10-K

QuickLinks -- Click here to rapidly navigate through this document

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

/x/ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (D) OF THE SECURITIES EXCHANGE ACT OF 1934 (FEE REQUIRED)

For the fiscal year ended: March 31, 2001
OR

/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 (FEE REQUIRED)

For the transition period from      to     
Commission file number: 333-32207

HCC INDUSTRIES INC.
(Exact name of Registrant as specified in its charter)

Delaware	95-2691666
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification No.)

4232 Temple City Blvd., Rosemead, California 91770
(Address of principal executive offices)

(626) 443-8933
(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12 (b) of the Act:

Title of each class	Name of each exchange on which registered
None	None

Securities registered pursuant to Section 12 (g) of the Act:
10 3/4% Senior Subordinated Notes Due 2007

    Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes  X  No    

    Registrant's Common Stock, outstanding at March 31, 2001 was 137,945 shares.

DOCUMENTS INCORPORATED BY REFERENCE:

Documents referenced on Exhibits Index, which begins on page 41

HCC INDUSTRIES INC.
INDEX TO ANNUAL REPORT ON FORM 10-K

Caption		Page
PART I
	Item 1.  —  BUSINESS	3
	Item 2.  —  PROPERTIES	10
	Item 3.  —  LEGAL PROCEEDINGS	10
	Item 4.  —  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS	13
PART II
	Item 5.  —  MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS	13
	Item 6.  —  SELECTED FINANCIAL DATA	13
	Item 7.  —  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	14
	Item 7a. —  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RATE RISK	18
	Item 8.  —  FINANCIAL STATEMENTS AND SUPPLEMENTAL DATA	18
	Item 9.  —  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE	33
PART III
	Item 10. —  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT	33
	Item 11. —  EXECUTIVE COMPENSATION	35
	Item 12. —  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT	38
	Item 13. —  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS	40
PART IV
	Item 14. —  EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K	41
SIGNATURES		45

2

PART I

Item 1—Business

General

    Except where the context indicates otherwise, the term "Company" means HCC Industries Inc. and its wholly owned subsidiaries Hermetic Seal Corporation, Glasseal Products, Inc., Sealtron, Inc., Norfolk Avon Realty Trust, HCC Industries International, HCC Machining Company, Inc. and HCC Foreign Sales Corporation.

    The Company was incorporated in Delaware in 1985 and is one of the largest custom manufacturers of high precision hermetically sealed electronic connection devices in the United States. High precision hermetic seals are used primarily to permit the flow of electricity across a barrier used to separate different atmospheric media (such as gas or liquid to air or vacuum) existing on opposite sides of the barrier. A hermetic seal is generally accomplished through the creation of a glass-to-metal seal ("GTMS").The hermetic seals manufactured by the Company generally fall into four categories—terminals, headers, connectors and microelectronics packages. A "terminal" is a device characterized by having only a single contact pin, while a "header" has multiple contact pins inserted in a frame. A "connector" is a type of terminal or header which can be mechanically coupled to or uncoupled from another connection. A "microelectronic package" is a container for thick and thin film substrates onto which hybrid circuitry has been etched. The Company operates in the premium segment of the market by providing high precision GTMS, custom designed to meet specific customer requirements. Each GTMS generally consists of a metal body or housing, metal contact pins, and an insulator fabricated from glass, ceramic or glass/ceramic mixtures. GTMS range in size from a two foot long, eight inch diameter cylindrical connector utilized for through-hull communication links for nuclear submarines, to a 40/1000 inch outside diameter (12/1000 inch inside diameter) implant to measure pressure in the heart chamber.

    The Company believes that it has been an industry leader in the design and manufacture of GTMS since it developed its GTMS process in 1945. The Company has developed over 75,000 different configurations, primarily for the following industries: (1) automotive (for use in, for example, the initiators in airbags and seat belt pretensioners); (2) aerospace and military electronics (for use in, for example, gyro guidance devices, flight instrumentation, jet engine controls, and space suit controls); (3) test and measurement (for use in, for example, temperature and pressure transducers, infrared detection instrumentation, electro-optical devices and fuel injection monitoring devices); (4) medical electronics (for use in, for example, pacemakers, kidney dialysis machines and devices for monitoring vital life signs); (5) telecommunications (for use, in for example, fiber optics); and (6) energy (for use in, for example, oil drilling equipment and downhole logging instrumentation and for conventional and nuclear electric power generating plants).

    The demand for the Company's products is largely dependent on the telecommunication, automotive and aerospace industries. Sales to the Company's two largest customers accounted for approximately 26% and 11%, respectively, of the Company's consolidated sales for the fiscal year ended March 31, 2001. Sales to the Company's ten largest customers accounted for approximately 59% of consolidated sales during the 2001 fiscal year. Approximately 70% of the Company's consolidated sales for fiscal 2001 were to customers with which the Company had contractual agreements, sole source relationships, letters of intent or long-term purchase orders. A substantial portion of these business relationships are informal and certain of the Company's contractual arrangements may be terminated at will. On January 16, 2001, the Company entered into a new 12-month supply agreement with Special Devices, Inc. ("SDI"). The agreement implements an immediate 12% price decrease and contains provisions for future price decreases subject to implementation of cost reduction initiatives and/or increased unit volumes.

3

Competitive Strengths

    The Company believes that it has the following competitive strengths:

    Long-Term Customer Relationships.  Many of the Company's customers, including SDI, have been customers for over ten years. The Company believes that both automotive and aerospace OEMs continue to seek long-term partnerships with fewer core suppliers. The Company's relationships are strengthened by the fact that many of its arrangements with its customers provide for the Company to act as the sole source of supply for the customer. The Company estimates that approximately 70% of the Company's consolidated sales for fiscal year 2001 were from contractual agreements, sole source relationships, letters of intent or long-term purchase orders.

    Market Leadership.  A number of the Company's products hold leading market positions in their respective niche markets. The Company currently believes based upon internal estimates that it produces hermetically sealed products for approximately 50% of the airbag initiators produced in the United States. The Company believes, based upon long-term relationships with SDI and other airbag initiator suppliers, that it is well positioned to continue to increase its market share, as well as expand its sales internationally.

    Commitment to Quality and Service.  The Company believes that its commitment to provide consistent, high quality products and services and flexible manufacturing and custom designed products at competitive prices, forms the basis for its strong and diversified customer relationships. The Company manufactures most of its parts to specific customer requirements. The Company utilizes Statistical Process Control, Design Failure Mode Effects Analysis, Process Failure Mode Analysis, and a strict adherence to complete manufacturing documentation in order to manufacture high quality products for internal use as well as external customer sales. The Company's three operating subsidiaries are registered to ISO 9001.

    Proprietary Technology.  The Company operates in the automotive, aerospace and general industrial technologies markets in which products typically require sophisticated engineering and production techniques. The Company designs and manufactures new products to fulfill customer needs, and has developed proprietary manufacturing technology since its founding in 1945. The Company believes that this proprietary technology helps enable it to attract and retain customers who require customized, high tolerance products. The Company estimates that it has produced over 75,000 different variations of GTMS.

    Low Cost Operations.  The Company believes that its extensive "in-house" capabilities and vertical integration are competitive advantages that have allowed it to become a low cost producer. By controlling the tolerance of the component parts, the Company has been able to reduce scrap and to increase the yields of its products. Furthermore, the Company is continually developing and assessing its programs designed to increase efficiency and enhance economies of scale in order to further reduce costs.

    Diverse Products and Customers.  The Company has a diverse customer base, with sales of numerous product variations to approximately 1,200 customers in fiscal 2001. Over the past several years, the Company has recognized consistent growth in sales of GTMS products to the telecommunication, automotive, aerospace and general industrial markets.

Business Strategy

    The Company's strategy is to expand its business through:

    Focusing on Core Strengths.  The Company continues to focus on what it believes are its core strengths and to invest in those businesses that are consistent with those strengths and which exhibit

4

high growth potential. Core strengths include the timely custom design and manufacturing of high tolerance, high reliability components and the effective program management of long term contracts and supply agreements.

    Leveraging Customer Relationships.  The Company works closely with its customers to jointly develop and design new products and to improve the performance and lower the cost of the Company's customers' products. The Company has sole source supply contracts, shares product development, and enters into other teaming arrangements with its key customers to further strengthen and broaden its relationships. The Company believes that this strategy, together with the successful performance under existing contracts has led to additional long-term business from key existing customers and new customers.

    Pursuing Selective Acquisitions.  The Company intends to pursue selective acquisitions and to add products and capabilities that are complementary to its existing operations. Priority is expected to be given to acquiring businesses whose products can be manufactured in the Company's existing facilities ("fold-in" acquisitions). The Company's operations are characterized by a relatively high level of operating leverage; therefore, such fold-in acquisitions should allow the Company to allocate costs across broader synergistic product lines and represent additional volume through the Company's existing facilities which should provide opportunities to improve profitability.

    Expanding Internationally.  The Company is considering the expansion of its operations in Europe. The primary motivation in a geographic expansion would most likely be to service the growth of its current customers' operations as they expand their production operations abroad.

Industries

    The Company estimates the total size of the GTMS market to be $600 million, with approximately one-half estimated to be the specialized, high precision segments in which the Company competes. The Company believes based upon internal analysis that the market for high-end hermetically sealed products is extremely fragmented, with no other competitor offering the same breadth of products as the Company. The Company believes that its focus on the high-end, custom segment of the GTMS market enables it to achieve higher margins.

    The Company sells its products to five principal industries: (i) the telecommunication industry for use in optical networking components, (ii) the automotive parts industry for use in airbag initiators, seat belt pretensioners, climate control devices and anti-lock braking systems; (iii) the aerospace industry for use primarily in commercial and military aviation and electronics; (iv) general industry for use primarily in process control, and other industrial and medical applications; and (v) the petrochemical industry, for use primarily in oil and gas downhole logging equipment.

Telecommunication

    The Company designs and manufactures highly engineered hermetic packaging used to facilitate the infrastructure outbuild of fiber optic telecommunications, supporting global internet communications. The Company has a strong position in the current OC-192 technology, as well as qualified designs for a variety of next generation products for increased speed and bandwidth.

Automotive

    The Company provides GTMS products used in initiators for airbag devices. At present, each airbag device requires at least one initiator (the device that deploys the airbag). The automotive airbag industry has undergone dynamic growth over the recent past stemming from increased consumer demand for automotive safety devices and federal regulations requiring such devices. Regulations adopted by the National Highway Traffic Safety Administration require that airbags be the automatic

5

frontal crash protection system used for both the driver and front passenger in 100% of all passenger automobiles, light trucks and vans manufactured for sale in the United States.

    Although not mandated by law, initiator-based safety systems are also employed in automobiles produced and sold in Europe and Asia, although fewer than in the U. S. The systems utilized in Europe and Asia include airbag systems similar to those in use in the U. S. and seat-belt pretensioners that employ initiators. While the majority of airbag initiators manufactured for use in cars outside the U. S. employ plastic initiators, there is a trend toward using GTMS in such products due to their increased reliability.

Commercial and Military Aviation and Electronics

    The Company provides hermetic seals that are used for a number of different applications in commercial and military aviation and electronics, primarily to protect guidance and sensor devices from the effects of changes in atmospheric conditions. The Company believes based upon internal estimates that GTMS products are utilized in almost every model of commercial aircraft currently in production and its customers include essentially all major aerospace suppliers. The Company's sales to the aerospace industry are dependent to a certain extent on new construction of commercial and military aircraft. The Company competes with a number of different suppliers in this market, based on quality, delivery and price.

General and Industrial

    The Company provides GTMS used in pressure and temperature transducers (sensors), industrial process control equipment, capacitor end-seals for electronic devices and other industrial and medical applications. The Company believes that its ability to help customers develop products to meet demanding specifications allow for significant opportunities within this market segment, including those customers not currently served by the Company's products. The Company also believes that the increased sophistication of equipment and increased level of automation being used in industrial applications will increase demand for GTMS products.

Petrochemical

    The Company provides GTMS used for downhole logging equipment in the oil and gas industry primarily under long-term contracts to oil field equipment and service companies. The Company's sales to this industry during any period are somewhat dependent on the current level of exploration and drilling in the oil and gas industry and current demand for and price of crude oil. The Company believes that it is one of only two significant providers of GTMS to this industry. The Company expects that the trend toward more sophisticated measurement-while-drilling equipment in the petrochemical industry is likely to lead to more demand for the Company's products.

Customers and Applications

    The Company has approximately 1,200 active customers. The Company's ten largest customers accounted for approximately 59% of net sales for fiscal year 2001. The Company's largest customer, Special Devices, Inc. ("SDI") (a manufacturer of airbag initiators), represented approximately 26% of consolidated sales for the fiscal year ended March 31, 2001.

    Approximately 70% of the Company's consolidated sales for fiscal year 2001 were to customers with which the Company had contractual agreements, sole source relationships, letters of intent or long-term purchase orders. The Company only begins to manufacture products upon receipt of a purchase order. The Company's relationship with SDI includes a contract expiring January 15, 2002 to produce approximately 85% of SDI's GTMS for its initiators provided the Company maintains pricing

6

and quality which are generally equivalent to or better than other suppliers. The Company believes that it currently provides nearly all of SDI's GTMS components.

    The following table sets forth the Company's principal end-user markets, certain applications for its products and certain of the Company's customers in fiscal year 2001.

End Markets	Telecommunication	Automotive	Aerospace	Industrial/Petrochemical
Applications:	Optical Switching DWDM Transport Optical Components Metro Access DWDM	Airbag Initiators Thermistors Airbag Pressure Switches ABS	Jet Engine Monitors Avionics Fuel Gauge Indicators Temperature Sensors De-icing Sensors Air Speed Indicators	Process Control Sensors Downhole Drilling Sensors Lithium Batteries
Customers*:	Agerea W J Communications MOEC Codeon Nortel JDS Uniphase	SDI NCS Pyrotechnie Keystone Takata	Honeywell Rosemount Aerospace Hamilton Sundstrand ITT Aerospace Ametek Aerospace	Druck, Ltd. Hawker Eternacel Invensys Schlumberger Halliburton Panametrics Kemet
Specific example of product application:	Modulator	Airbag Initiator	Temperature Sensors	High pressure electrical bulkheads for downhole use (oil exploration)
What the product does:	Optical shutter to create binary code for laser transmission along fiber.	Electric current flows from crash sensor through initiator to begin inflation of the airbag.	Passes electric current from sensors that detect excessive heat and/or fire in aircraft	Carries electrical signals between geological formation measurement tools and sensors.
Result:	Higher speed data transmission.	Airbag is inflated in approximately 6 to 14 milliseconds	Warning signal and automatic release of fire retardant	Allows precise measurement of geology while protecting sensitive equipment from extreme heat and pressure.

*

Other than SDI, Agere and W J Communications, all of the customers listed represented individually less than 5% of the Company's consolidated sales for fiscal year 2001.

7

Manufacturing Process

    A GTMS is made by assembling three sets of component parts (metal contacts or pins, glass bead(s) and an outer metal housing or shell) on a graphite fixture. This assembly is put through a controlled atmosphere furnace at approximately 1,800 degrees Fahrenheit until the glass becomes molten. The graphite fixture is used to hold the components in place while the glass is molten. As the assembly cools, a physical and chemical bond is formed between the glass and the shell as well as the glass and the pin, thus forming a hermetic seal.

    The Company believes that its extensive "in-house" capabilities are a key competitive advantage that has allowed it to become a low cost producer. By specifically controlling the tolerance of the component parts, the Company believes that it is able to increase the end yields of its product. This attention to quality throughout the manufacturing process also helps to ensure the timely delivery of its products. It also enables the Company to respond very quickly to prototype and new product development opportunities.

    The Company manufactures most of its parts to specific customer requirements. All three of the Company's operating subsidiaries use Computer Aided Design ("CAD") to produce the drawings and specifications required by the customer. The Company estimates that it has produced over 75,000 different variations to GTMS since 1945. This extensive library of designs enables the Company to suggest design changes to its customers that reduce manufacturing costs without sacrificing quality and therefore reduce the cost to the customer (value engineering).

    The Company has made a significant investment in Computer Numerically Controlled ("CNC") machine tools in order to manufacture the metal shells and pins to demanding customer specifications. The Company also machines most of its own graphite fixtures thereby allowing it to maintain process quality. Many of the glass preforms used in the Company's products are manufactured internally as well. The Company has many proprietary formulas for glass and glass/ceramic mixtures that it has developed in over 50 years of manufacturing. In addition, the Company has extensive capabilities in selective plating of precious and non precious metals.

    The Company utilizes Statistical Process Control ("SPC"), Design Failure Mode Effects Analysis, Process Failure Mode Effects Analysis and a strict adherence to complete manufacturing documentation in order to manufacture high quality products for internal use as well as external customer sales. The Company believes that its knowledge and use of these procedures give the Company a competitive advantage. Hermetic, Glasseal, Sealtron and HCC Machining are ISO 9001 registered. The ISO 9001 registration, an international standard of quality, should facilitate business expansion in Europe.

Marketing and Sales

    The Company's products are marketed throughout the Unites States to customers in a wide variety of industries, both by Company-employed salespersons, who work out of the Company's plants, and by a number of independent regional manufacturers' sale representatives. The 14 Company-employed salespersons receive a base salary plus bonus potential. Sales in Europe are through a two person office in Northampton, England. As part of the Company's growth strategy, the Company believes that it can capture an increasing share of the business outside the United States. Economic, political, governmental and regulatory conditions in such international markets could adversely affect the Company's ability to successfully enter or operate in such markets. Therefore, no assurances can be given that the Company's attempts to expand its business into such international markets will be successful. The Company currently has 8 independent regional manufacturers-sales representatives spread geographically across North America and Europe. These representatives, who do not exclusively sell the Company's products, are remunerated on a commission basis. The Company believes there is a

8

significant opportunity to increase its sales through expansion of its sales and distribution efforts, both within the markets it currently serves and in new markets.

Competition

    The Company believes based upon internal analysis that most of the Company's competitors in the GTMS sector of the industry in which it competes are smaller and have less technological and manufacturing expertise than the Company. The Company believes that it occupies a favorable competitive position because of its experience in engineering and production techniques and also its extensive vertical integration. Price has generally been a less significant competitive factor than the quality and design of the GTMS because their cost typically is a small percentage of the total cost of the end products in which they are used and because of the importance of the uses to which many of the Company's products are put. In addition, products for airbag initiators are qualified for particular new automotive models and new products are subject to design and process verification testing (prior to which there are no sales) which typically takes 8 to 24 months and, therefore, helps to inhibit new entry into the market.

Backlog

    As of March 31, 2001, the Company had a backlog of $52.4 million compared to $36.2 million as of April 1, 2000. The Company sells a majority of its products pursuant to contractual agreements, sole source relationships, letters of intent or long-term purchase orders, each of which may permit early termination by the customer. However, due to the specialized, highly engineered nature of the Company's product, it is not practical in many cases for customers to shift their business to other suppliers without incurring significant switching and opportunity costs.

Employees

    At March 31, 2001, the Company had approximately 800 employees, substantially all of whom were located in the United States. None of the Company's employees is subject to a union contract. The Company considers its relations with its employees to be excellent.

Raw Materials

    The Company obtains raw materials, component parts and supplies from a variety of sources and generally from more than one supplier. The Company's principal raw materials are steel and glass. The Company's suppliers and sources of raw materials are based in the United States and the Company believes that its sources are adequate for its needs for the foreseeable future. The loss of any one supplier would not have a material adverse effect on the Company's financial condition or results of operations.

Environmental Matters

    The Company's operations are subject to numerous environmental laws, including those regulating air emissions and discharges to water, and the storage, handling and disposal of solid and hazardous waste. The Company believes that it is in substantial compliance with such laws and regulations. Because environmental laws are becoming increasingly more stringent, the Company's environmental capital expenditures and costs for environmental compliance may increase in the future.

    Under certain environmental laws, in particular CERCLA, a current or previous owner or operator of real property may be liable for the costs of removal or remediation of hazardous or toxic substances on, under or in such property. Generally, liability under CERCLA is joint and several and remediation can extend to properties owned by third parties. Persons who arrange for the disposal or treatment of hazardous or toxic substances or otherwise cause the release of such substances into the environment

9

may also be liable under such laws for the costs of removal or remediation of such substances at a disposal or treatment facility or other location where the substances have migrated or come to be located, whether or not such facility or location is or ever was operated by such person and regardless of whether the method of disposal or treatment was legal at the time. Such laws often impose liability whether or not the owner or operator knew of, or was responsible for the presence of such hazardous or toxic substances, and the liability under such laws has been interpreted to be strict, joint and several unless the harm is divisible and there is a reasonable basis for the allocation of responsibility. In addition, the presence of hazardous or toxic substances, or the failure to properly remedy such property may adversely affect the market value of the property, as well as the owner's ability to sell or lease the property. The Company has potential liability under environmental laws for the remediation of contamination at two of its facilities (see Item 3 for further discussion of environmental matters).

Item 2—Properties

Facilities

    The Company's principal executive offices are owned by the Company and are located in the Hermetic Seal facility located in Rosemead, California. Additionally, the Company has operating facilities in El Monte, California; Lakewood, New Jersey, and Reading, Ohio, as set forth below. The Company also owns approximately 47,400 square feet of plant and office space in Avon, Massachusetts, which is currently vacant.

Location	Owned/Leased	Square Feet
Rosemead, CA	Owned	37,000
El Monte, CA	Owned	110,000
Lakewood, NJ	Owned	50,000
Reading, OH	Owned	37,000

Item 3—Legal Proceedings

Environmental Matters

Rosemead, California

Regional Groundwater Contamination. A portion of the San Gabriel Valley in which the Rosemead facility is located was designated by the EPA as a federal Superfund site in 1984. The Company has been named as a potentially responsible party ("PRP") under CERCLA for the El Monte Operable Unit. If the Rosemead facility contributed to the regional contamination, such contribution is in connection with alleged spills of the degreasing solvent tetracholoroethylene (PCE).

    Many other companies are believed to be contributors to the groundwater contamination in the El Monte Operable Unit. The Company and 18 other such companies have formed the Northwest El Monte Community Task Force (the "Task Force") to undertake the investigation of the remediation, to identify other potential contributors and potentially to undertake required remediation. In March of 1995, the Task Force entered into a Consent Administrative Order with the EPA to perform a Remedial Investigation and Feasibility Study (RI/FS) of the operable unit. The RI/FS was completed in 1999 and the EPA issued an interim record of decision. The RI/FS costs of approximately $2.4 million to date have been funded with about one-quarter of the costs coming from governmental entities and the balance paid pursuant to a confidential interim allocation agreement of Task Force members. To date an additional $1,100,000 has been spent to undertake early remediation efforts on a voluntary basis and an additional $1,600,000 will be spent in 2001. This money has been raised pursuant to a matching funds, cost sharing agreement with a public entity.

10

    On-site/Soil and Groundwater Cleanup Costs.  In addition to the Operable Unit Remediation costs, the Company has voluntarily undertaken both on-site soil and groundwater remediation. In 1995, the Company installed a soil vapor extraction system. To date, the remediation system has removed over 97% of contaminants in the soil.

    The Company has installed a groundwater extraction system in conjunction with a neighboring facility. This system extracts contaminated water from the shallow aquifer and pumps the water for use in our neighbor's manufacturing process prior to discharge to the municipal sanitary sewer. The system has been operational since August 1996 and is designed to capture contaminated groundwater from under the Company's property before it impacts the regional groundwater flow. Although the system has been successful, it is premature to determine how long it will be needed to remediate the groundwater to acceptable levels, or if the operation of the system will be discontinued and replaced with a regional groundwater remediation program.

    The Company believes that its financial liability with respect to regional groundwater contamination may be substantially reduced by acting on its own initiative to commence early remediation of groundwater contamination under its property.

Avon, Massachusetts

    The Company's facility in Avon, Massachusetts, currently inactive, was purchased in 1985 and operated as its Hermetite facility until June 1988. The facility became inactive in August of 1989. Subsequent to its closure, the Company identified significant levels of solvents in the groundwater. Subsurface investigations have delineated a plume of contaminants extending from the facility, beneath a neighboring property and into a town public water supply wellfield about 800 feet to the southeast of the property. Despite the fact that contaminants continue to move toward the wellfield, the levels at the well field remain within acceptable drinking water standards.

    The Avon property is subject to Massachusetts "Chapter 21E," the state's hazardous site cleanup program. The property is classified as a "Tier 1B" category based on the level of contaminants. Under Tier 1B procedures, the Company may design its own remediation program subject to state oversight, auditing, and scheduling.

    Pursuant to this procedure, the Company, through its licensed consultants, designed a remediation system which is intended to capture the contaminants before they reach the town wells. In 1996, the program was approved, constructed and became operational. In 1999, to accelerate the cleanup, the Company installed additional extraction wells closer to the source area and removed the suspected source of contamination. No additional infrastructure is anticipated at this time. To date, the system has been very successful in reducing contaminant levels.

Financial Impact

    Uncertainty as to (a) the extent to which the Company caused, if at all, the conditions being investigated, (b) the extent of environmental contamination and risks, (c) the applicability of changing and complex environmental laws (d) the number and financial viability of other PRP's, (e) the stage of the investigation and/or remediation, (f) the unpredictability of investigation and/or remediation costs (including as to when they will be incurred), (g) applicable clean-up standards, (h) the remediation (if any) that will ultimately be required, and (i) available technology make it difficult to assess the likelihood and scope of further investigation or remediation activities or to estimate the future costs of such activities if undertaken. In addition, liability under CERCLA is joint and several, and any potential inability of other PRP's to pay their pro rata share of the environmental remediation costs may result in the Company being required to bear costs in excess of its pro rata share.

11

    In fiscal 1997, the Company with the help of independent consultants, determined a cost estimate and accrued $10,000,000 for existing estimated environmental remediation and other related costs. The time frame over which the Company expects to incur such costs varies with each site, ranging up to 20 years. This estimate is based on progress made in determining the magnitude of such costs, experience gained from sites on which remediation is ongoing or has been completed, and the timing and extent of remedial actions required by the applicable governmental authorities.

    As of March 31, 2001, the accrual for estimated environmental costs was $8,702,000. The Company believes its accrual is adequate, but as the scope of its obligations becomes more clearly defined, this accrual may be modified and related charges against earnings may be made.

    Claims for recovery of costs already incurred and future costs have been asserted against various insurance companies. The Company has neither recorded any asset nor reduced any liability in anticipation of recovery with respect to such claims made.

Other

    On March 3, 1998, Walter Neubauer, a former stockholder of the Company and a current stockholder of SDI, filed a lawsuit in California Superior Court (Case BC186937; Walter Neubauer vs. Andrew Goldfarb, et. al.) against the Company and certain other stockholders alleging (i) breach of fiduciary duty, (ii) fraud, (iii) negligent misrepresentation, (iv) negligence, (v) violations of corporations code and (vi) breach of contract. The allegations primarily relate to the Company's exercise of an option to acquire Mr. Neubauer's stock in August 1996. In September 1999, five of the six claims were dismissed upon a summary judgment motion made by the Company, including all of the claims against the Company. The remaining claim is against Andrew Goldfarb, the former Chief Executive Officer, as an individual, for alleged violations of oral representations.

    On May 7, 1998, the Company filed a lawsuit against Mr. Neubauer in California Superior Court alleging (i) breach of contract, (ii) intentional interference with business relations and (iii) interference with prospective business advantage. All allegations relate to violations of the noncompetition agreement executed by Mr. Neubauer in August 1996. A preliminary injunction was granted in September 1998. The Company is seeking damages of $50.0 million. The case was consolidated with Mr. Neubauer's action, discussed above.

    There are other various claims and legal proceedings against the Company relating to its operations in the normal course of business, none of which the Company believes will be material to its financial position and results of its operations.

    The Company currently maintains insurance coverage for product liability claims. There can be no assurance that coverage under insurance policies will be adequate to cover any future product liability claims against the Company. In addition, product liability insurance coverage is expensive, difficult to maintain and may be unobtainable in the future on acceptable terms.

Indemnification

    Pursuant to the terms of a recapitalization in early 1997, the selling stockholders agreed to indemnify the Company with respect to the after-tax costs of contingent liabilities, subject to a cap for all indemnified liabilities of $30 million. In February 1997, a $6.0 million interest bearing escrow account was established by the selling stockholders (the "Deferred Amount") to secure indemnity claims of the Company. Although there can be no assurances, the Company believes that the Deferred Amount should be adequate to cover these liabilities. In the event the Deferred Amount is inadequate to cover the liabilities, the Company has been informed by the selling stockholders that they will draw upon personal funds to cover such excess costs.

12

Item 4—Submission of Matters to a Vote of Security Holders

None

PART II

Item 5—Market for the Registrant's Common Equity and Related Stockholders Matters

Not Applicable

Item 6—Selected Financial Data

    The following selected consolidated financial information for each of the five fiscal years in the period ended March 31, 2001 has been derived from the audited consolidated financial statements of the Company. The information presented below should be read in conjunction with Item 7. "Management's Discussion and Analysis of Financial Condition and Results of Operations" and the consolidated financial statements of the Company and related notes thereto appearing elsewhere herein (in thousands).

	March 29, 1997			March 28, 1998			April 3, 1999			April 1, 2000			March 31, 2001
Statement of Operations Data
Net sales	$	56,683		$	64,561		$	67,701		$	54,607		$	80,539
Cost of goods sold		35,729			38,922			41,361			39,794			53,405
Gross profit		20,954			25,639			26,340			14,813			27,134
Selling, general and administrative expenses		9,308			8,552			7,213			8,073			8,329
Non-recurring expense(1)		10,000			1,250			—			—			—
Earnings from operations		1,646			15,837			19,127			6,740			18,805
Interest and other income		479			510			755			734			649
Interest expense		(2,946	)		(10,327	)		(11,190	)		(11,333	)		(10,717	)
Earnings (loss) before taxes, and extraordinary item		(821	)		6,020			8,692			(3,859	)		8,737
Taxes (benefit) on earnings (loss)		(293	)		2,406			3,325			(1,525	)		2,975
Earnings (loss) before extraordinary item		(528	)		3,614			5,367			(2,334	)		5,762
Extraordinary gain/(loss), net of taxes(2)		(1,186	)		(986	)		—			—			3,187
Net earnings (loss)	$	(1,714	)	$	2,628		$	5,367		$	(2,334	)	$	8,949
Balance Sheet Data (at period end)
Total assets	$	116,141		$	62,860		$	70,368		$	71,768		$	69,222
Working capital		7,594			16,883			22,079			13,255			11,019
Long-term debt, less current portion		78,916			98,201			102,043			97,475			87,864
Stockholders' deficit		(53,340	)		(56,940	)		(51,372	)		(53,706	)		(44,614	)
Dividends declared		—			—			—			—			—

(1)

Represents $10.0 million non-recurring expense for environmental remediation for fiscal 1997 and $1.3 million non-recurring expense for financial advisory fee for fiscal 1998.

(2)

Represents gain/(loss) on early retirement of debt, net of taxes (tax benefit).

13

Item 7—Management's Discussion and Analysis of Financial Condition and Results of Operations

    The following table and discussion should be read in conjunction with the information contained in the consolidated financial statements and notes thereto of the Company appearing elsewhere herein. Unless otherwise stated, all references to years means the Company's fiscal year ending March 31, 2001 (2001), April 1, 2000 (2000), and April 3, 1999 (1999), respectively.

Results of Operations (In millions)

	2001			Percent		2000			Percent		1999			Percent
Net sales	$	80.5		100.0	%	$	54.6		100.0	%	$	67.7		100.0	%
Gross profit		27.1		33.7	%		14.8		27.1	%		26.3		38.9	%
Selling, general and administrative expenses		8.3		10.3	%		8.1		14.8	%		7.2		10.7	%
Earnings from operations		18.8		23.4	%		6.7		12.3	%		19.1		28.3	%
Other expense, net		(10.1	)	(12.5	%)		(10.6	)	(19.4	%)		(10.4	)	(15.4	%)
Extraordinary gain(1)		3.2		4.0	%		—		—			—		—
Net earnings (loss)	$	8.9		11.1	%	($	2.3	)	(4.3	%)	$	5.4		7.9	%

(1)

Represents extraordinary gain on early retirement of debt, net of taxes.

Comparison of the Fiscal Year Ended 2001 with 2000

Net Sales

    The Company's net sales increased by approximately 47.4% or $25.9 million to $80.5 million for 2001 compared to sales of $54.6 million for 2000. The significant increase was due to increasing demand in all markets, other than automotive products. Sales to existing aerospace, industrial process control, and petrochemical customers increased by approximately 47% in 2001 compared to 2000. Based on current order volume, the Company expects the strong demand in the aerospace, industrial process control and petrochemical markets to continue in the next several quarters.

    The Company has continued to develop a significant market presence in the telecom markets through component products designed for optical networking infrastructure. Sales of these products increased by $14.3 million in 2001 compared to 2000. Based on recent industry reports, the Company expects significant weakness in these markets to prevail for the next few quarters.

    On the automotive side, unit shipments of airbag initiator products decreased moderately due to customer demand on several existing programs. The Company's airbag initiator shipments to its largest customer, Special Devices, Inc. ("SDI") decreased approximately 5% for 2001 compared to the 2000. Overall, revenue from all automotive shipments decreased approximately 5% in 2001 compared to 2000. On January 16, 2001, the Company entered into a new 12-month supply agreement with SDI. The agreement resulted in an immediate 12% price decrease and contains provisions for future price decreases subject to implementation of cost reduction initiatives and/or increased unit volumes. Based on current order volume, the Company expects no significant change in revenue from automotive products over the near term.

Gross Profit

    Gross profit increased by approximately 83.1% or $12.3 million, to $27.1 million for 2001 compared to $14.8 million for 2000. Gross margin increased to 33.7% for 2001 from 27.1% for 2000.

    The increase in gross profit is attributable to the increased sales volume. The increase in gross margin was primarily attributable to the significant increase in revenue and the corresponding impact of fixed overhead costs leveraged against higher revenue.

14

Selling, General and Administrative Expenses

    Selling, general and administrative ("S,G&A") expenses increased by approximately 2.5% or $0.2 million to $8.3 million for 2001 compared to $8.1 million for 2000. S,G&A expenses as a percent to sales decreased to 10.3% in 2001 from 14.8% for 2000.

    The $0.2 million increase in S,G&A expenses was primarily attributable to a $0.3 million increase in selling commissions incurred on the higher sales volume, and a $0.7 million increase in management incentive plans incurred with the improved operating results of the Company. These increased costs were mostly offset by non-recurring due diligence costs associated with two abandoned acquisitions as well as compensation costs incurred during the management transition in 2000. The improvement in the percentage of S,G&A expenses to sales reflects the increased growth in net sales.

Earnings from Operations

    Operating earnings increased $12.1 million to $18.8 million for 2001 compared to $6.7 million for 2000. The significant increase in operating earnings and margin was attributable to the same factors (as discussed above) that contributed to the increase in gross profit, gross margin and S,G&A expenses as a percent to sales.

Other Expense, net

    Other expense, net (which is predominantly net interest expense) decreased 4.7% or $0.5 million to $10.1 million in 2001 compared to $10.6 million in 2000. The $0.5 million decrease was primarily attributable to lower interest expense realized from the early retirement of debt during 2001. The Company has $91.0 million of indebtedness as of March 31, 2001 compared to $104.5 million at April 1, 2000.

Extraordinary Gain, net

    During 2001, the Company purchased for retirement $10.2 million face value of it's 10.75% Senior Subordinated Notes for $4.6 million in cash. The transaction resulted in an extraordinary gain on the early retirement of debt of $3.2 million, net of taxes of $2.1 million. The purchase of this indebtedness will reduce interest costs by $1.1 million annually.

Net Earnings

    Net earnings increased by approximately $11.2 million to $8.9 million for 2001 from net a net loss of $2.3 million in 2000. The increase in net earnings was primarily attributable to the increase in earnings from operations, the decrease in interest expense and the extraordinary gain, all as discussed above.

Comparison of the Fiscal Year Ended 2000 with 1999

Net Sales

    The Company's net sales decreased by approximately 19.4% or $13.1 million to $54.6 million for 2000 compared to sales of $67.7 million for 1999. The significant decrease was due to decreasing demand in all product lines. Sales to existing aerospace, industrial process control, and petrochemical customers decreased significantly in 2000. Net non-automotive shipments decreased by approximately 23% in 2000 compared to 1999.

    On the automotive side, sales of airbag initiator products decreased significantly due to weak customer demand on existing programs. The Company's airbag initiator shipments (in units) to its largest customer, Special Devices, Inc. ("SDI") was flat for 2000 compared to 1999. The flat units

15

volume was compounded by a price reduction effected under a supply agreement with SDI and decreases in automotive shipments to other customers. The agreement with SDI was effective March 18, 1999 and was due to expire on December 31, 2002 (a revised supplier agreement was executed in 2001). Overall, revenue from all automotive shipments decreased approximately 14% in 2000 compared to 1999.

Gross Profit

    Gross profit decreased by approximately 43.7% or $11.5 million, to $14.8 million for 2000 compared to $26.3 million for 1999. Gross margin decreased to 27.1% for 2000 from 38.9% for 1999.

    The decrease in gross profit is attributable to the decreased sales volume. The decrease in gross margin was primarily attributable to the significant decrease in revenue and the corresponding impact of fixed overhead costs leveraged against lower revenue. Additionally, gross margin was impacted by price concessions on automotive products that have exceeded the Company's ability to reduce its production costs.

Selling, General and Administrative Expenses

    Selling, general and administrative ("S,G&A") expenses increased by approximately 12.5% or $0.9 million to $8.1 million for 2000 compared to $7.2 million for 1999. S,G&A expenses as a percent to sales increased to 14.8% in 2000 from 10.7% for 1999.

    The $0.9 million increase in S,G&A expenses was primarily attributable to the write off of due diligence costs associated with two abandoned acquisitions as well as compensation costs incurred during the management transition in 2000. The increase in the percentage of S,G&A expenses to sales reflects the impact of the increased costs spread over decreased sales compared to 1999.

Earnings from Operations

    Operating earnings decreased $12.4 million to $6.7 million for 2000 compared to $19.1 million for 1999. The significant decrease in operating earnings and margin was attributable to the same factors (as discussed above) that contributed to the decrease in gross profit, gross margin and S,G&A expenses as a percent to sales.

Other Expense, net

    Other expense, net (which is predominantly net interest expense) increased 1.9% or $0.2 million to $10.6 million in 2000 compared to $10.4 million in 1999. The $0.2 million increase was attributable to additional interest expense incurred from additional indebtedness, net of increased interest income. The Company has $104.5 million of indebtedness as of April 1, 2000 compared to $103.2 million at April 3, 1999.

Net Earnings

    Net earnings decreased by approximately $7.7 million to a net loss of $2.3 million for 2000 from net earnings of $5.4 million in 1999. The decrease in net earnings was primarily attributable to the decrease in earnings from operations.

Liquidity and Capital Resources

    Net cash provided by operating activities was $8.7 million for 2001 compared to $0.1 million for 2000. The increase of $8.6 million was primarily attributable to increased net earnings.

16

    Net cash used in investing activities was $2.6 million for 2001 compared to $1.6 million for 2000, was due to an increase in purchases of property, plant and equipment.

    Net cash used in financing activities was $11.8 million for 2001 compared to $1.3 million for 2000. The increase in 2001 is primarily attributable to debt maturities and the early retirement of debt.

    As of March 31, 2001, the Company's outstanding indebtedness was $91.0 million, consisting of $79.8 million principal amount of the senior subordinated notes and $10.2 million of other borrowings. The Company also maintains a $20 million Revolving Credit Facility ("the Revolver") to augment its liquidity requirements. Borrowings under the Revolver may be used for general and other corporate purposes. The Revolver provides for interest on outstanding balances at the bank's prime rate plus 1¹/4% and is collateralized by accounts receivable and inventories of the Company. At March 31, 2001 there was $19.1 million available under the Revolver. The Revolver includes covenants requiring maintenance of certain financial ratios. At March 31, 2001 and April 1, 2000 there were no borrowings outstanding under the Revolver and the Company was in compliance with the required financial ratios.

    The Company believes that cash flow from operations and the availability of borrowings under the Revolving Credit Facility will provide adequate funds for ongoing operations, planned capital expenditures and debt service during the term of the Revolver.

    Capital expenditures for fiscal 2002 are expected to focus on vertical integration with investments in equipment to expand manufacturing capacity in machining, glass production, sealing and plating, as well as automation equipment to lower production costs on the high volume production lines. Expected capital expenditures for fiscal 2002 are approximately $4.3 million and will be financed through working capital.

Impact Of Recently Issued Accounting Standards

    In June 1998, the FASB issued SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities". Adoption of SFAS No. 133 is required for the Company's fiscal year beginning April 1, 2001. The Company has no Derivative Instruments and Hedging Activities as defined in SFAS No. 133 and; therefore, the adoption will not have any impact on the Company's financial position, results of operations or cash flows.

    In December 1999, the Securities Exchange Commission issued Staff Accounting Bulletin ("SAB") No. 101, "Revenue Recognition in Financial Statements". The bulletin was effective during the Company's fiscal year 2001. The Company was in compliance with the bulletin; accordingly, the adoption of SAB No. 101 did not have an impact on the Company's consolidated financial position, results of operations or cash flows.

Factors Affecting Future Performance

    Although increases in operating costs could adversely affect the Company's operations, management does not believe inflation has had a material effect on operating profit during the past several years.

Disclosure Regarding Forward Looking Statements

    This filing contains statements that are "forward looking statements", and includes, among other things, discussions of the Company's business strategy and expectations concerning market position, future operations, margins, profitability, liquidity and capital resources. Although the Company believes that the expectations reflected in such forward looking statements are reasonable, it can give no assurance that such expectations will prove to have been correct.

17

    All phases of the operations of the Company are subject to a number of uncertainties, risks and other influences, including general economic conditions, regulatory changes and competition, many of which are outside the control of the Company, any one of which, or a combination of which, could materially affect the results of the Company's operations and whether the forward looking statements made by the Company ultimately prove to be accurate.

Item 7a—Quantitative and Qualitative Disclosures About Market Risk

    The Company is exposed to market risk from changes in interest rates on the Company's Revolving Credit Facility. At March 31, 2001, the Company had no outstanding borrowings under the Revolver and, therefore, changes in interest rates would have no impact on the Company's results of operations.

Item 8—Financial Statements and Supplemental Data

INDEX TO FINANCIAL STATEMENTS	Page
Report of Independent Accountants	19
Consolidated Balance Sheets as of March 31, 2001 and April 1, 2000	20
Consolidated Statements of Operations for the years ended March 31, 2001, April 1, 2000 and April 3, 1999	21
Consolidated Statements of Stockholder's Equity (Deficit) for the years ended March 31, 2001, April 1, 2000 and April 3, 1999	22
Consolidated Statements of Cash Flows for the years ended March 31, 2001, April 1, 2000 and April 3, 1999	23
Notes to Consolidated Financial Statements	24
Schedule II—Valuation and Qualifying Accounts	33

    All other financial statement schedules not listed have been omitted since the required information is included in the consolidated financial statements, the notes thereto, is not applicable, or not required.

18

REPORT OF INDEPENDENT ACCOUNTANTS

Board of Directors and Stockholders
HCC Industries Inc. and Subsidiaries
Rosemead, California

    In our opinion, the consolidated financial statements listed in the accompanying index present fairly, in all material respects, the financial position of HCC Industries Inc. and Subsidiaries at March 31, 2001 and April 1, 2000, and the results of their operations and their cash flows for each of the three years in the period ended March 31, 2001 in conformity with accounting principles generally accepted in the United States of America. In addition, in our opinion, the financial statement schedule listed in the accompanying index presents fairly, in all material respects, the information set forth therein when read in conjunction with the related consolidated financial statements. These financial statements and financial statement schedule are the responsibility of the Company's management; our responsibility is to express an opinion on these financial statements and financial statement schedule based on our audits. We conducted our audits of these statements in accordance with auditing standards generally accepted in the United States of America, which require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

/s/ PricewaterhouseCoopers LLP
Los Angeles, California
May 11, 2001

19

HCC INDUSTRIES INC. AND SUBSIDIARIES

Consolidated Balance Sheets

(in thousands, except share data)

			March 31, 2001			April 1, 2000
ASSETS
Current Assets:
	Cash and cash equivalents		$	8,896		$	14,537
	Trade accounts receivable, less allowance for doubtful accounts of $61 at March 31, 2001 and $51 at April 1, 2000			10,799			10,041
	Inventories			6,468			4,515
	Income taxes receivable			728			2,255
	Prepaid and other current assets			1,398			728
		Total current assets		28,289			32,076
Property, Plant and Equipment, net				25,836			21,605
Other Assets:
	Intangible assets			4,775			5,063
	Deferred financing costs			2,071			2,727
	Deferred income taxes			2,080			4,100
	Restricted cash			6,171			6,197
		Total assets	$	69,222		$	71,768
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current Liabilities:
	Current portion of long-term debt		$	3,103		$	6,994
	Accounts payable			3,897			2,950
	Accrued liabilities			10,270			8,877
		Total current liabilities		17,270			18,821
Long Term Liabilities:
	Long-term debt, net of current portion			87,864			97,475
	Other long-term liabilities			8,702			9,178
				113,836			125,474
Commitments and contingencies
Stockholders' Equity (Deficit):
	Common stock; $.10 par value; authorized 550,000 shares, issued and outstanding 137,945 shares at March 31, 2001 and 135,495 shares at April 1, 2000			14			14
	Additional paid-in capital			343			200
	Accumulated deficit			(44,971	)		(53,920	)
Total stockholders' deficit				(44,614	)		(53,706	)
Total liabilities and stockholders' deficit			$	69,222		$	71,768

The accompanying notes are an integral part of these consolidated financial statements.

20

HCC INDUSTRIES INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands)

			For The Year Ended
			March 31, 2001			April 1, 2000			April 3, 1999
Net sales			$	80,539		$	54,607		$	67,701
Cost of goods sold				53,405			39,794			41,361
Gross profit				27,134			14,813			26,340
Selling, general and administrative expenses				8,329			8,073			7,213
Earnings from operations				18,805			6,740			19,127
Other income (expense):
	Interest and other income			649			734			755
	Interest expense			(10,717	)		(11,333	)		(11,190	)
		Total other expenses, net		(10,068	)		(10,599	)		(10,435	)
Earnings (loss) before taxes and extraordinary item				8,737			(3,859	)		8,692
Taxes (benefit) on earnings (loss)				2,975			(1,525	)		3,325
Earnings (loss) before extraordinary item				5,762			(2,334	)		5,367
Extraordinary gain on retirement of debt, net of taxes of $2,125				3,187			—			—
Net earnings (loss)			$	8,949		$	(2,334	)	$	5,367

The accompanying notes are an integral part of these consolidated financial statements.

21

HCC INDUSTRIES INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)

(in thousands)

		Common Stock
					Additional Paid-In Capital		Retained Earnings (Deficit)			Total Stockholders' Equity(Deficit)
		Shares	Amount
Balance, March 28, 1998		135	$	13	$	—	$	(56,953	)	$	(56,940	)
	Sale of stock	—		1		200		—			201
	Net earnings	—		—		—		5,367			5,367
Balance, April 3, 1999		135		14		200		(51,586	)		(51,372	)
	Net loss	—		—		—		(2,334	)		(2,334	)
Balance, April 1, 2000		135		14		200		(53,920	)		(53,706	)
	Sale of stock	3		—		50		—			50
	Non-cash stock compensation	—		—		93		—			93
	Net earnings	—		—		—		8,949			8,949
Balance, March 31, 2001		138	$	14	$	343	$	(44,971	)	$	(44,614	)

The accompanying notes are an integral part of these consolidated financial statements.

22

HCC INDUSTRIES INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

					For The Year Ended
					March 31, 2001			April 1, 2000			April 3, 1999
Cash flows from operating activities:
Net earnings (loss)					$	8,949		$	(2,334	)	$	5,367
Reconciliation of net earnings (loss) to net cash provided by operating activities:
		Depreciation				2,251			1,773			1,684
		Amortization				639			670			715
		Deferred income taxes				1,332			108			(333	)
		Extraordinary gain				(3,187	)		—			—
		Non-cash stock compensation				93			—			—
		Non-cash expense				—			—			1,085
		Changes in operating assets and liabilities:
			(Increase) decrease in trade accounts receivable, net			(758	)		(207	)		302
			(Increase) decrease in inventories			(1,953	)		(145	)		240
			Decrease (increase) in other assets			44			(43	)		(159	)
			Increase in other liabilities			917			1,595			120
			Increase (decrease) in accounts payable and income taxes receivable/payable			349			(1,351	)		(2,033	)
				Net cash provided by operating activities		8,676			66			6,988
Cash flows from investing activities:
	Purchases of property, plant and equipment					(2,565	)		(1,644	)		(2,242	)
		Net cash used in investing activities				(2,565	)		(1,644	)		(2,242	)
Cash flows from financing activities:
	Principal payments on long-term debt					(7,204	)		(1,280	)		(993	)
	Early retirement of debt					(4,598	)		—			—
	Proceeds from sale of stock					50			—			201
			Net cash used in financing activities			(11,752	)		(1,280	)		(792	)
Net (decrease) increase in cash and cash equivalents						(5,641	)		(2,858	)		3,954
Cash and cash equivalents at beginning of period						14,537			17,395			13,441
Cash and cash equivalents at end of period					$	8,896		$	14,537		$	17,395
Supplemental noncash financing activities:
	Capital lease obligations and mortgages				$	3,917		$	2,581		$	3,978
	Bonus notes payable to employees					—			—			1,085

The accompanying notes are an integral part of these consolidated financial statements.

23

HCC INDUSTRIES INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

General

    HCC Industries Inc. and Subsidiaries ("HCC" or "Company") was incorporated in Delaware in 1985. HCC designs, manufactures and markets broad lines of state-of-the-art, high precision electronic connection devices known as hermetic seals and operates in one reportable industry segment. The Company's products are sold primarily in North America and Europe to the aerospace, energy, telecommunications, test and measurement and automotive industries.

    On February 14, 1997, pursuant to a Stock Purchase and Sale Agreement dated as of December 23, 1996, the Company, certain members of management and an investor group completed a recapitalization of the Company (the "Recapitalization"). In connection with the Recapitalization, the Company issued an aggregate of 87,721 shares of common stock to the investor group and repurchased an aggregate of 245,972 shares of common stock from the former principal stockholders. As a result, the investor group acquired a 65% ownership interest in the Company. In accounting for the Recapitalization, no fair value adjustments were made to the book value of the Company's assets and no goodwill was recognized. The amounts paid to the selling stockholders to purchase and retire the shares of common stock was charged to stockholders' equity as a treasury stock transaction.

Indemnification

    In addition, in connection with the Recapitalization, a $6,000,000 interest bearing escrow account was established by the selling stockholders to indemnify the Company with respect to after-tax costs of contingent liabilities, subject to a cap for all indemnified liabilities of $30 million. The escrow account has been classified as restricted cash on the consolidated balance sheet. The restricted cash escrow balance was $6,171,000 at March 31, 2001 and $6,197,000 at April 1, 2000. Any funds remaining in this account upon satisfaction of conditions specified in the escrow agreement, will be paid to the selling stockholders.

Principles Of Consolidation

    The consolidated financial statements include the accounts of the Company and all wholly owned subsidiaries. All intercompany transactions (which are primarily sales/purchases and receivables/payables) have been eliminated in consolidation.

    The Company's 10³/4% Senior Subordinated Notes are guaranteed by all operating subsidiaries of the Company (the "Subsidiary Guarantors"). The guarantee obligations of the Subsidiary Guarantors (which are all direct or indirect wholly owned subsidiaries of the Company) are full, unconditional and joint and several. The aggregate assets, liabilities, earnings, and equity of the Subsidiary Guarantors are substantially equivalent to the total assets, liabilities, earnings and equity of HCC Industries Inc. and its subsidiaries on a consolidated basis. Separate financial statements of the Subsidiary Guarantors are not included in the accompanying financial statements because management of the Company has determined that separate financial statements of the Subsidiary Guarantors would not be material to investors.

Use of Estimates

    The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets

24

and liabilities, reported results of operations and disclosure of contingencies at the dates of the consolidated financial statements. Actual results could differ from those estimates.

Accounting Period

    The consolidated financial statements are based on the fiscal year ending on the Saturday nearest to March 31.

Revenue Recognition

    The Company generally manufactures products under both individual firm purchase orders and fixed price, long-term production contracts. The contracts vary in length, but generally are completed within 12 to 24 months. Sales under individual purchase orders and long-term production contracts are recognized at the time units are shipped and title transfers.

Cash Equivalents

    The Company considers all highly liquid investments purchased with an initial maturity of three months or less to be cash equivalents. The Company has bank balances, including cash and cash equivalents, which at times may exceed federally insured limits.

Accounts Receivable, Concentration Of Credit Risk and Geographic Information

    The Company grants uncollateralized credit to its customers who are located in various geographical areas. Estimated credit losses and returns have been provided for in the financial statements and, to date, have been within management's expectations.

    Two customers each accounted for more than 10% of the Company's consolidated revenues in fiscal year 2001 and one customer in fiscal years 2000 and 1999. Sales to Special Devices, Incorporated ("SDI") were $20,736,000 (26%), $21,193,000 (39%) and $24,642,000 (36%) for the fiscal years 2001, 2000 and 1999, respectively. The related accounts receivable from SDI as of March 31, 2001 and April 1, 2000 was $3,042,000 and $4,713,000, respectively. Sales to another customer amounted to $8,920,000 (11%) for the fiscal year 2001 and the related receivable as of March 31, 2001 was $375,000.

    Sales to European customers were approximately $9,250,000 (11.5%), $5,663,000 (10.4%), and $5,000,000 (7.4%) of the Company's consolidated sales for fiscal years 2001, 2000 and 1999, respectively. Sales are attributed to countries based on the location of customers.

Inventories

    Inventories are stated at the lower of cost (first-in, first-out method) or market.

Property, Plant and Equipment

    Property, plant and equipment is recorded at cost. Depreciation is computed generally by the straight-line method over the estimated useful lives of the respective assets of 3 years to 40 years.

    Repairs and maintenance are charged directly to expense as incurred. Additions and betterments to property, plant and equipment are capitalized. When assets are disposed of, the related cost and accumulated depreciation thereon are removed from the accounts and any resulting gain or loss is included in operations.

Intangible Assets

    The excess of purchase price over net assets acquired is amortized on a straight-line basis over the estimated useful lives of the respective assets of 14 to 40 years. Amortization expense was $288,000

25

(2001), $289,000 (2000), and $291,000 (1999). Accumulated amortization on the excess purchase price over net assets acquired was $2,826,000 and $2,538,000 as of March 31, 2001 and April 1, 2000, respectively.

Long-Lived Assets

    In accordance with SFAS No. 121, long-lived assets held and used by the Company are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. For purposes of evaluating the recoverability of long-lived assets, the Company evaluates the carrying value of its goodwill and property, plant and equipment on an ongoing basis and recognizes an impairment when the estimated future undiscounted cash flows from operations are less than the carrying value of the related long-lived assets.

Fair Value of Financial Instruments

    All financial instruments are held for purposes other than trading. The estimated fair value of the Company's long-term debt is based on either quoted market prices or current rates for similar issues for debt of the same remaining maturities. All other non-derivative financial instruments as of March 31, 2001 and April 1, 2000 approximate their carrying amounts either because of the short maturity of the instrument, or based on their effective interest rates compared to current market rates for similar long-term debt or obligations.

Income Taxes

    The Company accounts for income taxes under the liability method. Under this method, deferred tax assets and liabilities are determined based on the differences between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. Income tax expense is the tax payable for the period and the change during the period in deferred tax assets and liabilities.

Stock Based Employee Compensation Awards

    Statement of Financial Accounting Standards No. 123, "Accounting for the Awards of Stock-Based Compensation to Employees" ("SFAS No. 123") encourages, but does not require companies to record compensation cost for stock-based compensation plans at fair value. The Company has adopted the disclosure requirements of SFAS No. 123, which involves pro forma disclosure of net income under SFAS No. 123, detailed descriptions of plan terms and assumptions used in valuing stock option grants. The Company has chosen to continue to account for stock-based employee compensation awards in accordance with Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees".

Recently Issued Accounting Standards

    In June 1998, the FASB issued SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities". Adoption of SFAS No. 133 is required for the Company's fiscal year beginning April 1, 2001. The Company has no Derivative Instruments and Hedging Activities as defined in SFAS No. 133 and; therefore, the adoption will not have any impact on the Company's financial position, results of operations or cash flows.

    In December 1999, the Securities Exchange Commission issued Staff Accounting Bulletin ("SAB") No. 101, "Revenue Recognition in Financial Statements". The bulletin was effective during the Company's fiscal year 2001. The Company was in compliance with the bulletin; accordingly, the

26

adoption of SAB No. 101 did not have an impact on the Company's consolidated financial position, results of operations or cash flows.

2.  INVENTORIES:

    Inventories consist of the following (in thousands):

	March 31, 2001		April 1, 2000
Raw materials and component parts	$	4,861	$	3,036
Work in process		1,607		1,479
	$	6,468	$	4,515

3.  PROPERTY, PLANT AND EQUIPMENT:

    Property, plant and equipment consist of the following (in thousands):

	March 31, 2001			April 1, 2000
Land	$	4,017		$	4,017
Buildings and improvements		9,671			9,160
Furniture, fixtures and equipment		24,917			19,043
		38,605			32,220
Less accumulated depreciation		(12,769	)		(10,615	)
	$	25,836		$	21,605

4.  LONG-TERM DEBT:

    Long-term debt consists of the following (in thousands):

	March 31, 2001		April 1, 2000
103/4% Senior Subordinated Notes—interest payable semi-annually; due May 15, 2007	$	79,785	$	90,000
Subordinated Bonus Notes—10% interest payable semi-annually; $3,000,000 due March 28, 2001 and $1,083,000 due April 3, 2002		1,083		4,085
Term loans on land, building and improvements—8% interest payable monthly; due May 2008		2,762		2,762
Subordinated Notes due Selling Shareholders—12% interest payable semi-annually; due March 28, 2001		—		2,500
Capital lease obligations (interest rates ranging between 6.36% and 9.63%)		7,337		5,122
		90,967		104,469
Less current portion		3,103		6,994
	$	87,864	$	97,475

    On May 6, 1997, the Company issued $90,000,000 in principal amount of 10³/4% Senior Subordinated Notes ("Notes") due in May 2007 and used the proceeds of such issuance to refinance existing debt. In issuing the Notes, the Company incurred $3,870,000 in deferred financing costs. These costs are being amortized using the straight-line method (which approximates the effective interest

27

method) over the term of the respective Notes. The fair value of the Notes may vary from time to time based on the Company's operating performance and other market related factors external to the Company. Presently, the Company believes the fair value of the Notes to be significantly less than the carrying value.

    During fiscal year 2001, the Company purchased for retirement $10.2 million face value of the Notes for $4.6 million in cash. The transaction resulted in an extraordinary gain on the early retirement of debt of $3.2 million, net of taxes of $2.1 million.

    The Notes are redeemable at the option of the Company commencing on May 15 of the year set forth below at the redemption prices also set forth below:

Period	Redemption Price
2002	105.375	%
2003	103.583	%
2004	101.792	%
2005 and thereafter	100.000	%

    Minimum payments due under long-term debt as of March 31, 2001 are as follows (in thousands):

Fiscal Year	Amount
2002	$	3,103
2003		1,891
2004		1,532
2005		1,272
2006		620
2007 and thereafter		82,549
	$	90,967

    Cash payments for interest were $10,325,000 (2001), $10,906,000 (2000) and $10,752,000 (1999). Included in accrued liabilities is interest payable of $3,274,000 at March 31, 2001 and $3,697,000 at April 1, 2000.

5.  LINE OF CREDIT:

    The Company has a revolving credit facility agreement, as amended on November 3, 1999, (the "Revolver") of up to $20,000,000 expiring on February 14, 2002. The Revolver provides for interest on outstanding balances at the bank's prime rate plus 1-¹/4% and is collateralized by accounts receivable and inventories of the Company. At March 31, 2001 and April 1, 2000, the prime rate was 8.00% and 9.00%, respectively. At March 31, 2001, there was $19,055,000 available under the Revolver. The Revolver includes covenants requiring maintenance of certain financial ratios. At March 31, 2001 and April 1, 2000 there were no borrowings outstanding under the Revolver.

28

6.  TAXES ON EARNINGS:

    The components of income tax expense (benefit) before extraordinary item consist of the following (in thousands):

		2001		2000			1999
Current:
	Federal	$	1,437	$	(1,341	)	$	3,090
	State		206		(292	)		568
			1,643		(1,633	)		3,658
Deferred:
	Federal		1,131		91			(290	)
	State		201		17			(43	)
			1,332		108			(333	)
		$	2,975	$	(1,525	)	$	3,325

    The Company's effective tax rate differs from the statutory federal income tax rate as follows:

	2001		2000		1999
Tax provision (benefit) at the statutory rate	34.0	%	(34.0	)%	34.0	%
Nondeductible expenses	1.2	%	2.1	%	1.0	%
State taxes, net of federal benefit	3.0	%	(4.7	)%	4.0	%
Other	(4.1	)%	(2.9	)%	(0.7	)%
	34.1	%	(39.5	)%	38.3	%

    The components of the net deferred taxes are as follows (in thousands):

		March 31, 2001			April 1, 2000
Deferred Tax Assets:
	Environmental liabilities	$	3,481		$	3,671
	Accrued bonus and other		983			1,928
			4,464			5,599
Deferred Tax Liabilities:
	Depreciation and other		(1,402	)		(1,205	)
Deferred Tax Asset, net		$	3,062		$	4,394

    Cash tax payments were $3,250,000 (2001), $239,000 (2000), and $5,302,000 (1999).

29

7.  CAPITAL STOCK:

    The Company is authorized to issue an aggregate of 550,000 shares of common stock. These shares may be issued in four different classes (A, B, C or D shares) which differ only in voting rights per share as follows:

Class	Voting Rights Per Share
A	1
B	1
C	None
D	10

    During fiscal year 2001, the Company sold 2,450 shares of Class A common stock to the Company's Chairman for $50,000. In conjunction with this transaction, the Company recorded non-cash compensation of $76,000 during fiscal year 2001. The changes in each class of common shares for each of the three years in the period ended March 31, 2001 are as follows (in thousands):

		Class of Common Stock
		A			B			C			D			Total
		Shares	Par Value		Shares	Par Value		Shares	Par Value		Shares	Par Value		Shares	Par Value
Balance—March 28, 1998		103	$	9	27	$	3	4	$	1	1	$	—	135	$	13
	Sale of Stock	—		1	—		—	—		—	—		—	—		1
Balance—April 3, 1999		103		10	27		3	4		1	1		—	135		14
Balance—April 1, 2000		103		10	27		3	4		1	1		—	135		14
	Sale of Stock	3		—	—		—	—		—	—		—	3		—
Balance—March 31, 2001		106	$	10	27	$	3	4	$	1	1	$	—	138	$	14

The remaining 412,055 shares are undesignated as to class.

    In February 1997, the Company adopted a stock option plan (the "Option Plan") which provides for the grant to employees and directors, from time to time, of non-qualified stock options to purchase up to an aggregate of 17,990 shares of common stock at exercise prices to be determined by the Board of Directors. The Option Plan provides for the grant of management options to purchase 5,485 shares of common stock (the "Management Options"), management performance options to purchase 10,870 shares of common stock (the "Management Performance Options"), director options to purchase 515 shares of common stock (the "Director Options") and director performance options to purchase 1,120 shares of common stock (the "Director Performance Options"). The Management Options and Director Options are subject to a vesting schedule that generally provides for each series of options to vest 20% per year over five years if the Company attains specified annual or cumulative earnings targets as defined in the Option Plan. The Management Performance Options and Director Performance Options are subject to a vesting schedule based on a change in control in which the investor group realizes specified annual rates of return on its equity investment in the Company as defined in the Option Plan. All options are exercisable over a period of 10 years and will automatically vest on the seventh anniversary of the date on which the Option Plan was adopted, regardless of whether the performance criteria are achieved.

    The Company granted options to purchase 5,000, 2,500 and 470 shares of common stock for the fiscal years 2001, 2000, and 1999, respectively, with an exercise price of $370 per share (or higher), which is equal to (or above) the fair value of common stock at the date of grant, except for 1,000 shares in fiscal year 2000 with an exercise price below estimated fair market value. Such difference will be recognized as additional compensation expense on a straight line basis over the vesting period of the underlying options. During fiscal year 2001, the Company recorded non-cash compensation of $17,000

30

related to these shares. As of March 31, 2001, 17,390 options have been granted under the Option Plan which entitles the holders to purchase upon vesting 17,390 shares of common stock at an exercise price of $370.49 per share. At March 31, 2001, options on 1,533 shares were exercisable and options to purchase 600 shares of common stock remained available for grant.

    The weighted average fair value of each option granted was estimated on the date of grant to be approximately $85 to $100 using the minimum value method with the following assumptions (i) risk-free interest rate of 5.32%, 6.38% and 5.48% for fiscal 2001, 2000 and 1999, respectively, (ii) expected option life of 5 years, (iii) forfeiture rate of 0 and (iv) no expected dividends.

    The Company has adopted the disclosure only provisions of SFAS No. 123. For the years ended March 31, 2001, April 1, 2000 and April 3, 1999, had the Company recognized compensation expense in accordance with Statement of Financial Accounting Standards No. 123, "Accounting for Stock-Based Compensation", net earnings (loss) would have been $8,715,000, ($2,566,000) and $5,135,000, respectively.

8.  EMPLOYEE BENEFIT PLANS:

    In 1993, the Company adopted the HCC Savings and Investment Plan (the "Plan") which covers all eligible full-time employees. The Company established the Plan to meet the requirements of a qualified retirement plan pursuant to the provisions of Section 401(k) of the Internal Revenue Code. The Plan provides participants the opportunity to make tax deferred contributions to a retirement trust account in amounts up to 15% of their gross wages. The Company has elected to make matching contributions in amounts that may change from year to year. The Company contributed $667,000 (2001), $572,000 (2000) and $536,000 (1999) in matching contributions to the Plan.

    In connection with the Recapitalization, the Company adopted a bonus plan (the "Bonus Plan"), pursuant to which the Company will grant Bonus Units (each representing an interest in the bonus pool of $6.0 million) to certain key employees. The Bonus Units are awarded by a committee of the Board of Directors of the Company. On April 3, 1999 and March 28, 1998, $1.1 million and $3.0 million of Bonus Units became vested, respectively. Vested contingent bonuses become due and payable on the third anniversary of the applicable vesting date and will bear interest at 10% per annum (payable semi-annually in arrears) from each applicable vesting date until paid in full.

9.  COMMITMENTS AND CONTINGENCIES:

Environmental

    As an ongoing facet of the Company's business, it is required to maintain compliance with various environmental regulations. The cost of this compliance is included in the Company's operating results as incurred. These ongoing costs include permitting fees and expenses and specialized effluent control systems as well as monitoring and site assessment costs required by various governmental agencies. In the opinion of management, the maintenance of this compliance will not have a significant effect on the financial position or results of operations of the Company.

    In August 1994, the U.S. Environmental Protection Agency ("EPA") identified the Company as a potentially responsible party ("PRP") in the El Monte Operable Unit ("EMOU") of the San Gabriel Valley Superfund Sites. In early 1995, the Company and the EPA executed an Administrative Consent Order which requires the Company and other PRP's to perform a Remedial Investigation and Feasibility Study ("RI/FS") for the EMOU. The RI/FS was completed in 1999 and the EPA issued an interim record of decision. In addition, the Company's facility in Avon, Massachusetts is subject to Massachusetts "Chapter 21E", the State's hazardous site clean-up program. Uncertainty as to (a) the extent to which the Company caused, if at all, the conditions being investigated, (b) the extent of environmental contamination and risks, (c) the applicability of changing and complex environmental laws (d) the number and financial viability of other PRP's, (e) the stage of the investigation and/or

31

remediation, (f) the unpredictability of investigation and/or remediation costs (including as to when they will be incurred), (g) applicable clean-up standards, (h) the remediation (if any) that will ultimately be required, and (i) available technology make it difficult to assess the likelihood and scope of further investigation or remediation activities or to estimate the future costs of such activities if undertaken. In addition, liability under CERCLA is joint and several, and any potential inability of other PRP's to pay their pro rata share of the environmental remediation costs may result in the Company being required to bear costs in excess of its pro rata share.

    In fiscal 1997, the Company with the help of independent consultants, determined a cost estimate and accrued $10,000,000 for existing estimated environmental remediation and other related costs. The time frame over which the Company expects to incur such costs varies with each site, ranging up to 20 years. This estimate is based on progress made in determining the magnitude of such costs, experience gained from sites on which remediation is ongoing or has been completed, and the timing and extent of remedial actions required by the applicable governmental authorities.

    As of March 31, 2001, the accrual for estimated environmental costs was $8,702,000. Actual expenditures for environmental remediation for each of the three years in the period ended March 31, 2001 were $476,000 (2001), $238,000 (2000) and $203,000 (1999). The Company believes its accrual is adequate, but as the scope of its obligations becomes more clearly defined, this accrual may be modified and related charges against earnings may be made.

    Claims for recovery of costs already incurred and future costs have been asserted against various insurance companies. The Company has neither recorded any asset nor reduced any liability in anticipation of recovery with respect to such claims made.

Other

    On March 3, 1998, Walter Neubauer, a former stockholder of the Company and a current stockholder of SDI, filed a lawsuit in California Superior Court (Case BC186937; Walter Neubauer vs. Andrew Goldfarb, et. al.) against the Company and certain other stockholders alleging (i) breach of fiduciary duty, (ii) fraud, (iii) negligent misrepresentation, (iv) negligence, (v) violations of corporations code and (vi) breach of contract. The allegations primarily relate to the Company's exercise of an option to acquire Mr. Neubauer's stock in August 1996. In September 1999, five of the six claims were dismissed upon a summary judgement motion made by the Company, including all of the claims against the Company. The remaining claim is against Andrew Goldfarb, the former Chief Executive Officer, as an individual, for alleged violations of oral representations.

    On May 7, 1998, the Company filed a lawsuit against Mr. Neubauer in California Superior Court alleging (i) breach of contract, (ii) intentional interference with business relations and (iii) interference with prospective business advantage. All allegations relate to violations of the noncompetition agreement executed by Mr. Neubauer in August 1996. A preliminary injunction was granted in September 1998. The Company is seeking damages of $50.0 million. The case was consolidated with Mr. Neubauer's action, discussed above.

    In addition to the above, the Company is involved in other claims and litigation arising in the normal course of business. Based on the advice of counsel and in the opinion of management, the ultimate resolution of these matters will not have a significant effect on the financial position or the results of operations of the Company.

10. RELATED PARTY TRANSACTIONS:

    The Company pays an annual management fee of $125,000 plus expenses to Windward Capital Partners (a member of the investor group). The total annual management fee and expenses paid to Windward Capital Partners was $143,000, $218,000 and $152,000 for the fiscal years ended March 31, 2001, April 1, 2000 and April 3, 1999, respectively.

32

HCC INDUSTRIES INC. AND SUBSIDIARIES

SCHEDULE II—VALUATION AND QUALIFYING ACCOUNTS

(In thousands)

		Balance at Beginning of Year		Additions— Charged to Costs and Expenses		Deductions— Uncollectible Accounts Write Offs		Balance at End of Year
2001
	Allowance for doubtful accounts	$	51	$	81	$	71	$	61
2000
	Allowance for doubtful accounts	$	46	$	11	$	6	$	51
1999
	Allowance for doubtful accounts	$	40	$	6	$	—	$	46

Item 9—Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

    None

PART III

Item 10—Directors and Executive Officers for the Registrant

Management

    The following table sets forth certain information concerning the directors and executive officers of the Company. Each director is elected for a one (1) year term or until such person's successor is duly elected and qualified.

Name	Age	Position
Richard Ferraid	45	Director, Chairman, President and CEO of HCC
Christopher H. Bateman	49	Director, Vice President and Chief Financial Officer of HCC
Robert H. Barton III	67	Director of HCC
Andy Goldfarb	53	Director of HCC
Fred Hauser	64	Director of HCC
John M. Leonis	67	Director of HCC
Robert H. Rau	64	Director of HCC
Thomas J. Sikorski	40	Director of HCC
Gary L. Swenson	63	Director of HCC

    Mr. Ferraid joined the Company in 1992 and currently serves as the Chairman, President and Chief Executive Officer of HCC. Prior to becoming the President and CEO of HCC in March 2000, he served in various capacities including President of Glasseal from 1994-2000. Mr. Ferraid became a director of the Company in February 1997 following the consummation of the Recapitalization. Mr. Ferraid previously worked at Electrical Industries, a competitor of the Company. Mr. Ferraid has over 20 years of experience in the GTMS industry.

    Mr. Bateman joined the Company in 1986 and has served in various capacities. He currently serves as Vice President, Secretary and Chief Financial Officer of HCC. Mr. Bateman has been a director of the Company since 1989. Prior to joining HCC, Mr. Bateman worked for Touche Ross & Co. from

33

1978 through 1986. He currently serves on the Board of Directors of Methodist Hospital Foundation, a non-profit foundation.

    Mr. Barton was elected a director of HCC in February 1997 following the consummation of the Recapitalization. Mr. Barton was elected Chairman of French Holdings, Inc. in October 1996 and Chairman and CEO of Meridian Automotive Systems, Inc. in April 1997. Mr. Barton was Chairman, President and Chief Executive Officer of Alcoa Fujikura Ltd. from May 1984 to December 1996. He currently serves on the Board of Directors of and as senior advisor to Alcoa Fujikura Ltd., and is Chairman, President and Chief Executive Officer of Meridian Automotive Systems, Inc.

    Mr. Goldfarb retired as Chairman, Chief Executive Officer and President of HCC in January 2000 after having served in various capacities since 1976. Mr. Goldfarb has been a director of the Company since 1979 and continues to serve the Company in that role. He currently serves on the Board of Directors of Safety Components International.

    Mr. Hauser was elected a director of HCC in April 1999. Mr. Hauser retired from Metropolitan Life Insurance Company in 1997 as Senior Vice President and Corporate Controller after 39 years with the company. Mr. Hauser has served as a director of METMOR, MetLife's mortgage banking operations, and MetLife Securities, a broker dealer. Mr. Hauser has also served on the board of the New York chapter of the Financial Executives Institute, an organization of Chief Financial Officers, Treasurers and Controllers of major corporations, and was its President in 1993-1994.

    Mr. Leonis was elected a director of HCC in July 1997. Mr. Leonis retired as Chairman of the Board of Directors of Litton Industries, Inc. in April 1999. Mr. Leonis worked at Litton Industries in various capacities for over 36 years. Mr. Leonis currently serves as a member of the Board of Directors of Litton Industries.

    Mr. Rau was elected a director of HCC in July 1998. Mr. Rau retired December 31, 1998 as President of the Aerostructures Group of The BFGoodrich Company. Prior to its merger with BFGoodrich, Mr. Rau was President and Chief Executive Officer of Rohr, Inc. from 1993 to 1997. Before joining Rohr, he was an Executive Vice President of Parker Hannifin Corporation and President of its Aerospace Sector. In addition, Mr. Rau is a past member of the Board of Governors of the Aerospace Industries Association, a past Chairman of the General Aviation Manufacturers Association, a member of the Board of Trustees of Whittier College and a member of the Board of Directors of B. F. Goodrich Aerospace Europe and Chairman of the International Advisory Panel of Singapore Aerospace.

    Mr. Sikorski was elected a director of HCC in February 1997 following the consummation of the Recapitalization. Mr. Sikorski has been a Managing Director of Windward Capital Partners, L.P. since its founding in 1994. Prior to joining Windward Capital Partners, L.P., Mr. Sikorski was Director of Private Equity Investments at MetLife from 1992 to 1994 and prior to that was a Vice President in the leveraged Buyout Group at the First Boston Corporation from 1986 to 1992. Mr. Sikorski currently serves on the Board of Directors of Furr's Supermarkets, Inc., DCV Holdings, Inc. and Palace Entertainment, Inc. Mr. Sikorski is Mr. Swenson's son-in-law.

    Mr. Swenson was elected a director of HCC in February 1997 following the consummation of the Recapitalization. Mr. Swenson has been President and Senior Managing Director of Windward Capital Partners, L.P. since it's founding in 1994, and was a Managing Director of CS First Boston Corporation from 1974 to 1994. Mr. Swenson currently serves on the Board of Directors of Furr's Supermarkets, Inc. and Meridian Automotive Systems, Inc. Mr. Swenson is Mr. Sikorski's father-in-law.

34

Item 11—Executive Compensation

    The following table sets forth the total value of compensation received by the Chief Executive Officer and the two most highly compensated executive officers, other than the Chief Executive Officer, who served as executive officers of the Company as of March 31, 2001, (collectively with the Chief Executive Officer, the "Named Executive Officers") for services rendered in all capacities to the Company for the year ended March 31, 2001.

Summary Compensation Table(1)

							Long-Term Compensation— Number of Securities Underlying Options
		Annual Compensation
Name and Principal Position	Fiscal Year								All Other Compensation(2)
		Salary		Bonus
Richard Ferraid   Chairman, Chief Executive   Officer and President	2001 2000 1999	$ $ $	350,000 218,806 205,418	$ $ $	526,968 51,150 40,000	(3)	$	17,000 — —	$ $ $	14,790 13,590 13,608
Christopher Bateman   Chief Financial Officer and   Vice President	2001 2000 1999	$ $ $	212,496 207,874 205,418	$ $ $	476,968 51,150 20,000	(3)		— — —	$ $ $	15,360 20,058 24,033
Dennis Moore   Vice President	2001 2000 1999	$ $ $	119,910 117,359 116,522	$ $ $	257,858 28,859 29,494	(3)		— — —	$ $ $	15,922 9,955 10,043

(1)

None of the executive officers has received perquisites the value of which exceeded the lesser of $50,000 or 10% of the salary and bonus of such executive officer.

(2)

For 2001 all other compensation included the following amounts: Mr. Ferraid, $6,000 for Company contributions into the Company's 401(k) plan, $8,550 for automobile allowance and $240 for allocated life insurance; Mr. Bateman, $6,000 for Company contributions into the Company's 401(k) plan, $9,000 for automobile allowance and $360 for allocated life insurance; Mr. Moore, $5,946 of Company contributions into the Company's 401(k) plan, $9,000 for automobile allowance and $976 for allocated life insurance;

(3)

Includes payment of deferred compensation earned in fiscal 1998 under the terms of the Contingent Bonus Plan as follows: Mr. Ferraid $475,000; Mr. Bateman $425,000 and Mr. Moore $228,537.

Grants of Stock Options

    Options on 3,000 shares were granted to Mr. Ferraid during the fiscal year ended March 31, 2001. These options vest at 1/3 per year for calendar years 2001, 2002 and 2003. Options on 2,500 shares were granted to Mr. Ferraid during the fiscal year ended April 1, 2000. The options vest at 1/3 per year for fiscal years 2001, 2002 and 2003. These options are not part of the Option Plan as discussed below.

35

    The following table sets forth information concerning the value of unexercised options held by the Named Executive Officers. The Named Executive Officers did not exercise any options during the fiscal year ended March 31, 2001.

	Options Outstanding at March 31, 2001
Name	Number of Shares Under Option— Exercisable/ Unexercisable	Value of Unexercised Options— Exercisable/ Unexercisable(1)
Richard Ferraid	577/8,513	$123,373/$370,000
Christopher Bateman	244/2,951	$—/$—
Dennis Moore	71/1,074	$—/$—

(1)

There is no public market for the Company's stock. The fair market value of a share of Common Stock is assumed to be equal to the exercise price per share of the options that were granted under the Option Plan ($370.49 per share).

Employment Agreements

    In March 2000, Richard Ferraid entered into an employment agreement with HCC (the "Employment Agreement"). Pursuant to the Employment Agreement, Mr. Ferraid will be employed by HCC until March 31, 2003 provided that HCC may terminate Mr. Ferraid by reason of disability, death or for good cause (as defined in the Employment Agreement). Upon termination by the Company for reasons other than death, disability or good cause, Mr. Ferraid will be entitled to receive salary and benefits for a period of 24 months. The agreement provides for a base salary to be determined in accordance with HCC's policies and an annual bonus contingent on certain performance-based criteria. Pursuant to the terms of the agreement, Mr. Ferraid, during the term of the Employment Agreement and a one year period thereafter, may not solicit customers of the Company, engage in business with any competing entity or induce any other employee of the Company to leave his or her employment with the Company. On December 31, 2000, Mr. Ferraid's employment agreement was amended to reflect the additional stock options granted to him.

    Mr. Goldfarb's employment with the Company expired on April 1, 2000. In fiscal 2001, the Company executed an agreement that compensates Mr. Goldfarb at $156,000 per year for consulting services and certain non-compete provisions. The agreement has a two-year term and expires on March 31, 2002.

    Mr. Rau served as the Chief Executive Officer (CEO) of the Company from January 3, 2000 through March 8, 2000 (when Mr. Ferraid was named CEO) and agreed to serve as the Non-Executive Chairman of the Company for a one year period ending December 31, 2000. Mr. Rau's compensation for the period was $450,000 of which $200,000 was paid in the fiscal year ended April 1, 2000. Mr. Rau was also given an option to purchase 2,450 shares of HCC stock at a price of $50,000, which purchase was made in June 2000.

Option Plan

    In connection with the Recapitalization, HCC adopted the Option Plan which provides for the grant to employees from time to time of non-qualified stock options to purchase up to an aggregate of 22,887 shares (reduced to 17,990 shares in December 2000) of Common Stock at exercise prices to be

36

determined by the Board of Directors. The Option Plan provides for the grant of management options to purchase 5,485 shares of Common Stock (the "Management Options"), management performance options to purchase 10,870 shares of Common Stock (the "Management Performance Options"), director options to non-affiliates of Windward to purchase 585 shares of Common Stock (the "Director Options"), and director performance options to non-affiliates of Windward to purchase 1,120 shares of Common Stock (the "Director Performance Options"). The Management Options and Director Options were granted subject to an EBITDA (as defined in the Option Plan) vesting schedule that provides for 20% of each series of options to vest in each of fiscal year 1998 through fiscal year 2002 if the Company attains a specified target for each such year. The Options will also vest if certain cumulative EBITDA targets are achieved after certain multiple year periods or, so long as the Windward Group realizes specified rates of return on its aggregate equity investment, upon a Change of Control (as defined in the Option Plan). In addition, regardless of whether the performance criteria are achieved, all Options including, the performance-based Options, will vest automatically on the seventh anniversary of the date of grant. To date, only 20% of stock options related to the Management Options and Director Options have vested.

    The Management Performance Options and Director Performance Options were granted subject to a vesting schedule providing for approximately 50% of each series of options to vest upon a Change of Control in which the Windward Group realizes a 30% compounded annual rate of return on its aggregate equity investment in the Company and the remaining options vesting upon a Change of Control in which Windward Group realizes a 40% compounded annual rate of return on its aggregate equity investment in the Company.

    As of March 31, 2001, 17,390 options have been granted under the Option Plan which entitle the holders to purchase upon vesting 17,390 shares of Common Stock at an exercise price of $370.49 per share. An additional 600 Management Options and Management Performance Options may be granted under the Option Plan.

Contingent Bonus Plan

    In connection with the Recapitalization, HCC adopted the Bonus Plan, pursuant to which the Company will grant Bonus Units (each representing an interest in the bonus pool of $6.0 million) to certain key employees (the "Participants"). The Bonus Units will be awarded by a committee of the Board of Directors of HCC formed to administer the Bonus Plan. On April 3, 1999 and March 28, 1998, $1.1 million and $3.0 million of Bonus Units became vested, respectively. Vested contingent bonuses become due and payable on the third anniversary of the applicable vesting date and will bear interest at 10% per annum (payable semi-annually in arrears) from each applicable vesting date until paid in full. Pursuant to this Plan, the $3.0 million of Bonus Units vested in 1998 were paid during fiscal 2001.

    Under the terms of the Bonus Plan, all of an employee's Bonus Units terminate immediately when such employee ceases to be employed by the Company, unless such employment ceases due to such employees' death or disability, in which case such employee will be vested in a portion of such employee's Bonus Units.

37

Director Compensation

    Each of Messrs. Barton, Leonis, Rau and Hauser receive an annual fee of $20,000. In addition, Mr. Rau received a fee of $250,000 and $200,000 in fiscal 2001 and 2000, respectively, for serving as Chairman of the Board. Messrs. Barton, Leonis and Rau were granted 695, 470 and 470 stock options, respectively, of which 215, 150 and 150, respectively, are subject to a vesting schedule that generally provides for each option to vest 20% per year over five years (25% over four years for Mr. Rau) commencing on the first anniversary of the date of grant if the Company attains specified annual or cumulative earnings targets set forth in the Option Plan and the remaining options vest upon a change in control in which the Windward Group realized specified annual rates of return on its equity investment in the Company as defined in the Option Plan. All options automatically vest on the seventh anniversary of the date of grant regardless of whether the performance criteria are achieved. All options have an exercise price equal to the fair value of the common stock at the date of grant ($370.49 per share).

Compensation Committee Interlocks and Insider Participation

    In fiscal 2001, the Company had no compensation committee and compensation matters were handled either by Mr. Ferraid or by the Board of Directors.

Item 12—Security Ownership of Certain Beneficial Owners and Management

    The following table lists all shares of HCC's Common Stock as of March 31, 2001, beneficially owned by each director of HCC, each executive officer of HCC and each person known by the Company to beneficially own more than 5% of such outstanding shares of Common Stock at such date. The table also reflects the percentage of the shares owned beneficially by all executive officers and directors of HCC as a group. Share numbers and percentages in the table are rounded to the nearest whole share. As of March 31, 2001 there were 137,945 shares of HCC Common Stock outstanding.

Name and Address of Beneficial Owners	Number of Shares of Common Stock*	Percent
Windward/Park HCC, L.L.C.(a)(b)	53,836	39.0	%
Windward/Merban, L.P.(a)(b)	10,767	7.8	%
Windward/Merchant, L.P.(a)(b)	21,535	15.6	%
Windward Capital Associates, L.P.(a)(b)(c)	87,721	63.6	%
Windward Capital Associates, Inc.(b)(c)	87,721	63.6	%
Gary Swenson(b)(d)(e)	87,721	63.6	%
Thomas J. Sikorski(b)(e)	—	**
Robert Barton(h)	—	**
John M. Leonis(h)	270	0.2	%
Robert Rau(g)(h)	2,720	2.0	%
Fred Hauser(h)	—	**
Andrew Goldarb(h)(k)	30,453	22.1	%
Christopher Bateman(h)(i)(j)	9,173	6.6	%
Richard Ferraid(h)(j)	3,558	2.6	%
All directors and executive officers of the Company as a group (7 persons)(j)(l)	46,174	33.5	%

*

HCC's common equity is divided into four separate classes of Common stock, par value $.10 per share: (i) Class A Common Stock with one vote per share, (ii) Class B Common Stock with one vote per share, (iii) Class C Common Stock with no voting rights, except as required by applicable state law and (iv) Class D Common Stock with 10 votes per share. Except for voting rights, all the common equity of the Company have identical economic terms. Other than Windward/Merban,

38

L.P. and Windward/Merchant, L.P., all other stockholders of HCC own Class A Common Stock. See note (a) below.

**

Less than 1.0%

(a)

Windward/Park HCC, L.L.C. owns 53,836 shares of Class A Common Stock, Windward/Merban L.P. owns 6,451 shares of Class B Common Stock and 4,316 shares of Class C Common Stock, Windward/Merchant, L.P. owns 21,055 shares of Class B Common Stock and 480 shares of Class D Common Stock and Windward Capital Associates, L.P. owns 1,583 shares of Class A Common Stock. The Windward Group due to their common control may be deemed to beneficially own each other's shares, but each disclaims such beneficial ownership. The Windward Group consists of Windward, Windward/Merchant, L.P., the partners of which are Windward and an affiliate of Credit Suisse First Boston Corporation, Windward/Merban, L.P., the partners of which are Windward and an affiliate of Credit Suisse First Boston Corporation and Windward/Park HCC, LLC, the members of which are Windward and MetLife. Pursuant to a set of program agreements, the Windward Group, along with certain other entities, invests in merchant banking investments organized and managed by Windward and its affiliates. The program agreements govern the relationship among the Windward Group and provide for, among other things, procedures for investments, allocations of income and loss, distributions of funds, transfers of interests between and among the partners or members or third parties, provisions relating to the activities of the general partner or manager, including in respect of fees, powers and limitations and removal by the other partners or members, and procedures for the limited partners or non-managing members to exercise voting and management control of the investments. Windward and the other members of the Windward Group have reached agreement concerning an early termination of the period during which they may make future investments under their program agreements. Windward and the other members have informed the Company that such termination will not have any effect on their investment in, or the management or control of, the Company.

(b)

The business address for such person(s) is c/o Windward Capital Partners, L.P., 1177 Avenue of the Americas, 42nd Floor, New York, New York 10036.

(c)

Windward Capital Associates, L.P. may be deemed to share beneficial ownership of the Common Stock owned of record by the Windward Group, by virtue of its status as the general partner of Windward/Merchant, L.P., Windward/Merban, L.P. and the Managing Member of Windward/Park HCC, L.L.C., but disclaims such beneficial ownership. Windward Capital Associates, Inc. may be deemed to share beneficial ownership of shares of Common Stock owned of record by the Windward Group by virtue of its status as the general partner of Windward Capital Associates, L.P., but disclaims such beneficial ownership.

(d)

Mr. Swenson may be deemed to share beneficial ownership of the shares of Common Stock owned of record by the Windward Group, by virtue of his status as the sole stockholder of Windward Capital Associates, Inc., the general partner of Windward Capital Associates, L.P. Mr. Swenson disclaims such beneficial ownership. Windward Capital Associates, L.P. is the general partner of Windward/Merchant, L.P., Windward/Merban, L.P. and the Managing Member of Windward/Park HCC, L.L.C.

(e)

Messrs. Swenson and Sikorski are limited partners of Windward Capital Associates, L.P. None of Messrs. Swenson and Sikorski, in their capacities as limited partners of Windward Capital Associates, L.P., has or shares voting or investment power with Windward Capital Associates, L.P. with respect to the Common Stock owned by Windward Capital Associates, L.P.

(f)

Includes 270 shares of Common Stock owned by the Leonis Family 1989 Inter Vivos Family Trust dated March 6, 1989.

(g)

Includes 2,720 shares of Common Stock owned by the Rau Family Trust dated December 14, 1984.

39

(h)

The business address of such person(s) is c/o HCC Industries, Inc., 4232 Temple City Blvd., Rosemead, CA 91770-1592.

(i)

Includes 9,173 shares of Common Stock owned by the Bateman Rillorta Family Trust 2000 dated December 18, 2000.

(j)

Excludes outstanding options to purchase shares of Common Stock of which 244 and 577 are exercisable at March 31, 2001 for Mr. Bateman and Mr. Ferraid, respectively.

(k)

Includes 27,753 shares of Common Stock owned by the Andrew and Denise Goldfarb Revocable Trust of 1995. Also includes 1,350 shares of Common Stock owned by the Jessica Anne Goldfarb Irrevocable Trust and the 1,350 shares of Common Stock owned by the Rebecca Goldfarb Irrevocable Trust of which Mr. Goldfarb's brother is the trustee. Mr. Goldfarb disclaims beneficial ownership of the shares of Common Stock owned by such trusts.

(l)

Excludes shares of Common Stock referred to in notes (d) and (e) above.

Item 13—Certain Relationships and Related Transactions

    The Company pays an annual management fee of $125,000 plus expenses to Windward Capital Partners (a member of the investor group). The total annual management fee and expenses paid to Windward Capital Partners was $143,000, $218,000 and $152,000 for the fiscal years ended March 31, 2001, April 1, 2000 and April 3, 1999, respectively.

40

PART IV

Item 14—Exhibits, Financial Statement Schedules, and Reports on Form 8-K

    The following documents are filed as part of this report:

		Page Reference Form 10-K
(a)(1)	Financial Statements
	Report of Independent Accountants	19
	Consolidated Balance Sheets at March 31, 2001 and April 1, 2000	20
	Consolidated Statements of Operations for each of the three years ended March 31, 2001, April 1, 2000 and April 3, 1999	21
	Consolidated Statements of Stockholders' Equity for each of the three years March 31, 2001, April 1, 2000 and April 3, 1999	22
	Consolidated Statements of Cash Flows for each of the three years ended March 31, 2001, April 1, 2000 and April 3, 1999	23
	Notes to Financial Statements	24
(a)(2)	Financial Statement Schedules
	Schedule II—Valuation and Qualifying Accounts	33
	All other schedules for which provision is made in the applicable accounting regulations of the Securities and Exchange Commission are not required under the applicable instructions or the required information is included in the Consolidated Financial Statements and Notes thereto, or they are inapplicable and are therefore omitted.
	The guarantee obligations of the Subsidiary Guarantors (which are all direct or indirect wholly owned subsidiaries of the Company) are full, unconditional and joint and several. The aggregate assets, liabilities, earnings, and equity of the Subsidiary Guarantors are substantially equivalent to the total assets, liabilities, earnings and equity of HCC Industries Inc. and its subsidiaries on a consolidated basis. Separate financial statements of the Subsidiary Guarantors are not included in this Form 10-K because management of the Company has determined that separate financial statements of the Subsidiary Guarantors would not be material to investors.

41

(a)(3) Exhibits
Regulation S-K Exhibit Table Reference
2.	Plan of Acquisition, Reorganization, Arrangement, Liquidation or Succession.
2.1	First Amendment and Restatement of the Stock Purchase and Sale Agreement, dated as of December 23, 1996, by and among the Company, the Windward Group, MetLife and the Sellers named therein.(1)
2.2	Subordinated Note Agreement, dated as of February 14, 1997, by and among the Company, Windward/Merchant L.P., Windward/Merban L.P. and MetLife.(1)
2.3	Escrow Agreement, dated as of February 14, 1997, by and among the Company, Windward Capital Associates L.P., the Sellers named therein and U. S. Trust Company of California, N.A., as escrow agent.(1)
3.	Certificate of Incorporation and By-Laws.
3.1	Amended and Restated Certificate of Incorporation of the Company(1)
3.2	Amended and Restated By-Laws of the Company.(1)
3.3	Certificate of Incorporation of Hermetic Seal Corporation.(1)
3.4	By-Laws of Hermetic Seal Corporation.(1)
3.5	Certificate of Incorporation of Glasseal PHroducts, Inc.(1)
3.6	By-Laws of Glasseal Products, Inc.(1)
3.7	Certificate of Incorporation of Sealtron, Inc.(1)
3.8	By-Laws of Sealtron, Inc.(1)
3.9	Certificate of Incorporation of Sealtron Acquisition Corp.(1)
3.10	By-Laws of Sealtron Acquisition Corp.(1)
3.11	Articles of Incorporation of HCC Industries International.(1)
3.12	By-Laws of HCC Industries International.(1)
3.13	Declaration of Trust of Norfolk Avon Realty Trust.(1)
4.	Instruments Defining the Right of Security Holders, including Indentures.
4.1	Indenture, dated as of May 6, 1997 (the "Indenture"), among the Company, the Subsidiary Guarantors and IBJ Schroder Bank & Trust Company, as Trustee, relating to the 103/4% Senior Subordinated Notes due 2007 and the 103/4% Senior Subordinated Exchange Notes due 2007.(1)
4.2	Form of 103/4% Senior Subordinated Exchange Notes due 2007.(1)

42

4.3	Registration Rights Amendment, dated May 6, 1997, among the Company, the Subsidiary Guarantors, and Credit Suisse First Boston Corporation and Furman Selz LLC, as Initial Purchasers.(1)
4.4	First Supplemental Indenture, dated as of October 24, 1997, to the Indenture. (1)
9.	Voting Trust Agreement
9.1	Stockholders Agreement, dated as of February 14, 1997, by and among the Company, the Windward Group and the Stockholders named therein.(1)
10.	Material Contracts.
10.1	Credit Agreement, dates as of February 14, 1997, by and among the Company, Fleet Capital Corporation, as Agent, and the Lender Parties thereto.(1)
10.2	Amendment No. 1 to the Credit Agreement, dated as of May 6, 1997, by and among the Company, Fleet Capital Corporation, as Agent, and the Lender Parties thereto.(1)
10.2.1	Amendment No. 2 to the Credit Agreement, dated as of October 8, 1999, by and among the Company, Fleet Capital Corporation, as Agent, and the Lender Parties thereto.(2)
10.2.2	Amendment No. 3 to the Credit Agreement, dated as of November 3, 1999, by and among the Company, Fleet Capital Corporation, as Agent, and the Lender Parties thereto.(2)
10.3	HCC Industries Inc. Stock Option Plan, dated February 14, 1997.(1)
10.4	Form of Stock Option Agreement (included in Exhibit 10.3).(1)
10.5	Contingent Bonus Plan of HCC Industries Inc., dated as of February 14, 1997.(1)
10.6	Form of Contingent Bonus Plan Award Agreement.(1)
10.7	Employment Agreement, dated as February 14, 1997, by and between the Company and Andrew Goldfarb.(1)
10.8.1	Employment Agreement dated as of April 3, 2000 by and between the Company and Christopher H. Bateman(2)
10.9.1	Employment Agreement dated as of March 31, 2000, by and between the Company and Richard L. Ferraid(2)
10.9.2	Amended and Restated Employment Agreement dated as of December 31, 2000, by and between the Company and Richard L. Ferraid.
10.9.3	Consulting and Release Agreement dated as of September 12, 2000, by and between the Company and Andrew Goldfarb.

43

10.10	Financial Advisory Services Agreement, dated as of February 14, 1997, by and between Windward Capital Partners, L.P. and the Company.(1)
10.11	Letter Agreement, dated February 14, 1997 from the Company to Windward Capital Partners, L.P., related to fees.(1)
10.12	Purchase Agreement, dated May 1, 1997, by and among the Company, the Subsidiary Guarantors and Credit Suisse First Boston Corporation and Furman Selz LLC, as Initial Purchasers.(1)
12.	Ratio of Earnings to Fixed Charges.
12.1	Statement regarding the computation of ratio of earnings to fixed charges for the Company.
21.	Subsidiaries
21.1	Subsidiaries of the Company.(1)

(1)

Previously filed under the same exhibit number as an exhibit to Registration Statement on Form S-4 (File No. 333-32207) and incorporated herein by reference.

(2)

Previously filed under the same exhibit number as an exhibit to the Company's Annual Report on Form 10-K for the fiscal year ended April 1, 2000 and incorporated herein by reference.

(a)(4)  Reports on Form 8-K

On January 11, 2001, we filed a Form 8-K regarding the appointment of Richard Ferraid as the Chairman of the Company.

44

SIGNATURES

    Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, in the city of Rosemead, State of California, on May 18, 2001.

HCC INDUSTRIES INC.
By:	/s/ RICHARD L. FERRAID Richard L. Ferraid President and Chief Executive Officer

    Pursuant to the requirements of the Securities Act of 1934, this report has been signed below by the following persons in the capacities and on the dates indicated.

Signature	Title	Date
/s/ RICHARD L. FERRAID Richard L. Ferraid	Chairman, President and Chief Executive Officer (Principal Executive Officer)	May 18, 2001
/s/ CHRISTOPHER H. BATEMAN Christopher H. Bateman	Director, Vice President and Chief Financial Officer (Principal Financial/Accounting Officer)	May 18, 2001
/s/ ROBERT H. BARTON, III Robert H. Barton, III	Director	May 18, 2001
/s/ ANDREW GOLDFARB Andrew Goldfarb	Director	May 18, 2001
Fred Hauser	Director
/s/ JOHN M. LEONIS John M. Leonis	Director	May 18, 2001
/s/ ROBERT H. RAU Robert H. Rau	Director	May 18, 2001
/s/ THOMAS J. SIKORSKI Thomas J. Sikorski	Director	May 18, 2001
/s/ GARY L. SWENSON Gary L. Swenson	Director	May 18, 2001

45

QuickLinks

HCC INDUSTRIES INC. INDEX TO ANNUAL REPORT ON FORM 10-K
PART I

Item 2—Properties
Item 3—Legal Proceedings

Item 4—Submission of Matters to a Vote of Security Holders

PART II

Item 5—Market for the Registrant's Common Equity and Related Stockholders Matters
Item 6—Selected Financial Data
Item 7—Management's Discussion and Analysis of Financial Condition and Results of Operations
Item 7a—Quantitative and Qualitative Disclosures About Market Risk
Item 8—Financial Statements and Supplemental Data

REPORT OF INDEPENDENT ACCOUNTANTS
HCC INDUSTRIES INC. AND SUBSIDIARIES Consolidated Balance Sheets (in thousands, except share data)
HCC INDUSTRIES INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands)
HCC INDUSTRIES INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT) (in thousands)
HCC INDUSTRIES INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands)
HCC INDUSTRIES INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Item 9—Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

PART III

Item 10—Directors and Executive Officers for the Registrant
Item 11—Executive Compensation

Item 12—Security Ownership of Certain Beneficial Owners and Management
Item 13—Certain Relationships and Related Transactions

PART IV

Item 14—Exhibits, Financial Statement Schedules, and Reports on Form 8-K

SIGNATURES

EX-10.9-2

QuickLinks -- Click here to rapidly navigate through this document

EXHIBIT 10.9.2

AMENDED AND RESTATED EMPLOYMENT AGREEMENT
BETWEEN
HCC INDUSTRIES, INC.
and
RICHARD FERRAID
ORIGINAL DATE OF AGREEMENT: MARCH 31, 2000
DATE OF AMENDED AND RESTATED AGREEMENT: DECEMBER 31, 2000

TABLE OF CONTENTS

			Page No.
1. Employment
	1.1	Term	1
	1.2	Title; Reporting; Policies	1
		1.2.1 Title; Duties	1
		1.2.2 Reporting	1
		1.2.3 Policies	1
	1.3	Place; Travel	1
		1.3.1 Place of Employment	1
		1.3.2 Travel	1
	1.4	Exclusive; Outside Activities	1
2. Compensation and Benefits
	2.1	Base Salary	2
	2.2(a)	Performance Bonus FY 2001	2
	2.2(b)	Performance Bonus FY 2002 and Subsequent Fiscal years	2
	2.3	Employee's Stock Options	2
		2.3.1 Option A	2
		2.3.2 Option B	3
		2.3.3 Option C	3
		2.3.4 Option D	3
		2.3.5. Effect of Termination of Employment on Employee's Stock Options	4
		2.3.5.1	4
		2.3.5.2	4
		2.3.6 Method of Exercise	4
		2.3.7 Change of Control	4
	2.4	Benefit Programs	4
	2.5	Expenses	5
	2.6	Car	5
	2.7	D&O Insurance	5
	2.8	Vacation	5
	2.9	Indemnity	5
	2.10	Section 162(m) of the Code	5
	2.11	Company's Call Rights	5
		2.11.1 Relationship of this Agreement to Stockholders Agreement	5
		2.11.2 Termination by Company Without Good Cause	6
		2.11.3 Termination Upon Disability, Death or Retirement	6
		2.11.4 Voluntary Termination	6
		2.11.4.1 Voluntary Termination Without Notice and                           Without Non-Competition Agreement	6
		2.11.4.2 Voluntary Termination With Notice and                           With Non-Competition Agreement	7
		2.11.5 Termination for Good Cause	7
		2.11.6 Construction Termination	7
		2.11.6.1 Constructive Termination Without Notice and                           Without Non-Competition Agreement	7
		2.11.6.2 Constructive Termination With Notice and                           With Non-Competition Agreement	8

i

3. Term and Termination
	3.1	Term	8
	3.2	Termination By Company	8
		3.2.1 Death	8
		3.2.2 Unavailability	8
		3.2.3 Good Cause	8
		3.2.4 Without Cause	8
	3.3	Termination By Employee	8
	3.4	Notice of Termination	9
	3.5	Effect of Termination	10
		3.5.1 Termination By Company for Any Reason Other Than For           Good Cause	10
		3.5.2 Termination By Company for Good Cause or Termination by Employee           Without Good Reason	10
		3.5.3 Termination By Employee for Good Reason or Constructive           Termination	10
		3.5.4 Contingent Bonus Plan Benefits	10
		3.5.5 Waiver	10
		3.5.6 Mitigation	11
		3.5.7 Effect on Benefit Programs	11
		3.5.8 Cooperation	11
4. Other Agreements
	4.1	Confidential Information, etc.	11
		4.1.1 Confidential Information	11
		4.1.2 Clients; Employees	11
		4.1.3 Publications	11
		4.1.4 Documents	11
		4.1.5 Property Rights and Confidentiality Arrangement	12
	4.2	Work Product	12
		4.2.1 Ownership of Work Product	12
		4.2.2 Nonassignable Section 2870 Inventions	12
		4.2.3 Employee Disclosure Obligation	12
	4.3	Insurance	12
	4.4	Assistance in Litigation	13
	4.5	Withholding Taxes	13
	4.6	Medical Examination	13
5. Dispute Resolution
	5.1	Dispute Resolution	13
	5.2	Rights and Remedies Upon Breach	13
		5.2.1 Specific Performance	13
		5.2.2 Accounting	14
		5.2.3 Severability of Covenants	14
		5.2.4 Blue-Penciling	14
		5.2.5 Enforceability in Jurisdictions	14
	5.3	Prevailing Party	14
	5.4	Successor	14
6. General Provisions
	6.1	Assignment	14

ii

6.2	Amendments; Waivers	15
6.3	Integration	15
6.4	Interpretation; Governing Law	15
6.5	Headings	15
6.6	Counterparts	15
6.7	Successors and Assigns	15
6.8	Expenses	15
6.9	Representation by Counsel; Interpretation	15
6.10	Time is of the Essence	15
6.11	Notices	15

Exhibit A	Defined Terms	A-1
Exhibit B	Employee-Owned Invention Notification	B-1
Exhibit C	FY 2001 Executive Bonus Plan EBITDA as a % of Target	C-1
Exhibit D	Property Rights and Confidentiality Agreement	D-1

iii

AMENDED AND RESTATED EMPLOYMENT AGREEMENT

    This Amended and Restated Employment Agreement is entered into as of the 31^st day of December, 2000 by and between HCC INDUSTRIES, INC., a Delaware corporation (the "Company") and RICHARD FERRAID ("Employee"). This Agreement amends, restates, supersedes, and replaces, but does not evidence satisfaction of, that certain Employment Agreement between the parties dated March 31, 2000. The parties agree as follows. The capitalized terms on Exhibit A have the meanings respectively assigned to them, which apply equally to the singular and plural forms of the terms.

1.  Employment

    1.1 Term. The Company agrees to employ Employee for the Term, and Employee accepts such employment.

    1.2 Title; Reporting; Policies.

   1.2.1   Title; Duties. Employee will serve as President and Chief Executive Officer of the Company. Employee will faithfully perform the duties of Employee's office to the best of Employee's ability. Employee will have such duties and responsibilities as are generally consistent with such position in a company of comparable present and projected size. Employee will also serve without additional compensation in such executive capacities for one or more direct or indirect subsidiaries of the Company as the Board from time to time requests. Employee will also, subject to Employee's election as such, serve as a member of any committee of the Board to which Employee may be elected or appointed.

    1.2.2  Reporting. Employee will report directly to the Board of Directors of the Company and will be subject to the direction of the Board and to such limits on Employee's authority as the Board from time to time imposes.

    1.2.3  Policies. Employee will be subject to and comply with the policies, standards and procedures generally applicable to senior executives of the Company from time to time.

    1.3 Place; Travel.

    1.3.1  Place of Employment. The Company shall furnish Employee with proper offices, other facilities and equipment, and such support staff and services as are suitable for the performance of his duties and functions hereunder. Employee will be based at the Company's offices in Lakewood, New Jersey, or at offices in Rosemead or El Monte, California at the discretion of Employee. Employee shall not be transferred to another location outside of New Jersey without his prior, written consent.

    1.3.2  Travel. Employee will be expected to engage in frequent travel as is required for the proper discharge of Employee's duties. Employee shall be entitled to reimbursement for his travel expenses and when flying between New Jersey and California, Employee shall be entitled to fly first class except on flights where business class is available. While traveling, Employee shall be entitled to stay in quality hotel accommodations.

    1.4 Exclusive; Outside Activities. Employee will devote full and exclusive business time to the Company. The foregoing will not prohibit Employee from: (a) passive ownership of real or personal property; (b) owning less than 5% of any class of securities of a corporation that is publicly held; (c) owning any class of securities of or being a partner in any other corporation or business not competing directly or indirectly with the Company or providing goods or services to the Company if, in each case (x) interests are held for investment, (y) Employee does not become involved in active management of an operating business, and (z) such ownership or management does not materially interfere with the performance of Employee's duties. Employee may also hold directorships or similar positions with nonprofit, charitable, community or other similar organizations, so long as such activities do not

1

materially interfere with the performance of Employee's duties. Any other directorships or similar positions must be approved by the Board, which approval will not be unreasonably withheld.

2.  Compensation and Benefits

    2.1 Base Salary. Employee will be paid the Base Salary during the Term in accordance with the Company's policies.

    2.2(a)  Performance Bonus—FY 2001. In addition to the Base Salary payable under Section 2.1, the Company shall pay Employee an annual Performance Bonus predicated upon the Company's achieving the EBITDA Target (the "EBITDA Target") established by the Company and identified on Exhibit C annexed hereto and made a part hereof, as determined by the Company's independent auditing firm based upon the Company's fiscal year-end audited financial statement. The amount of Employee's Performance Bonus is expressed as a percentage of his Base Salary and corresponds to a percentage of the EBITDA Target set forth in Exhibit C. As an example, in the event that the Company achieves 100% of the targeted EBITDA, the Employee's Performance Bonus shall equal 35% of his Base Salary. This Performance Bonus will decrease or increase as the Company falls short or exceeds the EBITDA Target as shown by the graph on Exhibit C.

    Any changes in the EBITDA Target will be evidenced by a substituted Exhibit C to this Agreement which shall be initialed by the Chairman of the Board of Directors and Employee and attached to, and made a part of, this Agreement.

    In the event that Employee is entitled to a Performance Bonus under this Section 2.2, such bonus shall be paid within thirty (30) days of the issuance of the Company's fiscal year-end audited financial statement.

    In the event that this Agreement is terminated by the Company, unless such termination is pursuant to Section 3.2.3, Employee shall be entitled to a Performance Bonus for the fiscal year of the Company in which the termination occurs, equal to the greater of (i) the Target Bonus for such fiscal year, or (ii) Employee's actual Performance Bonus for the previous fiscal year.

    2.2(b)  Performance Bonus—FY 2002 and Subsequent Fiscal Years. For fiscal years beginning April 1, 2001 and beyond, the employee shall be entitled to a target bonus of not less than 35% of Base Salary. Such target bonus shall be based upon a Bonus Plan developed for FY 2002 and subsequent years as approved by the Board of Directors. The provisions of such Bonus Plans are at the sole discretion of the Board except that such provisions must provide employee with a reasonable opportunity to earn 35% of Base Salary.

    2.3 Employee's Stock Options. In consideration of Employee's execution of this Agreement, the Company shall grant Employee an option to purchase a total of 5,500 shares of the Company's common stock, pursuant to Option A, Option B, Option C, and Option D below (collectively, "Employee's Stock Options"). The terms of Employee's Stock Options shall be as follows:

    2.3.1  Option A. Employee shall have the option to purchase up to one thousand (1,000) shares of the Company's common stock at an exercise price of $0.00 (zero). This option shall expire on, and shall not be exercisable on and after, April 1, 2010, subject to earlier expiration in accordance with Section 2.3.5 below. No portion of Option A shall be exercisable on Option A's

2

date of grant, but a percentage of Option A shall vest and become exercisable on, and shall remain exercisable on and after, each of the dates set forth in the table below:

Date	Percentage of Option A which is Exercisable and Remains Exercisable Until Option A Expires
April 1, 2001	33	%
April 1, 2002	67	%
April 1, 2003	100	%

    2.3.2  Option B. Employee shall have the option to purchase up to one thousand five hundred (1,500) shares of the Company's common stock at an exercise price of $740.98 per share; provided, however, that such exercise price shall automatically be changed to $0.00 (zero) in the event that a Change of Control shall occur and Employee shall be an employee of the Company at the time of such occurrence. This option shall expire on, and shall not be exercisable on and after, the tenth (10^th) anniversary of the Effective Date, i.e., January 1, 2011, subject to earlier expiration in accordance with Section 2.3.5 below. No portion of Option B shall be exercisable on Option B's date of grant, but a percentage of Option B shall vest and become exercisable on, and shall remain exercisable on and after, each of the dates set forth in the table below:

Exercise Date	Percentage of Option B which is Exercisable and Remains Exercisable Until Option B Expires
December 31, 2001	33	%
December 31, 2002	67	%
December 31, 2003	100	%

    2.3.3  Option C. Employee shall have the option to purchase up to one thousand (1,000) shares of the Company's common stock at an exercise price of $740.98 per share; provided, however, that such exercise price shall automatically be changed to $0.00 (zero) in the event that a Change of Control shall occur and Employee shall be an employee of the Company at the time of such occurrence. This option shall expire on, and shall not be exercisable on and after January 1, 2011, subject to earlier expiration in accordance with Section 2.3.5 below. No portion of Option C shall be exercisable on Option C's date of grant, but a percentage of Option C shall vest and become exercisable on, and shall remain exercisable on and after, each of the dates set forth in the table below:

Exercise Date	Percentage of Option C which is Exercisable and Remains Exercisable Until Option C Expires
December 31, 2001	33	%
December 31, 2002	67	%
December 31, 2003	100	%

    2.3.4  Option D. Employee shall have the option to purchase up to two thousand (2,000) shares of the Company's common stock at an exercise price of $1,111.47 per share. This option shall expire on, and shall not be exercisable on and after, January1, 2011, subject to earlier expiration in accordance with Section 2.3.5 below. No portion of Option D shall be exercisable on

3

Option D's date of grant, but a percentage of Option D shall vest and become exercisable on, and shall remain exercisable on and after, each of the dates set forth in the table below:

Exercise Date	Percentage of Option D which is Exercisable and Remains Exercisable Until Option D Expires
December 31, 2001	33	%
December 31, 2002	67	%
December 31, 2003	100	%

    2.3.5  Effect of Termination of Employment on Employee's Stock Options.

    2.3.5.1  In the event that the Employee's employment with the Company shall terminate for any reason other than account of Retirement, Disability or death of the Employee, (i) an Employee's Stock Option, to the extent that such Employee's Stock Option is exercisable at the time of such termination, shall remain exercisable until the date that is 120 days after such termination, on which date such Employee's Stock Option shall expire, and (ii) an Employee's Stock Option, to the extent that such Employee's Stock Option is not exercisable at the time of such termination, shall expire at the close of business on the date of such termination. The 120-day period described in this Section 2.3.4.1 shall be extended to one (1) year after the date of such termination in the event of the Employee's death during such 120-day period. Notwithstanding the foregoing, no Employee's Stock Option shall be exercisable after the expiration of its term. As used in this Section 2.3.5, the terms "Retirement" and "Disability" shall have the meanings ascribed to them in the Stockholders' Agreement referred to in Exhibit A of this Employment Agreement.

    2.3.5.2  In the event that the Employee's employment with the Company shall terminate on account of Retirement, Disability or death of the Employee, (i) an Employee's Stock Option , to the extent that such Employee's Stock Option is exercisable at the time of such termination, shall remain exercisable until the date that is one (1) year after such termination, on which date such Employee's Stock Option shall expire, and (ii) an Employee's Stock Option, to the extent that such Employee's Stock Option is not exercisable at the time of such termination, shall expire at the close of business on the date of such termination. Notwithstanding the foregoing, no Employee's Stock Option shall be exercisable after the expiration of its term.

    2.3.6  Method of Exercise. An Employee's Stock Option shall be exercised by delivering notice to the Company's principal office, to the attention of its Secretary. Such notice shall specify the number of shares of the Company's common stock with respect to which the Employee's Stock Option is being exercised and the effective date of the proposed exercise and shall be signed by the Employee. Payment for shares of the Company's common stock purchased upon the exercise of an Employee's Stock Option shall be made on the effective date of such exercise in cash (or cash equivalents acceptable to the Company).

    2.3.7  The foregoing notwithstanding, in the event of a Change of Control, all Employee's Stock Options shall be deemed to have become fully (i.e., 100%) vested and exercisable and shall remain exercisable for a period of one (1) year thereafter regardless of whether Employee continues to be employed by the Company or, if longer, then for the period during which such Option would otherwise be exercisable under this Agreement.

    2.4 Benefit Programs. During the Term, Employee will be entitled to participate in those Benefit Programs made generally available to the senior executives of the Company, which shall in any event provide no less benefit to Employee than those Benefit Programs in which Employee participates on the date hereof.

4

    2.5 Expenses. The Company will pay or reimburse Employee for all reasonable travel (see Section 1.3.2), entertainment or other expenses incurred by Employee in connection with the performance of his duties in accordance with Company policy existing at the time the expense was incurred. Any such expenses must be either specifically authorized by the Company or incurred in accordance with Company policies. Employee must furnish the Company with evidence relating to such expenses, as the Company reasonably requires, substantiating such expenses for tax and accounting purposes.

    2.6 Car. The Company will either (a) provide Employee with the use of a car (luxury class) or reimburse Employee in the amount of $750.00 per month for car expenses and will provide maintenance and insurance in each case, in a manner consistent with present practice of the Company.

    2.7 D&O Insurance. The Company will furnish Employee with the same Directors' and Officers' liability insurance furnished to other executive officers from time to time, and use reasonable efforts to name Employee as a named insured for four (4) years after the Term ends.

    2.8 Vacation. Employee shall be entitled to four weeks paid vacation per year, taken at a time, at employee's discretion, in order to best meet employee's personal desires while minimizing any potential for disruption to the Company's business.

    Employee is encouraged to take the vacation provided for here. The Company recognizes that it may be in the best interest of the Company for employee to defer some portion of his vacation. However, in no case can employee accrue vacation in excess of six weeks without prior written consent of the Board of Directors.

    2.9 Indemnity. To the fullest extent permitted by applicable law, as from time to time in effect, the Company will indemnify Employee and hold Employee harmless for any acts or decision made in good faith in performing services for the Company. If Employee is a party to a definitive indemnification agreement with the Company, then the foregoing sentence will not be applicable.

    2.10   Section 162(m) of the Code. Notwithstanding anything to the contrary in this Agreement, any remuneration under this Agreement or any other agreements to which the Company and Employee are parties in respect of employment that is not deductible for any taxable year of the Company because of Section 162(m) of the Code will be deferred until the first day that any excess remuneration becomes deductible under Section 162(m) or by virtue of its repeal or amendment. Any such deferred payment will bear interest at the short term federal rate determined under the Code beginning with the date such payment is first deferred. Notwithstanding any provision in this Agreement to the contrary, this Section 2.10 shall survive the termination of this Agreement.

    2.11   Company's Call Rights.

    2.11.1  Relationship of This Agreement to Stockholders Agreement. The purpose and intent of this Section 2.11 is to amend the provisions of Article VII of the Stockholders Agreement as it relates specifically to Employee. The parties hereto acknowledge that Article VII of the Stockholders Agreement generally governs the right of the Company to purchase Company Stock from a Management Stockholder upon the termination of such Management Stockholder's employment with the Company. Section 7.7 of the Stockholders Agreement expressly permits the Board of Directors of the Company to amend the provisions of Article VII of the Stockholders Agreement as it relates to any Stockholder who is an employee or director of the Company. This Section 2.11 evidences the determination of the Board of Directors to so amend Article VII of the Stockholder's Agreement as it relates to Employee. As between Employee and the Company, in the event of any inconsistency between the provisions of Article VII of the Stockholders Agreement and this Section 2.11, the provisions of this Section 2.11 shall prevail. Except to the extent specifically amended by this Section 2.11, the provisions of Article VII of the Stockholders Agreement, as applicable to Employee, shall remain in full force and effect. Italicized terms used but not specifically defined in this Section 2.11 shall have the meanings ascribed to them in the

5

Stockholders Agreement (as such term is defined in Exhibit A to this Employment Agreement), unless a different meaning is clearly required by the context hereof. Capitalized (but not italicized) terms used but not specifically defined in this Section 2.11 shall have the meanings ascribed to them in Exhibit A to this Employment Agreement, unless a different meaning is clearly required by the context hereof.

    2.11.2  Termination by Company Without Good Cause. Anything in Section 7.1(a) of the Stockholders Agreement to the contrary notwithstanding, if, prior to an IPO Event, Employee's employment with the Company and its subsidiaries is terminated by the Company for any reason other than Good Cause (as such term is defined in Exhibit A to this Employment Agreement) or other than in connection with the Retirement, Disability or death of Employee, then the Company (or its designee) shall have the right, for 120 days following the date of termination of Employee's employment and subject in each case to the provisions of Section 7.3 of the Stockholders Agreement, upon the approval of at least 75% of the members of the Board, to purchase from Employee and his Permitted Transferees, and Employee and his Permitted Transferees shall be required to sell on one occasion to the Company (or its designee), all Company Stock then held by such person(s) at a price equal to the greater of (x) 100% of the Fair Market Value, or (y) $370.00 per share; provided, however, that the Company may not exercise such right if payment for such shares must be made in Management Repurchase Notes in accordance with Section 7.4 of the Stockholders Agreement.

    2.11.3  Termination Upon Disability, Death or Retirement. Anything in Section 7.1(b) of the Stockholders Agreement to the contrary notwithstanding, if, prior to an IPO Event, Employee's employment with the Company and its subsidiaries is terminated due to the Retirement, Disability or death of Employee, then the Company (or its designee) shall have the right, for 120 days following the date of termination of Employee's employment and subject in each case to the provisions of Section 7.3 of the Stockholders Agreement, upon the approval of at least 75% of the members of the Board, to purchase from Employee (or the personal representatives of Employee, as the case may be) and his Permitted Transferees, and Employee (or the personal representatives of Employee, as the case may be) and his Permitted Transferees shall be required to sell on one occasion to the Company (or its designee), all Company Stock then held by such person(s) at a price equal to the greater of (x) 100% of the Fair Market Value, or (y) $370.00 per share; provided, however, that in the event of such a "call" (a "Management Stockholder Call Event"), if prior to 180 days after the consummation of such Management Stockholder Call Event, a Change of Control (as such term is defined in Exhibit A to this Employment Agreement) shall have occurred, the Company will pay to Employee (or to his personal representative, as the case may be) upon the consummation of such Change of Control (i) the positive difference between (A) the price per share of the Company Stock paid to Stockholders in connection with the Change of Control (based on the value of cash or property (including the retained value of any security and the present value of any right to receive payment in the future) paid to such Stockholders in the Change of Control) and (B) the purchase price per share of Company Stock paid to the Employee (or his personal representatives, as the case may be) in any such Management Stockholder Call Event, multiplied by (ii) the number of shares of Company Stock sold in such Management Stockholder Call Event.

    2.11.4  Voluntary Termination. Anything in Section 7.1(c) of the Stockholders Agreement to the contrary notwithstanding, the following provisions shall apply in the event of the Voluntary Termination of Employee's employment with the Company:

    2.11.4.1  Voluntary Termination Without Notice and Without Non-Competition Agreement. Anything in Section 7.1(c) of the Stockholders Agreement to the contrary notwithstanding, if, (i) prior to an IPO Event, Employee's employment with the Company and its subsidiaries is terminated by reason of Voluntary Termination (other than Voluntary Termination as a result of Constructive Termination, as defined in this Employment Agreement) and (ii) Employee shall

6

not have provided the Company with at least six (6) months prior written notice of such Voluntary Termination, and (iii) Employee and the Company have not executed an Employee Non-Competition Agreement (as such term is defined in Exhibit A to this Employment Agreement), then in such event the Company (or its designee) shall have the right, for 120 days following the date of termination of Employee's employment and subject in each case to the provisions of Section 7.3 of the Stockholders Agreement, upon the approval of at least 75% of the members of the Board, to purchase from Employee and his Permitted Transferees, and Employee and his Permitted Transferees shall be required to sell on one occasion to the Company (or its designee), all Company Stock then held by such person(s) at a price equal to the greater of (a) 50% of the Fair Market Value, or (b) $185.00 per share. The last sentence of Section 7.1(c) of the Stockholders Agreement shall not apply to Employee.

    2.11.4.2  Voluntary Termination With Notice and With Non-Competition Agreement. Anything in Section 7.1(c) of the Stockholders Agreement to the contrary notwithstanding, if, (i) prior to an IPO Event, Employee's employment with the Company and its subsidiaries is terminated by reason of Voluntary Termination (other than Voluntary Termination as the result of Constructive Termination, as defined in this Employment Agreement) and (ii) Employee shall have provided the Company with not fewer than six (6) months prior written notice of such Voluntary Termination, and (iii) Employee and the Company shall have executed an Employee Non-Competition Agreement (as such term is defined in Exhibit A to this Employment Agreement), then in such event the Company (or its designee) shall have the right, for 120 days following the date of termination of Employee's employment and subject in each case to the provisions of Section 7.3 of the Stockholders Agreement, upon the approval of at least 75% of the members of the Board, to purchase from Employee and his Permitted Transferees, and Employee and his Permitted Transferees shall be required to sell on one occasion to the Company (or its designee), all Company Stock then held by such person(s) at a price equal to the greater of (a) 95% of the Fair Market Value, or (b) $277.87 per share. The last sentence of Section 7.1(c) of the Stockholders Agreement shall not apply to Employee.

    2.11.5  Termination for Good Cause. Anything in Section 7.1(d) of the Stockholders Agreement to the contrary notwithstanding, if, prior to an IPO Event, (x) Employee's employment with the Company and its subsidiaries is terminated by the Company for Good Cause (as such term is defined in Exhibit A to this Employment Agreement) or (y) Employee voluntarily terminates his employment simultaneous with or following termination for Good Cause or an event which, if known to the Company at the time of such voluntary termination by Employee of his employment, would allow the Company and its subsidiaries to terminate Employee's employment for Good Cause, then the Company (or its designee) shall have the right, for 120 days following the date of termination of such employment and subject in each case to the provisions of Section 7.3 of the Stockholders Agreement, upon the approval of at least 75% of the members of the Board, to purchase from Employee and his Permitted Transferees, and Employee and his Permitted Transferees shall be required to sell on one occasion to the Company (or its designee), all shares of Company Stock then held by such person(s), at a price equal to the greater of (a) 10% of Fair Market Value, or (b) $37.00 per share.

    2.11.6  Constructive Termination. Anything in Article VII of the Stockholders Agreement to the contrary notwithstanding, the following provisions shall apply in the event of the Constructive Termination (as such term is defined in Exhibit A to this Employment Agreement) of Employee's employment with the Company:

    2.11.6.1  Constructive Termination Without Notice and Without Non-Competition Agreement. Anything in Article VII of the Stockholders Agreement to the contrary notwithstanding, if, (i) prior to an IPO Event, Employee's employment with the Company and its subsidiaries is terminated by reason of Constructive Termination, and (ii) Employee shall

7

not have provided the Company with at least six (6) months prior written notice of such Constructive Termination, and (iii) Employee and the Company have not executed an Employee Non-Competition Agreement (as such term is defined in Exhibit A to this Employment Agreement), then in such event the Company (or its designee) shall have the right, for 120 days following the date of termination of Employee's employment and subject in each case to the provisions of Section 7.3 of the Stockholders Agreement, upon the approval of at least 75% of the members of the Board, to purchase from Employee and his Permitted Transferees, and Employee and his Permitted Transferees shall be required to sell on one occasion to the Company (or its designee), all Company Stock then held by such person(s) at a price equal to the greater of (a) 85% of the Fair Market Value, or (b) $314.50 per share.

    2.11.6.2  Constructive Termination With Notice and With Non-Competition Agreement. Anything in Article VII of the Stockholders Agreement to the contrary notwithstanding, if, (i) prior to an IPO Event, Employee's employment with the Company and its subsidiaries is terminated by reason of Constructive Termination (other than Voluntary Termination as the result of Constructive Termination, as defined in this Employment Agreement) and (ii) Employee shall have provided the Company with not fewer than six (6) months prior written notice of such Constructive Termination, and (iii) Employee and the Company shall have executed an Employee Non-Competition Agreement (as such term is defined in Exhibit A to this Employment Agreement), then in such event the Company (or its designee) shall have the right, for 120 days following the date of termination of Employee's employment and subject in each case to the provisions of Section 7.3 of the Stockholders Agreement, upon the approval of at least 75% of the members of the Board, to purchase from Employee and his Permitted Transferees, and Employee and his Permitted Transferees shall be required to sell on one occasion to the Company (or its designee), all Company Stock then held by such person(s) at a price equal to the greater of (a) 100% of the Fair Market Value, or (b) $351.50 per share.

3.  Term and Termination.

    3.1 Term. Unless terminated as provided in Subsection 3.2, the Term of this Agreement shall be two (2) years, commencing on April 1, 2000 and terminating on March 31, 2002; provided, however, that the Term of this Agreement shall automatically renew for a period of two (2) years on March 31^st of each year (such date, the "Renewal Date"), unless the Board of Directors shall have elected to terminate this Agreement by delivering written notice of its election to terminate to Employee not fewer than thirty (30) days prior to the Renewal Date.

    3.2 Termination By Company. The compensation and other benefits provided to Employee under this Agreement, and the employment of Employee by the Company, can be terminated prior to the expiration of the Term only as set forth in this Section 3.2.

    3.2.1  Death. Employee's employment will terminate upon his death.

    3.2.2  Unavailability. Employee's employment will terminate upon the date as of which Employee is Unavailable, without further action or notice by the Company.

    3.2.3  Good Cause. Employee's employment will terminate upon a determination that there is Good Cause for such termination.

    3.2.4  Without Cause. The Board has the right to terminate Employee's employment at any time, with or without Good Cause.

    3.3 Termination By Employee. Employee can terminate employment under this Agreement for Constructive Termination or if Employee has established Good Reason under the terms of this Agreement.

8

    3.4 Notice of Termination. Any termination by the Company for Good Cause, or by Employee for Good Reason or Constructive Termination, will be communicated by Notice of Termination to the other party hereto. A "Notice of Termination" will (a) indicate the specific termination provision in this Agreement relied upon; (b) to the extent applicable, set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of Employee's employment under such provisions; and (c) if the Date of Termination is other than the date of receipt of such notice, specify the termination date (which date shall not be more than fifteen (15) days after the giving of such notice). The failure by the Employee or the Company to set forth in the Notice of Termination any fact or circumstance that contributes to a showing of Good Reason or Good Cause will not waive any right of Employee or the Company hereunder or preclude Employee or the Company from asserting such fact or circumstance in enforcing Employee's or the Company's rights hereunder.

9

    3.5  Effect of Termination.

    3.5.1  Termination By Company for Any Reason Other than for Good Cause.  If, during the Term, Employee's employment is terminated by the Company for any reason other than for Good Cause, the Company will continue to pay to Employee the Base Salary and any Earned and Unpaid Performance Bonuses to which Employee would have been entitled for a period of twenty-four (24) months from the date of termination. Employee will also be entitled to continue to participate in any insurance programs that are part of the Benefit Programs, as though Employee remained an employee, for such period. Such amounts will be paid or provided to Employee at such times and in such manner as they would have been paid or provided if no such termination had occurred. If Employee becomes re-employed with another employer and is eligible to receive medical or other welfare benefits under another employer provided plan, then the medical and other welfare benefits described herein will be secondary to those provided under such other plan during such applicable period of eligibility.

    3.5.2  Termination By Company for Good Cause or Termination by Employee Without Good Reason.  If during the Term, Employee is terminated for Good Cause, or resigns without Good Reason, then the Company will pay to Employee the sum of Employee's Base Salary and Earned and Unpaid Performance Bonuses, to which Employee was entitled through the Date of Termination, and any other previously earned but unpaid compensation under this Agreement, in each case to the extent not previously paid (the "Accrued Obligations"). The Accrued Obligations will be paid in a lump sum in cash within thirty (30) days after the Date of Termination. All accruals or vesting of benefits will terminate as of the Date of Termination.

    3.5.3  Termination By Employee for Good Reason or Constructive Termination.  If, during the Term, Employee's employment is terminated by Employee by Constructive Termination or for Good Reason, then the Company will continue to pay to Employee the Base Salary and any Earned and Unpaid Performance Bonuses to which Employee would have been entitled for a period of twenty-four (24) months from the date of termination. Employee will also be entitled to continue to participate in any insurance programs that are part of the Benefit Programs, as though Employee remained an employee, for such period. Such amounts will be paid or provided to Employee at such times and in such manner as they would have been paid or provided if no such termination had occurred. If Employee becomes reemployed with another employer and is eligible to receive medical or other welfare benefits under another employer provided plan, then the medical and other welfare benefits described herein will be secondary to those provided under such other plan during such applicable period of eligibility.

    3.5.4  Contingent Bonus Plan Benefits.  Notwithstanding Section 6.3 of the Contingent Bonus Plan of the Company, if this Agreement is terminated by the Company under Sections 3.2.1, 3.2.2 or 3.2.4 or by the Employee under Section 3.3 the Employee's vested benefits, if any, under the Contingent Bonus Plan of the Company shall not terminate. Such benefits will be paid to the Employee in accordance with the payment provisions of the Contingent Bonus Plan of the Company.

    3.5.5  Waiver.  If Employee elects to receive the payments, and accepts the payments, set forth in this Section 3.5, then Employee agrees that such payments will constitute Employee's sole and exclusive right and entitlement in connection with Employee's employment by the Company and the termination of such employment and any and all matters related to or arising in connection with such employment. Employee's acceptance of such amounts will release the Company and its affiliated entities (including all directors, officers, employees and agents) from any claims that Employee might otherwise have or assert in connection with such matters. In addition, the Company is entitled to condition such payment on Employee's

10

execution of a release in customary form. If Employee desires to pursue or enforce any such rights, entitlements or remedies that would otherwise be waived and released, then Employee must refuse the payments provided for in Section 3.5 in their entirety. If Employee accepts such payments, then Employee will be deemed to have agreed to the foregoing exclusivity of rights and waiver of claims.

    3.5.6  Mitigation.  Employee shall have no obligation to seek or accept employment elsewhere after any termination under this Agreement pursuant to Section 3.5.1 or 3.5.3. Additionally, if Employee accepts employment elsewhere after any termination under this Agreement pursuant to Section 3.5.3, then the Company will have no right to offset any amounts paid to Employee from such other employment during the remaining Term hereof, including any benefits to which Employee is entitled under the other company's benefit plans and programs.

    3.5.7  Effect on Benefit Programs.  The termination of this Agreement will not affect any vested rights that Employee may have at the Date of Termination under any Benefit Program.

    3.5.8  Cooperation.  Following termination of employment with the Company for any reason, Employee will cooperate with the Company, as reasonably requested by the Company, to effect a transition of Employee's responsibilities and to ensure that the Company is aware of all matters being handled by Employee. Employee will, upon reasonable notice, furnish such information and assistance to the Company as may reasonably be required by the Company in connection with any legal or quasi-legal, proceeding, including any external or internal investigation, involving the Company or any of its affiliates or in which any of them is, or may become, a party; provided, however, that the Company shall reimburse Employee for any reasonable expenses incurred by him in effecting such cooperation and assistance.

4.  Other Agreements

    4.1  Confidential Information; etc.

    4.1.1  Confidential Information.  Employee will hold all Confidential Information in a fiduciary capacity for the benefit of the Company. After termination of Employee's employment, Employee will not, without the prior written consent of the Company or as may otherwise be required by court order, communicate or divulge any such Confidential Information to anyone other than the Company and those designated by it.

    4.1.2  Clients; Employees.  During the Term and afterwards for a period of one (1) year, Employee will not (a) solicit customers, suppliers or clients of the Company to reduce or discontinue their business with the Company or to engage in business with any competing entity or (b) attempt to induce any employee of the Company to leave such employment.

    4.1.3  Publications.  During the Term and afterwards for a period of one (1) year, if Employee desires to publish the results of Employee's work for or experiences with the Company through literature, interviews or speeches, then Employee will submit requests for such interviews or such literature or speeches to the Board at least thirty (30) days before any anticipated dissemination of such information for a determination of whether such disclosure is in the best interest of the Company. Employee will not publish, disclose or otherwise disseminate such information without the prior written approval of the Company.

    4.1.4  Documents.  On the Date of Termination, Employee shall deliver to the Company and not keep or deliver to anyone else any and all notes, notebooks, memoranda, documents, regardless of whether such materials are in hard copy form or on computer disks and, in

11

general, any and all material, relating to the Company's business. Employee shall not retain any such materials without prior written approval by the Company.

    4.1.5  Property Rights and Confidentiality Arrangement.  Employee shall execute a Property Rights and Confidentiality Agreement attached hereto as Exhibit D.

    4.2  Work Product.

    4.2.1  Ownership of Work Product.  If Employee conceives of, discovers, invents or creates inventions, improvements, new contributions, literary property, materials, ideas, and discoveries, whether patentable or copyrightable or not (all of the foregoing being collectively referred to herein as "Work Product"), or receives information about business opportunities for the Company, unless the Company otherwise agrees in writing, then all of the foregoing will be owned by and belong exclusively to Company and Employee will have no personal interest therein, if they are either related in any manner to the business (commercial or experimental) of Company, or are, in the case of Work Product, conceived or made on Company's time or with the use of Company's facilities or materials, or, in the case of business opportunities, are presented to Employee for the possible interest or participation of Company. Further, unless Company otherwise agrees in writing, Employee will (a) promptly disclose any such Work Product and business opportunities to Company; (b) assign to Company, upon request and without additional compensation, the entire rights to such Work Product and business opportunities; (c) sign all papers necessary to carry out the foregoing; and (d) give testimony in support of Employee's inventorship or creation in any appropriate case. Employee will not assert any rights to any Work Product or business opportunity as having been made or acquired by Employee prior to the date of this Agreement except for Work Product or business opportunities, if any, disclosed to and acknowledged by Company in writing prior to the date thereof.

    4.2.2  Nonassignable Section 2870 Inventions.  In the event that Employee's employment is subject to the California Labor Code, except for Employee's obligations under Section 4.2.3. below, this Agreement does not apply to Work Product which qualifies as a nonassignable Work Product under Section 2870 of the California Labor Code ("Section 2870"). Employee acknowledges that Employee has reviewed the Employee-Owned Invention Notification attached hereto as Exhibit B and agrees that Employee's signature on that Notification acknowledges his or her receipt thereof.

    4.2.3  Employee Disclosure Obligation.  Employee shall, during the employment and for six (6) months thereafter, promptly disclose to the Company—fully and in writing—all Work Product made, conceived or first reduced to practice by Employee, either alone or jointly with others, including, if Section 2870 applies to Employee, any Work Product that Employee believes fully qualifies for protection under Section 2870, together with all evidence, in writing, necessary to substantiate that belief. In addition, Employee will disclose to the Company all patent applications filed by Employee or on Employee's behalf within one (1) year after termination of the employment. The Company will maintain such information in confidence and will not use for any purpose or disclose to third parties any such information without Employee's consent except to the extent necessary to exploit and enforce any proprietary or intellectual property right the Company may have in such disclosed information.

    4.3  Insurance.  The Company will have the right to take out life, health, accident, "Key-man" or other insurance covering Employee, in the name of the Company and at the Company's expense, in any amount deemed appropriate by the Company. Employee will assist the Company in obtaining such insurance, including, but not limited to, submitting to any reasonably required medical examination. The Company will be the owner and beneficiary of any and all policies for such insurance.

12

    4.4  Assistance in Litigation.  Employee will render assistance, advice, and counsel to the Company at its request regarding any matter, dispute or controversy with which the Company may become involved and of which Employee has or may have reason to have knowledge, information or expertise. Such services will be without additional compensation if Employee is then employed by the Company and for reasonable compensation and subject to Employee's reasonable availability if Employee is not. In any event, the Company will pay all of Employee's reasonable out-of-pocket expenses in connection therewith.

    4.5  Withholding Taxes.  To the extent required by the law in effect at the time any amounts under this Agreement are paid, the Company will withhold from such payments the taxes and other amounts required to be withheld by applicable law. Whenever shares of the Company's common stock are to be delivered pursuant to the exercise of an Employee's Stock Option, the Company shall have the right to require the Employee to remit to the Company in cash an amount sufficient to satisfy any federal, state and local withholding tax requirements related thereto.

    4.6  Medical Examination.  Employee will submit to and cooperate in, from time to time, such examinations as the Company reasonably requests to determine whether Employee is or continues to be able to perform the essential functions of his/her position.

5.  Dispute Resolution

    5.1  Dispute Resolution.  Except as necessary for the Company to specifically enforce its rights under Sections 1.4, 4.1 and 4.2 of the Agreement or to obtain injunctive relief, the parties agree that any disputes that may rise in connection with, arising out of or relating to this Agreement, or any dispute that relates in any way, in whole or in part, to Employee's employment with the Company, the termination of that employment or any other dispute by and between the parties or their successors or assigns, will be submitted to binding arbitration in Los Angeles, California, according to the Employment Dispute Resolution rules and procedures of the American Arbitration Association and California Code of Civil Procedure Section 1283.05. Each party will pay one-half of the cost of the arbitration, excluding the cost of the parties' respective legal counsel. This arbitration obligation extends to any and all claims that may arise by and between the parties or their successors, assigns or affiliates, and expressly extends to, without limitation, claims or causes of action for wrongful termination, impairment of ability to compete in the open labor market, breach of an express or implied contract, breach of the covenant of good faith and fair dealing, breach of fiduciary duty, fraud, misrepresentation, defamation, slander, infliction of emotional distress, disability, loss of future earnings, and claims under any State Constitution, the United States Constitution, and applicable state and federal fair employment laws, federal equal employment opportunity laws, and federal and state labor statutes and regulations, including, but not limited to, the Civil Rights Act of 1964, as amended, the Fair Labor Standards Act, as amended, the Americans With Disabilities Act of 1990, the Rehabilitation Act of 1973, as amended, the Employee Retirement Income Security Act of 1974, as amended, and the Age Discrimination in Employment Act of 1967.

    5.2  Rights and Remedies Upon Breach.  If Employee breaches, or threatens to commit a breach of, any of the provision of Sections 1.4, , 4.1 and 4.2 of the Agreement (the "Restrictive Covenants"), then the Company and its subsidiaries, affiliates, successors or assigns shall have the following rights and remedies, each of which shall be independent of the others and severally enforceable, and each of which shall be in addition to, and not in lieu of, any other rights or remedies available to the Company or its subsidiaries, affiliates, successors or assigns at law or in equity:

    5.2.1  Specific Performance.  The right and remedy to have the Restrictive Covenants specifically enforced by any court of competent jurisdiction, it being agreed that any breach or threatened breach of the Restrictive Covenants would cause irreparable injury to the Company

13

or its subsidiaries, affiliates, successors or assigns and that money damages would not provide an adequate remedy to the Company or its subsidiaries, affiliates, successors or assigns;

    5.2.2  Accounting.  The right and remedy to require Employee to account for and pay over to the Company or its subsidiaries, affiliates, successors or assigns, as the case may be, all compensation, profits, monies, accruals, increments or other benefits derived or received by Employee as a result of any transaction or activity constituting a breach of the Restrictive Covenants;

    5.2.3  Severability of Covenants.  Employee acknowledges and agrees that the Restrictive Covenants are reasonable and valid in geographic and temporal scope and in all other respects. If any court determines that any of the Restrictive Covenants, or any part thereof, is invalid or unenforceable, the remainder of the Restrictive Covenants shall not thereby be affected and shall be given full effect without regard to the invalid portions;

    5.2.4  Blue-Penciling.  If any court determines that any of the Restrictive Covenants, or any part thereof, is unenforceable because of the duration or geographic scope of such provision, then such court shall have the power to reduce the duration or scope of such provision, as the case may be, and in its reduced form, such provision shall then be enforceable;

    5.2.5  Enforceability in Jurisdiction.  Employee intends to and hereby confers jurisdiction to enforce the Restrictive Covenants upon the courts of any jurisdiction within the geographic scope of such covenants. If the courts of any one or more of such jurisdictions hold the Restrictive Covenants unenforceable by reason of the breadth of such scope or otherwise, then it is the intention of Employee that such determination not bar or in any way affect the Company's or its subsidiaries', affiliates', successors' or assigns' right to the relief provided above in the courts of any other jurisdiction within the geographic scope of such covenants, as to breaches of such covenants in such other respective jurisdictions, such covenants as they relate to each jurisdiction being, for this purpose, severable into diverse and independent covenants.

    5.3  Prevailing Party.  The prevailing party in any action relating to this Agreement will be entitled to recover, in addition to other appropriate relief, reasonable legal fees, costs and expenses incurred in such action.

    5.4  Successor.  The Company will require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company, to expressly assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place.

6.  General Provisions

    6.1  Assignment.  This Agreement is a personal contract, and the rights, interests and obligations of Employee under this Agreement may not be sold, transferred, assigned, pledged or hypothecated by Employee, except that this Agreement may be assigned by the Company to any corporation or other business entity that succeeds to all or substantially all of the business of the Company or any division or sub-unit thereof through merger, consolidation, corporate reorganization or by acquisition of all of substantially all of the assets of the Company and that assumes the Company's obligations under this Agreement. The term and conditions of this Agreement will inure to the benefit of and be binding upon any successor to the business of the Company and Employee's heirs and legal representatives.

14

    6.2  Amendments; Waivers.  Amendments, waivers, demands, consents and approvals under this Agreement must be in writing and designated as such. No failure or delay in exercising any right will be deemed a waiver of such right.

    6.3  Integration.  This Agreement is the entire agreement between the parties pertaining to its subject matter, and supersedes all prior agreements and understandings of the parties in connection with such subject matter.

    6.4  Interpretation; Governing Law.  This Agreement is to be construed as a whole and in accordance with its fair meaning. This Agreement is to be interpreted in accordance with the laws of the State of New Jersey.

    6.5  Headings.  Headings of Sections and subsections are for convenience only and are not a part of this Agreement.

    6.6  Counterparts.  This Agreement may be executed in one or more counterparts, all of which constitute one agreement.

    6.7  Successors and Assigns.  This Agreement is binding upon and inures to the benefit of each party and such party's respective heirs, personal representatives, successors and assigns. Nothing in this Agreement, express or implied, is intended to confer any rights or remedies upon any other person.

    6.8  Expenses.  If the Employee seeks legal representation in connection with this Agreement, the Company shall reimburse the Employee for legal expenses in an amount not to exceed $1,500.00.

    6.9  Representation by Counsel; Interpretation.  The Employee acknowledges that he/she has had the opportunity to be represented by counsel in connection with this Agreement. Any rule of law, including, but not limited to, Section 1654 of the California Civil Code, or any legal decision that would require interpretation of any claimed ambiguities in this Agreement against the party that drafted it, has no application and is expressly waived.

    6.10  Time is of the Essence.  Time is of the essence in the performance of each and every term, provision and covenant in this Agreement.

    6.11  Notices.  Any notice to be given hereunder must be in writing and delivered to the following addresses (or to another address as either shall designate in writing). Such notice will be effective (a) if given by telecopy or if confirmed by returned telecopy, (b) one Business Day after delivery through a generally recognized and reputable overnight courier or messenger for next day deliver, (c) if given by mail or any other means, when actually delivered to the address specified.

If to the Company:	HCC Industries, Inc. 4232 Temple City Boulevard Rosemead, California 91770 Attention: Corporate Secretary
If to Employee:	At Employee's most recent address on the books and records of the Company.

15

    The parties have signed this Agreement effective as of the date on page three.

HCC INDUSTRIES, INC.

By:

Its:

EMPLOYEE:

Richard Ferraid

16

EXHIBIT A

DEFINED TERMS

    "Earned and Unpaid Performance Bonuses" means with respect to any date, Performance Bonuses which have been earned by Employee as of the end of the Company's fiscal year preceding such date but not paid to Employee.

    "Agreement" means this Employment Agreement, as amended from time to time.

    "Base Salary" means the annual amount of $350,000.00. Employee's Base Salary shall be reviewed by the Board of Directors annually and may be increased from time to time at the sole discretion of the Board of Directors. In no event will Base Salary be reduced.

    "Benefits Program" means programs such as group health, dental, life and disability, profit sharing, pension and similar programs (but excluding bonus plans) made generally available to the senior executives of the Company.

    "Board" means the Company's Board of Directors as composed at the time, not including Employee.

    "Business Day" means any day except a Saturday, Sunday or other day national banks in the State of California are authorized or required by law to close.

    "Change of Control" means the occurrence of any of the following events:

    (a) the sale, lease, transfer or other disposition of all or substantially all of the assets of the Company or its subsidiaries (taken as a whole) to any Person or related group of Persons other than the Stockholders; and/or

    (b) the merger or consolidation of the Company with or into another corporation, or the merger of another corporation into the Company, with the effect that Persons other than the Stockholders and their Permitted Transferees (as such terms are defined in the Stockholders Agreement) or any "group" (as defined in the rules promulgated under Section 13(d) of the Securities Exchange Act of 1934, as amended) of which any Stockholder or Permitted Transferees is a member) hold more than 50% of the total voting power on a fully diluted basis entitled to vote in the election of directors, managers or trustees of the surviving corporation of such merger or the corporation resulting from such consolidation; and/or

    (c) any other event which results in a Person or "group" other than the Stockholders (and their Permitted Transferees or any "group" of which any Stockholder or their Permitted Transferees is a member) holding, directly or indirectly, in the aggregate more than 50% of common stock to the issuance of all shares of common stock issuable (i) upon conversion of all convertible securities outstanding at such time and all convertible securities issuable upon the exercise of any warrants, options and other rights outstanding at such time, and (ii) upon exercise of all other warrants, options and other rights outstanding at such time; and/or

    (d) when, during any period of twenty-four consecutive months after the Effective Date, the individuals who, at the beginning of such period, constitute the Board of Directors of the Company (the "Incumbent Directors") cease for any reason other than death to constitute at least a majority thereof, provided that a director who was not a director at the beginning of such twenty-four month period shall be deemed to have satisfied such twenty-four month requirement (and be an Incumbent Director) if such director was elected by, or on the recommendation of or with the approval of, at least two-thirds of the directors who then qualified as Incumbent Directors.

    "Change of Status" means any change in Employee's title, duties and responsibilities or place of employment.

    "Code" means the Internal Revenue Code of 1986, as amended from time to time.

    "Common Stock" means the Company's common stock, $0.10 par value.

    "Company" means HCC Industries, Inc., a Delaware corporation, together with its subsidiaries.

    "Confidential Information" means information not known by the trade generally or not reasonably available to a knowledgeable person in the trade, even though such information may have been disclosed to one or more third parties pursuant to consulting agreements, joint research agreements, or other agreements entered into by the Company and includes, without limitation, trade secrets, designs, plans, formulas, customer lists, lists of suppliers, and all other confidential and proprietary information.

    "Constructive Termination" means that if there is a Change of Control in the Company, or a Change of Status of the Employee, Employee may terminate his employment with the same effect as if he were terminating for Good Reason. However, in event of a Change of Control, if employee is asked to remain as a division or subsidiary president, then there shall not be deemed to be a "constructive termination".

    "Contingent Bonus Plan of the Company" means the contingent bonus plan that went into effect upon the Recapitalization with Windward Capital February 14, 1997.

    "Date of Termination" means:

    (a) the end of the Term, if Employee's employment has not terminated before then;

    (b) if Employee's employment is terminated by the Company for Good Cause, or by Employee for Good Reason, then the date of receipt of the Notice of Termination or any later date specified therein, as the case may be;

    (c) if Employee's employment is terminated by the Company other than for Good Cause, then 180 days after the date on which the Company notifies Employee of such termination; and

    (d) if Employee's employment is terminated by reason of death or Unavailability, then the date of death of Employee or the effective date, of the Unavailability, as the case may be.

    "Disability" means the Employee's inability to substantially render to the Company the services required under this Agreement for more than 60 days out of any consecutive 120 day period because of mental or physical illness or incapacity, as determined in good faith by the Board.

    "EBITDA" means the combined earnings before interest, federal and state income taxes, and depreciation and amortization of the Company and its subsidiaries determined in good faith by the Company in accordance with generally accepted accounting principles.

    "Effective Date" means January 1, 2001.

    "Employee Non-Competition Agreement" means an agreement between Employee and the Company executed in connection with a Voluntary Termination (as such term is defined in the Stockholders Agreement) or a Constructive Termination, containing the terms outlined in Exhibit E.

    "Good Cause" means a finding by the Board in good faith that Employee has

    (a) been engaged in an act or acts of dishonesty that were intended to and did result directly or indirectly in gain or personal enrichment to Employee at the expense of the Company;

    (b) failed to substantially perform Employee's duties hereunder (other than failure resulting from Employee's Unavailability due to Disability) persisting for a reasonable period following the delivery to Employee of written notice specifying the details of any alleged failure to perform, which failure has, at the sole but reasonable discretion of the Company, resulted in injury and damage to the Company;

    (c) breached this Agreement in any material respect; or

    (d) been convicted of any felony offense or misdemeanor offense involving fraud, theft or dishonesty at any time.

An event specified in (b), (c) or (d) above will not constitute "Good Cause" until the Board provides Employee with written notice of such event setting forth in reasonable detail the specifics of such event

and such event has not been cured to the reasonable satisfaction of the Board, if such act or event can be cured, within thirty days of such notice (except upon the subsequent occurrence of a substantially similar event, in which case such second event will constitute "Good Cause" without any notice or cure period).

    "Good Reason" means, other than an event also constituting Good Cause, the Company's material breach of this Agreement.

    "Including" or "includes," when following any general provision, sentence, clause, statement, term or matter, will be deemed to be followed by, but not limited to, "and," but is not limited to," respectively.

    "Stockholders Agreement" means the Amended and Restated Stockholders Agreement, dated February 14, 1997, and amended as of September 12, 2000, among the Company, Windward Capital Associates, L.P., Windward/Park HCC, L.L.C., Windward/Merchant, L.P., Windward/Merban, L.P., and the Management Stockholders as defined therein, as the same may be amended, restated or modified from time to time.

    "Term" means the period from the Effective Date through 180 days after the Notice of Termination date in which the Employee is terminated for any reason other than Good Cause, Death, Unavailability or voluntary termination.

    "Unavailability" means Employee being unable to fully perform Employee's duties by reason of illness, Disability or other incapacity, or by reason of any statute, law, ordinance, regulation, order, judgment, or decree, except for an instance that would constitute Good Cause.

EXHIBIT B

EMPLOYEE-OWNED INVENTION NOTIFICATION

    This Employee-Owned Invention Notification ("Notification") is to inform Employee in accordance with Section 2872 of the California Labor Code that the Agreement between Employee and the Company does not require Employee to assign or offer to assign to the Company any invention that Employee developed or develops entirely on his or her own time without using the Company's equipment, supplies, facilities or trade secret information except for those inventions that either:

1.

Relate at the time of conception or reduction to practice of the invention to the Company's business, or actual or demonstrably anticipated research or development of the Company; or



2.

Result from any work performed by Employee for the Company.

    To the extent a provision in the Agreement purports to require Employee to assign an invention otherwise excluded from the preceding paragraph, the provision is against the public policy of the State of California and is unenforceable.

    This Notification does not apply to any patent or invention covered by a contract between the Company and the United States or any of its agencies requiring full title to such patent or invention to be in the United States.

    Employee acknowledges receipt of a copy of this Notification.

	By:
		Printed Name of Employee
	Date:
Witnessed by:
Printed Name of Representative
Date:

EXHIBIT C

Chart depicting HCC Industries FY2001 Executive Bonus
Plan (% of Base Pay / EBITDA as a % of Target)

EXHIBIT D

PROPERTY RIGHTS AND CONFIDENTIALITY AGREEMENT

    In consideration of my employment and the compensation paid me by HCC Industries Inc., or any of its subsidiary companies (hereinafter collectively referred to as the "Company"), I hereby agree as follows:

    1.  Confidentiality.  I agree that for and during the entire term of my employment any of the following shall be considered and kept as the private and privileged records of the Company and will not be divulged to any person, firm, or institution except with the prior written authorization fo the President of HCC:

a)

Sales and marketing: customer lists and files, price lists, forecasts, reports, data, research, orders, RFQ'S, and related information;



b)

Financial: financial reports, budgets, forecasts, operating analyses;



c)

Other: engineering processes and designs, drawings, trade secrets, purchasing data, quality levels and yields, and personnel files.

Further, upon termination of my employment for any reason, I agree that I will continue to treat as private and privileged such information and will not release any such information to any person, firm or institution without the prior written authorization of the President of HCC, and the Company shall be entitled to an injunction by any competent court to enjoin and restrain the authorized disclosure of such information.

    2.  Ownership of Employee's Inventions.  All inventions, processes, procedures, systems, discoveries, designs, glass formulae, trade secrets and improvements conceived by me, alone or with others, during the term of my employment, that are within the scope of the Company's business operations or that relate to any of the Company's work or projects, are the exclusive property of the Company. I agree to assist the Company, at its expense, to obtain patents on any such patentable ideas, inventions, and other developments, and I agree to execute all documents necessary to obtain such patents in the name of the Company.

    3.  Return of Property.  Upon termination of my employment, regardless of how effected, I shall immediately turn over to the Company all of the Company's property, including all items used by me in rendering services to the Company that may be in my possession or under my control, including all notes, memoranda, notebooks, drawings, records, reports, files and other documents (and all copies or reproductions of such material). I acknowledge that this material is the sole property of the Company.

    4.  Miscellaneous.

a)

In the event I seek employment with any person, firm or other enterprise competitive with the Company, I will disclose this Agreement to them.



b)

I acknowledge that this Agreement is not in any way intended to create an Employment Contract, Either expressed or implied.

c)

This Agreement is governed by and will be construed under the laws of the State of California.

	EMPLOYEE:
Dated:
	Employee's Signature
	Employee's Name
	HCC INDUSTRIES INC.:
Dated:	By:

QuickLinks

EXHIBIT 10.9.2

AMENDED AND RESTATED EMPLOYMENT AGREEMENT BETWEEN HCC INDUSTRIES, INC. and RICHARD FERRAID ORIGINAL DATE OF AGREEMENT: MARCH 31, 2000 DATE OF AMENDED AND RESTATED AGREEMENT: DECEMBER 31, 2000
TABLE OF CONTENTS
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
EXHIBIT A DEFINED TERMS
EXHIBIT B EMPLOYEE-OWNED INVENTION NOTIFICATION
EXHIBIT C
EXHIBIT D PROPERTY RIGHTS AND CONFIDENTIALITY AGREEMENT

EX-10.9-3

QuickLinks -- Click here to rapidly navigate through this document

EXHIBIT 10.9.3

CONSULTING AND RELEASE AGREEMENT

    CONSULTING AND RELEASE AGREEMENT ("Agreement"), made this 12th day of September 2000, and effective as of April 1, 2000, by and between HCC Industries Inc. (the "Company"), on the one hand, and Andrew Goldfarb ("Executive"), on the other hand (each a "Party," and together, the "Parties").

WITNESSETH:

WHEREAS, Executive is employed by the Company as its Chairman and Chief Executive Officer pursuant to the terms of an employment agreement dated February 14, 1997 (the "Employment Agreement"), a copy of which is annexed hereto as Exhibit A; and

WHEREAS, the Parties intend for the term of the Employment Agreement to have continued through March 31, 2000, so that the parties may provide a smooth and orderly transition of Executive's responsibilities to Robert Rau as Chairman and acting Chief Executive Officer, and until a succession plan for the Company is finalized; and

WHEREAS, the Parties wish to resolve amicably any and all matters arising out of or relating in any way to their relationship and to enter into a new contractual arrangement effective as of April 1, 2000, whereby Executive shall provide services to the Company as a consultant; and

WHEREAS, the Parties have executed an amended stockholders' agreement dated as of September 12, 2000 (the "Amended Stockholders' Agreement"), a copy of which is annexed hereto as Exhibit B.

NOW, THEREFORE, in consideration of the mutual representations, warranties, covenants and agreements set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties, intending to be legally bound hereby, agree as follows:

    1.(a)  Executive's employment with the Company shall cease effective March 31, 2000, and as of April 1, 2000, Executive shall continue to be employed by the Company as a consultant for a period of up to three (3) years, as set forth below in paragraph 3(b) (the "Consulting Period").

    (b) During the Consulting Period, Executive shall, at reasonable times and places, taking into account any other employment or activities Executive may then have, be available to consult with and advise the managers, officers, directors and other representatives of the Company on any subjects that were within Executive's scope of duties during his employment with the Company. Notwithstanding anything to the contrary herein, Executive agrees to refrain from engaging in any activity that does, will or could reasonably conflict with the best interests of the Company during the Consulting Period.

    (c) Executive shall not have any right or authority to assume or create any obligation or responsibility, express or implied, on behalf of or in the name of the Company, or to bind the Company in any manner, except as may be authorized in writing by an officer of the Company, and shall not make any contrary representation to any third party. Without in any way limiting the generality of the foregoing, Executive shall have no right or authority to accept service of legal process on behalf of the Company.

    2.  This Agreement shall become effective on the eighth (8th) day after the date of its execution by Executive, provided that Executive does not revoke his consent to the Agreement as provided in paragraph 6 below (the "Effective Date").

1

    3.  In consideration of Executive's promises in this Agreement, including the Release set forth below in paragraphs 4 and 5, the Company agrees:

    (a) to pay Executive a Base Salary (as such term is defined in the Employment Agreement) through March 31, 2000, less applicable withholding and deductions, in accordance with the Company's regular payroll practices.

    (b) to pay Executive consulting fees in the amount of one-twenty-fourth (1/24) of Executive's Base Salary per month, for a period of twenty four (24) months (i.e., through April 1, 2002) (the "Initial Consulting Period"). The Company may, in its sole discretion, by written notice to Executive on or before January 1, 2002, extend the Initial Consulting Period for an additional twelve (12) months (i.e., through April 1, 2003) (the "Extended Consulting Period," together with the Initial Consulting Period, the "Consulting Period"), at the same monthly rate.

    (c) to permit Executive to participate in the Company's medical plans during the Consulting Period and in the event that the Initial Consulting Period is not extended and Executive elects to continue coverage under COBRA, the Company shall pay the costs of such COBRA premiums for a twelve-month period, in each case, in accordance with the terms and conditions of such plans and as such plans may be amended from time to time. Except for the foregoing, Executive shall not be entitled to, and shall make no claim to, any rights or fringe benefits afforded to the Company's employees, including but not limited to participation or continuation in any employee benefit plans, executive compensation arrangements or policies applicable to employees of the Company or any of its parents, subsidiaries or affiliates, as of March 31, 2000.

    (d) to provide Executive with a computer, phone and facsimile services at his primary residence during the Consulting Period.

    (e) to transfer the lease on Executive's car to Executive.

    (f)  to reimburse Executive for reasonable travel (first-class), entertainment or other expenses incurred on behalf of the Company in connection with the performance of Executive's duties during the Consulting Period, provided that, (1) any such expenses be either specifically authorized by the Company or incurred in accordance with Company policies, and (2) Executive furnishes the Company with evidence relating to such expenses as the Company requires to substantiate such expenses for tax and accounting purposes.

    Executive also represents that he has been paid for all accrued but unused vacation time.

    Executive acknowledges and agrees that, in the event that he revokes this Agreement pursuant to paragraph 6 below, he shall have no right to receive any of the payments hereunder. The amounts referred to in this paragraph 3 are in lieu of and in full satisfaction of any amounts that might otherwise be payable under any contract, plan, policy or practice, past or present of the Company or any of its parents, subsidiaries and affiliates, including but not limited to the Employment Agreement. Moreover, Executive further acknowledges that following his receipt of the payments set forth in this paragraph 3, the Company shall have no further obligations to him as an employee, consultant or executive of the Company, and he shall have no right to further payments, with respect to his employment with the Company or the separation thereof.

    4.(a)  In consideration of the Company's promises in this Agreement, including the promises set forth in paragraph 3 above, Executive knowingly and voluntarily releases and forever discharges the Company, Windward Capital Partners, L.P., Windward Capital Associates, Inc., Windward/Park HCC L.L.C., Windward/Merban, L.P., Windward Capital Associates, L.P., HCC Industries, L.P., and any of their respective parents, subsidiaries and affiliates, together with all of their respective past and present directors, managers, officers, shareholders, partners, employees, agents, attorneys and servants, and each of their affiliates, predecessors, successors and assigns (collectively, the "Releasees") from any and

2

all claims, charges, complaints, promises, agreements, controversies, liens, demands, causes of action, obligations, damages and liabilities of any nature whatsoever, known or unknown, suspected or unsuspected, which against them Executive or his executors, administrators, successors or assigns ever had, now have, or may hereafter claim to have against any of the Releasees by reason of any matter, cause or thing whatsoever arising on or before the date this Agreement is executed by Executive, and whether or not previously asserted before any state or federal court or before any state or federal agency or governmental entity (the "Release").

    (b) This Release includes, without limitation, any rights or claims relating in any way to Executive's employment relationship with the Company or any of the Releasees, or the separation thereof, or arising under any statute or regulation, including the federal Age Discrimination in Employment Act of 1967, Title VII of the Civil Rights Act of 1964, the Civil Rights Act of 1991, the Americans with Disabilities Act of 1990, the Employee Retirement Income Security Act of 1974, and the Family Medical Leave Act of 1993, each as amended, the California Fair Employment and Housing Act, the California Labor Code, or any other federal, state or local law, regulation, ordinance, or common law, or under any policy, agreement, understanding or promise, written or oral, formal or informal, between Executive and the Company or any of the Releasees; provided that, (i) nothing contained herein shall (1) operate to waive or release any vested rights Executive may have under the Company's 401K plan, (2) impair any rights Executive may have in connection with any vested Contingent Payment Notes as set forth in the Stock Purchase and Sale Agreement dated December 23, 1996, as amended, (3) impair any rights Executive may have as a shareholder based upon events occurring subsequent to the date Executive signs this Agreement, (4) impair any rights Executive may have to indemnification under the Certificate of Incorporation or Bylaws of the Company or Section 2.8 of the Employment Agreement, or (5) be construed to prohibit Executive from bringing appropriate proceedings to enforce this Agreement, Section 2.8 of the Employment Agreement, the Contingent Payment Notes or the Amended Stockholders Agreement; and (ii) in the event the Company files or otherwise commences any claim, demand, cause of action or proceeding against Executive, Executive shall be permitted, notwithstanding the Release, to assert any counterclaim against the Company that is related to the subject matter of any such claim, demand, cause of action or proceeding.

    (c) The Board of Directors of the Company unanimously represents and warrants to Executive, after inquiry of the Company's officers, that it is not aware of any basis for any claim, demand, proceeding or cause of action against Executive. The Company further agrees that, with respect to any matters arising between February 14, 1997 and before December 23, 1999, it shall not be entitled to make or bring any claim, demand, proceeding or cause of action against Executive after the earlier of the appropriate statute of limitations period or August 15, 2001.

    (d) Executive represents that he has not commenced or joined in any claim, charge, action or proceeding whatsoever against the Company or any of the Releasees arising out of or relating to any of the matters set forth in this paragraph 4. Executive further agrees that he will not seek or be entitled to any personal recovery in any claim, charge, action or proceeding whatsoever against the Company or any of the Releasees for any of the matters set forth in this paragraph 4.

    5.  In order to provide a full and complete release, Executive understands and agrees that this Agreement is intended to include all claims, if any, which Executive may have and which Executive does not now know or suspect to exist in his favor against any of the Releasees and that this Agreement extinguishes those claims. Executive expressly waives all rights under California Civil Code Section 1542 or any statute or common law principle of similar effect in any jurisdiction. Section 1542 states as follows:

A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF

3

EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR.

    Thus, notwithstanding the provisions of Section 1542, and for the purpose of implementing a full and complete release, Executive understands and agrees that this Agreement is intended to include all claims, if any, which he may have and which he does not now know or suspect to exist in his favor against any of the Releasees and that this Agreement extinguishes those claims.

    6.  Executive acknowledges and represents that the Company has advised him to consult with an attorney of his choosing prior to signing this Agreement and that he has been given at least twenty-one (21) days during which to review and consider the provisions of this Agreement and, specifically, the Release set forth in paragraphs 4 and 5 above, although Executive may sign and return it sooner if he so desires. Executive further acknowledges and represents that he has been advised by the Company that he has the right to revoke this Agreement for a period of seven (7) days after signing it. Executive acknowledges and agrees that, if he wishes to revoke this Agreement, he must do so in writing, signed by Executive and received by the Company no later than 5:00 p.m. Pacific Standard Time on the seventh (7th) day of the revocation period. Executive further acknowledges and agrees that, in the event that he revokes this Agreement, it shall have no force or effect, and he shall have no right to receive any payment hereunder. Executive understands and agrees that the Company is under no obligation to offer the payments set forth in paragraph 3 above, and that he is under no obligation to consent to the Release set forth in paragraphs 4 and 5 above. Executive represents that he has read this Agreement, including the Release set forth in paragraphs 4 and 5 above, and understands its terms and that he enters into this Agreement freely, voluntarily, and without coercion.

    7.  The Parties agree that the following provisions of the Employment Agreement shall survive Executive's separation of employment and remain in full force and effect throughout the Consulting Period and for such further period as is provided in the Employment Agreement: Section 2.8 ("Indemnity"); Section 3.4.7 ("Cooperation"); Section 4.1 ("Confidential Information, etc.") and subsections thereof; Section 4.2 ("Work Product") and subsections thereof; Section 4.4 ("Assistance in Litigation"); Section 4.5 ("Withholding Taxes"); Section 5.1 ("Dispute Resolution"); Section 5.2 ("Rights and Remedies Upon Breach") and subsections thereof; Section 5.3 ("Prevailing Party"); and Section 6.9 ("Representation by Counsel; Interpretation").

    8.  During the Consulting Period and for a two (2) year period thereafter, Executive shall not render services, advice or financing directly or indirectly for any business enterprise that competes directly or indirectly with the Company in the business of designing, manufacturing, servicing, distributing and selling hermetic seals, including, among others, glass to metal seals, in, among others, the automotive, defense, aviation, aerospace, petrochemical, telecommunications and process control industries in any county in the State of California, the names of all of which are deemed hereby to be specifically included herein by this reference, throughout the United States and North America, and anywhere else in the world where the Company has operations or conducts business. In the event Executive commits a breach of this paragraph 8 or of Section 4.1 of the Employment Agreement and subsections thereof ("Confidential Information, etc."), in addition to any and all other remedies available to the Company, Executive shall have no right to any further payments under this Agreement, and the Release set forth in paragraphs 4 and 5 above shall remain in full force and effect.

    9.  Executive agrees that this Agreement and the negotiation of this Agreement shall remain confidential and shall not be disclosed to any person, except (a) to Executive's immediate family and as may be required for obtaining legal or tax advice; (b) for the filing of income tax returns or required financial disclosures; or (c) as may be required by law or in any proceeding to enforce this Agreement. In the case of any disclosure to immediate family or a legal or tax advisor, Executive shall require any person receiving such information to maintain its confidentiality.

4

    10. It is the desire and intent of the Parties that the provisions of this Agreement shall be enforced to the fullest extent permissible under the laws and public policies applied in each jurisdiction in which enforcement is sought. In the event that any one or more of the provisions or parts thereof of this Agreement shall be held to be invalid, illegal or unenforceable, the validity, legality and enforceability of the remainder of this Agreement shall not in any way be affected or impaired thereby. Moreover, if any one or more of the provisions or parts thereof contained in this Agreement is held to be excessively broad as to duration, scope, activity or subject, such provisions shall be construed by limiting and reducing them so as to be enforceable to the maximum extent allowed by applicable law.

    11. This Agreement, together with the Amended Stockholder's Agreement, sets forth the entire agreement and understanding of the Parties and merges and supersedes all prior discussions, agreements, arrangements and understandings of every kind and nature, written or oral, between the Parties, including, but not limited to, the Employment Agreement (except as set forth in paragraph 7 above). No provision of this Agreement may be modified or discharged unless such modification or discharge is authorized and agreed to in writing, signed by Executive and the Company.

    12. Any notice given hereunder shall be in writing and shall be deemed to have been given when delivered by messenger or courier service (against appropriate receipt), or mailed by registered or certified mail (return receipt requested), addressed as follows:

If to the Company:	HCC Industries Inc. 4232 Temple City Boulevard Rosemead, California 91770 Attention: Chief Executive Officer
with a copy to:	Windward Capital Partners, L.P. 1177 Avenue of the Americas 42nd Floor New York, New York 10036 Attention: Thomas J. Sikorski
and	Skadden, Arps, Slate, Meagher & Flom LLP Four Times Square New York, New York 10036 Attention: Howard L. Ellin, Esq.
If to Executive:	Andrew Goldfarb

or at such other address as shall be indicated to either Party in writing. Notice of change of address shall be effective only upon receipt.

    13. The failure of either Party to this Agreement to enforce any of its terms, provisions or covenants shall not be construed as a waiver of the same or of the right of such Party to enforce the same. Waiver by either Party hereto of any breach or default by the other Party of any term or provision of this Agreement shall not operate as a waiver of any other breach or default. This Agreement and the provisions contained in it shall not be construed or interpreted for or against any Party to this Agreement because that Party drafted or caused that Party's legal representative to draft any of its provisions.

    14. This Agreement and all rights, duties and remedies hereunder shall be governed by and construed and enforced in accordance with the laws of the State of California, without reference to its conflict of law rules. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument.

5

    15. The Company's offer to Executive of this Agreement and the payments set forth herein is not intended to, and shall not be construed as, any admission of liability to Executive or of any improper conduct on the part of the Company or any of the Releasees.

    16. Executive shall neither assign any rights nor delegate any personal duties under this Agreement, except with the express written consent of the Company which consent may be withheld by the Company in its sole and absolute discretion.

    THE PARTIES ACKNOWLEDGE THAT THEY HAVE EACH READ THIS AGREEMENT AND UNDERSTAND ITS TERMS. BY SIGNING THIS AGREEMENT, THE PARTIES ACKNOWLEDGE AND AGREE THAT THEY ENTER INTO THIS AGREEMENT KNOWINGLY, VOLUNTARILY AND WITHOUT COERCION, THAT THEY HAVE HAD SUFFICIENT OPPORTUNITY TO CONSULT WITH LEGAL COUNSEL OF THEIR CHOICE, AND THAT THEY DO NOT RELY, AND HAVE NOT RELIED, ON ANY FACT, REPRESENTATION, STATEMENT OR ASSUMPTION OTHER THAN AS SPECIFICALLY SET FORTH IN THIS AGREEMENT.

    IN WITNESS WHEREOF, the Parties hereto have executed this Agreement on the date first written above.

HCC INDUSTRIES INC.		EXECUTIVE
By:
	Christopher H. Bateman Vice President	Andrew Goldfarb

6

QuickLinks

EXHIBIT 10.9.3

CONSULTING AND RELEASE AGREEMENT

EX-12.1

QuickLinks -- Click here to rapidly navigate through this document

EXHIBIT 12.1

HCC INDUSTRIES INC.
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(in thousands)

		For The Year Ended
		March 31, 2001		April 1, 2000			April 3, 1999
Earnings:
	Earnings (loss) before taxes and extraordinary item	$	8,737	$	(3,859	)	$	8,692
	Add: Fixed charges(1)		10,717		11,333			11,190
		$	19,454	$	7,474		$	19,882
Fixed Charges:(1)
	Interest expense	$	10,717	$	11,333		$	11,190
Ratio of Earnings to Fixed Charges			1.8		—	(2)		1.8

(1)

The ratios of earnings to fixed charges were computed by adding earnings before income taxes and extraordinary item to fixed charges and dividing by fixed charges. Fixed charges consist of interest expense and amortization of debt issuance costs.

(2)

The Company's earnings were insufficient to cover fixed charges for the fiscal year ended April 1, 2000. The dollar amount of the deficiency was $3,859,000.

QuickLinks

EXHIBIT 12.1

HCC INDUSTRIES INC. COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES (in thousands)