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HIGH-SHEAR TECHNOLOGY CORPORATION
24225 GARNIER STREET
TORRANCE, CALIFORNIA 90505-5323
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ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD OCTOBER 21, 1996
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PROXY STATEMENT
GENERAL INFORMATION
This Proxy Statement is furnished by the Board of Directors of Hi-Shear
Technology Corporation ("Hi-Shear" or the "Company"), a Delaware corporation,
to be used in voting at the Annual Meeting of Stockholders to be held at 9:30
a.m., local time, October 21, 1996 at the Radisson Plaza Hotel, 1400 Parkview
Avenue, Manhattan Beach, California, and at any adjournment of such meeting
(collectively the "Annual Meeting"). The Annual Meeting is being held for the
purposes set forth in the accompanying Notice of Annual Meeting of Stockholders.
The proxy statement, the accompanying proxy card and the Notice of Annual
Meeting of Stockholders are provided to stockholders beginning on or about
September 24, 1996.
RECORD DATE AND OUTSTANDING SHARES
The record date for determining stockholders entitled to vote at the
Annual Meeting is the close of business on August 29, 1996 (the "Record Date"),
at which time the Company had issued an outstanding 6,527,000 shares of $.001
par value Common Stock (the "Common Stock"). Each share of Common Stock
outstanding on the Record Date is entitled to one vote on each matter presented.
QUORUM REQUIREMENTS
The presence at the Annual Meeting of Stockholders, in person or by Proxy,
of the holders of a majority of the outstanding shares of Common Stock is
necessary to constitute a quorum. The holder of each share of Common Stock held
of record on the Record Date is entitled to one vote on each matter to be
considered at the Annual Meeting of Stockholders.
The giving of the enclosed proxy does not preclude the right to vote in
person should the stockholder giving the proxy so desire. A proxy may be
revoked at any time prior to its exercise by delivering a written statement to
the Secretary of the Company that the proxy is revoked, by presenting to the
Company a later-dated proxy executed by the person executing the prior proxy, or
by attending the Annual Meeting and voting in person.
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ELECTION OF DIRECTORS
The Bylaws of Hi-Shear Technology Corporation authorize the Board of
Directors to fix the number of directors up to a maximum of seven (7) directors.
The Board of Directors has currently fixed the number of directors at four (4),
all of whom will be elected at the Annual Meeting of Stockholders. Shares of
Common Stock cannot be voted for more than four (4) Directors and each will be
elected at the Annual Meeting of Stockholders to hold office until the next
Annual Meeting of Stockholders and until their respective successors have been
duly elected and qualified.
All of the four (4) nominees for election to the Board of Directors are
members of the current Board of Directors. Each of the nominees named herein has
consented to be named in this Proxy Statement and has consented to serve as a
Director if elected. However, should any nominee named herein for the office of
Directors become unable or unwilling to accept nomination or election, the Board
of Directors may recommend an nominate another person in the place and stead of
such person. The Board of Directors has no reason to believe that any substitute
nominee will be required.
THOMAS R. MOONEY, 59, joined the Company as President in March 1988. He
was elected as a director of the Company in June 1993. Prior to joining the
Company, Mr. Mooney served as Vice President of Programs at Quantic Industries,
a component supplier and subsystems manufacturer in the ordnance and electronics
business, from 1982 to 1988. After retiring from the U.S. Army as a Lieutenant
Colonel in 1979, Mr. Mooney served as a Program Manager for Thiokol Corporation.
He is a graduate of the U.S. Military Academy and holds a Masters of Science in
Physics from Penn State University and a Masters of Business Administration from
Old Dominion University.
GEORGE W. TRAHAN, 48, joined the Company as Vice President, Finance and
Administration, in July 1990 and was elected as a director, Chief Financial
Officer and Treasurer of the Company in June 1993. Before joining the Company,
he served as Vice President, Finance, of Cherry Fasteners, a division of
Textron, Inc., a leading supplier to the commercial corporate headquarters of
Textron advising management regarding strategic planning, capital investment and
acquisitions. Prior to that, he was Manager of Corporate Audit for Textron's
international operations. Mr. Trahan received his Bachelor of Science in
Industrial Engineering from Clarkson University and has attended the Harvard
Advanced Management Program.
DAVID W. EINSEL, 67, joined the Company as a director in March 1994. He
served in the U.S. Army from 1950 to 1989, retiring with the rank of Major
General. As a general officer, Mr. Einsel served as the Deputy Commander, Army
Research and Development Command, Deputy and Assistant Secretary Defense for
Atomic Energy and served on the President's Task Force for Reorganization of
Nuclear Weapons Employment. After retiring from the Army in 1989, he served as a
National Intelligence Expert at large to the Director of the Central
Intelligence Agency. Mr. Einsel was elected to the U.S. Army Chemical Corps Hall
of Fame.
JACK BUNIS, 61, joined the Company as a Director in September 1996. He is
currently the Founder and Principal of a management consulting firm, Bunis &
Associates. Most recently, Mr. Bunis was the Chairman, President, and Chief
Executive Officer of Cair Systems, Inc., an Orange County based provider of
information and automation services to the insurance and health care industries.
Previously, Mr. Bunis held the position of Senior Vice President and Chief
Operating Officer at Mitchellmatix, a division of Cordura Corporation acquired
by International Thomson Organization, LTD.
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BOARD OF DIRECTORS AND COMMITTEES
The Board of Directors meets during its fiscal year to review significant
developments affecting the Company and to act on matters requiring board
approval. The Board of Directors met four times and acted by unanimous written
consent three times during the 1996 fiscal year. During such period, all members
of the Board participated in at least 75% of all Board and applicable committee
meetings.
The Board of Directors has established audit, executive, compensation and
nominating committees to devote attention to specific subjects and to assist it
in the discharge of its responsibilities. The functions of those committees,
their members and the number of meetings held during the 1996 fiscal year are
described below:
AUDIT COMMITTEE. The Audit Committee was established to recommend to the
Board of Directors the appointment of the firm selected to be the independent
public accountants for the Company and monitor the performance of such firm; to
review and approve the scope of the annual audit and quarterly reviews and
evaluate with the independent public accountants the Company's annual audit and
annual financial statements; to review with management the status of the
internal accounting controls; to evaluate any problem areas having a potential
financial impact on the Company which may be brought to its attention by
management, the independent public accountants or the Board of Directors; and to
evaluate all public financial reporting documents of the Company. Messrs. David
W. Einsel and Jack Bunis are members of the Audit Committee. The Audit Committee
met once during the fiscal year.
EXECUTIVE COMMITTEE. The Executive Committee is empowered to act in lieu
of the Board of Directors on any matter except that for which the Board of
Directors has specifically reserved authority to itself and except for those
matters specifically reserved to the full Board of Directors by law. Messrs.
Thomas R. Mooney and George W. Trahan are members of the Executive Committee.
The Executive Committee met five times during the fiscal year.
COMPENSATION AND OPTIONS COMMITTEE. The Compensation and Options
Committee is responsible for making recommendations to the Board of Directors
concerning the annual compensation of all officers and key employees. The
Options Committee develops and administers incentive plans, including the
Company's 1994 Stock Option Plan. Messrs. David W. Einsel and Jack Bunis are
members of the Compensation Committee, which did not meet during the year.
Messrs. Thomas R. Mooney and George W. Trahan are members of the Options
Committee, which met two times during the fiscal year.
NOMINATING COMMITTEE. The Nominating Committee was established to
recommend and nominate qualified persons to serve as independent directors of
the Company. Messrs. David W. Einsel and Jack Buins are members of the
Nominating Committee. The Nominating Committee has not adopted procedures for
the consideration of nominees recommended by security holders. The Nominating
Committee met once during the fiscal year.
The Company pays annual director's fee of $1,000 for each meeting of the
Board of Directors or separate committee meetings attended by each independent
director, and reimbursement of costs and expenses of all directors for attending
such meetings.
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EXECUTIVE OFFICERS AND KEY EMPLOYEES
The Executive Officers serve at the discretion of the Company's Board of
Directors. For biographical information regarding Messrs. Mooney and Trahan, who
are nominees for Director of the Company, see "Election of Directors".
KEY EMPLOYEES
JOHN J. WENCKUS, 41, has served the Company as Vice President, Operations
since 1990 and is the Vice President and General Manager of the Aerospace and
Defense Division. Mr. Wenckus joined the Company in 1978 and has served the
Company as a Project Engineer, Program Manager, and Director of Manufacturing
before being promoted to his current position. He holds a Bachelor of Science in
Mechanical Engineering from the Massachusetts Institute of Technology.
MICHAEL D. PATTISON, 36, has served the Company as Vice President of
Business Development and Contracts since October 1995. He joined the Company as
Director of New Business and Development in 1993. Mr. Pattison holds a Bachelor
of Science degree in Engineering from Auburn University and Masters degree in
Business Administration from Pepperdine University .
G.B. LITTLE, 56, has served the Company as Chief Scientist since 1989. Mr.
Little joined the Company in 1959 and has served the Company as Vice President
of Electronic Engineering, Senior Project Engineer and Design Engineer. Mr.
Little holds a Bachelor of Science in Electrical Engineering from the University
of California at Berkeley.
LINDA A. NESPOLE, 34, joined the Company in 1989 and has served as
Manager, Human Resources before being named Director of Human Resources and
Corporate Secretary of the Company in January 1994. Prior to her association
with the Company, Ms. Nespole was the Assistant Personnel Director for Saks
Fifth Avenue, Beverly Hills, from 1986-1989. She holds a Bachelor of Arts degree
in Communications from the University of California, Santa Barbara, a
certificate in Human Resources Management from Loyola Marymount University.
SUMMARY COMPENSATION TABLE
The following table sets forth the annual and long-term cash and non-cash
compensation paid by the Company for services rendered in all capacities during
the fiscal years ended May 31, 1994, 1995 and 1996 to those persons who were, as
of May 31, 1996, President and the other most highly compensated officers of the
Company whose total annual salary and bonus exceeded $100,000 during the fiscal
year ended May 31, 1996 (the "Named Officers"):
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<TABLE>
<CAPTION>
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Long Term Compensation
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Annual Compensation Awards Payout
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Name and Principal Fiscal Salary($) Bonus($) Other($) Restricted Options/ LTIP All Other
Position Year Stock SARs(#) Payout($) Compensation
Award(s)($) ($)(1)
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<S> <C> <C> <C> <C> <C> <C> <C> <C>
Thomas R. Mooney, 1996 250,000 -0- -0- -0- -0- -0- -0-
President 1995 250,000 -0- -0- -0- -0- -0- -0-
1994 250,000 -0- -0- -0- -0- -0- -0-
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George W. Trahan, 1996 205,000 -0- -0- -0- -0- -0- -0-
Executive Vice 1995 205,000 -0- -0- -0- -0- -0- -0-
President, CFO 1994 205,000 -0- -0- -0- -0- -0- -0-
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John J. Wenckus 1996 112,000 -0- -0- -0- 5,000 -0- -0-
Vice President,
General Manager
Aerospace &
Defense
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</TABLE>
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(1) The remuneration described in the table does not include the cost to the
Company of benefits furnished to the Named Officers, including premium for
health insurance and other personal benefits provided to such individuals in
connection with their employment, The value of such benefits cannot be precisely
determined; however, the Named Officers did not receive other compensation in
excess of the lesser of $50,000 or 10% of such officers' cash compensation.
Effective June 1993, the Company entered into five-year employment
agreements with Messrs. Mooney and Trahan, with initial base annual salaries of
$250,000 and $205,000 per year, respectively. In addition, Messrs. Mooney and
Trahan are eligible to participate in the Company's incentive compensation
program including the Stock Option Plan and Bonus Pool Compensation Program.
SECURITY OWNERSHIP OF
CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding the ownership
of the Company's Common Stock as of August 29, 1996 by (i) each person known
to the Company to own beneficially more than 5% of the outstanding shares of the
Common Stock, (ii) each director, including the nominees for Director and each
Named Officer, and (iii) all Executive Officers and Directors as a group:
<TABLE>
<CAPTION>
Percentage of
Shares of Common Stock Outstanding
Stock Beneficially Owned Common Stock (2)
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<S> <C> <C>
Thomas R. Mooney....................... 2,720,000 41.0
George W. Trahan....................... 2,205,630 33.3
David W. Einsel........................ 6,000 *
Jack Bunis............................. 3,000 (3) *
All Executive Officers and Directors
as a group (4 persons)............. 4,934,630 74.3
</TABLE>
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*Less than 1% of the outstanding shares of Common Stock
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(1) The address for each of the named persons is c/o Hi-Shear Technology
Corporation, 24225 Garnier Street, Torrance, CA 90505-5323. The named
persons possess sole voting and investment power with respect to the
shares listed (except to the extent authority is shared with spouses under
applicable law).
(2) Based on 6,631,500 shares of Common Stock outstanding as of the date of
this Proxy Statement.
(3) Represents shares of Common Stock which can be acquired within 6 months
from the date of this Proxy Statement.
APPOINTMENT OF AUDITORS
The Board of Directors has appointed McGladrey & Pullen, LLP, an
independent public accounting firm, to examine the financial statements of the
Company for the fiscal year ended May 31, 1996. This appointment became
effective in June 1996 as a result of a recommendation by the Audit Committee. A
representative from McGladrey & Pullen, LLP is expected to be available for the
Annual Shareholders Meeting and will be provided with an opportunity to make a
statement in person or respond to appropriate questions from stockholders.
ANNUAL REPORT
A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-KSB AS FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION, INCLUDING FINANCIAL STATEMENTS AND NOTES
THERETO, IS BEING MAILED TO EACH STOCKHOLDER TOGETHER WITH THIS PROXY STATEMENT.
ADDITIONAL COPIES OF THE ANNUAL REPORT MAY BE OBTAINED BY STOCKHOLDERS WITHOUT
CHARGE BY WRITING TO THE ATTENTION OF LINDA A. NESPOLE, CORPORATE SECRETARY AT
THE ADDRESS OF THE COMPANY SET FORTH ON THE COVER OF THIS INFORMATION STATEMENT.
COMPLIANCE WITH SECTION 16(A) OF THE
SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's directors and certain of its officers, and persons who own more than
10 percent of a registered class of the Company's equity securities, to file
reports of ownership and changes in ownership with the Securities and Exchange
Commission (the "SEC"). Officers, directors and greater than 10 percent
stockholders are required by SEC regulations to furnish the Company with copies
of all Section 16(a) forms they file.
Based solely on its review of the copies of such forms received by it, or
written representations from certain reporting persons that no Forms 5 were
required for those persons, the Company believes that during the year ended May
31, 1996, all filing requirements applicable to its officers, directors and
greater than 10 percent beneficial owners were complied.
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OTHER MATTERS THAT MAY COME BEFORE THE MEETING
As of the date of this Proxy Statement, the Board of Directors knows of no
other business that will be presented by management for consideration at the
meeting. If any other business properly comes before the meeting, the proxy
holders intend to vote the proxies as recommended by the Board.
STOCKHOLDER PROPOSALS FOR 1996 ANNUAL MEETING
Stockholder proposals intended to be presented at the 1997 Annual Meeting
of Stockholders must be received by the Company not later than June 3, 1997.
Such proposal must set forth (i) a brief description of the business desired to
be brought before the meeting; (ii) the stockholder's name and address as they
appear on the Company's records; (iii) the number of shares of common stock
beneficially owned by the stockholder; and (iv) any material interest of the
stockholder in such business. Such proposals should be addressed to the
Secretary of the Company.
SOLICITATION OF PROXIES
The costs of this solicitation will be borne by the Company. Proxy
solicitations will be made by mail and also may be made by personal interview,
telephone, facsimile transmission and telegram on behalf of the Company by
officers and regular employees of the Company, banks, brokerage houses, nominees
and other fiduciaries may be requested to forward the proxy soliciting material
to the beneficial owners and to obtain authorization for the execution of
proxies The Company will, upon request, reimburse such parties for their
reasonable expenses in forwarding proxy materials to the beneficial owners.
By the order of the Board of Directors,
Thomas R. Mooney
Chairman & President
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HI-SHEAR TECHNOLOGY CORPORATION
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
ANNUAL MEETING OF STOCKHOLDERS
MONDAY, OCTOBER 21, 1996
The undersigned hereby appoints THOMAS R. MOONEY and GEORGE W. TRAHAN, and
each of them, with power of substitution, as proxies to represent the
undersigned at the Annual Meeting of Stockholders to be held on Monday, October
21, 1996 at 9:30 A.M., and at any adjournment thereof, and to vote all the
shares of stock the undersigned would be entitled to vote if personally present
at the meeting as indicated on the reverse side of this proxy:
(CONTINUED AND TO BE SIGNED ON THE REVERSE SIDE)
[SEE REVERSE SIDE]
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Please mark your
A [X] votes as in this
example
1. Election of Directors
FOR all nominees WITHHOLD AUTHORITY NOMINEES: Thomas R. Mooney
listed at right to vote for all George W. Trahan
(except as nominees listed David W. Einsel
indicated below) at right Jack Bunis
[_] [_]
(Instruction: To withhold authority to vote for any individual nominees,
write that nominee's name on the line provided below)
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2. In their discretion the proxies are authorized to vote upon such other
business as may properly come before the meeting.
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS DIRECTED. IF NO CONTRARY
INSTRUCTION IS GIVEN, THE SHARES WILL BE VOTED FOR THE ELECTION OF DIRECTORS.
PLEASE MARK, DATE, SIGN AND RETURN THIS PROXY IN THE ENCLOSED ENVELOPE.
Signature(s) DATE
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(Please date this Proxy)
NOTE: (Please date, sign exactly as name appears hereon and send promptly. If
the stock is undersigned in the names of two or more persons, each should
sign. When signing as Corporate Officer, Attorney, Executor,
Administrator, Trustee or Guardian, please give full title. Please note
any change in your address alongside the address as it appears hereon.)
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