and the significant
benefits expected therefrom. Additionally, fiscal 1996 (ended June 30th)
witnessed further progress of the core Memry business activities in which you
have invested. The purpose of this letter is to better apprise you of the
dramatically strengthened outlook and composition of the "new" Memry
Corporation.

Reflecting upon the acquisition, Raychem Corporation (RYC - NYSE) is a $1.7
billion manufacturer of specialty metals and components utilized extensively by
original equipment manufacturers around the world, including automotive,
electronic, aerospace, utility and medical manufacturers. In the late 1960's
Raychem began to investigate and invest in the field of shape memory alloys.
During the intervening years Raychem pioneered a number of new applications,
invented several important proprietary alloys (several of which are currently
used by Memry), and more recently made significant inroads into medical
applications.

During the past four years Raychem developed the largest secondary
processing capability for shape memory alloys in Western Europe and North
America. Growth exceeded 30 per cent annually for medical, cellular telephone
and industrial OEM markets worldwide. Memry Corporation was only one of several
bidders for the business. The cornerstone of Memry's approach was to acquire the
revenue producing assets and associated intellectual properties of this business
and simultaneously enter into a long term, exclusive private label/distribution
agreement with Raychem's worldwide Electronics Division. Excluded from the
private label/distribution agreement are all medical implant applications, a
growing medical assembly business serving United States Surgical Cooperation,
and Memry's existing end use products (such as MemrySafe(R), UltraValve/TM/,
FireCheck(R), Nicklaus Golf Equipment I.Q./TM/ Inserts, and the MemryTec/TM/
valve products). All of these products will continue to be sold to the market
place directly by Memry. Highlighted below are several of the most immediate
<PAGE>

benefits of this transaction:

- A $4.5 million medical assembly business building laparoscopic
surgical components for United States Surgical Corporation.
- A proprietary position in the supply of shape memory tubular
products, nearly all of which are supplied to medical customers
in the United States and abroad.
- A leading position in the supply of cellular telephone antenna
materials used by Motorola, Nokia, L.M. Erikson and others.
- Control over the dominant patented alloy used for shape memory
actuators and unrestricted access to another patented alloy used for
connectors and sealing systems, such as Diesel Technology
Corporation's application in high pressure fuel injectors.
- The medical material, component and assembly business is expected to
exceed $7 million in FY 1997.
- Inclusive of medical business, the aggregate shape memory alloy
revenue base is now expected to exceed $13 million in
FY 1997 - a six fold increase over FY 1996.
- An outstanding marketing and distribution partner with over 100 field
sales engineers throughout the world, most of whom are
technically knowledgeable about shape memory alloy materials
and subsequent applications.

In short, this transaction transforms Memry Corporation from a company
engaged in the development and manufacture of proprietary end use products
incorporating the features of shape memory metals to a much larger, integrated
supplier of shape memory metals, products and technology to rapidly growing
markets - with a strong worldwide sales and marketing presence.

During 1996 Memry also continued to establish a number of important
commercial revenue platforms independent of the Raychem acquisition,
specifically:

- Nicklaus Golf Equipment introduced its new line of wedges and a
putter under the trade name I.Q./TM/ insert. All of these inserts are
supplied by Memry Corporation, which holds a patent pending on the
application and has applied for trademark protection for the alloy
involved (ZeeMet/TM/).

- Achieved primary supplier status for InStent Incorporated, acquired
by
<PAGE>

Medtronic, Inc. in June, 1996, for the supply of Nickel Titanium used
in the manufacture of medical stent products.

- Retained High Mark Group, Inc.. as a distributor for distribution of
the MemrySafe(R) product line to public housing agencies throughout
the United States.
- Continued development of the marketing and distribution of the
UltraValve(TM) product line by American Standard thoughout the United
States.
- Continued development and implementation of a new national plumbing
standard covering the MemrySafe(R) product line - to be known as ASSE
1062 - expected to become effective by calendar year end.
- Successful market penetration of United States Military base family
day care centers, with over fifty such facilities now using the
MemrySafe(R) products.
- Capturing a major development program with McDonnell Douglas
Helicopter Systems for the development and supply of micro-tabs for
helicopter rotor blades, the first phase of which has a value of over
$300,000.
- Successful demonstration of new, proprietary titanium-based shape
memory alloy for medical and orthodontic use. Patents relating
thereto will be filed in 1996, with expected product introduction to
the medical world late in 1997.

The combined efforts of our respective operations (old and new) have
resulted in a radically different and stronger company. Your company is in
transformation from a primarily R & D company to a full fledged commercial, high
technology enterprise. Such activities have already achieved pro-forma revenues
of more than $12,000,000 in FY 1996, an equity base in excess of $6 million and
assets of over $9 million.

Memry's Annual Report on Form 10-KSB, which includes audited financial
results (exclusive of the results of the acquisition's operations contained
---------
therein) is included in this package in advance of our Annual Stockholders
Meeting on December 5, 1996. Copies of the Company's Quarterly Report on Form
10-QSB for the first fiscal quarter of FY 1997, which includes the results of
operations of the acquired business, will be available for stockholders at the
Annual Meeting.

Needless to say, we look forward with enthusiasm to the future, with
several critical strategic objectives in our sights:
<PAGE>

- To become the recognized world leader in the application and supply
of shape memory and super elastic products and materials,
- To firmly establish Memry Corporation as the company of choice for
medical applications expertise and supply within this field of
material technology,
- To achieve rapid revenue growth through the end of the decade, and
- To attain and sustain a significant financial return for our
investors.

We look forward to meeting and sharing with you the many exciting
advancements made since our last meeting.

Sincerely yours,

/s/ James G. Binch

JAMES G. BINCH
Chariman, President and C.E.O.
<PAGE>

MEMRY CORPORATION

57 COMMERCE DRIVE
BROOKFIELD, CONNECTICUT 06804
(203) 740-7311

--------------------

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
--------------------

October 28, 1996

To the Holders of Common 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 the Ramada Inn,
Exit 8, I-84, Danbury, Connecticut 06810, on Thursday, December 5, 1996, 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 25,000,000 to 30,000,000.

3. To consider and vote upon an amendment to the Memry Corporation Stock
Option Plan to increase the maximum number of shares of the Company's
Common Stock that could be issued pursuant thereto from 600,000 to
1,100,000.

4. 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 October 15, 1996,
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 November 1, 1996, 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,

/s/ Wendy A. Gavaghan

Wendy A. Gavaghan
Secretary

Dated: Brookfield, Connecticut
October 28, 1996

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<PAGE>

MEMRY CORPORATION

57 COMMERCE DRIVE
BROOKFIELD, CONNECTICUT 06804
(203) 740-7311

--------------------

PROXY STATEMENT

--------------------

ANNUAL MEETING OF STOCKHOLDERS
THURSDAY, DECEMBER 5, 1996

--------------------

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 5, 1996, 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, 1996 was mailed to stockholders, along with these proxy
materials, on or about October 28, 1996.

The Annual Meeting of Stockholders of Memry Corporation will be held on
Thursday, December 5, 1996 at the 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
Tuesday, October 15, 1996, as the record date (the "Record Date") for the
determination of holders of outstanding shares of the Company's Common Stock
entitled to notice of and to vote at the Annual Meeting or any adjournment(s)
thereof. Holders of record of Common Stock at the close of business on October
15, 1996, are entitled to notice of and to vote at the meeting. As of October
1, 1996, there were issued and outstanding 16,657,354 shares of the Company's
Common Stock, each entitled to one vote, which were held of record on such date
by approximately 1,489 holders. All five directors shall be elected by a
plurality of the shares of the Company's Common Stock present and voting (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 is required for the adoption of the
resolution authorizing and approving the Capitalization Amendment (as defined
below). 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. The affirmative
vote of the holders of a majority of the present and voting shares of the
Company's Common Stock
<PAGE>

is required for the adoption of the resolution authorizing and approving the
Stock Option Plan Amendment (as defined below). Shares that abstain from voting
on the Stock Option Plan Amendment, as well as broker non-votes, would not be
counted either in favor of or against the proposal.

All shares of the Company's Common 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, FOR the adoption of a
resolution authorizing and approving the Capitalization Amendment and FOR the
adoption of a resolution approving the Stock Option Plan Amendment. See
"PROPOSAL NO. 1 - ELECTION OF DIRECTORS," "PROPOSAL NO. 2 - THE CAPITALIZATION
AMENDMENT" and "PROPOSAL NO. 3 - THE STOCK OPTION PLAN 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 a quorum is
not present or 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 represented 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' 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 1, 1996 and giving effect to the
one-for-ten reverse stock split effected on August 8, 1994, information
regarding beneficial ownership of the Company's Common Stock by (i) each person
who is known by the Company to own beneficially more than 5% of the outstanding
Common 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 (iii) all directors
and executive officers as a group. Security ownership of shares of Series G
Preferred Stock and Series H Preferred Stock is not described below, as all
shares of Series G Preferred Stock and Series H Preferred Stock automatically
converted into shares of Common Stock on September 4, 1996.

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) 13.7%
1281 Main Street
Stamford, Connecticut 06902

Harbour Investment Corporation 2,328,401 (2)(3) 13.7%
1281 Main Street
Stamford, Connecticut 06902

Raychem Corporation 2,380,000 (4) 12.5%
300 Constitution Drive
Menlo Park, CA 94025

Group Des Assurances Nationales 1,244,307 (5) 7.4%
("GAN")
2 Rue Pillet-Will
75009 Paris, France

Connecticut Innovations, 3,041,963 (6) 16.2%
Incorporated
40 Cold Spring Road
Rocky Hill, CT 06067

FirstInvest Holding Ltd Inc. 4,230,000 25.4%
Ch. des Primeveres 45
1701 Fribourg, Switzerland

Conoreq S.A. 1,413,236 8.5%
Ch. des Primeveres 45
1701 Fribourg, Switzerland
</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>
James G. Binch 2,512,633 (2) 14.7%
362 Canoe Hill Road (7)(8)
New Canaan, CT 06840

Nicholas J. Grant 41,684 *
Materials Sciences and
Engineering Department
Massachusetts Institute of Technology
Cambridge, Massachusetts 02139

Jack H. Halperin, Esq. 22,500 *
361 Silver Court
Woodmere, New York 11598

W. Andrew Krusen, Jr. 137,328 (9) *
Dominion Financial Group
Incorporated
2909 Bay-to-Bay Blvd., Suite 200
Tampa, Florida 33629

John A. Morgan 51,184 (10) *
121 Elderwood Avenue
Pelham, New York 10803

William H. Morton, Jr. 95,000 (11) *
Memry Corporation
57 Commerce Drive
Brookfield, CT 06804

All directors and 2,910,712 (12) 16.9%
executive officers as --------- --- ----
a group (8 persons)
- ------------------------------
</TABLE>
* Less than one percent.

(1) In each case where shares subject to warrants or options 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 warrants or
options had been exercised prior to such calculation.

(2) 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. These warrants expired on October 11, 1996.

(3) Comprised of the 2,328,401 shares of Common Stock beneficially owned by
Harbour Holdings Limited Partnership. Harbour Investment Corporation is
the sole general partner of Harbour Holdings Limited Partnership.

(4) Comprised of 1,250,000 shares of Common Stock for which warrants owned by
Raychem Corporation may be exercised at an exercise price of $2.00 per
share, and 1,130,000 shares of Common Stock for which warrants owned by
Raychem Corporation may be exercised at an exercise price of $0.01 per
share, all of which warrants expire on June 28, 2003.

4
<PAGE>

(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,
which warrants expire December 15, 1999.

(6) Includes (i) 1,282,450 shares of Common Stock for which Class I warrants
issued by the Company to CII may be exercised at $0.853 per share, which
warrants expire on April 25, 2002, (ii) 705,485 shares of Common Stock for
which Class II warrants issued by the Company to CII may be exercised at
$1.19 per share, which warrants expire on April 25, 2002, and (iii) 100,000
shares of Common Stock for which Class III warrants issued by the Company
to CII may be exercised at $1.00 per share, which warrants expire on May 5,
2008. The expiration dates of these warrants are subject to extension
under certain circumstances.

(7) Includes currently exercisable options to purchase 104,000 shares of the
Common Stock at $1.50 per share. Additional options granted to Mr. Binch
to purchase 96,000 shares of Common Stock at $1.50 per share are not yet
exercisable. Also includes 232 shares of Common Stock owned by Mr. Binch's
daughter. Mr. Binch disclaims beneficial ownership of such shares owned by
his daughter.

(8) Mr. Binch is the President, Chief Executive Officer and sole shareholder of
Harbour Investment Corporation, the sole general partner of Harbour
Holdings Limited Partnership. He is also individually a limited partner of
Harbour Holdings Limited Partnership, with a limited partnership interest
of less than one percent.

(9) Includes 47,152 shares of Common Stock owned by Dominion Partners, 20,000
shares of Common Stock owned by 169855 Canada Inc., 8,000 shares of Common
Stock owned by Krusen-Vogt & Co and 18,000 shares of Common Stock for which
warrants issued by the Company to Dominion Capital Partners may be
exercised at $1.50 per share, which warrants expire on July 15, 1999. Mr.
Krusen is the President and a principal shareholder of Dominion Financial
Group, Inc. which is the managing General Partner of Dominion Partners as
well as Dominion Capital Partners, President of 169855 Canada Inc., and a
General Partner of Krusen-Vogt & Co.

(10) 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.

(11) Includes options to purchase 25,000 shares of the Company's Common Stock at
$0.90 per share which become exercisable November 7, 1996 as well as
warrants issued to Mr. Morton's wife, Dawn Morton, to purchase 18,000
shares of Common Stock at a purchase price of $1.50 per share, which
warrants expire on July 16, 1999. Additional options granted to Mr. Morton
to purchase 100,000 shares of Common Stock at $0.90 per share are not yet
exercisable.

(12) See preceding footnotes.
___________________

5
<PAGE>

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.

Positions with Director
Name Age the Company Since
- ----------------------------- --- ----------------------------- --------
James G. Binch 49 President, CEO, Treasurer and 1989
Chairman of the Board
Nicholas J. Grant 81 Director 1986
John A. Morgan/1/ 50 Director 1989
W. Andrew Krusen, Jr./1/ 48 Director 1994
Jack H. Halperin/1/ 50 Director 1994

- ---------------------------------------------------------------------------
/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 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

6
<PAGE>

the Law Review. Mr. Halperin is a director of AccuMed International, Inc.,
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 (as well as a principal
shareholder) of Dominion Financial Group, Inc., a family-controlled corporation
in real estate development, construction, leasing and manufacturing, and which
is also the managing general partner of Dominion Partners as well as Dominion
Capital Partners. 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. 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, Halperin
and Krusen, 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 met once during the fiscal year ended June 30, 1996.

The Board of Directors held six meetings during the fiscal year ended June 30,
1996. Each incumbent director except for Dr. Grant 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. In
addition, the stock compensation due to be paid on June 28, 1996, was deferred
by the Board until September 30, 1996. Directors are reimbursed for expenses
reasonably incurred in connection with the performance of their duties.

7
<PAGE>

EXECUTIVE OFFICERS OF THE COMPANY

Name Position Age
- ------------------------ --------------------------------------------- ---
James G. Binch President, Chief Executive Officer, 49
Treasurer & Chairman

Wendy A. Gavaghan Corporate Controller and Secretary 42

William H. Morton, Jr. Senior Vice President and Chief Operating 51
Officer

James Proft Vice President and General Manager - Western 38
Operations

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 has been Corporate Controller and Secretary of the Company
since September 24, 1993. From 1988 until 1993 Ms. Gavaghan served as
Controller of Trinity Capital Corporation. From 1993 until 1994, Ms. Gavaghan
served as Controller of Harbour Investment Corporation. 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.

WILLIAM H. MORTON, JR. 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, Inc. 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.

JAMES L. PROFT was employed by the Company on July 23, 1996 as Vice President
and General Manager - Western Operations. From July 1984 through March 1989,
Mr. Proft served as Research Metallurgist with Raychem Corporation's Metals
Division. From April 1989 through July 1992, Mr. Proft served as Area Sales
Manager for Raychem Corporation's Electronics Group. From August 1992 through
January of 1993, Mr. Proft was the Vice President of Sales and Marketing of
Shape Memory Applications, Inc., followed by a return to Raychem Corporation as
Marketing Manager for its Medical Division. Prior to joining the Company, from
January 1996 to July 1996, Mr. Proft was Regional Sales Manager of Planar
America, an electroluminescent flat panel display company located in Beaverton,
Oregon. Mr. Proft holds a B.S. degree in materials engineering from the
University of Wisconsin-Milwaukee and a Masters degree in material science and
engineering from Stanford University.

EXECUTIVE COMPENSATION

The following table sets forth for the fiscal years ended June 30, 1996, 1995
and 1994, 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 1996.

8
<PAGE>

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, 1996 $150,000(1) $ -0- 200,000/0 (2)
Chief Executive Officer, 1995 $150,000(1) $ -0- 240,000/0 (3)
Treasurer & Chairman 1994 $150,000(1) $210,000(4) - 0 -

William H. Morton, Jr., 1996 $150,000 $ 95,000(5) 125,000/0 (6)
Senior Vice President and 1995 $ - 0 - $ -0- - 0 -
Chief Operating Officer 1994 $ - 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
discussion following

(2) In April 1996 Mr. Binch agreed to the termination (for no value, except as
provided in the following sentence) of 40,000 of the 240,000 options
previously granted to him. With respect to the remaining 200,000 options,
the exercise price was repriced from $4.40 per share to $1.50 per share
simultaneously with the repricing of all of the Company's outstanding
incentive stock options with exercise prices above $1.50 to $1.50.

(3) These options are exercisable in five equal annual installments, commencing
on September 24, 1994.

(4) Mr. Binch's bonus consisted of $50,000 in cash and 80,000 shares of the
Company's Common Stock valued at $2.00 a share.

(5) Includes payment of $50,000 to The Risor Corporation, of which Mr. Morton
is President and the sole stockholder, for consulting services.

(6) These options are exercisable in five equal annual installments, commencing
on November 7, 1996.

____________________

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 200,000/0 (2) (2) $1.50 9/24/2003

William H. Morton, Jr. 125,000/0 (3) 100% $0.90 11/7/2005

- ---------------------------
</TABLE>

(1) Assumes full vesting of options. Excluded from this calculation are 407,500
options which were previously granted but as to which the exercise price
was repriced from $2.34 to $1.50 in fiscal year 1996. Also excluded are
83,000 options which were granted to former employees of Raychem
Corporation who became employed by the Company in July 1996.

(3) These options are exercisable in five equal annual installments, commencing
on November 7, 1996.

----------------------

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(1)
- -------------------------------- ----------------------------- ----------------------------
<S> <C> <C>
James G. Binch 56,000 Options Exercisable/ $115,640/$297,000
144,000 Options Unexercisable

William H. Morton, Jr. 0 Options Exercisable/ $ 0/$257,813
125,000 Options Unexercisable
</TABLE>
- ---------------------------

(1) Based on average of bid and asked prices per share of the Company's
Common Stock on June 28, 1996.

----------------------

10
<PAGE>

Effective September 24, 1993, the Company and James G. Binch entered into a
two-year employment agreement, which automatically renews for successive one-
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, 1996. 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 options are exercisable in
five equal installments, commencing on September 24, 1994, 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. During the fiscal year ended June 30, 1996, Mr. Binch and
the Company agreed to the termination of 40,000 of his options (for no value)
and the repricing of his remaining options from $4.40 per share to $1.50 per
share simultaneously with the repricing of all of the Company's outstanding
incentive stock options with exercises above $1.50 to $1.50.

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. HIC's retention was extended for calendar 1996 on January
1, 1996, for an additional $350,000 custodial fee. 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.

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 under and
pursuant to the Memry Corporation Stock Option Plan exercisable to purchase
125,000 shares of Common Stock for an exercise price of $0.90, exercisable in
five equal annual installments, commencing on November 7, 1996 and terminating
on November 7, 2005. In the event of a change in control of the Company, these
options will become immediately exercisable.

On July 23, 1996, James Proft joined the Company as Vice President and General
Manager - Western Operations. Mr. Proft's employment agreement provides for a
one-year term of employment, which term automatically renews for successive one-
year periods unless either Mr. Proft or the Company gives the other notice of
his or its intention not to renew such contract. This agreement entitles Mr.
Proft to an annual salary of $140,000. In addition, as inducement to Mr. Proft
to enter into such employment agreement, this agreement entitles Mr. Proft to:
(i) warrants exercisable to purchase 40,000 shares of Common Stock at an
exercise price of $0.01 per share, of which warrants exercisable to

11
<PAGE>

purchase 20,000 shares of Common Stock became exercisable upon Mr. Proft's first
day of employment with the Company, with one-half of the remaining warrants to
become exercisable on each of the first and second anniversaries thereof; (ii)
non-qualified stock options, pursuant to the Company's Stock Option Plan, to
purchase 20,000 shares of Common Stock at $1.59 per share (representing a
discount of 25% from market price on June 28, 1996), which options vest in three
equal annual installments commencing October 1997, and which expire
October 2006; (iii) a cash bonus of $25,000 on March 31, 1997 if Mr. Proft
remains in the employ of the Company on such date; (iv) cash compensation from
February 1, 1997 and March 31, 1997 equal to an aggregate of $3,710 (35% of the
difference between the actual closing price of the Common Stock on June 28, 1996
of $2 1/8 and $1.59, times 20,000 options); (v) upon stockholder approval of an
increase in the authorized number of shares of Common Stock as well as the
number of options which may be granted pursuant to the Company's Stock Option
Plan, incentive stock options exercisable to purchase 25,000 shares of Common
Stock, exercisable in three installments commencing on the first anniversary of
the date of grant; (vi) reimbursement of certain relocation expenses (including
those associated with an earlier move to another entity); (vii) a mortgage
assistance loan of $25,000 at an annual interest rate of 6.75%, secured by a
second mortgage on Mr. Proft's residence (with only interest due for the first
two years, principal being due in five annual installments thereafter, with the
entire balance being payable within thirty days of the termination of Mr.
Proft's employment with the Company); and (viii) a cash signing bonus of $10,000
payable in equal installments on July 31, 1996 and August 31, 1996.

COMPENSATION COMMITTEE REPORT ON REPRICING OF OPTIONS AND SARS

On April 30, 1996, the Compensation Committee approved the repricing of all
existing stock options and stock appreciation rights ("SARs") granted pursuant
to the Company's Stock Option Plan with exercise prices above $1.50 per share to
$1.50 per share. The market price per share at such time was $1.00, based on
the average of the bid and asked prices on such date. Prior to such repricing,
the exercise prices of such options were either $2.34 per share or $4.40 per
share.

Prior to such repricing, due to the fact that the exercise prices of such
options were so far above the market price, the Compensation Committee concluded
that the options and SARs were no longer effectively acting as incentives to the
employees. The Compensation Committee determined that, based on the market
price at such time and future prospects for the Company, $1.50 was an
appropriate exercise price for such options and SARs in order to ensure that
they acted as incentives to the employees granted such options and SARs.

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 1, 1996
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

12
<PAGE>

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 (the "Purchase Agreement"), the Company issued to CII the
following securities (the "CII Securities") for an aggregate consideration
(comprised of cash and forgiveness of indebtedness) of $750,000: (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. On October 12, 1995, the Purchase Agreement
and the CII Securities were modified, such that the Debenture became convertible
into 954,010 shares of Common Stock, and due to anti-dilution provisions, the
Class I Warrants became exercisable for 1,176,269 shares of Common Stock at an
exercise price of $0.93 per share and the Class II Warrants became exercisable
for 705,485 shares of Common Stock at an exercise price of $1.19 per share. The
number of shares of Common Stock for which the Class III Warrants
wereexercisable remained the same, but the exercise price per share was adjusted
to $0.65. On June 24, 1996, the parties agreed that in order to help the Company
market the Common Stock sold to fund the acquisition of Raychem Corporation's
nickel-titanium product line, CII would convert the Debenture into equity, and a
further amendment to the Purchase Agreement was executed by CII and the Company,
which amendment became effective on June 28, 1996. Pursuant to such further
amendment, on June 28, 1996, the Debenture was converted into 285,528 shares of
Common Stock and 66.85 shares of Series H Preferred Stock (the "Series H
Shares"). The parties agreed that additional shares of Common Stock which were
issuable to CII due to a penalty adjustment provision of the Debenture would be
folded into the Class I Warrants. Accordingly, the number of shares of Common
Stock for which the Class I Warrants are exercisable was increased to 1,282,450,
with the exercise price per share of such Class I Warrants being adjusted to
$0.853 per share. The Class II and Class III Warrants were not adjusted. As of
the close of business on September 4, 1996, all of the Series H Shares
automatically were converted into 668,500 shares of Common Stock, pursuant to
the terms of the Certificate of Designations, Rights and Preferences of the
Series H Preferred Stock. The Class I, II and III Warrants are subject to
certain antidilution rights. CII also has been granted a "put" right if, among
other things, the Company ceases to maintain its principal offices and certain
operations within the State of Connecticut, fails to file a registration
statement covering the resale of its securities by October 31, 1996 or fails to
effect such registration statement by January 31, 1997. Upon CII's exercise of
its put, the Company would be obligated to purchase from CII all CII Securities
and Registrable Securities held at that time by CII for a price equal to the
greater of (x) the then current market price of such CII Securities and
Registrable Securities (on an as-converted basis) and (y) $2.00, multiplied by
the number of CII Securities and Registrable Securities (on an as-converted
basis), less in the case of Common Stock issued upon the exercise of the Class I
Warrants, the Class II Warrants or Class III Warrants, any exercise price paid
to acquire Common Stock. As of October 1, 1996, 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, (i) 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 and (ii) on June 28, 1996, the
Company sold to GAN 250,000 shares of Common Stock at a per share purchase price
of $2.00, for an aggregate purchase price of $500,000. As of October 1, 1996,
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. On June 25, 1996,
FirstInvest voluntarily converted 126.9 shares of Series G Preferred Stock into
1,269,000 shares of Common Stock of the Company. As of the

13
<PAGE>

close of business on September 4, 1996, the remaining 296.1 shares of Series G
Preferred Stock owned by FirstInvest automatically were converted into 2,960,000
shares of Common Stock. As of October 1, 1996, FirstInvest beneficially owned
more than five percent of the Common Stock.

On November 7, 1995, William H. Morton, Jr. joined the Company as Senior Vice
President and Chief Operating Officer. Pursuant to the terms of the employment
agreement between the Company and Mr. Morton, as consideration for past services
rendered by either Mr. Morton individually or through The Risor Corporation, the
Company granted to Mr. Morton 50,000 shares of Common Stock and agreed to pay
$50,000 to The Risor Corporation. See "Executive Compensation."

On March 28, 1996, Conoreq S.A. purchased 295,118 shares of Common Stock for
$0.85 per share, for an aggregate purchase price of $250,850.30. Subsequently,
on May 17, 1996, Conoreq S.A. purchased an additional 118,118 shares of Common
Stock for $0.85 per share, for an aggregate purchase price of $100,400.30, and
on June 28, 1996, purchased 1,000,000 shares of Common Stock for a purchase
price of $2,000,000. As of October 1, 1996, Conoreq S.A. owned more than 5% of
the Common Stock.

On June 28, 1996, the Company consummated the purchase from Raychem
Corporation, a Delaware corporation ("Raychem"), of certain tangible assets
(primarily consisting of leasehold improvements, machinery and equipment and
inventory) and intangible assets (primarily consisting of patents, other
intellectual property, goodwill and certain contractual rights) constituting
Raychem's shape memory metals components business. The purchase did not include
Raychem's patents and related intellectual property relating to the production
of certain medical instruments. The purchase price paid by the Company to
Raychem consisted of the following: (i) the payment of $3,650,000 in cash; (ii)
a $350,000 promissory note, accruing interest at the rate of 10% per annum and
secured by a first lien security interest in the tangible property being
acquired by the Company from Raychem; (iii) warrants to purchase 1,250,000
shares of the Company's common stock, par value $0.01 per share ("Common
Stock"), at an exercise price of $2.00 per share; (iv) warrants to purchase an
additional 1,130,000 shares of Common Stock at an exercise price of $0.01 per
share; and (v) the assumption of certain specified liabilities relating to the
assets being acquired, including $200,000 in severance obligations being
incurred by Raychem. In addition, the Company and Raychem entered into a number
of agreements regarding the ongoing relationship between Raychem and the
Company, including an agreement under which the Company will manufacture and
sell shape memory alloy components to Raychem. The purchase price paid by the
Company to Raychem pursuant to the aforesaid transaction was determined by arms-
length bargaining between two non-affiliated parties. No material relationship
existed between Raychem and the Company (including any of the Company's
affiliates, directors, officers or their associates) prior to the consummation
of the transaction. The $350,000 promissory note from the Company to Raychem
was repaid in full on August 9, 1996. As of October 1, 1996, Raychem owned more
than 5% of the Common Stock.

The funds that the Company used to pay Raychem the cash portion of the
purchase price were obtained through the sale by the Company on June 28, 1996 of
2,000,000 shares of Common Stock to three sophisticated European investors for a
purchase price of $2.00 per share, including sales to Conoreq S.A. (which, as
described above, purchased 1,000,000 of such shares), and Group Des Assurances
Nationales (which, as described above, purchased 250,000 of such shares).

On July 15 and 16, 1996, as part of bridge financing for working capital
purposes until financing could be obtained from Affiliated Business Credit
Corporation, the Company borrowed $100,000 from each of Dawn Morton and Dominion
Capital Partners (for an aggregate of $200,000), at an annual interest rate of
10%, such notes to be due on the earlier of August 15, 1996 and the date of
consummation of financing in the amount of at least $1,500,000 from Affiliated
Business Credit Corporation to the Company. As additional consideration for
such loans, the Company issued to each of Ms. Morton and Dominion Capital
Partners warrants exercisable to purchase 18,000 shares of Common Stock at
an exercise price of $1.50 per share. Each of Ms. Morton and Dominion Capital
Partners was also paid a facility fee of $5,000 in connection with such bridge
financing. These notes were paid in full by the Company on August 9, 1996. Ms.
Morton is the wife of William H. Morton, Jr.,

14
<PAGE>

the Company's Senior Vice President and Chief Operating Officer. The managing
general partner of Dominion Partners is Dominion Financial Group, Inc., of which
W. Andrew Krusen, Jr. is a principal shareholder and the President.

On July 23, 1996, James Proft joined the Company as Vice President and General
Manager - Western Operations. For the terms of Mr. Proft's employment
agreement, see "Proposal No. 1 - Executive Compensation." In addition, on
September 20, 1996, the Company loaned to Mr. Proft $45,000 at an annual
interest rate of 6-3/4%, in connection with certain relocation expenses of Mr.
Proft. This loan was repaid in full on October 16, 1996.

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

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.

James G. Binch failed to report on his Form 5 timely filed in August 1996 the
acquisition by his daughter of 232 shares of Common Stock in June 1996. Such
acquisition was subsequently reported pursuant to an amendment to his Form 5
(although Mr. Binch disclaims beneficial ownership of such shares).

Edward J. Murphy, formerly Vice President of the Company and President of
Wright, failed to file a Form 4 to report his acquisition of 13,000 shares of
Common Stock on September 22, 1995. In addition, he failed to file a Form 5 to
report either this acquisition or the expiration on December 2, 1995, for no
value, of 5,000 options previously granted to him.

The Company has not received a Form 3 from FirstInvest Holding Ltd.
("FirstInvest") to report its acquisition of beneficial ownership of more than
10% of the Company's Common Stock. The Company also has not received a Form 4
to report the conversion by FirstInvest of 126.9 shares of Series G Preferred
Stock into 1,269,000 shares of Common Stock on June 25, 1996.

The Company has not received a Form 3 from Conoreq, S.A. to report its
acquisition on June 28, 1996 of beneficial ownership of more than 10% of the
Company's Common Stock. Raychem Corporation also failed to timely file a Form 3
to report its acquisition on June 28, 1996 of beneficial ownership of more than
10% of the Company's Common Stock, although Raychem Corporation has since filed
such notice (albeit after the due date therefor). The Company has not received
a Form 4 from GAN to report its acquisitions on June 28, 1996 of 250,000 shares
of 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 Thirty Million One Hundred
Thousand (30,100,000) shares consisting of (a) Thirty Million
(30,000,000) 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.

15
<PAGE>

This amendment to the Certificate of Incorporation (the "Capitalization
Amendment") would increase the number of authorized shares of Common Stock from
25,000,000 to 30,000,000. 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. The Board of Directors recommends a vote
FOR approval of the Capitalization Amendment.

REASONS FOR AND EFFECT OF INCREASE IN NUMBER OF AUTHORIZED SHARES

The Board of Directors believes that the five million additional authorized
shares of Common Stock are necessary to provide the Company with future
flexibility in effecting equity financings. As of October 1, 1996, the
authorized capital stock of the Company was 25,000,000 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, 16,657,354 shares of the Company's Common
Stock were issued and outstanding, 5,745,368 shares of the Company's Common
Stock were reserved for issuance upon the exercise of outstanding warrants
(363,636 of which expired on October 11, 1996) and 600,000 shares of Common
Stock were reserved for issuance pursuant to the Company's Stock Option Plan.
Based upon such numbers, the Company had, on October 1, 1996, 1,997,278 shares
of Common Stock neither issued nor reserved for issuance. If the Stock Option
Plan Amendment is approved, however, the Board of Directors will promptly
reserve an additional 500,000 shares for issuance pursuant to the Company's
Stock Option Plan, leaving 1,497,278 shares of Common Stock available for future
issuances (and 1,860,914 shares taking into account the expiration of the above-
described warrants).

If the Capitalization Amendment is approved by the Company's stockholders, the
Company would still have, after the above reservations, and taking into account
the expiration of the above-described warrants, approximately 6,860,914
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 of Incorporation and without further approval of the holders of
Common Stock. The additional authorized shares of Common Stock will provide the
Company with additional 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, whether through growth or acquisition, and
some or all of that financing might best be obtained by the sale 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.

Approximately one year ago, at the Company's 1995 Annual Meeting of
Stockholders, the Company's stockholders approved an amendment to the Company's
Certificate of Incorporation increasing the number of authorized shares of the
Company's Common Stock from 10,000,000 to 25,000,000. Although more than ten
million of the additional authorized shares of Common Stock were needed to
satisfy existing contractual obligations of the Company to reserve shares of
Common Stock for certain already existing warrants, options and convertible
Securities, as of the time of such increase the Company still had over four
million additional shares of Common Stock authorized but unissued and unreserved
to serve future needs (and the reservation of an additional approximately
3,600,000 shares of Common Stock terminated shortly after such approval due to
the expiration of related warrants). It was not anticipated at that time that it
would be necessary to authorize additional shares of Common Stock at the
Company's 1996 Annual Meeting of Stockholders. However, to meet working capital
needs, the Company sold 1,001,003 shares of Common Stock for $850,853 prior to
the Raychem Acquisition. Thereafter, on June 28, 1996, the Company acquired
Raychem Corporation's nickel-titanium product line (the "Raychem Acquisition").
In order to consummate the Raychem Acquisition, the Company sold 2,000,000
shares of Common Stock for $4,000,000 to fund the cash component of the purchase
price of the Raychem Acquisition. In addition, the Company reserved 2,380,000
shares of Common Stock for issuance upon the exercise of warrants issued to
Raychem as part of the purchase price and 120,000 shares were reserved for
issuance upon the exercise of warrants granted to former Raychem employees in
order to induce them to accept employment offers from Memry.

16
<PAGE>

It was primarily these issuances and reservations that necessitated the proposal
by the Company of the Capitalization Amendment.

If the Capitalization Amendment is adopted and the shares of Common Stock
authorized thereby are thereafter issued, current holders of shares of Common
Stock could have their current ownership of the Company's Common Stock
substantially diluted.

PROPOSAL NO. 3 - THE STOCK OPTION PLAN AMENDMENT

SUMMARY OF STOCK OPTION PLAN AMENDMENT

The Memry Corporation Stock Option Plan (the "Plan") was adopted by the
Company's Board of Directors on September 24, 1993 and was approved by the
Company's stockholders at the 1994 Annual Meeting of Stockholders of the
Company. Such Plan was subsequently amended by the Board of Directors of the
Company in October 1996 to conform the Plan's conditions regarding who is
eligible to serve on the Compensation Committee to the requirements of new Rule
16b-3 promulgated under the Securities Exchange Act of 1934, as amended, which
rule becomes mandatory November 1, 1996, and to make certain corrections to the
Plan. At a meeting of the Compensation Committee in April 1996, the
Compensation Committee adopted a proposal to amend the Plan to increase from
600,000 to 1,100,000 the aggregate number of shares of Common Stock reserved for
issuance under the Plan. A copy of the Plan as proposed to be amended is
annexed hereto as Appendix A. The proposal to amend the Plan is subject to
stockholder approval. The Plan provides for the grant of incentive stock
options (which satisfy the requirements of Section 422(b)) of the Internal
Revenue Code of 1986, as amended (the "Code") and nonqualified options (which do
not satisfy such requirements) to regular salaried officers and other employees
of the Company. The material features of the Plan as proposed to be amended are
described in "Description of Plan" below. Said summary is qualified in its
entirety by reference to the Plan itself.

The approval of this amendment to the Plan (the "Stock Option Plan Amendment")
will require the affirmative vote of the holders of a majority of the present
and voting shares of the Company's Common Stock. The Board of Directors
recommends a vote FOR approval of the Stock Option Plan Amendment.

REASONS FOR THE APPROVAL

As of October 1, 1996, there were outstanding stock options covering 575,500
shares of Common Stock held by 27 persons (including 83,000 options which have
been granted to former Raychem employees and which will vest in three annual
installments beginning July 1997). Therefore, as of October 1, 1996, only
24,500 shares of Common Stock remained available for future awards under the
Plan. In addition, in connection with the Raychem Acquisition, the Company
agreed, subject to stockholder approval, to grant options under the Plan to
purchase an additional 200,500 shares of Common Stock in order to induce former
Raychem employees to accept offers of employment from the Company. The Board of
Directors believes that the increase in the number of shares covered by the Plan
is necessary, both to allow for the issuance of options to former Raychem
employees and to be available for issuance to future employees as the Company
grows.

PLAN BENEFITS

Pursuant to the employment agreement executed by the Company and James Proft
in October 1996, the Company agreed to issue to Mr. Proft incentive stock
options, pursuant to the Plan, exercisable to purchase 25,000 shares of Common
Stock upon approval by the Company's stockholders of the Stock Option Plan
Amendment at a price equal to the average of the bid and asked prices of the
Common Stock on the date of the Annual Meeting. Mr. Proft was not one of the
named executive officers for the fiscal year ended June 30, 1996 for the
purposes of the executive compensation tables included herein. None of such
named executive officers or directors have current agreements with the Company

17
<PAGE>

to receive additional stock options pending stockholder approval. The following
table sets forth certain information relating to the award to Mr. Proft and
relating to the specified groups and persons (and does not set forth information
regarding the options covering 575,500 (including 63,000 options subject to
vesting conditions) which previously have been granted under the Plan).

NEW PLAN BENEFITS
MEMRY CORPORATION STOCK OPTION PLAN

Name and Position Dollar Value Number of Shares
- ---------------------------------- ------------- -----------------
James G. Binch, $ 0 (1) - 0 - (1)
Chairman, President, Treasurer
and CEO
William H. Morton, Jr., $ 0 (2) - 0 - (2)
Senior Vice President and
Chief Operating Officer
Current executive officers $ 43,750 (3) 25,000
as a group (8 persons)
Current directors, who are not $ 0 - 0 -
executive officers, as a group
All current employees, including $307,125 (3) 175,500
officers who are not executive
officers, as a group
- -----------------------------------

(1) Although it is not currently planned that Mr. Binch will receive additional
stock options upon approval by the stockholders of the proposed amendment,
he previously has been granted options exercisable to purchase 200,000
shares of Common Stock at an exercise price of $1.50 per share. See
"Proposal No. 1 - Election of Directors -Executive Compensation."

(2) Although it is not currently planned that Mr. Morton will receive additional
stock options upon approval by the stockholders of the proposed amendment,
he previously has been granted options exercisable to purchase 125,000
shares of Common Stock at an exercise price of $0.90 per share. See
"Proposal No. 1 - Election of Directors -Executive Compensation."

(3) Based on average of bid and asked prices per share on October 1, 1996.

DESCRIPTION OF PLAN

A summary of the significant provisions of the Plan as proposed to be amended
is set forth below. A copy of the full Plan as proposed to be amended is annexed
as Exhibit A to this Proxy Statement. The following description is qualified in
its entirety by reference to the Plan itself.

ADMINISTRATION OF THE PLAN. The Plan is administered by the Compensation
Committee (the "Committee") consisting of two or more persons who are appointed
by, and serve at the pleasure of, the Board of Directors and each of whom is a
"Non-Employee Director" as that term is defined in Rule 16b-3(b)(3)(i) of the
General Rules and Regulations promulgated under the Securities Exchange Act of
1934. Subject to the express provisions of the Plan, the Committee has the sole
discretion to determine to whom among those eligible, and the time or times at
which, options will be granted, the number of shares to be subject to each
option and the manner in and price at which options may be exercised; provided,
however, the aggregate fair market value of the Common Stock for which incentive
stock options granted to any employee under the Plan may first become
exercisable in any calendar year may not exceed $100,000. In making

18
<PAGE>

such determinations, the Committee may take into account the nature and period
of service of eligible employees, their level of compensation, their past,
present and potential contributions to the Company and such other factors as the
Committee in its discretion deems relevant. Options are designated at the time
of grant as either "incentive stock options," intended to qualify under Section
422 of the Internal Revenue Code of 1986, "non-qualified options," which do not
so qualify, or "stock appreciation rights" ("SARs").

The Committee may amend, suspend or terminate the Plan (including without
limitation to increase the cost thereof to the Company or to alter the
allocation of the benefits) at any time, except that no amendment may be adopted
without the approval of stockholders which would (i) increase the maximum number
of shares which may be issued pursuant to the exercise of options granted under
the Plan; (ii) change the eligibility requirements for participation in the
Plan; (iii) permit the grant of any incentive stock option under the Plan with
an option price of less than 100% of fair market value of the shares at the time
such incentive stock option is granted; (iv) extend the term of any incentive
stock options or the period during which any incentive stock options may be
granted under the Plan; or (v) materially increase the benefits provided under
the Plan to the extent that stockholder approval would be required pursuant to
Rule 16b-3 under the Securities Exchange Act of 1934.

SHARES SUBJECT TO THE PLAN. Subject to adjustments resulting from changes in
capitalization (and subject to the approval of the Stock Option Plan Amendment),
no more than 1,100,000 shares of Common Stock may be issued pursuant to the
exercise of options granted under the Plan. The Committee may cancel
outstanding options and reissue options at a lower exercise price in the event
that the fair market value of the shares of Common Stock falls below the
exercise price of such outstanding options. If any option expires or terminates
for any reason without having been exercised in full, the unpurchased shares
subject to such option will be available again for purposes of the Plan.

Under certain circumstances involving a change in the number of shares of
Common Stock without the receipt by the Company of any consideration therefor,
such as a stock split, stock consolidation or payment of a stock dividend, the
class and aggregate number of shares of Common Stock in respect of which options
and SARs may be granted under the Plan, the class and number of shares subject
to each outstanding option and the option price per share will be
proportionately adjusted. An option or SAR may not be transferred other than by
will or by laws of descent and distribution, and during the lifetime of the
option or SAR holder may be exercised only by such holder.

PARTICIPATION. The Committee is authorized to grant incentive stock options
("ISOs"), nonqualified stock options ("NQSOs"), or SARs from time to time to
such employees of the Company as the Committee, in its sole discretion, may
determine.

OPTION PRICE. The exercise price of each option and the base amount to
determine the subsequent value of an SAR is determined by the Committee, but may
not, in the case of incentive stock options, be less than 100% of the fair
market value of the shares of Common Stock covered by the option on the date the
option is granted. In the case of nonqualified options, the option price per
share may be less than, equal to or greater than the fair market value of the
shares of Common Stock covered by the option on the date the option is granted.
If an incentive stock option is to be granted to an employee who owns over 10%
of the total combined voting power of all classes of the Company's stock, then
the exercise price may not be less than 110% of the fair market value of the
Common Stock covered by the incentive stock option on the date the option is
granted. A participant has the right to cancel all or any part of an option or
SAR then subject to exercise, in which event the Company shall pay the
participant the excess of the fair market value of the cancelled shares over the
exercise price in cash and/or stock.

TERM AND EXERCISE OF OPTIONS AND SARS. The Committee has the discretion to
fix the term of each option or SAR granted under the Plan, with a maximum length
of term of each option or SAR of 10 years, subject to earlier termination as
provided in the Plan (five years in the case of incentive stock options granted
to an employee who owns over 10% of the total combined voting power of all
classes of the Company's stock). All such options and SARs expire, to the
extent unexercised, ten years after the date of the grant.

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<PAGE>

FEDERAL INCOME TAX CONSEQUENCES OF NON-QUALIFIED OPTIONS. An employee who is
granted an NQSO under the Plan will not realize any income for Federal income
tax purposes on the grant of an option. An option holder will realize ordinary
income for Federal income tax purposes on the exercise of an option, provided
the shares are not then subject to a substantial risk of forfeiture within the
meaning of Section 83 of the Code ("Risk of Forfeiture"), in an amount equal to
the excess, if any, of the fair market value of the shares of Common Stock on
the date of exercise over the exercise price thereof. If the shares are subject
to a Risk of Forfeiture on the date of exercise, the option holder will realize
ordinary income for the year in which the shares cease to be subject to a Risk
of Forfeiture in an amount equal to the excess, if any, of the fair market value
of the shares at the date they cease to be subject to a Risk of Forfeiture over
the exercise price, unless the option holder shall have made a timely election
under Section 83 of the Code to include in his income for the year of exercise
an amount equal to the excess of the fair market value of the shares of Common
Stock on the date of exercise over the exercise price. The amount realized for
tax purposes by an option holder by reason of the exercise of an NQSO granted
under the Plan is subject to withholding by the Company, and the Company is
entitled to a deduction in an amount equal to the income so realized by an
option holder, provided all necessary withholding requirements under the Code
are met.

Provided that an employee satisfies certain holding period requirements
provided by the Code, an employee will realize long-term capital gain or loss,
as the case may be, if the shares issued upon exercise of an NQSO are disposed
of more than one year after (i) the shares are transferred to the employee or
(ii) if the shares were subject to a Risk of Forfeiture on the date of exercise
and a valid election under Section 83 of the Code shall not have been made, the
date as of which the shares cease to be subject to a Risk of Forfeiture. The
amount recognized upon such disposition will be the difference between the
option holder's basis in such shares and the amount realized upon such
disposition. Generally, an option holder's basis in the shares will be equal to
the exercise price plus the amount of income recognized upon exercise of the
option.

FEDERAL INCOME TAX CONSEQUENCES OF INCENTIVE STOCK OPTIONS. An ISO holder who
meets the eligibility requirements of Section 422 of the Code will not realize
income for Federal income tax purposes, and the Company will not be entitled to
a deduction, on either the grant or the exercise of an ISO. If the ISO holder
does not dispose of the shares acquired within two years after the date the ISO
was granted to him or within one year after the transfer of the shares to him,
(i) any proceeds realized on a sale of such shares in excess of the option price
will be treated as long-term capital gain and (ii) the Company will not be
entitled to any deduction for Federal income tax purposes with respect to such
shares.

If an ISO holder disposes of shares during the two-year or one-year periods
referred to above (a "Disqualifying Disposition"), the ISO holder will not be
entitled to the favorable tax treatment afforded to incentive stock options
under the Code. Instead, the ISO holder will realize ordinary income for
Federal income tax purposes in the year the Disqualifying Disposition is made in
an amount equal to the excess, if any, of the fair market value of the shares of
Common Stock on the date of exercise over the exercise price.

An ISO holder generally will recognize long-term capital gains or loss, as the
case may be, if the Disqualifying Disposition is made more than one year after
the shares are transferred to the ISO holder. The amount of any such gain or
loss will be equal to the difference between the amount realized on the
Disqualifying Disposition and the sum of (x) the exercise price and (y) the
ordinary income realized by the ISO holder as the result of the Disqualifying
Disposition. The Company will be allowed in the taxable year of the
Disqualifying Disposition a deduction in the same amount as the ordinary income
recognized by the ISO holder, provided all necessary withholding requirements
are met.

Notwithstanding the foregoing, if the Disqualifying Disposition is made in a
transaction with respect to which a loss (if sustained) would be recognized to
the ISO holder, then the amount of ordinary income required to be recognized
upon the Disqualifying Disposition will not exceed the amount by which the
amount realized from the disposition exceeds the exercise price. Generally, a
loss may be recognized if the transaction is not a "wash" sale, i.e. a gift or a
sale between certain persons or entities classified under the Code as "related
persons."

20
<PAGE>

FEDERAL INCOME TAX CONSEQUENCES OF STOCK APPRECIATION RIGHTS. An employee who
is granted a stock appreciation right under the Plan will not realize any income
for Federal income tax purposes on the grant of the SAR. The amount of cash and
the fair market value of the Common Stock received upon the employee's exercise
of a stock appreciation right will be ordinary income.

ALTERNATIVE MINIMUM TAX. For purposes of computing the Federal alternative
minimum tax with respect to shares acquired pursuant to the exercise of ISOs,
the difference between the fair market value of the shares on the date of
exercise over the exercise price will be includible in alternative minimum
taxable income in the year of exercise if the shares are not subject to a Risk
of Forfeiture; if the shares are subject to a Risk of Forfeiture, the amount
will be taken into account in the year the Risk of Forfeiture ceases and will be
the excess of the fair market value of the shares at the date they cease to be
subject to a Risk of Forfeiture over the exercise price. The basis of the
shares for alternative minimum tax purposes generally will be an amount equal to
the exercise price, increased by the amount of the tax preference taken into
account in computing the alternative minimum taxable income. In general, the
alternative minimum tax is the excess of 24% of alternative minimum taxable
income over the regular income tax, in each case subject to various adjustments.

INTEREST OF CERTAIN PERSONS

James Proft, Vice President and General Manager - Western Operations, has an
interest in the proposal to approve amendment of the Plan because he has been
promised by the Company that he will be issued incentive stock options
exercisable to purchase 25,000 shares of Common Stock upon stockholder approval
of such amendment.

INDEPENDENT AUDITORS

McGladrey & Pullen, LLP ("M&P") have audited the consolidated financial
statements of the Company for the fiscal years ended June 30, 1996 and 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. The Board of Directors of the Company, in its capacity as Audit
Committee, will select independent auditors for the fiscal year ending June 30,
1997 at a later date. 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. Because E&Y resigned, rather than having been dismissed by the
Company, neither the Company's Board of Directors nor the Company made a
decision to change accounting firms. The Company does not have a separate
audit committee of the Board of Directors. 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

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<PAGE>

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.

STOCKHOLDER PROPOSALS

Stockholder proposals intended to be presented at the Company's 1997 Annual
Meeting of Stockholders, which the Company contemplates holding in November
1997, must be received at the Company's principal executive offices located at
57 Commerce Drive, Brookfield, Connecticut 06804 on or before June 30, 1997 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, 1996, 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

/s/ Wendy A. Gavaghan

Wendy A. Gavaghan
Secretary

October 28, 1996

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<PAGE>

APPENDIX A
----------

MEMRY CORPORATION

STOCK OPTION PLAN
<PAGE>

MEMRY CORPORATION

STOCK OPTION PLAN

Table of Contents

Section Page

1. Purpose............................................................ 1

2. Definitions........................................................ 1

3. Shares Subject to the Plan......................................... 2

4. Grant of Stock Options............................................. 2

5. Certificates for Award of Stock.................................... 4

6. Beneficiary........................................................ 4

7. Administration of the Plan......................................... 5

8. Amendment or Discontinuance........................................ 5

9. Adjustments in Event of Change in Common Stock..................... 5

10. Miscellaneous...................................................... 6

11. Effective Date and Stockholder Approval............................ 7

<PAGE>

MEMRY CORPORATION
STOCK OPTION PLAN

1. Purpose
-------

The purpose of the Memry Corporation Stock Option Plan is to attract and
retain persons of ability as employees of Memry Corporation, its subsidiaries
and affiliates and encourage such employees to continue to exert their best
efforts on behalf of the Company, its subsidiaries and affiliates.

2. Definitions
-----------

When used herein, the following terms shall have the following meanings:

"Beneficiary" means the beneficiary or beneficiaries designated pursuant
to Section 6 to receive the benefit, if any, provided under the Plan upon the
death of an Employee.

"Board" means the Board of Directors of the Company.

"Code" means the Internal Revenue Code of 1986, as now in effect or as
hereafter amended. (All citations to sections of the Code are to such sections
as they may from time to time be amended or renumbered.)

"Committee" means the Committee appointed by the Board pursuant to
Section 7.

"Company" means Memry Corporation, and its successors and assigns.

"Employee" means an employee of a Participating Company who, in the
judgment of the Committee, is responsible for or contributes to the growth or
profitability of the business of the Company.

"Exchange" means the New York Stock Exchange, or if the Stock is not
listed on the New York Stock Exchange, the principal exchange on which the Stock
is listed or the NASDAQ system of the National Association of Securities
Dealers.

"Fair Market Value" means, as of any date, the mean between the reported
high and low sales prices on the Exchange for one share of Stock on such date,
or, if no sales of Stock have taken place on such date, the Fair Market Value of
one share of Stock on the most recent date on which selling prices were reported
on the Exchange. In the event that the Company's shares are not publicly traded
on an Exchange, the Committee shall determine the fair market value for all
purposes.

"Option" means an option to purchase Stock subject to the applicable
provisions of Section 4 and awarded in accordance with the terms of the Plan and
which may be an incentive stock option qualified under Section 422 of the Code
or a nonqualified stock option.

"Option Agreement" means the written agreement evidencing each Option or
SAR granted to an Employee under the Plan.

"Participating Company" means the Company or any corporation which at
the time such option is granted qualifies as a "subsidiary corporation" of the
Company under Section 424(f) of the Code.

"Plan" means the Memry Corporation Stock Option Plan, as the same may be
amended, administered or interpreted from time to time.

"SAR" means a stock appreciation right to subject to the appropriate
requirements under Section 4 and awarded in accordance with the terms of the
Plan.
<PAGE>

"Stock" means the common stock, $0.01 par value, of the Company.

"Total Disability" means the complete and permanent inability of an Employee
to perform all of his or her duties under the terms of his or her employment
with any Participating Company, as determined by the Committee upon the basis of
such evidence, including independent medical reports and data, as the Committee
deems appropriate or necessary.

3. Shares Subject to the Plan
--------------------------

The aggregate number of shares of Stock which may be awarded under the Plan,
used to determine the value of SARs, or subject to purchase by exercising
Options is 1,100,000 shares. Such shares shall be made available either from
authorized and unissued shares or shares held by the Company in its treasury.
If, for any reason, any shares of Stock subject to purchase or payment by
exercising an Option or SAR under the Plan are not delivered or are reacquired
by the Company, for reasons including, but not limited to, termination of
employment, or expiration or a cancellation with the consent of an Employee of
an Option or SAR, such shares of Stock shall again become available for award
under the Plan.

4. Grant of Stock Options
----------------------

(a) Subject to the provisions of the Plan, the Committee shall (i) determine
and designate from time to time those Employees to whom Options and/or SARs are
to be granted; (ii) determine the number of shares of Stock subject to each
Option; (iii) determine the time or times when and the manner in which each
Option shall be exercisable, the exercise price and the duration of the exercise
period; (iv) determine whether such Option shall be incentive stock options or
nonqualified stock options or a combination of incentive stock options and
nonqualified stock options; and (v) determine the number of shares of Stock that
shall be used to determine the value of an SAR; provided, however, that (A) no
-------- -------
Option or SAR shall be granted after the expiration of ten years from the
effective date of the Plan and (B) the aggregate Fair Market Value (determined
as of the date an Option is granted) of the Stock for which incentive stock
options granted to any Employee under this Plan that may first become
exercisable in any calendar year shall not exceed $100,000.

(b) The exercise period for an incentive stock option shall be no more than
ten years from the date of grant, except that in the case of an incentive stock
option granted to an Employee who is a Ten Percent Shareholder as described in
Section 4(c), the exercise period shall be no more than five years. The
exercise period for a nonqualified stock option or an SAR shall be no more than
ten years.

(c) The Option or SAR exercise price per share shall be determined by the
Committee at the time the Option is granted and shall be at least equal to the
par value of one share of Stock; provided, however, that the exercise price for
-------- -------
an incentive stock option and any tandem SARs shall be not less than the Stock's
Fair Market Value at date of grant, or in the case of an incentive stock option
and any tandem SARs granted to an Employee who, at the time of grant, owns stock
possessing more than 10 percent of the total combined voting power of all
classes of stock of the Company (a "Ten Percent Shareholder"), 110 percent of
the Fair Market Value on the date of grant, all as determined by the Committee.

(d) No part of any Option or SAR may be exercised by an Employee until such
Employee shall have (i) remained in the employ of one or more Participating
Companies for one year after the date on which the Option is granted, unless
employment is terminated on account of death or Total Disability, or (ii)
achieved such performance or other criteria, as the Committee may specify, if
any, of the Company or any other Participating Company, and the Committee may
further require exercisability in installments; provided, however, the period
-------- -------
during which an SAR is exercisable shall commence no earlier than six months
following the date the SAR is granted.

(e) (i) If the Employee's employment terminates because of (a) involuntary
termination of employment by the Participating Company other than for cause, as
determined by the Company in its sole discretion, or (b) retirement in
accordance with the terms and conditions of a retirement plan adopted by the
Participating Company; he or she may exercise his or her Options to the extent
that he or she shall have been entitled to do so at the date of the termination
of his or her employment, at any time, or from time to time, within three months
after the date of the termination of his or

A-2
<PAGE>

her employment or within such other period, and subject to such terms and
conditions as the Committee may specify, but not later than the expiration date
specified in Section 4(b) above.

(ii) If an Employee who has been granted an Option or SAR dies while an
Employee of a Participating Company, his or her Options or SARs may be
exercised, to the extent that the Employee shall have been entitled to do so on
the date of his or her death or such termination of employment, by his or her
Beneficiary including, if applicable, his or her executors or administrators, at
any time, or from time to time, within three months after the date of the
Employee's death or within such other period, and subject to such terms and
conditions as the Committee may specify, but no later than the expiration date
specified in Section 4(b) above.

(iii) If the Employee's employment by a Participating Company terminates
because of his or her Total Disability, he or she may exercise his or her
Options or SARs, to the extent that he or she shall have been entitled to do so
at the date of the termination of his or her employment, at any time, or from
time to time, within one year after the date of the termination of his or her
employment or within such other period, and subject to such terms and conditions
as the Committee may specify, but not later than the expiration date specified
in Section 4(b) above.

(iv) If an Employee's employment is terminated by a Participating
Company for cause, as determined by the Company in its sole discretion, or by
the Employee voluntarily, all outstanding Options and SARs immediately shall be
forfeited as of the date of termination.

(f) No Option or SAR granted under the Plan shall be transferable other than
by will or by the laws of descent and distribution. During the lifetime of the
optionee, an Option shall be exercisable only by him or her.

(g) With respect to an incentive stock option, the Committee shall specify
such terms and provisions as the Committee may determine to be necessary or
desirable in order to qualify such Option as an incentive stock option within
the meaning of Section 422 of the Code.

(h) Each Option and SAR granted under the Plan shall be evidenced by a written
Option Agreement, in a form approved by the Committee. Such agreement shall be
subject to and incorporate the express terms and conditions, if any, required
under the Plan or as required by the Committee for the form of Option granted
and such other terms and conditions as the Committee may specify. Further, each
such Option Agreement shall provide that unless at the time of exercise of the
Option there shall be, in the opinion of counsel for the Company, a valid and
effective registration statement under the Securities Act of 1933 ("'33 Act")
and appropriate qualification and registration under applicable state securities
laws relating to the Stock being acquired pursuant to the Option, the Employee
shall upon exercise of the Option give a representation that he or she is
acquiring such shares for his or her own account for investment and not with a
view to, or for sale in connection with, the resale or distribution of any such
shares. In the absence of such registration statement, the Employee shall be
required to execute a written affirmation, in a form reasonably satisfactory to
the Company, of such investment intent and to further agree that he or she will
not sell or transfer any Stock acquired pursuant to the Option until he or she
requests and receives an opinion of the Company's counsel to the effect that
such proposed sale or transfer will not result in a violation of the '33 Act, or
a registration statement covering the sale or transfer of the shares has been
declared effective by the Securities and Exchange Commission, or he or she
obtains a no-action letter from the Securities and Exchange Commission with
respect to the proposed transfer.

(i) Except as otherwise provided in the Plan, the purchase price of the shares
as to which an Option shall be exercised shall be paid to the Company at the
time of exercise either in cash or in Stock already owned by the optionee, or a
combination of cash and Stock, or in such other consideration acceptable to the
Committee (including, to the extent permitted by applicable law, the
relinquishment of a portion of the Option) as the Committee deems appropriate,
having a total Fair Market Value equal to the purchase price. For purposes of
this Section 4(i), the fair market value of the portion of an Option that is
relinquished shall be the excess of

(x) the Fair Market Value at the time of exercise of the number of
shares of Stock subject to the portion of the Option that is
relinquished over

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<PAGE>

(y) the aggregate exercise price specified in the Option with respect to
such shares.

(j) Upon exercise of an SAR, the Employee shall be entitled to receive all or
a portion of (i) the Fair Market Value of a specified number of shares of Stock
at the time of exercise over (ii) a specified amount which shall not, subject to
Section 4(i), be less than the Fair Market Value of such specified number of
shares of Stock at the time the SAR is granted. Upon exercise of an SAR,
payment of such excess shall be made in cash or Stock, or both, as determined by
the Committee in its sole discretion.

(k) If the Option granted to an Employee allows the Employee to elect to
cancel all or any portion of an unexercised Option by exercising a related
(tandem) SAR, then the Option price per share of Stock shall be used as the
specified price in Section 4(j), to determine the value of the SAR upon such
exercise, and, in the event of the exercise of such SAR, the Company's
obligation in respect of such Option or such portion thereof will be discharged
by payment of the SAR so exercised.

5. Certificates for Award of Stock
-------------------------------

(a) Each Employee entitled to receive shares of Stock under the Plan shall be
issued a certificate for such shares. Such certificate shall be registered in
the name designated by the Employee, and shall bear an appropriate legend
reciting the terms, conditions and restrictions, if any, applicable to such
shares and shall be subject to appropriate stop-transfer orders.

(b) Shares of Stock shall be made available under the Plan either from
authorized and unissued shares, or shares held by the Company in its treasury.
The Company shall not be required to issue or deliver any certificates for
shares of Stock prior to (i) the listing of such shares on any stock exchange on
which the Stock may then be listed, (ii) the completion of any registration or
qualification of such shares under any federal or state law, or any ruling or
regulation of any governmental body, which the Committee shall, in its sole
discretion, determine to be necessary or advisable and (iii) the recipient's
execution of a shareholders agreement providing such terms and conditions as the
Committee may determine in its sole discretion.

(c) All certificates for shares of Stock delivered under the Plan also shall
be subject to such stop-transfer orders and other restrictions as the Committee
may deem advisable under the rules, regulations, and other requirements of the
Securities and Exchange Commission, any stock exchange upon which the Stock is
then listed and any applicable federal or state securities laws, and the
Committee may cause a legend or legends to be placed on any such certificates to
make appropriate reference to such restrictions. The foregoing provisions of
this Section 5(c) shall not be effective if and to the extent that the shares of
Stock delivered under the Plan are covered by an effective and current
registration statement under the Securities Act of 1933, or if, and so long as,
the Committee determines that application of such provisions is no longer
required or desirable. In making such determination, the Committee may rely
upon an opinion of counsel for the Company.

(d) Each Employee who receives Stock upon exercise of an Option shall have all
of the rights of a shareholder with respect to such shares, including the right
to vote the shares and receive dividends and other distributions. No Employee
awarded an Option shall have any right as a shareholder with respect to any
shares subject to such Option prior to the date of issuance to him or her of a
certificate or certificates for such shares.

6. Beneficiary
-----------

(a) Each Employee shall file with the Company a written designation of one or
more persons as the Beneficiary who shall be entitled to receive the Option or
SAR, if any, awarded under the Plan upon his or her death. An Employee may from
time to time revoke or change his or her Beneficiary designation without the
consent of any prior Beneficiary by filing a new designation with the Company.
The last such designation received by the Company shall be controlling;

provided, however, that no designation, or change or revocation thereof, shall
- -------- -------
be effective unless received by the Company prior to the Employee's death, and
in no event shall it be effective as of a date prior to such receipt.

A-4
<PAGE>

(b) If no such Beneficiary designation is in effect at the time of a
Employee's death, or if no designated Beneficiary survives the Employee or if
such designation conflicts with law, the Employee's estate shall be entitled to
receive the Option, if any, awarded under the Plan upon his or her death. If
the Company is in doubt as to the right of any person to receive such Option or
SAR, the Company may retain such Option or SAR, without liability for any income
thereon, until the Company determines the rights thereto, or the Company may
transfer such Option or SAR into any court of appropriate jurisdiction and such
payment shall be a complete discharge of the liability of the Company therefor.

7. Administration of the Plan
--------------------------

(a) The Plan shall be administered by the Compensation Committee of the Board
of such other committee as appointed by the Board (the "Committee"). The
Committee shall have at least two members and each member shall be a "Non-
Employee Director" within the meaning of Rule 16b-3 under the Securities
Exchange Act of 1934 or successor rule or regulation. No member of the
Committee shall have been granted an option or SAR under the Plan or have been
granted or awarded an option or other right with respect to equity securities of
the Company pursuant to any other plan of a Participating Company at any time
within the one-year period immediately preceding the member's appointment to the
Committee.

(b) All decisions, determinations or actions of the Committee made or taken
pursuant to grants of authority under the Plan shall be made or taken in the
sole discretion of the Committee and shall be final, conclusive and binding on
all persons for all purposes.

(c) The Committee shall have full power, discretion and authority to
interpret, construe and administer the Plan and any part thereof, and its
interpretations and constructions thereof and actions taken thereunder shall be
final, conclusive and binding on all persons for all purposes.

(d) The Committee's decisions and determinations under the Plan need not be
uniform and may be made selectively among Employees, whether or not such
Employees are similarly situated.

(e) The act of a majority of the members present at a meeting duly called and
held shall be the act of the Committee. Any decision or determination reduced
to writing and signed by all members of the Committee shall be fully as
effective as if made by unanimous vote at a meeting duly called and held.

(f) Notwithstanding anything else herein to the contrary, the Committee shall
not be required to direct the Company to grant any Options or SARs under this
Plan.

8. Amendment or Discontinuance
---------------------------

The Board may, at any time, amend or terminate the Plan. No amendment shall,
without approval by a majority of the Company's stockholders, (i) alter the
group of persons eligible to participate in the Plan, (ii) materially increase
the benefits provided under the Plan to the extent that stockholder approval
would then be required pursuant to Rule 16b-3 under the Securities Exchange Act
of 1934 or successor rule or regulation, (iii) increase the maximum number of
shares of Stock which are available for awards under the Plan or (iv) extend the
period during which Options may be granted under the Plan beyond the expiration
of ten years from the effective date of the Plan. No amendment or termination
shall retroactively impair the rights of any person with respect to an Option or
SAR.

9. Adjustments in Event of Change in Common Stock
----------------------------------------------

(a) Subject to Section 9(b), if the outstanding shares of Stock of the
Company are increased, decreased, or exchanged for a different number or kind of
shares or other securities, or if additional shares or new or different shares
or other securities are distributed with respect to such shares of Stock or
other securities, through merger, consolidation, sale of all of substantially
all of the property of the Company, reorganization, recapitalization,
reclassification, stock dividend, stock split, reverse stock split or other
distribution with respect to such shares of Stock or other securities, then,

A-5
<PAGE>

to the extent permitted by the Company, an appropriate and proportionate
adjustment shall be made in (i) the maximum number and kind of shares provided
in Section 3, (ii) the number and kind of shares or other securities subject to
the outstanding Options and SARS, if any, and (iii) the price for each share or
other unit of any other securities subject to outstanding Options or SARs
without change in the aggregate purchase price or value as to which such Options
or SARS remain exercisable or subject to restrictions. Any adjustment under
this Section 9(a) shall be made by the Board, whose determination as to what
adjustments shall be made and the extent thereof will be final, binding and
conclusive. No fractional interests will be issued under the Plan resulting
from any such adjustment.

(b) Notwithstanding anything else herein to the contrary, the Board, in its
sole discretion at the time of grant of an Option or SAR or otherwise may, in
an Option Agreement or otherwise, provide that, with any Employee's consent,
upon the occurrence of certain events, including a change in control of the
Company (as determined by the Board) any outstanding Options or SARs, not
theretofore exercisable, shall immediately become exercisable in their entirety
and that any such Option or SAR may be purchased by the Company for cash at a
price to be determined by the Board.

10. Miscellaneous
-------------

(a) Nothing in this Plan or any Option Agreement hereunder shall confer upon
any employee any right to continue in the employ of any Participating Company or
interfere in any way with the right of any Participating Company to terminate
his or her employment at any time.

(b) No Option or SAR granted under the Plan shall be deemed salary or
compensation for the purpose of computing benefits under any employee benefit
plan or other arrangement of any Participating Company for the benefit of its
employees unless any such Participating Company shall determine otherwise.

(c) No Employee shall have any claim to an Option or SAR until it is actually
granted under the Plan. To the extent that any person acquires a right to
receive payments from the Company under this Plan, such right shall be no
greater than the right of an unsecured general creditor of the Company.

(d) Absence on leave approved by a duly constituted officer of a
Participating Company shall not be considered interruption or termination of
employment for any purposes of the Plan; provided, however, that no Option or
-------- -------
SAR may be granted to an employee while he or she is absent on leave.

(e) If the Committee shall find that any person to whom any Option or SAR, or
portion thereof, is awarded to under the Plan is unable to care for his or her
affairs because of illness or accident, or is a minor, then any payment due him
or her (unless a prior claim therefor has been made by a duly appointed legal
representative) may, if the Committee so directs the Company, be paid to his or
her spouse, a child, a relative, an institution maintaining or having custody of
such person, or any other person deemed by the Committee to be a proper
recipient on behalf of such person otherwise entitled to payment. Any such
payment shall be a complete discharge of the liability of the Company therefor.

(f) The right of any Employee or other person to any Option, SAR or Stock
under the Plan may not be assigned, transferred, pledged or encumbered, either
voluntarily or by operation of law, except as provided in Section 6 with respect
to the designation of a Beneficiary or as may otherwise be required by law. If,
by reason of any attempted assignment, transfer, pledge, or encumbrance or any
bankruptcy or other event happening at any time, any amount payable under the
Plan would be made subject to the debts or liabilities or the Employee or his or
her Beneficiary or would otherwise devolve upon anyone else and not be enjoyed
by the Employee or his or her Beneficiary, then the Committee may terminate such
person's interest in any such payment and direct that the same be held and
applied to or for the benefit of the Employee, his or her Beneficiary or any
other persons deemed to be the natural objects of his or her bounty, taking into
account the expressed wishes of the Employee (or, in the event of his or her
death, those of his or her Beneficiary) in such manner as the Committee may deem
proper.

(g) Copies of the Plan and all amendments, administrative rules and
procedures and interpretations shall be made available to all Employees at all
reasonable times at the Company's headquarters.

A-6
<PAGE>

(h) The Committee may cause to be made, as a condition precedent to the grant
and exercise of any Option or SAR, or otherwise, appropriate arrangements with
the Employee or his or her Beneficiary, for the withholding of any federal,
state, local or foreign taxes prior to the delivery of any certificate or
certificates for Stock.

(i) The Plan and the grant and exercise of Options and SARs shall be subject
to all applicable federal and state laws, rules, and regulations and to such
approvals by any government or regulatory agency as may be required.

(j) All elections, designations, requests, notices, instructions and other
communications from an Employee, Beneficiary or other person to the Committee,
required or permitted under the Plan, shall be in such form as is prescribed
from time to time by the Committee and shall be mailed by first class mail or
delivered to such location as shall be specified by the Committee.

(k) The terms of the Plan shall be binding upon the Company and its
successors and assigns.

(l) Captions preceding the sections hereof are inserted solely as a matter of
convenience and in no way define or limit the scope or intent of any provision
hereof.

11. Effective Date and Stockholder Approval
---------------------------------------

The effective date of the Plan shall be September 24, 1993, subject to
approval by a majority of the Company's stockholders at the 1994 Annual Meeting.
Notwithstanding anything in the Plan to the contrary, if the Plan shall have
been approved by the Board prior to such stockholder approval, Employees may be
selected and award criteria may be determined as provided herein subject to such
subsequent stockholder approval.

A-7
<PAGE>

APPENDIX B

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 on the reverse side of this proxy, all of the shares of Common 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 5,
1996, 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, FOR THE AMENDMENT TO THE
CERTIFICATE OF INCORPORATION DESCRIBED IN PROPOSAL 2 AND FOR THE AMENDMENT TO
THE MEMRY CORPORATION STOCK OPTION PLAN DESCRIBED IN PROPOSAL 3, 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 25,000,000 to
30,000,000.

[ ] FOR [ ] AGAINST [ ] ABSTAIN

3. Proposal to amend the Memry Corporation Stock Option Plan to increase the
number of shares of the Company's Common Stock eligible for issuance
thereunder from 600,000 to 1,100,000.

[ ] FOR [ ] AGAINST [ ] ABSTAIN

4. 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.

-------------------------------------
Signature of Stockholder

-------------------------------------
Signature if held jointly

Date: ____________________, 1996

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.

F:\WPFILES\4626\01\PROXY96.5