<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
Filed by the Registrant /x/
Filed by a Party other than the Registrant
Check the appropriate box:
/ / No fee required
/x/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
PLASMA-THERM, INC.
(Name of Registrant as Specified in its Charter)
PLASMA-THERM, INC.
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box)
/x/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which trnasaction applies:
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (setforth the amount on which the
filing fee is calculated and state how it was determined):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
/ / Fee paid previously with preliminary materials:
/ / Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
<PAGE> 2
PLASMA-THERM, INC.
10050 16th Street North
St. Petersburg, FL 33716
(813) 577-4999
Notice of Annual Meeting of Shareholders
to be held on May 6, 1997
TO THE SHAREHOLDERS:
The Annual Meeting of Shareholders of Plasma-Therm, Inc. (the
"Company") will be held at the Company's headquarters, 10050 16th Street North,
St. Petersburg, Florida 33716, on Tuesday, May 6, 1997, at 10:00 a.m., Local
Time, for the following purposes:
1. To elect three directors of the Company to serve until the
next Annual Meeting of Shareholders and until their
successors are duly elected and qualified; and
2. To consider and act upon proposed amendments to the
Company's 1995 Stock Incentive Plan; and
3. To transact such other business as may properly come
before the meeting or any adjournment thereof.
The Board of Directors has selected the close of business on March 7,
1997 as the record date for the determination of Shareholders entitled to notice
of and to vote at this Annual Meeting and any adjournment or postponement
thereof.
YOU ARE CORDIALLY INVITED TO ATTEND THE MEETING IN PERSON. WHETHER OR
NOT YOU EXPECT TO ATTEND IN PERSON, YOU ARE URGED TO COMPLETE, DATE, SIGN AND
RETURN THE ENCLOSED PROXY CARD, WHICH IS SOLICITED BY THE BOARD OF DIRECTORS, IN
THE SELF-ADDRESSED ENVELOPE ENCLOSED FOR YOUR CONVENIENCE WHICH REQUIRES NO
POSTAGE IF MAILED IN THE UNITED STATES. YOU MAY REVOKE YOUR PROXY AT ANY TIME
BEFORE IT IS VOTED AT THE MEETING BY GIVING WRITTEN NOTICE TO THE SECRETARY OF
THE COMPANY, BY DELIVERING TO THE SECRETARY OF THE COMPANY A DULY EXECUTED PROXY
BEARING A LATER DATE OR BY APPEARING AT THE MEETING AND VOTING BY WRITTEN BALLOT
IN PERSON.
By Order of the Board of Directors
Diana M. DeFerrari, Secretary
Dated: March 28, 1997
<PAGE> 3
PLASMA-THERM, INC.
10050 16th Street North
St. Petersburg, Florida 33716
(813) 577-4999
------------------------------------
PROXY STATEMENT
for
Annual Meeting of Shareholders
May 6, 1997
------------------------------------
This Proxy Statement and the accompanying form of proxy are furnished
in connection with the solicitation of proxies by the Board of Directors of
Plasma-Therm, Inc., a Florida corporation (the "Company"), for the Annual
Meeting of Shareholders to be held at the Company's headquarters, 10050 16th
Street North, St. Petersburg, Florida 33716, on Tuesday, May 6, 1997 at 10:00
a.m., Local Time, and at any postponements or adjournments thereof (the
"Meeting" or the "Annual Meeting"). The approximate date on which this Proxy
Statement and the accompanying form of proxy will be first sent or given to
Shareholders is March 28, 1997.
The record date for determining Shareholders entitled to vote at the
Meeting has been fixed as the close of business on March 7, 1997 (the "Record
Date"). As of the Record Date, there were 10,595,061 shares of the Company's
common stock, $.01 par value ("Common Stock"), outstanding and entitled to vote.
Each share of Common Stock owned at the Record Date entitles the holder to one
vote. There is no other class of voting securities outstanding. Votes may not be
cumulated in the election of directors. The presence, in person or by proxy, at
the Meeting of the holders of a majority of the shares of Common Stock entitled
to vote will constitute a quorum for purposes of the Meeting.
A form of proxy is enclosed for use at the Annual Meeting. If the
enclosed proxy is properly executed and returned prior to the vote at the Annual
Meeting (and is not revoked prior to such vote), the shares represented thereby
will be voted in accordance with the instructions marked thereon. If no
instructions are indicated on the proxy card, all shares represented by valid
proxies received pursuant to this solicitation (and not revoked before they are
voted) will be voted "FOR" the election of the nominees for directors named
below, "FOR" the proposed amendments to the Company's 1995 Stock Incentive Plan
and by the proxies in their discretion on any other matters to come before the
Meeting. Any proxy given may, however, be revoked by the stockholder executing
it at any time before it is voted by giving written notice to the Secretary of
the Company, by delivering to the Secretary of the Company a duly executed proxy
bearing a later date or by appearing at the Meeting and voting by written ballot
in person.
The cost of solicitation of proxies by the Board of Directors will be
borne by the Company. Proxies may be solicited by mail, personal interview,
telephone or telegraph and, in addition, directors, officers and employees of
the Company may solicit proxies by such methods without additional remuneration.
In accordance with the regulations of the Securities and Exchange Commission,
the Company will reimburse, upon request, banks, brokers and other institutions,
nominees and fiduciaries for their expenses incurred in sending proxies and
proxy materials to the beneficial owners of the Company's Common Stock.
ELECTION OF DIRECTORS
(ITEM NO. 1)
Three directors are to be elected at the Meeting to serve until the
next annual meeting and until their successors are duly elected and qualified.
The persons named in the accompanying form of proxy intend to vote the shares
represented by the proxy for the election as directors of the three nominees
named below, unless authority to vote for any nominee is withheld in the proxy.
Although the Board of Directors does not contemplate that any of the nominees
named will be unavailable for election, in the event a vacancy in the slate of
nominees results from an unexpected occurrence, it is presently intended that
the proxy will be voted for the election of a nominee who shall be designated by
the Board.
<PAGE> 4
The following persons have been nominated for election as directors for
terms of office expiring at the next Annual Meeting of Shareholders.
RONALD H. DEFERRARI, Age 56, founder of the Company, has served as
Chairman of the Board of Directors since the Company's formation in 1975. At
the present time, he is also the Chief Executive Officer, Chief Financial
Officer and Treasurer of the Company. Mr. Deferrari served as President of the
Company from 1975 to 1995. He is the father of Ronald S. Deferrari, President
and Chief Operating Officer of the Company, and Diana M. DeFerrari, Senior Vice
President and Secretary of the Company.
ANASTASIOS S. GIANOPLUS, Age 66, has served as President of Open Retail
Systems, Inc., a supplier of software systems and services to the retail
industry, since July of 1995. From August 1988 to June 1995, Mr. Gianoplus was
Executive Vice President of Compex Corporation, a provider of computer systems
and services to government and industry, where he was responsible for the
company's operations. From August 1982 to July 1988, he was Vice President for
Corporate Development at Planning Research Corp. (also a provider of computer
systems and services to government and industry), where he was responsible for
acquisitions, divestitures and strategic development. Prior to that he held
several positions with ITT Corp., the last being Director of Business Strategy
for ITT's Telecommunications and Electronics Group. He has served as Director of
Plasma-Therm, Inc. since 1989.
LUBEK JASTRZEBSKI, Ph.D., Age 48, has served as Vice President in
charge of development, application, marketing and sales of Semiconductor
Diagnostics Inc. (SDI) of Tampa, a provider of sophisticated contamination
monitoring equipment to the integrated circuit (IC) industry, since 1989 and is
one of two founders of SDI. He also holds an academic appointment at the Center
for Microelectronic Research at the University of South Florida, where he
conducts research and teaches at the Department of Electrical Engineering. Prior
to that he worked for 10 years at David Sarnof Research Laboratories in
Princeton, New Jersey on advancement of processes used by the IC industry. He
holds more than 40 patents and has published over 150 scientific papers. He has
served as Director of Plasma-Therm, Inc. since February 1996.
Directors will be elected by a plurality of the votes cast in person
and by proxy at the Annual Meeting. That is, the nominees receiving the three
highest numbers of votes for election will be elected.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" EACH OF THE
ABOVE NOMINEES FOR ELECTION AS DIRECTORS OF THE COMPANY.
COMMITTEES, MEETINGS AND COMPENSATION OF THE BOARD OF DIRECTORS
The Board of Directors held eight meetings during the fiscal year ended
November 30, 1996 ("fiscal 1996"). The Board acted once by unanimous written
consent during that period. There are no standing nominating or compensation
committees of the Board of Directors. The Board of Directors of the Company has
an Audit Committee consisting of two members. Mr. Gianoplus is Chairman of the
Audit Committee and Dr. Jastrzebski is the other member. The Audit Committee,
which held one meeting during fiscal 1996, has responsibility for reviewing
matters involving the retention of auditors, for overseeing internal audit
matters, for responding to and resolving issues with the Company's auditors and
for reporting on these issues to the Board of Directors for appropriate action.
The Board of Directors of the Company also has a Stock Option Committee
consisting of two members. Mr. Gianoplus is Chairman of the Stock Option
Committee and Mr. Deferrari is the other member. The Stock Option Committee has
responsibility for administering the Company's stock option plans. The Stock
Option Committee met four times during fiscal 1996. In addition to formal
meetings of the Board of Directors and its committees, the directors have
frequent informal communications among themselves and with other executives
regarding Board and Committee issues.
Mr. Gianoplus and Dr. Jastrzebski are compensated at the rate of
$20,000 and $15,000 per year, respectively, for services as a director. They are
also entitled to reimbursement of expenses. For services on the Stock Option
Committee, Mr. Gianoplus is entitled to receive a five-year option to purchase
5,000 shares of Common Stock each June 30, exercisable at 60% of the Fair Market
Value (as defined) of the Common Stock on the date of grant. His option granted
on June 30, 1995 is exercisable at $2.25 per share of Common Stock and his
option granted on June 30, 1996 is exercisable at $2.74 per share of Common
Stock. For services as a director, Dr.
2
<PAGE> 5
Jastrzebski received a three-year option grant on April 30, 1996 for 5,000
shares of Common Stock, exercisable at 100% of the Fair Market Value of the
Common Stock on the date of grant. This option is exercisable at $3.87 per share
of Common Stock.
Mr. Deferrari receives no separate compensation for services as a
director.
REPORT OF THE DIRECTORS REGARDING COMPENSATION
The Board of Directors reviews annually the compensation to be paid to
the Company's executive officers. In making such review, the Board of Directors
evaluates information supplied by management. The compensation provided by the
Company to executive officers includes salary, stock options and bonuses. The
Company's compensation policies are structured to enable the Company to attract,
retain and motivate highly qualified executive officers and to reward
contributions to the Company's success. The objective is to provide a management
team that will consistently produce superior results for the Company and its
shareholders. The Board of Directors negotiates employment agreements, including
provisions for salary and bonuses, with each of the Company's executive
officers. Currently, pursuant to the Company's employment agreements with its
executive officers, each executive officer receives a fixed annual base salary
and a bonus equal to a fixed percentage of the Company's net earnings for each
fiscal year during the term of the agreement.
Section 162(m) of the Internal Revenue Code ("Section 162(m)")
generally disallows a tax deduction to a public company for compensation over $1
million annually (the "Million Dollar Cap") paid to its chief executive officer
and four other most highly compensated executive officers. Qualifying
performance-based compensation will not be subject to the deduction limitation
if certain requirements are met. The Board of Directors' current policy is to
structure the performance-based portion of the compensation of the Company's
executive officers (currently consisting of stock option grants and cash
bonuses) in a manner that complies with Section 162(m) whenever possible and
appropriate, in the judgment of the Board of Directors. Because the current
composition of the Board of Directors and, therefore, the Stock Option
Committee, does not include two directors who are outside directors for Section
162(m) purposes, any income attributable to the exercise of options granted
under the 1995 Stock Incentive Plan by the current Board of Directors or Stock
Option Committee will not be treated as performance-based compensation and,
therefore, will not be afforded the performance-based exemption from the Million
Dollar Cap. However, the Board of Directors does not currently believe that it
is likely that the options granted under the 1995 Stock Incentive Plan will
cause the annual compensation of any named executive officer to be more than
$1,000,000, although no assurances in that regard can be given.
Salary. The Board of Directors' policy is to negotiate salaries in
relation to the contribution of each incumbent and to grant merit increases
based on individual performance. The Board of Directors considers the financial
condition of the Company, earnings in an absolute manner and in relation to the
previously established business plan, other measures of business success and the
degree of difficulty in achieving these levels. Executive officer compensation
for the last three years is described on page 6.
Stock Options/Bonuses. The Board of Directors believes that providing a
portion of an executive's annual incentive compensation in the form of stock
options in addition to cash bonuses encourages the executive to share with
outside shareholders the goals of increasing the value of the Company's stock
and contributing to the success of the Company. The Board of Directors
encourages stock ownership by management. Option grants are based upon the
contributions of each individual executive toward achievement of corporate and
individual goals during the previous fiscal year. Executive officer stock option
grants for the last three years are listed on page 8. Similarly, bonus formulae
are based on the Company's net earnings, instead of other measures of
performance, because net earnings have a significant effect on the market price
of the Common Stock.
In May 1994, the Company entered into a three-year employment agreement
with Ronald H. Deferrari. Pursuant to the agreement, Mr. Deferrari receives
$150,000 in base salary per year and a bonus equal to 3% of the Company's net
earnings, for each fiscal year during the term of the agreement, such bonus not
to exceed $100,000. In June 1995, Mr. Deferrari's bonus percentage was decreased
from 5% to 3% of the Company's fiscal year net earnings. Mr. Deferrari suggested
such decrease so that certain other key employees could receive bonuses without
increasing the overall size of the bonus pool. In January 1997, the Board of
Directors resolved to permit Mr. Deferrari's employment agreement to renew
automatically, in accordance with its terms, for an
3
<PAGE> 6
additional three year term. His employment agreement is more fully described in
footnotes 1 and 3 to the Summary Compensation Table.
In May 1994, the Company entered into a three-year employment agreement
with Ronald S. Deferrari. The agreement was amended in June 1995 to reflect Mr.
Deferrari's promotion from Executive Vice President to President. Pursuant to
this agreement, Mr. Deferrari is entitled to receive $160,000 per year in base
salary and an annual bonus equal to 5% of the Company's fiscal year net
earnings, such bonus not to exceed $150,000. In addition, Mr. Deferrari is
entitled to receive reimbursement for two automobiles. In January 1997, the
Board of Directors resolved to provide Mr. Deferrari with a new employment
agreement for a three-year term, with an increase in the bonus compensation cap
to $250,000. His current employment agreement is more fully described in
footnotes 1, 2 and 4 to the Summary Compensation Table.
In February 1995, the Company entered into an employment agreement with
Diana M. DeFerrari. The agreement was amended, effective September 18, 1996, to
reflect Ms. DeFerrari's promotion from Vice President of Administration to
Senior Vice President. Pursuant to this agreement, Ms. DeFerrari is entitled to
receive $101,000 per year in base salary and an annual bonus equal to 2.5% of
the Company's fiscal year net earnings, such bonus not to exceed $100,000
annually. Ms. DeFerrari's employment agreement is more fully described in
footnotes 1 and 6 to the Summary Compensation Table.
In February 1996, the Company entered into an employment agreement with
Curt Barratt, pursuant to which Mr. Barratt was entitled to receive $110,510 per
year in base salary and an annual bonus equal to 1% of the Company's fiscal year
net earnings, such bonus not to exceed $75,000. Pursuant to an amendment to the
agreement, which was effective September 18, 1996, Mr. Barratt's annual base
salary was increased to $125,000 and his annual bonus was increased to 2.5% of
fiscal year net earnings, such bonus not to exceed $75,000. Mr. Barratt's
employment with the Company terminated effective November 18, 1996. His
employment agreement is more fully described in footnotes 1, 8 and 9 to the
Summary Compensation Table.
The Company entered into a new employment agreement with Edmond A.
Richards for a three-year term, commencing as of January 22, 1997. Under the
agreement, Mr. Richards is entitled to receive $146,772 per year in base salary
and an annual bonus equal to 0.5% of the Company's fiscal year net earnings,
such bonus not to exceed $50,000 annually. Mr. Richard's employment agreement is
more fully described in footnotes 1 and 7 to the Summary Compensation Table.
The Company entered into an employment agreement with Stacy L. Wagner
for a three-year term, commencing as of January 22, 1997. Under the agreement,
Ms. Wagner is entitled to receive $70,000 per year in base salary and an annual
bonus equal to 1.0% of the Company's fiscal year net earnings, such bonus not to
exceed $50,000 annually. If the agreement is terminated due to death or
disability or by the Company without cause, Ms. Wagner is entitled to receive
full compensation for the then remaining term of the agreement. In the event of
a change in control (as that term is defined in the agreement), (a) the term of
the agreement will be extended, to the extent necessary, so that there are 12
months remaining in the term from the time of the change in control; and (b) Ms.
Wagner commits to continue to perform her duties under the agreement for 12
months after the time of the change in control after which she may terminate the
agreement without a loss of benefits, as if the Company had terminated the
agreement without cause.
Members of the Board of Directors:
Ronald H. Deferrari, Chairman
Anastasios S. Gianoplus
Lubek Jastrzebski, Ph.D.
4
<PAGE> 7
COMPARATIVE STOCK PERFORMANCE
The following graph compares cumulative total stockholder return on Company
Common Stock for the five years in the period ended November 30, 1996 with that
of The Nasdaq Stock Market (U.S. Companies) Composite Index (the "Composite
Index") and a peer group stock performance index defined as follows: SIC Index
No 3500-3599 (industrial and commercial machinery and computer equipment
companies)(the "Peer Group"). The graph shows the comparative values for $100
invested on November 30, 1991.
<TABLE>
<CAPTION>
Total Return
----------------------------------------------------
Year Plasma-Therm, Inc. Composite Index Peer Group
------------------ --------------- ----------
<S> <C> <C> <C>
1991 100.00 100.00 100.00
1992 106.30 126.00 139.50
1993 725.00 145.80 142.90
1994 925.00 146.10 160.60
1995 637.50 208.30 277.10
1996 737.50 255.20 347.90
</TABLE>
Source: Center for Research in Security Prices (CRSP), The University of
Chicago, Graduate School of Business, 1101 East 58th Street, Chicago, IL 60637
5
<PAGE> 8
MANAGEMENT COMPENSATION
Set forth below is information regarding the cash and noncash
compensation for the last three fiscal years earned by or awarded to the
Company's Chief Executive Officer, the four most highly compensated executive
officers whose total annual salary and bonus exceeded $100,000 and one
additional individual who would have been one of the Company's four most highly
compensated officers except that he was not serving as an officer at the end of
fiscal 1996 (collectively, the "named executive officers").
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Annual Compensation Long Term Compensation
------------------- ----------------------
(a) (b) (c) (d) (e) (f) (g) (h)
Other Annual Restricted Securities
Name and Compensation Stock Underlying All Other
Principal Position Year Salary($) Bonus($)(1) ($)(2) Awards($) Options(#) Compensation($)
------------------ ---- --------- -------- ------------ ---------- ---------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C>
Ronald H. Deferrari, 1996 150,000 99,357 36,306 - - -
CEO, CFO, 1995 150,000 44,146 33,284 - - -
Treasurer (3) 1994 150,000 53,688 25,931 - - -
Ronald S. Deferrari, 1996 160,000 150,000 8,334 - 150,000
President, COO (4) 1995 146,340 53,006 5,613 - 70,000 -
1994 112,539 53,688 3,000 - 25,000 57,626(5)
Diana M. DeFerrari, 1996 101,000 82,797 - - 150,000
Sr. Vice President, 1995 93,119 20,378 1,500 - 20,000 -
Secretary (6) 1994 56,553 10,738 5,600 - 10,000 -
Edmond A. Richards, 1996 144,779 3,671 3,240 - 18,000
Vice President of
Engineering (7)
Curtis A. Barratt,(8) 1996 108,814 57,815 - - 150,000 2,404(9)
Former Sr. Vice 1995 101,594 4,430 4,800 - 20,000 -
President and
Chief Technical
Officer
</TABLE>
- - ---------------------------
(1) Reflects bonuses based on fiscal year net income. Bonuses are paid
quarterly based on quarterly net income before bonuses, for the first
three fiscal quarters, and are reconciled for the full fiscal year after
the fiscal year end. The bonuses are subject to certain limitations, which
vary among the individuals.
(2) Automobile allowance.
(3) In May 1994, the Company entered into an employment agreement with Ronald
H. Deferrari, for a term of three years. The agreement was amended in
June 1995, and in January 1997 the Board of Directors resolved to permit
Mr. Deferrari's employment agreement to renew automatically, in
accordance with its terms, for an additional three-year term. Under Mr.
Deferrari's current agreement he receives $150,000 in base salary per
year and a bonus equal to 3% of the Company's fiscal year net earnings,
such bonus not to exceed $100,000 annually, and reimbursement for
payments related to the lease or purchase of two automobiles. Upon
termination of the agreement, including termination on death or
disability, Mr. Deferrari is entitled to receive the full compensation
provided thereunder for the remainder of the term of the agreement,
unless the termination is made by the Company based upon reasonable cause
as defined in the
6
<PAGE> 9
agreement, in which event the compensation shall continue one year from
the notice of termination. Mr. Deferrari is entitled to terminate the
agreement in the event of a change of control of the Company, in which
case Mr. Deferrari will also be entitled to receive the full compensation
provided thereunder for the remainder of the agreement term.
(4) In May 1994, the Company entered into an employment agreement with Mr.
Ronald S. Deferrari, for a term of three years. The agreement was
amended in June 1995 to reflect his promotion from Executive Vice
President to President. Under Mr. Deferrari's employment agreement, as
in effect during fiscal 1996, he was entitled to receive $160,000 per
year in base salary, an annual bonus equal to 5% of the Company's fiscal
year net earnings, such bonus not to exceed $150,000, and reimbursement
for payments related to the lease or purchase of two automobiles. In
January 1997, the Board of Directors resolved to provide Mr. Deferrari
with a new employment agreement for a three-year term, commencing January
22, 1997. Under the new agreement, Mr. Deferrari is entitled to receive
$160,000 per year in base salary, an annual bonus equal to 5% of the
Company's fiscal year net earnings, such bonus not to exceed $250,000
annually, and reimbursement for payments related to the lease or purchase
of two automobiles. If the agreement is terminated due to death or
disability, Mr. Deferrari is entitled to receive full compensation for
the then remaining term of the agreement. If the agreement is terminated
by the Company with cause or by Mr. Deferrari without cause, Mr.
Deferrari is entitled to receive a severance package of six months salary
and benefits (the severance package ) as set forth in the agreement. If
the agreement is terminated by the Company without cause, Mr. Deferrari
is entitled to receive full compensation for the then remaining term of
the agreement as well as the severance package. In the event of a change
in control or change in the Board of Directors of the Company (as those
terms are defined in the agreement), (a) the term of the agreement will
be extended, to the extent necessary, so that there are 18 months
remaining in the term from the time of the change in control or change in
the Board of Directors; and (b) Mr. Deferrari commits to continue to
perform his duties under the agreement for 18 months after the time of
the change in control or change in the Board of Directors after which he
may terminate the Agreement without a loss of benefits, as if the Company
had terminated the agreement without cause, except that if Mr. Deferrari
terminates the Agreement in the event of a change in control or if the
Company terminates the agreement subsequent to a change in control, Mr.
Deferrari is entitled to receive at least 12 months of salary and
benefits.
(5) Sales commissions earned by Ronald S. Deferrari under a prior agreement.
Under Ronald S. Deferrari's current employment agreement described in
footnote 4 above, he is not entitled to sales commissions.
(6) In February 1995, the Company entered into an employment agreement with
Ms. DeFerrari for a three-year term. The agreement was amended,
effective September 18, 1996, to reflect Ms. DeFerrari's promotion from
Vice President of Administration to Senior Vice President. Under the
agreement, Ms. DeFerrari receives $101,000 per year in base salary and an
annual bonus equal to 2.5% of the Company's fiscal year net earnings,
such bonus not to exceed $100,000 annually. Upon termination of the
agreement, including termination on death or disability, Ms. DeFerrari is
entitled to receive the full compensation provided thereunder for the
remainder of the term of the agreement, unless a termination is made by
the Company based upon reasonable cause as defined in the agreement, in
which event the compensation shall continue one year from the notice of
termination. Ms. DeFerrari is entitled to terminate the agreement in the
event of a change of control of the Company, in which case Ms. DeFerrari
will also be entitled to receive the full compensation provided
thereunder for the remainder of the agreement term.
(7) The Company entered into an employment agreement with Mr. Richards for a
three-year term, commencing as of January 22, 1997. Under the agreement,
Mr. Richards is entitled to receive $146,772 per year in base salary and
an annual bonus equal to 0.5% of the Company's fiscal year net earnings,
such bonus not to exceed $50,000 annually. If the agreement is
terminated due to death or disability or by the Company without cause,
Mr. Richards is entitled to receive full compensation for the then
remaining term of the agreement. In the event of a change in control (as
that term is defined in the agreement), (a) the term of the agreement
will be extended, to the extent necessary, so that there are 18 months
remaining in the term from the time of the change in control; and (b) Mr.
Richards commits to continue to perform his duties under the
7
<PAGE> 10
agreement for 18 months after the time of the change in control after
which he may terminate the Agreement without a loss of benefits, as if the
Company had terminated the agreement without cause.
(8) Mr. Barratt's employment with the Company terminated effective November
18, 1996. Mr. Barratt became an executive officer of the Company in July
1995. In February 1996, the Company entered into an employment agreement
with Mr. Barratt for a two-year term. Under the original terms of the
agreement, Mr. Barratt received $110,510 per year in base salary and an
annual bonus based on 1% of the Company's fiscal year net earnings, such
bonus not to exceed $75,000 annually. Pursuant to an amendment to the
agreement, which was effective September 18, 1996, Mr. Barratt's annual
base salary was increased to $125,000 and his annual bonus was increased
to 2.5% of fiscal year net earnings, such bonus not to exceed $75,000.
The agreement provides that, in the event of termination of the agreement
due to death or disability or by the Company without cause, Mr. Barratt
is entitled to receive full compensation for the then remaining term of
the agreement. In the event of termination by Mr. Barratt with cause
(including a change in control), Mr. Barratt is entitled to receive full
compensation and benefits for the then remaining term of the agreement.
(9) Amount paid to Mr. Barratt post-termination pursuant to the terms of his
employment agreement.
The following table provides certain information regarding the stock
options granted during fiscal 1996 to the named executive officers in the
Summary Compensation Table.
OPTION GRANTS IN FISCAL 1996
<TABLE>
<CAPTION>
Potential Realizable
Individual Grants Value at Assumed
------------------------------------------------ Annual Rates of
Number of % of Total Stock Price
Securities Options Appreciation for
Underlying Granted to Exercise or Option Term($)
Options Employees in Base Price Expiration --------------------
Name Granted(#) Fiscal Year Per Share($) Date 5% 10%
---- ---------- ----------- ------------- ---------- ------ -------
<S> <C> <C> <C> <C> <C> <C>
Ronald H. Deferrari -- -- -- -- -- --
Ronald S. Deferrari 40,000 5.9 2.62 12/26/98 10,742 22,008
110,000 16.1 3.87 04/30/99 67,101 140,907
Diana M. DeFerrari 30,000 4.4 2.62 12/26/98 8,057 16,506
100,000 14.7 3.87 04/30/99 61,001 128,097
20,000 2.9 5.25 06/26/99 16,551 34,755
Edmond A. Richards 3,000 .4 2.31 01/20/99 1,092 2,294
15,000 2.2 3.87 04/30/99 9,150 19,215
Curtis A. Barratt 20,000(1) 2.9 2.62 12/26/98 5,371 11,004
75,000(1) 11.0 3.87 04/30/99 45,751 96,073
20,000(2) 2.9 5.25 11/18/96 n/a n/a
35,000(2) 5.1 4.25 11/18/96 n/a n/a
</TABLE>
(1) Represents options for which the original expiration date, as set forth
in this table, was accelerated to February 18, 1997 upon the
termination of Mr. Barratt's services to the Company, in accordance
with the terms of the 1995 Stock Incentive Plan. The potential
realizable values shown are based on the original terms of the options.
8
<PAGE> 11
(2) Represents options that were not vested as of Mr. Barratt's termination
of services with the Company and that, therefore, expired on the date
of termination in accordance with his Stock Option agreement.
The following table provides certain information regarding stock
options exercised in fiscal 1996 and 1996 stock option values for the named
executive officers in the Summary Compensation Table. As of November 30, 1996,
the named executive officers held beneficially, excluding their options, an
aggregate of 2,223,289 shares of the Common Stock.
AGGREGATED OPTION EXERCISES IN
FISCAL 1996 AND NOVEMBER 30, 1996 OPTION VALUES
<TABLE>
<CAPTION>
(a) (b) (c) (d) (e) (f) (g)
Value of unexercised in-the-
Number of unexercised money options at fiscal year
options at fiscal year end end($)
Shares Value --------------------------- --------------------------
acquired on realized
Name exercise(#) ($) Exercisable Unexercisable Exercisable Unexercisable
---- ----------- ------------ ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Ronald H. Deferrari(1) -- -- -- -- -- --
Ronald S. Deferrari 40,000 141,600 180,000 -- 42,700 --
Diana M. DeFerrari 10,000 9,700 150,000 20,000 32,025 --
Edmond A. Richards -- -- 21,000 -- 4,133 --
Curtis A. Barratt -- -- 115,000 -- 21,350 --
</TABLE>
- - --------------------------
(1) Does not include 400,000 shares acquired on the exercise of warrants,
exercised on January 28, 1997 at an exercise price of $0.7721 per
share. The closing price of the Company's Common Stock on that date was
$5.50 per share.
CERTAIN TRANSACTIONS WITH MANAGEMENT
On November 1, 1994, Magnetran, Inc. ("Magnetran"), the Company's
subsidiary located in New Jersey, entered into a five-year gross lease for
approximately 17,750 square feet, with the Company's Chief Executive Officer.
The premises are leased by Magnetran at an annual base rental of $86,841, which
escalates 3% annually. After the initial term of the lease, Magnetran has an
option to renew for five years with a 3% increase each year. The rent paid to
the Chief Executive Officer for fiscal 1996 was approximately $90,000. The
Company believes that the terms of the lease are generally as favorable to the
Company as could be obtained from unaffiliated third parties.
COMMON STOCK OWNERSHIP
The following table sets forth certain information regarding beneficial
ownership of the Company's Common Stock as of March 7, 1997 by (i) each person
who is known to beneficially own more than 5% of the Company's Common Stock,
computed in accordance with Securities Exchange Act Rule 13d-3; (ii) each of the
Company's directors, (iii) each of the Company's named executive officers; and
(iv) all directors and executive officers of the Company as a group. The
Shareholders listed possess sole voting and investment power with respect to the
shares listed.
<TABLE>
<CAPTION>
Amount Approximate
of Beneficial percent of
Name Ownership Class
- - ------------------------------------------------ ------------ ------------
<S> <C> <C>
Ronald H. Deferrari 2,428,005 22.92%
10050 16th Street North
St. Petersburg, FL 33716
</TABLE>
9
<PAGE> 12
<TABLE>
<CAPTION>
<S> <C> <C>
Anastasios S. Gianoplus 18,000(1) (2)
8007 Algarve St
McLean, VA 22102
Lubek Jastrzebski 5,000(3) (2)
450 Gulfview Blvd
Apartment 1705
Clearwater, FL 34630
Ronald S. Deferrari 165,592(4) 1.54%
10050 16th Street North
St. Petersburg, FL 33716
Diana M. DeFerrari 98,792(5) (2)
10050 16th Street North
St. Petersburg, FL 33716
Edmond A. Richards 31,000(6) (2)
10050 16th Street North
St. Petersburg, FL 33716
Curtis A. Barratt 100 (2)
2831 Quail Hollow
Clearwater, FL 34621
Executive officers 2,850,489 26.18%
and directors as a group
(8 persons)
</TABLE>
(1) Includes an option to purchase 5,000 shares at a price of $2.25 per
share, which expires on June 30, 2000.
(2) Less than 1% of the outstanding Common Stock.
(3) Represents option to purchase 5,000 shares at a price of $3.87 per
share, which expires on April 30, 1999.
(4) Includes an option to purchase 30,000 shares at a price of $4.06 per
share, which expires on June 26, 1998; and an option to purchase
110,000 shares at a price of $3.87 per share, which expires on April
30, 1999.
(5) Includes an option to purchase 20,000 shares at a price of $4.06 per
share, which expires on June 26, 1998; and an option to purchase 20,000
shares at a price of $5.25 per share, which expires on June 26, 1999.
(6) Includes an option to purchase 3,000 shares at a price of $4.31 per
share, which expires on July 20, 1998; and an option to purchase 15,000
shares at a price of $3.87 per share, which expires on April 30, 1999.
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
Section 16(a) of the Exchange Act, and the regulations thereunder, requires
the Company's officers and directors and persons who own more than ten percent
of a registered class of the Company's equity securities (collectively, the
"reporting persons") to file reports of ownership and changes in ownership with
the Commission and furnish the
10
<PAGE> 13
Company with copies of these reports. Based on the Company's review of the
copies of these reports received by it and written representations received from
reporting persons, the Company believes that all filings required to be made by
the reporting persons for the 1996 fiscal year were made on a timely basis.
APPROVAL OF PROPOSED
AMENDMENTS TO THE
1995 STOCK INCENTIVE PLAN
(Item No. 2)
The Board of Directors and the Stock Option Committee of the Company
adopted the Plasma-Therm, Inc. 1995 Stock Incentive Plan on March 17, 1995 and
the shareholders subsequently approved the plan at the 1995 Annual Meeting. The
Board of Directors and the Stock Option Committee have proposed to amend the
Plasma-Therm, Inc. 1995 Stock Incentive Plan, subject to shareholder approval,
to increase the available shares of Common Stock for issuance under the plan by
1,500,000, to increase the maximum number of shares of Common Stock for which
options may be granted under the plan during any fiscal year to each optionee to
500,000 shares and to permit members of the Stock Option Committee to receive
discretionary, as well as formula, option grants and awards under the plan. The
Plasma-Therm, Inc. 1995 Stock Incentive Plan, as amended, is hereinafter
referred to as the "Plan".
The Plan is intended as an additional incentive to directors,
employees, consultants and advisors of the Company to serve the Company and to
devote themselves to the future success of the Company by providing them with an
opportunity to acquire or increase their proprietary interest in the Company
through the receipt of rights to acquire Common Stock.
Options granted under the Plan to employees, including directors who
are employees, may be designated as "incentive stock options" ("ISOs") within
the meaning of Section 422 of the Internal Revenue Code of 1986, as amended (the
"Code"), or may be designated as options not intended to be ISOs ("non-qualified
stock options").
The key provisions of the Plan, assuming the proposed amendments are
approved by the shareholders, are as follows:
1. Number of Shares. The maximum number of shares for which options or
awards may be granted under the Plan is 2,706,757 shares of Common Stock (of
which 1,628,257 shares are currently available for option or award grants),
which shall be increased annually by an additional number of shares equal to 1%
of the number of shares outstanding on the last day of each fiscal year;
provided that the maximum aggregate number of shares to be issued under the Plan
shall not exceed 3,000,000. Such increase shall be made each November 30,
regardless of the number of shares remaining available for issuance under the
Plan on such date. Such shares are subject to adjustment if the outstanding
shares of Common Stock are changed by reason of a reorganization, merger,
consolidation, recapitalization, reclassification, stock split-up, combination
or exchange of shares and the like or dividends payable in shares. No optionee
may receive options for more than 500,000 shares in any fiscal year of the
Company. All numbers of shares set forth in this description of the Plan are
subject to adjustment under antidilution provisions.
2. Administration. The Plan is administered in whole or in part by the
Board of Directors or by one or more committees of two or more directors who may
be "outside" directors as such term is defined for purposes of Section 162(m) of
the Internal Revenue Code. The Board of Directors or any committee administering
the Plan is referred to herein as the "Committee." The Committee has the
authority to (i) determine the optionees to whom, the times at which, and the
price at which, options shall be granted, (ii) the number of shares subject to
the option and whether the option is an ISO or a non-qualified stock option,
(iii) approve the form and terms and conditions of the option grants. The
Committee has similar authority to approve awards of shares under the Plan.
3. Eligibility. All Company employees, members of the Board of
Directors, consultants and advisors to the Company are eligible to receive
options and/or awards under the Plan. The Plan provides that members of the
Committee may receive non-qualified stock options automatically in accordance
with the following
11
<PAGE> 14
formula: on June 30, 1995 and on each June 30th thereafter, each Committee
member will receive an option for 5,000 shares. Such options will be exercisable
at 60% of the fair market value of the shares on the option issuance date, will
become exercisable with respect to 100% of the shares covered by the option on
the first anniversary of the date of grant, and will expire five years after the
date of grant. The Plan provides that a Committee member may elect not to
receive a formula option grant (in which case the Committee member will receive
nothing in lieu thereof) and may also revoke such election. In either case, the
election or the revocation of the election will be effective only for formula
option grants that otherwise were scheduled to be made after the date of the
election. Mr. Ronald H. Deferrari has waived his rights to receive any formula
options on June 30, 1995, 1996 and 1997. There are currently approximately one
hundred sixty (160) employees, two (2) directors (exclusive of Mr. Deferrari),
zero (0) consultants and zero (0) advisors to the Company who are eligible to
receive grants and/or awards under the Plan.
4. Term of Plan. No ISOs may be granted under the Plan after
March 16, 2005.
5. Term of Option. All options terminate on the earliest of: (a) the
expiration of the term specified in the option document, which, in the case of
an ISO, may not exceed ten years from the date of grant or five years after the
date of grant if the optionee on the date of grant owns, directly or by
attribution, shares possessing more than 10% of the total combined voting power
of all classes of stock of the Company; (b) a finding by the Committee, except
as otherwise provided in the optionee's option document, that the optionee has
been engaged in disloyalty to the Company and has violated the Company's
policies, including, without limitation, fraud, embezzlement, theft, commission
of a felony or proven dishonesty in the course of his employment or services, or
has disclosed trade secrets or confidential information of the Company; (c) the
date, if any, set by the Board of Directors as an accelerated expiration date in
the event of the liquidation or dissolution of the Company; (d) the occurrence
of such other event or events as may be set forth in the option document as
causing an accelerated expiration of the option; or (e) except as otherwise set
forth in a particular option document, options will terminate three months after
the optionee's employment or service with the Company terminates for any reason
other than disability or death, or one year after such termination due to the
optionee's disability or death.
6. Option Price. The option price for non-qualified stock options may
be less than, equal to, or greater than the fair market value of the shares
subject to the option on the date that the option is granted, and for ISOs will
be at least 100% of the fair market value of the shares subject to the option on
the date that the option is granted. The market value of the Common Stock was
$5.25 per share at March 7, 1997. If an ISO is granted to an employee who then
owns, directly or by attribution under the Code, shares possessing more than 10%
of the total combined voting power of all classes of shares of the Company, the
option price will be at least 110% of the fair market value of the shares on the
date that the option is granted.
7. Stock Appreciation Rights (SARs). The Committee may grant to an
optionee rights to surrender to the Company, in whole or in part, an option, and
to receive in exchange thereof payment by the Company of an amount equal to the
excess of the fair market value of the shares of Common Stock subject to such
option, or portion thereof, so surrendered over the exercise price to acquire
such shares. The Committee has the sole discretion to determine whether payment
is to be made in shares of Common Stock, in cash, or in a combination of Common
Stock and cash. Each SAR will relate to a specific option granted under the Plan
and will be granted to the optionee concurrently with the grant of the option.
The formula options granted to Committee members shall contain the SAR feature.
8. Payment. An option holder may pay for shares covered by an option in
cash or by certified or cashier's check payable to the order of the Company or
by such other mode of payment as the Committee may approve, including payment
through a broker in accordance with Regulation T of the Federal Reserve Board.
If any payment is required by a grantee of an award, such payment may be made in
cash or by certified check payable to the order of the Company or by such other
mode of payment that the Committee may approve.
9. Awards. Shares may be awarded under the Plan with or without payment
of consideration in such amount as the Committee may determine. Shares may be
awarded subject to various conditions -- e.g., that the shares may be reacquired
by the Company in return for the consideration (if any) paid by the recipient of
the award
12
<PAGE> 15
upon the recipient's termination of employment or other relationship with the
Company, with such reacquisition rights of the Company lapsing in installments
over time.
10. Option Document; Award Document; Restriction on Transferability
All options will be evidenced by a written option document containing provisions
consistent with the Plan and such other provisions as the Committee deems
appropriate. No option granted under the Plan may be transferred, except by will
or the laws of descent and distribution; provided that a non-qualified stock
option may be transferred pursuant to a qualified domestic relations order, as
defined by the Internal Revenue Code or in Title I of the Employee Retirement
Income Security Act of 1974, as amended, or to certain family members or family
related entities as described in the Plan. All awards granted pursuant to the
Plan will be evidenced by a written award agreement in a form as the Committee
will approve, which agreement will comply with terms and conditions as the
Committee may require as long as these terms and conditions are not inconsistent
with the terms of the Plan.
11. Provisions Relating to a "Change of Control ." Notwithstanding any
other provision of the Plan, in the event of a "Change of Control" (as defined
in the Plan), the Committee may accelerate the expiration and/or exercisability
of individual options. Such acceleration will apply automatically to the formula
options granted to the Committee members and with respect to those optionees
who, in the good faith determination of the Board of Directors, are likely to
have their relationship with the Company terminated (including constructive
termination through a significant decrease in authority, responsibility, or
overall total compensation) as a result of such change of control.
12. Amendments to the Plan or Option and Award Document's
Interpretation. Subject to certain limitations in the Plan, the Board of
Directors may amend the Plan or an option or award from time to time in such
manner as it may deem advisable, provided that no option or award document may
be amended in a manner adverse to the interest of the holder without the consent
of the holder. The Committee has the power to interpret the Plan and adopt rules
and regulations for its administration.
13. Tax Aspects of the Plan. The following discussion is intended
to summarize briefly the general principles of Federal income tax law applicable
to options granted under the Plan. A recipient of an ISO will not recognize
taxable income upon either the grant or exercise of the ISO. The option holder
will recognize long-term capital gain or loss on a disposition of the shares
acquired upon exercise of an ISO, provided the option holder does not dispose of
those shares within two years from the date the ISO was granted or within one
year after the shares were transferred to such option holder. Currently, for
regular federal income tax purposes, long-term capital gain is taxed at a
maximum rate of 28%, while ordinary income is generally subject to a maximum
effective rate of 39.6%. If the option holder satisfies both of the foregoing
holding periods, then the Company will not be allowed a deduction by reason of
the grant or exercise of an ISO.
As a general rule, if the option holder disposes of the shares before
satisfying both holding period requirements (a "disqualifying disposition"), the
gain recognized by the option holder on the disqualifying disposition will be
taxed as ordinary income to the extent of the difference between (a) the lesser
of the fair market value of the shares on the date of exercise or the amount
received for the shares in the disqualifying disposition, and (b) the adjusted
basis of the shares, and the Company will be entitled to a deduction in that
amount. The gain (if any) in excess of the amount recognized as ordinary income
on a disqualifying disposition will be long-term or short-term capital gain,
depending on the length of time the option holder held the shares prior to the
disposition.
The amount by which the fair market value of a share at the time of
exercise exceeds the option price will be included in the computation of such
option holder's "alternative minimum taxable income" in the year the option
holder exercises the ISO. Currently, for a taxpayer subject to the alternative
minimum tax, the alternative minimum tax rate varies between 26% and 28%
depending upon the amount of alternative minimum taxable income. If an option
holder pays alternative minimum tax with respect to the exercise of an ISO, then
the amount of such tax paid will be allowed as a credit against regular tax
liability in subsequent years. The option holder's basis in the shares for
purposes of the alternative minimum tax will be adjusted when income is included
in alternative minimum taxable income.
13
<PAGE> 16
A recipient of a non-qualified stock option will not recognize taxable
income at the time of grant, and the Company will not be allowed a deduction by
reason of the grant. Such an option holder will recognize ordinary income in the
taxable year in which the option holder exercises the non-qualified stock
option, in an amount equal to the excess of the fair market value of the shares
received upon exercise at the time of exercise of such options over the exercise
price of the option, and the Company will be allowed a deduction in that amount.
Upon disposition of the shares subject to the option, an option holder will
recognize long-term or short-term capital gain or loss, depending upon the
length of time the shares were held prior to disposition, equal to the
difference between the amount realized on disposition and the option holder's
basis in a share subject to the option (which basis ordinarily is the fair
market value of the shares subject to the option on the date the option was
exercised).
In the case of SARs, the Company is of the opinion that the holder will
not realize any compensation income at the time of grant. However, the fair
market value of stock or cash delivered pursuant to the exercise of such SARs
will be treated as compensation income taxable to the employee at the time of
exercise, and the Company will be entitled to a deduction under the Code at the
time and equal to the amount of compensation income that is realized by the
holder.
Section 162(m) generally limits the deductibility of
compensation paid to certain employees ("Covered Employees") of any publicly
held company to the extent such compensation exceeds the Million Dollar Cap.
Income recognized as a result of the exercise of a stock option by a Covered
Employee would normally be taken into account for this purpose. However, if an
option is granted pursuant to a plan which meets certain requirements, relating
both to the terms of the plan and to its administration by "outside directors,"
any income attributable to the exercise of the option will be treated as
"performance-based compensation" to which the Million Dollar Cap does not apply.
The Board of Directors' current policy is to structure the performance-based
portion of the compensation of the Company's executive officers (including
grants of stock options under the Plan) in a manner that complies with Section
162(m) whenever possible and appropriate, in the judgment of the Board of
Directors. Because the current composition of the Board of Directors and,
therefore, the Stock Option Committee, does not include two directors who are
outside directors for Section 162(m) purposes, any income attributable to the
exercise of options granted under the Plan by the current Board of Directors or
Stock Option Committee will not be treated as performance-based compensation
and, therefore, will not be afforded the performance-based exemption from the
Million Dollar Cap. However, the Board of Directors does not currently believe
that it is likely that the options granted under the Plan will cause the annual
compensation of any named executive officer to be more than $1,000,000, although
no assurances in that regard can be given.
The following table sets forth the total number of options that have
been received by or allocated to the persons listed below under the Plan.
<TABLE>
<CAPTION>
Plan Benefits
Name Number of Securities Underlying Options
- - ---- ---------------------------------------
<S> <C>
Ronald H. Deferrari 0
Chairman of the Board of Directors, CEO,
CFO, Treasurer, nominee for Director
Anastasios S. Gianoplus 30,000(1)
Director, nominee for Director
Lubek Jastrzebski 25,000
Director, nominee for Director
Ronald S. Deferrari 370,000
President, COO
</TABLE>
14
<PAGE> 17
<TABLE>
<S> <C>
Diana M. DeFerrari 170,000
Senior Vice President, Secretary
Edmond A. Richards 71,000
Vice President of Engineering
Stacy L. Wagner 101,000
Vice President of Finance
Curtis A. Barratt 170,000(2)
Former Senior Vice President and
Chief Technical Officer
Current Executive Officers as a Group 712,000
Non-Employee Directors as a Group 55,000
Non-Executive Employees as a Group 308,500
</TABLE>
- - ---------------------------------------------------------
(1) Excludes future automatic formula option grants pursuant to the Plan.
(2) 150,000 shares have expired as a result of Mr. Barratt's termination of
employment with the Company, in accordance with the terms of the options.
VOTE REQUIRED
The proposed amendments to the Plan will be adopted by the shareholders if a
majority of the votes cast at the Annual Meeting on the proposal to adopt the
proposed amendments to the Plan are in favor of adoption. For the purpose of
determining the vote on this proposal, broker non-votes and abstentions will not
be included in calculating whether the majority of the votes cast was for or
against adoption.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS VOTING "FOR" THE PROPOSAL TO
APPROVE THE PLAN.
SHAREHOLDER PROPOSALS
Shareholder proposals intended to be presented at the 1998 Annual Meeting of
Shareholders must be received by the Company at the address appearing on the
first page of this proxy statement by November 28, 1997 in order to be
considered for inclusion in the Company's proxy statement and form of proxy
relating to that meeting.
RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS
The firm of Grant Thornton LLP served as independent public accountants for
the Company for its most recently completed fiscal year and has been selected by
the Board of Directors to serve in such capacity for the current fiscal year. A
representative of Grant Thornton is expected to be present at the Meeting and
will have the opportunity to make a statement if he or she desires to do so. The
representative is also expected to be available to respond to appropriate
questions.
15
<PAGE> 18
ANNUAL REPORT ON FORM 10-K
THE COMPANY WILL PROVIDE WITHOUT CHARGE TO EACH PERSON WHOSE PROXY IS BEING
SOLICITED BY THIS PROXY STATEMENT, ON THE WRITTEN REQUEST OF ANY SUCH PERSON, A
COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K (INCLUDING THE FINANCIAL
STATEMENTS AND SCHEDULE THERETO) AS FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION FOR ITS MOST RECENT FISCAL YEAR. SUCH WRITTEN REQUESTS SHOULD BE
DIRECTED TO SHAREHOLDER RELATIONS AT THE ADDRESS OF THE COMPANY APPEARING ON THE
FIRST PAGE OF THIS PROXY STATEMENT.
16
<PAGE> 19
PLASMA-THERM, INC.
1995 STOCK INCENTIVE PLAN
AS ADOPTED BY THE BOARD OF DIRECTORS
AND THE STOCK OPTION COMMITTEE
ON MARCH 17, 1995
AND AS AMENDED AND RESTATED EFFECTIVE AS OF MAY 6, 1997
1. Purpose. Plasma-Therm, Inc., a Florida corporation (the
"Company"), hereby amends and restates the Plasma-Therm, Inc. 1995 Stock
Incentive Plan (the "Plan"). The Plan is intended to recognize the
contributions made to the Company by employees (including employees who are
members of the Board of Directors) of the Company or any Affiliate, to provide
such persons with additional incentive to devote themselves to the future
success of the Company or an Affiliate, and to improve the ability of the
Company or an Affiliate to attract, retain, and motivate individuals upon whom
the Company's sustained growth and financial success depend, by providing such
persons with an opportunity to acquire or increase their proprietary interest
in the Company through receipt of rights to acquire the Company's Common Stock,
par value $.01 per Share (the "Common Stock") and through the transfer or
issuance of Common Stock. In addition, the Plan is intended as an additional
incentive to directors of the Company who are not employees of the Company or
an Affiliate to serve on the Board of Directors and to devote themselves to the
future success of the Company by providing them with an opportunity to acquire
or increase their proprietary interest in the Company through the receipt of
rights to acquire Common Stock. Furthermore, the Plan may be used to encourage
consultants and advisors of the Company to further the success of the Company.
2. Definitions. Unless the context clearly indicates
otherwise, the following terms shall have the following meanings:
(a) "Affiliate" means a corporation which is a parent
corporation or a subsidiary corporation with respect to the Company within the
meaning of Section 424(e) or (f) of the Code.
(b) "Award" shall mean a transfer of Common Stock made
pursuant to the terms of the Plan.
(c) "Award Agreement" shall mean the agreement between
the Company and a Grantee with respect to an Award made pursuant to the Plan.
(d) "Board of Directors" means the Board of Directors
of the Company.
(e) "Change of Control" shall have the meaning as set
forth in Section 10 of the Plan.
(f) "Code" means the Internal Revenue Code of 1986,
as amended.
<PAGE> 20
(g) "Committee" shall have the meaning set forth in
Section 3 of the Plan.
(h) "Common Stock" shall have the meaning set forth in
Section 1 of the Plan.
(i) "Company" means Plasma-Therm, Inc., a Florida
corporation.
(j) "Disability" shall have the meaning set forth in
Section 22(e)(3) of the Code.
(k) "Employee" means an employee of the Company or an
Affiliate.
(l) "Fair Market Value" shall have the meaning set
forth in Subsection 8(b) of the Plan.
(m) "Grantee" shall mean a person to whom an Award has
been granted pursuant to the Plan.
(n) "ISO" means an Option granted under the Plan which
is intended to qualify as an "incentive stock option" within the meaning of
Section 422(b) of the Code.
(o) "Non-Employee Director" shall mean a member of the
Board of Directors of the Company who is a "non-employee director" as that term
is defined in paragraph (b)(3) of Rule 16b-3 [and an "outside director" as that
term is defined in Treasury Regulations Section 1.162-27 promulgated under the
Code].
(p) "Non-qualified Stock Option" means an Option
granted under the Plan which is not intended to qualify, or otherwise does not
qualify, as an "incentive stock option" within the meaning of Section 422(b) of
the Code.
(q) "Option" means either an ISO or a Non-qualified
Stock Option granted under the Plan.
(r) "Optionee" means a person to whom an Option has
been granted under the Plan, which Option has not been exercised and has not
expired or terminated.
(s) "Option Document" means the document described in
Section 8 or Section 9 of the Plan, as applicable, which sets forth the terms
and conditions of each grant of Options.
(t) "Option Price" means the price at which Shares may
be purchased upon exercise of an Option, as calculated pursuant to Subsection
8(b) of the Plan.
(u) "Rule 16b-3" means Rule 16b-3 promulgated under
the Securities Exchange Act of 1934, as amended.
(v) "SAR" shall have the meaning set forth in
Section 12 of the Plan.
-2-
<PAGE> 21
(w) "Section 16 Officers" means any person who is an
"officer" within the meaning of Rule 16a-1(f) promulgated under the Securities
Exchange Act of 1934, as amended, or any successor rule.
(x) "Shares" means the shares of Common Stock of the
Company which are the subject of Options or granted as Awards under the Plan.
3. Administration of the Plan. The Board of Directors may
designate a committee or committees composed of two or more of directors, each
of whom is a Non-employee Director, to operate and administer the Plan with
respect to all or a designated portion of the participants. Any such committee
designated by the Board of Directors, and the Board of Directors itself in its
administrative capacity with respect to the Plan, is referred to as the
"Committee." With the exception of the timing of grants of Options, the price at
which Shares may be purchased, and the number of Shares covered by Options
granted to each member of the Committee, all of which shall be as specifically
set forth in Section 9, the other provisions set forth herein, as it pertains to
members of the Committee, may be administered by the Board of Directors.
(a) Meetings. The Committee shall hold meetings at such
times and places as it may determine, shall keep minutes of its meetings, and
shall adopt, amend and revoke such rules or procedures as it may deem proper;
provided, however, that it may take action only upon the agreement of a majority
of the whole Committee. Any action which the Committee shall take through a
written instrument signed by a majority of its members shall be as effective as
though it had been taken at a meeting duly called and held.
(b) Exculpation. No member of the Board of Directors
shall be personally liable for monetary damages for any action taken or any
failure to take any action in connection with the administration of the Plan or
the granting of Options or Awards under the Plan, provided that this Subsection
3(b) shall not apply to (i) any breach of such member's duty of loyalty to the
Company, an Affiliate, or the Company's stockholders, (ii) acts or omissions not
in good faith or involving intentional misconduct or a knowing violation of law,
(iii) acts or omissions that would result in liability under applicable law, and
(iv) any transaction from which the member derived an improper personal benefit.
(c) Indemnification. Service on the Committee shall
constitute service as a member of the Board of Directors of the Company. Each
member of the Committee shall be entitled, without further act on his part, to
indemnity from the Company and limitation of liability to the fullest extent
provided by applicable law and by the Company's Articles of Incorporation and/or
By-law in connection with or arising out of any action, suit or proceeding with
respect to the administration of the Plan or the granting of Options or Awards
thereunder in which he or she may be involved by reason of his or her being or
having been a member of the Committee, whether or not he or she continues to be
such member of the Committee at the time of the action, suit or proceeding.
(d) Interpretation. The Committee shall have the power
and authority to interpret the Plan and to adopt rules and regulations for its
administration that are not inconsistent with the express terms of the Plan. Any
such actions by the Committee shall be final, binding and conclusive on all
parties in interest.
4. Grants under the Plan. Grants under the Plan may be
in the form of a Non-qualified Stock Option, an ISO or a combination thereof, at
the discretion of the Committee.
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5. Eligibility. All Employees, members of the Board of
Directors and consultants and advisors to the Company shall be eligible to
receive Options and Awards hereunder. Consultants and advisors shall be eligible
only if they render bona fide services to the Company unrelated to the offer or
sale of securities. The Committee, in its sole discretion, shall determine
whether an individual qualifies as an employee.
6. Shares Subject to Plan. The aggregate maximum number
of Shares for which Awards or Options may be granted pursuant to the Plan is
2,706,757 (including Options and Awards granted under the Plan prior to the
effective date of this amended and restated Plan), increased on November 30 of
each year from and including November 30, 1997 by a number of shares equal to
one percent (1%) of the number of shares of Common Stock outstanding on such
date; provided, however, that any such increase shall be made only to the extent
that the Company has sufficient authorized and unreserved Common Stock for such
purpose; and further provided that the maximum aggregate number of Shares to be
issued under the Plan shall not exceed 3,000,000. Such increase shall be made
each November 30, regardless of the number of shares remaining available for
issuance under the Plan on such date. The number of shares which may be issued
under the Plan shall be further subject to adjustment in accordance with Section
11. The Shares shall be issued from authorized and unissued Common Stock or
Common Stock held in or hereafter acquired for the treasury of the Company. If
an Option terminates or expires without having been fully exercised for any
reason or if Shares subject to an Award have been conveyed back to the Company
pursuant to the terms of an Award Agreement, the Shares for which the Option was
not exercised or the Shares that were conveyed back to the Company may again be
the subject of one or more Options or Awards granted pursuant to the Plan.
7. Term of the Plan. The Plan (as amended and
restated herein) is effective as of May 6, 1997, provided it is approved on or
about such date by the stockholders in the manner required by state law. If the
Plan is not so approved by the stockholders, this amended and restated Plan
shall be null and void and the Plan as in effect without regard to this
amendment and restatement shall continue in effect under its own terms. No ISO
may be granted under the Plan after March 16, 2005.
8. Option Documents and Terms. Each Option granted under
the Plan shall be a Non-qualified Stock Option unless the Option shall be
specifically designated at the time of grant to be an ISO for Federal income tax
purposes. If any Option designated an ISO is determined for any reason not to
qualify as an incentive stock option within the meaning of Section 422 of the
Code, such Option shall be treated as a Non-qualified Stock Option for all
purposes under the provisions of the Plan. Options granted pursuant to the Plan
shall be evidenced by the Option Documents in such form as the Committee shall
from time to time approve, which Option Documents shall comply with and be
subject to the following terms and conditions and such other terms and
conditions as the Committee shall from time to time require which are not
inconsistent with the terms of the Plan. However, the provisions of this Section
8 shall not be applicable to Options granted to members of the Committee, except
as otherwise provided in Subsection 9(c).
(a) Number of Option Shares. Each Option Document
shall state the number of Shares to which it pertains. An Optionee may receive
more than one Option, which may include Options which are intended to be ISO's
and Options which are not intended to be ISO's, but only on the terms and
subject to the conditions and restrictions of the Plan. Notwithstanding anything
herein to the contrary, no Optionee shall be granted Options during one fiscal
year of the Company for more than Five Hundred Thousand (500,000) Shares (such
number to be subject to adjustment in accordance with Section 11).
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(b) Option Price. Subject to the provisions of
Section 9 hereof, each Option Document shall state the Option Price which, for a
Non-qualified Stock Option, may be less than, equal to, or greater than the Fair
Market Value of the Shares on the date the Option is granted and, for an ISO,
shall be at least 100% of the Fair Market Value of the Shares on the date the
Option is granted as determined by the Committee in accordance with this
Subsection 8(b); provided, however, that if an ISO is granted to an Optionee who
then owns, directly or by attribution under Section 424(d) of the Code, shares
possessing more than ten percent of the total combined voting power of all
classes of stock of the Company or an Affiliate, then the Option Price shall be
at least 110% of the Fair Market Value of the Shares on the date the Option is
granted. If the Common Stock is traded in a public market, then the Fair Market
Value per share shall be, if the Common Stock is listed on a national securities
exchange or included in the NASDAQ System, the last reported sale price thereof
on the relevant date, or, if the Common Stock is not so listed or included, the
mean between the last reported "bid" and "asked" prices thereof on the relevant
date, as reported on NASDAQ or, if not so reported, as reported by the National
Daily Quotation Bureau, Inc. or as reported in a customary financial reporting
service, as applicable and as the Committee determines.
(c) Exercise. No Option shall be deemed to have been
exercised prior to the receipt by the Company of written notice of such exercise
and (unless arrangements satisfactory to the Company have been made for payment
through a broker in accordance with procedures permitted by Regulation T of the
Federal Reserve Board) of payment in full of the Option Price for the Shares to
be purchased. Each such notice shall specify the number of Shares to be
purchased and shall (unless the Shares are covered by a then current
registration statement or a Notification under Regulation A under the Securities
Act of 1933, as amended (the "Act")), contain the Optionee's acknowledgment in
form and substance satisfactory to the Company that (a) such Shares are being
purchased for investment and not for distribution or resale (other than a
distribution or resale which, in the opinion of counsel satisfactory to the
Company, may be made without violating the registration provisions of the Act),
(b) the Optionee has been advised and understands that (i) the Shares have not
been registered under the Act and are "restricted securities" within the meaning
of Rule 144 under the Act and are subject to restrictions on transfer and (ii)
the Company is under no obligation to register the Shares under the Act or to
take any action which would make available to the Optionee any exemption from
such registration, (c) such Shares may not be transferred without compliance
with all applicable federal and state securities laws, and (d) an appropriate
legend referring to the foregoing restrictions on transfer and any other
restrictions imposed under the Option Documents may be endorsed on the
certificates. Notwithstanding the foregoing, if the Company determines that
issuance of Shares should be delayed pending (A) registration under federal or
state securities laws, (B) the receipt of an opinion of counsel satisfactory to
the Company that an appropriate exemption from such registration is available,
(C) the listing or inclusion of the Shares on any securities exchange or an
automated quotation system or (D) the consent or approval of any governmental
regulatory body whose consent or approval is necessary in connection with the
issuance of such Shares, the Company may defer exercise of any Option granted
hereunder until any of the events described in this sentence has occurred.
(d) Medium of Payment. Subject to the terms
of the applicable Option Document, an Optionee shall pay for Shares (i) in cash,
(ii) by certified or cashier's check payable to the order of the Company, or
(iii) by such other mode of payment as the Committee may approve, including
payment through a broker in accordance with procedures permitted by Regulation T
of the Federal Reserve Board. The Optionee may also exercise the Option in any
manner contemplated by Section 12. Furthermore, the Committee may provide in an
Option Document that payment may be made in whole or in
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<PAGE> 24
part in shares of the Company's Common Stock held by the Optionee. If payment is
made in whole or in part in shares of the Company's Common Stock, then the
Optionee shall deliver to the Company certificates registered in the name of
such Optionee representing the shares owned by such Optionee, free of all liens,
claims and encumbrances of every kind and having an aggregate Fair Market Value
on the date of delivery that is at least as great as the Option Price of the
Shares (or relevant portion thereof) with respect to which such Option is to be
exercised by the payment in shares of Common Stock, endorsed in blank or
accompanied by stock powers duly endorsed in blank by the Optionee. In the event
that certificates for shares of the Company's Common Stock delivered to the
Company represent a number of shares in excess of the number of shares required
to make payment for the Option Price of the Shares (or relevant portion thereof)
with respect to which such Option is to be exercised by payment in shares of
Common Stock, the stock certificate or certificates issued to the
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<PAGE> 25
Optionee shall represent (i) the Shares in respect of which payment is made, and
(ii) such excess number of shares. Notwithstanding the foregoing, the Committee
may impose from time to time such limitations and prohibitions on the use of
shares of the Common Stock to exercise an Option as it deems appropriate.
(e) Termination of Options.
(i) No Option shall be exercisable after the first to occur
of the following:
(A) Expiration of the Option term specified in the
Option Document, which, in the case of an ISO, shall not occur after (1) ten
years from the date of grant, or (2) five years from the date of grant if the
Optionee on the date of grant owns, directly or by attribution under Section
424(d) of the Code, shares possessing more than ten percent (10%) of the total
combined voting power of all classes of stock of the Company or of an Affiliate;
(B) Except to the extent otherwise provided in an
Optionee's Option Document, a finding by the Committee, after full consideration
of the facts presented on behalf of both the Company and the Optionee, that the
Optionee has been engaged in disloyalty to the Company or an Affiliate,
including, without limitation, fraud, embezzlement, theft, commission of a
felony or proven dishonesty in the course of his employment or service, or has
disclosed trade secrets or confidential information of the Company or an
Affiliate. In such event, in addition to immediate termination of the Option,
the Optionee shall automatically forfeit all Shares for which the Company has
not yet delivered the share certificates upon refund by the Company of the
Option Price. Notwithstanding anything herein to the contrary, the Company may
withhold delivery of share certificates pending the resolution of any inquiry
that could lead to a finding resulting in a forfeiture;
(C) The date, if any, set by the Board of Directors as
an accelerated expiration date in the event of the liquidation or dissolution of
the Company; or
(D) The occurrence of such other event or events as may
be set forth in the Option Document as causing an accelerated expiration of the
Option.
(E) Except as otherwise set forth in the Option
Document and subject to the foregoing provisions of this Subsection 8(e), three
months after the Optionee's employment or service with the Company or its
Affiliates terminates for any reason other than Disability or death or one year
after such termination due to Optionee's Disability or death. With respect to
this Subsections 8(e)(i)(E), the only Options that may be exercised during the
three-month or one-year period, as the case may be, are Options which were
exercisable on the last date of such employment or service and not Options
which, if the Optionee were still employed or rendering service during such
three-month or one-year period, would become exercisable, unless the Option
Document specifically provides to the contrary. The terms of an executive
severance agreement or other agreement between the Company and an Optionee,
approved by the Committee, whether entered into prior or subsequent to the grant
of an Option, which provide for Option exercise dates later than those set forth
in Subsection 8(e)(i) shall be deemed to be Option terms approved by the
Committee and consented to by the Optionee.
(ii) Notwithstanding the foregoing, the Committee may extend
the period during which all or any portion of an Option may be exercised to a
date
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<PAGE> 26
no later than the Option term specified in the Option Document pursuant to
Subsection 8(e)(i)(A), provided that any change pursuant to this Subsection
8(e)(ii) which would cause an ISO to become a Non-qualified Stock Option may be
made only with the consent of the Optionee.
(iii) Notwithstanding anything to the contrary
contained in the Plan or an Option Document, an ISO shall be treated as a
Non-qualified Stock Option to the extent such ISO is exercised at any time after
the expiration of the time period permitted under the Code for the exercise of
an ISO.
(f) Transfers. No Option granted under the Plan may be
transferred, except by will or by the laws of descent and distribution. During
the lifetime of the person to whom an Option is granted, such Option may be
exercised only by him. Notwithstanding the foregoing, an Option, other than an
ISO, shall be transferrable pursuant to a "qualified domestic relations order"
as defined in the Code and also shall be transferrable, without payment of
consideration, to (a) immediate family members of the holder (i.e. spouse or
former spouse, parents, issue, including adopted and "step" issue or siblings),
(b) trusts for the benefit of immediate family members, and (c) partnerships
whose only partners are such family members. Any transferee will be subject to
all of the conditions set forth in the Option prior to its transfer.
(g) Limitation on ISO Grants. To the extent that the
aggregate fair market value of the shares of Common Stock (determined at the
time the ISO is granted) with respect to which ISO's under all incentive stock
option plans of the Company or its Affiliates are exercisable for the first time
by the Optionee during any calendar year exceeds $100,000, such ISO's shall, to
the extent of such excess, be treated as Non-qualified Stock Options.
(h) Other Provisions. Subject to the provisions of the
Plan, the Option Documents shall contain such other provisions including,
without limitation, provisions authorizing the Committee to accelerate the
exercisability of all or any portion of an Option granted pursuant to the Plan,
additional restrictions upon the exercise of the Option or additional
limitations upon the term of the Option, as the Committee shall deem advisable.
(i) Amendment. Subject to the provisions of the Plan,
the Committee shall have the right to amend any Option Document or Award
Agreement issued to an Optionee or Award holder, subject to the Optionee's or
Award holder's consent if such amendment is not favorable to the Optionee or
Award holder, or if such amendment has the effect of changing an ISO to a
Non-Qualified Stock Option, except that the consent of the Optionee or Award
holder shall not be required for any amendment made pursuant to Subsection
8(e)(i)(C) or Section 10 of the Plan, as applicable.
9. Special Provisions Relating to Grants of Options to
members of the Committee. Options granted pursuant to the Plan to members of the
Committee shall be granted, without any further action by the Committee, in
accordance with the terms and conditions set forth in this Section 9. Options
granted pursuant to this Section 9 shall be evidenced by Option Documents in
such form as the Committee shall from time to time approve, which Option
Documents shall comply with and be subject to the following terms and conditions
and such other terms and conditions as the Committee shall from time to time
require which are not inconsistent with the terms of the Plan. Notwithstanding
the foregoing, a Committee member may elect not to receive a formula option
grant (in which case the Committee member will receive nothing in lieu thereof)
and may also revoke such election. In either case, the election or the
revocation of the election will be effective only
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<PAGE> 27
for formula option grants that otherwise were scheduled to be made after the
date of the election.
(a) Timing of Grants; Number of Shares Subject of
Options; Exercisability of Options; Option Price. Each member of the Committee
shall be granted on each June 30 annually, commencing on June 30, 1995, an
Option to purchase Five Thousand (5,000) Shares (such number to be subject to
adjustment as provided in Section 11). Each such Option shall be a Non-qualified
Stock Option becoming exercisable with respect to (100%) of the Shares covered
thereby on the first anniversary of the date of grant and expiring five years
after the date of grant. The Option Price shall be equal to 60% the Fair Market
Value of the Shares on the date the Option is granted. The Option shall permit
any method of exercise permitted by Section 12.
(b) Termination of Options Granted Pursuant to
Section 9. All Options granted pursuant to this Section 9 shall be exercisable
until the first to occur of the following:
(i) Expiration of five (5) years from
the date of grant;
(ii) Expiration of three (3) months from
the date the Optionee's service as a director of the Company terminates for any
reason other than disability or death; or
(iii) Expiration of one (1) year
from the date the Optionee's service as a director terminates due to the
Optionee's disability or death.
(c) Applicability of Provisions of Section 8 to
Options Granted Pursuant to Section 9. The following provisions of Section 8
shall be applicable to Options granted pursuant to this Section 9: Subsection
8(a)(provided that all Options granted pursuant to this Section 9 shall be
Non-qualified Stock Options); the last sentence of Subsection 8(b); Subsection
8(c); Subsection 8(d) (provided that Option Documents relating to Options
granted pursuant to this Section 9 shall provide that payment may be made in
whole or in part in shares of Company Common Stock); Subsection 8(f); and
Subsection 8(i).
10. Change of Control. Except as may be provided in an
Option Document (which will take precedence over the provisions of this Section
10), in the event of a Change of Control, the Committee may take whatever
actions it deems necessary or desirable with respect to any of the Options
outstanding (other than Options granted pursuant to Section 9), which need not
be treated identically, including, without limitation, accelerating (a) the
expiration or termination date in the respective Option Documents to a date no
earlier than thirty (30) days after notice of such acceleration is given to the
Optionees, or (b) the exercisability of the Option. In the event of a Change of
Control, Options granted pursuant to Section 9 shall accelerate and become
exercisable immediately. Notwithstanding the foregoing, in the event of a Change
of Control, Options granted pursuant to the Plan will become automatically
exercisable in full but only with respect to those Optionees who, in the good
faith determination of the Board of Directors, are likely to have their
relationship with the Company or any Affiliate of the Company terminated
(including constructive termination through a significant decrease in authority,
responsibility or overall total compensation) as a result of such Change of
Control.
A "Change of Control" shall be deemed to have
occurred upon the earliest to occur of the following events:
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<PAGE> 28
(i) any "person," as such term is used in Sections
3(a)(9) and 13(d) of the Securities Exchange Act of 1934, other than Ronald H.
Deferrari, his children and/or their respective affiliates and their respective
heirs, executors, administrators and successors, becomes a "beneficial owner,"
as such term is used in Rule 13d-3 promulgated under that act, of 50% or more of
the Company's Voting Stock;
(ii) individuals who are Incumbent Directors cease to
constitute a majority of the members of the Board of Directors ("Incumbent
Directors" for this purpose being the members of the Board of Directors on the
date of adoption of this Plan, provided that any person becoming a member of the
Board of Directors subsequent to such date whose election or nomination for
election was supported by two-thirds of the directors who then comprised the
Incumbent Directors shall be considered to be an Incumbent Director);
(iii) the Company adopts any plan of liquidation
providing for the distribution of all or substantially all of its assets;
(iv) all or substantially all of the business of the
Company is disposed of pursuant to a merger, consolidation or other transaction
(unless the stockholders of the Company immediately prior to such merger,
consolidation or other transaction beneficially own, directly or indirectly, in
substantially the same proportion as they owned the voting stock of the Company,
all of the voting stock or other ownership interests of the entity or entities,
if any, that succeed to the business of the Company);
(v) the Company combines with another company and is
the surviving corporation but, immediately after the combination, the
stockholders of the Company immediately prior to the combination hold, directly
or indirectly, 50% or less of the voting stock entitled to vote for the election
of directors of the combined company (there being excluded from the number of
shares held by such stockholders, but not from the voting stock of the combined
company, any shares received by "affiliates", as such term is defined in the
rules of the Securities and Exchange Commission, of such other company in
exchange for stock of such other company); or
(vi) a "change of control" as defined in the form of
indenture governing any indebtedness of the Company shall have occurred.
11. Adjustments on Changes in Capitalization.
(a) In the event that the outstanding Shares are
changed by reason of a reorganization, merger, consolidation, recapitalization,
reclassification, stock split-up, combination or exchange of shares and the like
(not including the issuance of Common Stock on the conversion of other
securities of the Company which are outstanding on the date of grant and which
are convertible into Common Stock) or dividends payable in Shares, an equitable
adjustment shall be made by the Committee in the aggregate number of shares
available under the Plan and in the number of Shares and price per Share subject
to outstanding Options. Unless the Committee makes other provisions for the
equitable settlement of outstanding options, if the Company shall be
reorganized, consolidated, or merged with another corporation, or if all or
substantially all of the assets of the Company shall be sold or exchanged, an
Optionee shall at the time of issuance of the stock under such corporate event
be entitled to receive upon the exercise of his or her Option the same number
and kind of shares of stock or the same amount of property, cash or securities
as he or she would have been entitled to receive upon the occurrence of any such
corporate event as if he or she had been, immediately prior to such event, the
holder of the number of shares covered by his or her Option.
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<PAGE> 29
(b) Any adjustment under this Section 11 in the
number of Shares subject to Options shall apply proportionately to only the
unexercised portion of any Option granted hereunder. If fractions of a Share
would result from any such adjustment, the adjustment shall be revised to the
next lower whole number of Shares.
(c) The Committee shall have authority to determine the
adjustments to be made under this Section, and any such determination by the
Committee shall be final, binding and conclusive.
12. Stock Appreciation Rights (SARs).
(a) In General. Subject to the terms and conditions of
the Plan, the Committee may, in its sole and absolute discretion, grant to an
Optionee the right to surrender an Option to the Company, in whole or in part,
and to receive in exchange therefor payment by the Company of an amount equal to
the excess of the fair market value of the shares of Common Stock subject to
such Option, or portion thereof, so surrendered (determined in the manner
described in section 8(b) as of the date the SARs are exercised) over the
exercise price to acquire such shares (which right shall be referred to as an
"SAR"). Except as may otherwise be provided in an Option Document, such payment
may be made, as determined by the Committee in accordance with subsection 12(c)
below and set forth in the Option Agreement, either in shares of Common Stock or
in cash or in any combination thereof. Notwithstanding anything herein to the
contrary, an Option granted to a member of the Disinterested Directors Committee
pursuant to Section 9 shall provide for SARs and the Optionee shall have the
right to determine the method of payment to the Optionee.
(b) Grant. Each SAR shall relate to a specific Option
granted under the Plan and shall be granted to the Optionee concurrently with
the grant of such Option by inclusion of appropriate provisions in the Option
Agreement pertaining thereto. The number of SARs granted to an Optionee shall
not exceed the number of shares of Common Stock which such Optionee is entitled
to purchase pursuant to the related Option. The number of SARs held by an
Optionee shall be reduced by (i) the number of SARs exercised under the
provisions of the Option Agreement pertaining to the related Option, and (ii)
the number of shares of Common Stock purchased pursuant to the exercise of the
related Option.
(c) Payment. The Committee shall have sole discretion
to determine whether payment in respect of SARs granted to any Optionee shall be
made in shares of Common Stock, or in cash, or in a combination thereof, except
that the method of payment shall be determined solely by the Optionee of an
Option granted to a member of the Disinterested Directors Committee pursuant to
Section 9. If payment is made in Common Stock, the number of shares of Common
Stock which shall be issued pursuant to the exercise of SARs shall be determined
by dividing (i) the total number of SARs being exercised, multiplied by the
amount by which the Fair Market Value (as determined under section 8(b)) of a
share of Common Stock on the exercise date exceeds the exercise price for shares
covered by the related Option, by (ii) the Fair Market Value of a share of
Common Stock on the exercise date of the SARs. No fractional share of Common
Stock shall be issued on exercise of an SAR; cash may be paid by the Company to
the individual exercising an SAR in lieu of any such fractional share. If
payment on exercise of an SAR is to be made in cash, the individual exercising
the SAR shall receive in respect of each share to which such exercise relates an
amount of money equal to the difference between the Fair Market Value of a share
of Common Stock on the exercise date and the exercise price for shares covered
by the related Option.
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(d) Limitations. SARs shall be exercisable at such
times and under such terms and conditions as the Committee, in its sole and
absolute discretion, shall determine; provided, however, that an SAR may be
exercised only at such times and by such individuals as the related Option under
the Plan and the Option Agreement may be exercised.
13. Terms and Conditions of Awards. Awards granted pursuant
to the Plan shall be evidenced by written Award Agreements in such form as the
Committee shall from time to time approve, which Award Agreements shall comply
with and be subject to the following terms and conditions and such other terms
and conditions which the Committee shall from time to time require which are not
inconsistent with the terms of the Plan.
(a) Number of Shares. Each Award Agreement shall
state the number of shares of Common Stock to which it pertains.
(b) Purchase Price. Each Award Agreement shall specify
the purchase price, if any, which applies to the Award. If the Board specifies a
purchase price, the Grantee shall be required to make payment on or before the
date specified in the Award Agreement. A Grantee shall pay for Shares (i) in
cash, (ii) by certified check payable to the order of the Company, or (iii) by
such other mode of payment as the Committee may approve.
(c) Grant. In the case of an Award which provides for a
grant of Shares without any payment by the Grantee, the grant shall take place
on the date specified in the Award Agreement. In the case of an Award which
provides for a payment, the grant shall take place on the date the initial
payment is delivered to the Company, unless the Committee or the Award Agreement
otherwise specifies. Stock certificates evidencing Shares granted pursuant to an
Award shall be issued in the sole name of the Grantee. Notwithstanding the
foregoing, as a precondition to a grant, the Company may require an
acknowledgment by the Grantee as required with respect to Options under Section
8.
(d) Conditions. The Committee may specify in an
Award Agreement any conditions under which the Grantee of that Award shall be
required to convey to the Company the Shares covered by the Award. Upon the
occurrence of any such specified condition, the Grantee shall forthwith
surrender and deliver to the Company the certificates evidencing such Shares as
well as completely executed instruments of conveyance. The Committee, in its
discretion, may provide that certificates for Shares transferred pursuant to an
Award be held in escrow by the Company or an officer of the Company until such
time as each and every condition has lapsed and that the Grantee be required, as
a condition of the Award, to deliver to such escrow agent or Company officer
stock powers covering the Award Shares duly endorsed by the Grantee. Unless
otherwise provided in the Award Agreement, distributions made on Shares held in
escrow will be deposited in escrow, to be distributed to the party becoming
entitled to the Shares on which the distribution was made. Stock certificates
evidencing Shares subject to conditions shall bear a legend to the effect that
the Common Stock evidenced thereby is subject to repurchase or conveyance to the
Company in accordance with an Award made under the Plan and that the Shares may
not be sold or otherwise transferred.
(e) Lapse of Conditions. Upon termination or lapse of
each and every forfeiture condition, the Company shall cause certificates
without the legend referring to the Company's repurchase right (but with any
other legends that may be appropriate) evidencing the Shares covered by the
Award to be issued to the Grantee upon the Grantee's surrender of the legended
certificates held by him to the Company.
-12-
<PAGE> 31
(f) Rights as Stockholder. Upon payment of the purchase
price, if any, for Shares covered by an Award and compliance with the
acknowledgment requirement of subsection 13(c), the Grantee shall have all of
the rights of a stockholder with respect to the Shares covered thereby,
including the right to vote the Shares and receive all dividends and other
distributions paid or made with respect thereto, except to the extent otherwise
provided by the Committee or in the Award Agreement.
14. Amendment of the Plan. The Board of Directors of the
Company may amend the Plan from time to time in such manner as it may deem
advisable. Nevertheless, the Board of Directors of the Company may not change
the class of individuals eligible to receive an ISO or increase the maximum
number of shares as to which Options may be granted without obtaining approval,
within twelve months before or after such action, by the stockholders in the
manner required by state law. In addition, the provisions of Section 9 that
determine (i) which directors shall be granted Options pursuant to Section 9;
(ii) the amount of Shares subject to Options granted pursuant to Section 9;
(iii) the price at which shares subject to Options granted pursuant to Section 9
may be purchased and (iv) the timing of grants of Options pursuant to Section 9
shall not be amended more than once every six months, other than to comport with
changes in the Code or the Employee Retirement Income Security Act of 1974, as
amended. No amendment to the Plan shall adversely affect any outstanding Option,
however, without the consent of the Optionee.
15. No Commitment to Retain. The grant of an Option or Award
pursuant to the Plan shall not be construed to imply or to constitute evidence
of any agreement, express or implied, on the part of the Company or any
Affiliate to retain the Optionee or Grantee as an employee, consultant or
advisor of the Company or any Affiliate, as a member of the Company's Board of
Directors or in any other capacity.
16. Withholding of Taxes. In connection with any event
relating to an Option or Award, the Company shall have the right to (a) require
the recipient to remit or otherwise make available to the Company an amount
sufficient to satisfy any federal, state and/or local withholding tax
requirements prior to the delivery or transfer of any certificate or
certificates for such Shares or (b) take whatever other action it deems
necessary to protect its interests with respect to tax liabilities. The
Company's obligations under the Plan shall be conditioned on the Optionee's or
Grantee's compliance, to the Company's satisfaction, with any withholding
requirement.
17. Interpretation. The Plan is intended to enable
transactions under the Plan with respect to directors to satisfy the conditions
of Rule 16b-3; to the extent that any provision of the Plan would cause a
conflict with such conditions or would cause the administration of the Plan as
provided in Section 3 to fail to satisfy the conditions of Rule 16b-3, such
provision shall be deemed null and void to the extent permitted by applicable
law. This section shall not be applicable if no class of the Company's equity
securities is then registered pursuant to Section 12 of the Securities Exchange
Act of 1934, as amended.
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<PAGE> 32
APPENDIX
PLASMA-THERM, INC.
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned, a stockholder of Plasma-Therm, Inc. (the "Company"), hereby
constitutes and appoints RONALD H. DEFERRRAI, A.S. GIANOPLUS, and LUBEK
JASTRZEBSKI, or any of them acting individually, as the attorney and proxy of
the undersigned, with full power of substitution, for and in the name and stead
of the undersigned, to attend the Annual Meeting of Stockholders of the Company
to be held at the Company's headquarters, 10050 16th Street North, St.
Petersburg, Florida 33716, on Tuesday, May 6, 1997 at 10:00 a.m., and at any
adjournment or postponement thereof and therein to vote all shares of the
Company's common stock which the undersigned would be entitled to vote if
personally present.
(CONTINUED ON REVERSE SIDE - PLEASE SIGN ON OTHER SIDE)
<PAGE> 33
[X] PLEASE MARK YOUR VOTES AS IN THIS EXAMPLE.
<TABLE>
<S> <C> <C> <C>
WITHHOLD
FOR AUTHORITY
all nominees to vote for all nominees NOMINEES:
listed at right listed at right Ronald H. Deferrari
1. Election of Anastasios G. Gianoplus
Directors. [ ] [ ] Lubek Jastrzebski, Ph.D.
Indicated in
the Proxy
Statement
(INSTRUCTION: to withhold authority to vote for any individual nominee(s), write the name(s)
of such nominee(s).)
- - ---------------------------------
FOR AGAINST ABSTAIN
2. Proposal to further amend the Company's [ ] [ ] [ ]
1995 Stock Incentive Plan.
</TABLE>
UNLESS OTHERWISE SPECIFIED, THE SHARES WILL BE VOTED "FOR" THE ELECTION
OF THE LISTED NOMINEES AS DIRECTORS AND "FOR" THE PROPOSAL TO AMEND THE
COMPANY'S 1995 STOCK INCENTIVE PLAN. THIS PROXY ALSO DELEGATES DISCRETIONARY
AUTHORITY TO VOTE WITH RESPECT TO ANY OTHER BUSINESS WHICH MAY PROPERLY COME
BEFORE THE MEETING OR ANY ADJOURNMENT OR POSTPONEMENT THEREOF.
The undersigned hereby acknowledges receipt of the Notice of Annual
Meeting of Stockholders and Proxy Statement for the Meeting.
PLEASE SIGN, DATE AND RETURN THIS PROXY IN THE ENCLOSED POSTAGE PREPAID
ENVELOPE.
Signature: Date: Date:
---------------- ----- ------------------------- --------
Signature if Held Jointly
Note: Please sign exactly as your name(s) appear(s) above. When signing as
attorney-in-fact, executor, administrator, trustee or guardian, please
give your title as such, and if signer is a corporation, please
sign with full corporate name by duly authorized officer or officers and
affix the corporate seal. When stock is issued in the name of two
or more persons, all such persons should sign.
