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:
[X] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[ ] 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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(4) Date Filed:
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<PAGE>
ALYN CORPORATION
16761 HALE AVENUE
IRVINE, CALIFORNIA 92606
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JULY 18, 2000
TO OUR STOCKHOLDERS:
Please take notice that the 2000 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 Tuesday July 18, 2000, at the Company's
corporate offices located at 16761 Hale Avenue, Irvine, California 92606, for
the following purposes:
1. To elect five directors to hold office until the 2001 Annual Meeting of
Stockholders (or until their successors are elected and qualified);
2. To increase the number of authorized shares from 20,000,000 to
55,000,000;
3. To consider and act upon a proposal to approve a reverse stock split of
the Company's existing Common Stock shares issued and outstanding;
4. To approve the appointment of the Company's auditors Deloitte & Touche
LLP; and
5. 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, June 19,
2000, 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/ RAYMOND E. BROOKS
------------------------------------
Raymond E. Brooks, 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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<PAGE>
ALYN CORPORATION
16761 HALE AVENUE
IRVINE, CALIFORNIA 92606
PROXY STATEMENT
FOR THE
2000 ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON
JULY 18, 2000
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 2000 Annual Meeting of Stockholders
scheduled to be held on Tuesday July 18, 2000, 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, California 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)
five members be elected to the Board of Directors for terms expiring at the 2001
Annual Meeting of Stockholders (or until their successors are elected and
qualified); (ii) the Company further amend its Amended and Restated Certificate
of Incorporation to increase the number of authorized shares of common stock;
(iii) the Company authorize a reverse stock split; (iv) the Company appoint as
its auditors for the fiscal year ending 2000, the firm of Deloitte & Touche LLP;
and (v) the Company 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.
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 Friday, June 23, 2000.
<PAGE>
Record Date; Voting Rights. Stockholders of record at the close of business on
Monday, June 19, 2000 (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 12,401,970 shares of Alyn common stock, $0.001 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 16,151,970 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.
Proposals 1, 3 and 4 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. Proposal 2 requires the
affirmative vote of at least a majority of the outstanding stock entitled to
vote thereon.
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.
2
<PAGE>
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 2001 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, Edwards, 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.
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 June 19, 2000.
ARNE VAN ROON, 56, 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, 49, 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 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 currently serves on the board of directors of
Caliber Learning Network, Inc. and Hudson Technologies, Inc. Mr. Burr received
an MBA from Columbia University and a BA from Stanford.
ROBIN A. CARDEN, 43, 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 has been issued a number of U.S. patents. Mr. Carden
graduated from Long Beach State University with a Bachelor of Science degree.
DAVID J. EDWARDS, 35, 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
Senior Vice President at Fleming Asset Management, part of Robert Fleming
Holdings Limited, a global asset management and merchant
3
<PAGE>
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 currently serves on the board of
directors of Impax Laboratories, Inc., a publicly traded specialty
pharmaceutical manufacturing company. Mr. Edwards received an MBA from Harvard
Business School and a Masters in Engineering from Cambridge University.
MICHAEL MARKBREITER, 38, 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. Mr. Markbreiter currently
serves as a Director of Impax Laboratories, Inc., a publicly traded specialty
pharmaceutical manufacturing company and Neff Corporation, a publicly traded
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 FIVE NOMINEES NAMED ABOVE.
BOARD OF DIRECTORS COMMITTEES AND MEETINGS
During 1999, the Board of Directors held five meetings. All of the 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 1999. 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, 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. As of December 31,
1999, the Executive Committee consisted of Messrs. van Roon (Chairman), Burr,
Carden, 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),
and Markbreiter. The Audit Committee held two separate meetings in 1999.
Following the Annual Meeting, if all nominees for Director are elected, the
Audit Committee is expected to consist of Messrs. Edwards, Burr and Markbreiter.
As of December 31, 1999, the Audit Committee consisted of Messrs. Edwards
(Chairman) and Markbreiter.
The Compensation Committee held one separate meeting in 1999. All of its
functions are discussed in the Report on Executive Compensation. The
Compensation Committee currently consists of Messrs. Burr (Chairman), van Roon,
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. As of December 31, 1999, the Compensation Committee
consisted of Messrs. Burr (Chairman), van Roon, and Markbreiter.
4
<PAGE>
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee currently consists of Messrs. Burr, van Roon, 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. James 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. It should be noted that the Board
has currently waived its rights to receive any compensation either in the form
of cash or shares of stock. Non-employee Directors are also eligible for the
grant of options under the 1999 Stock Incentive Plans that provides for each
non-employee Director (currently, Messrs. Burr, Edwards, 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.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" THE ABOVE NAMED
DIRECTORS TO CONTINUE TO SERVE A ONE YEAR TERM EXPIRING AT THE 2001 ANNUAL
STOCKHOLDERS MEETING.
5
<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. Raymond E. Brooks serves as the Company's Vice President,
Finance and Administration and Chief Financial Officer and is the Secretary of
the Corporation, and Mr. Maurizio Tosca serves as Vice President of Operations.
RAYMOND E. BROOKS, 58, Vice President, Finance and Administration and Chief
Financial Officer joined the Company in early 2000. Prior to joining Alyn, Mr.
Brooks was most recently the Chief Financial Officer and Director of
Administration for Rohm Electronics, USA, LLC, based in Nashville, Tennessee, a
subsidiary of Rohm Co. Ltd., Kyoto, Japan, a manufacturer and distributor of
electronic components to the automotive, computer, telecommunications and
consumer industries. He served in that capacity from 1994 to 1999. Prior to this
time he was CFO/Controller for Rohm Electronics. Mr. Brooks earned his MBA
degree, with Honors, from Golden Gate University in San Francisco, and has a
Bachelor of Science degree, with Honors, from Arizona State University.
MAURIZIO TOSCA, 48, Vice President, Operations, has over 20 years experience in
developing manufacturing companies in countries such as Venezuela, United
Kingdom and Italy. Notably, for Duet, Srl, a company Mr. Tosca co-founded in
Italy, he specialized in providing engineering solutions to factories dealing in
ceramics, and ferrous foundries for automotive products. Most recently, Mr.
Tosca was involved in marketing BorALYN(R) in Europe. He was educated at the
University of Sciences in Milan.
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 January 2000, the Company entered into an agreement with Raymond E. Brooks,
the Company's newly appointed Vice President and Chief Financial Officer. The
agreement provided that Mr. Brooks shall be paid annual base compensation of
$135,000. It also provided an incentive bonus of up to 25% and stock options of
150,000 shares at $2.16 per share with 75,000 shares to be fully vested January
1, 2003 and 75,000 shares to be fully vested in January 1, 2004.
In April 2000, the Company entered into an agreement with Maurizio Tosca, the
Company's newly appointed Vice President of Operations. The agreement provided
that Mr. Tosca shall be paid annual base compensation of $135,000. It also
provided an incentive bonus of up to 25% and stock options of 135,000 whereby
35,000 shares at $1.87 per share vested as of January 1, 2000 when Mr. Tosca was
working in the capacity as a consultant for the Company, and 50,000 shares to be
vested January 1, 2001, and 50,000 shares to be vested January 1, 2002.
6
<PAGE>
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 was 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. Mr. Carden resigned as an active
employee of the Corporation effective March 31, 2000, thereby terminating any
further obligation by the Company related to this employment agreement. Mr.
Carden continues to provide sales and technology support on a consulting basis
effective April 1, 2000.
7
<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.
SUMMARY COMPENSATION TABLE
<TABLE>
ANNUAL COMPENSATION
-------------------
<CAPTION>
NUMBER OF
SECURITIES
OTHER ANNUAL UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS(2) COMPENSATION OPTIONS COMPENSATION(1)
--------------------------- ---- ------ -------- ------------ ---------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Steven S. Price, 1999 267,016
former President and 1998 170,803 41,670 160,000 4,550
Chief Executive Officer 1997 5,950
1996
Robin A. Carden, 1999 162,070
Founder, formerly 1998 162,521 7,200
President and Chief 1997 156,667 6,900
Executive Officer 1996 100,000 28,500 310,985
Arne van Roon,
President and Chief 1999 121,813 750,000 4,550
Executive Officer
Walter R. Menetrey, 1999 5,666
formerly Executive Vice 1998 148,408
President and Chief 1997 117,708 27,500 50,000
Operating Officer 1996 65,000
Richard L. Little, 1999 140,176 60,000 3,900
formerly Vice President, 1998 135,000 50,000 2,400
Finance and Administration 1997 84,375 20,000 60,000 1,500
and Chief Financial Officer 1996
Jon A. Knartzer, 1999 54,175 1,700
formerly President of 1998 50,833 35,000 800
Operations 1997
1996
</TABLE>
------------
(1) For 1999, represents car allowance for Mr. van Roon of $4,550, for Mr.
Price of $4,550, for Mr. Little of $3,900 and for Mr. Knartzer of $1,700.
For 1998, represents car allowance 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 $20,000 bonus that was paid in 1998.
8
<PAGE>
STOCK OPTION GRANTS AND EXERCISE
The following table sets forth information regarding stock options granted to
each Named Executive Officer during fiscal year 1999 pursuant to the Company's
1996 Stock Option Plan.
<TABLE>
<CAPTION>
# OF TOTAL
AWARDS GRANTED GRANT DATE
OPTIONS TO EMPLOYEES IN EXERCISE OR BASE EXPIRATION PRESENT VALUE(4)
NAME GRANTED(1) (#) FISCAL YEAR(2) PRICE(3) ($/SH) DATE ($/SH)
--------------------- -------------- --------------- ---------------- ---------- ----------------
<S> <C> <C> <C> <C> <C>
Harry Edelson 100,000 7.5% 3.00 04/09/08 $1.64
Richard Little 60,000 4.5% 3.50 11/02/08 $1.91
James Hesburgh 50,000 3.7% 2.63 12/09/08 $1.44
Arne van Roon 750,000 56.2% 2.63 04/09/09 $1.43
</TABLE>
------------
(1) Options granted to Mr. van Roon shall be subject to the provisions
discussed above under "Agreements with Key Executives". Options granted to
Mr. Price were granted subject to certain vesting provisions as described
above. 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 1,335,000 options were granted for the fiscal year ended
December 31, 1999. At December 31, 1999, 928,500 options were outstanding.
Of these, 547,000 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 1999: risk-free rate of
return of 6%, no dividend yield, expected life of 5 years and historical
volatility of 56%; 1998: risk-free rate of return of 5.50%, no dividend
yield, expected life of 5 years, and historical volatility of 56%.
9
<PAGE>
REPORT ON EXECUTIVE COMPENSATION(1)
--------
(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.
INTRODUCTION
Three of Alyn's Directors, Messrs. Burr (Chairman), van Roon, 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 1999
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 1999 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.
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
10
<PAGE>
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 based upon Company and individual
performance.
Long-Term Incentive Compensation. The 1996 and 1999 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. On April 15, 1999, Mr. van Roon was
appointed 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.
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.
THE COMPENSATION COMMITTEE
Robert L. Burr (Chairman)
Arne van Roon
Michael Markbreiter
11
<PAGE>
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 June 19, 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) 6.579,166 43.67%
Kingdon Capital Management Corp.(3) 3,235,455 21.48%
Robin A. Carden 2,544,500 16.89%
Talisman Capital Opportunity Fund Ltd.(4) 1,607,465 10.67%
Capital Guardian Trust(5) 928,200 6.16%
Arne van Roon(6) 108,000
*
Michael Markbreiter(7) 35,000 *
Maurizio Tosca(8) 35,000 *
*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 3,750,000 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 2,812,500 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 100,000 shares of common
stock. Does not include options to purchase 650,000 shares of common stock
which are not immediately exercisable.
(7) Includes options immediately exercisable for 35,000 shares of common stock
for Michael Markbreiter.
(8) Includes options immediately exercisable for 35,000 shares of common stock
for Maurizio Tosca.
12
<PAGE>
PROPOSAL 2 - INCREASE AUTHORIZED SHARES
In order to for the Company to be in a position to continue to raise additional
capital, should that be necessary, it will need to increase the current number
of authorized shares. The Company may also need additional authorized shares for
future option grants or other services related to retaining qualified personnel.
The Company's Amended and Restated Certificate of Incorporation currently
authorizes the issuance of up to 20,000,000 shares of common stock, par value
$0.001 per share, and 5,000,000 shares of preferred stock, par value $0.01 per
share. As of March 31, 2000 there were 12,401,970 shares of common stock
currently issued and outstanding and an additional 8,942,900 shares which would
be issued in future years upon the exercise of outstanding preferred stock,
warrants, and stock options. Accordingly, the Company requires additional
authorized shares in order to fully reserve for the exercise of preferred stock,
warrants and stock options, as well as to have shares available for future
issuances.
The Company has no present plans to issue additional shares, and the Board has
determined that the increase in the number of authorized shares sought hereby
adequately balances the Company's reasonably anticipated needs to have shares
available for issuance and the costs of seeking shareholder approval amendments
of the Certificate of Incorporation on multiple occasions.
If this Proposal 2 is approved, the Board of Directors will not solicit
shareholder approval to issue additional authorized shares of common stock,
except to the extent that such approval may be required by law.
In the event that the reverse stock split described in Proposal 3 below is not
approved by the stockholders, the Board of Directors has approved an amendment
to the Company's Amended and Restated Certificate of Incorporation to increase
the number of authorized shares of common stock from 20,000,000 to 55,000,000.
Such an amendment would not effect any change in the Company's currently
outstanding common stock. Should Proposal 3 be approved, which authorizes a 5 to
1 reverse stock split, then the 55,000,000 authorized shares would be adjusted
accordingly to 11,000,000 shares.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" THE PROPOSAL TO
INCREASE THE NUMBER OF AUTHORIZED SHARES FROM 20,000,000 TO 55,000,000.
13
<PAGE>
PROPOSAL 3 - REVERSE STOCK SPLIT
THE REVERSE STOCK SPLIT PROPOSAL
On May 23, 2000, the Board of Directors adopted a resolution directing that the
Stockholders consider and vote upon a possible reverse stock split of the
Company's Common Stock. The Board believes that the reverse stock split is
beneficial to the Company and the Stockholders. The principal reasons for the
reverse stock split are to aid the Company in meeting listing requirements for
the Nasdaq Stock Market, to attempt to enhance investor interest in the Common
Stock and to attempt to help the investment community realize the underlying
value of the Common Stock.
Under the terms of the reverse stock split Proposal being submitted to the
Stockholders, the Board of Directors would be authorized to file an amendment to
the Company's Certificate of Incorporation to effect a reverse stock split of
the Company's outstanding Common Stock in an amount not greater than one share
of Common Stock for each 5 shares of outstanding Common Stock at any time prior
to the Company's next Annual Meeting of Stockholders on July 18, 2000. Assuming
Stockholder approval of the reverse stock split Proposal, the Board of Directors
would retain the discretion to implement a reverse stock split of not greater
than 1:5, or to abandon the reverse stock split Proposal.
In determining when or if the Board will implement the reverse stock split
Proposal, the Board of Directors may consider a variety of factors in
determining whether to proceed with the reverse stock split, including, but not
limited to, overall trends in the stock market, recent changes and anticipated
trends in the per share market price of the Company's Common Stock, business
developments and the Company's actual and projected financial performance.
If the Stockholders' approve the reverse stock split Proposal at the annual
meeting, the Board of Directors will retain the absolute discretion to implement
the reverse stock split Proposal in an amount not greater than 1:5 at any time
prior to the Company's next Annual Meeting of Stockholders in 2001, or to
abandon implementation of the reverse stock split. On May 23, 2000, the closing
price of the Company's Common Stock was $0.75 per share.
If the Stockholders approve the reverse stock split Proposal and the Board of
Directors thereafter elects to implement the reverse split, the Company intends
to issue a press release announcing the terms and effective date of the reverse
split not less than 10 days prior to the effective date of the reverse split.
REASONS FOR THE REVERSE STOCK SPLIT PROPOSAL
The Company believes the reverse split is necessary to achieve compliance with
the quantitative listing maintenance criteria established by Nasdaq regarding
the minimum bid price of listed securities. For maintaining its listing on the
Nasdaq National Market, the minimum bid price per share required is to be at
least $1.00. The Company believes that, other than the minimum bid price, it
will meet all of the listing requirements required for listing on Nasdaq.
The Company expects that, as a result of the reverse split, the market price of
the Common Stock would increase, thereby enabling the Company to continue its
compliance with the Nasdaq $1.00 minimum bid price requirement.
14
<PAGE>
The Board also believes that the current low per share price of the Common Stock
may have a negative effect on the price and marketability of existing shares,
the amount and percentage (relative to share price) of transaction costs paid by
individual Stockholders and the potential ability of the Company to raise
capital by issuing additional shares of Common Stock or other securities
convertible into Common Stock or to undertake merger or acquisition
transactions. Reasons for these effects include internal policies and practices
of certain institutional investors which prevent or tend to discourage the
purchase of low-priced stocks, the fact that many brokerage houses do not permit
low-priced stocks to be used as collateral for margin accounts or to be
purchased on margin and a variety of brokerage house policies and practices
which tend to discourage individual brokers within those firms from dealing in
low-priced stocks.
In addition, since broker's commissions on low-priced stocks generally represent
a higher percentage of the stock price than commissions on higher priced stocks,
the current share price of the Common Stock can result in individual
Stockholders paying transaction costs which are a higher percentage of the share
price than would be the case if the share price were substantially higher. The
Board believes that the reverse stock split, and the expected resulting
increased price level, may enhance investor interest in the Common Stock and may
help the investment community realize the underlying value of the Common Stock.
There is however, no assurance that any of the foregoing effects will occur.
While the Board of Directors believes that the shares of Common Stock will trade
at higher prices than those which have prevailed in recent months, there is no
assurance that such increase in the trading price will occur or, if it does
occur, that it will equal or exceed the direct arithmetical result of the
reverse stock split since there are numerous factors and contingencies which
could affect such price. There is no assurance that the Company will continue to
meet the listing requirements for Nasdaq following the reverse stock split.
IMPLEMENTATION OF THE REVERSE STOCK SPLIT
The reverse stock split, if implemented, will be formally implemented by filing
an amendment to the Company's Certificate of Incorporation with the Secretary of
State of the State of Delaware amending the Company's Certificate of
Incorporation to reflect the reverse stock split, effective as of 5:00 p.m.,
Eastern time, on the date of the filing of such amendment with the Delaware
Secretary of State (the "Effective Time"). At the Effective Time all outstanding
shares of Common Stock held by each holder of record on such date would be
automatically combined into such lesser number of shares as is determined by the
Board of Directors, without any further action on the part of the Stockholders.
No fractional shares will be issued. All fractional shares for one-half share or
more will be increased to the next higher whole number of shares and all
fractional shares less than one-half share will be decreased to the next lower
whole number of shares, respectively.
EFFECTS OF THE REVERSE STOCK SPLIT
The effect of the reverse stock split upon holders of Common Stock will be that
the total number of shares of the Company's Common Stock (each, an "Old Share")
held by each Stockholder will be automatically converted into the number of
whole shares of Common Stock equal to the number of shares of Common Stock owned
immediately prior to the reverse split divided by the number determined by the
Board of Directors, not to exceed 5, adjusted as described below, for any
fractional shares (each, a "New Share").
15
<PAGE>
Assuming the reverse stock split is approved by the Company's Stockholders at
the Annual Meeting and implemented by the Company, each Stockholder's percentage
ownership interest in the Company and proportional voting power will remain
unchanged, except for the minor differences resulting from adjustments for
fractional shares. The rights and privileges of the holders of shares of Common
Stock will be substantially unaffected by the reverse stock split.
All issued and outstanding options, warrants, and convertible securities would
be appropriately adjusted for the reverse stock split automatically on the
effective date of the reverse stock split. The reverse stock split would not
affect any Stockholder's proportionate equity interest in the Company except for
those Stockholders who would receive an additional share of Common Stock in lieu
of fractional shares.
The reverse stock split may result in some Stockholders owning "odd-lots" of
less than 100 shares of Common Stock. Brokerage commissions and other costs of
transactions in odd-lots are generally somewhat higher than the costs of
transactions in "round-lots" of even multiples of 100 shares.
CERTAIN RIGHTS OF COMMON STOCKHOLDERS
The holders of Common Stock have equal rights to dividends when, as and if
declared by the Board of Directors and are entitled to share ratably in all of
the assets of the Company available for distribution to holders of Common Stock
upon the liquidation, dissolution or winding up of the affairs of the Company,
subject to any rights, preferences or privileges of holders of any outstanding
preferred stock. Holders of Common Stock do not have preemptive rights. Holders
of Common Stock are entitled to one vote per share on all matters which
Stockholders are entitled to vote upon at all meetings of Stockholders.
The Common Stock is currently registered under Section 12(g) of the Exchange
Act, and, as a result, the Company is subject to the periodic reporting and
other requirements of the Exchange Act. The reverse stock split will not affect
the registration of the Common Stock under the Exchange Act.
Pursuant to Delaware law the Company's Stockholders are not entitled to
dissenters' rights of appraisal with respect to the reverse stock split
Proposal.
EXCHANGE OF STOCK CERTIFICATES
Assuming the reverse stock split is approved by the Stockholders and implemented
by the Company, Stockholders will be required to exchange their stock
certificates for new certificates representing the shares of new Common Stock.
Stockholders will be furnished with the necessary materials and instructions for
the surrender and exchange of stock certificates at the appropriate time by the
Company's transfer agent following the effectiveness of the reverse stock split.
Stockholders will not be required to pay a transfer or other fee in connection
with the exchange of certificates. Stockholders should not submit any
certificates until requested to do so.
FEDERAL INCOME TAX CONSEQUENCES
The following description of federal income tax consequences is based upon the
Internal Revenue Code of 1986, as amended (the "Code"), the applicable Treasury
Regulations promulgated thereunder, judicial authority and current
administrative rulings and practices as in effect on the date of this Proxy
Statement.
16
<PAGE>
The Company has not sought and will not seek an opinion of counsel or a ruling
from the Internal Revenue Service regarding the federal income tax consequences
of the reverse stock split. The Company, however, believes that because the
reverse stock split is not part of a plan to periodically increase a
Stockholder's proportionate interest in the assets or earnings and profits or
the Company, the reverse stock split will have the following federal income tax
effects:
1. The reverse stock split will constitute a reorganization within the
meaning of Section 368(a)(1)(E)(5) of the Code.
2. A Stockholder will not recognize gain or loss on the exchange. In the
aggregate, the stockholder's basis in the New Shares will equal such
Stockholder's basis in the Old Shares.
3. A Stockholder's holding period for the New Shares will be the same as
the holding period of the Old Shares exchanged therefor.
The Company will not recognize any gain or loss on the exchange by reason of
Section 1032 of the Code.
The federal income tax discussion with respect to the reverse stock split set
forth above is included for general information only. All Stockholders are
advised to consult their own tax advisors as to federal, state and local or
foreign tax consequences applicable to them which could result from the reverse
stock split.
STOCKHOLDER VOTE
The affirmative vote of the holders of shares representing a majority of the
outstanding shares on the record date is required to adopt the reverse stock
split Proposal.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" THE PROPOSAL TO
EFFECT THE REVERSE STOCK SPLIT AT THE DISCRETION OF THE BOARD OF DIRECTORS.
17
<PAGE>
PROPOSAL 4 - APPOINTMENT OF INDEPENDENT
AUDITORS, DELOITTE & TOUCHE LLP
Alyn Corporation appointed Deloitte & Touche LLP as its independent auditors for
the fiscal year ending 1999 and fiscal year ending 2000. The firm is considered
very well versed in the high tech industry as well as working with emerging
companies such as Alyn Corporation. With their thorough approach to reporting,
we issued a 10K Annual Report for fiscal year ending 1999 which had much more
detail for stockholders to review than the previous 10K reports issued. Deloitte
& Touche LLP have committed to work with Alyn Corporation during its emergence
from a research and development type of company to a manufacturing organization
which can realize much greater potential in revenue growth. Representatives of
Deloitte & Touche LLP are expected to be present at the meeting and will have
the opportunity to make a statement if they so desire and will be available to
respond to appropriate questions.
STOCKHOLDER VOTE
The affirmative vote of the holders of shares representing a majority of the
outstanding shares on the record date is required to adopt the appointment of
Deloitte & Touche LLP as Alyn Corporation's independent auditors for the fiscal
year ending December 31, 2001.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" THE PROPOSAL TO
APPOINT DELOITTE & TOUCHE LLP AS ALYN CORPORATION'S OUTSIDE AUDITORS.
18
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PERFORMANCE MEASUREMENT COMPARISON
The following data provides a comparison of the cumulative total stockholder
return for the period from December 31, 1997 through December 31, 1999 (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, 1999*
* 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.
CUMULATIVE TOTAL RETURN
--------------------------------------
DEC-96 DEC-97 DEC-98 DEC-99
------ ------ ------ ------
Alyn Corporation 100 97 39 14
NASDAQ Stock 100 124 170 247
Russell 2000 Index 100 121 116 137
INCORPORATION BY REFERENCE
The Securities Exchange Act of 1934 allows the Company to "incorporate by
reference" information into this proxy statement. This means that the Company
can disclose important information to stockholders by referring stockholders to
another document filed separately with the SEC. This proxy statement
incorporates by reference the Company's Current Report on Form 8-K/A filed
February 1, 2000.
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.
19
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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 2001 Annual Meeting of stockholders must be received by
the Company at its principal executive office, 16761 Hale Avenue, Irvine,
California 92606, no later than February 23, 2001 if such proposals are to be
considered for inclusion in the Company's proxy statement for the 2001 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/ RAYMOND E. BROOKS
----------------------------------
Raymond E. Brooks
Secretary
20
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[PROXY CARD]
<TABLE>
<CAPTION>
<S> <C>
07/18/00 AT 10:00 A.M. PSI
1985 ITEM(S) 4404045 SHARE(S)
DIRECTORS
---------
(MARK "X" FOR ONLY ONE BOX)
CUSIP: 022611107
DIRECTORS CONTROL NO [ ] [ ] FOR ALL NOMINEES
---------
DIRECTORS RECOMMEND: A VOTE FOR ELECTION OF THE [ ] WITHHOLD ALL NOMINEES
FOLLOWING NOMINEES
[ ] WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL
1 - ROBERT L. BURR, 2 - ARNE VAN ROON, NOMINEE. WRITE NUMBER(S) OF NOMINEE(S) BELOW.
3 - DAVID J. EDWARDS, 4 - ROBIN A. CARDEN,
5 - MICHAEL MARKBREITER USE NUMBER ONLY _____________________________
DIRECTORS
PROPOSAL(S) RECOMMEND
----------- ---------
1. TO ELECT FIVE DIRECTORS TO HOLD FOR AGAINST ABSTAIN PLEASE INDICATE YOUR PROPOSAL SELECTION BY
OFFICE UNTIL THE 2001 ANNUAL [ ] [ ] [ ] FIRMLY PLACING AN "X" IN THE APPROPRIATE
MEETING OF STOCKHOLDERS (OR UNTIL NUMBERED BOX WITH BLUE OR BLACK INK ONLY. [X]
THEIR SUCCESSORS ARE ELECTED AND
QUALIFIED. SEE VOTING INSTRUCTION NO. 3 ON REVERSE
2. TO INCREASE THE NUMBER OF FOR AGAINST ABSTAIN ACCOUNT NO:
AUTHORIZED SHARES FROM 20,000,000 [ ] [ ] [ ]
TO 55,000,000. CUSIP: 022611107
3. TO CONSIDER AND ACT UPON A PROPOSAL FOR AGAINST ABSTAIN CONTROL NO [ ]
TO APPROVE A REVERSE STOCK SPLIT OF [ ] [ ] [ ]
THE COMPANY'S EXISTING COMMON STOCK CLIENT NO:
SHARES ISSUED AND OUTSTANDING.
PLACE "X" HERE IF YOU PLAN TO ATTEND
4. TO APPROVE THE APPOINTMENT OF THE FOR AGAINST ABSTAIN AND VOTE YOUR SHARES AT THE MEETING [ ]
COMPANY'S AUDITORS DELOITTE & [ ] [ ] [ ]
TOUCHE LLP.
ADP
5. OTHER MATTERS. DISCRETIONARY FOR AGAINST ABSTAIN
AUTHORITY IS HEREBY GRANTED WITH [ ] [ ] [ ] 51 MERCEDES WAY
RESPECT TO SUCH OTHER MATTERS AS EDGEWOOD NY 11717
MAY PROPERLY COME BEFORE THE
MEETING OR ANY ADJOURNMENT OR
POSTPONEMENT THEREOF. ALYN CORPORATION
ATTN: RAY BROOKS
16761 HALE AVENUE
IRVINE, CA 92606
TELEPHONE VOTE AT 1-800-454-8683 OR
INTERNET VOTE AT WWW.PROXYVOTE.COM ____________________________________ ____________
SIGNATURE(S) DATE
</TABLE>
