<PAGE>
Thomas R. Mooney
CHAIRMAN AND PRESIDENT
August 29, 1997
To Our Stockholders:
On behalf of the Board of Directors, I am pleased to invite you to the
Annual Meeting of Stockholders of Hi-Shear Technology Corporation to be held
October 6, 1997 at 9:30 a.m., at the Marriott Hotel, 3635 Fashion Way, Torrance,
California. I look forward to greeting you personally and reporting on the
progress of your company.
The items of business to be acted on during the meeting are listed in
the Notice of Annual Meeting of Stockholders and are described more fully in the
Proxy Statement. The formal business of the meeting will also include a report
on operations followed by a question and discussion period.
Only stockholders of record on the books of the Company at the close of
business on August 29, 1997, will be entitled to notice of and to vote at the
Annual Meeting of Stockholders or any adjournment thereof.
While we hope many stockholders will exercise their right to vote their
shares in person, we recognize that many stockholders may not be able to attend
the Annual Meeting. Accordingly, we have enclosed a proxy which will enable you
to vote your shares on the issues to be considered at the Annual Meeting even if
you are unable to attend. All you need to do is mark the proxy to indicate your
vote, date and sign the proxy, and return it in the enclosed postage-paid
envelope as soon as conveniently possible. If you desire to vote in accordance
with management's recommendations, you need not mark your votes on the proxy but
only sign, date and return the proxy in the enclosed postage-paid envelope in
order to record your vote.
I hope to see you at the meeting.
Sincerely,
/s/ Thomas R. Mooney
Chairman and President
<PAGE>
HI-SHEAR TECHNOLOGY CORPORATION
24225 Garnier Street
Torrance, California 90505-5323
The Annual Meeting of Stockholders of HI-SHEAR TECHNOLOGY CORPORATION
will be held on October 6, 1996 at 9:30 a.m., at the Torrance Marriott Hotel,
located at 3635 Fashion Way, Torrance, California, to consider and act upon the
following matters:
1. The election of Directors
2. Such other business as may properly come before the meeting or
any adjournment thereof.
As far as management is aware, no business will properly come before
the Annual Meeting of Stockholders other than the matters set forth above.
Pursuant to the Company's by-laws, the Board of Directors has fixed the
close of business on August 29, 1997, as the record date for determination of
stockholders of the Company entitled to receive notice of and to vote at the
Annual Meeting of Stockholders and any adjournment thereof.
By Order of the Board of Directors
September 15, 1997
===============================================================================
YOUR VOTE IS IMPORTANT. PLEASE PROMPTLY MARK, DATE, SIGN AND RETURN YOUR PROXY
IN THE ENCLOSED ENVELOPE IN ORDER THAT YOUR SHARES WILL BE REPRESENTED.
===============================================================================
<PAGE>
HI-SHEAR TECHNOLOGY CORPORATION
24225 GARNIER STREET
TORRANCE, CALIFORNIA 90505-5323
------------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD OCTOBER 6, 1997
------------------------------
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 6, 1997 at the Marriott Hotel, 3635 Fashion Way, Torrance,
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 15, 1997.
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, 1997 (the "Record Date"),
at which time the Company had issued an outstanding 6,635,791 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.
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 and nominate another person in the
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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, 60, 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, 49, 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, of Cherry Textron, a leading supplier of fasteners
to the commercial aerospace and automobile market from 1985 to 1990. From 1978
to 1985, Mr. Trahan served as Group Controller at the corporate headquarters of
Textron Inc. 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, 68, became 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, 62, became a Director in September 1996. He is currently the
Founder and Principal of a management consulting firm, Bunis & Associates.
Previously, 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.
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 1997 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 Compensation, Audit, and
Nominating Committees consists solely of the "independent" directors of the
Company. The functions of those committees, their members and the number of
meetings held during the 1997 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 twice 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
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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 four times during the fiscal year.
OPTIONS COMMITTEE. The Options Committee develops and administers incentive
plans, including the Company's 1994 Stock Option Plan. Messrs. Thomas R. Mooney
and George W. Trahan are members of the Options Committee, which met two times
during the fiscal year.
COMPENSATION COMMITTEE AND NOMINATING COMMITTEE. The Compensation Committee
is responsible for making recommendations to the Board of Directors concerning
the annual compensation of all executive officers and key employees. Messrs.
David W. Einsel and Jack Bunis are members of the Compensation Committee, which
did not meet during the year. 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 Bunis 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.
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
TIMOTHY R. PAGANO, 48, joined the Company in August of 1997 as Vice
President and General Manager of Aerospace Products. Prior to joining the
Company, Mr. Pagano was employed by Optical Corporation of America (a unit of
Corning Glass) where he held the position of Vice President, Operations. Mr.
Pagano is responsible for the design, engineering, manufacture, and shipment of
the Company's aerospace products. Mr. Pagano has extensive experience in
manufacturing, product engineering, quality assurance, precision machining and
the development of new commercial and military products.
MICHAEL D. PATTISON, 37, has served the Company as Vice President of
Business Development and Contracts since October 1995. Mr. Pattison joined the
Company as Director of Marketing in 1993. Mr. Pattison holds a Bachelor of
Science degree in Engineering from Auburn University, a Masters degree in
Business Administration from Pepperdine University, a Master of Science in
Engineering from the University of Florida, and a Master of Science Systems
Management from the University of Southern California. G.B. LITTLE, 57, 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, 35, 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.
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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, 1995, 1996 and 1997 to those persons who were, as
of May 31, 1997, President and the other most highly compensated officers of the
Company whose total annual salary and bonus exceeded $100,000 during the fiscal
year ended May 31, 1997 (the "Named Officers"):
<TABLE>
<CAPTION>
Long Term Compensation
----------------------
Annual Compensation Awards Payout
------------------- ------ ------
Name and Principal Fiscal Salary($) Bonus($) Other($) Restricted Options/ LTIP All Other
Position Year Stock SARs(#) Payout($) Compensation
Award(s)($) ($)(1)
- ----------------------- -------- ----------- ----------- ----------- -------------- ---------- ------------ ----------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Thomas R. Mooney, 1997 250,000 -0- -0- -0- -0- -0- -0-
President 1996 250,000 -0- -0- -0- -0- -0- -0-
1995 250,000 -0- -0- -0- -0- -0- -0-
George W. Trahan, 1997 205,000 -0- -0- -0- -0- -0- -0-
Executive Vice 1996 205,000 -0- -0- -0- -0- -0- -0-
President, CFO 1995 205,000 -0- -0- -0- -0- -0- -0-
- ----------------------- -------- ----------- ----------- ----------- -------------- ---------- ------------ ----------------
</TABLE>
(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.
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, 1997 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 Executive 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)
------------------------- ----------------
<S> <C> <C>
Thomas R. Mooney ..................................... 2,715,000 40.9
George W. Trahan .................................... 2,198,680 33.1
David W. Einsel .................................... 9,000 *
Jack Bunis ......................................... 6,000 *
All Executive Officers and Directors
as a group (4 persons) ........................... 4,928,680 74.2
- ----------------------
</TABLE>
*Less than 1% of the outstanding shares of Common Stock
(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 6,635,791 shares of Common Stock outstanding as of the date
of this Proxy Statement.
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ANNUAL REPORT
The Company undertakes, on written request, and without charge, to
provide each person from whom the accompanying Proxy is solicited with a copy of
the Company's Annual Report on Form 10-KSB for the year ended May 31, 1997, as
filed with the Securities and Exchange Commission, including the financial
statements and note thereto. Copies of the exhibits not included in the form
10-KSB are also available, on written request, at the Company's cost. Request
should be addressed to Hi-Shear Technology Corporation, 24225 Garnier Street,
Torrance, CA 90505-5355, Attention Corporate Secretary.
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, 1997. A representative from McGladrey
& Pullen, LLP is expected to be available for the Annual Meeting of Stockholders
and will be provided an opportunity to make a statement in person or respond to
appropriate questions from stockholders.
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, 1997, all filing requirements applicable to its officers, directors and
greater than 10 percent beneficial owners were complied with.
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 1998 ANNUAL MEETING
Stockholder proposals intended to be presented at the 1998 Annual
Meeting of Stockholders must be received by the Company not later than June 3,
1998. Such proposals 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.
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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,
/s/ Thomas R. Mooney
Chairman & President
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