<PAGE>
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement.
[_] Confidential, for use of the Commission only (as permitted by Rule 14a-
6(e)(2)).
[X] Definitive Proxy Statement.
[_] Definitive Additional Materials.
[_] Soliciting Material under Rule 14a-12.
GSI Lumonics Inc.
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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 or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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<PAGE>
GSI LUMONICS INC.
105 SCHNEIDER ROAD
KANATA, ONTARIO K2K 1Y3
NOTICE OF ANNUAL AND SPECIAL MEETING OF SHAREHOLDERS
MAY 8, 2000
NOTICE IS HEREBY GIVEN THAT the annual and special meeting of the
shareholders of GSI LUMONICS INC. (the "Company") will be held on Monday, May 8,
2000 at 10:00 a.m. (Ottawa time) at the Chateau Laurier Hotel, 1 Rideau Street,
Ottawa, Ontario, for the following purposes:
(a) to receive the annual report of the Company and the consolidated
financial statements of the Company for the fiscal year ended December
31, 1999, together with the auditors report thereon;
(b) to elect directors;
(c) to appoint auditors and to authorize the directors to fix the
auditors' remuneration;
(d) to consider and, if thought fit, adopt Resolution No. 1 to approve the
amendment to the Company's 1995 Stock Option Plan as described in the
management proxy circular accompanying this notice; and
(e) to transact such further or other business as may properly come before
the meeting or any adjournment or adjournments thereof.
Only those GSI Lumonics Inc. shareholders of record at the close of
business on March 31, 2000 will be entitled to vote at the meeting and at any
adjournment or postponement thereof, except to the extent that any such holder
has transferred any of the common shares after that date and the transferee of
such common shares establishes proper ownership and requests on or before the
commencement of the meeting that his name be included in the list of
shareholders for the meeting.
A copy of the Management Proxy Circular and a form of proxy accompanies
this notice, as well as a copy of the Company's Annual Report which contains the
financial statements of the Company and the report of the auditors thereon for
the fiscal year ended December 31, 1999 and management's discussion and analysis
of financial condition and results of operation relating thereto.
DATED at Ottawa, Ontario this 22nd day of March, 2000.
By Order of the Board of Directors
Charles J. Gardner, Q.C.
CORPORATE SECRETARY
Shareholders who are unable to attend the meeting in person are requested
to date and sign the enclosed form of proxy or other appropriate form of proxy
and return it to Montreal Trust Company of Canada in the addressed envelope
enclosed not later than Friday, May 5, 2000. In order to be represented by
proxy, you must complete and submit the enclosed form of proxy or other
appropriate form of proxy.
<PAGE>
GSI LUMONICS INC.
MANAGEMENT PROXY CIRCULAR
SOLICITATION OF PROXIES
THIS MANAGEMENT PROXY CIRCULAR IS FURNISHED IN CONNECTION WITH THE SOLICITATION
OF PROXIES BY THE MANAGEMENT OF GSI LUMONICS INC. (THE "COMPANY") FOR USE AT THE
ANNUAL AND SPECIAL MEETING OF SHAREHOLDERS TO BE HELD AT 10 A.M. (LOCAL TIME) ON
MONDAY, MAY 8, 2000 AT THE CHATEAU LAURIER HOTEL, 1 RIDEAU STREET, OTTAWA,
ONTARIO, CANADA. The solicitation will be made by mail but proxies may also be
solicited personally by employees of the Company. The cost of solicitation has
been or will be borne by the Company. The Company may also pay brokers or
nominees holding common shares of the Company in their names or in the names of
their principals for their reasonable expenses in sending solicitation material
to their principals.
All monetary amounts referred to herein are stated in United States dollars
unless otherwise stated. Unless the context indicates otherwise, the Company
refers to GSI Lumonics Inc. and its subsidiaries.
The Notice of the Meeting, this Management Proxy Circular and the form of Proxy
will be forwarded on or about April 2, 2000 to the registered shareholders of
the Company's common shares on March 31, 2000.
APPOINTMENT AND REVOCATION OF PROXIES
The persons named in the enclosed form of proxy are officers of the Company. A
SHAREHOLDER MAY APPOINT A PERSON TO REPRESENT HIM OR HER AT THE MEETING, OTHER
THAN THE PERSONS ALREADY NAMED IN THE ACCOMPANYING FORM OF PROXY, BY INSERTING
THE NAME OF SUCH OTHER PERSON IN THE BLANK SPACE PROVIDED IN THE FORM OF PROXY
OR BY COMPLETING ANOTHER PROPER FORM OF PROXY. SUCH PERSON NEED NOT BE A
SHAREHOLDER. The completed form of proxy must be deposited with the Company at
its principal executive offices at 105 Schneider Road, Kanata, Ontario, K2K 1Y3
or Montreal Trust Company of Canada, 151 Front Street West, 8th Floor Toronto,
Ontario, M5J 2N1, in either case no later than 5:00 p.m. (Ottawa time) on May 5,
2000, or, if the meeting is adjourned, before commencement of the reconvened
meeting.
The shareholder executing the form of proxy may revoke it as to any manner on
which a vote has not already been cast pursuant to the authority confirmed by
such proxy a) by delivering another properly executed form of proxy bearing a
later date and depositing it in the manner described above; b) by delivering an
instrument in writing revoking the proxy, executed by the shareholder or by the
shareholder's attorney authorized in writing, i) at the registered office of the
Company, at any time up to and including the last business day preceding the
date of the meeting, or at any reconvened meeting following its adjournment, or
ii) with the chairman of the meeting on the day of the meeting, or at any
reconvened meeting following its adjournment; or c) in any other manner
permitted by law.
1
<PAGE>
VOTING OF PROXIES
The officers named in the form of proxy accompanying this Circular will vote the
common shares of the Company in respect of which they are appointed proxy in
accordance with the directions of the shareholder appointing them. In the
absence of such direction, such shares will be voted FOR the election of
Directors, FOR the appointment of Ernst & Young as auditors and FOR Resolution
No. 1 - Proposal to Amend the 1995 Stock Option Plan.
The New Brunswick Business Corporations Act (the "Act") provides by section
65(1) for cumulative voting for the election of Directors so that each
shareholder entitled to vote at an election of Directors has the right to cast a
number of votes equal to the number of votes attached to the shares held by such
shareholders multiplied by the number of Directors to be elected and may cast
all such votes in favour of one candidate or distribute them among the
candidates in any manner. The Act further provides, in section 65(2), that a
separate vote of shareholders shall be taken with respect to each candidate
nominated for Director unless a resolution is passed unanimously permitting two
or more persons to be elected by a single resolution. It is expected that at
the meeting a motion will be made in favour of such a resolution in order to
permit the election of all seven directors by way of a single resolution. Where
a shareholder has voted for more than one candidate without specifying the
distribution of votes among such candidates, the shareholder shall be deemed to
have divided the votes equally among the candidates for whom such shareholder
voted. If a shareholder desires to distribute votes otherwise than equally among
the nominees for whom such shareholder has directed persons in the enclosed form
of proxy to vote, such shareholder must do so personally at the meeting or by
completing the appropriate portion of the enclosed form of proxy. ON ANY BALLOT
THAT MAY BE CALLED FOR THE ELECTION OF DIRECTORS, THE PERSONS NAMED IN THE
ENCLOSED FORM OF PROXY INTEND TO CAST THE VOTES TO WHICH THE SHARES REPRESENTED
BY SUCH PROXY ARE ENTITLED EQUALLY AMONG ALL THE PROPOSED NOMINEES WHOSE NAMES
ARE SET FORTH IN THE TABLE UNDER "ELECTION OF DIRECTORS" BELOW, EXCEPT THOSE, IF
ANY, EXCLUDED BY THE SHAREHOLDER IN THE PROXY, OR UNLESS THE SHAREHOLDER WHO HAS
GIVEN SUCH PROXY HAS DIRECTED THAT THE SHARES BE WITHHELD FROM VOTING IN THE
ELECTION OF DIRECTORS OR THAT THE SHARES BE WITHHELD FROM VOTING FOR ANY
INDIVIDUAL DIRECTOR OR DIRECTORS.
The enclosed form of proxy confers discretionary authority on the person named
therein with respect to amendments to or variations of matters identified in the
Notice of Meeting and other matters which may properly come before the meeting.
At the date of this Circular, the management of the Company knows of no such
amendments, variations or other matters.
Proxies to be used at the meeting must be deposited with the Company or its
transfer agent and registrar, Montreal Trust Company of Canada, prior to the
commencement of the meeting. If you are unable to attend the meeting, please
date, sign and return the accompanying form of proxy to Montreal Trust Company
of Canada. Broker non-votes are not treated as abstentions or votes cast or
common shares entitled to vote with respect to any matter described in this
Management Proxy Circular.
2
<PAGE>
VOTING AND OWNERSHIP OF SHARES
At the date of this Circular the Company had 34,720,324 common shares
outstanding. Each shareholder of record is entitled to one vote for each common
share held at the close of business on March 31, 2000, except to the extent that
such shareholder has transferred the ownership of any shares after such date and
the transferee of such shares establishes proper ownership thereof and demands
not later than ten days before the meeting to be added to the list of
shareholders entitled to vote at the meeting in which case such transferee will
be entitle to vote such shares. The failure of any shareholder to receive a
Notice of Meeting of Shareholders does not deprive the shareholder of a vote at
the meeting.
OWNERSHIP
The following sets forth certain information concerning the direct and indirect
beneficial ownership of common shares as at the date hereof by each person known
by the directors or senior officers of the Company to be the beneficial owner
of, or exercise control or direction over 5% or more of the common shares.
<TABLE>
<CAPTION>
Shareholder Shares Percentage
================================= ================================= ==================================
<S> <C> <C>
Sumitomo Heavy Industries Ltd. 6,078,238 17%
9-11, Kitashinagawa 5-chome
Shinagawa-ku, Toyko 141-8686,
JAPAN
</TABLE>
A merger of equals (the "Merger") involving General Scanning Inc. ("GSI") and
Lumonics Inc. ("Lumonics") was completed on March 22, 1999. In the Merger, GSI
stockholders received common shares of Lumonics in exchange for their GSI common
stock. Following the Merger, the GSI stockholders and Lumonics Shareholders
each, as a group, held approximately 50% of the outstanding common shares of the
Lumonics, which was renamed GSI Lumonics Inc. as a result of the Merger. Unless
otherwise stated herein, the disclosures set forth in this Management Proxy
Circular relate to the Company on a post Merger basis current to the date
hereof.
ELECTION OF DIRECTORS
During the fiscal year ended December 31, 1999, the board of directors of the
Company held 6 meetings. Committees of the board held 6 meetings. During
fiscal 1999, each director attended 93% or more of the aggregate total of
meetings of both the board and committees thereof on which such director served.
Below are the names of the persons for whom it is intended that votes be cast
for their election as directors pursuant to the proxy which is hereby solicited
unless the shareholder directs therein that his or her shares be withheld from
voting. Within the minimum and maximum number of directors prescribed by the
Company's articles, the Board has determined the board will consist of seven (7)
directors. Each director will hold office until the next annual meeting or until
his successor is elected or appointed.
3
<PAGE>
Management does not contemplate that any of the nominees named below will be
unable to serve as a director, but if that should occur for any reason prior to
the meeting, where the proxy is granted to the management nominees, the
management nominees reserve the right to vote for other nominees in their
discretion unless directed to withhold from voting. The following table states
the name, position held with the Company by each person proposed to be nominated
for election as a director, the year first elected or appointed as a director,
committee memberships, and the person's principal occupation and employment
during the past five years.
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NAME, AGE YEAR
PRINCIPAL OCCUPATION AND BECAME
MUNICIPALITY OF RESIDENCE DIRECTOR
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Richard B. Black(1) (2), 66 1999
Vice Chairman
Oak Technology, Inc.
New York, New York, U.S.A.
Paul F. Ferrari, 69 1999
Independent Consultant /
Former V.P. & Treasurer
Thermo Electron Corporation
Hobe Sound, Florida, U.S.A.
Woodie C. Flowers(3), 56 1999
Pappalardo Professor of
Mechanical Engineering at MIT
Weston, Massachusetts, U.S.A.
Byron O. Pond(2), 63 2000
Chairman Emeritus
Arvin Industries, Inc.
Chicago, Illinois, U.S.A.
Ben J. Virgilio(1)(2), 60 1998
President & CEO
Rea International Inc.
Kleinberg, Ontario, Canada
William B. Waite(1), 62 1999
Corporate Director
Former President & CEO
Siemens Electric Limited
Victoria, British Columbia, Canada
Charles D. Winston(3), 57 1999
President & CEO
GSI Lumonics Inc.
Westlake Village, California, U.S.A.
4
<PAGE>
1 Member, Audit Committee
2 Member, Compensation Committee
3 Member, Technology Committee
Richard Black has served as Vice Chairman of Oak Technology, Inc. since March
1999, as President of Oak from January 1998 to March 1999, and has been a
director of Oak since 1988. He has served as Chairman of the board of directors
of ERCM Incorporated since 1983. He also serves as a director of Morgan Group,
Inc., Gabelli Funds, Inc., Benedetto Gartland, Inc., Grand Eagle Companies, and
Altigen Communications, Inc.
Paul F. Ferrari has been an independent consultant since 1991. Previously, he
was Vice president of Thermo Electron Corporation from 1988 to 1991 and was
Treasurer of Thermo Electron Corporation from 1967 to 1988. He also serves as a
director of Thermedics Inc. and ThermoTrex Inc.
Woodie Flowers, Ph.D., is the Pappalardo Professor of Mechanical Engineering at
Massachusetts Institute of Technology. Professor Flowers also served as a
Professor of Teaching Innovation at the MIT School of Engineering from 1991 to
1993 and was Head of the Systems Design Division at MIT from 1989 to 1991. He
also serves as a director of Nypro, Inc. and is a member of the National Academy
of Engineering.
Byron O. Pond is Chairman Emeritus of Arvin Industries, Inc. Mr. Pond has been
a senior executive with Arvin Industries, Inc. since 1990 serving as its
President and Chief Executive Officer from 1993 to 1996 and as its Chairman and
Chief Executive Officer from 1996 to 1998.
Benjamin J. Virgilio is the President and Chief Executive Officer of Rea
International Inc., an automotive fuel systems manufacturer. Prior to May 1995,
Mr. Virgilio was a business consultant. Prior to November 1993, he was
President and Chief Executive Officer of A.G. Simpson Limited.
William B. Waite has been a Corporate Director since 1995. Prior to September
1995, Mr. Waite was President and Chief Executive Officer of Siemens Electric
Limited.
Charles D. Winston served as President and Chief Executive Officer of General
Scanning Inc. from September 1988 until the Merger. Since March 1999, he has
served as Chief Executive Officer of the merged entities, and since November
1999 he has also served as President.
5
<PAGE>
SECURITY OWNERSHIP OF DIRECTORS AND MANAGEMENT
The following table shows the number of common shares, the Company's only class
of equity securities, of the Company beneficially owned by each of the
directors, the Named Executive Officers (see "Executive Compensation" below), as
well as by the directors, and the executive officers of the Company as a group,
as at the date of this circular:
<TABLE>
<CAPTION>
NAME OF AMOUNT AND NATURE OF PERCENTAGE OF
BENEFICIAL OWNER BENEFICIAL OWNERSHIP(1) COMMON SHARES
------------------------ ----------------------------- -----------------------
<S> <C> <C>
Robert J. Atkinson [1,000] *
Retired Chairman
Kanata, Ontario
Patrick D. Austin, [115,834](2) .33%
Vice President, Sales
Ojai, CA
Richard B. Black, [14,817](3) .04%
Director
New York, NY
Paul F. Ferrari, [149,518](4) .43%
Chairman
Hobe Sound, FL
Woodie C. Flowers, [42,296](5) .12%
Director
Weston, MA
Michael R. Kampfe [145,298](6) .42%
Vice President,
Operations
Chestnut Hill, MA
Warren Scott Nix, [205,750](7) .59%
Former President and
Chief Executive Officer
West Lake Village, CA
Kurt A. Pelsue [114,411](8) .33%
Vice President
Technology
Wayland, MA
Byron O. Pond 0 *
Director
Chicago, IL
</TABLE>
6
<PAGE>
<TABLE>
<S> <C> <C>
Ben J. Virgillio, [10,667](9) .03%
Director
Kleinberg, ON
William B. Waite [0] *
Director
Canada
Charles D. Winston, [235,735](10) .68%
President, Chief Executive
Officer and Director
Oxnard, California
All directors, nominees for [1,215,409] 3.5%
directors and executive
officers as a group (14
persons)
</TABLE>
* Less than .01%.
(1) A person is deemed to be the beneficial owner of securities that can be
acquired by such person within 60 days from March 31, 2000, whether
pursuant to the exercise of options, conversion of securities or otherwise.
Each beneficial owner's percentage of ownership is determined by assuming
that options that are held by such person (but not those held by any other
person) and which are exercisable (or convertible) within 60 days of March
31, 2000 have been exercised. Unless otherwise noted in the footnotes
below, the Company believes all persons named in the table have sole voting
power and investment power with respect to all common shares beneficially
owned by them. Statements as to ownership of common shares are based upon
information obtained from the directors, nominees and executive officers
and from records available to the Company.
(2) [All common shares subject to options].
(3) [Includes 8,082 common shares subject to options].
(4) Includes [24,920] common shares subject to options.
(5) Includes [2,694] common shares subject to options.
(6) Includes [44,987] common shares subject to options
(7) Includes [120,000] common shares subject to options.
(8) Includes [39,113] common shares subject to options, and 6,763 shares held
in trust for children
(9) Includes [6,667] common shares subject to options.
(10) Includes [114,116] common shares subject to options. [Does not include
75,000 shares which may be acquired upon achieving certain performance
goals which the Company does not expect to be reached within 60 days.]
EXECUTIVE COMPENSATION
The following table, presented in accordance with the rules of the United States
Securities and Exchange Commission and applicable Canadian securities laws, sets
forth information with respect to the compensation earned during the fiscal
years ended December 31, 1999, 1998 and 1997 by each person who served as the
Company's Chief Executive Officer in 1999 and the four other most highly
compensated executive officers of the Company at year end (the "Named Executive
Officers").
7
<PAGE>
SUMMARY COMPENSATION TABLE
(All figures rounded to the nearest dollar)
<TABLE>
<CAPTION>
Long-Term
Compensation
Annual Compensation Awards
--------------------------------------------- ------------------------------------
Securities
Name and Fiscal Other Annual Under Options All Other
Principal Position Year Salary Bonus Compensation Granted Compensation
----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Robert J. Atkinson (1) (11) 1999 $171,768 $ ---- $ 47,173(3) ----
1998 178,508 ---- 43,650(3) 100,000
Retired Chairman 1997 183,956 25,278 41,944(3) 100,000
Charles D. Winston(4) 1999 343,000 75,000 (2) 506,074(4) $82,946(5)
President & CEO
Warren Scott Nix(6) 1999 299,038 ---- (2) 140,000
Former President & CEO 1998 275,000 ---- (2) 120,000
1997 275,000 37,500 (2) 240,000 60,000(7)
Patrick D. Austin 1999 199,340 82,950 (2) 50,000
V.P. Sales 1998 153,000 18,337 23,456(8) 70,000
1997 153,000 25,400 (2) 40,000
Michael R. Kampfe(9) 1999 176,850 45,000 (2) 198,536(9)
V.P. Operations
Kurt A. Pelsue(10) 1999 161,250 33,000 (2) 143,866(10)
V.P. Technology
</TABLE>
(1) Mr. Atkinson retired as Chairman on January 1, 2000.
(2) Perquisites and Personal Benefits do not exceed the lesser of $50,000 and
10% of the total of the annual salary and bonus of the executive.
(3) For 1999, 1998 and 1997, includes total amounts accrued of $39,419, $35,738
and $34,689 with respect to a deferred retirement benefit.
(4) Mr. Winston became the CEO on March 22, 1999 and also President in November
1999. Prior to that time, Mr. Winston was employed by General Scanning
Inc. Salary includes earnings from both companies. Options granted during
the year include those assumed by the Company at the time of the merger, as
described further in the section dealing with stock options.
(5) Includes $82,946 with respect to relocation expenses.
(6) Mr. Nix served as President and Chief Executive Officer until March 22,
1999, and as President and Chief Operating Officer until he resigned on
October 26, 1999.
(7) Includes $60,000 with respect to the forgiveness of a demand loan.
(8) For 1998, includes $9,412 with respect to the 401K Company match, and
$8,700 of automobile allowance.
8
<PAGE>
(9) Mr. Kampfe became the V.P. Operations on March 22, 1999. Prior to that
time, Mr. Kampfe was employed by General Scanning Inc. Salary includes
earnings from both companies. Options granted during the year include
those assumed by the Company at the time of the merger, as described
further in the section dealing with stock options.
(10) Mr. Pelsue became the V.P. Technology on March 22, 1999. Prior to that
time, Mr. Pelsue was employed by General Scanning Inc. Salary includes
earnings from both companies. Options granted during the year include
those assumed by the Company at the time of the merger, as described
further in the section dealing with stock options.
(11) For 1999, 1998 and 1997 compensation paid in Canadian dollars has been
translated to U.S. dollars at the following average annual rates: 0.6736,
0.6741 and 0.7222.
STOCK OPTION PLANS
The Company has entered into option agreements ("Option Agreements") dated May
11, 1994 (the "Date of Grant") with five executive officers under which options
to purchase 700,000 common shares were granted, at an exercise price of Cdn$4.00
per share. As at the date hereof there are options to acquire 26,250 common
shares outstanding under the Option Agreements. The options granted pursuant to
the Option Agreements will expire on September 14, 2001.
On September 1, 1994, the Company adopted a stock option plan for key employees
and directors (the "Plan").
As of the date hereof, there were outstanding options held by 49 employees and
directors to acquire 100,200 common shares under the Plan, all of which options
were granted on September 1, 1994. The exercise price of all outstanding
options under the Plan is Cdn$7.00 per share. All outstanding options under the
Plan will expire September 14, 2001. No additional options will be granted
under the Plan.
On September 14, 1995, the Company established the 1995 Stock Option Plan for
Employees and Directors (the "1995 Plan") for the benefit of employees
(including contract employees) and directors of the Company. Subject to the
requirements of the 1995 Plan, the Compensation Committee or in lieu thereof,
the Board of Directors, has the authority to select those directors and
employees to whom options will be granted, the number of options to be granted
and the price at which the common shares may be purchased and to otherwise
administer the 1995 Plan. The exercise price of options granted under the 1995
Plan must be equal to the closing price of the Company's common shares on The
Toronto Stock Exchange or in lieu thereof, Nasdaq, on the trading day
immediately preceding the date of grant. The exercise period of each option is
determined by the Compensation Committee but may not exceed 10 years. A maximum
of 2,906,000 options to purchase common shares are permitted to be issued under
the 1995 Plan. The Compensation Committee has the power to amend, modify or
terminate the 1995 Plan provided that optionee rights are not materially
adversely affected and subject to any approvals required under the applicable
regulatory requirements. As at the date hereof, options to purchase an aggregate
of approximately 2,157,268 common shares are outstanding under the 1995 Plan to
employees and directors at prices ranging from Cdn$6.50 per share to Cdn$28.60
per share and from US$4.38 per share to US$28.60 per share. Generally, at the
time a stock option is exercised, for U.S. tax purposes the optionee will
realize compensation taxable as ordinary income, and the Company will be
entitled to a deduction, in an amount equal to the difference between the fair
market value on the exercise date of the common shares acquired on exercise and
the exercise
9
<PAGE>
price. At the meeting, shareholders will be asked to consider a resolution to
increase the number of options which are permitted to be granted under the 1995
Plan to 4,906,000. See "Resolution No. 1 - Proposal to Amend the 1995 Stock
Option Plan."
No past financial assistance has been given to participants to assist them in
purchasing common shares under the 1995 Plan, nor is such financial assistance
contemplated. The 1995 Plan contains no provision for the Company to provide
any such assistance.
In accordance with the terms of the Merger, all outstanding options or warrants
to purchase General Scanning Inc. common stock were assumed by the Company and
currently represent options to purchase an aggregate of approximately 2,142,423
common shares of the Company.
OPTION GRANTS DURING THE FISCAL YEAR ENDED DECEMBER 31, 1999
The following table provides information regarding options granted by the
Company during the fiscal year ended December 31, 1999 to the Named Executive
Officers. Twenty-five per cent of the options granted to each named Executive
Officer will vest on each of the 1st, 2nd, 3rd and 4th anniversaries of the date
of grant.
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE VALUE
AT ASSUMED ANNUAL RATE OF
SHARE PRICE APPRECIATION
FOR OPTION TERM (1)
PERCENT OF ---------------------------
NUMBER TOTAL OPTIONS
OF SHARES GRANTED TO EXERCISE
UNDERLYING EMPLOYEES OR BASE EXPIRATION
NAME OPTIONS GRANTED IN FISCAL YEAR PRICE ($/SH)(1) DATE (2) 5% ($) 10% ($)
------------------- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Charles D. Winston 190,000 11.7 $4.38 8/11/2005 $521,819 $1,323,848
President & CEO
Warren Scott Nix 140,000 8.6 $4.38 8/11/2005 $384,498 $ 975,467
Former President
& CEO
Patrick D. Austin 50,000 3.0 $4.38 8/11/2005 $137,321 $ 348,381
V.P. Sales
Michael R. Kampfe 80,000 4.9 $4.38 8/11/2005 $219,713 $ 557,410
V.P. Operations
Kurt A. Pelsue 45,000 2.7 $4.38 8/11/2005 $123,589 $ 313,543
V.P. Technology
</TABLE>
(1) This column shows the hypothetical gain of the options granted based on
assumed annual share appreciation rates of 5% and 10% above the exercise
price over the full term of the option. The 5% and 10% rates of
appreciation are mandated by the rules of the Commission and do not
represent the Company's estimate of future the Company's common share
prices.
10
<PAGE>
AGGREGATED OPTION EXERCISES DURING THE FISCAL YEAR ENDED DECEMBER 31, 1999,
AND FISCAL YEAR END OPTION VALUES
<TABLE>
<CAPTION>
Value (2) of Unexercised
Securities Aggregate Unexercised Options at in-the-Money Options at
Name and Acquired Value December 31, 1999 December 31, 1999
Principal Position On Exercise Realized (1) Exercisable/Unexercisable Exercisable/Unexercisable
(#) ($) (#) (#) ($) ($)
---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
81,250 $567,450 CDN -- 100,000 -- $ 550,000 CDN
Robert J. Atkinson
Retired Chairman
-- -- 100,646 405,428 $399,056 $2,117,206
Charles D. Winston
President & CEO
5,000 $2,250 CDN 73,750 120,000 $551,500 CDN $ 660,000 CDN
Warren Scott Nix
Former President
& CEO
-- -- 39,168 133,332 $ 72,500 CDN $ 385,000 CDN
Patrick D. Austin $ 421,000 US
V.P. Sales
-- -- 39,599 158,937 $196,836 $ 952,506
Michael R. Kampfe
V.P. Operations
2,694 $18,853 33,725 110,141 $154,376 $ 594,259
Kurt A. Pelsue
V.P. Technology
</TABLE>
(1) Market value of the underlying shares on the date of exercise less the
option exercise price. Values reported are in USD unless otherwise
specified.
(2) Market value of shares covered by in-the-money options on December 31,
1999, less the option exercise price. Options are in-the-money if the
market value of the share covered thereby is greater than the option
exercise price. Values reported are in USD unless otherwise specified.
MANAGEMENT CONTRACTS AND INDEBTEDNESS
The Company has entered into termination agreements (the "Agreements") with its
Chief Executive Officer, Charles Winston and with certain members of its
executive management team, including Pat Austin, Des Bradley and Michael Kampfe.
Each Agreement provides for a severance payment if the employee's employment
with the Company is terminated without cause.
Under the Agreement entered into with Mr. Winston the severance payment is equal
to twice the sum of (1) annual salary plus (2) average target and actual bonus
payments for the last two years plus (3) the cost to the Company of certain
employment benefits. If the severance payment occurs following of a change of
control of the Company, the benefit is calculated as three times the previously
noted sum.
11
<PAGE>
Under the Agreements entered into with each of Messrs. Austin, Kampfe and
Pelsue, the severance payment is equal to a factor (one month multiplied by the
number of months employed with the Company, minimum one year, maximum two
years), multiplied by the sum of (1) annual salary plus (2) average target and
actual bonus payments for the last two years plus (3) the cost to the Company of
certain employment benefits. If the severance payment occurs following a change
of control of the Company, the factor is increased by one year.
The Agreement with Mr. Austin was effective January 1, 1998 and the Agreements
with Mr. Winston, Mr. Kampfe and Mr. Pelsue were effective May 1, 9999. These
Agreements will continue for a minimum term of three years from their respective
effective dates and will automatically extend for periods of one year after the
initial term unless notice is given by the Company or the individual at least
ninety days prior to the expiration of the current period that the Agreement
shall not be extended.
Mr. Scott Nix resigned as a director and officer of the Company on October 27,
1999. Pursuant to a severance agreement entered into between Mr. Nix and the
Company, Mr. Nix is entitled to receive the following benefits: (a) his base
salary ($300,000 per year) for a period of 12 months; (b) a bonus of $60,000 to
paid January 1, 2001; (c) reimbursement for outplacement services and re-
employment counseling to a maximum of $25,000 and for legal and accounting
advice to a maximum of $5,000 (d) continuation, for a period of 12 months or
until he becomes re-employed, whichever occurs first, of certain health and
medical insurance benefits.
COMPOSITION OF COMPENSATION COMMITTEE
The Compensation Committee (the "Committee") determines all aspects of
compensation payable to the Chief Executive Officer and the other Named
Executive Officers (see "Summary Compensation Table"). Prior to the Merger, the
Committee was composed of three members of the then existing Board of Directors,
namely Benjamin J. Virgilio, Charles J. Gardner, and Atsushi Naitoh. Mr.
Gardner was Secretary of the Company, but, at that time, was not an employee.
Subsequent to the Merger and as at December 31, 1999 the members of the
Committee were Paul F. Ferrari, Benjamin J. Virgilio and Richard B. Black.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The executive compensation policy of the Company has as its goals the following:
(1) to provide executives with compensation that is fair and competitive
in the market place;
(2) to incent executives to meet and exceed financial and other strategic
objectives; and
(3) to raise the perspectives of executives from simply increasing the
size of the Company to taking a strategic path toward increasing
shareholder value.
12
<PAGE>
Salary
Base salaries are determined on an individual basis taking into consideration
the individual's position in the Company, the individual's ability to contribute
to the Company's performance and amounts paid by technology companies of similar
size for comparable positions.
Annual Bonus
Each executive officer has the opportunity to earn an annual bonus. The amount
of the bonus is tied to specific financial goals that are approved by the
Compensation Committee. The amount of the potential bonuses vary based upon the
executive officer's position in the Company, ability to impact on Company
performance and degree of responsibility.
Long Term Incentives
Executives may participate in the Company's stock option plans (the "Plans").
The Plans are administered by the Compensation Committee which designates the
individuals who are to be granted options, the number of options to be granted
and other terms and conditions of the options. The number of stock options
granted to executive officers are based upon the same factors as are relevant in
setting their salaries and annual bonuses.
Chief Executive Officer's Compensation
During the most recently completed financial year, Warren S. Nix served as the
Company's Chief Executive Officer from January 1, 1999 to March 22, 1999, and
Charles D. Winston served as the Company's Chief Executive Officer thereafter.
In setting each of the Chief Executive Officer's salary and target bonus for the
year ended December 31, 1999, the Committee reviewed salaries and bonuses paid
to other chief executive officers of technology companies of similar size and
considered their respective abilities to impact on the achievement of the
Company's objectives. For the year ended December 31, 1999, Mr. Nix's target
bonus was 60% of his base salary. Options to purchase 140,000 common shares
were granted to Mr. Nix in 1999 at an exercise price of $4.38US. For the year
ended December 31, 1999, Mr. Winston's target bonus was 70% of his base salary.
Options to purchase 190,000 common shares were granted to Mr. Winston in 1999 at
an exercise price of $$4.38US.
Report Submitted by: Benjamin J. Virgilio
Richard B. Black
Byron O. Pond
13
<PAGE>
COMPENSATION OF DIRECTORS
During the most recently completed financial year, Company directors who were
not employees of the Company received an annual retainer of $10,000 and an
attendance fee of $1,000 ($500 for telephone meetings) for attending meetings of
shareholders, the Board of Directors and committees of the Board of Directors.
In addition, Committee Chairmen and Members received annual retainers of $4,000
and $2,000 respectively. All amounts are paid in the currency of residence of
the director. In addition, upon initial election, they receive an option to
purchase 15,000 common shares of the Company with an exercise price of fair
market value on the date of grant. Directors who are employees of the Company
receive no remuneration for serving as members of the Board of Directors. All
directors were entitled to reimbursement by the Company for all reasonable
expenses incurred in attending meetings of shareholders, the Board of Directors
and committees of the Board of Directors.
RELATED PARTY TRANSACTIONS
During the most recently completed financial year the Company had sales to
Sumitomo Heavy Industries Ltd. of 11.7 million dollars and the Company purchased
from Sumitomo Heavy Industries Ltd. all of the shares of Lumonics Pacific
Katushiki Kaisha for 1.3 million dollars.
CORPORATE GOVERNANCE
The Toronto Stock Exchange Committee on Corporate Governance in Canada has
issued a series of guidelines for effective corporate governance. The
guidelines address matters such as the constitution and independence of
corporate boards, the function to be performed by boards and their committees
and the effectiveness and education of board members. The Toronto Stock
Exchange has adopted as a listing requirement the disclosure by each listed
corporation of its approach to corporate governance with reference to the
guidelines.
The Company's Board of Directors and senior management believe that good
corporate governance is important to the effective and efficient operation of
Canadian corporations. The Company's disclosure of its corporate governance
practises is set out in matrix form and attached to this management proxy
circular as Schedule "B".
DIRECTORS' AND OFFICERS' LIABILITY INSURANCE
The Company maintains directors' and officers' liability insurance in the
aggregate principal amount of $35,000,000 subject to a $1,000,000 deductible per
loss payable by the Company. The premium payable for such insurance is
currently $104,000 per year, which is paid by the Company.
14
<PAGE>
INVESTMENT PERFORMANCE GRAPHS
The following graph assumes an investment of Cdn$100 on September 28, 1995 (the
date of the closing of the Company's initial public offering) and compares the
yearly percentage change in the cumulative total shareholder return on such
investment to the cumulative total return on The Toronto Stock Exchange 300
Composite Index for the period which commenced September 28, 1995 and ended on
December 31, 1999.
<TABLE>
<CAPTION>
Date TSE 300 GSI Lumonics (Canadian $)
<S> <C> <C>
September 28, 1995 4,521.45 14.38
December 29, 1995 4,713.54 19.38
March 29, 1996 4,970.83 25.50
June 28, 1996 5,044.07 28.00
September 30, 1996 5,291.07 27.00
December 31, 1996 5,927.03 25.00
March 31, 1997 5,850.22 25.40
June 30, 1997 6,437.74 28.60
September 30, 1997 7,040.23 27.50
December 31, 1997 6,699.44 26.25
March 31, 1998 7,558.50 23.00
June 30, 1998 7,366.89 12.90
September 30, 1998 5,614.12 7.80
December 31, 1998 6,485.94 7.40
March 31, 1999 6,597.79 7.25
June 30, 1999 7,010.07 5.80
September 30, 1999 6,957.72 8.70
December 31, 1999 8,413.75 12.80
</TABLE>
15
<PAGE>
The following graphs assume an investment of US$100 on March 22, 1999 (the date
on which the Company's shares commenced trading on the Nasdaq National Market)
and compares the percentage change in the cumulative total shareholder return on
such investment to the cumulative total return on (1) the Nasdaq Composite Index
and (2) the Standard and Poor Small Cap 600 Electronics Equipment Subindex.
(1) The Nasdaq Composite Index
<TABLE>
<CAPTION>
Date GSI Lumonics NASDAQ
<S> <C> <C>
March 22, 1999 5.313 2,395.94
March 31, 1999 4.625 2,461.40
April 30, 1999 4.250 2,542.85
May 31, 1999 4.625 2,470.52
June 30, 1999 3.813 2,686.12
July 30, 1999 4.188 2,638.49
August 31, 1999 5.313 2,739.35
September 30, 1999 5.938 2,746.16
October 29, 1999 6.313 2,966.43
November 30, 1999 8.813 3,336.16
December 31, 1999 8.750 4,069.31
</TABLE>
(2) Standard and Poor Small Cap 600 Electronics Equipment Subindex
<TABLE>
<CAPTION>
Date GSI Lumonics S&P Small Cap Electrical Equipment Index
<S> <C> <C>
March 22, 1999 5.313 129.27
March 31, 1999 4.625 133.48
April 30, 1999 4.250 150.75
May 31, 1999 4.625 160.33
June 30, 1999 3.813 169.42
July 30, 1999 4.188 165.41
August 31, 1999 5.313 156.74
September 30, 1999 5.938 162.94
October 29, 1999 6.313 157.30
November 30, 1999 8.813 187.29
December 31, 1999 8.750 214.35
</TABLE>
16
<PAGE>
APPOINTMENT OF AUDITORS
The persons named in the accompanying form of proxy intend to vote for the
reappointment of Ernst & Young as auditors of the Company to hold office until
the annual meeting of shareholders in 2001. Ernst & Young have served as
auditors of the Company since 1993.
Arrangements have been made for one or more representatives of Ernst & Young to
attend the Meeting, which representatives will be given an opportunity to make a
statement if they so desire, and to answer appropriate questions.
RESOLUTION NO. 1 - AMENDMENT TO 1995 STOCK OPTION PLAN
The holders of the common shares will be asked to consider and, if thought
satisfactory, to approve, with or without variation, Resolution No. 1, the full
text of which is set out in Schedule "A" to this Management Proxy Circular,
which resolution relates to the approval of an amendment to the Company's 1995
Stock Option Plan, as amended (the "1995 Plan"). The Board of Directors
approved the amendment to the 1995 Plan and shareholder approval is required to
meet the Rules of The Toronto Stock Exchange. At the date hereof, the amendment
to the 1995 Plan is subject to approval by shareholders and by the Toronto Stock
Exchange.
The 1995 Plan is intended to encourage ownership of common shares by employees
(including contract employees) and directors and thereby provide additional
incentive for them to promote the success of the Company in a highly competitive
business environment. Under the 1995 Plan, the maximum number of common shares
which may be issued is 2,906,000 of which 320,718 are unissued as at the date
hereof. The 1995 Plan is more fully described herein under the heading "Stock
Option Plans." In the view of the Board of Directors, it is necessary and
appropriate to increase the specified maximum number of common shares issuable
under the 1995 Plan in order to permit the continued grant of options to attract
and retain talented individuals in accordance with the purposes of the 1995
Plan. Accordingly, the Board of Directors has determined that the total maximum
number of common shares reserved for issuance under the 1995 Plan should be
increased by 2,000,000 to 4,906,000. The new specified maximum number of shares
that may be issuable under the 1995 Plan would represent approximately 14% of
the issued and outstanding common shares at the date hereof. This increase in
the 1995 Plan together with other common shares reserved for issuance pursuant
to share compensation arrangements of the Company represents approximately 6% of
the issued and outstanding common shares as of the date hereof.
The Toronto Stock Exchange Policy requires a specified maximum number of shares
issuable under the 1995 Plan to be stated therein. The Toronto Stock Exchange
Policy also requires a shareholder vote to be taken where, among other matters,
the maximum number of shares reserved for issuance pursuant to the stock options
may exceed 10% of the outstanding shares.
17
<PAGE>
Recommendation of the Board of Directors
The Board of Directors recommends that the shareholders approve the amendment to
the 1995 Plan and vote for the adoption of Resolution No. 1. In order to be
effective, Resolution No. 1 must be approved by a majority of votes cast at the
meeting.
OTHER BUSINESS
Management does not know of any matters to be brought before the Meeting other
than those set forth in the Notice accompanying this Circular.
PROPOSALS
Proposals of shareholders intended for inclusion in next year's Management Proxy
Circular must be received by the Company on or before January 1, 2001.
Shareholder proposals not intended for inclusion in next year's Management Proxy
Circular will be considered untimely if received later then February 21, 2001.
DIRECTORS' APPROVAL
The contents and the sending of this Management Proxy Circular have been
approved by the directors.
Ottawa, Ontario
March 22, 2000
By order of the Board of Directors
Charles Gardner, Q.C.
Secretary
18
<PAGE>
SCHEDULE "A"
RESOLUTION NO. 1
Amendment to 1995 Stock Option Plan
-----------------------------------
BE IT RESOLVED AS AN ORDINARY RESOLUTION OF THE SHAREHOLDERS THAT:
1. the proposed amendment to the 1995 Plan increasing the number of shares
reserved for issuance under the 1995 Plan by 2,000,000 to an aggregate
total of 4,906,000, which change is more particularly set forth in the
Management Proxy Circular for the Company's Annual and Special Meeting of
Shareholders on May 8, 2000 be and the same are hereby authorized and
approved; and
2. any officer or director of the Company be and is hereby authorized and
directed, for and on behalf of the Company, to execute and deliver all such
documents and to do all such acts and things as he or she may determine to
be necessary or desirable in order to carry out the foregoing provisions of
this resolution, the execution of any such document or the doing of any
such acts and things being conclusive evidence of such determination.
A-1
<PAGE>
SCHEDULE "B"
Corporate Governance
<TABLE>
<CAPTION>
Does the
Company
TSE Corporate Governance Guideline Comply? Comments
----------------------------------------- ---------- ---------------------------------------------------
<S> <C> <C>
1. The Board should explicitly
assume responsibility for the
stewardship of the Corporation,
and specifically for:
(i) adoption of a strategic planning Yes (i) one Board meeting per year is set aside for a
process review of management's strategic direction,
guidelines and plans
(ii) identification of principal Yes (ii) the Board has specifically identified the
risks of the Corporation's business Company's principal risks and manages these risks
and ensuring the implementation of through regular appraisal of management's practices
appropriate systems to manage these
risks
(iii) succession planning, including Yes (iii) the Board reviews its organization
appointing, training and monitoring structure and succession planning matters at least
of senior management annually
(iv) communications policy Yes (iv) the Board has approved, and reserves the
right to review and approve, amendments to the
Corporation's policies relating to communications
between the Company, it's shareholders and the
public. In furtherance of this responsibility the
Board is obliged to approve any public information
releases of a material nature
(v) the integrity of the Yes (v) the Board, through the appointment of various
Corporation's internal control and committees, or through the review and approval of
management information systems the plans of various committees of management has
assured itself of an effective means of monitoring
the integrity of the Company's system of internal
control. Each of the following committees is
responsible for periodically reporting to the
Board on the noted areas:
. Audit Committee: compliance of all financial
reporting with accounting principles and oversight
of all financial plans
. Compensation Committee: fixing the remuneration
for the Chief Executive Officers and other senior
executives who report to the Chief Executive
Officer, and administration of the Company's stock
option plans
</TABLE>
B-1
<PAGE>
<TABLE>
<S> <C> <C>
2. Majority of Directors to be Yes Mr. Winston (President and CEO) is the only
"unrelated" related Director
3. Disclosure for each Director Yes Related - Charles D. Winston, President and CEO of
whether related or unrelated and the the Company
basis of the conclusion
For the remainder of the proposed Directors none
of them or their associates have:
- worked for the Company
- material contracts with the Company
- received remuneration from the Company in excess
of Director fees
Black Unrelated
Ferrari Unrelated
Flowers Unrelated
Pond Unrelated
Virgillio Unrelated
Waite Unrelated
4. a) Appoint a Committee of the Currently, the Board has responsibility for
Board responsible for nominating new directors
appointment/assessment of
Directors
b) Composed exclusively of
non-management Directors the
majority of whom are unrelated
5. Implement a process for assessing Yes Currently, the Board monitors the effectiveness of
the effectiveness of the Board, its the relationship between management and the Board,
committees and individual directors the effectiveness of Board operations, the
operations of Board committees and that of
individual directors, to recommend improvements to
each of the above
6. Provide orientation and education Yes Currently, the Board is responsible for the
programs for new Directors orientation and education of new Directors
7. Review and where appropriate, to Yes Board membership is set at seven (7) which is
reduce, the size of the Board to considered optimum
promote more effective decision
making
8. Review and ensure that the Yes The Board ensures director compensation levels are
compensation of Directors reflects sufficiently reflective of responsibilities and
the responsibilities and risks risks involved
involved
</TABLE>
B-2
<PAGE>
<TABLE>
<S> <C> <C>
9. Committees of the Board should Yes All Board committees are composed entirely of
generally be composed of outside outside Directors
Directors who are unrelated
10. Assign responsibility for the Currently, the Company does not have a Corporate
Board's approach to governance Governance Committee, but regularly reviews
issues to a committee of the Board matters pertaining to governance including
committee membership and mandates, making
recommendations for change and for other such
initiatives which may be deemed in the interest of
the Board in order to improve corporate governance
11. Define limits to management's
responsibilities by developing
mandates for:
a) the Board Yes The Board reviews and approves significant
operational and financial matters and provides
direction to management on these matters
b) the CEO, and approving the Yes The CEO's mandate, which includes the general
CEO's corporate objectives mandate to maximize shareholder value, is
established year to year in the form of the annual
corporate objectives and strategic directions
which are subject to Board approval
12. Ensure the Board is able to Yes Six of seven Board members are outside Directors
function independently of management and all Board committees are composed entirely of
outside Directors
13. a) Establish an Audit Committee Yes The Company's Audit Committee is mandated to:
with a specifically defined
mandate
- monitor audit functions and the preparation of
financial statements
- approve press releases on financial results
- review annual information circulars as well as
any material change reports and prospectuses
- meet with outside auditors independent of
management where appropriate
- review and approve foreign currency risk
strategies and the Corporation's investment policy
b) All members of the Audit Yes
Committee are outside Directors
14. Provide for the engagement of
outside advisors by individual Yes Individual Directors may engage the services of an
Directors at the Corporation's outside advisor with the approval of the Board
expense
</TABLE>
B-3
<PAGE>
GSI LUMONICS INC.
PROXY FOR THE ANNUAL AND SPECIAL MEETING TO BE HELD ON MAY 8, 2000
THIS PROXY IS SOLICITED ON BEHALF OF MANAGEMENT OF THE CORPORATION
The undersigned shareholder of GSI Lumonics Inc. (the "Corporation") hereby
appoints Charles Winston or failing him, Desmond Bradley, or instead of them
_________________________ as proxy of the undersigned with the power of
substitution to attend and vote for and on behalf of the undersigned at the
Annual and Special Meeting of the Shareholders of the Corporation to be held on
Monday, May 8, 2000 and at any adjournment or adjournments thereof, in the same
manner, to the same extent and with the same powers as if the undersigned were
present at the said meeting or any adjournment or adjournments thereof and
without limiting the general authorization and power hereby granted, the persons
named above are specifically directed to vote as follows:
1. VOTE FOR [_] AGAINST [_] or ABSTAIN [_]
(IF NO SPECIFICATION IS MADE, VOTE FOR) the resolution, if proposed at
the Meeting, permitting two or more director nominees to be elected by
a single resolution and vote as opposed to electing each director
nominee by way of separate resolution and vote.
2. ELECTION OF DIRECTORS LISTED IN THE ACCOMPANYING MANAGEMENT PROXY CIRCULAR.
The undersigned casts the number of votes equal to the number of
common shares held by the undersigned multiplied by 7: The
distribution of votes among the nominees is as indicated below. A
vote in favor of the election of more than one nominee without an
indication as to how the votes are to be distributed among the
nominees shall mean that the votes are to be distributed equally among
all nominees voted for by the undersigned. IF NO SPECIFICATION IS
MADE FOR ANY NOMINEE, IT SHALL MEAN THAT THE PROXY NOMINEES ARE
INSTRUCTED TO VOTE FOR ALL OF THE FOLLOWING NOMINEES WITH THE VOTES
DISTRIBUTED EQUALLY AMONG ALL NOMINEES.
Nominee Vote
Richard B. Black __________ FOR __________ WITHHOLD
Paul F. Ferrari __________ FOR __________ WITHHOLD
Woodie C. Flowers __________ FOR __________ WITHHOLD
Byron O. Pond __________ FOR __________ WITHHOLD
Ben J. Virgillio __________ FOR __________ WITHHOLD
William B. Waite __________ FOR __________ WITHHOLD
Charles D. Winston __________ FOR __________ WITHHOLD
1
<PAGE>
3. APPOINTMENT OF ERNST & YOUNG AS AUDITORS AND AUTHORIZING THE BOARD OF
DIRECTORS TO FIX THEIR REMUNERATION.
[_] Vote for [_] Withhold vote
4. RESOLUTION NO. 1 - PROPOSAL TO AMEND 1995 STOCK OPTION PLAN.
[_] Vote For [_] Vote Against
This proxy when properly executed will be voted in the manner directed herein by
the undersigned shareholder. If the officers named in this proxy are appointed
by the undersigned and no direction is made, such officers will vote in favor of
the resolution.
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY PROMPTLY USING THE ENCLOSED
ENVELOPE. If not dated, this proxy is deemed to bear the date on which it is
mailed by the person making the solicitation.
Dated the ________ day of _________________________, 2000.
________________________________
(Signature of Shareholder)
________________________________
(Signature if held jointly)
NOTES:
1. The shares represented by this proxy will be voted unless authority to vote
is withheld. This proxy confers authority for the above named to vote in
their discretion with respect to amendments or variations to the matters
identified in the notice of the meeting accompanying this proxy or other
matters which may properly come before the meeting.
2. Each shareholder has the right to appoint a person to represent such
shareholder at the meeting other than the persons specified above. Such
right may be exercised by inserting in the blank space provided the name of
the person to be appointed who need not be a shareholder of the Corporation.
3. This proxy is not valid unless signed and dated. Where shares are held
jointly, tenants both should sign. When signing as attorney, executor,
administrator, trustee or guardian, please give full title as such. If the
shareholder is a corporation, this proxy must be executed by an authorized
person under corporate seal. If a partnership, please sign in partnership
name by authorized person.
2
