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 Rule 14a-11(c) or Rule 14a-12
ALYN CORPORATION
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(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):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[ ] 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:
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(2) Form, Schedule of Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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ALYN CORPORATION
16761 HALE AVENUE
IRVINE, CALIFORNIA 92606
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON DECEMBER 16, 1999
TO OUR STOCKHOLDERS:
Please take notice that the 1999 Annual Meeting of Stockholders (the "Annual
Meeting") of Alyn Corporation, a Delaware corporation (the "Company"), will be
held at 10:00 a.m., local time, on Thursday, December 16, 1999, at the Company's
corporate offices located at 16761 Hale Avenue, Irvine, CA 92606, for the
following purposes:
1. To elect six directors to hold office until the 2000 Annual Meeting of
Stockholders (or until their successors are elected and qualified);
2. Approval of 1999 Stock Incentive Plan; and
3. To transact such other business as may properly come before the
meeting or any postponement or adjournment thereof.
Stockholders of record at the close of business on the record date, October 29,
1999, are entitled to notice of, and to vote at, the Annual Meeting and any
postponement or adjournment thereof.
By Order of the Board of Directors
/S/ RICHARD L. LITTLE
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November 16, 1999 Richard L. Little
Secretary
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YOUR VOTE IS IMPORTANT. PLEASE COMPLETE, DATE, SIGN AND PROMPTLY RETURN THE
ENCLOSED FORM OF PROXY IN THE ENVELOPE PROVIDED WHETHER OR NOT YOU PLAN TO
ATTEND THE ANNUAL MEETING. NO POSTAGE IS REQUIRED FOR MAILING IN THE UNITED
STATES. STOCKHOLDERS WHO ATTEND THE ANNUAL MEETING MAY REVOKE THEIR PROXIES
AND VOTE THEIR SHARES IN PERSON.
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ALYN CORPORATION
16761 HALE AVENUE
IRVINE, CALIFORNIA 92606
PROXY STATEMENT
FOR THE
1999 ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON
DECEMBER 16, 1999
GENERAL INFORMATION
This Proxy Statement is being furnished in connection with the solicitation of
proxies by the Board of Directors of Alyn Corporation, a Delaware corporation
("Alyn" or the "Company"), for use at the 1999 Annual Meeting of Stockholders
scheduled to be held on Thursday, December 16, 1999, at 10:00 a.m., local time,
or any postponement or adjournment thereof (the "Annual Meeting"). The Annual
Meeting will be held at the Company's corporate offices located at 16761 Hale
Avenue, Irvine, CA 92606. A form of proxy for use at the Annual Meeting and a
return envelope for the proxy are also enclosed.
Purpose of the Annual Meeting. It is proposed that at the Annual Meeting: (i)
six members be elected to the Board of Directors for terms expiring at the 2000
Annual Meeting of Stockholders (or until their successors are elected and
qualified); (ii) the 1999 Stock Incentive Plan be approved; and (iii) transact
such other business as may properly come before the Annual Meeting or any
postponement or adjournment thereof.
The Company is not aware at this time of any other business to be acted upon at
the Annual Meeting. However, if any other business properly comes before the
Annual Meeting, it is the intention of the persons named in the enclosed form of
proxy to vote on those matters in accordance with their best judgment.
Solicitation and Voting of Proxies; Revocation. Shares cannot be voted at the
Annual Meeting unless the owner thereof is present in person or by proxy. The
Board of Directors urges stockholders to complete, date, sign and return their
proxies promptly whether or not they plan to attend the Annual Meeting. All duly
executed and unrevoked proxies in the accompanying form that are received in
time for the Annual Meeting will be voted at the Annual Meeting in accordance
with the instructions indicated thereon. In the absence of such instructions,
duly executed proxies will be voted "FOR" the election of the director nominees
listed below and "FOR" the approval of the other proposals set forth in the
Notice of Annual Meeting of Stockholders of the Company.
The submission of a signed proxy will not affect a stockholder's right to
attend, or to vote in person at, the Annual Meeting. A stockholder who executes
a proxy may revoke it at any time before it is voted by filing a revocation with
the Secretary of the Company, executing a proxy bearing a later date or by
attending the Annual Meeting and voting in person. In accordance with applicable
rules, boxes and a designated blank space are provided on the form of proxy for
stockholders to mark if they wish either to withhold authority to vote for the
nominees for director or abstain on the other matters presented for a vote of
stockholders.
The solicitation will be by mail, and may also be made personally or by
telephone by directors, officers and employees of the Company, for which they
will receive no compensation other than their regular compensation as directors,
officers or employees, if any. All the expenses of the solicitation will be
borne by the Company. Arrangements will be made with brokerage houses and other
custodians, nominees and fiduciaries to send proxies and proxy materials to
beneficial owners of the Company's voting securities, and the Company will
reimburse such brokerage houses and others for their reasonable expenses in so
doing. This Proxy Statement and the enclosed proxy card are being mailed to
stockholders beginning approximately November 16, 1999.
Record Date; Voting Rights. Stockholders of record at the close of business on
October 29, 1999 (the "Record Date"), will be entitled to notice of, and to vote
at, the Annual Meeting. At the close of business on the Record Date, there were
issued and outstanding 12,122,403 shares of Alyn common stock, $0.001
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par value per share. Holders of common stock are entitled to one vote for each
share of common stock registered in their name. As of the Record Date, there
were also outstanding an aggregate of 75,000 shares of Convertible Preferred
Stock that, in accordance with their terms, vote together with the common stock
as a single class with respect to matters such as those that will be voted upon
at the Annual Meeting. The holders of those shares of Convertible Preferred
Stock are entitled to one vote for each share of common stock into which the
shares of Convertible Preferred Stock are convertible as of the Record Date.
Accordingly, as of the Record Date, there are outstanding voting securities
(common stock and Convertible Preferred Stock) that represent a total of
14,622,403 votes ("Voting Securities"). The presence at the Annual Meeting, in
person or by proxy, of stockholders holding a majority of the Voting Securities
outstanding on the Record Date will constitute a quorum to transact business at
the Annual Meeting. Matters to be voted upon at the Annual Meeting require the
affirmative vote of a majority in voting power of the Voting Securities that are
present in person or by proxy voting as a single class.
In accordance with applicable Securities and Exchange Commission ("SEC") rules,
designated blank spaces are provided on the form of proxy for stockholders to
mark if they wish either to abstain on one or more of the proposals or to
withhold authority to vote for any nominee for director. Under the rules of the
principal stock exchanges, when brokers have not received instructions from
their customers, brokers holding shares in street name have the authority to
vote the shares on some matters, but not others. Such missing votes are called
"broker non-votes." Abstentions and broker non-votes are counted for purposes of
determining the presence or absence of a quorum. Since the Company's Certificate
of Incorporation requires the affirmative vote of a majority of shares present,
in person or by proxy, an abstention on the Company's proposal to ratify the
selection of its auditors will have the practical effect of a negative vote
since it represents one less vote for approval. With regard to the election of
directors, votes that are withheld will be excluded entirely from the vote and
will have no effect. Under applicable Delaware law, broker non-votes will not be
counted for purposes of determining total votes cast and thus will have no
effect on the outcome of the election of the Board of Directors or the Company's
other proposals.
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PROPOSAL 1 - ELECTION OF DIRECTORS
Information concerning the nominees for election to the Company's Board of
Directors is set forth below. Each nominee for election to the Board of
Directors named below has consented to being named as a nominee and has agreed
to serve if elected. If elected, each director would serve for a one-year term,
expiring at the 2000 Annual Meeting of Stockholders (or until such person's
successor is elected and qualified). The persons identified as proxies on the
enclosed form of proxy intend to vote each properly executed proxy "FOR" the
election of the listed nominees for the ensuing terms or until their successors
are elected and qualified, unless indicated otherwise in a properly executed
form of proxy. If any of the named nominees is not available for election at the
time of the Annual Meeting, discretionary authority will be exercised to vote
for a substitute or substitutes unless the Board of Directors chooses to reduce
the number of directors. Management is not aware of any circumstances that would
render any nominee for director named below unavailable.
Messrs. van Roon, Burr, Carden, Edelson, Edwards, Hesburgh and Markbreiter are
currently serving on the Company's Board of Directors. Mr. van Roon was
appointed as a Director on April 14, 1999. Messrs. Burr and Edwards were
appointed as Directors on October 21, 1999. Mr. Burr was also elected Chairman
of the Board on October 21, 1999. Mr. Hesburgh is currently a Director, but is
not being nominated for reelection.
The following information with respect to each nominee has been furnished to the
Company by such nominee. The ages of the nominees are as of October 29, 1999.
ARNE VAN ROON, 55, has been President, Chief Executive Officer and a Director
since April 15, 1999. Mr. van Roon is Chairman of the Company's Executive
Committee and a member of the Compensation Committee. From 1984 to 1999, he was
founder and President of Van Roon Partners, Ltd., a firm specializing in the
development and implementation of growth strategies for emerging companies with
new technologies. From 1971 to 1984 he was with Philips Electronics, a
Netherlands-based global electronics company, in a variety of senior positions
in finance, marketing and executive management in Holland, Germany, Italy, East
Africa and the Middle East. Mr. van Roon has a degree from Erasmus University in
Rotterdam, The Netherlands.
ROBERT L. BURR, 48, has been a Director of the Company and its Chairman of the
Board since October 21, 1999. He is also Chairman of the Company's Compensation
Committee and a member of the Executive Committee. Since 1995, Mr. Burr has been
a Director of Fleming Asset Management, a part of Robert Fleming Holdings
Limited, a global asset management and merchant banking firm. From 1992 to 1995,
Mr. Burr managed Kidder, Peabody & Company's Private Equity Group. Prior to
joining Kidder, Peabody, he was an investor for over ten years; the majority of
this time he spent at Morgan Stanley as the Managing General Partner of Morgan
Stanley Ventures and also as a General Partner of Morgan Stanley Venture Capital
Fund I. Prior to becoming an investor, Mr. Burr was a corporate lending officer
with Citibank, N.A. Mr. Burr received an MBA from Columbia University and a BA
from Stanford. Mr. Burr currently serves on the board of directors of Global
Pharmaceutical Corporation and Hudson Technologies, Inc.
ROBIN A. CARDEN, 42, is the founder of the Company and has been a Director since
the Company's formation in 1990. Mr. Carden is a member of the Company's
Executive Committee. From the Company's formation until April 1998, he was
President and Chief Executive Officer. Prior to 1990, Mr. Carden was employed by
Ceradyne Inc., a company engaged in the development and production of advanced
ceramics products, as Senior Sales Engineer, and was engaged in developing
civilian applications for advanced ceramics products originally developed for
military use. Mr. Carden graduated from Long Beach State University with a
Bachelor of Science degree. A number of United States patents have been issued
to Mr. Carden.
HARRY EDELSON, 62, has been a Director of the Company since May 1996. Mr.
Edelson is a member of the Company's Audit Committee. Since 1984, Mr. Edelson
has been the Managing Partner of Edelson Technology Partners, a series of four
venture capital funds with ten large corporations as the limited partners. The
focus of the funds is to provide the corporate partners with access to high
technology products and services. One of the funds, Edelson Technology Partners
III, is a principal stockholder of the Company. Edelson Technology Partners,
through its related funds, has invested in approximately 80
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companies involved in a wide range of technologies, including
telecommunications, computers, semiconductors, specialty chemicals,
environmental and publishing. Prior to founding Edelson Technology Partners, Mr.
Edelson was a transmission engineer at AT&T, a senior computer engineer for
UNISYS and a technology analyst for three leading investment banking firms,
Merrill Lynch, Drexel Burnham Lambert and First Boston. Mr. Edelson has a
Bachelor of Science degree in Physics from Brooklyn College and a Masters of
Business Administration from New York University.
DAVID J. EDWARDS, 34, has been a Director of the Company since October 21, 1999
and is Chairman of the Audit Committee. Since 1994, Mr. Edwards has been a Vice
President at Fleming Asset Management, part of Robert Fleming Holdings Limited,
a global asset management and merchant banking firm. Prior to joining Fleming
Asset Management, Mr. Edwards was an Associate with Booz Allen & Hamilton, a
strategic management consulting company based in New York. From 1987 to 1990,
Mr. Edwards was a Process Engineer with Exxon Chemical Corporation. Mr. Edwards
received an MBA from Harvard Business School and a Masters in Engineering from
Cambridge University. Mr. Edwards currently serves on the board of directors of
Global Pharmaceutical Corporation.
MICHAEL MARKBREITER, 37, has been a Director of the Company since May 1996. Mr.
Markbreiter is a member of the Company's Executive, Audit and Compensation
Committees. Currently, Mr. Markbreiter is engaged in management consulting and
investing. From 1995 to 1999, Mr. Markbreiter was a portfolio manager for
private equity investments for Kingdon Capital Management Corp., a manager of
investment funds. In April 1994, he co-founded Ram Investment Corp., a venture
capital company. From March 1993 to January 1994, he served as a portfolio
manager for Kingdon Capital Management Corp. Prior to February 1993, he worked
as an analyst at Alliance Capital Management Corp. Since December 1997, Mr.
Markbreiter has been a Director of Global Pharmaceutical Corporation, a publicly
traded generic pharmaceutical manufacturing company. Mr. Markbreiter graduated
from Cambridge University with a degree in Engineering.
UNLESS INDIVIDUAL STOCKHOLDERS INDICATE OTHERWISE, EACH RETURNED PROXY WILL
BE VOTED "FOR" THE ELECTION TO THE BOARD OF DIRECTORS
OF EACH OF THE SIX NOMINEES NAMED ABOVE.
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BOARD OF DIRECTORS COMMITTEES AND MEETINGS
During 1998, the Board of Directors held five meetings. Messrs. Udi Toledano and
Walter Menetrey, who are no longer Directors, were each unable to attend one
meeting. All other members of the Board of Directors attended all meetings. The
Board of Directors has three standing committees: the Executive Committee, the
Audit Committee and the Compensation Committee.
The Executive Committee has all the powers of the Company's full Board of
Directors, except that it is not authorized to amend the Company's Certificate
of Incorporation, declare any dividends or issue shares of capital stock of the
Company. The Executive Committee held no separate meetings in 1998. All issues
relevant to the Executive Committee were addressed by the full Board of
Directors. The Executive Committee currently consists of Messrs. van Roon
(Chairman), Burr, Carden, Hesburgh and Markbreiter. Following the Annual
Meeting, if all nominees for Director are elected, the Executive Committee is
expected to consist of Messrs. van Roon, Burr, Carden and Markbreiter. At
December 31, 1998, the Executive Committee consisted of Messrs. Price
(Chairman), Carden, Hesburgh and Markbreiter.
The Audit Committee was established in June 1996. The functions of the Audit
Committee are to recommend annually to the Board of Directors the appointment of
the independent public accountants of the Company, review the scope of the
annual audit and other services the independent auditors are asked to perform,
review the report on the Company's financial statements following the audit,
review the accounting and financial policies of the Company and review
management's procedures and policies with respect to the Company's internal
controls. The Audit Committee currently consists of Messrs. Edwards (Chairman),
Edelson, Hesburgh and Markbreiter. The Audit Committee held two separate
meetings in 1998. Following the Annual Meeting, if all nominees for Director are
elected, the Audit Committee is expected to consist of Messrs. Edwards, Edelson
and Markbreiter. At December 31, 1998, the Audit Committee consisted of Messrs.
Edelson (Chairman), Hesburgh and Markbreiter.
The Compensation Committee held one separate meeting in 1998. All of its
functions are discussed in the Report on Executive Compensation which starts on
page 13. The Compensation Committee currently consists of Messrs. Burr
(Chairman), van Roon, Hesburgh and Markbreiter. Following the Annual Meeting, if
all nominees for Director are elected, the Compensation Committee is expected to
consist of Messrs. Burr, van Roon and Markbreiter. At December 31, 1998, the
Compensation Committee consisted of Messrs. Markbreiter (Chairman), Price and
Hesburgh.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee currently consists of Messrs. Burr, van Roon,
Hesburgh and Markbreiter. Mr. van Roon has been President and Chief Executive
Officer of the Company since April 1999. Mr. Burr has been Chairman of the Board
of the Company since October 21, 1999, succeeding Mr. Hesburgh, who was Chairman
of the Board from April 1999 to October 1999.
DIRECTOR COMPENSATION
Members of the Board of Directors of the Company presently receive no annual
remuneration for acting in that capacity. During the period James L. Hesburgh
was Chairman of the Board and an employee of the Company (April to October
1999), he received annualized compensation of $72,000. The Company's
non-employee Directors are compensated at the rate of $1,500 (plus reasonable
expenses) for each attended meeting of the Board of Directors and $500 for each
telephonic meeting in which each participates. Non-employee Directors are also
eligible for the grant of options under the 1996 Stock Incentive Plan (the "1996
Plan") that provides for each non-employee Director (currently, Messrs. Burr,
Edelson, Edwards, Hesburgh and Markbreiter) to receive an initial grant of
options to purchase 5,000 shares of common stock and an annual grant of options,
to be granted as of the date of the Annual Meeting of Stockholders, to purchase
10,000 shares of common stock. Following approval by the Company's stockholders
of the 1999 Stock Incentive Plan, all such future grants will be under the 1999
Stock Incentive Plan.
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PROPOSAL 2 - APPROVAL OF THE
1999 STOCK INCENTIVE PLAN
The Company's stockholders are being asked to approve the Company's new 1999
Stock Incentive Plan (the "1999 Plan") under which 1,500,000 shares of the
Company's common stock have been reserved for issuance. The Board of Directors
adopted the 1999 Plan on April 15, 1999, subject to stockholder approval at the
1999 Annual Meeting. The 1999 Plan is intended to serve as a comprehensive
equity incentive program for the Company's officers, employees and non-employee
Board members which will encourage such individuals to remain in the Company's
service and more closely align their interests with those of the stockholders.
The following is a summary of the principal features of the 1999 Plan. This
summary does not, however, purport to be a complete description of all the
provisions of the 1999 Plan. Any stockholder of the Company who wishes to obtain
a copy of the actual plan document may do so upon written request to the
Company's Chief Financial Officer at the Company's principal executive offices
in Irvine, California.
EQUITY INCENTIVE PROGRAMS
The 1999 Plan consists of three separate equity incentive programs: (i) a
Discretionary Option Grant Program, (ii) a Stock Issuance Program and (iii) an
Automatic Option Grant Program. The principal features of each program are
described below. The Compensation Committee of the Board will administer the
Discretionary Option Grant and Stock Issuance Programs with respect to all
officers and Directors of the Company subject to the short-swing trading
restrictions of the federal securities laws ("Section 16 Insiders"). With
respect to all other participants, those programs may be administered by either
the Compensation Committee or a special stock option committee (the "Secondary
Committee") comprised of one or more Board members appointed by the Board or by
the entire Board itself. Each entity, whether the Compensation Committee, the
Secondary Committee or the Board, will be referred to in this summary as the
Plan Administrator with respect to its particular administrative functions under
the 1999 Plan, and each Plan Administrator will have complete discretion
(subject to the provisions of the 1999 Plan) to authorize option grants and
direct stock issuances under the 1999 Plan within the scope of its
administrative jurisdiction. However, all grants under the Automatic Option
Grant Program will be made in strict compliance with the provisions of that
program, and no administrative discretion will be exercised by any Plan
Administrator with respect to the grants made under such program.
SHARE RESERVE
1,500,000 shares of common stock have been reserved for issuance over the
ten-year term of the 1999 Plan. Should any option terminate prior to exercise in
full, the shares subject to the unexercised portion of that option will be
available for subsequent issuance under the 1999 Plan. In addition, any unvested
shares issued under the 1999 Plan and subsequently repurchased by the Company at
the option exercise or direct issue price paid per share pursuant to the
Company's repurchase rights under the 1999 Plan will be added back to the number
of shares of common stock reserved for issuance under the 1999 Plan and will
accordingly be available for reissuance through one or more subsequent option
grants or direct stock issuances made under the 1999 Plan. However, shares
subject to any option surrendered in accordance with the stock appreciation
right provisions of the 1999 Plan will not be available for subsequent issuance.
In no event may any individual be granted stock options, separately exercisable
stock appreciation rights and direct stock issuances for more than 750,000
shares in total per calendar year under the 1999 Plan. Stockholder approval of
this Proposal will also constitute approval of such limitation for purposes of
Internal Revenue Code Section 162(m).
The Company also maintains the 1996 Plan under which 1,000,000 shares of common
stock have been reserved for issuance. The provisions governing the
discretionary and automatic option grants under the 1996 Plan are substantially
similar to the provisions which will be in effect for the Discretionary Option
Grant and Automatic Option Grant Programs of the 1999 Plan. As of October 18,
1999, options for 655,800 shares were outstanding under the 1996 Plan and
options for 344,200 shares remained available for future issuance. No options
have been exercised under the 1996 Plan. Upon stockholder approval of
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this Proposal, the automatic grant program in effect for non-employee Board
members under the 1996 Plan will terminate, and no further option grants will be
made to the non-employee Board members under that program. All automatic option
grants to the non-employee Board members on or after the date of the 1999 Annual
Meeting will be made solely and exclusively in accordance with the provisions of
the Automatic Option Grant Program of the 1999 Plan.
CHANGES IN CAPITALIZATION
If any change is made to the outstanding shares of common stock by reason of any
recapitalization, stock dividend, stock split, combination of shares, exchange
of shares or other change in corporate structure effected without the Company's
receipt of consideration, appropriate adjustments will be made to (i) the
maximum number and class of securities issuable under the 1999 Plan, (ii) the
maximum number and class of securities for which any one participant may be
granted stock options, separately exercisable stock appreciation rights and
direct stock issuances per calendar year under the 1999 Plan, (iii) the number
and class of securities for which option grants will subsequently be made under
the Automatic Option Grant Program to each newly-elected or continuing
non-employee Board member and (iv) the number and class of securities and the
exercise price per share in effect under each outstanding option under the Plan.
All such adjustments will be designed to preclude the enlargement or dilution of
participant rights and benefits under the 1999 Plan.
ELIGIBILITY
Employees, non-employee Board members, and independent consultants and advisors
to the Company and its subsidiaries (if any are subsequently established) will
be eligible to participate in the Discretionary Option Grant and Stock Issuance
Programs. Non-employee members of the Board will also be eligible to participate
in the Automatic Option Grant Program.
As of October 30, 1999, two (2) executive officers, five (5) non-employee Board
members and fifty-three (53) other employees were eligible to participate in the
Discretionary Option Grant and Stock Issuance Programs, and five (5)
non-employee Board members were also eligible to participate in the Automatic
Option Grant Program.
VALUATION
The fair market value per share of common stock on any relevant date under the
1999 Plan will be the closing selling price per share on that date on the Nasdaq
National Market. On November 9, 1999, the closing selling price of the Company's
common stock was $2.813 per share.
DISCRETIONARY OPTION GRANT PROGRAM
GRANTS
The Plan Administrator has complete discretion under the Discretionary Option
Grant Program to determine which eligible individuals are to receive option
grants, the time or times when such grants are to be made, the number of shares
subject to each such grant, the status of the granted option as either an
incentive stock option or a non-statutory option under the federal tax laws, the
vesting schedule (if any) to be in effect for the option grant and the maximum
term for which the option is to remain outstanding.
PRICE AND EXERCISABILITY
The exercise price per share for options granted under the Discretionary Option
Grant Program may not be less than one hundred percent (100%) of the fair market
value per share of common stock on the grant date. No option will have a term in
excess of ten (10) years, and each option will generally become exercisable in
one or more installments over the optionee's period of service with the Company.
However, one or more options may be granted which are immediately exercisable
for all the option shares, but any
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shares acquired under those options will be subject to repurchase by the
Company, at the exercise price paid per share, upon the optionee's cessation of
service with the Company prior to vesting in those shares. The Plan
Administrator may at any time cancel the Company's outstanding repurchase rights
with respect to any such unvested shares and thereby accelerate the vesting of
those shares.
The exercise price may be paid in cash or in shares of the common stock.
Outstanding options may also be exercised through a same-day sale program
pursuant to which a designated brokerage firm will effect an immediate sale of
the shares purchased under the option and pay over to the Company, out of the
sale proceeds available on the settlement date, sufficient funds to cover the
exercise price for the purchased shares plus all applicable withholding taxes.
No optionee will have any stockholder rights with respect to the option shares
until such optionee has exercised the option and paid the exercise price for the
purchased shares. Options are generally not assignable or transferable other
than by will or the laws of inheritance and, during the optionee's lifetime, the
option may be exercised only by such optionee. However, the Plan Administrator
may allow non-statutory options to be transferred or assigned during the
optionee's lifetime to one or more members of the optionee's immediate family or
to a trust established exclusively for one or more such family members, to the
extent such transfer or assignment is in furtherance of the optionee's estate
plan. The optionee may also designate one or more persons as the beneficiary or
beneficiaries of his or her outstanding option, and that option will, in
accordance with such designation, automatically be transferred to such
beneficiary or beneficiaries upon the optionee's death while holding such
option.
TERMINATION OF SERVICE
Upon the optionee's cessation of employment or service, the optionee will have a
limited period of time in which to exercise his or her outstanding options for
any shares in which the optionee is vested at that time. However, at any time
while the options remain outstanding, the Plan Administrator will have complete
discretion to extend the period following the optionee's cessation of employment
or service during which his or her outstanding options may be exercised. The
Plan Administrator will also have complete discretion to accelerate the
exercisability or vesting of those options in whole or in part at any time.
STOCK APPRECIATION RIGHTS
The Plan Administrator is authorized to issue two types of stock appreciation
rights in connection with option grants made under the Discretionary Option
Grant Program:
Tandem stock appreciation rights provide the holders with the right to
surrender their options for an appreciation distribution from the Company
equal in amount to the excess of (a) the fair market value of the vested
shares of common stock subject to the surrendered option over (b) the
aggregate exercise price payable for those shares. Such appreciation
distribution may, at the discretion of the Plan Administrator, be made in
cash or in shares of common stock (valued for this purpose at the market
price of the common stock on the date of issuance).
Limited stock appreciation rights may be provided to one or more Section
16 Insiders as part of their option grants. Any option with such a limited
stock appreciation right may be surrendered to the Company upon the
successful completion of a hostile tender offer, if such tender offer was
made, for more than fifty percent (50%) of the Company's outstanding
voting stock. In return for the surrendered option, the officer will be
entitled to a cash distribution from the Company in an amount per
surrendered option share equal to the excess of (a) the highest price per
share of common stock paid in connection with the tender offer over (b)
the exercise price payable for such share.
STOCK ISSUANCE PROGRAM
Shares may be sold under the Stock Issuance Program at a price per share not
less than one hundred percent (100%) of their fair market value, payable in cash
or through a promissory note payable to the Company. Shares may also be issued
as a bonus for past services.
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The shares issued as a bonus for past services will be fully vested upon
issuance. All other shares issued under the program will be subject to a vesting
schedule tied to the performance of service or the attainment of performance
goals. The Plan Administrator will, however, have the discretionary authority at
any time to accelerate the vesting of any and all unvested shares outstanding
under the 1999 Plan.
AUTOMATIC OPTION GRANT PROGRAM
TERMS
Under the Automatic Option Grant Program, non-employee Board members will
receive option grants at specified intervals over their period of Board service.
All grants under the Automatic Option Grant Program will be made in strict
compliance with the express provisions of such program. Accordingly, stockholder
approval of this Proposal will also constitute approval of each option granted
on or after the date of the 1999 Annual Meeting pursuant to the provisions of
the Automatic Option Grant Program summarized below and the subsequent exercise
of that option in accordance with such provisions.
1. Each individual who first becomes a non-employee Board member on or
after the date of the 1999 Annual Meeting, whether through election by the
stockholders or appointment by the Board, will automatically be granted, at the
time of such initial election or appointment, a non-statutory option to purchase
five thousand (5,000) shares of common stock, provided such individual has not
previously been in the Company's employ.
2. On the date of each Annual Stockholders Meeting, beginning with the
1999 Annual Meeting, each individual who is to continue to serve as a
non-employee Board member, so long as that individual is standing for initial
election or re-election at that particular annual meeting, will automatically be
granted a non-statutory option to purchase ten thousand (10,000) shares of
common stock. There will be no limit on the number of such ten thousand
(10,000)-share option grants any one non-employee Board member may receive over
his or her period of Board service, and non-employee Board members who have
previously been in the Company's employ will be eligible to receive one or more
of those annual grants. Should a non-employee Board member's appointment to the
Board occur other than at an Annual Stockholders Meeting, then at the time of
the appointment, the individual will be granted a number of shares subject to
the option reduced through a pro-ration based on the number of months that have
elapsed between the date of the Annual Stockholders Meeting immediately prior to
the individual's election or appointment to the Board and the date of that
election or appointment. For example, an individual who is appointed as a
non-employee Board member three (3) months after the date of the 1999 Annual
Meeting, will receive an automatic option grant for three-fourths of the 10,000
share annual grant, or 7,500 shares.
3. Each automatic option grant will have an exercise price per share equal
to 100% of the fair market value per share of common stock on the grant date.
The option will have a maximum term of ten (10) years, subject to earlier
termination at the end of the twelve (12) month period measured from the date of
the optionee's cessation of Board service. Each option will be immediately
exercisable for all of the option shares. However, any unvested shares purchased
under the option will be subject to repurchase by the Company, at the exercise
price paid per share, upon the optionee's cessation of Board service prior to
vesting in those shares. The shares subject to each initial five thousand
(5,000)-share option grant will be fully-vested upon the grant of that option.
One third of the shares subject to each annual ten thousand (10,000)-share
option, or pro rata option relating to the annual grant, will be immediately
vested at the time of the grant, and the remaining shares will vest in two
successive equal annual installments upon optionee's completion of each twelve
(12)-month period of Board service over the twenty-four (24)-month period
measured from the option grant date.
4. Each automatic option will remain exercisable for a twelve (12) month
period following the optionee's cessation of service as a Board member. In no
event, however, may the option be exercised after the expiration date of the
option term. During the applicable post-service exercise period, the option may
not be exercised for more than the number of option shares in which the Board
member is vested at the time of his or her cessation of Board service.
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Any unvested shares subject to an outstanding automatic option grant will
immediately vest upon (i) the optionee's death or permanent disability while a
Board member, (ii) an acquisition of the Company by merger or asset sale, (iii)
the successful completion of a tender offer for more than 50% of the Company's
outstanding voting stock or (iv) a change in the majority of the Board effected
through one or more proxy contests for Board membership.
5. Upon the successful completion of a hostile tender offer for more than
50% of the Company's outstanding voting stock, each outstanding automatic option
grant may be surrendered to the Company for a cash distribution per surrendered
option share in an amount equal to the excess of (a) the highest price per share
of common stock paid in connection with such tender offer over (b) the exercise
price payable for such share. Stockholder approval of this Proposal will also
constitute pre-approval of each option granted with such a surrender right on or
after the date of the 1999 Annual Meeting and the subsequent exercise of that
right in accordance with the foregoing terms.
6. The automatic option grant may be transferred or assigned during the
optionee's lifetime to one or more members of the optionee's immediate family or
to a trust established exclusively for one or more such family members, to the
extent such transfer or assignment is in furtherance of the optionee's estate
plan. The optionee may also designate one or more persons as the beneficiary or
beneficiaries of his or her outstanding automatic option grants, and those
options will, in accordance with such designation, automatically be transferred
to such beneficiary or beneficiaries upon the optionee's death while holding
that option.
The remaining terms and conditions of each automatic option grant will generally
conform to the terms summarized above for option grants made under the
Discretionary Option Grant Program and will be incorporated into the option
agreement evidencing the automatic grant.
The new Automatic Option Grant Program is intended to replace the automatic
option grant program currently in effect for the non-employee Board members
under the 1996 Plan. However, if the stockholders do not approve this Proposal,
then the automatic option grant program under the 1996 Plan will remain in full
force and effect, and option grants will be made under that program to all
non-employee Board members who continue to serve on the Board on or after the
date of the 1999 Annual Meeting.
GENERAL PROVISIONS
ACCELERATION
In the event that the Company is acquired by merger or asset sale, each
outstanding option under the Discretionary Option Grant Program will
automatically accelerate in full, unless assumed by the successor corporation or
replaced with a cash incentive program which preserves the spread existing on
the unvested option shares (the excess of the fair market value of those shares
over the option exercise price payable for such shares) and provides for
subsequent payout in accordance with the same vesting schedule in effect for the
option. In addition, all unvested shares outstanding under the Discretionary
Option Grant and Stock Issuance Programs will immediately vest, except to the
extent the Company's repurchase rights with respect to those shares are to be
assigned to the successor corporation. Any options under the Discretionary
Option Grant Program which are assumed or replaced in the acquisition will
subsequently vest and become exercisable for all the option shares in the event
the optionee's service with the Company or the acquiring entity terminates the
optionee within a designated period (not to exceed eighteen months) following
such acquisition. Any unvested shares held by an individual under the Stock
Issuance Program will also vest in full upon such an involuntary termination of
his or her service.
The Plan Administrator will have the authority to grant options under the
Discretionary Option Grant Program which will immediately vest upon an
acquisition of the Company, whether or not those options are assumed by the
successor corporation. The Plan Administrator is also authorized under the
Discretionary Option Grant and Stock Issuance Programs to grant options and to
structure repurchase rights so that the shares subject to those options or
repurchase rights will immediately vest in connection with a change in control
of the Company (whether by successful tender offer for more than fifty percent
(50%) of the outstanding voting stock or a change in the majority of the Board
by reason of one or more contested elections for Board membership), with such
vesting to occur either at the time of such change in
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control or upon the subsequent termination of the individual's service within a
designated period (not to exceed eighteen months) following such change in
control.
The acceleration of vesting upon a change in the ownership or control of the
Company may be seen as an anti-takeover provision and may have the effect of
discouraging a merger proposal, a takeover attempt or other efforts to gain
control of the Company.
FINANCIAL ASSISTANCE
The Plan Administrator may institute a loan program to assist one or more
participants in financing the exercise of outstanding options or the purchase of
shares under the Discretionary Option Grant or Stock Issuance Programs. The Plan
Administrator will have complete discretion to determine the terms of any such
financial assistance. However, the maximum amount of financing provided any
individual may not exceed the cash consideration payable for the issued shares
plus all applicable taxes. Any such financing may be subject to forgiveness in
whole or in part, at the discretion of the Plan Administrator, over the
participant's period of service.
SPECIAL TAX ELECTION
The Plan Administrator may provide one or more holders of options or unvested
shares with the right to have the Company withhold a portion of the shares
otherwise issuable to such individuals in satisfaction of the withholding taxes
to which such individuals may become subject in connection with the exercise of
those options or the vesting of those shares. Alternatively, the Plan
Administrator may allow such individuals to deliver previously acquired shares
of common stock in payment of such tax liability.
NEW PLAN BENEFITS
The following table lists, as of October 29, 1999, the number of shares subject
to options granted under the 1999 Plan to (i) the Company's executive officers
named in the Summary Compensation Table of the Executive Compensation and
Related Information section of this Proxy Statement and (ii) the various other
indicated individuals and groups. None of the listed options will become
exercisable unless the stockholders approve this Proposal. In the event such
stockholder approval is not obtained, the options will terminate.
1999 STOCK INCENTIVE PLAN
OPTIONS
GRANTED
(NUMBER OF
NAME AND POSITION SHARES) EXERCISE PRICE ($)
----------------- ------- ------------------
Mr. Arne van Roon, 750,000 $2.63
President and Chief Executive Officer
All current executive officers as a group (2 750,000 2.63
persons)
All current non-employee directors as a 50,000 2.63
group (5 persons)
All employees, including current officers who 800,000 2.63
are not executive officers, as a group (53
persons)
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As of October 29, 1999, options covering 800,000 shares of common stock were
outstanding under the 1999 Plan, 700,000 shares remained available for future
option grant or direct issuance, and no shares have been issued pursuant to the
exercise of outstanding options under the 1999 Plan.
In addition, at the 1999 Annual Meeting, each individual who will continue to
serve as a non-employee Board member will receive an option grant under the
Automatic Option Grant Program to purchase 10,000 shares of common stock at an
exercise price per share equal to the fair market value per share of common
stock on the grant date.
AMENDMENT AND TERMINATION
The Board may amend or modify the 1999 Plan in any or all respects whatsoever,
subject to any stockholder approval required under applicable law or regulation.
The Board may terminate the 1999 Plan at any time, and the 1999 Plan will in all
events terminate on April 14, 2009.
OPTION GRANTS
The table below shows, as to each of the executive officers named in the Summary
Compensation Table and the various other indicated persons and groups,
information with respect to stock option grants effected during the period from
January 1, 1998 through October 18, 1999 under the 1996 Plan.
OPTION TRANSACTIONS UNDER
THE 1996 STOCK INCENTIVE PLAN
OPTIONS WEIGHTED
GRANTED AVERAGE
(NUMBER OF EXERCISE PRICE OF
NAME SHARES) GRANTED OPTIONS ($)
---- ------- -------------------
Executive officers:
Mr. Steven S. Price* 400,000 $7.63
Mr. Richard L. Little 100,000 3.50
Mr. Jon A. Knartzer 135,000 3.89
All current executive officers as a group (2
persons) 100,000 3.50
Non-employee directors who received automatic
or discretionary grants under the 1996 Plan:
Mr. Harry Edelson 10,000 8.00
Mr. James L. Hesburgh** 10,000 5.38
Mr. Michael Markbreiter 10,000 8.00
Mr. Udi Toledano*** 10,000 8.00
All current non-employee directors as a
group (5 persons) 30,000 7.13
All employees, including current executive
officers, as a group (55 persons) 830,800 6.08
* Formerly President and Chief Executive Officer and a Director (April 1998
to April 1999)
** Formerly Chairman of the Board (April 1999 to October 1999)
*** Formerly a Director of the Company (April 1996 to September 1998) and
Chairman of the Board (February 1997 to September 1998)
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FEDERAL INCOME TAX CONSEQUENCES
Options granted under the 1999 Plan may be either incentive stock options that
satisfy the requirements of Section 422 of the Internal Revenue Code or
non-statutory options that are not intended to meet such requirements. The
Federal income tax treatment for the two types of options differs as follows:
INCENTIVE OPTIONS. No taxable income is recognized by the optionee at the time
of the option grant, and no taxable income is generally recognized at the time
the option is exercised. The optionee will, however, recognize taxable income in
the year in which the purchased shares are sold or otherwise made the subject of
a taxable disposition. For Federal income tax purposes, dispositions are divided
into two categories: qualifying dispositions and disqualifying dispositions. A
qualifying disposition occurs if the sale or other disposition is made after the
optionee has held the shares for more than two (2) years after the option grant
date and more than one (1) year after the exercise date. If either of these two
holding periods is not satisfied, then a disqualifying disposition will result.
Upon a qualifying disposition, the optionee will recognize long-term capital
gain in an amount equal to the excess of (i) the amount realized upon the sale
or other disposition of the purchased shares over (ii) the exercise price paid
for the shares. If there is a disqualifying disposition of the shares, then the
excess of (i) the fair market value of those shares on the exercise date over
(ii) the exercise price paid for the shares will be taxable as ordinary income
to the optionee. Any additional gain or loss recognized upon the disposition
will be recognized as a capital gain or loss by the optionee.
If the optionee makes a disqualifying disposition of the purchased shares, then
the Company will be entitled to an income tax deduction, for the taxable year in
which such disposition occurs, equal to the excess of (i) the fair market value
of such shares on the option exercise date over (ii) the exercise price paid for
the shares. If the optionee makes a qualifying disposition, the Company will not
be entitled to any income tax deduction.
NON-STATUTORY OPTIONS. No taxable income is recognized by an optionee upon the
grant of a non-statutory option. The optionee will in general recognize ordinary
income, in the year in which the option is exercised, equal to the excess of the
fair market value of the purchased shares on the exercise date over the exercise
price paid for the shares, and the optionee will be required to satisfy the tax
withholding requirements applicable to such income.
If the shares acquired upon exercise of the non-statutory option are unvested
and subject to repurchase by the Company in the event of the optionee's
termination of service prior to vesting in those shares, then the optionee will
not recognize any taxable income at the time of exercise but will have to report
as ordinary income, as and when the Company's repurchase right lapses, an amount
equal to the excess of (i) the fair market value of the shares on the date the
repurchase right lapses over (ii) the exercise price paid for the shares. The
optionee may, however, elect under Section 83(b) of the Internal Revenue Code to
include as ordinary income in the year of exercise of the option an amount equal
to the excess of (i) the fair market value of the purchased shares on the
exercise date over (ii) the exercise price paid for such shares. If the Section
83(b) election is made, the optionee will not recognize any additional income as
and when the repurchase right lapses.
The Company will be entitled to an income tax deduction equal to the amount of
ordinary income recognized by the optionee with respect to the exercised
non-statutory option. The deduction will in general be allowed for the taxable
year of the Company in which such ordinary income is recognized by the optionee.
STOCK APPRECIATION RIGHTS
An optionee who is granted a stock appreciation right will recognize ordinary
income in the year of exercise equal to the amount of the appreciation
distribution. The Company will be entitled to an income tax deduction equal to
such distribution for the taxable year in which the ordinary income is
recognized by the optionee.
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<PAGE>
DIRECT STOCK ISSUANCE
The tax principles applicable to direct stock issuances under the 1999 Plan will
be substantially the same as those summarized above for the exercise of
non-statutory option grants.
DEDUCTIBILITY OF EXECUTIVE COMPENSATION
The Company anticipates that any compensation deemed paid by it in connection
with the disqualifying disposition of incentive stock option shares or the
exercise of non-statutory options granted with exercise prices equal to the fair
market value of the shares on the grant date will qualify as performance-based
compensation for purposes of Code Section 162(m) and will not have to be taken
into account for purposes of the $1 million limitation per covered individual on
the deductibility of the compensation paid to certain executive officers of the
Company. Accordingly, all compensation deemed paid under the 1999 Plan with
respect to such dispositions or exercises will remain deductible by the Company
without limitation under Code Section 162(m).
ACCOUNTING TREATMENT
Option grants or stock issuances to employees or non-employee Board members with
exercise or issue prices equal to the fair market value of the shares at the
time of grant or issuance will not result in any direct charge to the Company's
earnings. However, the fair value of those options must be disclosed in the
notes to the Company's financial statements, in the form of pro-forma
information to those financial statements, describing the impact those options
would have upon the Company's reported earnings if the fair value of those
options at the time of grant were treated as compensation expense. Whether or
not granted at a discount, the number of outstanding options may be a factor in
determining the Company's earnings per share on a fully-diluted basis.
Should one or more optionees be granted stock appreciation rights under the 1999
Plan that have no conditions upon exercisability other than a service or
employment requirement, then such rights would result in a compensation expense
to be charged against the Company's reported earnings. Accordingly, at the end
of each fiscal quarter, the amount (if any) by which the fair market value of
the shares of common stock subject to such outstanding stock appreciation rights
has increased from the prior quarter-end would be accrued as compensation
expense, to the extent such fair market value is in excess of the aggregate
exercise price in effect for those rights.
STOCKHOLDER APPROVAL
The affirmative vote of a majority of the outstanding voting shares of the
Company present or represented and entitled to vote at the 1999 Annual Meeting
is required for approval of the 1999 Plan. Should such stockholder approval not
be obtained, then any stock options granted under the 1999 Plan will immediately
terminate without becoming exercisable for the shares of common stock subject to
those options, and no additional options will be granted under the 1999 Plan.
The 1996 Plan will remain in effect, whether or not the stockholders approve the
1999 Plan, and option grants will continue to be made under the 1996 Plan until
the remaining share reserve has been issued. However, the automatic option grant
program for non-employee Board members under the 1996 Plan will terminate upon
stockholder approval of the 1999 Plan.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT THE STOCKHOLDERS
VOTE FOR THE APPROVAL OF THE 1999 STOCK INCENTIVE PLAN.
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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth the number of shares of common stock
beneficially owned, including shares of common stock issuable upon conversion of
Convertible Preferred Stock owned, upon exchange of exchangeable debt and upon
exercise of warrants, as of November 9, 1999, by (i) each stockholder known to
the Company to be a beneficial owner of more than 5% of the common stock, (ii)
each Director and nominee for Director and (iii) the Directors and officers of
the Company as a group. Unless otherwise noted, all shares and equivalents are
owned directly with sole voting and dispositive powers.
Beneficial Ownership
--------------------
Name(1) No. of Shares % of Total
- ------- ------------- ----------
Fleming US Discovery Fund III, L.P. and
Fleming US Discovery Offshore
Fund III, L.P.(2) 4,391,666 24.32%
Kingdon Capital Management Corp.(3) 3,235,455 17.92%
Robin A. Carden 2,544,500 14.09%
Talisman Capital Opportunity Fund Ltd.(4) 1,607,465 8.90%
Capital Guardian Trust(5) 928,200 5.14%
Harry Edelson(6) 637,000 3.53%
Arne van Roon(7) 108,000 *
James Hesburgh(8) 58,333 *
Richard Little(9) 40,000 *
Michael Markbreiter(10) 35,000 *
All executive officers and directors of 2,832,500 15.69%
the Company as a group (six persons)(11)
- ------------------
*Less than 1%.
(1) The address for each of the persons in the table below is c/o Alyn
Corporation, 16761 Hale Avenue, Irvine, California 92606.
(2) Includes 2,500,000 shares of common stock that would be issuable upon
conversion of 75,000 shares of Series C Convertible Preferred Stock and
warrants to purchase up to 1,875,000 shares of common stock, subject to
certain provisions which provide for a reduction in the number of shares
of common stock for which the warrants are exercisable upon reaching
certain financial performance objectives. Includes options immediately
exercisable for 16,666 shares of common stock granted to Fleming US
Discovery Fund III, L.P. and Fleming US Discovery Offshore Fund III, L.P.
as compensation for Robert L. Burr's and David J. Edwards', employees of
Robert Fleming Inc., service on the Board of Directors of the Company.
(3) Includes shares of common stock held by M. Kingdon Offshore NV, Kingdon
Associates, L.P. and Kingdon Partners, L.P. Does not include the shares of
common stock underlying immediately exercisable options that appear in the
table above opposite the name of Michael Markbreiter, a Director of the
Company and formerly an employee of Kingdon Capital Management Corp.
("Kingdon"). Mr. Mark Kingdon is the sole shareholder, director and
executive officer of Kingdon. Mr. Markbreiter serves on the Board of
Directors as the representative of Kingdon.
(4) Includes 1,000,000 shares of common stock that would be issuable upon
exchange of $3 million in exchangeable debt, at an assumed price of $3.00
per share, and warrants to purchase 420,000 shares of common stock.
(5) Shares held are as reported as of June 30, 1999 in such stockholder's
recent 13D filing.
(6) Includes options immediately exercisable for 35,000 shares of common stock
held by Mr. Edelson. Also includes 602,000 shares of common stock held by
Edelson Technology Partners III, with respect to which Mr. Edelson
disclaims beneficial ownership.
(7) Includes options immediately exercisable for 100,000 shares of common
stock. Does not include options to purchase 650,000 shares of common stock
which are not immediately exercisable.
(8) Includes options immediately exercisable for 58,333 shares of common
stock.
(9) Includes options immediately exercisable for 40,000 shares of common
stock. Does not include options to purchase 120,000 shares of common stock
which are not immediately exercisable.
(10) Includes options immediately exercisable for 35,000 shares of common
stock.
(11) Includes options immediately exercisable for 280,000 shares of common
stock. Does not include (I) 4,391,666 of common stock equivalents held by
Fleming US Discovery Fund III, L.P. and Fleming US Discovery Offshore Fund
III, L.P., with respect to which Messrs. Burr and Edwards, Directors,
disclaim beneficial ownership; (ii) 602,000 shares of common stock held by
Edelson Technology Partners III, with respect to which Mr. Edelson, a
Director, disclaims beneficial ownership and (iii) 3,235,455 shares of
common stock held by Kingdon Partners, L.P., Kingdon Associates, L.P. and
M. Kingdon Offshore NV, with respect to which Mr. Markbreiter, a Director,
disclaims beneficial ownership.
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<PAGE>
EXECUTIVE OFFICERS
See "Proposal 1 - Election of Directors" above for information pertaining to Mr.
van Roon, the Company's President and Chief Executive Officer. In addition to
Mr. van Roon, Mr. Richard L. Little serves as the Company's Vice President,
Finance and Administration and Chief Financial Officer and is the Secretary of
the Corporation.
RICHARD L. LITTLE, 55, has been the Vice President, Finance and Administration
and Chief Financial Officer of the Company since May 1997 and Secretary since
September 1998. Mr. Little was Executive Vice President of d'essence Designer
Fragrances, a marketer of fine perfumes and related products from 1995 to 1997
and President of d'essence International from 1996 to 1997. From 1994 to 1995,
he was Chief Operating Officer and Chief Financial Officer of Graphix Zone, a
publicly traded producer of CD-ROMS. In 1989, Mr. Little co-founded Bainbridge
International Holdings, a merchant bank specializing in acquiring middle market
companies. From 1986 to 1989, Mr. Little was Chief Financial Officer, Vice
President Finance, Treasurer and Secretary of Teradata Corporation, a publicly
traded manufacturer and marketer of supercomputers for managing very large data
bases. Prior to joining Teradata, Mr. Little was Chief Financial Officer of
Quotron Systems, a publicly traded provider of on-line financial information
services. Mr. Little has a Bachelor of Science degree in Engineering and a
Masters of Business Administration in Finance from the University of California,
Los Angeles. He is also a CPA.
Executive officers of the Company serve at the discretion of the Board. There
are no family relationships between or among any of the Company's directors or
executive officers.
AGREEMENTS WITH KEY EXECUTIVES
In April 1999, the Company entered into an agreement with Arne van Roon, the
Company's newly appointed President and Chief Executive Officer. The agreement
provided that Mr. van Roon shall be paid annual base compensation of $164,320.
In June 1999, the Board adjusted Mr. van Roon's annual base compensation to
$175,000. The agreement also provides that Mr. van Roon shall be granted options
to purchase 750,000 shares of the Company's common stock to vest on April 15,
2004, subject to the following acceleration provisions: (i) 100,000 to be vested
on December 31, 1999; (ii) 100,000 to vest on December 31, 2000 if the Company's
common stock price is at or above $4.00 per share on that date; and (iii) 50,000
to vest for every whole dollar per share that the Company's common stock price
at December 31, 2000 is above $4 per share up to a maximum of $15 per share. On
February 18, 1999 Mr. van Roon was granted warrants to purchase up to 50,000
shares of the Company's common stock, subject to vesting based upon the
Company's European sales exceeding certain minimum requirements for 1999.
In April 1999, the Company entered into an agreement with James L. Hesburgh, the
Company's then newly elected Chairman of the Board, to provide additional
assistance to the Company. The agreement provided that Mr. Hesburgh's annualized
compensation would be $72,000. The agreement also provided that Mr. Hesburgh
would be granted options to purchase 100,000 shares of the Company's common
stock which would vest on December 31, 1999, if such period of additional
assistance was still in effect as of that date. On October 21, 1999, Mr.
Hesburgh's period of additional assistance terminated and he ceased to be
Chairman of the Board; however, he continues to remain as a Director. On
November 5, 1999, the terms of the vesting schedule for Mr. Hesburgh's options
for such additional assistance were amended to provide, in part, for full
vesting of options to purchase 50,000 shares of common stock, with the remaining
50,000 options cancelled and returned to the option pool available to grant.
In April 1998, the Company entered into a two-year employment agreement with
Steven S. Price, the Company's former President and Chief Executive Officer.
Subject to the termination provisions provided therein, the term of Mr. Price's
employment agreement was to be automatically renewed for a one-year term after
the expiration of the initial two-year term. The employment agreement provided
that Mr. Price's annual base salary was to be $200,000 during the initial year
and not less than $200,000, as determined by the Compensation Committee, during
the second year of the initial two-year term. In addition to his base salary
during the initial two-year term, Mr. Price was entitled to an annual bonus of
up to one hundred percent (100%) of his base salary, subject to a $100,000
minimum guarantee. He was also to receive a Company paid personal term life
insurance policy in an amount of not less than $1 million, reimbursement of
certain relocation costs and a customary benefits package. The employment
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<PAGE>
agreement provided that Mr. Price be granted options to purchase 400,000 shares
of the Company's common stock, to be vested in the following amounts and at the
times indicated: (I) 80,000 shares on the date of execution of his employment
agreement; (ii) 80,000 shares on the last day of the first year of employment;
and (iii) 40,000 shares upon completion of each succeeding six month period of
employment for a period of three years. Under the termination provisions of Mr.
Price's employment agreement, if he was not terminated for cause, he may not be
terminated during the first year of his employment. If terminated during the
second year of his employment other than for cause, he would be entitled to
continuation of salary and benefits, plus the minimum guaranteed bonus, paid
monthly, up to a period of one (1) year. The employment agreement prohibits Mr.
Price from (i) competing with the Company for a period of two years following
termination of employment with the Company and (ii) disclosing confidential
information or trade secrets in any unauthorized manner.
Effective April 15, 1999, Mr. Price was no longer President and Chief Executive
Officer of the Company. On October 15, 1999, after paying six months of
severance, the Company's severance obligations under the employment agreement
were completed, due to Mr. Price's employment by another company.
In May 1996, the Company entered into a three-year employment agreement with
Robin A. Carden, then the Company's President and Chief Executive Officer. On
April 20, 1998, Mr. Carden was replaced by Mr. Price as President and Chief
Executive Officer. Subject to the provisions for termination provided in his May
1996 agreement, the term of Mr. Carden's employment agreement shall
automatically be renewed for a one-year term after the expiration of the initial
three-year term, and for successive one-year terms thereafter for a maximum of
10 years. The employment agreement provides that Mr. Carden's annual base salary
shall be determined by the Board of Directors, but in no event shall such annual
salary be less than $150,000, which amount shall be increased annually in an
amount equal to at least the annual Consumer Price Index. In addition to his
base salary, Mr. Carden is entitled to bonus consideration and a customary
benefits package. The employment agreement prohibits Mr. Carden from (i)
competing with the Company for a period of two years following termination of
employment with the Company and (ii) disclosing confidential information or
trade secrets in any unauthorized manner.
In May 1997, Richard L. Little entered into a one-year employment agreement with
the Company for the position of Vice President, Finance and Administration and
Chief Financial Officer. Subject to the termination provisions provided therein,
Mr. Little's employment agreement was to automatically be renewed for a one-year
term after the expiration of the initial term, and for successive one-year terms
thereafter. Mr. Little's agreement was renewed for its first one-year extension.
His employment agreement provides for an annual base salary to be determined by
the Compensation Committee of the Board of Directors, but in no event shall such
annual salary be less than $135,000. In addition to an annual base salary, Mr.
Little's employment agreement provides for a minimum annual bonus of $20,000 and
a customary benefits package. The employment agreement prohibits Mr. Little from
(i) competing with the Company for a period of two years following termination
of employment with the Company and (ii) disclosing confidential information or
trade secrets in any unauthorized manner. In May 1998, Mr. Little and other
senior management of the Company were given notice of the Company's intent to
allow certain existing employment agreements to expire at their next anniversary
date and that such employees would become "at will" employees as defined by
California labor law. Mr. Little's employment agreement expired on May 19, 1999.
17
<PAGE>
EXECUTIVE COMPENSATION
The following table sets forth information for the years indicated concerning
the compensation awarded to, earned by or paid to the Chief Executive Officer of
the Company and the other executive officers (collectively, the "Named Executive
Officers") for services rendered in all capacities to the Company during such
period.
<TABLE>
SUMMARY COMPENSATION TABLE
<CAPTION>
ANNUAL COMPENSATION NUMBER OF
------------------- SECURITIES
NAME AND PRINCIPAL OTHER ANNUAL UNDERLYING ALL OTHER
POSITION YEAR SALARY BONUS(2) COMPENSATION OPTIONS COMPENSATION(1)
- -------- ---- ------ -------- ------------ ------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Steven S. Price 1998 $170,830 $41,670 -- 400,000 $ 5,950
Formerly President 1997 -- -- -- -- --
and Chief 1996 -- -- -- -- --
Executive Officer
Robin A. Carden 1998 $162,521 -- -- -- $ 7,200
Founder, Formerly 1997 156,667 -- -- -- 6,900
President and Chief 1996 100,000 $28,500 -- -- 310,895
Executive Officer
Walter R. Menetrey 1998 $148,408 -- -- -- --
Formerly Executive 1997 117,708 -- -- 50,000 --
Vice President and 1996 65,000 $27,500 -- -- --
Chief Operating
Officer
Richard L. Little 1998 $135,000 $50,000 -- -- $ 2,400
Vice President, 1997 84,375 20,000 -- 60,000 1,500
Finance and 1996 -- -- -- -- --
Administration
and Chief Financial
Officer
Jon A. Knartzer 1998 $ 50,833 -- -- 35,000 $ 800
Formerly Vice 1997 -- -- -- -- --
President of 1996 -- -- -- -- --
Operations
</TABLE>
- -----------------
(1) For 1998, represents car allowances for Mr. Price of $5,950, Mr. Carden
$7,200, Mr. Knartzer $800 and Mr. Little of $2,400. For 1997, represents car
allowances for Mr. Carden of $6,900 and Mr. Little of $1,500. For 1996,
represents Mr. Carden's $4,800 car allowance, $283,100 in deferred
compensation and $22,995 interest on his loan to the Company.
(2) In 1998, Mr. Little received a $50,000 bonus that was paid in 1999. In 1997
Mr. Little received a $20,000 bonus that was paid in 1998.
18
<PAGE>
STOCK OPTION GRANTS AND EXERCISE
The following table sets forth information regarding stock options granted to
each Named Executive Officer during fiscal year 1998 pursuant to the Company's
1996 Stock Option Plan.
% OF TOTAL
AWARDS
GRANTED TO EXERCISE GRANT DATE
OPTIONS EMPLOYEES OR BASE PRESENT
GRANTED(1) IN FISCAL PRICE(3) EXPIRATION VALUE(4)
NAME (#) YEAR(2) ($/SH) DATE ($/SH)
---- --- ------- ------ ---- ------
Steven S. Price 400,000 73.5% 7.62 04/09/08 $4.02
Jon A. Knartzer 35,000 6.4% 5.00 11/02/08 $4.02
- -----------------
(1) Options granted to Mr. Price were granted subject to certain vesting
provisions as described above. Options granted to Mr. Knartzer were
exercisable in a series of four (4) equal and successive annual
installments over the optionee's period of service with the Company,
measured from the grant date, with the first installment exercisable one
year from the grant date. Of the options included in the table above, only
160,000 for Mr. Price remain issued and outstanding. The remaining 275,000
have been cancelled. Each option must be exercised within 10 years of the
grant date, subject to earlier termination in the event of the optionee's
termination of employment with the Company. An incentive stock option
granted to a person owning more than 10% of the total combined voting power
of all classes of stock of the Company or of any parent or subsidiary of
the Company (a "Ten Percent Stockholder") must be exercised within five
years of the grant date. For incentive stock options granted to a Ten
Percent Stockholder, the exercise price shall not be less than 110% of the
Fair Value per share of common stock.
(2) A total of 544,000 options were granted for the fiscal year ended December
31, 1998. At December 31, 1998, 928,500 options were outstanding. Of these,
319,000 options were exercisable. At December 31, 1998 there were 71,500
shares of common stock reserved under the plan for future stock option
grants. A total of 260,500 options were granted for the fiscal year ended
December 31, 1997. At December 31, 1997, 524,500 shares were outstanding.
Of these, 138,894 options were exercisable. At December 31, 1997 there were
475,500 shares of common stock reserved under the plan for future stock
option grants. In October 1996, the Company granted options for the
purchase of 383,000 shares of common stock at the initial public offering
price, all of which were outstanding at December 31, 1996. Of the options
outstanding at December 31, 1996, 25,000 options were exercisable.
(3) The exercise price for each option granted under the 1996 Stock Option Plan
shall not be less than 100% of the fair market value (the "Fair Value") per
share of common stock on the date such option is granted. The exercise
price may be paid in cash (by check), by transferring shares of common
stock owned by the option holder and having a Fair Value on the date of
surrender equal to the aggregate exercise price of the option or, solely
with respect to options other than those granted to non-employee Directors,
by cash payments in installments or pursuant to a full recourse promissory
note, in either case, upon the terms and conditions as the Compensation
Committee shall determine. Upon the exercise of any option, the Company is
required to comply with all applicable withholding tax requirements.
(4) Represents grant date valuation computed under the Black-Scholes option
pricing model adapted for use in valuing stock options. The actual value,
if any, that may be realized will depend on the excess of the stock price
over the exercise price on the date the option is exercised, so there can
be no assurance that the value realized will be at or near the value
estimated by the Black-Scholes model. Grant date values were determined
based in part on the following assumptions for 1998: risk-free rate of
return of 5.50%, no dividend yield, expected life of 5 years, and
historical volatility of 56.31%.
19
<PAGE>
OPTION EXERCISES AND HOLDINGS AS OF DECEMBER 31, 1998
No stock options were exercised in fiscal year 1998 by any of the Named
Executive Officers. The following table sets forth, as of December 31, 1998, the
number of unexercised options held by each Named Executive Officer and the value
thereof based on the closing price of the common stock of $4.25 on December 31,
1998.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
Value of Unexercised
Number of Unexercised In-the-Money Options at
Options at FY-End FY-End ($)(1)
Name Exercisable/Unexercisable Exercisable/Unexercisable
- ---- ------------------------- -------------------------
Steven S. Price 80,000/320,000
Robin A. Carden NA NA
Walter R. Menetrey 33,300/16,700 0/0
Richard L. Little 20,000/40,000 0/0
Jon A. Knartzer 0/35,000 0/0
- ------------------
(1) Represents (i) the number of shares of common stock underlying options
(including options the exercise price of which was more than the market
value of the underlying securities) multiplied by (ii) the closing price at
December 31, 1998 of $4.25 minus the exercise price.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
ANDROMEDA ENTERPRISES, INC.
Andromeda Enterprises, Inc., a Delaware corporation ("Andromeda"), received
$50,000 from the Company in 1998 for sales, marketing and consulting services
performed by Andromeda on behalf of the Company. Mr. Udi Toledano, formerly a
Director, principal stockholder and Chairman of the Board of the Company, is,
and was at all relevant times, the President of Andromeda.
REPORT ON EXECUTIVE COMPENSATION(1)
INTRODUCTION
Four of Alyn's Directors, Messrs. Burr (Chairman), van Roon, Hesburgh and
Markbreiter, currently constitute the Compensation Committee, which, among other
things, is responsible for (1) reviewing and approving salaries, benefits and
bonuses for all executive officers of the Company; (2) reviewing and approving
stock option grants to employees of the Company; and (3) reviewing and
recommending to the Board of Directors matters relating to employee compensation
and employee benefit plans. The Board of Directors did not modify or reject any
action or recommendation of the Compensation Committee regarding compensation
for the 1998 fiscal year.
This report sets out the Company's executive compensation philosophy and
objectives, describes the components of its executive compensation program and
describes the bases on which 1998 executive compensation determinations were
made with respect to the executive officers of the Company, including those
named in the Summary Compensation Table preceding this report.
- ------------------
(1) Pursuant to Item 402(a)(9) of Regulation S-K promulgated by the SEC,
neither the "Report on Executive Compensation" nor the material under the
caption "Performance Measurement Comparison" shall be deemed to be filed
with the SEC for purposes of the Securities Exchange Act of 1934, as
amended, nor shall such report or such material be deemed to be
incorporated by reference in any past or future filing by the Company under
the Exchange Act or the Securities Act of 1933, as amended.
20
<PAGE>
EXECUTIVE COMPENSATION PHILOSOPHY AND OBJECTIVES
In establishing and evaluating the effectiveness of compensation programs for
executive officers, as well as other employees of the Company, the Compensation
Committee is guided by three basic principles:
o The Company must offer competitive salaries to be able to attract and
retain highly-qualified and experienced executives and other
management personnel;
o Executive cash compensation in excess of base salaries should be tied
to Company and individual performance; and
o The financial interests of the Company's executives should be aligned
with the financial interests of the stockholders, primarily through
stock option grants and incentive compensation.
COMPENSATION PROGRAM COMPONENTS
Consistent with the Company's executive compensation objectives, compensation
for its senior executives consists of three elements: an annual base salary,
annual incentive compensation and long-term incentive compensation.
Annual Base Salary. The Compensation Committee annually reviews each executive's
base salary. Salary levels are generally targeted at and correspond to the
median of the range of compensation paid by similarly situated companies. Actual
salaries are based on individual performance contributions within a competitive
salary range for each position that is established through job evaluation and
market comparisons. Base pay levels for the executive officers are competitive
within a range that the Compensation Committee considers to be reasonable and
necessary to attract and retain qualified executives. Increases in base salary
are primarily the result of individual performance, which includes meeting
specific goals established by the Compensation Committee. The criteria used in
evaluating individual performance varies depending on the executive's function,
but generally include leadership inside and outside the Company; advancing the
Company's interests with customers, vendors and in other business relationships;
product quality and development; and advancement in skills and responsibility.
Annual Incentive Compensation. The Compensation Committee annually considers the
performance of the Company and of each executive in determining the amount of
cash compensation to be paid in excess of base salaries. The Compensation
Committee also considers Management recommendations regarding bonus compensation
for all other employees, which are also based upon Company and individual
performance.
Long-Term Incentive Compensation. The 1996 Stock Incentive Plan authorizes the
Compensation Committee to make grants and awards of stock options to the
Company's employees. The stock options are granted with an exercise price equal
to the market price of the Company's common stock on the date of grant, have a
duration of ten years, and vest over three or four years. This approach is
designed to motivate management to increase stockholder value over the long-term
since, the full benefit of the compensation package cannot be realized unless
stock price appreciation occurs over a number of years. In determining the
number of options awarded, the Compensation Committee considers competitive
practices, the duties and scope of responsibilities of each officer's position
and the amount and terms of options already held by management.
Chief Executive Officer's Compensation. Mr. Price, who was appointed President
and Chief Executive Officer on April 20, 1998, and served in that capacity for
approximately one year, had a base annual salary of $200,000, a guaranteed
minimum bonus compensation of $100,000 per year and in April 1998 received
options to purchase 400,000 shares of the Company's common stock. On April 15,
1999, Mr. van Roon succeeded Mr. Price as President and Chief Executive Officer
at an annual base compensation of $164,320 and received options to purchase
750,000 shares of the Company's common stock. On June 23, 1999, the Board of
Directors raised Mr. van Roon's annual base compensation to $175,000.
21
<PAGE>
SUMMARY
The Compensation Committee believes that the compensation program for the
executives of the Company is comparable with the compensation programs provided
by comparable companies and serves the best interests of the stockholders of the
Company. The Compensation Committee also believes that annual performance pay is
appropriately linked to individual performance, annual financial performance of
the Company and stockholder value. Messrs. Burr and van Roon were not members of
the Board of Directors or Compensation Committee in 1998 and, accordingly, were
not involved in the matters discussed in this Report on Executive Compensation
or in the preparation of this report..
THE COMPENSATION COMMITTEE
Robert L. Burr (Chairman)
Arne van Roon
James L. Hesburgh
Michael Markbreiter
22
<PAGE>
PERFORMANCE MEASUREMENT COMPARISON
The following graph provides a comparison of the cumulative total stockholder
return for the period from December 31, 1996 through December 31, 1998 (assuming
reinvestment of any dividends) among the Company, the NASDAQ Stock Market - U.S.
Index and the Russell 2000 Index.
COMPARISON OF 12 MONTH CUMULATIVE TOTAL RETURN
AMONG ALYN CORPORATION, THE NASDAQ STOCK MARKET-U.S. INDEX
AND THE RUSSELL 2000 INDEX FOR PERIOD ENDED DECEMBER 31, 1998*
* ASSUMES THAT THE VALUE OF THE INVESTMENT IN ALYN CORPORATION COMMON STOCK AND
EACH INDEX WAS $100 ON DECEMBER 31, 1996 AND THAT ALL DIVIDENDS WERE REINVESTED.
COMPARISON OF 12 MONTH CUMULATIVE TOTAL RETURN
[GRAPHIC OMITTED]
The foregoing graph is based upon the following data:
Cumulative Total Return
-----------------------
12/31/96 12/31/97 12/31/98
-------- -------- --------
ALYN CORPORATION 100 97 39
NASDAQ STOCK MARKET - 100 124 170
U.S. INDEX
RUSSELL 2000 INDEX 100 121 116
23
<PAGE>
ANNUAL REPORT
A copy of the Company's Annual Report to Stockholders is being provided to each
stockholder of the Company with this Proxy Statement. Additional copies may be
obtained without charge by writing to Alyn Corporation, 16761 Hale Avenue,
Irvine, California 92606, Attention:
Secretary.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
certain officers of the Company and its directors, and persons who own
beneficially more than ten percent of any registered class of the Company's
equity securities, to file reports of ownership and changes in ownership of
common stock of the Company with the SEC, the Nasdaq National Market and the
Company. Based solely on a review of the reports and representations provided to
the Company by the above-referenced persons, the Company believes that during
1998 all filing requirements applicable to its reporting officers, directors and
greater than ten percent beneficial owners were properly and timely satisfied.
In making these statements, the Company has relied on representations of its
directors, officers and greater than ten percent beneficial owners, and copies
of reports they have filed with the SEC.
STOCKHOLDER PROPOSALS
The eligibility of stockholders to submit proposals, the proper subjects of
stockholder proposals and the form of stockholder proposals are regulated by
Rule 14a-8 under Section 14 of the Securities Exchange Act of 1934, as amended.
In accordance with regulations issued by the SEC, stockholder proposals intended
for presentation at the 2000 Annual Meeting of stockholders must be received by
the Company at its principal executive office, 16761 Hale Avenue, Irvine, CA
92606, no later than February 3, 2000, if such proposals are to be considered
for inclusion in the Company's proxy statement for the 2000 Annual Meeting of
stockholders. Each proposal submitted should include the full and correct name
and address of the stockholder(s) making the proposal, the number of shares
beneficially owned and their date of acquisition. If beneficial ownership is
claimed, proof thereof should also be submitted with the proposal. The
stockholder or his or her representative must appear in person at the annual
meeting and must present the proposal, unless he or she can show good reason for
not doing so.
By Order of the Board of Directors
/S/ RICHARD L. LITTLE
----------------------------------
Richard L. Little
Secretary
24
<PAGE>
ALYN CORPORATION
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS FOR THE ANNUAL MEETING
OF STOCKHOLDERS TO BE HELD ON DECEMBER 16, 1999
The undersigned hereby appoints Robert L. Burr and Arne van Roon, and
each of them, with full power of substitution, proxies to vote all shares of
common stock, $.001 par value, of Alyn Corporation, a Delaware corporation (the
"Company"), for which the undersigned is entitled to vote at the Annual Meeting
of Stockholders of the Company to be held at the Company's corporate offices
located at 16761 Hale Avenue, Irvine, California 92606, on December 16, 1999, at
10:00 a.m., local time, and at any and all adjournments or postponements
thereof.
THE BOARD OF DIRECTORS OF THE COMPANY RECOMMENDS VOTES "FOR" EACH OF THE
FOLLOWING:
1. Election of Directors.
/_/ FOR /_/ WITHHOLD
ROBERT L. BURR ARNE VAN ROON ROBIN A. CARDEN
HARRY EDELSON DAVID J. EDWARDS MICHAEL MARKBREITER
For, except vote withheld for the following nominee(s):
_______________________________________________________
2. Approval of 1999 Stock Incentive Plan.
/_/ FOR /_/ AGAINST /_/ ABSTAIN
3. Other Matters: Discretionary authority is hereby granted with respect to
such other matters as may properly come before the meeting or any
adjournment or postponement thereof.
/_/ FOR /_/ AGAINST /_/ ABSTAIN
25
<PAGE>
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED IN THE MANNER DIRECTED AND,
IF NO INSTRUCTIONS TO THE CONTRARY ARE INDICATED, WILL BE VOTED FOR THE ELECTION
OF THE NAMED NOMINEES AND APPROVAL OF THE PROPOSALS SET FORTH IN THE NOTICE OF
THE ANNUAL MEETING OF STOCKHOLDERS.
THE UNDERSIGNED HEREBY ACKNOWLEDGES RECEIPT OF THE NOTICE OF ANNUAL MEETING OF
STOCKHOLDERS AND THE PROXY STATEMENT FURNISHED HEREWITH.
PLEASE MARK, SIGN, DATE AND PROMPTLY RETURN THIS PROXY CARD USING THE ENCLOSED
ENVELOPE. YOU MAY REVOKE THIS PROXY AT ANY TIME BY FORWARDING TO THE COMPANY A
SUBEQUENTLY DATED PROXY RECEIVED BY THE COMPANY PRIOR TO TAKING OF A VOTE ON THE
MATTERS HEREIN.
Date:___________________________________
________________________________________
Signature (title, if any)
________________________________________
Signature (if held jointly)
NOTE: Please print and sign your name
exactly as it appears hereon. When
signing as attorney, agent, executor,
administrator, trustee, guardian or
corporate officer, please give full
title as such. Each joint owner should
sign the Proxy. If a corporation, please
sign as full corporate name by president
or authorized officer. If a partnership,
please sign in partnership name by
authorized person.
26
