<PAGE>
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934
Filed by registrant [X] Filed by a party other than the registrant [ ]
Check the appropriate box:
[ ] Preliminary proxy statement [ ] Definitive additional materials
[X] Definitive proxy statement [ ] Soliciting material pursuant to
Rule 14a-11(c) or Rule 14a-12
AIRSENSORS. INC.
----------------------------------------------
(Name of Registrant as Specified in Its Charter)
CARY M. WONG
----------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of filing fee (Check the appropriate box):
[X] $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1),
or 14a-6(j)(2).
[ ] $500 per each party to the controversy pursuant to Exchange Act
Rule 14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act rules 14a-6(i)(4)
and 0-11.
(1) Title of each class of securities to which transaction applies:
________________________________________________________________
(2) Aggregate number of securities to which transaction applies:
________________________________________________________________
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:
________________________________________________________________
(4) Proposed maximum aggregate value of transaction:
________________________________________________________________
[ ] 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>
AIRSENSORS, INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To the Stockholders of AirSensors, Inc.
Notice is hereby given that the Annual Meeting of Stockholders of
AirSensors, Inc. will be held at 1:30 p.m. local time on November 3, 1995
at the Sheraton Cerritos Hotel Towne Center, 12725 Center Court Drive,
Cerritos, California 90703 for the following purposes:
(1) To elect two directors for a term of three years;
(2) To ratify the appointment of Ernst & Young LLP as the Company's
independent public accountants; and
(3) To transact such other business as may properly come before the
meeting.
Stockholders of record at the close of business on September 4, 1995, will
be entitled to notice of and to vote at the meeting and any adjournment
thereof. The vote of each stockholder is important. Whether or not you
plan to attend the meeting, you are requested to date and sign the enclosed
proxy card and return it promptly.
By Order of the Board of Directors,
/s/ Dale L. Rasmussen
----------------------------------
Dale L. Rasmussen
Secretary
Cerritos, California
September 26, 1995
<PAGE>
AIRSENSORS, INC.
Proxy Statement
-----------------------
INFORMATION REGARDING PROXIES
This Proxy Statement and the enclosed proxy are furnished in
connection with the solicitation of proxies by the Board of Directors of
AirSensors, Inc. (the "Company") for use at the annual meeting of
stockholders to be held on Friday, November 3, 1995, at 1:30 p.m. local
time, at the Sheraton Cerritos Hotel Towne Center, 12725 Center Court
Drive, Cerritos, California 90703, and any adjournment thereof.
Expenses of solicitation of proxies will be paid by the Company.
Solicitation will be by mail. There may be telegraph, telephone or
personal solicitations by directors, officers, and employees of the Company
which will be made without paying them additional compensation. The
Company will request banks and brokers to solicit proxies from their
customers and will reimburse those banks and brokers for reasonable out-of-
pocket costs for this solicitation.
If the enclosed proxy is properly executed and returned, it will be
voted in accordance with the instructions specified thereon. In the
absence of instructions to the contrary, it will be voted (i) for all of
the nominees for the Company's Board of Directors listed in this Proxy
Statement and (ii) for ratification of the appointment of Ernst & Young LLP
as the Company's independent public accountants. If other matters come
before the meeting, it will be voted in accordance with the best judgment
of the persons named as proxies in the enclosed proxy. Execution of the
proxy will not in any way affect a stockholder's right to attend the
meeting or prevent voting in person. A proxy may be revoked at any time by
delivering written notice to the Secretary of the Company before it is
voted.
Stockholders who withhold or abstain from voting and broker non-votes
are counted for purposes of achieving a quorum. Abstentions are counted in
tabulations of the votes cast on proposals presented to the stockholders.
Broker non-votes are not counted for purposes of determining whether a
proposal has been approved.
The principal executive offices of AirSensors, Inc. are located at
16804 Gridley Place, Cerritos, California 90703. This Proxy Statement and
accompanying proxy were first sent to stockholders about October 6, 1995.
1
<PAGE>
ELECTION OF DIRECTORS
The Board of Directors is divided into three classes, each consisting
of three Directors, with the three classes serving staggered three-year
terms. The Directors elected at the meeting will be elected for three-year
terms. Each Director will hold office until the first meeting of
stockholders immediately following expiration of his term of office and
until his successor is qualified and elected.
Kelly Waller, whose term as a Director expires this year, announced
his retirement. While the Board of Directors is undertaking a search for a
replacement and expects to fill the vacancy, no nominee has been selected
at this time. Proxies cannot be voted for more than two nominees for the
election of Directors.
Although the Board of Directors anticipates that all of the nominees
will be available to serve as Directors of the Company, if any of them do
not accept the nomination, or otherwise are unwilling or unable to serve,
the proxies will be voted for the election of a substitute nominee or
nominees designated by the Board of Directors.
Directors are elected by a plurality of the votes of the shares of the
Common Stock and the 1993 Series 1 Preferred Stock present in person or
represented by proxy and entitled to vote at the annual meeting. Any
shares not voted (whether by abstention, broker non-vote or votes withheld)
are not counted as votes cast for or against the nominees and will be
excluded from the vote.
INFORMATION ABOUT DIRECTORS
AND NOMINEES FOR ELECTION
The names and ages of the nominees and the other Directors, the year
in which each first became a director of the Company, their principal
occupations and certain other information are as follows:
NOMINEES FOR ELECTION TO TERMS EXPIRING IN 1995
V. ROBERT COLTON, age 65, has been a Director since March 1989. Mr.
Colton is a retired dentist and has engaged in real estate investment and
development activities for a number of years.
ROBERT M. STEMMLER, age 60, has been a Director since May 1993, and
became the President and Chief Executive Officer of the Company on July 1,
1993. He was a full-time consultant to the Company from December 1992
until becoming President and CEO. From 1988 until December 1992, Mr.
Stemmler was the Chief Operating Officer of Sargent Fletcher Company, a
manufacturer of fuel tanks, aerial refueling systems and specialty mission
equipment for military aircraft. He was the General Manager of IMPCO
Technologies, Inc. from 1982 to 1985.
DIRECTORS WHOSE TERMS CONTINUE UNTIL 1996
NORMAN L. BRYAN, age 54, has been a Director since November 1993. He
was employed by Pacific Gas and Electric Company until his retirement in
1994. Mr. Bryan was Vice President, Marketing from February 1993 until
December 1994, and was Vice President, Clean Air Vehicles from February
1991 to February 1993.
2
<PAGE>
EDWIN J. SCHNEEBECK, age 83, has been a Director since March 1981 and
is the Vice Chairman of the Board. He was the owner and operator of a
magazine and newspaper distribution business which was sold in 1980 and,
until its dissolution, was President of ESS Corporation, a closely held
real estate company. Since then he has been active as an investor in real
estate and various closely held businesses.
DON J. SIMPLOT, age 60, has been a Director since May 1978. He is the
President of Simplot Industries, Inc., which is engaged in agricultural
enterprises, and a Vice President of J.R. Simplot Company, which is also
engaged in agricultural enterprises. Mr. Simplot is a Director of Micron
Technology, Inc., a designer and manufacturer of semiconductor memory
components primarily used in various computer applications.
DIRECTORS WHOSE TERMS CONTINUE UNTIL 1997
PETER B. BENSINGER, age 59, has been a Director since March 1995. He
has been the President and CEO of Bensinger, DuPont & Associates, a
consulting firm providing consulting, training and employee assistance
programs, since 1982. Mr. Bensinger served as Administrator of the U.S.
Drug Enforcement Administration from January 1976 to July 1981. Mr.
Bensinger is the son-in-law of Edwin J. Schneebeck.
RAWLEY F. TAPLETT, age 74, is the Chairman of the Board and has been a
Director of the Company since May 1978. He is the founder and owner of
R.F. Taplett Fruit and Storage Company, a grower, packer and marketer of
fruit, primarily apples. He is also the principal shareholder, and officer
and director, of Whitestone Orchards, Inc., which owns and operates apple
orchards.
DOUGLAS W. TOMS, age 65, is the Chairman of the Executive Committee
and has been a Director of the Company since October 1980. He served as
President and Chief Executive Officer of the Company from October 1980 to
April 1989. Since April 1989, Mr. Toms has been a consultant to American
Honda Motor Company, Inc.
MEETINGS OF THE BOARD OF DIRECTORS AND COMMITTEES
During the fiscal year ended April 30, 1995, there were four meetings
of the Board of Directors. Each Director attended at least 75% of the
total number of meetings of the Board of Directors and committees on which
the Director served, with the exception of V. Robert Colton and Don J.
Simplot.
Members of the Executive Committee are Douglas W. Toms, Chairman, V.
Robert Colton, Edwin J. Schneebeck, Robert M. Stemmler and Rawley F.
Taplett. The Executive Committee has the authority to exercise all of the
authority of the Board of Directors, except that it may not recommend to
the stockholders proposals to be approved by the stockholders, amend the
Bylaws, or amend the Certificate of Incorporation. The Executive Committee
met three times during the fiscal year ended April 30, 1995.
Members of the Audit Committee are Kelly Waller, Chairman, Norman L.
Bryan, Edwin J. Schneebeck and Douglas W. Toms. The Audit Committee
reviews with the Company's independent auditors the scope, results and
costs of the annual audit and the Company's accounting policies and
financial reporting. There was one meeting of the Audit Committee during
the fiscal year ended April 30, 1995.
3
<PAGE>
Members of the Compensation Committee are Douglas W. Toms, Chairman,
Edwin J. Schneebeck, Don J. Simplot and Rawley F. Taplett. The function of
the Compensation Committee is to consider and propose executive
compensation policies and submit to the Board of Directors reports
recommending compensation to be paid to the Company's executive officers.
The Compensation Committee met twice during the fiscal year ended April 30,
1995.
The Board of Directors does not have a standing nominating committee.
COMPENSATION OF DIRECTORS
Each Director who is not an employee of the Company is paid an
attendance fee of $1,000 plus out-of-pocket expenses for each Board or
Committee meeting attended. In addition, the Chairman and Vice-Chairman of
the Board of Directors are each paid an annual retainer of $50,000 plus
reimbursement of out-of-pocket expenses, and provided a company vehicle.
The Company provides medical insurance for the Chairman of the Executive
Committee.
A total of 220,000 options have been granted to Directors under the
1993 Stock Option Plan for nonemployee Directors. These options are held
by Messrs. Bensinger, Bryan, Colton, Schneebeck, Simplot, Taplett and Toms,
all of whom are nonemployee Directors, and one retired nonemployee
Director. 130,000 options were available for future grants as of April 30,
1995. Option exercise prices are the higher of (i) the average market
value of the stock for the 15 trading days following the date of grant and
(ii) the market value on the fifteenth trading day following the date of
grant. Options are not assignable and vest cumulatively at the rate of 25%
annually, beginning on the first anniversary date of grant. However, if a
Director dies, becomes disabled or retires at age 62 or later, then options
vest at the rate of 25% for each full calendar year in which optionee
served as a Director of the Company. Options must be exercised while a
Director or within three months following termination as Director, unless
termination results from death or disability, in which case options may be
exercised during the one-year period following termination. In no event
may options be exercised more than ten years after date of grant.
VOTING SECURITIES
Stockholders eligible to vote at the meeting are those of record at
the close of business on September 4, 1995. The voting securities of the
Company consist of shares of Common Stock and shares of 1993 Series 1
Preferred Stock ("1993 Preferred Stock"). At September 4, 1995, 5,644,870
shares of Common Stock and 5,950 shares of 1993 Preferred Stock were
outstanding.
Each outstanding share of Common Stock is entitled to one vote on all
matters to be presented at the meeting. Each share of 1993 Preferred Stock
is also entitled to vote on all such matters and is entitled to the number
of votes equal to the number of full shares of Common Stock into which it
was convertible on the record date. On that date, each share of 1993
Preferred Stock was convertible into the number of shares of Common Stock
that results from dividing $1,000 by a conversion price of $5.30 per share,
or 188 votes.
4
<PAGE>
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
COMMON STOCK
The following table sets forth information as of September 4, 1995,
with respect to all stockholders known by the Company to be the beneficial
owners of more than 5% of the outstanding Common Stock. Except as
otherwise specified, each named beneficial owner has sole voting and
investment power with respect to the shares set forth opposite his or her
name.
<TABLE>
<CAPTION>
NAME AND ADDRESS AMOUNT AND NATURE OF PERCENT
OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP OF CLASS
----------------- --------------------- --------
<S> <C> <C>
Edwin J. Schneebeck 1,784,185 (1),(2) 28.33%
P.O. Box 5245
Tacoma, WA 98405
Rawley F. Taplett 701,005 (3) 11.97%
P.O. Box 2188
Wenatchee, WA 98801
Timothy J. Schneebeck 445,601 (4) 7.89%
P.O. Box 5245
Tacoma, WA 98405
Mary Chichester 356,644 (5) 6.14%
714 East 48th Street
Tacoma, WA 98404
<FN>
-------------------------
(1) Includes 613,671 shares subject to conversion rights under
3,250 shares of 1993 Series 1 Preferred Stock.
(2) Includes 445,601 shares owned by Timothy J. Schneebeck
subject to a power of attorney held by Edwin J. Schneebeck.
(3) Includes 40,000 shares subject to options under the
Directors Stock Option Plan and 169,940 shares subject to
conversion rights under 900 shares of 1993 Series 1
Preferred Stock.
(4) See footnote (2) above.
(5) Includes 166,666 shares subject to a presently exercisable
warrant.
</FN>
</TABLE>
5
<PAGE>
PREFERRED STOCK
The following table sets forth information as of September 4, 1995,
with respect to all stockholders known by the Company to be the beneficial
owners of more than 5% of the outstanding 1993 Preferred Stock. Each
named beneficial owner has sole voting and investment power with respect to
the shares set forth opposite his name.
<TABLE>
<CAPTION>
NAME AND ADDRESS AMOUNT AND NATURE OF PERCENT
OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP OF CLASS
----------------- --------------------- --------
<S> <C> <C>
Edwin J. Schneebeck 3,250 54.62%
P.O. Box 5245
Tacoma, WA 98405
Don J. Simplot 900 15.13%
P.O. Box 27
Boise, ID 83707
Rawley F. Taplett 900 15.13%
P.O. Box 2188
Wenatchee, WA 98801
Douglas W. Toms 450 7.56%
2001 Lakewood
Olympia, WA 98501
Dale L. Rasmussen 450 7.56%
28833 228th Ave. S.E.
Kent, WA 98042
----- -------
5,950 100.00%
</TABLE>
6
<PAGE>
OWNERSHIP OF MANAGEMENT
The following table sets forth information as of September 4, 1995, as
to the number of shares of Common Stock and 1993 Preferred Stock
beneficially owned by (i) each Director, (ii) the executive officers named
in the Summary Compensation Table and (iii) all Directors and executive
officers as a group. Except as otherwise specified, each named beneficial
owner has sole voting and investment power with respect to the shares set
forth opposite his name.
<TABLE>
<CAPTION>
TITLE OF NAME OF BENEFICIAL AMOUNT AND NATURE OF PERCENT
CLASS OWNER BENEFICIAL OWNERSHIP OF CLASS
- -------- ------------------ -------------------- --------
<S> <C> <C> <C>
Common Peter B. Bensigner 35,833 0.63%
Common Norman L. Bryan -0- -0-
Common V. Robert Colton 136,666(1) 2.41%
Common Thomas M. Costales -0- -0-
Common Edward E. Elsner -0- -0-
Common James J. Mantras 37,714(2) 0.66%
Common Dale L. Rasmussen 188,849(3) 3.25%
Common Edwin J. Schneebeck 1,784,185(4) 28.33%
Common Don J. Simplot 270,741(5) 4.65%
Common David H. Smith 3,419 0.06%
Common Robert M. Stemmler 40,000(6) 0.70%
Common Rawley F. Taplett 701,005(7) 11.97%
Common Douglas W. Toms 255,635(8) 4.43%
Common Kelly Waller 53,541(9) 0.95%
Common All executive officers
and directors
as a group (14 persons) 3,507,588 49.15%
Preferred See Ownership of Certain
Beneficial Owners -
Preferred Stock for
ownership of 1993 Preferred
Stock
Preferred All executive officers
and directors
as a group (14 persons) 5,950 100.0%
7
<PAGE>
<FN>
- -------------------------
(1) Includes 20,000 shares subject to options under Directors Stock Option
Plan.
(2) Includes 37,714 shares subject to options under the 1991 Executive
Stock Option Plan.
(3) Includes 25,000 shares subject to options under the Incentive Stock
Option Plan, 52,714 shares subject to options under the 1991 Executive
Stock Option Plan and 84,970 shares subject to conversion rights under
450 shares of 1993 Series 1 Preferred Stock.
(4) Includes 40,000 shares subject to options under Directors Stock Option
Plan, 613,671 shares subject to conversion rights under 3,250 shares
of 1993 Series 1 Preferred Stock and 445,601 shares owned by Timothy
J. Schneebeck subject to a power of attorney held by Edwin J.
Schneebeck.
(5) Includes 5,000 shares subject to options under Directors Stock Option
Plan and 169,940 shares subject to conversion rights under 900 shares
of 1993 Series 1 Preferred Stock.
(6) Includes 40,000 shares subject to options under the Incentive Stock
Option Plan.
(7) Includes 40,000 shares subject to options under Directors Stock Option
Plan and 169,940 shares subject to conversion rights under 900 shares
of 1993 Series 1 Preferred Stock.
(8) Includes 40,000 shares subject to options under Directors Stock Option
Plan and 84,970 shares subject to conversion rights under 450 shares
of 1993 Series 1 Preferred Stock.
(9) Includes 20,000 shares subject to options under Directors Stock Option
Plan.
</FN>
</TABLE>
EXECUTIVE OFFICERS
The following are the executive officers of the Company. Executive
officers are elected by the Board of Directors. For information concerning
Common Stock and 1993 Preferred Stock beneficially owned by the executive
officers, see "Ownership of Management."
ROBERT M. STEMMLER. See description under "Election of Directors -
Information About Directors and Nominees for Election."
DALE L. RASMUSSEN, age 45, has been the Senior Vice President and
Secretary since June 1989. He joined the Company in 1984 as Vice President
of Finance and Administration.
JAMES J. MANTRAS, age 67, was the Treasurer and Chief Financial
Officer of the Company from June 1989 until March 1995, and was the
Executive Vice President until his retirement on August 31, 1995.
THOMAS M. COSTALES, age 48, has been the Treasurer and Chief Financial
Officer of the Company since March 1995. From September 1993 until joining
the Company, he was Vice President and Controller of the Omnifax division
of Danka Industries, Inc. He held a similar position with Omnifax's
predecessor, Telautograph Corporation, from 1987 until it was acquired by
Danka Industries.
EDWARD E. ELSNER, age 47, has been Vice President of Operations of the
Company since June 1989, and Vice President of Operations of IMPCO since
October, 1985. He held similar manufacturing positions at Litton
Industries, Inc.
8
<PAGE>
DAVID H. SMITH, age 55, has been Vice President, Research and
Technology since May 1993, and from 1988 until becoming a Vice President,
was the Company's Director of Research and Development.
COMPENSATION OF EXECUTIVE OFFICERS
The following table sets forth certain information regarding
compensation paid during each of the Company's last three fiscal years to
the Company's chief executive officer and each of the Company's other
executive officers who were serving at the end of fiscal year 1995.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
LONG-TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS
----------------- ------------
SECURITIES
UNDERLYING
NAME AND FISCAL SALARY BONUS OPTIONS ALL OTHER
PRINCIPAL POSITION YEAR ($)(1) ($) (IN SHARES) COMPENSATION
- ------------------- ---- -------- ------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Robert M. Stemmler(2) 1995 $170,083 $53,625 50,000(3) $25,872(4)
President and Chief 1994 145,417 50,000 70,000(3) 20,786
Executive Officer
James J. Mantras 1995 $115,000 $12,000 -0- $19,992(5)
Executive Vice 1994 115,000 27,000 -0- 23,158
President 1993 115,000 20,000 -0- 21,793
David H. Smith (6) 1995 $ 92,000 $15,000 -0- $14,324(7)
Vice President of 1994 92,000 16,000 -0- 11,924
Research
Edward E. Elsner 1995 $ 90,000 $24,000 -0- $16,918(8)
Vice President of 1994 85,000 18,000 -0- 16,656
Operations 1993 84,000 14,000 -0- 17,639
Dale L. Rasmussen 1995 $ 89,083 $15,000 -0- $15,122(9)
Senior Vice President 1994 85,000 17,000 -0- 16,341
and Secretary 1993 85,000 15,000 -0- 16,623
Thomas M. Costales(10) 1995 $ 16,667 $ 3,000 12,000(3) $ 2,000(11)
Treasurer and Chief
Financial Officer
<FN>
- -------------------------
(1) Includes amounts deferred by executive officers pursuant to the IMPCO
Employee Savings Plan.
(2) Mr. Stemmler became the Company's Chief Executive Officer on July 1,
1993.
(3) Options under Incentive Stock Option Plan.
9
<PAGE>
(4) Group term life insurance premium of $10,350, Company's contribution
of $2,522 pursuant to the IMPCO Employee Savings Plan, Christmas
bonus of $1,000 and automobile allowance of $12,000.
(5) Group term life insurance premium of $5,404, Company's contribution of
$2,088 pursuant to the IMPCO Employee Saving Plan, Christmas bonus of
$1,000 and automobile allowance of $11,500.
(6) Mr. Smith became a Vice President in May 1993.
(7) Company's contribution of $1,674 pursuant to the IMPCO Employee
Savings Plan, Christmas bonus of $1,000 and automobile allowance of
$11,650.
(8) Group term life insurance premium of $2,280, Company's contribution of
$1,638 pursuant to the IMPCO Employee Savings Plan, Christmas bonus of
$1,000 and automobile allowance of $12,000.
(9) Company's contribution of $1,622 pursuant to the IMPCO Employee
Savings Plan, Christmas bonus of $1,000 and automobile allowance of
$12,500.
(10) Mr. Costales became the Company's Treasurer and Chief Financial
Officer in March 1995.
(11) Automobile allowance of $2,000
</FN>
</TABLE>
OPTIONS GRANTED IN FISCAL YEAR 1995
The following table provides information with respect to options
granted during the last fiscal year.
<TABLE>
<CAPTION>
Individual Grants
---------------------------------------------------------
Number of % of Total
Securities Options
Underlying Granted to Exercise
Options Employees Price Per Expiration
Name Granted(1) in Fiscal year Share Date
- ------------------- ---------- -------------- --------- ----------
<S> <C> <C> <C> <C>
Robert M. Stemmler 50,000 38% $11.25 6/02/04
James J. Mantras -0- -0- -0- -
Dale L. Rasmussen -0- -0- -0- -
Thomas M. Costales 12,000 9% $9.00 3/24/05
Edward Elsner -0- -0- -0- -
David H. Smith -0- -0- -0- -
Potential Realizable
Value at Assumed Annual
Rates of Stock Price
Appreciation for Option Term (2)
---------------------------------
Name 5% 10%
- ------------------- -------- --------
<S> <C> <C>
Robert M. Stemmler $353,753 $896,480
James J. Mantras -0- -0-
Dale L. Rasmussen -0- -0-
Thomas M. Costales $ 67,920 $172,124
Edward Elsner -0- -0-
David H. Smith -0- -0-
<FN>
- -------------------------
(1) Material terms of options granted under the Incentive Stock Option
Plan are as follows: Options are granted at the fair market value
of the Common Stock on the date of grant and vest cumulatively at the
rate of 25% annually, beginning on the first anniversary of the date
of grant. However, if employment terminates due to death or
disablement, retirement at or after age 62, or termination without
cause, then options vest at the rate of 25% for each full calendar
year of employment. Options may be exercised only while an optionee
is employed by the Company, or within 30 days following termination
of employment. However, if termination results from death or
disability, options may be exercised within one year of the
termination date. In no event may options be exercised more than ten
years after date of grant.
10
<PAGE>
(2) Based on ten-year option term and annual compounding at rates shown.
The dollar amounts under these columns are the results of
calculations at the 5% and 10% rates set by the Securities and
Exchange Commission and, therefore, are not intended to forecast
possible future appreciation, if any, of the Common Stock. No gain
to optionees is possible without stock price appreciation, which will
benefit all stockholders commensurately.
</FN>
</TABLE>
AGGREGATED OPTION EXERCISES DURING FISCAL YEAR 1995
AND
FISCAL YEAR-END OPTION VALUES
The following table provides information with respect to exercise of
options during the last fiscal year and value of unexercised options at the
end of fiscal year 1995.
<TABLE>
<CAPTION>
VALUE
NUMBER OF OF UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS OPTIONS
SHARES (IN SHARES) AT AT FISCAL
ACQUIRED FISCAL YEAR-END YEAR-END(1)
ON VALUE ---------------- ---------------
EXERCISE REALIZED EXERCISABLE/ EXERCISABLE/
NAME (#) ($) UNEXERCISABLE UNEXERCISABLE
- ------------------ -------- -------- ---------------- ----------------
<S> <C> <C> <C> <C>
Robert M. Stemmler -0- -0- 17,500/102,500 $ 32,500/97,500
James J. Mantras 31,666 208,522(2) 37,714/ -0- (3) $248,087/ -0-
Dale L. Rasmussen -0- -0- 77,714/ -0- (3) $379,737/ -0-
Thomas M. Costales -0- -0- -0- /12,000(4) -0- / -0-
Edward Elsner -0- -0- -0- / -0- -0- / -0-
David H. Smith 16,666 102,079(2) -0- / -0- (4) -0- / -0-
<FN>
- -------------------------
(1) Calculated by determining the difference between the fair market value
of the Common Stock underlying the options on April 30, 1995 ($8.50)
and the exercise price of the options.
(2) Calculated by determining the difference between the fair market value
of the Common Stock on the date of exercise and the exercise price of
the options.
(3) Options under Incentive Stock Option Plan and 1991 Executive Stock
Option Plan.
(4) Options under Incentive Stock Option Plan.
</FN>
</TABLE>
11
<PAGE>
EMPLOYMENT AGREEMENTS
An Employment Agreement with Robert M. Stemmler in effect through
March 31, 1995 was replaced with a new Employment Agreement effective April
1, 1995. The new Agreement is for three consecutive twelve month periods,
commencing April 1, 1995. It is subject to certain termination events,
which include Mr. Stemmler's resignation and the Company's right to
terminate him with or without cause upon payment of lump sum equal to 100%
in the first term and 75% in the second and third terms, respectively, of
base salary, plus certain incentive compensation and payment of benefits
for a period following termination. The Agreement requires payment of an
annual base salary of $195,000, payment of incentive compensation under the
Company's Bonus Incentive Plan and a special one-time bonus of $20,000 paid
upon the commencement of the Agreement.
COMPENSATION COMMITTEE REPORT
ON EXECUTIVE COMPENSATION
The following report on executive compensation is furnished by the
Board of Directors. In fiscal year 1995, as in prior years, the
nonmanagement members of the Board of Directors determined the compensation
to be paid to the executive officers. Employment Agreements with Robert M.
Stemmler were in effect during the fiscal year. See "Employment
Agreements."
FISCAL YEAR 1995 COMPENSATION
COMPENSATION PHILOSOPHY
Compensation of the executive officers is designed to link
compensation directly to the Company's growth and financial performance.
Compensation consists of base compensation, a Bonus Incentive Plan and
options under an Incentive Stock Option Plan. The objective of these three
elements, taken together, is to provide reasonable base compensation and to
retain, recognize and reward superior performance. The compensation
philosophy also ensures that the Company provides a comprehensive
compensation package that is competitive in the marketplace.
BONUS INCENTIVE PLAN
The Company has a Bonus Incentive Plan which includes a bonus
incentive plan for the chief executive officer and a bonus incentive pool
for the executive officers and staff. These bonus plans have two
components: A "revenue portion" which is based upon the percentage
increase of the Company's gross revenues to the extent gross revenues
exceed 110% of the prior fiscal year gross revenues, and an "earnings
before interest and taxes (EBIT) portion" which is based upon the
incremental growth in EBIT over the prior fiscal year. The minimum bonus
payable to the chief executive officer is 1.5% of the current fiscal year's
EBIT and the maximum bonus is 75% of current salary. The minimum bonus
pool for the other executive officers and staff is 4% of the current fiscal
year's EBIT and the maximum bonus pool is 50% of their current aggregate
salaries.
12
<PAGE>
CEO Compensation
Robert M. Stemmler served as chief executive officer pursuant to an
employment agreement which was in effect through March 31, 1995. Pursuant
to that employment agreement, he was paid a base salary at an annual rate
of $134,000. Effective April 1, 1995, the Company entered into a new
employment agreement with Mr. Stemmler providing for a base salary at an
annual rate of $195,000. In addition to the base salary, Mr. Stemmler is
eligible for an annual cash bonus under the Bonus Incentive Plan. The 1995
employment agreement also provided a special one-time bonus payment of
$20,000. The increase in the base salary and the one-time bonus payment
were in recognition of Mr. Stemmler's development and execution of the
Company's fiscal year 1995 operating plan and the identification and
implementation of significant strategic relationships with original
equipment manufacturers, domestic and international distributors and
various governmental agencies.
Mr. Stemmler's bonus for fiscal year 1995 was the minimum bonus
payable under the Bonus Incentive Plan. As longer term compensation,
options were granted to purchase 50,000 shares of common stock under the
Incentive Stock Option Plan. The options were intended to induce
Mr. Stemmler's continued employment, allow him to participate in the
ownership of the Company, and provide further long-term incentive to
advance the interest of the Company and increase the value of the Company's
stock.
OTHER EXECUTIVE OFFICERS
In reviewing and approving base salaries for the executive officers,
the Compensation Committee relies on independent industry surveys to assess
the Company's salary competitiveness and salary range for each position.
Base salary is based upon individual performance, experience, competitive
pay practices and level of responsibilities. Base salaries in fiscal year
1995 reflected the Committee's determination of compensation levels
required to remain competitive, given each executive officer's performance,
the Company's performance and the competitive environment for executive
talent. The purpose of Stock Options are to induce selected, key employees
of the Corporation and its subsidiaries to remain employed with the
Corporation, to participate in the ownership of the Corporation, to advance
the interests of the Corporation and to increase the value of the
Corporation's Common Stock. In fiscal year 1995, the executive officers'
bonuses under the Bonus Incentive Plan were at the minimum level payable
under the Plan.
The foregoing report was made by the members of the Compensation
Committee.
Douglas W. Toms, Chair
Edwin J. Schneebeck
Don J. Simplot
Rawley F. Taplett
13
<PAGE>
COMPARATIVE STOCK PERFORMANCE
The graph below compares the cumulative total stockholder return on
the Company's Common Stock for the last five fiscal years with the
cumulative total return of the CRSP Total Return Index for The Nasdaq Stock
Market Index and the Nasdaq Trucking and Transportation Stock Index over
the same period (assuming the investment of $100 and reinvestment of all
dividends).
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPH
<TABLE>
<CAPTION>
Nasdaq
Value at Trucking &
April 30, AirSensors Nasdaq Transportation
---------- ---------- -------- --------------
<S> <C> <C> <C>
1990 100.0 100.0 100.0
1991 75.0 118.8 107.2
1992 62.5 144.1 143.6
1993 85.4 165.6 160.9
1994 177.1 184.3 182.3
1995 141.7 214.2 180.3
</TABLE>
14
<PAGE>
APPROVAL OF INDEPENDENT PUBLIC ACCOUNTANTS
Ernst & Young LLP has audited the Company's financial statements for
the fiscal years ended April 30, 1988 through 1995.
The Board of Directors has selected Ernst & Young LLP as independent
public accountants for the Company for the fiscal year ending April 30,
1996. Although not required to be voted upon by the stockholders, the
Board of Directors deems it appropriate for the selection to be submitted
for ratification by the stockholders. The persons named in the
accompanying proxy will vote the Common Stock represented by the proxy for
ratification of the selection of Ernst & Young LLP, unless a contrary
choice has been specified in the proxy. If the stockholders do not ratify
the selection of Ernst & Young LLP by a majority vote, the selection of
independent public accountants will be considered by the Board of
Directors, although the Board of Directors would not be required to select
different independent public accountants for the Company. The Board of
Directors retains the power to select another firm as independent public
accountants for the Company to replace a firm whose selection was ratified
by the stockholders in the event the Board of Directors determines that the
best interest of the Company warrants a change of its independent public
accountants. A representative of Ernst & Young LLP is expected to be
present at the Annual Meeting and will have the opportunity to make a
statement if he or she desires to do so. Such representative is expected
to be available to respond to appropriate questions.
THE BOARD OF DIRECTORS HAS UNANIMOUSLY APPROVED THE APPOINTMENT
OF ERNST & YOUNG LLP AS INDEPENDENT PUBLIC ACCOUNTANTS FOR THE
COMPANY FOR FISCAL YEAR 1996 AND RECOMMENDS A VOTE "FOR"
APPROVAL OF THE APPOINTMENT.
SECTION 16(a) REPORTING
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's directors and executive officers, and persons who own more than
10% of the Company's Common Stock to file with the Securities and Exchange
Commission ("SEC") initial reports of ownership and reports of changes in
ownership of Common Stock and other equity securities of the Company.
Officers, directors and greater than 10% stockholders are required by SEC
regulation to furnish the Company with copies of all Section 16(a) reports
they file. To the Company's knowledge, based solely on review of the
copies of such reports furnished to the Company or advice that no filings
were required, during fiscal year 1995 all officers, directors and greater
than 10% beneficial owners were complied with the Section 16(a) filing
requirements, except Peter B. Bensinger filed one Form 4 late.
PROPOSALS OF STOCKHOLDERS
In order for proposals of stockholders to be included in the proxy
materials for presentation at the 1996 Annual Meeting of Stockholders, such
proposals must be received by the Corporate Secretary no later than June 1,
1996.
15
<PAGE>
OTHER INFORMATION
The 1995 Annual Report of the Company for the fiscal year ended April
30, 1995 was mailed to stockholders prior to or together with the mailing
of this Proxy Statement. Stockholders who did not receive a copy of the
1995 Annual Report with their Proxy Statement may obtain a copy by writing
to or calling Dale L. Rasmussen, Secretary, AirSensors, Inc., 708 Industry
Drive, Seattle, Washington 98188, its telephone number is (206) 575-1594.
OTHER BUSINESS
As of the date of this Proxy Statement management knows of no other
business which will be presented for action at the meeting. If any other
business requiring a vote of the stockholders should come before the
meeting, the persons named in the enclosed form of proxy will vote or
refrain from voting in accordance with their best judgment.
By Order of the Board of Directors,
/s/ Dale L. Rasmussen
----------------------------------
Dale L. Rasmussen
Secretary
Cerritos, California
September 26, 1995
16
<PAGE>
AIRSENSORS, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Robert M. Stemmler and Dale L.
Rasmussen, and each of them, as proxies, each with power of substitution, to
vote for and on behalf of the undersigned all of the shares of Common Stock
of AirSensors, Inc. that the undersigned would be entitled to vote if
personally present at the Annual Meeting of Stockholders to be held on
November 3, 1995, and at any adjournment thereof, as follows:
[See Reverse Side]
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED ON
THIS PROXY CARD. MANAGEMENT RECOMMENDS A VOTE FOR ALL NOMINEES AND FOR THE
MATTERS DESIGNATED ON THIS PROXY CARD; IF NO SPECIFICATION IS MADE, A VOTE
FOR ALL OF SAID NOMINEES AND FOR ALL SUCH MATTERS WILL BE ENTERED.
I plan to attend the meeting [ ]
(1) ELECTION OF DIRECTORS:
[ ] FOR All Nominees listed
(except as indicated to the contrary)
[ ] WITHHOLD AUTHORITY
to vote for all nominees as indicated
INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL
NOMINEE, PRINT THAT NOMINEE'S NAME IN THE FOLLOWING SPACE:
----------------------------------------------------------------------
V. Robert Colton Robert M. Stemmler
(2) FOR RATIFICATION OF THE APPOINTMENT OF ERNST & YOUNG LLP AS THE
COMPANY'S INDEPENDENT ACCOUNTANTS
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(3) IN THEIR DIRECTION, THE HOLDERS OF THIS PROXY ARE AUTHORIZED TO
VOTE UPON SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE
MEETING.
[ ] YES [ ] NO
The undersigned hereby revokes any proxy or
proxies heretofore given for such shares and
ratifies all that said proxies or their
substitutes may lawfully do by virtue hereof.
Date:_______________________________, 1995
__________________________________________
Signature
__________________________________________
Signature if held jointly
Please sign exactly as name appears on this
proxy. If stock is held jointly, both
persons should sign. Persons signing in a
representative capacity should give their
title.
