EXHIBIT 22.3 - PROXY STATEMENT
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
JUNE 6, 1997
To The Stockholders of Electronic Systems Technology, Inc.:
The Annual Meeting of Stockholders of Electronic Systems Technology, Inc. (EST),
a Washington Corporation, will be held at Cavanaugh's Motor Inn at Columbia
Center, Kennewick, Washington on Friday, June 6, 1997 at 3:00 p.m. Kennewick
time for the following purposes:
1. To re-elect certain members of the Board of Directors
2. To ratify the selection of the independent auditors of the Corporation
3. To transact such other business as may properly come before the annual
meeting or any adjournments thereof.
Stockholders of record at the close of business on April 7, 1997 are entitled
to notice of and to vote at the meeting.
By order of the Board of Directors,
ELECTRONIC SYSTEMS TECHNOLOGY, INC.
/s/ T.L. KIRCHNER
T.L. Kirchner, President
April 24, 1997 / Approximate Date of mailing to Stockholders
IMPORTANT: Whether or not you plan to attend the meeting, please execute and
return the enclosed proxy. A return envelope is enclosed for your
convenience. Prompt return of the proxy will assure a quorum and save the
Company unnecessary expense. At least ten (10) days before the meeting of
stockholders, a complete record of the stockholders of the Company entitled
to vote at such meeting, or any adjournment thereof, will be on file at the
place of business of the Company at 415 N. Quay St., Kennewick, Washington
99336, and shall be produced and kept open at the time and place of the
meeting. During all times referred to above, the records shall be subject to
the inspection of any shareholder for the purposes of the meeting.
ELECTRONIC SYSTEMS TECHNOLOGY, INC.
415 N. Quay Street
Kennewick, Washington 99336
(509) 735-9092
PROXY STATEMENT
Relating to
ANNUAL MEETING OF SHAREHOLDERS
to be held on June 6, 1997
INTRODUCTION
This Proxy Statement is being furnished by the Board of Directors of Electronic
Systems Technology, Inc. a Washington corporation (the "Corporation"), to
holders of shares of the Corporation's Common Stock ("Common Stock") in
connection with the solicitation by the Board of Directors of proxies to be
voted at the Annual Meeting of Shareholders of the Corporation to be held on
Friday, June 6, 1997 and any adjournment or adjournments thereof
(the "Annual Meeting") for the purposes set forth in the accompanying Notice
of the Annual Meeting. This Proxy Statement is first being mailed to
shareholders on or about April 24, 1996. The Annual Report of the Company for
the year ending December 31, 1996 was mailed to stockholders prior to the
mailing of this Proxy Statement. Such Annual Report does not form any part of
the material for solicitation of proxies.
PURPOSES OF ANNUAL MEETING
Election of Directors
At the Annual Meeting, shareholders entitled to vote (see "Voting at Annual
Meeting") will be asked to consider and take action on the election of three
directors to the Corporation's Board of Directors to serve for a three year
term. See "Election of Directors."
Ratification of Auditors
At the Annual Meeting, shareholders will be asked to ratify the selection of
Robert Moe & Associates, P.S. as independent auditors of the Corporation for
the fiscal year ending December 31, 1997. See "Approval of Auditors."
Other Business
To transact other matters as may properly come before the annual meeting or any
adjournment or adjournments thereof.
VOTING AT ANNUAL MEETING
General
The close of business on the Date of April 7, 1997 has been fixed as the record
date for determination of the shareholders entitled to notice of, and to vote
at, the Annual Meeting (the "Record Date"). As of the Record Date, there
were issued and outstanding 4,953,667 shares of Common Stock entitled to vote.
A majority of such shares will constitute a quorum for the transaction of
business at the Annual Meeting.
The holders of record on the Record Date of the shares entitled to be voted
at the Annual Meeting are entitled to cast one vote per share on each matter
submitted to a vote at the Annual Meeting. All action proposed herein may
be taken upon a favorable vote of the holders of a majority of such shares of
Common Stock represented at the Annual Meeting provided a quorum is present at
the meeting in person or by proxy.
Proxies
Shares of Common Stock which are entitled to be voted at the Annual Meeting and
which are represented by properly executed proxies will be voted in accordance
with the instructions indicated in such proxies. If no instructions are
indicated, such shares will be voted: (1) FOR election of three individuals
to the Corporation's Board of Directors, (2) FOR the ratification of the
selection of independent auditors; (3) AT the discretion of the proxy holder,
any other matters which may properly come before the Annual Meeting. A
shareholder who has executed and returned a proxy may revoke it at any time
before it is voted at the Annual Meeting by executing and returning a proxy
bearing a later date, by giving written notice of revocation to the
Secretary of the Corporation, or by attending the Annual Meeting and voting
in person. A proxy is not revoked by the death or incompetence of the maker
unless, before the authority granted thereunder is exercised, written notice of
such death or incompetence is received by the Corporation from the executor
or administrator of the estate or from a fiduciary having control of the
shares represented by such proxy.
The indication of an abstention on a proxy or the failure to vote either by
proxy or in person will be treated as neither a vote "for" nor "against" the
election of any director. Each of the other matters must be approved by the
affirmative vote of a majority of shares present in person or represented by
proxy at the meeting and entitled to vote. Abstention from voting will have
the practical effect of voting against these matters since it is one less
vote for approval. Broker non-votes, shares held by brokers or nominees
for the accounts of others as to which voting instructions have not been
given, will be treated as shares that are present for determining a quorum,
but will not be counted for purposes of determining the number of votes cast
with respect to a proposal. Brokers and nominees, under applicable law, may
vote shares for which no instructions have been given in their discretion in
the election of directors.
The Corporation will bear all the costs and expenses relating to the
solicitation of proxies, including the costs of preparing, printing and
mailing this Proxy Statement and accompanying material to shareholders. In
addition to the solicitation of proxies by use of the mails, the directors,
officers, and employees of the Corporation, without additional compensation,
may solicit proxies personally or by telephone or telegram.
1. ELECTION OF DIRECTORS
It is intended that the proxies solicited hereby will be voted for election of
the nominees for directors listed below, unless authority to do so has been
withheld. The Board of Directors knows of no reason why its nominees will
be unable to accept election. However, if any nominee becomes unable to accept
election, the Board will either reduce the number of directors to be elected or
select substitute nominees. If substitute nominees are selected, proxies will
be voted in favor of such nominees.
The Board of Directors is divided into three classes, with the terms of office
of each class ending in successive years. The terms of directors of Class II
expire with the 1998 Annual Meeting, the terms of directors of Class III
expire with the 1999 Annual Meeting and the terms of directors of Class I
expire with the 1997 Annual Meeting.
Nominees
The nominees for Class I directors whose terms, if elected, will expire in 2000
and certain additional information with respect to each of them is as follows:
Nominee's Name, Position with the Company, Principal Occupation(s), Other
Directorships, Age, and Ownership:
CLASS I - Three Year Term Expiring June 1997
Melvin H. Brown: Mr. Brown is a Director of the Company. During the last five
years Mr. Brown has been the owner and president of Manufacturing
Services, Inc. Manufacturing Services provides services in packaging design,
printed circuit board layout, prototyping, production runs, verification of
documentation testing, burn-in, quality control, and repetitive volume
production. Manufacturing Services provides electronic manufacturing and
quality control testing services for Electronic Systems Technology. EST
purchased $52,199 of these services from Manufacturing Services during 1996.
(See Related Party Transactions below.) Mr. Brown does not serve as a director
for any company registered under the Securities Exchange Act.
Age: 66
Shares Beneficially Owned* 76,500
Percent of Class: 1.5
A Director Since: 1985
* Shares beneficially owned do not include 75,000 shares subject to the
options granted 2-3-95, 2-9-96, and 2-7-97.
Arthur Leighton: Mr. Leighton is a Director of the Company. Mr. Leighton
served as President of Kraft Industries through mid 1986. Since then he has
been working as an independent Management Consultant. Mr. Leighton does not
serve as director of any company which is registered under the Securities
Exchange Act. See also the Company's Form 8-K dated March 3, 1997, incorporated
herein by reference, describing a shooting incident wherein Mr. Leighton was
wounded. As of the date of this Proxy Statement, the Company is unsure of the
extent or enormity of Mr. Leighton's injuries or the effect on his continued
ability to serve as a Director for the Company.
Age: 73
Shares Beneficially Owned* 84,000
Percent of Class: 1.7
A Director Since: 1985
* Shares beneficially owned do not include 75,000 shares subject to the
options granted 2-3-95, 2-9-96, and 2-7-97.
Robert Southworth: Mr. Southworth is a Director of the Corporation. In his
primary occupation he is a Senior Patent Attorney with the United States
Department of Energy in Richland, Washington, and is responsible, among other
duties, for preparing and prosecuting domestic and foreign patent applications
in such fields as nuclear reactors, fuel reprocessing, waste management and
energy fields of solar, wind, and fossil fuels. Mr. Southworth received a
degree in Chemical and Petroleum Refining Engineering from the Colorado School
of Mines in 1968, a Masters of Business Administration from the University of
Colorado in 1973, and a Law Degree from the University of Denver in 1976.
Mr. Southworth has not been engaged in any legal matters concerning the
Company. Mr. Southworth does not serve as a director for any company
registered under the Securities Act.
Age: 53
Shares Beneficially Owned* 4,000
Percent of Class: 0.1
A Director Since: 1985
* Shares beneficially owned do not include 75,000 shares subject to the options
granted 2-3-95, 2-9-96, and 2-7-97.
MANAGEMENT RECOMMENDS THAT THE STOCKHOLDERS VOTE "FOR" THE NOMINEES TO THE
BOARD OF DIRECTORS OF THE COMPANY
2. RATIFICATION OF AUDITORS
Robert Moe & Associates, P.S., independent public accountants, have again been
selected by the Board of Directors as the independent auditors for the
Corporation for the fiscal year ending December 31, 1997, subject to
approval by the shareholders. Robert Moe & Associates, P. S. has served as an
independent auditor for the Corporation since the fiscal year ended
December 31, 1984. This firm is experienced in the field of accounting and
is well qualified to act in the capacity of auditors.
Robert Moe & Associates, P.S., will not be represented at the annual meeting,
but questions from shareholders will be presented to the auditors for response.
MANAGEMENT RECOMMENDS THAT THE STOCKHOLDERS VOTE "FOR" ITEM 2
3. OTHER MATTERS
As of the date of this Proxy Statement, the Board of Directors is not aware of
any matters that will be presented for action at the Annual Meeting other than
those described above. Should other business properly be brought before the
Annual Meeting, it is intended that the accompanying Proxy will be voted
thereon in the discretion of the persons named as proxies.
MEMBERS OF BOARD OF DIRECTORS CONTINUING IN OFFICE:
CLASS II - Three Year Term Expiring June 1998
John L. Schooley: Mr. Schooley is a Director of the Company. During the
past five years, Mr. Schooley has been the owner and President of Remtron, Inc.
in San Diego, California. Remtron, Inc. is a manufacturer of advanced radio
control and telemetry systems for the industrial market. Remtron, Inc. has
provided research and development services for Electronic Systems Technology in
1994, but did not do so in 1995 or 1996. Mr. Schooley does not serve as
director of any other company which is registered under the Securities Act.
Age: 57
Shares Beneficially Owned: 10,000
Percent of Class: 0.2
A Director Since: 1993
* Shares beneficially owned do not include 25,000 shares subject to the options
granted 2-7-97.
CLASS III - Three Year Term Expiring June 1999
T.L. Kirchner: Mr. Kirchner is founder, President and a Director of the
Company. During the last five years Mr. Kirchner devoted 100% of his time to
the Management of the Company. His primary duties were, are are, to oversee
the Management and Marketing functions of the Company. Mr. Kirchner does
not serve as a director for any company registered under the Securities
Exchange Act.
Age: 48
Shares Beneficially Owned* 403,488
Percent of Class: 8.1
A Director Since: 1985
* Shares beneficially owned do not include 75,000 shares subject to the options
granted 2-3-95, 2-9-96, and 2-7-97.
John H. Rector: Mr. Rector is a Director of the Company. Mr. Rector founded
Western Sintering, located in Richland, Washington. Western Sintering, a
powdered metal parts manufacturer, is an Original Equipment Manufacturer (OEM).
Mr. Rector is the former President of Western Sintering, Inc. Mr. Rector
recently retired as President of Western Sintering, but is still acting in an
advisory position to its officers and directors. Mr. Rector does not serve as
director of any company which is registered under the Securities Exchange Act.
Age: 80
Shares Beneficially Owned: 6,000
Percent of Class: 0.1
A Director Since: 1992
* Shares beneficially owned do not include 25,000 shares subject to the options
granted 2-7-97.
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth, as of March 1, 1997, amount and percentage of
the Common Stock of the Company, which according to information supplied by the
Company, is beneficially owned by management, including officers and directors
of the Company.
Title Name Amount & Nature Percent
of of of of
Class Beneficial Owner Beneficial Ownership Class
________ _____________________ ____________________ ________
Common T.L. Kirchner 403,488* 8.1%
(Officer & Director)
Common Robert Southworth 4,000* 0.1%
(Officer & Director)
Common Melvin H. Brown 76,500* 1.5%
(Director)
Common Arthur Leighton 84,000* 1.7%
(Director)
Common John H. Rector 6,000 0.1%
(Director)
Common John L. Schooley 10,000 0.2%
(Director)
* Shares beneficially owned do not include shares subject to the options
granted 2-3-95, 2-9-96, and 2-7-97.
REMUNERATION OF EXECUTIVE OFFICERS
(a) Named Executive Officers
The Corporation's named executive officers are:
T.L. Kirchner, President and CEO
The Registrant's four most highly compensated executive officers other than the
CEO who served as executive officers as of December 31, 1996 are: None
(b) Summary Compensation Table
Long Term Compensation
Annual Compensation Awards Payouts
(a) (b) (c) (d) (e) (f) (g) (h) (i)
Securities
Name and Other Restricted Options All
Principal Annual Stock Underlying LTIP Other
Position Year Salary Bonus Compensation Awards SARs/Options Payouts Compensation
($) ($)(1) ($)(2) ($) (#) ($) ($)(3)
___________________________________________________________________________________________________
T. L. Kirchner 1996 74,015 8,748 1,185 0 25,000 0 5,368
President & 1995 67,800 5,356 1,406 0 25,000 0 5,025
CEO 1994 67,800 8,103 578 0 0 0 6,368
(1) Includes amounts paid under the Non-qualified Employee Profit Sharing Bonus
(2) Other Annual Compensation includes Accrued Vacation Pay
(3) All Other Compensation consists of premiums paid for Group Health Insurance
and Key Man Insurance
The information specified concerning the stock options of the named executive
officers during the fiscal year ended December 31, 1996 is provided in the
following Option/SAR Grants in the Last Fiscal Year Table:
STOCK OPTION/SAR GRANTS IN LAST FISCAL YEAR
Individual Grants (4)
(a) (b) (c) (d) (e)
Number of % of Total
Securities Options/SARs
Underlying Granted to
Options/SARs Employees in Exercise or base Expiration
Name Granted # (4) Fiscal Year Price($/Sh) Date
--------------------------------------------------------------------------------------------
T.L. Kirchner 25,000 12.5% $ 0.42 2/8/99
(4) This table does not include Stock Options granted previously on 2/3/95.
The information specified concerning the stock options of the named executive
officers during the fiscal year ended December 31, 1996 is provided in the
following Aggregated Option/SAR Exercises in Last Fiscal Year and Fiscal
Year-End Options/SAR Values Table:
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR END OPTION/SAR VALUES
(a) (b) (c) (d) (e)
Number of
Securities Value of
Underlying Unexercised
Unexercised in-the-money
Options/SARs Options/SARs
at FY-End (#) at FY-End ($)
Number of
Shares Acquired Value
Name on Exercise Realized ($) Exercisable/Unexercisable Exercisable/Unexercisable
- -------------------------------------------------------------------------------------------------------------------
T.L. Kirchner 0 0 50,000 0
The Company does not currently have a Long-Term Incentive Plan ("LTIP").
Compensation to outside directors is limited to reimbursement of out-of-pocket
expenses that are incurred in connection with the directors duties
associated with the Company's business. There is currently no other
compensation arrangements for the Company's directors.
The Company currently does not hold any Employment Contracts or Change of
Control Arrangements with any parties.
CERTAIN INFORMATION REGARDING THE BOARD OF DIRECTORS
During the fiscal year ended December 31, 1996 the Board of Directors held
three meetings on November 15, 1996, June 6, 1996, February 9, 1996. All
directors were in attendance at such meetings, except as follows:
Mr. Schooley was absent from the February 9, 1996 and November 15, 1996
meetings.
COMMITTEES
There are no Compensation, Audit or Nominating Committees. However, the Board
has established a Stock Option Committee. The sole purpose of this committee
is to research and make recommendations to the Board of Directors regarding
issuance of Stock Options pursuant to the Company's Stock Option Plan.
RELATED PARTY TRANSACTIONS
During fiscal year 1996, the Company contracted for services from Manufacturing
Services, Inc. in the amount of $52,199. Manufacturing Services, Inc. is
owned and operated by Melvin H. Brown, who is a Director of Electronic
Systems Technology, Inc. Management believes all prices for services, provided
by Manufacturing Services, Inc., were as favorable as could be obtained from
comparable manufacturing services companies.
COMPENSATION OF DIRECTORS
Director compensation is limited to reimbursement of out-of-pocket expenses
that are incurred in connection with the directors duties associated with the
Corporation's business.
SHAREHOLDER PROPOSALS AND OTHER MATTERS
The Corporation's next annual meeting will be held on June 7, 1998. A
Stockholder who desires to have a qualified proposal considered for
inclusion in the Proxy Statement for that meeting must notify the Secretary
of the terms and content of the proposal no later than March 15, 1998.
The Corporation's By-Laws outline the procedures including notice provisions,
for stockholder nomination of directors and other stockholder business to be
brought before stockholders at the Annual Meeting. At the time of submission
of such proposal a stockholder must have been of record or beneficial owner of
at least 1% of the outstanding shares or $1,000 worth of stock in the
Corporation, and have held such stock for at least one year and through the
date on which the meeting is held. A copy of the pertinent By-Law provisions
are available upon written request to Robert Southworth, Secretary, Electronic
Systems Technology, Inc., 415 North Quay Street, Kennewick, Washington 99336.
FORM 10-KSB
Any shareholder of record may obtain a copy of the Corporation's Annual Report
on Form 10-KSB for the fiscal year ended December 31, 1996 (the "Form 10-KSB"),
without cost, upon written request to the Secretary of the Corporation. The
Form 10-KSB is not part of the proxy solicitation material for the Annual
Meeting.
By Order of the Board of Directors
/s/ T.L. KIRCHNER
T.L. Kirchner
President
4/16/97
(Date)