<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement / / Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
STAR TECHNOLOGIES, INC.
- --------------------------------------------------------------------------------
(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/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
(1) Title of each class of securities to which transaction applies:
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
(5) Total fee paid:
- --------------------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
- --------------------------------------------------------------------------------
/ / Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the form or schedule and the date of its filing.
(1) Amount previously paid:
- --------------------------------------------------------------------------------
(2) Form, schedule or registration statement no.:
- --------------------------------------------------------------------------------
(3) Filing party:
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(4) Date filed:
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<PAGE> 2
[STAR TECHNOLOGIES LOGO]
NOTICE OF
1995 ANNUAL MEETING
AND
PROXY STATEMENT
<PAGE> 3
STAR TECHNOLOGIES, INC.
515 SHAW ROAD
STERLING, VIRGINIA 20166
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
The 1995 Annual Meeting of Stockholders of Star Technologies, Inc., a
Delaware corporation (the "Company"), will be held at the Holiday Inn at 1000
Sully Road, Sterling, Virginia, on Wednesday, August 16, 1995, at 11:00 a.m.,
for the following purposes:
(1) To elect three Directors, each to hold office for terms of one,
two and three years, respectively; and
(2) To transact any other business that may properly come before the
meeting or any adjournments thereof.
Stockholders who wish to bring other business before the Annual Meeting
must comply with the provisions of Section 2.1 of the By-Laws of the Company.
Only stockholders of record at the close of business on June 19, 1995, are
entitled to vote at the Annual Meeting or any adjournments thereof. A complete
list of the stockholders entitled to vote at the Annual Meeting will be open to
the examination of any stockholder, for any purpose germane to the Annual
Meeting, during ordinary business hours, for a period of ten days prior to the
Annual Meeting at the Company's executive offices at 515 Shaw Road, Sterling,
Virginia.
By Order of the Board of Directors
Brenda A. Potosnak
Secretary
July 18, 1995
THE FORM OF PROXY IS ENCLOSED. TO ENSURE THAT YOUR SHARES WILL BE VOTED AT
THE MEETING, PLEASE COMPLETE AND SIGN THE ENCLOSED PROXY AND RETURN IT PROMPTLY
IN THE ENCLOSED ENVELOPE. NO POSTAGE IS REQUIRED IF MAILED IN THE UNITED STATES.
THE GIVING OF A PROXY WILL NOT AFFECT YOUR RIGHT TO VOTE IN PERSON IF YOU ATTEND
THE MEETING.
<PAGE> 4
[STAR TECHNOLOGIES LOGO]
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD
AUGUST 16, 1995
The enclosed proxy is solicited on behalf of the Board of Directors of Star
Technologies, Inc., a Delaware corporation (the "Company"), for use at the
Annual Meeting of Stockholders to be held at the Holiday Inn at 1000 Sully Road,
Sterling, Virginia, on Wednesday, August 16, 1995, at 11:00 a.m., or any
adjournments thereof (the "Annual Meeting"). This Proxy Statement and the
accompanying form of proxy will be mailed to stockholders on or about July 18,
1995.
Any person signing and returning the enclosed proxy may revoke it at any
time before it is voted by giving written notice of the revocation to the
Company or by voting in person at the meeting.
The cost of soliciting proxies, including the cost of preparing, assembling
and mailing this proxy material to stockholders, will be borne by the Company.
Solicitation initially will be made by mail. Further solicitation may be made by
telephone, telegram or in person by officers and employees of the Company who
would be reimbursed by the Company for any costs they might incur in making any
solicitation. Brokerage houses, custodians, nominees, fiduciaries and others
acting in a representative capacity will be requested to forward the proxy
solicitation material to the beneficial owners of the Company's stock and the
Company will reimburse them for their reasonable expenses.
VOTING SECURITIES
All voting rights are vested exclusively in the holders of the Company's
common stock, having a par value of $.01 per share ("Common Stock"), and the
Company's preferred stock, having a par value of $.01 per share ("Preferred
Stock"). Three series of Preferred Stock are issued and outstanding: the Series
A Preferred Stock ("Series A Stock"), the Series B Senior Preferred Stock
("Series B Stock") and the Series C Senior Preferred Stock ("Series C Stock").
With regard to the election of Directors of the Company, the holders of
Common Stock and Series A Stock (as a single class) and the holders of Series B
Stock and Series C Stock (as a single class) vote separately, as described
below. With regard to any other business that may properly come before the
Annual Meeting, the holders of Common Stock and Preferred Stock vote together as
a single class. Each share of Common Stock is entitled to one vote. Each share
of Preferred Stock is entitled to vote on an "as if converted" basis. Each share
of Series A Stock was, as of the record date, convertible into 7.20 shares of
Common Stock. Each share of Series B Stock and each share of Series C Stock
were, as of the record date, convertible into 100 shares of Common Stock.
Only stockholders of record at the close of business on June 19, 1995, are
entitled to notice of and to vote at the Annual Meeting or any adjournments
thereof. On June 19, 1995, the Company had outstanding 19,919,035 shares of
Common Stock; 46,900 shares of Series A Stock, which vote as if converted to
337,680 shares of Common Stock; 59,584 shares of Series B Stock, which vote as
if converted to 5,958,400 shares of Common Stock; and 39,723 shares of Series C
Stock, which vote as if converted to 3,972,300 shares of Common Stock. The
presence of a
<PAGE> 5
majority of the shares of Common Stock and Common Stock equivalents represented
by the Preferred Stock, in person or by proxy, will constitute a quorum for the
Annual Meeting.
The holders of Series B Stock and Series C Stock have the right to nominate
and elect independently two Directors of the Company. The holders of Series B
Stock and Series C Stock do not have the right to nominate or elect any other
Directors, except as described below under "Election of Directors -- Potential
Change in Control." As of the date of this Proxy Statement, the holders of
Series B Stock and Series C Stock have elected only one individual, Dr. Carl E.
Ravin, to the Board of Directors.
Only holders of Common Stock and Series A Stock will vote, as a single
class, to elect the Directors at the Annual Meeting. The presence of a majority
of the shares of Common Stock and Series A Stock, in person or by proxy, will
constitute a quorum for the election of the Directors. All shares of Common
Stock and Preferred Stock will vote together as a single class on any other
business that may be considered at the Annual Meeting or any adjournments
thereof. Under Delaware law and the Company's Restated Certificate of
Incorporation, if a quorum is present at the Annual Meeting, each nominee for
Director who receives the greatest number of votes cast for the election of each
Director at the Annual Meeting by the shares present in person or by proxy and
entitled to vote shall be elected a Director and, except as described below, any
other matters submitted to a vote of the stockholders must be approved by the
affirmative vote of the majority of the shares present in person or by proxy and
entitled to vote on the subject matter. With regard to the election of
Directors, an abstention will not be counted either in favor of or against the
election of the nominee. Abstention from voting will have the practical effect
of voting against any other matter voted upon at the Annual Meeting since it is
one less vote for approval. Broker nonvotes will have no impact on any matter
voted upon at the Annual Meeting since they are not considered "shares present"
for voting purposes.
Unless otherwise indicated, reference to "voting" stock throughout this
Proxy Statement assumes the full conversion of the relevant series of Preferred
Stock to Common Stock and reference to "shares" includes both shares of
outstanding Common Stock and shares of Common Stock into which the relevant
series of Preferred Stock is or are convertible.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table shows the beneficial ownership, on June 19, 1995, of
(i) each person known by the Company to be the beneficial owner of more than
five percent of any class of the Company's stock, (ii) each Director, (iii) the
Chief Executive Officer and the other executive officers whose total annual
salary and bonus exceeded $100,000 for the last fiscal year, and (iv) all of the
Company's Directors and executive officers as a group. Because each series of
Preferred Stock is convertible into Common Stock (see "Voting Securities,"
above), each beneficial owner of Preferred Stock is deemed by the Securities and
Exchange Commission (the "SEC") to be the beneficial owner of the number of
shares of Common Stock into which such Preferred Stock is convertible.
Therefore, in indicating the number of shares of Common Stock and the percentage
of the class of Common Stock beneficially owned by each person, the table's
figures assume that such person has converted into Common Stock all shares of
Preferred Stock of which such person is the beneficial owner. For this reason,
the table contains substantial duplication in the number of shares and
percentages of Common Stock. The table also provides information setting forth
each listed person's relative voting power for the election of Directors (taking
into account only the person's beneficial ownership of Common Stock and Series A
Stock) and for any other business that may properly come before the Annual
Meeting (taking into account all of the person's holdings).
2
<PAGE> 6
PERCENT OF VOTING POWER
<TABLE>
<CAPTION>
AMOUNT AND
NATURE OF PERCENT
NAME OF TITLE OF BENEFICIAL OF ELECTION OF OTHER
BENEFICIAL OWNER CLASS OWNERSHIP(1) CLASS DIRECTORS(2) BUSINESS(3)
- -------------------------- ------------- ---------------- ------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Principal Stockholders
General Electric Company Common Stock 10,555,039(4) 35.4% 3.1% 35.0%
3135 Easton Turnpike Series B Stock 59,584 100.0%
Fairfield, CT 06431 Series C Stock 39,723 100.0%
State Farm Mutual Common Stock 1,217,334(5) 6.1% 12.2% 4.0%
Automobile Insurance Series A Stock 28,000 59.7%
Company
One State Farm Plaza
Bloomington, IL 61710
Dimensional Fund Common Stock 1,076,700 5.4% 5.3% 3.6%
Advisors Inc.
1299 Ocean Avenue
11th Floor
Santa Monica, CA 90401
FRAPCO Common Stock 50,400(6) * * *
c/o National Series A Stock 7,000 14.9%
Westminster
Bank NJ
2 Montgomery Street
Jersey City, NJ 07302
SG Warburg and Company Common Stock 30,960(6) *
Ltd. Series A Stock 4,300 9.2% * *
30 Gresham Street
London EC2, England
Stuebner Properties Common Stock 20,160(6) * * *
7000 Northland Circle Series A Stock 2,800 6.0%
Minneapolis, MN 55428
Directors
Francis Jungers Common Stock 100,000(7) * 0.0% 0.0%
Alan O. Maxwell Common Stock 731,000(8) 3.5% 3.3% 2.2%
Herbert S. Shaw Common Stock 0 0.0% 0.0% 0.0%
Carl E. Ravin Common Stock 10,000(9) * 0.0% 0.0%
Executive Officers
Robert C. Compton** Common Stock 580,097(10) 2.8% * *
(Joe) Shing-Chou Pi Common Stock 172,500(11) * * *
Robert L. Collins Common Stock 139,033(12) * * *
All executive officers and Common Stock 1,732,630(13) 8.0% 3.4% 2.3%
Directors as a group
(7 persons)
</TABLE>
- ---------------
* Less than one percent.
** Also serves as a Director.
3
<PAGE> 7
(1) A person is considered to "beneficially own" any shares over which such
person exercises sole or shared voting or investment power or of which
such person has the right to acquire beneficial ownership within sixty
days (for example, through the conversion of securities or exercise of
stock options). Unless otherwise indicated, voting and investment power
relating to the above shares is exercised solely by the beneficial owner
or shared by such owner and such owner's spouse or children.
(2) Indicates the beneficial owner's percentage voting power to elect a
Director to the class of Directors nominated and elected by the holders of
Common Stock and Series A Stock relative to all shares of Common Stock and
Series A Stock (on an as if converted basis) outstanding on June 19, 1995,
assuming that all shares of Common Stock and Series A Stock are voted as a
single class and that no options are exercised.
(3) Indicates the beneficial owner's percentage voting power with respect to
any business other than the election of a Director that may properly come
before the Annual Meeting relative to all shares of Common Stock and
Preferred Stock (on an as if converted basis) outstanding on June 19, 1995,
assuming that all shares of Common Stock and Preferred Stock are voted as a
single class and that no options are exercised.
(4) Includes 5,958,400 shares of Common Stock issuable upon the conversion of
Series B Stock and 3,972,300 shares of Common Stock issuable upon the
conversion of Series C Stock.
(5) Includes 201,600 shares of Common Stock issuable upon the conversion of
Series A Stock.
(6) Represents shares of Common Stock issuable upon the conversion of Series A
Stock.
(7) Represents 100,000 shares of Common Stock subject to options that are
either currently exercisable or exercisable within sixty days of June 19,
1995.
(8) Includes 70,000 shares of Common Stock subject to options that are either
currently exercisable or exercisable within sixty days of June 19, 1995.
(9) Represents 10,000 shares of Common Stock subject to options that are either
currently exercisable or exercisable within sixty days of June 19, 1995.
(10) Includes 574,138 shares of Common Stock subject to options that are either
currently exercisable or exercisable within sixty days of June 19, 1995.
(11) Includes 160,000 shares of Common Stock subject to options that are either
currently exercisable or exercisable within sixty days of June 19, 1995.
(12) Includes 125,256 shares of Common Stock subject to options that are either
currently exercisable or exercisable within sixty days of June 19, 1995.
(13) Includes 1,039,394 shares of Common Stock subject to options that are
either currently exercisable or exercisable within sixty days of June 19,
1995.
ELECTION OF DIRECTORS
BACKGROUND
There are six positions on the Company's Board of Directors. Two of the
positions are reserved for Directors who are nominated and elected independently
by the holder of Series B Stock and Series C Stock. One of these positions is
and will remain vacant until such time as the holder of Series B Stock and
Series C Stock acts to fill it. The remaining four positions on the Board of
Directors are filled by persons elected by the holders of the Company's Common
Stock and Series A Stock voting as a single class on an as if converted basis.
NOMINEES FOR ELECTION TO THE BOARD OF DIRECTORS
The terms of Messrs. Shaw, Compton, and Maxwell expire on the date of the
Annual Meeting. The term of Mr. Jungers expires on the date of the 1996 annual
meeting. The term of
4
<PAGE> 8
Dr. Ravin expires on the date of the 1997 annual meeting. Thus, the holders of
Common Stock and Series A Stock will vote, as a single class, to fill three
Board positions at the Annual Meeting. The Board of Directors has nominated
Messrs. Shaw, Compton, and Maxwell for re-election to the Board for terms of
office of one year, two years, and three years, respectively, or until the
election and qualification of their successor or their death, resignation or
removal from office. The persons named on the enclosed proxy intend to vote for
the re-election of Messrs. Shaw, Compton, and Maxwell to the Board of Directors.
In the event that Messrs. Shaw, Compton, and Maxwell should become unable to
stand for re-election as Directors, the proxy will be voted in accordance with
the best judgment of the persons acting under the proxy.
INFORMATION REGARDING DIRECTORS OF THE COMPANY
ROBERT C. COMPTON, age 48, has served as a Director since July 1988 and was
elected Chairman of the Board in March 1990. He has served as Chief Executive
Officer since October 1989 and as President since June 1988. His previous
positions with the Company include Executive Vice President and Vice
President -- Finance, Administration and Corporate Development. Prior to joining
the Company in 1985, he served for seventeen years in various financial,
management and corporate auditing positions at the General Electric Company
("GE").
FRANCIS JUNGERS, age 68, has served as a Director since May 1984. Mr.
Jungers has been an independent investor and consultant for the past several
years. Mr. Jungers is a former Chairman of the Board and Chief Executive Officer
of Arabian American Oil Company, a petroleum producer. He is a director of AES
Corporation, Georgia Pacific Corporation, Thermo Electron Corporation, Thermo
Ecotek Corporation, Thermo Instrument Systems, Inc., Dual Drilling Company,
Pacific Rehabilitation and Sports Medicine, Esco Corporation, and an advisory
director of Donaldson, Lufkin & Jenrette Securities Corporation.
ALAN O. MAXWELL, age 65, has served as a Director since 1981. He was
Chairman and President of Sunny Service Stations, Inc., a chain of retail and
wholesale fuel distribution centers and convenience food stores, from 1984 until
1988. Since 1989, he has served as Managing Director of Maxwell Management, a
capital and management company. He is a Director of TMA Technologies and Excel
Sports Science.
CARL E. RAVIN, age 52, has served as a Director since February 1994. Dr.
Ravin is the Chairman of the Department of Radiology at Duke University Medical
Center and Professor of Radiology at Duke University, where he has been
associated since 1978. He is a nationally known expert in thoracic radiology,
currently serves on the editorial board of the "Journal of Thoracic Imaging,"
and is a Fellow of the American College of Chest Physicians and the American
College of Radiology. Dr. Ravin has served on various corporate advisory boards,
including the General Electric Advisory Board.
HERBERT S. SHAW, age 59, joined the Company in November 1985 as President
and Chief Executive Officer. In March 1986, he was elected Chairman of the Board
and a Director. He resigned as President and Chief Executive Officer in May 1987
and resigned as Chairman of the Board in March 1990. Mr. Shaw is currently Chief
Executive Officer and President of the Laughlin Group of Companies, a
diversified financial services firm. He was a general partner of Shaw Venture
Partners, a venture capital firm, from December 1983 until February 1992. At
that time he joined the Laughlin Group. Prior to that, he was Manager, Marketing
and Business Development, of GE's Advanced Energy Operations Division, where he
had been employed since 1962.
COMMITTEES OF THE BOARD OF DIRECTORS
During the fiscal year ended March 31, 1995, there were nine meetings of
the Board of Directors. Each Director of the Company attended all the meetings
of the Board of Directors. The Audit Committee, together with all other
Directors, met three times during fiscal year 1995.
5
<PAGE> 9
The Compensation Committee of the Board met once during fiscal year 1995. The
Board of Directors does not have a Nominating Committee.
The Audit Committee, currently consisting of Messrs. Jungers and Shaw, is
primarily responsible for approving the services performed by the Company's
independent public accountants and for reviewing and evaluating the Company's
accounting principles and reporting practices and its system of internal
accounting controls. The Compensation Committee, currently consisting of Messrs.
Jungers, Maxwell and Ravin, principally reviews and approves the salaries,
bonuses and stock options of executive officers of the Company.
COMPENSATION OF DIRECTORS
Directors' fees may be paid in cash or Common Stock, or a combination
thereof, at the discretion of each Director. Fees are not paid to the Chairman
or to Directors who are employees of the Company. The Company's policy is to pay
to each eligible Director $8,000 annually plus $1,000 for each regular meeting
and $500 for each conference telephone meeting of the Board of Directors
attended. No additional fees are paid for committee participation.
The Company believes that it is important for directors to have a personal
interest in the success of the Company and for their interests to be aligned
with those of the Company's stockholders. Therefore, in addition to the cash
compensation described above, each nonemployee Director, under the 1989 Stock
Option Plan for Nonemployee Directors (the "1989 Plan"), annually receives
options to purchase 10,000 shares of Common Stock, subject to the limitations
that a nonemployee Director may not receive options or rights to purchase in the
aggregate more than 100,000 shares pursuant to the 1989 Plan or any other plan
of, or agreement with, the Company and that no more than an aggregate of 700,000
shares may be granted under the 1989 Plan. Mr. Shaw has been, and continues to
be, ineligible to receive options under the 1989 Plan as he has received options
or rights to purchase in the aggregate more than 100,000 shares pursuant to
other plans of, or agreement with, the Company. Options have an exercise price
equal to the fair market value of the shares covered by the option at the time
of the grant and are exercisable immediately.
POTENTIAL CHANGE IN CONTROL
Pursuant to a contract between the Company and the initial purchasers of
Series B Stock and Series C Stock, the holder of Series B Stock and Series C
Stock may under certain circumstances vote to exercise an exclusive right to
elect a number of additional Directors to the Board sufficient, when added to
the two Directors the holders already are entitled to elect, to comprise a
majority of the Board of Directors. The holder of Series B Stock and Series C
Stock is currently entitled to elect such additional Directors because the
Company has not, as required by the contract, entered into a loan agreement (the
"Loan Agreement") reasonably acceptable to the holder of Series B Stock and
Series C Stock with a banking institution providing for a loan of at least
twelve months' duration and in an aggregate principal amount between $5 million
and $8 million. Thus, upon the affirmative vote of the holders of at least 70%
of the shares of Series B Stock and Series C Stock then outstanding, voting as a
single class, the holder of Series B Stock and Series C Stock could exercise its
right to elect any or all of such additional Directors necessary to comprise a
majority of the Board of Directors. The right of the holder of Series B Stock
and Series C Stock to elect the additional Directors will terminate when the
Company enters into the Loan Agreement, when no shares of Series B Stock or
Series C Stock remain outstanding, or when the holder of the Series B Stock and
Series C Stock waives the breach of the contract.
6
<PAGE> 10
EXECUTIVE COMPENSATION
REPORT OF THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS
The Compensation Committee of the Board of Directors (the "Committee")
establishes and oversees the general compensation policies of the Company,
including the review and approval of compensation levels and cash incentive
initiatives for the executive officers, and administers the Company's employee
compensation plans. The Committee is composed of three nonemployee Directors.
Executive officers are generally compensated through a combination of base
salary, year-end performance bonuses and limited stock options. The officers, as
well as substantially all full-time employees, are eligible to participate in
the Company's 401(k) Plan. The Company made its first contribution to the 401(k)
Plan during fiscal year 1995. The Company is committed to providing compensation
that helps attract, retain and motivate the skilled people it requires. The
Committee reviews annually with the full Board of Directors compensation for all
of the Company's officers, along with performance reviews evaluating the
criteria listed below.
In determining base salary and salary increases, the Committee considers
such variables as the officer's expertise, responsibilities, and the officer's
contributions to corporate teamwork, efficiency, profitability and performance
and the attainment of individual performance criteria. The Committee also
considers the salary of officers with comparable responsibilities and
performance criteria of other companies with which the Company competes for
executive officers. Such companies may or may not include the companies in the
S&P Computer Systems Index (excluding IBM) identified in the performance graph
following this report. There was no change to the Chief Executive Officer's base
pay in fiscal year 1995 and salary increases for most other executives were
limited.
The Committee believes that year-end bonuses for the Chief Executive
Officer and the other top executives must be tied to the achievement of
profitability objectives, business growth and the Company's overall performance,
both current and long-term. All bonus awards are the sole responsibility of the
Committee and are based on the philosophy that incentive compensation should be
directly and materially linked to the operating results of the Company. In
determining the bonuses paid to executive officers in fiscal year 1995 for
fiscal year 1994, the Committee focused on the Company's significant increase in
profitability and cash flows from operations.
The long-term component of the compensation for the Chief Executive Officer
and other executives has been the award of stock options, thereby aligning the
interests of the executive officers with those of the stockholders. An award of
stock options, vesting over five years, has historically been granted to the
executives when hired. No additional options were granted to the Chief Executive
Officer or to the other executives during fiscal year 1994 or fiscal year 1995.
The Committee plans to evaluate alternative long-term compensation incentives.
Francis Jungers
Alan O. Maxwell
Carl E. Ravin
7
<PAGE> 11
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN*
AMONG STAR TECHNOLOGIES, INC. COMMON STOCK, THE NASDAQ STOCK MARKET-US INDEX
AND THE S & P COMPUTER SYSTEMS (EXCLUDING IBM) INDEX
(GRAPH IN PRINTED VERSION)
<TABLE>
<CAPTION>
MEASUREMENT PERIOD STAR TECH- NASDAQ STOCK S & P COMPTR
(FISCAL YEAR COVERED) NOLOGIES, INC. MRKT - US SYS- EXCL IBM
<S> <C> <C> <C>
3/90 100 100 100
3/91 320 114 107
3/92 460 146 94
3/93 280 167 86
3/94 260 181 86
3/95 110 201 96
</TABLE>
* $100 INVESTED ON 03/31/90 IN STOCK OR INDEX -
INCLUDING REINVESTMENT OF DIVIDENDS.
FISCAL YEAR ENDING MARCH 31.
The Board of Directors and the Committee recognize that the market price of
stock is influenced by many factors, only one of which is company performance.
The stock price performance shown on the graph is not necessarily indicative of
future price performance.
8
<PAGE> 12
SUMMARY COMPENSATION TABLE
Shown below is information concerning the annual and long-term compensation
for services in all capacities to the Company for the fiscal years ended March
31, 1995, 1994, and 1993, of those persons who were, on March 31, 1995, (i) the
chief executive officer and (ii) the other executive officers whose total annual
salary and bonus exceeded $100,000 for the last fiscal year (the "Named
Executives"):
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION AWARDS
ANNUAL SECURITIES
NAME AND FISCAL COMPENSATION UNDERLYING ALL OTHER
PRINCIPAL POSITION YEAR SALARY OPTIONS(#) COMPENSATION
- -------------------------------------- ---- ------------ ------------------- ------------
<S> <C> <C> <C> <C>
Robert C. Compton 1995 $160,000 -- $ 38,260(2)
Chairman of the Board, President 1994 $160,000 -- --
and Chief Executive Officer 1993 $156,000 -- --
(Joe) Shing-Chou Pi 1995 $137,925 -- $ 32,157(2)
Vice President, Engineering & 1994 $130,000 -- --
Manufacturing 1993 $126,758 200,000(1) --
Robert L. Collins 1995 $120,000 -- $ 24,045(2)
Vice President, Graphicon Operations 1994 $120,000 -- --
1993 $117,000 -- $ 20,987(3)
</TABLE>
- ---------------
(1) Options issued to Mr. Pi in fiscal year 1992 were canceled and reissued at a
different price in fiscal year 1993.
(2) Represents bonuses.
(3) Represents relocation expenses.
OPTION GRANTS IN LAST FISCAL YEAR
No stock options were granted to the Named Executives during the fiscal
year ended March 31, 1995.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION
VALUES
Shown below is information with respect to the aggregate fiscal year-end
value of unexercised options to purchase the Company's Common Stock under the
1984 Plan. There were no stock options exercised by the Named Executives during
the last fiscal year.
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY
OPTIONS AT MARCH 31, OPTIONS AT MARCH 31,
1995(#) 1995($)
----------------------------- -----------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ------------------------------------ ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Robert C. Compton 574,138 430,862 0 0
(Joe) Shing-Chou Pi 160,000 40,000 0 0
Robert L. Collins 125,256 112,824 0 0
</TABLE>
OTHER AGREEMENTS
The Company has entered into an agreement with Mr. Pi whereby he would
continue to be paid his salary and receive his benefits for one year in the
event of his termination by the Company.
STOCK OWNERSHIP AND TRADING REPORTS
Section 16(a) of the Securities Exchange Act of 1934 (the "Exchange Act")
requires the Company's officers and directors to file reports of their ownership
of the Company's stock and of changes in such ownership with the SEC and the
National Association of Securities Dealers, Inc.
9
<PAGE> 13
SEC regulations require those persons to furnish the Company with copies of all
Section 16(a) forms they file.
Based on its review of the copies of such forms received by it, or written
representations from certain reporting persons that no such forms were required
for those persons, the Company believes that, during fiscal year 1995, its
officers and directors complied with all applicable filing requirements.
MARKET VALUE OF COMMON STOCK
On June 19, 1995, the average of the closing bid and ask prices of the
Common Stock of the Company reported on the NASDAQ National Market was $9/16
($0.56).
AUDITORS
The Board of Directors has selected the firm of KPMG Peat Marwick LLP
("Peat Marwick"), independent certified public accountants, to serve as auditors
of the Company for the current fiscal year. Representatives of Peat Marwick will
be present at the Annual Meeting, will have an opportunity to make a statement
if they so desire and will be available to respond to questions.
STOCKHOLDER PROPOSALS
Any stockholder desiring to have an appropriate proposal presented for
action at next year's Annual Meeting of Stockholders, and who wishes to have it
shown in the Proxy Statement and form of proxy for the meeting, must notify the
Company and submit the proposal in writing for receipt at the Company's
executive offices noted above not later than March 20, 1996. See Securities and
Exchange Commission Rule 14a-8 for additional applicable requirements and
procedures.
ANNUAL REPORT
A copy of the Company's 1995 Annual Report to Stockholders is being mailed
with this Proxy Statement to each stockholder of record as of June 19, 1995.
Additional copies may be obtained from the Secretary of the Company, 515 Shaw
Road, Sterling, Virginia, 20166.
A copy of the Company's Annual Report on Form 10-K for the fiscal year
ended March 31, 1995, as filed with the Securities and Exchange Commission, will
be furnished without charge to record or beneficial holders, as of June 19,
1995, of the Company's stock on request to the Secretary of the Company at the
above address.
OTHER MATTERS
The Board of Directors of the Company knows of no other matters that will
be presented at this year's Annual Meeting of Stockholders. If any other matter
arises at the Annual Meeting, it is intended that the shares represented by
proxies in the accompanying form will be voted in accordance with the best
judgment of the persons acting under the proxies.
By Order of the Board of Directors
Brenda A. Potosnak
Secretary
July 18, 1995
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<PAGE> 14
STAR TECHNOLOGIES, INC.
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR ANNUAL MEETING OF STOCKHOLDERS, AUGUST 16, 1995
The undersigned hereby appoint(s) Brenda A. Potosnak and Jerry Carter, or
either of them, the true and lawful attorneys and proxies of the undersigned
with full power of substitution, to act and to vote at the Annual Meeting of
Stockholders of STAR TECHNOLOGIES, INC. (the "Company"), to be held at the
Holiday Inn at 1000 Sully Road, Sterling, Virginia, on August 16, 1995, at
11:00 a.m., Eastern Daylight Time, and at any adjournments of said meeting, the
shares of common stock or preferred stock of the Company in the name of the
undersigned or that the undersigned may be entitled to vote, upon the matters
set forth on the reverse, in accordance with and as more fully described in the
Notice and accompanying Proxy Statement for said meeting, receipt of which is
hereby acknowledged.
(CONTINUED AND TO BE SIGNED ON OTHER SIDE)
/X/ PLEASE MARK YOUR
VOTES AS IN THIS
EXAMPLE.
<TABLE>
<S> <C>
FOR WITHHOLD NOMINEES: Robert C. Compton The shares represented by this proxy will be voted according
1. Election of / / / / Alan O. Maxwell to the directions indicated hereon, or, IF NO DIRECTIONS
three (3) Herbert S. Shaw ARE GIVEN, THE SHARES REPRESENTED BY THIS PROXY WILL BE
Directors VOTED FOR EACH ITEM OF BUSINESS.
(INSTRUCTION: To withhold authority to vote for any IT IS UNDERSTOOD THAT THIS PROXY CONFERS DISCRETIONARY
individual nominee, strike a line through the nominee's AUTHORITY WITH RESPECT TO MATTERS NOT KNOWN OR
name in the list to the right.) DETERMINED AT THE TIME OF THE MAILING OF THE NOTICE OF
ANNUAL MEETING OF STOCKHOLDERS TO THE UNDERSIGNED. THE
PROXIES INTEND TO VOTE THE SHARES REPRESENTED BY THIS PROXY
ON SUCH MATTERS, IF ANY, AS DETERMINED BY THE BOARD OF
DIRECTORS.
PLEASE MARK, DATE, SIGN AND RETURN THIS PROXY PROMPTLY
USING THE ENCLOSED ENVELOPE. THE GIVING OF A PROXY WILL
NOT AFFECT YOUR RIGHT TO VOTE IN PERSON IF YOU ATTEND THE
MEETING.
Will attend / /
meeting
SIGNATURE __________________________________ DATE _________ SIGNATURE ________________________________________ DATE _________
SIGNATURE IF HELD JOINTLY
</TABLE>
NOTE: This Proxy must be signed exactly as name appears hereon. When shares
are being held by joint tenants, both shall sign. Executors,
administrators, trustees, guardians and others signing in a representative
capacity, and attorneys, should indicate that they sign in a
representative capacity. Attorneys should attach powers of attorney. If
the signer is a corporation, please sign full corporate name by duly
authorized officer.
