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SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12
SENSYS TECHNOLOGIES INC.
------------------------
(Name of Registrant as Specified In Its Charter)
-----------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3)
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
------------------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
5) Total fee paid:
------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
------------------------------------------------------------------------
2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------------------
3) Filing Party:
------------------------------------------------------------------------
4) Date Filed:
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SENSYS TECHNOLOGIES INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD FEBRUARY 10, 1999
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of Sensys
Technologies Inc. will be held at the Radisson Plaza Hotel at Mark Center, 5000
Seminary Road, Alexandria, Virginia, on Tuesday, February 10, 1999, at 10:00
a.m., local time, for the following purposes:
(a) To elect seven members to the Board of Directors;
(b) To ratify the appointment of independent auditors; and
(c) To transact such other business as may properly come before the
meeting or any adjournment thereof.
Only stockholders of record at the close of business on December 21,
1998 will be entitled to notice of, and to vote at, the meeting and any
adjournment thereof.
THE BOARD OF DIRECTORS OF SENSYS TECHNOLOGIES INC. HOPES THAT YOU WILL
FIND IT CONVENIENT TO ATTEND THE MEETING IN PERSON. EVEN IF YOU DO NOT GRANT
YOUR PROXY, IF YOU ARE PLANNING TO ATTEND THE MEETING, PLEASE MARK THE BOX SET
FORTH ON THE ACCOMPANYING PROXY FORM ACCORDINGLY. ALSO, PLEASE MARK, SIGN, DATE
AND RETURN THE ENCLOSED PROXY TO MAKE SURE THAT YOUR SHARES ARE REPRESENTED AT
THE MEETING. IF YOU ATTEND THE MEETING, YOU MAY VOTE YOUR STOCK PERSONALLY EVEN
THOUGH YOU HAVE SENT IN YOUR PROXY.
By Order of the Board of Directors,
/s/ LLOYD A. SEMPLE
Lloyd A. Semple
Secretary
Newington, Virginia
January 7, 1999
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SENSYS TECHNOLOGIES INC.
PROXY STATEMENT
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Sensys Technologies Inc. (the "Company")
for use at the Annual Meeting of Stockholders of the Company ("Annual Meeting")
on Wednesday, February 10, 1999, at 10:00 a.m., local time, or at any
adjournment thereof, for the purposes set forth in the accompanying Notice of
Annual Meeting of Stockholders and in this Proxy Statement.
Only stockholders of record as of the close of business on December 21,
1998, will be entitled to vote at the Annual Meeting or any adjournment thereof.
The Company has 3,968,271 shares of Common Stock, $.01 par value (the "Common
Stock"), issued and outstanding as of that date. Each holder of shares of the
Company's Common Stock is entitled to one vote per share. This Proxy Statement
and the accompanying form of proxy are being first sent or given to the
Company's stockholders on or about January 7, 1999. Ten days before the Annual
Meeting, a complete list of stockholders entitled to vote at the meeting will be
open to examination by any stockholder for any purpose germane to the meeting
during ordinary business hours at the Company's principal offices.
Shares represented by a proxy in the accompanying form, unless
previously revoked, will be voted at the meeting if the proxy, properly
executed, is received by the Company before the close of business on February 9,
1999. Shares represented by a proxy received after that time will be voted if
the proxy is received by the Company in sufficient time to permit the necessary
examination and tabulation of the proxy before a vote is taken. Stockholders who
execute a proxy in the accompanying form may nevertheless revoke the proxy at
any time before it is exercised by notice to the Company, by executing and
delivering a later dated proxy, or by voting in person at the meeting.
The expenses of solicitation of proxies will be paid by the Company. In
addition to solicitation by mail, the officers and employees of the Company, who
will receive no extra compensation therefor, may solicit proxies personally or
by telephone. The Company will reimburse brokerage houses and other nominees for
their expenses incurred in sending proxies and proxy materials to the beneficial
owners of shares held by them.
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STOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
Common stock is the only voting security of the Company. The following
table sets forth certain information with respect to the beneficial ownership of
shares of the Company's Common Stock, as of December 21, 1998, by each person
who is known by the Company to have been the beneficial owner of 5% or more of
the shares of Common Stock outstanding as of such date. Unless otherwise noted,
each stockholder exercises sole voting and investment power with respect to the
shares beneficially owned.
PRINCIPAL HOLDERS OF SECURITIES
NAME AND ADDRESS OF NUMBER OF PERCENT OF
BENEFICIAL OWNER SHARES (1) CLASS
- ------------------------------------------------------------------------
S. Kent Rockwell 926,194 (2) 22.5
960 Penn Avenue,
Suite 800
Pittsburgh, PA 15222
- ------------------------------------------------------------------------
S. R. Perrino 798,117 (3) 19.4
Sensys Technologies Inc.
P. O. Box 1430
Newington, VA 22122
- ------------------------------------------------------------------------
Donald G. Reiser 208,340 (4) 5.0
5657 Ravenel Lane
Springfield, VA 22151
- ------------------------------------------------------------------------
(1) The column sets forth shares of Common Stock which are deemed to be
"beneficially owned" by the persons named in the table under Rule 13d-3 of
the SEC.
(2) Includes 900,394 shares held of record by Rockwell Holdings, Inc., over
which Mr. Rockwell has sole authority and control.
(3) Includes 68,297 shares held of record by the 401(k) Profit Sharing Plan over
which Mr. Perrino has authority to sell and vote, and 10,000 shares owned by
Mr. Perrino's spouse, over which control is shared.
(4) Excludes 25,800 shares held of record by the Rosenberg Family Trust, for
which Mr. Reiser's spouse acts as trustee, and of which Mr. Reiser disclaims
beneficial ownership. Includes 39,036 shares held of record by the 401(k)
Profit Sharing Plan over which Mr. Reiser has authority to sell and vote.
OWNERSHIP OF EQUITY AND VOTING
SECURITIES BY DIRECTORS AND OFFICERS
The following table sets forth information with respect to the
beneficial ownership of the Company's Common Stock by each person nominated for
director, by each of the Executive Officers named in the Summary Compensation
Table (the "Named Executive Officers") and by all nominees and executive
officers as a group, as of December 21, 1998. Except as noted, each person
exercises sole voting and investment power over the shares beneficially owned.
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NUMBER OF PERCENT OF
NAME SHARES (1) CLASS (2)
- -------------------------------------------------------------------------------------------
Charles W. Bernard 25,800 .6
- -------------------------------------------------------------------------------------------
Robert R. Bower 61,347 (3) .5
- -------------------------------------------------------------------------------------------
James B. Busey, IV 25,800 .6
- -------------------------------------------------------------------------------------------
Thomas R. Ory 54,936 (4) 1.4
- -------------------------------------------------------------------------------------------
S.R. Perrino 798,117 (5) 19.4
- -------------------------------------------------------------------------------------------
Philip H. Power 27,420 .7
- -------------------------------------------------------------------------------------------
Donald Reiser 208,340 (6) 5.0
- -------------------------------------------------------------------------------------------
S. Kent Rockwell 926,194 (7) 22.5
- -------------------------------------------------------------------------------------------
John D. Sanders 70,210 (8) 1.8
- -------------------------------------------------------------------------------------------
Charles Stanich 39,697 .9
- -------------------------------------------------------------------------------------------
All directors and executive officers as a 2,019,860 49.9
group (9 persons)
- -------------------------------------------------------------------------------------------
(1) The column sets forth shares of Common Stock, which are deemed to be
"beneficially owned" by the persons named in the table under Rule 13d-3 of
the SEC, including shares of Common Stock that may be acquired upon exercise
of stock options that are currently exercisable or become exercisable within
the next 60 days as follows: Dr. Bernard, 25,800; Dr. Sanders, 25,800; Mr.
Bower, 6,192; Mr. Ory, 20,000; and Mr. Stanich, 20,000.
(2) For purposes of calculating the percentage of Common Stock beneficially
owned by any person or group, the shares issuable to such person or group
upon exercise of stock options that are currently exercisable or become
exercisable within the next 60 days are considered outstanding.
(3) Includes 5,160 shares with respect to which Mr. Bower shares voting and
investment power with his spouse. Also includes 19,995 shares held in the
401(k) Profit Sharing Plan.
(4) Includes 34,936 shares with respect to which Mr. Ory shares voting and
investment power with his spouse.
(5) Includes 10,000 shares owned by Mr. Perrino's spouse and 68,297 shares held
in the 401(k) Profit Sharing Plan.
(6) Excludes 25,800 shares held of record by the Rosenberg Family Trust, for
which Mr. Reiser's spouse acts as trustee, and of which Mr. Reiser disclaims
beneficial ownership. Includes 39,036 shares held of record by the 401(k)
Profit Sharing Plan over which Mr. Reiser has authority to sell and vote.
(7) Includes 900,394 shares held by Rockwell Holdings, Inc. over which Mr.
Rockwell has sole investment authority and control.
(8) Includes 550 shares owned by Dr. Sanders' spouse and 17,190 shares held in a
Profit Sharing Plan over which Mr. Sanders has sole investment authority and
control.
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PROPOSAL I
ELECTION OF DIRECTORS
The Board of Directors has the ultimate authority for the management of
the Company's business, objectives and operations. It selects the Company's
executive officers, delegates responsibilities for the conduct of the Company's
day-to-day operations to those officers, and monitors their performance.
Seven directors, constituting the entire Board of Directors, will be
elected at the Annual Meeting, each to hold office until the next Annual Meeting
of Stockholders or until his successor is elected and qualified. The individuals
who will be nominated by management for election to the Board of Directors at
the Annual Meeting are listed in the following table. Each of the nominees is
currently a Director of the Company.
The Board of Directors recommends that the nominees described below,
each of whom is currently serving as a director of the Company, be elected for a
new term of one year and until they are re-elected or their successors are duly
elected and qualified. PROXIES IN THE ACCOMPANYING FORM WILL BE VOTED FOR THE
ELECTION OF THE NOMINEES LISTED IN THE FOLLOWING TABLE UNLESS THE PROXY CARD IS
MARKED IN ACCORDANCE WITH THE INSTRUCTIONS THEREON TO INDICATE THAT AUTHORITY TO
DO SO IS WITHHELD. If, as a result of circumstances not now known or foreseen,
any of such nominees shall be unavailable to serve as a Director, proxies will
be voted for the election of such other person or persons as the Board of
Directors may select. The nominees receiving a plurality of the votes cast at
the meeting will be elected as Directors.
YEAR FIRST
POSITIONS WITH THE COMPANY AND ELECTED OR
NAME AGE PRINCIPAL OCCUPATION OR EMPLOYMENT APPOINTED DIRECTOR*
- ---------------------------------------------------------------------------------------------------
Charles W. Bernard 67 Consultant 1992
- ---------------------------------------------------------------------------------------------------
James B. Busey, IV 66 Consultant 1993
- ---------------------------------------------------------------------------------------------------
Thomas R. Ory 60 President, Imaging Group 1987
- ---------------------------------------------------------------------------------------------------
S.R. Perrino 64 Chairman of the Board 1972
- ---------------------------------------------------------------------------------------------------
Chairman, HomeTown Communications
Philip H. Power 60 Network 1985
- ---------------------------------------------------------------------------------------------------
S. Kent Rockwell 54 Vice Chairman, CEO 1987
- ---------------------------------------------------------------------------------------------------
John D. Sanders 60 Investor/Consultant 1982
- ---------------------------------------------------------------------------------------------------
*Reflects the year first elected or appointed to Board of Directors of S.T.
Research Corporation ("STR") and Daedalus Enterprises, Inc. ("DEI"). On June 9,
1998, a newly formed wholly-owned subsidiary of DEI merged into STR which
thereafter merged into DEI (which had on the same date changed its name to
Sensys Technologies Inc.). This overall transaction is hereafter referred to in
this Proxy Statement as the "Merger". Messrs. Bernard, Busey, Perrino and
Rockwell were elected or appointed to the Board of the Directors of the Company
in June 1998 in connection with the Merger.
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CERTAIN INFORMATION REGARDING NOMINEES
S.R. Perrino is Chairman of the Board and served as President and CEO of
STR since 1972 through the date of the Merger. He served as CEO of the Company
from June 9, 1998 until July 7, 1998. From 1967 to 1974, Mr. Perrino worked as a
consultant to the U.S. Navy for threat warning systems, and to various companies
including STR, Systems Dynamic, Inc., and System Consultants. From 1960 through
1967, Mr. Perrino served as Director of Marketing/Project Engineer and was one
of the original founders of Radiation Systems, Inc.
S. Kent Rockwell, Vice Chairman and CEO, is former Chairman of the
Board, President and CEO of Astrotech International Corporation, where he served
from 1986 to 1997. Mr. Rockwell has served as Chairman of Rockwell Forest
Products, Inc. since 1983, Appalachian Timber Services, Inc. since 1988; and
Chairman and President of Rockwell Venture Capital, Inc. since 1983. Mr.
Rockwell previously served on the Board of Rockwell International from 1973 to
1983.
Dr. Charles Bernard, Director, served in a number of Government
positions. He was Technical Director of the Naval Weapons Laboratory in
Dahlgren, Virginia, from 1973 to 1975, and the Naval Ordinance Laboratory in
White Oak, Maryland from 1975 to 1977. He was Director of Land Warfare on the
staff of the Under Secretary of Defense for Research, Development and
Acquisition from 1978 to 1988. He founded the Columbia Bay Company and
co-founded K&B Engineering Associates in 1995. Dr. Bernard has been on the board
of directors of the Naval Weapons Laboratory from 1969 to 1975, the Naval
Ordinance Laboratory from 1975 to 1977, the Naval Surface Weapons Center from
1975 to 1977, the Columbia Bay Company from 1988 to present, and K&B Engineering
Associates from 1995 to present.
Admiral James B. Busey IV, USN (Ret.), Director, served in the U.S. Navy
for 37 years in a variety of aviation and command positions. He held the
positions of Commander in Chief of U.S. Naval Forces in Europe, and Commander in
Chief of Allied Forces in southern Europe for two years prior to his retirement
in 1989. Admiral Busey served as Administrator of the Federal Aviation
Administration from June 1989 until December 1991. He served as the Deputy
Secretary of Transportation until June 1992. He also served as Acting Secretary
for several months during this period. He served as the International President
and Chief Executive Officer of the Armed Forces Communications and Electronics
Association from October 1992 until April 1996. He continues to serve on the
boards of the Flight Safety Foundation and the National Aeronautic Association
in addition to several corporate boards, including Texas Instruments, Inc.,
Curtiss Wright Corporation, and The MITRE Corporation.
Dr. John D. Sanders, Director, serves as a business consultant to
emerging technology companies. He was Chairman and Chief Executive Officer of
Tech News, Inc., a news publisher, from 1988 to 1996, prior to its sale to the
Washington Post Company. In addition, Dr. Sanders has been a Registered
Representative (now inactive) of Wachtel & Co., Inc., a Washington D.C.-based
stock brokerage firm, since 1968. Dr. Sanders serves on the boards of Hadron
Inc. and ITC Learning Corporation.
Mr. Thomas R. Ory, Director, joined Daedalus Enterprises Inc. (the
Company's predecessor) in 1972 as Director of its Applications Division, and
has served as Vice President-Marketing from 1979 to 1984, and Executive Vice
President from 1985 to August 1987, when he was appointed President and Chief
Executive. Since June 1998, Mr. Ory has been President, Imaging Group, Sensys
Technologies Inc.
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Mr. Philip H. Power, Director, has served as Chairman of Hometown
Communications Network, Livonia, Michigan, (formerly known as Suburban
Communication Corporation), for more than 20 years. Mr. Power currently serves
on the Board of Jacobson Stores Inc.
MEETINGS AND COMMITTEES OF THE BOARD
The Board of Directors of the Company met a total of seven times,
including two meetings subsequent to the Merger. Prior to the Merger, the Board
of Directors of STR met three times. The Board of Directors has established an
Audit Committee and Executive Commission/Stock Option Committee. The Audit
Committee met one time. The Executive Compensation/Stock Option Committee met
two times. All of the directors attended 75 percent or more of the aggregate
number of Board and Committee Meetings on which he served during the last fiscal
year.
The members of the Audit Committee are Messrs. Busey, Bernard and
Rockwell. Generally, the Audit Committee nominates the independent auditors,
reviews with the independent auditors the scope and results of the audit
engagement and any non-audit services to be performed by the independent
auditors. The Audit Committee also examines the scope and results of the
Company's procedures, the adequacy of its system of internal accounting and
financial controls, and evaluates the independence of the independent auditors
and their fees for services.
The members of the Executive Compensation/Stock Option Committee are
Messrs. Power, Sanders and Busey. The Executive Compensation/Stock Option
Committee is responsible for reviewing the performance of, and recommending
salaries and other compensation arrangements for, officers of the Company, as
well as reviewing bonus, pension and other compensation plans prepared by
management for consideration by the Board, and performing such functions as may
be delegated to it under the provisions of any bonus, stock option, pension or
other compensation plan adopted by the Company.
The Company does not have a standing nominating committee.
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EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table provides a summary of compensation paid or accrued
by the Company and its subsidiaries during fiscal years 1998, 1997 and 1996 to
or on behalf of the Company's Named Executive Officers. The Compensation
indicates that paid by the Company following the Merger and amounts paid by DEI
and STR prior to the Merger.
- ----------------------------------------------------------------------------------------------------------------
Annual compensation Long Term Compensation
Name and -----------------------------------------------------------------------------------------
Principal Awards Payouts
Position -----------------------------------------------------
Restricted Securities LTIP All Other
Other Annual stock Underlying Payouts Compensation
Year Salary Bonus(1) Compensation(2) award(s) Options/SARs (4)
($) (#)
- ----------------------------------------------------------------------------------------------------------------
S. Kent 1998(3) --- --- --- --- --- --- ---
Rockwell 1997 --- --- --- --- --- --- ---
Vice 1996 --- --- --- --- --- --- ---
Chairman,
CEO
- ----------------------------------------------------------------------------------------------------------------
Robert R. 1998 $105,393 --- $15,230 --- --- --- ---
Bower 1997 $107,420 --- $7,516 --- 15,280 --- ---
Vice 1996 $105,394 $18,000 $7,080 --- --- --- ---
President,
Finance --
CFO
- ----------------------------------------------------------------------------------------------------------------
Thomas R. 1998 $150,848 --- $25,717 --- --- --- ---
Ory 1997 $148,000 --- $26,315 --- 20,000 --- ---
President, 1996 $148,000 --- $26,951 --- --- --- ---
Imaging
Group
- ----------------------------------------------------------------------------------------------------------------
S. R. Perrino 1998 $175,884 --- $24,951 --- --- --- ---
Chairman 1997 $179,267 --- $10,357 --- --- --- ---
of the 1996 $175,885 $12,000 $10,046 --- --- --- ---
Board
- ----------------------------------------------------------------------------------------------------------------
Donald 1998 $112,631 --- $17,011 --- --- --- $78,291
Reiser (4) 1997 $134,194 --- $11,185 --- --- --- ---
1996 $127,754 $50,000 $9,794 --- --- --- ---
- ----------------------------------------------------------------------------------------------------------------
Charles 1998 $132,202 --- $22,207 --- --- --- ---
Stanich (5) 1997 $130,000 --- $24,941 --- 20,000 --- ---
1996 $130,000 --- $25,694 --- --- --- ---
- ----------------------------------------------------------------------------------------------------------------
(1) Paid pursuant to Incentive Compensation Plan.
(2) Detail of amounts reported in the "Other Annual Compensation" column is
provided in the table below.
(3) Mr. Rockwell became an unpaid employee of the Company effective July 1,
1998. He began receiving compensation at an annual rate of $100,000
effective October 1, 1998.
(4) Mr. Reiser served as the Company's Senior Vice President of Research and
Development until his retirement on July 17, 1998. He continues to
receive bi-weekly payments in an amount equal to his bi-weekly salary on
the date of his retirement, plus continuation of fringe benefits, in
accordance with an agreement between him and the Company, which payments
shall continue through January 15, 1999. The amount disclosed includes
payments received in accordance with this agreement through the end of
fiscal year 1998, as well as payments accrued therefore and payable in
fiscal year 1999.
(5) Mr. Stanich served as the Company's Chief Operating Officer until June
9, 1998; he currently serves as the Company's Vice President of the
Imaging Group.
The following table provides information regarding Other Annual
Compensation not properly categorized as salary or bonus:
401(K)/
PENSION
OFFICER'S FISCAL PLAN EXCESS LIFE EXCESS AUTO/
NAME YEAR CONTRIBUTION INSURANCE VACATION FUEL
- ----------------------------------------------------------------------------------------------------------------
1998 $4,043 $786 $8,565 $1,836
Robert R. Bower 1997 $4,932 $786 $0 $1,798
1996 $4,713 $482 $0 $1,886
- ----------------------------------------------------------------------------------------------------------------
1998 $17,873 $553 $0 $0
Thomas R. Ory (1) 1997 $18,385 $450 $0 $0
1996 $18,725 $450 $0 $0
- ----------------------------------------------------------------------------------------------------------------
1998 $6,652 $1,755 $14,368 $2,176
S. R. Perrino 1997 $6,457 $1,755 $0 $2,144
1996 $6,318 $1,755 $0 $1,973
- ----------------------------------------------------------------------------------------------------------------
Donald Reiser 1998 $3,986 $2,527 $8,997 $1,501
1997 $6,075 $3,023 $0 $2,087
1996 $5,719 $1,966 $0 $2,109
- ----------------------------------------------------------------------------------------------------------------
Charles G. 1998 $14,618 $340 $0 $0
Stanich(1) 1997 $16,028 $288 $0 $0
1996 $16,056 $288 $0 $0
- ----------------------------------------------------------------------------------------------------------------
(1) Other Annual Compensation for Thomas R. Ory and Charles G. Stanich also
includes:
OFFICER'S FISCAL DIRECTOR'S MEDICAL IMPUTED
NAME YEAR FEE REIMBURSEMENTS INTEREST
- ----------------------------------------------------------------------------------------------------------------
1998 $5,100 $991 $0
Thomas R. Ory 1997 $4,800 $2,630 $50
1996 $5,100 $2,501 $175
- ----------------------------------------------------------------------------------------------------------------
1998 $5,100 $2,149 $0
Charles G. Stanich 1997 $4,500 $4,125 $0
1996 $5,100 $4,125 $125
- ----------------------------------------------------------------------------------------------------------------
OPTIONS
The following table provides information concerning stock option
exercises in fiscal year 1998 by the Named Executive Officers and the value of
their unexercised options as of September 30, 1998. There were no options or SAR
grants to the Named Executive Officers in 1998.
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AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR-END OPTION/SAR VALUES
NUMBER OF VALUE OF
UNEXERCISED OPTIONS UNEXERCISED
SHARES AT FISCAL YEAR END IN-THE-MONEY OPTIONS
ACQUIRED (#) EXERCISABLE AT FISCAL YEAR END ($)
ON VALUE (E)/ EXERCISABLE (E)/
EXERCISE REALIZED UNEXERCISABLE UNEXERCISABLE
NAME (#) ($) (U) (U)
- ----------------------------------------------------------------------------------------------------------------
S. Kent Rockwell 25,800 $45,666 ----- -----
- ----------------------------------------------------------------------------------------------------------------
6,192 (E)/ $2,087(E)/
Robert R. Bower 0 0 9,288 (U) $4,365(U)
- ----------------------------------------------------------------------------------------------------------------
20,000 (E)/ $31,800(E)/
Thomas R. Ory 15,000 $19,688 0 (U) $0 (U)
- ----------------------------------------------------------------------------------------------------------------
S. R. Perrino 0 0 ----- -----
- ----------------------------------------------------------------------------------------------------------------
Donald Reiser 0 0 ----- -----
- ----------------------------------------------------------------------------------------------------------------
$20,000(E)/ $31,800(E)/
Charles Stanich 10,000 $13,125 $0 (U) $0 (U)
- ----------------------------------------------------------------------------------------------------------------
BUSINESS EXPERIENCE OF EXECUTIVE OFFICERS
The following sets forth the business experience of executive officers
that are not also directors of the Company.
Joseph C. Hassab, Ph.D., age 57, joined the Company in August 1998 as
President and Chief Operating Officer. Dr. Hassab has over 25 years experience
in acquisition and development of large military systems. He was previously
employed by Lockheed-Martin Corporation and predecessor companies, General
Electric Corporation and Radio Corporation of America (RCA) from 1985 to 1998.
Dr. Hassab was employed by the U.S. Navy at its Naval Undersea Warfare Center
from 1971 to 1985.
Robert R. Bower, age 61, serves as the Company's Senior Vice President-
Finance and Chief Financial Officer. He served in the same capacity for STR
since 1985. Prior to joining STR, Mr. Bower served as Director of Financial
Planning and Analysis at Fairchild Industries, Inc. from 1983 to 1985, and held
several financial management positions at Rockwell International Corporation
from 1962 to 1982. Mr. Bower was employed by Ernst & Ernst CPA's from 1958 to
1962.
EMPLOYMENT AGREEMENTS
The Company's employment agreement with Joseph C. Hassab requires the
Company to pay him upon termination severance compensation of salary and fringe
benefits for two years.
Thomas R. Ory and Charles Stanich each is a party to an Employment
Agreement that requires the Company to pay him an amount equal to his present
salary and benefits until June
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8, 2000, if termination of his employment would meet one of several criteria.
There are further provisions for severance pay under certain conditions. In
general, such amounts would be payable upon resignation following a reduction
in such person's salary or other compensation, any diminution of the authority
or duties or a significant change in the nature and scope of duties or any
change in the status or title (other than a bona fide promotion). The cash
payment required under the agreement may be paid in a lump sum or in monthly
installments. If Mr. Ory or Mr. Stanich is employed subsequent to June 8, 2000,
he is entitled to six months' severance plus benefits if terminated by the
Company.
COMPENSATION OF DIRECTORS
Effective June 9, 1998, outside directors receive $1,200 per quarter
with an additional payment of $300 for each Board or Committee meeting attended,
and are reimbursed for travel expenses incurred in connection with their
attendance at Board and Committee meetings. Employee directors do not receive
directors' fees.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Company leases its principal facility in Newington, Virginia, under
two triple-net leases with two separate partnerships in which executive officers
of the Company, along with other stockholders of the Company, participate. The
Company leases approximately 56,000 square feet from Research Development
Properties, a partnership in which S.R. Perrino and Robert Bower, the company's
chairman and chief financial officer, respectively, each hold a 1/14th interest
along with 12 other persons who similarly each hold a 1/14th interest. Of these
12 other partners, six are also stockholders in the Company. The second lease is
with Terminal Real Estate, a partnership in which S.R. Perrino is a 50% partner.
The remaining 50% interest in this partnership is also held by a stockholder in
the Company.
During the fiscal year ending September 30, 1998, the Company paid
Research Development Properties and Terminal Real Estate approximately $348,000
and $71,000, respectively, in rent. The rents paid under both leases are at the
same rate per square foot and, in the Company's opinion, this rental rate does
not exceed the fair market rental value for the Company's facility.
In January and October, 1997, S.T. Research Corporation ("STR"), a
predecessor of the Company became a subcontractor to AES International
Corporation ("AES"). The first subcontract arose under a contract AES maintained
with the U.S. Navy for which STR was to provide certain professional services.
The second subcontract arose under a contract AES maintained with American
Electrical Power, a utility company, for which STR was to provide data
processing services for a digital mapping survey which AES was to perform. At
the time STR entered into these subcontracts, STR believed that the daughter and
son-in-law of the Company's chairman, S.R. Perrino, were the principal
stockholders of AES. Subsequent events, however, have placed the ownership of
AES in dispute.
The amount due under the first contract was $17,000 for which payment
has not been made. The amount due under the second contract was approximately
$138,000 which includes not only the amounts due for services but the value of
certain equipment which was sold and
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otherwise provided to AES. When payment from AES was not forthcoming, STR
attempted to obtain the amounts due through litigation against AES. After
commencing the litigation, STR determined that any collection efforts, assuming
it prevailed in the litigation, would prove futile. In addition, AES, through
the individual who contested the ownership of Mr. Perrino's family members in
AES, also caused AES to file a counterclaim against STR which STR deemed
without merit but which would require STR to devote additional resources to the
litigation. Against this backdrop, STR determined to dismiss the litigation
against AES, in consideration of which AES similarly dismissed its counterclaim
against STR. The dismissal of the litigation was without prejudice thereby
enabling the Company to reinstitute the litigation if the prospects of
collection improve.
SECTION 16(a) BENEFICIAL OWNERSHIP
REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 (the "Exchange
Act") requires the Company's officers and directors, and persons who own more
than 10% 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 ("SEC"). Officers and directors and greater than 10% shareholders are
required by SEC regulation 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 other reports were required for fiscal year 1998, the Company notes that all
reports were timely filed, except that Dr. Hassab and Dr. Bernard each
inadvertently failed to timely file a Form 3, and Mr. Power inadvertently failed
to timely file a Form 4 reporting his acquisition of shares of the Company's
stock as a result of the Merger, all of which Forms have been subsequently
filed. Additionally, Mr. Perrino filed a Form 5 to amend an earlier filing.
PROPOSAL 2
RATIFICATION OF THE APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors has, upon recommendation of the Audit Committee,
selected PricewaterhouseCoopers LLP as independent auditors of the Company for
the fiscal year ending September 30, 1999, and has further directed that the
selection of such auditors be submitted for ratification by the stockholders at
the Annual Meeting. On June 9, 1998, the Company dismissed Deloitte & Touche LLP
as its independent accountants. Except for a going concern explanatory paragraph
set forth in the September 23, 1997 reports of Deloitte & Touche LLP, the
Company's financial statements for the past two fiscal years did not contain an
adverse opinion or a disclaimer of opinion and were not qualified or modified as
to uncertainty, audit scope, or accounting principals. The decision to change
independent accountants was approved by the Board of Directors as a whole. In
connection with the audits of the Company's financial statements for each of the
two fiscal years ended July 31, 1997 and July 31, 1996, and in the subsequent
six-month interim period ended April 30, 1998, there were no disagreements with
Deloitte & Touche LLP on any matters of accounting principles or practices,
financial statement disclosure, or auditing scope and procedures which, if not
resolved to the satisfaction of Deloitte & Touche LLP, would have caused
Deloitte & Touche LLP to make reference to the matter in their report on
financial statements for such periods.
During the Company's two most recent fiscal years and through June 9,
1998, there has been no reportable event as defined in Regulation S-B Item
304(a)(1)(v). Deloitte & Touche LLP furnished the Company with a letter
addressed to the Commission stating whether or not Deloitte & Touche LLP agrees
with the above statements. A copy of such letter, dated June 11,
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1998, was filed as Exhibit 16.1 to the Company's report on 8-K filed with the
Securities and Exchange Commission on June 15, 1998.
The Company engaged PricewaterhouseCoopers LLP (formerly Coopers &
Lybrand, L.L.P) as the Company's new independent accountants as of June 9, 1998.
PricewaterhouseCoopers LLP had served as the independent accountants of STR for
fiscal year ended September 30, 1997. The Company has been advised by
PricewaterhouseCoopers LLP that neither the firm nor any of its associates had
any relationship with the Company other than the usual relationship that exists
between independent certified public accountants and their clients.
PricewaterhouseCoopers LLP has served as the Company's independent auditors
since 1998. Representatives of PricewaterhouseCoopers LLP will attend the
meeting to make any statement they consider appropriate and to respond to
appropriate questions raised at the meeting.
THE BOARD RECOMMENDS THAT THE COMPANY'S STOCKHOLDERS VOTE "FOR" APPROVAL OF THE
PROPOSAL TO RATIFY THE APPOINTMENT OF INDEPENDENT AUDITORS.
GENERAL
At the date of this Proxy Statement, management is not aware of any
matters to be presented for action at the meeting other than those described
above. However, if any other matters should come before the Annual Meeting, it
is the intention of the persons named in the accompanying proxy to vote such
proxy in accordance with their judgment on such matters.
STOCKHOLDER PROPOSAL FOR YEAR 2000 ANNUAL MEETING
Proposals by stockholders which are intended to be presented at the
Company's 2000 Annual Meeting of Stockholders must be received by the Company no
later than September 5, 1999.
By order of the Board of Directors
/s/ LLOYD A. SEMPLE
------------------------------------
Lloyd A. Semple
Secretary
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PROXY PROXY
1999 ANNUAL STOCKHOLDERS' MEETING
SENSYS TECHNOLOGIES INC.
The 1999 Annual Meeting of Stockholders of Sensys Technologies Inc. will
be held at the Radisson Plaza Hotel at Mark Center, Alexandria, Virginia on
Wednesday, February 10, 1999, at 10:00 a.m., local time. The undersigned hereby
constitutes and appoints Robert R. Bower and Joseph C. Hassab, and each of them,
attorneys and proxies with power of substitution to vote all of the shares of
Common Stock that the undersigned is (are) entitled to vote at the 1999 Annual
Meeting and at any adjournments thereof, upon the following matters which are
being proposed by the Company:
PROPOSAL 1
Election of Directors
For the election as directors of all nominees listed below (except as marked to
the contrary):( )
Charles W. Bernard; James B. Busey; Thomas R. Ory;
S.R. Perrino; Philip H. Power; S. Kent Rockwell;
John D. Sanders
Withhold authority for the following:
( ) Charles W. Bernard; ( ) James B. Busey; ( ) Thomas R. Ory;
( ) S. R. Perrino; ( ) Philip H. Power; ( ) S. Kent Rockwell;
( ) John D. Sanders
Withhold authority for all nominees: ( )
PROPOSAL 2
Ratification of selection of independent auditors
To ratify the selection of PricewaterhouseCoopers LLP as the Company's
independent accountants for the 1999 Fiscal Year.
FOR ( ) AGAINST ( ) ABSTAIN( )
(Continued and to be signed on other side)
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THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED; IF NO
DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR ALL NOMINEES. In their
direction, the proxies are also authorized to vote upon such other matters as
may properly come before the meeting, including the election of any person to
the Board of Directors where a nominee named in the Proxy Statement dated
__________________is unable to serve or, for good cause, will not serve.
I (we) acknowledge receipt of the Notice of Annual Meeting of
Stockholders and the Proxy Statement dated _________________, and the 1998
Annual Report to Stockholders and ratify all that the proxies, or either of
them, or their substitutes may lawfully do or cause to be done by virtue hereof
and revoke all former proxies.
Signature: Date:
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Signature: Date:
------------------------------- ---------------------
NOTE: Please sign exactly as name(s) appear(s) on stock records. When
signing as attorney, administrator, trustee, guardian or corporate officer,
please so indicate.
Comments/Address Changes:
I/We plan to attend the Annual Meeting
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THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF SENSYS TECHNOLOGIES INC.