Unassociated Document

-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, KHPfTzLju9zBHiQOVsHD+PStq36Jd0rAG3Ovh/YHjZD4FMlsh11vnHYv3R7ZzTJx vjuOsjIzbRbP+5CePUaDug== 0001144204-09-049993.txt : 20090925 0001144204-09-049993.hdr.sgml : 20090925 20090925150254 ACCESSION NUMBER: 0001144204-09-049993 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 2 FILED AS OF DATE: 20090925 DATE AS OF CHANGE: 20090925 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: HI SHEAR TECHNOLOGY CORP CENTRAL INDEX KEY: 0000918027 STANDARD INDUSTRIAL CLASSIFICATION: GUIDED MISSILES & SPACE VEHICLES & PARTS [3760] IRS NUMBER: 222535743 STATE OF INCORPORATION: DE FISCAL YEAR END: 0531 FILING VALUES: FORM TYPE: SC 13D SEC ACT: 1934 Act SEC FILE NUMBER: 005-46380 FILM NUMBER: 091087392 BUSINESS ADDRESS: STREET 1: 24225 GARNIER ST CITY: TORRANCE STATE: CA ZIP: 90505 BUSINESS PHONE: 3107842100 MAIL ADDRESS: STREET 1: 24225 GARNIER ST CITY: TORRANCE STATE: CA ZIP: 90505 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: CHEMRING GROUP PLC CENTRAL INDEX KEY: 0001472977 IRS NUMBER: 000000000 STATE OF INCORPORATION: TX FISCAL YEAR END: 0831 FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: CHEMRING HOUSE 1500 PARKWAY STREET 2: WHITELEY FAREHAM CITY: HAMPSHIRE ENGLAND STATE: X0 ZIP: PO157AF BUSINESS PHONE: 44 1489 881 880 MAIL ADDRESS: STREET 1: CHEMRING HOUSE 1500 PARKWAY STREET 2: WHITELEY FAREHAM CITY: HAMPSHIRE ENGLAND STATE: X0 ZIP: PO157AF SC 13D 1 v161203_sc13d.htm Unassociated Document

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 13D

Under the Securities Exchange Act of 1934

(Amendment No. )*

HI SHEAR TECHNOLOGY CORPORATION

(Name of Issuer)

Common Stock (par value, $0.001 per share)

(Title of Class of Securities)

42839Y104

(CUSIP Number)

Sarah Ellard

Company Secretary

Chemring Group PLC

Chemring House, 1500 Parkway

Whiteley, Fareham, Hampshire, PO15 7AF, ENGLAND

Telephone: +44 1489 881 880

With copies to:

Seyfarth Shaw LLP

131 S. Dearborn, Suite 2400

Chicago, IL 60603

Attn: Robert F. Weber

Michael D. Thompson

(312) 460-5000

(Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications)

September 16, 2009

(Date of Event which Requires Filing of this Statement)

If the filing person has previously filed a statement on Schedule 13G to report the acquisition which is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(e), Rule 13d-1(f) or Rule 13d-1(g), check the following box: 

NOTE: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See Rule 13d-7 for other parties to whom copies are to be sent.

The remainder of this cover page shall be filled out for a reporting person ’s initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.

The information required on the remainder of this cover page shall not be deemed to be “filed” for purpose of Section 18 of the Securities Exchange Act of 1934 (“Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).

CUSIP No. 42839Y104
1	NAME OF REPORTING PERSONS S.S. or I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS (ENTITIES ONLY) Chemring Group PLC 98-0527993
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS) (a) ¨ (b) ¨
3	SEC USE ONLY
4	SOURCE OF FUNDS (SEE INSTRUCTIONS) OO (Not Applicable)
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e)	¨
6	CITIZENSHIP OR PLACE OF ORGANIZATION England and Wales

NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH	7	SOLE VOTING POWER 0
	8	SHARED VOTING POWER 2,217,135 (See Note 1)
	9	SOLE DISPOSITIVE POWER 0
	10	SHARED DISPOSITIVE POWER 0

11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 2,217,135 (See Note 1)
12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS)	¨
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 32.4% (See Note 1)
14	TYPE OF REPORTING PERSON (SEE INSTRUCTIONS) CO

Note 1. As described herein, the reporting person has sole voting power over these shares solely with respect to the specific matters identified in the Stockholder Agreement (as defined below) and the person who has entered into the Stockholder Agreement with the reporting person retains sole voting power with respect to all other matters. Beneficial ownership of the common stock of Hi-Shear Technology Corporation referred to herein is being reported hereunder solely because Chemring Group PLC may be deemed to beneficially own such shares as a result of the Stockholder Agreement and the limited proxy granted therein described in Item 5 hereof. Neither the filing of this statement on Schedule 13D nor any of its contents shall be deemed to constitute an admission by Chemring Group PLC that it is the beneficial owner of any of the common stock of Hi-Shear Technology Corporation referred to herein for purposes of Section 13(d) of the Securities Exchange Act of 1934, as amended, or for any other purpose, and such beneficial ownership is expressly disclaimed (subject to the Stockholder Agreement and the limited proxy granted therein).

CUSIP No. 42839Y104

ITEM 1.

SECURITY AND ISSUER

This statement on Schedule 13D (this “Statement”) relates to the common stock, par value $0.001 per share (the “Common Stock”), of Hi-Shear Technology Corporation, a Delaware corporation (the “Company”). The principal executive offices of the Company are located at 24225 Garnier Street, Torrance, CA 90505, United States.

ITEM 2.

IDENTITY AND BACKGROUND

The name of the person filing this Statement is Chemring Group PLC, a company organized under the laws of England and Wales (the “Reporting Person”). The Reporting Person is a public limited company organized under the laws of England and Wales, with a longstanding presence in the United States defense sector. The Reporting Person currently owns a number of U.S. operating subsidiaries, all of which are engaged primarily in defense contracting.

The address of the principal business and the principal office of the Reporting Person is Chemring House, 1500 Parkway, Whiteley, Fareham, Hampshire, England. The name, business address, present principal occupation or employment, and the name, principal business and address of any corporation or other organization in which such employment is conducted, and citizenship of each director and executive officer of the Reporting Person is set forth on Schedule A to this Statement.

During the last five years, neither the Reporting Person nor, to the Reporting Person’s knowledge, any person named on Schedule A has been (i) convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) or (ii) a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree, or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws.

ITEM 3.

SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION

In connection with an Agreement and Plan of Merger among the Reporting Person, Parkway Merger Sub, Inc. (“Merger Sub”) and the Company dated as of September 16, 2009 (the “Merger Agreement”), the Reporting Person and Merger Sub entered into a Stockholder Agreement, dated as of September 16, 2009 (the “Stockholder Agreement”), with George W. Trahan (the “Stockholder”), with respect to the transactions contemplated by the Merger Agreement. The shares of Common Stock to which this Statement relates have not been purchased by the Reporting Person, and thus no funds were expended in connection with the Stockholder Agreement. For a description of the Stockholder Agreement, see Item 5 below, which description is incorporated herein by reference in response to this Item 3.

ITEM 4.

PURPOSE OF THE TRANSACTION

On September 16, 2009, the Reporting Person and Merger Sub entered into the Merger Agreement with the Company. Upon consummation of the transactions contemplated by the Merger Agreement, Merger Sub will be merged with and into the Company (the “Merger”) with the Company surviving the Merger (the “Surviving Corporation”) as a direct or indirect, wholly-owned subsidiary of the Reporting Person. Subject to certain exceptions described in the Merger Agreement, each outstanding share of Common Stock outstanding immediately prior to the effective time of the Merger will be converted into the right to receive $19.18 in cash, without interest. Each outstanding Company stock option (whether vested or unvested) will be converted into the right to receive a cash payment equal to the excess, if any, of $19.18 over the exercise price of such option, without interest. Each outstanding Company restricted stock unit (whether vested or unvested) will be converted into the right to receive a cash payment equal to $19.18, without interest. No consideration will be payable in respect of any Company stock options with an exercise price per share equal to or in excess of $19.18 as of immediately prior to the effective time of the Merger, and all such options will be cancelled automatically at the effective time of the Merger.

The Merger Agreement has been approved by the respective boards of directors of the Reporting Person, Merger Sub and the Company. Consummation of the Merger is subject to customary conditions, including the approval of the Merger by stockholders representing a majority of the shares of Common Stock outstanding and entitled to vote and the receipt of necessary regulatory consents and approvals. Upon consummation of the Merger, the officers and directors set forth in Schedules 2.6 and 2.7 of the Merger Agreement will become the officers and directors of the Surviving Corporation, until their respective successors are duly elected or appointed and qualified.

Upon consummation of the Merger, the Restated Certificate of Incorporation of the Company will be amended to read in its entirety as the Certificate of Incorporation of Merger Sub as in effect immediately prior to the consummation of the Merger except that the Certificate of Incorporation shall be so amended such that the name of the corporation shall be “Hi-Shear Technology Corporation”, and as so amended will be the Certificate of Incorporation of the Surviving Corporation until thereafter amended in accordance with its terms and applicable law. Upon consummation of the Merger, the Bylaws of the Company will be amended to read in their entirety as the Bylaws of Merger Sub as in effect immediately prior to the consummation of the Merger, except that the Bylaws shall be so amended such that the name of the corporation shall be “Hi-Shear Technology Corporation”. If the Merger is consummated, the Common Stock will cease to be listed on the NYSE Amex and will become eligible for termination of registration pursuant to Section 12 of the Securities Exchange Act of 1934, as amended.

This summary of the Merger Agreement does not purport to be complete and is qualified in its entirety by reference to the copy of the Merger Agreement which is attached hereto as Exhibit 99.1 and incorporated herein by reference.

ITEM 5.

INTEREST IN SECURITIES OF THE ISSUER

In connection with the Merger, George W. Trahan (the President, Chief Executive Officer and Chairman of the Board of Directors of the Company), the Reporting Person and Merger Sub entered into a Stockholder Agreement. Pursuant to the Stockholder Agreement, during the period beginning on September 16, 2009 and ending on the earlier of (i) the effective time of the Merger or (ii) the termination of the Merger Agreement, the Stockholder has, among other things, granted a limited, irrevocable proxy to the Reporting Person to vote certain shares of Common Stock owned by the Stockholder in favor of approval of the Merger.

As a result of the execution of the Stockholder Agreement and the limited proxy granted therein, the Reporting Person may be deemed to beneficially own, and have shared voting power with respect to, the 2,217,135 shares of Common Stock beneficially owned by the Stockholder that are subject to the Stockholder Agreement (collectively, the “ Subject Shares ”), based on the Stockholder’s representations in the Stockholder Agreement. Neither the filing of this Statement nor any of its contents will be deemed to constitute an admission by the Reporting Person that it is the beneficial owner of any of the Subject Shares referred to herein for any purpose, and such beneficial ownership is expressly disclaimed (subject to the Stockholder Agreement and the limited proxy granted therein).

The Subject Shares constitute approximately 32.4% of the issued and outstanding Common Stock, based on the Company’s representation in the Merger Agreement that there were 6,852,416 shares of Common Stock issued and outstanding as of September 16, 2009. Pursuant to the Stockholder Agreement, if the Stockholder becomes the beneficial owner of any additional shares of Common Stock or other securities of the Company that entitle the Stockholder to vote on the matters contemplated by the Stockholder Agreement (including pursuant to the exercise of any Company stock options), then the terms of the Stockholder Agreement will apply to certain additional shares of capital stock of the Company then held by the Stockholder. Accordingly, any such acquisition of shares of capital stock of the Company by the Stockholder may result in the Reporting Person being deemed to acquire beneficial ownership of additional securities of the Company.

The Stockholder has granted a limited irrevocable proxy to the Reporting Person for the Reporting Person to vote the Subject Shares (i) in favor of the merger and the other transactions contemplated by the Merger Agreement, and/or (ii) against any action or agreement which would in any material respect impede, interfere with or prevent the merger, including, but not limited to, any other extraordinary corporate transaction, including, a merger, acquisition, sale, consolidation, reorganization or liquidation involving the Company and a third party, or any other proposal of a third party to acquire the Company or all or substantially all of the assets thereof. If during the term of the Stockholder Agreement for any reason the proxy granted in the Stockholder Agreement is not irrevocable, the Stockholder agrees that the Stockholder will vote his shares of Common Stock in accordance with the terms of the limited irrevocable proxy, as instructed by the Reporting Person in writing. Except as stated in this paragraph and the immediately preceding paragraph, the Reporting Person does not have the power to vote or to direct the voting of the Subject Shares, nor does it have the sole or shared power to dispose or to direct the disposition of the Subject Shares.

The Stockholder has agreed that, from September 16, 2009 and until the earlier of the effective time of the merger or the termination of the Merger Agreement, except as otherwise provided in the Stockholder Agreement or in the Merger Agreement, the Stockholder shall not: (i) transfer, assign, sell, gift-over, hedge, pledge or otherwise dispose (whether by sale, liquidation, dissolution, dividend or distribution) of, enter into any derivative arrangement with respect to, create or suffer to exist any encumbrances (other than certain permitted encumbrances) on or consent to any of the foregoing (a “Transfer”), any or all of the Subject Shares or any right or interest therein; (ii) enter into any contract, option or other agreement with respect to any Transfer; (iii) grant any proxy, power-of-attorney or other authorization or consent with respect to any of the Subject Shares with respect to any matter that is, or that is reasonably likely to be exercised in a manner, inconsistent with the transactions contemplated by the Merger Agreement or the provisions thereof; (iv) deposit any of the Subject Shares into a voting trust, or enter into a voting agreement or arrangement with respect to any of the Subject Shares; or (v) knowingly, directly or indirectly, take or cause the taking of any other action that would restrict, limit or interfere with the performance of the Stockholder’s obligations under the Stockholder Agreement or the transactions contemplated by the Stockholder Agreement, excluding any bankruptcy filing and excluding certain transfers relating to estate planning purposes.

This summary of the Stockholder Agreement does not purport to be complete and is qualified in its entirety by reference to the copy of the Stockholder Agreement which is attached hereto as Exhibit 99.2 and incorporated herein by reference.

Except for the Stockholder Agreement, the Merger Agreement and the transactions contemplated by those agreements, neither the Reporting Person, nor to the Reporting Person’s knowledge, any person named on Schedule A has effected any transaction in the common stock of the Company during the past 60 days. To the Reporting Person’s knowledge, no person has the right to receive or power to direct the receipt of dividends from, or the proceeds from the sale of, the Subject Shares, other than the Stockholder.

ITEM 6.

CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE ISSUER

Other than as described in Items 4 and 5 and the agreements incorporated herein by reference and set forth as exhibits hereto, to the Reporting Person’s knowledge, there are no contracts, arrangements, understandings or relationships (legal or otherwise) among the persons named in Item 2 and between such persons and any person with respect to any securities of the Company, including but not limited to transfer or voting of any of the securities, finder’s fees, joint ventures, loan or option arrangements, puts or calls, guarantees of profits, division of profits or losses, or the giving or withholding of proxies.

ITEM 7.

MATERIALS TO BE FILED AS EXHIBITS

The following documents are filed as exhibits:


Exhibit No.		Description
99.1		Agreement and Plan of Merger, dated as of September 16, 2009, by and among Hi-Shear Technology Corporation, Chemring Group PLC, and Parkway Merger Sub, Inc. (incorporated by reference to Exhibit 2.1 to the Current Report on Form 8-K of Hi-Shear Technology Corporation filed on September 16, 2009).

99.2		Stockholder Agreement, dated as of September 16, 2009, by and among Chemring Group PLC, Parkway Merger Sub, Inc. and George W. Trahan.

After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

Date: September 25, 2009


CHEMRING GROUP PLC.

By:		/s/ Sarah Ellard
Name:		Sarah Ellard
Title:		Company Secretary

SCHEDULE A

DIRECTORS AND EXECUTIVE OFFICERS OF THE REPORTING PERSON

The name, present principal occupation or employment, and the name, principal business and address of any corporation or other organization in which such employment is conducted, of each director and executive officer of Chemring Group PLC is set forth below. The business address for each executive officer (other than Daniel McKenrick) is Chemring House, 1500 Parkway, Whiteley, Fareham, Hampshire, PO15 7AF, ENGLAND. The business address for Mr. McKenrick is 90 N. Commerce Drive, Chester Township, Pennsylvania, USA. Each director and executive officer, other than Daniel McKenrick, is a citizen of the United Kingdom. Mr. McKenrick is a citizen of the United States.

Board of Directors of Chemring Group PLC


Name		Present Principal Occupation or Employment (including Name and Address of Employer)
Kenneth C. Scobie		Non-Executive Chairman Chemring Group PLC Chemring House, 1500 Parkway Whiteley, Fareham, Hampshire, PO15 7AF, ENGLAND

Dr. David J. Price		Chief Executive Chemring Group PLC Chemring House, 1500 Parkway Whiteley, Fareham, Hampshire, PO15 7AF, ENGLAND

Paul Rayner		Finance Director Chemring Group PLC Chemring House, 1500 Parkway Whiteley, Fareham, Hampshire, PO15 7AF, ENGLAND

David R. Evans		Non-Executive Director Chemring Group PLC Chemring House, 1500 Parkway Whiteley, Fareham, Hampshire, PO15 7AF, ENGLAND

The Rt. Hon. Lord Freeman		Non-Executive Director Chemring Group PLC Chemring House, 1500 Parkway Whiteley, Fareham, Hampshire, PO15 7AF, ENGLAND

Ian F.R. Much		Non-Executive Director and Senior Independent Director Chemring Group PLC Chemring House, 1500 Parkway Whiteley, Fareham, Hampshire, PO15 7AF, ENGLAND

Air Marshall Sir Peter Norriss CB AFC MA FRAeS		Non-Executive Director Chemring Group PLC Chemring House, 1500 Parkway Whiteley, Fareham, Hampshire, PO15 7AF, ENGLAND

Executive Officers of Chemring Group PLC


Name		Position
Dr. David J. Price		Chief Executive
Paul Rayner		Finance Director
Daniel McKenrick		President Chemring North America
Rik Armitage		Business Development Director
Mike Helme		Managing Director Europe Division
Sarah Ellard		Group Company Secretary
Richard Dellar		Managing Director International Division
Terry Bridgewater		Director of Safety

EXHIBIT INDEX


Exhibit No.		Description
99.1		Agreement and Plan of Merger, dated as of September 16, 2009, by and among Hi-Shear Technology Corporation, Chemring Group PLC, and Parkway Merger Sub, Inc. (incorporated by reference to Exhibit 2.1 to the Current Report on Form 8-K of Hi-Shear Technology Corporation filed on September 16, 2009).

99.2		Stockholder Agreement, dated as of September 16, 2009, by and among Chemring Group PLC, Parkway Merger Sub, Inc. and George W. Trahan.

EX-99.2 2 v161203_ex99-2.htm Unassociated Document

Exhibit 99.2

STOCKHOLDER AGREEMENT

STOCKHOLDER AGREEMENT (this “Agreement”), dated as of September 16, 2009, is by and among Chemring Group PLC, a corporation organized under the laws of England and Wales(“Parent”), Parkway Merger Sub, Inc., a Delaware corporation and a wholly-owned subsidiary of Parent (“Merger Sub”) and George W. Trahan (“Stockholder”), solely in his capacity as a stockholder of the Company (as defined below).

WHEREAS, Stockholder is, as of the date hereof, the record and beneficial owner (as defined in Rule 13d-3 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), which meaning will apply for all purposes of this Agreement) of the number of shares of Common Stock, par value $0.001 (the “Company Common Stock”) of Hi-Shear Technology Corporation, a Delaware corporation (the “Company”), set forth opposite the name of Stockholder on Schedule I hereto;

WHEREAS, Parent, Merger Sub, and the Company have entered into an Agreement and Plan of Merger, dated as of the date hereof, in the form attached hereto as Exhibit A and as may be amended from time to time (the “Merger Agreement”), which provides, among other things, for the merger of Merger Sub with and into the Company (the “Merger”) upon the terms and subject to the conditions set forth in the Merger Agreement (capitalized terms used herein without definition shall have the respective meanings specified in the Merger Agreement); and

WHEREAS, as a condition to the willingness of Parent and Merger Sub to enter into the Merger Agreement and as an inducement and in consideration therefor, Stockholder has agreed to enter into this Agreement.

NOW, THEREFORE, in consideration of the foregoing and the mutual covenants and agreements set forth herein and in the Merger Agreement, and intending to be legally bound hereby, the parties hereto agree as follows:

SECTION 1. Representations and Warranties of Stockholder. Stockholder hereby represents and warrants to Parent and Merger Sub as follows:

(a) Stockholder (i) is the sole record and beneficial owner of the shares of Company Common Stock (together with any shares of Company Common Stock which Stockholder may acquire at any time in the future during the term of this Agreement, the “Shares”) set forth opposite Stockholder’s name on Schedule I to this Agreement and (ii) except as set forth in Schedule I to this Agreement, neither holds nor has any beneficial ownership interest in any other shares of Company Common Stock or any performance based stock unit, restricted stock, deferred stock unit, option (including any granted pursuant to a Company Equity Plan), or warrant to acquire shares of Company Common Stock or other right or security convertible into or exercisable or exchangeable for shares of Company Common Stock.

(b) Stockholder has the legal capacity and authority to execute and deliver this Agreement and to consummate the transactions contemplated hereby.

(c) This Agreement has been validly executed and delivered by Stockholder and, assuming this Agreement constitutes a valid and binding obligation of Parent and Merger Sub, constitutes the valid and binding obligation of Stockholder, enforceable against Stockholder in accordance with its terms, except (i) as limited by applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally, and (ii) the availability of the remedy of specific performance or injunctive or other forms of equitable relief may be subject to equitable defenses and would be subject to the discretion of the court before which any proceeding therefor may be brought. If Stockholder is married and the Shares constitute community property, then this Agreement (including the granting of the irrevocable proxy in Section 4) has been validly executed and delivered by, and constitutes a valid and binding agreement of, such Stockholder’s spouse, enforceable against such person in accordance with its terms.

(d) Neither the execution and delivery of this Agreement nor the consummation by Stockholder of the transactions contemplated hereby will result in a violation of, or a default under, or conflict with, any contract, trust, commitment, agreement, understanding, arrangement or restriction of any kind to which Stockholder is a party or by which Stockholder or Stockholder’s assets are bound. The consummation by Stockholder of the transactions contemplated hereby will not (i) violate any provision of any judgment, order or decree applicable to Stockholder or (ii) to the knowledge of the Stockholder, require any consent, approval, or notice under any statute, law, rule or regulation applicable to Stockholder other than (x) as required under the Exchange Act and the rules and regulations promulgated thereunder and (y) where the failure to obtain such consents or approvals or to make such notifications, would not, individually or in the aggregate, prevent or materially delay the performance by Stockholder of any of his obligations under this Agreement.

(e) The Shares and the certificates, if any, representing the Shares owned by Stockholder are now, and at all times during the term hereof will be, held by Stockholder or by a nominee or custodian for the benefit of Stockholder, free and clear of all liens, claims, security interests, proxies, voting trusts or agreements, options, rights (other than community property interests), understandings or arrangements or any other encumbrances or restrictions whatsoever on title, transfer, or exercise of any rights of a shareholder in respect of such Shares (collectively, “Encumbrances”), except for (i) any such Encumbrances arising hereunder (in connection therewith any restrictions on transfer or any other Encumbrances have been waived by appropriate consent), (ii) Encumbrances imposed by federal or state securities laws, and (iii) Encumbrances imposed on the number of Shares set forth on Schedule II (the “Encumbered Shares”), pursuant to that certain Buy-Sell and Voting Agreement and Irrevocable Proxy, dated as of March 3, 2000 (the “Buy-Sell Agreement”), by and between Stockholder and Thomas R. Mooney (collectively, “Permitted Encumbrances”).

SECTION 2. Representations and Warranties of Parent and Merger Sub. Each of Parent and Merger Sub hereby, jointly and severally, represents and warrants to Stockholder as follows:

(a) Each of Parent and Merger Sub is a corporation duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation, and each of Parent and Merger Sub has all requisite corporate power and authority to execute and deliver this Agreement and the Merger Agreement and to consummate the transactions contemplated hereby and thereby, and has taken all necessary corporate action to authorize the execution, delivery and performance of this Agreement and the Merger Agreement.

(b) This Agreement and the Merger Agreement have been duly authorized, executed and delivered by each of Parent and Merger Sub, and constitute the valid and binding obligations of each of Parent and Merger Sub, enforceable against each of them in accordance with their terms, except (i) as limited by applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally and (ii) the availability of the remedy of specific performance or injunctive or other forms of equitable relief may be subject to equitable defenses and would be subject to the discretion of the court before which any proceeding therefor may be brought.

(c) Neither the execution and delivery of this Agreement or the Merger Agreement by each of Parent and Merger Sub nor the consummation by Parent and Merger Sub of the transactions contemplated hereby or thereby will result in a violation of, or a default under, any contract, trust, commitment, agreement, understanding, arrangement or restriction of any kind to which either Parent or Merger Sub is a party or by which either Parent or Merger Sub or their respective assets are bound. The consummation by Parent and Merger Sub of the transactions contemplated by this Agreement or the Merger Agreement will not (i) violate any provision of any judgment, order or decree applicable to Parent or Merger Sub or (ii) require any consent, approval or notice under any statute, law, rule or regulation applicable to either Parent or Merger Sub, other than (x) filings under the Exchange Act and the rules and regulations promulgated thereunder and (y) where the failure to obtain such consents or approvals or to make such notifications, would not, individually or in the aggregate, prevent or materially delay the performance by either Parent or Merger Sub of any of their obligations under this Agreement and the Merger Agreement.

SECTION 3. Transfer of the Shares; Other Actions.

(a) Prior to the termination of this Agreement, except as otherwise provided herein or in the Merger Agreement, Stockholder shall not: (i) transfer, assign, sell, gift-over, hedge, pledge or otherwise dispose (whether by sale, liquidation, dissolution, dividend or distribution) of, enter into any derivative arrangement with respect to, create or suffer to exist any Encumbrances (other than Permitted Encumbrances) on or consent to any of the foregoing (“Transfer”), any or all of the Shares or any right or interest therein; (ii) enter into any contract, option or other agreement with respect to any Transfer; (iii) grant any proxy, power-of-attorney or other authorization or consent with respect to any of the Shares with respect to any matter that is, or that is reasonably likely to be exercised in a manner, inconsistent with the transactions contemplated by the Merger Agreement or the provisions thereof; (iv) deposit any of the Shares into a voting trust, or enter into a voting agreement or arrangement with respect to any of the Shares; or (v) knowingly, directly or indirectly, take or cause the taking of any other action that would restrict, limit or interfere with the performance of Stockholder’s obligations hereunder or the transactions contemplated hereby, excluding any bankruptcy filing.

(b) Notwithstanding the foregoing, Stockholder may make (a) Transfers of Shares by will or by operation of law or other transfers for estate planning purposes, in which case any such transferee shall agree in writing to be bound by this Agreement prior to the consummation of any such Transfer, (b) with respect to Stockholder’s Company Stock Options which expire on or prior to the Termination Date, to the extent permitted by the Company Equity Plans, Transfers of Shares to the Company as payment for the (I) exercise price of Stockholder’s Company Stock Options and (II) taxes applicable to the exercise of Stockholder’s Company Stock Options, and (c) as Parent may otherwise agree in writing in its sole discretion.

(c) Upon receipt of payment in full for all of his Shares pursuant to the Merger Agreement, Stockholder agrees that any and all rights incident to his ownership of Shares (including any rights to recover amounts, if any, that may be determined to be due to any stockholder or former stockholder of the Company), including but not limited to rights arising out of Stockholder’s ownership of Shares prior to the Merger, shall be transferred to Merger Sub and Parent.

SECTION 4. Grant of Irrevocable Proxy; Appointment of Proxy.

(a) Without in any way limiting Stockholder’s right to vote the Shares in his sole discretion on any other matters that may be submitted to a stockholder vote, consent or other approval, Stockholder hereby irrevocably grants to, and appoints, Parent and any designee thereof, Stockholder’s proxy and attorney-in-fact (with full power of substitution), for and in the name, place and stead of Stockholder, to attend any meeting of the stockholders of the Company on behalf of Stockholder, to include the Shares (other than the Encumbered Shares) in any computation for purposes of establishing a quorum at any meeting of stockholders of the Company, and to vote the Shares (other than the Encumbered Shares), or to grant a consent or approval in respect of the Shares (other than the Encumbered Shares), in connection with any meeting of the stockholders of the Company or any action by written consent in lieu of a meeting of stockholders of the Company (i) in favor of the Merger and the other transactions contemplated by the Merger Agreement, and/or (ii) against any action or agreement which would in any material respect impede, interfere with or prevent the Merger, including, but not limited to, any other extraordinary corporate transaction, including, a merger, acquisition, sale, consolidation, reorganization or liquidation involving the Company and a third party, or any other proposal of a third party to acquire the Company or all or substantially all of the assets thereof.

(b) Stockholder hereby represents that any proxies heretofore given in respect of the Shares (other than the proxy related to the Encumbered Shares granted by Stockholder pursuant to the Buy-Sell Agreement), if any, are revocable, and hereby revokes such proxies.

(c) Stockholder hereby affirms that the irrevocable proxy set forth in this Section 4 is given in connection with the execution of the Merger Agreement, and that such irrevocable proxy is given to secure the performance of the duties of Stockholder under this Agreement. Stockholder hereby further affirms that the irrevocable proxy is coupled with an interest and, except as set forth in this Section or in Section 8 hereof, is intended to be irrevocable in accordance with the provisions of Section 212 of the DGCL. If during the term of this Agreement for any reason the proxy granted herein is not irrevocable, then Stockholder agrees that he shall vote his Shares in accordance with Section 4(a) above as instructed by Parent in writing. The parties agree that the foregoing shall be a voting agreement created under Section 218 of the DGCL.

SECTION 5. Directors and Officers. This Agreement shall apply to Stockholder solely in Stockholder’s capacity as a stockholder of the Company and/or holder of Company Stock Options, performance based stock units, restricted stock or deferred stock units, and not in Stockholder’s capacity as a director, officer or employee of the Company or in Stockholder’s capacity as a trustee or fiduciary of any employee benefit plan or trust. Notwithstanding any provision of this Agreement to the contrary, nothing in this Agreement shall (or require Stockholder to attempt to) limit or restrict a director and/or officer of the Company in the exercise of his fiduciary duties consistent with the terms of the Merger Agreement as a director and/or officer of the Company or in his capacity as a trustee or fiduciary of any employee benefit plan or trust, or prevent or be construed to create any obligation on the part of any director and/or officer of the Company or any trustee or fiduciary of any employee benefit plan or trust from taking any action in his capacity as such director, officer, trustee and/or fiduciary.

SECTION 6. Appraisal Rights. Stockholder hereby irrevocably and unconditionally waives, and agrees to cause to be waived and to prevent the exercise of, with respect to the Shares, any dissenters’ rights, any rights of appraisal and any similar rights (whether under Law or otherwise) in connection with the Merger that Stockholder or any other Person who is the record owner of the Shares may have by virtue of the Shares.

SECTION 7. Further Assurances. Each party shall execute and deliver any additional documents and take such further actions as may be reasonably necessary or desirable to carry out all of the provisions hereof, including all of the parties’ obligations under this Agreement, including without limitation to vest in Parent the power to vote the Shares to the extent contemplated by Section 4 hereof.

SECTION 8. Termination.

(a) This Agreement (including but not limited to the irrevocable proxy set forth in Section 4), and all rights and obligations of the parties hereunder, shall terminate immediately upon the earliest to occur of the following (such time, the “Termination Date”):

(i)

termination of the Merger Agreement;

(ii)

the Effective Time; or

(iii)

the mutual written consent of Parent and Stockholder.

(b) Sections 9 and 12(e) hereof shall survive the termination of this Agreement.

SECTION 9. Expenses. All fees and expenses incurred in connection with this Agreement and the transactions contemplated hereby shall be paid by the party incurring such fees or expenses, whether or not the Merger is consummated.

SECTION 10. Public Announcements. Stockholder (in his capacity as a stockholder of the Company and/or signatory to this Agreement) shall not make any public announcement regarding this Agreement and the transactions contemplated hereby, without the prior written consent of Parent. Stockholder (a) hereby authorizes Parent, Merger Sub and the Company to publish and disclose in any announcement or disclosure in connection with the Merger, including the Proxy Statement, Stockholder’s identity and ownership of the Shares and the nature of Stockholder’s obligations under this Agreement, and (b) agrees to furnish promptly to Parent and the Company any information either of them reasonably requests for the preparation of any such announcement or disclosure. Stockholder agrees to notify promptly Parent and the Company of any required corrections with respect to any information supplied by him for use in any such announcement or disclosure, if and to the extent that any such information shall have become false or misleading.

SECTION 11. Adjustments. In the event (a) of any stock dividend, stock split, merger, recapitalization, reclassification, combination, exchange of shares or the like of the capital stock of the Company on, of or affecting the Shares or (b) that Stockholder shall become the beneficial owner of any additional shares of Company Common Stock, then the terms of this Agreement shall apply to the shares of Company Common Stock held by Stockholder immediately following the effectiveness of the events described in clause (a) or Stockholder becoming the beneficial owner thereof as described in clause (b), as though, in either case, they were Shares hereunder. In the event that Stockholder shall become the beneficial owner of any other securities entitling the holder thereof to vote or give consent with respect to the matters set forth in Section 4 hereof, then the terms of Section 4 hereof shall apply to such other securities (other than any such securities that would be encumbered by the Buy-Sell Agreement, which would be treated as Encumbered Shares hereunder) as though they were Shares hereunder.

SECTION 12. Miscellaneous.

(a) Notices. All notices, requests, claims, demands and other communications under this Agreement shall be in writing and shall be deemed given if delivered personally, sent via electronic mail (receipt confirmed), facsimile (receipt confirmed) or sent by a nationally recognized overnight courier (providing proof of delivery) to the parties at the following addresses (or at such other address for a party as shall be specified by like notice):

If to Stockholder, to:

George W. Trahan

24225 Garnier Street

Torrance, CA 90505-5355

Telephone: (310) 784-7820

Facsimile: (310) 784-7806

If to Parent or Merger Sub, to:

Chemring Group PLC

1500 Parkway

Whiteley, Fareham, Hampshire

P015 7AF England

Telephone: +44 (0) 1489 881880

Fax: +44 (0) 1489 881123

Attention: Sarah Ellard

with a copy to:

Seyfarth Shaw LLP

131 S. Dearborn Street

Suite 2400

Chicago, IL 60603

Telephone: (312) 460-5961

Facsimile: (312) 460-7961

Attention: Robert F. Weber

(b) Headings. The headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement.

(c) Counterparts; Facsimile or PDF Signature. This Agreement may be executed in two or more counterparts, all of which shall be considered one and the same agreement and shall become effective when one or more counterparts have been signed by each of the parties and delivered to the other parties. This Agreement may be executed by facsimile or PDF signature and a facsimile or PDF signature shall constitute an original for all purposes.

(d) Entire Agreement, No Third-Party Beneficiaries. This Agreement constitutes the entire agreement, and supersedes all prior agreements and understandings, both written and oral, among the parties with respect to the subject matter of this Agreement and (b) except as otherwise expressly provided herein, is not intended to confer, nor shall it confer, upon any Person other than the parties hereto any rights or remedies or benefits of any nature whatsoever.

(e) Governing Law, Jurisdiction. This Agreement shall be governed by, and construed in accordance with, the laws of the State of Delaware, regardless of the laws that might otherwise govern under applicable principles of conflict of laws thereof.

(f) Waiver of Jury Trial. EACH OF PARENT, MERGER SUB AND STOCKHOLDER HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THE ACTIONS OF PARENT, MERGER SUB OR STOCKHOLDER IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE AND ENFORCEMENT OF THIS AGREEMENT. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (A) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE EITHER OF SUCH WAIVERS, (B) IT UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF SUCH WAIVERS, (C) IT MAKES SUCH WAIVERS VOLUNTARILY, AND (D) IT HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 12(f).

(g) Assignment. Prior to the earlier to occur of (i) the termination of the Merger Agreement or (ii) the consummation of the Merger, neither this Agreement nor any of the rights, interests or obligations under this Agreement shall be assigned, in whole or in part, by operation of law or otherwise by any of the parties hereto without the prior written consent of the other parties, except that Parent and Merger Sub may assign, in their sole discretion and without the consent of any other party, any or all of their rights, interests and obligations hereunder to each other or to one or more direct or indirect wholly owned subsidiaries of Parent, and any such assignee may thereafter assign, in its sole discretion and without the consent of any other party, any or all of its rights, interests and obligations hereunder to one or more additional direct or indirect wholly owned subsidiaries of Parent; provided, that no such assignment shall relieve Parent or Merger Sub of any of their respective obligations under this Agreement. Any assignment in violation of the preceding sentence shall be void. Subject to the preceding two sentences, this Agreement will be binding upon, inure to the benefit of, and be enforceable by, the parties and their respective successors and assigns.

(h) Severability of Provisions. If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced by any rule of law or public policy, all other conditions and provisions of this Agreement shall nevertheless remain in full force and effect, insofar as the foregoing can be accomplished without materially affecting the economic benefits anticipated by the parties to this Agreement. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible to the fullest extent permitted by applicable Law in an acceptable manner to the end that the transactions contemplated hereby are fulfilled to the extent possible.

(i) Specific Performance. The parties agree that irreparable damage would occur and that the parties would not have any adequate remedy at law in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that the parties shall be entitled to an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the terms and provisions of this Agreement in any federal court located in the State of Delaware or in Delaware state court, this being in addition to any other remedy to which they are entitled at law or in equity.

(j) Amendment. No amendment or modification of this Agreement shall be effective unless it shall be in writing and signed by each of the parties hereto, and no waiver or consent hereunder shall be effective against any party unless it shall be in writing and signed by such party.

(k) Binding Nature. This Agreement is binding upon and is solely for the benefit of the parties hereto and their respective successors, legal representatives and assigns.

(l) No Ownership Interest. Except as otherwise provided herein, nothing contained in this Agreement shall be deemed to vest in Parent any direct or indirect ownership or incidence of ownership of or with respect to the Shares. All rights, ownership and economic benefits of and relating to the Shares shall remain vested in and belong to the Stockholder, and Parent shall have no authority to manage, direct, restrict, regulate, govern, or administer any of the policies or operations of the Company or exercise any power or authority to direct the Stockholder in the voting of any of the Shares, except as otherwise provided herein.

(m) Non-Survival of Representations and Warranties. The representations and warranties of the parties set forth herein shall not survive the closing of the transactions contemplated hereby and by the Merger Agreement. The covenants and agreements made herein will survive in accordance with their respective terms.

[Signature Page Follows]

IN WITNESS WHEREOF, Parent, Merger Sub and the Stockholder have caused this Agreement to be duly executed and delivered as of the date first written above.

CHEMRING GROUP PLC
By:	/s/ Paul Rayner
Name:	Paul Rayner
Title:	Director
PARKWAY MERGER SUB, INC.
By:	/s/ Paul Rayner
Name:	Paul Rayner
Title:	President
STOCKHOLDER:
By:	/s/ George W. Trahan
Name:	George W. Trahan

SPOUSAL CONSENT

The undersigned represents that the undersigned is the spouse of George W. Trahan, and that the undersigned is familiar with the terms of the foregoing Stockholder Agreement dated as of September 16, 2009 (the “Agreement”). The undersigned hereby agrees that the interest of the undersigned’s spouse in all property which is the subject of such Agreement shall be irrevocably bound by the terms of such Agreement and by any amendment, modification, waiver or termination signed by the undersigned’s spouse. The undersigned further agrees that the undersigned’s community property interest in all property which is the subject of such Agreement shall be irrevocably bound by the terms of such Agreement, and that such Agreement shall be binding on the executors, administrators, heirs and assigns of the undersigned. The undersigned further authorizes the undersigned’s spouse to amend, modify or terminate such Agreement, or waive any rights thereunder, and that each such amendment, modification, waiver or termination signed by the undersigned’s spouse shall be binding on the community property interest of undersigned in all property which is the subject of such Agreement and on the executors, administrators, heirs and assigns of the undersigned, each as fully as if the undersigned had signed such amendment, modification, waiver or termination.

Dated: September 16, 2009	/s/ Kim C. Trahan
	Kim C. Trahan

SCHEDULE I

Name and Address	Company Common Stock	Vested Options	Unvested Options	Restricted Stock Units

George W. Trahan 24225 Garnier Street Torrance, CA 90505-5355 Telephone: (310) 784-7820 Facsimile: (310) 784-7806	2,213,318	-	-	-

George W. Trahan & Kim C. Trahan JTTEN 24225 Garnier Street Torrance, CA 90505-5355 Telephone: (310) 784-7820 Facsimile: (310) 784-7806	250,596	-	-	1,875

TOTAL	2,463,914	-	-	1,875

I-1

SCHEDULE II

ENCUMBERED SHARES

246,779 Shares

II-1

EXHIBIT A

AGREEMENT AND PLAN OF MERGER

See attached.

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