<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
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 Section 240.14a-11(c) or Section 240.14a-12
ROFIN-SINAR TECHNOLOGIES INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
/x/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transactions applies:
----------------------------------------------------------------------
2) Aggregate number of securities to which transaction applies:
----------------------------------------------------------------------
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
----------------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
----------------------------------------------------------------------
5) Total fee paid:
----------------------------------------------------------------------
/ / 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 the registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:_____________________________________________
2) Form Schedule or Registration Statement No.:________________________
3) Filing Party:_______________________________________________________
4) Date Filed:________________________________________
<PAGE>
[ROFIN-SINAR TECHNOLOGIES LOGO]
PETER WIRTH
Chairman of the Board,
President and
Chief Executive Officer January 28, 1997
Dear Stockholder:
You are cordially invited to attend the Annual Meeting of Stockholders that will
be held on Tuesday, March 18, 1997, at 10:00 a.m., local time, at the Embassy
Suites Livonia, 19525 Victor Parkway, Livonia, Michigan 48152.
The enclosed notice and proxy statement contain details concerning the business
to be acted upon at the meeting. You will note that the Board of Directors of
the Company recommends a vote "FOR" the election of two directors to serve until
the 2000 Annual Meeting of Stockholders and for the ratification of KPMG Peat
Marwick LLP as independent public auditors of the Company. Please sign and
return your proxy card in the enclosed postage-paid envelope at your earliest
convenience to assure that your shares will be represented and voted at the
meeting even if you cannot attend.
To help us plan for the meeting, please mark the appropriate box on the
accompanying proxy card telling us if you will be attending.
Sincerely,
/s/ Peter Wirth
______________________
Peter Wirth
<PAGE>
[ROFIN-SINAR TECHNOLOGIES LOGO]
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO THE STOCKHOLDERS
OF ROFIN-SINAR TECHNOLOGIES INC.
The Annual Meeting of Stockholders of Rofin-Sinar Technologies, Inc. will be
held at Embassy Suites Livonia, 19525 Victor Parkway, Livonia, Michigan 48152,
on Tuesday, March 18, 1997, at 10:00 a.m., local time, for the following
purposes:
1. To elect two Class I directors to serve for a three-year term until the
2000 Annual Meeting of Stockholders;
2. To appoint KPMG Peat Marwick LLP as independent auditors for the
Company for the fiscal year ended September 30, 1997; and
3. To transact such other business as may properly come before the meeting
and any adjournments thereof.
Stockholders of record at the close of business on January 23, 1997 are entitled
to notice of, and to vote at, the meeting and any adjournments thereof.
By Order of the Board of Directors
/s/ Derek Heins
-------------------------------
Derek Heins
Assistant Secretary
Plymouth, Michigan
January 28, 1997
EACH STOCKHOLDER IS URGED TO EXECUTE AND RETURN THE ENCLOSED PROXY CARD
PROMPTLY. IN THE EVENT A STOCKHOLDER DECIDES TO ATTEND THE MEETING, HE OR SHE
MAY, IF SO DESIRED, REVOKE THE PROXY AND VOTE THE SHARES IN PERSON.
<PAGE>
ROFIN-SINAR TECHNOLOGIES INC.
45701 MAST STREET
PLYMOUTH, MICHIGAN 48170
----------------------------------
PROXY STATEMENT
----------------------------------
FOR ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MARCH 18, 1997
----------------------------------
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Rofin-Sinar Technologies Inc., a Delaware
corporation (the "Company"), to be voted at the Annual Meeting of Stockholders
of the Company (the "Annual Meeting") to be held at Embassy Suites Livonia,
19525 Victor Parkway, Livonia, Michigan 48152, on March 18, 1997 at 10:00 a.m.,
local time, and at any adjournments thereof. The approximate date on which this
Proxy Statement and form of proxy are first being sent to the stockholders is
January 28, 1997.
Only holders of record of shares of Common Stock of the Company at the
close of business on January 23, 1997 (the "Record Date") are entitled to vote
at the Annual Meeting or any adjournments thereof. Each owner of record on the
record date is entitled to one vote for each share of Common Stock of the
Company so held. The presence, either in person or by properly executed proxy,
of the owners of a majority of the outstanding shares of Common Stock of the
Company is necessary to constitute a quorum at the Annual Meeting and to permit
action to be taken by the stockholders at such meeting. As of the close of
business on the Record Date, there were 11,510,500 shares of Common Stock of the
Company outstanding.
Any proxy given pursuant to this solicitation may be revoked by the person
giving it at any time before it is exercised by delivering to the Company (to
the attention of Derek Heins) a written notice of revocation or a duly executed
proxy bearing a later date, or by attending the Annual Meeting and voting in
person.
All properly executed proxies delivered pursuant to this solicitation and
not revoked will be voted at the Annual Meeting in accordance with the
directions given. Stockholders voting by proxy for the election of directors
nominated to serve until the 2000 Annual Meeting may vote in favor of all
nominees or withhold their votes as to all nominees or withhold their votes as
to specific nominees. Stockholders should specify their choices on the enclosed
form of proxy. If no specific instructions are given with respect to the
matters to be acted upon, the shares represented by a signed proxy will be voted
FOR the election of all nominees for director and FOR the proposal to ratify the
appointment of auditors. Directors will be elected by a plurality of the votes
cast by the holders of the shares of Common Stock voting in person or by proxy
at the Annual Meeting. Abstentions and broker non-votes will not affect the
outcome of the vote.
The Board of Directors of the Company knows of no business that will be
presented for consideration at the Annual Meeting other than the matters
described in this Proxy Statement. If any other matters are presented at the
Annual Meeting, the persons named in the proxy card will vote in accordance with
their judgment.
This solicitation is being made by the Board of Directors of the Company
and its cost (including preparing and mailing of the notice, this Proxy
Statement and the form of proxy) will be paid by the Company. The Company will
also make arrangements with brokerage houses and other custodians, nominees and
fiduciaries to send the proxy material to their principals and will reimburse
them for their reasonable expenses in so doing. To the extent
<PAGE>
necessary in order to ensure sufficient representation at the Annual Meeting,
officers and regular employees of the Company may solicit the return of proxies
by mail, telephone, telegram, telex and personal interview. No compensation in
addition to regular salary and benefits will be paid to any officer or regular
employee for such solicitation.
PROPOSAL ONE:
ELECTION OF DIRECTORS
Board of Directors
The Board of Directors of the Company is divided into three classes, each
class serving for a period of three years. Under the By-Laws of the Company the
number of directors of the Company has initially been set at six.
One-third of the members of the Board of Directors are elected by the
stockholders annually. The Class I directors whose terms will expire at the
Annual Meeting are Gunther Braun and Ralph E. Reins, both of whom have been
nominated by the Board of Directors to stand for reelection as directors to hold
office until the 2000 Annual Meeting of Stockholders and until their successors
are elected and qualified. The Board of Directors knows of no reason why either
nominee will be unable or unwilling to serve as a nominee or director if
elected.
Certain information about Gunther Braun and Ralph E. Reins, the Board's
Class I director nominees, is furnished below:
Gunther Braun has been Executive Vice President, Finance and
Administration, Chief Financial Officer and Treasurer of the Company, as
well as a member of its Board of Directors, since September 1996. Since
1994, he has also been the Financial Director for Rofin-Sinar Laser GmbH.
He joined RSL in 1989 when RSL acquired Laser Optronic's marking division
from Coherent General Inc. Mr. Braun holds a Business Administration degree
from the Fachhochschule in Regensburg, Germany.
Ralph E. Reins became President and Chief Executive Officer of AP Parts
International, Inc. in 1996. Previously, Mr. Reins served as President and
Chief Executive Officer of Envirotest Systems Corp. in 1995, as President of
Allied Signal Automotive from 1991 through 1994 and as President of United
Technologies Automotive from 1990 to 1991. Prior to that, he was Chairman,
Chief Executive Officer, President and Chief Operating Officer of Mack Truck
from 1989 to 1990 and President and Chief Executive Officer of ITT
Automotive from 1985 to 1989. Mr. Reins is a member of the University of
Michigan's National Advisory Council and the Society of Automotive
Engineers.
The two nominees receiving the highest number of affirmative votes will be
elected as Class I directors of the Company.
Recommendation of the Board of Directors Concerning the Election of Directors
The Board of Directors of the Company recommends a vote FOR Gunther Braun
and Ralph E. Reins as Class I directors to hold office until the 2000 Annual
Meeting of Stockholders and until their successors are elected and qualified.
Proxies received by the Board of Directors will be so voted unless stockholders
specify a contrary choice in their proxy.
2
<PAGE>
NOMINEES FOR ELECTION TO THE BOARD OF DIRECTORS
FOR A THREE-YEAR TERM EXPIRING AT THE 2000 ANNUAL MEETING:
Name Age Director Since
---- --- --------------
Gunther Braun 39 1996
Ralph E. Reins (A) (B) 56 1996
DIRECTORS WHOSE TERMS EXPIRE AT THE 1998 ANNUAL MEETING:
Name Age Director Since
---- --- --------------
Hinrich Martinen 54 1996
Gary K. Willis (A) 51 1996
DIRECTORS WHOSE TERMS EXPIRE AT THE 1999 ANNUAL MEETING:
Name Age Director Since
---- --- --------------
Peter Wirth 50 1996
William R. Hoover (B) 67 1996
- -----------------
(A) Member of the Audit Committee.
(B) Member of the Compensation Committee.
3
<PAGE>
DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth certain information with respect to the
executive officers.
Name Age Title
____ --- -----
Peter Wirth 50 Chairman of the Board of Directors, Chief
Executive Officer and President
Hinrich Martinen 54 Executive Vice President, Research and
Development Operations, Chief Technical Officer
and Director
Gunther Braun 39 Executive Vice President, Finance and
Administration, Chief Financial Officer,
Treasurer and Director
Walter Volkmar 53 Manager, RSL Marking Division
Joseph Ferrario 49 President, RSI
Richard Walker 51 Vice President - Sales and Marketing, RSI
Bernd Ladiges 54 European Sales Manager, RSL
Ulrich Hefter 43 Manager of Research and Development for the
Marking Division, RSL
William R. Hoover 67 Director
Ralph E. Reins 56 Director
Gary K. Willis 51 Director
Business Experience
Peter Wirth is Chairman of the Board of Directors, Chief Executive Officer and
President of the Company. He has also served as the General Manager of RSL
since October 1994. From 1991 until October 1994, Dr. Wirth was President of
Rofin-Sinar, Inc. He joined Rofin-Sinar in 1979 as Sales Manager for Industrial
Lasers, and became Director, Sales and Marketing in 1983. He holds a Masters
Degree and a Ph.D in Physics from the Technical University in Munich, Germany.
Hinrich Martinen is Executive Vice President, Research and
Development/Operations and Chief Technical Officer, as well as a member
of the Board of Directors of the Company. He has held a number of
senior R&D management positions since joining RSL in 1981 and is
currently the Technical Director of RSL. Mr. Martinen holds a Masters
Degree in Physics from the University of Hamburg, Germany.
Gunther Braun has been Executive Vice President, Finance and Administration,
Chief Financial Officer and Treasurer of the Company, as well as a member of its
Board of Directors, since September 1996. Since 1994, he has also been the
Financial Director for Rofin-Sinar Laser GmbH. He joined RSL in 1989 when RSL
acquired Laser Optronic's marking division from Coherent General Inc. Mr. Braun
holds a Business Administration degree from the Fachhochschule in Regensburg,
Germany.
Walter Volkmar has been the Manager of the Marking Division of RSL since 1994.
He joined RSL in 1989 when RSL acquired Laser Optronic's marking division from
Coherent General Inc. Dr. Volkmar holds
4
<PAGE>
Master's Degrees in Mechanical Engineering and Business Administration from the
Technical University in Darmstadt, and a Ph.D. in Economics and Trade from the
University of Parma in Italy.
Joseph Ferrario was the President of RSI from August 1994 until December 20,
1996, at which time Mr. Ferrario's employment as President terminated. Pursuant
to a letter agreement between the Company and Mr. Ferrario, Mr. Ferrario's
employment with the Company will terminate in all capacities effective December
20, 1997. See "Employment Agreements and Termination of Employment Arrangements
- -- Termination of Employment Agreement with Mr. Ferrario."
Richard Walker has been the Vice President Sales and Marketing of RSI since
1993. Prior to that, he was Vice President Marketing for Nd:YAG products. Mr.
Walker joined RSI in 1988. Mr. Walker holds a B.S. from the University of
London.
Bernd Ladiges has been the European Sales Manager of RSL since 1987. He joined
RSL in 1982. Mr Ladiges holds an electrical engineering and economics degree
from the Fachhochschule in Wedel, Germany.
Ulrich Hefter has been the Research and Development Manager of the Marking
Division since 1984. He joined RSL in 1989 when RSL acquired Laser-Optronic's
marking division from Coherent General, Inc. Dr. Hefter holds a Master's Degree
and a Ph.D. in Physics from the University of Kaiserslautern, Germany.
William R. Hoover has been a member of the Company's Board of Directors since
September 1996. He has been Chairman of the Board of Computer Sciences
Corporation, a provider of information technology consulting, systems
integration and outsourcing to industry and government, since November 1972. He
has been consultant to that company since March 1995; prior to that, he was its
President from November 1969 to March 1995 and its Chief Executive Officer from
November 1972 until March 1995. Mr. Hoover serves as Director on the Boards of
Merrill Lynch & Co., Storage Technology Corp. and Eltron International.
Ralph E. Reins has been a member of the Company's Board of Directors since
September 1996. He became President and Chief Executive Officer of AP Parts
International, Inc. in 1996. Previously, Mr. Reins served as President and
Chief Executive Officer of Envirotest Systems Corp. in 1995, as President of
Allied Signal Automotive from 1991 through 1994 and as President of United
Technologies Automotive from 1990 to 1991. Prior to that, he was Chairman, Chief
Executive Officer, President and Chief Operating Officer of Mack Truck from 1989
to 1990 and President and Chief Executive Officer of ITT Automotive from 1985 to
1989. Mr. Reins is a member of the University of Michigan's National Advisory
Council and the Society of Automotive Engineers.
Gary K. Willis has been a member of the Company's Board of Directors since
September 1996. Since 1992, he has been President, Chief Executive Officer and
Director of Zygo Corporation. He was an independent consultant between 1990 and
1992. Before 1990, Mr. Willis was President, Chief Executive Officer and a
director of the Foxboro Company. Mr. Willis served as a director of Neworld Bank
from 1991 through June 1994.
Relationships Among Directors or Executive Officers
There are no family relationships among any of the directors or executive
officers of the Company.
5
<PAGE>
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the Company's officers and directors, and persons who own more than ten percent
of a registered class of the Company's equity securities, to file reports of
securities ownership and changes in such ownership with the Securities and
Exchange Commission (the "SEC"). Officers, directors and greater than ten
percent shareholders are also required by rules promulgated by the SEC to
furnish the Company with copies of all Section 16(a) forms they file.
Based solely upon a review of the copies of such forms, the absence of a
Form 3 or Form 5 or written representations that no Form 5s were required, the
Company believes that, with respect to the fiscal year ended September 30, 1996,
its officers, directors and greater than ten percent beneficial owners complied
with all applicable Section 16(a) filing requirements, except that amended Form
4s were filed by five executive officers of the Company, Messrs. Wirth,
Martinen, Braun, Volkmar and Ferrario, in order to correct the date of an exempt
transaction.
COMMITTEES OF THE BOARD OF DIRECTORS;
MEETINGS AND COMPENSATION OF DIRECTORS
The Board of Directors did not meet during fiscal 1996. The Board has an
Audit Committee and a Compensation Committee. It does not have a nominating
committee or a committee performing the functions of a nominating committee.
The Audit Committee. The responsibilities of the Audit Committee are to
recommend to the Board of Directors the independent public accountants to be
selected to conduct the annual audit of the books and records of the Company,
review the proposed scope of such audit and approve the audit fees to be paid,
review the adequacy and effectiveness of the accounting and internal financial
controls of the Company with the independent public accountants and the
Company's financial and accounting staff and review and approve transactions
between the Company and its directors, officers and affiliates. The members of
the Audit Committee are Mr. Reins and Mr. Willis. The Audit Committee held no
meetings in fiscal 1996.
The Compensation Committee. The responsibilities of the Compensation
Committee are to provide a general review of the Company's compensation and
benefit plans to ensure that they meet corporate financial and strategic
objectives. The responsibilities of the Compensation Committee also include
administering the Equity Incentive Plan and the Annual Incentive Plan (both of
which are described below), including selecting the officers and salaried
employees to whom awards will be granted and making such awards. The members of
the Compensation Committee are Mr. Hoover and Mr. Reins. The Committee held no
meetings in fiscal 1996.
Compensation of Directors. Directors who are not employees of the Company
are entitled to an annual cash retainer fee of $15,000 plus an honorarium of
$1,000 and $500 for each board meeting and committee meeting, respectively,
which they attend, plus reimbursement of expenses. In addition, at the time of
the IPO (as defined herein), the Company adopted a non-employee director stock
plan (the "Directors' Plan") which authorizes 100,000 shares of Common Stock for
issuance pursuant to stock awards and restricted stock awards to non-employee
directors. Under the Directors' Plan, each non-employee director who is first
elected or appointed to the Board of Directors prior to age 65 will receive an
initial grant of 1,500 shares of Common Stock and an annual grant of 1,500
shares of Common Stock in each subsequent year. Each non-employee director who
is first appointed or elected to the Board of Directors after attaining age 65
will receive upon his or her initial appointment or election a one-time grant of
7,500 shares of restricted stock which will vest in five equal installments on
the date of grant and each of the following four anniversaries thereof. Upon
their initial appointment to the Board of Directors on
6
<PAGE>
September 30, 1996, Messrs. Reins and Willis each received an initial
grant of 1,500 shares of Common Stock and Mr. Hoover received a grant of
7,500 shares of restricted stock.
OWNERSHIP OF COMMON STOCK BY MANAGEMENT
The following table sets forth information as of January 1, 1997, with
respect to beneficial ownership of the Company's Common Stock by each director,
each of the executive officers named in the Summary Compensation Table below
(each, a "Named Executive Officer"), and the directors and executive officers of
the Company as a group. To the Company's knowledge, each of the directors and
executive officers has sole voting and investment power with respect to the
shares he or she owns.
Number of Shares of
Common Stock
Name Beneficially Owned Percentage of Class
---- ------------------- -------------------
Peter Wirth................. 2,300 *
Hinrich Martinen............ 2,500 *
Gunther Braun............... 3,000 *
Walter Volkmar.............. 8,000 *
Joseph Ferrario............. 500 *
William R. Hoover........... 37,500 *
Ralph E. Reins.............. 11,500 *
Gary K. Willis.............. 6,500 *
All directors and executive
officers as a group
(11 persons).............. 71,800 *
_____________________
* Less than one (1) percent of class.
7
<PAGE>
PRINCIPAL STOCKHOLDERS
Beneficial Ownership
The following table sets forth information as to the only persons known to the
Company to be the beneficial owner of more than five (5) percent of the
Company's common stock:
Name and address of Amount and Nature
Beneficial Owner of Beneficial Ownership Percentage of Class
------------------- ----------------------- -------------------
Janus Capital Corporation 1,000,000(a) 8.7%
100 Fillmore Street, Suite 300
Denver, Colorado 80206-4823
_________________
(a) The information shown is as of November 8, 1996 and is based upon
information disclosed in the Schedule 13G report filed with the SEC
jointly by Janus Capital Corporation ("Janus Capital") and Thomas H.
Bailey ("Mr. Bailey"). Janus Capital is a registered investment adviser
which furnishes investment advice to several investment companies
registered under Section 8 of the Investment Company Act of 1940 and
individual and institutional clients (collectively referred to herein as
"Managed Portfolios"). As a result of its role as investment adviser or
sub-adviser to the Managed Portfolios, Janus Capital may be deemed to be
the beneficial owner of the shares of Common Stock of the Company held by
such Managed Portfolios. However, Janus Capital does not have the right
to receive any dividends from, or the proceeds from the sale of, the
securities held in the Managed Portfolios and disclaims any ownership
associated with such rights. The Schedule 13G report discloses that Mr.
Bailey is a stockholder of Janus Capital who owns approximately 12.2% of
Janus Capital and serves as President and Chairman of the Board of Janus
Capital. Although he does not own of record any shares of Common Stock
of the Company and he has not engaged in any transaction in shares of
Common Stock of the Company, as a result of such stock ownership and
positions he may be deemed to exercise control over Janus Capital, and
thus may be deemed to have the power to exercise or to direct the
exercise of such voting and/or dispositive power that Janus Capital may
have with respect to shares of Common Stock of the Company held by the
Managed Portfolios. The Schedule 13G report further discloses that Janus
Capital and Mr. Bailey have shared voting and investment power over the
shares of Common Stock of the Company held by the Managed Portfolios.
All shares reported herein have been acquired by the Managed Portfolios,
and Mr. Bailey disclaims beneficial ownership over any shares of Common
Stock of the Company that he or Janus Capital may be deemed to
beneficially own. Furthermore, Mr. Bailey does not have the right to
receive any dividends from, or the proceeds from the sale of, the
securities held in the Managed Portfolios and disclaims any ownership
associated with such rights.
8
<PAGE>
CERTAIN TRANSACTIONS
Prior to the consummation of the Company's initial public offering ("IPO")
on September 30, 1996, the business of the Company was conducted by subsidiaries
of Siemens AG ("Siemens"), a company organized under the laws of the Federal
Republic of Germany whose principal business is the design, development,
manufacture and marketing of a wide range of electrical and electronics products
and systems. In connection with the IPO, Siemens and certain of its
subsidiaries entered into the following agreements with the Company and certain
of its subsidiaries with respect to the transfer of the laser business of
Siemens to the Company.
Transfer Agreements
The Company, Siemens and Siemens Power Corporation, a subsidiary of Siemens
("SPC"), entered into certain sale and transfer agreements (collectively, the
"Transfer Agreements") pursuant to which, the Company purchased all of the
outstanding capital stock of Rofin-Sinar Laser GmbH ("RSL") from Siemens and all
of the outstanding capital stock of Rofin-Sinar Inc. ("RSI") from SPC for an
aggregate purchase price of $70.1 million.
The Transfer Agreements govern the allocation of liabilities and
obligations of the respective businesses of the Company, Siemens and their
respective subsidiaries. Pursuant to the Transfer Agreements, the Company and
Siemens are each responsible for all claims and liabilities relating to its own
business and the businesses of its respective subsidiaries (whether or not such
claims and liabilities are asserted, or arise from activities occurring, prior
to the closing of the Offerings), except as provided in the Transfer Agreements
and the Tax Allocation and Indemnification Agreement (described below), and will
each indemnify the other against such claims and liabilities.
Pursuant to the Transfer Agreements, the Company and Siemens have each
agreed to indemnify each other and their respective affiliates for certain
liabilities that may arise after the offering date (which is defined to be the
date of closing of the Offerings). The Company will indemnify Siemens and its
affiliates for any claims or liabilities arising out of (i) the ownership or
operation by the Company of its business, properties or assets after the
completion of the Offerings, (ii) any breach or inaccuracy in any of the
representations or warranties of the Company contained in the Transfer
Agreements or (iii) any failure by the Company to perform any of its
obligations, covenants or agreements contained in or contemplated by the
Transfer Agreements. In addition, the Company irrevocably and unconditionally
waives any right against Siemens or any of its subsidiaries for any
reimbursement or funding of any losses incurred by RSL pursuant to a profit and
loss transfer arrangement between RSL and Siemens which has been terminated and
relating to periods following the termination for tax purposes of such
arrangement.
Siemens will indemnify the Company and its affiliates for (i) any breach or
inaccuracy in any of the representations or warranties relating to Siemens
contained in the Transfer Agreements, (ii) any failure by Siemens to perform any
of its obligations, covenants or agreements contained in the Transfer Agreements
and (iii) for all German and certain other taxes imposed upon RSL for tax
periods prior to the consummation of the IPO (for fiscal 1996, in excess of
amounts recorded or incurred in the ordinary course). Although Siemens received
a dividend in respect of RSL's fiscal 1996 earnings shortly before the end of
such fiscal year, a capital contribution in like amount was made to RSL by
Siemens immediately prior to the transfer of the RSL stock to the Company, with
the effect that such earnings were for the account of RSL. Siemens and the
Company have also agreed that the Company will bear a pro rata portion of the
expenses of the IPO.
The Transfer Agreements also provide that Siemens and its subsidiaries,
subject to certain exceptions, will not engage in the design, development,
engineering, manufacture and marketing of laser products for material processing
applications for a period of four years after the closing of the IPO.
9
<PAGE>
Tax Allocation and Indemnification Agreement
For United States federal income tax reporting purposes, for periods prior
to September 30, 1996, the Company and RSI filed a consolidated federal income
tax return with other members of the affiliated group of corporations of which
Siemens Corporation ("SC"), the parent company of SPC, is the common parent (the
"SC Group"). Under United States Federal income tax law, each corporation in a
consolidated group is liable for all taxes of the consolidated group. In the
event that SC and other members of the SC Group do not discharge the tax
obligations for Federal income tax periods of the SC Group which end with the
tax period which includes the date of consummation of the Offerings, the Company
and RSI could be required under law to satisfy such obligations.
The Company, RSI, SC and SPC entered into a Tax Allocation and
Indemnification Agreement (the "TAIA") to reflect the fact that the Company and
RSI are no longer be a part of the SC Group because of the IPO. Pursuant to the
TAIA, the SC Group will bear the economic burden of all income taxes imposed on
the income of any member of the SC Group, including the Company and RSI, with
respect to a tax period prior to September 30, 1996. SC and SPC will indemnify
the Company and RSI for (i) all such income taxes and (ii) any reduction in the
deferred tax asset of RSI attributable to its net operating loss carryforwards,
which reduction results from an adjustment to taxable income for periods prior
to September 30, 1996. The TAIA also contains provisions for the disposition of
audits and contests regarding tax items relating to RSI during the period it was
a member of the SC Group.
Intercompany Transactions
In the ordinary course of business, the Company and its subsidiaries and
Siemens or affiliates of Siemens have from time to time entered into various
business transactions and agreements, and the Company and its subsidiaries and
Siemens or such affiliates of Siemens may enter into additional transactions and
agreements from time to time in the future.
The Company and its subsidiaries have provided certain products (primarily
laser markers) and related services to Siemens and its affiliates. Revenue from
such transactions amounted to $2.9 million, $1.2 million and $5.4 million for
the fiscal years ended September 30, 1994, 1995 and 1996, respectively. In
addition, the Company and its subsidiaries have from time to time purchased
certain products (primarily electrical components, subassemblies and computers
used in the Company's products) from Siemens and its affiliates. Such purchases
totalled approximately $2.7 million, $2.4 million and $4.4 million for the
fiscal years ended September 30, 1994, 1995 and 1996, respectively. The Company
expects to continue to engage in transactions involving products and services
with Siemens and its affiliates on generally the same basis as it would engage
in transactions with any other unaffiliated third party. In addition, the
Company and Siemens intend to continue their cooperative relationship for the
development of certain advanced industrial laser technologies.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Mr. Hoover and Mr. Reins are the members of the Compensation Committee of
the Board of Directors of the Company, neither of whom is an officer of the
Company. There are no compensation committee interlocks involving executive
officers of the Company.
10
<PAGE>
EXECUTIVE COMPENSATION AND RELATED INFORMATION
Compensation Committee Report on Executive Officer Compensation
Prior to the IPO, as a wholly-owned subsidiary of Siemens, the Company's
executive compensation program was set by Siemens based upon its own business
purposes. The Compensation Committee was organized at the time of the IPO, and
consists solely of non-management directors. The current members of the
Compensation Committee are Messrs. Hoover and Reins.
Policies, Goals and Responsibilities
The Compensation Committee is responsible for oversight and administration
of executive compensation. The philosophy of the Compensation Committee is to
establish an executive compensation program that will allow the Company to
achieve the following objectives:
o Attract, retain and motivate key executives of the Company.
o Tie executive pay to shareholder value creation through the use of
equity-based incentives.
o Link pay to performance by making individual compensation directly
dependent upon the achievement of certain predetermined performance
goals.
As a newly public company, the Compensation Committee recognizes that a
transition period is necessary to fully achieve the objectives it has
established. Accordingly, with respect to the Company's current fiscal year,
the Compensation Committee has carried forward Siemens's historical compensation
policies, but with an increased emphasis on annual and long-term incentives and
comparisons to comparable companies. The Compensation Committee is continuing
to evaluate its current executive compensation program in relation to its
philosophy and objectives in order to enhance consistency between these elements
in the future.
In contemplation of the IPO, the Company also retained independent
compensation consultants to assist in the formulation of salary and incentive
compensation programs for the Company's executive officers. The use of
independent consultants has provided additional assurance that the Company's
compensation programs are appropriately aligned with its objectives, and that,
based upon survey data, executive compensation levels are appropriately aligned
with the compensation levels of persons in similar positions at comparable
companies, taking into account, in certain instances, differences between U.S.
and German compensation practices.
Components of Compensation
Base Salaries. In fiscal year 1996, executive officer base salaries were
set by Siemens based upon its business objectives. At the time of the IPO, the
Company reevaluated salary levels based upon survey data and recommendations
provided by its independent compensation consultants. Accordingly, during the
current transition period, both Siemens's historical practices and the
information and recommendations provided by the Company's independent
consultants have been taken into account in determining salary levels. The
Compensation Committee anticipates that, in the future, executive officer base
salaries will be reviewed on an annual basis and that base salary increases will
be determined by an evaluation of factors which may include individual
performance and comparisons with salaries paid at comparable companies.
Annual Incentives. In fiscal year 1996, the Company's executive officers
received discretionary bonuses determined by the Chairman of the Advisory Board
of RSL. At the time of the IPO, the Company established the Annual Incentive
Plan, in which key employees, including executive officers, are eligible to
participate at the discretion of the Compensation Committee. The Compensation
Committee has determined that bonuses with respect
11
<PAGE>
to the Company's current fiscal year will be based upon the degree to which the
Company (or, with respect to middle management, the applicable business unit or
division of the Company) achieves certain preset performance goals related to
net sales, order entry and after-tax profits. The maximum bonus each
participant may receive under the Annual Incentive Plan is expressed as a
percentage of salary, with percentages varying among participants based upon
their positions at the Company. The Compensation Committee anticipates that, in
the future, survey data and comparisons to comparable companies will also be
considered in determining performance criteria and bonus levels.
Long-Term Incentives. At the time of the IPO, the Company also implemented
an Equity Incentive Plan which provides for grants of stock options, restricted
stock and performance shares to officers and other key employees of the
Company.
In connection with the IPO, key employees of the Company, including the
executive officers, received grants of stock options under the Equity Incentive
Plan. All such stock options were granted with an exercise price equal to the
initial public offering price of the Company's shares and will vest in equal
installments on each of the first five anniversaries of the date of grant. The
award size for each executive officer was determined primarily by a comparison
to the sizes of awards to persons in similar positions in a survey group of
companies with sales of less than $500 million per year provided by the
Company's independent consultants, and by reviewing typical initial option
grants made by other companies that had recently engaged in initial public
offerings.
The Compensation Committee believes that stock options are an important
part of incentive compensation because stock options only have value if stock
price increases over time. Consequently, the Compensation Committee anticipates
that additional option grants will be made to the executive officers and other
key employees of the Company from time to time to reflect their ongoing
contributions to the Company, to provide additional incentives and to take into
account practices at competitive companies.
Compensation of the Chairman of the Board and Chief Executive Officer
In 1996, Mr. Wirth's compensation was determined pursuant to the terms of
his employment agreement with RSL, which took effect in 1994 and terminated
effective with the IPO. Mr. Wirth's employment agreement provided for a base
annual salary (subject to annual adjustment) and discretionary annual bonuses
determined by the Chairman of the Advisory Board of RSL.
Effective with the IPO, the Company entered into a new employment agreement
with Mr. Wirth, providing for a minimum base annual salary of $245,000 (subject
to periodic adjustment) and annual incentive bonuses. Mr. Wirth's minimum
salary level was determined based upon the recommendations of the Company's
independent compensation consultants as well as historical practices at
Siemens. The Compensation Committee has determined that Mr. Wirth's annual bonus
with respect to the Company's current fiscal year will be based upon the
Company's attainment of certain predetermined performance goals related to net
sales, order entry and after-tax profits. The maximum bonus that Mr. Wirth will
receive, if all applicable performance targets are achieved, will equal 45% of
base salary.
In connection with the IPO, Mr. Wirth was granted options to purchase
42,000 shares of stock. The number of shares awarded to Mr. Wirth was
determined primarily by a comparison to the award sizes to chief executive
officers in a survey group of companies with sales of less than $500 million per
year provided by the Company's independent consultants, and by reviewing typical
initial option grants made by other companies that had recently engaged in
initial public offerings. The options vest in equal installments on each of the
first five anniversaries of the date of grant and have an exercise price equal
to the initial public offering price.
12
<PAGE>
Policy with Respect to Qualifying Compensation for Deductibility
Section 162(m) of the Internal Revenue Code generally limits to $1,000,000
the tax deductible compensation paid for a particular year to the chief
executive officer and to each of the four highest-paid executive officers who
are employed as executive officers on the last day of such year (the "Covered
Executive Officers"). Presently, because of the application of certain
transition rules and grandfather provisions, the Company does not expect any of
the Covered Executive Officers' compensation to be subject to the deductibility
limit. While it is the Compensation Committee's intention to maximize the
deductibility of compensation paid to executive officers, the Compensation
Committee may, from time to time, reevaluate its policy with respect to Section
162(m).
COMPENSATION COMMITTEE
William R. Hoover
Ralph E. Reins
13
<PAGE>
Executive Compensation
The following table presents information concerning compensation paid for
services to the Company during fiscal 1996 and 1995 to the Chief Executive
Officer and the four other most highly compensated executive officers (the
"Named Executive Officers") of the Company.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long-Term
Compensation
Other Securities
Annual Underlying All Other
Compens- Options/ Compens-
Name and Principal Position Year Salary($)(1) Bonus($)(2) ation(3) SARs(#) ation(4)
- --------------------------- ---- ----------- ---------- -------- ------------ ---------
<S> <C> <C> <C> <C> <C> <C>
Peter Wirth 1996 $239,449 $40,683 42,000
Chairman, Chief Executive 1995 $231,236 $20,684 -- --
Officer, and President
Hinrich Martinen 1996 $214,524 $40,683 36,000
Executive Vice President, 1995 $206,796 $20,684 -- --
Research & Development, and
Chief Technical Officer
Gunther Braun 1996 $137,110 $33,903 36,000
Executive Vice President, 1995 $129,980 $13,789 -- --
Finance and Administration,
and Chief Financial Officer
Walter Volkmar 1996 $139,375 $19,944 30,000
Manager, RSL Marking 1995 $132,675 $20,250 -- --
Division
Joseph Ferrario(5) 1996 $139,100 $43,448 $9,437 30,000 $3,370
President, RSI 1995 $133,900 $49,754 -- $5,510
</TABLE>
- ------------
(1) Amounts paid in German marks have been translated into U.S. dollars at the
weighted average exchange rate for the relevant fiscal year (for fiscal year
ended September 30, 1995: US$1.00 : DM 1.4504; for fiscal year ended
September 30, 1996: US$1.00 : DM 1.4748).
(2) Includes discretionary bonuses awarded by Siemens (with respect to Messrs.
Wirth, Martinen and Braun), and bonuses awarded pursuant to the RSL
Annual Bonus Plan (with respect to Mr. Volkmar) and the RSI Incentive
Compensation Plan (with respect to Mr. Ferrario).
(3) Amount shown represents tax reimbursement payments made to Mr. Ferrario by
RSI.
(4) Amounts shown represent matching contributions made by RSI on behalf of
Mr. Ferrario in accordance with the terms of the Siemens Savings Plan,
in which Mr. Ferrario and other RSI employees participated prior to the
closing of the IPO, at which time the account balances of RSI employees
under the Siemens Savings Plan were transferred to a successor 401(k)
plan adopted by RSI.
(5) Pursuant to a letter agreement between the Company and Mr. Ferrario, Mr.
Ferrario's employment as President of RSI terminated effective December
20, 1996 and Mr. Ferrario's employment with the Company will terminate
in all capacities effective December 20, 1997 (See -- Termination of
Employment Agreement With Mr. Ferrario).
14
<PAGE>
The following table presents information concerning grants of stock options
during fiscal 1996 to each of the Named Executive Officers.
INDIVIDUAL GRANTS OPTION/SAR GRANTS IN FISCAL YEAR 1996
<TABLE>
<CAPTION>
Number of % of Total Potential Realizable Value
Securities Options at Assumed Annual Rates
Underlying Granted to of Stock Price
Options Employees Exercise Appreciation for Option
Granted (#) in Fiscal Price ($ / Sh) Expiration Term (3)
Name (1) Year (2) Date 5% ($) 10% ($)
---- ------------ ---------- -------------- ---------- -------- -------
<S> <C> <C> <C> <C> <C> <C>
Peter Wirth 42,000 13.46% $9.50 9/26/06 250,740 635,880
Hinrich Martinen 36,000 11.56% $9.50 9/26/06 214,920 545,040
Gunther Braun 36,000 11.56% $9.50 9/26/06 214,920 545,040
Walter Volkmar 30,000 9.62% $9.50 9/26/06 179,100 454,200
Joseph Ferrario(4) 30,000 9.62% $9.50 9/26/06 179,100 454,200
</TABLE>
- -----------------
(1) All option grants to the Named Executive Officers were made pursuant to the
Equity Incentive Plan at the time of the IPO.
(2) All options were granted to the Named Executive Officers at an exercise
price equal to the initial public offering price. All options will vest
and becomes exercisable in equal installments on each of the first five
anniversaries of the date of grant. Pursuant to the terms of the awards,
all options will, subject to the discretion of the Compensation Committee,
become fully exercisable upon the occurrence of a change in control as
defined in the Equity Incentive Plan.
(3) Potential gains are net of exercise price, but before taxes associated with
exercise. These amounts represent assumed rates of appreciation only,
based on SEC rules, and do not represent the Company's estimate or
projection of the Company's stock price in the future. Actual gains, if
any, on stock option exercises depend upon the actual future performance
of Common Stock and the continued employment of the option holders
through the vesting period. The amounts reflected in this table may not
necessarily be achieved.
(4) Pursuant to a letter agreement between the Company and Mr. Ferrario, Mr.
Ferrario's employment as President of RSI terminated effective December
20, 1996 and Mr. Ferrario's employment with the Company will terminate in
all capacities effective December 20, 1997 (See -- Termination of
Employment Agreement With Mr. Ferrario). As a result of the termination
of Mr. Ferrario's employment with the Company, all of his options will be
forfeited.
15
<PAGE>
AGGREGATED OPTION/SAR EXERCISES
IN FY 1996 AND FY 1996 YEAR-END
OPTION/SAR VALUES
<TABLE>
<CAPTION>
Value of
Number of Unexercised
Unexercised In-The-Money
Options at Options at
Shares FY-end (#) FY-End ($)
Acquired on Value Exercisable/ Exercisable /
Name Exercise (#) Realized ($) Unexercisable Unexercisable (1)
---- ----------- ------------ ------------- ----------------
<S> <C> <C> <C> <C>
Peter Wirth -- -- 0 / 42,000 0 / $57,750
Hinrich Martinen -- -- 0 / 36,000 0 / $49,500
Gunther Braun -- -- 0 / 36,000 0 / $49,500
Walter Volkmar -- -- 0 / 30,000 0 / $41,250
Joseph Ferrario -- -- 0 / 30,000 (2) 0 / $41,250
</TABLE>
- ------------
(1) Based on the closing price of Common Stock, as reported on the NASDAQ
National Market, at September 30, 1996, which was $10-7/8 per share.
(2) As a result of the termination of Mr. Ferrario's employment with the
Company, all of his options will be forfeited (See -- Termination of
Employment Agreement With Mr. Ferrario).
Pension Plans
RSL Pension Plan
Messrs. Wirth, Martinen, Braun and Volkmar participate in the Rofin-Sinar
Laser GmbH Pension Plan (the "RSL Pension Plan") for RSL executives, an unfunded
plan in accordance with the typical practices of German companies. The RSL
Pension Plan provides pensions to participants who (i) retire on or after age 60
or terminate employment due to a permanent disability and (ii) have served at
least ten years with RSL at the time of separation.
The annual benefits payable under the RSL Pension Plan, which commence at
the statutory retirement age of 65 (according to German law), are based upon the
age at which the participant leaves RSL. Book reserves are kept to record
benefits accruals under the RSL Pension Plan. Messrs. Wirth, Martinen, Braun
and Volkmar joined or were deemed to have joined (as applicable), the RSL
Pension Plan on July 1, 1979, October 1, 1981, November 1, 1984 and March 1,
1985, respectively. Assuming retirement at or after age 60, Messrs. Wirth,
Martinen, Braun and Volkmar would receive a monthly pension benefit of $2,822,
$2,726, $1,907 and $1,271, respectively (at the German mark/U.S. dollar exchange
rate in effect on December 31, 1996).
16
<PAGE>
Siemens Corporation Retirement Plan
In fiscal year 1996, RSI employees participated in the Siemens Corporation
Retirement Plan, a qualified defined benefit plan maintained for U.S. employees
of Siemens. Under that plan, employees receive annual pension benefits equal to
the product of (i) the sum of 1.125% of the first $12,000 of average final
compensation and 1.5% of "average final compensation" in excess of that amount,
and (ii) the number of years of service in which the employee was employed by a
participating employer. Average final compensation is based upon the period of
four consecutive plan years out of the last ten full plan years preceding the
employee's retirement which produces the highest amount. Pension benefits under
the Siemens Corporation Retirement Plan are subject to reduction for benefits
payable to the employee under any other qualified defined benefit plan
attributable to the same period of service as the benefits payable under the
Siemens Corporation Retirement Plan.
Siemens also maintains the Siemens Corporation Pension Preservation Plan, a
nonqualified and unfunded plan in which certain employees of RSI (including Mr.
Ferrario) participated prior to the IPO, which is designed to provide benefits
in excess of the applicable Internal Revenue Code limitations on qualified plan
benefits.
The following table shows the estimated annual pension benefits provided by
the combination of the Siemens Corporation Retirement Plan and the Siemens
Corporation Pension Preservation Plan, based on the remuneration and years of
service classifications indicated:
PENSION PLAN TABLE
Years of Service
---------------------------------------------------
Remuneration (1) 15 20 25 30 35
- ----------------- ------- ------- ------- -------- --------
$125,000......... $27,450 $36,600 $45,750 $ 54,900 $ 64,050
150,000......... 33,075 44,100 55,125 66,150 77,175
175,000......... 38,700 51,600 64,500 77,400 90,300
200,000......... 44,325 59,100 73,875 88,650 103,425
225,000......... 49,950 66,600 83,250 99,900 116,550
250,000......... 55,575 74,100 92,625 111,150 129,675
- -------------
(1) Annual pension benefits are calculated with respect to remuneration
levels of up to $250,000, which amount is in excess of 120% of the covered
compensation of Mr. Ferrario, the only Named Executive Officer who has
participated in either the Siemens Corporation Retirement Plan or the
Siemens Corporation Pension Preservation Plan. The amounts shown are on a
single life annuity basis and assume retirement at age 65. As of September
30, 1996, Mr. Ferrario had two years of benefit service under the Siemens
Corporation Retirement Plan. Mr. Ferrario's covered compensation under
the Siemens Corporation Retirement Plan does not differ by more than 10%
from his annual compensation set forth in the Summary Compensation Table.
17
<PAGE>
Rofin-Sinar Inc. Pension Plan
Effective as of the closing of the IPO, RSI adopted a new defined benefit
plan for its employees known as the Rofin-Sinar Inc. Pension Plan, to which
Siemens transferred all liabilities relating to RSI employees (including both
active employees and retirees) under the Siemens Corporation Retirement Plan and
an amount required under Section 414(l) of the Internal Revenue Code to satisfy
such liabilities. The Rofin-Sinar Inc. Pension Plan contains substantially
similar terms to the Siemens Corporation Retirement Plan. RSI has not
established a successor plan to the Siemens Pension Preservation Plan.
Mr. Ferrario is the only Named Executive Officer who participates in the
Rofin-Sinar Inc. Pension Plan. As Mr. Ferrario's employment with the Company
will terminate prior to the vesting of his benefits under the plan, he will not
be entitled to receive pension benefits.
Employment Agreements and Termination of Employment Arrangements
Employment Agreements with Named Executive Officers
In August 1994, RSL entered into an employment agreement with Peter Wirth
pursuant to which Mr. Wirth agreed to serve as RSL's General Manager. Mr. Wirth
also agreed not to compete with RSL throughout the term of his employment with
RSL and not to disclose any confidential information thereafter. In exchange
for his services, RSL agreed to compensate Mr. Wirth with a base salary of
$228,800 per annum (subject to annual adjustment). The agreement also provided
for a yearly discretionary bonus determined by the Chairman of the Shareholder's
Advisory Board of RSL. Effective with the IPO, this agreement terminated and
the Company entered into a new employment agreement with Mr. Wirth, the terms of
which are described below.
In June 1987, RSL entered into an employment agreement with Hinrich
Martinen pursuant to which Mr. Martinen agreed to serve as RSL's Technical
Director - Research and Development Operations. Mr. Martinen also agreed not to
compete with RSL throughout the term of his employment, and not to disclose any
confidential information thereafter. In exchange for his services, RSL agreed
to compensate Mr. Martinen with a base salary of $175,770 per annum (subject to
annual adjustment). The agreement also provided for a yearly discretionary
bonus determined by the Chairman of the Shareholder's Advisory Board of RSL.
Effective with the IPO, this agreement terminated and the Company entered into a
new employment agreement with Mr. Martinen, the terms of which are described
below.
In January 1994, RSL entered into an employment agreement with Gunther
Braun pursuant to which Mr. Braun agreed to serve as RSL's Financial Director.
Mr. Braun also agreed not to compete with RSL throughout the term of his
employment with RSL and for six months thereafter, and not to disclose any
confidential information thereafter. In exchange for his services, RSL agreed
to compensate Mr. Braun with a base salary of $122,615 per annum (subject to
annual adjustment). The agreement also provided for a yearly discretionary
bonus determined by the Chairman of the Shareholder's Advisory Board of RSL.
Effective with the IPO, this agreement terminated and the Company entered into a
new employment agreement with Mr. Braun, the terms of which are described below.
Effective with the IPO, the Company and RSL entered into new employment
agreements with Messrs. Wirth, Martinen and Braun (collectively, the "New
Employment Agreements"), under which the executives have retained the job titles
specified in their prior employment agreements, and are entitled to a base
compensation of not less than DM 367,500, DM 319,500 and DM 231,000,
respectively ($245,000, $213,000 and $154,000, respectively, at an exchange rate
of DM 1.5 per $1.00) plus a yearly discretionary bonus determined by the
Compensation Committee. Each New Employment Agreement has an indefinite term,
subject to earlier termination by either the Company and RSL or the executive
upon two years' prior notice, which notice may not be given by either the
Company and RSL or the executive prior to the second anniversary of the closing
of the IPO. In accordance with the New Employment Agreements, each executive
has agreed (i) not to disclose or exploit any of
18
<PAGE>
the Company's Confidential Information (as defined therein), (ii) to assign to
the Company all inventions or improvements made by the executive in the course
of his employment with the Company, and (iii) not to compete with the Company
for a six month period after the completion of his term of employment with the
Company. During any such six month period, the executive is entitled under
German law to receive half of his monthly salary.
Termination of Employment Agreement with Mr. Ferrario
In December 1996, the Company and Mr. Ferrario entered into a letter
agreement (the "Termination Agreement") pursuant to which Mr. Ferrario's
employment as President of RSI terminated effective December 20, 1996 and his
twelve-month leave of absence (the "Twelve-Month Leave") commenced. Mr.
Ferrario will provide consulting services to the Company during the Twelve-Month
Leave to the extent reasonably requested by the Company. Effective December 20,
1997, Mr. Ferrario's employment by the Company will terminate in all
capacities. During the Twelve-Month Leave, Mr. Ferrario will receive payments
from the Company with an aggregate value of $175,000 and will continue to
participate in all employee benefit plans and policies of the Company (other
than RSI's 401(k) plan) in which he was participating prior to the commencement
of the Twelve-Month Leave. If, however, Mr. Ferrario enters into employment
with another employer during the Twelve-Month Leave, his right to such benefits
will be immediately forfeited, other than his right to the $175,000 payment.
Pursuant to the Termination Agreement, Mr. Ferrario's options to purchase 30,000
shares of Common Stock, granted in connection with the IPO, will be forfeited
upon his termination of employment with the Company. The Termination Agreement
also contains certain non-competition and confidentiality covenants.
Stock Performance Graph
The Company commenced its IPO on September 26, 1996. Because there were
only three trading days from September 26, 1996 to and including September 30,
1996 (the last day of the Company's 1996 fiscal year), the Company has been
advised that it is not required, under current SEC interpretations of the proxy
rules, to comply with the requirement of Item 402(l) of Regulation S-K to
furnish a stock performance graph.
19
<PAGE>
PROPOSAL TWO:
INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors recommend the appointment of KPMG Peat Marwick LLP,
Independent Auditors for the Company during the fiscal year 1996, to serve in
the same capacity for the fiscal year ending September 30, 1997, and is asking
the stockholders to ratify this appointment. The affirmative vote of a majority
of the shares represented and voting at the Annual Meeting is required to ratify
the selection of KPMG Peat Marwick LLP. Unless otherwise instructed, the proxy
holder will vote the proxies received for the ratification of KPMG Peat Marwick
LLP as the independent auditors for fiscal 1997.
In the event the stockholders fail to ratify the appointment, the Board of
Directors will reconsider its selection. Even if the selection is ratified, the
Board of Directors in its discretion may direct the appointment of a different
independent auditing firm at any time during the year if the Board of Directors
believes that such a change would be in the best interests of the Company and
its stockholders.
A representative of KPMG Peat Marwick LLP is expected to be present at the
Annual Meeting, will have the opportunity to make a statement if he or she
desires to do so, and will be available to respond to appropriate questions.
KPMG Peat Marwick LLP has audited the Company's financial statements for
fiscal 1994 to 1996.
Recommendation of the Board of Directors Concerning the Election of Directors
The Board recommends a vote FOR ratification of the appointment of KPMG
Peat Marwick LLP as the Company's independent auditor for the current fiscal
year.
EXPENSES OF SOLICITATION
All expenses incurred in connection with the solicitation of proxies will
be borne by the Company. The Company will request brokerage houses, custodians,
fiduciaries and nominees to forward proxy materials to their principals and will
reimburse them for their reasonable expenses in doing so. Solicitation may also
be undertaken by mail, telephone and personal contact by directors, officers and
employees of the Company without additional compensation.
The Bank of New York, the Company's transfer agent and registrar, will
receive and tabulate proxies and will provide representatives to act as
inspectors of election at the Annual Meeting.
STOCKHOLDERS' PROPOSALS
Proposals of stockholders intended to be presented at the 1998 Annual
Meeting of Stockholders must be received by the Company on or before Friday,
January 16, 1998, to be eligible for inclusion in the Company's proxy statement
and proxy relating to that meeting. Proposals should be addressed to Derek
Heins, Assistant Secretary, Rofin-Sinar Technologies Inc., 45701 Mast Street,
Plymouth, Michigan 48170.
20
<PAGE>
Under the Company's Certificate of Incorporation and By-Laws, stockholders
desiring to nominate persons for election as directors or bring other business
before the annual meeting must deliver or mail a notice to the Secretary that
must be received at the principal executive offices of the Company not less than
60 days nor more than 90 days prior to the anniversary date of the immediately
preceding annual meeting of stockholders; provided, however, that in the event
that the annual meeting is called for a date that is not within 30 days before
or after such anniversary date, notice by the stockholder in order to be timely
must be so received not later than the close of business on the tenth day
following the day on which such notice of the date of the annual meeting is
mailed or such public disclosure of the date of the annual meeting is made,
whichever first occurs. Stockholders' notices must contain the specific
information set forth in the Certificate of Incorporation and the By-Laws.
Stockholders will be furnished a copy of the Company's Certificate of
Incorporation and By-Laws without charge upon written request to the Secretary
of the Company.
OTHER INFORMATION
The Company knows of no other matters which will be presented for
consideration at the Annual Meeting. If any other matters or proposals properly
come before the meeting, including voting for the election of any person as a
Director in place of a nominee named herein who becomes unable to serve or for
good cause will not serve, and voting on proposals omitted from the proxy
statement pursuant to the rules of the Securities and Exchange Commission, it is
intended that proxies received will be voted in accordance with the discretion
of the proxy holders.
The Annual Report to Stockholders of the Company for the fiscal year ended
September 30, 1996, which includes financial statements, is enclosed. The
Annual Report does not form any part of the material for the solicitation of
proxies.
Any stockholder who desires a copy of the Company's 1996 Annual Report on
Form 10-K filed with the Securities and Exchange Commission may obtain a copy
(excluding exhibits) without charge by addressing a written request to the
Assistant Secretary, Rofin-Sinar Technologies Inc., 45701 Mast Street, Plymouth,
Michigan 48170.
By Order of the Board of Directors
/s/ Peter Wirth
------------------------
Peter Wirth
Chairman of the Board,
President and
Chief Executive Officer
Plymouth, Michigan
January 28, 1997
21
<PAGE>
<TABLE>
<S> <C> <C>
1. Election of Directors 2. Proposal to ratify the appointment of KPMG 3. In their discretion, the Proxies are
For Election to Term Expiring Peat Marwick LLP as the Company's independent authorized to vote upon such other
in 2000; Gunther Braun and accountants for the fiscal year ending further business, if any, as lawfully
Ralph E. Reins September 30, 1997. may be brought before the meeting.
</TABLE>
<TABLE>
<S> <C>
For / / Withheld / / Exceptions*/ / For / / Against / / Abstain / / Address Change
and/or Comments Mark Here / /
</TABLE>
<TABLE>
<S> <C>
*Exceptions__________________________________________________
To vote your shares for all Director nominees, mark the "For"
box on Item 1. To withhold voting for all nominees, mark the When signing as attorney, as executor, administrator,
"Withhold" box. If you do not wish your shares voted "For" a trustee or guardian, please give full title as such. If a
particular nominee, mark the "Exceptions" box and enter the corporation, please sign in full corporate name by
name(s) of the exception(s) in the space provided. President or other authorized officer. If a partnership,
please sign in partnership name by authorized person.
DATED_____________________________________________, 1997
SIGNED__________________________________________________
________________________________________________________
Please sign exactly as name appears hereon. When shares
are held by joint tenants, both should sign.
Sign, Date and Return the Proxy Card Promptly Using the Votes must be indicated
Enclosed Envelope. (x) in Black or Blue ink. /X/
</TABLE>
<PAGE>
ROFIN-SINAR TECHNOLOGIES INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Peter Wirth, Gunther Braun and Derek Heins
as Proxies, each with the power to appoint his substitute, and hereby authorizes
each of them to represent and to vote, as designated below, all the Common
Shares of Rofin-Sinar Technologies Inc. which the undersigned is entitled to
vote at the Annual Meeting to be held on March 18, 1997 or any adjournment
thereof.
This proxy will be voted as directed. If no direction is indicated, this
proxy will be voted FOR proposals 1 and 2.
(Continued on Reverse)
