<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement
[_] Confidential, for Use of the
Commission Only (as Permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S)240.14a-11(c) or (S)240.14a-12
DTM Corporation
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
Notes:
<PAGE>
[LOGO OF DTM]
April 21, 2000
Dear Shareholder:
You are cordially invited to attend the 2000 Annual Meeting of Shareholders of
DTM Corporation, which will be held at the Company's corporate and manufacturing
offices at 1611 Headway Circle, Building Two, Austin, Texas on Wednesday, May
17, 2000 at 1:00 p.m. (Central Daylight Time).
Details of the business to be conducted at the annual meeting are given in the
attached Notice of Annual Meeting of Shareholders and Proxy Statement.
After careful consideration, the Company's Board of Directors has unanimously
approved the proposals set forth in the Proxy Statement and recommends that you
vote in favor of each such proposal and for each of the directors nominated for
election to the Company's Board of Directors.
In order for us to have an efficient meeting, please sign, date and return the
enclosed proxy promptly in the accompanying reply envelope. If you are able to
attend the annual meeting and wish to change your proxy vote, you may do so
simply by voting in person at the annual meeting.
We look forward to seeing you at the meeting.
Sincerely,
/s/ John S. Murchison, III
John S. Murchison, III
President and Chief Executive Officer
------------------------------------------------------------------------------
YOUR VOTE IS IMPORTANT
In order to assure your representation at the meeting, you are requested to
complete, sign and date the enclosed proxy as promptly as possible and return
it in the enclosed envelope. No postage needs to be affixed if mailed in the
United States.
------------------------------------------------------------------------------
<PAGE>
DTM CORPORATION
1611 Headway Circle
Building Two
Austin, Texas 78754
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 17, 2000
TO THE SHAREHOLDERS OF DTM CORPORATION:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of DTM
Corporation, a Texas corporation (the "Company"), will be held on Wednesday, May
17, 2000, at 1:00 p.m. (Central Daylight Time) at the Company's corporate and
manufacturing offices at 1611 Headway Circle, Building Two, Austin, Texas, for
the following purposes, as more fully described in the Proxy Statement
accompanying this Notice:
1. To elect five (5) directors to the Company's Board of Directors to
serve until the next annual meeting of the Company's Board of
Directors or until their respective successors are duly elected and
qualified;
2. To ratify the appointment of Ernst & Young LLP as independent auditors
of the Company for the fiscal year ending December 31, 2000; and
3. To transact such other business as may properly come before the
meeting or any adjournment or adjournments thereof.
Only shareholders of record at the close of business on April 12, 2000 are
entitled to notice of and to vote at the Annual Meeting. The stock transfer
books of the Company will remain open between the record date and the date of
the meeting. A list of shareholders entitled to vote at the Annual Meeting will
be available for inspection at the executive offices of the Company.
All shareholders are cordially invited to attend the meeting in person.
Whether or not you plan to attend, please sign and return the enclosed proxy as
promptly as possible in the envelope enclosed for your convenience. Should you
receive more than one proxy because your shares are registered in different
names and addresses, each proxy should be signed and returned to assure that all
your shares will be voted. You may revoke your proxy at any time prior to the
Annual Meeting. If you attend the Annual Meeting and vote by ballot, your proxy
will be revoked automatically and only your vote at the Annual Meeting will be
counted.
Sincerely,
/s/ Geoffrey W. Kreiger
Geoffrey W. Kreiger
Secretary
Austin, Texas
April 21, 2000
YOUR VOTE IS VERY IMPORTANT, REGARDLESS OF THE NUMBER OF SHARES YOU OWN. PLEASE
READ THE ATTACHED PROXY STATEMENT CAREFULLY, COMPLETE, SIGN AND DATE THE
ENCLOSED PROXY CARD AS PROMPTLY AS POSSIBLE, AND RETURN IT IN THE ENCLOSED
ENVELOPE.
<PAGE>
DTM CORPORATION
1611 Headway Circle
Building Two
Austin, Texas 78754
---------------
PROXY STATEMENT
FOR THE ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON MAY 17, 2000
---------------
General
The enclosed proxy (the "Proxy") is solicited on behalf of the Board of
Directors (the "Board") of DTM Corporation, a Texas corporation (the "Company"),
for use at the Annual Meeting of Shareholders to be held on Wednesday, May 17,
2000 (the "Annual Meeting"). The Annual Meeting will be held at 1:00 p.m.
(Central Daylight Time) at the Company's corporate and manufacturing offices at
1611 Headway Circle, Building Two, Austin, Texas. These proxy solicitation
materials were mailed on or about April 21, 2000, to all shareholders entitled
to vote at the Annual Meeting.
Voting
The specific proposals to be considered and acted upon at the Annual
Meeting are summarized in the accompanying Notice and are described in more
detail in this Proxy Statement. On April 12, 2000, the record date for
determination of shareholders entitled to notice of and to vote at the Annual
Meeting, 7,027,631 shares of the Company's common stock, par value $0.0002 per
share ("Common Stock"), were issued and outstanding. No shares of the Company's
preferred stock, par value $0.001 per share, were issued and outstanding. Each
shareholder is entitled to one vote for each share of Common Stock held by such
shareholder on April 12, 2000. Shareholders may not cumulate votes in the
election of directors.
All votes will be tabulated by the inspector of election appointed for the
meeting, who will separately tabulate affirmative and negative votes,
abstentions and broker non-votes. Abstentions and broker non-votes are counted
as present for purposes of determining the presence or absence of a quorum for
the transaction of business. In the election of directors, the five candidates
receiving the highest number of affirmative votes will be elected.
Principal Holders of Securities
On June 11, 1999, the Company repaid a shareholder liability of
approximately $909,000 to an affiliate of Proactive Finance Group, LLC
("Proactive"). Immediately after the transaction, this shareholder owned
approximately 50.3% of the outstanding capital stock of the Company.
Proxies
If the enclosed form of Proxy is properly signed and returned, the shares
represented thereby will be voted at the Annual Meeting in accordance with the
instructions specified thereon. If the Proxy does not specify how the shares
represented thereby are to be voted, the Proxy will be voted "FOR" the election
of each director proposed by the Board unless the authority to vote for the
election of such director is withheld. You may revoke or change your Proxy at
any time before the Annual Meeting by filing with the Secretary of the Company
at the Company's principal executive offices at 1611 Headway Circle, Building
Two, Austin, Texas 78754, a notice of revocation or another signed Proxy with a
later date. You may also revoke your Proxy by attending the Annual Meeting and
voting in person.
1
<PAGE>
Solicitation
The Company will bear the entire cost of solicitation, including the
preparation, assembly, printing and mailing of this Proxy Statement, the Proxy
and any additional solicitation materials furnished to the shareholders. Copies
of solicitation materials will be furnished to brokerage houses, fiduciaries and
custodians holding shares in their names that are beneficially owned by others
so that they may forward this solicitation material to such beneficial owners.
In addition, the Company may reimburse such persons for their costs in
forwarding the solicitation materials to such beneficial owners. The original
solicitation of proxies by mail may be supplemented by a solicitation by
telephone, telegram or other means by directors, officers or employees of the
Company. No additional compensation will be paid to these individuals for any
such services. Except as described above, the Company does not presently intend
to solicit proxies other than by mail.
2
<PAGE>
MATTERS TO BE CONSIDERED AT ANNUAL MEETING
PROPOSAL ONE: ELECTION OF DIRECTORS
-----------------------------------
General
Five directors are proposed to be elected at the Annual Meeting, all of
whom currently are directors of the Company. Each director will serve until the
next annual meeting of shareholders or until his successor is duly elected and
qualified. The Bylaws of the Company provide for a Board of Directors of not
less than three directors, with the number of directors that shall constitute
the Board of Directors being determined from time to time by resolution of the
Board of Directors (provided that no decrease in the number of directors that
would have the effect of shortening the term of an incumbent director may be
made by the Board of Directors). Furthermore, the Bylaws provide that vacancies
on the Board of Directors may be filled by election at an annual or special
meeting of the shareholders called for such purpose or by the affirmative vote
of a majority of the remaining directors, even if the remaining directors do not
constitute a quorum.
The nominees for election each have agreed to serve if elected, and
management has no reason to believe that such nominee will be unavailable to
serve. The persons named in the accompanying Proxy may act with discretionary
authority to vote for a new management nominee should any nominee named in this
Proxy Statement become unavailable for election, although management is unaware
of any circumstances likely to render any nominee unavailable for election.
Unless otherwise instructed, the proxy holders will vote the Proxies received by
them FOR the nominees named below.
The Amended and Restated Articles of Incorporation of the Company do not
permit cumulative voting. A plurality of the votes of the holders of the
outstanding shares of Common Stock of the Company represented at the Annual
Meeting at which a quorum is present will elect all five directors.
Nominees for Director
The following table sets forth the name, age (as of April 21, 2000) and
current position with the Company of each person who is a nominee for election
as a director of the Company.
Name Age Director Since
- ---- --- --------------
Lawrence Goldstein 37 1999
Anthony Mariotti 39 1999
John S. Murchison, III 59 1996
Thomas G. Ricks 47 1988
James B. Skaggs 62 1999
LAWRENCE GOLDSTEIN has served as a director of the Company since February
1999. Mr. Goldstein joined Seed Capital Partners, a venture capital firm, as
Vice President in May 1994 and assumed the position of President in July 1998.
In addition, he has been a principal of Proactive Finance Group, LLC since its
inception in August 1997. Mr. Goldstein serves as a member of the Compensation
Committee of the Board of Directors.
ANTHONY MARIOTTI has served as a director of the Company since February
1999. Since August 1997, Mr. Mariotti has served as the Managing Member of
Proactive Finance Group, LLC. Prior to that, he served as the interim Chief
Financial Officer and Chief Operating Officer of Skipstone, Inc. from April 1996
until July
3
<PAGE>
1997. From August 1991 until April 1996, Mr. Mariotti was an independent
financing and business advisor. Mr. Mariotti serves as a member of the
Compensation Committee of the Board of Directors.
JOHN S. MURCHISON, III joined the Company as Chief Executive Officer and
President in September 1990. He was a director of the Company from September
1990 through September 1993 and currently serves as a director, having been
again elected as a member of the Board of Directors in March 1996.
THOMAS G. RICKS has served as a director of the Company since May 1988.
From August 1991 to March 1996, Mr. Ricks served as Chairman of the Board of the
Company. Since March 1996, he has served as President and Chief Executive
Officer of The University of Texas Investment Management Company, a non-profit
corporation engaged exclusively in providing investment management services to
the Board of Regents of The University of Texas, a minority shareholder in the
Company. From August 1992 through February 1996, Mr. Ricks served as Vice
Chancellor-Asset Management of The University of Texas. Mr. Ricks serves as a
member of the Audit and Ethics Committee of the Board of Directors. Mr. Ricks is
also a director of the Newfield Exploration Company, a publicly-held oil and gas
company engaged in the exploration, development and acquisition of oil and gas
properties located primarily in the Gulf of Mexico.
JAMES B. SKAGGS has served as a director of the Company since February
1999. In June 1998, Mr. Skaggs retired from Tracor, Inc., a publicly-held
defense electronics and information systems company, where he had served as
President, Chief Executive Officer and Chairman of the Board since March 1990.
Mr. Skaggs serves as a member of the Audit and Ethics and the Compensation
Committees of the Board of Directors. Mr. Skaggs is also a director of Alamo
Group Inc., a publicly-held vegetation maintenance equipment manufacturing
company.
Executive Officers Who Are Not Nominees
KEVIN MCALEA, PH.D. (age 41) has served as the Company's Vice
President, Marketing and Business Development since April 1997. He was the
Company's Director of Materials and Process Development from March 1993 to April
1997.
GEOFFREY W. KREIGER (age 50) has served as the Company's Vice
President, Finance since March 1998 and as its Vice President, Controller,
Treasurer and Secretary since December 1997. Prior to joining the Company, Mr.
Kreiger was the Executive Vice President of the Austin Software Foundry, an
information technology consulting company, from July 1996 to December 1997. From
September 1995 until June 1996, Mr. Kreiger was an independent financial
consultant. From October 1988 until September 1995, he was employed at
Datamarine International, Inc. in various positions, including Chief Financial
Officer and President of the Datamarine Business Unit and also served as a
director.
Board Committees and Meetings
The Board of Directors held ten meetings during the fiscal year ended
December 31, 1999 (the "1999 Fiscal Year"). No incumbent director failed to
attend or participate in at least 75% or more of the aggregate of (i) the total
number of meetings of the Board of Directors held during the period for which he
has been a director and (ii) the total number of meetings held by all committees
of the Board on which such director served during the 1999 Fiscal Year.
The Board of Directors has the following standing committees: Audit and
Ethics Committee and Compensation Committee. The Board of Directors does not
have a Nominating Committee.
The Audit and Ethics Committee currently consists of two directors, Messrs.
Ricks and Skaggs, and is primarily responsible for approving the services
performed by the Company's independent auditors and reviewing the auditors'
reports regarding the Company's accounting practices and systems of internal
accounting controls. During the 1999 Fiscal Year, the Audit and Ethics Committee
reviewed and discussed the audited financial statements with management and
discussed with the independent auditors the matters required by SAS 61 and the
independence of the auditors. Based on its review of the above items, the Audit
and Ethics Committee recommended to management that the Company's audited
financial statements be included in the Company's
4
<PAGE>
Annual Report. The Audit and Ethics Committee held three meetings during the
1999 Fiscal Year. The Board of Directors has adopted a written charter for the
Audit and Ethics Committee.
The Compensation Committee currently consists of three directors, Messrs.
Goldstein, Mariotti and Skaggs, and is primarily responsible for reviewing and
approving the Company's general compensation policies and for setting
compensation levels for the Company's executive officers. The Compensation
Committee also has the authority to administer the Company's equity incentive
and bonus plans, including the Company's Equity Appreciation Plan, the Company's
1996, 1998 and 1999 Stock Option Plans and the Company's Management Incentive
Plan. The Compensation Committee held three meetings during the 1999 Fiscal
Year.
Director Compensation
In March 1996, the Company instituted a program under which its non-
employee, non-affiliated directors are paid an annual retainer of $15,000, a
meeting fee of $1,000 for each board meeting attended and a committee fee of
$800 for each committee meeting attended. The Company permits directors to defer
all or part of their compensation. Non-employee, non-affiliated directors whose
service on the Board of Directors commenced after the fiscal year ended December
31, 1998 are not eligible to receive compensation under this program.
Accordingly, the only director who is eligible to receive compensation is Mr.
Ricks. Mr. Ricks' compensation is payable to The University of Texas Investment
Management Company. Mr. Ricks' fees have been accumulated but pursuant to Mr.
Ricks' request have not been paid. Mr. Ricks reserves the right to request
payment of these deferred fees at any time, although he has informed the Company
that he has no present intention to make such a payment request.
Under the Company's 1999 Stock Incentive Plan, non-employee Board members
receive option grants at periodic intervals under the Automatic Option Grant
Program of that plan and also receive discretionary option grants under the
Discretionary Option Grant Program of such plan.
Under the Automatic Option Grant Program of the 1999 Stock Incentive Plan,
at each Annual Shareholder's Meeting each individual who is to continue to serve
as a non-employee Board member will receive an option grant for 5,000 shares of
Common Stock, whether or not such individual has been in the prior employ of the
Company. The shares subject to each annual 5,000-share grant will vest upon the
optionee's completion of one year of Board service measured from the grant date.
Messrs. Goldstein and Mariotti informed the Company that they waive their
rights to receive option grants under the 1999 Stock Incentive Plan or any other
director compensation for so long as DTM Acquisition Company, L.P. ("DTMAC")
holds at least a 20% interest in the Company. Mr. Ricks has also informed the
Company that he waives his right to receive option grants under the 1999 Stock
Incentive Plan.
Recommendation of the Board of Directors Regarding Proposal One
The Board believes that the election of the persons listed above as
directors of the Company is in the best interests of the Company and its
shareholders. The Board of Directors therefore recommends that the shareholders
vote "FOR" the election of the nominees listed above.
PROPOSAL TWO: RATIFICATION OF INDEPENDENT AUDITORS
--------------------------------------------------
The Board of Directors has appointed the firm of Ernst & Young LLP,
independent public auditors for the Company during the 1999 Fiscal Year, to
serve in the same capacity for the fiscal year ending December 31, 2000, and is
asking the shareholders to ratify this appointment. The affirmative vote of a
majority of the shares represented and voting at the Annual Meeting is required
to ratify the selection of Ernst & Young LLP. Unless otherwise instructed, the
proxy holders will vote the Proxies received by them FOR the ratification of
Ernst & Young LLP as the independent auditors of the Company.
In the event the shareholders fail to ratify the appointment, the Board of
Directors will reconsider its selection. Even if the selection is ratified, the
Board of Directors in its discretion may direct the appointment of a
5
<PAGE>
different independent auditing firm at any time during the year if the Board of
Directors believes that such a change would be in the best interests of the
Company and its shareholders.
A representative of Ernst & Young LLP is expected to be present at the
Annual Meeting, will have the opportunity to make a statement if he or she
desires to do so and will be available to respond to appropriate questions.
Recommendation of the Board of Directors Regarding Proposal Two
The Board of Directors recommends that the shareholders vote "FOR" the
ratification of the selection of Ernst & Young LLP to serve as the Company's
independent auditors for the fiscal year ending December 31, 2000.
OTHER MATTERS
The Company knows of no other matters that will be presented for
consideration at the Annual Meeting. If any other matters properly come before
the Annual Meeting, it is the intention of the persons named in the enclosed
form of Proxy to vote the shares they represent as the Board of Directors may
recommend. Discretionary authority with respect to such other matters is granted
by the execution of the enclosed Proxy.
BENEFICIAL OWNERSHIP OF DTM COMMON STOCK
The following table sets forth certain information known to the Company
with respect to the beneficial ownership of the Company's Common Stock as of
April 12, 2000, by (i) all persons who are beneficial owners of 5% or more of
the Company's Common Stock, (ii) each director and nominee for director, (iii)
the executive officers named in the Summary Compensation Table of the section of
this Proxy Statement entitled "Executive Compensation and Other Information" and
(iv) all current directors and executive officers as a group. Unless otherwise
indicated, each of the shareholders has sole voting and investment power with
respect to the shares beneficially owned, subject to community property laws,
where applicable.
<TABLE>
<CAPTION>
Shares Beneficially Percentage of Shares
Beneficial Owner Owned Beneficially Owned (1)
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
DTM Acquisition Company, L.P. (2)
221 West 6th Street, Suite 1520
Austin, Texas 78701........................................ 3,509,357 49.94%
Lawrence Goldstein (3)...................................... -- *
John S. Murchison, III (4).................................. 194,278 2.69
Geoffrey W. Kreiger (5)..................................... 43,750 *
Anthony Mariotti (6)........................................ 3,509,357 49.94
Kevin McAlea, Ph.D. (7)..................................... 77,957 1.10
Thomas G. Ricks............................................. -- *
James B. Skaggs (8)......................................... 8,000 *
All current directors and executive officers as
a group (7 persons) (9)..................................... 3,833,342 52.17
</TABLE>
- --------------------
* Less than one percent.
(1) Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission and generally includes voting or
investment power with respect to securities. Shares of Common Stock subject
to stock options which are currently exercisable or will become exercisable
within 60 days after April 12, 2000 are deemed outstanding for computing the
percentage of the person or group holding such options, but are not deemed
outstanding for computing the percentage of any other person or group.
(2) Based on Schedule 13D/A of Proactive as filed with the Securities and
Exchange Commission on June 25, 1999.
6
<PAGE>
(3) Mr. Goldstein is a limited partner in Proactive-DTM, L.P. ("Pro-DTM"), which
is the general partner of DTM Acquisition Company, L.P. ("DTMAC"). Mr.
Goldstein is also a limited partner in DTMAC. Mr. Goldstein disclaims
beneficial ownership of the shares held by DTMAC.
(4) Includes 190,278 shares of Common Stock issuable upon the exercise of option
grants which will become exercisable within 60 days after April 12, 2000.
(5) Represents 43,750 shares of Common Stock issuable upon the exercise of
option grants which will become exercisable within 60 days after April 12,
2000.
(6) Includes only shares owned by DTMAC. Mr. Mariotti is the managing member of
Proactive, which is the general partner of Pro-DTM, which is the general
partner of DTMAC. Mr. Mariotti is also a limited partner in Pro-DTM and
DTMAC. Mr. Mariotti disclaims beneficial ownership of the shares held by
DTMAC, except to the extent of his pecuniary interest in them arising from
his ownership interests in Proactive, Pro-DTM and DTMAC. Mr. Mariotti's
address is c/o Proactive Finance Group, LLC, 221 West 6th Street, Suite
1520, Austin, Texas 78701.
(7) Represents 77,957 shares of Common Stock issuable upon the exercise of
option grants which will become exercisable within 60 days after April 12,
2000.
(8) Represents 8,000 shares of Common Stock issuable upon the exercise of option
grants which will become exercisable within 60 days after April 12, 2000.
Mr. Skaggs is a limited partner in DTMAC. Mr. Skaggs disclaims beneficial
ownership of the shares held by DTMAC.
(9) Includes 3,509,357 shares owned by DTMAC, of which Messrs. Goldstein,
Mariotti and Skaggs each disclaims beneficial ownership. Also includes
319,985 shares issuable upon the exercise of stock options which will become
exercisable within 60 days after April 12, 2000.
7
<PAGE>
EXECUTIVE COMPENSATION AND OTHER INFORMATION
Summary of Cash and Certain Other Compensation
The following table provides certain summary information concerning the
compensation earned by the Company's Chief Executive Officer and each of the two
other most highly compensated executive officers of the Company whose annual
salary and bonus for the 1999 Fiscal Year was in excess of $100,000 for services
rendered in all capacities to the Company and its subsidiaries for the fiscal
years ended December 31, 1997, 1998 and 1999. No other executive officer who
would have otherwise been includable in such table on the basis of salary and
bonus earned for the 1999 Fiscal Year has been excluded by reason of his or her
termination of employment or change in executive status during that year. The
listed individuals shall be hereinafter referred to as the "Named Officers."
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long-Term Compensation
Annual Compensation Awards
-------------------------------------------------------------------------------------
Name and Principal Other Annual Securities Underlying
Position Year Salary Bonus Compensation Options/SARs (1)
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
John S. Murchison, III 1999 $170,000 $109,480 -- 85,000
President and Chief 1998 170,000 -- -- 50,000
Executive Officer 1997 157,500 -- -- 25,000
Kevin McAlea, Ph.D. 1999 135,000 $ 62,100 -- 85,000
Vice President, 1998 135,000 -- -- 25,000
Marketing and 1997 105,833 -- -- 15,000
Business Develop-ment
Geoffrey W. Kreiger (2) 1999 106,667 $ 50,600 -- 85,000
Vice President, 1998 90,000 -- -- 20,000
Finance, Controller, 1997 938 -- -- --
Treasurer and
Secretary
</TABLE>
- --------------------
(1) Consists of stock options under the 1996, 1998 and 1999 Stock Option Plans.
(2) Mr. Kreiger commenced employment with the Company in December 1997.
8
<PAGE>
Stock Options and Stock Appreciation Rights
The following table contains information concerning the stock options
granted to the Named Officers during the 1999 Fiscal Year. The stock option
grants were made under the Company's 1996 Stock Option Plan, 1998 Stock Option
Plan or 1999 Stock Option Plan, as indicated. No stock appreciation rights were
granted to the Named Officers during the 1999 Fiscal Year.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
Potential Realizable Value
at Assumed Annual Rates
of Stock Price Appreciation
Individual Grants for Option Term (1)
-------------------------------------------------------------------- ------------------------------
% of Total
Number of Options Market
Securities Granted to Price on
Underlying Employees Exercise or Date of
Options in Fiscal Base Price Grant Expiration
Name Granted (#) Year ($/Sh)(2) ($) Date 5% ($) 10% ($)
- ---------------------- ----------- ----------- ----------- --------- ---------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C> <C>
John S. Murchison, III 25,000(3) 6.54% 1.25 1.25 03/16/09 19,652.96 49,804.45
50,000(4) 13.07% 1.25 1.25 03/16/09 39,305.91 99,608.90
10,000(5) 2.61% 1.47 1.47 05/24/09 9,244.75 23,428.01
Kevin McAlea, Ph.D. 25,000(3) 6.54% 1.25 1.25 03/16/09 19,652.96 49,804.45
50,000(4) 13.07% 1.25 1.25 03/16/09 39,305.91 99,608.90
10,000(5) 2.61% 1.47 1.47 05/24/09 9,244.75 23,428.01
Geoffrey W. Kreiger 25,000(3) 6.54% 1.25 1.25 03/16/09 19,652.96 49,804.45
50,000(4) 13.07% 1.25 1.25 03/16/09 39,305.91 99,608.90
10,000(5) 2.61% 1.47 1.47 05/24/09 9,244.75 23,428.01
</TABLE>
__________________
(1) There can be no assurance provided to any executive officer or other holder
of the Company's securities that the actual stock price appreciation over
the ten-year option term will be at the assumed 5% and 10% levels or at any
other defined level. Unless the market price of the Common Stock appreciates
over the option term, no value will be realized from those option grants
which were made to the Named Officers with an exercise price equal to the
fair market value of the option shares on the grant date.
(2) The exercise price may be paid in cash or in shares of Common Stock valued
at fair market value on the exercise date or in any other manner authorized
by the Plan Administrator of the 1996, 1998 and 1999 Stock Option Plans, as
the case may be, pursuant to which the options were granted.
(3) Each option under the 1996 Stock Option Plan becomes exercisable for 35% of
the shares upon the optionee's completion of one year of service measured
from the grant date, 35% of the shares upon the second anniversary of such
grant date and the remaining 30% of the shares on the third anniversary of
such grant date. In the event of certain changes in the ownership or control
of the Company pursuant to which the holders of the Company's outstanding
securities immediately prior to such transaction do not control more than
70% of the successor corporation's outstanding voting securities following
such transaction or in the event that, over a period of two years, there is
a change in the majority of the Board by reason of one or more proxy
contests for the election of Board members, the option will automatically
accelerate and become exercisable in full.
(4) Each option under the 1998 Stock Option Plan becomes exercisable for 35% of
the shares upon the optionee's completion of one year of service measured
from the grant date, 35% of the shares upon the second anniversary of such
grant date and the remaining 30% of the shares on the third anniversary of
such grant date. In the event of certain changes in the ownership or control
of the Company pursuant to which the holders of the Company's outstanding
securities immediately prior to such transaction do not control more than
70% of the successor corporation's outstanding voting securities following
such transaction or in the event that, over a period of two
9
<PAGE>
years, there is a change in the majority of the Board by reason of one or
more proxy contests for the election of Board members, the option will
automatically accelerate and become exercisable in full except to the extent
such option is to be assumed by the successor entity or otherwise continued
in effect. Should the optionee's service be terminated, whether by the
Company other than for cause or pursuant to a resignation by the optionee
for good reason, within eighteen (18) months following a change in ownership
or control of the Company in which such option does not otherwise
accelerate, the option shall become exercisable in full.
(5) Each option under the 1999 Stock Option Plan becomes exercisable for 35% of
the shares upon the optionee's completion of one year of service measured
from the grant date, 35% of the shares upon the second anniversary of such
grant date and the remaining 30% of the shares on the third anniversary of
such grant date. In the event of certain changes in the ownership of control
of the Company pursuant to which the holders of the Company's outstanding
securities immediately prior to such transaction do not control more than
50% of the successor corporation's outstanding voting securities following
such transaction or in the event that, over a period of two years, there is
a change in the majority of the Board by reason of one or more proxy
contests for the election of Board members, the option will automatically
accelerate and become exercisable in full except to the extent such option
is to be assumed by the successor entity or otherwise continued in effect.
Should the optionee's service be terminated, whether by the Company and
other than for cause or pursuant to a resignation by the optionee for good
reason, within eighteen (18) months following a change in ownership or
control of the Company in which such option does not otherwise accelerate,
the option shall become exercisable in full.
Aggregated Option\SAR Exercises and Fiscal Year-End Values
The following table provides information, with respect to the Named
Officers, concerning the unexercised options held by them at of the end of the
1999 Fiscal Year. None of the Named Officers exercised any stock options or
stock appreciation rights during the 1999 Fiscal Year.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FY-END OPTION VALUES
<TABLE>
<CAPTION>
Number of Unexercised
Options at Value of Unexercised in-the-Money
FY-End(#) Options at FY-End ($)(1)
---------------------------------- ----------------------------------------
Name Exercisable Unexercisable Exercisable Unexercisable
- -------------------------- -------------- ---------------- ------------------- -----------------
<S> <C> <C> <C> <C>
John S. Murchison, III 135,528 125,000 $0 $19,050
Kevin McAlea, Ph.D. 34,957 105,750 0 19,050
Geoffrey W. Kreiger 7,000 98,000 0 19,050
</TABLE>
_____________
(1) Based upon the market price $1.50 per share, determined on the basis of the
mean of the high and low prices per share of Common Stock on the Nasdaq
SmallCap Market on the last day of the 1999 Fiscal Year, less the option
exercise price payable per share.
Employment Contracts, Termination of Employment and Change in Control
Arrangements
On October 28, 1997, the Company and John S. Murchison, III entered
into a severance agreement that will take effect in the event that Mr.
Murchison's employment should ever be terminated without cause by the Company.
In such event, the severance agreement provides that the Company will continue
to pay Mr. Murchison's base salary for one year after the date of the
termination of his employment without cause. Furthermore, the severance
agreement provides that Mr. Murchison shall not compete with the Company for a
period of one year after the date of the termination of his employment.
The Company does not have any existing employment agreements with any
other executive officer.
The Plan Administrator of the 1999 Incentive Plan has the authority to
provide for accelerated vesting of the shares of Common Stock subject to any
outstanding options held by the Chief Executive Officer or any other executive
officer or any unvested shares actually held by such individual, including
options granted or shares issued
10
<PAGE>
under the 1996 and 1998 Stock Option Plans, in connection with certain changes
in control or ownership of the Company or the termination of the officer's
employment following such event.
Compensation Committee Interlocks and Insider Participation
The Compensation Committee of the Company's Board of Directors
currently consists of Messrs. Goldstein, Mariotti and Skaggs. None of these
individuals was an officer or employee of the Company at any time during the
1999 Fiscal Year or at any other time.
No current executive officer of the Company has ever served as a
member of the board of directors or compensation committee of any other entity
that has or has had one or more executive officers serving as a member of the
Company's Board of Directors or Compensation Committee.
Board Compensation Committee Report on Executive Compensation
It is the duty of the Compensation Committee to review and determine
the salaries and bonuses of executive officers of the Company, including the
Chief Executive Officer, and to establish the general compensation policies for
such individuals. The Compensation Committee also administers the Management
Incentive Plan and has the authority to make discretionary option grants to the
Company's executive officers under the Company's stock option plans.
The Compensation Committee believes that the compensation programs for
the Company's executive officers should reflect the Company's performance and
the value created for the Company's shareholders. In addition, the compensation
programs should support the short-term and long-term strategic goals and values
of the Company and should reward individual contribution to the Company's
success. The Compensation Committee has reviewed and is in accord with the
compensation paid to executive officers in the 1999 Fiscal Year.
General Compensation Policy
The fundamental policy of the Compensation Committee is to provide the
Company's executive officers with competitive compensation opportunities based
upon their contribution to the development and financial success of the Company
and their personal performance. It is the Compensation Committee's objective to
have a portion of each executive officer's compensation contingent upon the
Company's performance as well as upon such executive officer's own level of
performance. Accordingly, the compensation package for each executive officer is
comprised of three elements: (i) base salary; (ii) bonus which reflects both
individual performance and the performance of the Company which, together with
base salary, is designed primarily to be competitive with salary and bonus
levels in the industry; and (iii) long-term stock-based incentive awards which
strengthen the mutuality of interests between the executive officer and the
Company's shareholders.
Factors
The principal factors that were taken into account in establishing
each executive officer's compensation package for the 1999 Fiscal Year are
described below. However, the Compensation Committee may in its discretion apply
entirely different factors, such as different measures of financial performance,
for future fiscal years.
. Base Salary. Each executive officer's base salary is adjusted each
-----------
year on the basis of (i) the Compensation Committee's evaluation of the
officer's personal performance for the year and (ii) the competitive
marketplace for persons in comparable positions. The Company's performance
and profitability may also be a factor in determining the base salaries of
executive officers.
. Annual Incentives. The DTM Corporation Management Incentive Plan
-----------------
(the "MIP") which was in effect for the 1999 Fiscal Year was established to
provide opportunities to certain key management personnel to receive
incentive compensation as a reward for levels of personal performance above
the ordinary performance standards compensated by base salary. The MIP was
designed to provide a competitive level of rewards if all relevant
performance objectives were achieved. Participation in the
11
<PAGE>
MIP was limited to those key executives selected by the Compensation
Committee that have the potential to influence significantly and positively
the performance of the Company.
Each participant was assigned for the 1999 Fiscal Year to an
incentive category based on organizational level and potential impact on
important Company results. The participant categories defined the target
level of incentive opportunity, stated as a percentage of base salary, that
would be available to the participant. Category assignments were approved
by the Chief Executive Officer. The category assignment for the Chief
Executive Officer was approved by the Compensation Committee. The annual
incentive bonus for participants for the 1999 Fiscal Year was based on 10%
to 35% of their base salary.
The total target incentive pool for the Company was equal to the
sum of the individual target bonuses for all MIP Participants. This total
target incentive pool was then divided into separate generator pools -one
generator pool for each performance measure (e.g. Net Income, Pre-tax
Income, Earnings Per Share, Return on Equity, etc.). The weightings for
each performance measure (which were determined by the Compensation
Committee) determined the target dollar amount for each generator pool. The
bonus became payable if the target performance funding level (100% of goal)
was reached. The maximum bonus payable under the MIP was 200% of the bonus
payable for performance above the target performance level.
. Long-Term Incentives. Generally, stock option grants are made annually by
--------------------
Compensation Committee to each of the Company's executive officers and
other selected employees pursuant to the 1999 Incentive Plan. Each grant is
designed to align the interests of the executive officer with those of the
shareholders and provide each individual with a significant incentive to
manage the Company from the perspective of an owner with an equity stake in
the business. Each grant under the Option Plans allows the officer to
acquire shares of the Company's Common Stock at a fixed price per share
(the market price on the grant date) over a specified period of time (up to
ten years). Each option becomes exercisable in a series of installments
generally over a 3-year period (generally 35% on each of the first and
second anniversary dates of the grant and 30% on the third such anniversary
date), contingent upon the officer's continued service with the Company.
Accordingly, the option will provide a return to the executive officer only
if he or she remains in the Company's service during the vesting period,
and then only if the market price of the shares appreciates over the option
term. The Compensation Committee may also award performance shares,
restricted shares, Common Stock and/or other incentive awards in accordance
with the provisions of the Option Plans.
The size of the option grant to each executive officer, including
the Chief Executive Officer, is set by the Compensation Committee at a
level that is intended to create a meaningful opportunity for stock
ownership based upon the individual's current position with the Company,
the individual's personal performance in recent periods and his or her
potential for future responsibility and promotion over the option term. The
maximum number of shares in respect of which options and awards may be
granted to any individual in any one year under the 1999 Incentive Plan is
100,000. The Compensation Committee also takes into account the total
number of existing vested or unvested options held by the executive
officer, as well as the exercise prices of such options, in order to
maintain an appropriate level of equity incentive for that individual. The
relevant weight given to each of these factors may vary from individual to
individual.
CEO Compensation
In setting the total compensation payable to the Company's Chief Executive
Officer, John S. Murchison, III, for the 1999 Fiscal Year, the Compensation
Committee sought to make that compensation competitive with the compensation
paid to persons with similar positions in the industry and in the Company's
geographic market, while at the same time assuring that a significant percentage
of compensation was tied to Company performance and stock price appreciation.
12
<PAGE>
The Compensation Committee adjusted Mr. Murchison's base salary for
the 1999 Fiscal Year in recognition of his personal performance and with the
objective of maintaining his base salary at a competitive level when compared
with the base salary levels in effect for similarly situated chief executive
officers.
The remaining components of Mr. Murchison's 1999 Fiscal Year
compensation, however, were primarily dependent upon corporate performance. Mr.
Murchison was eligible for a cash bonus under the MIP for the 1999 Fiscal Year
conditioned on the Company's attainment of performance goals with additional
consideration to be given to individual business plan objectives. A $109,480
bonus was paid to him for the 1999 Fiscal Year. The Compensation Committee
awarded stock option grants totaling 85,000 shares (25,000 under the 1996 Stock
Option Plan, 50,000 under the 1998 Stock Option Plan and 10,000 under the 1999
Stock Option Plan) to Mr. Murchison in the 1999 Fiscal Year in order to provide
him with an equity incentive to continue contributing to the financial success
of the Company. These options will have value for Mr. Murchison only if the
market price of the underlying option shares appreciates over the market price
in effect on the date the grant was made.
Compliance with Internal Revenue Code Section 162(m)
Section 162(m) of the Internal Revenue Code disallows a tax deduction
to publicly held companies for compensation paid to certain of their executive
officers, to the extent that compensation exceeds $1 million per covered officer
in any fiscal year. The limitation applies only to compensation which is not
considered to be performance-based. Non-performance based compensation paid to
the Company's executive officers for the 1999 Fiscal Year did not exceed the $1
million limit per officer. Compensation deemed paid by the Company in connection
with disqualifying dispositions of incentive stock option shares or exercises of
non-statutory stock options granted under the 1999 Incentive Plan qualifies as
performance-based compensation for purposes of Section 162(m) if such plan is
administered by a committee comprised solely of "outside directors" as defined
under Section 162(m). The 1999 Incentive Plan is currently administered by such
a committee. However, because of the relationship between the Company and
Proactive as a result of the Financial Advisory Services Agreement between
Proactive and the Company dated February 16, 1999, the committee is not
comprised solely of "outside directors" for purposes of Section 162(m).
Accordingly, compensation deemed paid by the Company in connection with
disqualifying dispositions of incentive stock option shares or exercises of non-
statutory stock options granted under the 1999 Incentive Plan will not qualify
as performance-based compensation for purposes of the $1 million limitation per
covered individual under Section 162(m).
It is the opinion of the current Compensation Committee that the
executive compensation policies and plans provide the necessary total
remuneration program to properly align the Company's performance and the
interests of the Company's shareholders through the use of competitive and
equitable executive compensation in a balanced and reasonable manner, for both
the short and long-term.
Submitted by the Compensation Committee of the Company's Board of
Directors:
Lawrence Goldstein
Anthony Mariotti
James B. Skaggs
13
<PAGE>
Stock Performance Graph
The graph below depicts a comparison of cumulative total shareholder
returns for the Company, the Standard & Poors SmallCap 600 Index and a peer
group of companies in the same line of business as the Company, which peer group
was selected by the Company in good faith and consists of 3D Systems Corporation
(NASD: TDSC), Stratasys, Inc. (NASD: SSYS) and Helisys, Inc. (NASD: HELI).
The graph covers the period from May 2, 1997, the commencement date of
the Company's initial public offering, to December 31, 1999, and assumes that
$100 was invested in the Company's Common Stock on May 2, 1997 and concurrently
in each index, and that all dividends were reinvested. No cash dividends have
been declared on the Company's Common Stock.
This information has been provided to the Company by Zack's Investment
Research, Inc. The comparisons in the graph are required by regulations of the
Securities Exchange Commission and are not intended to forecast or to be
indicative of the possible future performance of the Common Stock.
[PERFORMANCE GRAPH APPEARS HERE]
<TABLE>
<S> <C> <C> <C> <C>
DTM CORP ($) $100.00 $ 17.19 $ 12.50 $ 19.53
S & P Smallcap 600 ($) $100.00 $131.36 $129.64 $145.73
PEER GROUP ONLY ($) $100.00 $ 71.16 $ 57.58 $ 70.53
</TABLE>
Notwithstanding anything to the contrary set forth in any of the
Company's previous filings made under the Securities Act of 1933, as amended, or
the Securities Exchange Act of 1934, as amended, that might incorporate future
filings made by the Company under those statutes, neither the preceding Stock
Performance Graph nor the Compensation Committee Report is to be incorporated by
reference into any such prior filings, nor shall such graph or report be
incorporated by reference into any future filings made by the Company under
those statutes.
14
<PAGE>
CERTAIN TRANSACTIONS
Shareholders' Agreement
Under the Shareholders' Agreement among DTM, DTMAC and certain other
shareholders as of March 1996, DTMAC has certain rights of participation in
public offerings by the Company of Common Stock, sometimes referred to as
"piggyback" registration rights. The rights continue for the benefit of the
parties to that agreement who are not eligible to sell shares of Common Stock
absent registration under the Securities Act of 1933, as amended (the
"Securities Act"). However, if the underwriter of such an offering determines
that not all shares tendered for a public offering can be sold, then the shares
tendered by each shareholder will be reduced proportionately. Participating
shareholders must enter into underwriting agreements, make certain
representations and share in registration and filing fees. DTM is obligated to
pay all other costs associated with a public offering and must indemnify
shareholders for certain liabilities that could arise in the context of a
registered public offering of Common Stock. Shareholders have a reciprocal
obligation of indemnification for information supplied by them. Shareholders'
registration rights terminate when two conditions are met: (a) there is a public
market for the Common Stock; and (b) their Common Stock can be sold pursuant to
Rule 144 under the Securities Act.
Indemnification and Liability of Officers and Directors
The Company's directors and officers are granted certain protections
or indemnities by virtue of the Articles of Incorporation and Bylaws of the
Company. Under the Articles of Incorporation, directors cannot be held liable to
shareholders for monetary damages except in the event of breach of the duty of
loyalty, bad faith, intentional misconduct or knowing violations of law and
certain other specified events. The Bylaws of the Company also contain
provisions consistent with Texas law providing for indemnification of directors,
officers, employees and agents acting on behalf of the Company.
Certain Arrangements with DTMAC and Proactive
Payment of $909,000
As of April 23, 1999, the Company had payables outstanding to DTMAC in
the approximate amount of $909,000, the right to which DTMAC was assigned by
Proactive in February 1999 contemporaneously with the transactions contemplated
by the stock purchase agreement between BFGoodrich and Proactive. The Company
and DTMAC agreed to, and the Company's Board of Directors approved, the terms
under which this debt was repaid partially for cash and partially for shares of
the Company's Common Stock. Under the terms of the debt repayment, DTMAC
received demand and "piggyback" registration rights. These registration rights
entitle DTMAC to require the Company to file a registration statement under the
Securities Act at the Company's expense with respect to DTMAC's shares of Common
Stock, as well as to participate in public offerings by the Company of Common
Stock. The registration rights agreement executed in connection with the debt
repayment terminated and replaced the registration rights that DTMAC had under
the Shareholders' Agreement described above.
On June 11, 1999, the Company repaid the shareholder liability of
approximately $909,000 by making a payment of $454,274 in cash borrowed under a
credit facility with Silicon Valley Bank and by issuing 352,167 additional
shares of DTM common stock. After the transaction, Proactive owned approximately
50.3% of the outstanding capital stock of the Company
Mr. Mariotti, one of the Company's directors, is the managing member
of Proactive, which is the general partner of Pro-DTM, which is the general
partner of DTMAC. Mr. Mariotti is also a limited partner in Pro-DTM and DTMAC.
Mr. Goldstein, one of the Company's directors, is a limited partner in Pro-DTM
and DTMAC. Mr. Skaggs, one of the Company's directors, is a limited partner in
DTMAC.
Financial Advisory Services Agreement
Proactive currently renders financial advisory services to the Company
for a fee. The initial agreement was entered into on February 16, 1999 with a
term of six months. Fees totaling $72,000 were paid in six monthly
15
<PAGE>
installments through August 1999. The agreement was renewed for an additional
six month period with fees totaling $72,000 to be paid in six monthly
installments through February 2000. The agreement was renewed for an additional
twelve months with fees totaling $114,000 to be paid in twelve monthly
installments through March 2001. Fees paid by the Company to Proactive pursuant
to these agreements amounted to $108,000 in 1999.
Certain Matters Affecting Corporate Governance
Mr. Mariotti, one of the Company's directors, is the managing member
of Proactive, which is the general partner of Pro-DTM, which is the general
partner of DTMAC. In addition, Mr. Goldstein, one of the Company's directors, is
a principal of Proactive. Although Messrs. Goldstein and Mariotti are subject to
the duties and responsibilities of directors under Texas corporate law,
Proactive may be able to have substantial influence over the Board of Directors
and could influence the outcome of matters submitted to the Company's
shareholders for their vote or consent due to the large percentage of shares of
Common Stock held by DTMAC, an affiliate of Proactive.
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934
The members of the Board of Directors, the executive officers of the
Company and persons who hold more than 10% of the Company's outstanding Common
Stock are subject to the reporting requirements of Section 16(a) of the
Securities Exchange Act of 1934 which require them to file reports with respect
to their ownership of the Common Stock and their transactions in such Common
Stock. Based upon (i) the copies of Section 16(a) reports which the Company
received from such persons for their 1999 Fiscal Year transactions in the Common
Stock and their Common Stock holdings, and (ii) the written representations
received from one or more of such persons that all reporting requirements under
Section 16(a) for such fiscal year were met in a timely manner by its directors,
executive officers and greater than ten percent beneficial owners.
DEADLINE FOR RECEIPT OF SHAREHOLDER PROPOSALS
Proposals of shareholders of the Company that are intended to be
presented by such shareholders at the Company's 2001 Annual Meeting must be
received no later than December 15, 2000, in order that they may be included in
the proxy statement and form of proxy relating to that meeting. Such proposals
may be included in next year's Proxy Statement if they comply with certain rules
and regulations promulgated by the Securities and Exchange Commission and the
procedure set forth in the Bylaws of the Company.
ANNUAL REPORT TO SHAREHOLDERS
A copy of the Company's Annual Report to shareholders for the 1999
Fiscal Year has been mailed concurrently with this Proxy Statement to all
shareholders entitled to notice of and to vote at the Annual Meeting. The Annual
Report is not incorporated into this Proxy Statement and is not considered proxy
solicitation material.
ANNUAL REPORT ON FORM 10-K
The Company filed an Annual Report on Form 10-K with the Securities
and Exchange Commission on March 31, 2000. Shareholders may obtain a copy of
this report, without charge, upon written request to Geoffrey W. Kreiger,
Secretary of the Company, at the Company's principal executive offices located
at 1611 Headway Circle, Building Two, Austin, Texas 78754.
BY ORDER OF THE BOARD OF DIRECTORS
OF DTM CORPORATION
Dated: April 21, 2000
16
<PAGE>
- --------------------------------------------------------------------------------
DTM CORPORATION
PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
DTM CORPORATION
The undersigned revokes all previous proxies, acknowledges receipt of the
Notice of the Annual Meeting of Shareholders to be held May 17, 2000 and the
related Proxy Statement dated April 21, 2000 and appoints John S. Murchison, III
and Geoffrey W. Kreiger, and each of them, the Proxy of the undersigned, with
full power of substitution, to vote all shares of Common Stock of DTM
Corporation, a Texas Corporation (the "Company"), which the undersigned is
entitled to vote, either on his or her own behalf or on the behalf of any entity
or entities, at the Annual Meeting of Shareholders of the Company to be held at
the Company's corporate and manufacturing offices at 1611 Headway Circle,
Building Two, Austin, Texas on May 17, 2000 at 1:00 p.m. Central Daylight Time
(the "Annual Meeting"), and at any adjournment or postponement thereof, with the
same force and effect as the undersigned might or could do if personally present
thereat. The shares represented by this Proxy shall be voted in the manner set
forth hereon.
(continued and to be signed on the reverse)
................................................................................
FOLD AND DETACH HERE
<PAGE>
<TABLE>
<S> <C>
- ------------------------------------------------------------------------------------------------------------------------------------
The Board of Directors recommends a vote FOR each of the directors listed below and a vote FOR each of Please mark ---------
the listed proposals. This Proxy, when properly executed, will be voted as specified hereon. If no your vote as X
specification is made, this Proxy will be voted "FOR" the election of wach of specified the indicated in --------
directors listed below and "FOR" each of the other proposals. this example.
1. TO ELECT THE FOLLOWING FIVE (5) NOMINEES AS DIRECTORS to serve for a one-year term ending on the next annual meeting of
shareholders or until his successor is duly elected and qualified:
FOR all nominees WITHHOLD NOMINEES: LAWRENCE GOLDSTEIN; ANTHONY MARIOTT; JOHN S. MURCHISON, III; THOMAS
G. RICKS; AND JAMES B. SKAGGS
listed to the right AUTHORITY
(except as marked) to vote for all
to the contrary nominees listed to the (INSTRUCTION: To withhold authority to vote for any individual nominee, write
right that nominee's name on the space provided below.)
[_] [_] --------------------------------------------------------------------------------
2. TO RATIFY THE APPOINTMENT OF ERNST & YOUNG LLP 3. In accordance with the discretion of the proxy holders, to act upon all
as independent auditors of the Company for the matters incident to the conduct of the meeting and upon other matters
2000 fiscal year. as may properly come before the meeting.
FOR AGAINST ABSTAIN
[_] [_] [_] Please print the name(s) appearing on each share certificate(s)
over which you have voting authority.
---------------------------------------------------------------
(Print name(s) exactly as it (may appear(s) on certificates)
Date:____________________________________________________, 2000
Please sign your name:_________________________________________
_______________________________________________________________
(Authorized Signature(s))
IMPORTANT: Please sign as your name appears hereon. If shares
are held jointly, all holders must sign. When signing as
attorney, executor, administrator, trustee or guardian, please
give your full title. If a corporation, please sign in full
corporate name by president or other authorized officer, if a
partnership, please sign in partnership name by authorized
person.
- ------------------------------------------------------------------------------------------------------------------------------------
. FOLD AND DETACH HERE .
</TABLE>
