SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
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[X] Preliminary Proxy Statement [ ] Confidential, for use of the
[ ] Definitive Proxy Statement Commission only (as permitted
[ ] Definitive Additional Materials by Rule 14a-6(e)(2)).
[ ] Soliciting Material Pursuant to /ss/240.14a-11(c) or /ss/240.14a-12
PLASMA-THERM, INC.
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(Name of Registrant as Specified in its Charter)
PLASMA-THERM, INC.
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PLASMA-THERM, INC.
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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 12, 1998
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Notice is hereby given that the Annual Meeting of Stockholders of
PLASMA-THERM, INC. (the "Company") will be held at the offices of the Company,
10050 16th Street North, St. Petersburg, Florida, on Tuesday, May 12, 1998 at
10:00 A.M., local time, for the following purposes:
1. To consider and approve an amendment to the Company's Articles of
Incorporation ("Articles of Incorporation") and Bylaws of the Company ("Bylaws")
to provide for the classification of the Board of Directors into three classes.
2. To consider and approve an amendment to the Articles of Incorporation and
Bylaws to eliminate the shareholders' ability to fill vacancies on the Board.
3. To consider and approve an amendment to the Articles of Incorporation and
Bylaws to increase to 66-2/3% the threshold of shareholder votes required to
remove a director for cause.
4. To consider and approve an amendment to the Articles of Incorporation and
Bylaws to increase to 50% the threshold of shareholder votes required to call a
special shareholders' meeting.
5. To consider and approve an amendment to the Articles of Incorporation and
Bylaws to increase to 66-2/3% the threshold of shareholder votes required for
shareholders to amend the Bylaws.
6. To elect four persons to serve as Directors of the Company.
7. To consider and act upon any matters incidental to the foregoing purposes
and 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 Friday, March
13, 1998, 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.
Enclosed is your copy of (i) the Company's Annual Report to Shareholders for
the fiscal year ended November 30, 1997 ("fiscal 1997"), (ii) the Company's
Annual Report on Form 10-K as filed with the Securities and Exchange Commission
for fiscal 1997; and (iii) the Company's Quarterly Report on Form 10-Q for the
quarter ended February 28, 1998.
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
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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
April 12, 1998 W. NICHOLAS GOETZ
SECRETARY
STOCKHOLDERS WHO DO NOT EXPECT TO ATTEND THE MEETING IN PERSON ARE URGED TO
COMPLETE, DATE AND SIGN THE ENCLOSED PROXY AND RETURN IT IN THE ENCLOSED
POSTAGE-PAID ENVELOPE.
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PLASMA-THERM, INC.
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PROXY STATEMENT
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 12, 1998 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 April 12, 1998.
The record date for determining Shareholders entitled to vote at the
Meeting has been fixed as the close of business on Friday, March 13, 1998 (the
"Record Date"). As of the Record Date, there were 11,160,561 shares of the
Common Stock owned at the Record Date entitling 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.
If the proxy card accompanying this Proxy Statement is properly executed
and returned, the shares of common stock, par value $.01 per share of the
Company (the "Common Stock"), represented thereby will be voted as instructed on
the proxy card, but if no instructions are given, such shares of Common Stock
will be voted in favor of (i) the addition to the Company's Articles of
Incorporation ("Articles of Incorporation"), and corresponding amendment of the
Bylaws of the Company ("Bylaws"), of a provision classifying the Board of
Directors into three classes, (ii) the amendment to the Articles of
Incorporation and Bylaws eliminating the shareholders' ability to fill vacancies
on the Board, (iii) the amendment to the Articles of Incorporation and Bylaws to
require the affirmative vote of 66-2/3% of the outstanding Common Stock to
remove a director for cause; (iv) the amendment to the Articles of Incorporation
and Bylaws to require the affirmative vote of 50% of the outstanding Common
Stock for shareholders to call a special meeting; (v) the amendment to the
Articles of Incorporation and Bylaws to require the affirmative vote of the
holders of 66-2/3% of the outstanding Common Stock to amend, alter or repeal the
Bylaws; (vi) the election to the Board of each of the nominees for directors of
the Company, and (vi) any other matters incidental to the foregoing purposes and
to transact such other business as may properly 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.
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POSSIBLE CONSEQUENCES OF THE
ANTI-TAKEOVER EFFECTS OF THE AMENDMENTS
The Board of Directors has evaluated the potential vulnerability of the
Company's stockholders to the threat of unfair or coercive takeover tactics and
has considered the range of possible responses to any such threat. The Board of
Directors has unanimously approved, and recommends to the Company's stockholders
for their approval, the amendments to the Articles of Incorporation and Bylaws
described in Proposals 1 through 5 set forth below. Proposals 1 through 5 are
referred to collectively as the "Amendments."
Proposals 1 through 5 involve related amendments to the Articles of
Incorporation and Bylaws designed to assist the Company's stockholders in
obtaining fair and equitable treatment in the event of a takeover of the
Company. These Proposals include (i) the addition to the Company's Articles of
Incorporation and Bylaws of a provision classifying the Board of Directors into
three classes, (ii) the amendment to the Articles of Incorporation and Bylaws
eliminating the shareholders' ability to fill vacancies on the Board, (iii) the
amendment to the Articles of Incorporation and Bylaws to require the affirmative
vote of 66-2/3% of the outstanding Common Stock to remove a director for cause;
(iv) the amendment to Articles of Incorporation and Bylaws to require the
affirmative vote of 50% of the outstanding Common Stock for shareholders to call
a special meeting; and (v) the amendment to the Articles of Incorporation and
Bylaws to require the affirmative vote of the holders of 66-2/3% of the
outstanding Common Stock to amend, alter or repeal the Bylaws (including, if
adopted, the amendments set forth in Proposals 1 through 5).
The Amendments are not in response to any effort, of which the Company is
aware, to accumulate the Common Stock or to obtain control of the Company. The
Board of Directors has observed the relatively common use of certain coercive
takeover tactics in recent years, including the accumulation of substantial
common stock positions as a prelude to a threatened takeover or corporate
restructuring, proxy fights, and partial tender offers. The Board of Directors
believes that the use of these tactics can place undue pressure on a
corporation's board of directors and stockholders to act hastily and on
incomplete information and, therefore, can be highly disruptive to a corporation
as well as result in unfair differences in treatment of stockholders who act
immediately in response to announcement of takeover activity and those who
choose to act later, if at all.
While the Amendments, individually and collectively, give added protection
to the Company's stockholders, they may also have the effect of making more
difficult and discouraging a merger, tender offer or proxy fight, even if such
transaction or occurrence may be favorable to the interests of some or all of
the Company's stockholders. The Amendments also may delay the assumption of
control by a holder of a large block of the Common Stock and the removal of
incumbent management, even if such removal might be beneficial to some or all of
the stockholders. Furthermore, the Amendments may have the effects of deterring
or frustrating certain types of future takeover attempts that may not be
approved by the incumbent Board of Directors, but that the holders of a majority
of the shares of Common Stock may deem to be in their best interests or in which
some or all of the stockholders may receive a substantial premium over
prevailing market prices for their stock. By having the effect of discouraging
takeover attempts, the Amendments also could have the incidental effect of
inhibiting certain changes in management (some or all of the members of which
might be replaced in the course of a change of control) and also the temporary
fluctuations in the market price of the Common Stock that often result from
actual or rumored takeover attempts.
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The Board of Directors recognizes that a takeover might in some
circumstances be beneficial to some or all of the Company's stockholders but,
nevertheless, believes that the stockholders as a whole will benefit from the
adoption of Proposals 1 through 5. The Board of Directors further believes that
it is preferable to act on the proposed Amendments when they can be considered
carefully rather than during an unsolicited bid for control.
Under Florida law, the adoption of a bylaw that adds, changes, or deletes a
greater voting requirement for shareholders must meet the same voting
requirement then in effect or proposed to be in adopted, whichever is greater.
Accordingly, the Amendment to the Bylaws set forth in Proposal 4 requires the
affirmative vote of the holders of 66-2/3% of the outstanding Common Stock.
Under the Company's Articles of Incorporation, the proposed Amendments to the
Articles of Incorporation described in Proposals 1 through 5 also requires the
affirmative vote of the holders of 66-2/3% of the Company's outstanding Common
Stock. All of the proposals are permitted by law. If stockholders approve any or
all of the Amendments, the Company will file an amendment to the Articles of
Incorporation of the Company that reflects the amendments which have been
approved with the Secretary of State of the State of Florida. Each of the
Amendments adopted by the Company's stockholders will become effective
regardless of whether any of the other Amendments to be acted upon at the
Meeting is adopted.
The full text of each Amendment for which approval is sought in Proposals 1
through 5 is set forth in the exhibits to this Proxy Statement, and the
following summaries of such Amendments are qualified in their entirety by
reference to such exhibits. Stockholders are urged to read carefully the
following description and discussion of the proposed Amendments and exhibits to
this Proxy Statement before voting on the Amendments.
PROPOSAL 1
CLASSIFICATION OF BOARD OF DIRECTORS
The Board of Directors has approved a resolution amending the Articles of
Incorporation to provide for a classified Board of Directors and to establish
procedures for filling vacancies on the Board. At the Meeting, stockholders will
consider and vote on this proposed amendment. The text of the proposed amendment
is attached to this Proxy Statement as EXHIBIT 1. The statements made in this
Proxy Statement with respect to this amendment to the Articles of Incorporation
should be read in conjunction with and are qualified in their entirety by
reference to EXHIBIT 1.
This Proposal 1 may have the effect of making it more difficult for
stockholders to remove the existing management of the Company and may,
therefore, discourage potentially unfriendly bids for shares of the Company. See
"Possible Consequences of the Anti-Takeover Effects of the Amendments."
The Articles of Incorporation would be amended to provide for a classified
Board of Directors by adding revising the first paragraph of Article VII as
provided in EXHIBIT 1. This Proposal 1 would operate to divide the Board into
three separate classes of directors, as nearly equal in number as possible, to
serve a three-year term and until their successors are duly elected and
qualified with each class being elected at different annual stockholder
meetings. Following the effectiveness of this Proposal, Class I will consist of
one director who will serve for an initial term of one year, Class II will
consist of two directors who will serve for an initial term of two years, and
Class III will consist of one director who will serve for an initial term of
three years. See
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"Proposal 6 - Election of Directors." At each annual meeting after 1998,
directors will be elected to succeed those whose terms then expire and each
newly elected director will serve for a three-year term. The proposed Amendment
would replace the prior system of electing all of the directors annually for one
year terms.
The effect of a classified Board of Directors may be circumvented by
increasing or decreasing the size of the Board. At present, vacancies in the
Board of Directors, including vacancies resulting from an increase in the number
of directors, are required to be filled by a majority of the remaining members
of the Board, although less than a quorum (and, if not so filled, by a majority
of the shareholders unless Proposal 2 also is adopted), and each person so
elected serves as a director until a successor is elected by the stockholders at
the next annual meeting at which directors are elected. This Proposal 1 provides
that the size of the Board may be fixed solely by action of the Board itself,
and that any vacancies in the Board of Directors be filled by a majority vote of
the remaining directors then in office, even though less than a quorum. If the
number of directors constituting the Board is increased or decreased, the
resulting number of directors will be apportioned among the three classes so as
to make all classes as nearly equal in number as possible, except that the term
of any incumbent director may not be shortened. Under the Florida Business
Corporation Act ("FBCA"), the term of a director elected to fill a vacancy
expires at the next shareholders' meeting at which directors are elected.
Accordingly, in the event that stockholders approve this Proposal 1, and the
number of directors constituting the Board is increased, persons appointed by
the Board to fill resulting vacancy will stand for reelection at the next annual
meeting of shareholders; however, each person so elected would serve for the
remainder of the full term of the class in which the new directorship was
created or the vacancy occurred.
Since directors will be serving for longer terms which expire at different
times and, in the event Proposal 3 is approved, may be removed only for cause by
a supermajority vote of stockholders, the Board of Directors believes that a
classified Board will promote continuity of management and, thereby enhance the
ability of the Company to carry out long-range plans and goals for its benefit
and the benefit of its stockholders. Although the Company has not experienced
difficulties in the past in maintaining continuity of the Board and management,
the Board of Directors believes that a classified Board will assist the Company
in maintaining this continuity of management into the future. Additionally, this
Proposal 1 has certain anti-takeover effects that the Board believes will deter
unsolicited takeover attempts and protect the value of each stockholder's
investment in the Company.
A classified Board would also extend the time it would take for a majority
stockholder to obtain control of the Board of Directors, thereby limiting such
abusive takeover tactics as two tiered tender offers. Assuming each class of
directors is equal in size, a majority stockholder could not obtain control of
the Board until the second annual stockholder' meeting after it acquired a
majority of the voting stock. During this time, the Board of Directors would
have a better opportunity to negotiate with any such majority stockholder to
obtain more favorable price and terms in any merger or tender offer. For these
reasons, the Board of Directors believes that Proposal 1 may have anti-takeover
effects as described above. In considering Proposal 1, stockholders should
consider and review the section entitled "Possible Consequences of the
Anti-Takeover Effects of the Amendments" appearing elsewhere in this Proxy
Statement.
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VOTE REQUIRED FOR APPROVAL
The affirmative vote of holders of at least 66-2/3% of the outstanding
Common Stock is required in order to approve this Proposal 1. Therefore, failure
to vote, broker nonvotes, and abstentions have the same effect as a negative
vote. Accordingly, if stockholders are in favor of this Proposal 1 and do not
vote their shares for this Proposal 1 either in person or by proxy, such
stockholders will have effectively voted against the Proposal. If approved, this
Proposal 1 will become effective upon the filing of Articles of Amendment to the
Articles of Incorporation with the Secretary of State of Florida, which is
expected to follow shortly after the approval, if at all, of this Proposal 1.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE CLASSIFICATION OF THE
BOARD OF DIRECTORS.
PROPOSAL 2
ELIMINATION OF SHAREHOLDERS ABILITY
TO FILL VACANCIES ON THE BOARD OF DIRECTORS
The Board of Directors has approved a resolution amending the Articles of
Incorporation and Bylaws to eliminate the shareholders ability to fill vacancies
created on the Board. At the Meeting, stockholders will consider and vote on
this proposed amendment. The text of the proposed amendment to the Articles of
Incorporation and Bylaws is attached to this Proxy Statement as EXHIBIT 2. The
statements made in this Proxy Statement with respect to this amendment to the
Articles of Incorporation and Bylaws should be read in conjunction with and are
qualified in their entirety by reference to EXHIBIT 2.
The Articles of Incorporation and Bylaws currently provide that newly
created directorships resulting from any increase in the number of directors or
any vacancy on the Board of Directors resulting from death, resignation,
disqualification, removal, or other cause may be filled by shareholders if not
filled by the affirmative vote a majority of the directors then in office, even
though less than a quorum, or by a sole remaining director. The amendments will
eliminate the ability of shareholders to fill vacancies, and is a counterpart
amendment to Proposal 1 regarding the classification of the Board. The Board
believes that the adoption of this amendment prevents a third party seeking
majority representation on the Board of Directors from obtaining such
representation simply by enlarging the Board and filling the new directorships
created thereby with his own nominees. The Board of Directors believes that
adoption of this Proposal will promote continuity of management and, thereby
enhance the ability of the Company to carry out long-range plans and goals for
its benefit and the benefit of its stockholders. For these reasons, the Board of
Directors believes that this Proposal may have an anti-takeover effect. In
considering Proposal 2, stockholders should consider and review the section
entitled "Possible Consequences of the Anti-Takeover Effects of the Amendments"
appearing elsewhere in this Proxy Statement.
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VOTE REQUIRED FOR APPROVAL
The affirmative vote of holders of at least 66-2/3% of the outstanding
Common Stock is required in order to approve this Proposal 2. Therefore, failure
to vote, broker nonvotes, and abstentions have the same effect as a negative
vote. Accordingly, if stockholders are in favor of this Proposal 2 and do not
vote their shares for this Proposal 2 either in person or by proxy, such
stockholders will have effectively voted against the Proposal. If approved, this
Proposal 2 will become effective upon the filing of Articles of Amendment to the
Articles of Incorporation with the Secretary of State of Florida, which is
expected to follow shortly after the approval, if at all, of this Proposal 2.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELIMINATION OF THE
ABILITY OF THE SHAREHOLDERS TO FILL VACANCIES ON THE BOARD.
PROPOSAL 3
SUPERMAJORITY VOTING REQUIRED
TO REMOVE DIRECTORS FOR CAUSE
The Board of Directors has approved a resolution amending the Articles of
Incorporation and Bylaws to require the affirmative vote of 66-2/3% of the
outstanding Common Stock to remove a director for cause. At the Meeting,
stockholders will consider and vote on this proposed amendment. The text of the
proposed amendment to the Articles of Incorporation and Bylaws is attached to
this Proxy Statement as EXHIBIT 3. The statements made in this Proxy Statement
with respect to this amendment to the Articles of Incorporation and Bylaws
should be read in conjunction with and are qualified in their entirety by
reference to EXHIBIT 3.
The Articles of Incorporation and Bylaws currently provide that directors
can only be removed for cause and upon the affirmative vote of the holders of a
majority of the outstanding Common Stock. The Board of Directors believes that
by increasing the percentage of outstanding Common Stock to remove a director to
a supermajority would make it more difficult for a hostile acquiror to obtain
Board control of the Company. The Board of Directors believes that adoption of
this Proposal will prevent a hostile acquiror from removing directors and
filling vacancies on the Board. The Board also believes that adoption of this
Proposal will promote continuity of management and, thereby enhance the ability
of the Company to carry out long-range plans and goals for its benefit and the
benefit of its stockholders. For these reasons, the Board of Directors believes
that this Proposal may have an anti-takeover effect. In considering Proposal 3,
stockholders should consider and review the section entitled "Possible
Consequences of the Anti-Takeover Effects of the Amendments" appearing elsewhere
in this Proxy Statement.
VOTE REQUIRED FOR APPROVAL
The affirmative vote of holders of at least 66-2/3% of the outstanding
Common Stock is required in order to approve this Proposal 3. Therefore, failure
to vote, broker nonvotes, and abstentions have the same effect as a negative
vote. Accordingly, if stockholders are in favor of this Proposal 3 and do not
vote their shares for this Proposal 3 either in person or by proxy, such
stockholders will have effectively voted against the Proposal. If approved, this
Proposal 3 will become effective upon the filing of Articles of Amendment to the
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Articles of Incorporation with the Secretary of State of Florida, which is
expected to follow shortly after the approval, if at all, of this Proposal 3.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ADOPTION OF A
SUPERMAJORITY VOTING REQUIREMENT TO REMOVE A DIRECTOR FOR CAUSE.
PROPOSAL 4
INCREASED VOTING REQUIRED FOR
SHAREHOLDERS TO CALL SPECIAL MEETING
The Board of Directors has approved a resolution amending the Articles of
Incorporation and Bylaws to require that special meetings of stockholders may
only be called by the President, the Chairman of the Board of Directors, by the
affirmative action of a majority of the Board of Directors, or by written demand
by the holders of not less than 50% of the outstanding Common Stock entitled to
vote on matters to be brought at such meeting. At the Meeting, stockholders will
consider and vote on this proposed amendment. The text of the proposed amendment
to the Articles of Incorporation and Bylaws is attached to this Proxy Statement
as EXHIBIT 4. The statements made in this Proxy Statement with respect to this
amendment to the Articles of Incorporation and Bylaws should be read in
conjunction with and are qualified in their entirety by reference to EXHIBIT 4.
The Articles of Incorporation and Bylaws currently provide that special
meetings can be called by stockholders who hold at least 20% of the voting power
to be cast on any issue proposed to be considered at the special meeting, by the
board of Directors, by the Chairman of the Board, or by the President of the
Company. The amendments will increase the percentage of the voting power to be
cast on any issue to be considered at a special meeting of shareholders to 50%.
This provision will provide for the orderly conduct of all Company affairs at a
special meeting called by the President, the Chairman, or the Board of
Directors. Accordingly, a relatively small minority of stockholders could not
force stockholder consideration of a proposal over the opposition of the Board
by calling a special meeting of stockholders prior to such time that the Board
believed such consideration to be appropriate, unless at least 50% of the
stockholders entitled to vote were in agreement. As a result, the Board will
have the opportunity to inform all other stockholders adequately of the matters
to be considered. For these reasons, the Board of Directors believes that this
Proposal may have an anti-takeover effect. In considering Proposal 4,
stockholders should consider and review the section entitled "Possible
Consequences of the Anti-Takeover Effects of the Amendments" appearing elsewhere
in this Proxy Statement.
VOTE REQUIRED FOR APPROVAL
The affirmative vote of holders of at least 66-2/3% of the outstanding
Common Stock is required in order to approve this Proposal 4. Therefore, failure
to vote has the same effect as a negative vote. Accordingly, if stockholders are
in favor of this Proposal 4 and do not vote their shares for this Proposal 4
either in person or by proxy, such stockholders will have effectively voted
against the Proposal. If approved, this Proposal 4 will become effective upon
the filing of Articles of Amendment to the Articles of Incorporation with the
Secretary of State of Florida, which is expected to follow shortly after the
approval, if at all, of this Proposal 4.
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THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ADOPTION OF INCREASED
VOTING REQUIREMENT FOR STOCKHOLDERS TO CALL A SPECIAL MEETING.
PROPOSAL 5
SUPERMAJORITY VOTING REQUIRED TO AMEND BYLAWS
The Board of Directors has approved a resolution amending the Articles of
Incorporation and Bylaws to require the affirmative vote of 66-2/3% of the
outstanding Common Stock for stockholders to amend, alter or repeal the Bylaws.
The Board of Directors currently has the right to amend, alter or repeal the
Bylaws without the consent of stockholders. Under the FBCA, however, a bylaw
that fixes a greater voting requirement for shareholders may not be adopted,
amended or repealed by the Board of Directors. At the Meeting, stockholders will
consider and vote on these proposed amendments. The text of the proposed
amendments to the Articles of Incorporation and Bylaws is attached to this Proxy
Statement as EXHIBIT 5. The statements made in this Proxy Statement with respect
to these amendments to the Articles of Incorporation and Bylaws should be read
in conjunction with and are qualified in their entirety by reference to EXHIBIT
5.
The bylaws of a corporation set forth the rules and regulations governing
certain processes and procedures relative to the governance of a corporation.
Bylaw provisions are subordinate to provisions contained in a corporation's
articles of incorporation. The bylaws typically contain the procedures regarding
the calling and conduct of stockholder meetings, stockholder rights to inspect
corporate records and qualification of directors as well as procedures regarding
directors meetings, quorums and required votes. Bylaws also set forth the
general duties of officers and procedures regarding their removal in addition to
detailed provisions regarding indemnification of officers, directors and
employees. The FBCA confers authority to adopt, amend, or repeal bylaws in the
board of directors unless the (i) the articles of incorporation or the FBCA
reserves the power to amend the bylaws generally or a particular bylaw provision
exclusively, to the shareholders; or (ii) the shareholders, in amending or
repealing the bylaws generally or a particular bylaw provision, provide
expressly that the board of directors may not amend or repeal the bylaws or that
bylaw provision. The FBCA also confers the power to amend or repeal bylaws upon
the shareholders, even though the bylaws may be amended or repealed by the board
of directors.
The Articles of Incorporation and Bylaws currently provide that the power
to adopt, alter, amend or repeal bylaws is vested in the Board of Directors and
stockholders, unless any bylaw adopted by the shareholders specifically provide
that the bylaw is not subject to amendment or repeal by the Board. Currently,
the affirmative vote of a majority of the Board or the affirmative vote of the
holders of a majority of the outstanding Common Stock is required to adopt,
alter, amend or repeal the Bylaws. This Proposal 5 would allow the Board of
Directors to continue to amend the Bylaws without the approval of the
stockholders (except for the bylaw amended pursuant to Proposal 5). In addition,
by requiring the supermajority vote of stockholders to amend the Bylaws,
Proposal 5 will have the effect of making it more difficult for stockholders (i)
to change the internal operating procedures of the Company, (ii) to undermine or
limit the effectiveness of the classified Board provisions set forth in Proposal
1, and (iii) to limit the Board's ability to manage the affairs of the Company
on behalf of all stockholders. If this Proposal 5 is adopted, amendment of the
Bylaws will require the affirmative vote of holders representing 66-2/3% of the
outstanding Common Stock entitled to vote thereon. These provisions may further
discourage potentially unfriendly bids for shares of the Company. For these
reasons, the Board of Directors believes that Proposal 5 may have an
anti-takeover effect. In considering
8
<PAGE>
this Proposal 5, stockholders should consider and review the section entitled
"Possible Consequences of the Anti-Takeover Effects of the Amendments" appearing
elsewhere in this Proxy Statement.
VOTE REQUIRED FOR APPROVAL
The affirmative vote of holders of at least 66-2/3% of the outstanding
Common Stock is required in order to approve this Proposal 5. Therefore, failure
to vote, broker nonvotes, and abstentions have the same effect as a negative
vote. Accordingly, if stockholders are in favor of this Proposal 5 and do not
vote their shares for this Proposal 5 either in person or by proxy, such
stockholders will have effectively voted against the Proposal. If approved, this
Proposal 5 will become effective upon the filing of Articles of Amendment to the
Articles of Incorporation with the Secretary of State of Florida, which is
expected to follow shortly after the approval, if at all, of this Proposal 5.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ADOPTION OF A
SUPERMAJORITY VOTING REQUIREMENT FOR SHAREHOLDERS TO AMEND THE BYLAWS.
PROPOSAL 6
ELECTION OF DIRECTORS
The four persons listed below have been nominated by the Board of Directors
to serve as directors of the Company. Nominees for directors who receive a
plurality of the votes cast by the holders of the outstanding shares of Common
Stock will be elected. Abstentions, broker nonvotes and withheld votes are not
counted in determining the number of votes cast for any nominee for director.
If the amendment to the Articles of Incorporation to provide for a
classified Board of Directors (see Proposal 1") is adopted, the Board of
Directors will be divided into three classes. This Meeting will be the first
election of directors after the amendment which created the classified Board of
Directors. Accordingly, at the Meeting, one director will be elected for a term
expiring at the Company's 1999 Annual Meeting, two directors for terms expiring
at the Company's 2000 Annual Meeting, and one director for a term expiring at
the Company's 2001 Annual Meeting; in each case, until their successors are duly
elected and qualified. At each Annual Meeting after 1998, directors will be
elected to succeed those directors whose terms then expire, and each person so
elected will serve for a three-year term.
If the Amendment to the Articles of Incorporation is not approved,
directors elected at the Meeting will serve one-year terms until the 1999 Annual
Meeting and until their successors are duly elected and qualified.
It is the intention of the persons named in the accompanying form of proxy
to vote such proxy for the election as directors of the following nominees. In
the event that any nominee is unable to serve or will not serve as a director,
it is intended that the proxies solicited hereby will be voted for such other
person or persons as may be nominated by management. Vacancies on the Board of
Directors may be filled by the Board of Directors and, assuming stockholder
approval of Proposal 1, any director chosen to fill a vacancy would hold office
until the next election of the class for which such director had been chosen.
Assuming stockholders do not approve Proposal 1, any director chosen to fill a
vacancy would hold office until the next election of directors.
9
<PAGE>
The following information is set forth with respect to the persons
nominated for election as a director and each director of the Company whose term
of office will continue after the meeting.
NOMINEES FOR ELECTION AT THE ANNUAL MEETING
DIRECTOR TERM WILL
NAME AGE SINCE EXPIRE
---- --- -------- ---------
Ronald H. Deferrari............................. 57 1975 2001
Anastasios S. Gianoplus......................... 67 1989 2000
Richard T. Heglin............................... 61 1997 1999
Lubek Jastrzebski............................... 49 1996 2000
<TABLE>
<CAPTION>
<S> <C>
Ronald H. Deferrari................. Founder and Chairman of the Board of Directors
since 1975; Chief Executive Officer, Chief
Financial Officer and Treasurer of the Company
for more than five years; President of the
Company from 1975 to 1995.
Anastasios S. Gianoplus............. 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 served
as Executive Vice President of Compex
Corporation, a provider of computer systems
and services to government and industry.
Richard T. Heglin................... President of Leybold Vacum Products, Inc., a
Division of Leybold GMBH of Cologne, Germany,
for more than five years.
Lubek Jastrzebski................... Vice President and founder of Semiconductor
Diagnostics Inc. (SDI) of Tampa, a provider of
sophisticated contamination monitoring
equipment to the integrated circuit (IC)
industry, for more than five years.
</TABLE>
VOTE REQUIRED FOR APPROVAL
Nominees for directors who receive a plurality of the votes cast by the
holders of the shares of Common Stock in person or by proxy at the Meeting shall
be elected. Abstentions, broker nonvotes and withheld votes are not counted in
determining the number of votes cast for any nominee for director.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" EACH OF THE ABOVE NOMINEES
FOR ELECTION AS DIRECTORS OF THE COMPANY.
10
<PAGE>
BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding the beneficial
ownership of the Company's Common Stock as of March 13, 1998 by each person
known to the Company to own beneficially more than five percent of the Company's
Common Stock, each director, each nominee for election as a director, each
executive officer, and all executive officers and directors as a group.
AMOUNT PERCENT
BENEFICIALLY OF
NAME OF BENEFICIAL OWNER OWNED (1) CLASS
------------------------ ------------ -------
Ronald H. Deferrari (2).......................... 2,038,200 18.26%
Ronald S. Deferrari (3).......................... 440,592 3.81%
Diana M. DeFerrari............................... 56,792 *
Anastasios S. Gianoplus (4)...................... 35,000 *
W. Nicholas Goetz (5)............................ 20,000 *
Richard T. Heglin (6)............................ 1,000 *
Lubek Jastrzebski (7)............................ 35,000 *
Edmond A. Richards (8)........................... 96,000 *
Stacy L. Wagner (9).............................. 118,000 1.06%
All directors and executive officers as a group
(9 persons).................................... 2,890,684 24.39%
- ------------------------
*Less than one percent. SEE FOOTNOTES FOLLOWING PAGE.
FOOTNOTES:
(1) The named stockholders have sole voting and dispositive power with respect
to all shares shown as being beneficially owned by them, except as
otherwise indicated.
(2) Ronald H. Deferrari is the founder of the Company. His address is 10050
16th Street North, St. Petersburg, Florida 33716. Ronald H. Deferrari is
the father of Ronald S. Deferrari and Diana M. DeFerrari.
(3) Includes 30,000, 110,000, 150,000 and 125,000 shares which Mr. Deferrari
has the right to acquire pursuant to currently exercisable stock options at
exercise prices of $4.06, $3.87, $4.12 and $6.97 per share, respectively.
The number of shares reflected does not include 125,000 shares which Mr.
Deferrari has the right to acquire pursuant to a stock option exercisable
after July 13, 1998 at an exercise price of $6.19 per share. Ronald S.
Deferrari is the son of Ronald H. Deferrari.
(4) Includes 20,000, 5,000, and 5,000 shares which Mr. Gianoplus has the right
to acquire pursuant to currently exercisable stock options at exercise
prices of $4.12, $6.98, and $3.60 per share, respectively. The number of
shares reflected does not include 5,000 shares which Mr. Gianoplus has the
right to acquire pursuant to a stock option exercisable after July 13, 1998
at an exercise price of $6.19 per share.
(5) Includes 20,000 shares Mr. Goetz has the right to acquire pursuant to a
currently exercisable stock option at an exercise price of $6.97 per share.
Does not include 20,000 shares which Mr. Goetz has the right
11
<PAGE>
to acquire pursuant to a stock option exercisable after July 13, 1998 at an
exercise price of $6.19 per share.
(6) Represents 200 shares held in Mr. Heglin's individual retirement account,
and 800 shares held by Mr. Heglin's spouse. Does not include 5,000 shares
which Mr. Heglin has the right to acquire pursuant to a stock option
exercisable after July 13, 1998 at an exercise price of $6.19 per share.
(7) Includes 5,000, 20,000, 5,000, and 5,000 shares Mr. Jastrzebski has the
right to acquire pursuant to currently exercisable stock options at
exercise prices of $3.87, $4.12, $6.97 and $3.60 per share, respectively.
Does not include 5,000 shares which Mr. Jastrzebski has the right to
acquire pursuant to a stock option exercisable after July 13, 1998 at an
exercise price of $6.19 per share.
(8) Includes 15,000, 50,000, and 30,000 shares which Mr. Richards has the right
to acquire pursuant to currently exercisable stock options at exercise
prices of $4.12, and $6.97 per share, respectively. Does not include 50,000
shares which Mr. Richards has the right to acquire pursuant to a stock
option exercisable after July 13, 1998 at an exercise price of $6.19 per
share.
(9) Includes 10,000, 50,000, 10,000, 15,000 and 10,000 shares Ms. Wagner has
the right to acquire pursuant to currently exercisable stock options at
exercise prices of $2.62, $3.87, $5.25, $4.12, and $6.97 per share,
respectively. Does not include 10,000 shares which Ms. Wagner has the right
to acquire pursuant to a stock option exercisable after July 13, 1998 at an
exercise price of $6.19 per share.
12
<PAGE>
EXECUTIVE COMPENSATION
The following table sets forth information with respect to 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 $100,000 and one
additional individual who would have been one of the Company's four most highly
compensated officers except that he was not serving as an officer at the end of
fiscal 1997 (collectively, the "named executive officers").
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
ANNUAL COMPENSATION LONG TERM COMPENSATION
--------------------------------- --------------------------------
AWARDS PAYOUTS
--------------------- -------
OTHER
ANNUAL RESTRICTED ALL OTHER
COMPEN- STOCK OPTION/S LTIP COMPEN-
SALARY BONUS SATION AWARD(S) SARs PAYOUTS ATION
NAME AND PRINCIPAL POSITION YEAR ($) ($)(1) ($)(2) ($) (#) ($) ($)
- --------------------------- ---- -------- -------- -------- --------- -------- ------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
RONALD H. DEFERRARI (3) 1997 $150,000 $100,000 $33,454
Chairman of the Board, Chief 1996 $150,000 $ 99,357 $36,306
Executive Officer, Chief 1995 $150,000 $ 44,146 $33,284
Financial Officer and
Treasurer
RONALD S. DEFERRARI (4) 1997 $160,000 $250,000 $18,968 275,000
President and Chief Operating 1996 $160,000 $150,000 $ 8,334 150,000
Officer 1995 $146,340 $ 53,006 $ 5,613 70,000
DIANA M. DEFERRARI (5)(6)(7) 1997 $ 88,619 $ 87,288 $ 20,000 $61,408
former Sr. Vice President 1996 $101,000 $ 82,797 $ 0 150,000
and Secretary 1995 $ 93,119 $ 20,378 $ 1,500 20,000
W. NICHOLAS GOETZ (8)(9) 1997 $ 21,154 $ 7,693 $ 0 20,000 $45,682
Vice President and Secretary 1996 $ 0 $ 0 $ 0
1995 $ 0 $ 0 $ 0
EDMOND A. RICHARDS (10) 1997 $146,772 $ 25,201 $ 0 80,000
Vice President of Engineering 1996 $144,779 $ 3,671 $ 3,240 18,000
1995 $ 0 $ 0 $ 0
STACY L. WAGNER (11) 1997 $ 76,370 $ 50,400 $ 1,800 25,000
Vice President of Finance and 1996 $ 63,545 $ 24,791 $ 0 70,000
Administration 1995 $ 56,233 $ 5,126 $ 0 16,000
<FN>
- --------------------------
(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.
13
<PAGE>
(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 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. Ronald H. Deferrari is the father of Ronald S. Deferrari and
Diana M. DeFerrari.
(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 1997, 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 or 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 received at least 12 months of salary and benefits. Ronald S. Deferrari
is the son of Ronald H. Deferrari and the brother of Diana M. DeFerrari.
(5) 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 Employment Agreement,
Ms. DeFerrari was 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. Under the terms of the
Employment Agreement, upon termination of the agreement, including
termination
14
<PAGE>
on death or disability, Ms. DeFerrari was entitled to receive the full
compensation provided thereunder for the remainder of the term, unless a
termination is made by the Company based upon reasonable cause, in which
event the compensation would continue one year from the notice of
termination. On March 5, 1997, the Company and Diana M. DeFerrari entered
into an Employment Termination and Consulting Agreement ("Termination and
Consulting Agreement") superseding the terms of the Employment Agreement.
Under the terms of the Termination and Consulting Agreement, Ms. DeFerrari's
employment with the Company would terminate effective September 30, 1997.
Upon termination, Ms. DeFerrari was entitled to receive six months severance
in base salary, and retain her bonus compensation for fiscal 1997 through
the third quarter period ended August 31, 1997. Pursuant to the terms of the
Termination and Consulting Agreement, Ms. DeFerrari will provide consulting
service to the Company from October 1, 1997 through May 31, 1998 and will be
compensated at an hourly rate of $100 per hour, plus business expenses.
Additionally, the Company agreed to pay for the continuation of Ms.
DeFerrari's health insurance through May 31, 1998.
(6) The amount reflected in the columns entitled "Salary," "Bonus," and "Other
Annual Compensation" represents amounts paid to Ms. DeFerrari in connection
with her services as Sr. Vice President and Secretary of the Company, which
employment arrangement terminated effective September 30, 1997. See
Footnotes (5) and (6).
(7) The amount reflected in the column entitled "All Other Compensation"
represents payments to Ms. DeFerrari pursuant to the Termination and
Consulting Agreement of $50,500 severance, $835 COBRA insurance premiums,
$10,000 consulting fees, and reimbursement of $73 in expenses for the period
October 1, 1997 through November 30, 1997. See Footnote (5).
(8) On July 31, 1997, the Company extended an offer of employment to W. Nicholas
Goetz to replace Diana M. DeFerrari as the Company's Secretary effective
September 8, 1997. Under the agreement, Mr. Goetz is entitled to receive
$100,000 per year in base salary and an annual bonus equal to 0.5% of the
Company's fiscal year net profits in the first year, and 1% of net profits
commencing in year two. Additionally, the Company agreed to pay relocation
expenses for Mr. Goetz in an amount of not more than $35,000. If the
agreement is terminated for any reason other than gross misconduct during
the first year following the satisfactory completion of the Company's normal
probationary period of 90 days, Mr. Goetz will be entitled to receive six
months severance pay.
(9) The amount reflected in the column entitled "Other Annual Compensation"
represents relocation expenses paid to Mr. Goetz in connection with his
employment with the Company.
(10)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 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.
15
<PAGE>
(11)The Company entered into an employment agreement with Stacy L. Wagner for a
three-year term, commencing as of January 22, 1997. 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. The agreement was amended, effective August 19, 1997, to
reflect Ms. Wagner's promotion to Vice President of Finance. Under the
amended Employment Agreement, Ms. Wagner is entitled to receive $85,000 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 $100,000 annually, plus a
monthly car allowance of $600.
</FN>
</TABLE>
The following table provides certain information regarding the stock options
granted during fiscal 1997 to the named executive officers in the Summary
Compensation Table.
<TABLE>
<CAPTION>
OPTION/SAR GRANTS IN LAST FISCAL YEAR
POTENTIAL REALIZABLE
VALUE AT ASSUMED
PERCENT OF ANNUAL RATES OF STOCK
NUMBER OF TOTAL PRICE APPRECIATION
SHARES OPTIONS/SARs EXERCISE FOR
UNDERLYING GRANTED TO OR OPTION TERM
OPTIONS/SARS EMPLOYEES IN BASE PRICE EXPIRATION ---------------------
NAME GRANTED FISCAL YEAR ($/SH) DATE 5% 10%
---- ------------ ------------ ---------- ---------- ---------------------
<S> <C> <C> <C> <C> <C> <C>
Ronald H. Deferrari 0 -- -- -- --
Ronald S. Deferrari 150,000 21.1% $ 4.12 05/06/00 $97,412 $204,558
125,000 17.6% $ 6.97 08/19/00 $137,331 $288,384
Diana M. DeFerrari 0 -- -- -- -- --
W. Nicholas Goetz 20,000 2.8% $ 6.97 08/19/00 $21,973 $ 46,141
Edmond A. Richards 50,000 7.0% $ 4.12 05/06/00 $32,471 $ 68,186
30,000 4.2% $ 6.97 08/18/00 $32,959 $ 69,212
Stacy L. Wagner 15,000 2.1% $ 4.12 05/06/00 $ 9,741 $ 20,456
10,000 1.4% $ 6.97 08/19/00 $10,986 $ 23,071
</TABLE>
16
<PAGE>
<TABLE>
<CAPTION>
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTIONS/SAR VALUE TABLE
VALUE OF
NUMBER OF UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS/SARS OPTIONS/SARS AT
AT FY-END (#) FY-END ($)*
SHARES ACQUIRED VALUE ---------------------------- ---------------------------
NAME ON EXERCISE REALIZED($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- --------------- ----------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Ronald H. Deferrari 0
Ronald S. Deferrari(1) 40,000 $115,200 290,000 125,000 $1,299,500 $191,250
Diana M. DeFerrari(2) 170,000 $431,950 0 0 $ 0 $ 0
W. Nicholas Goetz(3) 0 -- 0 20,000 $ 0 $ 30,600
Edmond A. Richards(4) 6,000 $ 19,170 65,000 30,000 $ 288,450 $ 45,900
Stacy L. Wagner(5) 6,000 $ 28,380 95,000 10,000 $ 432,900 $ 15,300
<FN>
- ----------
*Based on the closing price of the Company's Common Stock on November 28, 1997
as quoted on The Nasdaq Stock Market.
(1) Of the 415,000 stock options held by Mr. Deferrari on November 30, 1997 (a)
30,000 were granted on June 26, 1995, expire on June 26, 1998, and became
exercisable on December 26, 1995 at an exercise price of $4.06 per share;
(b) 110,000 were granted on April 30, 1996, expire on April 30, 1999, and
became exercisable on October 30, 1996 at an exercise price of $3.87 per
share; (c) 150,000 were granted on May 6, 1997, expire on May 6, 2000, and
became exercisable on November 6, 1997 at an exercise price of $4.12 per
share; and (d) 125,000 were granted on August 19, 1997, expire on August 19,
2000, and became exercisable after the end of fiscal 1997, at an exercise
price of $6.97 per share.
(2) Prior to leaving the employ of the Company in September 1997, Ms. DeFerrari
exercised all of her outstanding stock options.
(3) The 20,000 stock options held by Mr. Goetz on November 30, 1997, were
granted on August 19, 1997, expire on August 19, 2000, and became
exercisable after the end of fiscal 1997, at an exercise price of $6.97 per
share.
(4) Of the 96,000 stock options held by Mr. Richards on November 30, 1997 (a)
15,000 were granted on April 30, 1996, expire on April 30, 1999, and became
exercisable on October 30, 1996 at an exercise price of $3.87 per share; (b)
50,000 were granted on May 6, 1997, expire on May 6, 2000, and became
exercisable on November 6, 1997 at an exercise price of $4.12 per share; and
(c) 30,000 were granted on August 19, 1997, expire on August 19, 2000, and
became exercisable after the end of fiscal 1997, at an exercise price of
$6.97 per share.
(5) Of the 105,000 stock options held by Ms. Wagner on November 30, 1997 (a)
10,000 were granted on June 26, 1995, expire on June 26, 1998, and became
exercisable on December 26, 1995 at an exercise price of $4.06 per share;
(b) 10,000 were granted on December 26, 1995, expire on December 26, 1998,
and became exercisable on June 26, 1996 at an exercise price of $2.62 per
share; (c) 50,000 were granted on April 30, 1996, expire on April 30, 1999,
and became exercisable on October 30, 1996 at an exercise price of $3.87 per
share; (d) 10,000 were granted on June 26, 1996, expire on June 26, 1999,
and became exercisable on December 26, 1996 at an exercise price of $5.25
per share; (e) 15,000 were granted on May 6, 1997, expire on May 6, 2000,
and became exercisable on November 6, 1997 at an exercise price of $4.12 per
share; and (f) 125,000 were granted on August 19, 1997, expire on August 19,
2000, and became exercisable after the end of fiscal 1997, at an exercise
price of $6.97 per share.
</FN>
</TABLE>
17
<PAGE>
REPORT BY THE BOARD OF DIRECTORS
ON EXECUTIVE 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 option 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 it
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 performanceCbased
compensation will not be subject to the deduction limitation if certain
requirements are met. The Board of Directors' current policy is to structure the
performanceCbased 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 performanceCbased compensation, and, therefore, will not be afforded
the performanceCbased 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 13.
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.
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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 additional three-year term.
See Footnote (3) to the Summary Compensation Table beginning on Page 14.
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. See Footnotes (4) to the Summary Compensation Table beginning on
Page 14.
On March 5, 1997, the Company and Diana M. DeFerrari entered into an
Employment Termination and Consulting Agreement ("Termination and Consulting
Agreement") superseding the terms of the Employment Agreement. Under the terms
of the Termination and Consulting Agreement, Ms. DeFerrari's employment with the
Company would terminate effective September 30, 1997. Upon termination, Ms.
DeFerrari was entitled to receive six months severance in base salary, and
retain her bonus compensation for fiscal 1997 through the third quarter period
ended August 31, 1997. Pursuant to the terms of the Termination and Consulting
Agreement, Ms. DeFerrari will provide consulting service to the Company from
October 1, 1997 through May 31, 1998 and will be compensated at an hourly rate
of $100 per hour, plus business expenses. Additionally, the Company agreed to
pay for the continuation of Ms. DeFerrari's health insurance through May 31,
1998. See Footnotes (5), (6) and (7) to the Summary Compensation Table beginning
on Page 14.
Effective January 22, 1997, the Company entered into an employment agreement
with Edmond A. Richards for a three-year term. 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. See Footnote (10) to the Summary Compensation Table
beginning on Page 14.
The Company entered into an employment agreement with Stacy L. Wagner for a
three-year term, commencing as of January 22, 1997. The agreement was amended,
effective August 19, 1997, to reflect Ms. Wagner's promotion to Vice President
of Finance. Under the amended Employment Agreement, Ms. Wagner is entitled to
receive $85,000 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 $100,000 annually,
plus a monthly car allowance of $600. See Footnote (11) to the Summary
Compensation Table beginning on Page 14.
On July 31, 1997, the Company extended an offer of employment to W. Nicholas
Goetz to replace Diana M. DeFerrari as the Company's Secretary effective
September 8, 1997. Under the letter agreement, Mr. Goetz is entitled to receive
$100,000 per year in base salary and an annual bonus equal to 0.5% of the
Company's fiscal year net profits in the first year, and 1% of net profits
commencing in year two. If the agreement is terminated for any reason other than
gross misconduct during the first year following the
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satisfactory completion of the Company's normal probationary period of 90 days,
Mr. Goetz will be entitled to receive six months severance pay.
MEMBERS OF THE BOARD OF DIRECTORS:
Ronald H. Deferrari, Chairman
Anastasios S. Gianoplus
Richard T. Heglin
Lubek Jastrzebski, Ph.D.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee currently consists of all of the members of the
Board of Directors of the Company which are identified above. Stock option
grants are considered part of the overall compensation for executive officers
and directors of the Company. Anastasios S. Gianoplus and Lubek Jastrzebski were
both granted stock options during fiscal 1997. See "Committees, Meetings, and
Compensation of the Board of Directors," below.
The Company's subsidiary, Magnetran, Inc. ("Magnetran"), located in New
Jersey, leases approximately 17,750 square feet, from the Company's Chief
Executive Officer, Ronald H. Deferrari. The premises are leased by Magnetran at
an annual base rental for fiscal 1997 of approximately $93,038. For a more
detailed description of the lease between the Company and Magnetran, see
"Certain Relationships and Related Party Transactions," below.
COMMITTEES, MEETINGS, AND COMPENSATION OF THE BOARD OF DIRECTORS
The Board of Directors held four meetings during fiscal 1997. 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 had two meetings during fiscal
1997, 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. 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 Ronald H. 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 1997. 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, Mr. Heglin, and Dr. Jastrzebski are compensated at the rate
of $20,000, $15,000, and $15,000 per year, respectively, for services as a
director. They are also entitled to reimbursement of expenses. During fiscal
1997, certain directors were granted stock options. Mr. Gianoplus and Dr.
Jastrzebski were each granted options to acquire 20,000 shares, 5,000 shares,
and 5,000 shares, on May 6, 1997, June 30, 1997, and
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August 19, 1997, respectively. The options are exercisable at exercise prices of
$4.12, $3.60, and $6.97, respectively. Upon election to the Board by
shareholders, Mr. Heglin will be granted 5,000 shares of the Company's Common
Stock for an exercise price equal to 100% of the Fair Market Value of the Common
Stock on the date of grant.
Mr. Deferrari receives no separate compensation for services as a director.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
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 Ronald H. Deferrari, the Company's founder, Chairman of
the Board, and Chief Executive Officer. The premises were leased by Magnetran at
an initial annual base rental of $86,841, which escalates 3% annually. Upon the
expriation of 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 Ronald H.
Deferrari for fiscal 1997 was approximately $93,038. The Company believes that
the terms of the lease are generally as favorable to the Company as could be
obtained from unaffiliated third parties.
PERFORMANCE GRAPH
The following graph compares cumulative total stockholder return on Company
Common Stock for the five years in the period ended November 30, 1997 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.
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[CHART TO BE SUPPLIED BY COMPANY]
There can be no assurance that the Company's stock performance will continue
into the future with the same or similar trends depicted in the graph above. The
Company does not make or endorse any predictions as to the future stock
performance.
THE STOCK PRICE PERFORMANCE GRAPH SHALL NOT BE DEEMED INCORPORATED BY
REFERENCE BY ANY GENERAL STATEMENT INCORPORATING BY REFERENCE THIS PROXY
STATEMENT INTO ANY FILING UNDER THE ACTS, EXCEPT TO THE EXTENT THAT THE COMPANY
SPECIFICALLY INCORPORATES THIS INFORMATION BY REFERENCE, AND SHALL NOT OTHERWISE
BE DEEMED FILED UNDER THE ACTS.
SELECTION OF INDEPENDENT AUDITORS
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
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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.
STOCKHOLDER PROPOSALS
Any stockholder who intends to present a proposal at the 1999 Annual Meeting
of Stockholders for inclusion in the proxy statement and form of proxy relating
to that meeting is advised that the proposal must be received by the Company at
its principal executive offices not later than November 25, 1998. The Company
will not be required to include in its proxy statement or form of proxy a
stockholder proposal which is received after that date or which otherwise fails
to meet requirements for stockholder proposals established by regulations of the
Securities and Exchange Commission.
OTHER MATTERS
The solicitation of proxies is made by and on behalf of the Board. The cost of
the solicitation will be borne by the Company, including the reasonable expenses
of brokerage firms or other nominees for forwarding proxy materials to
beneficial owners. In addition to solicitation by mail, proxies may be solicited
by telephone, telegraph or personally. Proxies may be solicited by directors,
officers and employees of the Company without additional compensation.
If the enclosed proxy is executed and returned, the shares represented thereby
will be voted in accordance with any specifications made by the stockholder. In
the absence of any such specification, they will be voted "FOR" the adoption of
the Amendments described in Proposals 1 through 5, and "FOR" the election of
each of the directors as set forth in Proposal 6 above. Pursuant to the
Company's Certificate and applicable law, broker nonvotes and abstaining votes
will not be counted in favor of or against the election of any nominee for
director or any of the proposals to be presented at the meeting.
The presence of a stockholder at the meeting will not operate to revoke his
proxy. A proxy may be revoked at any time insofar as it has not been exercised
by giving written notice to the Company.
If any other matters shall come before the meeting, the persons named in the
proxy, or their substitutes, will vote thereon in accordance with their
judgment. The Board does not know of any other matters which will be presented
for action at the meeting.
By Order of the Board of Directors
April 12, 1998
W. Nicholas Goetz
SECRETARY
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EXHIBIT 1
CLASSIFIED BOARD OF DIRECTORS
AMENDMENT TO ARTICLES OF INCORPORATION
PARAGRAPH 1 OF ARTICLE VII OF THE ARTICLES OF INCORPORATION OF THE COMPANY
SHALL BE AMENDED TO READ AS FOLLOWS:
Except as otherwise fixed by or pursuant to provisions hereof relating to
the rights of the holders of any class or series of stock having a preference
over common stock as to dividends or upon liquidation to elect additional
directors under specified circumstances, the corporation shall have two
directors initially. The number of directors may be either increased or
diminished from time to time, as provided in the bylaws, but shall never be less
than two or more than twelve, the exact number fixed from time to time by
affirmative vote of a majority of the directors then in office. The directors,
other than those who may be elected by the holders of any classes or series of
stock having a preference over the common stock as to dividends or upon
liquidation, shall be classified, with respect to the time for which they
severally hold office, into three classes, as nearly equal in number as
possible, as shall be provided in the manner specified in the bylaws of the
corporation, one class to be originally elected for a term expiring at the
annual meeting of stockholders to be held in 1999, another class to be
originally elected for a term expiring at the annual meeting of stockholders to
be held in 2000, and another class to be originally elected for a term expiring
at the annual meeting of stockholders to be held in 2001, with each class to
hold office until its successor is elected and qualified. At each annual meeting
of the stockholders of the Corporation after fiscal year 1998, the successors of
the class of directors whose term expires at that meeting shall be elected to
hold office for a term expiring at the annual meeting of stockholders held in
the third year following the year of their election.
AMENDMENT TO BYLAWS
IN THE EVENT PROPOSAL 1 IS APPROVED BY THE STOCKHOLDERS, CONFORMING CHANGES
SHALL BE MADE TO SECTION 4 OF ARTICLE II OF THE BYLAWS OF THE COMPANY.
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EXHIBIT 2
ELIMINATION OF SHAREHOLDERS ABILITY
TO FILL VACANCIES ON THE BOARD OF DIRECTORS
AMENDMENT TO ARTICLES OF INCORPORATION
PARAGRAPH 3 OF ARTICLE VII OF THE ARTICLES OF INCORPORATION OF THE COMPANY
SHALL BE AMENDED TO READ AS FOLLOWS:
Except as otherwise fixed by or pursuant to provisions hereof relating to
the rights of the holders of any class or series of stock having a preference
over common stock as to dividends or upon liquidation to elect additional
directors under specified circumstances, newly created directorships resulting
from any increase in the number of directors and any vacancies on the Board of
Directors resulting from death, resignation, disqualification, removal or other
cause shall be filled by the affirmative vote of a majority of the remaining
directors then in office, even though less than a quorum of the Board of
Directors. Any director elected in accordance with the preceding sentence shall
hold office until the next shareholders' meeting at which directors are elected,
and thereafter shall hold office for the remainder of the full term of the class
of directors in which the new directorship was created or the vacancy occurred
and until such director's successor shall have been elected and qualified. No
decrease in the number of directors constituting the Board of Directors shall
shorten the term of any incumbent director.
AMENDMENTS TO BYLAWS
IN THE EVENT PROPOSAL 2 IS APPROVED BY THE STOCKHOLDERS, CONFORMING CHANGES
SHALL BE MADE TO SECTION 8 OF ARTICLE II OF THE BYLAWS OF THE COMPANY.
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EXHIBIT 3
SUPERMAJORITY VOTING REQUIRED
TO REMOVE DIRECTORS FOR CAUSE
AMENDMENT TO ARTICLES OF INCORPORATION
PARAGRAPH 2 OF ARTICLE VII OF THE ARTICLES OF INCORPORATION OF THE COMPANY
SHALL BE AMENDED TO READ AS FOLLOWS:
Except as otherwise fixed by or pursuant to provisions hereof relating to
the rights of the holders of any class or series of stock having a preference
over common stock as to dividends or upon liquidation to elect additional
directors under specified circumstances, any and all of he directors of this
corporation may be removed from office for cause by the shareholders of this
corporation at any annual or special meeting of shareholders by the affirmative
vote of 66-2/3% of the outstanding shares of common stock of this corporation.
Notice of any such annual or special meeting of shareholders shall state that
the removal of a director or directors for cause is among the purposes of the
meeting. Directors may not be removed by the shareholders without cause.
AMENDMENT TO BYLAWS
IN THE EVENT PROPOSAL 3 IS APPROVED BY THE STOCKHOLDERS, CONFORMING CHANGES
SHALL BE MADE TO SECTION 9 OF ARTICLE II OF THE BYLAWS OF THE COMPANY.
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EXHIBIT 4
INCREASED VOTING REQUIRED FOR
SHAREHOLDERS TO CALL SPECIAL MEETING
AMENDMENT TO ARTICLES OF INCORPORATION
THE SIXTH PARAGRAPH OF ARTICLE IX OF THE ARTICLES OF INCORPORATION OF THE
COMPANY SHALL BE AMENDED TO READ AS FOLLOWS:
Special meetings of the shareholders of this corporation for any purpose or
purposes may be called at any time by (a) the Board of Directors; (b) the
Chairman of the board of directors (if one is so appointed); (c) the President
of this corporation; or (d) by the holders of not less than 50% of all the votes
entitled to be case on any issue proposed to be considered at the proposed
special meeting, if such shareholders sign, date and deliver to this
corporation's secretary one or more written demands for the meeting describing
the purpose or purposes for which it is to be held. Special meetings of
shareholders of this corporation may not be called by any other person or
persons.
AMENDMENT TO BYLAWS
IN THE EVENT PROPOSAL 4 IS APPROVED BY THE STOCKHOLDERS, CONFORMING CHANGES
SHALL BE MADE TO SECTION 2 OF ARTICLE I OF THE BYLAWS OF THE COMPANY.
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<PAGE>
EXHIBIT 5
SUPERMAJORITY VOTING REQUIRED TO AMEND BYLAWS
AMENDMENT TO ARTICLES OF INCORPORATION
ARTICLE X OF THE ARTICLES OF INCORPORATION OF THE COMPANY SHALL BE AMENDED
TO READ AS FOLLOWS:
The power to adopt, alter, amend, or repeal bylaws shall be vested in the
Board of Directors and the affirmative vote of 66-2/3% of the shareholders,
except that the Board of Directors may not amend or repeal any bylaws adopted by
the shareholders if otherwise provided by law or if the shareholders
specifically provide that the bylaw is not subject to amendment or repeal by the
directors.
AMENDMENT TO BYLAWS
IN THE EVENT PROPOSAL 5 IS APPROVED BY THE STOCKHOLDERS, CONFORMING CHANGES
SHALL BE MADE TO ARTICLE VII OF THE BYLAWS OF THE COMPANY.
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<PAGE>
PROXY
PLASMA-THERM, INC.
ANNUAL MEETING OF STOCKHOLDERS
MAY 12, 1997
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby nominates and appoints Ronald S. Deferrari and W.
Nicholas Goetz or any one of them, as proxies of the undersigned, with power of
substitution to each, to vote all shares of stock of PLASMA-THERM, INC. (the
"Company") which the undersigned may be entitled to vote at the Annual Meeting
of Stockholders of the Company to be held at the offices of the Company located
at 10050 16th Street North, St. Petersburg, Florida, on Tuesday, May 12, 1998 at
10:00 A.M., local time, and at any adjournment or adjournments thereof with
authority to vote said stock on the following matters:
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSAL 1:
1. Approve an amendment to the Articles of Incorporation of the Company
("Articles of Incorporation") and to corresponding amendment to the Bylaws of
the Company ("Bylaws") to provide for the classification of the Board of
Directors into three classes.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSAL 2:
2. Approval of an amendment to the Articles of Incorporation and
corresponding amendments to the Bylaws to eliminate the ability of shareholders
to fill vacancies on the Board of Directors.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSAL 3:
3. Approval of an amendment to the Articles of Incorporation and
corresponding amendments to the Bylaws requiring the affirmative vote of the
holders of 66-2/3% of the outstanding common stock to remove directors for
cause.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
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<PAGE>
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSAL 4:
4. Approval of an amendment to the Articles of Incorporation and
corresponding amendment to the Bylaws to provide that special meetings of
stockholders may only be called by the President, the Chairman of the board of
Directors, by the affirmative action of a majority of the Board of Directors, or
by the written demand by the holders of not less than 50% of the outstanding
Common Stock entitled to vote on matters to be brought at such meeting.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSAL 5:
5. Approval of an amendment to the Articles of Incorporation and
corresponding amendment to the Bylaws to require the affirmative vote of 66-2/3%
of the outstanding common stock for stockholders to amend, alter or repeal the
Bylaws.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSAL 6:
6. The election of four directors of the Company: Ronald H. Deferrari,
Anastasios S. Gianoplus, Richard T. Heglin, Lubek Jastrzebski.
[ ] VOTE FOR all nominees listed above, with the following exceptions:
Exceptions:_________________________________________________________________
NOTE: Please sign and return promptly in the envelope provided. No postage is
required if mailed in the United States.
Date: _____________ , 1998
___________________________________________
Signature
___________________________________________
Signature
Please sign exactly as your name appears.
When signing as attorney, executor,
administrator, trustee or guardian, please
set forth your full title. If signer is a
corporation, please sign the full
corporation name by a duly authorized
officer. Joint shareholders should each
sign.
2
