<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER 28, 1999
REGISTRATION NO. 333-87665
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
AMENDMENT NO. 1
TO
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
METRON TECHNOLOGY N.V.
(Exact name of registrant as specified in its charter)
--------------------------
<TABLE>
<S> <C> <C>
THE NETHERLANDS 3559 98-0180010
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</TABLE>
------------------------
1350 OLD BAYSHORE HIGHWAY
SUITE 360
BURLINGAME, CALIFORNIA 94010
(650) 373-1133
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
--------------------------
EDWARD D. SEGAL
PRESIDENT AND CHIEF EXECUTIVE OFFICER
METRON TECHNOLOGY N.V.
1350 OLD BAYSHORE HIGHWAY
SUITE 360
BURLINGAME, CALIFORNIA 94010
(650) 373-1133
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
--------------------------
COPIES TO:
<TABLE>
<S> <C>
ALAN C. MENDELSON, ESQ. CHRISTOPHER L. KAUFMAN, ESQ.
SUZANNE SAWOCHKA HOOPER, ESQ. WILLIAM DAVISSON, ESQ.
COOLEY GODWARD LLP LATHAM & WATKINS
FIVE PALO ALTO SQUARE 135 COMMONWEALTH DRIVE
3000 EL CAMINO REAL MENLO PARK, CA 94025
PALO ALTO, CA 94306-2155 (650) 328-4600
(650) 843-5000
</TABLE>
------------------------
APPROXIMATE DATE OF PROPOSED SALE TO THE PUBLIC:
AS SOON AS PRACTICABLE AFTER THE REGISTRATION STATEMENT BECOMES EFFECTIVE.
--------------------------
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, as amended (the "Securities Act"), check the following box. / /
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. / /
If this Form is a post-effective amendment filed pursuant to
Rule 462(c) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. / /
If this Form is a post-effective amendment filed pursuant to
Rule 462(d) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. / /
If delivery of the Prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /
--------------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT THAT SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(a), MAY DETERMINE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
SUBJECT TO COMPLETION, DATED OCTOBER 28, 1999
The information in this prospectus is not complete and may be changed. We may
not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an offer
to sell these securities and we are not soliciting offers to buy these
securities in any state where the offer or sale is not permitted.
<PAGE>
3,750,000 SHARES
[LOGO]
COMMON SHARES
----------------
Metron Technology N.V. is offering 2,300,000 common shares, and the selling
shareholders are offering 1,450,000 common shares in a firmly underwritten
offering. Metron will not receive any of the proceeds from the sale of shares by
the selling shareholders. This is Metron's initial public offering, and no
public market currently exists for Metron's common shares. Metron anticipates
that the initial public offering price for its shares will be between $11.00 and
$13.00 per share. After the offering, the market price for Metron's shares may
be outside of this range.
------------------------
We have applied to list our common shares on the Nasdaq National Market
under the symbol "MTCH."
------------------------
INVESTING IN THE COMMON SHARES INVOLVES A HIGH DEGREE OF RISK. SEE "RISK
FACTORS" BEGINNING ON PAGE 6.
---------------------
<TABLE>
<CAPTION>
Per Share Total
--------- -----
<S> <C> <C>
Offering Price $ $
Discounts and Commissions to Underwriters $ $
Offering Proceeds to Metron $ $
Offering Proceeds to the Selling Shareholders $ $
</TABLE>
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if this
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
Metron Technology N.V. has granted the underwriters the right to purchase up
to an additional 562,500 common shares to cover over-allotments. The
underwriters can exercise this right at any time within thirty days after the
offering. Banc of America Securities LLC expects to deliver the common shares to
investors on , 1999.
BANC OF AMERICA SECURITIES LLC
SG COWEN
U.S. BANCORP PIPER JAFFRAY
----------------
The date of this Prospectus is , 1999.
<PAGE>
Graphic depicting certain of Metron's principals' names with arrows pointing
toward the Metron logo in the center of the page, below which arrows point
toward the names of certain of Metron's customers.
<PAGE>
Graphic depicting a map of the world indicating the locations of Metron's
offices and facilities.
<PAGE>
YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN THIS PROSPECTUS. WE
HAVE NOT AUTHORIZED ANYONE TO PROVIDE YOU WITH INFORMATION THAT IS DIFFERENT. WE
ARE OFFERING TO SELL, AND SEEKING OFFERS TO BUY, COMMON SHARES ONLY IN
JURISDICTIONS WHERE OFFERS AND SALES ARE PERMITTED. THIS PROSPECTUS MAY ONLY BE
USED WHERE IT IS LEGAL TO SELL THESE SECURITIES. THE INFORMATION IN THIS
DOCUMENT MAY ONLY BE ACCURATE ON THE DATE OF THIS PROSPECTUS, REGARDLESS OF THE
TIME OF DELIVERY OF THIS PROSPECTUS OR OF ANY SALE OF OUR EQUITY SHARES.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
Prospectus Summary.......................................... 3
Risk Factors................................................ 6
Use of Proceeds............................................. 18
Dividend Policy............................................. 18
Capitalization.............................................. 19
Dilution.................................................... 20
Selected Consolidated Financial Data........................ 21
Management's Discussion and Analysis of Financial Condition
and Results of Operations................................. 22
Business.................................................... 33
Management.................................................. 42
Certain Transactions........................................ 54
Principal and Selling Shareholders.......................... 57
Description of Capital Shares............................... 59
Shares Eligible for Future Sale............................. 64
Underwriting................................................ 66
Legal Matters............................................... 68
Experts..................................................... 68
Where You Can Find Additional Information................... 68
Index to Consolidated Financial Statements.................. F-1
</TABLE>
"METRON" AND THE METRON LOGO ARE REGISTERED TRADEMARKS OF METRON
TECHNOLOGY N.V. IN THE UNITED STATES AND OTHER JURISDICTIONS. ALL OTHER
TRADEMARKS OR SERVICE MARKS APPEARING IN THIS PROSPECTUS ARE TRADEMARKS OR
SERVICE MARKS OF THE RESPECTIVE COMPANIES THAT USE THEM.
<PAGE>
PROSPECTUS SUMMARY
THIS SUMMARY HIGHLIGHTS SELECTED INFORMATION CONTAINED ELSEWHERE IN THIS
PROSPECTUS. THIS SUMMARY DOES NOT CONTAIN ALL OF THE INFORMATION THAT YOU SHOULD
CONSIDER BEFORE INVESTING IN OUR COMMON SHARES. YOU SHOULD READ THE ENTIRE
PROSPECTUS CAREFULLY BEFORE MAKING AN INVESTMENT DECISION. THIS PROSPECTUS
CONTAINS FORWARD-LOOKING STATEMENTS WHICH INVOLVE RISKS AND UNCERTAINTIES. OUR
RESULTS COULD DIFFER MATERIALLY FROM THOSE ANTICIPATED IN THESE FORWARD-LOOKING
STATEMENTS AS A RESULT OF VARIOUS FACTORS, INCLUDING THOSE SET FORTH IN "RISK
FACTORS" AND THE CONSOLIDATED FINANCIAL STATEMENTS AND THE RELATED NOTES. EXCEPT
AS OTHERWISE INDICATED, ALL INFORMATION IN THIS PROSPECTUS ASSUMES NO EXERCISE
OF THE UNDERWRITERS' OVER-ALLOTMENT OPTION, THE EFFECTIVENESS OF AN AMENDMENT TO
OUR ARTICLES OF ASSOCIATION UPON COMPLETION OF THIS OFFERING AND THE CONVERSION
OF METRON TECHNOLOGY FROM A "B.V." INTO AN "N.V." UNDER NETHERLANDS LAW.
REFERENCES TO "GUILDERS" AND "NLG" ARE TO DUTCH GUILDERS, AND REFERENCES TO
"DOLLARS," "U.S.$" AND "$" ARE TO UNITED STATES DOLLARS.
METRON TECHNOLOGY
We are a leading global provider of marketing, sales, service and support
solutions to semiconductor materials and equipment suppliers and semiconductor
manufacturers. On behalf of semiconductor materials and equipment suppliers,
which we refer to as our principals, we provide a broad range of materials and
equipment to leading semiconductor manufacturers such as Advanced Micro Devices,
IBM, Intel, Lucent, Motorola, NEC Electronics, Philips, Infineon (Siemens) and
STMicroelectronics. This enables our customers to purchase a broad range of
products from a single supplier. We also provide semiconductor manufacturers
with the ability to outsource a wide variety of silicon wafer fabrication
facility, or fab, and equipment support services, such as materials management,
cleanroom services and facility maintenance. These services enable our customers
to increase fab productivity in a cost-effective manner, simplify and
standardize their materials and equipment purchases and focus on their core
competencies, such as product development, manufacturing and marketing. By
partnering with us, our principals can focus on product development and other
core competencies, reduce their time to market and use our global network to
better compete with larger companies that often have established sales, service
and support infrastructures. Our principals are both independent companies that
have developed emerging technologies and divisions of larger companies that have
other primary products and markets and include Cabot, Entegris, FSI, Komatsu,
Pall, Schumacher, SDI, Seiko Instruments and Zeiss.
Demand by semiconductor manufacturers for global solutions is being driven
by profitability pressures. As semiconductors have become increasingly complex,
the manufacturing process requires a wide range of complex and expensive
fabrication equipment and materials, and modern fabs can cost over $2.0 billion
to build. At the same time, semiconductor average selling prices have
consistently declined. Therefore, it is imperative that fabs quickly reach and
maintain optimal productivity levels in order to maximize their return on
investment. This necessitates around-the-clock manufacturing, which in turn
requires effective materials management and support services to minimize
equipment downtime.
We work closely with our principals to support semiconductor manufacturers
in numerous ways, from supplying materials to installing and servicing complex
equipment. Our materials offerings include an extensive array of over 15,000
items, including wafer carriers and shippers, fluid and gas handling components,
high purity chemicals and cleanroom products. Our equipment offerings include
cleaning, microlithography, which refers to the part of the fabrication process
during which an image is projected on to a wafer by passing light through a
photomask, metrology, which refers to the measurement and inspection of the
wafer during the fabrication process, photomask inspection and repair, which
refers to the inspection and repair, if necessary, of the glass or quartz
photomasks used during the microlithography process, and inspection and defect
characterization, which refers to the process by which silicon wafers are
inspected during and after fabrication, equipment. Our global infrastructure,
developed over our 25-year history in the semiconductor industry, provides our
principals with access to
3
<PAGE>
our extensive customer base, a technically sophisticated sales force and the
ability to effectively provide global product service and support in all major
semiconductor manufacturing markets in the world, except Japan.
Our goal is to be the leading global provider of marketing, sales, service
and support solutions to semiconductor materials and equipment suppliers and
semiconductor manufacturers. The key elements of our strategy include:
- leveraging our global infrastructure and expanding our leadership
position;
- continuing to broaden product and service offerings;
- expanding our materials business;
- fostering long-term relationships with our principals;
- acquiring complementary businesses; and
- expanding into Japan.
We were incorporated under the laws of The Netherlands in October 1975. Our
principal executive offices are located at 1350 Old Bayshore Highway,
Suite 360, Burlingame, California 94010, and our telephone number is
(650) 373-1133. The address of our web site is "www.metrontech.com." Information
contained on our web site is not a part of this prospectus.
THE OFFERING
<TABLE>
<S> <C>
Common shares offered by Metron...................... 2,300,000 shares
Common shares offered by the selling shareholders.... 1,450,000 shares
Common shares to be outstanding after this 12,404,261 shares
offering...........................................
Use of proceeds...................................... For working capital and general corporate
purposes. We may also use a portion of the
proceeds to acquire complementary businesses.
See "Use of Proceeds."
Proposed Nasdaq National Market symbol............... MTCH
</TABLE>
The number of common shares to be outstanding after this offering is based
on the number of shares outstanding as of August 31, 1999 and does not include
the following:
- 1,986,348 shares subject to options outstanding as of August 31, 1999 at a
weighted average exercise price of $5.50 per share;
- 828,952 shares that we could issue under employee stock plans; and
- 562,500 shares that may be purchased by the underwriters to cover
over-allotments, if any.
4
<PAGE>
SUMMARY CONSOLIDATED FINANCIAL DATA
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
THREE MONTHS
FISCAL YEAR ENDED MAY 31, ENDED AUGUST 31,
------------------------------ -------------------
1997 1998 1999 1998 1999
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
CONSOLIDATED STATEMENT OF OPERATIONS DATA:
Net revenue................................. $298,576 $275,024 $228,618 $56,922 $69,473
Cost of revenue............................. 241,675 222,028 189,295 46,596 57,332
-------- -------- -------- ------- -------
Gross profit................................ 56,901 52,996 39,323 10,326 12,141
Selling, general, administrative and other
expenses.................................. 49,417 48,997 43,391 11,321 10,489
Restructuring and merger costs.............. 258 881 2,550 806 --
-------- -------- -------- ------- -------
Operating income (loss)..................... 7,226 3,118 (6,618) (1,801) 1,652
Equity in net income (loss) of joint
ventures.................................. 273 (497) 267 44 (85)
Other expense, net.......................... (602) (71) (397) (212) (198)
-------- -------- -------- ------- -------
Income (loss) before income taxes........... 6,897 2,550 (6,748) (1,969) 1,369
Provision (benefit) for income taxes........ 2,699 1,448 (2,214) (703) 466
-------- -------- -------- ------- -------
Net income (loss)........................... $ 4,198 $ 1,102 $ (4,534) $(1,266) $ 903
======== ======== ======== ======= =======
Basic net income (loss) per share........... $ 0.40 $ 0.11 $ (0.44) $ (0.12) $ 0.09
Diluted net income (loss) per share......... $ 0.37 $ 0.10 $ (0.44) $ (0.12) $ 0.08
Shares used to compute basic net income
(loss) per share(1)....................... 10,386 10,369 10,325 10,341 10,104
Shares used to compute diluted net income
(loss) per share(1)....................... 11,195 11,112 10,325 10,341 11,179
</TABLE>
<TABLE>
<CAPTION>
AUGUST 31, 1999
----------------------------------------
PRO FORMA
ACTUAL PRO FORMA(2) AS ADJUSTED(3)
-------- ------------ --------------
<S> <C> <C> <C>
CONSOLIDATED BALANCE SHEET DATA:
Cash and cash equivalents.............................. $ 17,128 $ 17,128 $ 42,146
Working capital........................................ 23,993 23,993 49,011
Total assets........................................... 112,431 112,431 137,449
Total shareholders' equity............................. 30,831 32,804 57,822
</TABLE>
- ------------------------
(1) See Note 1 of Notes to Consolidated Financial Statements for an explanation
of the determination of the number of shares used in computing per share
data.
(2) Pro forma to give effect to the termination of certain put rights as a
result of the termination of a buy and sell agreement upon completion of
this offering.
(3) Adjusted to reflect the sale by Metron of 2,300,000 common shares, assuming
no exercise of the underwriters' over-allotment option, at an assumed
initial public offering price of $12.00 per share and the application of the
estimated net proceeds after deducting the underwriting discounts and
commissions and our estimated offering expenses.
5
<PAGE>
RISK FACTORS
YOU SHOULD CAREFULLY CONSIDER THE FOLLOWING RISK FACTORS AND ALL OTHER
INFORMATION CONTAINED IN THIS PROSPECTUS BEFORE PURCHASING OUR COMMON SHARES.
INVESTING IN OUR COMMON SHARES INVOLVES A HIGH DEGREE OF RISK. THE RISKS AND
UNCERTAINTIES DESCRIBED BELOW ARE NOT THE ONLY ONES THAT WE FACE. ADDITIONAL
RISKS AND UNCERTAINTIES NOT PRESENTLY KNOWN TO US OR THAT WE CURRENTLY BELIEVE
ARE IMMATERIAL ALSO MAY IMPAIR OUR BUSINESS OPERATIONS. IF ANY OF THE EVENTS
DESCRIBED IN THE FOLLOWING RISKS OCCUR, OUR BUSINESS, OPERATING RESULTS AND
FINANCIAL CONDITION COULD BE MATERIALLY ADVERSELY AFFECTED. IN ADDITION, THE
TRADING PRICE OF OUR COMMON SHARES COULD DECLINE DUE TO ANY OF THE EVENTS
DESCRIBED IN THESE RISKS, AND YOU MAY LOSE ALL OR PART OF YOUR INVESTMENT.
RISKS RELATED TO METRON.
WE ARE DEPENDENT ON A FEW KEY PRINCIPALS FOR A MAJORITY OF OUR REVENUE;
THEREFORE, THE LOSS OF ONE OR MORE OF OUR KEY PRINCIPALS COULD SERIOUSLY HARM
OUR BUSINESS.
If, for any reason, any of our key principals were to materially reduce
their business or terminate their relationship with us, the loss of the key
principal would have a material adverse effect on our business. In particular,
if our commercial relationship with FSI or Entegris were to materially change or
were terminated, our business would be significantly adversely affected due to
the large percentage of our revenue generated by sales of these companies'
products. For the fiscal year ended May 31, 1999, 24% of our total revenue was
generated from the sale of products manufactured by FSI and 21% from the sale of
products manufactured by Entegris. For more information about our relationships
with FSI and Entegris, see also the risk titled "We are significantly controlled
by FSI and Entegris, which may limit your ability to influence the outcome of
director elections and other shareholder matters" and "Certain Transactions." In
each of our last three fiscal years, a majority of our revenue came from the
sale of products from five or fewer of the semiconductor materials and equipment
companies we represent, who we refer to as our principals. Although the
principals that comprise our largest sources of revenue may change from period
to period, we expect that revenue from the sale of products of a relatively
small number of principals will continue to account for a substantial portion of
our revenue for the foreseeable future.
All of the semiconductor materials, equipment and products we market, sell,
service and support are sold pursuant to agreements with our principals. These
agreements are generally cancelable at will, subject to notification periods
which range from 30 days to two years. We generally do not sell competing
products in the same market, and therefore the number of principals we can
represent at any one time is limited. It is likely that in the future some of
our principals will terminate their relationships with us upon relatively short
notice. If we lose a key principal, we may not be able to find a replacement
quickly, or at all. The loss of a key principal may cause us to lose customers
and incur expenses associated with ending our agreement with that principal. We
may lose principals for various reasons, including:
- mergers and acquisitions involving our principals and other semiconductor
materials and equipment manufacturers that we do not represent;
- a principal's decision to attempt to build a direct sales organization;
- the expansion of a principal's product offerings to compete with the
products of another principal, because we generally do not offer competing
product lines;
- a principal's dissatisfaction with our level or quality of service; and
- the failure of a principal's business.
We have lost principals in the past. For example, after Ontrak was acquired
by Lam Research in August 1997, we ceased marketing and selling Ontrak products
in Europe in September 1998 and in
6
<PAGE>
South Korea in June 1998. In March 1999, A.G. Associates was acquired by Steag.
As a result of this acquisition, we will cease marketing and selling A.G.
Associates' products in September 1999. In July 1999, FSI sold its chemical
management division to BOC Edwards. As a result of this divestiture, we are
phasing out our marketing and sale of products of this division. In
October 1999, Applied Materials acquired Obsidian. As a result of the
acquisition, we expect that Obsidian will terminate its agreement with us.
THE SEMICONDUCTOR INDUSTRY IS HIGHLY CYCLICAL, AND THEREFORE, A DOWNTURN MAY
RESULT IN POOR OPERATING RESULTS.
The recent downturn in the semiconductor industry has had a material adverse
effect on our recent operating results. Our business depends in large part on
the procurement expenditures of semiconductor manufacturers, which, in turn,
depend on the current and anticipated demand for semiconductors and products
utilizing semiconductors. The semiconductor industry is highly cyclical and
historically has experienced periodic downturns, which often have resulted in
decreased expenditures by semiconductor manufacturers. These downturns generally
have adversely affected the sales, gross profits and operating results of
semiconductor materials and equipment suppliers. From 1996 through 1998, the
semiconductor industry experienced a downturn, which led semiconductor
manufacturers to delay or cancel capital expenditures. During this downturn,
some of our customers delayed or canceled purchases of semiconductor materials
and equipment, which had a negative impact on our sales, gross profits and
operating results. We cannot predict when downturns will occur and how we will
be affected by future downturns.
IF WE ARE UNABLE TO SUCCESSFULLY IDENTIFY NEW PRODUCTS AND ENTER INTO AND
IMPLEMENT ARRANGEMENTS WITH THE SUPPLIERS OF THESE PRODUCTS, OUR BUSINESS WILL
BE SERIOUSLY HARMED.
Any failure by us to enter into relationships with principals that
anticipate or respond adequately to technological developments or customer
requirements, or any significant delays in product development or introductions
by these principals, could result in a loss of competitiveness and could
materially adversely effect our business. The semiconductor materials and
equipment market is subject to rapid technological change, changing customer
requirements and frequent new product introductions. Because of this, the life
cycle of products that we market and sell is difficult to determine. Our future
success will depend to a significant extent on our principals' ability to keep
pace with changes in the market and on our ability to identify and carry
successful new product lines, particularly because we generally do not carry
competing product lines.
WE FACE INTENSE COMPETITION FROM COMPANIES WITH SIGNIFICANTLY GREATER FINANCIAL,
TECHNICAL AND MARKETING RESOURCES, WHICH COULD ADVERSELY AFFECT OUR ABILITY TO
MAINTAIN OR INCREASE SALES.
We face intense competition on two distinct fronts: competition for product
lines and competition for customers.
IF WE ARE UNABLE TO COMPETE FOR PRODUCT LINES, WE WILL BE UNABLE TO OFFER
COMPETITIVE PRODUCTS, WHICH WILL NEGATIVELY IMPACT OUR SALES.
We compete with independent sales and distribution companies for the right
to sell specific product lines in specific territories. We believe that our most
formidable competition comes from regionally established semiconductor materials
and equipment distribution companies. Some of these independent sales and
distribution companies have substantially greater financial resources to devote
to a particular region than we do, are better established in particular regions
than we are, have greater name recognition in their chosen markets than we have
and have long-standing collaborative business relationships with semiconductor
materials and equipment manufacturers which are difficult to
7
<PAGE>
overcome. If we are unable to effectively compete with sales and distribution
companies to attract and retain principals, our business will be adversely
effected.
IF WE ARE UNABLE TO COMPETE FOR CUSTOMERS, IT WILL ADVERSELY AFFECT OUR
ABILITY TO MAINTAIN OR INCREASE SALES.
We compete for orders from semiconductor manufacturers with established
semiconductor materials and equipment manufacturers who sell directly to
customers and with independent sales and distribution companies and sales
representatives. We believe that to compete effectively for customers we must
maintain a high level of investment in marketing, customer service and support
in all of the markets in which we operate, and we may not have sufficient
financial resources, technical expertise or marketing, services and support
capabilities to continue to compete successfully in the future. Some of our
competitors have greater name recognition in the territories they serve and have
long-standing relationships with semiconductor manufacturers that may give them
an advantage in attracting and retaining customers. Furthermore, we believe that
once a semiconductor manufacturer has selected a particular product for a
specific use from a vendor that is not one of our principals, it may be
difficult to achieve significant sales of a competing product to that customer
unless there are compelling reasons for the customer to switch products, such as
significant performance or cost advantages.
We anticipate that as we continue to diversify our product portfolio and
expand into new markets for our principals' products, we will encounter
additional competition for customers. If we cannot continue to compete
successfully for customers in the future, it will have a significant negative
impact on our business.
THE MANAGEMENT INFORMATION SYSTEMS THAT WE CURRENTLY USE IN OUR DAY-TO-DAY
OPERATIONS ARE NOT INTEGRATED ACROSS COUNTRY BORDERS AND NEED TO BE UPGRADED.
UPGRADING THEM WILL BE COSTLY, AND IF THE NEW SYSTEM IS NOT SUCCESSFULLY
IMPLEMENTED, OUR BUSINESS MAY SUFFER MATERIAL ADVERSE CONSEQUENCES.
While our financial reporting management information system is integrated
and operational, our current management information systems that we use to
control our day-to-day operations are not integrated across country borders. To
accommodate growth in the past, we have had to hire additional people to
compensate for the lack of a fully-functional, integrated operations management
information system. We anticipate that we will need to invest in a new
operations management information system in order to maintain our current level
of business and accommodate any future growth. We anticipate that the total
costs associated with the implementation of the new system will be approximately
$3.0 to $4.0 million and that the system will be implemented over the next
18 months. Any failure to successfully choose and implement a new operations
management information system may result in delayed growth, increased
inefficiency due to a lack of centralized data, higher inventories, increased
expenses associated with employing additional employees, a loss of our
investment in the new operations management information system and may have
additional material adverse effects on our business.
WE NEED TO SUCCESSFULLY MANAGE THE ANTICIPATED EXPANSION IN OUR OPERATIONS OR
OUR BUSINESS MAY SUFFER MATERIAL ADVERSE CONSEQUENCES.
Any failure by us to effectively manage future expansion and the system and
procedural transitions required by expansion could seriously harm our business
and our operating results. We have expanded our operations in the past and
anticipate future expansion of our operations through acquisitions and
otherwise. Our growth has placed and will continue to place significant demands
on our management, operational, financial and technical resources, as well as
our accounting and control systems, as we work to integrate geographically
dispersed offices and administrative personnel, diverse service and
8
<PAGE>
maintenance operations and different accounting and financial systems. Our
future operating results will depend on the ability of our management and other
employees to:
- continue to implement and improve our operational, customer support and
financial control systems;
- recruit, train, manage and motivate our employees;
- identify companies that are strategic acquisition candidates and
successfully acquire and integrate them with our existing business;
- communicate information efficiently throughout our organization; and
- work effectively with principals and customers.
We cannot predict whether these efforts will be successful or will occur in
a timely or efficient manner. We may not be able to install adequate control
systems in an efficient and timely manner, and our current or planned
operational systems, procedures and controls may not be adequate to support our
future operations. The difficulties associated with installing and implementing
new systems, procedures and controls may place a significant burden on our
management and our internal resources. Delays in the implementation of new
systems or operational disruptions when we transition to new systems would
impair our ability to accurately forecast sales demand, manage our product
inventory and record and report financial and management information on a timely
and accurate basis.
WE MAY NOT BE SUCCESSFUL IN ANY EFFORT TO PENETRATE JAPAN, WHICH COULD LIMIT OUR
FUTURE GROWTH.
We do not market and sell products to semiconductor manufacturers in Japan.
However, approximately 21% of the world's production of semiconductors takes
place in Japan. Accordingly, to reach all of the world's major semiconductor
markets, we will need to establish or acquire sales and marketing capabilities
in Japan. Historically, it has been difficult for non-Japanese companies to
succeed in establishing themselves in Japan, and we believe that expanding our
operations to Japan would be both expensive and time-consuming and would place
additional demands on our management. In addition, FSI and Entegris have
existing arrangements for the sale, service and support of their products in
Japan and have not indicated that they would modify such arrangements in the
event that Metron establishes or acquires sales and marketing capabilities in
Japan. We cannot predict whether any of our efforts to penetrate the Japanese
market will be successful. If we are not successful in our efforts to penetrate
the Japanese market, our future growth may be limited.
WE EXPECT CONTINUED DOWNWARD PRESSURE ON THE GROSS MARGINS OF THE PRODUCTS WE
SELL, AND AS A RESULT, IF WE ARE UNABLE TO CONTINUE TO DECREASE OUR EXPENSES AS
A PERCENTAGE OF SALES, WE WILL BE UNABLE TO INCREASE OR MAINTAIN OUR OPERATING
MARGINS.
Particularly during industry down cycles, pressure on the gross margins of
the products we sell is intense and can adversely impact our financial
performance. We have experienced significant downward pressure on our gross
margins mainly as a result of sales discounts offered by our competitors and
pressure from our customers to reduce prices and from our principals to reduce
the discounts they provide to us. This, in turn, has put significant downward
pressure on our operating margins. To maintain or increase our gross margins, we
must develop and maintain relationships with principals who introduce new
products and product enhancements on a timely basis. As a result of continued
pressure on gross margins, we must find ways to decrease our selling, general,
administrative and other expenses as a percentage of sales to increase or
maintain our operating margins. If our principals cannot continue to innovate,
if we cannot maintain our relationships with the innovating principals, or if we
cannot successfully manage our selling, general, administrative and other
expenses, our operating margins may decrease. If our operating margins decline
as a result of these factors, our business would be harmed.
9
<PAGE>
OUR EMPLOYMENT COSTS IN THE SHORT-TERM ARE TO A LARGE EXTENT FIXED, AND
THEREFORE ANY UNEXPECTED REVENUE SHORTFALL COULD ADVERSELY AFFECT OUR OPERATING
RESULTS.
Our operating expense levels are based in significant part on our head
count, which is generally driven by longer-term revenue goals. For a variety of
reasons, particularly the high cost and disruption of lay-offs and the costs of
recruiting and training, our head count in the short-term is, to a large extent,
fixed. In particular, approximately half of our employees are in Europe, and the
costs associated with the reduction of our labor force in Europe are high.
Accordingly, we may be unable to reduce employment costs in a timely manner to
compensate for any unexpected revenue or gross margin shortfall, which could
have a material adverse effect on our operating results.
WE MAY BEAR INVENTORY RISK DUE TO AN INABILITY TO RETURN PRODUCTS, AND IF WE ARE
UNABLE TO MANAGE OUR INVENTORY EFFECTIVELY, OUR OPERATING RESULTS COULD BE
ADVERSELY AFFECTED.
We bear inventory risk because we generally take title to our products when
we receive them from our principals, and we cannot always return products to the
principal in the event the products are not sold. Our customers do not always
purchase at the time or in the quantities we originally anticipated. For
example, as a result of the industry downturn in 1997 and 1998, we had excess
inventory for which we booked reserves in both the United States and Asia.
Typically, products cannot be returned to principals after they have been in our
inventory for a certain period of time; this time period varies depending on the
product and the principal. In addition, although it is typical when a
relationship with a principal terminates for that principal to repurchase most
of the inventory we have of that principal's products, it is possible under
certain circumstances that a principal may be unable or unwilling to repurchase
our inventory. If we fail to manage our inventory and accumulate substantial
product that cannot be returned, our operating results could be adversely
affected. Furthermore, if a principal cannot provide refunds in cash for the
inventory we desire to return, we may be forced to dispose of inventory below
cost, and this may have a material adverse effect on our financial condition.
OUR REVENUE AND OPERATING RESULTS MAY FLUCTUATE IN FUTURE PERIODS, WHICH COULD
ADVERSELY AFFECT OUR SHARE PRICE.
In the past, we have experienced fluctuations in our quarterly and annual
operating results and anticipate that these fluctuations will continue in the
future due to a variety of factors, many of which are out of our control.
Fluctuations in our results could cause our share price to decline
substantially. We believe that period-to-period comparisons of our results of
operations may not be meaningful, and you should not rely upon them as
indicators of our future performance. Our sales in, and the operating results
for, a particular quarter can vary significantly due to a variety of factors,
including those described elsewhere in this prospectus and the following:
- THE TIMING OF SIGNIFICANT CUSTOMER ORDERS AND CUSTOMER SPENDING PATTERNS.
During industry downturns, our customers may ask us to delay or even
cancel the shipment of previously firm orders. Delays and cancellations
may adversely affect our operating results in any particular quarter if we
are unable to recognize revenue for particular sales in the quarter in
which those sales were expected.
- THE TIMING OF PRODUCT SHIPMENTS BY OUR PRINCIPALS. For the most part, we
recognize sales upon the shipment of goods to our customers. Most of the
equipment and some of the materials we sell are shipped by the principal
directly to our customers, and we do not necessarily have any control over
the timing of a particular shipment. If we are unable to recognize revenue
for a particular sale in the quarter in which that sale was expected, our
operating results in that particular quarter will be negatively affected.
- THE TIMING OF NEW PRODUCT AND SERVICE ANNOUNCEMENTS BY OUR PRINCIPALS AND
THEIR COMPETITORS. New product announcements by our principals and their
competitors could cause our customers to
10
<PAGE>
delay a purchase or to decide to purchase products of one of our
principal's competitors which would adversely affect our revenue and,
therefore, our results of operations. New product announcements by others
may make it necessary for us to reduce prices on our products or offer
more service options, which could adversely impact operating margins and
net income.
- THE MIX OF PRODUCTS SOLD AND THE MARKET ACCEPTANCE OF OUR NEW PRODUCT
LINES. The mix of products we sell varies from period to period, and
because margins vary amongst or within different product lines, this can
adversely affect our results of operations. If we fail to sell our
products which generate higher margins, our average gross margins may be
lower than expected. If we fail to sell our new product lines, our revenue
may be lower than expected.
- GENERAL GLOBAL ECONOMIC CONDITIONS OR ECONOMIC CONDITIONS IN A PARTICULAR
REGION. When economic conditions in a region or worldwide worsen,
customers may delay or cancel their orders. There may also be an increase
in the time it takes to collect from our customers or even outright
defaults in payments. This can negatively affect our cash flow and our
results.
- COSTS WE MAY INCUR IF WE BECOME INVOLVED IN FUTURE LITIGATION. Litigation
is often costly, and even if we are successful in defending or making any
claim, the expenses incurred may significantly impact our results.
As a result of the factors listed above, our future operating results are
difficult to predict. Further, we base our current and future expense plans in
significant part on our expectations of our longer-term future revenue. As a
result, we expect our expense levels to be relatively fixed in the short-run. An
unanticipated decline in revenue for a particular quarter may disproportionately
affect our net income in that quarter. If our revenue is below our projections,
then our operating results will also be below expectations and, as we have in
the past, we may even have losses in the short-run. Any one of the factors
listed above, or a combination thereof, could adversely affect our quarterly
results of operations, and consequently may cause a decline in our share price.
WE DEPEND ON SALES TO A RELATIVELY SMALL NUMBER OF CUSTOMERS FOR A SIGNIFICANT
PORTION OF OUR REVENUE, AND IF ANY OF OUR LARGE CUSTOMERS WERE TO STOP OR REDUCE
THEIR PURCHASING FROM US, IT WOULD MATERIALLY AND ADVERSELY AFFECT OUR REVENUE.
A loss or a significant reduction or delay in sales to any of our major
customers could materially and adversely affect our revenue. We depend on a
small number of customers for a substantial portion of our revenue. During
fiscal 1999, our top 10 customers accounted for an aggregate of 32% of our
sales. Although a ranking by revenue of our largest customers will vary from
period to period, we expect that revenue from a relatively small number of
customers will account for a substantial portion of our revenue in any
accounting period for the foreseeable future. Consolidation in the semiconductor
industry may result in increased customer concentration and the potential loss
of customers as a result of acquisitions. Unless we diversify and expand our
customer base, our future success will significantly depend upon certain factors
which are not within our control, including:
- the timing and size of future purchase orders, if any, from our larger
customers;
- the product requirements of our customers; and
- the financial and operational success of our customers.
If any of our largest customers were to stop or reduce their purchasing from
us, our financial results could be adversely affected. A significant decrease in
sales to a major customer or the deferral or cancellation of any significant
order would have a material adverse effect on our operating results.
11
<PAGE>
OUR SALES CYCLE, PARTICULARLY FOR EQUIPMENT, IS LONG AND UNPREDICTABLE, WHICH
COULD REQUIRE US TO INCUR HIGH SALES AND MARKETING EXPENSES WITH NO ASSURANCE
THAT A SALE WILL RESULT.
Sales cycles for some of our products, particularly equipment, can run as
long as 12 to 18 months. As a result, we may not recognize revenue from efforts
to sell particular products for extended periods of time. We believe that the
length of the sales cycle may increase as some current and potential customers
of our key principals centralize purchasing decisions into one decision-making
entity. We expect this may intensify the evaluation process and require us to
make additional sales and marketing expenditures with no assurance that a sale
will result.
WE HAVE NOT YET DEVELOPED A STRATEGY TO SELL TO OUR CUSTOMERS OVER THE INTERNET,
AND IF A COMPETITOR DEVELOPS AND IMPLEMENTS AN EFFECTIVE E-COMMERCE STRATEGY, WE
MAY LOSE SOME OF OUR CUSTOMERS, WHICH WOULD HAVE A NEGATIVE IMPACT ON OUR
RESULTS OF OPERATIONS.
We have not developed a strategy to sell to our customers over the Internet,
but we plan to develop an e-commerce strategy in the future. Because rights to
sell principals' products are granted only for specific territories and sales
conducted over the Internet may occur anywhere around the globe, it is difficult
to adopt e-commerce practices in this industry. If principals decide to directly
distribute their products over the Internet, if our competitors develop a
successful strategy for engaging in e-commerce or if our customers require
e-commerce capability, we may lose customers, which would have a negative impact
on our revenue and on our operating results.
WE FACE YEAR 2000 RISKS.
The year 2000 problem arises because many older computer hardware and
software systems use only two digits to represent the year. As a result, these
systems and programs cannot distinguish between 20(th) and 21(st) century dates,
which may cause errors in information or system failures. Failure by us to
identify and remediate all material year 2000 risks could adversely affect our
business, financial condition and results of operations. Some of the risks you
should be aware of include:
- we cannot assure you that the entities that we rely on for products and
services that are important for our business, including our principals,
will be successful in addressing all of their software and systems
problems in order to operate without disruption in the year 2000;
- our customers or potential customers may be affected by year 2000 issues
that may, in part, cause a reduction, delay or cancellation of customer
orders; cause a delay in payments for products shipped; or cause customers
to expend significant resources on year 2000 compliance matters rather
than the products we sell; and
- we have not developed a contingency plan related to a failure of our, or a
third party's, year 2000 remediation efforts and may not be prepared if
this occurs.
Although we have not yet determined the most-likely worst-case year 2000
scenarios or quantified the likely impact of these scenarios, it is clear that
the occurrence of one or more of the risks described above could have a material
adverse effect on our business, financial condition or results of operations.
While we have made efforts to notify our customers who have purchased
potentially non-compliant products, we cannot be sure that these customers will
not assert claims against us alleging that the purchased products should have
been year 2000 compliant at the time of purchase, which could result in costly
litigation and divert management's attention.
12
<PAGE>
RISKS RELATED TO OUR INTERNATIONAL OPERATIONS.
ECONOMIC DIFFICULTIES IN COUNTRIES IN WHICH WE SELL OUR PRODUCTS CAN LEAD TO A
DECREASE IN DEMAND FOR OUR PRODUCTS AND IMPAIR OUR FINANCIAL RESULTS.
The volatility of general economic conditions and fluctuations in currency
exchange and interest rates can lead to decreased demand in countries in which
we sell product. For example, in 1997 and 1998 many Asian countries experienced
economic and financial difficulties. During this period, we experienced
cancellation or delay of orders for our products from customers in Asia, thus
adversely affecting our results of operations. Moreover, any economic, banking
or currency difficulties experienced by countries in which we have sales may
lead to economic recession in those countries. This in turn may result in the
cancellation or delay of orders for our products from customers in these
countries, thus adversely affecting our results of operations.
MOST OF OUR PRODUCT SALES ARE OUTSIDE THE UNITED STATES, AND CURRENCY
FLUCTUATIONS MAY IMPAIR OUR FINANCIAL RESULTS.
While most of our international sales are denominated in dollars, some are
denominated in various foreign currencies. To the extent that our sales and
operating expenses are denominated in foreign currencies, our operating results
may be adversely affected by changes in exchange rates. For example, in fiscal
1997, we recorded exchange losses of approximately $600,000. Given the number of
currencies involved, the substantial volatility of currency exchange rates, and
our constantly changing currency exposures, we cannot predict the effect of
exchange rate fluctuations on our future operating results. Although we engage
in foreign currency hedging transactions from time to time, these hedging
transactions can be costly, and therefore, we do not attempt to cover all
potential foreign currency exposures. These hedging techniques do not eliminate
all of the effects of foreign currency fluctuations on anticipated revenue.
In addition, the transition period from legacy currencies to the euro
currently is set to expire January 1, 2002. We are assessing our information
technology systems to determine whether they will accommodate the eventual
elimination of the legacy currencies. If our information technology systems are
unable to do so, they would have to be upgraded or replaced.
IF WE OR OUR NON-UNITED STATES SUBSIDIARIES ARE DEEMED SUBJECT TO UNITED STATES
TAXES, OUR BUSINESS, FINANCIAL CONDITION AND RESULTS MAY SUFFER.
Metron and its non-United States subsidiaries conduct most of their
activities in a manner which we believe does not constitute the conduct of a
trade or business in the United States. Accordingly, although we report taxable
income and pay taxes in the countries where we operate, including the United
States, we believe that income earned by Metron and its non-United States
subsidiaries from operations outside the United States is not reportable in the
United States for tax purposes and is not subject to United States income tax.
If income earned by us or our non-United States subsidiaries from operations
outside the United States is determined to be income effectively connected to an
United States trade or business and as a result becomes taxable in the United
States, we could be subject to United States taxes on this income. If we were to
be deemed to be subject to these taxes, our business, financial condition and
results of operations might be materially and adversely affected.
RISKS RELATED TO INVESTING IN OUR INITIAL PUBLIC OFFERING.
WE ARE SIGNIFICANTLY CONTROLLED BY FSI AND ENTEGRIS, WHICH MAY LIMIT YOUR
ABILITY TO INFLUENCE THE OUTCOME OF DIRECTOR ELECTIONS AND OTHER SHAREHOLDER
MATTERS.
Prior to this offering, FSI owned 32.7% and Entegris owned 32.7% of our
outstanding shares, and following the offering, FSI will own 21.8% and Entegris
will own 21.8% of our outstanding shares. By
13
<PAGE>
virtue of their share ownership and the fact that each holds one of the four
seats on our supervisory board, FSI and Entegris can exercise significant voting
and management control over Metron. As a result, each of these shareholders will
have significant influence over all matters requiring shareholder or supervisory
board approval, including the election of directors and approval of significant
corporate transactions, which may have the effect of delaying or preventing a
third party from acquiring control over us.
WE WILL HAVE BROAD DISCRETION AS TO THE USE OF THE OFFERING PROCEEDS.
We have not allocated the majority of the net proceeds of this offering for
specific uses, and our shareholders may disagree with the uses to which
management puts the proceeds from this offering. We may use a portion of the net
proceeds to acquire additional businesses or to invest in one or more principals
that we believe will complement or enhance our current or future business. We
cannot be certain that we will be able to use the proceeds to earn a favorable
return.
WE MAY NEED TO RAISE ADDITIONAL CAPITAL, AND ANY INABILITY TO RAISE REQUIRED
FUNDS COULD HARM OUR BUSINESS.
We expect the net proceeds from this offering, cash from operations and
borrowings under our credit facilities will be sufficient to meet our working
capital and capital expenditure needs for the foreseeable future. However, we
may need to raise additional capital to acquire or invest in complementary
businesses. Further, if we issue additional equity securities, the ownership
stakes of our existing shareholders would be reduced, and the new equity
securities may have rights, preferences or privileges senior to those of our
existing common shares. If we cannot raise funds, if needed, on acceptable
terms, we may not be able to develop our business, take advantage of future
opportunities or respond to competitive pressures or unanticipated requirements,
all of which could seriously harm our business and results of operations.
NEW INVESTORS IN OUR COMMON SHARES WILL EXPERIENCE IMMEDIATE AND SUBSTANTIAL
DILUTION.
The initial public offering price is substantially higher than the book
value per share of our common shares. Investors purchasing common shares in this
offering will, therefore, incur immediate dilution of $7.54 in net tangible book
value per common share. Investors will incur additional dilution upon the
exercise of outstanding share options. See "Dilution."
THERE IS CURRENTLY NO PUBLIC MARKET FOR OUR COMMON SHARES AND FOLLOWING THE
OFFERING, OUR SHARE PRICE MAY BE VOLATILE.
There has not been a public market for our common shares prior to this
offering, and a liquid trading market for our shares may not develop following
this offering. The initial price for our common shares to be sold in the
offering has been determined by negotiations between us and the representatives
of the underwriters and may not be indicative of prices that will prevail in the
trading market. The trading price of our common shares could be subject to wide
fluctuations in response to various factors, some of which are beyond our
control, including factors discussed elsewhere in this prospectus and the
following:
- failure to meet the published expectations of securities analysts for a
given quarterly period;
- changes in financial estimates by securities analysts;
- changes in market values of comparable companies;
- stock market price and volume fluctuations, which are particularly common
among securities of high technology companies;
14
<PAGE>
- stock market price and volume fluctuations attributable to inconsistent
trading volume levels;
- additions or departures of key personnel; and
- commencement of our involvement in litigation.
In the past, securities class action litigation has often been brought
against a company following periods of volatility in the market price of its
securities. We may in the future be the target of similar litigation. Securities
litigation may result in substantial costs and divert management's attention and
resources, which may seriously harm our business.
SUBSTANTIAL SALES OF SHARES MAY IMPACT THE MARKET PRICE OF OUR COMMON SHARES.
If our shareholders sell substantial amounts of our common shares, including
shares issued upon the exercise of outstanding options, the market price of our
common shares may fall. These sales also might make it more difficult for us to
sell equity or equity-related securities in the future at a time and price that
we deem appropriate. After completion of this offering, we will have outstanding
12,404,261 common shares, assuming no exercise of outstanding options after
August 31, 1999. All of the shares sold in this offering will be freely
tradable. 139,341 additional shares are eligible to be sold immediately, of
these 12,300 are subject to volume limitations, under federal securities laws.
2,200 restricted shares will be eligible for sale 90 days after the date of this
offering. 8,590,945 shares are subject to lock-up arrangements between the
shareholders and us or the underwriters. 8,590,945 shares will be eligible for
sale in the public market 180 days following the date of this prospectus. Of
these shares 8,060,867 shares will be subject to volume limitations, under
federal securities laws. The remaining 5,000 shares will be eligible for sale in
the public market subject to volume restrictions on March 17, 2000.
If our shareholders sell substantial amounts of common shares (including
shares issued upon the exercise of outstanding options) in the public market,
the market price of our common shares could fall.
WE DO NOT INTEND TO PAY DIVIDENDS.
We have never declared or paid any cash dividends on our capital shares. We
currently intend to retain any future earnings for funding growth and,
therefore, do not expect to pay any dividends in the foreseeable future.
RISKS RELATED TO BEING A DUTCH COMPANY.
OUR SUPERVISORY BOARD HAS THE AUTHORITY TO ISSUE SHARES WITHOUT SHAREHOLDER
APPROVAL, WHICH MAY MAKE IT MORE DIFFICULT FOR A THIRD PARTY TO ACQUIRE US.
As a Netherlands "NAAMLOZE VENNOOTSCHAP," or N.V., we are subject to
requirements not generally applicable to corporations organized in United States
jurisdictions. Among other things, under Netherlands law the issuance of shares
of a N.V. company must be approved by the shareholders unless the shareholders
have delegated this authority to issue shares to another corporate body. Our
articles of association provide that the shareholders have the authority to
resolve to issue shares, common or preferred, and may designate the Metron board
of supervisory directors as the corporate body with the authority to adopt the
resolution to issue shares, but this designation may not exceed a period of five
years. Our articles also provide that as long as the supervisory board has the
authority to adopt a resolution to issue shares, the shareholders shall not have
the authority to adopt this resolution. Pursuant to the Metron articles, the
supervisory board will have the authority to adopt resolutions to issue shares
until five years from the date of the deed of conversion from a B.V. to an N.V.
and the related amendment of the articles. This authorization of the supervisory
board may be renewed by the
15
<PAGE>
shareholders from time to time. As a result, our supervisory board has the
authority to issue common and preferred shares without shareholder approval.
The issuance of preferred shares could have the effect of making it more
difficult for a third party to acquire, or of discouraging a third party from
acquiring, a majority of the outstanding shares of our share capital.
IT MAY NOT BE POSSIBLE TO ENFORCE UNITED STATES JUDGMENTS AGAINST NETHERLANDS
CORPORATIONS, DIRECTORS AND OTHERS.
Our articles provide that Metron has two separate boards of directors, a
managing board and a supervisory board. One of our managing directors resides
outside of the United States. A significant percentage of our assets are located
outside the United States. As a result, it may not be possible to effect service
of process within the United States upon the managing director who lives outside
the United States. Furthermore, judgments of United States courts, including
judgments against us, our directors or our officers predicated on the civil
liability provisions of the federal securities laws of the United States, are
not directly enforceable in The Netherlands.
PROVISIONS OF OUR CHARTER DOCUMENTS AND DUTCH LAW COULD DISCOURAGE POTENTIAL
ACQUISITION PROPOSALS AND COULD DELAY, DETER OR PREVENT A CHANGE IN CONTROL.
Our articles of association and the applicable law of The Netherlands
contain provisions that may be deemed to have anti-takeover effects. These
provisions may delay, defer or prevent a takeover attempt that a shareholder
might consider in the best interest of our shareholders. For example, our
articles may be amended only pursuant to a proposal of the supervisory board
followed by a resolution of the general meeting of shareholders. To amend our
articles requires that at a general meeting of shareholders, (1) more than half
of the issued share capital is represented and (2) the resolution to amend the
articles is supported by a two-thirds majority of the valid votes cast. This
supermajority voting requirement may have the effect of discouraging a third
party from acquiring a majority of the outstanding Metron shares. In addition,
these provisions could have a negative impact on our stock price. Furthermore,
some United States tax laws may discourage third parties from accumulating
significant blocks of our common shares. For a more full description of
anti-takeover measures, see "Description of Capital Shares."
IF WE ARE CLASSIFIED AS A "CONTROLLED FOREIGN CORPORATION," OUR 10% OR MORE
UNITED STATES SHAREHOLDERS COULD BE TAXED ON DIVIDENDS PAID BY OUR OPERATING
SUBSIDIARIES TO US, EVEN IN THE ABSENCE OF A DISTRIBUTION OF OUR INCOME TO THEM.
Following this offering, we do not believe that we will be a "controlled
foreign corporation" for the purposes of United States tax law. However, we are
currently classified as a "controlled foreign corporation" and we may again be
so classified if the sum of the percentage ownership by all United States
holders of more than 10% of our common shares were greater than 50% by voting
power or value. As of August 31, 1999, United States shareholders of more than
10% of our common shares held, in the aggregate, 65.6% of our common shares. In
the event we are determined to be a "controlled foreign corporation" after this
offering, our 10% or more United States shareholders could be taxed on dividends
paid by our operating subsidiaries to us, even in the absence of a distribution
of our income to them.
16
<PAGE>
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
Some of the statements under the captions "Prospectus Summary," "Risk
Factors," "Use of Proceeds," "Management's Discussion and Analysis of Financial
Condition and Results of Operations" and "Business" and elsewhere in this
prospectus are "forward-looking statements." These statements involve known and
unknown risks, uncertainties, and other factors that may cause our, or our
industry's, actual results, levels of activity, performance or achievements to
be materially different from any future results, levels of activity, performance
or achievements expressed or implied by the forward-looking statements. These
factors are listed under "Risk Factors" and elsewhere in this prospectus.
In some cases, you can identify forward-looking statements by terminology
such as "expects," "anticipates," "intends," "may," "should," "plans,"
"believes," "seeks," "estimates," "could," "would" or the negative of such terms
or other comparable terminology.
Although we believe that the expectations reflected in the forward-looking
statements are reasonable, we cannot guarantee future results, levels of
activity, performance or achievements. Moreover, neither we nor any other person
assumes responsibility for the accuracy and completeness of these statements. We
are under no duty to update any of the forward-looking statements after the date
of this prospectus to conform these statements to actual results.
17
<PAGE>
USE OF PROCEEDS
We expect to receive net proceeds of approximately $25,018,000, after
deducting underwriting discounts and estimated offering expenses, from the sale
of 2,300,000 common shares, and an additional $6,277,500 from the sale of
562,500 common shares if the underwriters' over-allotment option is exercised in
full, at an assumed initial public offering price of $12.00 per share. We will
not receive any proceeds from the sale of common shares by the selling
shareholders.
We intend to use the proceeds of the offering for working capital and
general corporate purposes, including sales, marketing, customer support and
other activities related to our business. We may also use a portion of the net
proceeds to acquire additional businesses or to invest in one or more of our
principals that we believe will complement or enhance our current or future
business. However, we have no specific plans, agreements or commitments to do so
and are not currently engaged in any negotiations for any acquisition or joint
venture.
The amounts that we actually expend for working capital and other general
corporate purposes will vary significantly depending on a number of factors,
including future revenue growth, if any, and the amount of cash we generate from
operations. As a result, we will retain broad discretion in the allocation of
the net proceeds of this offering. Pending such uses, we intend to invest the
net proceeds of the initial public offering in investment grade interest-bearing
securities.
DIVIDEND POLICY
We have never declared or paid any cash dividends on our common shares. We
currently intend to retain any future earnings to fund the development and
growth of the our business. Therefore, we currently do not anticipate paying any
cash dividends.
18
<PAGE>
CAPITALIZATION
The following table sets forth our capitalization as of August 31, 1999: (1)
on an actual basis; (2) pro forma to give effect to the termination of certain
put rights as a result of the termination of a buy-sell agreement upon
completion of this offering; and (3) pro forma as adjusted to give effect to the
sale of 2,300,000 common shares offered in this offering and to give effect to
the receipt of the estimated net proceeds from the sale of such shares at an
assumed initial public offering price of $12.00 per share and the application of
the net proceeds from such sale.
The capitalization information set forth in the table below is qualified by,
and you should read it in conjunction with, our more detailed Consolidated
Financial Statements and the related Notes and "Management's Discussion and
Analysis of Financial Condition and Results of Operations" appearing elsewhere
in this prospectus.
<TABLE>
<CAPTION>
AUGUST 31, 1999
------------------------------------
PRO FORMA
ACTUAL PRO FORMA AS ADJUSTED
-------- ----------- -----------
(UNAUDITED)
(IN THOUSANDS, EXCEPT SHARE DATA)
<S> <C> <C> <C>
Short-term debt (including current portion of
long-term debt)...................................
$ 15,111 $ 15,111 $ 15,111
======== ======== ========
Long-term debt (excluding current portion).......... $ 1,101 $ 1,101 $ 1,101
Common shares subject to Buy-Sell Agreement......... 1,973 -- --
Shareholders' equity:
Preferred shares: NLG 0.96 par value, 10,000,000
shares authorized; no shares issued and
outstanding, actual; no shares issued and
outstanding, pro forma and pro forma as
adjusted........................................ -- -- --
Common shares: NLG 0.96 par value, 40,000,000
shares authorized; 10,385,268 shares issued and
10,104,261 shares outstanding, actual and pro
forma; 12,685,268 shares issued and
12,404,261 shares outstanding, pro forma as
adjusted........................................ 3,030 5,003 30,021
Retained earnings................................. 31,089 31,089 31,089
Cumulative other comprehensive loss............... (3,157) (3,157) (3,157)
Treasury shares: 281,007.......................... (131) (131) (131)
-------- -------- --------
Total shareholders' equity...................... $ 30,831 $ 32,804 $ 57,822
-------- -------- --------
Total capitalization............................ $ 33,905 $ 33,905 $ 58,923
======== ======== ========
</TABLE>
This table excludes the following shares as of August 31, 1999:
- 1,986,348 shares subject to options outstanding as of August 31, 1999 at a
weighted average exercise price of $5.50 per share; and
- 828,952 additional shares that could be granted under our stock plans.
19
<PAGE>
DILUTION
Our pro forma tangible book value as of August 31, 1999 was $30,338,000, or
approximately $3.00 per share. Pro forma net tangible book value per share
represents the amount of our total assets less total liabilities, divided by the
number of common shares outstanding. Dilution in net tangible book value per
share represents the difference between the amount per share paid by purchasers
of common shares in this offering and the net tangible book value per common
share immediately after the completion of this offering. After giving effect to
the sale of the 2,300,000 common shares in this offering at an assumed initial
public offering price of $12.00 per share and after deducting the estimated
underwriting discounts and commissions and estimated offering expenses payable
by us, our pro forma net tangible book value at August 31, 1999 would have been
$55,356,000, or approximately $4.46 per share. This represents an immediate
increase in pro forma net tangible book value of $1.46 per share to existing
shareholders and an immediate dilution in net tangible book value of $7.54 per
share to purchasers of common shares in this offering. The following table
illustrates this dilution on a per share basis:
<TABLE>
<S> <C> <C>
Assumed initial public offering price per share......... $ 12.00
Pro forma net tangible book value per share as of
August 31, 1999..................................... $ 3.00
Increase in net tangible book value per share
attributable to new investors....................... 1.46
--------
Pro forma net tangible book value per share after
offering.............................................. 4.46
--------
Dilution in net tangible book value per share to new
investors............................................. $ 7.54
========
</TABLE>
The following table sets forth, on a pro forma basis as of August 31, 1999,
after giving effect to the difference between the number of common shares
purchased from us, the total cash consideration paid and the average price per
share paid by existing holders of common shares and by the new investors, before
deducting underwriting discounts and commissions and estimated offering expenses
payable by us, at an assumed initial public offering price of $12.00 per share:
<TABLE>
<CAPTION>
SHARES PURCHASED TOTAL CONSIDERATION AVERAGE
---------------------- ---------------------- PRICE
NUMBER PERCENT AMOUNT PERCENT PER SHARE
----------- -------- ----------- -------- ---------
<S> <C> <C> <C> <C> <C>
Existing shareholders.... 11,355,809 83.2% $10,147,000 26.9% $ 0.89
New investors............ 2,300,000 16.8 27,600,000 73.1 $12.00
----------- ----- ----------- -----
Total................ 13,655,809 100.0% $37,747,000 100.0%
=========== ===== =========== =====
</TABLE>
This table includes the following shares as of August 31, 1999:
- 1,251,548 shares subject to exercisable options outstanding as of August
31, 1999 at a weighted average exercise price of $4.11 per share.
This table excludes the following shares as of August 31, 1999:
- 734,800 shares subject to unexercisable options outstanding as of
August 31, 1999 at a weighted average exercise price of $7.87 per share;
and
- 870,952 additional shares that could be issued under our stock plans.
The sale of common shares by the selling shareholders in this offering will
reduce the number of common shares held by existing shareholders to 9,905,809,
or approximately 72.5% of the total number of common shares outstanding upon the
closing of this offering; and will increase the number of shares held by new
public investors to 3,750,000, or approximately 27.5% of the total number of
common shares outstanding after this offering.
20
<PAGE>
SELECTED CONSOLIDATED FINANCIAL DATA
The tables that follow present portions of our consolidated financial
statements and are not complete. You should read the following selected
consolidated financial data in conjunction with our Consolidated Financial
Statements and the related Notes and with "Management's Discussion and Analysis
of Financial Condition and Results of Operations" included elsewhere in this
prospectus. The consolidated statement of operations data for the years ended
May 31, 1997, 1998 and 1999, and the consolidated balance sheet data as of
May 31, 1998 and 1999, are derived from and are qualified in their entirety by
our Consolidated Financial Statements that have been audited by KPMG LLP,
independent auditors, and are included elsewhere in this prospectus. The
consolidated statement of operations data for the years ended May 31, 1995 and
1996, and the consolidated balance sheet data as of May 31 1995, 1996 and 1997
are derived from our audited consolidated financial statements which do not
appear elsewhere in this prospectus. The selected consolidated statement of
operations data for the three-month periods ended August 31, 1998 and 1999 and
the selected consolidated balance sheet data at August 31, 1999 have been
derived from unaudited consolidated financial statements included elsewhere in
this prospectus. The unaudited consolidated financial statements include, in the
opinion of management, all adjustments, consisting only of normal recurring
adjustments, that management considers necessary for a fair statement of the
results for those periods. The historical results presented below are not
necessarily indicative of the results to be expected for any future fiscal year.
<TABLE>
<CAPTION>
THREE MONTHS
FISCAL YEAR ENDED MAY 31, ENDED AUGUST 31,
---------------------------------------------------- -------------------
1995 1996 1997 1998 1999 1998 1999
-------- -------- -------- -------- -------- -------- --------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C> <C>
CONSOLIDATED STATEMENT OF OPERATIONS DATA:
Net revenue................................... $167,681 $283,325 $298,576 $275,024 $228,618 $56,922 $ 69,473
Cost of revenue............................... 130,921 223,292 241,675 222,028 189,295 46,596 57,332
-------- -------- -------- -------- -------- ------- --------
Gross profit.................................. 36,760 60,033 56,901 52,996 39,323 10,326 12,141
Selling, general, administrative and other
expenses.................................... 23,229 43,989 49,417 48,997 43,391 11,321 10,489
Restructuring and merger costs................ -- -- 258 881 2,550 806 --
-------- -------- -------- -------- -------- ------- --------
Operating income (loss)....................... 13,531 16,044 7,226 3,118 (6,618) (1,801) 1,652
Equity in net income (loss) of joint
ventures.................................... 97 355 273 (497) 267 44 (85)
Minority interest in net income of
consolidated entities....................... (116) -- -- -- -- -- --
Other income (expense), net................... (1,401) 15 (602) (71) (397) (212) (198)
-------- -------- -------- -------- -------- ------- --------
Income (loss) before income taxes............. 12,111 16,414 6,897 2,550 (6,748) (1,969) 1,369
Provision (benefit) for income taxes.......... 3,682 5,435 2,699 1,448 (2,214) (703) 466
-------- -------- -------- -------- -------- ------- --------
Net income (loss)............................. $ 8,429 $ 10,979 $ 4,198 $ 1,102 $ (4,534) $(1,266) $ 903
======== ======== ======== ======== ======== ======= ========
Basic net income (loss) per share............. $ 0.93 $ 1.07 $ 0.40 $ 0.11 $ (0.44) $ (0.12) $ 0.09
======== ======== ======== ======== ======== ======= ========
Diluted net income (loss) per share........... $ 0.93 $ 1.02 $ 0.37 $ 0.10 $ (0.44) $ (0.12) $ 0.08
======== ======== ======== ======== ======== ======= ========
Shares used to compute basic in per share
calculation................................. 9,094 10,289 10,386 10,369 10,325 10,341 10,104
Shares used to compute diluted in per share
calculation................................. 9,094 10,801 11,195 11,112 10,325 10,341 11,179
</TABLE>
<TABLE>
<CAPTION>
MAY 31,
---------------------------------------------------- AUGUST 31,
1995 1996 1997 1998 1999 1999
-------- -------- -------- -------- -------- -----------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
CONSOLIDATED BALANCE SHEET DATA:
Cash and cash equivalents........................ $11,008 $ 13,683 $ 17,033 $ 10,387 $10,601 $ 17,128
Working capital.................................. 17,782 23,296 26,383 24,469 22,630 23,993
Total assets..................................... 68,869 125,791 110,791 114,161 99,625 112,431
Total shareholders' equity....................... 22,825 32,908 36,399 36,049 29,955 30,831
</TABLE>
21
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The information in this Management's Discussion and Analysis of Financial
Condition and Results of Operations, except for the historical information,
contains forward-looking statements. These statements are subject to risks and
uncertainties. You should not place undue reliance on these forward-looking
statements as actual results could differ materially. We do not assume any
obligation to publicly release the results of any revision or updates to these
forward-looking statements to reflect future events or unanticipated
occurrences. This discussion and analysis should be read in conjunction with our
Consolidated Financial Statements and the related Notes, which are included
elsewhere in this prospectus. This discussion of fiscal 1997, 1998 and 1999
refers to the fiscal years ended on May 31 of each year.
OVERVIEW
Metron Technology N.V. is a holding company organized under the laws of The
Netherlands. Through our various operating subsidiaries, we are a leading global
provider of marketing, sales, service and support solutions to semiconductor
materials and equipment suppliers and semiconductor manufacturers. We operate in
Europe, Asia and the United States. We were founded in Europe in 1975 by our two
corporate shareholders, who own a majority of our shares, and certain of our
current and former management. In 1995, we reorganized Metron to combine three
Asian companies as a reorganization under common control, and purchased
Transpacific Technology Corporation and its subsidiaries, referred to as TTC.
TTC was founded in California in 1982 as a semiconductor equipment
manufacturers' representative company and expanded into the distribution
business in 1990. In July 1998, we acquired T.A. Kyser Co., which we refer to as
Kyser, in a transaction accounted for as a pooling of interests. Founded in
1977, Kyser markets and sells materials in nine states within the United States
principally to the semiconductor industry.
We derive our revenue from sales of materials, equipment, service and spare
parts to the semiconductor industry, as well as from commissions on sales of
equipment and materials. We recognize revenue for most of an equipment sale and
all other product sales upon the shipment of goods to customers. We defer the
portion of our equipment revenue associated with our estimate of our
installation and warranty obligations. We amortize the deferred revenue over the
applicable installation and warranty periods. We recognize service revenue in
the periods the services are rendered to customers.
In each of our three fiscal years ended May 31, 1999, a majority of our
revenue came from the sale of products from five or fewer of the semiconductor
materials and equipment companies we represent, who we refer to as our
principals. For fiscal 1999, 24% of our total revenue was generated from the
sale of products manufactured by FSI and 21% from the sale of products
manufactured by Entegris. In addition to representing our two largest sources of
revenue, FSI and Entegris are also our two largest shareholders, and after the
offering FSI will hold 21.8% and Entegris will hold 21.8% of our outstanding
shares. Although the principals that comprise our largest sources of revenue may
change from period to period, we expect that revenue from the sale of products
of a relatively small number of principals will continue to account for a
substantial portion of our revenue.
We operate in all areas of the world in which there is a significant
semiconductor industry, except Japan. The following tables show our sales in
Europe, Asia and the United States in dollars and as a
22
<PAGE>
percentage of net revenue for each of the three fiscal years ended May 31, 1997,
1998 and 1999 and for the three month periods ended August 31, 1998 and 1999:
<TABLE>
<CAPTION>
THREE MONTHS
FISCAL YEAR ENDED MAY 31, ENDED AUGUST 31,
------------------------------------ ----------------------
1997 1998 1999 1998 1999
-------- -------- -------- -------- --------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
Net revenue
Europe................................. $179,853 $155,472 $112,369 $29,040 $31,705
Asia................................... 58,839 53,047 62,243 14,285 19,345
United States.......................... 59,884 66,505 54,006 13,597 18,423
-------- -------- -------- ------- -------
Total net revenue.................... $298,576 $275,024 $228,618 $56,922 $69,473
======== ======== ======== ======= =======
</TABLE>
<TABLE>
<CAPTION>
THREE MONTHS
FISCAL YEAR ENDED MAY 31, ENDED AUGUST 31,
------------------------------------ --------------------
1997 1998 1999 1998 1999
-------- -------- -------- ------- -------
(PERCENTAGE OF NET REVENUE)
<S> <C> <C> <C> <C> <C>
Net revenue
Europe................................. 60.2% 56.5% 49.2% 51.0% 45.7%
Asia................................... 19.7 19.3 27.2 25.1 27.8
United States.......................... 20.1 24.2 23.6 23.9 26.5
----- ----- ----- ----- -----
Total net revenue.................... 100.0% 100.0% 100.0% 100.0% 100.0%
===== ===== ===== ===== =====
</TABLE>
Since the beginning of fiscal 1999, we have been organized into two
worldwide operating divisions, equipment and materials. Our equipment division
derives the majority of its revenue from the sale of capital equipment. The
remainder of the division's revenue comes from service, which includes the
installation, maintenance and repair of semiconductor equipment, spare part
sales and commissions. Our equipment sales represent products that support
various production activities for the manufacture of semiconductors. The sales
of the equipment division principally represent a small number of high-dollar
value transactions for which the products are generally shipped directly to the
customer by the manufacturer. As a result, our equipment sales are significantly
affected by the pattern of capital spending by customers, the timing of customer
orders and the timing of product shipments by the equipment manufacturer.
Our materials division derives the majority of its revenue from sales of
materials and components. The remainder of the division's revenue comes from
commissions. The materials and components we sell are used both in the
production of semiconductors and in the building and maintenance of
semiconductor equipment and manufacturing facilities. Materials include products
such as wafer handling cassettes and accessories, wafer surface preparation
materials, fluid-handling components such as fittings, valves and tubing, and
disposable cleanroom clothing. Sales of these products tend to be less cyclical
than sales of semiconductor equipment and generally offer higher gross margins.
RESULTS OF OPERATIONS
Beginning in the second half of 1996, as the result of excess capacity and
significant price erosion, especially for memory chips, semiconductor industry
growth slowed significantly. This slowdown caused semiconductor manufacturers to
exercise caution in making capital equipment purchasing decisions. Some
semiconductor manufacturers reduced or delayed the expansion or construction of
facilities. This directly affected the sales of semiconductor capital equipment
and, to a lesser extent, the sales of materials. As a result of the slowdown, we
experienced order cancellations, delays in booking new orders and delays in
shipping orders to customers, all of which contributed to the reductions in our
23
<PAGE>
revenue in fiscal 1998 and 1999. We believe that, despite short term slowdowns,
the semiconductor industry has long term growth opportunities. As a result, we
believe we must maintain our infrastructure, even during periodic slowdowns, in
order to continue to serve our customers and to be in a position to take
advantage of long term growth opportunities. Accordingly, we did not reduce our
operating expenses sufficiently to prevent us from recording an operating loss
in fiscal 1999.
The following table summarizes our historical results of operations as a
percentage of net revenue for the fiscal years and periods indicated. The
historical financial data for fiscal 1997, 1998 and 1999 were derived from, and
should be read in conjunction with, our audited Consolidated Financial
Statements and the related Notes included elsewhere in this prospectus. The
historical financial data for the three month periods ended August 31, 1998 and
1999 have been derived from unaudited consolidated financial statements included
elsewhere in this prospectus.
<TABLE>
<CAPTION>
THREE MONTHS
FISCAL YEAR ENDED MAY 31, ENDED AUGUST 31,
------------------------------------ ----------------------
1997 1998 1999 1998 1999
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Net revenue........................................ 100.0% 100.0% 100.0% 100.0% 100.0%
Cost of revenue.................................... 80.9 80.7 82.8 81.9 82.5
----- ----- ----- ----- -----
Gross margin....................................... 19.1 19.3 17.2 18.1 17.5
Selling, general, administrative, and other
expenses......................................... 16.6 17.8 19.0 19.9 15.1
Restructuring and merger costs..................... 0.1 0.3 1.1 1.4 --
----- ----- ----- ----- -----
Operating margin................................... 2.4 1.2 (2.9) (3.2) 2.4
</TABLE>
The following table shows our materials division and equipment division
revenue as a percent of net revenue, together with the related gross margins:
<TABLE>
<CAPTION>
THREE MONTHS
FISCAL YEAR ENDED MAY 31, ENDED AUGUST 31,
--------------------------- ------------------
1997 1998 1999 1998 1999
----- ----- ----- ------ ------
<S> <C> <C> <C> <C> <C>
Net revenue
Equipment division............................... 62.9% 55.1% 55.7% 59.5% 53.0%
Materials division............................... 37.1 44.9 44.3 40.5 47.0
Gross margins
Equipment division............................... 18.2% 17.4% 14.9% 16.5% 14.1%
Materials division............................... 20.5 21.6 20.1 20.5 21.3
</TABLE>
THREE MONTHS ENDED AUGUST 31, 1999 COMPARED TO THREE MONTHS ENDED AUGUST 31,
1998
NET REVENUE.
EQUIPMENT DIVISION. The equipment division's net revenue for the three
months ended August 31, 1999 was $36.8 million, an increase of $2.8 million or
8.3% from the three months ended August 31, 1998. Revenue gains in Asia and
Europe were offset by lower revenue in the United States, where revenue is
particularly dependent on a small number of high-dollar transactions. Service
revenue was lower in the three months ended August 31, 1998, principally as a
result of a reduction in the amount of deferred revenue realized from the
installation and warranty of equipment. This reduction was due to lower
equipment sales during the second through fourth quarters of fiscal 1999
compared to the same quarters in fiscal 1998. The division's revenue decreased
as a percentage of total revenue owing to higher growth of materials division
revenue.
MATERIALS DIVISION. The materials division's net revenue for the three
months ended August 31, 1999 was $32.7 million, an increase of $9.8 million or
42.3% from the three months ended August 31,
24
<PAGE>
1998. The division recorded higher revenue in all regions, with particularly
strong growth coming from the United States.
GROSS MARGINS
EQUIPMENT DIVISION. The equipment division's gross margin was 2.4
percentage points lower for the three months ended August 31, 1999 compared to
the three months ended August 31, 1998. The decline was due to the lower service
revenues cited above which were insufficient to cover the largely fixed costs of
Metron's service organization, and to lower commission revenue in the three
months ended August 31, 1998.
MATERIALS DIVISION. The gross margin of the materials division increased
0.8 percentage points for the three months ended August 31, 1999 compared to the
three months ended August 31, 1998. Higher gross margins in Asia and the United
States offset a slight margin decline in Europe.
SELLING, GENERAL, ADMINISTRATIVE AND OTHER (SG&A) EXPENSES. SG&A expenses
for the three months ended August 31, 1999 were $10.5 million, down
$0.8 million or 7.0% from the $11.3 million incurred in the three months ended
August 31, 1998. The decline is due to reduced salary and other employment
related costs as a result of lower headcount.
RESTRUCTURING AND MERGER COSTS. There was no restructuring expense in
either period, but in the three months ended August 31, 1998, Metron incurred
$806,000 of expenses in connection with the acquisition of Kyser which was
consummated during the period. There were no comparable merger costs in the
three months ended August 31, 1999.
FISCAL YEAR ENDED MAY 31, 1999 COMPARED TO FISCAL YEARS ENDED MAY 31, 1998 AND
1997
NET REVENUE
EQUIPMENT DIVISION. The equipment division's net revenue in fiscal 1999 was
$127.4 million, down $24.2 million or 16.0% from fiscal 1998. Net revenue in
fiscal 1998 was $151.6 million, down $36.3 million or 19.3% from $187.9 million
in fiscal 1997. The revenue decline over the three-year period was primarily the
result of reduced equipment sales in Europe, our largest geographic segment. The
decline in our equipment sales during the three-year period ended May 31, 1999
reflected the influence of the cyclical slowdown in the growth of the
semiconductor industry. In the third and fourth quarters of fiscal 1999, as the
industry began to emerge from its prolonged downturn, revenue grew by 16.2% in
the third quarter and 6.4% in the fourth quarter of fiscal 1999.
MATERIALS DIVISION. The materials division's net revenue in fiscal 1999 was
$101.2 million, down $22.2 million or 18.0% from fiscal 1998. Net revenue in
fiscal 1998 was $123.4 million, up $12.8 million or 11.6% from the
$110.6 million in fiscal 1997. The decline in net revenue in fiscal 1999 was a
result of the reduced and delayed expansion and construction of semiconductor
facilities and lower than expected increases in the number of wafers processed.
In fiscal 1999, materials revenue was lower in all geographic areas. However, as
the industry began to emerge from its prolonged downturn, revenue grew
sequentially from the two year low in the first quarter and, in the fourth
quarter of fiscal 1999, was 21.3% higher than in the third quarter. The increase
in fiscal 1998 from fiscal 1997 was primarily due to revenue growth in Europe
and the United States, with a smaller amount of revenue growth in Asia.
GROSS MARGINS
EQUIPMENT DIVISION. The equipment division's gross margin declined in both
fiscal 1999 and fiscal 1998. The decline in gross margin in fiscal 1999 was due
principally to the lower proportion of division revenue represented by
commission sales. This reflected both the closure of our United States
25
<PAGE>
manufacturers' representative sales business in December 1998 and the decline in
equipment sales in South Korea, most of which are structured as commission
sales. The decline in gross margin in fiscal 1998 was due principally to the
fact that we recorded a small loss on service in fiscal 1998, whereas we
recorded a small profit in fiscal 1997.
MATERIALS DIVISION. The gross margin of the materials division declined in
fiscal 1999. The decline was due principally to changes in product mix,
increased reserves which we booked for potential inventory obsolescence and
higher period costs. Gross margin increased in fiscal 1998 as a result of
changes in product mix and higher margins on materials sales in Asia.
SELLING, GENERAL, ADMINISTRATIVE AND OTHER (SG&A) EXPENSES. SG&A expenses
in fiscal 1999 were $43.4 million, down $5.6 million or 11.4% from the
$49.0 million incurred in fiscal 1998. Fiscal 1998 expenses were down by
$0.4 million or less than 1% from the $49.4 million incurred in fiscal 1997.
SG&A expenses consist principally of salaries and other employment-related
costs, travel and entertainment, occupancy, communications and computer-related
expense, trade show and professional services, depreciation and amortization of
acquisition goodwill. Our SG&A expenses are a function principally of our total
headcount. Over 60% of SG&A expenses consist of salaries and other
employment-related costs.
The decrease in SG&A expenses in fiscal 1999 was primarily the result of the
reduction in headcount levels which we made to match the lower than expected
levels of revenue. However, because we base our headcount levels on longer term
revenue goals, we did not reduce headcount sufficiently to prevent SG&A expense
from increasing as a percentage of net revenue.
RESTRUCTURING AND MERGER COSTS. The following table summarizes the
restructuring and merger costs we incurred in the periods indicated.
<TABLE>
<CAPTION>
THREE MONTHS
FISCAL YEAR ENDED MAY 31, ENDED AUGUST 31,
-------------------------------------- -----------------------
1997 1998 1999 1998 1999
-------- -------- -------- -------- --------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
Restructuring costs.............................. -- $261 $1,835 -- --
Merger costs..................................... $258 620 715 $806 --
---- ---- ------ ---- ----
Restructuring and merger costs................. $258 $881 $2,550 $806 --
==== ==== ====== ==== ====
</TABLE>
Restructuring costs represent primarily severance costs associated with the
implementation of our new organizational structure and other reductions in
headcount. During fiscal 1998, we began the transition from our organizational
structure based on geography to a global organization built around our product
lines. The restructuring costs incurred during fiscal 1998 represent termination
costs for 13 employees, primarily in finance and administration. This change did
not have a material impact on restructuring and merger expenses in fiscal 1998,
but we incurred approximately $856,000 of charges in fiscal 1999. This
represents the termination costs of 51 employees, most of whom worked in the
equipment division. In February 1999, we entered into an early retirement
agreement with one of our managing directors in connection with the termination
of his employment agreement. To cover the entire cost of the early retirement
agreement, we recorded a pre-tax charge of $979,000 in fiscal 1999.
All the merger costs we incurred, primarily professional fees, were in
connection with the acquisition of Kyser. We began discussions with Kyser
regarding a possible combination of the two companies in fiscal 1997.
Discussions were terminated for extended periods of time and subsequently
resumed several times before completion of the transaction in July 1998.
26
<PAGE>
OTHER EXPENSE. The following table summarizes the components of other
income (expense) for the periods indicated.
<TABLE>
<CAPTION>
THREE MONTHS
FISCAL YEAR ENDED MAY 31, ENDED AUGUST 31,
------------------------------------ ----------------------
1997 1998 1999 1998 1999
-------- -------- -------- -------- --------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
Foreign exchange gain (loss).................... $ (578) $ 489 $ 211 $ 58 $(114)
Interest income................................. 487 514 438 83 69
Interest expense................................ (1,260) (1,110) (913) (252) (263)
Loss on the sale of joint ventures.............. -- -- (140) -- --
Miscellaneous income............................ 749 36 7 (101) 110
------- ------- ----- ----- -----
Other expense................................... $ (602) $ (71) $(397) $(212) $(198)
======= ======= ===== ===== =====
</TABLE>
We engage in limited hedging activities to reduce our exposure to exchange
risks arising from fluctuations in foreign currency, but because hedging
activities can be costly, we do not attempt to cover all potential foreign
currency exposures. During the three-year period ended May 31, 1999, we entered
into contracts to hedge firm purchase commitments, to hedge the maturities of
foreign currency denominated liabilities with foreign currency denominated
assets and to hedge differences existing between foreign currency assets and
liabilities. The currencies in which we purchase forward exchange contracts have
numerous market makers to provide ample depth and liquidity for our hedging
activities.
Interest income represents primarily earnings on our available cash
balances. The decrease in our interest income in fiscal 1999 is a result of
lower average cash balances and of declining interest rates. Our interest
expense decreased year over year primarily as the result of reduced interest
rates, and the reduction in average borrowings from our various overdraft
facilities.
QUARTERLY RESULTS OF OPERATIONS
The following tables present certain consolidated statements of operations
data in dollars and as a percentage of net revenue for the eight quarters ended
August 31, 1999. In management's opinion, this unaudited information has been
prepared on the same basis as our audited annual Consolidated Financial
Statements and includes all adjustments (consisting only of normal recurring
adjustments) necessary for fair presentation of the unaudited information for
the quarters presented. The results of operations for any quarter are not
necessarily indicative of results that we may achieve for any subsequent
quarters.
27
<PAGE>
<TABLE>
<CAPTION>
QUARTER ENDED
-------------------------------------------------------------------------------------------
NOV. 30, FEB. 28, MAY 31, AUG. 31, NOV. 30, FEB. 28, MAY 31, AUG. 31,
1997 1998 1998 1998 1998 1999 1999 1999
--------- --------- -------- --------- --------- --------- -------- ---------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
CONSOLIDATED STATEMENT OF
OPERATIONS DATA:
Net revenue................. $72,209 $78,249 $63,014 $56,922 $51,296 $56,559 $63,840 $69,473
Gross profit................ 13,432 14,343 12,689 10,326 8,445 9,022 11,530 12,141
Income (loss) from
operations................ 158 1,364 271 (1,801) (2,595) (2,832) 610 1,652
Net income (loss)........... (308) 563 (39) (1,266) (1,513) (1,899) 144 903
Basic net income (loss) per
share..................... $ (0.03) $ 0.05 $ 0.00 $ (0.12) $ (0.15) $ (0.18) $ 0.01 $ 0.09
Diluted net income (loss)
per share................. $ (0.03) $ 0.05 $ 0.00 $ (0.12) $ (0.15) $ (0.18) $ 0.01 $ 0.08
PERCENTAGE OF NET REVENUE:
Net revenue................. 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%
Gross profit................ 18.6 18.3 20.1 18.1 16.5 16.0 18.1 17.5
Income (loss) from
operations................ 0.2 1.7 0.4 (3.2) (5.1) (5.0) 1.0 2.4
Net income (loss)........... (0.4) 0.7 (0.1) (2.2) (2.9) (3.4) 0.2 1.3
</TABLE>
Our quarterly operating results have fluctuated significantly and are likely
to continue to fluctuate significantly due to a number of factors including:
- the timing of significant customer orders and customer spending patterns;
- the timing of product shipments by our principals;
- the loss of any significant customer or principal;
- the timing of new product and service announcements by our principals and
their competitors;
- the mix of products sold and the market acceptance of our new product
lines;
- the efficiencies we are able to achieve in managing inventories of
materials and spare parts;
- the timing of expenditures intended to increase future sales of materials
and equipment;
- general global economic conditions or economic conditions in a particular
region;
- changes in pricing by us, our principals or our competitors;
- changes in currency valuations relative to the U.S. dollar;
- costs we may incur if we become involved in future litigation; and
- other factors, many of which are beyond our control.
28
<PAGE>
Net revenue has fluctuated over the past eight quarters primarily due to the
cyclical downturn of the semiconductor industry. The following table shows our
materials division and equipment division net revenue, together with their
related gross margins:
<TABLE>
<CAPTION>
QUARTER ENDED
------------------------------------------------------------------------------------------
NOV. 30, FEB. 28, MAY 31, AUG. 31, NOV. 30, FEB. 28, MAY 31, AUG. 31,
1997 1998 1998 1998 1998 1999 1999 1999
--------- --------- -------- -------- --------- --------- -------- ---------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net revenue
Equipment
division.......... $39,352 $47,804 $32,812 $33,975 $27,507 $31,950 $33,991 $36,807
Materials
division.......... 32,857 30,445 30,201 22,948 23,790 24,609 29,849 32,666
Gross margins
Equipment
division.......... 16.9% 15.7% 18.9% 16.5% 13.9% 12.9% 15.9% 14.1%
Materials
division.......... 20.7 22.5 21.4 20.5 19.4 19.9 20.5 21.3
</TABLE>
Equipment division revenue for the past eight quarters fluctuated primarily
due to the factors described above. The decline in materials division revenue
during the first quarter of fiscal 1999 was primarily due to the slowdown in the
construction of semiconductor fabrication facilities. In the fourth quarter of
fiscal 1999, the increase in equipment and materials division revenue reflects
the beginning of the industry's emergence from its prolonged downturn.
Equipment division gross margins fluctuate primarily due to changes in
product mix. Materials division gross margins have remained relatively stable
for the past eight quarters except for the second and third quarters of fiscal
1999 when we recorded additional provisions for inventory which we purchased for
customer orders in Asia that were subsequently delayed or canceled.
LIQUIDITY AND CAPITAL RESOURCES
Our principal sources of liquidity to date have been cash flow from
operations and bank borrowings. We define liquidity as our ability to generate
resources to pay our current obligations and to finance our growth during
periods of business expansion. Our principal requirement for capital is for
working capital to finance receivables and inventories. Our working capital,
current assets less current liabilities, at August 31, 1999 was $24.0 million.
Our working capital at May 31, 1999 was $22.6 million. As a result of lower
revenue, our working capital decreased 7.5% from May 31, 1998, and our current
ratio, current assets divided by current liabilities, was 1.3 at May 31, 1998
and 1.4 at May 31, 1999.
OPERATING ACTIVITIES. Cash flows from operating activities in fiscal 1998
were $1.1 million. The net total of items which did not affect operating cash
flows, $4.1 million, was offset by net changes in assets and liabilities of a
similar amount. As a result, the $1.1 million of cash flows from operating
activities in fiscal 1998 were approximately equal to net income. Cash flows
from operating activities in fiscal 1999 were a negative $3.0 million, largely
as the result of Metron's net loss of $4.5 million. In fiscal 1999, the net
total of items which did not affect operating cash flows increased to
$4.8 million. The increase was principally due to the fact that we provided
additional reserves against inventory purchased for customers in Asia who
subsequently deferred or canceled their orders, and took a reserve against a
receivable from a customer in Europe who filed for bankruptcy. The net effect of
changes in assets and liabilities in fiscal 1999 was approximately
$3.3 million. A significant reduction in receivables caused by the reduction in
revenue was offset by reductions in accounts payable and amounts due to
affiliates, which are also accounts payable. The decline in equipment revenue in
fiscal 1999 also caused a significant reduction in the amounts deferred for
installation and warranty. The net effect of all these items was a positive
$1.5 million.
INVESTING ACTIVITIES. In fiscal 1998, we contributed $526,000 to increase
our investment in FSI-CME, a joint venture with FSI in Europe, and invested
$583,000 to purchase a 35% interest in a
29
<PAGE>
new Korean joint venture with FSI called FSI-CMK. In February 1999, we sold our
interests in these joint ventures to FSI for $2.5 million.
During fiscal 1999, through our wholly-owned subsidiary Metron Technology
(United Kingdom) Ltd. we formed a joint venture with WS Atkins Plc., a publicly
traded provider of engineering and facilities maintenance services around the
world. This joint venture Metron Atkins Partnership Limited, of which we own a
50% interest, makes available the services of both joint venturers to the
semiconductor industry and coordinates the supply of services from others. These
services include the design and engineering of manufacturing facilities changes,
facilities management and comprehensive technical support.
Our capital expenditures for property, plant and equipment totaled
$3.6 million for fiscal 1997, $4.0 million for fiscal 1998 and $1.4 million for
fiscal 1999. Most of our capital expenditures are for leasehold improvements and
computer and communications equipment. We expect that our total capital
expenditures in fiscal 2000 will be about $2.5 million, excluding whatever
portion we incur this year of the costs of a new operations management
information system which we estimate could total $3.0 to $4.0 million over a 24
to 36 month period. At May 31, 1999, we had commitments to spend approximately
$22.0 million for the purchase of equipment, materials and spare parts for
resale.
FINANCING ACTIVITIES. During the three-year period ending May 31, 1999, we
satisfied our funding requirements principally from internally generated funds
and our various borrowing facilities. In fiscal 1999, we repurchased common
shares from two employee shareholders for a total of $1.2 million pursuant to
the Amended and Restated Buy and Sell Agreement. We expect that the net proceeds
from this offering, along with cash generated from operations, will be
sufficient to meet our anticipated needs for working capital both in the
short-term and the long-term. We do not anticipate that we will need to raise
additional capital to permit us to conduct our operations in the ordinary
course. However, we may need to raise additional capital for significant
acquisitions or other extraordinary transactions. We do not currently have any
specific plans, agreements or commitments related to any such transaction and
are not currently engaged in any negotiations related to any such transaction.
We have no plans to pay any dividends on our common shares and intend to retain
all of our future profits to fund future growth. However, our future growth,
including potential acquisitions, may require additional external financing, and
from time to time we may need to raise additional funds through public or
private sales of equity and/or additional borrowings. If we are unable to obtain
this additional funding, we might have to curtail our expansion plans. The
issuance of additional equity or debt securities convertible into equity could
result in dilution to our existing shareholders.
The following table summarizes our material borrowing facilities as of
August 31, 1999:
<TABLE>
<CAPTION>
RECENT
U.S. $ EQUIVALENT AMOUNT AMOUNT INTEREST
LENDER FACILITY AMOUNT CURRENTLY OUTSTANDING AVAILABLE RATE
- ------ ----------------- --------------------- --------- ----------
<S> <C> <C> <C> <C>
Deutsche Bank......................... 4,283,398 3,272,794 1,010,604 7.50%
Royal Bank of Scotland................ 3,427,465 1,692,069 1,735,396 7.25%
Silicon Valley Bank................... 4,000,000 3,200,000 800,000 8.00%
Compass Bank.......................... 8,500,000 6,985,226 1,514,774 7.50%
ING Bank.............................. 1,401,933 216,748 1,185,185 7.50%
All Others............................ 2,055,999 845,163 1,210,836 5.0 to 8.5%
Total................................. 23,668,795 16,212,000 7,456,795
========== ========== =========
</TABLE>
YEAR 2000 IMPLICATIONS
The year 2000 problem arises because many older computer hardware and
software systems use only two digits to represent the year. As a result, these
systems and programs cannot distinguish
30
<PAGE>
between 20(th) and 21(st) century dates, which may cause errors in information
or system failures. Since uncertainty is inherent in any assessment of the
potential year 2000 issues, we recognize the need to remain vigilant and are
continuing our analysis, assessment and conversion for the various year 2000
issues which we have identified across our business.
We utilize many third party software packages for our business applications
and computer systems that support our day-to-day operations. We are upgrading
our business applications and computer systems to be year 2000 compliant as the
result of our analysis of identified year 2000 deficiencies.
Many of the pieces of equipment we sold to customers in prior years and sell
now rely on specialized integrated software to monitor and control their
functions. Since the beginning of 1998, we have been working with suppliers and
customers to review and assess the software in these older products and in our
current product portfolio to identify any year 2000 issues. In January 1999, we
completed a report on all our current equipment principals, including our key
principals FSI and Entegris, and sent it to all of our customers. To date, we
have completed analysis of approximately 80% of our installed base and found
that about 10% require modification or upgrading to be year 2000 compliant. Our
goal is to complete this analysis as soon as we can, but we are significantly
dependent for information on our customers and on former principals, and we
cannot predict whether we will be able to complete the project before
December 31, 1999. We believe that those principals that are not currently
year 2000 compliant will be compliant before the year 2000. Wherever possible,
we are letting our customers know what upgrades or modifications are necessary
to be year 2000 ready. We are in the process of upgrading the software for
certain customers and are working with all of our customers to insure that any
necessary upgrades can be scheduled for completion in a timely manner. In
addition, we have asked those customers that do not wish to receive an upgrade
to sign a disclaimer. We also intend to support our customers with spare parts
and technical support, after the year 2000 commences.
Our internal systems include both information technology, or IT, and non-IT
systems. We are in the process of completing an assessment of our material
internal IT systems, including both our own software products and third-party
software and hardware technology, but we have not initiated an assessment of our
non-IT systems. We expect to complete testing of our IT systems in 1999. To the
extent that we are not able to test the technology provided by principals and
third-party vendors, we are seeking assurances from vendors that their systems
are year 2000 compliant and/or installing upgrades and modifications where
recommended. We are not currently aware of any material operational issues or
costs associated with preparing our internal IT and non-IT systems for the year
2000. However, we may experience material unanticipated problems and costs
caused by undetected errors or defects in the technology used in our internal IT
and non-IT systems. Although the year 2000 project team has not yet determined
the most-likely worst-case year 2000 scenarios or quantified the likely impact
of these scenarios, it is clear that the occurrence of one or more of the risks
described above could have a material adverse effect on our business, financial
condition or results of operations.
While we have made efforts to notify our customers who have purchased
potentially non-compliant products, we cannot be sure that these customers will
not assert claims against us alleging that the purchased products should have
been year 2000 compliant at the time of purchase, which could result in costly
litigation and divert management's attention. We cannot be sure that we will not
encounter unforeseen problems related to year 2000 issues, but we currently
expect that the year 2000 program and any resulting issues will be resolved in a
timely manner. We are currently incurring staff costs and may incur other costs
to complete our program to resolve year 2000 issues, but we do not account for
these costs separately. Although we do not separately account for year 2000
expenses, we estimate that the expenses we have incurred to date to address
year 2000 issues have not been material and, although we have not completed our
full assessment of our year 2000 readiness, we do not expect to incur material
expenses in connection with any required future remediation efforts.
31
<PAGE>
We have not developed a contingency plan related to a failure of our, or a
third party's, year 2000 remediation effort and may not be prepared if this
occurs. We are also subject to external forces, both in the United States and
elsewhere, that might affect generally affect industry and commerce, such as
utility or transportation company year 2000 compliance failures and related
service interruptions.
EFFECT OF CURRENCY EXCHANGE RATE AND EXCHANGE RATE RISK MANAGEMENT
A significant portion of our business is conducted outside of the United
States through our foreign subsidiaries. While most of our international sales
are denominated in dollars, some are denominated in various foreign currencies.
To the extent that our sales and operating expenses are denominated in foreign
currencies, our operating results may be adversely affected by changes in
exchange rates. Owing to the number of currencies involved, the substantial
volatility of currency exchange rates, and our constantly changing currency
exposures, we cannot predict the effect of exchange rate fluctuations on our
future operating results. Although we engage in foreign currency hedging
transactions from time to time, these hedging transactions can be costly, and
therefore, we do not attempt to cover all potential foreign currency exposures.
These hedging techniques do not eliminate all of the effects of foreign currency
fluctuations on anticipated revenue.
In addition, the transition period from legacy currencies to the euro
currently is set to expire January 1, 2002. We are assessing our information
technology systems to determine whether they will accommodate the eventual
elimination of the legacy currencies. If our information technology systems are
unable to do so, they would have to be upgraded or replaced.
MARKET RISK
At May 31, 1999 we had aggregate forward exchange contracts in various
currencies as follows:
<TABLE>
<CAPTION>
WEIGHTED AVERAGE
CONTRACT AMOUNT US$ BUY SELL CONTRACT RATE FAIR VALUE EXPIRATION DATE
- --------------------- ----------------- ----------------- ---------------- ---------- ---------------
<C> <S> <C> <C> <C> <C>
$3,773,000 -- Singapore Dollars 1.69 $ 98,319 January 2000
$4,889,000 Japanese Yen 107.26 (1,439) March 2000
$2,022,000 Singapore Dollars 1.67 3,578 January 2000
$1,700,000 Italian Lira 1,864.90 5,492 July 1999
$ 500,000 British Pound 1.63 (475) June 1999
$ 700,000 Deutsch Mark 1.79 (36,445) July 1999
--------
$ 69,030
========
</TABLE>
The building mortgage with the Royal Bank of Scotland plc interest rate is
comprised of a variable LIBOR rate, a fixed rate of 1.5%, and a regulatory bank
charge. In May 1996 we entered into an interest rate swap, expiring June 2001,
to convert only the variable LIBOR portion of the interest rate to a fixed
interest rate of 7.72%. The interest rates at May 31, 1998 and 1999 for the
mortgage were 9.25% and 6.87%, while the interest rates for the swap were 9.27%
and 9.24%, respectively. At May 31, 1999, the notional amount for the interest
rate swap was $1,002,000 and its estimated fair value was a payable of $43,000.
32
<PAGE>
BUSINESS
OVERVIEW
We are a leading global provider of marketing, sales, service and support
solutions to semiconductor materials and equipment suppliers and semiconductor
manufacturers. On behalf of semiconductor materials and equipment suppliers,
which we refer to as our principals, we provide a broad range of materials and
equipment to leading semiconductor manufacturers such as Advanced Micro Devices,
IBM, Intel, Lucent, Motorola, NEC Electronics, Philips, Infineon (Siemens) and
STMicroelectronics. We also provide semiconductor manufacturers with the ability
to outsource a wide variety of silicon wafer fabrication, or fab, and equipment
support services, such as materials management, cleanroom services and facility
maintenance. Our principals are both independent companies that have developed
emerging technologies and divisions of larger companies that have other primary
products and markets and include Cabot, Entegris, FSI, Komatsu, Pall,
Schumacher, SDI, Seiko Instruments and Zeiss. Our materials offerings include an
extensive array of over 15,000 items, including wafer carriers and shippers,
fluid and gas handling components, high purity chemicals and cleanroom products.
Our equipment offerings include cleaning, microlithography, which refers to the
part of the fabrication process during which an image is projected on to a wafer
by passing light through a photomask, metrology, which refers to the measurement
and inspection of the wafer during the fabrication process, photomask inspection
and repair, which refers to the inspection and repair, if necessary, of the
glass or quartz photomasks used during the microlithography process, and
inspection and defect characterization, which refers to the process by which
silicon wafers are inspected during and after fabrication, equipment.
INDUSTRY BACKGROUND
Semiconductor Industry Association data indicated that the semiconductor
industry grew from $21.5 billion in revenue in 1985 to $125.5 billion in revenue
in 1998, representing a compound annual growth rate of 14.6%. Although the
industry recently experienced one of its periodic down cycles, Dataquest
estimates that semiconductor industry revenue will reach $153.3 billion in 1999
and will increase at a compound annual growth rate of 12.4% to $244.0 billion in
2003. The increase in demand for semiconductors is driven by the communications
industry, particularly the Internet, as well as growth in traditional markets
for semiconductors such as computers, automobiles and other consumer and
industrial products.
The manufacture of semiconductors requires a wide array of equipment and
materials. The semiconductor capital equipment industry consists of equipment
for wafer manufacture and processing and equipment for assembly, packaging and
testing of semiconductors. According to Dataquest, in 1998, the semiconductor
wafer fabrication equipment industry generated $14.6 billion in revenue. The
high cost of equipment development and the desire of semiconductor manufacturers
to buy products from financially and technically strong suppliers have led to
consolidation among equipment manufacturers. At the same time, the long-term
growth prospects of the industry continue to attract small players with new
technologies to fill product niches. In addition, some suppliers to the industry
are divisions of larger companies which have other primary products and markets.
The semiconductor manufacturing materials industry provides the wide variety
of consumable and manufacturing materials that are required by semiconductor
manufacturers, including wafer carriers and shippers, fluid and gas handling
components, high purity chemicals and cleanroom products. In 1998, the
semiconductor manufacturing materials industry generated $19.8 billion in
revenue. Rapid changes in technology have led to the creation and emergence of
newer semiconductor materials manufacturers offering innovative products. The
materials industry is more fragmented and less cyclical than the equipment
industry, in part because demand for semiconductor materials is driven more by
the volume
33
<PAGE>
of semiconductors produced than by industry capacity and expectations of future
revenue growth. The lower barriers to entry in this industry also attracts new
competitors.
As semiconductors continually become smaller and more complex, the number of
manufacturing steps increases, which requires more complex and costly
semiconductor equipment. The complex manufacturing process also entails the use
of a large variety of materials from many sources. In addition, the high capital
cost of semiconductor fabrication plants, called fabs, which can now exceed
$2.0 billion, requires that fabs quickly reach and maintain optimal productivity
levels in order to maximize their return on investment. This also necessitates
around-the-clock manufacturing, which in turn requires that spare parts,
materials and service be delivered quickly and on short notice.
The semiconductor industry has evolved into a global industry as
semiconductor manufacturers are increasingly operating fabs in multiple
locations throughout the world in proximity to their customers. The requirement
for the rapid ramp-up of new facilities and new products has led semiconductor
manufacturers increasingly to standardize all aspects of their operations and to
require that their suppliers do the same. We believe that in order to ensure
standardization, semiconductor manufacturers are increasingly seeking materials
and equipment suppliers that offer a comprehensive and cost-effective global
procurement solution to their materials, equipment and service needs.
Semiconductor equipment and materials suppliers and semiconductor
manufacturers are increasingly focusing on their core competencies and
outsourcing other aspects of their operations to third parties. The increasing
complexity of semiconductors and related capital investment, combined with
long-term pricing pressures, have led semiconductor manufacturers to
increasingly focus on design, development and manufacturing and outsource to
third parties equipment service, materials management, cleanroom services and
facility maintenance, as well as other similar services. We believe that
outsourcing enables these companies to increase fab productivity in a
cost-effective manner. In addition, semiconductor equipment and materials
suppliers often focus on product development and manufacturing and outsource to
third parties the marketing, sale, installation, service and support of their
products. In particular, smaller semiconductor equipment and materials
manufacturers that cannot afford to invest the time or the capital resources
required to build a global infrastructure, and divisions of larger companies
whose main focus is on other products or markets, often benefit from
outsourcing. Outsourcing enables these companies to reduce time to market,
financial risk and marketing investment while maintaining the ability to compete
with often larger companies with established infrastructures.
Providers of outsourcing services to the semiconductor industry are able to
take advantage of operational efficiencies due to their ability to offer
products and services from multiple suppliers and leverage their infrastructure
costs over a larger revenue base. There are a large number of generally smaller
companies that provide outsourcing services, including regional, privately-held
companies that focus on a portion of, or a specific geographic market in, the
semiconductor manufacturing industry. We believe that semiconductor equipment
and materials manufacturers and semiconductor manufacturers are increasingly
seeking an international services and support company that offers a
comprehensive global solution.
THE METRON SOLUTION
We are a leading global provider of marketing, sales, service and support
solutions to semiconductor materials and equipment suppliers and semiconductor
manufacturers. We provide an important link between semiconductor manufacturers
and our principals. We provide semiconductor manufacturers, who otherwise might
be required to purchase materials and equipment from a range of suppliers
worldwide, with the ability to purchase their materials and equipment through a
single
34
<PAGE>
supplier and the ability to outsource equipment service, materials management,
cleanroom services and facility maintenance. These services enable our customers
to:
- simplify and standardize their materials and equipment purchases in
multiple locations throughout the world;
- focus their resources on product design, development and marketing; and
- increase fab productivity in a cost-effective manner.
We also provide timely and comprehensive marketing, sales, installation,
service and support for materials and equipment manufacturers, enabling our
principals to:
- focus their resources on technology and product development and
manufacturing;
- reduce their time to market, financial risk and marketing investment; and
- enable them to compete more effectively with larger companies with
established infrastructures without investing the time or capital
resources required to build their own infrastructures.
STRATEGY
Our goal is to be the leading global provider of marketing, sales, service
and support solutions to semiconductor materials and equipment suppliers and
semiconductor manufacturers. The key elements of our strategy include:
- LEVERAGE OUR GLOBAL INFRASTRUCTURE AND EXPAND OUR LEADERSHIP POSITION. We
believe that our global infrastructure, as well as our 25-year history of
serving the semiconductor industry, provide us a significant competitive
advantage in serving our principals and customers. As of August 31, 1999,
we had approximately 390 sales and marketing and customer service and
support employees in 33 offices in Asia (except Japan), Europe and the
United States. We plan to continue to leverage our global infrastructure
by offering an increasing variety of products and services.
- CONTINUE TO BROADEN PRODUCT AND SERVICE OFFERINGS. We offer a wide range
of semiconductor manufacturing materials and equipment and plan to
selectively broaden our product lines and territories to meet the needs of
our customers. We believe our competitive advantage is generally greater
in product areas that are not served by one of the large
globally-integrated equipment or materials manufacturers. We will also
seek to enter into additional relationships with non-United States
principals seeking to penetrate the United States market and other markets
outside their home territories. We also plan to expand on-site maintenance
and other support services, including specialized parts cleaning,
inventory management and engineering services. We believe these efforts
will strengthen our long-term relationships with our customers.
- EXPAND MATERIALS BUSINESS. While continuing to expand our equipment
business, we intend to increase the relative size of our materials
business. We believe that the materials business is particularly
well-suited to benefit from the global infrastructure that we have
developed, in part because addressable markets are more fragmented, there
are a large number of individual products and typical transactions are
smaller. Materials products generally offer relatively favorable gross
margins, and the materials business is generally less cyclical than the
equipment business.
- FOSTER LONG-TERM RELATIONSHIPS WITH OUR PRINCIPALS. We seek to continue to
develop long-term relationships with our principals. Generally, within the
territories we serve for a principal, we operate as the exclusive
representative of the principal and do not offer competing product lines.
To foster long-term relationships with our principals, we will continue
the joint training of our sales, service and applications personnel, the
investment in inventories and demonstration equipment, as appropriate, and
the joint participation in trade shows with our principals. In
35
<PAGE>
addition, to help us secure longer term relationships with our principals,
we plan to selectively invest in principals during their later stage
financings.
- ACQUIRE COMPLEMENTARY BUSINESSES. To enable us to better serve our
principals and customers, we plan to selectively acquire complementary
businesses. Potential acquisition candidates include independent regional
sales, service and support companies, which currently operate in a highly
fragmented segment of the semiconductor industry. We believe that our
acquisition strategy will allow us to gain access to new principals and
territories, broaden our offerings to existing customers and gain new
customers. Our acquisition of T.A. Kyser Co. in 1998, an example of our
execution of this strategy, established our United States materials and
components business.
- EXPAND INTO JAPAN. Japan is the second largest producer of semiconductors
in the world and accounted for approximately 21% of world production in
1998. Although we represent a limited number of Japanese principals, we do
not currently operate an office in Japan. We currently intend to open an
office in Japan in 2000 to foster closer relations with Japanese materials
and equipment suppliers and to explore opportunities to service the
Japanese semiconductor manufacturing industry.
PRODUCTS AND SERVICES
We believe Metron markets and sells a wider range of materials, equipment,
spare parts, service and support solutions to the semiconductor industry than
any other independent provider of these products and services. We are organized
into two worldwide operating divisions, materials and equipment. In fiscal 1999,
sales by our equipment division accounted for approximately 56% of our revenue,
and sales by our materials division accounted for approximately 44% of our
revenue.
We operate under a series of agreements with our principals. These
agreements generally give us the exclusive right to market, sell and support
particular products in specific geographic regions. Generally, within the
territories we serve for a principal, we operate as the exclusive representative
of the principal and do not offer competing product lines. The agreements with
our principals are typically cancelable without cause with notice periods that
range from 30 days to two years. In addition to maintaining appropriate
inventories of materials and spare parts, we sometimes purchase equipment for
demonstration purposes which may be installed in a customer's fab for evaluation
purposes or at one of our facilities.
Product selection is critical to our success. We evaluate a large number of
product opportunities, relatively few of which we ultimately add to our product
offerings. In our evaluation of new product lines, we thoroughly review numerous
factors, including the product line's current and projected revenue stream and
market share, whether the product line is sufficiently developed for its
targeted market segment, whether distribution arrangements for the product line
are currently in place, the prospective principal's anticipated ability to offer
innovative and advanced products, the history and stability of the prospective
principal and our ability to market, sell and provide a consistent level of
service and support for the product line.
MATERIALS
Our materials business includes the marketing and sale of an extensive array
of over 15,000 items, including wafer carriers and shippers, fluid and gas
handling components, high purity chemicals and cleanroom products, to
semiconductor manufacturers, manufacturers of semiconductor equipment and to a
lesser extent, customers in other industries such as pharmaceuticals and
petroleum. As of August 31, 1999, our materials division represented over 50
principals. The table below lists the
36
<PAGE>
business units in our materials division, the types of products sold and the
largest principals within each business unit:
<TABLE>
<CAPTION>
BUSINESS UNIT TYPES OF PRODUCTS LARGEST PRINCIPALS
- ------------- ----------------- ------------------
<S> <C> <C>
Gas and fluid handling Valves, fittings and other components for Entegris
ultrapure applications
High end filtration products and systems Pall
Stainless steel control valves and regulators Tescom
Wafer management Wafer transport carriers Entegris
Pellicles MLI
Device handling Semiconductor device transport carriers Entegris
Vacuum release chip trays Gelpak
Quartz components MGI Products
Cleanroom products Latex gloves Omni Sales
Face masks Tecnol
Wipers and swabs Texwipe
Integrated shippers products Wafer and disc shippers Entegris
</TABLE>
We believe the materials business is particularly well-suited to benefit
from our global infrastructure because addressable markets are more fragmented,
there are a large number of individual products and average transaction sizes
are generally smaller than in the equipment business. As a result, we believe
that many companies are often unable to cost-effectively provide materials,
service and support globally in order to meet semiconductor manufacturer
requirements and can benefit from Metron's ability to distribute their products
through our international sales and marketing organization. Similarly, by
working with Metron, a customer can increase sales by improving fab productivity
while reducing inventory, warehousing and other costs. For some fabs of our
customers in the United States, including Motorola and Philips, our materials
division has primary responsibility for the operation of the customer's on-site
warehouse of materials and components we sell. Our experience, infrastructure
and systems in the United States enable us to maintain a highly reliable
materials inventory management and order processing system, which allows us to
increase the speed of order fulfillment and provide other value-added services
to both customers and principals. We plan to expand our activities in this area
to other parts of the world to provide more comprehensive support to more of our
customers.
EQUIPMENT
Our equipment business includes the marketing and sale of equipment,
including products for cleaning, coating, developing and etching; detection,
measurement and quality control tools; equipment used in the manufacture, fault
diagnosis and repair of the masks used to create the complex patterning of
semiconductors; automatic wafer handling, particle counting and cleanroom
monitoring equipment. The equipment division also markets specialized containers
of high purity chemicals which are used in the chemical vapor deposition and
diffusion phases of semiconductor wafer processing. As of
37
<PAGE>
August 31, 1999, our equipment division represented over 40 principals. The
table below lists the largest products by revenue in the equipment division and
the principals for those products:
<TABLE>
<CAPTION>
TYPES OF PRODUCTS PRINCIPALS
- ----------------- ----------
<S> <C>
Environmental gas cleaning systems ATMI
Wafer cleaning tools FSI
Photo-lithography processing tools FSI
High purity wafer processing chemicals Schumacher
Wafer characterization and diagnostic tools SDI
Photomask inspection and repair tools Seiko Instruments
</TABLE>
In July 1999, we signed an agreement with Carl Zeiss to market, sell,
service and support its semiconductor inspection tools in the United States. In
August 1999, we signed an agreement with Komatsu Ltd. to market, sell, service
and support its deep UV excimer lasers in Europe.
Particularly in the equipment business, we believe our competitive advantage
is generally greater in product areas that are not served by one of the large
globally-integrated manufacturers. We have sought, and expect to continue to
seek, relationships with non-United States principals seeking to penetrate the
United States market and other markets outside their home territories.
SERVICE AND SPARE PARTS
We believe that as semiconductor manufacturers become increasingly sensitive
to the costs of system downtime, they direct their purchases to suppliers who
can offer comprehensive local installation, maintenance and repair service and
spare parts. To meet these needs, we provide installation, maintenance, repair
and service for the equipment we sell, and we employ skilled service engineers
in 18 offices located in approximately 13 countries. In some cases, our service
engineers are located on-site at a semiconductor manufacturer's facility. By
continuing to maintain local offices in most major markets and staffing those
offices with nationals fluent in local languages and customs, we are able to
provide our principals and customers with sales, service and support 24 hours a
day, seven days a week where necessary. We provide our customers with
applications services and help them develop customized solutions to technical
problems. To better serve our customers, during fiscal 1999 Metron formed a
joint venture with WS Atkins Plc. to provide additional services to the
semiconductor industry, including facilities management and comprehensive
technical support of production equipment.
Our service personnel receive extensive initial and follow-up training
internally and/or from the principals whose products they service. Our service
personnel generally receive the same training from our principals as their own
personnel and receive and maintain the same certification. We generally warrant
the products we sell for a period of one year, and our warranty liability is
generally backed by a warranty from the principal. If we install the equipment
in a customer's fab, we are generally responsible for the costs of the labor
component of the warranty, and the principal is responsible for replacing parts
which are under warranty. After the warranty period has expired, we also offer
service contracts or on-call service support for equipment which we have
supplied.
We also provide our customers with the spare parts required to maintain and
repair the equipment we have supplied and to operate other systems in their
fabs. We work with our principals to maintain an inventory of mission-critical
spare parts and materials close to our customers' sites so we can deliver the
required parts in the shortest time possible. In some cases, we are responsible
for maintaining inventories at our customers' sites, and we plan to expand the
service we provide in this area.
38
<PAGE>
SALES AND MARKETING
Our worldwide sales and marketing organization is an essential part of our
strategy of maintaining close relationships with our principals and with our
semiconductor manufacturer customers. We provide timely and comprehensive
marketing, sales, service and support for materials and equipment manufacturers,
enabling these manufacturers to focus their resources on technology and product
development. As of August 31, 1999, we had 204 sales and marketing employees in
33 offices in Asia, Europe and the United States. Through these sales and
support offices, we maintain an important link between our principals and
semiconductor manufacturers. Our sales and marketing organization identifies
customer requirements, assists in product selection and monitors each
transaction through final sale, shipment and installation. We also employ
approximately 183 highly-skilled technical and engineering personnel around the
world to support our sales and marketing organization and our customers. In
Europe, we have approximately 114 support personnel in eight countries located
in eleven offices as well as at several semiconductor manufacturers' facilities.
In Asia, we have approximately 57 support personnel in five countries located in
seven offices as well as at several semiconductor manufacturers' facilities. In
the United States, we have approximately eleven support personnel located in two
states. Most of our employees are fully conversant in local languages and
familiar with local business culture and practices.
We offer comprehensive sales and marketing technical support services,
including materials and equipment specification review from the initial sales
effort through on-going product improvement programs; demonstration of materials
and equipment; tool installation, including customer site preparation and final
system acceptance; on-going customer support and process improvement; editing,
improving and writing of operation and maintenance manuals; and customer
training programs including maintenance training and on-site operator training.
Our ability to offer these extensive support services is due in part to
extensive initial and follow-up training of our sales and marketing technical
support personnel both in-house and by the principals whose products we sell. We
also conduct technical seminars, training sessions and user group meetings, and
we own and operate a 720 square foot, Class 100 cleanroom facility in Sunnyvale,
California.
We also employ applications engineers who work closely with our customers to
solve particular customer problems and develop innovative processing solutions
using particular equipment supplied by our principals. In some cases, our
customers' engineers have collaborated with our engineers to produce and publish
technical papers. Application selling and application support is a key part of
our strategy to introduce and sell new technology into the semiconductor
marketplace.
We utilize a number of other marketing techniques that enable our principals
to access new markets and semiconductor manufacturers. We seek to actively
involve our principals in the marketing and sales process and often conduct
joint sales calls on existing and potential customers with representatives from
our principals. We assign product managers to some of our principals to provide
particular attention to the marketing, service and support of specific product
lines. We participate in various trade shows around the world, including Semicon
Europa in Europe, Semicon Korea, Semicon Singapore and Semicon Taiwan in Asia
and Semicon Southwest and Semicon West in the United States.
CUSTOMERS
We market semiconductor materials and equipment to most of the world's
semiconductor manufacturers and to many suppliers to the semiconductor industry,
including semiconductor equipment manufacturers. In fiscal 1999, our 10 largest
customers accounted for approximately 32% of our net revenue. We expect that
sales to relatively few semiconductor manufacturers will continue to account for
a significant percentage of our revenue, although the relative revenue ranking
of individual
39
<PAGE>
customers may change from period to period. The table below sets forth our 10
largest customers in 1999 based on revenue and the geographic regions where we
support these customers:
<TABLE>
<CAPTION>
CUSTOMER LOCATIONS
- -------- ---------
<S> <C>
Advanced Micro Devices Germany, Singapore, United States
Dupont Photomask France, United States
IBM France, Germany, United States
Intel Ireland, Israel, United States
Lucent France, Singapore, United States
Motorola France, Hong Kong, United Kingdom,
United States
NEC Electronics United Kingdom, United States
Philips France, Hong Kong, The Netherlands
Infineon (Siemens) Germany
STMicroelectronics France, Italy
</TABLE>
COMPETITION
The semiconductor industry is highly competitive. We face substantial
competition on two distinct fronts: competition for product lines and
competition for customers.
COMPETITION FOR PRODUCT LINES
For those semiconductor equipment and materials manufacturers who elect to
sell through independent sales and distribution companies, we must compete with
other companies for the right to sell specific product lines. Some of these
independent sales and distribution companies have long-standing collaborative
business relationships with semiconductor equipment and materials manufacturers
which are difficult to overcome. We believe that the most significant
competition on this front comes from regional semiconductor equipment and
materials distribution companies. Furthermore, many equipment and materials
manufacturers choose to sell directly to semiconductor manufacturers in some or
all markets. In Europe and Asia, we compete with equipment and materials
manufacturers who choose to sell their products directly to semiconductor
manufacturers as well as with regional independent distribution companies such
as Hermes in Taiwan and Macrotron and Teltec in Europe. In the United States, we
compete primarily with United States semiconductor equipment and materials
manufacturers who choose to sell their products directly to semiconductor
manufacturers.
We believe that our competitive advantage is greater in product areas that
are not served by one of the large globally-integrated equipment or materials
manufacturers. We believe that to compete effectively we must maintain a high
level of investment in marketing, customer service and support in all of the
markets in which we operate. Although we consider our global operations and
reputation to be significant competitive advantages, we cannot be certain that
we will have sufficient financial resources, technical expertise, or marketing,
services and support capabilities to continue to compete successfully on this
front in the future.
COMPETITION FOR CUSTOMERS
We compete with established semiconductor equipment and materials
manufacturers who sell directly to customers and with other independent sales
and distribution companies for orders from semiconductor manufacturers. Some of
these competitors have greater name recognition in the territories they serve
and have long-standing relationships with semiconductor manufacturers that may
40
<PAGE>
give them a competitive advantage. Other significant competitive factors in the
semiconductor equipment and materials market include product specifications and
quality, product performance, product reliability, process repeatability,
customer service and support, timeliness of new product introductions, in
addition to total cost of ownership and price. We anticipate that as we expand
our product portfolio and expand into new markets, we will encounter additional
competition, and the competitive factors listed above, among others, might make
it difficult for us to establish sales and distribution capability in new
markets such as Japan. This competition, as well as the local political climate
and local business practices, may limit our ability to successfully expand into
new markets. We cannot be certain that we will continue to compete successfully
in the future.
EMPLOYEES
As of August 31, 1999, we had 571 full-time employees, including 142 in our
materials division, 246 in our equipment division and 183 in general
administrative activities, including finance and accounting, sales
administration, shipping and receiving and corporate management. Of our
full-time employees, 125 are located in the United States, 311 are located in
Europe and 135 are located in Asia. None of our employees is covered by a
collective bargaining arrangement. We consider our relationships with our
employees to be good.
FACILITIES
Our corporate headquarters are located in Burlingame, California. The head
of our global materials division is also based in Burlingame, California, and
the head of our global equipment division is based in the United Kingdom. We own
our 30,000 square foot facility in Livingston, Scotland, 18,000 square foot
facility in Aschheim, Germany and 6,500 square foot facility in Almere, The
Netherlands. In addition, we leased space for marketing and customer service and
support purposes in 33 locations worldwide as of August 31, 1999. We operate a
720 square foot, Class 100 cleanroom in our leased facility in Sunnyvale,
California.
LEGAL PROCEEDINGS
We are not a party to any material pending legal proceedings.
41
<PAGE>
MANAGEMENT
SUPERVISORY AND MANAGING DIRECTORS
The following tables set forth, as of August 31, 1999, certain information
with respect to the supervisory directors and managing directors of Metron:
SUPERVISORY BOARD
<TABLE>
<CAPTION>
NAME AGE POSITION
- ---- -------- --------
<S> <C> <C>
Robert R. Anderson(1)(2).................. 61 Supervisory Director
James E. Dauwalter(1)(2).................. 48 Supervisory Director
Joel A. Elftmann(1)(2).................... 59 Supervisory Director
Sho Nakanuma(3)(4)........................ 67 Supervisory Director
</TABLE>
MANAGING BOARD
<TABLE>
<CAPTION>
NAME AGE POSITION
- ---- -------- --------
<S> <C> <C>
Edward D. Segal(5)........................ 59 President, Chief Executive Officer and
Managing Director
Michael A. Grandinetti(6)................. 51 Executive Vice President, Materials
Division and Managing Director
C. Garry Hendricks(6)..................... 65 Vice Chairman of T.A. Kyser Co. and
Managing Director
Peter V. Leigh(6)......................... 54 Vice President, Finance, Chief Financial
Officer and Managing Director
J. Christopher Levett-Prinsep(6).......... 53 Executive Vice President, Equipment
Division and Managing Director
Keith Reidy(6)............................ 42 Vice President, Marketing and Managing
Director
</TABLE>
- ------------------------
(1) Member of the audit committee.
(2) Member of the compensation committee.
(3) Has agreed to serve as a supervisory director of Metron upon completion of
this offering.
(4) Expected to become a member of the audit committee and the compensation
committee.
(5) Managing director A.
(6) Managing director B.
ROBERT R. ANDERSON has been a supervisory director of Metron since
November 1995. Mr. Anderson is presently Chairman of the Board and Chief
Executive Officer of Yield Dynamics, Inc., (YDI) a semiconductor yield
management software start-up company. He became a director of YDI in
August 1997 and Chairman and Chief Executive Officer in October 1998.
Mr. Anderson has been Chairman of the Board of Silicon Valley Research, a
semiconductor design automation software company, since January 1994 and served
as Chief Executive Officer from April 1994 until July 1995 and from
December 1996 until October 1997 and as Chief Financial Officer from
September 1994 to November 1995. Mr. Anderson co-founded KLA Instruments
Corporation, now KLA-Tencor Corporation, a supplier of equipment for
semiconductor process control, in 1975 and served in various
42
<PAGE>
capacities including Chief Operating Officer, Chief Financial Officer, Vice
Chairman and Chairman. Mr. Anderson also serves as a director of Applied
Science & Technology Inc., a supplier of systems components for the
semiconductor industry.
JAMES E. DAUWALTER has been a supervisory director of Metron since
November 1995 and was a managing director from June 1979 until November 1995.
Mr. Dauwalter is Executive Vice President of Fluoroware, Inc., a wholly-owned
subsidiary of Entegris, Inc. which is a principal and a large minority
shareholder of Metron. Mr. Dauwalter joined Fluoroware in 1973. Mr. Dauwalter
also serves as a director of Nippon Fluoroware K.K., Fluoroware-Valqua Japan
K.K. and Fluoroware Southeast Asia PTE Ltd.
JOEL A. ELFTMANN, a co-founder of Metron, has been a supervisory director
since November 1995 and was a managing director from October 1975 until
November 1995. Mr. Elftmann is Chairman of the Board, President and Chief
Executive Officer of FSI International, Inc., a principal and a large minority
shareholder of Metron. Mr. Elftmann is also a co-founder of FSI and has served
as a director of FSI since 1973 and as Chairman of the Board since August 1983.
From August 1983 to August 1989, and from May 1991 until the present,
Mr. Elftmann also has served as Chief Executive Officer of FSI. From 1977 to
August 1983, from May 1991 until January 1998 and from August 1999 to the
present, Mr. Elftmann has served as President of FSI. Mr. Elftmann also serves
as a director of Veeco, Inc.
SHO NAKANUMA, who has agreed to serve as a supervisory director of Metron
upon the closing of this offering, has been Chairman of the Board of Directors
of Ando Electric Company in Japan since June 1997. From 1988 to 1997,
Mr. Nakanuma served as President of Ando Electric Company. From 1984 to 1986,
Mr. Nakanuma served as President of NEC Electronics Inc. in the United States.
From 1985 to 1988, Mr. Nakanuma served as a member of the Board of Directors of
NEC Corporation in Japan. Mr. Nakanuma is a member of the Board of Directors of
Semiconductor Equipment and Materials Internationals in the United States.
Mr. Nakanuma holds a B.S. degree in Chemical Engineering from the University of
Kyoto and a Ph.D. in Engineering from the University of Tokyo.
EDWARD D. SEGAL has been a managing director of Metron since November 1995.
He joined Metron as President and Chief Executive Officer in July 1995. Prior to
joining Metron, Mr. Segal served as President and Chief Executive Officer of
Transpacific Technology Corporation, a company which he founded in 1982.
Mr. Segal is a member of the Board of Directors of Semiconductor Equipment &
Materials International, a trade association for suppliers to the semiconductor
industry. Mr. Segal holds a B.S. degree in Metallurgical Engineering from
Rensselaer Polytechnic Institute.
MICHAEL A. GRANDINETTI has been a managing director and served as Executive
Vice President, Materials Division of Metron since December 1997. From 1990 to
1997, Mr. Grandinetti served in several management positions at Tylan
General, Inc., a publicly-traded manufacturer of mass flow controllers, vacuum
gauges and other engineering products, most recently as Senior Vice President,
and prior to that as Vice President of Sales and Marketing. Mr. Grandinetti
holds a B.S. degree in Mechanical Engineering and an M.S. degree in Engineering
Management from Northeastern University.
C. GARRY HENDRICKS has been a managing director of Metron since
January 1999. He was a founding associate of T.A. Kyser Co. and Chief Executive
Officer since its inception in 1977 until Kyser became a wholly-owned subsidiary
of Metron in July of 1999, at which point he joined Metron and was appointed
Vice Chairman of Kyser. Mr. Hendricks has served on various distributor councils
of principals represented by Metron and its subsidiary, Kyser. Mr. Hendricks
holds a B.B.A. degree from North Texas State University in production
management.
PETER V. LEIGH has served as Vice President, Finance and Chief Financial
Officer of Metron since November 1995 and has been a managing director of Metron
since November 1996. From 1992 to 1995 Mr. Leigh served as Vice President,
Finance and Chief Financial Officer of Sequus Pharmaceuticals, a
43
<PAGE>
publicly-traded bio-pharmaceutical firm. From 1982 until 1992, Mr. Leigh served
as Corporate Controller of Bio-Rad Laboratories, a publicly-traded
multi-national manufacturer and marketer of analytical chemistry, diagnostic and
semiconductor metrology equipment and materials. Mr. Leigh holds a B.A. degree
from the University of Oxford and an M.B.A. degree from the Harvard Business
School.
J. CHRISTOPHER LEVETT-PRINSEP has been a managing director of Metron since
July 1983 and has served as managing director of Metron's United Kingdom
subsidiary, of which he was the founder and first employee, since 1978.
Mr. Levett-Prinsep served as President of Metron's European Operations from
August 1994 until December 1997, when he became Executive Vice President,
Equipment Division. Mr. Levett-Prinsep holds an Ordinary Certificate in
Technology from Coventry Technical College and an Advanced Certificate from
Wednesbury College of Technology.
KEITH REIDY has been a managing director of Metron since April 1999 and has
served as Vice President, Marketing since March 1999. Mr. Reidy has also served
as Director, Product Development and Director, U.S. Representative Organization.
Prior to joining Metron in July 1995, Mr. Reidy served as the Vice President,
Sales of Transpacific Technology. Mr. Reidy holds a B.S. degree in engineering
from the University of California, Davis and an M.S. in engineering from Purdue
University.
DUTIES OF METRON MANAGEMENT
Metron has a supervisory board and a managing board. Under the laws of The
Netherlands, supervisory directors cannot be managing directors of a company.
The primary responsibilities of the supervisory board are supervising the
managing board of Metron and the general affairs and business of Metron and
advising the managing board. The managing board is responsible for the
management of the day-to-day operations of Metron and is required to keep the
supervisory board informed about such operations. Under Metron's articles of
association, the managing board is required to obtain the prior approval of the
supervisory board for those resolutions of the managing board as the supervisory
board has designated by resolution and so informed the managing board. No
resolution to this effect has been passed to date. Generic references in this
prospectus to directors refer to members of either the supervisory board or
managing board. Other executives do not bear the responsibilities attributed to
members of the managing board and the supervisory board, or the related
liabilities, if any.
The Metron articles provide for a supervisory board of one or more persons.
The Metron articles also provide for the appointment of one or more managing
directors A and one or more managing directors B under the supervision of the
supervisory board. The number of supervisory directors and the number of
managing directors is determined by the supervisory board. Metron presently has
three supervisory directors, one managing director A, Mr. Segal, its President
and Chief Executive Officer, and five managing directors B.
The general meeting of shareholders appoints the supervisory directors and
at all times has the power to suspend or dismiss any supervisory director. A
resolution to appoint a supervisory director can only be passed upon
recommendation by the supervisory board. Under the Metron articles, each member
of the supervisory board holds office for a one-year term following that
member's election as a member of the supervisory board, or until that member's
earlier resignation, death or removal by a decision of a general meeting.
However, a member of the supervisory board elected not at the general meeting of
shareholders but at an extraordinary meeting of shareholders serves until the
next general meeting of shareholders or until that member's earlier resignation,
death or removal by a decision of the general meeting. Each member of the
supervisory board holds office until that member's resignation, death or removal
by a decision of a general meeting of shareholders. In addition, each
supervisory director is required to resign as of the date of the general meeting
of shareholders held in the year in which that director attains the age of 72. A
shareholders' resolution to suspend or dismiss a supervisory director must be
adopted by a two-thirds majority of the valid votes cast representing more than
half of the issued share capital.
44
<PAGE>
The entire managing board, as well as each managing director A individually,
has the power to represent Metron and bind Metron in agreements with third
parties. A managing director B may only represent Metron together with another
managing director. The general meeting of shareholders appoints the managing
directors for an unlimited period of time, determines whether the managing
director shall serve as a managing director A or as a managing director B and at
all times has the power to suspend or dismiss any managing director. A
resolution to appoint a managing director can only be passed upon recommendation
by the supervisory board. Each managing director can at all times also be
suspended by the supervisory board for a period of up to three months. A
shareholders' resolution to suspend or dismiss a managing director must be
adopted by a two-thirds majority of the valid votes cast representing more than
half of the issued share capital. The supervisory board decides on the
remuneration and further terms and conditions of employment for each of the
managing directors. Managing directors, along with other employees of
subsidiaries of Metron, are eligible for options under the terms of Metron's
employee option plans.
Metron's managing directors have been appointed by the general meeting of
Metron's shareholders to serve for an indefinite period of time.
COMMITTEES OF THE SUPERVISORY BOARD
In March 1996, the supervisory board created two supervisory board
committees. The compensation committee has responsibility for providing
recommendations to the supervisory board for final decision concerning salaries
and incentive compensation for managing directors, executive officers and
certain key employees of, and consultants to, Metron. The audit committee has
responsibility for reviewing the internal accounting procedures and controls of
Metron and the results and scope of the audit and other services provided by
Metron's independent auditors. At the present time, and until the general
meeting appoints further supervisory board members, all of the existing
supervisory directors are members of both committees.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Our compensation committee consists of Messrs. Anderson, Dauwalter and
Elftmann.
None of the current members of our compensation committee is an officer or
employee of Metron. Mr. Elftmann is Chairman of the Board and Chief Executive
Officer of FSI, one of our principals and shareholders. Mr. Dauwalter is
Executive Vice President of Fluoroware, a wholly-owned subsidiary of Entegris,
one of our principals and shareholders. See "Certain Transactions" for a more
detailed description of the relationship between Metron and each of FSI and
Entegris.
SUPERVISORY DIRECTOR COMPENSATION
The supervisory board may grant a remuneration to one or more of the
supervisory directors. Members of the supervisory board are paid annual
director's fees of $1,000 for each meeting which they attend in person or by
telephone. In addition, supervisory board members are paid $500 for each meeting
they attend of a board committee of which they are a member, but only when the
board committee meets on a day when the supervisory board itself is not meeting.
Beginning in January 1998, the supervisory directors voluntarily opted to forego
receiving their directors fees. The supervisory directors may at any time choose
to accept their director fees and at that point the fees would again be paid by
Metron to the supervisory directors. Each member of the supervisory board will
receive an initial grant of 15,000 options and subsequent annual grants of 3,750
options.
45
<PAGE>
MANAGING DIRECTOR COMPENSATION
The following table sets forth certain information for fiscal 1999 regarding
the compensation of Metron's Chief Executive Officer and each of the four most
highly compensated managing directors of Metron whose salary and bonus for such
year were in excess of $100,000 on an annualized basis, which we refer to as the
Named Executive Officers:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION
-------------------------------------
OTHER ANNUAL ALL OTHER
NAME AND POSITION SALARY BONUS COMPENSATION(1) COMPENSATION
- ----------------- -------- -------- --------------- ------------
<S> <C> <C> <C> <C>
Edward D. Segal .............................. $281,730 $86,000 -- $ 699(2)
President and Chief Executive Officer and
Managing Director
J. Christopher Levett-Prinsep ................ 207,611 60,644 -- 44,338(3)
Executive Vice President, Equipment Division
and Managing Director
Keith Reidy .................................. 192,500 60,000 $1,308(4) 677(2)
Vice President, Marketing and Managing
Director
C. Garry Hendricks ........................... 190,818 25,000 -- --
Vice Chairman of T.A. Kyser Co. and Managing
Director
Peter V. Leigh ............................... 155,513 51,000 -- 614(2)
Vice President, Finance and Chief Financial
Officer and Managing Director
</TABLE>
- ------------------------
(1) None of the perquisites and other benefits paid to any Named Executive
Officer exceeded the lesser of $50,000 or 10% of the total annual salary and
bonus received by the Named Executive Officer.
(2) Represents insurance premiums.
(3) Represents $8,654 in insurance premiums and $35,684 in payments to a defined
contribution plan.
(4) Represents commissions.
OPTION GRANTS IN LAST FISCAL YEAR
There were no options or stock appreciation rights awarded to any of the
Named Executive Officers during fiscal 1999.
46
<PAGE>
AGGREGATE OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END
OPTION/SAR VALUES
None of the Named Executive Officers exercised options in the last fiscal
year. The following table sets forth the number and value of securities
underlying unexercised options held by the Named Executive Officers at May 31,
1999:
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
OPTIONS/SARS AT IN-THE-MONEY OPTIONS
MAY 31, 1999(1) AT MAY 31, 1999(2)
------------------------------ ------------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Edward D. Segal .......................... 493,076 32,872 $2,490,034 $166,004
President and Chief Executive Officer
and Managing Director
J. Christopher Levett-Prinsep ............ 84,375 5,625 426,094 28,406
Executive Vice President, Equipment
Division and Managing Director
Keith Reidy .............................. 84,375 5,625 426,094 28,406
Vice President, Marketing and Managing
Director
C. Garry Hendricks ....................... -- -- -- --
Vice Chairman of T.A. Kyser Co. and
Managing Director
Peter V. Leigh ........................... 78,750 11,250 397,688 56,813
Vice President, Finance and Chief
Financial Officer and Managing Director
</TABLE>
- ------------------------
(1) The weighted average exercise price for these options is $2.87 per share.
(2) The value of unexercised "in-the-money" options is based on the fair market
value of $7.83 as of May 31, 1999, as determined by the supervisory board,
minus the exercise price, multiplied by the number of shares underlying the
option.
EQUITY AND PROFIT SHARING PLANS
EMPLOYEE STOCK OPTION PLAN. The Amended and Restated Employee Stock Option
Plan (Option Plan) was adopted by our supervisory board in February 1995 and
approved by our shareholders in June 1995. An amendment and restatement of the
Option Plan, adopted by our supervisory board in October 1999, amended the
Option Plan in preparation for this offering. Our shareholders will also be
asked to approve the amendment and restatement of the Option Plan.
There are 2,750,000 common shares reserved for issuance under the Option
Plan. Shares subject to share awards that have lapsed or terminated, without
having been exercised in full, and any shares repurchased by Metron pursuant to
a repurchase option provided under the Option Plan may again become available
for the grant of awards under the Option Plan.
The Option Plan provides for grants of incentive stock options that qualify
under Section 422 of the Internal Revenue Code of 1986, as amended (Code), to
our employees, including officers and employee directors, or the employees of
any of our affiliates. Nonqualified stock options, rights to acquire restricted
shares and share bonuses may be granted to employees, including officers,
directors of and consultants to Metron or any of our affiliates. Options, rights
to acquire restricted shares and share bonuses are referred to collectively as
"stock awards" for purposes of the Option Plan. The Option Plan may be
administered by the supervisory board or a committee appointed by the
47
<PAGE>
supervisory board; references herein to the supervisory board shall include any
such committee. After this offering, it is intended that the Option Plan will be
administered by the compensation committee, currently consisting of
Messrs. Anderson, Dauwalter and Elftmann, all of whom are "non-employee
directors" under applicable securities laws and "outside directors," as defined
under the Code. The supervisory board has the authority to determine to whom
awards are granted, the terms of such awards, including the type of awards to be
granted, the exercise price, the number of shares subject to the awards and the
vesting and exercisability of the awards.
The term of an option granted under the Option Plan generally may not exceed
ten years. The exercise price of options granted under the Option Plan is
determined by the supervisory board, but cannot be less than 100% of the fair
market value of the underlying common shares on the date of grant. Options
granted under the Option Plan vest at the rate specified in the option
agreement. No option may be transferred by the optionee other than by will or
the laws of descent or distribution, provided that an optionee may designate a
beneficiary who may exercise the option following the optionee's death. An
optionee whose relationship with Metron or any of our affiliates ceases for any
reason, other than due to disability, generally may exercise vested options
during the 90-day period following such cessation, unless such options terminate
or expire sooner by their terms, or during such longer or shorter period as may
be determined by the supervisory board and set forth in the option agreement.
Vested options generally may be exercised during the 12-month period after an
optionee's relationship with Metron or any of our affiliates ceases due to the
optionee's disability.
No incentive stock options may be granted to any person who, at the time of
the grant, owns, or is deemed to own, shares possessing more than 10% of the
total combined voting power of Metron or any of our affiliates, unless the
option exercise price is at least 110% of the fair market value of the shares
subject to the option on the date of grant and the term of the option does not
exceed five years from the date of grant. In addition, the aggregate fair market
value, determined at the time of grant, of the common shares underlying
incentive stock options which become exercisable by an optionee during any
calendar year may not exceed $100,000. Any options, or portions thereof, which
exceed this limit are treated as nonqualified stock options.
If Metron becomes subject to Section 162(m) of the Code, which denies a
deduction to publicly held corporations for certain compensation paid to
specific employees in a taxable year to the extent that the compensation exceeds
$1,000,000, no person may be granted options under the Option Plan covering more
than 1,000,000 common shares in any calendar year.
Rights to acquire restricted shares granted under the Option Plan may be
granted subject to a repurchase option in favor of Metron that will expire
pursuant to a vesting schedule. The purchase price of such awards will be at
least 85% of the fair market value of the common shares on the date of grant.
Share bonuses may be awarded in consideration for past services without the
payment of a purchase price. Rights under a share bonus or restricted share
bonus agreement may not be transferred other than by will, the laws of descent
and distribution or a qualified domestic relations order while the shares
awarded pursuant to such an agreement remain subject to the agreement, provided
that a holder of such rights may designate a beneficiary who may exercise the
right following the holder's death.
Upon certain changes in control of Metron, all outstanding share awards
under the Option Plan may be assumed by the surviving entity or replaced with
similar share awards granted by the surviving entity. If the surviving entity
does not assume such awards or provide substitute awards, then with respect to
persons whose service with Metron or an affiliate has not terminated prior to
such change in control, the awards shall become fully vested and will terminate
if not exercised prior to such change in control.
As of August 31, 1999, there were 1,926,598 options outstanding under the
Option Plan, held by 331 employees including all of the managing directors, to
purchase shares of Metron at a weighted average exercise price of $5.41 per
share. No other share awards were outstanding under the Option
48
<PAGE>
Plan. The Option Plan will terminate in February 2005, unless terminated sooner
by the supervisory board.
1999 EMPLOYEE STOCK PURCHASE PLAN. In October 1999, our supervisory board
adopted, subject to shareholder approval, the 1999 Employee Stock Purchase Plan
(Purchase Plan). A total of 300,000 common shares have been reserved for
issuance under the Purchase Plan. The Purchase Plan is intended to qualify as an
employee stock purchase plan within the meaning of Section 423 of the Code.
The Purchase Plan provides a means by which employees may purchase common
shares of Metron through payroll deductions. The Purchase Plan is implemented by
offerings of rights to eligible employees. Under the Purchase Plan, the
supervisory board may specify offerings with a duration of not more than
12 months, and may specify shorter purchase periods within each offering. The
initial offering will begin on the effective date of this offering and terminate
on June 1, 2000. Purchase dates under the offerings will occur each June 1 and
December 1. New offerings are expected to begin each June 1 and December 1 after
the initial offering.
Employees who participate in an offering may have up to 10% of their
earnings withheld pursuant to the Purchase Plan. The amount withheld is then
used to purchase common shares on specified purchase dates determined by the
supervisory board, up to a maximum of 10,000 common shares on each specified
purchase date. The price of common shares purchased under the Purchase Plan will
be equal to 85% of the lower of the fair market value of the common shares on
the commencement date of each offering period or the fair market value of the
common shares on the relevant purchase date. Employees who become eligible to
participate in the Purchase Plan for the first time during an ongoing offering
will be permitted to begin participating in the Purchase Plan on the day after
the next purchase date that occurs under the offering. The price of common
shares purchased under the Purchase Plan for employees who begin participating
in the Purchase Plan during an ongoing offering will be equal to 85% of the
lower of the fair market value of the common shares on the day they begin
participating in the Purchase Plan or the fair market value of the common shares
on the relevant purchase date. Employees may end their participation in an
offering at any time during such offering except during the 15-day period
immediately prior to a purchase date. Employees' participation in all offerings
will end automatically on termination of their employment with us or one of our
subsidiaries.
Unless otherwise determined by our supervisory board, employees are eligible
to participate in the Purchase Plan only if they are customarily employed by us
or one of our subsidiaries designated by the supervisory board for at least
20 hours per week and five months per calendar year. No employee shall be
eligible for the grant of any rights under the Purchase Plan if immediately
after such rights are granted, such employee will have voting power over 5% or
more of our outstanding capital shares. Eligible employees may be granted rights
only if the rights together with any other rights granted under employee stock
purchase plans do not permit such employees' rights to purchase shares of Metron
to accrue at a rate which exceeds $25,000 of fair market value of those shares
for each calendar year in which those rights are outstanding.
Upon a change in control of Metron, each right to purchase common shares
will be assumed or an equivalent right substituted by the successor corporation;
if the rights are not assumed or substituted, all sums collected by payroll
deductions will be applied to purchase shares immediately prior to the change in
control. The supervisory board has the authority to amend or terminate the
Purchase Plan; provided, however, that no action may adversely affect any
outstanding rights to purchase common shares.
1997 SUPERVISORY DIRECTORS' STOCK OPTION PLAN. Effective October 1997, our
supervisory board and managing board adopted, and our shareholders approved, the
1997 Supervisory Directors' Stock Option Plan (Directors' Plan), to provide for
the automatic grant of options to purchase common shares to supervisory
directors of Metron. The Directors' Plan is administered by the supervisory
board. In
49
<PAGE>
October 1999, an amendment and restatement of the Directors' Plan was adopted by
the supervisory board in connection with this offering.
The aggregate number of common shares that may be issued pursuant to options
granted under the Directors' Plan is 225,000. Pursuant to the terms of the
Directors' Plan, each of our directors who is not an employee of or consultant
to Metron or one of our affiliates was automatically granted an option to
purchase 15,000 common shares on the effective date of the Directors' Plan. Each
person who is elected or appointed for the first time to be a non-employee
director after the effective date of the Directors' Plan will be granted an
option to purchase 15,000 common shares upon such election or appointment. In
addition, each non-employee director who has served as a non-employee director
for six months prior to an annual meeting and who is reelected at such annual
meeting will be automatically granted an option to purchase 3,750 common shares
on the day of each such annual meeting. The exercise price of options under the
Directors' Plan will equal the fair market value of the common shares on the
date of grant. No option granted under the Directors' Plan may be exercised
after the expiration of ten years from the date on which it was granted.
Each option granted under the Directors' Plan will vest in four equal annual
installments, with the first installment vesting on the first anniversary of the
date of grant, provided that the optionee has, during the entire period prior to
each vesting installment date, continuously served as a non-employee director or
employee of or consultant to Metron or one of our affiliates. If a non-employee
director's service as a non-employee director or employee of or consultant to
Metron or one of our affiliates ceases for any reason other than a voluntary
termination by the optionee or an involuntary termination for cause, the option
will become fully vested on the date of termination. A non-employee director
whose service as a non-employee director or employee of or consultant to Metron
or any of our affiliates ceases for any reason other than death may exercise
outstanding options in the 12-month period following such cessation (unless
these options terminate or expire sooner by their terms). Outstanding options
may be exercised during the 18-month period after such service ceases due to
death.
Upon specified changes in control of Metron, all outstanding share awards
under the Directors' Plan may be assumed by the surviving entity or replaced
with similar share awards granted by the surviving entity. If the surviving
entity does not assume the awards or provide substitute awards, then the awards
will terminate if not exercised prior to the change in control.
As of August 31, 1999, there were 67,500 options outstanding under the
Directors' Plan, held by three non-employee directors, to purchase common shares
of Metron at a weighted average exercise price of $8.03 per share. The
Directors' Plan will terminate in October 2007, unless terminated sooner by the
supervisory board.
T.A. KYSER COMPANY EMPLOYEE STOCK OWNERSHIP PLAN. Prior to our acquisition
of Kyser, Kyser established a stock bonus plan that qualifies as a tax-qualified
employee stock ownership plan under Sections 401(a) and 4975(e)(7) of the Code
and Section 407(d)(6) of ERISA, the T.A. Kyser Company Employee Stock Ownership
Plan (Kyser ESOP). Employees of Kyser are eligible to participate in the Kyser
ESOP. Unlike our 401(k) plan, eligible employees may not make deferrals from
their own compensation as contributions to the Kyser ESOP. Instead, we may make
discretionary contributions to the Kyser ESOP on behalf of eligible employees.
These contributions are then used to purchase common shares of Metron, which is
held in the Kyser ESOP in participants' accounts. Participants may also elect to
invest a portion of their account balances in other investment options. Eligible
employees may not sell the Metron shares held in their accounts until they
retire or otherwise terminate employment with Kyser. Contributions to the Kyser
ESOP, if any, are subject to a vesting schedule. Although Kyser made
contributions to the Kyser ESOP prior to our acquisition of Kyser, we do not
intend to make, and have not made, any contributions to the Kyser ESOP following
that acquisition.
As of August 31, 1999, the Kyser ESOP held an aggregate of 460,683 common
shares.
50
<PAGE>
METRON TECHNOLOGY CORPORATION 401(k) RETIREMENT PLAN. We have established a
tax-qualified employee savings and retirement plan, the Metron Technology
Corporation 401(k) Retirement Plan (401(k) Plan), for eligible employees.
Eligible employees may elect to defer a percentage of their pre-tax gross
compensation in the 401(k) Plan, subject to the statutorily prescribed annual
limit. We may make matching contributions on behalf of all participants in the
401(k) Plan in an amount determined by our supervisory board. We may also make
additional discretionary profit sharing contributions in such amounts as
determined by the supervisory board, subject to statutory limitations. Matching
and profit-sharing contributions, if any, are subject to a vesting schedule; all
other contributions are at all times fully vested. We intend the 401(k) Plan,
and the accompanying trust, to qualify under Sections 401 and 501 of the Code so
that contributions by employees or by Metron to the 401(k) Plan, and income
earned, if any, on plan contributions, are not taxable to employees until
withdrawn from the 401(k) Plan, and so that we will be able to deduct our
contributions, if any, when made. The trustee under the 401(k) Plan, at the
direction of each participant, invests the assets of the 401(k) Plan in any of a
number of investment options.
The Named Executive Officers, along with other members of management, are
also entitled to participate in various annual profit sharing plans which are
adopted on an annual basis by our supervisory board on the recommendation of our
Chief Executive Officer. These profit sharing plans generally provide that we
will reserve various amounts, a profit sharing pool, calculated in accordance
with certain pre-determined formulas, and that participants in a particular
profit sharing pool will be entitled to receive a pre-determined share of such
pool. In addition, the compensation committee of the supervisory board does,
from time to time, grant discretionary bonuses to our employees, including the
Named Executive Officers.
EMPLOYMENT AGREEMENTS AND TERMINATION OF EMPLOYMENT ARRANGEMENTS
All of the Named Executive Officers are employed pursuant to employment
contracts with a subsidiary of Metron which is incorporated in their country of
residence.
Edward D. Segal is employed at will pursuant to an employment contract
entered into in September 1999 with Metron Technology Corporation (MTC), a
California corporation and with Metron Technology N.V. The employment contract
provides that Mr. Segal will serve as a managing director of Metron and as
Metron's President and Chief Executive Officer at an annual salary of not less
than $295,000. The agreement also provides for Mr. Segal's participation in an
annual incentive compensation plan approved by the supervisory board and for
other usual and customary benefits. Metron and MTC agreed to indemnify
Mr. Segal against any liability to which he may be subject for judgments,
settlements, penalties, fees and expenses of defense, including attorney's fees,
bonds and costs of investigation, arising out of or in any way related to acts
or omissions as a member of the management board, or an executive officer, or in
any other capacity in which services are rendered to Metron or MTC and its
subsidiaries. However, Mr. Segal would not be entitled to indemnification under
this agreement under certain circumstances including if indemnification is
expressly prohibited under applicable law and if indemnification is expressly
prohibited by Metron's articles or MTC's charter. If Mr. Segal's employment is
terminated by MTC without cause or by Mr. Segal for good reason or due to
disability, in exchange for Mr. Segal's signing a release of all claims, he will
continue to receive his base salary for a period of 12 months in addition to
other customary benefits.
Michael A. Grandinetti is employed pursuant to an employment contract
entered into in September 1999 with MTC and with Metron Technology N.V. The
employment contract provides that Mr. Grandinetti will serve as a managing
director and as Executive Vice President, Materials of Metron at an annual
salary of not less than $190,000. The agreement also provides for
Mr. Grandinetti's participation in an annual incentive compensation plan
approved by the supervisory board and for other usual and customary benefits.
Metron and MTC agreed to indemnify Mr. Grandinetti against any liability to
which he may be subject for judgments, settlements, penalties, fees and expenses
of defense,
51
<PAGE>
including attorney's fees, bonds and costs of investigation, arising out of or
in any way related to acts or omissions as a member of the management board, or
an executive officer, or in any other capacity in which services are rendered to
Metron or MTC and its subsidiaries. However, Mr. Grandinetti would not be
entitled to indemnification under this agreement under specified circumstances,
including if indemnification is expressly prohibited under applicable law or
prohibited by Metron's articles or MTC's charter. If Mr. Grandinetti's
employment is terminated by MTC without cause or by Mr. Grandinetti for good
reason or due to disability, in exchange for Mr. Grandinetti's signing a release
of all claims, he will continue to receive his base salary for a period of
12 months in addition to other customary benefits.
C. Garry Hendricks is employed pursuant to an employment contract entered
into July 1998 with Kyser, MTC and Metron Technology N.V. The employment
contract provides that Mr. Hendricks will serve as Vice Chairman of Kyser at an
annual salary of not less than $195,000. The agreement also provides that if
Mr. Hendricks' employment is terminated by Metron for cause or by Mr. Hendricks
for good reason prior to July 2001, Mr. Hendricks will enter into a consulting
arrangement with Metron and will continue to receive his base salary until
July 2001. Under the agreement, Mr. Hendricks participates in an annual
incentive compensation plan approved by the supervisory board of Metron and an
incentive compensation plan for employees of Kyser and receives other usual and
customary benefits. Kyser agreed to indemnify Mr. Hendricks against any
liability to which he may be subject for judgments, settlements, penalties, fees
and expenses of defense, including attorney's fees, bonds and costs of
investigation, arising out of or in any way related to acts or omissions as an
employee, officer, director or agent in which services are rendered to Kyser.
However, Mr. Hendricks would not be entitled to indemnification under this
agreement under specified circumstances, including if indemnification is
expressly prohibited under applicable law or prohibited by Kyser's charter.
Peter V. Leigh is employed pursuant to an employment contract entered into
in September 1999 with MTC and with Metron Technology N.V. The employment
contract provides that Mr. Leigh will serve as a managing director of Metron and
as Metron's Vice President, Finance and Chief Financial Officer at an annual
salary of not less than $170,000. The agreement also provides for Mr. Leigh's
participation in an annual incentive compensation plan approved by the
supervisory board and for other usual and customary benefits. Metron and MTC
agreed to indemnify Mr. Leigh against any liability to which he may be subject
for judgments, settlements, penalties, fees and expenses of defense, including
attorney's fees, bonds and costs of investigation, arising out of or in any way
related to acts or omissions as a member of the management board, or an
executive officer, or in any other capacity in which services are rendered to
Metron or MTC and its subsidiaries. However, Mr. Leigh would not be entitled to
indemnification under this agreement under specified circumstances including if
indemnification is expressly prohibited under applicable law or prohibited by
Metron's articles or MTC's charter. If Mr. Leigh's employment is terminated by
MTC without cause or by Mr. Leigh for good reason or due to disability, in
exchange for Mr. Leigh's signing a release of all claims, he will continue to
receive his final base salary for a period of 12 months in addition to other
customary benefits.
J. Christopher Levett-Prinsep is employed by Metron Technology (U.K.) Ltd.,
pursuant to an employment contract entered into in May 1996. The employment
contract provides that Mr. Levett-Prinsep will serve as a managing director of
Metron and of Metron Technology (U.K.) Ltd. and as President of Metron's
European Operations at an annual salary of not less than L103,000, or
approximately $173,000. The agreement also provides for Mr. Levett-Prinsep's
participation in an annual incentive compensation plan approved by our
supervisory board and for other usual and customary benefits. The employment
contract may be terminated by either party on twelve months' notice.
Keith Reidy is employed by Metron Technology Corporation, pursuant to an
employment contract entered into in September 1999 with MTC and with Metron
Technology N.V. The employment contract
52
<PAGE>
provides that Mr. Reidy will serve as a managing director and as Vice President,
Marketing of Metron at an annual salary of not less than $200,000. The agreement
also provides for Mr. Reidy's participation in an annual incentive compensation
plan approved by the supervisory board, and for other usual and customary
benefits. Metron and MTC agreed to indemnify Mr. Reidy against any liability to
which he may be subject for judgments, settlements, penalties, fees and expenses
of defense, including attorney's fees, bonds and costs of investigation, arising
out of or in any way related to acts or omissions as a member of the management
board, or an executive officer, or in any other capacity in which services are
rendered to Metron or MTC and its subsidiaries. However, Mr. Reidy would not be
entitled to indemnification under this agreement under specified circumstances,
including if indemnification is expressly prohibited under applicable law or
prohibited by Metron's articles or MTC's charter. If Mr. Reidy's employment is
terminated by MTC without cause or by Mr. Reidy for good reason or due to
disability, in exchange for Mr. Reidy's signing a release of all claims, he will
continue to receive his base salary for a period of 12 months in addition to
other customary benefits.
LIMITATION OF LIABILITY AND INDEMNIFICATION
In addition to the indemnification provisions included in some of the
managing directors' employment agreements discussed above, under the Metron
articles, except in case of willful misfeasance, bad faith or gross negligence
or improper personal benefit, every person or legal entity who is, or has been,
a managing director, a supervisory director or an officer with the power to
represent Metron, employee or agent of Metron, who is made a party or is
threatened to be made a party to any claim by virtue of such capacity, shall be
indemnified by Metron, to the fullest extent permitted under any applicable law,
against (1) any and all liabilities imposed on him or it, (2) any and all
expenses and (3) any and all amounts paid in settlement by him or it, in each
case in connection with any such claim.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933, as amended, may be permitted to directors, officers or persons
controlling Metron pursuant to the foregoing provisions, Metron has been
informed that in the opinion of the SEC, such indemnification is against public
policy as expressed in the Securities Act and therefore is unenforceable.
53
<PAGE>
CERTAIN TRANSACTIONS
The following is a description of transactions since June 1, 1996, to which
Metron has been a party, in which the amount involved in the transaction exceeds
$60,000, and in which any of our directors, executive officers or holders of
more than 5% of our capital stock had or will have a direct or indirect material
interest other than compensation arrangement which are otherwise required to be
described under "Management."
TRANSACTIONS WITH FSI
Prior to this offering, FSI held approximately 32.7% of Metron's outstanding
shares, and in fiscal 1999, products from FSI accounted for 24% of Metron's
revenue. In addition, Mr. Elftmann, a supervisory director of Metron, is
Chairman of the Board of FSI.
DISTRIBUTION AGREEMENT. In March 1998, Metron and FSI entered into a
distribution agreement which has been amended to reflect FSI's sale of its
chemical management division in July 1999. Pursuant to the terms of this
agreement, FSI and Metron agreed that, with some exceptions, Metron would
distribute some of FSI's products and related spare parts in specific countries
primarily in Europe and Asia. Metron, as distributor, agreed to use its best
efforts to sell the agreed upon products and spare parts in the designated
territory. Provided that FSI does not provide Metron with a termination notice
prior to the closing of this offering, the distribution agreement shall continue
for a term of two years from the date of the closing of the offering. Either
party may terminate the agreement after the expiration of this initial term by
providing at least 12 months prior written notice. In the event that, in
connection with a public offering, the agreement with Entegris is amended to
change the term and termination provisions which are in effect, and if those
terms are more favorable to Entergis, then the agreement with FSI shall be
amended to include the terms of the Entegris amendment regarding the term and
termination.
FSI sells products to Metron and Metron receives from FSI discounts ranging
from 5% to 20% of the net sales price. The exact percentage varies depending on
the product. For some products, the discounts may be renegotiated at the request
of FSI if FSI's ownership of Metron drops below 25%. In cases where customers
receive discounts off of the net sales price, the discounts are generally
divided between FSI and Metron. The actual terms vary depending on product,
location and the extent of the discount.
JOINT VENTURE AND SHARE PURCHASE AGREEMENTS. Prior to February 27, 1999,
Metron and FSI were parties to joint venture agreements. Pursuant to these
agreements, Metron owned 50% of FSI-CME and 35% of FSI-CMK. Metron contributed
470,925,000 South Korean won, or approximately $583,000, as an initial capital
contribution to FSI-CMK in June 1997 and was responsible for 35% of any further
capital contributions. Metron was responsible for 50% of any capital
contributions to FSI-CME. Metron distributed some of the products of FSI-CME
pursuant to a distribution agreement with FSI-CME. Metron was entitled to elect
two members to FSI-CME's board and one member to the board of FSI-CMK.
As of February 27, 1999, Metron entered into share purchase agreements with
FSI pursuant to which Metron sold, and FSI purchased, all of Metron's ownership
interest in FSI-CMK for $310,000 and all of Metron's ownership interest in
FSI-CME for $2,200,000. Metron recorded a loss on the sale of its interest in
FSI-CMK of $263,000 and a gain on the sale of its interest in FSI-CME of
$123,000. Pursuant to the share purchase agreements, Metron agreed to execute
whatever documentation was reasonably determined necessary for the parties to
terminate the joint venture agreements and the distribution agreement with
FSI-CME. In addition, the directors appointed by Metron to the boards of FSI-CMK
and FSI-CME resigned from these board positions. On May 18, 1999 Metron and FSI
entered into an agreement, effective as of February 27, 1999, to terminate the
joint venture agreements and the distribution agreement with FSI-CME.
54
<PAGE>
OTHER AGREEMENTS. FSI is also party to an investor rights agreement which
grants FSI registration rights pursuant to the shares it owns. See "Summary of
Certain Provisions of the Metron Articles and Other Matters--Registration
Rights" for a description of the registration rights granted to FSI.
As a supervisory director of Metron, Mr. Elftmann receives yearly option
grants. In connection with Mr. Elftmann's service as the Chairman of the Board
of FSI, he has entered into an agreement with FSI pursuant to which he agrees to
exercise his options to purchase common shares of Metron at the request of FSI,
to vote the shares received upon exercise of the options as directed by FSI and
to hold title to these shares only as a nominee for FSI, without any beneficial
right, ownership, or interest in the shares. In addition, Mr. Elftmann agreed to
convey title to the option (if this is permitted by its terms) and any shares
received upon exercise of the option to FSI or to sell the shares and remit the
proceeds to FSI upon FSI's request.
TRANSACTIONS WITH ENTEGRIS
Prior to this offering, Entegris held approximately 32.7% of Metron's
outstanding shares, and in fiscal 1999, products from Entegris accounted for 21%
of Metron's revenue. In addition, Mr. Dauwalter, a supervisory director of
Metron, is Executive Vice President and Chief Operating Officer of Fluoroware, a
wholly-owned subsidiary of Entegris.
DISTRIBUTION AGREEMENTS. In July 1995, Metron and Fluoroware, now a
wholly-owned subsidiary of Entegris, entered into a distribution agreement.
Pursuant to the terms of this agreement, Entegris and Metron agreed that, with
some exceptions, Metron would be the exclusive, independent distributor of some
of Entegris's products in specific countries primarily in Europe and Asia.
Metron, as distributor, agreed to use its best efforts to sell the agreed upon
products in the designated territory. Unless the contract is terminated under
specific conditions, the contract will remain in place until July 1, 2000, and
is automatically renewed thereafter for additional terms of two years. The
contract can be terminated upon written notification given more than twelve
months prior to the expiration of the applicable term.
Entegris may sell products for use in the territories on a representative
basis, but agrees to pay Metron a commission of 10% of the applicable sales list
price of the products for all such sales, such commission may, at the option of
Entegris, be divided between Metron and a third party on an equitable basis and
consistent with past practices between Metron and Entegris. With certain
exceptions, products are sold to Metron at the U.S. domestic sales list prices,
less a discount which ranges from 5% to 40% depending on the product, unless
another amount is agreed to in writing.
In September of 1997, Fluoroware entered into a distribution agreement with
Kyser. Pursuant to the terms of this agreement, Fluoroware and Kyser agreed that
Kyser would be stocking distributor for specific Fluoroware gas and liquid
handling products in certain states in the United States. Kyser, as distributor,
agreed to use its best efforts to stock, market and sell products within the
states which comprise its territory. The agreement is for a term of five years,
expiring August 31, 2002, and, unless either party terminates, the agreement is
renewed automatically for successive five year terms. Notice of termination must
be given one year prior to the expiration of the term of the agreement for
termination without cause. Termination for cause may occur at any time if
specific conditions are met.
Fluoroware agreed to sell its products to Kyser at a 15% to 40% discount
from the Fluoroware published list price, with the exact percentage dependent on
the product. In some instances, Kyser may act as a manufacturer's representative
rather than as a stocking distributor. As a manufacturer's representative, Kyser
receives a commission of between 10% and 2% of the sales price depending on the
discount off of the list price given to the customer and the products sold. In
some instances the commission is not specified and is to be negotiated prior to
the sale.
OTHER AGREEMENTS. Entegris is also party to an investor rights agreement
which grants Entegris registration rights pursuant to the shares it owns. See
"Summary of Certain Provisions of the Metron
55
<PAGE>
Articles and Other Matters--Registration Rights" for a description of the
registration rights granted to Entegris.
As a supervisory director of Metron, Mr. Dauwalter receives yearly option
grants. In connection with Mr. Dauwalter's service as the Executive Vice
President of Fluoroware, he has entered into an agreement with Fluoroware
pursuant to which he agrees to exercise his options to purchase common shares of
Metron at the request of Fluoroware, to vote the shares received upon exercise
of the options as directed by Fluoroware and to hold title to these shares only
as a nominee for Fluoroware, without any beneficial right, ownership, or
interest in the shares. In addition, Mr. Dauwalter agreed to convey title to the
option (if this is permitted by its terms) and any shares received upon exercise
of the option to Fluoroware or to sell the shares and remit the proceeds to
Fluoroware upon the request of Fluoroware.
KYSER TRANSACTIONS
In July 1998, Metron entered into a merger and reorganization agreement with
Kyser pursuant to which all of the outstanding shares of Kyser stock were
converted into 1,582,683 common shares of Metron, of which 10,230 have been
returned to Metron in accordance with the agreement. The transaction was valued
by an independent appraiser at approximately $12.3 million. Pursuant to the
transaction, Kyser became a wholly-owned subsidiary of Metron. Mr. Hendricks,
currently a managing director of Metron and Vice Chairman of Kyser, was the
Chief Executive Officer and large minority shareholder of Kyser at the time.
Pursuant to the merger agreement, Mr. Hendricks received 694,585 shares in the
transaction, valued at approximately $5.4 million, he entered into an employment
agreement with us, was elected as a managing director of Metron and appointed as
Vice Chairman of Kyser. For additional information on the terms of the
employment agreement, see "Employment Agreements and Termination of Employment
Arrangements."
Prior to Kyser's becoming a subsidiary of Metron, Mr. Hendricks personally
guaranteed loans and revolving credit agreements made by banks to Kyser for
general operating expenses. Mr. Hendricks was the guarantor on a revolving
credit agreement in a maximum amount of $11,000,000 with Compass Bank at the
time of the Kyser transaction. In October 1998, following the acquisition of
Kyser by Metron, the note was amended and Metron became the guarantor and
Mr. Hendricks was released as a guarantor.
EARLY RETIREMENT AGREEMENT
Udo Jaensch was the managing director of Metron Technology Deutschland Gmbh
(MTD), a subsidiary of Metron, until 1998 and a managing director of Metron
until February 15, 1999. Pursuant to a cancellation and early retirement
agreement among Metron, MTD and Mr. Jaensch, Mr. Jaensch resigned from both
positions. In exchange, MTD agreed to pay Mr. Jaensch early retirement payments
of DM 270,000 (approximately $150,000) per year in monthly installments until
April 2, 2005. The early retirement payment is to be adjusted yearly for changes
in the cost of living. In the event MTD fails to make these payments, Metron
agreed to make the payments to Mr. Jaensch. MTD also agreed to transfer certain
property owned by MTD and used by Mr. Jaensch to Mr. Jaensch. Mr. Jaensch is
selling 83,225 common shares in this offering.
56
<PAGE>
PRINCIPAL AND SELLING SHAREHOLDERS
The following table sets forth certain information regarding the beneficial
ownership of our common shares as of August 31, 1999, and as adjusted to reflect
the sale of our common shares offered in this offering: (1) each shareholder who
is known by us to own beneficially more than 5% of our common shares; (2) each
of our supervisory directors; (3) each of our Named Executive Officers; (4) all
of our supervisory directors and managing directors as a group; and (5) all
selling shareholders as a group. Unless otherwise indicated, to our knowledge,
all persons listed below have sole voting and investment power with respect to
their common shares, except to the extent authority is shared by spouses under
applicable law. Unless otherwise noted, the address of each shareholder is
c/o Metron Technology N.V., 1350 Old Bayshore Highway, Suite 360, Burlingame,
California 94010.
<TABLE>
<CAPTION>
SHARES BENEFICIALLY SHARES BENEFICIALLY
OWNED PRIOR TO THE NUMBER OF OWNED AFTER THE
OFFERING(1) SHARES OFFERING(1)
-------------------- BEING ----------------------
NAME AND ADDRESS NUMBER PERCENT OFFERED NUMBER PERCENT(2)
- ---------------- --------- -------- --------- --------- ----------
<S> <C> <C> <C> <C> <C>
Entegris, Inc.(3) ........................ 3,315,774 32.8% 611,962 2,703,812 21.8%
3500 Lyman Boulevard
Chaska, MN 55318
FSI International, Inc.(4) ............... 3,315,774 32.8 611,962 2,703,812 21.8
322 Hazeltime Drive
Chaska, MN 55318
Udo Jaensch .............................. 440,000 4.0 83,225 356,775 2.9
Burgmaierstrasse 9A
801Z Ottobrunn
Germany
Joel A. Elftmann(5) ...................... 3,315,774 32.8 611,962 2,703,812 21.8
James E. Dauwalter(6) .................... 3,315,774 32.8 611,962 2,703,812 21.8
Robert R. Anderson(7) .................... 57,600 * 0 57,600 *
Edward D. Segal(8) ....................... 1,077,046 10.1 0 1,077,046 8.3
J. Christopher Levett-Prinsep(9) ......... 710,712 7.0 142,851 567,861 4.5
C. Garry Hendricks ....................... 694,585 6.9 0 694,585 5.6
Keith Reidy(10) .......................... 164,856 1.6 0 164,856 1.3
Peter V. Leigh(11) ....................... 84,375 * 0 84,375 *
Michael A. Grandinetti(12) ............... 39,375 * 0 39,375 *
All supervisory directors and managing
directors as a group (9 persons)(13) ... 9,460,097 86.2 1,450,000 8,010,097 60.3
All selling shareholders as a 7,342,260 71.8 1,450,000 5,892,260 47.1
group(14) ..............................
</TABLE>
- ------------------------
* Represents beneficial ownership of less than one percent of the common
shares.
(1) Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission. Applicable percentage ownership based
on 10,104,261 common shares outstanding as of August 31, 1999 and
12,404,261 common shares outstanding immediately following the completion
of this offering, both numbers include 0 shares issuable upon exercise of
warrants, together with applicable options for such shareholder. Common
shares subject to options currently exercisable, or exercisable within
60 days of August 31, 1999, are not deemed outstanding for computing the
percentage ownership of any other person.
57
<PAGE>
(2) After giving effect to the issuance of 2,300,000 common shares offered in
this offering, assuming no exercise of the underwriters' over-allotment
option.
(3) Includes 13,125 shares issuable to Mr. Dauwalter pursuant to an agreement
between Mr. Dauwalter and Entegris in which Mr. Dauwalter assigned
ownership rights to all shares issuable upon exercise of the options to
Entegris.
(4) Includes 13,125 shares issuable to Mr. Elftmann pursuant to an agreement
between Mr. Elftmann and FSI in which Mr. Elftmann assigned ownership
rights to all shares issuable upon exercise of the options to FSI.
(5) Mr. Elftmann is Chairman of the Board and Chief Executive Officer of FSI.
The shares listed consist of 3,302,649 shares held by FSI prior to this
offering, or 2,690,687 shares to be held by FSI after this offering, and
13,125 shares issuable pursuant to options exercisable within 60 days of
August 31, 1999. The shares being offered consist of 611,962 shares being
offered by FSI. Mr. Elftmann disclaims beneficial ownership of all shares
held by FSI and of all shares issuable pursuant to the exercise of options,
pursuant to an agreement with FSI in which Mr. Elftmann assigned ownership
rights to all shares issuable upon exercise of the options to FSI.
(6) Mr. Dauwalter is Executive Vice President and Chief Operating Officer of
Entegris. The shares listed consist of 3,302,649 shares held by Entegris
prior to this offering, or 2,690,687 shares to be held by Entegris after
this offering, and 13,125 shares issuable pursuant to options exercisable
within 60 days of August 31, 1999. The shares being offered consist of
611,962 shares being offered by Entegris. Mr. Dauwalter disclaims
beneficial ownership of all shares held by Entegris and of all shares
issuable pursuant to the exercise of options, pursuant to an agreement with
Entegris in which Mr. Dauwalter assigned ownership rights to all shares
issuable upon exercise of the options to Entegris.
(7) Consists of 13,125 shares issuable pursuant to options exercisable within
60 days of August 31, 1999.
(8) Consists of 421,570 shares held by Mr. Segal, 129,528 shares held by Segal
Investments LP, an investment partnership of which Mr. Segal is the
Managing Partner and 525,948 shares issuable pursuant to options
exercisable within 60 days of August 31, 1999. Mr. Segal disclaims
beneficial ownership of the shares held by Segal Investment LP.
(9) Consists of 620,712 shares held by Mr. Levett-Prinsep prior to this
offering, or 477,861 shares to be held by Mr. Levett-Prinsep after this
offering, and 90,000 shares issuable pursuant to options exercisable within
60 days of August 31, 1999.
(10) Consists of 74,856 shares held by Mr. Reidy and 90,000 shares issuable
pursuant to options exercisable within 60 days of August 31, 1999.
(11) Consists of 84,375 shares issuable pursuant to options exercisable within
60 days of August 31, 1999.
(12) Consists of 39,375 shares issuable pursuant to options exercisable within
60 days of August 31, 1999.
(13) Includes an aggregate of 869,073 shares issuable pursuant to options
exercisable within 60 days of August 31, 1999. Also includes an aggregate
of 3,302,649 shares held by Entegris, 3,302,649 shares held by FSI and
129,528 shares owned by the investment partnership of Mr. Segal.
(14) Includes an aggregate of 116,250 shares issuable pursuant to options
exercisable within 60 days of August 31, 1999, including 13,125 options
held by Mr. Dauwalter and 13,125 options held by Mr. Elftmann, pursuant to
agreements with Entegris and FSI.
58
<PAGE>
DESCRIPTION OF CAPITAL SHARES
Following the closing of the sale of the common shares offered by this
prospectus, our authorized capital shares will consist of 48,000,000 Dutch
guilders, divided into 40,000,000 common shares, NLG 0.96 par value, and
10,000,000 preferred shares, NLG 0.96 par value.
Harris Trust and Savings Bank will maintain the registry and act as transfer
agent and registrar for the shares sold in this offering.
Unless otherwise set forth in a supplement to this prospectus, all of the
common shares sold in this offering will initially be represented by a single
global certificate held through the Depository Trust Company, DTC, and
registered in the name of Cede & Co., the nominee of DTC. Beneficial interests
in the shares represented by the global certificate or otherwise held through
DTC will be represented, and transfers of such beneficial interests will be
effected through accounts of financial institutions acting on behalf of
beneficial owners as direct and indirect participants in DTC. Investors may hold
beneficial interests in the shares directly through DTC if they are a
participant in such system, or indirectly through organizations that are
participants in such system.
COMMON SHARES
As of August 31, 1999, there were 10,104,261 Metron common shares
outstanding, which were held of record by 32 shareholders. Each shareholder of
record is entitled to one vote for each Metron share held on every matter
submitted to a vote of shareholders. The shareholders, at a general meeting, may
decide upon a distribution of Metron's annual profits to all shareholders out of
nonreserved profits insofar as permitted by Netherlands law. In the event of the
dissolution of Metron, holders of Metron common shares are entitled to receive,
on a pro rata basis, all assets of Metron remaining after the payment of all
debts, liquidation expenses and taxes and after payment to the holders of
preferred shares of all amounts paid by such holders on such shares. The Metron
articles make no provision for cumulative voting and, as a result, the holders
of a majority of Metron's voting power will have the power to elect all members
of the supervisory and managing boards. The holders of Metron common shares are
entitled to preemptive rights to subscribe for a pro rata portion of future
issuances of Metron common shares, with the exception of shares issued to
employees of Metron or of a group company. However, pursuant to the Metron
articles, the supervisory board has the authority to limit or exclude these
preemptive rights with respect to issuances of Metron common shares until
5 years from the date of execution of the deed of conversion and amendment of
the articles or a later date if the general meeting of shareholders extends the
term of this authority.
PREFERRED SHARES
Pursuant to the Metron articles, the supervisory board has authority to
issue authorized but unissued preferred shares of Metron until 5 years from the
date of execution of the deed of conversion and amendment of the articles or a
later date if the general meeting of shareholders extends the term of this
authority. Each preferred share would have voting rights equal to those of the
Metron common shares. Preferred shares could be issued quickly for a
subscription price equal to their par value, irrespective of the then current
market value of the common shares. Furthermore, it can be agreed between Metron
and the subscriber that upon issuance, only 25% of the nominal value of the
preferred shares needs to be paid at the time of issuance, with the balance
subject to call by Metron. Consequently, the issuance of preferred shares could
effectively delay or prevent a change in control of Metron or make removal of
management more difficult. In addition, the issuance of preferred shares may
have the effect of decreasing the value of the Metron common shares. As of
August 31, 1999, there were no preferred shares outstanding and Metron has no
plans to issue any of the preferred shares.
59
<PAGE>
SUMMARY OF CERTAIN PROVISIONS OF THE METRON ARTICLES AND OTHER MATTERS
GENERAL MEETINGS OF SHAREHOLDERS. All holders of Metron shares are entitled
to attend any general meeting in person or by proxy and to cast one vote for
each share held. The annual general meeting is required to be held in The
Netherlands no later than six months after the end of Metron's financial year.
Other general meetings may be called by the managing board, the supervisory
board or, subject to certain conditions, by the holders of not less than 10% of
the outstanding share capital. Metron will mail notices to the shareholders at
least 14 days before any general meetings. Most resolutions at general meetings
may be adopted by an absolute majority of the votes cast but only when a quorum
of at least half of the outstanding shares entitled to vote are represented in
person or by proxy. There are no laws currently in effect in The Netherlands or
provisions in the Metron articles limiting the rights of non-resident or foreign
investors to hold or vote the Metron common shares. A resolution to legally
merge, to legally split-up, to amend the Metron articles, to dissolve Metron or
to suspend or dismiss a managing director or a supervisory director requires at
least two-thirds of the validly cast votes in a general meeting at which more
than half of the issued capital is present or represented. In addition, such a
resolution to legally merge, to legally split-up, to amend the Metron articles
or to dissolve the company must be proposed by the supervisory board.
Shareholders must give notice of at least 60 days and no more than 90 days prior
to the one year anniversary of the date of the previous year's annual general
meeting of any shareholder proposal to be discussed at an annual general meeting
of shareholders. Proposals by shareholders for extraordinary general meetings of
shareholders will be discussed only if timely notice has been given to Metron.
ADOPTION OF STATUTORY ANNUAL ACCOUNTS; DIVIDENDS. Within five months after
the close of Metron's financial year, except where this period is extended for a
further period of up to a maximum of six months by the general meeting on
account of special circumstances, the managing board is required to submit to
the general meeting its annual report with respect to such financial year and
Metron's statutory annual accounts for such year, prepared in accordance with
Dutch GAAP and accompanied by a report of an independent auditor on such
statutory annual accounts. The statutory annual accounts are submitted by the
managing board to the general meeting for confirmation and adoption by the
shareholders at the annual general meeting which must be held no later than six
months after the close of Metron's financial year; in the event that the period
for submitting the annual accounts has been extended as set forth above, a
special shareholders' meeting will be called for such purpose. Under the Metron
articles such confirmation and adoption shall, subject to compliance with
certain requirements of Dutch law, including disclosure of all relevant facts to
the general meeting, to the extent permitted by law, constitute a full release
from liability of the managing directors and the members of the supervisory
board for the exercise of their duties during the financial year concerned.
Under the Metron articles, the supervisory board may set aside as reserves a
part or all of the annual profits of Metron. The amount reserved is not
available to be distributed as a dividend. Out of the remaining profits, a
non-cumulative cash dividend of one tenth of one percent (0.1%) of the par value
of the preferred shares will be paid to the holders of such shares, if any. At
any general meeting, the shareholders are entitled to decide upon a distribution
of the remaining profits to all common shareholders insofar as permitted by law.
Metron can only make distributions to its shareholders to the extent that its
equity exceeds the aggregate of (1) the par value of its issued share capital
and (2) the reserves to be maintained pursuant to the law. In addition, subject
to statutory provisions, the supervisory board may distribute one or more
interim dividends on the common shares before the annual financial statements
for any financial year have been adopted at a general meeting. The general
meeting may also declare and pay dividends out of reserves other than reserves
set aside by the supervisory board. Dividends may be paid either in cash or in
kind. Dividends and distributions must be claimed within five years and one day
following the date on which they become payable. There are no laws currently in
force in The Netherlands or provisions of the Metron articles restricting
payment of dividends to holders of Metron common shares not resident in The
Netherlands.
60
<PAGE>
LIQUIDATION RIGHTS. In the event of dissolution of Metron, the liquidation
proceeds remaining after payment of all debts, liquidation expenses and taxes
are to be distributed ratably first to the holders of the preferred shares to
the extent of the amount paid by them on their shares and then to the holders of
Metron common shares.
PREEMPTIVE RIGHTS. Under the Metron articles, the holders of Metron shares
have preemptive rights with regard to any issue of Metron shares pro rata to the
aggregate amount of the Metron shares held by them. Metron shareholders have no
preemptive rights to subscribe for the Metron common shares issued to employees
of Metron or of a company belonging to the Metron group. Preemptive rights may
be limited or excluded by the supervisory board until 5 years from the date of
the execution of the deed of conversion and amendment of the Metron articles and
thereafter, provided that the supervisory board is so authorized by the general
meeting.
ACQUISITION BY METRON OF ITS OWN SHARES. Subject to certain restrictions
contained in Netherlands law and the Metron articles, the general meeting of
shareholders may delegate to the managing board for a period of not longer than
18 months the authority to cause Metron to acquire its own fully-paid shares in
an amount not to exceed 10% of the issued share capital. No such authorization
will be required if Metron acquires shares in its own capital for the purpose of
transferring the same to employees of Metron or of a group company under a plan
applicable to such employees, provided that such shares are officially listed on
an exchange, including the Nasdaq National Market.
ISSUANCE OF ADDITIONAL SHARES. Pursuant to the Metron articles, the
supervisory board has authority to issue authorized but unissued common shares
of Metron until five years from the date of execution of the deed of conversion
and amendment of the Metron articles or a later date if the general meeting
extends the term of this authority. As long as the supervisory board has the
authority to adopt a resolution to issue shares, the general meeting shall not
have the authority to adopt such resolutions. In the event that a future
supervisory board no longer has the authority to issue shares, pursuant to the
Metron articles any resolution of the general meeting to issue shares will
require the prior approval of the supervisory board.
PUT AND CALL RIGHTS WITH RESPECT TO CERTAIN METRON COMMON SHARES. Pursuant
to the terms of the Kyser ESOP, Metron is required in certain limited
circumstances to repurchase Metron common shares from the trustee of the Kyser
ESOP or participants or beneficiaries of the Kyser ESOP. However, there are
certain restrictions imposed by Netherlands law on the ability of Metron to
repurchase its common shares. See "Acquisition by Metron of its own Shares." To
the extent Metron is prohibited by Netherlands law from repurchasing any shares
when required to do so by the Kyser ESOP, Metron has agreed to use its best
efforts to timely obtain an alternate purchaser for Metron common shares
required to be purchased from the Trustee of the Kyser ESOP or participants or
beneficiaries of the Kyser ESOP.
REGISTRATION RIGHTS. Pursuant to an investor rights agreement entered into
in July 1995 and two accession agreements entered into in 1998, a limited number
of shareholders have the right to require Metron to register their common shares
under specific circumstances. In the event Metron decides to offer shares
pursuant to underwritten registrations, Metron must notify these shareholders
and include the shares of those who elect to be included in the offering. In the
case of an initial public offering involving net proceeds of more than
$7,500,000 and a gross offering price of at least $1.33 per share with a par
value of 0.10 Dutch guilders, the underwriters and Metron have the right to
reduce pro rata the number of shares proposed to be registered in view of market
conditions. The combined holders of at least 375,000 common shares of Metron, as
adjusted for share splits, share dividends and the like, may request that Metron
file a registration statement on Form S-3, if available to Metron. However,
Metron shall not be obligated to file more than one Form S-3 registration in any
12 month period or within 180 days after completing Metron's initial public
offering. In addition, if the majority of the members of the supervisory board
determine in good faith that a registration on Form S-3 would be
61
<PAGE>
seriously detrimental to Metron, the registration may be delayed for up to
130 days. Metron will bear all registration expenses related to the above
mentioned registrations.
The registration rights are transferable to anyone acquiring all of a
shareholder's common shares and who agrees to be bound by the terms of the
investor rights agreement. The registration rights of each shareholder entitled
to such rights terminate on the earlier of the date three years after the date
of Metron's initial public offering and the date the holder may sell all of its
shares pursuant to Rule 144 during any 90 day period.
CERTAIN NETHERLANDS TAX CONSEQUENCES OF HOLDING METRON COMMON SHARES
The following discussion is a summary of the material anticipated tax
consequences of an investment in Metron common shares under Netherlands tax
laws. The discussion does not deal with all possible tax consequences relating
to an investment in Metron common shares. In particular, the discussion does not
address the tax consequences under any non-Netherlands tax laws, nor does it
address special circumstances that may apply to any individual investor.
Accordingly, prospective investors should consult their respective tax advisors
regarding the tax consequences to them of an investment in the Metron common
shares.
The anticipated tax consequences are subject to change, and such change may
be retroactively effective. In particular, a complete revision of the
Netherlands income tax act is planned. The anticipated effective date of this
revision is January 1, 2001. The revision, if enacted, may affect the
Netherlands tax position as described below. Further, any variation or
differences from the facts or representations recited below, for any reason,
might affect the following discussion, perhaps in an adverse manner, and make
them inapplicable. In addition, Metron does not expect to update this discussion
for changes in facts or laws occurring subsequent to the date of this
prospectus.
The summary represents solely the views of Metron as to the interpretation
of existing law and, accordingly, no assurance can be given that the tax
authorities or courts in the Netherlands will agree with the summary below.
The following is a summary of Netherlands tax consequences to an owner of
Metron common shares who is not, or is not deemed to be, a resident of the
Netherlands for purposes of the relevant tax codes (a "non-resident
shareholder"). The summary does not address taxes imposed by the Netherlands and
its political subdivisions, other than the dividend withholding tax, individual
income tax, corporate income tax, net wealth tax and gift and inheritance tax.
NETHERLANDS DIVIDEND WITHHOLDING TAX. Metron does not expect to pay
dividends on its capital stock. To the extent that dividends are distributed by
Metron, such dividends would be subject under Netherlands tax law to withholding
tax at a statutory rate of 25%. Dividends, in principle, include dividends in
cash or in kind, constructive dividends and liquidation proceeds in excess of,
for Netherlands tax purposes, recognized paid-in capital. Stock dividends are
also subject to withholding tax unless distributed out of Metron's paid-in share
premium as recognized for Netherlands tax purposes.
No withholding tax applies on the sale or disposition of Metron common
shares to persons other than Metron.
A non-resident shareholder may be eligible for a reduction or a refund of
Netherlands dividend withholding tax under a tax convention which is in effect
between the country of residence of the non-resident shareholder and the
Netherlands. The Netherlands has concluded such conventions with, among others,
the United States, most European Union countries, Canada, Switzerland and Japan.
Under most of these conventions, Netherlands dividend withholding tax is reduced
to a rate of 15% or under certain circumstances a lower rate unless the
non-resident shareholder has an enterprise or an interest in an enterprise that
is, in whole or in part, carried on through a permanent establishment in
62
<PAGE>
the Netherlands or performs independent services from a fixed base in the
Netherlands and to which enterprise, part of an enterprise or fixed base the
Metron common shares are attributable.
NETHERLANDS INCOME TAX AND CORPORATE INCOME TAX. A non-resident shareholder
will not be subject to Netherlands personal or corporate income tax with respect
to dividends distributed by Metron on the Metron common shares or with respect
to capital gains derived from the sale or disposal of Metron common shares,
provided that:
(a) the non-resident shareholder does not have an enterprise or an interest
in an enterprise that is, in whole or in part, carried on through a
permanent establishment or permanent representative in the Netherlands
and to which enterprise or part of an enterprise the Metron common shares
are attributable; and
(b) neither the non-resident shareholder nor his/her spouse, other persons
sharing his/her household or certain other close relatives have a
substantial interest or a deemed substantial interest in the share
capital of Metron or, in the event that the non-resident shareholder or
one or more of the other persons referred to does have such an interest,
the substantial interest(s) form part of the assets of an enterprise; and
(c) the non-resident shareholder does not carry out and has not carried out
employment activities with which the holding of the Metron common shares
is connected.
In general terms, a substantial interest in the share capital of Metron does
not exist if the non-resident shareholder, his/her spouse, other persons sharing
his/her household or certain other close relatives, do not hold alone or
together, whether directly or indirectly, the ownership of, or certain other
rights over, shares representing 5% or more of the total issued and outstanding
capital (or the issued and outstanding capital of any class of shares) of
Metron.
NETHERLANDS NET WEALTH TAX. A non-resident shareholder who is an individual
is not subject to Netherlands net wealth tax with respect to the Metron common
shares, provided the non-resident shareholder does not have an enterprise or an
interest in an enterprise that is, in whole or in part, carried on through a
permanent establishment or a permanent representative in the Netherlands and to
which enterprise or part of an enterprise the Metron common shares is
attributable. Corporations are not subject to Netherlands net wealth tax.
NETHERLANDS GIFT AND INHERITANCE TAX. A gift or inheritance of Metron
common shares from a non-resident shareholder will not be subject to a
Netherlands gift and inheritance tax, provided that:
(a) the non-resident shareholder does not have an enterprise or an interest
in an enterprise that is, in whole or in part, carried on through a
permanent establishment or a permanent representative in the Netherlands
to which the Metron common shares are attributable;
(b) in the event a non-resident shareholder is a citizen of the Netherlands
he or she has not been a resident of the Netherlands at any time during
the ten years preceding the time of the gift or death or he or she was
not a citizen of the Netherlands upon termination of the Netherlands
residency;
(c) for purposes of the tax on gifts, the non-resident shareholder has not
been a resident of the Netherlands at any time during the twelve months
preceding the time of the gift; and
(d) in the case of a gift of Metron common shares by an individual who at
the date of the gift was neither a resident nor a deemed resident of the
Netherlands, such individual does not die within 180 days after the date
of the gift while being a resident or a deemed resident of the
Netherlands.
EACH PROSPECTIVE PURCHASER IS URGED TO CONSULT ITS OWN TAX ADVISORS ABOUT THE
SPECIFIC NETHERLANDS TAX CONSEQUENCES TO SUCH PROSPECTIVE PURCHASER AND THE
EFFECTS, IF ANY, OF APPLICABLE NETHERLANDS TAX LAWS.
63
<PAGE>
SHARES ELIGIBLE FOR FUTURE SALE
Prior to this offering, there has been no public market for the common
shares. We cannot provide any assurances that a significant public market for
the common shares will develop or be sustained after this offering. Future sales
of substantial amounts of common shares in the public market, or the possibility
of such sales occurring, could adversely affect prevailing market prices for the
common shares or our future ability to raise capital through an offering of
equity securities.
After this offering, we will have outstanding 12,404,261 common shares. Of
these shares, the 3,750,000 shares to be sold in this offering, 4,312,500 shares
if the underwriters' over-allotment option is exercised in full, will be freely
tradable in the public market without restriction under the Securities Act,
unless such shares are held by "affiliates" of Metron, as that term is defined
in Rule 144 under the Securities Act.
The remaining 8,654,261 shares outstanding upon completion of this offering
will be "restricted securities" as that term is defined under Rule 144. We
issued and sold the restricted shares in private transactions in reliance on
exemptions from registration under the Securities Act. Restricted shares may be
sold in the public market only if they are registered or if they qualify for an
exemption from registration under Rule 144 or Rule 701 under the Securities Act,
as summarized below.
139,341 of the restricted shares are available for immediate sale, of which
12,300 shares will be subject to certain volume, manner of sale and other
limitations under Rule 144. 2,200 of the restricted shares will be available for
sale 90 days from the date of this offering. Pursuant to certain "lock-up"
agreements between our shareholders and either Metron or the underwriters, the
holders of 8,590,945 restricted shares have agreed not to offer, sell, pledge or
otherwise dispose of, directly or indirectly, or announce their intention to do
the same, any common shares of Metron or security convertible into, or
exchangeable or exercisable for any security of Metron for a period of 180 days
from the date of this offering. However, if the holder of the restricted shares
is an individual, he or she may transfer any such securities either during his
or her lifetime or on death by will or intestacy to his or her immediate family
or to a trust the beneficiaries of which are exclusively the holder of the
securities and/or a member of his or her immediate family. We also have entered
into an agreement with the underwriters that we will not offer, sell or
otherwise dispose of common shares for a period of 180 days from the date of
this offering. On the date of the expiration of the lock-up agreements,
8,590,945 of the restricted shares will be eligible for immediate sale, of which
8,060,867 shares will be subject to certain volume, manner of sale and other
limitations under Rule 144, and 5,000 shares will be eligible for sale subject
to volume restrictions on March 17, 2000.
Following the expiration of such lock-up periods, certain shares issued upon
exercise of options we granted prior to the date of this offering will also be
available for sale in the public market pursuant to Rule 701 under the
Securities Act. Rule 701 permits resales of such shares in reliance upon
Rule 144 under the Securities Act but without compliance with certain
restrictions, including the holding-period requirement, imposed under Rule 144.
In general, under Rule 144 as in effect at the closing of this offering,
beginning 90 days after the date of this prospectus, a person, or persons whose
shares are aggregated, who has beneficially owned Restricted shares for at least
one year, including the holding period of any prior owner who is not an
Affiliate, would be entitled to sell, within any three-month period, a number of
shares that does not exceed the greater of (1) 1% of the then-outstanding common
shares or (2) the average weekly trading volume of the common shares during the
four calendar weeks preceding the filing of a Form 144 with respect to such
sale. Sales under Rule 144 are also subject to certain manner of sale and notice
requirements and to the availability of current public information about us.
Under Rule 144(k), a person who is not deemed to have been an Affiliate at any
time during the 90 days preceding a sale and who has beneficially owned the
shares proposed to be sold for at least two years, including the holding period
of any prior owner who is not an Affiliate, is entitled to sell
64
<PAGE>
such shares without complying with the manner of sale, public information,
volume limitation or notice provisions of Rule 144.
We intend to file, after the effective date of this offering, a Registration
Statement on Form S-8 to register approximately 3,735,683 common shares reserved
for issuance under the Option Plan, the Directors' Plan, the Purchase Plan and
the Kyser ESOP. The Registration Statement will become effective automatically
upon filing. Shares issued under the foregoing plans, after the filing of a
Registration Statement on Form S-8, may be sold in the open market, subject, in
the case of certain holders, to the Rule 144 limitations applicable to
affiliates, the above-referenced lock-up agreements and vesting restrictions
imposed by us.
In addition, following this offering, the holders of 7,606,759 common shares
will, under certain circumstances, have rights to require us to register their
shares for future sale.
65
<PAGE>
UNDERWRITING
Metron and the selling shareholders are offering the common shares described
in this prospectus through a number of underwriters. Banc of America Securities
LLC, SG Cowen Securities Corporation and U.S. Bancorp Piper Jaffray Inc. are the
representatives of the underwriters. Metron and certain of the selling
shareholders have entered into an underwriting agreement with the
representatives. Subject to the terms and conditions of the underwriting
agreement, Metron and the selling shareholders have agreed to sell to the
underwriters, and each underwriter has severally agreed to purchase, the number
of common shares listed next to its name in the following table:
<TABLE>
<CAPTION>
NUMBER OF
UNDERWRITER SHARES
- ----------- ---------
<S> <C>
Banc of America Securities LLC..............................
SG Cowen Securities Corporation.............................
U.S. Bancorp Piper Jaffray Inc..............................
-------
Total...................................................
=======
</TABLE>
Shares sold by the underwriters to the public will initially be offered on
the terms set forth on the cover page of this prospectus. The underwriters may
allow to selected dealers a concession of not more than $ per share, and
the underwriters may also allow, and any other dealers may reallow, a concession
of not more than $ per share to other dealers. If all the shares are not
sold at the initial public offering price, the underwriters may change the
offering price and the other selling terms. The common shares are offered
subject to receipt and acceptance by the underwriters and other conditions,
including the right to reject orders in whole or in part.
If the underwriters sell more shares than the total number of shares set
forth in the table above, they have an option to buy up to a maximum of 562,500
additional shares from Metron and the selling shareholders to cover such sales.
The underwriters have 30 days to exercise this option. If any shares are
purchased pursuant to this option, the underwriters will severally purchase
shares in approximately the same proportion as set forth in the table above. If
purchased, the underwriters will offer such additional shares on the same terms
as those on which the 3,750,000 shares are being offered. The following table
sets forth the per share and total underwriting discounts and commissions to be
paid to the underwriters assuming both no exercise and full exercise of the
underwriters' option to purchase 562,500 additional shares.
<TABLE>
<CAPTION>
NO EXERCISE FULL EXERCISE
----------- -------------
<S> <C> <C>
Per share............................................ $ $
------ --------
Total................................................ $ $
====== ========
</TABLE>
Metron and holders of approximately 90% of our outstanding common shares,
including all of our executive officers and directors, as well as holders of
options to purchase common shares who are senior officers, have agreed with the
underwriters not to dispose of or hedge any of their common shares or securities
convertible into or exchangeable for common shares during the period from the
date of this prospectus continuing through 180 days after the date of this
prospectus without the prior written consent of Banc of America Securities LLC.
At any time and without notice, Banc of America Securities LLC may, in its sole
discretion, release all or any portion of the securities from these lock-up
agreements.
66
<PAGE>
The underwriting agreement provides that Metron and certain of the selling
shareholders will indemnify the underwriters against liabilities set forth in
such agreement, including civil liabilities under the Securities Act, or will
contribute to payments the underwriters may be required to make in respect
thereof.
At our request, the underwriters have reserved up to 115,000 of the common
shares offered by this prospectus for sale at the initial public offering price
to persons having business relationships with us. The number of shares of common
stock available to the general public will be reduced to the extent that these
persons purchase the reserved shares. Any reserved common shares that are not
purchased by such persons at the closing of the initial public offering will be
offered by the underwriters to the general public on the same terms as the other
shares in the initial public offering.
In connection with this offering, the underwriters may purchase and sell
common shares in the open market. These transactions may include:
- short sales;
- stabilizing transactions; and
- purchases to cover positions created by short sales.
Short sales involve the sale by the underwriters of a greater number of
shares than they are required to purchase in this offering. Stabilizing
transactions consist of bids or purchases made for the purpose of preventing or
retarding a decline in the market price of the common shares while this offering
is in progress.
The underwriters also may impose a penalty bid. This occurs when a
particular underwriter repays to the underwriters a portion of the underwriting
discount received by it because the representatives have repurchased shares sold
by or for the account of such underwriter in stabilizing or short covering
transactions.
The underwriters may engage in activities that stabilize, maintain or
otherwise affect the price of the common shares, including:
- over-allotment;
- stabilization;
- syndicate covering transactions; and
- imposition of penalty bids.
As a result of these activities, the price of the common shares may be
higher than the price that otherwise might exist in the open market. If the
underwriters commence these activities, they may discontinue them at any time.
The underwriters may carry out these transactions on the Nasdaq National Market,
in the over-the-counter market or otherwise.
The underwriters do not expect sales to discretionary accounts to exceed 5%
of the total number of common shares offered by this prospectus.
Prior to this offering, there has been no public market for the common
shares of Metron. The initial public offering price will be negotiated among
Metron and the underwriters. Among the factors to be considered in such
negotiations are:
- the history of, and prospects for, Metron and the industry in which it
competes;
- the past and present financial performance of Metron;
- an assessment of Metron's management;
67
<PAGE>
- the present state of Metron's development;
- the prospects for Metron's future earnings;
- the prevailing market conditions of the applicable U.S. securities market
at the time of this offering;
- market valuations of publicly traded companies that Metron and the
representatives believe to be comparable to Metron; and
- other factors deemed relevant.
The total expenses related to this initial public offering of our common
shares are estimated to be $650,000.
LEGAL MATTERS
The validity of the issuance of the common shares offered by this prospectus
will be passed upon for Metron by Nauta Dutilh, Netherlands counsel to the
company. Certain other legal matters in connection with the offering will be
passed upon for Metron by Cooley Godward LLP, Palo Alto, California. Certain
legal matters in connection with the offering will be passed upon for the
underwriters by Latham & Watkins, Menlo Park, California.
EXPERTS
The consolidated balance sheets of Metron Technology N.V. and subsidiaries
as of May 31, 1998 and 1999, and the related consolidated statements of income,
shareholders' equity and cash flows for each of the years in the three year
period ended May 31, 1999, have been included in this prospectus and in the
registration statement in reliance upon the report of KPMG LLP, independent
auditors, as set forth in their report thereon appearing elsewhere in this
prospectus, and upon the authority of said firm as experts in accounting and
auditing.
WHERE YOU CAN FIND ADDITIONAL INFORMATION
A registration statement on Form S-1, including amendments to the
registration statement, relating to the common shares offered by this prospectus
has been filed by us with the Commission. This prospectus, which constitutes a
part of the registration statement, does not contain all of the information set
forth in the registration statement and the exhibits and schedules to the
registration statement. Statements contained in this prospectus as to the
contents of any contract or other document referred to are not necessarily
complete, and in each instance reference is made to the copy of such contract or
other document filed as an exhibit to the registration statement, each such
statement being qualified in all respects by such reference. For further
information with respect to us and the common shares offered by this prospectus,
reference is made to such registration statement, exhibits and schedules. A copy
of the registration statement may be inspected by anyone without charge at the
public reference facilities maintained by the Commission at 450 Fifth Street,
NW, Judiciary Plaza, Washington, D.C. 20549, and copies of all or any part
thereof maybe obtained from the Commission upon payment of certain fees
prescribed by the Commission. The telephone number for the public reference
facilities maintained by the Commission is (800) SEC-0330. The Commission
maintains a World Wide Web site that contains reports, proxy and information
statements and other information filed electronically with the Commission. The
address of the site is http://www.sec.gov.
68
<PAGE>
INDEX TO FINANCIAL STATEMENTS
<TABLE>
<S> <C>
Report of Independent Accountants....................... F-2
Consolidated Statements of Income for the years ended
May 31, 1997, 1998 and 1999 and for the three months
ended August 31, 1998 and 1999......................... F-3
Consolidated Balance Sheets as of May 31, 1998 and 1999
and as of August 31, 1999.............................. F-4
Consolidated Statements of Cash Flows for the years
ended May 31, 1997, 1998 and 1999 and for the three
months ended August 31, 1998 and 1999.................. F-5
Consolidated Statements of Shareholders' Equity for the
years ended May 31, 1996, 1997, 1998 and 1999 and for
the three months ended August 31, 1999................. F-6
Notes to Consolidated Financial Statements.............. F-7
</TABLE>
F-1
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
WHEN METRON TECHNOLOGY B.V. CONVERTS FROM A B.V. TO AN N.V. UNDER THE LAWS OF
THE NETHERLANDS AS DISCUSSED IN NOTE 19, WE WILL BE IN A POSITION TO RENDER
THE FOLLOWING REPORT.
/s/ KPMG LLP
The Board of Directors and Shareholders
Metron Technology N.V.:
We have audited the accompanying consolidated balance sheets of Metron
Technology N.V. and subsidiaries as of May 31, 1999 and 1998, and the related
consolidated statements of income, shareholders' equity and cash flows for each
of the years in the three-year period ended May 31, 1999. These consolidated
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these consolidated financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of Metron
Technology N.V. and subsidiaries as of May 31, 1999 and 1998, and the results of
their operations and their cash flows for each of the years in the three-year
period ended May 31, 1999 in conformity with generally accepted accounting
principles.
KPMG LLP
Mountain View, California
July 22, 1999, except as to
Note 19 which is as of
November , 1999.
F-2
<PAGE>
METRON TECHNOLOGY N.V.
CONSOLIDATED STATEMENTS OF INCOME
(DOLLARS IN THOUSANDS EXCEPT PER SHARE)
<TABLE>
<CAPTION>
THREE MONTHS
YEARS ENDED MAY 31 ENDED AUGUST 31,
------------------------------ -------------------
1997 1998 1999 1998 1999
-------- -------- -------- -------- --------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Net revenue................................. $298,576 $275,024 $228,618 $56,922 $69,473
Cost of revenue............................. 241,675 222,028 189,295 46,596 57,332
-------- -------- -------- ------- -------
Gross profit................................ 56,901 52,996 39,323 10,326 12,141
Selling, general, administrative, and other
expenses.................................. 49,417 48,997 43,391 11,321 10,489
Restructuring and merger costs.............. 258 881 2,550 806 --
-------- -------- -------- ------- -------
Operating income (loss)..................... 7,226 3,118 (6,618) (1,801) 1,652
Equity in net income (loss) of joint
ventures.................................. 273 (497) 267 44 (85)
Other expense, net.......................... (602) (71) (397) (212) (198)
-------- -------- -------- ------- -------
Income (loss) before income taxes........... 6,897 2,550 (6,748) (1,969) 1,369
Provision (benefit) for income taxes........ 2,699 1,448 (2,214) (703) 466
-------- -------- -------- ------- -------
Net income (loss)........................... $ 4,198 $ 1,102 $ (4,534) $(1,266) $ 903
======== ======== ======== ======= =======
Earnings (loss) per common share
Basic..................................... $ 0.40 $ 0.11 $ (0.44) $ (0.12) $ 0.09
Diluted................................... $ 0.37 $ 0.10 $ (0.44) $ (0.12) $ 0.08
</TABLE>
The accompanying Notes are an integral part of the Consolidated Financial
Statements.
F-3
<PAGE>
METRON TECHNOLOGY N.V.
CONSOLIDATED BALANCE SHEETS
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
MAY 31 AUGUST 31, 1999
------------------- --------------------
1998 1999 ACTUAL PRO FORMA
-------- -------- -------- ---------
(UNAUDITED)
<S> <C> <C> <C> <C>
ASSETS
Cash and cash equivalents................................. $ 10,387 $10,601 $ 17,128 $ 17,128
Accounts receivable, net of allowance for doubtful
accounts of $815, $1,312, $1,395, and $1,395,
respectively............................................ 53,216 42,150 49,044 49,044
Inventories, net.......................................... 25,881 24,079 24,413 24,413
Prepaid expenses and other current assets................. 8,375 10,126 9,766 9,766
-------- ------- -------- --------
Total current assets.................................. 97,859 86,956 100,351 100,351
Property, plant, and equipment, net....................... 9,901 8,152 7,757 7,757
Intangible assets, net.................................... 2,995 2,572 2,466 2,466
Investments in joint ventures............................. 2,342 185 100 100
Other assets.............................................. 1,064 1,760 1,757 1,757
-------- ------- -------- --------
Total Assets.......................................... $114,161 $99,625 $112,431 $112,431
======== ======= ======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Accounts payable.......................................... $ 26,633 $21,507 $ 24,341 $ 24,341
Amounts due affiliates.................................... 18,125 13,125 18,824 18,824
Accrued wages and employee-related expenses............... 5,716 5,304 4,537 4,537
Deferred revenue for installation and warranty............ 7,224 4,611 5,374 5,374
Short term borrowings and current portion of long-term
debt.................................................... 8,771 11,086 15,111 15,111
Amounts payable to shareholders........................... 76 1,016 1,016 1,016
Other current liabilities................................. 6,845 7,677 7,155 7,155
-------- ------- -------- --------
Total current liabilities............................. 73,390 64,326 76,358 76,358
Long-term debt, excluding current portion................... 1,379 1,141 1,101 1,101
Deferred credits and other long-term liabilities............ 1,343 2,230 2,168 2,168
-------- ------- -------- --------
Total liabilities..................................... 76,112 67,697 79,627 79,627
-------- ------- -------- --------
Commitments................................................. -- -- -- --
Common shares subject to Buy-Sell Agreement................. 2,000 1,973 1,973 --
-------- ------- -------- --------
Shareholders' Equity:
Preferred shares, par value NLG 0.96 Authorized;
10,000,000 shares Issued and outstanding; none.......... -- -- -- --
Common shares and additional paid-in capital, par value
NLG 0.96;
Authorized: 40,000,000
Issued: 10,383,068; 10,385,268; 10,385,268 and
10,385,268, respectively
Outstanding: 10,367,862; 10,104,261; 10,104,261; and
10,104,261, respectively................................ 3,177 3,030 3,030 5,003
Retained earnings......................................... 35,559 30,186 31,089 31,089
Cumulative other comprehensive loss....................... (2,405) (3,130) (3,157) (3,157)
Deferred compensation..................................... (275) -- -- --
Treasury shares; 15,206 shares in 1998 and 281,007 shares
in 1999................................................. (7) (131) (131) (131)
-------- ------- -------- --------
Total shareholders' equity............................ 36,049 29,955 30,831 32,804
-------- ------- -------- --------
Total Liabilities and Shareholders' Equity............ $114,161 $99,625 $112,431 $112,431
======== ======= ======== ========
</TABLE>
The accompanying Notes are an integral part of the Consolidated Financial
Statements.
F-4
<PAGE>
METRON TECHNOLOGY N.V.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
THREE MONTHS
YEARS ENDED MAY 31 ENDED AUGUST 31
------------------------------ -------------------
1997 1998 1999 1998 1999
-------- -------- -------- -------- --------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Cash flows from (used for) operating activities:
Net income (loss)..................................... $ 4,198 $ 1,102 $(4,534) $(1,266) $ 903
Adjustments to reconcile net income for items currently
not affecting operating cash flows:
Pooling adjustment relating to acquisition of T.A.
Kyser Co.......................................... -- (185) --
Depreciation and amortization....................... 2,748 2,911 3,047 761 682
Provision for inventory valuation and bad debts..... 2,724 1,701 2,781 244 242
Deferred income taxes............................... (604) (1,152) (1,157) (254) 291
Amortization of deferred compensation expense....... 329 245 275 69 --
Equity in net (income) loss of joint venture........ (273) 497 (267) (44) 85
Loss on disposition of assets....................... 9 80 126 8 15
Changes in assets and liabilities:
Accounts receivable, net.......................... 17,980 (5,779) 10,003 9,947 (6,989)
Inventories, net.................................. (654) (3,309) (21) 2,843 (464)
Prepaid expenses and other current assets......... (517) (1,123) (904) 597 45
Accounts payable.................................. (3,513) 1,246 (5,126) (8,105) 2,834
Amounts due affiliates............................ (9,419) 6,089 (5,000) (3,993) 5,699
Accrued wages and employee-related expenses....... 6 (378) (412) (1,161) (767)
Deferred revenue for installation and warranty.... 635 (16) (2,613) (249) 763
Other current liabilities......................... (6,761) (802) 832 47 (522)
------- ------- ------- ------- -------
Net cash flows from (used for) operating
activities.................................. 6,888 1,127 (2,970) (556) 2,817
------- ------- ------- ------- -------
Cash flows (used for) from investing activities:
Additions to property, plant, and equipment......... (3,598) (3,966) (1,369) (526) (377)
Proceeds from the sale of property, plant, and
equipment......................................... 383 66 334 39 190
Equity investment in joint venture.................. -- (1,109) --
Proceeds from the sale of equity investment in joint
ventures.......................................... -- -- 2,510
Other assets........................................ (191) (90) (418) (19) 33
Deferred credits and other long-term liabilities 121 254 283 102 (5)
------- ------- ------- ------- -------
Net cash flows (used for) from investing
activities.................................. (3,285) (4,845) 1,340 (404) (159)
------- ------- ------- ------- -------
Cash flows (used for) from financing activities:
Increase (decrease) in short-term borrowings........ 238 (1,522) 2,377 1,118 4,060
Proceeds from issuance of long-term debt............ 407 40 120 118 --
Principal payments on long-term debt................ (175) (283) (323) (75) (77)
Amounts payable to shareholders..................... 372 -- 1,582 (62) (62)
Principal payments on indebtedness to officer and
shareholders...................................... (465) (342) (76) -- --
Purchase of treasury stock.......................... -- (469) (1,152) -- --
Proceeds from issuance of common and treasury
shares............................................ -- 200 15 -- --
------- ------- ------- ------- -------
Net cash flows (used for) from financing
activities.................................. 377 (2,376) 2,543 1,099 3,921
------- ------- ------- ------- -------
Effect of exchange rate changes on cash and cash
equivalents........................................... (629) (553) (699) (90) (52)
------- ------- ------- ------- -------
Net change in cash and cash equivalents................. 3,351 (6,647) 214 49 6,527
Beginning cash and cash equivalents..................... 13,683 17,034 10,387 10,387 10,601
------- ------- ------- ------- -------
Ending cash and cash equivalents........................ $17,034 $10,387 $10,601 $10,436 $17,128
======= ======= ======= ======= =======
</TABLE>
The accompanying Notes are an integral part of the Consolidated Financial
Statements.
F-5
<PAGE>
METRON TECHNOLOGY N.V.
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
(IN THOUSANDS)
<TABLE>
<CAPTION>
COMMON
SHARES AND
ADDITIONAL CUMULATIVE
PAID-IN CAPITAL OTHER
------------------- TREASURY RETAINED COMPREHENSIVE DEFERRED COMPREHENSIVE
SHARES AMOUNT STOCK EARNINGS INCOME (LOSS) COMPENSATION TOTAL INCOME (LOSS)
-------- -------- -------- -------- ------------- ------------ -------- -------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balances at May 31, 1996.... 10,383 $3,221 $ (5) $30,444 $ 136 $(888) $32,908
Net income.................. 4,198 4,198 $ 4,198
Foreign translation
adjustment................ (1,088) (1,088) (1,088)
Amortization of deferred
compensation.............. 329 329
Issuance of shares for
license................... 8 52 52
------ ------ ----- ------- ------- ----- ------- -------
Balances at May 31, 1997.... 10,391 3,273 (5) 34,642 (952) (559) 36,399 $ 3,110
=======
Net income.................. 1,102 1,102 $ 1,102
Kyser pooling adjustment.... (185) (185)
Foreign translation
adjustment................ (1,453) (1,453) (1,453)
Amortization of deferred
compensation.............. (38) 284 246
Release of rights under
Buy-Sell Agreement........ 209 209
Purchase of treasury
stock..................... (75) (463) (6) (469)
Issuance of shares
For cash.................. 7 75 75
Exercise of stock
option.................. 45 121 4 125
------ ------ ----- ------- ------- ----- ------- -------
Balances at May 31, 1998.... 10,368 3,177 (7) 35,559 (2,405) (275) 36,049 $ (351)
=======
Net loss.................... (4,534) (4,534) $(4,534)
Foreign translation
adjustment................ (725) (725) (725)
Amortization of deferred
compensation.............. 275 275
Release of rights under
Buy-Sell Agreement........ 27 27
Purchase of treasury
stock..................... (266) (189) (124) (839) (1,152)
Issuance of shares
Exercise of stock
option.................. 2 15 15
------ ------ ----- ------- ------- ----- ------- -------
Balances at May 31, 1999.... 10,104 $3,030 $(131) $30,186 $(3,130) $ -- $29,955 $(5,259)
=======
Net income (unaudited)...... 903 903 $ 903
Foreign translation
adjustment (unaudited).... (27) (27) (27)
------ ------ ----- ------- ------- ----- ------- -------
Balances at August 31, 1999
(unaudited)............... 10,104 $3,030 $(131) $31,089 $(3,157) $ -- $30,831 $ 876
====== ====== ===== ======= ======= ===== ======= =======
</TABLE>
The accompanying Notes are an integral part of the Consolidated Financial
Statements.
F-6
<PAGE>
METRON TECHNOLOGY N.V.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(INFORMATION AS OF AUGUST 31, 1999 AND
FOR THE THREE MONTHS ENDED AUGUST 31, 1998 AND 1999 IS UNAUDITED)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION
Metron Technology N.V. ("Metron" or "the Company") is a holding company
organized under the laws of The Netherlands. Metron and its subsidiaries are
engaged in the marketing, sale and service of semiconductor equipment and
materials support in Europe, Asia and the United States. The majority of
Metron's revenue is derived from sales of materials and equipment. The Company's
principal subsidiaries include: Metron Technology (Deutschland) GmbH, Metron
Technology (United Kingdom) Ltd., Metron Technology (France) EURL, Metron
Technology (Italy) S.r.l., Metron Technology (Benelux) B.V., Metron Technology
(Israel) Ltd., Metron Technology (Asia) Ltd., Metron Technology (Hong Kong)
Ltd., T.A. Kyser Co. (a Nevada corporation), and Metron Technology Corporation
(a California corporation). Certain prior period items have been reclassified to
conform with the current year format.
In June 1995, the Company issued 1,595,376 common shares in exchange for all
of the outstanding capital stock of three companies trading in Asia, similarly
engaged in the distribution of semiconductor equipment and materials. These
three Asian companies were owned by the controlling shareholders of Metron.
Accordingly, the transaction has been treated as a reorganization of entities
under common control and is presented in a manner similar to a pooling-of
interests. Consequently, the Company's consolidated financial statements have
been restated to include the accounts and operations of the three Asian
companies for all reported periods prior to the reorganization.
In July 1995, the Company acquired Transpacific Technology Corporation
("TTC") and its subsidiaries in a business combination accounted for as a
purchase. The total purchase price for TTC was $5,035,000 and resulted in
goodwill of $4,229,000 which is being amortized over 10 years.
In July 1998, the Company issued common shares in exchange for substantially
all of the outstanding capital stock of T.A. Kyser Co ("Kyser"), which was
engaged in the marketing and sale of semiconductor materials. The transaction
has been treated as a pooling of interests. Consequently, the Company's
consolidated financial statements have been restated to include the accounts and
operations of Kyser for all reported periods prior to the merger.
The Consolidated Financial Statements have been prepared in accordance with
generally accepted accounting principles ("GAAP") applicable in the United
States. Conformity with GAAP requires the use of estimates and assumptions that
affect the reported amounts of assets and liabilities, disclosure of contingent
assets and liabilities at the date of the financial statements, and the reported
amounts of revenues and expenses during the reporting period. Future results may
differ from these estimates.
UNAUDITED INTERIM INFORMATION
The interim consolidated financial statements (including notes to financial
statements) of the Company for the three months ended August 31, 1998 and 1999,
included herein have been prepared by the Company, without audit, pursuant to
the rules and regulations of the Securities and Exchange Commission ("SEC"). In
the opinion of management, the accompanying unaudited interim consolidated
financial statements reflect all adjustments, consisting only of normal
recurring adjustments, necessary to present fairly the financial position of the
Company at August 31, 1999, and
F-7
<PAGE>
METRON TECHNOLOGY N.V.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(INFORMATION AS OF AUGUST 31, 1999 AND
FOR THE THREE MONTHS ENDED AUGUST 31, 1998 AND 1999 IS UNAUDITED)
the results of its operations and its cash flows for the three months ended
August 31, 1998 and 1999. Historical results are not necessarily indicative of
the results to be expected in the future.
PRINCIPLES OF CONSOLIDATION
The Consolidated Financial Statements include the accounts of the Company
and all its subsidiaries. All significant intercompany balances and transactions
have been eliminated.
REVENUE RECOGNITION
Equipment and other product sales are recognized on the shipment of goods to
customers. The Company defers the revenue associated with its installation and
warranty obligations. The deferred revenue is recognized ratably over the
applicable installation and warranty periods. Service revenue is recognized in
the periods the services are rendered to customers.
COMPREHENSIVE INCOME (LOSS)
Effective June 1, 1998, the Company adopted the provisions of Statement of
Financial Accounting Standards ("SFAS") No. 130, REPORTING COMPREHENSIVE INCOME.
SFAS No. 130 establishes standards of report and presentation of comprehensive
income and its components of net income and other comprehensive income. Other
comprehensive income pertains to revenues, expenses, gains, and losses that are
not included in net income, but rather are recorded directly in stockholders'
equity. For the years ended May 31, 1997, 1998, and 1999, the Company had one
item of other comprehensive loss related to the foreign currency translation
adjustment.
EARNINGS PER SHARE
Basic earnings per common share are based on the weighted-average number of
common shares outstanding in each year. Diluted earnings per common share
reflect the potential dilution that could occur if dilutive securities were
exercised into common shares. For all years presented the reported net income
(loss) was used in the computation of basic and diluted earnings per common
share.
A reconciliation of the shares used in the computation follows:
<TABLE>
<CAPTION>
THREE MONTHS
YEAR ENDED MAY 31 ENDED AUGUST 31
------------------------------ -------------------
1997 1998 1999 1998 1999
-------- -------- -------- -------- --------
(SHARES IN THOUSANDS) (UNAUDITED)
<S> <C> <C> <C> <C> <C>
Shares used for basic earnings per
common share...................... 10,386 10,369 10,325 10,341 10,104
Shares used for stock options having
a dilutive effect................. 809 743 -- -- 1,075
------ ------ ------ ------ ------
Shares used for diluted earnings per
share............................. 11,195 11,112 10,325 10,341 11,179
====== ====== ====== ====== ======
</TABLE>
As of May 31, 1999 there were 1,944,348 shares of stock options outstanding
to purchase the Company's common stock with a weighted-average exercise price of
approximately $5.41. These securities were not included in diluted earnings per
share for the fiscal 1999 periods as their effect was anti-dilutive, but could
potentially dilute basic earnings per share in the future.
F-8
<PAGE>
METRON TECHNOLOGY N.V.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(INFORMATION AS OF AUGUST 31, 1999 AND
FOR THE THREE MONTHS ENDED AUGUST 31, 1998 AND 1999 IS UNAUDITED)
CASH EQUIVALENTS
Cash equivalents are short-term, highly liquid investments with original
maturities of 90 days or less from the date of purchase.
INVENTORIES
Inventories consist primarily of purchased products and are stated at the
lower of cost (first-in, first-out basis) or net realizable value. Provision is
made for slow-moving and obsolete items.
FOREIGN CURRENCY TRANSLATION AND TRANSACTIONS
Metron Technology N.V., Metron Technology (Asia) Ltd., and Metron Technology
(Hong Kong) Ltd. maintain their books in their respective local currencies, but
their functional currency is the U.S. dollar. Accordingly, the gains and losses
from the re-measurement of these financial statements into US dollars are
included in current results of operations. The functional currency for each of
the Company's other subsidiaries is the applicable local currency. The
translation from foreign currencies to U. S. dollars is performed for balance
sheet accounts using current exchange rates in effect at the balance sheet date
and for revenue and expense accounts using an average exchange rate during the
period. Translation gains or losses are included in "Cumulative other
comprehensive income" within shareholders' equity.
FINANCIAL INSTRUMENTS AND CREDIT RISK
The carrying value of the Company's financial instruments, including cash
and cash equivalents, and accounts receivable approximates fair value. Financial
instruments that subject the Company to concentrations of credit risk consist
primarily of cash and cash equivalents and accounts receivable.
The Company sells its products and services principally to leading well
established semiconductor companies. Credit risk is concentrated in North
America, Europe and Asia. The Company performs ongoing credit evaluations of its
customers' financial condition and, generally, requires no collateral from its
customers. The Company has had write-offs of accounts receivable, and based on
an ongoing evaluation of its accounts receivable collectibility and customer
creditworthiness, believes it has adequately provided for such losses, which
have been within management's expectations.
The Company attempts to reduce its exposure arising from foreign currency
fluctuations by matching the maturities of foreign currency assets and
liabilities, mainly accounts receivable and accounts payable. Metron enters into
forward exchange contracts that are designated to hedge differences existing
between foreign currency assets and liabilities. Any gains or losses on these
contracts are recognized in the income statement, and generally offset the
resulting gains and losses on the related balance sheet items. Metron also uses
forward exchange contracts that are designated to hedge firm purchase
commitments. Any unrealized gains or losses are deferred and realized gains or
losses adjust the carrying basis of assets acquired, principally inventory.
F-9
<PAGE>
METRON TECHNOLOGY N.V.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(INFORMATION AS OF AUGUST 31, 1999 AND
FOR THE THREE MONTHS ENDED AUGUST 31, 1998 AND 1999 IS UNAUDITED)
PROPERTY, PLANT, AND EQUIPMENT
Property, plant, and equipment is recorded at cost. Depreciation is
determined primarily by the straight-line method over the estimated useful life
of the related asset or the lease term if applicable, as follows:
<TABLE>
<S> <C>
Buildings and leasehold improvements........................ 10 - 50 years
Machinery, equipment, vehicles and fixtures................. 3 - 17 years
</TABLE>
Land is not depreciated. Gains and losses on disposals are included in
income at amounts equal to the difference between the net book value of the
disposed assets and the proceeds received upon disposal. Repair and maintenance
costs are capitalized only if they extend the useful life of the related asset.
The Company reviews the carrying value of these assets for impairment whenever
events and circumstances indicate that the carrying value of an asset may not be
recoverable from estimated future cash flows expected to result from its use and
disposition. Where undiscounted expected cash flows are less than the carrying
value, an impairment loss is recognized for the difference between the estimated
fair value and the carrying value of an asset. No impairment of property, plant,
and equipment existed at May 31, 1999.
INTANGIBLE ASSETS
Intangible assets consist primarily of goodwill, representing the excess of
the purchase price paid over the fair value of net assets acquired in a business
combination. Goodwill is amortized in selling, general, administrative, and
other expenses over ten years, using the straight-line method. The Company
periodically reviews intangible assets for recoverability using an undiscounted
cash flow approach to assess if there is impairment. If the undiscounted cash
flows are less than the carrying value, impairment is measured by the excess of
the carrying value over the undiscounted cash flows.
INVESTMENT IN JOINT VENTURES
The Company uses the equity method to account for its joint ventures. Metron
has the ability to influence the operating policies of, but does not control its
joint ventures.
INCOME TAXES
The Company uses the asset and liability method of accounting for income
taxes. Under this method deferred income taxes are provided to reflect the net
tax effects of temporary differences between the carrying amounts of assets and
liabilities for financial reporting purposes and the amounts used for tax
purposes.
DEFERRED REVENUE FOR WARRANTY AND INSTALLATION
Generally, the Company warrants products sold to customers to be free from
defects in material and workmanship for up to two years and defers the portion
of equipment revenue associated with its estimate of installation and warranty
obligations. Deferred revenue includes both the estimated cost of fulfilling the
obligations for installation and warranty and the related profit.
F-10
<PAGE>
METRON TECHNOLOGY N.V.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(INFORMATION AS OF AUGUST 31, 1999 AND
FOR THE THREE MONTHS ENDED AUGUST 31, 1998 AND 1999 IS UNAUDITED)
COMMON SHARES SUBJECT TO BUY-SELL AGREEMENT
The Company has reflected under the caption "Common shares subject to
Buy-Sell Agreement" the value as of the date of original issuance of the common
shares subject to put rights at the effective date of the Amended and Restated
Buy and Sell Agreement (the "Buy-Sell Agreement"). When shares are put to the
Company, the related value is released and reclassified to common shares. If the
offering contemplated by this prospectus is consummated, the Buy-Sell Agreement
will be terminated and the value ascribed to the put rights will be reclassified
to shareholders' equity.
The unaudited pro forma consolidated balance sheet at May 31, 1999 assumes
the consummation of this offering, and reflects the value of the put rights in
shareholders' equity.
ACCOUNTING FOR STOCK OPTIONS
The Company uses the intrinsic value-based method to account for employee
stock-based compensation plans. The Company has adopted the disclosure
requirements of SFAS 123--"Accounting for Stock Based Compensation." (See
footnote 9)
2. ACQUISITION OF KYSER
On July 13, 1998, pursuant to an Agreement and Plan of Merger and
Reorganization ("Merger Agreement") dated as of June 12, 1998, the Company
acquired substantially all the outstanding shares of Kyser. Under the terms of
the Merger Agreement, each outstanding share of Kyser's common stock acquired
was converted into 16.5 shares of the Company's common shares. Accordingly, the
Company issued 1,572,453 new common shares to the shareholders of Kyser. Kyser
is a stocking distributor of materials and components which markets both
high-purity and industrial-use products in Texas and five other states.
The merger has been accounted for as a pooling of interests. There were no
transactions between the Company and Kyser prior to the combination. In
conjunction with the merger, Kyser changed its fiscal year end to coincide with
Metron's.
Certain amounts for Kyser have been reclassified to conform to the financial
statement classification followed by Metron. Since the fiscal years of Metron
and Kyser prior to May 31, 1998 differ, the consolidated statements of income
combine the operations of Kyser for its fiscal year ended July 31, 1997 with the
operations of Metron for the fiscal year ended May 31, 1997. The operations of
Metron for the year ended May 31, 1998 are combined with the operations of Kyser
for both the ten-month period ended May 31, 1998, and for the two-month period
ended July 31, 1997. Thus the two-month period ended July 31, 1997 is included
both in the Kyser fiscal year ended July 31, 1997 and the consolidated statement
of income for the fiscal year ended May 31, 1998. Accordingly, the net income of
Kyser for the two-month period ended July 31, 1997 is deducted from retained
earnings. Kyser revenue and net income for the two-month period was $8,842,000
and $185,000, respectively.
F-11
<PAGE>
METRON TECHNOLOGY N.V.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(INFORMATION AS OF AUGUST 31, 1999 AND
FOR THE THREE MONTHS ENDED AUGUST 31, 1998 AND 1999 IS UNAUDITED)
Total revenues and net income (loss) previously reported by the separate
enterprises prior to the acquisition were as follows.
<TABLE>
<CAPTION>
MAY 31
-----------------------
1997 1998
---------- ----------
(DOLLARS IN THOUSANDS)
<S> <C> <C>
Total revenues:
Metron................................................ $255,283 $224,913
Kyser................................................. 43,293 50,111
-------- --------
$298,576 $275,024
Net income (loss):
Metron................................................ $ 4,614 $ 414
Kyser................................................. (416) 688
-------- --------
$ 4,198 $ 1,102
======== ========
</TABLE>
3. PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment consists of the following:
<TABLE>
<CAPTION>
MAY 31
-----------------------
1998 1999
-------- --------
(DOLLARS IN THOUSANDS)
<S> <C> <C>
Land................................................... $ 951 $ 917
Buildings and leasehold improvements................... 4,107 4,056
Machinery, equipment, vehicles, and fixtures........... 13,338 13,141
------- -------
18,396 18,114
Less accumulated depreciation.......................... 8,495 9,962
------- -------
Property, plant and equipment.......................... $ 9,901 $ 8,152
======= =======
</TABLE>
Depreciation expense relating to property, plant and equipment for the years
ended May 31, 1997, 1998, and 1999 was $2,320,000, $2,474,000, and $2,617,000,
respectively.
4. INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
The Company's interests in its joint ventures were as follows:
<TABLE>
<CAPTION>
MAY 31
-------------------------
1998 1999
-------- --------
(DOLLARS IN THOUSANDS)
<S> <C> <C>
FSI-CME.................................................. $2,127 $ --
FSI-CMK.................................................. 215 --
MAP...................................................... -- 185
------ ----
Investment in joint ventures............................. $2,342 $185
====== ====
</TABLE>
F-12
<PAGE>
METRON TECHNOLOGY N.V.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(INFORMATION AS OF AUGUST 31, 1999 AND
FOR THE THREE MONTHS ENDED AUGUST 31, 1998 AND 1999 IS UNAUDITED)
In 1995, the Company and FSI International, Inc. ("FSI"), a related party,
each acquired 50% of FSI-CME (formerly Vinylglass Ltd.). In 1998, Metron
Technology (Asia) Ltd. ("MTA"), a wholly owned subsidiary of the Company and FSI
established another joint venture in Korea, FSI-CMK. FSI-CMK was owned 65% by
FSI and 35% by MTA. The business of FSI-CMK is the design, construction,
installation, supply, support and servicing of chemical management equipment for
microelectronics fabrication facilities located within Korea. In February 1999,
the Company sold its interests in these joint ventures to FSI. Proceeds from the
sale of the Company's interests in FSI-CME and FSI-CMK amounted to $2,200,000
and $310,000, respectively. The Company recorded a gain on the sale of its
interest in FSI-CME of $123,000 and a loss on the sale of its interest in
FSI-CMK of $263,000.
During fiscal year 1999, Metron Technology (United Kingdom) Ltd., a wholly
owned subsidiary of the Company and WS Atkins Plc. formed a 50/50 joint venture
Metron Atkins Partnership Limited ("MAP"). MAP provides services to the
semiconductor industry including but not limited to design and engineering of
manufacturing facilities, facilities management, and comprehensive technical
support.
Condensed combined financial information for the unconsolidated investments
in FSI-CME, FSI-CMK, and MAP are as follows:
<TABLE>
<CAPTION>
MAY 31
-------------------------
1998 1999
-------- --------
(DOLLARS IN THOUSANDS)
<S> <C> <C>
Current assets........................................... $6,971 $3,771
Noncurrent assets........................................ 1,536 --
Current liabilities...................................... (4,540) (3,400)
Noncurrent liabilities................................... (34) --
------ ------
Total shareholders' equity............................... 3,933 371
Other shareholder's share of equity...................... (2,059) (186)
------ ------
Metron's share of equity................................. 1,874 185
Goodwill and other items (10 year life).................. 468 --
------ ------
Investment in unconsolidated joint ventures.............. $2,342 $ 185
====== ======
</TABLE>
<TABLE>
<CAPTION>
YEAR ENDED MAY 31
------------------------------
1997 1998 1999
-------- -------- --------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
Operating income (loss).............................. $946 $(1,804) $1,605
Net income (loss).................................... $682 $ (995) $ 705
Metron's share of net income (loss).................. $342 $ (437) $ 319
Amortization of goodwill and other intangible
items.............................................. (69) (60) (52)
---- ------- ------
Equity in net income (loss) of joint ventures........ $273 $ (497) $ 267
==== ======= ======
</TABLE>
Product sales to FSI-CME for the years ended May 31, 1997, 1998, and 1999
were $1,738,000, $632,000, and $441,000, respectively. Purchases from FSI-CME
during the same periods were $17,956,000, $6,470,000, and $4,560,000,
respectively. At May 31, 1998 and 1999, amounts receivable from joint ventures
were $49,469 and $449,000, respectively, and amounts payable were $1,035,000 and
none, respectively.
F-13
<PAGE>
METRON TECHNOLOGY N.V.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(INFORMATION AS OF AUGUST 31, 1999 AND
FOR THE THREE MONTHS ENDED AUGUST 31, 1998 AND 1999 IS UNAUDITED)
5. SHORT-TERM BORROWINGS AND DEBT
Short-term borrowings consist of the following:
<TABLE>
<CAPTION>
MAY 31
-----------------------
1998 1999
-------- --------
(DOLLARS IN THOUSANDS)
<S> <C> <C>
Line of credit.......................................... $7,017 $ 7,669
Short-term credit facilities............................ 1,443 3,168
Current portion of long-term debt....................... 311 249
------ -------
Short-term borrowings and current portion of long-term
debt.................................................. $8,771 $11,086
====== =======
</TABLE>
A subsidiary of the Company has a revolving line of credit with a bank. The
line of credit provides borrowings not to exceed the lesser of $8,500,000 or a
borrowing base based upon inventory and accounts receivable, which collateralize
the line. The interest rate is 2.5% above LIBOR, and was 9.0% and 7.43% at
May 31, 1998 and 1999, respectively. The line of credit is also subject to the
maintenance of certain financial ratios and minimum levels of tangible net
worth. The Company has guaranteed the line of credit.
The Company and its subsidiaries have short-term credit facilities in
various currencies with a number of banks. Weighted average interest rates on
the outstanding facilities at May 31, 1998 and 1999 were 7.2% and 6.6%,
respectively. Certain assets of subsidiaries of the Company collateralize the
facilities. At May 31, 1999, the total amount available and unutilized under the
Company's short-term borrowings was approximately $8,000,000. The Company and
its subsidiaries have guaranteed certain short-term credit facilities.
F-14
<PAGE>
METRON TECHNOLOGY N.V.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(INFORMATION AS OF AUGUST 31, 1999 AND
FOR THE THREE MONTHS ENDED AUGUST 31, 1998 AND 1999 IS UNAUDITED)
Long-term debt consists of the following:
<TABLE>
<CAPTION>
MAY 31
-------------------
<S> <C> <C>
1998 1999
------ ------
<CAPTION>
(DOLLARS IN
THOUSANDS)
<S> <C> <C>
Building mortgage with The Royal Bank of Scotland plc with
an interest rate of 9.24% (9.27% in 1998) until
June 2001, and thereafter at LIBOR plus 1.5% per annum
until maturity. Principal and interest are payable in
quarterly installments through April 2006. The mortgage is
also subject to the maintenance of certain financial
ratios and minimum levels of tangible net worth........... $1,100 $ 953
Note payable to shareholder for purchase of retired treasury
shares. The note has an interest rate of 6.65%, payable in
annual installments until July 2002, and is collateralized
by an ESOP bond........................................... 310 248
Unsecured notes payable with principal and interest payable
quarterly. Two of the notes bear interest at the 6-month
Rome Interbank Offered Rate plus 1.75%, and one note bears
interest at the Italian Prime Rate plus 1.0%.............. 93 41
Various notes maturing through August 2005; interest rates
ranging from 3.4% to 7.5%................................. 263 210
------ ------
1,766 1,452
Less current portions:
Notes payable to shareholder.............................. 76 62
Long-term debt............................................ 311 249
------ ------
Long-term debt.............................................. $1,379 $1,141
====== ======
</TABLE>
Future fiscal year ("FY") annual maturities of long-term debt are as
follows: FY2000, $311,000; FY2001, $218,000; FY2002, $220,000; FY2003, $217,000;
FY2004, $155,000 and thereafter, $331,000.
F-15
<PAGE>
METRON TECHNOLOGY N.V.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(INFORMATION AS OF AUGUST 31, 1999 AND
FOR THE THREE MONTHS ENDED AUGUST 31, 1998 AND 1999 IS UNAUDITED)
6. RESTRUCTURING AND MERGER COSTS
The following table summarizes the restructuring and merger costs incurred
for fiscal years 1997, 1998, and 1999.
<TABLE>
<CAPTION>
FOR THE YEAR ENDED MAY 31
------------------------------------
<S> <C> <C> <C>
1997 1998 1999
---- ---- ------
<CAPTION>
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
Restructuring costs................................ $ -- $261 $1,835
Merger costs (primarily professional fees)
associated with the acquisition of Kyser......... 258 620 715
---- ---- ------
Restructuring and merger costs..................... $258 $881 $2,550
==== ==== ======
</TABLE>
Restructuring costs are comprised primarily of severance costs and the early
retirement agreement ("ERA") associated with the implementation of the Company's
new organizational structure and other reductions in headcount. During fiscal
year 1998, Metron began the transition from an organizational structure based on
geography to a global organization built around the Company product lines. The
restructuring costs incurred during fiscal 1998 represent termination costs for
13 employees, primarily in finance and administration. In fiscal 1999,
approximately $856,000 pertains to the change in the organization and represents
the termination costs of 51 employees, most of whom worked in the equipment
division. At May 31, 1999, approximately $86,000 remained as a liability of the
Company.
In February 1999, the Company entered into an early retirement agreement
with one of its managing directors in connection with the termination of his
employment agreement, who had a lifetime employment agreement with the Company.
To cover the entire cost of the early retirement agreement, the Company recorded
a pre-tax charge of $979,000 in fiscal year 1999. Under the terms of the ERA,
the Managing Director resigned from his employment, and the Company agreed to
pay him a portion of his salary for the years remaining until he is eligible to
retire under the terms of his employment agreement. The Company also agreed to
provide him with certain other benefits. The present value of remaining
obligation discounted at an interest rate of 6.0% is $782,000 of which $154,000,
the current portion, is included in amounts payable to shareholders with the
remainder included in deferred credits and other long-term liabilities. The ERA
is payable monthly until March 2005.
7. RELATED PARTIES
Two of Metron's shareholders, Entegris (formerly Fluoroware) and FSI, each
own approximately 32.7% of the outstanding shares of the Company. The Company
purchases goods from these shareholders and their subsidiaries for resale in the
normal course of business under terms and conditions similar to those with
unrelated vendors. For the years ended May 31, 1997, 1998 and 1999 such
purchases totaled approximately $79,000,000, $83,400,000, and $65,300,000,
respectively. At May 31, 1998 and 1999, amounts payable to these affiliates were
$18,125,000 and $13,125,000, respectively. In addition, the Company receives
commissions from these shareholders for sales made to certain Asian customers.
For the years ended May 31, 1997, 1998 and 1999 such commissions totaled
approximately $677,000, $316,000, and $7,000, respectively. At May 31, 1998 and
1999, amounts receivable from these shareholders were $186,000 and $168,000,
respectively.
F-16
<PAGE>
METRON TECHNOLOGY N.V.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(INFORMATION AS OF AUGUST 31, 1999 AND
FOR THE THREE MONTHS ENDED AUGUST 31, 1998 AND 1999 IS UNAUDITED)
8. INCOME TAXES
The domestic and foreign components of income (loss) before taxes for each
year ended May 31 are as follows:
<TABLE>
<CAPTION>
YEARS ENDED MAY 31,
------------------------------
<S> <C> <C> <C>
1997 1998 1999
------ ------ -------
The Netherlands.................................... $ 360 $ 502 $ (792)
Other countries:
France........................................... (91) (91) (2,283)
Germany.......................................... 609 (1,374) (2,937)
United Kingdom................................... 1,792 764 553
Hong Kong........................................ 2,725 831 (254)
Korea............................................ (1,490) (1,460) (1,246)
United States.................................... 1,993 3,476 700
All other countries.............................. 999 (98) (489)
------ ------ -------
Income (loss) before income taxes.................. $6,897 $2,550 $(6,748)
====== ====== =======
</TABLE>
The components of income tax expense (benefit) for each year ended May 31
are as follows:
<TABLE>
<CAPTION>
YEARS ENDED MAY 31,
------------------------------
<S> <C> <C> <C>
1997 1998 1999
------ ------ -------
CURRENT:
The Netherlands.................................. $ 80 $ 117 $ (207)
Other countries:
France......................................... 303 12 (751)
Germany........................................ 115 (26) (180)
United Kingdom................................. 697 395 (132)
United States.................................. 1,497 1,735 (129)
All other countries............................ 435 347 341
------ ------ -------
Current tax...................................... 3,127 2,580 (1,058)
------ ------ -------
DEFERRED:
The Netherlands.................................. -- -- --
Other countries:
France......................................... (248) (19) 225
Germany........................................ (197) (723) (1,557)
United Kingdom................................. (3) 21 (44)
United States.................................. (321) (223) 552
All other countries............................ 341 (188) (332)
------ ------ -------
Deferred tax..................................... (428) (1,132) (1,156)
------ ------ -------
Total income taxes................................. $2,699 $1,448 $(2,214)
====== ====== =======
</TABLE>
At May 31, 1999, the Company had $9,473,000 in net operating loss
carryforwards, which represented approximately $3,100,000 of tax benefit, which
may be carried forward for periods ranging from 5 years to indefinitely. A
valuation allowance of $2,506,000 has been provided against the related deferred
tax asset because it is more likely than not that Metron will not fully utilize
these tax losses.
F-17
<PAGE>
METRON TECHNOLOGY N.V.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(INFORMATION AS OF AUGUST 31, 1999 AND
FOR THE THREE MONTHS ENDED AUGUST 31, 1998 AND 1999 IS UNAUDITED)
Significant components of the Company's deferred tax assets and liabilities
are set forth below.
<TABLE>
<CAPTION>
MAY 31
-------------------
<S> <C> <C>
1998 1999
------ ------
<CAPTION>
(DOLLARS IN
THOUSANDS)
<S> <C> <C>
Deferred tax assets:
Deferred revenue for installation and warranty............ $ 731 $ 251
Account receivable and inventory provisions............... 598 942
Unrealized foreign currency losses........................ 302 923
Accruals deductible when paid............................. 1,273 1,168
Tax loss carryforwards and other items.................... 2,261 3,264
------ ------
5,165 6,548
Less: Valuation allowance................................... 2,256 2,506
------ ------
2,909 4,042
Deferred tax liabilities.................................... 91 68
------ ------
Net deferred tax assets recorded in consolidated balance
sheets.................................................... $2,818 $3,974
====== ======
</TABLE>
Differences between the statutory income tax rate of The Netherlands and the
Company's effective income tax rate are reconciled as follows:
<TABLE>
<CAPTION>
YEARS ENDED MAY 31
------------------------------
<S> <C> <C> <C>
1997 1998 1999
---- ----- -----
Statutory income tax rate............................... 35.1% 35.1% (35.0)%
Increase (decrease) in taxes resulting from:
Tax rate differential in other countries.............. (5.7) (15.9) (6.5)
Current year net operating losses for which no benefit
is recognized....................................... -- 37.6 17.0
Utilization of prior year net operating losses for
which no benefit was previously recognized.......... -- (7.4) (2.3)
Amortization of Goodwill.............................. 2.1 6.9 2.5
All other............................................. 7.6 .5 (8.5)
---- ----- -----
Effective income tax rate............................... 39.1% 56.8% (32.8)%
==== ===== =====
</TABLE>
9. CAPITAL STOCK
CHANGES IN CAPITAL SHARES
During 1998, the Company amended and restated its Articles of Association to
include, among other things, changes in the par value and in the number of
authorized shares of its common stock. The Company increased the par value of
its common shares from NLG 0.24 to NLG 0.96, and issued one new share for each 2
shares then outstanding. As a result of the stock split, the Company issued
additional common shares, and the financial statements reflect changes in par
value and the stock split for all periods presented.
F-18
<PAGE>
METRON TECHNOLOGY N.V.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(INFORMATION AS OF AUGUST 31, 1999 AND
FOR THE THREE MONTHS ENDED AUGUST 31, 1998 AND 1999 IS UNAUDITED)
AMENDED AND RESTATED BUY AND SELL AGREEMENT
In conjunction with the acquisition of Transpacific Technology Corporation,
the Company and five shareholder-employees of the Company entered into an
Amended and Restated Buy and Sell Agreement (the "Buy-Sell Agreement") effective
as of July 1995. The Buy-Sell Agreement provides for the repurchase under
certain circumstances of the outstanding shares and options of the five
shareholder-employees. Under the terms of the Buy-Sell Agreement, the
shareholder-employees have certain put rights and the Company has certain call
rights on the shares and options owned by the shareholder-employees. Until
July 5, 2000, the put rights are triggered upon the occurrence of certain
specified events, namely death, permanent disability, termination of employment
of the shareholder-employee, and failure of the Company to complete a qualified
initial public offering by July 6, 2000.
Under the terms of the Buy-Sell Agreement, the maximum obligation of the
Company during any fiscal year is re-determined annually until the fiscal year
beginning June 1, 2000. In general, the Company's payment obligations are
subject to an annual limit equal to one half of the sum of the previous fiscal
year's net income and the non-cash flow items reported in the consolidated
financial statements. Any obligation remaining is carried forward to the
following fiscal year. At May 31, 1998 and 1999, the potential obligation to the
Company to settle the Buy-Sell Agreement rights for the shareholder-employees
amounted to approximately $9,700,000 and $9,000,000, respectively. Pursuant to
the payment cap provision of the Buy-Sell Agreement, the Company will have no
payment obligation for put rights exercised during fiscal 2000.
The Buy-Sell Agreement terminates upon a change in control or the completion
of a qualified initial public offering by the Company.
TREASURY SHARES
In July 1998 and May 1999, under the terms of the Buy-Sell Agreement, two
former employees exercised certain of their put rights, which required the
Company to repurchase 265,801 common shares for approximately $1,152,000.
STOCK OPTION PLAN
In fiscal 1996 the Company established an Employee Stock Option Plan to
award options to managing directors and employees, and in fiscal 1997
established a Supervisory Directors' Stock Option Plan to award options to
supervisory directors. The two plans consist of 2,362,500 common shares
(2,250,000 shares for managing directors and employees and 112,500 for
supervisory directors). The plans require that the exercise price of options be
the fair value of the common shares at the grant date, except for 1,065,948
shares awarded at amounts below fair value during the initial six-month period
following the establishment of the Plan. Deferred compensation expense of
$1,232,000 for the 1,065,948 shares was charged to income over the vesting
periods. Options generally vest over a four-year period, and are exercisable in
installments beginning one year after the grant date.
The following pro forma information has been prepared as if the Company had
accounted for its stock options using the fair value accounting method
established by SFAS No. 123--"Accounting for Stock Based Compensation."
Additional compensation expense arising from the application of SFAS 123 has
been estimated using the minimum value method from the date of grant without
F-19
<PAGE>
METRON TECHNOLOGY N.V.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(INFORMATION AS OF AUGUST 31, 1999 AND
FOR THE THREE MONTHS ENDED AUGUST 31, 1998 AND 1999 IS UNAUDITED)
considering the volatility of the underlying stock. For purposes of the pro
forma disclosures below, additional compensation cost is amortized to expense
over the options' vesting period.
<TABLE>
<CAPTION>
YEARS ENDED MAY 31
------------------------------
<S> <C> <C> <C>
1997 1998 1999
------ ------ -------
<CAPTION>
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
Net income (loss):
As reported...................................... $4,198 $1,102 $(4,534)
Pro forma(a)..................................... $3,816 $ 761 $(4,822)
Earnings (loss) per common share
Basic
As reported.................................... $ 0.40 $ 0.11 $ (0.44)
Pro forma...................................... $ 0.37 $ 0.07 $ (0.47)
Diluted
As reported.................................... $ 0.37 $ 0.10 $ (0.44)
Pro forma...................................... $ 0.34 $ 0.07 $ (0.47)
</TABLE>
- ------------------------
(a) Based on the following assumptions for grants in fiscal years 1997, 1998,
and 1999: risk-free weighted average interest rates of 6.13%, 6.14%, and
5.16% in fiscal years 1997, 1998, and 1999, respectively; weighted average
expected option lives of 6.5 years, 5.6 years, and 4.8 years in fiscal years
1997, 1998, and 1999, respectively; and no dividend yield in each year.
There were approximately 326,000 and 45,000 shares available for future
employee awards and supervisory director awards, respectively, at May 31, 1999.
The following table summarizes award activity:
<TABLE>
<CAPTION>
1997 1998 1999
-------------------- -------------------- --------------------
<S> <C> <C> <C> <C> <C> <C>
WEIGHTED WEIGHTED WEIGHTED
AVERAGE AVERAGE AVERAGE
EXERCISE EXERCISE EXERCISE
SHARES PRICE SHARES PRICE SHARES PRICE
--------- ----- --------- ----- --------- -----
Outstanding, beginning of period......... 1,410,348 $3.60 1,557,798 $3.99 1,669,998 $4.67
Stock options granted.................... 154,950 $7.70 302,700 $8.33 446,250 $7.83
Stock options exercised.................. -- -- (45,000) $2.78 (2,200) $7.00
Awards canceled.......................... (7,500) $7.08 (145,500) $5.57 (169,700) $5.46
--------- ----- --------- ----- --------- -----
Outstanding, end of period............... 1,557,798 $3.99 1,669,998 $4.67 1,944,348 $5.41
========= ===== ========= ===== ========= =====
Options exercisable at end of period..... 588,467 $3.51 666,244 $3.75 1,128,602 $3.91
========= ===== ========= ===== ========= =====
</TABLE>
F-20
<PAGE>
METRON TECHNOLOGY N.V.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(INFORMATION AS OF AUGUST 31, 1999 AND
FOR THE THREE MONTHS ENDED AUGUST 31, 1998 AND 1999 IS UNAUDITED)
Summary information concerning outstanding and exercisable options as of
May 31, 1999 is as follows:
<TABLE>
<CAPTION>
WEIGHTED
AVERAGE WEIGHTED WEIGHTED
REMAINING AVERAGE AVERAGE
RANGE OF NUMBER CONTRACTUAL EXERCISE NUMBER EXERCISE
EXERCISE PRICES OUTSTANDING LIFE PRICE EXERCISABLE PRICE
- --------------------- ----------- ----------- -------- ----------- --------
<C> <C> <S> <C> <C> <C>
$0.00 - $2.78 885,948 6.1 yrs $ 2.78 824,951 $ 2.78
$2.79 - $6.16 229,650 5.9 yrs $ 6.16 175,047 $ 6.16
$6.17 - $7.00 8,400 5.5 yrs $ 7.00 4,200 $ 7.00
$7.01 - $7.83 421,500 8.9 yrs $ 7.83 8,377 $ 7.83
$7.84 - $8.00 129,600 6.0 yrs $ 8.00 49,804 $ 8.00
$8.01 - $8.33 269,250 7.5 yrs $ 8.33 66,223 $ 8.33
--------- ---------
1,944,348 1,128,602
========= =========
</TABLE>
Market price is the fair value of the Company's common stock as determined
by the Plan Committee on the grant date. All options issued during the past
three years have an exercise price equal to the market price on the date of
grant. The weighted average fair values below have been determined using the
Minimum Value Method.
<TABLE>
<CAPTION>
YEARS ENDED MAY 31
------------------------------
<S> <C> <C> <C>
1997 1998 1999
-------- -------- --------
Options granted............................... 154,950 302,700 446,250
Weighted average exercise price............... $ 7.70 $ 8.33 $ 7.83
Weighted average fair value................... $ 2.51 $ 2.35 $ 1.66
</TABLE>
10. EMPLOYEE BENEFITS
Most employees of the Company are covered by one of several defined
contribution retirement plans. Contributions are generally based on the
participant's compensation. The amount of pension expense charged to operating
expenses for defined contribution plans was $659,000 in fiscal 1997, $956,000 in
fiscal 1998, and $1,140,000 in fiscal 1999.
Kyser has an employee stock ownership plan ("ESOP") for its employees. Upon
the acquisition of Kyser, all Kyser shares held by the ESOP were exchanged for
shares of the Company. The subsidiary's full time employees generally become
eligible to participate after 12 months of continuous service. The cost of the
ESOP may be paid by the subsidiary or through contributions made by the
subsidiary to the ESOP in amounts determined by the Board of Directors. Shares
of common stock acquired from terminated employees by the plan and forfeitures
by terminated participants are allocated to each eligible participant account
under the plan. Participants are eligible for a distribution in the sixth year
after normal termination and in the second year after termination for
retirement, death, or disability. Participants vest in amounts allocated to them
according to a vesting schedule. Distributions of participant accounts to
participants in either cash or the Company's common stock may be made in the
event of termination, retirement, death or disability. To the extent the
participant elects to receive common stock in the event of retirement, death or
disability, and the common stock is not readily
F-21
<PAGE>
METRON TECHNOLOGY N.V.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(INFORMATION AS OF AUGUST 31, 1999 AND
FOR THE THREE MONTHS ENDED AUGUST 31, 1998 AND 1999 IS UNAUDITED)
tradable in an established market, such common stock may be put to the Company
during the put option period at the then current fair value.
11. FINANCIAL INSTRUMENTS
The carrying value of accounts receivable, accounts payable and long-term
debt approximate fair value. At May 31, 1999 the Company had aggregate forward
exchange contracts in various currencies as follows:
<TABLE>
<CAPTION>
WEIGHTED
AVERAGE
CONTRACT AMOUNT EXCHANGE
US $ BUY SELL RATE FAIR VALUE EXPIRATION DATE
- --------------- ----------------- ----------------- -------- ---------- ---------------
<S> <C> <C> <C> <C> <C>
$3,773,000 -- Singapore Dollars 1.69 $ 98,319 January 2000
$4,889,000 Japanese Yen 107.26 (1,439) March 2000
$2,022,000 Singapore Dollars 1.67 3,578 January 2000
$1,700,000 Italian Lira 1,864.90 5,492 July 1999
$500,000 British Pounds 1.63 (475) June 1999
$700,000 Deutsch Mark 1.79 (36,445) July 1999
--------
$ 69,030
========
</TABLE>
The building mortgage with the Royal Bank of Scotland plc interest rate
comprises a variable LIBOR rate, a fixed rate of 1.5%, and a regulatory bank
charge. In May 1996 the Company entered into an interest rate swap, expiring
June 2001, to convert the variable LIBOR portion of the interest rate to a fixed
interest rate of 7.72%. The interest rates at May 31, 1998 and 1999 for the
mortgage were 9.25% and 6.87%, while the interest rates for the swap were 9.27%
and 9.24%, respectively. At May 31, 1999, the notional amount for the interest
rate swap was $1,002,000 and its estimated fair value was a payable of $43,000.
12. COMMITMENTS
At May 31, 1999, Metron was committed to spending approximately $21,900,000,
principally to purchase equipment, materials, and spare parts for resale.
The Company and its subsidiaries lease certain facilities and equipment
under various operating lease agreements. Future minimum payments under
operating leases that have initial or remaining noncancelable lease terms of one
year or more consist of the following at May 31, 1999.
<TABLE>
<CAPTION>
FISCAL YEAR (DOLLARS IN THOUSANDS)
- ----------- ----------------------
<S> <C>
2000..................................................... $2,579
2001..................................................... 1,906
2002..................................................... 739
2003..................................................... 448
2004..................................................... 209
Thereafter............................................... 1,208
------
Total minimum lease payments............................. $7,089
======
</TABLE>
F-22
<PAGE>
METRON TECHNOLOGY N.V.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(INFORMATION AS OF AUGUST 31, 1999 AND
FOR THE THREE MONTHS ENDED AUGUST 31, 1998 AND 1999 IS UNAUDITED)
The Company's rental expense for operating leases for the fiscal years ended
May 31, 1997, 1998 and 1999, was $2,919,000, $2,976,000, and $3,330,000
respectively.
13. ADDITIONAL SALES INFORMATION AND CONCENTRATION OF RISK
In fiscal 1997, sales to Seimens and IBM represented approximately 11.4% and
11.3%, of net revenues, respectively. In fiscal 1998 and 1999, no individual
customer represented sales of 10% or more of operating revenues.
A large portion of the Company's sales is made to a number of major publicly
owned corporations. There is a concentration of credit risk in accounts
receivable from these customers. Metron performs ongoing credit evaluations of
its customers and generally does not require collateral. Although the credit
risk associated with nonpayment from these customers is affected by conditions
or occurrences within their industry, accounts receivable from these customers
were substantially current at May 31, 1999. The Company believes that there is
no significant credit risk with respect to these receivables.
14. SEGMENT AND GEOGRAPHIC DATA
The Company implemented SFAS No. 131, "Disclosures about Segments of an
Enterprise and Related Information," as of June 1, 1998. This Statement
establishes standards for the reporting of information pertaining to operating
segments in annual and in interim financial reports issued to shareholders.
Previously reported amounts are not presented to compare with operating results
for fiscal year 1999, except for net revenues. The Company is unable to restate
reported amounts in fiscal years 1997 and 1998 due to the reorganization 1999 of
its management structure to coincide with its product lines beginning in fiscal
1999.
The Company operates predominantly in the semiconductor industry. This
involves the marketing, sales, and service of semiconductor manufacturing and
test equipment and materials. Reportable segments are based on the way the
Company is organized, reporting responsibilities to the chief operating officer,
and on the nature of the products offered to customers. Reportable segments are
the equipment division (which includes equipment including certain specialized
process chemicals, and spare part sales, and equipment service), the materials
division (which includes components used in construction and maintenance), and
other which includes finance, administration and corporate functions.
The accounting policies of the segments are the same as those described in
Note 1 Summary of Significant Accounting Policies. Segment operating results are
measured based on profit (loss) before tax, adjusted if necessary, for certain
segment specific items. There are no inter-segment sales. Identifiable assets
are the Company's assets that are identified with classes of similar products or
operations in each geographic region. Corporate assets include primarily cash,
equity investments and administrative headquarters assets of the Company.
F-23
<PAGE>
METRON TECHNOLOGY N.V.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(INFORMATION AS OF AUGUST 31, 1999 AND
FOR THE THREE MONTHS ENDED AUGUST 31, 1998 AND 1999 IS UNAUDITED)
SEGMENT INFORMATION
<TABLE>
<CAPTION>
EQUIPMENT MATERIALS
DIVISION DIVISION OTHER TOTAL
--------- --------- -------- --------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C>
Year ended May 31, 1997
Net revenues...................................... $187,944 $110,632 $ -- $298,576
Year ended May 31, 1998
Net revenues...................................... $151,610 $123,414 $ -- $275,024
Year ended May 31, 1999
Net revenues...................................... $127,420 $101,198 $ -- $228,618
Depreciation expense.............................. $ 794 $ 475 $ 1,348 $ 2,617
Interest income................................... $ -- $ -- $ 438 $ 438
Interest expense.................................. $ -- $ -- $ 913 $ 913
Operating income (loss) before tax................ $ 3,161 $ 8,384 $(18,293) $ (6,748)
Assets............................................ $ 35,424 $ 48,635 $ 15,566 $ 99,625
Capital expenditures.............................. $ 409 $ 341 $ 619 $ 1,369
Three months ended August 31, 1998 (unaudited)
Net revenues...................................... $ 33,893 $ 23,029 $ -- $ 56,922
Operating income (loss) before tax................ $ 721 $ 2,308 $ (4,830) $ (1,801)
Assets............................................ $ 39,575 $ 28,303 $ 32,482 $100,360
Three months ended August 31, 1999 (unaudited)
Net revenues...................................... $ 36,807 $ 32,666 $ -- $ 69,473
Operating income (loss) before tax................ $ 1,877 $ 3,196 $ (3,421) $ 1,652
Assets............................................ $ 42,844 $ 30,371 $ 39,216 $112,431
</TABLE>
F-24
<PAGE>
METRON TECHNOLOGY N.V.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(INFORMATION AS OF AUGUST 31, 1999 AND
FOR THE THREE MONTHS ENDED AUGUST 31, 1998 AND 1999 IS UNAUDITED)
GEOGRAPHIC INFORMATION
<TABLE>
<CAPTION>
THREE MONTHS
YEARS ENDED MAY 31 ENDED AUGUST 31
------------------------------ -------------------
1997 1998 1999 1998 1999
-------- -------- -------- -------- --------
(DOLLARS IN THOUSANDS) (UNAUDITED)
<S> <C> <C> <C> <C> <C>
Net revenues:
United States........................... $ 59,884 $ 66,505 $ 54,285 $ 13,597 $ 18,423
Germany................................. 60,639 44,425 32,059 9,057 9,701
United Kingdom.......................... 58,645 47,483 30,952 6,806 7,702
France.................................. 36,512 29,393 17,701 5,525 4,867
Hong Kong............................... 33,342 29,218 27,672 7,148 9,535
Singapore............................... 21,148 17,155 29,000 6,415 8,610
The Netherlands......................... 9,126 14,219 10,780 3,516 2,558
Other nations........................... 19,280 26,626 26,169 4,858 8,077
-------- -------- -------- -------- --------
Geographic totals......................... $298,576 $275,024 $228,618 $ 56,922 $ 69,473
======== ======== ======== ======== ========
</TABLE>
<TABLE>
<CAPTION>
MAY 31 AUGUST 31
------------------- -------------------
1998 1999 1998 1999
-------- -------- -------- --------
(DOLLARS IN (UNAUDITED)
THOUSANDS)
<S> <C> <C> <C> <C>
Assets:
United States............................................ $ 30,798 $23,171 $ 22,313 $ 27,309
Germany.................................................. 16,120 12,330 12,416 13,745
United Kingdom........................................... 22,276 13,868 16,477 14,060
Singapore................................................ 9,262 24,910 15,869 19,432
Hong Kong................................................ 14,302 11,821 7,181 12,706
The Netherlands.......................................... 6,855 5,787 5,972 5,578
Other nations............................................ 14,548 7,738 20,132 19,601
-------- ------- -------- --------
Geographic totals.......................................... $114,161 $99,625 $100,360 $112,431
======== ======= ======== ========
</TABLE>
F-25
<PAGE>
METRON TECHNOLOGY N.V.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(INFORMATION AS OF AUGUST 31, 1999 AND
FOR THE THREE MONTHS ENDED AUGUST 31, 1998 AND 1999 IS UNAUDITED)
15. SUPPLEMENTAL FINANCIAL INFORMATION
<TABLE>
<CAPTION>
MAY 31
-------------------
1998 1999
-------- --------
(DOLLARS IN
THOUSANDS)
<S> <C> <C>
Other current liabilities:
Customer prepayments...................................... $2,143 $1,321
Accrued taxes including income taxes...................... 2,577 2,150
Project costs............................................. 840 1,677
Other..................................................... 1,285 2,529
------ ------
Total other current liabilities............................. $6,845 $7,677
====== ======
</TABLE>
<TABLE>
<CAPTION>
YEARS ENDED MAY 31
------------------------------
1997 1998 1999
-------- -------- --------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
Other income (expense):
Foreign exchange gain (loss).............................. $ (578) $ 489 $ 211
Interest income........................................... 487 514 438
Interest expense.......................................... (1,260) (1,110) (913)
Loss on sale of joint ventures............................ -- -- (140)
Miscellaneous income...................................... 749 36 7
------- ------- -----
Other income (expense)...................................... $ (602) $ (71) $(397)
======= ======= =====
</TABLE>
<TABLE>
<CAPTION>
YEARS ENDED MAY 31
------------------------------
1997 1998 1999
-------- -------- --------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
Supplemental cash flow information:
Cash payments for:
Interest................................................ $1,312 $ 982 $ 930
Income taxes............................................ $3,210 $3,622 $(604)
Noncash transactions:
Issuance of shares for license.......................... $ 52 $ -- $ --
Deferred compensation................................... $ -- $ (38) $ --
</TABLE>
F-26
<PAGE>
METRON TECHNOLOGY N.V.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(INFORMATION AS OF AUGUST 31, 1999 AND
FOR THE THREE MONTHS ENDED AUGUST 31, 1998 AND 1999 IS UNAUDITED)
16. QUARTERLY FINANCIAL DATA (UNAUDITED)
<TABLE>
<CAPTION>
FIRST SECOND THIRD FOURTH
-------- -------- -------- --------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C>
Year ended May 31, 1998
Net revenues.......................................... $61,552 $72,209 $78,249 $63,014
Operating income...................................... $ 1,325 $ 158 $ 1,364 $ 271
Net income (loss)..................................... $ 886 $ (308) $ 563 $ (39)
Basic net income (loss) per share..................... $ 0.09 $ (0.03) $ 0.05 $ 0.00
Diluted net income (loss) per share................... $ 0.08 $ (0.03) $ 0.05 $ 0.00
Year ended May 31, 1999
Net revenues.......................................... $56,922 $51,296 $56,559 $63,840
Operating income (loss)............................... $(1,801) $(2,595) $(2,832) $ 610
Net income (loss)..................................... $(1,266) $(1,513) $(1,899) $ 144
Basic net income (loss) per share..................... $ (0.12) $ (0.15) $ (0.18) $ 0.01
Diluted net income (loss) per share................... $ (0.12) $ (0.15) $ (0.18) $ 0.01
</TABLE>
17. RECENT ACCOUNTING PRONOUNCEMENT
In June 1998, FASB issued SFAS No. 133, ACCOUNTING FOR DERIVATIVE
INSTRUMENTS AND HEDGING ACTIVITIES, which, as amended, becomes effective for
fiscal years beginning after June 15, 2000, with early adoption encouraged. The
pronouncement requires companies to record derivatives on the balance sheet as
assets or liabilities, measured at fair value. Gains or losses resulting from
changes in the value of those derivatives would be accounted for depending on
the use of the derivative and whether it qualifies for hedge accounting. The
Company is presently analyzing this statement and the impact, if any, on the
Company's financial statements.
18. DIVIDEND RESTRICTION
Pursuant to the Company's Articles of Incorporation and Dutch law, the
Company has available for distribution to its shareholders approximately
$22,000,000 (assuming the removal of the mandatory reserve of $7,000,000
discussed in footnote 19).
19. SUBSEQUENT EVENTS
In July 1999, the Supervisory Board of the Company reserved an additional
500,000 shares for future grant under the Employee Stock Option Plan.
In October 1999 the Supervisory Board of the Company reserved an additional
112,500 shares for future grant under the Supervisory Directors' Stock Option
Plan.
Prior to completion of its initial public offering pursuant to this
Prospectus, the Company intends to amend its Articles of Association to convert
from a B.V. to an N.V. under the laws of The Netherlands, to increase the number
of authorized preferred shares from 1,500,000 to 10,000,000 and the number of
authorized common shares from 23,500,000 to 40,000,000 and to remove the
mandatory reserve of $7,000,000 created in connection with the Buy-Sell
Agreement.
F-27
<PAGE>
[Photographs of selected materials and equipment marketed and sold by Metron.]
<PAGE>
- ------------------------------------------------------------
- ------------------------------------------------------------
3,750,000 SHARES
[LOGO]
------------
Prospectus
, 1999
-------------------
BANC OF AMERICA SECURITIES LLC
SG COWEN
U.S. BANCORP PIPER JAFFRAY
Until , 1999 (25 days after the date of this prospectus), all
dealers effecting transactions in the common shares, whether or not
participating in this distribution, may be required to deliver a prospectus.
This is in addition to the obligation of dealers to deliver a prospectus when
acting as underwriters and with respect to their unsold allotments or
subscriptions.
- ------------------------------------------------------------
- ------------------------------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth the costs and expenses, other than
underwriting discounts and commissions, payable by the registrant in connection
with the distribution of the common shares being registered. All amounts are
estimated, except the SEC Registration Fee, the NASD Filing Fee and the Nasdaq
National Market Filing Fee:
<TABLE>
<S> <C>
SEC Registration Fee........................................ $15,985
NASD Filing Fee............................................. 6,250
Nasdaq National Market Filing Fee........................... *
Blue Sky Fees and Expenses.................................. *
Accounting Fees............................................. *
Legal Fees and Expenses..................................... *
Transfer Agent and Registrar Fees........................... *
Printing and Engraving...................................... *
Miscellaneous............................................... *
-------
Total................................................... $ *
=======
</TABLE>
- ------------------------
* To be supplied by amendment.
ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Metron has entered into indemnification agreements with certain of its
managing directors, providing for indemnification by Metron against any
liability to which a managing director may be subject for judgments,
settlements, penalties, fees and expenses of defense (including attorney's fees,
bonds and costs of investigation), arising out of or in any way related to acts
or omissions as a member of the management board, or an executive officer, or in
any other capacity in which services are rendered to Metron or its subsidiaries.
Metron believes that the indemnification agreements will assist Metron in
attracting and retaining qualified individuals to serve as managing directors.
The agreements provide that a managing director is not entitled to
indemnification under these agreements under certain circumstances including
(i) if indemnification is expressly prohibited under applicable law and (ii) if
indemnification is expressly prohibited by Metron's articles.
Generally, under Dutch law, a director will not be held personally liable
for decisions made with reasonable business judgment, absent self dealing or, in
the event of bankruptcy, which do not qualify as clearly improper performance.
In addition, indemnification may not be available to directors or officers under
Dutch law if any act or omission by a director or officer would qualify as
willful misconduct or gross negligence (including not taking action to prevent
the consequences of improper performance by the board). Due to lack of
applicable case law, it is not clear whether indemnification is available in
case of breach of securities laws of the United States.
Under the Metron articles, except in case of willful misfeasance, bad faith
or gross negligence or improper personal benefit, every person or legal entity
who is, or has been, a managing director, supervisory director, or an officer
with the power to represent Metron, employee or agent of Metron, who is made a
party or is threatened to be made a party to any claim by virtue of such
capacity, shall be indemnified by Metron, to the fullest extent permitted under
any applicable law against (i) any and all liabilities imposed on him or it,
(ii) any and all expenses and (iii) any and all amounts paid in settlement by
him or it, in each case in connection with any such claim.
II-1
<PAGE>
ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES
Since June 1, 1996, Metron has sold and issued the following unregistered
securities (references to shares of common stock reflect a three for two stock
split on April 22, 1998):
(1) On December 12, 1996, Metron issued 7,500 common shares to D.E. Lund
in exchange for the rights to use the name Metron in Texas, valued at
$52,000;
(2) On November 25, 1997, Metron issued 7,500 common shares to A. Inoue
in exchange for cash in the amount of $62,475;
(3) On July 18, 1998, Metron issued an aggregate of 1,582,683 common
shares valued at $12,392,407 to the former shareholders of T.A. Kyser Co. in
connection with a merger transaction in which Kyser became a wholly-owned
subsidiary of Metron, 10,230 have since been returned to Metron in
accordance with the Agreement and Plan of Merger and Reorganization entered
into a connection with the transaction; and
(4) As of August 31, 1999, Metron has granted options to purchase
2,466,948 common shares to employees, directors and consultants pursuant to
its Employee Stock Option Plan and 1997 Supervisory Directors' Stock Option
Plan. Of these options, 433,400 shares have been canceled without being
exercised, 47,200 shares have been exercised, 45,000 shares of which have
been repurchased and 2,200 shares remain outstanding.
The sales and issuances of securities in the transactions described in
paragraphs 1 and 2 above were deemed to be exempt from registration under the
Securities Act by virtue of Section 4(2) as a transaction not involving a public
offering.
The sale and issuance of securities in the transaction described in
paragraph 3 above was deemed to be exempt from registration under the Securities
Act by virtue of Section 4(2) and Rule 506 of Regulation D promulgated
thereunder as a transaction by an issuer not involving any public offering.
The sale and issuance of securities described in paragraph 4 above were
deemed to be exempt from registration under the Securities Act by virtue of
Rule 701 promulgated thereunder.
There were no underwritten offerings employed in connection with any of the
transactions set forth in Item 15(a).
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) Exhibits
<TABLE>
<C> <S>
1.1* Form of Underwriting Agreement
2.1+ Agreement and Plan of Merger and Reorganization among Metron
Technology B.V., Metron Acquisition Sub, Inc. and T.A.
Kyser Co., dated June 12, 1998
2.2+ Amendment to Agreement and Plan of Merger and Reorganization
among Metron Technology B.V., Metron Acquisition
Sub, Inc. and T.A. Kyser Co., dated July 13, 1998
2.3+ Joinder Agreement among certain stockholders of T.A. Kyser
Co, Metron Technology B.V. and Metron Acquisition
Sub, Inc. dated July 13, 1998
3.1* Articles of Association of the Registrant and translation
thereof
4.1 Reference is made to Exhibits 3.1, 10.23, 10.24 and 10.26
5.1* Form of Opinion of Nauta Dutilh
10.1 1997 Supervisory Directors' Stock Option Plan
10.2 Form of 1997 Supervisory Directors' Stock Option Agreement
10.3 Amended and Restated Metron Technology N.V. Employee Stock
Option Plan
</TABLE>
II-2
<PAGE>
<TABLE>
<C> <S>
10.4 Form of Metron Technology N.V. Employee Stock Option
Agreement (for employees in countries other than the
United States and the United Kingdom)
10.5 Form of Metron Technology N.V. Employee Stock Option
Agreement (for employees in the United States)
10.6 Form of Metron Technology N.V. Employee Stock Option
Agreement (for employees in the United Kingdom)
10.7 Aufhebungs und Ruhestandsvertrag (Cancellation and Early
Retirement Agreement) between Metron Technology
(Deutschland) GmbH, Metron Technology B.V. and Udo Jaensch
dated February 2, 1999 and translation thereof
10.8+ Share Purchase Agreement (CME) between FSI
International, Inc. and Metron Technology B.V. dated
February 27, 1999
10.9+ Share Purchase Agreement (CMK) between FSI
International, Inc. and Metron Technology B.V. dated
February 27, 1999
10.10+ Agreement to Terminate Joint Venture Agreements and
Distribution Agreement between FSI International, Inc. and
Metron Technology B.V. dated May 18, 1999
10.11 FSI/Metron Distribution Agreement dated March 31, 1998
between FSI International, Inc. and Metron Technology B.V.
10.12+ Distribution Agreement dated July 6, 1995 between
Fluoroware, Inc. (now a wholly-owned subsidiary of
Entegris, Inc.) and Metron Semiconductors Europa B.V. (now
Metron Technology N.V.)
10.13+ U.S. Stocking Distributor Five-Year Agreement as of
September 1, 1997 between Fluoroware, Inc. and Kyser
Company
10.14 Form of Employment Agreement among Metron Technology B.V.,
Metron Technology Corporation and Edward D. Segal,
Michael A. Grandinetti, Peter V. Leigh and Keith Reidy
10.15+ Managing Director Service Agreement between Metron
Technology (U.K.) Ltd. and John Christopher Levett-Prinsep
dated May 1, 1996.
10.16+ Employment Agreement dated July 13, 1998 among T.A. Kyser
Co., Metron Technology Corporation, Metron Technology B.V.
and Garry Hendricks
10.17 Metron Technology Employee Stock Purchase Plan
10.18+ T.A. Kyser Co. Employee Stock Ownership Trust as amended and
restated March 17, 1997
10.19+ Amendment No. 1 dated July 13, 1998 to the T.A. Kyser Co.
Employee Stock Ownership Trust
10.20+ T.A. Kyser Co. Employee Stock Ownership Plan as amended and
restated March 17, 1997
10.21+ Amendment No. 1 dated June 12, 1998 to the T.A. Kyser Co.
Employee Stock Ownership Plan
10.22+ Amendment No. 2 dated July 13, 1998 to the T.A. Kyser Co.
Employee Stock Ownership Plan
10.23+ Investors Rights Agreement dated July 6, 1995 among Metron
Semiconductors Europa B.V. and the Investors as defined
therein
10.24+ Accession Agreement dated October 15, 1998 among Metron
Technology B.V., the Original Parties as defined therein,
Segal Investments, L.P., M. Segal, N. Segal, M. Segal as
trustee of the Matthew Dean Segal 1997 Trust and N. Segal
as trustee of the Matthew Dean Segal 1997 Trust
10.25+ Confirmation Agreement dated October 15, 1998 among Metron
Technology B.V. and the Investors as defined in the
Investor Rights Agreement of July 6, 1995
10.26+ Accession Agreement dated July 13, 1998 among Metron
Technology B.V., the Stockholders and the Signing
Stockholders as defined therein
10.27+ Consent Agreement dated July 13, 1998 among Metron
Technology B.V. and the Investors as defined therein
10.28 Incentive Compensation Plan for Edward D. Segal FY2000
</TABLE>
II-3
<PAGE>
<TABLE>
<C> <S>
10.29 Incentive Compensation Plan for Michael A. Grandinetti
FY2000
10.30 Incentive Compensation Plan for Peter V. Leigh FY2000
10.31 Incentive Compensation Plan for J. Christopher
Levett-Prinsep FY2000
10.32 Incentive Compensation Plan for Keith Reidy FY2000
10.33+ Amended and Restated Buy and Sell Agreement among Metron
Technology B.V. and the Significant Shareholders as
defined therein, as of July 6, 1995.
10.34 Form of Indemnification Agreement among Metron Technology
B.V. and the Investors as defined therein
21.1+ List of Subsidiaries of the Registrant
23.1 Consent of KPMG LLP, independent auditors
23.2* Consent of Nauta Dutilh (included in Exhibit 5.1)
23.3* Consent of Cooley Godward LLP
24.1+ Power of Attorney
27.1 Financial Data Schedule
99.1 Consent of Sho Nakanuma
</TABLE>
- ------------------------
* To be filed by amendment.
+ Previously filed.
(b) Financial Statement Schedules
Metron Technology N.V., Schedule II--Valuation and Qualifying Accounts.
ITEM 17. UNDERTAKINGS
The undersigned Registrant hereby undertakes to provide to the Underwriters
at the closing specified in the Underwriting Agreement, certificates in such
denominations and registered in such names as required by the Underwriters to
permit prompt delivery to each purchaser.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 (the "Act") may be permitted to directors, officers, and controlling
persons of the Registrant pursuant to the foregoing provisions, or otherwise,
the Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question of whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
The undersigned Registrant hereby undertakes that:
(1) For purposes of determining any liability under the Act, the
information omitted from the form of prospectus filed as part of this
Registration Statement in reliance upon Rule 430A and contained in a form of
prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4) or
497(h) under the Act shall be deemed to be a part of this Registration
Statement as of the time it was declared effective.
(2) For purposes of determining any liability under the Act, each
post-effective amendment that contains a form of prospectus shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to
be the initial bona fide offering thereof.
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Registrant has
duly caused this Amendment No. 1 to the Registration Statement to be signed on
its behalf, by the undersigned, thereunto duly authorized, in the City of
Burlingame, County of San Mateo, State of California, on October 28, 1999.
<TABLE>
<S> <C> <C>
METRON TECHNOLOGY N.V.
By: /s/ PETER V. LEIGH
-----------------------------------------
Peter V. Leigh
VICE PRESIDENT, FINANCE
</TABLE>
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement on Form S-1 has been signed by the following
persons in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
*
------------------------------------------- Supervisory Board Member October 28, 1999
Robert R. Anderson
*
------------------------------------------- Supervisory Board Member October 28, 1999
James E. Dauwalter
*
------------------------------------------- Supervisory Board Member October 28, 1999
Joel A. Elftmann
President and Chief
* Executive Officer and
------------------------------------------- Managing Director October 28, 1999
Edward D. Segal (Principal Executive
Officer)
Vice President, Finance and
/s/ PETER V. LEIGH Chief Financial Officer
------------------------------------------- and Managing Director October 28, 1999
Peter V. Leigh (Principal Financial and
Accounting Officer)
</TABLE>
II-5
<PAGE>
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
* Executive Vice President,
------------------------------------------- Equipment Division and October 28, 1999
J. Christopher Levett-Prinsep Managing Director
* Executive Vice President,
------------------------------------------- Materials Division and October 28, 1999
Michael A. Grandinetti Managing Director
* Vice Chairman of
------------------------------------------- T.A. Kyser Co. and October 28, 1999
C. Garry Hendricks Managing Director
*
------------------------------------------- Vice President, Marketing October 28, 1999
Keith Reidy and Managing Director
*By: /s/ PETER V. LEIGH
---------------------------------------
Peter V. Leigh
(ATTORNEY-IN-FACT)
</TABLE>
II-6
<PAGE>
METRON TECHNOLOGY N.V.
SCHEDULE II--VALUATION AND QUALIFYING ACCOUNTS
<TABLE>
<CAPTION>
COL. A COL. B COL. C COL. D COL. E
- ---------------------------------------- ------------ ----------------------- --------- ----------
ADDITIONS
-----------------------
BALANCE AT CHARGED TO CHARGED TO BALANCE AT
BEGINNING OF COSTS AND OTHER END OF
DESCRIPTION PERIOD EXPENSES ACCOUNTS DEDUCTION PERIOD
- ---------------------------------------- ------------ ---------- ---------- --------- ----------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
Deducted from asset accounts:
Year ended May 31, 1997:
Allowance for doubtful accounts..... $ 749 $ 1,533 $ -- $ 508 $ 1,774
======= ======= ======= ======= =======
Inventory valuation allowance....... $ 2,247 $ 2,038 $ -- $ 949 $ 3,336
======= ======= ======= ======= =======
Deducted from asset accounts:
Year ended May 31, 1998:
Allowance for doubtful accounts..... $ 1,774 $ 434 $ -- $ 1,393 $ 815
======= ======= ======= ======= =======
Inventory valuation allowance....... $ 3,336 $ 2,644 $ -- $ 1,655 $ 4,325
======= ======= ======= ======= =======
Deducted from asset accounts:
Year ended May 31, 1999:
Allowance for doubtful accounts..... $ 815 1,029 $ -- $ 532 $ 1,312
======= ======= ======= ======= =======
Inventory valuation allowance....... $ 4,325 $ 2,696 $ -- $ 1,014 $ 6,007
======= ======= ======= ======= =======
</TABLE>
S-1
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
- --------------------- -----------
<C> <S>
1.1* Form of Underwriting Agreement
2.1+ Agreement and Plan of Merger and Reorganization among Metron
Technology B.V., Metron Acquisition Sub, Inc. and
T.A. Kyser Co., dated June 12, 1998
2.2+ Amendment to Agreement and Plan of Merger and Reorganization
among Metron Technology B.V., Metron Acquisition
Sub, Inc. and T.A. Kyser Co., as of July 13, 1998
2.3+ Joinder Agreement among certain stockholders of
T.A. Kyser Co., Metron Technology B.V. and Metron
Acquisition Sub, Inc. dated July 13, 1998
3.1* Articles of Association of the Registrant and translation
thereof
4.1 Reference is made to Exhibits 3.1, 10.23, 10.24 and 10.26
5.1* Form of Opinion of Nauta Dutilh
10.1 1997 Supervisory Directors' Stock Option Plan
10.2 Form of 1997 Supervisory Directors' Stock Option Agreement
10.3 Amended and Restated Metron Technology N.V. Employee Stock
Option Plan
10.4 Form of Metron Technology N.V. Employee Stock Option
Agreement (for employees in countries other than the
United States and the United Kingdom)
10.5 Form of Metron Technology N.V. Employee Stock Option
Agreement (for employees in the United States)
10.6 Form of Metron Technology N.V. Employee Stock Option
Agreement (for employees in the United Kingdom)
10.7 Aufhebungs und Ruhestandsvertrag (Cancellation and Early
Retirement Agreement) between Metron Technology
(Deutschland) GmbH, Metron Technology B.V. and Udo Jaensch
dated February 2, 1999 and translation thereof
10.8+ Share Purchase Agreement (CME) between FSI
International, Inc. and Metron Technology B.V. dated
February 27, 1999
10.9+ Share Purchase Agreement (CMK) between FSI
International, Inc. and Metron Technology B.V. dated
February 27, 1999
10.10+ Agreement to Terminate Joint Venture Agreements and
Distribution Agreement between FSI International, Inc. and
Metron Technology B.V. dated May 18, 1999
10.11 FSI/Metron Distribution Agreement dated March 31, 1998
between FSI International, Inc. and Metron
Technology B.V.
10.12+ Distribution Agreement dated July 6, 1995 between
Fluoroware, Inc. (now a wholly-owned subsidiary of
Entegris, Inc.) and Metron Semiconductors Europa B.V. (now
Metron Technology N.V.)
10.13+ U.S. Stocking Distributor Five-Year Agreement as of
September 1, 1997 between Fluoroware, Inc. and Kyser
Company
10.14 Form of Employment Agreement among Metron Technology B.V.,
Metron Technology Corporation and Edward D. Seal,
Michael A. Grandinetti, Peter V. Leigh and Keith Reidy
10.15+ Managing Director Service Agreement between Metron
Technology (U.K.) Ltd. and John Christopher Levett-Prinsep
dated May 1, 1996.
10.16+ Employment Agreement dated July 13, 1998 among
T.A. Kyser Co., Metron Technology Corporation, Metron
Technology B.V. and Garry Hendricks
10.17 Metron Technology Employee Stock Purchase Plan
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
- --------------------- -----------
<C> <S>
10.18+ T.A. Kyser Co. Employee Stock Ownership Trust as amended and
restated March 17, 1997
10.19+ Amendment No. 1 dated July 13, 1998 to the T.A. Kyser Co.
Employee Stock Ownership Trust
10.20+ T.A. Kyser Co. Employee Stock Ownership Plan as amended and
restated March 17, 1997
10.21+ Amendment No. 1 dated June 12, 1998 to the T.A. Kyser Co.
Employee Stock Ownership Plan
10.22+ Amendment No. 2 dated July 13, 1998 to the T.A. Kyser Co.
Employee Stock Ownership Plan
10.23+ Investors Rights Agreement dated July 6, 1995 among Metron
Semiconductors Europa B.V. and the investors as defined
therein
10.24+ Accession Agreement dated October 15, 1998 among Metron
Technology B.V., the Original Parties as defined therein,
Segal Investments, L.P., M. Segal, N. Segal, M. Segal as
trustee of the Matthew Dean Segal 1997 Trust and N. Segal
as trustee of the Ned Douglas Segal 1997 Trust
10.25+ Confirmation Agreement dated October 15, 1998 among Metron
Technology B.V. and the Investors as defined in the
Investor Rights Agreement of July 6, 1995
10.26+ Accession Agreement dated July 13, 1998 among Metron
Technology B.V., the Stockholders and the Signing
Stockholders as defined therein
10.27+ Consent Agreement dated July 13, 1998 among Metron
Technology B.V. and the Investors as defined therein
10.28 Incentive Compensation Plan for Edward D. Segal FY2000
10.29 Incentive Compensation Plan for Michael A. Grandinetti
FY2000
10.30 Incentive Compensation Plan for Peter V. Leigh FY2000
10.31 Incentive Compensation Plan for J. Christopher
Levett-Prinsep FY2000
10.32 Incentive Compensation Plan for Keith Reidy FY2000
10.33+ Amended and Restated Buy and Sell Agreement among Metron
Technology B.V. and the Significant Shareholders as
defined therein, as of July 6, 1995
10.34 Form of Indemnification Agreement among Metron Technology
B.V. and the Investors as defined therein
21.1+ List of Subsidiaries of the Registrant
23.1 Consent of KPMG LLP, independent auditors
23.2* Consent of Nauta Dutilh (included in Exhibit 5.1)
23.3* Consent of Cooley Godward LLP
24.1+ Power of Attorney
27.1 Financial Data Schedule
99.1 Consent of Sho Nakanuma
</TABLE>
- ------------------------
* To be filed by amendment.
+ Previously filed.
<PAGE>
Exhibit 4.2
COMMON SHARES COMMON SHARES
MTC METRON TECHNOLOGY
[METRON LOGO]
INCORPORATED UNDER THE LAWS OF THE NETHERLANDS
THIS CERTIFICATE IS TRANSFERABLE SEE REVERSE FOR CERTAIN
DEFINITIONS AND A STATEMENT AS
TO THE RIGHTS, PREFERENCES,
PRIVILEGES AND RESTRICTIONS
ON SHARES
CUSIP: N5665B 10 5
THIS CERTIFIES THAT
IS THE RECORD HOLDER OF
FULLY PAID AND NON-ASSESSABLE COMMON SHARES,
NLG 0.96 PAR VALUE PER SHARE, OF
METRON TECHNOLOGY N.V.
transferable on the books of the Corporation by the holder hereof in person
or by duly authorized attorney upon surrender of this Certificate properly
endorsed. This Certificate is not valid until countersigned by the Transfer
Agent and registered by the Registrar.
WITNESS the facsimile signatures of its duly authorized officers.
Dated:
PRESIDENT AND CHIEF EXECUTIVE OFFICER
COUNTERSIGNED AND REGISTERED
HARRIS TRUST AND SAVINGS BANK
TRANSFER AGENT AND REGISTRAR
BY
AUTHORIZED SIGNATURE
<PAGE>
METRON TECHNOLOGY N.V.
The Company will furnish without charge to each shareholder who so
requests information about the designations, preferences and relative,
participating, optional or other special rights of each class of shares or
series thereof of the Company, and about the qualifications, limitations or
restrictions of such preferences and/or rights. Such request may be made to
the Company at its executive office in Burlingame, California, or to the
Transfer Agent.
Keep this Certificate in a safe place. If it is lost, stolen or
destroyed the Company may require a bond of indemnity as a condition to the
issuance of a replacement certificate.
The Share(s) represented by this Certificate have been issued by METRON
TECHNOLOGY N.V., a company organized and existing under the laws of The
Netherlands (the "Company"). The Company has authorized the Transfer Agent to
acknowledge the transfer of share(s) on its behalf, which acknowledgement is
required by Netherlands law.
--------------
The following abbreviations, when used in the inscription on the face of
this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM -- as tenants in common
TEN ENT -- as tenants by the entireties
JT TEN -- as joint tenants with right of
survivorship and not as tenants
in common
UNIF GIFT MIN ACT-- _____________ Custodian ______________
(Cust) (Minor)
under Uniform Gifts to Minors
Act___________________________________
(State)
Additional abbreviations may also be used though not listed.
--------------------------------
For value received, ________________________________________ hereby sell,
assign and transfer to
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF PURCHASER
- ---------------------------------------------
- ---------------------------------------------
________________________________________________________________________________
PLEASE PRINT OR TYPE NAME AND ADDRESS INCLUDING ZIP CODE OF PURCHASER
________________________________________________________________________________
________________________________________________________________________________
who accepts title to _____________________________________________ Common Shares
each with par value 0.96 Dutch Guilder (NLG 0.96) in the share capital of the
Company, represented by this Certificate. The parties waive their right to
invoke a recission of this agreement on any ground whatsoever upon the
transfer of the aforementioned Common Shares. This agreement is governed by
the laws of The Netherlands. Seller hereby irrevocably constitutes and
appoints
_______________________________________________________________________ Attorney
to transfer the same on the books of the Company, with full power of
substitution.
Seller _________________________________________________________________________
SIGNATURE
Place __________________________________________________________________________
Date ___________________________________________________________________________
Signature(s) Guaranteed:
By
THE SIGNATURE(S) SHOULD BE GUARANTEED BY AN ELIGIBLE GUARANTEED INSTITUTION
(BANKS, STOCKBROKERS, SAVINGS AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH
MEMBERSHIP IN AN APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM, PURSUANT TO
UNITED STATES SECURITIES AND EXCHANGE ACT RULE 17AD-15.
<PAGE>
METRON TECHNOLOGY N.V.
1997 SUPERVISORY DIRECTORS' STOCK OPTION PLAN
ADOPTED ON APRIL 13, 1997
1. PURPOSE.
(a) The purpose of the 1997 Supervisory Directors' Stock Option Plan
(the "Plan") is to provide a means by which each director ("COMMISSARIS") of
Metron Technology B.V. (the "Company") who is not otherwise at the time of
grant an employee of or consultant to the Company or of any Affiliate of the
Company (each such person being hereafter referred to as a "Supervisory
Director") will be given an opportunity to purchase stock of the Company.
(b) The word "Affiliate" as used in the Plan means any parent
corporation or subsidiary corporation of the Company as those terms are
defined in Sections 424(e) and (f), respectively, of the Internal Revenue
Code of 1986, as amended from time to time (the "Code").
(c) The Company, by means of the Plan, seeks to retain the services
of persons now serving as Supervisory Directors of the Company, to secure and
retain the services of persons capable of serving in such capacity, and to
promote the strong financial performance and success of the Company.
2. ADMINISTRATION.
(a) The Plan shall be administered by the Supervisory Board of the
Company (the "Supervisory Board") unless and until the Supervisory Board
delegates administration to a committee, as provided in subparagraph 2(b).
(b) The Supervisory Board may delegate administration of the Plan to
a committee composed of one (1) or more members of the Supervisory Board (the
"Committee"). If administration is delegated to a Committee, the Committee
shall have, in connection with the administration of the Plan, the powers
theretofore possessed by the Supervisory Board, subject, however, to such
resolutions, not inconsistent with the provisions of the Plan, as may be
adopted from time to time by the Supervisory Board. The Supervisory Board may
abolish the Committee at any time and thereby automatically revest in the
Supervisory Board the administration of the Plan.
3. SHARES SUBJECT TO THE PLAN.
(a) Subject to the provisions of paragraph 10 relating to
adjustments upon changes in stock, the stock that may be issued pursuant to
options granted under the Plan shall not exceed in the aggregate two hundred
twenty-five thousand (225,000)* shares of the Company's common stock. If any
option granted under the Plan shall for any reason expire or otherwise
terminate without having been exercised in full, the stock not purchased
under such option shall again become available for the Plan.
- --------------------
* 75,000 shares originally authorized. 112,500 post the 3:2 split in April
1998. Increased by 112,500 in October of 1999 to 225,000 total.
<PAGE>
(b) The stock subject to the Plan may be unissued shares or
reacquired shares, bought on the market or otherwise.
4. ELIGIBILITY.
Options shall be granted only to Supervisory Directors of the Company.
5. NON-DISCRETIONARY GRANTS.
(a) Each person who is serving as a Supervisory Director on the date
of adoption of the Plan by the Supervisory Board (the "Adoption Date") and
each person who is subsequently first elected or appointed as a Supervisory
Director after the Adoption Date shall automatically be granted, on the
Adoption Date or the date of such initial election or appointment, if later,
an option to purchase Fifteen Thousand (15,000) shares of common stock of the
Company on the terms and conditions set forth herein (hereinafter, an
"Initial Grant").
(b) Each Supervisory Director who is reelected at each annual
meeting of stockholders ("Annual Meeting"), commencing with the 1997 Annual
Meeting, who has continuously served as a Supervisory Director for at least
six (6) months prior to such Annual Meeting shall automatically be granted,
on the date of such Annual Meeting, an option to purchase Three Thousand
Seven Hundred Fifty (3,750) shares of common stock of the Company on the
terms and conditions set forth herein (hereinafter, an "Annual Grant"). There
shall be no limit to the number of grants any individual may receive pursuant
to this subparagraph 5(b).
6. OPTION PROVISIONS.
(a) Each option shall be subject to the terms and conditions of this
Section 6, and the terms of a stock option agreement entered into with each
optionee.
(b) The term of each option commences on the date it is granted and,
unless sooner terminated as set forth herein, expires on the date ten (10)
years from the date of grant ("Expiration Date"). If the optionee's service
as a Supervisory Director or employee of or consultant to the Company or any
Affiliate terminates for any reason (including, but not limited to, death,
disability, involuntary and voluntary terminations), the option shall
terminate on the earlier of the Expiration Date or the date twelve (12)
months following the date of termination of all such service; PROVIDED,
HOWEVER, that if such termination of service is due to the optionee's death,
the option shall terminate on the earlier of the Expiration Date or eighteen
(18) months following the date of the optionee's death. In any and all
circumstances, an option may be exercised following termination of the
optionee's service as a Supervisory Director or employee of or consultant to
the Company or any Affiliate only as to that number of shares as to which it
was exercisable as of the date of termination of all such service under the
provisions of subparagraph 6(f).
(c) The exercise price of each option shall be equal to one hundred
percent (100%) of the Fair Market Value of the stock (as such term is defined
in subparagraph 9(e)) subject to such option on the date such option is
granted.
2
<PAGE>
(d) The optionee may elect to make payment of the exercise price
under one of the following alternatives:
(i) Payment of the exercise price per share in cash at the
time of exercise;
(ii) Provided that at the time of the exercise the
Company's common stock is publicly traded and quoted regularly in the Wall
Street Journal, this option may be exercised pursuant to a program developed
under Regulation T as promulgated by the Federal Reserve Board which results
in the receipt of cash (or check) by the Company either prior to the issuance
of shares of the Company's common stock or pursuant to the terms of
irrevocable instructions issued by the optionee prior to the issuance of
shares of the Company's common stock; or
(iii) Payment by a combination of the methods of payment
specified in subparagraph 6(d)(i) and 6(d)(ii) above.
(e) An option shall not be transferable, except by will or by the
laws of descent and distribution, and shall be exercisable during the
lifetime of the person to whom the option is granted only by such person (or
by his guardian or legal representative) or transferee pursuant to a domestic
relations order. In addition, an option may not be encumbered with a right of
pledge or any other lien. Notwithstanding the foregoing, the optionee may, by
delivering written notice to the Company in a form satisfactory to the
Company, designate a third party who, in the event of the death of the
optionee, shall thereafter be entitled to exercise the option.
(f) The option shall vest and become exercisable in four (4) equal
annual installments, measured from the date of grant, provided that the
optionee has, during the entire period prior to such vesting installment
date, continuously served as a Supervisory Director or employee of or
consultant to the Company or any Affiliate of the Company, whereupon such
option shall become fully exercisable in accordance with its terms with
respect to that portion of the shares represented by such installment.
Notwithstanding the foregoing, in the event the optionee's service as a
Supervisory Director, employee of or consultant to the Company or any
Affiliate is terminated for any reason other than a voluntary termination by
optionee or a termination for cause, then the option shall, as of the date of
such termination, immediately become vested and exercisable with respect to
all of the shares subject to the option.
(g) The Company may require any optionee, or any person to whom an
option is transferred under subparagraph 6(e), as a condition of exercising
any such option: (i) to give written assurances satisfactory to the Company
as to the optionee's knowledge and experience in financial and business
matters; and (ii) to give written assurances satisfactory to the Company
stating that such person is acquiring the stock subject to the option for
such person's own account and not with any present intention of selling or
otherwise distributing the stock. These requirements, and any assurances
given pursuant to such requirements, shall be inoperative if (i) the issuance
of the shares upon the exercise of the option has been registered under a
then currently-effective registration statement under the Securities Act of
1933, as amended (the "Securities Act"), or (ii) as to any particular
requirement, a determination is made by counsel for the Company that such
requirement need not be met in the circumstances under the then
3
<PAGE>
applicable securities laws. The Company may require any optionee to provide such
other representations, written assurances or information which the Company shall
determine is necessary, desirable or appropriate to comply with applicable
securities laws as a condition of granting an option to the optionee or
permitting the optionee to exercise the option. The Company may, upon advice of
counsel to the Company, place legends on stock certificates issued under the
Plan as such counsel deems necessary or appropriate in order to comply with
applicable securities laws, including, but not limited to, legends restricting
the transfer of the stock.
(h) Notwithstanding anything to the contrary contained herein, an
option may not be exercised unless the shares issuable upon exercise of such
option are then registered under the Securities Act or, if such shares are
not then so registered, the Company has determined that such exercise and
issuance would be exempt from the registration requirements of the Securities
Act.
7. COVENANTS OF THE COMPANY.
(a) During the terms of the options granted under the Plan, the
Company shall keep available at all times in its authorized and unissued
share capital and/or as shares held by the Company in its own share capital
the number of shares of stock required to satisfy such options.
(b) The Company shall seek to obtain from each regulatory commission
or agency having jurisdiction over the Plan such authority as may be required
to issue and sell shares of stock upon exercise of the options granted under
the Plan; PROVIDED, HOWEVER, that this undertaking shall not require the
Company to register under the Securities Act either the Plan, any option
granted under the Plan, or any stock issued or issuable pursuant to any such
option. If, after reasonable efforts, the Company is unable to obtain from
any such regulatory commission or agency the authority which counsel for the
Company deems necessary for the lawful issuance and sale of stock under the
Plan, the Company shall be relieved from any liability for failure to issue
and sell stock upon exercise of such options.
8. USE OF PROCEEDS FROM STOCK.
Proceeds from the sale of stock pursuant to options granted under the Plan
shall constitute general funds of the Company.
9. MISCELLANEOUS.
(a) Neither an optionee nor any person to whom an option is
transferred under subparagraph 6(e) shall be deemed to be the holder of, or
to have any of the rights of a holder with respect to, any shares subject to
such option unless and until such person has satisfied all requirements for
exercise of the option pursuant to its terms.
(b) Nothing in the Plan or in any instrument executed pursuant
thereto shall confer upon any Supervisory Director any right to continue in
the service of the Company or any Affiliate in any capacity or shall affect
any right of the Company or its stockholders or any Affiliate, to remove any
Supervisory Director pursuant to the Company's Articles of Association and
the provisions of Netherlands law.
4
<PAGE>
(c) No Supervisory Director, individually or as a member of a group,
and no beneficiary or other person claiming under or through him, shall have
any right, title or interest in or to any option reserved for the purposes of
the Plan except as to such shares of common stock, if any, as shall have been
reserved for him pursuant to an option granted to him.
(d) In connection with each option made pursuant to the Plan, it
shall be a condition precedent to the Company's obligation to issue or
transfer shares to a Supervisory Director, or to evidence the removal of any
restrictions on transfer, that such Supervisory Director make arrangements
satisfactory to the Company to insure that the amount of any federal, state,
local or foreign withholding tax required to be withheld with respect to such
sale or transfer, or such removal or lapse, is made available to the Company
for timely payment of such tax.
(e) As used in this Plan, "Fair Market Value" means, as of any date,
the value of the common stock of the Company determined as follows:
(i) if the common stock is listed on any established stock
exchange or a national market system, including without limitation the Nasdaq
National Market or The Nasdaq SmallCap, the Fair Market Value of a share of
common stock shall be the closing sales price for such stock (or the closing
bid, if no sales were reported) as quoted on such system or exchange (or the
exchange with the greatest volume of trading in common stock) on the last
market trading day prior to the day of determination, as reported in the Wall
Street Journal or such other source as the Supervisory Board deems reliable;
or
(ii) in the absence of an established market for the common
stock, the Fair Market Value shall be determined in good faith by the
Supervisory Board; provided, however, that the Fair Market Value as expressed
in U.S. Dollars shall never be less than the counter (foreign exchange) value
of the nominal value as expressed in Dutch Guilders.
10. ADJUSTMENTS UPON CHANGES IN STOCK.
(a) If any change is made in the stock subject to the Plan, or
subject to any option granted under the Plan (through merger, consolidation,
reorganization, recapitalization, stock dividend, dividend in property other
than cash, stock split, liquidating dividend, combination of shares, exchange
of shares, change in corporate structure or other transaction not involving
the receipt of consideration by the Company), the Plan and outstanding
options will be appropriately adjusted in the class(es) and maximum number of
shares subject to the Plan and the class(es) and number of shares and price
per share of stock subject to outstanding options. Such adjustments shall be
made by the Supervisory Board, the determination of which shall be final,
binding and conclusive. (The conversion of any convertible securities of the
Company shall not be treated as a "transaction not involving the receipt of
consideration by the Company.")
(b) In the event of: (1) a dissolution, liquidation, or sale of all
or substantially all of the assets of the Company; (2) a merger or
consolidation in which the Company is not the surviving corporation; (3) a
reverse merger in which the Company is the surviving corporation but the
shares of the Company's common stock outstanding immediately preceding the
merger are converted by virtue of the merger into other property, whether in
the form of securities, cash
5
<PAGE>
or otherwise; or (4) the acquisition by any person, entity or group within the
meaning of Section 13(d) or 14(d) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act") or any comparable successor provisions (excluding
any employee benefit plan, or related trust, sponsored or maintained by the
Company or any Affiliate of the Company) of the beneficial ownership (within the
meaning of Rule 13d-3 promulgated under the Exchange Act, or comparable
successor rule) of securities of the Company representing at least fifty percent
(50%) of the combined voting power entitled to vote in the election of
directors, then to the extent not prohibited by applicable law, the time during
which options outstanding under the Plan may be exercised shall be accelerated
prior to such event and the options terminated if not exercised after such
acceleration and at or prior to such event.
11. AMENDMENT OF THE PLAN.
(a) The Supervisory Board at any time, and from time to time, may
amend the Plan and/or some or all outstanding options granted under the Plan.
However, except as provided in paragraph 10 relating to adjustments upon
changes in stock, no amendment shall be effective unless approved by the
stockholders of the Company to the extent such approval is necessary for the
Plan to satisfy the requirements of Rule 16b-3 under the Exchange Act or any
Nasdaq or securities exchange listing requirements.
12. TERMINATION OR SUSPENSION OF THE PLAN.
(a) The Supervisory Board may suspend or terminate the Plan at any
time. Unless sooner terminated, the Plan shall terminate on April 12, 2007.
No options may be granted under the Plan while the Plan is suspended or after
it is terminated.
(b) Rights and obligations under any option granted while the Plan
is in effect shall not be impaired by suspension or termination of the Plan,
except with the consent of the person to whom the option was granted.
(c) The Plan shall terminate upon the occurrence of any of the
events described in subparagraph 10(b) above.
13. EFFECTIVE DATE OF PLAN; CONDITIONS OF EXERCISE.
(a) The Plan shall become effective upon adoption by the Managing
Board and by the Supervisory Board.
(b) No option granted under the Plan shall be exercised or become
exercisable unless and until the Plan is approved (or ratified) by the
stockholders of the Company.
6
<PAGE>
METRON TECHNOLOGY N.V.
1997 SUPERVISORY DIRECTORS' STOCK OPTION PLAN
STOCK OPTION AGREEMENT
NOTICE OF GRANT
<TABLE>
<S><C>
- ----------------------------------------------------------------------------------------------------------------
Full Name of Optionee: _______________ Country of Residence: _______________
- ----------------------------------------------------------------------------------------------------------------
No. of Shares Covered: _______________ Date of Grant: _______________
- ----------------------------------------------------------------------------------------------------------------
Option Price Per Share: US$________ Equal to Fair
Market Value (as such term is defined in the Plan) as of
the Date of Grant. Expiration Date: _______________
- ----------------------------------------------------------------------------------------------------------------
Exercise Schedule pursuant to Section 4:
No. of Shares
As To Which Option
Becomes Exercisable
Initial Date of Exercisability As of Such Date
-------------------------------- ---------------------
----------------- -------------------
----------------- -------------------
----------------- -------------------
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
TERMS AND CONDITIONS
On the Date of Grant an option was automatically granted to you (the
"optionee") pursuant to the Metron Technology N.V. (the "Company") 1997
Supervisory Directors' Stock Option Plan (the "Plan") to purchase shares of the
Company's common stock ("Common Stock"). This option is NOT intended to qualify
and will NOT be treated as an "incentive stock option" within the meaning of
Section 422 of the Internal Revenue Code of 1986, as amended (the "Code").
The grant hereunder is in connection with and in furtherance of the
Company's compensatory benefit plan for Supervisory Directors (as defined in the
Plan).
The details of your option are as follows:
1. The total number of shares of Common Stock subject to this option is
set forth in the Notice of Grant.
1.
<PAGE>
2. The exercise price of this option is set forth in the Notice of
Grant.
3. (a) Subject to the limitations contained herein, this option shall
become exercisable (i.e., vest) in four (4) equal annual installments as set
forth in the Notice of Grant; PROVIDED, HOWEVER, that you have, during the
period from the grant date to such vesting date, continuously served as a
Supervisory Director, employee of or consultant to the Company or any Affiliate
(as defined in the Plan); whereupon this option shall become fully exercisable
with respect to that portion of the shares represented by that installment.
(b) Notwithstanding anything to the foregoing, in the event
the optionee's service as a Supervisory Director, employee of or consultant to
the Company or any Affiliate is terminated for any reason other than a voluntary
termination by optionee or a termination for cause, then this option shall, as
of the date of such termination, immediately become vested and exercisable with
respect to all of the shares subject to this option.
(c) This option shall in no event be exercisable in whole or in
part unless and until the Plan has been approved (or ratified) by the
Company's stockholders.
4. (a) This option may be exercised, to the extent specified above, by
delivering a notice of exercise (in the form attached or as otherwise designated
by the Company) together with the exercise price, to the Secretary of the
Company, or to such other person as the Company may designate, during regular
business hours, together with such additional documents as the Company may then
require pursuant to Section 6 of the Plan.
(b) This option may only be exercised for whole shares.
(c) You may elect to pay the exercise price under one of the
following alternatives:
(i) Payment of the exercise price per share in cash (or
check);
(ii) Provided that at the time of the exercise the Common
Stock is publicly traded and quoted regularly in the Wall Street Journal,
payment pursuant to a program developed under Regulation T as promulgated by the
Federal Reserve Board which results in the receipt of cash (or check) by the
Company either prior to the issuance of shares of the Common Stock or pursuant
to the terms of irrevocable instructions issued by you prior to the issuance of
shares of the Common Stock.
(iii) Payment by a combination of the methods of payment
specified in subparagraphs (i) through (ii) above.
(d) By exercising this option you agree that the Company may require
you to enter an arrangement providing for the cash payment by you to the Company
of any tax withholding obligation of the Company arising by reason of the
exercise of this option.
5. The Expiration Date of this option is set forth in the Notice of
Grant, subject, however, to earlier termination upon your termination of
service, as set forth in Section 6 of the Plan.
2.
<PAGE>
6. Any notices provided for in this option or the Plan shall be given
in writing and shall be deemed effectively given upon receipt or, in the case of
notices delivered by the Company to you, five (5) days after deposit in the
United States mail, postage prepaid, addressed to you at the address specified
below or at such other address as you hereafter designate by written notice to
the Company.
7. This option is subject to all the provisions of the Plan, a copy of
which is attached hereto and its provisions are hereby made a part of this
option, including without limitation the provisions of Section 6 of the Plan
relating to option provisions, and is further subject to all interpretations,
amendments, rules and regulations which may from time to time be promulgated and
adopted pursuant to the Plan. In the event of any conflict between the
provisions of this option and those of the Plan, the provisions of the Plan
shall control.
Dated the ____ day of_______________, 19__.
Very truly yours,
Metron Technology N.V.
By:
Duly authorized on behalf
of the Supervisory Board
ATTACHMENTS:
1997 Supervisory Directors' Stock Option Plan
Notice of Exercise
3.
<PAGE>
The undersigned:
(a) Acknowledges receipt of the foregoing option and the attachments
referenced therein and understands that all rights and liabilities with respect
to this option are set forth in the option and the Plan; and
(b) Acknowledges that as of the date of grant of this option, it sets
forth the entire understanding between the undersigned optionee and the Company
and its Affiliates regarding the acquisition of Common Stock in the Company and
supersedes all prior oral and written agreements on that subject with the
exception of (i) the options and any other stock awards previously granted and
delivered to the undersigned under stock award plans of the Company, and (ii)
the following agreements only:
NONE: ______________________
(Initial)
OTHER: _____________________________________________
_____________________________________________
_____________________________________________
___________________________________________
Optionee
4.
<PAGE>
METRON TECHNOLOGY N.V.
EMPLOYEE STOCK OPTION PLAN
AMENDED AND RESTATED EFFECTIVE OCTOBER 13, 1999
1. PURPOSE.
1.1 The purpose of this employee stock option plan (the "Plan") is
to motivate key employees of and consultants to Metron Technology N.V. (the
"Company") and its group companies (the "Group Companies") to improve individual
performance by providing long-term incentives to such persons by way of
facilitating ownership of shares in the issued share capital of the Company. The
Plan is also intended to facilitate recruiting and retaining key personnel of
outstanding ability by providing an attractive capital accumulation opportunity.
1.2 The Plan provides employees (including directors who are
employees) of the Company and its Group Companies ("Employees") an opportunity
to purchase Shares pursuant to options which may qualify as incentive stock
options (hereafter "Incentive Stock Options") under Section 422 of the United
States Internal Revenue Code of 1986, as amended (hereafter the "Code"), and
employees (including directors who are employees) of and consultants to the
Company and its Group Companies an opportunity to purchase Shares pursuant to
options which are not described in Sections 422 or 423 of the Code (hereafter
"Nonqualified Stock Options").
2. SUBPLANS AUTHORIZED.
The Plan shall operate as a master plan and to the extent appropriate
the Company and/or its Group Companies may adopt subplans which among other
things may be intended to address specific laws of one or more of the
jurisdictions in which the Company and/or its Group Companies operate (a
"Subplan").
3. DEFINITIONS.
Capitalized terms used in the Plan and in the Agreement (as defined
below) have the meaning ascribed thereto in this Section 3.
(a) "AGREEMENT" means a written contract entered into between the
Company and/or a Group Company on the one hand and an Optionee on the other hand
containing the terms and conditions of an Option, which shall be consistent with
the Plan and be determined by the Board, together with all amendments thereto
made by the Board in accordance with Section 13 hereof.
(b) "BOARD" means the supervisory board of the Company.
(c) "COMMITTEE" means a committee designated by the Board to
administer the Plan in accordance with Section 13 hereof.
(d) "COMPANY" means Metron Technologies N.V., a public company
with limited liability established at Amsterdam, The Netherlands.
1.
<PAGE>
(e) "CONSULTANT" means any person, including an advisor, (i)
engaged by the Company or a Group Company to render consulting or advisory
services and who is compensated for such services or (ii) who is a member of the
Board of Directors of a Group Company. However, the term "Consultant" shall not
include either Directors who are not compensated by the Company for their
services as Directors or Directors who are merely paid a director's fee by the
Company for their services as Directors.
(f) "EMPLOYEE" means an employee (including a managing director
who is also an employee) of the Company or a Group Company.
(g) "EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.
(h) "FAIR MARKET VALUE" means, as of any date, the value per Share
determined as follows:
(i) if the Stock is listed on any official stock
exchange, the Fair Market Value shall be the closing sales price per Share on
such stock exchange (or the closing bid price if no sales were reported) for the
last trading day prior to the time of determination; or
(ii) if the Stock is not listed on any official stock
exchange, the Fair Market Value shall be determined by the Board, using such
criteria as it shall determine, in its sole discretion, to be appropriate for
such valuation.
(i) "GENERAL MEETING" means the general meeting of shareholders of
the Company.
(j) "GROUP COMPANY" ("groepsmaatschappij") has the meaning
assigned to it in Section 2:24b of the Dutch Civil Code or any successor
provision thereof with the understanding that FSI Metron Europe Ltd., a company
under the laws of England with its registered at Brighton is deemed not to be a
Group Company.
(k) "NON-EMPLOYEE DIRECTOR" means a Director who either (i) is not
a current Employee or Officer of the Company or its parent or a subsidiary, does
not receive compensation (directly or indirectly) from the Company or its parent
or a subsidiary for services rendered as a consultant or in any capacity other
than as a Director (except for an amount as to which disclosure would not be
required under Item 404(a) of Regulation S-K promulgated pursuant to the
Securities Act ("Regulation S-K")), does not possess an interest in any other
transaction as to which disclosure would be required under Item 404(a) of
Regulation S-K and is not engaged in a business relationship as to which
disclosure would be required under Item 404(b) of Regulation S-K; or (ii) is
otherwise considered a "non-employee director" for purposes of Rule 16b-3.
(l) "OFFICER" means a person who is an officer of the Company
within the meaning of Section 16 of the Exchange Act and the rules and
regulations promulgated thereunder.
(m) "OPTION" means a right to purchase Shares pursuant to the
terms of the Plan.
(n) "OPTION PRICE" means the price at which a Share covered by the
respective Option may be purchased.
2.
<PAGE>
(o) "OPTIONEE" means an Employee or Consultant to whom an Option
is or has been granted.
(p) "OUTSIDE DIRECTOR" means a Director who either (i) is not a
current employee of the Company or an "affiliated corporation" (within the
meaning of Treasury Regulations promulgated under Section 162(m) of the Code),
is not a former employee of the Company or an "affiliated corporation" receiving
compensation for prior services (other than benefits under a tax qualified
pension plan), was not an officer of the Company or an "affiliated corporation"
at any time and is not currently receiving direct or indirect remuneration from
the Company or an "affiliated corporation" for services in any capacity other
than as a Director or (ii) is otherwise considered an "outside director" for
purposes of Section 162(m) of the Code.
(q) "PLAN" means this Metron Technologies N.V. Employee Stock
Option Plan, any Subplans authorized by the Company and any amendments made
thereto by the Board in accordance with Section 12 hereof.
(r) "SECURITIES ACT" means the Securities Act of 1933, as amended.
(s) "SHARE" means a common share in the issued share capital of
the Company.
(t) "STOCK" means the common shares in the issued share capital of
the Company.
(u) "SUCCESSOR" with respect to an Optionee means the person or
persons who, by will or according to the applicable law of inheritance,
acquire(s) the right to exercise an Option.
(v) "TEN PERCENT SHAREHOLDER" means a person who owns (or is
deemed to own pursuant to Section 424(d) of the Code) stock possessing more than
ten percent (10%) of the total combined voting power of all classes of stock of
the Company or of any of the Group Companies.
(w) "TERM" means the period during which an Option may be
exercised.
4. SHARES AVAILABLE UNDER THE PLAN.
4.1 The number of Shares available for distribution under the
Plan shall not exceed 2,750,000*, subject to adjustment pursuant to Section
14 hereof. Shares used for purposes of the Plan shall be common shares in the
authorized share capital of the Company.
4.2 If an Option should expire or can no longer be exercised for
any reason without having been exercised in full, the unissued Shares which were
subject thereto shall, unless the Plan shall have been terminated, become
available for future issuance under the Plan.
4.3 For the purposes of computing the total number of Shares
granted under the Plan, each Option shall be deemed to be the equivalent of the
maximum number of Shares that may be issued upon exercise of the particular
Option.
- -------------------
* 525,000 shares originally authorized. 1,050,000 post 1:2 stock split in
December 1995. Increased to 1,300,000 shares in June 1996. Increased to
1,500,000 in October of 1997. 2,250,000 shares post the 3:2 stock split in
April 1998. Increased to 2,750,000 shares in July of 1999.
3.
<PAGE>
4.4 Subject to the provisions of Section 14 relating to
adjustments upon changes in the shares of Common Stock, no Employee shall be
eligible to be granted Options covering more than one million (1,000,000) shares
of Common Stock during any calendar year.
5. ELIGIBILITY.
Participation in the Plan shall be limited to Employees and
Consultants, and the Committee or the Board shall determine which Employees and
Consultants shall be granted Options under the Plan, and the terms of such
Options, all as more fully provided in the relevant Agreement.
6. GENERAL TERMS OF OPTIONS.
6.1 Each Option shall be subject to an Agreement.
6.2 Each Agreement shall set forth the number of Shares to which
the Option subject to such Agreement applies, the Option Price and such other
terms and conditions applicable to the Option as shall be determined by the
Board acting in its sole discretion, subject however to the provisions of the
Plan, particularly this Section 6.2 thereof.
6.3 The Option Price shall never be less than the nominal value
per Share. Moreover, the Option Price shall not be less than the Fair Market
Value on the date the Option is granted. Notwithstanding the foregoing, (a) in
the case of an Incentive Stock Option granted to a Ten Percent Shareholder, then
such Incentive Stock Options shall have a Term of no longer than 5 years and an
Option Price of at least 110% of the Fair Market Value on the date the Option is
granted and (b) in the case of an Incentive Stock Option granted to any other
person, the Option Price shall not be less than the fair Market Value on the
date that the Option is granted. The Option Price shall be subject to adjustment
to the extent provided in this Plan or the relevant Agreement.
6.4 In the case of Incentive Stock Options, the aggregate Fair
Market Value (determined as of the time such Option is granted) of the Shares
with respect to which Incentive Stock Options are exercisable for the first time
by an Employee in any calendar year (under the Plan and any other plans of the
Company or its Group Companies) shall not exceed $100,000 or the equivalent
thereof in another currency.
6.5 The Agreement may contain such other terms, provisions, and
conditions as may be determined by the Board (not inconsistent with this Plan).
If an Option, or any part thereof is intended to qualify as an Incentive Stock
Option, the Agreement shall contain those terms and conditions which are
necessary to so qualify it.
7. TRANSFERABILITY.
Each Agreement shall provide that Options may not be sold, assigned,
transferred, exchanged, pledged or otherwise encumbered. Notwithstanding the
immediately preceding sentence, an Agreement may provide that the Option subject
to the Agreement shall transfer in the event of the death of an Optionee to a
Successor or, alternatively, that the death of an Optionee shall accelerate the
Term of the Option in accordance with Section 9 of the Plan.
4.
<PAGE>
8. EFFECTIVE DATE AND DURATION OF THE PLAN.
8.1 The Plan shall become effective as of and its "Effective Date"
shall be the date it is approved by the general meeting of shareholders of the
Company.
8.2 The Plan shall remain in effect until the earlier of (i) the
date as of which the Board has terminated the Plan; and (ii) the tenth
anniversary of the Effective Date (the "Termination Date"); PROVIDED, HOWEVER,
that Options granted prior to the Termination Date may vest, be exercised or
otherwise effectuated in accordance with the relevant Agreement beyond the
Termination Date unless the authority to do so is limited in the Agreement or
otherwise.
9. TERM OF OPTIONS, ACCELERATION.
Each Agreement shall set forth the Term of the Option; PROVIDED,
HOWEVER, that the Term of an Option shall not be for more than 10 years and
that, in the case of an Incentive Stock Option granted to Ten Percent
Shareholder, then such Incentive Stock Options shall have a Term of no longer
than 5 years and an Option Price of at least 110% of the Fair Market Value on
the date the Option is granted. Acceleration of the expiration of the applicable
Term is permitted upon such terms and conditions as shall be set forth in the
Agreement, which may, but need not, include, without limitation, acceleration in
the event of the Optionee's death or retirement as Employee.
10. TERMINATION OF EMPLOYMENT AND CONSULTING RELATIONSHIP AND PERMANENT
DISABILITY OF THE OPTIONEE.
10.1 No Option may be exercised by an Optionee from the date on or
as per which the Optionee is no longer an Employee or a Consultant, for any
reason whatsoever, except as and to the extent provided in the Agreement
applicable to that Option. Notwithstanding the foregoing, a change in the
capacity in which a person provides services to the Company will not constitute
a termination of employment or consulting relationship for purposes of the Plan
provided that there is no interruption in the period during which the person
provides services to the Company.
10.2 Subject to Section 10.1 of the Plan, during the lifetime of an
Optionee, only such Optionee (or such Optionee's legal representative) may
exercise an Option. An Option may be exercised by the Successor of an Optionee
following the death of such Optionee to the extent, and during the period of
time, if any, provided in the applicable Agreement.
10.3 Notwithstanding the provisions of Section 10.1 above, in the
event of termination of the Optionee's employment or consulting relationship
with the Company or one or more of the Group Companies as a result of his total
and permanent disability (as determined by the Board or the Committee) the
Optionee may, but only within 12 months from the date of such termination (but
in no event later than the expiration date of the Term of such Option as set
forth in the relevant Agreement), exercise the Option in accordance with the
terms and conditions of the relevant Agreement. If and to the extent that the
Optionee does not so exercise the Option, the Option shall terminate without any
payment of compensation or remuneration being due or payable to the Optionee.
11. EXERCISE OF OPTIONS.
5.
<PAGE>
11.1 The Option Price of the Shares with respect to which an Option
is exercised shall be payable to the Company in full at the time of exercise of
the Option and shall be made in such currency as the Board shall specify in the
applicable Agreement. However, the Board may, in its sole discretion, permit an
Optionee to pay the Option Price in whole or in part (i) with Shares owned by
the Optionee; (ii) with Shares issuable upon exercise of the Option; (iii)
delivery on a form prescribed by the Board of an irrevocable direction to a
securities broker approved by the board or the Board to sell Shares and to
deliver all or a portion of the proceeds thereof to the Company in payment for
the Shares; or (iv) a combination of the foregoing, and in any such event the
Company undertakes to repurchase the Shares involved. Any Shares used to pay all
or part of the Option Price shall be valued by the Board or the Committee at
their Fair Market Value on the date of the exercise of the Option. In addition,
any Shares used to pay all or part of the Option Price that were acquired,
directly or indirectly from the Company, must have been held for more than six
(6) months (or such longer or shorter period of time required to avoid a charge
to earnings for financial accounting purposes) prior to their use for such
payment.
Notwithstanding the above, it is expressly understood that an Optionee
may only use Shares to pay all or part of the Option Price and that the Company
shall only be bound to repurchase those Shares subject to the condition
precedent that the provisions of Dutch law and the articles of association of
the Company, as the same may be amended from time to time, concerning the
repurchase by the Company of shares in its own capital are complied with and
satisfied.
11.2 Each Option shall be exercisable in whole or in part on the
terms provided for in the relevant Agreement. In no event shall any Option be
exercisable at any time after the expiration of its Term. When an Option is no
longer exercisable, it shall be deemed to have lapsed or terminated without any
payment of compensation or remuneration due to anybody.
12. TERMINATION, SUSPENSION AND MODIFICATION OF THE PLAN AND ALTERATION AND
AMENDMENT OF AGREEMENTS AND OPTIONS.
To the extent permitted by law the Board may at any time and from time
to time terminate, suspend or modify the Plan. The Board shall in no event amend
the Plan in the following respects without the approval of the general meeting
of shareholders resolving with a majority then sufficient to approve the Plan in
the first instance:
(i) to increase the maximum number of Shares subject to
Incentive Stock Options issued under the Plan; or
(ii) to change the designation or class of persons
eligible to receive Incentive Stock Options under the Plan.
The Board may at any time alter or amend any or all Agreements and the
terms and conditions of outstanding Options, except the Option Price, PROVIDED,
HOWEVER, that no such termination, suspension, modification, alteration or
amendment will materially and adversely affect any right acquired by any
Optionee under an Option granted before the date of termination, suspension,
modification, alteration or amendment, unless otherwise agreed to by the
Optionee in the Agreement or otherwise or unless required by law. However, it
will be
6.
<PAGE>
conclusively presumed that any adjustment for changes in capitalization provided
for in Section 14 does not adversely affect the rights of any Optionee.
13. ADMINISTRATION.
13.1 ADMINISTRATION BY BOARD. The Board shall administer the Plan
unless and until the Board delegates administration to a Committee, as provided
in Section 13.3.
13.2 POWERS OF BOARD. The Board shall have the power, subject to,
and within the limitations of, the express provisions of the Plan:
(a) To determine from time to time which of the
persons eligible under the Plan shall be granted Options; when and how each
Option shall be granted; the provisions of each Option granted (which need
not be identical), including the time or times when a person shall be
permitted to receive Common Stock pursuant to an Option; and the number of
shares of Common Stock with respect to which an Option shall be granted to
each such person.
(b) To construe and interpret the Plan and Options
granted under it, and to establish, amend and revoke rules and regulations
for its administration. The Board, in the exercise of this power, may correct
any defect, omission or inconsistency in the Plan or in any Agreement, in a
manner and to the extent it shall deem necessary or expedient to make the
Plan fully effective.
(c) Generally, to exercise such powers and to perform
such acts as the Board deems necessary or expedient to promote the best
interests of the Company which are not in conflict with the provisions of the
Plan.
13.3 DELEGATION TO COMMITTEE.
(a) The Board may delegate administration of the Plan
to a Committee or Committees of one (1) or more members of the Board, and the
term "Committee" shall apply to any person or persons to whom such authority
has been delegated. If administration is delegated to a Committee, the
Committee shall have, in connection with the administration of the Plan, the
powers theretofore possessed by the Board, including the power to delegate to
a subcommittee any of the administrative powers the Committee is authorized
to exercise (and in this Plan to the Board shall thereafter be to the
Committee or subcommittee), subject, however, to such resolutions, not
inconsistent with the provisions of the Plan, as may be adopted from time to
time by the Board. The Board may abolish the Committee at any time and revest
in the Board the administration of the Plan.
(b) At such time as the Common Stock is publicly
traded, in the discretion of the Board, a Committee may consist solely of two
or more Outside Directors, in accordance with Section 162(m) of the Code,
and/or solely of two or more Non-Employee Directors, in accordance with Rule
16b-3. Within the scope of such authority, the Board or the Committee may (1)
delegate to a committee of one or more members of the Board who are not
Outside Directors the authority to grant Options to eligible persons who are
either (a) not then Covered Employees and are not expected to be Covered
Employees at the time of recognition of income resulting from such Stock
Award or (b) not persons with respect to whom the Company wishes
7.
<PAGE>
to comply with Section 162(m) of the Code and/or (2) delegate to a committee of
one or more members of the Board who are not Non-Employee Directors the
authority to grant Options to eligible persons who are not then subject to
Section 16 of the Exchange Act.
13.4 EFFECT OF BOARD'S DECISION. All determinations,
interpretations and constructions made by the Board in good faith shall not be
subject to review by any person and shall be final, binding and conclusive on
all persons.
14. ADJUSTMENT FOR CHANGES IN CAPITALIZATION.
14.1 In the event of any change in the number of outstanding Shares
by reason of any stock dividend, stock split, reorganization, recapitalization,
merger, exchange of shares or other similar corporate change, such reasonable
adjustments may be made in the Plan, the Agreements and the Options granted
hereunder (including the Option Price) as the Board shall, in its sole
discretion, determine are necessary or appropriate to ensure the Optionees, to
the extent possible, reasonable rights with equal value, including, if
necessary, an adjustment in the number of Shares and in the Option Prices
applicable to Options then outstanding and in the number of Shares which are
reserved for issuance under the Plan. Any such adjustment shall be conclusive
and binding for all purposes of the Plan.
14.2 Unless otherwise determined by the Board, upon the dissolution
or liquidation of the Company the Options granted under the Plan shall terminate
and thereupon become null and void. Upon any merger or consolidation, if the
Company is not the surviving corporation, or if the Company is the surviving
corporation in a "triangular merger" transaction with a subsidiary of a "parent
corporation" (as such term is defined and used in Section 175 and Section 1101
of the California General Corporation Law), then with respect to Options held by
persons whose employment or consulting relationship with the Company or any
Group Company has not terminated, the vesting of such Options (and, if
applicable, the time during which such Options may be exercised) shall be
accelerated in full, and the Options shall terminate if not exercised (if
applicable) at or prior to such event. With respect to any other Options
outstanding under the Plan, such Options shall terminate if not exercised (if
applicable) prior to such event.
15. NO COMMITMENTS VIS-A-VIS ELIGIBLE EMPLOYEES, CONSULTANTS OR OPTIONEES.
15.1 The status as an eligible Employee or Consultant of any
person shall not be construed as a commitment that any Option will be granted
under the Plan to such eligible Employee or Consultant, or to eligible
Employees or Consultants generally.
15.2 Nothing in the plan or in any Agreement or related documents
shall confer upon any Employee, Consultant or Optionee any right to continue in
the employment or service of the Company or any Group Company or constitute any
contract of employment or consulting relationship or affect any right which the
Company or any Group Company may have to change such person's remuneration,
other benefits, job responsibilities or title, or to terminate the employment or
consulting relationship of such person with or without cause. Options and/or
Shares granted to an Optionee under the Plan are not and shall not be considered
to be a remuneration for work performed bush such Optionee under his contract of
employment with the Company or any Group Company.
8.
<PAGE>
16. TAX WITHHOLDING.
No Shares shall be granted or sold under the Plan to any Optionee until
the Optionee has made arrangements acceptable to the Company or to the Board for
the satisfaction of federal, state, local and foreign income tax, social
security tax and any other applicable withholding obligations including, without
limitation, obligations incident to the receipt of Shares under the Plan or the
receipt of an Option pursuant to the Plan or to the failure to satisfy the
conditions for treatment as incentive stock options under applicable tax law.
Upon exercise of an Option, the Company at its option may withhold from the
Optionee or require the Optionee to surrender cash or Shares sufficient to
satisfy the minimum applicable federal, state, local and foreign income tax,
social security tax and any other minimum applicable withholding obligations as
well as any capital duty and transfer or other similar duty payable in respect
of payment of the Option Price or for the Shares.
17. OTHER BENEFITS AND COMPENSATION PROGRAMS.
Payments and other benefits received by an Optionee under the Plan or
under an Option granted pursuant to the Plan shall not be deemed a part of an
Optionee's regular, recurring compensation for purposes of the termination,
indemnity or severance pay law of any country and shall not be included in, nor
have any effect on, the determination of benefits under any other employee
benefit plan, contract or similar arrangement provided by the Company or a Group
Company, unless expressly so provided by such other plan, contract or
arrangement, or unless the Board expressly determines that an Option or portion
of an Option should be included to reflect competitive compensation practices or
to recognize that an Option has been granted in lieu of a portion of competitive
cash compensation.
18. UNFUNDED PLAN.
The Plan shall be unfunded and the Company shall not be required to
segregate any assets that may at any time be represented by Options under the
Plan. Neither the Company, its Group Companies, the Committee, nor the Board
shall be deemed to be a trustee of any amounts to be paid under the Plan nor
shall anything contained in the Plan or any action taken pursuant to its
provisions create or be construed to create a fiduciary relationship between the
Company and/or its Group Companies, and an Optionee. To the extent that any
person acquires a right to receive an Option or Shares under the Plan, such
right shall be no greater than the right of an unsecured general creditor of the
Company.
19. LIMITS OF LIABILITY, INDEMNIFICATION.
19.1 Any liability of the Company to any Optionee with respect to
an Option shall be based solely upon the contractual obligations created by the
Plan and the Agreement.
19.2 Except as may be required by law, neither the Company nor any
member of the Board or of the Committee, nor any other person participating in
any determination of any question under the Plan, or in the interpretation,
administration or application of the Plan, shall have any liability to any party
for any action taken, or not taken, under the Plan.
9.
<PAGE>
19.3 Each person who is or shall have been a member of the
Committee or of the Board, and any other person to whom the Board delegates
authority under the Plan, shall be indemnified and held harmless by the Company,
to the extent permitted by law, against and from any loss, cost, liability or
expense that may be imposed upon or reasonably incurred by such person in
connection with or resulting from any claim, action, suit or proceeding to which
such person may be a party or in which such person may be involved by reason of
any action taken or failure to act, made in good faith, under the Plan and
against and from any and all amounts paid by such person in settlement thereof
with the Company's approval, or paid by such person in satisfaction of any
judgment in any such action, suit or proceeding against such person, provided
such person shall give the Company an opportunity, at the Company's expense, to
handle and defend the same before such person undertakes to handle and defend it
on such person's own behalf.
20. COMPLIANCE WITH APPLICABLE LEGAL REQUIREMENTS.
No Options shall be granted and no Shares distributable pursuant to the
Plan or to an Agreement shall be issued and delivered unless the granting of
such Options respectively the issuance and delivery of such Shares complies with
all applicable legal requirements including, without limitation, with the
provisions of any applicable national or state securities laws, and the
requirements of the stock exchanges, if any, on which the Shares may, from time
to time, be listed.
21. GENDER AND NUMBER.
Except when otherwise indicated by the context, reference to the
masculine gender shall include, when used, the feminine gender and any term used
in the singular shall also include the plural.
22. PARTIAL INVALIDITY.
In the event any provision of the Plan shall be held illegal or invalid
for any reason, the illegality or invalidity shall not affect the remaining
parts of the Plan, and the Plan shall be construed and enforced as if the
illegal or invalid provision had not been included.
10.
<PAGE>
METRON TECHNOLOGY N.V.
EMPLOYEE STOCK OPTION PLAN
STOCK OPTION AGREEMENT
- --------------------------------------------------------------------------------
Country of Residence: [FOR USE FOR
Full Name of Optionee: _______________ NON-U.K. AND NON-U.S. RESIDENTS]
- --------------------------------------------------------------------------------
No. of Shares Covered: _______________ Date of Grant: _______________
- --------------------------------------------------------------------------------
Option Price Per Share: US$___________
Equal to Fair Market Value (as such term
is defined in The Plan) as of ___________. Expiration Date: _______________
- --------------------------------------------------------------------------------
Exercise Schedule pursuant to Section 4:
No. of Shares
As To Which Option
Becomes Exercisable
Initial Date of Exercisability As of Such Date
------------------------------ ---------------
--------------- ---------------
--------------- ---------------
--------------- ---------------
--------------- ---------------
- --------------------------------------------------------------------------------
This is a STOCK OPTION AGREEMENT ("Agreement") between METRON
TECHNOLOGY N.V. (the "Company"), and the Optionee identified above (the
"Optionee") effective as of the date of grant specified above.
RECITALS
WHEREAS, the Company maintains the Metron Technology Employee Stock
Option Plan ("Plan");
WHEREAS, the Supervisory Board of the Company has been appointed as the
committee (the "Committee") with the authority to determine the Options to be
granted under the Plan; and
WHEREAS, the Supervisory Board, in its own capacity and in the capacity
of the Committee has determined that the Optionee is eligible to receive an
Option under the Plan (the "Option") and has set the terms and conditions
thereof.
1.
<PAGE>
TERMS AND CONDITIONS* /
1. GRANT. The Optionee is granted this Option to purchase the number of Shares
specified at the beginning of this Agreement on the terms and conditions set
forth herein.
2. EXERCISE PRICE. The price payable by the Optionee for each Share subject to
this Option shall be the Option Price specified at the beginning of this
Agreement.
3. TYPE OF STOCK OPTION. This Option is not intended to be an "incentive stock
option" within the meaning of Section 422 of the United States Internal Revenue
Code of 1986, as amended (the "Code").
4. EXERCISE SCHEDULE. Except as provided in Section 7(c) of this Agreement, this
Option may not be exercised until and before _______________. If the Option has
not expired and your continuous service as an employee or consultant of the
Company or a Group Company has not terminated, twenty-five percent (25%) of the
total shares originally subject to the Option shall become exercisable on each
of _______________, _______________, _______________ and _______________ (in
each case the total number of shares to be exercisable, if other than a whole
number, will be rounded to the next lowest whole number on a cumulative basis)
and the remaining Shares subject to this Option shall become exercisable on the
fourth anniversary of the date of grant all as reflected on the first page of
this Option Agreement. Before this Option expires, the Optionee may at any time
purchase all or any portion of the Shares then available under the Exercise
Schedule to the extent not previously purchased.
5. EXPIRATION. This Option shall expire at 4:00 p.m. Pacific Standard Time on
the earliest of:
(a) The expiration date specified at the beginning of this
Agreement which date shall not be later than ten years after
the date of grant;
(b) The last day of the period following the termination of
Optionee's continuous service as an employee or consultant
of the Company or a Group Company during which this Option
can be exercised as specified in Section 7 of this
Agreement; or
(c) The date (if any) fixed for termination of this Option
pursuant to Section 14.2 of the Plan.
In no event may anyone exercise this Option, in whole or in part, after
it has expired, notwithstanding any other provision of this Agreement.
- --------------------
*/ Unless the context indicates otherwise, capitalized terms that are not
defined in this Agreement shall have the meaning set forth in the Plan as it
currently exists or as it is amended in the future.
2.
<PAGE>
6. PROCEDURE TO EXERCISE OPTION.
NOTICE OF EXERCISE. Subject to the terms and conditions of this
Agreement, this Option may be exercised by delivering advance written notice of
exercise in the form attached to this Agreement or a similar form containing
substantially the same information to the Company at 1350 Old Bayshore Highway,
Suite 360, Burlingame, California (or such other address as the Company shall
advise the Optionee of pursuant to written notice to the Optionee), or to the
Optionee's Employer if it is a Group Company (as defined in book 2 of the Dutch
Civil Code) at such Employer's address; and, if to the Company, the notice shall
be addressed or delivered to the Corporate Secretary or a Managing Director, or
if to his/her Employer, the notice shall be addressed and delivered to its Chief
Financial Officer or the person holding the comparable position. The notice
shall state the number of Shares to be purchased, and shall be signed by the
Optionee, or the Optionee's heir, successor or permitted assign exercising this
Option. If the person exercising this Option is not the Optionee, he/she also
must submit appropriate proof of his/her right to exercise this Option.
TENDER OF PAYMENT. Any notice of exercise hereunder shall be
accompanied by payment by check, bank draft or money order payable to the
Company of the full purchase price of the Shares being purchased in the same
currency as listed on page one of this Agreement; provided, however, that the
Committee, in its sole discretion, may permit the Optionee to pay the Option
Price in whole or in part (i) with Shares owned by the Optionee; or (ii) by
delivery on a form prescribed by the Committee of an irrevocable direction to a
securities broker approved by the Committee to sell Shares and deliver all or a
portion of the proceeds to the Company in payment for the Shares acquired upon
exercise; or (iii) by Shares issuable upon exercise of the option; or (iv) in
any combination of the foregoing. Any Shares used to exercise options shall be
valued by the Committee at their fair market value on the date of the exercise
of the Option.
OWNERSHIP OF SHARES. As soon as practicable after the Company
receives a properly executed notice and the purchase price provided for
above, the Optionee's ownership of Shares in the Company shall be effected by
a deed to be executed before a Dutch civil law notary and entry of the name
of the Optionee or other person acquiring those Shares in the Company's
shareholders' register. The Optionee agrees that none of the Shares so
acquired shall be offered, transferred or sold at any time to any person,
including legal entities, that are established, domiciled or resident in The
Netherlands, except for repurchases by the Company, or as otherwise permitted
pursuant to the laws of The Netherlands and all other applicable securities
and share transfer laws. All such Shares shall be fully paid.
7. CONTINUOUS SERVICE. This Option may be exercised only during Optionee's
continuous service as an employee or consultant of the Company or a Group
Company, provided that:
(a) The Optionee may exercise this Option during the 90-day
period following termination of continuous service as an
employee or consultant, but only to the extent that it was
exercisable immediately prior to the date of termination of
continuous service as an employee or consultant (I.E. he/she
shall not progress on the Exercise Schedule).
3.
<PAGE>
(b) If the Optionee becomes totally and permanently disabled (as
determined by the Committee) during Optionee's continuous
service as an employee or consultant, he/she may exercise
this Option during the one year period following the date of
his/her termination of continuous service as an employee or
consultant but only to the extent that it was exercisable
immediately prior to the date of termination of continuous
service as an employee or consultant.
(c) If the Optionee dies during Optionee's continuous service as
an employee or consultant, the legal representative of
his/her estate, or other person or persons acquiring the
right to exercise the Option by bequest or inheritance, may
exercise this Option during the 90-day period following the
date the Optionee dies, and this Option may be exercised in
full (notwithstanding the Exercise Schedule).
However, this Option may be exercised following termination of
continuous service as an employee or consultant only as to that number of shares
as to which it was exercisable on the date of termination of continuous service
as an employee or consultant under the provisions of Section 4 of this
Agreement.
Notwithstanding anything stated above to the contrary, this Option may
not be exercised after it has expired as provided in Section 5 of this
Agreement.
8. LIMITATION ON TRANSFER. While the Optionee is alive, only the Optionee or
his/her guardian or other legal representative may exercise this Option. This
Option may not be assigned or transferred other than by will or the laws of
descent and distribution, and shall not be subject to pledge or other security
right. Any attempt to assign, transfer, pledge or otherwise dispose of this
Option contrary to the provisions hereof shall be without effect.
9. NO STOCKHOLDER RIGHTS BEFORE EXERCISE. No person shall have any of the rights
of a shareholder of the Company with respect to any Share subject to this Option
until exercise of this Option with respect to such Share.
10. DISCRETIONARY ADJUSTMENT. The Committee may in its sole discretion make
appropriate adjustments in the number of Shares subject to this Option and in
the Option Price per Share to give effect to any adjustments made in the number
of outstanding Shares through a merger, consolidation, recapitalization,
reclassification, combination, stock dividend, stock split or other relevant
change; provided that, fractional Shares shall be rounded to the nearest whole
Share.
11. TAX WITHHOLDING. No Shares shall be issued under the Plan to the Optionee
until the Optionee has made arrangements acceptable to the Committee for the
satisfaction of U.S. federal, state, local and foreign income and social
security tax withholding obligations, including without limitation, obligations
incident to the receipt of Shares under the Plan or the receipt of any cash
payments by the Optionee. Upon exercise of the Option, the Company, at its
option, may withhold from the Optionee or require the Optionee to surrender
Shares sufficient to satisfy all _______________, local and foreign income,
withholding and other tax obligations. Any adverse consequences incurred by the
Optionee with respect to the use of Shares to pay any part
4.
<PAGE>
of the Option Price or of any tax in connection with the exercise of the Option
shall be the sole responsibility of the Optionee.
12. ASSIGNABILITY. This option shall, during Optionee's lifetime, be exercisable
only by him, and neither the Option nor any right hereunder shall be
transferable by Optionee except as permitted under Section 8 of this Agreement.
13. INTERPRETATION OF THIS AGREEMENT. All decisions and interpretations made by
the Company or the Committee with regard to any question arising hereunder or
under the Plan shall be binding and conclusive upon the Company and the
Optionee. If there is any inconsistency between the provisions of the Agreement
and the Plan, the provisions of the Plan shall govern.
14. DISCONTINUATION OF EMPLOYMENT. This Agreement shall not give the Optionee a
right to continued employment with the Company or a Group Company, and the
Company or Group Company employing the Optionee may terminate his/her employment
and otherwise deal with the Optionee without regard to the effect it may have
upon his/her under this Agreement.
15. OBLIGATION TO RESERVE SUFFICIENT SHARES. The Company shall at all times
during the term of this Option reserve and keep available a sufficient number of
Shares to satisfy the Company's obligations upon exercise of the Option in
accordance with the terms of this Agreement.
16. BINDING EFFECT. This Agreement shall be binding in all respects on the
heirs, representatives, successors and assigns of the Optionee.
17. CHOICE OF LAW. The Agreement is entered into under the laws of The
Netherlands and shall be construed and interpreted thereunder (without regard to
its conflicts of laws principles).
18. CAPITAL DUTY. The Company and/or the Group Company for whom the Employee is
employed shall be responsible for the payment of the capital duty due under
Netherlands law upon exercise of the Option and payment of the purchase price
for the Shares subject thereto.
5.
<PAGE>
19. ACKNOWLEDGEMENT. The Optionee acknowledges receipt of a copy of the Plan,
and represents that he or she is familiar with the terms and provisions thereof,
and hereby accepts this Option subject to all of the terms and provisions
thereof. The Optionee hereby agrees to accept as binding, conclusive and final
all decisions or interpretations of the Committee upon any questions arising
under the Plan.
IN WITNESS WHEREOF, the Optionee and the Company have executed this
Agreement as of the _____ day of .
METRON TECHNOLOGY N.V.
OPTIONEE
By:
--------------------------- --------------------------------
Its:
-------------------------- --------------------
6.
<PAGE>
CONSENT OF SPOUSE
I, ___________________________, spouse of the OPTIONEE who executed the
foregoing Agreement, hereby agree that my spouse's interest in the Shares
subject to said Agreement shall be irrevocably bound by the Agreement's terms. I
further agree that my community property or other marital property interest in
such shares, if any, shall similarly be bound by said Agreement and that such
consent is binding upon my executors, administrators, heirs and assigns. I agree
to execute and deliver such documents as may be necessary to carry out the
intent of said Agreement and this consent.
Dated: _________________, 19____
-----------------------------------
7.
<PAGE>
METRON TECHNOLOGY N.V.
EMPLOYEE STOCK OPTION PLAN
STOCK OPTION AGREEMENT
- --------------------------------------------------------------------------------
Full Name of Optionee: _______________ Country of Residence: U.S.A.
- --------------------------------------------------------------------------------
No. of Shares Covered: _______________ Date of Grant: ______________
- --------------------------------------------------------------------------------
Option Price Per Share: US$____________
(Equal to Fair Market Value (as such term is
defined in The Plan) as of _______________ Expiration Date: ____________
- --------------------------------------------------------------------------------
Exercise Schedule pursuant to Section 4:
No. of Shares
As To Which Option
Becomes Exercisable
Initial Date of Exercisability As of Such Date
------------------------------ ---------------
--------------- ---------------
--------------- ---------------
--------------- ---------------
--------------- ---------------
- --------------------------------------------------------------------------------
This is a STOCK OPTION AGREEMENT ("Agreement") between Metron Technology N.V.
(the "Company"), and the Optionee identified above (the "Optionee") effective as
of the date of grant specified above.
RECITALS
WHEREAS, the Company maintains the Metron Technology Employee Stock Option Plan
("Plan");
WHEREAS, the Supervisory Board of the Company has been appointed as the
committee (the "Committee") with the authority to determine the Options to be
granted under the Plan; and
WHEREAS, the Supervisory Board, in its own capacity and in the capacity of the
Committee has determined that the Optionee is eligible to receive an Option
under the Plan (the "Option") and has set the terms and conditions thereof.
1.
<PAGE>
TERMS AND CONDITIONS*
1. GRANT. The Optionee is granted this Option to purchase the number of Shares
specified at the beginning of this Agreement on the terms and conditions set
forth herein.
2. EXERCISE PRICE. The price payable by the Optionee for each Share subject to
this Option shall be the Option Price specified at the beginning of this
Agreement.
3. TYPE OF STOCK OPTION. This Option is intended to be an "incentive stock
option" within the meaning of Section 422 of the United States Internal Revenue
Code of 1986, as amended (the "Code").
4. EXERCISE SCHEDULE. Except as provided in Section 7(c) of this Agreement, this
Option may not be exercised until and before _______________. If the Option has
not expired, twenty-five percent (25%) of the total shares originally subject to
the Option shall become exercisable on each of _______________, _______________,
_______________ and _______________ (in each case the total number of shares to
be exercisable, if other than a whole number, will be rounded to the next lowest
whole number on a cumulative basis) and the remaining Shares subject to this
Option shall become exercisable on the fourth anniversary of the date of grant
all as reflected on the first page of this Option Agreement. The exercise
schedule is cumulative - that is, if this Option has not expired prior thereto,
the Optionee may at any time purchase all or any portion of the Shares then
available under the Exercise Schedule to the extent not previously purchased.
5. EXPIRATION. This Option shall expire at 4:00 p.m. Pacific Standard Time on
the earliest of:
(a) The expiration date specified at the beginning of this
Agreement which date shall not be later than ten years after
the date of grant;
(b) The last day of the period following the termination of
employment of the Optionee during which this Option can be
exercised as specified in Section 7 of this Agreement; or
(c) The date (if any) fixed for termination of this Option
pursuant to Section 14.2 of the Plan.
In no event may anyone exercise this Option, in whole or in part, after it has
expired, notwithstanding any other provision of this Agreement.
6. PROCEDURE TO EXERCISE OPTION.
- ---------------
*/ Unless the context indicates otherwise, capitalized terms that are not
defined in this Agreement shall have the meaning set forth in the Plan as it
currently exists or as it is amended in the future.
2.
<PAGE>
NOTICE OF EXERCISE. Subject to the terms and conditions of this Agreement, this
Option may be exercised by delivering advance written notice of exercise in the
form attached to this Agreement or a similar form containing substantially the
same information to the Company at 1350 Old Bayshore Highway, Suite 360,
Burlingame, California (or such other address as the Company shall advise the
Optionee of pursuant to written notice to the Optionee), or to the Optionee's
Employer if it is a Group Company (as defined in book 2 of the Dutch Civil Code)
at such Employer's address; and, if to the Company, the notice shall be
addressed or delivered to the Corporate Secretary or a Managing Director, or if
to his/her Employer, the notice shall be addressed and delivered to its Chief
Financial Officer or the person holding the comparable position. The notice
shall state the number of Shares to be purchased, and shall be signed by the
Optionee, or the Optionee's heir, successor or permitted assign exercising this
Option. If the person exercising this Option is not the Optionee, he/she also
must submit appropriate proof of his/her right to exercise this Option.
TENDER OF PAYMENT. Any notice of exercise hereunder shall be accompanied by
payment by check, bank draft or money order payable to the Company of the full
purchase price of the Shares being purchased in the same currency as listed on
page one of this Agreement; provided, however, that the Committee, in its sole
discretion, may permit the Optionee to pay the Option Price in whole or in part
(i) with Shares owned by the Optionee; or (ii) by delivery on a form prescribed
by the Committee of an irrevocable direction to a securities broker approved by
the Committee to sell Shares and deliver all or a portion of the proceeds to the
Company in payment for the Shares acquired upon exercise; or (iii) by Shares
issuable upon exercise of the option; or (iv) in any combination of the
foregoing. Any Shares used to exercise options shall be valued by the Committee
at their fair market value on the date of the exercise of the Option.
OWNERSHIP OF SHARES. As soon as practicable after the Company receives a
properly executed notice and the purchase price provided for above, the
Optionee's ownership of Shares in the Company shall be effected by a deed to be
executed before a Dutch civil law notary and entry of the name of the Optionee
or other person acquiring those Shares in the Company's shareholders' register.
The Optionee agrees that none of the Shares so acquired shall be offered,
transferred or sold at any time to any person, including legal entities, that
are established, domiciled or resident in The Netherlands, except for
repurchases by the Company, or as otherwise permitted pursuant to the laws of
The Netherlands and all other applicable securities and share transfer laws. All
such Shares shall be fully paid.
7. EMPLOYMENT REQUIREMENT. This Option may be exercised only while the Optionee
remains employed by the Company or a Group Company, and only if the Optionee has
been continuously so employed since the date of this Agreement; provided that:
(a) The Optionee may exercise this Option during the 90-day period
following termination of employment, but only to the extent
that it was exercisable immediately prior to the date of
termination of employment (I.E. he/she shall not progress on
the Exercise Schedule).
(b) If the Optionee's employment is terminated because the
Optionee has become totally and permanently disabled (within
the meaning of Section 22(e)(3) of the Code as amended, except
that instead of using such section's reference to "twelve
3.
<PAGE>
months," the period of 90 days shall be used instead
("Disabled")) while employed by the Company or a Group
Company, he/she may exercise this Option during the one year
period following the date of his/her termination of employment
but only to the extent that it was exercisable immediately
prior to the date of termination of employment.
(c) If the Optionee dies while employed by the Company or a Group
Company, the legal representative of his/her estate, or other
person or persons acquiring the right to exercise the Option
by bequest or inheritance, may exercise this Option during the
90-day period following the date the Optionee dies, and this
Option may be exercised in full (notwithstanding the Exercise
Schedule), if the Optionee dies while employed by the Company
or a Group Company.
Notwithstanding anything stated above to the contrary, this Option may not be
exercised after it has expired as provided in Section 5 of this Agreement.
8. LIMITATION ON TRANSFER. While the Optionee is alive, only the Optionee or
his/her guardian or other legal representative may exercise this Option. This
Option may not be assigned or transferred other than by will or the laws of
descent and distribution, and shall not be subject to pledge or other security
right. Any attempt to assign, transfer, pledge or otherwise dispose of this
Option contrary to the provisions hereof shall be without effect.
9. NO STOCKHOLDER RIGHTS BEFORE EXERCISE. No person shall have any of the rights
of a shareholder of the Company with respect to any Share subject to this Option
until exercise of this Option with respect to such Share.
10. DISCRETIONARY ADJUSTMENT. The Committee may in its sole discretion make
appropriate adjustments in the number of Shares subject to this Option and in
the Option Price per Share to give effect to any adjustments made in the number
of outstanding Shares through a merger, consolidation, recapitalization,
reclassification, combination, stock dividend, stock split or other relevant
change; provided that, fractional Shares shall be rounded to the nearest whole
Share.
11. TAX WITHHOLDING. No Shares shall be issued under the Plan to the Optionee
until the Optionee has made arrangements acceptable to the Committee for the
satisfaction of U.S. federal, state, local and foreign income and social
security tax withholding obligations, including without limitation, obligations
incident to the receipt of Shares under the Plan or the receipt of any cash
payments by the Optionee. Upon exercise of the Option, the Company, at its
option, may withhold from the Optionee or require the Optionee to surrender
Shares sufficient to satisfy U.S. federal, state, local and foreign income and
social security tax withholding obligations. Any adverse consequences incurred
by the Optionee with respect to the use of Shares to pay any part of the Option
Price or of any tax in connection with the exercise of the Option, including,
without limitation, any adverse tax consequences arising as a result of a
"disqualifying disposition" within the meaning of Section 422 of the Code shall
be the sole responsibility of the Optionee.
4.
<PAGE>
12. ASSIGNABILITY. This option shall, during Optionee's lifetime, be exercisable
only by him, and neither the Option nor any right hereunder shall be
transferable by Optionee except as permitted under Section 8 of this Agreement.
13. INTERPRETATION OF THIS AGREEMENT. All decisions and interpretations made by
the Company or the Committee with regard to any question arising hereunder or
under the Plan shall be binding and conclusive upon the Company and the
Optionee. If there is any inconsistency between the provisions of the Agreement
and the Plan, the provisions of the Plan shall govern.
14. DISCONTINUATION OF EMPLOYMENT. This Agreement shall not give the Optionee a
right to continued employment with the Company or a Group Company, and the
Company or Group Company employing the Optionee may terminate his/her employment
and otherwise deal with the Optionee without regard to the effect it may have
upon his/her under this Agreement.
15. OBLIGATION TO RESERVE SUFFICIENT SHARES. The Company shall at all times
during the term of this Option reserve and keep available a sufficient number of
Shares to satisfy the Company's obligations upon exercise of the Option in
accordance with the terms of this Agreement.
16. BINDING EFFECT. This Agreement shall be binding in all respects on the
heirs, representatives, successors and assigns of the Optionee.
17. CHOICE OF LAW. The Agreement is entered into under the laws of The
Netherlands and shall be construed and interpreted thereunder (without regard to
its conflicts of laws principles).
18. CAPITAL DUTY. The Company and/or the Group Company for whom the Employee is
employed shall be responsible for the payment of the capital duty due under
Netherlands law upon exercise of the Option and payment of the purchase price
for the Shares subject thereto.
19. ACKNOWLEDGEMENT. The Optionee acknowledges receipt of a copy of the Plan,
and represents that he or she is familiar with the terms and provisions thereof,
and hereby accepts this Option subject to all of the terms and provisions
thereof. The Optionee hereby agrees to accept as binding, conclusive and final
all decisions or interpretations of the Committee upon any questions arising
under the Plan.
IN WITNESS WHEREOF, the Optionee and the Company have executed this Agreement as
of the _____ day of _______________, 1999.
METRON TECHNOLOGY N.V. OPTIONEE
By: _______________________________ ________________________________
Its: ______________________________ _______________
5.
<PAGE>
CONSENT OF SPOUSE
I, ___________________________, spouse of the Optionee who
executed the foregoing Agreement, hereby agree that my spouse's interest in the
Shares subject to said Agreement shall be irrevocably bound by the Agreement's
terms. I further agree that my community property or other marital property
interest in such shares, if any, shall similarly be bound by said Agreement and
that such consent is binding upon my executors, administrators, heirs and
assigns. I agree to execute and deliver such documents as may be necessary to
carry out the intent of said Agreement and this consent.
Dated: _________________, 19____
-----------------------------------
6.
<PAGE>
METRON TECHNOLOGY N.V.
EMPLOYEE STOCK OPTION PLAN
STOCK OPTION AGREEMENT
- --------------------------------------------------------------------------------
Full Name of Optionee: _______________ Country of Residence: United Kingdom
- --------------------------------------------------------------------------------
No. of Shares Covered: _______________ Date of Grant: _______________
- --------------------------------------------------------------------------------
Option Price Per Share: US$_____________
(Equal to Fair Market Value (as such term
is defined in The Plan) as of____________) Expiration Date: _______________
- --------------------------------------------------------------------------------
Exercise Schedule pursuant to Section 4:
No. of Shares
As To Which Option
Becomes Exercisable
Initial Date of Exercisability As of Such Date
------------------------------ ---------------
--------------- ---------------
--------------- ---------------
--------------- ---------------
--------------- ---------------
- --------------------------------------------------------------------------------
This is a STOCK OPTION AGREEMENT ("Agreement") between Metron Technology N.V.
(the "Company"), and the Optionee identified above (the "Optionee") effective as
of the date of grant specified above.
RECITALS
WHEREAS, the Company maintains the Metron Technology Employee Stock Option Plan
("Plan");
WHEREAS, the Supervisory Board of the Company has been appointed as the
committee (the "Committee") with the authority to determine the Options to be
granted under the Plan; and
WHEREAS, the Supervisory Board, in its own capacity and in the capacity of the
Committee has determined that the Optionee is eligible to receive an Option
under the Plan (the "Option") and has set the terms and conditions thereof.
1.
<PAGE>
TERMS AND CONDITIONS*
1. GRANT. The Optionee is granted this Option to purchase the number of Shares
specified at the beginning of this Agreement on the terms and conditions set
forth herein.
2. EXERCISE PRICE. The price payable by the Optionee for each Share subject to
this Option shall be the Option Price specified at the beginning of this
Agreement.
3. TYPE OF STOCK OPTION. This Option is [not] intended to be an "incentive stock
option" within the meaning of Section 422 of the United States Internal Revenue
Code of 1986, as amended (the "Code").
4. EXERCISE SCHEDULE. Except as provided in Section 7(c) of this Agreement, this
Option may not be exercised until and before _______________. If the Option has
not expired, and your continuous service as an employee or consultant of the
Company or a Group Company has not terminated, twenty-five percent (25%) of the
total shares originally subject to the Option shall become exercisable on each
of _______________, _______________, _______________ and _______________ (in
each case the total number of shares to be exercisable, if other than a whole
number, will be rounded to the next lowest whole number on a cumulative basis)
and the remaining Shares subject to this Option shall become exercisable on the
fourth anniversary of the date of grant all as reflected on the first page of
this Option Agreement. Before this Option expires, the Optionee may at any time
purchase all or any portion of the Shares then available under the Exercise
Schedule to the extent not previously purchased.
5. EXPIRATION. This Option shall expire at 4:00 p.m. Pacific Standard Time on
the earliest of:
(a) The expiration date specified at the beginning of this Agreement
which date shall not be later than seven years after the date of
grant;
(b) The last day of the period following the termination of
Optionee's continuous service as an employee or consultant of the
Company or a Group company during which this Option can be
exercised as specified in Section 7 of this Agreement; or
(c) The date (if any) fixed for termination of this Option pursuant
to Section 14.2 of the Plan.
In no event may anyone exercise this Option, in whole or in part, after it has
expired, notwithstanding any other provision of this Agreement.
- ---------------
*/ Unless the context indicates otherwise, capitalized terms that are not
defined in this Agreement shall have the meaning set forth in the Plan as it
currently exists or as it is amended in the future.
2.
<PAGE>
6. PROCEDURE TO EXERCISE OPTION.
NOTICE OF EXERCISE. Subject to the terms and conditions of this Agreement, this
Option may be exercised by delivering advance written notice of exercise in the
form attached to this Agreement or a similar form containing substantially the
same information to the Company at 1350 Old Bayshore Highway, Suite 360,
Burlingame, California (or such other address as the Company shall advise the
Optionee of pursuant to written notice to the Optionee), or to the Optionee's
Employer if it is a Group Company (as defined in book 2 of the Dutch Civil Code)
at such Employer's address; and, if to the Company, the notice shall be
addressed or delivered to the Corporate Secretary or a Managing Director, or if
to his/her Employer, the notice shall be addressed and delivered to its Chief
Financial Officer or the person holding the comparable position. The notice
shall state the number of Shares to be purchased, and shall be signed by the
Optionee, or the Optionee's heir, successor or permitted assign exercising this
Option. If the person exercising this Option is not the Optionee, he/she also
must submit appropriate proof of his/her right to exercise this Option.
TENDER OF PAYMENT. Any notice of exercise hereunder shall be accompanied by
payment by check, bank draft or money order payable to the Company of the full
purchase price of the Shares being purchased in the same currency as listed on
page one of this Agreement; provided, however, that the Committee, in its sole
discretion, may permit the Optionee to pay the Option Price in whole or in part
(i) with Shares owned by the Optionee; or (ii) by delivery on a form prescribed
by the Committee of an irrevocable direction to a securities broker approved by
the Committee to sell Shares and deliver all or a portion of the proceeds to the
Company in payment for the Shares acquired upon exercise; or (iii) by Shares
issuable upon exercise of the option; or (iv) in any combination of the
foregoing. Any Shares used to exercise options shall be valued by the Committee
at their fair market value on the date of the exercise of the Option.
OWNERSHIP OF SHARES. As soon as practicable after the Company receives a
properly executed notice and the purchase price provided for above, the
Optionee's ownership of Shares in the Company shall be effected by a deed to be
executed before a Dutch civil law notary and entry of the name of the Optionee
or other person acquiring those Shares in the Company's shareholders' register.
The Optionee agrees that none of the Shares so acquired shall be offered,
transferred or sold at any time to any person, including legal entities, that
are established, domiciled or resident in The Netherlands, except for
repurchases by the Company, or as otherwise permitted pursuant to the laws of
The Netherlands and all other applicable securities and share transfer laws. All
such Shares shall be fully paid.
7. CONTINUOUS SERVICE. This Option may be exercised only during Optionee's
continuous service as an employee or consultant of the Company or a Group
Company, provided that:
(a) The Optionee may exercise this Option during the 90-day period
following termination of continuous service as an employee or
consultant of, but only to the extent that it was exercisable
immediately prior to the date of termination of continuous
service as an employee or consultant (I.E. he/she shall not
progress on the Exercise Schedule).
3.
<PAGE>
(b) If the Optionee becomes totally and permanently disabled (as
determined by the Committee) during Optionee's continuous service
as an employee or consultant, he/she may exercise this Option
during the one year period following the date of his/her
termination of continuous service as an employee or consultant
but only to the extent that it was exercisable immediately prior
to the date of termination of continuous service as an employee
or consultant.
(c) If the Optionee dies during Optionee's continuous service as an
employee or consultant, the legal representative of his/her
estate, or other person or persons acquiring the right to
exercise the Option by bequest or inheritance, may exercise this
Option during the 90-day period following the date the Optionee
dies, and this Option may be exercised in full (notwithstanding
the Exercise Schedule). However, this option may be exercised
following termination of continuous service as an employee or
consultant only as to that number of shares as to which it was
exercisable on the date of termination of continuous service as
an employee or consultant under the provisions of Section 4 of
this Agreement.
Notwithstanding anything stated above to the contrary, this Option may not be
exercised after it has expired as provided in Section 5 of this Agreement.
8. LIMITATION ON TRANSFER. While the Optionee is alive, only the Optionee or
his/her guardian or other legal representative may exercise this Option. This
Option may not be assigned or transferred other than by will or the laws of
descent and distribution, and shall not be subject to pledge or other security
right. Any attempt to assign, transfer, pledge or otherwise dispose of this
Option contrary to the provisions hereof shall be without effect.
9. NO STOCKHOLDER RIGHTS BEFORE EXERCISE. No person shall have any of the rights
of a shareholder of the Company with respect to any Share subject to this Option
until exercise of this Option with respect to such Share.
10. DISCRETIONARY ADJUSTMENT. The Committee may in its sole discretion make
appropriate adjustments in the number of Shares subject to this Option and in
the Option Price per Share to give effect to any adjustments made in the number
of outstanding Shares through a merger, consolidation, recapitalization,
reclassification, combination, stock dividend, stock split or other relevant
change; provided that, fractional Shares shall be rounded to the nearest whole
Share.
11. TAX WITHHOLDING. No Shares shall be issued under the Plan to the Optionee
until the Optionee has made arrangements acceptable to the Committee for the
satisfaction of U.S. federal, state, local and foreign income and social
security tax withholding obligations, including without limitation, obligations
incident to the receipt of Shares under the Plan or the receipt of any cash
payments by the Optionee. Upon exercise of the Option, the Company, at its
option, may withhold from the Optionee or require the Optionee to surrender
Shares sufficient to satisfy U.K., local and foreign income, withholding and
other tax obligations. Any adverse consequences incurred by the Optionee with
respect to the use of Shares to pay any part of the Option Price or of any tax
in connection with the exercise of the Option shall be the sole responsibility
of the Optionee.
4.
<PAGE>
12. ASSIGNABILITY. This option shall, during Optionee's lifetime, be exercisable
only by him, and neither the Option nor any right hereunder shall be
transferable by Optionee except as permitted under Section 8 of this Agreement.
13. INTERPRETATION OF THIS AGREEMENT. All decisions and interpretations made by
the Company or the Committee with regard to any question arising hereunder or
under the Plan shall be binding and conclusive upon the Company and the
Optionee. If there is any inconsistency between the provisions of the Agreement
and the Plan, the provisions of the Plan shall govern.
14. DISCONTINUATION OF EMPLOYMENT. This Agreement shall not give the Optionee a
right to continued employment with the Company or a Group Company, and the
Company or Group Company employing the Optionee may terminate his/her employment
and otherwise deal with the Optionee without regard to the effect it may have
upon his/her under this Agreement.
15. OBLIGATION TO RESERVE SUFFICIENT SHARES. The Company shall at all times
during the term of this Option reserve and keep available a sufficient number of
Shares to satisfy the Company's obligations upon exercise of the Option in
accordance with the terms of this Agreement.
16. BINDING EFFECT. This Agreement shall be binding in all respects on the
heirs, representatives, successors and assigns of the Optionee.
17. CHOICE OF LAW. The Agreement is entered into under the laws of The
Netherlands and shall be construed and interpreted thereunder (without regard to
its conflicts of laws principles).
18. CAPITAL DUTY. The Company and/or the Group Company for whom the Employee is
employed shall be responsible for the payment of the capital duty due under
Netherlands law upon exercise of the Option and payment of the purchase price
for the Shares subject thereto.
19. ACKNOWLEDGEMENT. The Optionee acknowledges receipt of a copy of the Plan,
and represents that he or she is familiar with the terms and provisions thereof,
and hereby accepts this Option subject to all of the terms and provisions
thereof. The Optionee hereby agrees to accept as binding, conclusive and final
all decisions or interpretations of the Committee upon any questions arising
under the Plan.
IN WITNESS WHEREOF, the Optionee and the Company have executed this Agreement as
of the _____ day of _______________, _____.
METRON TECHNOLOGY N.V. OPTIONEE
By:
----------------------------------- ------------------------------
Its:
---------------------------------- -------------------
5.
<PAGE>
CONSENT OF SPOUSE
I, ___________________________, spouse of the OPTIONEE who executed the
foregoing Agreement, hereby agree that my spouse's interest in the Shares
subject to said Agreement shall be irrevocably bound by the Agreement's terms. I
further agree that my community property or other marital property interest in
such shares, if any, shall similarly be bound by said Agreement and that such
consent is binding upon my executors, administrators, heirs and assigns. I agree
to execute and deliver such documents as may be necessary to carry out the
intent of said Agreement and this consent.
Dated: _________________, 19____
-----------------------------------
6.
<PAGE>
Exhibit 10.7
AUFHEBUNGS-UND RUHESTANDSVERTRAG
zwischen
1. DER METRON TECHNOLOGY (DEUTSCHLAND) GMBH,
SATURNSTRSSE 48, 85609 ASCHHEIM - als Dienstgeberin -
2. DER METRON TECHNOLOGY B.V.
KABELSTRAAT 19, 1322 AD ALMERE / NIEDERLANDE
- als Dienstgeberin -
beide vertrenten durch den Managing Director der Metron Technology
B.V., Edward Segal
und
HERRN UDO JAENSCH,
BURGMEIERSTRASSE 9a, 85521 OTTOBRUNN- als Dienstnehmer
PRAAMBEL
Die Parteien dieser Vereinbarung sind nach langeren Gesprachen uberein gekommen,
ihre Zusammenarbeit einvernehmlich zu beenden. Herr Jaensch war Geschaftsfuhrer
der Metron Technology (Deutschland) GmbH bis zum 04.03.1998. Er ist zum
Zeitpunkt dieser Vereinbarung noch Member of the Managing Board und Managing
Director Klasse B der Metron Technology B.V., Geschaftsfuhrer der Metron
Technology EDA GmbH und hat einen Anstellungsvertrag mit der Metron Technology
(Deutschland) GmbH. Um die gemeinsame Zielsetzung der einvernehmlichen Losung
aller Vertragsverhaltnisse zu bewirken, vereinbaren die Parteien folgendes:
1. Die Parteien sind sich daruber einig, daSS samtliche zwischen ihnen
bestehende Anstellungsveraltnisse, insbesondere der Anstellungsvertrag
von Herrn Jaensch als Geschaftsfuhrer, der am 13.07.1979 von
Rechtsanwalt und Notar Andreas RoSSbach in Frankfurt/Main
attestiert worden ist, in der Fassung der Zusatzvereinbarung Nr. 1, die
am 05.07.1982 von Rechtsanwalt und Notar Johann Andreas RoSSbach in
Frankfurt/Main attestiert wurde, sowie der Zusatzvereinbarung Nr.2, am
15.02.1999 endet.
2. Herr Jaensch verpflichtet sich, sein Amt als Member of the Managing
Board und Managing Director Klasse B der Metron Technology B.V. sowie
sein Geschaftsfuhreramt bei der Metron Technology EDA GmbH mit Wirkung
zum 15.02.1999 niederzulegen. Der Entwurf eines entsprechenden
Schreibens ist dieser Vereinbarung als ANLAGE 1 beigefugt und von Herrn
Jaensch im Original zeitgleich mit Unterzeichnumg dieser
1.
<PAGE>
Vereinbarung zu unterschreiben. Die Gesellschafter verpflichten
sich, die Niederlegung zu akzeptieren und Herrn Jaensch zu entlasten.
3. Die Metron Technology (Deutschland) GmbH verpflichtet sich, Herrn
Jaensch im Zeitraum vom 16.02.1999 bis zur Vollendung des 63.
Lebensjahres von Herrn Jaensch am 02.04.2005 Vorruhestandsgeldzahlungen
in Hohe von DM 270.000,00 brutto jahrlich zu leisten. Die Auszahlung
des Betrages erfolgt in zwolf gleichen Monatsraten, zahlbar jeweils zum
Monatsende.
Die Zahlung ist zum Ablauf eines jeden Jahres anhand des Preisindex der
Gesamtlebenshaltung aller privaten Haushalte im fruheren Bundesgebiet
dadurch anzupassen, daSS er sich um die Steigerung des Vorjahres
auf das jeweils abgelaufene Jahr erhoht oder erniedrigt. Die Parteien
werden etwa erforderliche Genehmigungen dieser Wertsicherungsklausel
einholen.
4. Die Metron Technology B.V. tritt dieser Vorruhestandsgeldzusage fur den
Fall bei, daSS die Metron Technology (Deutschland) GmbH ihre
Leistungen nicht oder nicht vollstandig erfullt.
5. Im Hinglick auf die Herrn Jaensch zugesagte (unverfallbare)
betriebliche Alterversorgung verienbaren die Parteien, daSS die
Leistungen aus der Pensionszusage vom 01.09.1980 mit vollendetem 63.
Lebensjahr, d.h., am 02.04.2005 beginnen.
In Abanderung der Ziff. 2 der Pensionszusage vom 01.09.1980 und
Nachtrag vom 27.05.1988 gilt als pensionsfahige Dienstzeit die Zeit
vom 01.02.1979 bis zur Vollendung des 63. Lebensjahres am 02.04.2005.
Als ruhegeldfahiges Einkommen im Sinne der Ziff. 5 der Pensionszusage
vom 01.09.1980 gilt das Jahresgrundgehalt des Jahres 1998/99 in Hohe
von DM 423.240,00 brutto. Soweit sich nach Anwendung der Indexklausel
Ziff. 3, 2. Absatz oben ein anderer Betrag ergibt, gilt dieser
angepaSSte Betrag als ruhegeldfahiges Einkommen. Im ubrigen
verbleibt es bei den Regelungen der Pensionszusage vom 01.09.1980
nebst Nachtrag vom 27.05.1988.
Ebenso verbleibt es bei der Firmendirektversicherung der Alllianz
Lebensversicherungs AG, Versicherungsschein-Nr. 111 989886, die von der
Metron Technology (Deutschland) GmbH durch Fortzahlung der
Versicherungsbetrage bis zum regularen Ablaufzeitpunkt weitergefuhrt
wird.
Zwischen der Metron Technology (Deutschland) GmbH und Herrn Jaensch
besteht Einigkeit, daSS die zugunsten der Sicherung der
Altersversorgung von Herrn Jaensch abgeschlossenen
Ruckdeckungsversicherungen bei der Allianz Versicherungs AG
Versicherungsvertrage-Nr. 220282256, 220282306, 224506122 und
229475950, bei der Metron Technology (Deutschland) GmbH verbleiben und
von dieser zur Absicherung der Alterssicherung genutzt werden,
Section 11 des Anstellungsvertrages zwischen der Metron Technology
(Deutschland) GmbH und Herrn Jaensch gemaSS Ziff. 6.3 des
Anderungsvertrages wird insoweit geandert.
2.
<PAGE>
Die Metron Technology (Deutschland) GmbH verpfandet jedoch die
Anspruche aus den vorbezeichneten Versicherungsvertragen gemaSS
beiliegender Vereinbarung Anlage 2 zur Sicherheit an Herrn Jaensch.
6. Die Metron Technology (Deutschland) GmbH verpflichtet sich, Herrn
Jaensch das von diesem genutzte Dienstfahrzeug, Daimler Benz E320 T,
Baujahr 1998, amtl. Kennzeichen M - T 3181, nach Herbeifuhrung der
Beendigung des laufenden Leasingvertrages am 30.06.2001 zu ubereignen.
Soweit und solange die Ubereignung noch nicht stattgefunden hat, bleibt
Herr Jaensch zur freien Nutzung des Dienstfahrzeuges berechtigt, die
Metron Technology (Deutschland) GmbH ubernimmt wahrend dieser Zeit die
Kosten der Nutzung im bisherigen Umfang. Herr Jaensch erklart bereits
jetzt seine Annahme der Ubereignung.
7. Herr Jaensch erhalt von der Gesellschaft den Kommanditanteil an der
Golfpark Anlage Aschheim Investitions GmbH & Co. Betriebs KG,
Fasanenallee, 85609 Aschheim, Eintritt 31.10.1989, DM 15.000,000
(Einlage DM 10.000,00 und Agio DM 5.000,00), ubereignet. Herr Jaensch
nimmt diese Ubereignung hiermit an.
8. Herr Jaensch erhalt von der Metron Technology (Deutschland) GmbH den
von ihm genutzten Laptop, Marke IBM Thinkpad, ubereignet. Er nimmt die
Ubereignung hiermit an. Herr Jaensch ist im Gegenzug einverstanden,
daSS ein Vertreter der Metron Technology (Deutschland) GmbH vor der
Ubereignung eine vollstandige Loschung samtlicher die Metron Technology
(Deutschland) GmbH bzw. die Metron Technology B.V. betreffenden Daten
und Informationen vornimmt. Herr Jaensch versichert, diese Daten nicht
kopiert zu haben.
9. Die Parteien sind sich daruber einig, dass Herrn Jaensch etwaig
noch zustehender Urlaub bereits tatsachlich in Anspruch genommen wurde.
10. Herr Jaensch unterliegt keiner Anrechnung anderweitigen Verdienstes und
keinem nachvertraglichen Wettbewerbsverbot. Er wird jedoch samtliche
ihm wahrend seiner Tatigkeit bekannt gewordenen betriebsinternen
Angelegenheiten, vor allem Geschafts- und Betriebsgeheimnisse,
geheimhalten und zu verwerten unterlassen. Beide Seiten verpflichten
sich, negative Ausserungen uber die jeweilig andere Seite zu
unterlassen.
Die Parteien sind sich weiter daruber einig, daSS im Falle der
Inanspruchnahme der Metron Technology (Deutschland) GmbH bzw. der
Metron Technology B.V. durch die Bundesanstalt fur Arbeit im Falle der
Beantragung von Arbeitslosenleistungen durch Herrn Jaensch eine
Reduzierung der monatlichen Vorruhestandsgeldzahlungen gem. Ziff. 3,
1. Abs dieser Vereinbarung um denjenigen Betrag erfolgt, der als
Erstattung vom Arbeitslosengeld der Bundesanstalt fur Arbeit zu
leisten ist.
11. Die Parteien sichern sich gegenseitig zu, Stillschweigen hinsichtlich
des finanziellen Inhalts dieser Vereinbarung gegenuber jedermann zu
wahren, es sei denn, es besteht eine gesetzliche Auskunftsverpflichtung
oder die Auskunft ist aus steuerlichen oder
sozialversicherungsrechtlichen Grunden gegenuber Behorden oder zur
Wahrung von Rechtsanspruchen gegenuber Gerichten erforderlich. Von der
3.
<PAGE>
Geheimhaltungsverpflichtung ebenfalls unberuhrt bleiben Auskunfte und
Informationen der Berater der Gesellschaft und deren Gesellschaftern.
12. Die Versteuerung samtlicher in dieser Vereinbarung enthaltener
Leistungen der Metron Technology (Deutschland) GmbH, gleich ob
(laufende) Zahlungen oder (einmaliger) Sachbezug, obliegt allein Herrn
Jaensch. Hiervon unberuhrt bleibt die Verpflichtung der Metron
Technology (Deutschland) GmbH zur Durchfuhrung des
Lohnsteuerabzugsverfahrens.
Sollten Leistungen nach dieser Vereinbarung der
Sozialversicherungspflicht unterliegen - wovon die Parteien nicht
ausgehen - , erfolgt die Abfuhrung des Arbeitgeber - sowie des
Arbeitnehmerbeitrages an die Einzugsstelle durch die Metron Technology
(Deutschland) GmbH. Besteht beim Abschlu(beta) dieser Vereinbarung oder
zu einem spateren Zeitpunkt wahrend deren Laufzeit Versicherungspflicht
in der gesetzlichen Rentenversicherung, ist die Metron Technology
(Deutschland) GmbH berechtigt, den auf sie entfallenden (Arbeitgeber -)
Betrag von den laufenden Zahlungen gem. Ziff. 3, 1.Abs. dieser
Vereinbarung in Abzug zu bringen.
Ungeachtet vorstehender Regelung verpflichtet sich Metron Technology
(Deutschland) GmbH, bis zum Zeitpunkt des Auslaufes der Zahlungen gem.
Ziff. 3, 1. Abs. dieser Vereinbarung Herrn Jaensch einen Zuschu(beta)
zum Beitrag fur dessen private Kranken- und Pflegeversicherung in
entsprechender Anwendung von Section 257 II SGB V (z.Zt. DM 474,94
monatlich) zu zahlen.
13. Metron Technology (Deutschland) GmbH verpflichtet sich, Herrn Jaensch
ein wohlwollend formuliertes, qualifiziertes Arbeitszeugnis zum
Zeitpunkt seines Ausscheidens auszustellen und zuzusenden.
14. Metron Technology (Deutschland) GmbH wird eine etwaige Bewerbung von
Herrn Jaensch bei der Industrieorganisation SEMI nach Moglichkeit
unterstutzen und fordern. Metron Technology (Deutschland) GmbH weist
allerdings darauf hin, insoweit nur uber beschrankte
EinfluSSmoglichkeiten zu verfugen und daher keine Zusicherungen
ubernehmen zu konnen.
15. Die Parteien sind sich einig, daSS mit Erfullung der vorstehenden
Verpflichtungen samtliche gegenseitigen Anspruche aus dem
Anstellungsverhaltnis zwischen ihnen und aus AnlaSS ihrer
Beendigung erfullt und erledigt sind.
16. Sollte eine Bestimmung dieser Vereinbarung unwirksam sein, wird die
Wirksamkeit der ubrigen Bestimmungen hiervon nicht beruhrt. Die
Parteien verpflichten sich, an Stelle einer unwirksamen Bestimmung eine
dieser Bestimmung moglichst nahe kommende wirksame Regelung zu treffen.
17. Diese Vereinbarung unterliegt allein dem Recht der Bundesrepublik
Deutschland. Alleiniger Gerichtsstand im Falle sich ergebender
Streitigkeiten ist Munchen.
4.
<PAGE>
MUNCHEN, DEN 12. FEBR. 1999
\s\ Edward Segal
------------------------------------------------
METRON TECHNOLOGY B.V./METRON TECHNOLOGY (DEUTSCHLAND) GMBH
\s\ Udo Jaensch
------------------------------------------------
UDO JAENSCH
5.
<PAGE>
CANCELLATION AND EARLY RETIREMENT AGREEMENT
(UNOFFICIAL TRANSLATION)
THE PARTIES TO THIS CANCELLATION AND EARLY RETIREMENT AGREEMENT (the
"Agreement") after lengthy discussions have agreed to terminate their working
relationship on mutually acceptable terms. Udo Jaensch was Geschaftsfuhrer
[Managing Director] of MTD until March 4, 1998. At the time of this Agreement he
remains a member of the Managing Board and a Managing Director B of MTBV,
Managing Director of MT EDA GmbH and has an employment contract with MTD. In
order to achieve the agreed goal of releasing all contractual relationships
between them, the parties agree as follows:
1. The parties agree that all existing employment relationships between them, in
particular the employment contract of Udo Jaensch as Geschaftsfuhrer which was
certified by attorney and notary Andreas Rossbach in Frankfurt/Main on July 13,
1979, was amended by Supplementary Agreement No. 1 which was certified by
attorney and notary Johann Andreas Rossbach in Frankfurt/Main on July 5, 1982
and was further modified by the [unsigned by Metron, undated] Supplementary
Agreement No. 2, will end on February 15, 1999.
2. Udo Jaensch undertakes to resign his office as member of the Managing Board
and Managing Director B of MTBV and his position as Geschaftsfuhrer of MT EDA
GmbH with effect from February 15, 1999. Attached hereto as Annex 1 are drafts
of the related documents, the originals of which are to be signed by Udo Jaensch
concurrently with the signing of this Agreement. The stockholder undertakes to
accept his resignation and to relieve Udo Jaensch of his liability.
3. From February 16, 1999 until his 63rd birthday on April 2, 2005, MTD
undertakes to pay Udo Jaensch early retirement payments in the gross amount of
DM 270,000 [~US'$152,000] per year. The payment of this amount will be made in
twelve equal installments, payable at the end of each month.
At the end of each year, the payment amount is to be adjusted by
reference to the price index for the total cost of living for all private
households in the former territory of West Germany and is to be increased or
decreased in accordance with the change of the then prior year. The parties
agree to take whatever actions may be required to adhere to the provisions of
this clause, which are intended to maintain the real value of the early
retirement payments.
4. MTBV undertakes to make these early retirement payments in the case where MTD
does not fulfill its obligations or does not fulfill them in their entirety.
5. With regard to the non-cancelable old age Company pension promised to Udo
Jaensch, the parties agree that the provisions of the pension supplement of
September 1, 1980 will begin on Udo Jaensch's 63rd birthday, i.e., on April 2,
2005.
In contra-distinction to paragraph 2 of the pension addendum of
September 1, 1980 and the supplement of May 27, 1988, the pension eligible
service period is deemed to run from February l, 1979 until Udo Jaensch's 63rd
birthday on April 2, 2005. Udo Jaensch's pension eligible income within the
meaning of paragraph 5 of the pension addendum of September 1, 1980 is the DM
423,240 (~US$238,000) gross base salary payable for [Metron's] fiscal 1999 year.
Insofar as the sum payable [as early retirement] is amended by operation of the
second paragraph of Clause 3, a
1.
<PAGE>
similar adjustment is to be made to the pension eligible income
[in this clause]. Otherwise the terms of the pension addendum of September 1,
1980 and the supplement of May 27, 1988 remain in effect.
In addition, MTD remains the owner of Company policy No. 111 989886
issued by Allianz Life Insurance AG which will remain in force until its regular
termination date through the further payment by MTD of the premiums due. MTD
remains the owner of Allianz Insurance AG's insurance policies nos. 220282256,
220282306, 224506122 and 229475950 and MTD and Udo Jaensch are agreed that to
secure the provision of an old age pension to Udo Jaensch, these policies will
be used to support the provisions of a pension to Udo Jaensch and that Clause 11
of the employment contract between MTD and Udo Jaensch and also paragraph 3 of
Clause 6 of the addendum will be correspondingly adjusted.
For the assurance of Udo Jaensch, MTD further pledges its rights and
claims under the above-referenced insurance policies in accordance with the
agreement attached hereto as Annex 2.
6. At the end of the current leasing contract on June 30, 2001, MTD undertakes
to assign to Udo Jaensch the 1998 Daimler Benz E320T motor vehicle, registration
number M-T3181. For as long as the assignment has not taken place, Udo Jaensch
is free to use the vehicle and MTD undertakes to pay the costs of such use in
the same manner as previously. Udo Jaensch stipulates now that he will accept
the assignment of the motor vehicle [when the time comes].
7. MTD will transfer to Udo Jaensch [at no cost] that certain share in the
Aschheim Investment Golf Club [Golfpark Anlage Aschheim Investitions GmbH & Co.
Betriebs KG, Fasanenallee, 85609 Aschheim], issued October 31, 1989 for DM
15,000 (DM10,000 paid in capital and DM 5,000 premium). Udo Jaensch hereby
accepts such transfer. [MTD book value of this asset is ~US$2,000.]
8. MTD will transfer to Udo Jaensch the IBM Thinkpad owned by MTD and used by
Udo Jaensch. Udo Jaensch hereby accepts such transfer. In consideration for this
transfer, Udo Jaensch agrees that prior to the transfer, an employee of MTD will
completely erase all data and information relating to MTD or to MTBV. Udo
Jaensch warrants that he has not copied this data.
9. The parties are agreed that Udo Jaensch will be deemed to have taken any or
all accrued but unused vacation to which he might otherwise be entitled.
10. Udo Jaensch is not subject to any restrictions on future employment or on
post-employment business activities. Nevertheless, Udo Jaensch undertakes to
hold in confidence and not to misuse all trade information to which he has had
access during his employment, and in particular company and trade secrets. Both
sides undertake not to make negative statements about the other. The parties are
further agreed that, in the case where Udo Jaensch becomes eligible for
unemployment benefits which are charged to the account of MTD and/or MTBV (as
the case may be) such benefits will reduce the mandatory early retirement
payment due under Clause 3, paragraph 1. From this understanding it follows that
the relevant sum is deemed to be in lieu of federal unemployment benefits [if
any].
11. The parties mutually undertake to keep in confidence the financial terms of
this Agreement and not to disclose them to any third party save only as a result
of a future legal obligation or in connection with official actions by the tax
or social insurance authorities or to prove legal claims in a court proceeding.
This undertaking does not apply to the advisers of the company or its
shareholder.
2.
<PAGE>
12. The tax liabilities arising out of any and all payments or assignments or
transfers made by MTD, whether lump sum or periodic, made by MTD pursuant to
this Agreement, are the sole responsibility of Udo Jaensch. MTD remains liable
for the required withholding on payments subject thereto. In the event that any
payments pursuant to this Agreement are subject to social insurance tax - which
the parties do not believe to be the case - MTD will be liable to withhold and
pay both the employer's and the employee's share. In the event that, at the
inception of this Agreement or later during its term, MTD is obliged to pay the
employer's share of any social insurance tax, MTD is entitled to deduct any such
payments from the periodic payments due under the first paragraph of Clause 3.
Independently from the provisions of the previous paragraph, MTD
undertakes to pay as a supplement to the payments due under the terms of the
first paragraph of Clause 3 the amount of Udo Jaensch's private health care
insurance within the meaning of Section 259 11 SGBV, currently DM 474.94
(~US$267) per month.
13. MTD undertakes to prepare and send to Udo Jaensch at the time of the
termination of his employment a good faith employment affidavit.
14. MTD will support and further any work solicitation which Udo Jaensch makes
to the industry organization SEMI. MTD draws particular attention to the fact
that insofar as it has only a limited influence in this direction, it cannot
offer any assurances in this regard.
15. The parties are agreed that with the completion of the foregoing
undertakings all mutual claims arising out of the employment relationship and
out of the consequences of its termination are fulfilled and are complete.
16. Should any provision of this Agreement be unworkable, the effectiveness of
the remaining conditions will remain undisturbed. The parties undertake to
replace any unworkable provision with a provision which is as near as possible
to the one which is unworkable.
17. This Agreement is subject exclusively, to the law of the Bundesrepublik
Deutschland. The sole forum for resolution of disputes is Munich.
Signed in Munich, this 12th day of February, 1999
BY: \s\ EDWARD SEGAL
METRON TECHNOLOGY B.V./METRON TECHNOLOGY (DEUTSCHLAND) GMBH
BY: \s\ UDO JAENSCH
UDO JAENSCH
3.
<PAGE>
Exhibit 10.11
FSI/METRON DISTRIBUTION AGREEMENT
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
ARTICLE 1 GENERAL CONDITIONS...............................................................................1
1.1 Appointment and Acceptance......................................................................1
1.2 Distributor Not Agent...........................................................................1
1.3 Product Registration............................................................................1
1.4 Term............................................................................................2
1.5 Customer Sales..................................................................................2
ARTICLE 2 RESPONSIBILITIES AND OBLIGATIONS OF DISTRIBUTOR..................................................2
2.1 Best Efforts....................................................................................2
2.2 Terms of Sale...................................................................................2
2.3 Spare Parts Inventory...........................................................................2
2.4 No Sub-Distribution.............................................................................3
2.5 Distribution Functions..........................................................................3
2.6 Globalization...................................................................................3
2.7 Applications/Process Support....................................................................3
2.8 Sales and Marketing Personnel...................................................................3
2.9 Service Personnel...............................................................................4
2.10 Consideration...................................................................................4
2.11 Business Plan...................................................................................4
2.12 Periodic Performance Reviews....................................................................5
2.13 Financial Data..................................................................................5
2.14 Books and Records...............................................................................5
2.15 Export Sales....................................................................................5
2.16 Competition.....................................................................................6
2.17 Indemnification.................................................................................6
2.18 Limitation of Product Warranty: Warranty........................................................6
2.19 Insurance.......................................................................................6
2.20 Escalation Policy...............................................................................6
2.21 Installation Obligations........................................................................7
2.22 New Product Introduction Installation Obligations...............................................7
2.23 Metrics.........................................................................................7
</TABLE>
i.
<PAGE>
TABLE OF CONTENTS
(CONTINUED)
<TABLE>
<CAPTION>
PAGE
<S> <C>
ARTICLE 3 OBLIGATION TO MAINTAIN INTEGRITY OF COMPANY TRADEMARKS, SERVICE
MARKS AND BRAND NAMES................................................................................7
3.1 Ownership of Trademarks, Patents, and Copyrights................................................7
3.2 Prominence of Trademarks........................................................................8
3.3 Compliance with Laws............................................................................8
3.4 Notification of Violations......................................................................8
3.5 Notification of Violations......................................................................8
3.6 Assistance in the Protection of the Trademarks, Patents, and Copyrights.........................8
3.7 Limitation on Distributor Rights................................................................8
3.8 License Agreements..............................................................................9
ARTICLE 4 RESPONSIBILITIES AND OBLIGATIONS OF COMPANY...................................................9
4.1 Consideration of Orders.........................................................................9
4.2 Sale by Company.................................................................................9
4.3 Shipment of Products...........................................................................10
4.4 Approval of Business Plan......................................................................10
4.5 Technical and Sales Assistance.................................................................10
4.6 Stock Obsolescence.............................................................................11
4.7 New Product Introduction.......................................................................11
4.8 Newly Acquired Products........................................................................11
4.9 New Product Installation.......................................................................11
4.10 Product Performance............................................................................11
ARTICLE 5 TERMS AND TERMINATION........................................................................11
5.1 Termination; Renewal...........................................................................12
5.2 Orders.........................................................................................12
5.3 Default: Failure to Cure.......................................................................13
5.4 Default: Insolvency............................................................................13
5.5 Waiver: Repurchase of Inventory................................................................13
5.6 Terms Applying after Termination...............................................................13
ARTICLE 6 MISCELLANEOUS................................................................................13
6.1 Confidential Data and Information..............................................................13
6.2 Financial Condition............................................................................14
6.3 Affiliates of Company..........................................................................14
</TABLE>
ii.
<PAGE>
TABLE OF CONTENTS
(CONTINUED)
<TABLE>
<CAPTION>
PAGE
<S> <C>
6.4 Maintenance of Records.........................................................................14
6.5 Irreparable Harm...............................................................................14
6.6 Compliance with Governmental Regulations.......................................................14
6.7 Force Majeure..................................................................................14
6.8 Non-Assignability..............................................................................15
6.9 Notice.........................................................................................15
6.10 Construction of Agreement......................................................................15
6.11 Compliance with Laws and Regulations...........................................................15
6.12 Execution......................................................................................16
6.13 Alternative Dispute Resolution.................................................................16
6.14 Governing Law..................................................................................17
6.15 Waiver of Breach...............................................................................17
6.16 Benefit........................................................................................17
6.17 No Other Agreements............................................................................17
6.18 Amendments.....................................................................................17
6.19 Severability...................................................................................17
6.20 Solicitation of Employees......................................................................17
6.21 Competing Principal............................................................................17
6.22 Resale of Equipment............................................................................17
6.23 Signatures.....................................................................................17
</TABLE>
iii.
<PAGE>
FSI/METRON DISTRIBUTION AGREEMENT
THIS AGREEMENT is made and entered into this 31st day of March, 1998,
by and between FSI INTERNATIONAL, INC., organized and existing under the laws of
the State of Minnesota, United States of America ("Company"), and METRON
TECHNOLOGY B.V., organized and existing under the laws of The Netherlands,
("Distributor").
WHEREAS, Company designs, manufactures and sells products for use in
the microelectronics industry and wishes to expand its market for the Products
(defined below) in the geographic territory (defined below) set forth herein;
WHEREAS, Distributor distributes and sells products in the
microelectronics industry and desires to serve as Company's distributor of the
Products upon the terms and conditions set forth herein; and
WHEREAS, Distributor and Company have over the past several months
negotiated and developed a formal outline describing their respective roles and
responsibilities, which is attached as Exhibit D.
WHEREAS, the Company and Distributor desire to enter into a new
Distribution Agreement to reflect the terms and provisions of Exhibit D.
NOW, THEREFORE, Company and Distributor hereby agree as follows:
1. GENERAL CONDITIONS
1.1 APPOINTMENT AND ACCEPTANCE. Subject to terms and conditions
contained in this Agreement, Company hereby hires and appoints, and
Distributor hereby undertakes and accepts, an appointment as the Distributor
of those Company products described in Exhibit A, Part I and spare parts
related thereto (described below) ("Spare Parts") (collectively "Products")
for the geographic territory described or defined in Exhibit B, Part I
("Territory") for the period commencing on the date set forth above (the
"Effective Date") for the term set forth in Section 1.4 hereof. Distributor
agrees to sell Products to all customers within the Territory ("Customers"),
except for those customers Products or geographic areas specifically excluded
in Exhibit B, Part II.
1.2 DISTRIBUTOR NOT AGENT. Distributor is not an agent, servant,
employee, co-partner, or joint venture of or for Company for any purpose
whatsoever. Distributor shall not have any right or authority to assume or
create any obligation or responsibility, expressed or implied, on behalf of
or in the name of Company, or to bind Company in any manner or way
whatsoever. Distributor shall perform its duties and obligations under this
Agreement as an independent contractor.
1.3 PRODUCT REGISTRATION. If required by local law, registration of
Products shall be in the name of the Company whenever possible. Within thirty
(30) days of the date of this Agreement, any registration documents required
under local law shall be provided to Company by Distributor. A copy of
registration documents are to be provided to the Company within ten (10) days
of receiving registration by Distributor if the registration is granted after
the effective
1.
<PAGE>
date of this Agreement. If this Agreement is terminated, then said
registrations belong solely to Company and Distributor shall execute any
assignments, modifications or changes necessary to immediately transfer such
registration(s) to Company.
1.4 TERM. This Agreement shall take effect as of the Effective Date
and shall continue until January 31, 2000 (the "Initial Term"), unless sooner
terminated as provided in Article 5.
1.5 CUSTOMER SALES. Distributor will follow its discount escalation
policy in its negotiations with its customers and will provide Company with a
current copy of same. Except to the extent expressly prohibited by applicable
law, Distributor shall not discount prices to global customers; (I.E., those
with multi-geographic locations or influence including existing or future
joint ventures) below Company's U.S. list (exclusive of any applicable
Company discounts to such customers) without Company's prior knowledge and
consent. Upon request, Distributor shall inform FSI of the discounts provided
to its customers and of complete sales proposals to potential customers.
Sales proposals to potential customers will be consistent with the divisional
or product format approved by the Company.
2. RESPONSIBILITIES AND OBLIGATIONS OF DISTRIBUTOR.
2.1 BEST EFFORTS. Distributor shall exercise its best efforts to
sell Products in the Territory to the reasonable satisfaction of Company, and
in connection therewith, Distributor shall carry out its responsibilities and
obligations set forth in this Article 2.
2.2 TERMS OF SALE. Distributor shall purchase Products in accordance
with Company's current prices, terms, and conditions of sale as established
by Company as of the date of sale and as set forth in Exhibit A, Parts I, II,
and III. No terms proposed by Distributor in a Purchase order or otherwise
that are different from or in addition to the terms of this Agreement shall
apply to any purchase hereunder unless expressly agreed to in writing by an
authorized representative of the Company. Company may, in its absolute
discretion, change the prices, terms and conditions of sale, other than
Distributor discounts or commissions, upon sixty (60) days prior written
notice to Distributor; PROVIDED, HOWEVER, that Company will hold prices on
firm quotes for products (but not Spare Parts) issued in writing by
Distributor to a Customer prior to the notice of the price increase where the
delivery date is within 180 days of the effective date of such price increase
so long as said Customer accepts that delivery date and issues an order
consistent with Product lead times. Notwithstanding anything contained in
this Section, prices are subject to change immediately and without notice for
correction of errors or Product structure changes. Distributor shall make
payment in full within sixty (60) days of shipment.
2.3 SPARE PARTS INVENTORY. Distributor shall maintain a level of
Spare Parts inventory necessary to enable Distributor to carry out its
distribution responsibilities and obligations under this Agreement. The level
of such inventory shall be as set forth in Distributor's Initial and Periodic
Business Plans as approved by Company as set forth in Section 2.11 below.
Upon reasonable advance notice, Distributor shall permit Company's
representatives to enter its premises during normal business hours and at
regular intervals to verify the inventory level of Products and to examine
parts from which a credit or warranty claim is or had been made.
2.
<PAGE>
Notwithstanding the provisions of Exhibit E, for two years following a
new product's introduction to which this Agreement, applies any spare parts
purchase during the first twelve months following the new product introduction
may be returned by Distributor within the two-year anniversary of the product's
introduction for a credit at Distributor's original cost. Any spare parts for
such new product obsoleted during this period will be covered by the Company's
general spare parts policy.
2.4 NO SUB-DISTRIBUTION. Distributor shall not appoint
sub-distributors in the Territory to carry out its responsibilities and
obligations under this Agreement.
2.5 DISTRIBUTION FUNCTIONS. Except for those Products, Territories,
or Customers listed in Exhibit B, Part II and notwithstanding any other
provisions contained herein, Distributor shall perform directly all ordering,
handling, stocking, selling, shipping, installation, and all warranty,
application, and engineering support necessary to distribute Products
effectively throughout the Territory, shall adequately maintain agreed upon
levels of Spare Parts inventory in good and marketable condition. Unless
otherwise agreed in writing by Company, Distributor will not distribute
directly or indirectly in the Territory any products, control systems or
systems which are similar to or competitive with the Products or their
applications; PROVIDED, HOWEVER, that Distributor may, with the written
permission of Company, manufacture items integral to Company's equipment,
control systems, or systems. Exhibit C Part I sets forth Distributor's
general responsibilities with respect to Product sales and service hereunder,
which responsibilities may be revised from time to time to include new
products.
2.6 GLOBALIZATION. Although Distributor's sales responsibility is
limited to the Territory, Distributor and Company recognize that customers
within the Territory may have facilities or business relationships outside
the Territory. Distributor agrees to actively support the Company's
globalization efforts including sales to Distributor's customers outside of
the Territory. Distributor acknowledges that support of this globalization
effort is part of its obligations under this Agreement and that it will not
be entitled to any additional compensation for sales to its customers outside
of the Territory unless such sale has been identified as a "strategic
account" as part of the Company's globalization efforts and then only to the
extent such globalization plan provides for compensation.
2.7 APPLICATIONS/PROCESS SUPPORT. In addition to its
responsibilities above, Distributor shall provide applications/process
support in the Territory by:
Providing trained field applications personnel in Asia and Europe to
troubleshoot and define customer processes and supply reports and data to
Company with respect to such endeavors;
Participating and facilitating user conferences with Customers and
Company;
Providing ongoing support directly or in cooperation with Company to
Customers in the areas of applications development, system acceptance and
qualification, troubleshooting, data collection and process refinement.
2.8 SALES AND MARKETING PERSONNEL. Distributor shall engage and
maintain, at its sole expense, fully qualified and technically knowledgeable
sales and marketing personnel to
3.
<PAGE>
promote the sale and service of Products in the Territory as set forth in
Distributor's Business Plan. Distributor's sales and marketing personnel
shall actually participate with Company in developing product and marketing
plans, in user groups and in Company programs relating to the marketing, sale
and promotion of the Products. Distributor shall also participate in trade
shows and exhibitions to promote the sale of Products in the Territory.
Distributor shall organize, at its expense, Product training seminars as may
be reasonably necessary to promote effectively the sale of Products in the
Territory. Distributor's use of non-qualified personnel to sell, market or
represent the Company in any way is prohibited.
2.9 SERVICE PERSONNEL. Distributor's Service Personnel must have
relevant technical background or experience. They must also meet any minimum
standards set by FSI prior to training for certification on FSI's Products.
The Distributor also will train its Service Personnel and supply them with
the proper tools and Distributor shall only permit level 3 certified service
personnel to service and maintain Products. Distributor also agrees to supply
its Service Personnel with and train them regarding safety equipment.
Distributor also agrees to maintain adequate service levels and to provide
retraining and recertification of its personnel and the Company will provide
assistance in establishing such levels. The Company may provide Distributor
with guidelines as to the qualifications, certifications, and abilities of
Distributor's service personnel. In the event that Company is required to
provide installation support to Distributor due to the non-certification of
Distributor's personnel, Distributor shall reimburse Company at Company's
then current hourly labor rate for each hour of service (plus travel
expenses) for such services.
2.10 CONSIDERATION. The grant of distribution rights is the sole
consideration provided by Company to Distributor for activities undertaken by
Distributor pursuant to this Agreement. Distributor is not entitled to any
compensation from Company for such activities, unless Company so agrees in
writing. All travel and selling expenses associated with sale and service of
Products shall be the sole responsibility of Distributor.
2.11 BUSINESS PLAN. Within ninety (90) days of the execution of this
Agreement, Distributor shall submit to Company an initial business plan (the
"Initial Business Plan") for its review and comment per Section 4.4. After
submission of the Initial Business Plan, Distributor shall update and submit
periodically (but no less than annually) to Company a written business plan
(the "Business Plan"), which shall set forth information including, but not
limited to, the number and addresses of locations within the Territory where
Distributor intends to maintain inventory, a projected level of annual sales
of Products which Distributor intends to achieve within the Territory and
Distributor's marketing strategies for the Product. Such sales projections
shall set forth estimated US dollar sales and volume of each Product by
Territory. After receipt of the Initial Business Plan, Company shall provide
to Distributor the form and content of such Business Plan at least ninety
(90) days prior to the start of Company's next fiscal year:
In addition, if requested to do so by Company, Distributor shall
provide or cause to be provided:
2.11.1 Distributor's current price lists for the sale of
Products to its customers in the Territory.
4.
<PAGE>
2.11.2 Distributor's merchandising plans and programs developed
and utilized with copies of any promotional written materials that contain
the Company name or logo.
2.11.3 Distributor's actual and planned sales volumes, itemized
by Product and customer.
2.11.4 Any other information reasonably related to the selling
and marketing of Products in the Territory.
2.11.5 Such information as the Company may reasonably request to
satisfy itself that Distributor is addressing internal hardware and software
systems issue related to Year 2000 compliance to insure there is no
interruption of its business.
2.12 PERIODIC PERFORMANCE REVIEWS. During the term of this
Agreement, Distributor shall provide Company with performance reviews at a
mutually agreed upon frequency (E.G. quarterly, four month intervals). Such
written performance reviews shall include, but not be limited to, the
identification of Products sold by the quantities and the selling prices or
costs thereof, the names and locations of customers to whom such Products
were sold in the Territory, the current and near term goals of Distributor,
quarterly metric reports, warranty claims, pricing, leads, customer surveys,
Product performance, cycletime/problem resolution, installations,
post-installation status reports, and any other information that Company may
from time to time reasonably deem appropriate.
2.13 FINANCIAL DATA. Distributor shall promptly provide quarterly
financial information reflecting Distributor's current financial condition
and operating results to Company's Chief Financial Officer. Company shall
keep such information confidential.
2.14 BOOKS AND RECORDS. Distributor shall keep accurate records and
accounts of all transactions covered by this Agreement, such as sales by
account, purchase orders, correspondence, Product sales, and tracking of
samples, and shall permit examination by Company or its representatives, at
any time during normal business hours, of such accounts and transactions with
customers. Company's right to examine such accounts and transactions shall
cease one year after the termination of this Agreement. Any requests for
review made after termination will be limited to a specific issue which
Company is investigating. Distributor shall keep, by Product and customer
location, records of all systems installed including records relating to
meantime between failure, service records, revision levels installed,
maintenance records, spare parts records, warranty service, installation
drawing, hookups, and acceptance criteria and shall provide copies of same to
Company upon its request. In addition, Distributor shall keep records
regarding the training and qualification of its Service Personnel, and
related items.
2.15 EXPORT SALES. Without Company's written consent, Distributor
shall not sell Products to customers within the Territory if Distributor
knows or reasonably could determine that such Products are intended for sale
or use outside the Territory. If Distributor acquires knowledge of the
opportunity for such sale, Distributor shall inform Company of such
opportunity, including the identity of the prospective customer, and provide
support consistent with Company's globalization strategy.
5.
<PAGE>
2.16 COMPETITION. Distributor shall promptly report unfair
competitive acts by others and shall take such steps as are reasonably
necessary to protect the Company's goodwill and reputation throughout the
Territory; PROVIDED, HOWEVER, that Distributor shall not have any authority
to bring or defend any legal action in the name of the Company or its
affiliates without the Company's prior written consent. In addition, if the
offerings of FSI products include OEM modules (I.E., an MHS System) Metron
shall not purchase such modules other than through FSI without FSI's express
written consent.
2.17 INDEMNIFICATION. Distributor shall indemnify, defend, and hold
harmless the Company and its officers, directors, agents, employees,
shareholders, legal representatives, successors and assigns, and each of
them, from loss, liability, costs, damages, or expenses from any and all
claims, actions and suits, whether groundless or otherwise, and from and
against any and all liabilities, judgments, losses, damages, costs, charges,
attorney's fees, and other expenses of every nature and character by reason
of Distributor's actions, inactions, performance, or business hereunder or
that of its agents, employees, subcontractors or others acting on its behalf.
Distributor further agrees that the provisions contained in this section
shall survive the termination or expiration of this Agreement and shall be
liberally construed in favor of Company.
2.18 LIMITATION OF PRODUCT WARRANTY: WARRANTY. COMPANY MAKES NO
REPRESENTATIONS OR WARRANTIES, EXPRESSED OR IMPLIED (INCLUDING THE IMPLIED
WARRANTIES OF MERCHANTABILITY AND FITNESS FOR PARTICULAR PURPOSE) EXCEPT
THOSE SET FORTH IN COMPANY'S THEN CURRENT PUBLISHED WARRANTY POLICIES AND
PROCEDURES APPLICABLE TO A PARTICULAR PRODUCT. Distributor hereby accepts
Company's then current published warranty with respect to a Product and with
respect to applications of a Product and agrees that such warranty shall be
extended by the Distributor to Customers in the Territory. Distributor is
responsible for any modifications to Company's standard warranty agreed to by
Distributor and shall also provide written notice of any such modifications
to Company. Distributor also agrees to provide support for and to implement
Company's upgrade and corrective action programs. Company reserves the right
to change the terms and conditions of the referenced warranty at its sole
option upon 30 days written notice to Distributor and any and all such
changes in and to the referenced warranty shall become effective upon
expiration of the notice period. The parties hereto acknowledge and agree
that Company's liability with respect to any Product shall be limited solely
to Company's referenced warranty, as may be changed or modified from time to
time by Company, in its sole discretion.
2.19 INSURANCE. During the term of this Agreement and for a period
of two years thereafter, Distributor agrees to maintain polices of insurance
of the nature and amounts specified below:
- General commercial liability insurance of at least $2.0 Million.
- Property damage insurance of at least $2.0 Million.
- Other statutory insurance provisions required by the applicable laws of
the Territory.
2.20 ESCALATION POLICY. If Distributor is not meeting its
performance objectives, Company and Distributor will mutually develop and
document a performance improvement plan
6.
<PAGE>
which may include adjustments in the compensation arrangements provided for
in this Agreement. Further, the parties agree to follow mutually agreed upon
escalation policies to promote the proper and effective resolution of any
issues among them or with customers.
2.21 INSTALLATION OBLIGATIONS. Distributor is primarily responsible
for installation, commissioning, start up and acceptance, except as provided
in Section 4.9 with respect to the first two installations of a new product
in each of Asia and Europe. Generally, Distributor's installation/service
personnel are expected to be certified prior to the third installation of
each Product in Asia and in Europe. If certified personnel are not available,
the Company and Distributor agree that at the time of the acceptance of such
order a determination will be made whether Company will perform the
installation and reduce the discount to Distributor or if Company will bill
Distributor on an hourly basis for support and service provided by Company.
Distributor may use subcontractors to assist on an installation so long as
they are insured, bonded and certified to service that FSI Product.
Distributor accepts full responsibility and liability for such
subcontractors' work.
2.22 NEW PRODUCT INTRODUCTION INSTALLATION OBLIGATIONS. With respect
to a new product to which this Agreement applies, Distributor will:
- develop an internal plan to insure it can support the product;
- commit sales parts personnel to participate in product
introduction programs and develop strategic and tactical sales and
market plans;
- provide qualified sales and service personnel to be trained and/or
certified with respect to the product; and
- assist in the development and implementation of Company's marketing
and strategic plans
2.23 METRICS. Distributor and Company shall agree upon Distributor's
performance metrics during the term of this Agreement, which will include not
only the Business Plan and Quarterly Plans referred to above, but also (i)
price attainment and lead attainment goals and incentives; (ii) customer
satisfaction surveys (similar to Company's own survey); (iii) service and
installation metrics in a form acceptable to Company; (iv) tool performance;
and (v) cycle time problem resolution. Failure to achieve satisfactory
metrics will result in mutually agreed upon escalation policies which may
impact the compensation arrangements under this Agreement.
3. OBLIGATION TO MAINTAIN INTEGRITY OF COMPANY TRADEMARKS, SERVICE MARKS
AND BRAND NAMES
3.1 OWNERSHIP OF TRADEMARKS, PATENTS, AND COPYRIGHTS. Distributor
acknowledges Company's exclusive right, title, and interest in and to any and
all trademarks and trade names, whether or not registered, (hereinafter, such
trademarks and trade names shall be collectively referred to as
"Trademarks"), patents ("Patents"), copyrights ("Copyrights") and trade
secrets or know-how which Company may have at any time created, adopted,
used, registered, or been issued in the United States of America or in any
other location, and Distributor agrees that it shall not do, or cause to be
done, any acts or things contesting or in any
7.
<PAGE>
way impairing or tending to impair any portion of Company's right, title, and
interest in and to the Trademarks, Patents, Copyrights, trade secrets and
know-how.
3.2 PROMINENCE OF TRADEMARKS. In advertising, promotions or in any
other manner so as to identify Products, Distributor shall clearly indicate
Company's ownership of the Trademarks, Patents, and Copyrights. Distributor
further agrees that before distributing or publishing any sales literature,
promotional or descriptive materials, Company shall have the right upon
request, to inspect, edit and approve of such materials and the Distributor
shall provide Company with an opportunity to inspect, edit and approve such
materials as a matter of routine.
3.3 COMPLIANCE WITH LAWS. When referring to the Trademarks, Patents,
and Copyrights, Distributor shall comply with any and all applicable laws and
regulations within the Territory or the United States.
3.4 NOTIFICATION OF VIOLATIONS. Distributor shall promptly notify
Company, in writing, of any and all infringements, imitations, illegal use or
misuse of the Trademarks, Patents, and/or Copyrights which shall come to the
Distributor's attention. Distributor further agrees that it shall take action
in connection with infringement of the Trademarks, Patents, and/or
Copyrights, and/or trade secrets and otherwise attempt to prevent the
infringement, imitation, illegal use or misuse of the Trademarks, Patents,
and/or Copyrights only with Company's prior written consent.
3.5 NOTIFICATION OF VIOLATIONS. Distributor agrees, except to the
extent prohibited by applicable law, to render to Company any and all
assistance reasonably requested of it by Company in connection with the
protection and/or registration of Trademarks, Patents, and/or Copyrights, and
to make promptly available to Company Distributor's personnel files and any
other files or records, or any other information it possesses, or to which it
has access, which may be of use to Company in connection with this Article 3,
except to the extent prohibited by applicable law.
3.6 ASSISTANCE IN THE PROTECTION OF THE TRADEMARKS, PATENTS, AND
COPYRIGHTS. Distributor agrees that at no time during the term of this
Agreement, nor at any time after this Agreement's expiration or termination,
shall Distributor adopt, register, or use in any manner whatsoever or permit
the adoption, registration, or use without Company's prior written consent,
any word, symbol, or combination thereof, which in any way imitates,
resembles, or is similar to any Trademarks of Company, nor shall Distributor
in any manner whatsoever infringe the rights of Company in any Patent or
Copyright.
3.7 LIMITATION ON DISTRIBUTOR RIGHTS. By executing this Agreement,
Distributor hereby agrees to grant and does grant to Company an exclusive
worldwide royalty-free license to make, have made, offer for sale, use, sell,
import, duplicate, create derivative works, distribute, perform and to
display all improvements, modifications or inventions (whether patentable or
not) that Distributor has made in the past or makes to any Product or any
process implemented or capable of being implemented on a Company Product
during the period of this Agreement and for two years thereafter. Said
license agreement shall be in a form reasonably acceptable to Company, in its
sole discretion. With respect to all such inventions, during the term of this
8.
<PAGE>
Agreement, Metron agrees to prosecute and be responsible for the costs
associated with prosecuting such inventions. If following termination of this
Agreement, Metron intends to abandon prosecution of any inventions or the
maintenance of a patent related to the Products of the Company or processes
related thereto, it shall provide the Company with at least 60 days advance
notice and the right to prosecute or continue maintenance of such patent at
Company's cost.
3.8 LICENSE AGREEMENT. By executing this Agreement, Distributor
hereby agrees to grant and does grant to Company an exclusive worldwide
royalty-free license to make, have made, offer for sale, use, sell, import,
duplicate, create derivative works, distribute, perform and to display all
improvements, modifications or inventions (whether patentable or not) that
Distributor has made in the past or makes to any Product or any process
implemented or capable of being implemented on a Company Product during the
period of this Agreement and for two years thereafter. Said license agreement
shall be in a form reasonably acceptable to Company, in its sole discretion.
With respect to all such inventions during the term of this Agreement, Metron
agrees to prosecute and be responsible for the costs associated with
prosecuting such inventions. If following termination of this Agreement,
Metron intends to abandon prosecution of any inventions or the maintenance of
a patent related to the Products of the Company or processes related thereto,
it shall provide the Company with at least 60 days advance notice and the
right to prosecute or continue maintenance of such patent at Company's cost.
4. RESPONSIBILITIES AND OBLIGATIONS OF COMPANY
4.1 CONSIDERATION OF ORDERS. Company shall give reasonable
consideration to Distributor's orders for Products and shall make shipments
of accepted orders promptly in accordance with Company's production schedule
and subject to Product manufacturing lead times. If not rejected within seven
(7) business days, all orders for Products shall be considered accepted.
After acceptance, order cancellations by Distributor are subject to Company's
cancellation policy provided however, the parties recognize that there are
circumstances where it would be inequitable to impose such charges.
4.2 SALE BY COMPANY. Company shall, subject to commercial
availability, offer for sale to Distributor those Products listed on Exhibit
A for resale to Customers within the Territory. Company will not knowingly
sell Products to customers within the Territory except as included within
Company's responsibility pursuant to Exhibit B. Notwithstanding the preceding
sentence, if Company reasonably determines that additional sales are
desirable for the full development of the Products in the Territory, and
Distributor has demonstrated that it is unable to develop fully the market
for Products to Customers in the Territory, then Company may, without notice
and without Distributor's consent, sell Product in the Territory so long as
Company does not change the compensation structure of Distributor. Company
further reserves the right, on a product by product basis, to sell or, in the
Company's sole discretion, to establish a local presence through a joint
venture, strategic alliance or otherwise for any one or more of Company's
Divisions or Products, provided, however, that Company will obtain the
consent of Distributor if such change modifies Distributor's compensation
structure. If the Distributor does not consent within thirty (30) days of
notice thereof, then Company will give Distributor twelve (12) months notice
of its intent to enter the market and change the compensation structure. The
prices and terms fixed by Company for sales to Distributor hereunder are
special prices and
9.
<PAGE>
terms applicable only to the Company Products intended for ultimate resale in
the Territory for which Distributor is responsible and in which Distributor
is to employ all its marketing efforts.
4.3 SHIPMENT OF PRODUCTS. Unless otherwise determined by Company,
Products shall be sold f.o.b. Company's warehouse/distribution center and
title and risk of loss shall pass to Distributor at the f.o.b. point.
4.4 APPROVAL OF BUSINESS PLAN. Company shall notify Distributor in
writing within thirty (30) days of receipt whether or not Distributor's
Business Plan is acceptable and, if unacceptable, the portions thereof which
require revision. Distributor shall have thirty (30) days to revise its
Business Plan to the reasonable satisfaction of Company. Distributor's
failure to revise its Business Plan to the reasonable satisfaction of Company
shall constitute a substantive breach of this Agreement.
4.5 TECHNICAL AND SALES ASSISTANCE. Company will assist Distributor
in promoting sales of Products within the Territory by:
4.5.1 Providing periodic technical and sales training seminars
and programs relating to the sales and service of Products, in the United
States for the training and certification of Distributor's personnel, and the
relevant certification criteria for such personnel;
4.5.2 Providing technical service and support, including the
establishment of procedures for the installation, design and certified
training process and the tools required for installation;
4.5.3 Providing technical service and promotional literature
including any documentation and drawings of maintenance procedures and tool
configurations;
4.5.4 Making joint sales calls and conducting Product seminars
in support of Distributor's sales efforts in the Territory;
4.5.5 Providing the necessary personnel, guidance and support
for the initial installation of a new Product-in the Territory;
4.5.6 Providing new Product introduction service obligations;
4.5.7 Providing telephone support during normal business hours;
4.5.8 Making Company Service Personnel available for assistance
at its prevailing hourly rates, plus travel expenses;
4.5.9 Providing Distributor with guidelines for staffing levels
and the job descriptions and qualifications of such individuals;
4.5.10 Providing copies to Distributor of process, technical,
service and safety bulletins;
4.5.11 Assisting Distributor in developing its Initial and
Business Plans; and
10.
<PAGE>
4.5.12 Providing any other assistance that Company may deem
appropriate to promote Product sales in the Territory.
Each party shall be responsible for the expenses (including the cost of
transportation, meals and lodging) incurred by its own employees with
respect to subparagraphs 4.5.1, 4.5.2, 4.5.4, and 4.5.5 above. In addition to
this Section 4.5, Exhibit C. Part II sets forth in general Company's overall
responsibilities with respect to Product sales and service hereunder.
4.6 STOCK OBSOLESCENCE. Commencing on or before June 30, 1998,
Company shall issue quarterly Spare Parts obsolescence reports ("Quarterly
Obsolescence Report") which shall list by part number the obsolescence
status/category and estimate the effective date for the Spare Parts status
change. Categories of obsolescence are as follows:
"Obsolete Immediately" means the part is obsoleted immediately for
safety reasons; or
"Obsolete Over Time" means the part may be used or returned over the
specified time period, typically not exceeding six (6) months.
For purposes of sub-sections 4.6.1 and 4.6.2 above, Company's order
administration will provide instructions for return of the obsolete parts. No
restocking fee will apply in the case of Subsection 4.6.1 or in the case of
4.6.2 when the obsolete Spare Part is returned within the time specified in
the Quarterly Obsolescence Report or twelve (12) months from the date of
original sale to the Distributor, whichever is later.
4.7 NEW PRODUCT INTRODUCTION. Company, in consultation with
Distributor, will develop comprehensive product introduction programs
addressing the issues of: (i) documentation of procedures, processes,
marketing and product specifications; (ii) installation, support and
criteria; (iii) training, certification and transition responsibility; (iv)
strategic location of demonstration units and trade show demonstrations; (v)
process and process support requirements of Distributor; (vi) identification
of strategic accounts; (vii) beta site support criteria; (viii) Spare Parts
issues; and (ix) recommended Spare Parts and return goods policy.
4.8 NEWLY ACQUIRED PRODUCTS. If Company, acquires or otherwise
merges with an existing Company with a direct sales presence in Distributor's
territory, the Company retains the right to operate those sales and services
offices and to use them to support the acquired Company's Products in those
areas notwithstanding any other provision of this Agreement.
4.9 NEW PRODUCT INSTALLATION. For the first two installations of a
new product in each of Asia and Europe, FSI will provide service personnel to
assist with support and direction with Distributor's support, generally until
product acceptance.
4.10 PRODUCT PERFORMANCE. Company is responsible for designing and
delivering Products capable of achieving published specifications. Company
and Distributor will follow an escalation policy to address any performance
issues relating to the Product's specifications. If the escalation policy
fails to resolve the issue, upon mutual agreement, such failure may result in
additional charges to the Company.
5. TERMS AND TERMINATION
11.
<PAGE>
5.1 TERMINATION; RENEWAL. This Agreement shall take effect as of the
Effective Date and continue until terminated. The Company or Distributor may
terminate this Agreement on or after January 31, 2000 by giving one (1) year
prior written notice. Neither party shall be entitled to any compensation,
indemnity, damages, or other payment in the event of termination in
accordance herewith. Each party hereby waives the application of any law
providing for such payment or restricting termination as provided herein.
Notwithstanding the above provisions of this Section 5.1, if at any time
during the initial or any subsequent term of this Agreement Distributor
completes an Initial Public Offering (as defined below), and provided that
Company continues to hold at least 20% of the Common Stock of Metron
outstanding immediately prior to such Initial Public Offering and FSI has not
prior to the closing of the Initial Public Offering provided Distributor with
a termination notice, then this Agreement shall continue for a term of two
(2) years from the date of the closing of the Initial Public Offering (the
"IPO term"). Either party may terminate this Agreement effective at any time
on or after the expiration of such IPO term by providing at least 12 months
prior written notice (which notice may be given during or after the IPO
term). Furthermore, if after the date hereof the Distribution Agreement
between Distributor and Fluoroware, Inc. is amended to deal in any manner
with the term and/or termination of such Distribution Agreement in connection
with a public offering by Metron or fails to deal with such event (the
"Fluoroware Amendment"), and if such terms contained in the Fluoroware
Amendment regarding the term and termination are more favorable to Fluoroware
with respect thereto than are the preceding two sentences to Company, then
this Agreement shall be amended so as to include the terms of the Fluoroware
Amendment regarding the term and termination and the parties hereto agree to
take all action necessary to affect such amendment.
The term "Initial Public Offering" shall mean the first public offering
of shares of Distributor Common Stock in the United States registered under the
Securities Act of 1933, as amended, in which Distributor receives at least
$20,000,000 in aggregate net proceeds from the sale of such stock and which is
closed by June 30, 2000.
Notwithstanding anything contained above in this Section 5.1, this
Agreement may be terminated at any time by either party with one (1) year notice
to the other party upon the happening of any of the following events: (i) sale
of all or substantially all of the Company or Distributor; (ii) an acquisition
involving more than 50% of the assets of Company or Distributor other than the
"Initial Public Offering" of Distributor; (iii) a merger or consolidation
involving Distributor or Company in which 40% or more of the new entity is owned
by persons other than the respective shareholders of Company or Distributor (as
the case may be) immediately preceding the effective date of the merger; or (iv)
the sale of a Division of Company, in which case the termination shall be
limited to the Division sold or the Products related to such sale.
5.2 ORDERS. Orders for Products accepted by Company as of the date
of termination of this Agreement which have not been delivered as of such
date shall be processed under the terms of this Agreement, subject to
Distributor's ability to provide adequate assurance of payment to Company for
such Products. Upon termination, if requested by Company, Distributor shall
assemble and deliver to Company all records pertaining to past, current and
pending orders for Products. Termination of this Agreement shall not affect
accrued rights of Company which by their nature are intended to survive
termination. In all events, such terminated Distributor shall work towards a
transition plan to address customer support, warranty, and spare parts.
12.
<PAGE>
5.3 DEFAULT: FAILURE TO CURE. This Agreement also may be terminated
by Company with one hundred eighty (180) days written notice if Distributor
defaults in performance of any of its obligations under Article 1, Sections
1.1 or 1.2, Articles 2, 3 or Article 6, Sections 6.1, 6,2, 6.4, 6.6 or 6.8 of
this Agreement if Distributor was first given 180 days' prior written notice
of the default, an opportunity to cure such default and informed at the time
of the notice of default that failure to cure could result in termination.
5.4 DEFAULT: INSOLVENCY. If Distributor shall be the subject of any
judicial or non-judicial bankruptcy or insolvency proceeding, or becomes
insolvent, or if a receiver, liquidator or administrator of the Distributor's
property or any part thereof is appointed by a court of competent authority,
or if Distributor shall make an assignment for the benefit of creditors,
Company may terminate this Agreement by giving written notice to the
Distributor, its legal representative or assigns, as the case may be. Any
termination, whether for default or otherwise, shall not relieve Distributor
from liability for amounts owed to Company.
5.5 WAIVER: REPURCHASE OF INVENTORY. Distributor hereby waives any
right or claim to damages or compensation resulting from Company's decision
not to extend this Agreement. If this Agreement is terminated or expires,
Company may, at its option, repurchase inventory from Distributor in
accordance with the Company's Spare Parts Policy. Notwithstanding the
provisions of Attachment E, if Company has given notice of a termination
other than for breach of the Agreement by Distributor, it shall repurchase
those spare parts in Distributor's inventory, which were purchased within two
years of the termination, at Distributor's cost and will purchase at its
depreciated value any demonstration equipment of Products from Distributor.
In addition, FSI shall become responsible for service, warranty and other
obligations of Distributor with respect to Company's Products following the
effective date of the termination and Distributor agrees to sign its
obligations to Company subject to mutual agreement by the parties as to an
appropriate amount of compensation to be paid to Company to assume
Distributor's obligations with its customers for Company Products. Company
reserves the right to reasonably reject any Spare Part which is not in the
condition as originally delivered to Distributor or which does not meet
Company's current design standards.
5.6 TERMS APPLYING AFTER TERMINATION. If this Agreement is
terminated or expires, the terms of this Agreement shall continue to apply to
the Products then owned, possessed or controlled by Distributor. Termination
of this Agreement will not release either party from any obligation accrued
prior to the effective date of termination.
6. MISCELLANEOUS
6.1 CONFIDENTIAL DATA AND INFORMATION. Distributor shall neither use
nor disclose to any third parties any confidential information concerning the
business, affairs, or Products of Company which Distributor may acquire
during the course of its activities under this Agreement (or any prior
agreements between Company and Distributor), provided, however, Distributor
may make such disclosures to prospective or actual customers subject to a
confidentiality agreement. As used herein confidential information of Company
shall include but not be limited to any confidential or proprietary
information or compilation of information acquired by or disclosed to
Distributor which relates to the business, products, markets or research or
planning activities of FSI, whether or not expressly designated by FSI as
"Confidential" or "Proprietary".
13.
<PAGE>
FSI Confidential Information also includes inventions made, strategies,
forecasts, research and development plans of FSI, FSI customer lists,
supplier lists, and information about FSI's computer systems and networks.
Distributor shall take any and all necessary precautions to prevent
unauthorized disclosures including, but not limited to, Confidentiality
Agreements, Non-Compete Agreements and/or Invention Assignment Agreements
with its employees in the form attached hereto as Exhibit F. The
Confidentiality Agreement must be signed by Distributor. Fully-executed
copies shall be filed with the Company. To the extent practical, Distributor
will follow Company's confidentiality guidelines, once finalized, and the
parties agree to protect the confidential information of third parties that
is exchanged between them in writing, using a reasonable of care, but in no
event less than the same degree of care it uses to protect its own
confidential information.
6.2 FINANCIAL CONDITION. If Distributor defaults in any financial
obligation hereunder, or if its financial condition is inadequate in
Company's opinion to justify extension of credit of further shipments of
Products, then Company may cancel any outstanding order for Products or delay
any shipment of Products to Distributor, unless adequate assurance of payment
is provided. Company may require execution of a security agreement or an
irrevocable letter of credit by Distributor at any time as a condition of
sale of Products to Distributor hereunder.
6.3 AFFILIATES OF COMPANY. Company reserves the right, upon written
notice to Distributor to assign to any company affiliated with Company
(herein called "Company Affiliate") responsibility for filling orders for
Company Products from Distributor. Distributor agrees to place orders with
such Company affiliate, and make payment as above in accordance with such
notice. Sales made by such Company affiliate pursuant to this Section shall
be deemed to be sales of Company Products made to Distributor hereunder.
6.4 MAINTENANCE OF RECORDS. Distributor shall keep accurate accounts
and records of all transactions covered by this Agreement, and shall permit
Company or its agents at any time during normal business hours to examine
such accounts and records. Company's right to examine such accounts and
records shall cease one year after the termination of this Agreement.
6.5 IRREPARABLE HARM. Any breach by Distributor under Sections 2.5
or 2.16, Article 3 or Sections 6.1. 6.21 or 6.22 hereof shall be deemed to
have caused irreparable injury to Company which is not compensable by an
adequate remedy at law. In such event, Company shall be entitled, in addition
to any other remedy permitted by law, to injunctive relief in respect of such
breach, plus an award of all costs and actual attorney's fees, incurred in
enforcing the same.
6.6 COMPLIANCE WITH GOVERNMENTAL REGULATIONS. In the event any law
or regulation is enacted in a country listed in Exhibit B, Part I attached
hereto, which commercially frustrates Company's purpose in entering into this
Agreement or its ability to perform hereunder, Company shall have the right,
in its sole discretion, upon 60 days notice, notwithstanding any other
provisions of this Agreement to immediately terminate this Agreement as to
the affected Territory or to modify unilaterally that portion of the
Agreement which has been so affected.
6.7 FORCE MAJEURE. Each party shall be excused from its obligation
to order or deliver Products under this Agreement in the event of national
emergency, war, acts of God,
14.
<PAGE>
prohibitive government regulations or other causes beyond the reasonable
control of such party if such event renders performance of this Agreement
impossible. If the event renders performance impossible for a period
exceeding sixty (60) days, either party may terminate this Agreement
effective immediately by giving the other party written notice of its
intention to do so and Distributor shall immediately pay all sums owed to
Company.
6.8 NON-ASSIGNABILITY. This Agreement may not be assigned by
Distributor, nor may any duty of obligation hereunder be delegated to any
party without the prior written consent of Company. Any permitted assignee
shall enter into a new distributorship agreement with Company upon request.
6.9 NOTICE. All notices required to be given hereunder shall be
deemed to have been effectively given only when delivered personally to an
officer of the applicable party, or when first sent by facsimile transmission
and confirmed by registered mail, addressed to the applicable party at its
address set forth below, or at such other address as such party may hereafter
designate as the appropriate address for the receipt of such notice:
<TABLE>
<S> <C>
To the Company at: FSI International, Inc. With a copy to: Luke R. Komarek
Attention: Benno Sand General Counsel
322 Lake Hazeltine Drive 322 Lake Hazeltine Drive
Chaska, Minnesota 55318 Chaska, MN 55318
U.S.A. U.S.A.
To the Distributor at: Metron Technology B.V. With a copy to: Metron Technology Ltd.
Attention: Edward Segal Attn: Chris Levett-Prinsep
1350 Old Bayshore Highway, Suite 360 6 & 7 Grafton Way
Burlingame, California 94010 Bassingstoke, Hampshire
U.S.A. England RG226HY
</TABLE>
6.10 CONSTRUCTION OF AGREEMENT. This instrument and the attached
Exhibits constitutes the entire Agreement of the parties with respect to the
subject matter thereof and shall be construed in accordance with the laws of
the State of Minnesota without regard to choice of law doctrine. The United
Nations Convention on Contracts for the International Sale of Goods will not
be applicable to this Agreement or the transactions contemplated hereunder.
For purposes of resolving any issue pertaining to conflict of laws, this
Agreement shall be deemed to be fully and solely executed, performed, and
observed in the State of Minnesota. The parties consent to personal
jurisdiction in the State of Minnesota and to accept service of process with
respect to any action or proceeding brought in any court as provided in the
following sentence. Distributor and Company agree that any action brought by
either party shall be filed only in the United States District Court for the
District of Minnesota.
6.11 COMPLIANCE WITH LAWS AND REGULATIONS. Distributor shall comply
with all applicable laws and regulations during the course of performance of
this Agreement and in related activities. Should registration of this
Agreement with governmental authorities be required under the local laws of
the Territory, Distributor shall comply with such registration
15.
<PAGE>
requirements and provide proof of such compliance to Company. Distributor
shall not directly or indirectly, engage in any acts which would constitute a
violation of United States laws and regulations, including but not limited to
laws and regulations governing exports of products or technology, the Foreign
Corrupt Practices Act and the AntiBoycott Act.
6.12 EXECUTION. This Agreement shall be executed in duplicate but
shall not be binding upon Company until a copy, signed by the Distributor, is
and executed by Company.
6.13 ALTERNATIVE DISPUTE RESOLUTION. The parties shall first attempt
to resolve any dispute arising out of or relating to this Agreement in
accordance with the procedures specified below.
6.13.1 The parties shall attempt in good faith to resolve any
dispute arising out of or relating to this Agreement promptly by negotiation
between executives who have authority to settle the controversy and who are
at a higher level of management than the persons with direct responsibilities
for administration of this contract. Any party may give the other party
written notice of any dispute not resolved in the normal course of business.
Within fifteen (15) days after delivery of the notice, the receiving party
shall submit to the other a written response. The notice and the response
shall include (i) a statement of such party's position and a summary of
arguments supporting that position, and (ii) the name and title of the
executive who will represent that party and of any other person who will
accompany the executive. Within thirty (30) days after delivery of the
disputing party's notice, the executives of both parties shall meet at a
mutually acceptable time and place, and thereafter as often as they
reasonably deem necessary, to attempt to resolve the dispute. All reasonable
requests for information made by one party to the other will be honored.
6.13.2 If the matter has not been resolved within sixty (60)
days of the disputing partys notice, or if the parties fail to meet within
thirty (30) days of such notice, either party may initiate mediation of the
controversy or claim as provided below in Section 6.13.3.
6.13.3 If the dispute has not been resolved by negotiation as
provided above, the parties shall endeavor to settle the dispute by mediation
through JAMS/Endispute under its then current Rules. The neutral third party
mediator will be selected from the JAMS/Endispute Panels of Neutrals, with
the assistance of JAMS/Endispute, unless the parties agree otherwise.
6.13.4 All negotiations pursuant to this clause are
confidential and shall be treated as compromise and settlement negotiations
for purposes of the Federal Rules of Evidence and state rules of evidence.
6.13.5 If the parties fail to resolve the dispute through
mediation within 45 days of the request for mediation, then either party may
pursue its remedies in Federal District Court of Minnesota.
6.13.6 Notwithstanding the above provisions of this Section
6.13, the parties shall not be required to attempt to negotiate or mediate
the dispute if it relates to a breach of the provisions of Sections 2.5,
2.16, 2.17, 2.18, 5.1, 5.3, 6.1, 6.21, 6.22 and Article 3 or to Distributor's
financial obligations.
16.
<PAGE>
6.14 GOVERNING LANGUAGE. The governing language of this Agreement
shall be English.
6.15 WAIVER OF BREACH. The failure of either party to require the
performance of any term of this Agreement or the waiver by either party of
the breach of any term of this Agreement shall not prevent a subsequent
enforcement of such term, nor be deemed a waiver of any subsequent breach.
6.16 BENEFIT. This Agreement shall be binding upon the legal
representatives, successors, and assigns of Company and of Distributor.
6.17 NO OTHER AGREEMENTS. Except as expressly contemplated in this
Agreement, there are no other agreements, oral or written, between the
parties effecting this Agreement or relating in any way to the selling or
servicing of Products. This Agreement supersedes all previous negotiations
and agreements between the parties.
6.18 AMENDMENTS. No change or addition to any portion of this
Agreement shall be valid or binding upon either party unless mutually agreed
to in writing.
6.19 SEVERABILITY. If any provision of this Agreement is determined
to be invalid or unenforceable, the provision shall be deemed to be severable
from the remainder of this Agreement and shall not cause the invalidity of
the remainder of this Agreement.
6.20 SOLICITATION OF EMPLOYEES. Company and Distributor agree that
during the term, of the Agreement and for a period of six months thereafter
it nor its successor company, will not directly or indirectly solicit the
other party's employees or alternatively will agree upon an appropriate
amount of compensation for each individual solicited and hired by it.
6.21 COMPETING PRINCIPAL. If an existing principal of Distributor
becomes a competitor of the Company, Distributor must choose within sixty
(60) days thereafter which principal's competing product it intends to
present and shall terminate its representation of the other principal for
product in the geographic area where it has been or is authorized to
represent both products as soon as possible but no later than six months from
the date of its election. Further, to reduce the likelihood of such
conflicts, Distributor will provide a quarterly report to Company of
principals of whom it is negotiating and the Company must indicate whether or
not it objects to proposed principal and, if so, the basis for its objection
shall be provided to Distributor.
6.22 RESALE OF EQUIPMENT. Distributor agrees not to resell or
refurbish Company Equipment without Company's written consent.
6.23 SIGNATURES. This Agreement may be executed in counterparts and
facsimile signatures shall be considered originals.
17.
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date and year first above written.
METRON TECHNOLOGY, B.V. FSI INTERNATIONAL, INC.
By: \s\ Ed Segal By: \s\ Joel Elftmann
------------------------------- -------------------------------
Ed Segal Joel Elftmann
Its: Managing Director Its: Chairman and Chief Executive
Officer
By: \s\ Chris Levett-Prinsep
-------------------------------
Chris Levett-Prinsep
Its: Managing Director
18.
<PAGE>
Exhibit 10.14
EMPLOYMENT AGREEMENT
This Employment Agreement (the "Agreement") is entered into as of September 1,
1999, by and among METRON TECHNOLOGY B.V., a limited liability company organized
under the laws of the Netherlands ("MTBV"), METRON TECHNOLOGY CORPORATION, a
California corporation ("Employer"), and [INSERT NAME] ("Executive"), a
California resident.
RECITALS
MTBV is the sole shareholder of Employer and Employer desires to employ
Executive on the terms and conditions set forth herein;
Executive desires to accept such employment with Employer pursuant to the terms
and conditions of this Agreement; and
MTBV intends to reconfirm the appointment of Executive as a Managing Director B;
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein, the parties hereto agree as follows:
1. EFFECTIVE TIME; EMPLOYMENT AND SERVICE
1.1 EFFECTIVE TIME. This Agreement is to be effective as of
September 1, 1999, (the "Effective Time") and shall continue in effect until
Executive's employment terminates pursuant to the provisions of Section 3
herein.
1.2 EMPLOYMENT WITH EMPLOYER. Employer agrees that it will employ
Executive as its [INSERT TITLE] or in such other capacity as determined by
Employer's Officers to whom the Executive reports or Employer's Supervisory
Board of Directors. MTBV agrees that it has elected Executive as a member of the
Board of Directors of Employer.
1.3 APPOINTMENT WITH MTBV. In view of Executive's employment with
Employer, and his appointment as a Class B (or similar description) Managing
Director by resolution of the General Meeting of Shareholders of MTBV, the
parties now wish to confirm the terms and conditions of his service as a
Managing Director as provided herein. The term of Executive's appointment as a
Managing Director of MTBV shall be determined by the General Meeting of
Shareholders of MTBV. To the extent permitted under Dutch corporate law, as a
Managing Director of MTBV, Executive shall perform such duties and
responsibilities as may be determined from time to time by MTBV's General
Meeting of Shareholders or MTBV's Supervisory Board (the "MTBV Supervisory
Board"), as the case may be.
1.4 RESPONSIBILITIES FOR EMPLOYER. During the term of this Agreement,
Executive shall have such responsibilities as may be assigned to him by
Employer's Officer (or Officers) to whom the Executive reports, or Employer's
Supervisory or Managing Board of Directors. Executive's duties shall be
performed at Employer's Burlingame, California office or at such other location
as Employer and Executive mutually agree; provided, however, that, in the
1.
<PAGE>
performance of his duties, Executive shall be required to travel at such times
and to such places as Employer or MTBV may reasonably request from time to time.
1.5 EXCLUSIVE SERVICES. Executive agrees to devote his full time,
attention and energy to performing his duties and responsibilities to Employer
and MTBV. Executive further agrees that he will not engage in any business
activity in competition with Employer or MTBV nor make preparations to do so,
and agrees not to engage in any outside employment or consulting without written
authorization from MTBV's Supervisory Board. The foregoing, however, shall not
preclude Executive from engaging in the following activities, provided that they
do not unreasonably interfere or conflict with Executive's responsibilities to
Employer and MTBV: (1) engaging in appropriate civic, charitable or religious
activities; (2) devoting a reasonable amount of time to private investments; (3)
serving on the boards of directors of nonprofit entities; or (4) serving on the
Board of Directors of a for-profit entity with the prior written consent of
Employer's Chief Executive Officer.
2. COMPENSATION, BENEFITS AND PERQUISITES
2.1 BASE SALARY. During the period this Agreement is in effect,
Employer shall pay Executive an annual base salary of [INSERT AMOUNT], less
standard deductions and withholdings. MTBV, acting through the MTBV Supervisory
Board or its Compensation Committee, as the case may be, shall review
Executive's base salary at least annually and may in its sole discretion
increase (but not decrease, unless such decrease is done on an equitable
pro-rata basis for all of Employer's executives, including its CEO) such salary
to reflect performance, appropriate industry data and other factors. Employer
and MTBV shall not be obligated to provide any such salary increases.
2.2 BONUSES.
(a) Executive shall be entitled to participate in the annual
incentive compensation plans for MTBV's senior management pursuant to the terms
of these plans. Generally, any such compensation shall be paid out of a pool
funded by a percentage of the annual pretax income of MTBV calculated before
income taxes and performance incentive compensation. MTBV shall have the sole
discretion to change or eliminate its annual incentive compensation plans, to
determine the amount placed into the pool, to determine whether Executive is
entitled to any compensation under these plans, and to determine the amount of
any such compensation.
(b) In addition, any such compensation shall be considered
earned as of the last day of Employer's fiscal year provided that Executive has
remained employed on a full-time basis by Employer through that date.
Notwithstanding the foregoing, if Executive is terminated without Cause (as
defined in Section 3.4(a) herein), or resigns for Good Reason (as defined in
Section 3.4(b) herein) during the term of this Agreement, for the fiscal year in
which his employment terminates, Employer shall pay Executive the bonus to which
he would otherwise have been entitled had he been employed as of the last day of
such fiscal year multiplied by a fraction, the numerator of which is the number
of days elapsed in the fiscal year up to and including the date of his
termination of employment, and the denominator of which is 365.
2.
<PAGE>
(c) In the event of Executive's death or Disability (as such
term is defined in Section 3.4(c) herein) during the term of this Agreement, for
the fiscal year in which his death or Disability occurs, Employer shall pay
Executive's estate (in the event of Executive's death) or the Executive (in case
of his Disability) the bonus to which he would otherwise have been entitled had
he been employed as of the last day of such fiscal year multiplied by a
fraction, the numerator of which is the number of days elapsed in the fiscal
year up to and including the date of his death, or, in the case of Disability,
the last day of active employment, and the denominator of which is 365.
(d) If Executive is awarded any such compensation, it will be
paid in one lump sum as soon as practicable after the annual audit of Employer's
financial statements are complete and Employer has completed the necessary
calculations of the amounts, if any, which are due. Any such compensation shall
be subject to standard withholdings.
2.3 VACATIONS. Executive shall accrue three weeks of annual vacation
with full pay in accordance with the policies applicable to executive employees
of Employer who are located in the United States. Executive may accrue up to a
maximum of 30 days vacation, at which point further accrual stops until accrued
vacation is used, unless otherwise agreed to in writing between Executive and
Employer.
2.4 EMPLOYEE BENEFITS. Executive shall be entitled to participate in
Employer's benefits and perquisites in accordance with Employer's policies which
it now or in the future makes generally available to all of its executives.
Executive shall pay any contributions which are generally required of its
executives to receive any such benefits. Such perquisites may include but not
necessarily be limited to, use of and reimbursement for cellular/car phone,
professional organizational dues and professional developmental seminars. It is
anticipated that the MTBV Supervisory Board will annually review Executive's
benefits package and may, in its discretion, increase (but not decrease unless
such decrease is done on an equitable pro rata basis for Employer's executives
including its CEO) such perquisites.
2.5 EXPENSES. During the term of his employment hereunder, Executive
shall be entitled to receive prompt reimbursement from Employer or MTBV (in
accordance with their policies and procedures for executive employees and on
submission of written documentation of such expenses suitable to Employer or
MTBV) for all reasonable travel and other expenses incurred by Executive in
connection with his services hereunder. For airline flights of four hours or
more in duration, Executive is entitled to fly business class and be reimbursed
for such expenses. Executive will make reasonable efforts to use frequent flyer
benefits derived from business travel on Employer's behalf to upgrade from coach
class to business class when feasible. Employer reserves the right to require
Executive to fly coach class (regardless of trip length or duration) in any
quarter in which MTBV reasonably expects to report a net loss, provided that
such a requirement is generally applicable to all of Employer's executives.
2.6 INDEMNIFICATION.
(a) Except to the extent modified below in (b), Employer, with
regard to Executive's performance of services on behalf of Employer as an
employee, officer, director, or
3.
<PAGE>
agent, and MTBV as an employee, officer, director, or agent, with regard to
Executive's performance of services on behalf of MTBV, agree, to the fullest
extent authorized or permitted by MTBV's charter documents and applicable law,
to fully indemnify Executive and to hold him harmless from and against all
claims, damages, judgments, losses, liabilities, fees and expenses incurred by
him or threatened against him in connection with his performance of services
hereunder and to make advances to him for the payment of legal fees, witness
fees, expenses and costs related thereto. MTBV and Employer also agree to pay
any damages, judgments, fines and amounts paid in settlement and any other
amounts that Executive becomes legally obligated to pay because of any claim or
claims made against or by Executive in connection with any threatened, pending
or completed action, suit or proceeding to which Employee is entitled to
indemnification pursuant to the terms of this Section 2.8(a), PROVIDED, HOWEVER,
Employee shall not settle any such proceeding without the express written
consent of the Supervisory Board of MTBV. MTBV and Employer agree to use their
best efforts to include Executive in the coverage of any errors and omissions
and/or directors and officers insurance policies, if any, obtained by MTBV or
Employer for officers and directors of MTBV and Employer, respectively.
(b) The indemnification provisions of Section 2.8(a) shall not
apply with respect to the obligations of MTBV or Employer to indemnify Executive
in the following events:
- to the extent that Executive is indemnified pursuant
to any insurance purchased and maintained by or on
behalf of MTBV and/or Employer pursuant to the
provisions of Section 2.8(a) of this Agreement and
any resulting obligations are actually paid on
behalf of or reimbursed to Executive pursuant to
such insurance;
- on account of Executive's acts or omissions that
involve intentional misconduct or would constitute
Cause under Section 3.4(a) herein;
- on account of violations of the provisions of
Section 4 of this Agreement;
- on account of acts or omissions of Executive that
Executive believed or reasonably should have known
at the time of the act or omission to be contrary to
the best interests of MTBV and Employer or its
shareholders or that involve the absence of good
faith on the part of Executive;
- with respect to any transaction from which Executive
derived an improper personal benefit;
- on account of acts or omissions that show a reckless
disregard by Executive for his duties to MTBV or
Employer or their shareholders in circumstances in
which Executive was aware, or should have been
aware, in the ordinary course of performing an
4.
<PAGE>
officer's duties, of a risk of serious injury to
MTBV, Employer or their shareholders;
- on account of acts or omissions that constitute an
unexcused pattern of inattention that amounts to an
abdication of Executive's duties to MTBV, Employer
or their shareholders;
- on account of acts or omissions that constitute a
violation of Section 16 of the Securities and
Exchange Act of 1934; or
- if indemnification is unlawful.
(c) CONTINUATION OF INDEMNITY. MTBV's and Employer's indemnity
obligations contained herein shall continue during the period Employee is a
director, officer, employee or other agent of MTBV or the Employer, respectively
(or is or was serving at the request of MTBV or Employer as a director, officer,
employee or other agent of another corporation, partnership, joint venture,
trust, employee benefit plan or other enterprise) and shall survive the
termination of Executive's employment with Employer and continue thereafter so
long as Executive shall be subject to any possible claim or threatened, pending
or completed action, suit or proceeding, by reason of the fact that Executive
was serving in the capacity referred to herein and to the extent he would
otherwise be entitled to indemnification pursuant to Section 2.8(a).
(d) EXPENSES. Upon request, MTBV or Employer may advance, prior
to the final disposition of any proceeding covered by this Section 2.6
(excluding any proceedings instituted by Executive or Employer under Sections
5.9 and 5.10 herein), such advance not to be unreasonably withheld or delayed,
all reasonable expenses incurred by Executive in connection with such proceeding
upon receipt of an undertaking by or on behalf of Executive to repay said
amounts if it shall be determined ultimately that Executive is not entitled to
be indemnified under the provisions of this Agreement, applicable law, MTBV's
Articles of Association or Employer's Charter Documents, or otherwise.
3. TERMINATION OF EXECUTIVE'S EMPLOYMENT
3.1 TERMINATION OF EMPLOYMENT. Executive's employment by Employer
under this Agreement may be terminated by Employer or Executive at any time,
with or without cause. Executive's appointment as a Managing Director of MTBV
may be terminated by the General Meeting of Shareholders of MTBV as permitted by
the Articles of Association of MTBV and Netherlands law. Executive agrees to
give ninety (90) days' written notice if he intends to resign without Good
Reason.
3.2 SEVERANCE BENEFITS UPON TERMINATION BY EMPLOYER WITHOUT CAUSE,
UPON RESIGNATION BY EXECUTIVE FOR GOOD REASON OR DISABILITY. If this Agreement
is: (1) terminated by Employer without Cause; or (2) terminated by the Executive
for Good Reason; or (3) terminated by Employer as a result of Executive's
Disability; and if Executive provides the
5.
<PAGE>
Company with a signed general release of all claims, a form of which is set
forth in Exhibit A, Employer shall provide Executive with the following
severance benefits only:
(a) Continuation of Executive's final base salary for a period
of twelve (12) months after Executive's termination date. These payments will be
made on the Company's standard payroll dates and will deduct standard deductions
and withholdings. To the extent, if any, Executive receives disability insurance
benefits during this salary continuation period, Executive agrees to tender
those payments to Employer.
(b) To the extent permitted by federal COBRA law and by
Employer's current group health insurance policies, Executive will be eligible
to continue his health insurance benefits. Employer will pay the cost of
continuing such benefits for a period of twelve (12) months after Executive's
termination date. Should Executive become eligible for such health care benefits
through another employer, any such payments under this provision shall
immediately cease. Executive agrees to notify Employer immediately if he becomes
eligible for such benefits; and
(c) In the event Executive's employment is terminated because
of his Disability, Executive also shall be entitled to receive the pro-rata
bonus as specified in Section 2.2(c) herein.
3.3 NO BENEFITS IF TERMINATED BY EMPLOYER FOR CAUSE, UPON RESIGNATION
BY EMPLOYEE WITHOUT GOOD REASON, OR UPON DEATH. If Executive's employment is
terminated for Cause by Employer, or if Executive resigns without Good Reason,
or if this Agreement is terminated by Executive's death, Executive shall not be
entitled to receive any severance benefits whatsoever, provided, however, that
in the event of Employee's death, his estate shall be entitled to the pro-rata
bonus as specified in Section 2.2(c) herein.
3.4 DEFINITIONS.
(a) DEFINITION OF "CAUSE." For purposes of this Article 3,
"Cause" shall mean the following: (i) indictment or conviction of, or a plea of
nolo contendere to, any felony or any misdemeanor involving moral turpitude;
(ii) commission of an act of fraud, theft or embezzlement of property of MTBV or
any of its subsidiaries or commission of similar acts involving dishonesty or
moral turpitude that are materially injurious to MTBV or any of its
subsidiaries; (iii) Executive's failure to devote substantially all of his
working time and efforts during normal business hours to the business of MTBV
and its subsidiaries except as otherwise permitted by this Agreement or to
comply with the covenants contained in Sections 4.1 or 4.2 of this Agreement;
(iv) knowingly providing materially misleading information concerning MTBV or
any of its subsidiaries to MTBV, the MTBV Managing Board or Supervisory Board,
its General Meeting of Shareholders, any shareholder holding 10% or more of MTBV
stock, any governmental body or regulatory agency or to any lender or other
financing source or proposed financing source of MTBV or its subsidiaries; or
(v) any other failure by Executive to substantially perform his material duties
as an employee of Employer under this Agreement or as a Managing Director of
MTBV (excluding nonperformance resulting from Executive's disability) which
failure is not cured within thirty (30) days after written notice from the MTBV
6.
<PAGE>
Supervisory or Managing Board, in the case of Executive's duties to MTBV, or
from the Employer, in the case of Executive's duties to Employer, specifying the
act(s) of nonperformance or within such longer period (but no longer than sixty
(60) days in any event) as is reasonably required to cure such nonperformance.
(b) DEFINITION OF "GOOD REASON." "Good Reason" shall mean: (i)
a material adverse change in the responsibilities, authority, title or office of
Executive resulting in the substantial diminution of his position; (ii) except
for decreases made on an equitable pro rata basis for Employer's executives
located in the United States, a diminution in Employee's annual base salary
below the amount stated in Section 2.1 or as same may be increased from time to
time; (iii) except for changes made on an equitable pro rata basis for
Employer's executives located in the United States, the failure by Employer to
continue to provide Executive with benefits substantially similar to those
enjoyed by executives of Employer; (iv) Employer's requiring of Executive to be
based anywhere other than a location which is within a 50-mile radius of the
Company's existing office in Burlingame, California; or (v) any other material
breach by Employer of this Agreement; excluding for all of these purposes an
isolated, insubstantial or inadvertent action not taken in bad faith which is
remedied by Employer promptly after notice thereof is given by Executive.
(c) DEFINITION OF "DISABILITY." "Disability" shall have the
same meaning provided in Section 22(e)(3) of the Internal Revenue Code of 1986,
as amended, except for that section's reference to "12 months," which time
period shall instead be ninety (90) days.
3.5 MERGER, TRANSFER OF ASSETS OR DISSOLUTION. This Agreement shall
not be terminated by a voluntary or involuntary dissolution of Employer or MTBV
or the transfer of all or substantially all the stock or assets of Employer or
MTBV or the merger of Employer or MTBV with or into another entity.
4. CONFIDENTIALITY AND TRADE SECRETS
4.1 PROPRIETARY INFORMATIONS AND INVENTIONS AGREEMENT. Executive
agrees to abide by all of Employer's policies and procedures and further agrees
to sign and abide by the terms of Employer's Proprietary Information and
Inventions Agreement, attached hereto as Exhibit B.
4.2 NONSOLICITATION OBLIGATIONS. Executive agrees that for two (2)
years following the termination of his employment, he will not, either directly
or through others, solicit, attempt to solicit, or induce any employee,
consultant or independent contractor of Employer or MTBV to terminate his or her
relationship with these entities in order to become an employee, consultant or
independent contractor to or for any other person or business entity. Executive
also agrees that in order to protect MTBV and Employer's confidential and
proprietary information, for two (2) years following the termination of his
employment, he will not, either directly or through others, render services to,
contract with, or attempt to solicit business from any principal, customer or
prospective customer of Employer or MTBV for products or services offered by
Employer or MTBV at the time of Executive's termination of employment.
7.
<PAGE>
4.3 SCOPE OF RESTRICTIONS. If the scope of the restrictions in this
section are determined by a court of competent jurisdiction to be too broad to
permit enforcement of such restrictions to their full extent, then such
restrictions shall be construed or rewritten ("Blue-lined") so as to be
enforceable to the maximum extent permitted by law, and Executive hereby
consents, to the extent he may lawfully do so, to the judicial modification of
the scope of such restrictions in any proceeding brought to enforce them.
5. MISCELLANEOUS
5.1 AMENDMENT. This Agreement may be amended only in writing signed by
each of the parties.
5.2 ENTIRE AGREEMENT. This Agreement contains the entire agreement
between the parties with respect to its subject matter and supersedes all prior
agreements and understandings, oral or written, between the parties; all prior
agreements regarding the subject matter of this Agreement are hereby terminated,
including Executive's previous employment agreement.
5.3 NO ASSIGNMENT BY EXECUTIVE. Executive acknowledges that the
services to be rendered by him are unique and personal. Accordingly, Executive
may not delegate or assign any of his obligations under this Agreement.
5.4 SUCCESSORS AND ASSIGNS. Subject to Section 5.3, the provisions of
this Agreement shall be binding upon and inure to the benefit of the parties
hereto, any successor to or assign of Employer or MTBV, and upon Executive's
heirs and the personal representative of Executive or Executive's estate.
5.5 NOTICES. Any notice or other communication required or permitted
hereunder shall be sufficient if given in writing, (i) by hand-delivery, (ii) by
express courier, (iii) by first class mail, certified or registered with return
receipt requested or (iv) by facsimile transmission with written confirmation
sent the same day by first class mail, certified or registered with return
receipt requested, which shall be addressed as follows (or to such other address
as a party may specify by notice duly given in accordance with this Section
5.5):
If to Employer:
Metron Technology Corporation
1350 Old Bayshore Highway, Suite 360
Burlingame, California 94010
Telephone: (650) 373-1133
Facsimile: (650) 373-1135
Attention: Edward Segal, President
8.
<PAGE>
If to MTBV:
Metron Technology B.V.
c/o FSI International, Inc.
322 Lake Hazeltine Drive
Chaska, Minnesota 55318
Telephone: (612) 448-5440
Facsimile: (650) 448-1300
Attention: Joel A. Elftmann, Chairman, Supervisory
Board of Directors
If to Executive:
[INSERT NAME, ADDRESS AND TELEPHONE NUMBER]
Any notice so sent shall be deemed effectively made on the day of actual
delivery to the recipient (if by hand or express courier), on the fifth business
day following mailing (if by airmail) or on the next business day following
transmission (if by telefax with written confirmation).
5.6 WAIVER OF BREACH. Any waiver by either party of compliance with
any provision of this Agreement by the other party shall not operate or be
construed as a waiver of any other provision of this Agreement, or of any
subsequent breach by such party of a provision of this Agreement. No waiver by
MTBV shall be valid unless in writing and signed by the Chairman of the MTBV
Supervisory Board.
5.7 SEVERABILITY. If any one or more of the provisions (or portions
thereof) of this Agreement shall for any reason be held by a final determination
of a court of competent jurisdiction to be invalid, illegal, or unenforceable in
any respect, such invalidity, illegality or unenforceability shall not affect
any other provisions (or portions of the provisions) of this Agreement, and the
invalid, illegal or unenforceable provisions shall be deemed replaced by a
provision that is valid, legal and enforceable and that comes closest to
expressing the intention of the parties hereto.
5.8 GOVERNING LAW. This Agreement shall be interpreted and enforced in
accordance with the laws of the State of California, without giving effect to
conflict of law principles. Executive hereby expressly agrees that the intention
of the parties is that Executive will remain a resident of California and will
perform all or substantially all of his services as an employee of Employer
hereunder and as a Managing Director of MTBV in and from the United States and
not The Netherlands. Accordingly, the parties hereby expressly exclude
application of Netherlands law to this Agreement, including in particular but
without limitation all Netherlands laws regarding employment, termination of
employment and employee benefits. Executive hereby irrevocably consents to such
exclusion and waives any and all claims or causes of action that he might
otherwise assert against MTBV, its subsidiaries, officers, directors and
shareholders based on, or arising out of, any provision of Netherlands law.
9.
<PAGE>
5.9 DISPUTE RESOLUTION. Unless otherwise prohibited by law, all
disputes, claims, and causes of action (including but not limited to any claims
of statutory discrimination of any type), in law or equity, arising from or
relating to this Agreement or its enforcement, performance, breach, or
interpretation, or to Executive's employment with Employer or service with MTBV,
or the termination of that employment or service, shall be resolved solely and
exclusively by final, binding and confidential arbitration through Judicial
Arbitration & Mediation Services/Endispute, Inc. ("JAMS") under the then
existing JAMS employment arbitration rules. Employer shall be responsible for
paying any and all fees and costs necessary to initiate such arbitration
proceedings, subject to final apportionment by the Arbitrator. Executive
understands and agrees that this provision waives his right to a jury trial on
these claims. This arbitration shall be held in the San Francisco Bay Area.
Nothing in this section is intended to prevent either party from obtaining
injunctive relief in court to prevent irreparable harm pending the conclusion of
any such arbitration.
5.10 ATTORNEYS' FEES. In the event of litigation between Executive and
Employer arising under Section 5.9 herein, the prevailing party shall be
entitled to reimbursement from the non-prevailing party for its reasonable
attorneys' fees and costs of suit in addition to such other relief as may be
granted.
5.11 HEADINGS. The headings of articles and sections herein are
included solely for convenience and reference and shall not control the meaning
or interpretation of any of the provisions of this Agreement.
5.12 COUNTERPARTS. This Agreement may be executed by either of the
parties hereto in counterparts, each of which shall be deemed to be an original,
but all such counterparts shall constitute a single instrument.
IN WITNESS WHEREOF, the parties have executed this Agreement effective as
of the date set forth above.
METRON TECHNOLOGY B.V.
By:
-----------------------------------------
Ed Segal
President
METRON TECHNOLOGY CORPORATION
By:
-----------------------------------------
Ed Segal
President
10.
<PAGE>
EXECUTIVE
-----------------------------------------
[INSERT NAME]
11.
<PAGE>
EXHIBIT A
EMPLOYEE AGREEMENT AND RELEASE
I hereby release, acquit and forever discharge Metron Technology
Corporation, its parents and subsidiaries (including Metron Technology B.V.
("MTBV"), and its and their officers, directors, agents, servants, employees,
attorneys, shareholders, successors, assigns and affiliates, of and from any and
all claims, liabilities, demands, causes of action, costs, expenses, attorneys'
fees, damages, indemnities and obligations of every kind and nature, in law,
equity, or otherwise, known and unknown, suspected and unsuspected, disclosed
and undisclosed, arising out of or in any way related directly or indirectly to
employment with Metron Technology Corporation or service with MTBV or the
termination of that employment or service, including any agreements, events,
acts or conduct at any time prior to and including the execution date of this
release, including but not limited to: claims or demands related to salary,
bonuses, commissions, stock, stock options, or any other ownership interests in
Metron Technology Corporation or MTBV, vacation pay, fringe benefits, expense
reimbursements, severance pay, or any other form of compensation; claims
pursuant to any federal, state or local law, statute, or cause of action
including, but not limited to, the federal Civil Rights Act of 1964, as amended;
the federal Americans with Disabilities Act of 1990; the federal Age
Discrimination in Employment Act of 1967, as amended ("ADEA"); the California
Fair Employment and Housing Act, as amended; tort law; contract law; wrongful
discharge; discrimination; harassment; fraud; defamation; emotional distress;
and breach of the implied covenant of good faith and fair dealing.
I acknowledge that I am knowingly and voluntarily waiving and releasing
any rights I may have under the ADEA, as amended. I also acknowledge that the
consideration given for the waiver and release in the preceding paragraph hereof
is in addition to anything of value to which I was already entitled. I further
acknowledge that I have been advised by this writing, as required by the ADEA,
that: (a) my waiver and release do not apply to any rights or claims that may
arise after the execution date of this release; (b) I have been advised hereby
that I have the right to consult with an attorney prior to executing this
release; (c) I have twenty-one (21) days to consider this release (although I
may choose to voluntarily execute this release earlier); (d) I have seven (7)
days following the execution of this release by the parties to revoke the
release; and (e) this release shall not be effective until the date upon which
the revocation period has expired, which shall be the eighth day after the
release is executed by me, provided that Metron Technology Corporation has also
executed the release by that date ("Effective Date").
In giving this release, which includes claims which may be unknown to me
at present, I acknowledge that I have read and understand Section 1542 of the
California Civil Code which reads as follows: "A GENERAL RELEASE DOES NOT EXTEND
TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT
THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY
AFFECTED HIS SETTLEMENT WITH THE DEBTOR." I hereby expressly waive and
relinquish all rights and benefits under that section and any law of any
jurisdiction of similar effect with respect to my release of the claims released
herein.
12.
<PAGE>
The parties hereto have caused this release to be executed and delivered
as of this ____ day of _______, 19___.
METRON TECHNOLOGY CORPORATION:
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
EXECUTIVE:
---------------------------------------------
[INSERT NAME]
13.
<PAGE>
METRON TECHNOLOGY N.V.
1999 EMPLOYEE STOCK PURCHASE PLAN
ADOPTED BY THE SUPERVISORY BOARD OCTOBER 13, 1999
APPROVED BY STOCKHOLDERS _______________ , 1999
1. PURPOSE.
(a) The purpose of the Plan is to provide a means by which
Employees of the Company and certain designated Affiliates may be given an
opportunity to purchase Common Shares of the Company.
(b) The Company, by means of the Plan, seeks to retain the
services of such Employees, to secure and retain the services of new Employees
and to provide incentives for such persons to exert maximum efforts for the
success of the Company and its Affiliates.
(c) The Company intends that the Rights to purchase Common Shares
of the Company granted under the Plan be considered options issued under an
"employee stock purchase plan," as that term is defined in Section 423(b) of the
Code.
2. DEFINITIONS.
(a) "AFFILIATE" means any parent corporation or subsidiary
corporation, whether now or hereafter existing, as those terms are defined in
Sections 424(e) and (f), respectively, of the Code.
(b) "BOARD" means the Supervisory Board of the Company.
(c) "CODE" means the Internal Revenue Code of 1986, as amended.
(d) "COMMITTEE" means a Committee appointed by the Board in
accordance with subparagraph 3(c) of the Plan.
(e) "COMMON SHARES" means the Common Shares of Metron Technology
N.V.
(f) "COMPANY" means Metron Technology N.V.
(g) "DIRECTOR" means a member of the Board.
(h) "ELIGIBLE EMPLOYEE" means an Employee who meets the
requirements set forth in the Offering for eligibility to participate in the
Offering.
(i) "EMPLOYEE" means any person, including Officers and Directors,
employed by the Company or an Affiliate of the Company. Neither service as a
Director nor payment of a director's fee shall be sufficient to constitute
"employment" by the Company or the Affiliate.
1.
<PAGE>
(j) "EMPLOYEE STOCK PURCHASE PLAN" means a plan that grants rights
intended to be options issued under an "employee stock purchase plan," as that
term is defined in Section 423(b) of the Code.
(k) "EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.
(l) "FAIR MARKET VALUE" means the value of a security, as
determined in good faith by the Board. If the security is listed on any
established stock exchange or traded on the Nasdaq National Market or the Nasdaq
SmallCap Market, then, except as otherwise provided in the Offering, the Fair
Market Value of the security shall be the closing sales price (rounded up where
necessary to the nearest whole cent) for such security (or the closing bid, if
no sales were reported) as quoted on such exchange or market (or the exchange or
market with the greatest volume of trading in the relevant security of the
Company) on the trading day prior to the relevant determination date, as
reported in THE WALL STREET JOURNAL or such other source as the Board deems
reliable, or if such date is not a trading day, then on the next previous
trading day.
(m) "NON-EMPLOYEE DIRECTOR" means a Director who either (i) is not
a current Employee or Officer of the Company or its parent or subsidiary, does
not receive compensation (directly or indirectly) from the Company or its parent
or subsidiary for services rendered as a consultant or in any capacity other
than as a Director (except for an amount as to which disclosure would not be
required under Item 404(a) of Regulation S-K promulgated pursuant to the
Securities Act ("Regulation S-K")), does not possess an interest in any other
transaction as to which disclosure would be required under Item 404(a) of
Regulation S-K, and is not engaged in a business relationship as to which
disclosure would be required under Item 404(b) of Regulation S-K; or (ii) is
otherwise considered a "non-employee director" for purposes of Rule 16b-3.
(n) "OFFERING" means the grant of Rights to purchase Common Shares
under the Plan to Eligible Employees.
(n) "OFFERING DATE" means a date selected by the Board for an
Offering to commence.
(p) "OUTSIDE DIRECTOR" means a Director who either (i) is not a
current employee of the Company or an "affiliated corporation" (within the
meaning of the Treasury regulations promulgated under Section 162(m) of the
Code), is not a former employee of the Company or an "affiliated corporation"
receiving compensation for prior services (other than benefits under a tax
qualified pension plan), was not an officer of the Company or an "affiliated
corporation" at any time, and is not currently receiving direct or indirect
remuneration from the Company or an "affiliated corporation" for services in any
capacity other than as a Director, or (ii) is otherwise considered an "outside
director" for purposes of Section 162(m) of the Code.
(q) "PARTICIPANT" means an Eligible Employee who holds an
outstanding Right granted pursuant to the Plan or, if applicable, such other
person who holds an outstanding Right granted under the Plan.
(r) "PLAN" means this Metron Technology N.V. 1999 Employee Stock
Purchase Plan.
2.
<PAGE>
(s) "PURCHASE DATE" means one or more dates established by the
Board during an Offering on which Rights granted under the Plan shall be
exercised and purchases of Common Shares carried out in accordance with such
Offering.
(t) "RIGHT" means an option to purchase Common Shares granted
pursuant to the Plan.
(u) "RULE 16B-3" means Rule 16b-3 of the Exchange Act or any
successor to Rule 16b-3 as in effect with respect to the Company at the time
discretion is being exercised regarding the Plan.
(v) "SECURITIES ACT" means the Securities Act of 1933, as amended.
3. ADMINISTRATION.
(a) The Board shall administer the Plan unless and until the Board
delegates administration to a Committee, as provided in subparagraph 3(c).
Whether or not the Board has delegated administration, the Board shall have the
final power to determine all questions of policy and expediency that may arise
in the administration of the Plan.
(b) The Board (or the Committee) shall have the power, subject to,
and within the limitations of, the express provisions of the Plan:
(i) To determine when and how Rights to purchase Common
Shares shall be granted and the provisions of each Offering of such Rights
(which need not be identical).
(ii) To designate from time to time which Affiliates of
the Company shall be eligible to participate in the Plan and in specified
Offerings thereunder.
(iii) To construe and interpret the Plan and Rights granted
under it, and to establish, amend and revoke rules and regulations for its
administration. The Board, in the exercise of this power, may correct any
defect, omission or inconsistency in the Plan, in a manner and to the extent it
shall deem necessary or expedient to make the Plan fully effective.
(iv) To amend the Plan as provided in paragraph 14.
(v) To terminate or suspend the Plan as provided in
paragraph 16.
(vi) Generally, to exercise such powers and to perform
such acts as it deems necessary or expedient to promote the best interests of
the Company and its Affiliates and to carry out the intent that the Plan be
treated as an Employee Stock Purchase Plan.
(c) The Board may delegate administration of the Plan to a
Committee of the Board composed of two (2) or more members, all of the
members of which Committee may be, in the discretion of the Board,
Non-Employee Directors and/or Outside Directors. If administration is
delegated to a Committee, the Committee shall have, in connection with the
administration of the Plan, the powers theretofore possessed by the Board,
including the power to delegate to a subcommittee of two (2) or more Outside
Directors any of the administrative powers the
3.
<PAGE>
Committee is authorized to exercise (and references in this Plan to the Board
shall thereafter be to the Committee or such a subcommittee), subject, however,
to such resolutions, not inconsistent with the provisions of the Plan, as may be
adopted from time to time by the Board. The Board may abolish the Committee at
any time and revest in the Board the administration of the Plan.
4. SHARES SUBJECT TO THE PLAN.
(a) Subject to the provisions of paragraph 13 relating to
adjustments upon changes in securities, the Common Shares that may be sold
pursuant to Rights granted under the Plan shall not exceed in the aggregate
three hundred thousand (300,000) Common Shares (the "Reserved Shares"). If any
Right granted under the Plan shall for any reason terminate without having been
exercised, the Common Shares not purchased under such Right shall again become
available for the Plan.
(b) The Common Shares subject to the Plan may be unissued Common
Shares or Common Shares that have been bought on the open market at prevailing
market prices or otherwise.
5. GRANT OF RIGHTS; OFFERING.
The Board may from time to time grant or provide for the grant of
Rights to purchase Common Shares under the Plan to Eligible Employees in an
Offering on an Offering Date or on Offering Dates selected by the Board. Each
Offering shall be in such form and shall contain such terms and conditions as
the Board shall deem appropriate, which shall comply with the requirements of
Section 423(b)(5) of the Code that all Employees granted Rights to purchase
Common Shares under the Plan shall have the same rights and privileges. The
terms and conditions of an Offering shall be incorporated by reference into the
Plan and treated as part of the Plan. The provisions of separate Offerings need
not be identical, but each Offering shall include (through incorporation of the
provisions of this Plan by reference in the document comprising the Offering or
otherwise) the period during which the Offering shall be effective, which period
shall not exceed twelve (12) months beginning with the Offering Date, and
the substance of the provisions contained in paragraphs 6 through 9, inclusive.
6. ELIGIBILITY.
(a) Rights may be granted only to Employees of the Company or, as
the Board may designate as provided in subparagraph 3(b), to Employees of an
Affiliate. Except as provided in subparagraph 6(b), an Employee shall not be
eligible to be granted Rights under the Plan unless, on the Offering Date, such
Employee has been in the employ of the Company or the Affiliate, as the case may
be, for such continuous period preceding such grant as the Board may require,
but in no event shall the required period of continuous employment be equal to
or greater than two (2) years.
(b) The Board may provide that each person who, during the course
of an Offering, first becomes an Eligible Employee will, on a date or dates
specified in the Offering which coincides with the day on which such person
becomes an Eligible Employee or which occurs thereafter, receive a Right under
that Offering, which Right shall thereafter be deemed to be a
4.
<PAGE>
part of that Offering. Such Right shall have the same characteristics as any
Rights originally granted under that Offering, as described herein, except that:
(i) the date on which such Right is granted shall be the
"Offering Date" of such Right for all purposes, including determination of the
exercise price of such Right;
(ii) the period of the Offering with respect to such Right
shall begin on its Offering Date and end coincident with the end of such
Offering; and
(iii) the Board may provide that if such person first
becomes an Eligible Employee within a specified period of time before the end of
the Offering, he or she will not receive any Right under that Offering.
(c) No Employee shall be eligible for the grant of any Rights
under the Plan if, immediately after any such Rights are granted, such Employee
owns stock possessing five percent (5%) or more of the total combined voting
power or value of all classes of stock of the Company or of any Affiliate. For
purposes of this subparagraph 6(c), the rules of Section 424(d) of the Code
shall apply in determining the stock ownership of any Employee, and stock which
such Employee may purchase under all outstanding rights and options shall be
treated as stock owned by such Employee.
(d) An Eligible Employee may be granted Rights under the Plan only
if such Rights, together with any other Rights granted under all Employee Stock
Purchase Plans of the Company and any Affiliates, as specified by Section
423(b)(8) of the Code, do not permit such Eligible Employee's rights to purchase
Common Shares or any Affiliate to accrue at a rate which exceeds twenty five
thousand dollars ($25,000) of the fair market value of such Common Shares
(determined at the time such Rights are granted) for each calendar year in which
such Rights are outstanding at any time.
(e) The Board may provide in an Offering that Employees who are
highly compensated Employees within the meaning of Section 423(b)(4)(D) of the
Code shall not be eligible to participate.
7. RIGHTS; PURCHASE PRICE.
(a) On each Offering Date, each Eligible Employee, pursuant to an
Offering made under the Plan, shall be granted the Right to purchase up to the
number of Common Shares purchasable either:
(i) with a percentage designated by the Board not
exceeding fifteen percent (15%) of such Employee's Earnings (as defined by the
Board in each Offering) during the period which begins on the Offering Date (or
such later date as the Board determines for a particular Offering) and ends on
the date stated in the Offering, which date shall be no later than the end of
the Offering; or
(ii) with a maximum contribution amount designated by
the Board that, as the Board determines for a particular Offering, (1) shall
be withheld, in whole or in part, from such Employee's Earnings (as defined
by the Board in each Offering) during the period which begins
5.
<PAGE>
on the Offering Date (or such later date as the Board determines for a
particular Offering) and ends on the date stated in the Offering, which date
shall be no later than the end of the Offering and/or (2) shall be contributed,
in whole or in part, by such Employee during such period.
(b) The Board shall establish one or more Purchase Dates during an
Offering on which Rights granted under the Plan shall be exercised and purchases
of Common Shares carried out in accordance with such Offering.
(c) In connection with each Offering made under the Plan, the
Board may specify a maximum number of Common Shares that may be purchased by any
Participant as well as a maximum aggregate number of Common Shares that may be
purchased by all Participants pursuant to such Offering. In addition, in
connection with each Offering that contains more than one Purchase Date, the
Board may specify a maximum aggregate number of Common Shares which may be
purchased by all Participants on any given Purchase Date under the Offering. If
the aggregate purchase of Common Shares upon exercise of Rights granted under
the Offering would exceed any such maximum aggregate amount, the Board shall
make a pro rata allocation of the Common Shares available in as nearly a uniform
manner as shall be practicable and as it shall deem to be equitable.
(d) The purchase price of Common Shares acquired pursuant to
Rights granted under the Plan shall be not less than the lesser of:
(i) an amount equal to eighty-five percent (85%) of the
fair market value of the Common Shares on the Offering Date; or
(ii) an amount equal to eighty-five percent (85%) of the
fair market value of the Common Shares on the Purchase Date.
8. PARTICIPATION; WITHDRAWAL; TERMINATION.
(a) An Eligible Employee may become a Participant in the
Plan pursuant to an Offering by delivering a participation agreement to the
Company within the time specified in the Offering, in such form as the Company
provides. To the extent required under the terms of the Offering, each such
agreement shall authorize payroll deductions of up to the maximum percentage
specified by the Board of such Employee's Earnings during the Offering (as
defined in each Offering) or specify an amount that the Participant may
contribute under the Plan during the Offering. The payroll deductions and any
other contributions made by or for each Participant shall be credited to a
bookkeeping account for such Participant under the Plan and either may be
deposited with the general funds of the Company or may be deposited in a
separate account in the name of, and for the benefit of, such Participant with a
financial institution designated by the Company. To the extent provided in the
Offering, a Participant may reduce (including to zero) or increase such payroll
deductions or other contributions. To the extent provided in the Offering, a
Participant may begin such payroll deductions or other contributions after the
beginning of the Offering. A Participant may make additional payments into his
or her account only if specifically provided for in the Offering and only if the
Participant has not already contributed or had withheld the maximum permitted
amount during the Offering.
6.
<PAGE>
(b) At any time during an Offering, a Participant may terminate
his or her payroll deductions under the Plan and, if applicable, his or her
other contributions, and withdraw from the Offering by delivering to the Company
a notice of withdrawal in such form as the Company provides. Such withdrawal may
be elected at any time prior to the end of the Offering except as provided by
the Board in the Offering. Upon such withdrawal from the Offering by a
Participant, the Company shall distribute to such Participant all of his or her
accumulated payroll deductions and other contributions under the Offering
(reduced to the extent, if any, such deductions have been used to acquire Common
Shares for the Participant), and such Participant's interest in that Offering
shall be automatically terminated. If the accumulated payroll deductions and
other contributions have been deposited with the Company's general funds, then
the distribution shall be made from the general funds of the Company, without
interest unless otherwise specified in the Offering. If the accumulated payroll
deductions and other contributions have been deposited in a separate account
with a financial institution as provided in subparagraph 8(a), then the
distribution shall be made from the separate account, without interest unless
otherwise specified in the Offering. A Participant's withdrawal from an Offering
will have no effect upon such Participant's eligibility to participate in any
other Offerings under the Plan but such Participant will be required to deliver
a new participation agreement in order to participate in subsequent Offerings
under the Plan.
(c) Rights granted pursuant to any Offering under the Plan shall
terminate immediately upon cessation of any participating Employee's employment
with the Company or a designated Affiliate for any reason (subject to any
post-employment participation period required by law) or other lack of
eligibility. The Company shall distribute to such terminated Employee all of his
or her accumulated payroll deductions and other contributions (reduced to the
extent, if any, such deductions have been used to acquire Common Shares for the
terminated Employee) that have been made under the Offering. If the accumulated
payroll deductions and other contributions have been deposited with the
Company's general funds, then the distribution shall be made from the general
funds of the Company, without interest unless otherwise specified in the
Offering. If the accumulated payroll deductions and other contributions have
been deposited in a separate account with a financial institution as provided in
subparagraph 8(a), then the distribution shall be made from the separate
account, without interest unless otherwise specified in the Offering.
(d) Rights granted under the Plan shall not be transferable by a
Participant otherwise than by will or the laws of descent and distribution, or
by a beneficiary designation as provided in paragraph 15 and, otherwise during
his or her lifetime, shall be exercisable only by the person to whom such Rights
are granted.
9. EXERCISE.
(a) On each Purchase Date specified therefor in the relevant
Offering, each Participant's accumulated payroll deductions and other
contributions specifically provided for in the Offering (without any increase
for interest unless otherwise specified in the Offering) will be applied to the
purchase of Common Shares up to the maximum number of Common Shares permitted
pursuant to the terms of the Plan and the applicable Offering, at the purchase
price specified in the Offering. No fractional Common Shares shall be issued
upon the exercise of Rights granted under the Plan unless specifically provided
for in the Offering.
7.
<PAGE>
(b) Unless otherwise specifically provided in the Offering, the
amount, if any, of accumulated payroll deductions or other contributions
remaining in any Participant's account after the purchase of Common Shares that
is equal to the amount required to purchase one or more whole Common Shares on
the final Purchase Date of the Offering shall be distributed in full to the
Participant at the end of the Offering. If the accumulated payroll deductions
and other contributions have been deposited with the Company's general funds,
then the distribution shall be made from the general funds of the Company,
without interest unless otherwise specified in the Offering. If the accumulated
payroll deductions and other contributions have been deposited in a separate
account with a financial institution as provided in subparagraph 8(a), then the
distribution shall be made from the separate account, without interest unless
otherwise specified in the Offering. The amount of accumulated payroll
deductions and other contributions remaining in any Participant's account that
is less than the amount required to purchase one whole Common Share on the final
Purchase Date of the Offering shall be carried over to the next Offering or
shall, if the Participant requests or does not participate in the next Offering,
be refunded.
(c) No Rights granted under the Plan may be exercised to any
extent unless the Common Shares to be issued upon such exercise under the Plan
(including Rights granted thereunder) are covered by an effective registration
statement pursuant to the Securities Act and the Plan is in material compliance
with all applicable state, foreign and other securities and other laws
applicable to the Plan. If on a Purchase Date in any Offering hereunder the Plan
is not so registered or in such compliance, no Rights granted under the Plan or
any Offering shall be exercised on such Purchase Date, and the Purchase Date
shall be delayed until the Plan is subject to such an effective registration
statement and such compliance, except that the Purchase Date shall not be
delayed more than twelve (12) months and the Purchase Date shall in no event be
more than twenty-seven (27) months from the Offering Date. If, on the Purchase
Date of any Offering hereunder, as delayed to the maximum extent permissible,
the Plan is not registered and in such compliance, no Rights granted under the
Plan or any Offering shall be exercised and all payroll deductions and other
contributions accumulated during the Offering (reduced to the extent, if any,
such deductions and contributions have been used to acquire Shares) shall be
distributed to the Participants, without interest unless otherwise specified in
the Offering. If the accumulated payroll deductions and other contributions have
been deposited with the Company's general funds, then the distribution shall be
made from the general funds of the Company, without interest. If the accumulated
payroll deductions and other contributions have been deposited in a separate
account with a financial institution as provided in subparagraph 8(a), then the
distribution shall be made from the separate account, without interest unless
otherwise specified in the Offering.
10. COVENANTS OF THE COMPANY.
(a) During the terms of the Rights granted under the Plan, the
Company shall ensure that the number of Common Shares required to satisfy such
Rights are available.
(b) The Company shall seek to obtain from each federal, state,
foreign or other regulatory commission or agency having jurisdiction over the
Plan such authority as may be required to issue and sell Common Shares upon
exercise of the Rights granted under the Plan. If, after reasonable efforts, the
Company is unable to obtain from any such regulatory commission
8.
<PAGE>
or agency the authority which counsel for the Company deems necessary for the
lawful issuance and sale of Common Shares under the Plan, the Company shall be
relieved from any liability for failure to issue and sell Common Shares upon
exercise of such Rights unless and until such authority is obtained.
11. USE OF PROCEEDS FROM SHARES.
Proceeds from the sale of Common Shares pursuant to Rights granted
under the Plan shall constitute general funds of the Company.
12. RIGHTS AS A STOCKHOLDER.
A Participant shall not be deemed to be the holder of, or to have any
of the rights of a holder with respect to, Common Shares subject to Rights
granted under the Plan unless and until the Participant's Common Shares acquired
upon exercise of Rights under the Plan are recorded in the books of the Company.
13. ADJUSTMENTS UPON CHANGES IN SECURITIES.
(a) If any change is made in the Common Shares subject to the
Plan, or subject to any Right, without the receipt of consideration by the
Company (through merger, consolidation, reorganization, recapitalization,
reincorporation, stock dividend, dividend in property other than cash, stock
split, liquidating dividend, combination of shares, exchange of shares, change
in corporate structure or other transaction not involving the receipt of
consideration by the Company), the Plan will be appropriately adjusted in the
class(es) and maximum number of Common Shares subject to the Plan pursuant to
subparagraph 4(a), and the outstanding Rights will be appropriately adjusted in
the class(es), number of Common Shares and purchase limits of such outstanding
Rights. The Board shall make such adjustments, and its determination shall be
final, binding and conclusive. (The conversion of any convertible securities of
the Company shall not be treated as a transaction that does not involve the
receipt of consideration by the Company.)
(b) In the event of: (i) a dissolution, liquidation, or sale of
all or substantially all of the assets of the Company; (ii) a merger or
consolidation in which the Company is not the surviving corporation; or (iii) a
reverse merger in which the Company is the surviving corporation but the Common
Shares outstanding immediately preceding the merger are converted by virtue of
the merger into other property, whether in the form of securities, cash or
otherwise, then: (1) any surviving or acquiring corporation may assume Rights
outstanding under the Plan or may substitute similar rights (including a right
to acquire the same consideration paid to the Company's stockholders in the
transaction described in this subparagraph 13(b)) for those outstanding under
the Plan, or (2) in the event any surviving or acquiring corporation does not
assume such Rights or substitute similar rights for those outstanding under the
Plan, then the Participants' accumulated payroll deductions and other
contributions (exclusive of any accumulated interest which cannot be applied
toward the purchase of Common Shares under the terms of the Offering) may be
used to purchase Common Shares immediately prior to the transaction described
above under the ongoing Offering and the Participants' Rights under the ongoing
Offering thereafter terminated.
9.
<PAGE>
14. AMENDMENT OF THE PLAN.
(a) The Board at any time, and from time to time, may amend the
Plan. However, except as provided in paragraph 13 relating to adjustments upon
changes in securities and except as to minor amendments to benefit the
administration of the Plan, to take account of a change in legislation or to
obtain or maintain favorable tax, exchange control or regulatory treatment for
Participants or the Company or any Affiliate, no amendment shall be effective
unless approved by the stockholders of the Company to the extent stockholder
approval is necessary for the Plan to satisfy the requirements of Section 423 of
the Code, Rule 16b-3 under the Exchange Act and any Nasdaq or other securities
exchange listing requirements. Currently under the Code, stockholder approval
within twelve (12) months before or after the adoption of the amendment is
required where the amendment will:
(i) Increase the number of Common Shares reserved for
Rights under the Plan;
(ii) Modify the provisions as to eligibility for
participation in the Plan to the extent such modification requires stockholder
approval in order for the Plan to obtain employee stock purchase plan treatment
under Section 423 of the Code or to comply with the requirements of Rule 16b-3;
or
(iii) Modify the Plan in any other way if such modification
requires stockholder approval in order for the Plan to obtain employee stock
purchase plan treatment under Section 423 of the Code or to comply with the
requirements of Rule 16b-3.
(b) It is expressly contemplated that the Board may amend the Plan
in any respect the Board deems necessary or advisable to provide Employees with
the maximum benefits provided or to be provided under the provisions of the Code
and the regulations promulgated thereunder relating to Employee Stock Purchase
Plans and/or to bring the Plan and/or Rights granted under it into compliance
therewith.
(c) Rights and obligations under any Rights granted before
amendment of the Plan shall not be impaired by any amendment of the Plan, except
with the consent of the person to whom such Rights were granted, or except as
necessary to comply with any laws or governmental regulations, or except as
necessary to ensure that the Plan and/or Rights granted under the Plan comply
with the requirements of Section 423 of the Code.
15. DESIGNATION OF BENEFICIARY.
(a) To the extent permitted by applicable law, a Participant may
file a written designation of a beneficiary who is to receive any Common Shares
and/or cash, if any, from the Participant's account under the Plan in the event
of such Participant's death subsequent to the end of an Offering but prior to
delivery to the Participant of such Common Shares and cash. In addition, a
Participant may file a written designation of a beneficiary who is to receive
any cash from the Participant's account under the Plan in the event of such
Participant's death during an Offering.
10.
<PAGE>
(b) To the extent permitted by applicable law, the Participant may
change such designation of beneficiary at any time by written notice. In the
event of the death of a Participant and in the absence of a beneficiary validly
designated under the Plan who is living at the time of such Participant's death,
the Company shall deliver such Common Shares and/or cash to the executor or
administrator of the estate of the Participant, or if no such executor or
administrator has been appointed (to the knowledge of the Company), the Company,
in its sole discretion, may deliver such Common Shares and/or cash to the spouse
or to any one or more dependents or relatives of the Participant, or if no
spouse, dependent or relative is known to the Company, then to such other person
as the Company may designate.
16. TERMINATION OR SUSPENSION OF THE PLAN.
(a) The Board in its discretion may suspend or terminate the Plan
at any time. Unless sooner terminated, the Plan shall terminate at the time that
all of the Common Shares subject to the Plan's reserve, as increased and/or
adjusted from time to time, have been issued under the terms of the Plan. No
Rights may be granted under the Plan while the Plan is suspended or after it is
terminated.
(b) Rights and obligations under any Rights granted while the Plan
is in effect shall not be impaired by suspension or termination of the Plan,
except as expressly provided in the Plan or with the consent of the person to
whom such Rights were granted, or except as necessary to comply with any laws or
governmental regulation, or except as necessary to ensure that the Plan and/or
Rights granted under the Plan comply with the requirements of Section 423 of the
Code.
17. EFFECTIVE DATE OF PLAN.
The Plan shall become effective simultaneously with the effectiveness
of the Company's registration statement under the Securities Act with respect to
the initial public offering of the Company's Common Shares (the "Effective
Date"), but no Rights granted under the Plan shall be exercised unless and until
the Plan has been approved by the stockholders of the Company within twelve (12)
months before or after the date the Plan is adopted by the Board, which date may
be prior to the Effective Date.
11.
<PAGE>
================================================================================
METRON TECHNOLOGY
FY2000 INCENTIVE PLAN
MBOS
EXECUTIVE: Ed Segal
TITLE: President and Chief Executive Officer
================================================================================
1. Complete one acquisition ($20,000).
a. Annual revenues 0-$9.99 million = $10K
b. Annual revenues over $10 million = $20K
2. Accuracy of quarterly booking forecast (maximum quarterly bonus is $5,000):
a. Submit 5 days prior to the beginning of each fiscal quarter a
forecasted dollar amount bookings.
b. Bonus is based on:
<TABLE>
<CAPTION>
MEETING FORECASTED PERCENTAGE OF
QUARTERLY BOOKINGS MAXIMUM BONUS
----------------------------------------- -------------------
<S> <C>
+/- 7% of forecast 100%
---------------------------------
+/- 7 to 11% of forecast 75%
---------------------------------
+/- 11 to +/-20% of forecast 25%
---------------------------------
Over +/- 20% of forecast - 0 -
</TABLE>
3. Raise additional equity capital of at least $10 million ($40,000).
4. Accurate P&L forecast. Accurately forecast each quarter net income forecast
due 30 days prior to the first date of each quarter. The maximum bonus for this
item is $5,000 per quarter.
-1-
<PAGE>
The bonus is based on:
<TABLE>
<CAPTION>
ACCURACY OF QUARTERLY P&L FORECAST BONUS
--------------------------------------- ------------
<S> <C>
+/- 10% or better 100%
+/- 10.01 to 25% 80%
+/- 25.01 to 50% 25%
+/- 50% or worse - 0 -
</TABLE>
Maximum available bonus for all items is $100,000.
~ ~ ~ ~ ~ ~ ~
-2-
<PAGE>
METRON TECHNOLOGY
FY 2000 INCENTIVE PLAN DESCRIPTION
PARTICIPANT: Ed Segal
ACKNOWLEDGMENT OF RECEIPT OF PLAN:
METRON TECHNOLOGY B.V.
EMPLOYEE: MANAGER:
/s/ E. Segal /s/ J.A. Elftmann
------------------------------------- ---------------------------------
Ed Segal Joel A. Elftmann
Title: President and Chief Executive Officer Title: Chairman, Supervisory Board
Date: 10/28/99 Date: 10/25/99
----------------------------------- ----------------------------
-1-
<PAGE>
METRON TECHNOLOGY
FY2000 INCENTIVE PLAN DESCRIPTION
1. PURPOSE
The purpose of the Metron Technology B.V. (the "Company") Incentive
Compensation Plan (the "Plan") is to attract, motivate and retain high
caliber employees who play significant roles in the attainment of
annual performance objectives of the Company.
2. DEFINITIONS
When used in the Plan, the following words and phrases shall have these
meanings:
"AWARD." A cash award granted under the Plan.
"BOARD." The Board of Supervisory Directors of the Company.
"BONUS POOL." The bonus pool described at paragraph 7 below.
"COMMITTEE." A committee consisting of two or more persons appointed by
the Board to administer the Plan.
"COMPANY." Metron Technology B.V., its successors or assigns.
"ELIGIBLE EMPLOYEE." A person who, during a Plan Year, was a regular
full-time salaried employee of the Company or a Subsidiary and who, in
the opinion of the Committee, is a key employee whose performance
contributed to the successful performance of the Company or a
Subsidiary.
"MANAGEMENT BY OBJECTIVES" (MBOS). MBOs are specific performance
targets or criteria set for each individual participant in the Plan in
consultation with the participant. Final determination of individual
performance against an MBO and payment, if any, is solely at the
discretion of the Company.
"OPERATING PROFIT." Means that, with respect to a fiscal year of the
Company, the amount reported as operating income in the Company's
consolidated audited financial statements, but excluding interest
income, actual or estimated bonus payments or accruals for such year
pursuant to bonus or incentive plans or arrangements of the Company and
its subsidiaries (other than this plan) and such other items, if any,
which in the judgment of the Board or its Compensation Committee are
unrelated to a true measurement of the Company's performance or
profitability, or the objectives of the Plan.
-1-
<PAGE>
"PARTICIPANT." An Eligible Employee to whom an Award has been made
under the Plan.
"PLAN." This Metron Technology B.V. Incentive Compensation Plan
"RETURN ON ASSETS." Return on assets is a percentage computation, the
numerator of which is pre-tax, pre-bonus operating income for the
Company as a whole (or the relevant segment of the Company) and the
denominator of which is a five point average of the assets employed by
the Company (or the segment as the case may be) at the beginning of the
fiscal year, at the end of the fiscal year and at each of the interim
quarterly balance sheet dates.
"REVENUES." The amount of revenues for a fiscal year reported by the
Company on a consolidated basis on its audited financial statements,
including sales, commission income and other income.
"SALES MARGIN." As to any fiscal year, the percentage resulting from
dividing Operating Profit by Revenues for such fiscal year.
"SUBSIDIARY." A corporation, the majority of the voting stock of which
is owned directly by the Company or by a company of which the majority
of voting stock is owned by the Company.
3. PLAN ADMINISTRATION
The plan shall be administered by the Board or the Committee if one is
appointed. The Board or the Committee shall have all necessary powers
to administer and interpret the Plan, such powers to include the
authority to select Eligible Employees to whom awards may be granted
under the Plan and to determine the amount of any Award to be granted
to any Eligible Employee, except that the aggregate amount of Awards to
be granted by the Committee to all Eligible Employees shall be approved
by the Board. The Board or the Committee shall have full power and
authority to adopt such rules and regulations for the administration of
the Plan and for the conduct of its business as either of them deems
necessary or advisable. The Board's or the Committee's interpretations
of the Plan, the determination of any Awards, and all actions taken and
determinations made by the Committee pursuant to the powers vested in
it, shall be final, conclusive and binding on all parties.
4. PLAN YEAR
The first Plan Year as to which Awards may be made under this Plan
shall commence as of the Effective Date of the Plan and terminate May
31, 2000, and thereafter a Plan year shall be the periods of June 1 to
May 31 or the Company's fiscal year, if different.
-2-
<PAGE>
5. EFFECTIVE DATE, TERMINATION, AMENDMENT
The Effective Date of the Plan shall be the date of adoption of the
Plan by the Company's Shareholders. The Board may, at any time,
terminate the Plan, and the Board or the Committee may, at any time,
amend or suspend and, if suspended, reinstate the Plan in whole or in
part; provided, however, that no such termination, amendment or
suspension shall impair or alter any incentive compensation
arrangements pursuant to a written employment agreement with an
Eligible Employee unless permitted by such agreement or agreed to in
writing by the Eligible Employee.
6. PARTICIPATION AND NOTIFICATION
Eligible Employees in the Plan shall be selected by the Board or the
Committee from among the Company's and its Subsidiaries' employees
based upon such criteria as the Committee may from time to time
determine.
After the beginning of a Plan Year, Eligible Employees shall be
notified of their eligibility for participation in the Plan.
Eligibility in any one year does not automatically qualify a
Participant for participation in future Plan Years.
Employees hired during a Plan Year are eligible for participation in
the Plan for such year and, if selected by the Board or Committee,
shall be so notified.
Eligible Employees in this Plan shall not be eligible to participate in
any sales commission plan unless authorized in writing by the Committee
and the Board or the Compensation Committee of the Board.
In order to be eligible for an Award under the Plan, an Eligible
Employee must be actively employed on the last day of the Plan Year.
7. BONUS POOL
The Bonus Pool shall consist of a sales margin pool, a return on assets
pool and MBOs (objectives) for each participant, notwithstanding
anything in the Plan to the contrary, the total amount of the Bonus
Pool need not be paid as awards under this Plan.
8. ALLOCATION OF BONUS POOL
The Committee shall allocate in writing a portion of the Bonus Pool to
be paid to each Participant for each Plan Year. The Committee shall
have complete discretion with respect to the determination of
eligibility, the determination of the Eligible Employees to whom Awards
shall be granted and the amount of any Awards to be made or made from
the Bonus Pool.
-3-
<PAGE>
9. PAYMENTS OF AWARDS
Awards under the Plan shall be paid in cash generally within 90 days
following the end of the Plan Year. The Plan shall at all times be
entirely unfunded. No provision shall at any time be made with respect
to segregating assets of the Company for payment of any distributions
hereunder. No Participant or any other person shall have any interest
in any particular assets of the Company by reason of the right to
receive an Award.
10. TERMINATION OF EMPLOYMENT
All potential awards under this Plan are forfeited if any employee's
employment with the Company and its subsidiaries is terminated either
voluntarily or involuntarily prior to the end of the Plan Year, except
due to death, disability or retirement.
11. DEATH, DISABILITY OR RETIREMENT OF A PARTICIPANT
In the event that a Participant dies, becomes permanently disabled or
retires during the Plan Year, a pro-rated Award may be made in the sole
discretion of the Company or the Committee. The pro-rated Award, if
any, shall be made based on the number of months actively employed
during the Plan Year and such other criteria as the Committee shall
determine.
12. EMPLOYMENT
Participation in this Plan does not imply that an Eligible Employee has
any right to continued employment with the Company or a Subsidiary.
There is no employment agreement or right associated with participation
in this Plan, nor does participation in this Plan restrict the
Company's ability to terminate the employment of an Eligible Employee
at any time, for any reason.
13. GOVERNMENT AND OTHER REGULATIONS
The obligation of the Company to make payments or distributions under
the Plan shall be subject to all applicable laws and regulations and to
such approvals by governmental agencies as may be required.
14. TAX WITHHOLDING
The Company shall have the right to deduct from all awards any federal,
state, local or non-U.S. taxes as required by law to be withheld with
respect to such cash payments. Tax withholding from the Award shall be
based on the Participant's normal withholding rates, unless the
Participant submits a written request to have withholding at a
different rate and such is permitted by law. All tax liabilities shall
remain the responsibility of the Participant.
-4-
<PAGE>
15. BENEFICIARIES
Any payment due to a deceased Participant shall be made to the
Participant's surviving spouse. If a Participant does not have a
surviving spouse, payment shall be made to the Participant's legal
representative.
16. NONTRANSFERABILITY
No Award payable under the Plan shall be subject in any manner to
anticipation, alienation, sale, transfer, assignment, pledge,
encumbrance or charge prior to actual receipt thereof by the payee;
and, any attempt to so anticipate, alienate, sell, transfer, assign,
pledge, encumber or charge prior to such receipt shall be void, except,
in the event of the Employee's death, to the Employee's surviving
spouse or in the absence of a surviving spouse, by will or the laws of
descent and distribution. The Company shall not be liable in any manner
for or subject to the debts, contracts, liabilities, engagements or
torts of any person entitled to any distribution under the Plan.
17. INDEMNIFICATION
The members of the Board, its Compensation Committee and the Plan's
Committee shall be defended, indemnified and held harmless by the
Company against and from any loss, cost, liability or expense that may
be imposed upon or reasonably incurred by them in connection with or
resulting from any claim, action, suit or proceeding to which they may
be a party or in which they may be a party or in which they may be
involved by reason of any action or failure to act under the Plan and
against and from any and all amounts paid by them in satisfaction of
judgment in any such action, suit or proceeding against them. They
shall give the Company an opportunity, at its own expense, to handle
and defend the same before they undertake to handle and defend it on
their own behalf. The foregoing right of indemnification and defense
shall not be exclusive of any other rights of indemnification to which
they may be entitled under the Company's Articles of Association, as a
matter of law, or otherwise, or any power that the Company may have to
indemnify them or hold them harmless.
18. RELIANCE ON REPORTS
The Board, its Compensation Committee and the Plan's Committee shall be
fully justified in relying or acting in good faith upon any report made
by the independent public accountants of the Company and upon any other
information furnished in connection with the Plan by any person or
persons other than themselves. In no event shall they be liable for any
determination made or other action taken or any omission to act in
reliance upon any such report or information or for any action taken,
including the furnishing of information, or failure to act, if in good
faith.
-5-
<PAGE>
19. RELATIONSHIP TO OTHER BENEFITS
No payment under the Plan shall be taken into account in determining
any benefits under any pension, retirement, profit-sharing, group
insurance or other benefit plan of the Company or a Subsidiary, unless
specifically so provided under such Plan.
20. EXPENSES
The expenses of administering the Plan shall be borne by the Company.
21. TITLES AND HEADINGS
The titles and headings of the section in the Plan are for convenience
of reference only and in the event of any conflict, the text of the
Plan, rather than such titles or headings, shall control.
22. GOVERNING LAW
Solely for the purposes of solving interpretive questions relating to
the provisions of the Plan, the laws of the Netherlands, without giving
effect to the principles of conflicts of laws thereof, shall apply.
However, with respect to other matters, including without limitation
employment, termination of employment and employee benefits (other than
bonuses under the Plan), which matters are excluded from and not
affected by the Plan, the law which is otherwise applicable to the
employment relationship between the Eligible Employee and the Eligible
Employee's employer shall apply.
~ ~ ~ ~ ~ ~~ ~ ~
-6-
<PAGE>
ED SEGAL
PRESIDENT AND CHIEF EXECUTIVE OFFICER
OUTLINE
Plan consists of three components for bonus:
- Corporate Sales Margin
- Corporate Return on Assets
- MBOs
<PAGE>
METRON CORPORATE INCENTIVE PLAN
FY2000
SALES MARGIN
FUNDING RATE
FACTORS
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
SALES MARGIN % FACTOR
- -------------------------------------------------------------------------------
<S> <C> <C>
0 - 2 0.33
over 2 0.50
- -------------------------------------------------------------------------------
</TABLE>
Funding Rate = Sales Margin % x Factor
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
SALES FUNDING RATE %
----------------------------------------------------
MARGIN % 0 - 2% > 2% TOTAL
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
1.0% 0.0033 0 0.0033
2.0% 0.0066 0 0.0066
3.0% 0.0066 0.0050 0.0116
4.0% 0.0066 0.0099 0.0165
5.0% 0.0066 0.0149 0.0215
6.0% 0.0066 0.0198 0.0264
7.0% 0.0066 0.0248 0.0314
- --------------------------------------------------------------------------------
</TABLE>
CORPORATE - 1
<PAGE>
METRON CORPORATE INCENTIVE PLAN
FY2000
SALES MARGIN
EXAMPLE OF VARIOUS OUTCOMES
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------
SALES OPERATING FUNDING CORPORATE
LEVEL REVENUES MARGIN % PROFIT ($MIL) RATE POOL ($000) % OF POOL/PAYOUT ($000)
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
30%
- -------------------------------------------------------------------------------------------------------------
1 $280.0 1.0% $2.8 0.330% $9.2 $2.8
1 $280.0 2.0% $5.6 0.660% $37.0 $11.1
1 $280.0 4.0% $11.2 1.650% $184.8 $55.4
- -------------------------------------------------------------------------------------------------------------
2 $300.0 1.0% $3.0 0.330% $9.9 $3.0
2 $300.0 2.0% $6.0 0.660% $39.6 $11.9
2 $300.0 4.0% $12.0 1.650% $198.0 $59.4
- -------------------------------------------------------------------------------------------------------------
3 $320.0 2.0% $6.4 0.660% $42.2 $12.7
3 $320.0 3.0% $9.6 1.155% $110.9 $33.3
3 $320.0 4.0% $12.8 1.650% $211.2 $63.4
- -------------------------------------------------------------------------------------------------------------
</TABLE>
Funding Rate = Sales Margin x Factor
Total Corporate Pool = Funding Rate x Operating Profit ($Mil)
CORPORATE - 2
<PAGE>
METRON CORPORATE INCENTIVE PLAN
FY2000
RETURN ON ASSETS
RETURN ON ASSETS FACTORS
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------
RETURN ON ASSETS % FACTOR
- -------------------------------------------------------------------------
<S> <C>
0 - 6 0.2200
Over 6 0.3300
- -------------------------------------------------------------------------
</TABLE>
Funding Rate = Return on Assets % x Factor
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------
FUNDING RATE %
RETURN ON --------------------------------------------------
ASSETS % 0 - 6% > 6% TOTAL
- -------------------------------------------------------------------------
<S> <C> <C> <C>
3.0 0.45 0 0.450
6.0 0.90 0 0.900
9.0 0.90 0.675 1.575
12.0 0.90 1.350 2.250
18.0 0.90 2.700 3.600
19.5 0.90 3.038 3.938
24.0 0.90 4.050 4.950
- -------------------------------------------------------------------------
</TABLE>
CORPORATE - 3
<PAGE>
METRON CORPORATE INCENTIVE PLAN
FY2000
RETURN ON ASSETS
EXAMPLES OF VARIOUS OUTCOMES
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------
AVERAGE OPERATING RETURN ON FUNDING CORPORATE
LEVEL ASSETS PROFIT ($MIL) ASSETS RATE POOL ($000) PERCENTAGE OF POOL/PAYOUT ($000)
- --------------------------------------------------------------------------------------------------------------------
30%
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1 $100.8 $2.8 2.8% 0.416% $11.7 $3.5
1 $106.2 $2.8 2.64% 0.396% $11.1 $3.3
1 $111.5 $2.8 2.5% 0.377% $10.6 $3.2
- --------------------------------------------------------------------------------------------------------------------
2 $85.5 $6.0 7.0% 1.129% $67.7 $20.3
2 $90.0 $6.0 6.7% 1.050% $63.0 $18.9
2 $111.7 $6.0 5.37% 0.805% $48.3 $14.5
- --------------------------------------------------------------------------------------------------------------------
3 $85.5 $12.8 15.0% 2.918% $373.6 $112.1
3 $90.0 $12.8 14.2% 2.750% $352.0 $105.6
3 $134.1 $12.8 9.55% 1.698% $217.3 $65.2
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
Average Assets are calculated by taking mean of beginning assets (5/31/99),
three interim asset totals and ending assets (5/31/00).
Total Corporate Pool = Operating Profit (pre-bonus, pre-tax) x funding rate.
CORPORATE - 4
<PAGE>
METRON INCENTIVE PLAN
FY2000
TOTAL POTENTIAL BONUSES AT THREE ASSUMED LEVELS OF PERFORMANCE
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
FISCAL YEAR FY00
- -----------------------------------------------------------------------------------------------------------------------------------
PARTICIPATION (% OF CORPORATE RETURN CORPORATE RETURN ON
$000 CORP POOL) ON SALES ASSETS MBO'S TOTAL BONUS
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
LEVEL 1 2 3 1 2 3 1 2 3 1 2 3
- -----------------------------------------------------------------------------------------------------------------------------------
$ $ $ $ $ $ $ $ $ $ $ $
- -----------------------------------------------------------------------------------------------------------------------------------
President 30% 2.8 11.9 63.4 3.3 14.5 65.2 25.0 50.0 100.0 31.1 76.4 228.6
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
-1-
<PAGE>
METRON CORPORATE INCENTIVE PLAN
FY2000
NAME: Ed Segal
------------------------------------------------------------
TITLE: President and Chief Executive Officer
------------------------------------------------------------
EXAMPLES OF TOTAL OUTCOMES FOR ALL THREE LEVELS OF THE PLAN
<TABLE>
<CAPTION>
-------------------------------------------------------
LEVEL
-------------------------------------------------------
ASSUMPTIONS: 1 2 3
-------------------------------------------------------
<S> <C> <C> <C>
Revenues ($millions) $ 280.0 $ 300.0 $ 320.0
Corporate Sales Margin 1.0% 2.0% 4.0%
BONUS COMPONENTS:
Corporate Sales Margin $ 2,772 $ 11,880 $ 63,360
Corporate Return on Assets $ 3,323 $ 14,498 $ 65,196
Division Sales Margin N/A N/A N/A
Division Return on Assets N/A N/A N/A
-------------------------------------------------------
Sub-total $ 6,095 $ 26,378 $128,556
MBO's (see Note 1 below) $ 25,000 $ 50,000 $100,000
-------------------------------------------------------
Total bonus components $ 31,095 $ 76,378 $228,556
=======================================================
</TABLE>
NOTE 1
MBO's are not related to Levels, and accordingly the amounts payable can be
independent of the financial performance of the Company or the Division
EX. TOTAL OUTCOMES-1
<PAGE>
================================================================================
METRON TECHNOLOGY
FY00 INCENTIVE PLAN
MBOs
EXECUTIVE: Michael A. Grandinetti
TITLE: Executive Vice President Materials
================================================================================
1. Meeting forecasted quarterly materials booking forecast (maximum quarterly
bonus is $5,000):
A. Submit 15 days prior to the beginning of each fiscal quarter a
forecasted dollar amount bookings.
B. Bonus is based on:
<TABLE>
<CAPTION>
MEETING FORECASTED PERCENTAGE OF
QUARTERLY MATERIALS BOOKINGS MAXIMUM BONUS
------------------------
<S> <C>
+/- 7% of forecast 100%
+/- 7 to 11% of forecast 75%
+/- 11 to +/-20% of forecast 25%
Over +/- 20% of forecast - 0 -
</TABLE>
2. ACCURATE P&L FORECAST. Accurately forecast each quarter net income forecast
due 30 days prior to the first date of each quarter. The maximum bonus for
this item is $5,000 per quarter.
The bonus is based on:
<TABLE>
<CAPTION>
ACCURACY OF QUARTERLY P&L FORECAST BONUS
---------------------------------------------- -------------
<S> <C>
+/- 10% or better 100%
+/- 10.01 to 25% 80%
+/- 25.01 to 50% 25%
+/- 50% or worse - 0 -
</TABLE>
-1-
<PAGE>
3. Yearly increase in revenues for specific product lines (maximum annual
bonus is $20,000):
<TABLE>
<CAPTION>
LINE TOTAL
--------------------------------- -------------------------------
<S> <C>
Tescom
Ametek (U.S. Gauge)
Gelpak
SPI
AST
Oak
SST Tube
Other
-------------------------------
===============================
</TABLE>
(Other is any new materials lines signed up after May 1, 1999.)
For each 1% increase in revenues, the bonus shall be 1% of the maximum
up to a maximum of 100% for this item.
4. Open an office in Northern California that has revenues of over $2
million in FY00 or complete an acquisition of California-based
distributor (bonus is $10,000).
5. Submit to CEO a list of risk items that may require reserves 15 days
before the beginning of each fiscal quarter. Bonus judged on avoiding
surprise reserves during the quarter. Maximum bonus equals $10,000.
Total maximum bonus is $80,000.
~ ~ ~ ~ ~ ~ ~
-2-
<PAGE>
METRON TECHNOLOGY
FY2000 INCENTIVE PLAN DESCRIPTION
PARTICIPANT: Michael A. Grandinetti
ACKNOWLEDGMENT OF RECEIPT OF PLAN:
EMPLOYEE: METRON TECHNOLOGY B.V.
/s/ Michael A. Grandinetti /s/ E. Segal
- ----------------------------------------- ------------------------------------
Michael A. Grandinetti Ed Segal
Title: Executive Vice President Materials Title: President and Chief Executive
Officer
Date: Oct. 25, 1999 Date: 7/10/99
------------------------------------ -------------------------------
<PAGE>
METRON TECHNOLOGY
FY2000 INCENTIVE PLAN PARTICIPATION
1. PURPOSE
The purpose of the Metron Technology B.V. (the "Company") Incentive
Compensation Plan (the "Plan") is to attract, motivate and retain high
caliber employees who play significant roles in the attainment of
annual performance objectives of the Company.
2. DEFINITIONS
When used in the Plan, the following words and phrases shall have these
meanings:
"AWARD." A cash award granted under the Plan.
"BOARD." The Board of Supervisory Directors of the Company.
"BONUS POOL." The bonus pool described at paragraph 7 below.
"COMMITTEE." A committee consisting of two or more persons appointed by
the Board to administer the Plan.
"COMPANY." Metron Technology B.V., its successors or assigns.
"ELIGIBLE EMPLOYEE." A person who, during a Plan Year, was a regular
full-time salaried employee of the Company or a Subsidiary and who, in
the opinion of the Committee, is a key employee whose performance
contributed to the successful performance of the Company or a
Subsidiary.
"MANAGEMENT BY OBJECTIVES" (MBOs). MBOs are specific performance
targets or criteria set for each individual participant in the Plan in
consultation with the participant. Final determination of individual
performance against an MBO and payment, if any, is solely at the
discretion of the Company.
"OPERATING PROFIT." Means that, with respect to a fiscal year of the
Company, the amount reported as operating income in the Company's
consolidated audited financial statements, but excluding interest
income, actual or estimated bonus payments or accruals for such year
pursuant to bonus or incentive plans or arrangements of the Company and
its subsidiaries (other than this plan) and such other items, if any,
which in the judgment of the Board or its Compensation Committee are
unrelated to a true measurement of the Company's performance or
profitability, or the objectives of the Plan.
-1-
<PAGE>
"PARTICIPANT." An Eligible Employee to whom an Award has been made
under the Plan.
"PLAN." This Metron Technology B.V. Incentive Compensation Plan
"RETURN ON ASSETS." Return on assets is a percentage computation, the
numerator of which is pre-tax, pre-bonus operating income for the
Company as a whole (or the relevant segment of the Company) and the
denominator of which is a five point average of the assets employed by
the Company (or the segment as the case may be) at the beginning of the
fiscal year, at the end of the fiscal year and at each of the interim
quarterly balance sheet dates.
"REVENUES." The amount of revenues for a fiscal year reported by the
Company on a consolidated basis on its audited financial statements,
including sales, commission income and other income.
"SALES MARGIN." As to any fiscal year, the percentage resulting from
dividing Operating Profit by Revenues for such fiscal year.
"SUBSIDIARY." A corporation, the majority of the voting stock of which
is owned directly by the Company or by a company of which the majority
of voting stock is owned by the Company.
3. PLAN ADMINISTRATION
The plan shall be administered by the Board or the Committee if one is
appointed. The Board or the Committee shall have all necessary powers
to administer and interpret the Plan, such powers to include the
authority to select Eligible Employees to whom awards may be granted
under the Plan and to determine the amount of any Award to be granted
to any Eligible Employee, except that the aggregate amount of Awards to
be granted by the Committee to all Eligible Employees shall be approved
by the Board. The Board or the Committee shall have full power and
authority to adopt such rules and regulations for the administration of
the Plan and for the conduct of its business as either of them deems
necessary or advisable. The Board's or the Committee's interpretations
of the Plan, the determination of any Awards, and all actions taken and
determinations made by the Committee pursuant to the powers vested in
it, shall be final, conclusive and binding on all parties.
4. PLAN YEAR
The first Plan Year as to which Awards may be made under this Plan
shall commence as of the Effective Date of the Plan and terminate May
31, 1999, and thereafter a Plan year shall be the periods of June 1 to
May 31 or the Company's fiscal year, if different.
-2-
<PAGE>
5. EFFECTIVE DATE, TERMINATION, AMENDMENT
The Effective Date of the Plan shall be the date of adoption of the
Plan by the Company's Shareholders. The Board may, at any time,
terminate the Plan, and the Board or the Committee may, at any time,
amend or suspend and, if suspended, reinstate the Plan in whole or in
part; provided, however, that no such termination, amendment or
suspension shall impair or alter any incentive compensation
arrangements pursuant to a written employment agreement with an
Eligible Employee unless permitted by such agreement or agreed to in
writing by the Eligible Employee.
6. PARTICIPATION AND NOTIFICATION
Eligible Employees in the Plan shall be selected by the Board or the
Committee from among the Company's and its Subsidiaries' employees
based upon such criteria as the Committee may from time to time
determine.
After the beginning of a Plan Year, Eligible Employees shall be
notified of their eligibility for participation in the Plan.
Eligibility in any one year does not automatically qualify a
Participant for participation in future Plan Years.
Employees hired during a Plan Year are eligible for participation in
the Plan for such year and, if selected by the Board or Committee,
shall be so notified.
Eligible Employees in this Plan shall not be eligible to participate in
any sales commission plan unless authorized in writing by the Committee
and the Board or the Compensation Committee of the Board.
In order to be eligible for an Award under the Plan, an Eligible
Employee must be actively employed on the last day of the Plan Year.
7. BONUS POOL
The Bonus Pool shall consist of a sales margin pool, a return on assets
pool and MBOs (objectives) for each participant, notwithstanding
anything in the Plan to the contrary, the total amount of the Bonus
Pool need not be paid as awards under this Plan.
8. ALLOCATION OF BONUS POOL
The Committee shall allocate in writing a portion of the Bonus Pool to
be paid to each Participant for each Plan Year. The Committee shall
have complete discretion with respect to the determination of
eligibility, the determination of the Eligible Employees to whom Awards
shall be granted and the amount of any Awards to be made or made from
the Bonus Pool.
-3-
<PAGE>
9. PAYMENTS OF AWARDS
Awards under the Plan shall be paid in cash generally within 90 days
following the end of the Plan Year. The Plan shall at all times be
entirely unfunded. No provision shall at any time be made with respect
to segregating assets of the Company for payment of any distributions
hereunder. No Participant or any other person shall have any interest
in any particular assets of the Company by reason of the right to
receive an Award.
10. TERMINATION OF EMPLOYMENT
All potential awards under this Plan are forfeited if any employee's
employment with the Company and its subsidiaries is terminated either
voluntarily or involuntarily prior to the end of the Plan Year, except
due to death, disability or retirement.
11. DEATH, DISABILITY OR RETIREMENT OF A PARTICIPANT
In the event that a Participant dies, becomes permanently disabled or
retires during the Plan Year, a pro-rated Award may be made in the sole
discretion of the Company or the Committee. The pro-rated Award, if
any, shall be made based on the number of months actively employed
during the Plan Year and such other criteria as the Committee shall
determine.
12. EMPLOYMENT
Participation in this Plan does not imply that an Eligible Employee has
any right to continued employment with the Company or a Subsidiary.
There is no employment agreement or right associated with participation
in this Plan, nor does participation in this Plan restrict the
Company's ability to terminate the employment of an Eligible Employee
at any time, for any reason.
13. GOVERNMENT AND OTHER REGULATIONS
The obligation of the Company to make payments or distributions under
the Plan shall be subject to all applicable laws and regulations and to
such approvals by governmental agencies as may be required.
14. TAX WITHHOLDING
The Company shall have the right to deduct from all awards any federal,
state, local or non-U.S. taxes as required by law to be withheld with
respect to such cash payments. Tax withholding from the Award shall be
based on the Participant's normal withholding rates, unless the
Participant submits a written request to have withholding at a
different rate and such is permitted by law. All tax liabilities shall
remain the responsibility of the Participant.
-4-
<PAGE>
15. BENEFICIARIES
Any payment due to a deceased Participant shall be made to the
Participant's surviving spouse. If a Participant does not have a
surviving spouse, payment shall be made to the Participant's legal
representative.
16. NONTRANSFERABILITY
No Award payable under the Plan shall be subject in any manner to
anticipation, alienation, sale, transfer, assignment, pledge,
encumbrance or charge prior to actual receipt thereof by the payee;
and, any attempt to so anticipate, alienate, sell, transfer, assign,
pledge, encumber or charge prior to such receipt shall be void, except,
in the event of the Employee's death, to the Employee's surviving
spouse or in the absence of a surviving spouse, by will or the laws of
descent and distribution. The Company shall not be liable in any manner
for or subject to the debts, contracts, liabilities, engagements or
torts of any person entitled to any distribution under the Plan.
17. INDEMNIFICATION
The members of the Board, its Compensation Committee and the Plan's
Committee shall be defended, indemnified and held harmless by the
Company against and from any loss, cost, liability or expense that may
be imposed upon or reasonably incurred by them in connection with or
resulting from any claim, action, suit or proceeding to which they may
be a party or in which they may be a party or in which they may be
involved by reason of any action or failure to act under the Plan and
against and from any and all amounts paid by them in satisfaction of
judgment in any such action, suit or proceeding against them. They
shall give the Company an opportunity, at its own expense, to handle
and defend the same before they undertake to handle and defend it on
their own behalf. The foregoing right of indemnification and defense
shall not be exclusive of any other rights of indemnification to which
they may be entitled under the Company's Articles of Association, as a
matter of law, or otherwise, or any power that the Company may have to
indemnify them or hold them harmless.
18. RELIANCE ON REPORTS
The Board, its Compensation Committee and the Plan's Committee shall be
fully justified in relying or acting in good faith upon any report made
by the independent public accountants of the Company and upon any other
information furnished in connection with the Plan by any person or
persons other than themselves. In no event shall they be liable for any
determination made or other action taken or any omission to act in
reliance upon any such report or information or for any action taken,
including the furnishing of information, or failure to act, if in good
faith.
-5-
<PAGE>
19. RELATIONSHIP TO OTHER BENEFITS
No payment under the Plan shall be taken into account in determining
any benefits under any pension, retirement, profit-sharing, group
insurance or other benefit plan of the Company or a Subsidiary, unless
specifically so provided under such Plan.
20. EXPENSES
The expenses of administering the Plan shall be borne by the Company.
21. TITLES AND HEADINGS
The titles and headings of the section in the Plan are for convenience
of reference only and in the event of any conflict, the text of the
Plan, rather than such titles or headings, shall control.
22. GOVERNING LAW
Solely for the purposes of solving interpretive questions relating to
the provisions of the Plan, the laws of the Netherlands, without
giving effect to the principles of conflicts of laws thereof, shall
apply. However, with respect to other matters, including without
limitation employment, termination of employment and employee benefits
(other than bonuses under the Plan), which matters are excluded from
and not affected by the Plan, the law which is otherwise applicable to
the employment relationship between the Eligible Employee and the
Eligible Employee's employer shall apply.
~ ~ ~ ~ ~ ~ ~ ~ ~
-6-
<PAGE>
MICHAEL A. GRANDINETTI
EXECUTIVE VICE PRESIDENT MATERIALS
OUTLINE
Plan consists of four components for bonus:
-- Corporate Sales Margin
-- Corporate Return on Assets
-- Management Objectives (MBOs)
-- Materials Sales Margin
<PAGE>
METRON CORPORATE INCENTIVE PLAN
FY2000
SALES MARGIN
FUNDING RATE
CORPORATE - RETURN ON SALES
FACTORS
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
SALES MARGIN % FACTOR
- -------------------------------------------------------------------------------
<S> <C>
0 - 2 0.33
over 2 0.50
- -------------------------------------------------------------------------------
</TABLE>
Funding Rate = Sales Margin % x Factor
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------
FUNDING RATE %
SALES ----------------------------------------------------
MARGIN % 0 - 2% > 2% TOTAL
- ---------------------------------------------------------------------------
<S> <C> <C> <C>
1.0% 0.0033 0 0.0033
2.0% 0.0066 0 0.0066
3.0% 0.0066 0.0050 0.0116
4.0% 0.0066 0.0099 0.0165
5.0% 0.0066 0.0149 0.0215
6.0% 0.0066 0.0198 0.0264
7.0% 0.0066 0.0248 0.0314
- ---------------------------------------------------------------------------
</TABLE>
CORPORATE-1
<PAGE>
METRON CORPORATE INCENTIVE PLAN
FY2000
SALES MARGIN
EXAMPLE OF VARIOUS OUTCOMES
(IN $000S)
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
LEVEL REVENUES SALES OPERATING FUNDING CORPORATE PERCENTAGE OF
MARGIN % PROFIT ($MIL) RATE POOL ($000) POOL ($000)
- -----------------------------------------------------------------------------------------------------------------------------------
10%
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1 $280.0 1.0% $2.8 0.330% $9.2 $0.9
1 $280.0 2.0% $5.6 0.660% $37.0 $3.7
1 $280.0 4.0% $11.2 1.650% $184.8 $18.5
- -----------------------------------------------------------------------------------------------------------------------------------
2 $300.0 1.0% $3.0 0.330% $9.9 $1.0
2 $300.0 2.0% $6.0 0.660% $39.6 $4.0
2 $300.0 4.0% $12.0 1.650% $198.0 $19.8
- -----------------------------------------------------------------------------------------------------------------------------------
3 $320.0 2.0% $6.4 0.660% $42.2 $4.2
3 $320.0 3.0% $9.6 1.155% $110.9 $11.1
3 $320.0 4.0% $12.8 1.650% $211.2 $21.1
- -----------------------------------------------------------------------------------------------------------------------------------
4 $340.0 2.0% $6.8 0.660% $44.9 $4.5
4 $340.0 4.0% $13.6 1.650% $224.4 $22.4
4 $320.0 5.0% $16.0 2.145% $343.2 $34.3
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Funding Rate = Sales Margin x Factor
Total Corporate Pool = Funding Rate x Operating Profit ($Mil)
CORPORATE-2
<PAGE>
METRON CORPORATE INCENTIVE PLAN
FY2000
RETURN ON ASSETS
RETURN ON ASSETS FACTORS
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------
RETURN ON ASSETS % FACTOR
- -------------------------------------------------------------------------
<S> <C>
0 - 6 0.2200
Over 6 0.3300
- -------------------------------------------------------------------------
</TABLE>
Funding Rate = Return on Assets % x Factor
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------
FUNDING RATE %
RETURN ON ---------------------------------------------------
ASSETS % 0 - 6% > 6% TOTAL
- -------------------------------------------------------------------------
<S> <C> <C> <C>
3.0 0.45 0 0.450
6.0 0.90 0 0.900
9.0 0.90 0.675 1.575
12.0 0.90 1.350 2.250
18.0 0.90 2.700 3.600
19.5 0.90 3.038 3.938
24.0 0.90 4.050 4.950
- -------------------------------------------------------------------------
</TABLE>
CORPORATE-3
<PAGE>
METRON CORPORATE INCENTIVE PLAN
FY2000
RETURN ON ASSETS
EXAMPLE OF VARIOUS OUTCOMES
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
LEVEL AVERAGE OPERATING RETURN ON FUNDING CORPORATE PERCENTAGE OF
ASSETS PROFIT ($MIL) ASSETS RATE POOL ($000) POOL ($000)
- -----------------------------------------------------------------------------------------------------------------------------------
10%
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1 $100.8 $2.8 2.8% 0.416% $11.7 $1.2
1 $106.2 $2.8 2.64% 0.396% $11.1 $1.1
1 $111.5 $2.8 2.5% 0.377% $10.6 $1.1
- -----------------------------------------------------------------------------------------------------------------------------------
2 $85.5 $6.0 7.0% 1.129% $67.7 $6.8
2 $90.0 $6.0 6.7% 1.050% $63.0 $6.3
2 $111.7 $6.0 5.37% 0.805% $48.3 $4.8
- -----------------------------------------------------------------------------------------------------------------------------------
3 $85.5 $12.8 15.0% 2.918% $373.6 $37.4
3 $90.0 $12.8 14.2% 2.750% $352.0 $35.2
3 $134.1 $12.8 9.55% 1.698% $217.3 $21.7
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Average Assets are calculated by taking mean of beginning assets (5/31/98),
three interim asset totals and ending assets (5/31/99)
Total Corporate Pool = Operating Profit (pre-bonus, pre-tax) x Funding Rate
CORPORATE-4
<PAGE>
METRON MATERIALS INCENTIVE PLAN
FY2000
SALES MARGIN
FUNDING RATE
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------
SALES MARGIN % FACTOR
- ---------------------------------------------------------------------
<S> <C>
0 - 8% 0.000
8 - 10% 0.750
over 10% 1.500
- ---------------------------------------------------------------------
</TABLE>
Funding Rate = Sales Margin % x Factor
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
FUNDING RATE %
SALES ------------------------------------------------------------------
MARGIN % 0 - 8% 8 - 10% OVER 10% TOTAL
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
4.0% 0.00% 0.00% 0.00% 0.00%
5.0% 0.00% 0.00% 0.00% 0.00%
6.0% 0.00% 0.00% 0.00% 0.00%
7.0% 0.00% 0.00% 0.00% 0.00%
8.0% 0.00% 0.00% 0.00% 0.00%
9.0% 0.00% 0.75% 0.00% 0.75%
10.0% 0.00% 1.50% 0.00% 1.50%
11.0% 0.00% 1.50% 1.50% 3.00%
- --------------------------------------------------------------------------------
</TABLE>
MATERIALS-1
<PAGE>
METRON MATERIALS DIVISION INCENTIVE PLAN
FY2000
SALES MARGIN
EXAMPLE OF VARIOUS OUTCOMES
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------
OPERATING SALES FUNDING MATERIALS PERCENTAGE OF
LEVEL REVENUES PROFIT ($MIL) MARGIN % RATE POOL ($000) POOL ($000)
- ------------------------------------------------------------------------------------------------------------------------------
25%
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1 $133.0 $11.1 8.32% 0.239% $26.4 $6.6
1 $133.0 0.00% 0.000% $0.0 $0.0
1 $133.0 0.00% 0.000% $0.0 $0.0
- ------------------------------------------------------------------------------------------------------------------------------
2 $143.0 0.00% 0.000% $0.0 $0.0
2 $143.0 0.00% 0.000% $0.0 $0.0
2 $143.0 $12.9 9.00% 0.746% $96.0 $24.0
- ------------------------------------------------------------------------------------------------------------------------------
3 $153.0 0.00% 0.000% $0.0 $0.0
3 $153.0 0.00% 0.000% $0.0 $0.0
3 $153.0 $16.5 10.80% 2.699% $446.0 $111.5
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
*Operating profit for Materials Plan = Pre-Tax, Pre-Bonus, Pre-Corporate
Charges, Pre-F&A Contribution
MATERIALS-2
<PAGE>
METRON TECHNOLOGY INCENTIVE PLAN
FY2000
TOTAL POTENTIAL BONUSES AT THREE ASSUMED LEVELS OF PERFORMANCE
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
FISCAL YEAR FY00
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
PARTICIPATION CORPORATE CORPORATE PARTICIPATION DIVISION
$000 (% OF CORP RETURN RETURN ON (% OF DIVISION RETURN
POOL) ON SALES ASSETS MBO's POOL) ON SALES TOTAL BONUS
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
LEVEL 1 2 3 1 2 3 1 2 3 1 2 3 1 2 3
- -----------------------------------------------------------------------------------------------------------------------------------
$ $ $ $ $ $ $ $ $ $ $ $ $ $ $
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
EVP Materials 10% 0.9 4.0 21.1 1.1 4.8 21.7 20.0 40.0 80.0 25% 6.6 24.0 111.5 28.6 72.8 234.2
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
CORPORATE-1
<PAGE>
METRON TECHNOLOGY INCENTIVE PLAN
FY2000
NAME: Michael A. Grandinetti
----------------------------------------------------------------------
TITLE: EVP Materials
----------------------------------------------------------------------
EXAMPLES OF TOTAL OUTCOMES FOR ALL THREE LEVELS OF THE PLAN
<TABLE>
<CAPTION>
-------------------------------------------------------------
LEVEL
-------------------------------------------------------------
ASSUMPTIONS: 1 2 3
-------------------------------------------------------------
<S> <C> <C> <C>
Revenues ($millions) $ 280.0 $ 300.0 $ 320.0
Corporate Sales Margin 1.0% 2.0% 4.0%
BONUS COMPONENTS:
Corporate Sales Margin $ 924 $ 3,960 $ 21,120
Corporate Return on Assets $ 1,108 $ 4,833 $ 21,732
Division Sales Margin $ 6,597 $ 24,000 $111,490
Division Return on Assets N/A N/A N/A
-------------------------------------------------------------
Sub-total $ 8,629 $ 32,793 $154,342
MBO's (see Note 1 below) $ 20,000 $ 40,000 $ 80,000
-------------------------------------------------------------
Total bonus components $ 28,629 $ 72,793 $234,342
=============================================================
</TABLE>
NOTE 1:
MBO's are not related to Levels, and accordingly the amounts payable can be
independent of the financial performance of the Company or the Division.
EX. TOTAL OUTCOMES-1
<PAGE>
================================================================================
METRON TECHNOLOGY
FY2000 INCENTIVE PLAN
MBOS
EXECUTIVE: Peter V. Leigh
TITLE: Vice President Finance and Chief Financial Officer
================================================================================
1. ACCURACY OF P&L FORECAST. Accurately forecast each quarter net income
due 30 days prior to the first date of each quarter. The maximum bonus
for this item is $5,000 per quarter.
The bonus is based on:
ACCURACY OF QUARTERLY P&L FORECAST BONUS
---------------------------------- -------------
+/- 10% or better 100%
+/- 10.01 to 25% 80%
+/- 25.01 to 50% 25%
+/- 50% or worse - 0 -
2. Timely submission of reports on budget, booking/ backlog report,
financial forecast in accordance with plan. Max. bonus equals $10,000.
Plan dates must be submitted and approved by June 1,1999.
3. Submit to CEO a list of risk items that may require reserves 10 days
before the beginning of each fiscal quarter. Bonus judged on avoiding
surprise reserves during the quarter. Maximum bonus equals $10,000.
4. Complete process of raising equity funding of a minimum of $10 million
for the Company. Maximum bonus = $10,000.
5. Complete one acquisition:
A. Annual revenues 0-$9.99 million = $5K
B. Annual revenues over $10 million = $10K
~ ~ ~ ~ ~ ~ ~
<PAGE>
METRON TECHNOLOGY
FY 2000 INCENTIVE PLAN DESCRIPTION
PARTICIPANT: Peter V. Leigh
ACKNOWLEDGMENT OF RECEIPT OF PLAN:
EMPLOYEE: METRON TECHNOLOGY B.V.
/s/ Peter V. Leigh /s/ E. Segal
- ------------------------------------ ------------------------------------
Peter V. Leigh Ed Segal
Title: Vice President Title: President and Chief Executive
and Chief Financial Officer Officer
Date: as of 7/10/99 Date: 7/10/99
------------------------------ -------------------------------
<PAGE>
METRON TECHNOLOGY
FY2000 INCENTIVE PLAN DESCRIPTION
1. PURPOSE
The purpose of the Metron Technology B.V. (the "Company") Incentive
Compensation Plan (the "Plan") is to attract, motivate and retain high
caliber employees who play significant roles in the attainment of
annual performance objectives of the Company.
2. DEFINITIONS
When used in the Plan, the following words and phrases shall have these
meanings:
"AWARD." A cash award granted under the Plan.
"BOARD." The Board of Supervisory Directors of the Company.
"BONUS POOL." The bonus pool described at paragraph 7 below.
"COMMITTEE." A committee consisting of two or more persons appointed by
the Board to administer the Plan.
"COMPANY." Metron Technology B.V., its successors or assigns.
"ELIGIBLE EMPLOYEE." A person who, during a Plan Year, was a regular
full-time salaried employee of the Company or a Subsidiary and who, in
the opinion of the Committee, is a key employee whose performance
contributed to the successful performance of the Company or a
Subsidiary.
"MANAGEMENT BY OBJECTIVES" (MBOS). MBOs are specific performance
targets or criteria set for each individual participant in the Plan in
consultation with the participant. Final determination of individual
performance against an MBO and payment, if any, is solely at the
discretion of the Company.
"OPERATING PROFIT." Means that, with respect to a fiscal year of the
Company, the amount reported as operating income in the Company's
consolidated audited financial statements, but excluding interest
income, actual or estimated bonus payments or accruals for such year
pursuant to bonus or incentive plans or arrangements of the Company and
its subsidiaries (other than this plan) and such other items, if any,
which in the judgment of the Board or its Compensation Committee are
unrelated to a true measurement of the Company's performance or
profitability, or the objectives of the Plan.
-1-
<PAGE>
"PARTICIPANT." An Eligible Employee to whom an Award has been made
under the Plan.
"PLAN." This Metron Technology B.V. Incentive Compensation Plan
"RETURN ON ASSETS." Return on assets is a percentage computation, the
numerator of which is pre-tax, pre-bonus operating income for the
Company as a whole (or the relevant segment of the Company) and the
denominator of which is a five point average of the assets employed by
the Company (or the segment as the case may be) at the beginning of the
fiscal year, at the end of the fiscal year and at each of the interim
quarterly balance sheet dates.
"REVENUES." The amount of revenues for a fiscal year reported by the
Company on a consolidated basis on its audited financial statements,
including sales, commission income and other income.
"SALES MARGIN." As to any fiscal year, the percentage resulting from
dividing Operating Profit by Revenues for such fiscal year.
"SUBSIDIARY." A corporation, the majority of the voting stock of which
is owned directly by the Company or by a company of which the majority
of voting stock is owned by the Company.
3. PLAN ADMINISTRATION
The plan shall be administered by the Board or the Committee if one is
appointed. The Board or the Committee shall have all necessary powers
to administer and interpret the Plan, such powers to include the
authority to select Eligible Employees to whom awards may be granted
under the Plan and to determine the amount of any Award to be granted
to any Eligible Employee, except that the aggregate amount of Awards to
be granted by the Committee to all Eligible Employees shall be approved
by the Board. The Board or the Committee shall have full power and
authority to adopt such rules and regulations for the administration of
the Plan and for the conduct of its business as either of them deems
necessary or advisable. The Board's or the Committee's interpretations
of the Plan, the determination of any Awards, and all actions taken and
determinations made by the Committee pursuant to the powers vested in
it, shall be final, conclusive and binding on all parties.
4. PLAN YEAR
The first Plan Year as to which Awards may be made under this Plan
shall commence as of the Effective Date of the Plan and terminate May
31, 2000, and thereafter a Plan year shall be the periods of June 1 to
May 31 or the Company's fiscal year, if different.
-2-
<PAGE>
5. EFFECTIVE DATE, TERMINATION, AMENDMENT
The Effective Date of the Plan shall be the date of adoption of the
Plan by the Company's Shareholders. The Board may, at any time,
terminate the Plan, and the Board or the Committee may, at any time,
amend or suspend and, if suspended, reinstate the Plan in whole or in
part; provided, however, that no such termination, amendment or
suspension shall impair or alter any incentive compensation
arrangements pursuant to a written employment agreement with an
Eligible Employee unless permitted by such agreement or agreed to in
writing by the Eligible Employee.
6. PARTICIPATION AND NOTIFICATION
Eligible Employees in the Plan shall be selected by the Board or the
Committee from among the Company's and its Subsidiaries' employees
based upon such criteria as the Committee may from time to time
determine.
After the beginning of a Plan Year, Eligible Employees shall be
notified of their eligibility for participation in the Plan.
Eligibility in any one year does not automatically qualify a
Participant for participation in future Plan Years.
Employees hired during a Plan Year are eligible for participation in
the Plan for such year and, if selected by the Board or Committee,
shall be so notified.
Eligible Employees in this Plan shall not be eligible to participate in
any sales commission plan unless authorized in writing by the Committee
and the Board or the Compensation Committee of the Board.
In order to be eligible for an Award under the Plan, an Eligible
Employee must be actively employed on the last day of the Plan Year.
7. BONUS POOL
The Bonus Pool shall consist of a sales margin pool, a return on assets
pool and MBOs (objectives) for each participant, notwithstanding
anything in the Plan to the contrary, the total amount of the Bonus
Pool need not be paid as awards under this Plan.
8. ALLOCATION OF BONUS POOL
The Committee shall allocate in writing a portion of the Bonus Pool to
be paid to each Participant for each Plan Year. The Committee shall
have complete discretion with respect to the determination of
eligibility, the determination of the Eligible Employees to whom Awards
shall be granted and the amount of any Awards to be made or made from
the Bonus Pool.
-3-
<PAGE>
9. PAYMENTS OF AWARDS
Awards under the Plan shall be paid in cash generally within 90 days
following the end of the Plan Year. The Plan shall at all times be
entirely unfunded. No provision shall at any time be made with respect
to segregating assets of the Company for payment of any distributions
hereunder. No Participant or any other person shall have any interest
in any particular assets of the Company by reason of the right to
receive an Award.
10. TERMINATION OF EMPLOYMENT
All potential awards under this Plan are forfeited if any employee's
employment with the Company and its subsidiaries is terminated either
voluntarily or involuntarily prior to the end of the Plan Year, except
due to death, disability or retirement.
11. DEATH, DISABILITY OR RETIREMENT OF A PARTICIPANT
In the event that a Participant dies, becomes permanently disabled or
retires during the Plan Year, a pro-rated Award may be made in the sole
discretion of the Company or the Committee. The pro-rated Award, if
any, shall be made based on the number of months actively employed
during the Plan Year and such other criteria as the Committee shall
determine.
12. EMPLOYMENT
Participation in this Plan does not imply that an Eligible Employee has
any right to continued employment with the Company or a Subsidiary.
There is no employment agreement or right associated with participation
in this Plan, nor does participation in this Plan restrict the
Company's ability to terminate the employment of an Eligible Employee
at any time, for any reason.
13. GOVERNMENT AND OTHER REGULATIONS
The obligation of the Company to make payments or distributions under
the Plan shall be subject to all applicable laws and regulations and to
such approvals by governmental agencies as may be required.
14. TAX WITHHOLDING
The Company shall have the right to deduct from all awards any federal,
state, local or non-U.S. taxes as required by law to be withheld with
respect to such cash payments. Tax withholding from the Award shall be
based on the Participant's normal withholding rates, unless the
Participant submits a written request to have withholding at a
different rate and such is permitted by law. All tax liabilities shall
remain the responsibility of the Participant.
-4-
<PAGE>
15. BENEFICIARIES
Any payment due to a deceased Participant shall be made to the
Participant's surviving spouse. If a Participant does not have a
surviving spouse, payment shall be made to the Participant's legal
representative.
16. NONTRANSFERABILITY
No Award payable under the Plan shall be subject in any manner to
anticipation, alienation, sale, transfer, assignment, pledge,
encumbrance or charge prior to actual receipt thereof by the payee;
and, any attempt to so anticipate, alienate, sell, transfer, assign,
pledge, encumber or charge prior to such receipt shall be void, except,
in the event of the Employee's death, to the Employee's surviving
spouse or in the absence of a surviving spouse, by will or the laws of
descent and distribution. The Company shall not be liable in any manner
for or subject to the debts, contracts, liabilities, engagements or
torts of any person entitled to any distribution under the Plan.
17. INDEMNIFICATION
The members of the Board, its Compensation Committee and the Plan's
Committee shall be defended, indemnified and held harmless by the
Company against and from any loss, cost, liability or expense that may
be imposed upon or reasonably incurred by them in connection with or
resulting from any claim, action, suit or proceeding to which they may
be a party or in which they may be a party or in which they may be
involved by reason of any action or failure to act under the Plan and
against and from any and all amounts paid by them in satisfaction of
judgment in any such action, suit or proceeding against them. They
shall give the Company an opportunity, at its own expense, to handle
and defend the same before they undertake to handle and defend it on
their own behalf. The foregoing right of indemnification and defense
shall not be exclusive of any other rights of indemnification to which
they may be entitled under the Company's Articles of Association, as a
matter of law, or otherwise, or any power that the Company may have to
indemnify them or hold them harmless.
18. RELIANCE ON REPORTS
The Board, its Compensation Committee and the Plan's Committee shall be
fully justified in relying or acting in good faith upon any report made
by the independent public accountants of the Company and upon any other
information furnished in connection with the Plan by any person or
persons other than themselves. In no event shall they be liable for any
determination made or other action taken or any omission to act in
reliance upon any such report or information or for any action taken,
including the furnishing of information, or failure to act, if in good
faith.
-5-
<PAGE>
19. RELATIONSHIP TO OTHER BENEFITS
No payment under the Plan shall be taken into account in determining
any benefits under any pension, retirement, profit-sharing, group
insurance or other benefit plan of the Company or a Subsidiary, unless
specifically so provided under such Plan.
20. EXPENSES
The expenses of administering the Plan shall be borne by the Company.
21. TITLES AND HEADINGS
The titles and headings of the section in the Plan are for convenience
of reference only and in the event of any conflict, the text of the
Plan, rather than such titles or headings, shall control.
22. GOVERNING LAW
Solely for the purposes of solving interpretive questions relating to
the provisions of the Plan, the laws of the Netherlands, without giving
effect to the principles of conflicts of laws thereof, shall apply.
However, with respect to other matters, including without limitation
employment, termination of employment and employee benefits (other than
bonuses under the Plan), which matters are excluded from and not
affected by the Plan, the law which is otherwise applicable to the
employment relationship between the Eligible Employee and the Eligible
Employee's employer shall apply.
~ ~ ~ ~ ~ ~~ ~ ~
-6-
<PAGE>
PETER V. LEIGH
VICE PRESIDENT FINANCE
AND CHIEF FINANCIAL OFFICER
OUTLINE
Plan consists of three components for bonus:
- Corporate Sales Margin
- Corporate Return on Assets
- Management Objectives (MBOs)
<PAGE>
METRON CORPORATE INCENTIVE PLAN
FY2000
FUNDING RATE
CORPORATE - RETURN ON SALES
FACTORS
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
SALES MARGIN % FACTOR
- -------------------------------------------------------------------------------
<S> <C>
0 - 2 0.33
over 2 0.50
- -------------------------------------------------------------------------------
</TABLE>
Funding Rate = Sales Margin % x Factor
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
SALES FUNDING RATE %
----------------------------------------------------
MARGIN % 0 - 2% > 2% TOTAL
- -------------------------------------------------------------------------------
<S> <C> <C> <C>
1.0% 0.0033 0 0.0033
2.0% 0.0066 0 0.0066
3.0% 0.0066 0.0050 0.0116
4.0% 0.0066 0.0099 0.0165
5.0% 0.0066 0.0149 0.0215
6.0% 0.0066 0.0198 0.0264
7.0% 0.0066 0.0248 0.0314
- -------------------------------------------------------------------------------
</TABLE>
CORPORATE-1
<PAGE>
METRON CORPORATE INCENTIVE PLAN
FY2000
SALES MARGIN
EXAMPLE OF VARIOUS OUTCOMES
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
SALES OPERATING FUNDING CORPORATE PERCENTAGE OF POOL
LEVEL REVENUES MARGIN % PROFIT ($MIL) RATE POOL ($000) ($000)
- -----------------------------------------------------------------------------------------------------------------------------------
15%
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1 $280.0 1.0% $2.8 0.330% $9.2 $1.4
1 $280.0 2.0% $5.6 0.660% $37.0 $5.5
1 $280.0 4.0% $11.2 1.650% $184.8 $27.7
- -----------------------------------------------------------------------------------------------------------------------------------
2 $300.0 1.0% $3.0 0.330% $9.9 $1.5
2 $300.0 2.0% $6.0 0.660% $39.6 $5.9
2 $300.0 4.0% $12.0 1.650% $198.0 $29.7
- -----------------------------------------------------------------------------------------------------------------------------------
3 $320.0 2.0% $6.4 0.660% $42.2 $6.3
3 $320.0 3.0% $9.6 1.155% $110.9 $16.6
3 $320.0 4.0% $12.8 1.650% $211.2 $31.7
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Funding Rate = Sales Margin x Factor
Total Corporate Pool = Funding Rate x Operating Profit ($Mil)
CORPORATE-2
<PAGE>
METRON CORPORATE INCENTIVE PLAN
FY2000
RETURN ON ASSETS
RETURN ON ASSETS FACTORS
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------
RETURN ON ASSETS % FACTOR
- -------------------------------------------------------------------------
<S> <C>
0 - 6 0.2200
Over 6 0.3300
- -------------------------------------------------------------------------
</TABLE>
Funding Rate = Return on Assets % x Factor
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------
RETURN ON FUNDING RATE %
---------------------------------------------------
ASSETS % 0 - 6% > 6% TOTAL
- -------------------------------------------------------------------------
<S> <C> <C> <C>
3.0 0.45 0 0.450
6.0 0.90 0 0.900
9.0 0.90 0.675 1.575
12.0 0.90 1.350 2.250
18.0 0.90 2.700 3.600
19.5 0.90 3.038 3.938
24.0 0.90 4.050 4.950
- -------------------------------------------------------------------------
</TABLE>
CORPORATE-3
<PAGE>
METRON CORPORATE INCENTIVE PLAN
FY2000
RETURN ON ASSETS
EXAMPLE OF VARIOUS OUTCOMES
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
LEVEL AVERAGE OPERATING RETURN ON FUNDING CORPORATE PERCENTAGE OF
ASSETS PROFIT ($MIL) ASSETS RATE POOL ($000) POOL ($000)
- -----------------------------------------------------------------------------------------------------------------------------------
15%
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1 $100.8 $2.8 2.8% 0.416% $11.7 $1.7
1 $106.2 $2.8 2.64% 0.396% $11.1 $1.7
1 $111.5 $2.8 2.5% 0.377% $10.6 $1.6
- -----------------------------------------------------------------------------------------------------------------------------------
2 $85.5 $6.0 7.0% 1.129% $67.7 $10.2
2 $90.0 $6.0 6.7% 1.050% $63.0 $9.5
2 $111.7 $6.0 5.37% 0.805% $48.3 $7.2
- -----------------------------------------------------------------------------------------------------------------------------------
3 $85.5 $12.8 15.0% 2.918% $373.6 $56.0
3 $90.0 $12.8 14.2% 2.750% $352.0 $52.8
3 $134.1 $12.8 9.55% 1.698% $217.3 $32.6
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Average Assets are calculated by taking mean of beginning assets (5/31/98),
three interim asset totals and ending assets (5/31/99)
CORPORATE-4
<PAGE>
METRON TECHNOLOGY INCENTIVE PLAN
FY2000
TOTAL POTENTIAL BONUSES AT THREE ASSUMED LEVELS OF PERFORMANCE
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------
FISCAL YEAR FY00
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
PARTICIPATION (% CORPORATE RETURN CORPORATE RETURN
$000 OF CORP POOL) ON SALES ON ASSETS MBO'S TOTAL BONUS
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
LEVEL 1 2 3 1 2 3 1 2 3 1 2 3
- -----------------------------------------------------------------------------------------------------------------------
$ $ $ $ $ $ $ $ $ $ $ $
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
VP Finance 15% 1.4 5.9 31.7 1.7 7.2 32.6 20.0 40.0 80.0 23.0 53.2 144.3
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>
NOTE 1:
MBO's are not related to Levels, and accordingly the amounts payable can be
independent of the financial performance of the Company or the Division.
-1-
<PAGE>
METRON TECHNOLOGY INCENTIVE PLAN
FY2000
TOTAL POTENTIAL BONUSES AT THREE ASSUMED LEVELS OF PERFORMANCE
NAME Peter V. Leigh
------------------------------------------------------------------
TITLE: VP Finance & CFO
------------------------------------------------------------------
Examples of Total Outcomes for all three levels of the Plan
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
LEVEL
----------------------------------------------
ASSUMPTIONS: 1 2 3
----------------------------------------------
<S> <C> <C> <C>
Revenues ($millions) $ 280.0 $ 300.0 $ 320.0
Corporate Sales Margin 1.0% 2.0% 4.0%
BONUS COMPONENTS:
Corporate Sales Margin $ 1,386 $ 5,940 $ 31,680
Corporate Return on Assets $ 1,662 $ 7,249 $ 32,598
Division Sales Margin N/A N/A N/A
Division Return on Assets N/A N/A N/A
----------------------------------------------
Sub-total $ 3,048 $ 13,189 $ 64,278
MBO's (see Note 1 below) $ 20,000 $ 40,000 $ 80,000
----------------------------------------------
Sub-total bonus components $ 23,048 $ 53,189 $144,278
==============================================
</TABLE>
NOTE 1:
MBO's are not related to Levels, and accordingly the amounts payable can be
independent of the financial performance of the Company or the Division.
-2-
<PAGE>
================================================================================
METRON TECHNOLOGY
FY2000 INCENTIVE PLAN
MBOS
EXECUTIVE: Christopher Levett-Prinsep
TITLE: Executive Vice President Equipment
================================================================================
1. Meeting forecasted quarterly equipment booking forecast (maximum
quarterly bonus is $5,000):
a. Submit 15 days prior to the beginning of each fiscal quarter a
forecasted dollar amount bookings.
b. Bonus is based on:
<TABLE>
<CAPTION>
MEETING FORECASTED PERCENTAGE OF
QUARTERLY EQUIPMENT BOOKINGS MAXIMUM BONUS
---------------------------------------- ---------------------
<S> <C>
+/- 7% of forecast 100%
+/- 7 to 11% of forecast 75%
+/- 11 to +/-20% of forecast 25%
Over +/- 20% of forecast - 0 -
</TABLE>
2. ACCURATE P&L FORECAST. Accurately forecast each quarter net income
forecast due 30 days prior to the first date of each quarter. The
maximum bonus for this item is $5,000 per quarter.
The bonus is based on:
<TABLE>
<CAPTION>
ACCURACY OF QUARTERLY P&L FORECAST BONUS
-------------------------------------- ---------
<S> <C>
+/- 10% or better 100%
+/- 10.01 to 25% 80%
+/- 25.01 to 50% 25%
+/- 50% or worse - 0 -
</TABLE>
-1-
<PAGE>
3. Yearly increase in revenues for specific product lines (maximum annual
bonus is $20,000):
<TABLE>
<CAPTION>
FY99 REVENUES ($000S)
- ------------------------------------------------------------------
LINE EQUIPMENT SPARE PARTS TOTAL
- --------------- -------------- ------------- ----------------
<S> <C> <C> <C>
SDI
Seiko
SELA
Obsidian
Sigmameltec
n & k
AG
EEJA
Komatsu
Other
Total
</TABLE>
(Other is any new equipment lines signed up after May 1, 1999.)
For each 1% increase in revenues, the bonus shall be 1% of the maximum
up to a maximum of 100% for this item. (AG is listed because its lost
business must be replaced by these lines.)
4. Sign up a new equipment principal for Asia that books at least $2
million in FY2000 (bonus is $10,000).
5. Submit to CEO a list of risk items that may require reserves 15 days
before the beginning of each fiscal quarter. Bonus judged on avoiding
surprise reserves during the quarter. Maximum bonus equals $10,000.
~ ~ ~ ~ ~ ~ ~
-2-
<PAGE>
METRON TECHNOLOGY
INCENTIVE PLAN DESCRIPTION
FY 2000
PARTICIPANT: Chris Levett-Prinsep
ACKNOWLEDGMENT OF RECEIPT OF PLAN:
EMPLOYEE: METRON TECHNOLOGY B.V.
/s/ J.C. Levett-Prinsep /s/ E. Segal
- ----------------------------------------- -----------------------------------
Chris Levett-Prinsep Ed Segal
Title: Executive Vice President Equipment Title: President and Chief Executive
Officer
Date: 10/27/99 Date: 7/10/99
------------------------------------ -----------------------------
-1-
<PAGE>
METRON TECHNOLOGY
FY 2000 INCENTIVE PLAN DESCRIPTION
1. PURPOSE
The purpose of the Metron Technology B.V. (the "Company") Incentive
Compensation Plan (the "Plan") is to attract, motivate and retain high
caliber employees who play significant roles in the attainment of
annual performance objectives of the Company.
2. DEFINITIONS
When used in the Plan, the following words and phrases shall have these
meanings:
"AWARD." A cash award granted under the Plan.
"BOARD." The Board of Supervisory Directors of the Company.
"BONUS POOL." The bonus pool described at paragraph 7 below.
"COMMITTEE." A committee consisting of two or more persons appointed by
the Board to administer the Plan.
"COMPANY." Metron Technology B.V., its successors or assigns.
"ELIGIBLE EMPLOYEE." A person who, during a Plan Year, was a regular
full-time salaried employee of the Company or a Subsidiary and who, in
the opinion of the Committee, is a key employee whose performance
contributed to the successful performance of the Company or a
Subsidiary.
"MANAGEMENT BY OBJECTIVES" (MBOS). MBOs are specific performance
targets or criteria set for each individual participant in the Plan in
consultation with the participant. Final determination of individual
performance against an MBO and payment, if any, is solely at the
discretion of the Company.
"OPERATING PROFIT." Means that, with respect to a fiscal year of the
Company, the amount reported as operating income in the Company's
consolidated audited financial statements, but excluding interest
income, actual or estimated bonus payments or accruals for such year
pursuant to bonus or incentive plans or arrangements of the Company and
its subsidiaries (other than this plan) and such other items, if any,
which in the judgment of the Board or its Compensation Committee are
unrelated to a true measurement of the Company's performance or
profitability, or the objectives of the Plan.
-1-
<PAGE>
"PARTICIPANT." An Eligible Employee to whom an Award has been made
under the Plan.
"PLAN." This Metron Technology B.V. Incentive Compensation Plan
"RETURN ON ASSETS." Return on assets is a percentage computation, the
numerator of which is pre-tax, pre-bonus operating income for the
Company as a whole (or the relevant segment of the Company) and the
denominator of which is a five point average of the assets employed by
the Company (or the segment as the case may be) at the beginning of the
fiscal year, at the end of the fiscal year and at each of the interim
quarterly balance sheet dates.
"REVENUES." The amount of revenues for a fiscal year reported by the
Company on a consolidated basis on its audited financial statements,
including sales, commission income and other income.
"SALES MARGIN." As to any fiscal year, the percentage resulting from
dividing Operating Profit by Revenues for such fiscal year.
"SUBSIDIARY." A corporation, the majority of the voting stock of which
is owned directly by the Company or by a company of which the majority
of voting stock is owned by the Company.
3. PLAN ADMINISTRATION
The plan shall be administered by the Board or the Committee if one is
appointed. The Board or the Committee shall have all necessary powers
to administer and interpret the Plan, such powers to include the
authority to select Eligible Employees to whom awards may be granted
under the Plan and to determine the amount of any Award to be granted
to any Eligible Employee, except that the aggregate amount of Awards to
be granted by the Committee to all Eligible Employees shall be approved
by the Board. The Board or the Committee shall have full power and
authority to adopt such rules and regulations for the administration of
the Plan and for the conduct of its business as either of them deems
necessary or advisable. The Board's or the Committee's interpretations
of the Plan, the determination of any Awards, and all actions taken and
determinations made by the Committee pursuant to the powers vested in
it, shall be final, conclusive and binding on all parties.
4. PLAN YEAR
The first Plan Year as to which Awards may be made under this Plan
shall commence as of the Effective Date of the Plan and terminate May
31, 2000, and thereafter a Plan year shall be the periods of June 1 to
May 31 or the Company's fiscal year, if different.
-2-
<PAGE>
5. EFFECTIVE DATE, TERMINATION, AMENDMENT
The Effective Date of the Plan shall be the date of adoption of the
Plan by the Company's Shareholders. The Board may, at any time,
terminate the Plan, and the Board or the Committee may, at any time,
amend or suspend and, if suspended, reinstate the Plan in whole or in
part; provided, however, that no such termination, amendment or
suspension shall impair or alter any incentive compensation
arrangements pursuant to a written employment agreement with an
Eligible Employee unless permitted by such agreement or agreed to in
writing by the Eligible Employee.
6. PARTICIPATION AND NOTIFICATION
Eligible Employees in the Plan shall be selected by the Board or the
Committee from among the Company's and its Subsidiaries' employees
based upon such criteria as the Committee may from time to time
determine.
After the beginning of a Plan Year, Eligible Employees shall be
notified of their eligibility for participation in the Plan.
Eligibility in any one year does not automatically qualify a
Participant for participation in future Plan Years.
Employees hired during a Plan Year are eligible for participation in
the Plan for such year and, if selected by the Board or Committee,
shall be so notified.
Eligible Employees in this Plan shall not be eligible to participate in
any sales commission plan unless authorized in writing by the Committee
and the Board or the Compensation Committee of the Board.
In order to be eligible for an Award under the Plan, an Eligible
Employee must be actively employed on the last day of the Plan Year.
7. BONUS POOL
The Bonus Pool shall consist of a sales margin pool, a return on assets
pool and MBOs (objectives) for each participant, notwithstanding
anything in the Plan to the contrary, the total amount of the Bonus
Pool need not be paid as awards under this Plan.
8. ALLOCATION OF BONUS POOL
The Committee shall allocate in writing a portion of the Bonus Pool to
be paid to each Participant for each Plan Year. The Committee shall
have complete discretion with respect to the determination of
eligibility, the determination of the Eligible Employees to whom Awards
shall be granted and the amount of any Awards to be made or made from
the Bonus Pool.
-3-
<PAGE>
9. PAYMENTS OF AWARDS
Awards under the Plan shall be paid in cash generally within 90 days
following the end of the Plan Year. The Plan shall at all times be
entirely unfunded. No provision shall at any time be made with respect
to segregating assets of the Company for payment of any distributions
hereunder. No Participant or any other person shall have any interest
in any particular assets of the Company by reason of the right to
receive an Award.
10. TERMINATION OF EMPLOYMENT
All potential awards under this Plan are forfeited if any employee's
employment with the Company and its subsidiaries is terminated either
voluntarily or involuntarily prior to the end of the Plan Year, except
due to death, disability or retirement.
11. DEATH, DISABILITY OR RETIREMENT OF A PARTICIPANT
In the event that a Participant dies, becomes permanently disabled or
retires during the Plan Year, a pro-rated Award may be made in the sole
discretion of the Company or the Committee. The pro-rated Award, if
any, shall be made based on the number of months actively employed
during the Plan Year and such other criteria as the Committee shall
determine.
12. EMPLOYMENT
Participation in this Plan does not imply that an Eligible Employee has
any right to continued employment with the Company or a Subsidiary.
There is no employment agreement or right associated with participation
in this Plan, nor does participation in this Plan restrict the
Company's ability to terminate the employment of an Eligible Employee
at any time, for any reason.
13. GOVERNMENT AND OTHER REGULATIONS
The obligation of the Company to make payments or distributions under
the Plan shall be subject to all applicable laws and regulations and to
such approvals by governmental agencies as may be required.
14. TAX WITHHOLDING
The Company shall have the right to deduct from all awards any federal,
state, local or non-U.S. taxes as required by law to be withheld with
respect to such cash payments. Tax withholding from the Award shall be
based on the Participant's normal withholding rates, unless the
Participant submits a written request to have withholding at a
different rate and such is permitted by law. All tax liabilities shall
remain the responsibility of the Participant.
-4-
<PAGE>
15. BENEFICIARIES
Any payment due to a deceased Participant shall be made to the
Participant's surviving spouse. If a Participant does not have a
surviving spouse, payment shall be made to the Participant's legal
representative.
16. NONTRANSFERABILITY
No Award payable under the Plan shall be subject in any manner to
anticipation, alienation, sale, transfer, assignment, pledge,
encumbrance or charge prior to actual receipt thereof by the payee;
and, any attempt to so anticipate, alienate, sell, transfer, assign,
pledge, encumber or charge prior to such receipt shall be void, except,
in the event of the Employee's death, to the Employee's surviving
spouse or in the absence of a surviving spouse, by will or the laws of
descent and distribution. The Company shall not be liable in any manner
for or subject to the debts, contracts, liabilities, engagements or
torts of any person entitled to any distribution under the Plan.
17. INDEMNIFICATION
The members of the Board, its Compensation Committee and the Plan's
Committee shall be defended, indemnified and held harmless by the
Company against and from any loss, cost, liability or expense that may
be imposed upon or reasonably incurred by them in connection with or
resulting from any claim, action, suit or proceeding to which they may
be a party or in which they may be a party or in which they may be
involved by reason of any action or failure to act under the Plan and
against and from any and all amounts paid by them in satisfaction of
judgment in any such action, suit or proceeding against them. They
shall give the Company an opportunity, at its own expense, to handle
and defend the same before they undertake to handle and defend it on
their own behalf. The foregoing right of indemnification and defense
shall not be exclusive of any other rights of indemnification to which
they may be entitled under the Company's Articles of Association, as a
matter of law, or otherwise, or any power that the Company may have to
indemnify them or hold them harmless.
18. RELIANCE ON REPORTS
The Board, its Compensation Committee and the Plan's Committee shall be
fully justified in relying or acting in good faith upon any report made
by the independent public accountants of the Company and upon any other
information furnished in connection with the Plan by any person or
persons other than themselves. In no event shall they be liable for any
determination made or other action taken or any omission to act in
reliance upon any such report or information or for any action taken,
including the furnishing of information, or failure to act, if in good
faith.
-5-
<PAGE>
19. RELATIONSHIP TO OTHER BENEFITS
No payment under the Plan shall be taken into account in determining
any benefits under any pension, retirement, profit-sharing, group
insurance or other benefit plan of the Company or a Subsidiary, unless
specifically so provided under such Plan.
20. EXPENSES
The expenses of administering the Plan shall be borne by the Company.
21. TITLES AND HEADINGS
The titles and headings of the section in the Plan are for convenience
of reference only and in the event of any conflict, the text of the
Plan, rather than such titles or headings, shall control.
22. GOVERNING LAW
Solely for the purposes of solving interpretive questions relating to
the provisions of the Plan, the laws of the Netherlands, without
giving effect to the principles of conflicts of laws thereof, shall
apply. However, with respect to other matters, including without
limitation employment, termination of employment and employee benefits
(other than bonuses under the Plan), which matters are excluded from
and not affected by the Plan, the law which is otherwise applicable to
the employment relationship between the Eligible Employee and the
Eligible Employee's employer shall apply.
~ ~ ~ ~ ~ ~~ ~ ~
-6-
<PAGE>
CHRIS LEVETT-PRINSEP
EXECUTIVE VICE PRESIDENT EQUIPMENT
OUTLINE
Plan consists of four components for bonus:
- Corporate Sales Margin
- Corporate Return on Assets
- Management Objectives (MBOs)
- Equipment Sales Margin
<PAGE>
METRON CORPORATE INCENTIVE PLAN
FY2000
SALES MARGIN
FUNDING RATE
CORPORATE - RETURN ON SALES
FACTORS
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
SALES MARGIN % FACTOR
- -------------------------------------------------------------------------------
<S> <C> <C>
0 - 2 0.33
over 2 0.50
- -------------------------------------------------------------------------------
</TABLE>
Funding Rate = Sales Margin % x Factor
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------
FUNDING RATE %
SALES ----------------------------------------------------
MARGIN % 0 - 2% > 2% TOTAL
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1.0% 0.0033 0 0.0033
2.0% 0.0066 0 0.0066
3.0% 0.0066 0.0050 0.0116
4.0% 0.0066 0.0099 0.0165
5.0% 0.0066 0.0149 0.0215
6.0% 0.0066 0.0198 0.0264
7.0% 0.0066 0.0248 0.0314
- ------------------------------------------------------------------------------------------------
</TABLE>
EQUIPMENT-1
<PAGE>
METRON CORPORATE INCENTIVE PLAN
FY2000
SALES MARGIN
EXAMPLE OF VARIOUS OUTCOMES
(IN $ 000S)
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------
SALES OPERATING FUNDING CORPORATE
LEVEL REVENUES MARGIN % PROFIT ($MIL) RATE POOL ($000) PERCENTAGE OF POOL ($000)
- ----------------------------------------------------------------------------------------------------------------
10%
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1 $280.0 1.0% $2.8 0.330% $9.2 $0.9
1 $280.0 2.0% $5.6 0.660% $37.0 $3.7
1 $280.0 4.0% $11.2 1.650% $184.8 $18.5
- ------------------------------------------------------------------------------------------------------------
2 $300.0 1.0% $3.0 0.330% $9.9 $1.0
2 $300.0 2.0% $6.0 0.660% $39.6 $4.0
2 $300.0 4.0% $12.0 1.650% $198.0 $19.8
- ------------------------------------------------------------------------------------------------------------
3 $320.0 2.0% $6.4 0.660% $42.2 $4.2
3 $320.0 3.0% $9.6 1.155% $110.9 $11.1
3 $320.0 4.0% $12.8 1.650% $211.2 $21.1
- ------------------------------------------------------------------------------------------------------------
</TABLE>
Funding Rate = Sales Margin x Factor
Total Corporate Pool = Funding Rate x Operating Profit ($Mil)
EQUIPMENT-2
<PAGE>
METRON CORPORATE INCENTIVE PLAN
FY2000
RETURN ON ASSETS
RETURN ON ASSETS FACTORS
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------
RETURN ON ASSETS % FACTOR
- -------------------------------------------------------------------------
<S> <C> <C>
0 - 6 0.2200
Over 6 0.3300
- -------------------------------------------------------------------------
</TABLE>
Funding Rate = Return on Assets % x Factor
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------
FUNDING RATE %
RETURN ON ---------------------------------------------------
ASSETS % 0 - 6% > 6% TOTAL
- -------------------------------------------------------------------------
<S> <C> <C> <C> <C>
3.0 0.45 0 0.450
6.0 0.90 0 0.900
9.0 0.90 0.675 1.575
12.0 0.90 1.350 2.250
18.0 0.90 2.700 3.600
19.5 0.90 3.038 3.938
24.0 0.90 4.050 4.950
- -------------------------------------------------------------------------
</TABLE>
Average Assets are calculated by taking mean of beginning assets (5/31/99),
three interim asset totals and ending assets (5/31/00)
Total Corporate Pool = Operating Profit (Pre-bonus, pre-tax) x Funding Rate
EQUIPMENT-3
<PAGE>
METRON EQUIPMENT DIVISION INCENTIVE PLAN
FY2000
RETURN ON ASSETS
EXAMPLE OF VARIOUS OUTCOMES
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------
LEVEL AVERAGE OPERATING RETURN ON FUNDING CORPORATE PERCENTAGE OF
ASSETS PROFIT ($MIL) ASSETS RATE POOL ($000) POOL ($000)
- ---------------------------------------------------------------------------------------------------------
10%
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1 $100.8 $2.8 2.8% 0.416% $11.7 $1.2
1 $106.2 $2.8 2.64% 0.396% $11.1 $1.1
1 $111.5 $2.8 2.5% 0.377% $10.6 $1.1
- ---------------------------------------------------------------------------------------------------------
2 $85.5 $6.0 7.0% 1.129% $67.7 $6.8
2 $90.0 $6.0 6.7% 1.050% $63.0 $6.3
2 $111.7 $6.0 5.37% 0.805% $48.3 $4.8
- ---------------------------------------------------------------------------------------------------------
3 $85.5 $12.8 15.0% 2.918% $373.6 $37.4
3 $90.0 $12.8 14.2% 2.750% $352.0 $35.2
3 $134.1 $12.8 9.55% 1.698% $217.3 $21.7
- ---------------------------------------------------------------------------------------------------------
</TABLE>
Average Assets are calculated by taking mean of beginning assets (5/31/98),
three interim asset totals and ending assets (5/31/99)
Total Corporate Pool = Operating Profit (pre-bonus, pre-tax) x Funding Rate
EQUIPMENT-4
<PAGE>
METRON EQUIPMENT DIVISION INCENTIVE PLAN
FY2000
SALES MARGIN
FUNDING RATE
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------
GROUP CONTRIBUTION MARGIN % FACTOR
- ------------------------------------------------------------------------------
<S> <C> <C>
0 - 5.5% 0.000
5.5 - 7.5% 0.800
Over 7.5% 3.200
- ------------------------------------------------------------------------------
</TABLE>
Funding Rate = Sales Margin % x Factor
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------
FUNDING RATE %
SALES --------------------------------------------------------------------
MARGIN % 0 - 5.5% 5.5 - 7.5% OVER 7.5% TOTAL
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
5.5% 0.00% 0.00% 0.00% 0.00%
6.5% 0.00% 0.80% 0.00% 0.80%
7.5% 0.00% 1.60% 0.00% 1.60%
8.5% 0.00% 1.60% 3.20% 4.80%
9.5% 0.00% 1.60% 6.40% 8.00%
10.5% 0.00% 1.60% 9.60% 11.20%
11.5% 0.00% 1.60% 12.80% 14.40%
- --------------------------------------------------------------------------------------------------
</TABLE>
EQUIPMENT-5
<PAGE>
METRON EQUIPMENT INCENTIVE PLAN
FY2000
SALES MARGIN
EXAMPLE OF VARIOUS OUTCOMES
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------
LEVEL REVENUES OPERATING SALES FUNDING EQUIPMENT PERCENTAGE OF POOL
PROFIT ($MIL) MARGIN % RATE POOL ($000) ($000)
- ----------------------------------------------------------------------------------------------------------------
25%
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1 $147.0 $8.8 5.96% 0.364% $31.9 $8.0
1 $147.0 0.00% 0.000% $0.0 $0.0
1 $147.0 0.00% 0.000% $0.0 $0.0
- ----------------------------------------------------------------------------------------------------------------
2 $157.0 0.00% 0.000% $0.0 $0.0
2 $157.0 $10.1 6.45% 0.759% $76.8 $19.2
2 $157.0 0.00% 0.000% $0.0 $0.0
- ----------------------------------------------------------------------------------------------------------------
3 $167.0 0.00% 0.000% $0.0 $0.0
3 $167.0 $13.4 8.04% 3.319% $445.4 $111.4
3 $167.0 0.00% 0.000% $0.0 $0.0
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
*Operating profit for Equipment Plan = Pre-Tax, Pre-Bonus, Pre-Corporate
Charges, Pre-F&A Contribution
EQUIPMENT-6
<PAGE>
METRON CORPORATE INCENTIVE PLAN
FY2000
TOTAL POTENTIAL BONUSES AT THREE ASSUMED LEVELS OF PERFORMANCE
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------
FISCAL YEAR FY00
- ---------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------
PARTICIPATION
(% OF CORP CORPORATE RETURN CORPORATE RETURN
$000 POOL) ON SALES ON ASSETS MBO'S
- ---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
LEVEL 1 2 3 1 2 3 1 2 3
- ---------------------------------------------------------------------------------------
$ $ $ $ $ $ $ $ $
- ---------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------
EVP Equipment 10% 0.9 4.0 21.1 1.1 4.8 21.7 20.0 40.0 80.0
- ---------------------------------------------------------------------------------------
<CAPTION>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PARTICIPATION (% DIVISION RETURN ON
OF DIVISION POOL) SALES TOTAL BONUS
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
LEVEL 1 2 3 1 2 3
- --------------------------------------------------------------------------------
$ $ $ $ $ $
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
EVP Equipment 25% 8.0 19.2 111.4 30.0 68.0 234.2
- --------------------------------------------------------------------------------
</TABLE>
TOTAL POTENTIAL BONUS-1
<PAGE>
METRON EQUIPMENT INCENTIVE PLAN
FY2000
NAME: J. C. Levett-Prinsep
------------------------------------------------------------
TITLE: EVP Equipment
------------------------------------------------------------
EXAMPLES OF TOTAL OUTCOMES FOR ALL THREE LEVELS OF THE PLAN
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
LEVEL
------------------------------------------------
ASSUMPTIONS: 1 2 3
------------------------------------------------
<S> <C> <C> <C>
Revenues ($millions) $ 280.0 $ 300.0 $ 320.0
Corporate Sales Margin 1.0% 2.0% 4.0%
BONUS COMPONENTS:
Corporate Sales Margin $ 924 $ 3,960 $ 21,120
Corporate Return on Assets $ 1,108 $ 4,833 $ 21,732
Division Sales Margin $ 7,968 $ 19,203 $111,362
Division Return on Assets n/a n/a n/a
------------------------------------------------
Sub-total $ 10,000 $ 27,996 $154,215
MBO's (see Note 1 below) $ 20,000 $ 40,000 $ 80,000
------------------------------------------------
Total bonus components $ 30,000 $ 67,996 $234,215
================================================
</TABLE>
NOTE 1:
MBO's are not related to Levels, and accordingly the amounts payable can be
independent of the financial performance of the Company or the Division.
EX. TOTAL OUTCOMES-1
<PAGE>
METRON TECHNOLOGY
FY2000 INCENTIVE PLAN
MBOs
EXECUTIVE: Keith Reidy
TITLE: Vice President Marketing
1. Sign a representative or distribution agreement with a minimum of two
new Japanese lines that book at least $200,000 each in FY00 (bonus for
goal is $10,000).
2. Work with operations to develop a used/refurbished equipment business
that books at least $500,000 in gross margin during FY00 (bonus for
goal is $10,000).
3. Control of marketing expenses within plan (maximum bonus is $5,000):
a. Submit expense plan for each financial quarter within 30 days
prior to the beginning of each quarter.
b. Bonus based on:
<TABLE>
<CAPTION>
PERCENTAGE OF
MEETING EXPENSE PLAN MAXIMUM BONUS
-------------------------------- ---------------------
<S> <C>
Equal to or less than Plan 100%
Over Plan by 0% to 2.999% 80%
Over Plan by 3% to 3.999% 25%
Over Plan by more than 4% - 0 -
</TABLE>
4. Close distribution agreements for new equipment principals with Asia
territory that each book at least $1 million in FY00 (bonus is $10,000
per line).
5. Close distribution agreement for any non-Japanese line for the U.S. and
book at least $2 million in FY00 (bonus is $10,000).
Maximum potential bonus = $80,000
~ ~ ~ ~ ~ ~ ~
<PAGE>
METRON TECHNOLOGY
FY2000 INCENTIVE PLAN DESCRIPTION
PARTICIPANT: Keith Reidy
ACKNOWLEDGMENT OF RECEIPT OF PLAN:
EMPLOYEE: METRON TECHNOLOGY B.V.
/s/ Keith Reidy /s/ E. Segal
- ------------------------------------- ------------------------------------
Keith Reidy Ed Segal
Title: VP, Marketing Title: President
------------------------------- ------------------------------
Date: 7/11/99 Date: 7/10/99
-------------------------------- -------------------------------
-1-
<PAGE>
METRON TECHNOLOGY
FY2000 INCENTIVE PLAN PARTICIPATION
1. PURPOSE
The purpose of the Metron Technology B.V. (the "Company") Incentive
Compensation Plan (the "Plan") is to attract, motivate and retain high
caliber employees who play significant roles in the attainment of
annual performance objectives of the Company.
2. DEFINITIONS
When used in the Plan, the following words and phrases shall have these
meanings:
"AWARD." A cash award granted under the Plan.
"BOARD." The Board of Supervisory Directors of the Company.
"BONUS POOL." The bonus pool described at paragraph 7 below.
"COMMITTEE." A committee consisting of two or more persons appointed by
the Board to administer the Plan.
"COMPANY." Metron Technology B.V., its successors or assigns.
"ELIGIBLE EMPLOYEE." A person who, during a Plan Year, was a regular
full-time salaried employee of the Company or a Subsidiary and who, in
the opinion of the Committee, is a key employee whose performance
contributed to the successful performance of the Company or a
Subsidiary.
"OPERATING PROFIT." Means that, with respect to a fiscal year of the
Company, the amount reported as operating income in the Company's
consolidated audited financial statements, but excluding interest
income, actual or estimated bonus payments or accruals for such year
pursuant to bonus or incentive plans or arrangements of the Company and
its subsidiaries (other than this plan) and such other items, if any,
which in the judgment of the Board or its Compensation Committee are
unrelated to a true measurement of the Company's performance or
profitability, or the objectives of the Plan.
"PARTICIPANT." An Eligible Employee to whom an Award has been made
under the Plan.
"PLAN." This Metron Technology B.V. Incentive Compensation Plan
-1-
<PAGE>
"REVENUES." The amount of revenues for a fiscal year reported by the
Company on a consolidated basis on its audited financial statements,
including sales, commission income and other income.
"SALES MARGIN." As to any fiscal year, the percentage resulting from
dividing Operating Profit by Revenues for such fiscal year.
"SUBSIDIARY." A corporation, the majority of the voting stock of which
is owned directly by the Company or by a company of which the majority
of voting stock is owned by the Company.
3. PLAN ADMINISTRATION
The plan shall be administered by the Board or the Committee if one is
appointed. The Board or the Committee shall have all necessary powers
to administer and interpret the Plan, such powers to include the
authority to select Eligible Employees to whom awards may be granted
under the Plan and to determine the amount of any Award to be granted
to any Eligible Employee, except that the aggregate amount of Awards to
be granted by the Committee to all Eligible Employees shall be approved
by the Board. The Board or the Committee shall have full power and
authority to adopt such rules and regulations for the administration of
the Plan and for the conduct of its business as either of them deems
necessary or advisable. The Board's or the Committee's interpretations
of the Plan, the determination of any Awards, and all actions taken and
determinations made by the Committee pursuant to the powers vested in
it, shall be final, conclusive and binding on all parties.
4. PLAN YEAR
The first Plan Year as to which Awards may be made under this Plan
shall commence as of the Effective Date of the Plan and terminate May
31, 2000, and thereafter a Plan year shall be the periods of June 1 to
May 31 or the Company's fiscal year, if different.
5. EFFECTIVE DATE, TERMINATION, AMENDMENT
The Effective Date of the Plan shall be the date of adoption of the
Plan by the Company's Shareholders. The Board may, at any time,
terminate the Plan, and the Board or the Committee may, at any time,
amend or suspend and, if suspended, reinstate the Plan in whole or in
part; provided, however, that no such termination, amendment or
suspension shall impair or alter any incentive compensation
arrangements pursuant to a written employment agreement with an
Eligible Employee unless permitted by such agreement or agreed to in
writing by the Eligible Employee.
-2-
<PAGE>
6. PARTICIPATION AND NOTIFICATION
Eligible Employees in the Plan shall be selected by the Board or the
Committee from among the Company's and its Subsidiaries' employees
based upon such criteria as the Committee may from time to time
determine.
After the beginning of a Plan Year, Eligible Employees shall be
notified of their eligibility for participation in the Plan.
Eligibility in any one year does not automatically qualify a
Participant for participation in future Plan Years.
Employees hired during a Plan Year are eligible for participation in
the Plan for such year and, if selected by the Board or Committee,
shall be so notified.
Eligible Employees in this Plan shall not be eligible to participate in
any sales commission plan unless authorized in writing by the Committee
and the Board or the Compensation Committee of the Board.
In order to be eligible for an Award under the Plan, an Eligible
Employee must be actively employed on the last day of the Plan Year.
7. BONUS POOL
The Bonus Pool shall consist of a sales margin pool, a return on assets
pool and MBOs (objectives) for each participant, notwithstanding
anything in the Plan to the contrary, the total amount of the Bonus
Pool need not be paid as awards under this Plan.
8. ALLOCATION OF BONUS POOL
The Committee shall allocate in writing a portion of the Bonus Pool to
be paid to each Participant for each Plan Year. The Committee shall
have complete discretion with respect to the determination of
eligibility, the determination of the Eligible Employees to whom Awards
shall be granted and the amount of any Awards to be made or made from
the Bonus Pool.
9. PAYMENTS OF AWARDS
Awards under the Plan shall be paid in cash generally within 90 days
following the end of the Plan Year. The Plan shall at all times be
entirely unfunded. No provision shall at any time be made with respect
to segregating assets of the Company for payment of any distributions
hereunder. No Participant or any other person shall have any interest
in any particular assets of the Company by reason of the right to
receive an Award.
-3-
<PAGE>
10. TERMINATION OF EMPLOYMENT
All potential awards under this Plan are forfeited if any employee's
employment with the Company and its subsidiaries is terminated either
voluntarily or involuntarily prior to the end of the Plan Year, except
due to death, disability or retirement.
11. DEATH, DISABILITY OR RETIREMENT OF A PARTICIPANT
In the event that a Participant dies, becomes permanently disabled or
retires during the Plan Year, a pro-rated Award may be made in the sole
discretion of the Company or the Committee. The pro-rated Award, if
any, shall be made based on the number of months actively employed
during the Plan Year and such other criteria as the Committee shall
determine.
12. EMPLOYMENT
Participation in this Plan does not imply that an Eligible Employee has
any right to continued employment with the Company or a Subsidiary.
There is no employment agreement or right associated with participation
in this Plan, nor does participation in this Plan restrict the
Company's ability to terminate the employment of an Eligible Employee
at any time, for any reason.
13. GOVERNMENT AND OTHER REGULATIONS
The obligation of the Company to make payments or distributions under
the Plan shall be subject to all applicable laws and regulations and to
such approvals by governmental agencies as may be required.
14. TAX WITHHOLDING
The Company shall have the right to deduct from all awards any federal,
state, local or non-U.S. taxes as required by law to be withheld with
respect to such cash payments. Tax withholding from the Award shall be
based on the Participant's normal withholding rates, unless the
Participant submits a written request to have withholding at a
different rate and such is permitted by law. All tax liabilities shall
remain the responsibility of the Participant.
15. BENEFICIARIES
Any payment due to a deceased Participant shall be made to the
Participant's surviving spouse. If a Participant does not have a
surviving spouse, payment shall be made to the Participant's legal
representative.
16. NONTRANSFERABILITY
No Award payable under the Plan shall be subject in any manner to
anticipation, alienation, sale, transfer, assignment, pledge,
encumbrance or charge prior to actual
-4-
<PAGE>
receipt thereof by the payee; and, any attempt to so anticipate,
alienate, sell, transfer, assign, pledge, encumber or charge prior to
such receipt shall be void, except, in the event of the Employee's
death, to the Employee's surviving spouse or in the absence of a
surviving spouse, by will or the laws of descent and distribution. The
Company shall not be liable in any manner for or subject to the debts,
contracts, liabilities, engagements or torts of any person entitled to
any distribution under the Plan.
17. INDEMNIFICATION
The members of the Board, its Compensation Committee and the Plan's
Committee shall be defended, indemnified and held harmless by the
Company against and from any loss, cost, liability or expense that may
be imposed upon or reasonably incurred by them in connection with or
resulting from any claim, action, suit or proceeding to which they may
be a party or in which they may be a party or in which they may be
involved by reason of any action or failure to act under the Plan and
against and from any and all amounts paid by them in satisfaction of
judgment in any such action, suit or proceeding against them. They
shall give the Company an opportunity, at its own expense, to handle
and defend the same before they undertake to handle and defend it on
their own behalf. The foregoing right of indemnification and defense
shall not be exclusive of any other rights of indemnification to which
they may be entitled under the Company's Articles of Association, as a
matter of law, or otherwise, or any power that the Company may have to
indemnify them or hold them harmless.
18. RELIANCE ON REPORTS
The Board, its Compensation Committee and the Plan's Committee shall be
fully justified in relying or acting in good faith upon any report made
by the independent public accountants of the Company and upon any other
information furnished in connection with the Plan by any person or
persons other than themselves. In no event shall they be liable for any
determination made or other action taken or any omission to act in
reliance upon any such report or information or for any action taken,
including the furnishing of information, or failure to act, if in good
faith.
19. RELATIONSHIP TO OTHER BENEFITS
No payment under the Plan shall be taken into account in determining
any benefits under any pension, retirement, profit-sharing, group
insurance or other benefit plan of the Company or a Subsidiary, unless
specifically so provided under such Plan.
20. EXPENSES
The expenses of administering the Plan shall be borne by the Company.
-5-
<PAGE>
21. TITLES AND HEADINGS
The titles and headings of the section in the Plan are for convenience
of reference only and in the event of any conflict, the text of the
Plan, rather than such titles or headings, shall control.
22. GOVERNING LAW
Solely for the purposes of solving interpretive questions relating to
the provisions of the Plan, the laws of the Netherlands, without
giving effect to the principles of conflicts of laws thereof, shall
apply. However, with respect to other matters, including without
limitation employment, termination of employment and employee benefits
(other than bonuses under the Plan), which matters are excluded from
and not affected by the Plan, the law which is otherwise applicable to
the employment relationship between the Eligible Employee and the
Eligible Employee's employer shall apply.
~ ~ ~ ~ ~ ~~ ~ ~
-6-
<PAGE>
KEITH REIDY
VICE PRESIDENT MARKETING
OUTLINE
Plan consists of three components for bonus:
- Corporate Sales Margin
- Corporate Return on Assets
- Management Objectives (MBOs)
<PAGE>
METRON CORPORATE INCENTIVE PLAN
FY2000
SALES MARGIN
FUNDING RATE
<TABLE>
<CAPTION>
FACTORS
- -------------------------------------------------------------------------------
SALES MARGIN % FACTOR
- -------------------------------------------------------------------------------
<S> <C> <C>
0 - 2 0.33
over 2 0.50
- -------------------------------------------------------------------------------
</TABLE>
Funding Rate = Sales Margin % x Factor
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------
SALES FUNDING RATE %
----------------------------------------------------
MARGIN % 0 - 2% > 2% TOTAL
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1.0% 0.0033 0 0.0033
2.0% 0.0066 0 0.0066
3.0% 0.0066 0.0050 0.0116
4.0% 0.0066 0.0099 0.0165
5.0% 0.0066 0.0149 0.0215
6.0% 0.0066 0.0198 0.0264
7.0% 0.0066 0.0248 0.0314
- ------------------------------------------------------------------------------------------------
</TABLE>
CORPORATE-1
<PAGE>
METRON CORPORATE INCENTIVE PLAN
FY2000
SALES MARGIN
EXAMPLE OF VARIOUS OUTCOMES
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------------
SALES OPERATING FUNDING CORPORATE
LEVEL REVENUES MARGIN % PROFIT ($MIL) RATE POOL ($000) PERCENTAGE OF POOL ($000)
---------------------------
- ------------------------------------------------------------------------------------------------------
15%
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1 $280.0 1.0% $2.8 0.330% $9.2 $1.4
1 $280.0 2.0% $5.6 0.660% $37.0 $5.5
1 $280.0 4.0% $11.2 1.650% $184.8 $27.7
- ---------------------------------------------------------------------------------------------------------------------------------
2 $300.0 1.0% $3.0 0.330% $9.9 $1.5
2 $300.0 2.0% $6.0 0.660% $39.6 $5.9
2 $300.0 4.0% $12.0 1.650% $198.0 $29.7
- ---------------------------------------------------------------------------------------------------------------------------------
3 $320.0 2.0% $6.4 0.660% $42.2 $6.3
3 $320.0 3.0% $9.6 1.155% $110.9 $16.6
3 $320.0 4.0% $12.8 1.650% $211.2 $31.7
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Funding Rate = Sales Margin x Factor
Total Corporate Pool = Funding Rate x Operating Profit ($Mil)
CORPORATE-2
<PAGE>
METRON CORPORATE INCENTIVE PLAN
FY2000
RETURN ON ASSETS
RETURN ON ASSETS FACTORS
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------
RETURN ON ASSETS % FACTOR
- -------------------------------------------------------------------------
<S> <C>
0 - 6 0.2200
Over 6 0.3300
- -------------------------------------------------------------------------
</TABLE>
Funding Rate = Return on Assets % x Factor
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------
RETURN ON FUNDING RATE %
---------------------------------------------------
ASSETS % 0 - 6% > 6% TOTAL
- -------------------------------------------------------------------------
<S> <C> <C> <C>
3.0 0.45 0 0.45
6.0 0.90 0 0.900
9.0 0.90 0.675 1.575
12.0 0.90 1.350 2.250
18.0 0.90 2.700 3.600
19.5 0.90 3.038 3.938
24.0 0.90 4.050 4.950
- -------------------------------------------------------------------------
</TABLE>
CORPORATE-3
<PAGE>
METRON CORPORATE INCENTIVE PLAN
FY2000
RETURN ON ASSETS
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
AVERAGE OPERATING RETURN ON FUNDING CORPORATE PERCENTAGE OF
LEVEL ASSETS PROFIT ($MIL) ASSETS RATE POOL ($000) POOL ($000)
- -----------------------------------------------------------------------------------------------------------------------------------
15%
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1 $100.8 $2.8 2.8% 0.416% $11.7 $1.7
1 $106.2 $2.8 2.64% 0.396% $11.1 $1.7
1 $111.5 $2.8 2.5% 0.377% $10.6 $1.6
- -----------------------------------------------------------------------------------------------------------------------------------
2 $85.5 $6.0 7.0% 1.129% $67.7 $10.2
2 $90.0 $6.0 6.7% 1.050% $63.0 $9.5
2 $111.7 $6.0 5.37% 0.805% $48.3 $7.2
- -----------------------------------------------------------------------------------------------------------------------------------
3 $85.5 $12.8 15.0% 2.918% $373.6 $56.0
3 $90.0 $12.8 14.2% 2.750% $352.0 $52.8
3 $134.1 $12.8 9.55% 1.698% $217.3 $32.6
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Average Assets are calculated by taking mean of beginning assets (5/31/98),
three interim asset totals and ending assets (5/31/99)
Total Corporate Pool = Operating Profit (pre-bonus, pre-tax) x Funding Rate
CORPORATE-4
<PAGE>
METRON CORPORATE INCENTIVE PLAN
FY2000
TOTAL POTENTIAL BONUSES AT THREE ASSUMED LEVELS OF PERFORMANCE
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------------
FISCAL YEAR FY00
- ----------------------------------------------------------------------------------------------------------------------------------
CORPORATE
PARTICIPATION (% RETURN CORPORATE RETURN
$000 OF CORP POOL) ON SALES ON ASSETS MBO's TOTAL BONUS
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
LEVEL 1 2 3 1 2 3 1 2 3 1 2 3
- ----------------------------------------------------------------------------------------------------------------------------------
$ $ $ $ $ $ $ $ $ $ $ $
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
VP Marketing 15% 1.4 5.9 31.7 1.7 7.2 32.6 20.0 40.0 80.0 23.0 53.2 144.3
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
CORPORATE-5
<PAGE>
METRON TECHNOLOGY INCENTIVE PLAN
FY2000
NAME: Keith Reidy
-------------------------------------------------
TITLE: VP Marketing
-------------------------------------------------
<TABLE>
<CAPTION>
Examples of Total Outcomes for all Three Levels of the Plan
- ------------------------------------------------------------------------------------------------
-----------------------------------------------
LEVEL
-----------------------------------------------
ASSUMPTIONS: 1 2 3
-----------------------------------------------
<S> <C> <C> <C>
Revenues ($millions) $ 280.0 $ 300.0 $ 320.0
Corporate Sales Margin 1.0% 2.0% 4.0%
BONUS COMPONENTS:
Corporate Sales Margin $ 1,386 $ 5,940 $ 31,680
Corporate Return on Assets $ 1,662 $ 7,249 $ 32,598
Division Sales Margin n/a n/a n/a
Division Return on Assets n/a n/a n/a
-----------------------------------------------
sub-total $ 3,048 $ 13,189 $ 64,278
MBO's (see Note 1 below) $ 20,000 $ 40,000 $ 80,000
-----------------------------------------------
Total bonus components $ 23,048 $ 53,189 $144,278
===============================================
</TABLE>
NOTE 1
MBO's are not related to Levels, and accordingly the amounts payable can be
independent of the financial performance of the Company or the Division
CORPORATE-6
<PAGE>
INDEMNIFICATION AGREEMENT
This INDEMNIFICATION AGREEMENT (this "Indemnification Agreement") is
made as of the ___day of _________, 1999, by and among Metron Technology
B.V., a corporation organized and existing under the laws of the Netherlands
(the "Company"), and the investors listed on the Schedule of Investors
attached hereto as Exhibit A (the "Investors").
RECITALS
WHEREAS, the Company and the Investors (as well as other shareholders of
the Company) are party to an Investor Rights Agreement dated as of July 6,
1995 (the "Investor Rights Agreement").
WHEREAS, the Company and the Investors desire to supplement the
indemnification provisions set forth in Section 1.8 of the Investor Rights
Agreement as set forth in this Indemnification Agreement.
WHEREAS, simultaneously with the execution of this Indemnification
Agreement, the Company and the Investors have executed the Underwriting
Agreement (referred to in Section 1(a) below).
AGREEMENT
Now therefore, in consideration of the foregoing premises and mutual
covenants set forth herein, the parties agree as follows:
1. INDEMNIFICATION.
(a) INDEMNIFICATION BY THE COMPANY. To the extent permitted by law, the
Company will indemnify and hold harmless each Investor, each of the officers,
directors and partners of such Investor, and each person, if any, who
controls such Investor within the meaning of the Securities Act of 1933, as
amended, or the Securities Exchange Act of 1934, as amended, against any
losses, claims, damages, or liabilities (joint or several) (or actions in
respect thereof) to which they may become subject under Section 8(a) of the
Underwriting Agreement dated as of ________ ___,____ by and among the
Company, the Investors and Banc of America Securities LLC, SG Cowen
Securities Corporation and U.S. Bancorp Piper Jaffray; and the Company will
reimburse each such Investor, officer, director or partner or controlling
person for any legal or other expenses reasonably incurred by them in
connection with investigating or defending any such loss, claim, damage,
liability or action; provided, however, that the indemnity agreement
contained in this Section 1(a) shall not apply to amounts paid in settlement
of any such loss, claim, damage, liability or action if such settlement is
effected without the consent of the Company (which consent shall not be
unreasonably withheld).
(b) INDEMNIFICATION MECHANICS. Promptly after receipt by an indemnified
party under this Section 1 of notice of the commencement of any action
(including any governmental action), such indemnified party will, if a claim in
respect thereof is to be made against any indemnifying
1
<PAGE>
party under this Section 1, notify the indemnifying party in writing of the
commencement thereof, and the indemnifying party shall have the right to
participate in, and, to the extent the indemnifying party so desires, jointly
with any other indemnifying party similarly noticed, to assume the defense
thereof with counsel mutually satisfactory to the parties; provided, however,
if the defendants in any action include both the indemnified party and the
indemnifying party and the indemnified party shall have reasonably concluded
that there may be legal defenses available to it and/or other indemnified
parties which are different from or additional to those available to the
indemnifying party, or if there is a conflict of interest which would prevent
counsel for the indemnifying party from also representing the indemnified
party, the indemnified party or parties shall have the right to select
separate counsel to participate in the defense of such action on behalf of
such indemnified party or parties. After notice from the indemnifying party
to such indemnified party of its election so to assume the defense thereof,
the indemnifying party will not be liable to such indemnified party pursuant
to the provisions of paragraph (a) above for any legal or other expense
subsequently incurred by such indemnified party in connection with the
defense thereof other than reasonable costs of investigation, unless (i) the
indemnified party shall have employed counsel in accordance with the proviso
of the preceding sentence, (ii) the indemnifying party shall not have
employed counsel satisfactory to the indemnified party to represent the
indemnified party within a reasonable time after the notice of the
commencement of the action or (iii) the indemnifying party has authorized the
employment of counsel for the indemnified party at the expense of the
indemnifying party. The failure of any indemnified party to notify an
indemnifying party within a reasonable time of the commencement of any such
action, if prejudicial to its ability to defend such action, shall relieve
such indemnifying party of liability to the indemnified party under this
Section 1 only to the extent that such failure to give notice shall
materially prejudice the indemnifying party in the defense of any such claim
or any such litigation, but the omission so to notify the indemnifying party
will not relieve it of any liability that it may have to any indemnified
party otherwise than under this Section 1.
2. MISCELLANEOUS.
(a) GOVERNING LAW. Section 1 of this Indemnification Agreement shall
be governed in all respects by the laws of the State of California applicable
to contracts entered into and wholly to be performed within California by
California residents. Sections 2(b)-(h) of this Indemnification Agreement
shall be governed in all respects by the laws of the Netherlands.
(b) ENTIRE AGREEMENT. This Indemnification Agreement constitutes the
entire agreement among the Company and the Investors with respect to the
subject matter hereof and supersedes all previous agreements and
understandings, written or oral, concerning the subject matter hereof.
(c) SUCCESSORS AND ASSIGNS. Subject to the exceptions and requirements
specifically set forth in this Indemnification Agreement, the terms and
conditions of this Indemnification Agreement shall inure to the benefit of
and be binding upon the respective heirs, successors, administrators,
executors and assigns of the parties hereto.
(d) NOTICES, ETC. All notices and other communications required or
permitted hereunder shall be in writing and shall be deemed effectively given
upon personal delivery or on
2
<PAGE>
the day sent by facsimile transmission if a true and correct copy is sent the
same day by first class mail, postage prepaid, or by dispatch by an
internationally recognized express courier service, and in each case
addressed (i) if to an Investor at the address set forth on Schedule A to the
Investor Rights Agreement, or at the such other address as such Investor
shall have furnished to the Company and to the other Investors by ten (10)
days' notice in writing, or (ii) if to the Company, at its principal office,
or at such other address as the Company shall have furnished to each Investor
in writing.
(e) AMENDMENTS; WAIVERS. Any provision of this Indemnification
Agreement may be amended and the observance thereof may be waived (either
generally or in a particular instance and either retroactively or
prospectively) by the written consent of the Company and each of the
Investors. Any Investor may waive any of his, her or its rights hereunder
without obtaining the consent of any other Investor. Any amendment or waiver
effected in accordance with the first sentence of this Section 2(e) shall be
binding upon each Investor, his, her or its successors and assigns, and the
Company. Any waiver effected in accordance with the second sentence of this
Section 2(e) shall be binding upon the waiving Investor and the successors
and assignees of such Investor.
(f) DELAYS OR OMISSIONS. No delay or omission to exercise any right,
power or remedy accruing to any Investor, upon any breach or default of the
Company or any other Investor under this Indemnification Agreement, shall
impair any such right, power or remedy of such Investor, nor shall it be
construed to be a waiver of any such breach or default, or any acquiescence
therein, or of or in any similar breach of default thereafter occurring; nor
shall any waiver of any single breach or default be deemed a waiver of any
other breach or default theretofore or thereafter occurring. Any waiver,
permit, consent or approval of any kind or character on the part of any
Investor of any breach or default under this Indemnification Agreement, or
any waiver on the part of any Investor of any provisions or conditions of
this Indemnification Agreement, must be in writing and shall be effective
only to the extent specifically set forth in such writing. All remedies
either under this Indemnification Agreement, or by law or otherwise afforded
to any Holder, shall be cumulative and not alternative.
(g) SEVERABILITY. If one or more provisions of this Indemnification
Agreement are held to be unenforceable under applicable law, such provision
shall be excluded from this Indemnification Agreement and the balance of this
Indemnification Agreement shall be interpreted as if such provision were so
excluded and shall be enforceable in accordance with its terms.
(h) COUNTERPARTS. This Indemnification Agreement may be executed in
two or more counterparts, each of which shall be deemed an original, and all
of which together shall constitute one and the same instrument.
3
<PAGE>
IN WITNESS WHEREOF, each of undersigned or their respective duly
authorized officers or representatives have executed this Indemnification
Agreement as of the date first above written.
COMPANY:
METRON TECHNOLOGY B.V.
By:
----------------------------------
Name:
---------------------------
Title:
---------------------------
INVESTORS:
ENTEGRIS, INC.
By:
----------------------------------
Name:
---------------------------
Title:
---------------------------
FSI INTERNATIONAL, INC.
By:
----------------------------------
Name:
---------------------------
Title:
---------------------------
J. CHRISTOPHER LEVETT-PRINSEP
----------------------------------
4
<PAGE>
EXHIBIT 23.1
WHEN METRON TECHNOLOGY B.V. CONVERTS FROM A B.V. TO AN N.V. UNDER THE LAWS OF
THE NETHERLANDS, WE WILL BE IN A POSITION TO RENDER THE FOLLOWING CONSENT:
/s/ KPMG LLP
The Board of Directors and Shareholders
Metron Technology N.V.
The audits referred to in our report dated July 22, 1999, except as to
Note 19, which is as of November , 1999, included the related financial
statement schedule as of May 31, 1999, and for each of the years in the
three-year period ended May 31, 1999, included in the registration statement.
This financial statement schedule is the responsibility of the Company's
management. Our responsibility is to express an opinion on this financial
statement schedule based on our audits. In our opinion, such financial statement
schedule, when considered in relation to the basic consolidated financial
statements taken as a whole, present fairly in all material respects the
information set forth therein.
We consent to the use of our reports included herein and to the references
to our firm under the headings "Selected Consolidated Financial Data" and
"Experts" in the prospectus.
KPMG LLP
Mountain View, California
, 1999
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM METRON
TECHNOLOGY N.V. CONSOLIDATED BALANCE SHEETS, CONSOLIDATED STATEMENTS OF INCOME,
CONSOLIDATED STATEMENTS OF CASH FLOW AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C> <C>
<PERIOD-TYPE> 3-MOS 3-MOS
<FISCAL-YEAR-END> MAY-31-1999 MAY-31-2000
<PERIOD-START> JUN-01-1998 JUN-01-1999
<PERIOD-END> AUG-31-1998 AUG-31-1999
<CASH> 10,436 17,128
<SECURITIES> 0 0
<RECEIVABLES> 44,531 50,439
<ALLOWANCES> 1,289 1,395
<INVENTORY> 22,806 24,413
<CURRENT-ASSETS> 84,110 100,351
<PP&E> 18,708 18,129
<DEPRECIATION> 8,885 10,372
<TOTAL-ASSETS> 100,360 112,431
<CURRENT-LIABILITIES> 61,048 76,358
<BONDS> 0 0
0 0
0 0
<COMMON> 4,564 3,030
<OTHER-SE> 31,961 27,801
<TOTAL-LIABILITY-AND-EQUITY> 100,360 112,431
<SALES> 56,922 69,473
<TOTAL-REVENUES> 56,922 69,473
<CGS> 46,596 57,332
<TOTAL-COSTS> 46,596 57,332
<OTHER-EXPENSES> 0 0
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 253 263
<INCOME-PRETAX> (1,969) 1,369
<INCOME-TAX> (703) 466
<INCOME-CONTINUING> 0 0
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> (1,266) 903
<EPS-BASIC> (0.12) 0.09
<EPS-DILUTED> (0.12) 0.08
</TABLE>
<PAGE>
October 26, 1999
Metron Technology
1350 Old Bayshore Highway
Suite 360
Burlingame, California 94010
Ladies and Gentlemen:
I hereby consent to being named in the registration statement filed by Metron
Technology N.V.
Sincerely,
/s/ Sho Nakanuma
Sho Nakanuma
