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 [ ]
Check the appropriate box:
[X] Preliminary proxy statement
[X] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[ ] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
HELIX TECHNOLOGY CORPORATION
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(Name of Registrant as Specified in Its Charter)
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(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of filing fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per-unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11: (Set forth the amount on which
the filing fee is calculated and state how it was determined.)
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the form or schedule and the date of its filing.
(1) Amount previously paid:
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(2) Form, schedule or registration statement no.:
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(3) Filing party:
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(4) Date filed:
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HELIX TECHNOLOGY CORPORATION
Mansfield Corporate Center
Nine Hampshire Street
Mansfield, MA 02048-9171
Telephone (508) 337-5111 - Fax (508) 337-5175
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
Thursday, April 29, 1999, at 11:00 a.m.
To the Stockholders of Helix Technology Corporation:
Notice is hereby given that the 1999 Annual Meeting of Stockholders (the
"Meeting") of Helix Technology Corporation (the "Company") will be held on
Thursday, April 29, 1999, at 11:00 a.m. at The Down Town Club, 225 Franklin
Street, Boston, Massachusetts, for the following purposes:
1. To elect a Board of Directors;
2. To approve an amendment to the Company's Restated Certificate of
Incorporation to divide the Board of Directors of the Company
into three classes;
3. To ratify the appointment of PricewaterhouseCoopers LLP as the
Company's independent accountants for the current year; and
4. To transact such other business as may properly come before the
Meeting.
Only stockholders of record at the close of business on March 17, 1999, will
be entitled to notice of and to vote at the Meeting.
By Order of the Board of Directors
Beverly L. Armell
Corporate Secretary
Mansfield, Massachusetts
March 26, 1999
IT IS IMPORTANT THAT YOUR SHARES BE REPRESENTED AT THE MEETING. WHETHER OR
NOT YOU PLAN TO ATTEND THE MEETING, PLEASE MARK, SIGN, DATE AND RETURN THE
ENCLOSED PROXY AS PROMPTLY AS POSSIBLE IN THE ENCLOSED POSTAGE PREPAID
ENVELOPE. IF YOU ATTEND THE MEETING AND WISH TO VOTE IN PERSON, YOUR PROXY
WILL NOT BE USED.
HELIX TECHNOLOGY CORPORATION
Mansfield Corporate Center
Nine Hampshire Street
Mansfield, MA 02048-9171
Telephone (508) 337-5111 - Fax (508) 337-5175
PROXY STATEMENT
This Proxy Statement is furnished in connection with the solicitation of
Proxies by the Board of Directors of the Company for use at the 1999 Annual
Meeting of Stockholders of the Company (the "Meeting") to be held at The
Down Town Club, 225 Franklin Street, Boston, Massachusetts, on Thursday,
April 29, 1999, at 11:00 a.m., and at any adjournments thereof. The matters
to be considered and acted upon at the Meeting are set forth in the attached
Notice of Annual Meeting.
The record date for the determination of stockholders entitled to notice of
and to vote at the Meeting has been fixed by the Board of Directors as the
close of business on March 17, 1999. As of that date there were
______________ shares of Common Stock, $1.00 par value per share (the
"Common Stock") of the Company outstanding and entitled to vote at the
Meeting. Each share of Common Stock is entitled to one vote on each of the
matters listed in the Notice of Annual Meeting. A majority of the
outstanding shares of Common Stock will constitute a quorum at the Meeting.
Votes withheld, abstentions and broker non-votes (where a broker or nominee
does not exercise discretionary authority to vote on a matter) are counted
for purposes of determining the presence or absence of a quorum for the
transaction of business.
When the proxy card of a stockholder is duly executed and returned, the
shares represented thereby will be voted in accordance with the voting
instructions given on the proxy by the stockholder. If no such voting
instructions are given on a proxy card with respect to one or more
proposals, the shares represented by that proxy card will be voted, with
respect to the election of directors, for the nominees named herein, and
with respect to other proposals, in accordance with the recommendations of
the Board. Stockholders may revoke their proxies at any time prior to any
vote at the Meeting by written notice of revocation to the Secretary of the
Company at or before the Meeting, by submission of a duly executed proxy
card bearing a later date, or by voting in person by ballot at the Meeting.
The affirmative vote of the holders of a majority of the shares of Common
Stock outstanding and entitled to vote at the Meeting is required to approve
the proposed amendment to the Company's Restated Certificate of
Incorporation to classify the Board of Directors. Abstentions and broker
non-votes will be counted as entitled to vote, and, accordingly, will have
the effect of negative votes for this purpose.
This Proxy Statement, the Notice of Annual Meeting, and the form of proxy
will first be sent to stockholders on or about March 26, 1999.
PROPOSAL 1
ELECTION OF DIRECTORS
In accordance with Section 2 of Article II of the By-Laws, the Board has
fixed the number of directors to constitute the full Board for the ensuing
year at seven. The Board has nominated Arthur R. Buckland, Matthew O.
Diggs, Jr., Frank Gabron, Robert H. Hayes, Robert J. Lepofsky, Marvin G.
Schorr and Mark S. Wrighton. Wickham Skinner has declined to be nominated
for reelection to the Board of Directors. Dr. Skinner's decision was not
based on any disagreement with the Company or any matter relating to the
Company's operations, policies or practices. Each of the nominees is
currently a director of the Company and has consented to be nominated and to
serve if elected. In the event any of these nominees shall be unable to
serve as a director, the shares represented by the proxy will be voted for
the person, if any, who is designated by the Board to replace the nominee.
In the event that a vacancy occurs during the year, such vacancy may be
filled by the Board for the remainder of the full term.
If the proposed amendment to Article FIFTH of the Restated Certificate of
Incorporation is approved by the stockholders at the Meeting and the
nominees are elected, the Board will be divided into three classes and
Robert H. Hayes and Mark S. Wrighton will serve terms expiring at the 2002
Annual Meeting of Stockholders (Class I); Arthur R. Buckland, Matthew O.
Diggs, Jr., and Frank Gabron will serve terms expiring at the 2001 Annual
Meeting of Stockholders (Class II); and Robert J. Lepofsky and Marvin G.
Schorr will serve terms expiring at the 2000 Annual Meeting of Stockholders
(Class III), or, in all cases, until their successors are duly elected and
qualified or until their earlier death, resignation or removal from office.
See "Proposal 2: Classification of the Board of Directors." If the
proposed amendment to Article FIFTH is not approved by the stockholders at
the Meeting, all seven of the nominees, if elected, will serve as directors
until the 2000 Annual Meeting of Stockholders and until their successors are
duly elected and qualified or until their earlier death, resignation or
removal from office.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE IN FAVOR OF THE
ELECTION OF MESSRS. BUCKLAND, DIGGS, GABRON, HAYES AND LEPOFSKY AND DRS.
SCHORR AND WRIGHTON TO THE BOARD OF DIRECTORS.
<TABLE>
<CAPTION>
Nominees
Director for Term
Name of Nominee Age Principal Occupation Since Expiring
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <S> <C> <C>
Nominees for Class I Directors:
Robert H. Hayes 62 Professor, Harvard Business School 1998 2002
Mark S. Wrighton 49 Chancellor, Washington University, St. Louis 1990 2002
Nominees for Class II Directors:
Arthur R. Buckland 50 President, Chief Executive Officer and Chairman 1996 2001
CP Clare Corporation
Matthew O. Diggs, Jr. 66 General Partner, McClintock Industries 1997 2001
Frank Gabron 68 Retired Chief Executive Officer of the Company 1980 2001
Nominees for Class III Directors:
Robert J. Lepofsky* 54 President and Chief Executive Officer of the Company 1987 2000
Marvin G. Schorr* 74 Chairman of the Board of the Company, 1982 2000
Chairman of the Board of Landauer, Inc.,
Tech/Ops Sevcon, Inc., and Tech/Ops Corporation
- ----------------------------------------------------------------------------------------------------------------
<FN>
<F*> Member of the Executive Committee
</FN>
</TABLE>
Mr. Buckland has served as President, Chief Executive Officer and Chairman
of CP Clare Corporation since July of 1993. He served as President of
FourPi Systems, a privately held company, from 1992 to 1993. He served as
President of Lex Electronics in the United Kingdom from 1990 to 1991. Prior
to 1990, he held executive management positions at Schlumberger Ltd.,
Teradyne, Fairchild and Texas Instruments Inc. He currently serves as a
director of General Scanning Inc.
Mr. Diggs has served as a General Partner of McClintock Industries, formerly
The Diggs Group, a private investment firm, since 1990. Prior to 1990, he
served as Vice Chairman of Copeland Corporation from 1987 to 1990 and as
President and Chief Executive Officer from 1975 to 1987. He currently serves
as Chairman of the Board of Ripplewood Holdings and Dayton Superior
Corporation, and as a director of Tower Automotive Industries and Wright
State University.
Mr. Gabron served as Chairman of the Board of the Company from January 1981
through July 1996. He served as President of the Company from November 1980
to February 1987, and Chief Executive Officer of the Company from November
1980 until December 1988.
Professor Hayes holds the Philip Caldwell Professorship in Business
Administration at Harvard Business School, where he specializes in
operations and technology management. Prior to his appointment to the
Harvard Faculty in 1966, Professor Hayes worked for IBM and McKinsey &
Company. He is a director of the American Productivity & Quality Center and
The Perkin-Elmer Corporation.
Mr. Lepofsky has served as President of the Company since February 1987, and
as Chief Executive Officer of the Company since January 1989. He was Chief
Operating Officer of the Company from December 1982 to December 1988, and
was Senior Vice President from December 1982 to February 1987. Prior to
December 1982, Mr. Lepofsky was a Vice President of the Company for two
years.
Dr. Schorr was elected Chairman of the Board of the Company in August 1996.
He served as President and Chief Executive Officer of Tech/Ops, Inc., from
1962 to 1987 and Chairman of the Board of that company from 1981 to 1987.
In 1987 Tech/Ops was reorganized into three companies: Landauer, Inc.,
Tech/Ops Sevcon, Inc., and Tech/Ops Corporation, of which the former two are
publicly owned manufacturers of technology-based products and services, and
the latter is a privately owned consulting business. Dr. Schorr has been
Chairman of the Board of Directors of all three companies since 1987.
Dr. Wrighton has been Chancellor of Washington University in St. Louis since
July 1995. He was Provost of Massachusetts Institute of Technology from
1990 until 1995, and held the Ciba-Geigy Chair in Chemistry at MIT. He
joined the faculty at MIT in 1972 as Assistant Professor of Chemistry, was
appointed Associate Professor in 1976 and Professor in 1977. From 1981
until 1989 he held the Frederick G. Keyes Chair in Chemistry and was Head of
the Department of Chemistry from 1987 until 1990. Dr. Wrighton also serves
as a director of Ionics, Inc., O.I.S. Optical Imaging Systems, Inc., and
Cabot Corporation.
There are no family relationships between any director, executive officer,
or person nominated or chosen by the Company to become a director or
executive officer of the Company.
PROPOSAL 2
CLASSIFICATION OF THE BOARD OF DIRECTORS
The proposed amendment to Article FIFTH of the Restated Certificate of
Incorporation of the Company provides that the Board of Directors shall be
divided into three classes of directors of approximately equal size serving
staggered three-year terms. If the proposed amendment is adopted, the Board
of Directors of the Company will be divided into three classes, and two
directors elected at the Meeting will serve a one-year term expiring at the
2000 Annual Meeting of Stockholders, three directors will serve a two-year
term expiring at the 2001 Annual Meeting of Stockholders, and the remaining
two directors will serve a three-year term expiring at the 2002 Annual
Meeting of Stockholders. At each Annual Meeting of Stockholders, directors
will be elected to succeed those whose terms expire, with each newly elected
director to serve for a three-year term. If the proposed amendments are not
adopted, all directors elected at the Meeting will be elected for a term
expiring at the 2000 Annual Meeting of Stockholders and until their
successors are duly elected and qualified.
Under the proposed amendment to the Restated Certificate of Incorporation,
limits are prescribed for the size of the entire Board of Directors, with a
minimum set at three directors and a maximum set at fifteen directors. The
total number of directors and the number of directors constituting each
class of directors (with each of the three classes being required to be as
nearly equal as possible) may be fixed or changed, from time to time, only
by the Board of Directors within such authorized limits.
In addition, the proposed amendment to the Restated Certificate of
Incorporation expressly delegates to incumbent directors the power to fill
any vacancies on the Board of Directors, however occurring, whether by an
increase in the number of directors, death, resignation, retirement,
disqualification, removal from office or otherwise. Any director elected by
the Board to fill a vacancy would hold office for the unexpired portion of
the term of the director whose place has been filled. A director elected by
the Board to fill a newly created directorship resulting from an increase in
the number of directors would hold office until the next election of the
class for which such director was chosen. If the size of the Board has been
increased, the additional directors would be apportioned among the three
classes to make all classes as nearly equal as possible.
Under Delaware law, directors serving on a classified Board may be removed
only for cause unless the Certificate of Incorporation provides otherwise.
The Company's Restated Certificate of Incorporation will provide that the
directors will be subject to removal by stockholders only for cause if the
amendment is approved.
The Board of Directors of the Company believes that a classified Board would
be advantageous to the Company and its stockholders because, by providing
that directors will serve three-year terms rather than one-year terms, it
would enhance the likelihood of continuity and stability in the composition
of the Company's Board of Directors and in the policies formulated by such
Board. The Company's Board believes that this, in turn, will permit the
Company's Board to represent more effectively the interests of all
stockholders, including responding to circumstances created by demands or
actions by a minority stockholder or group. In the past, numerous attempts
were made by various individuals and entities to acquire significant
minority positions in certain other companies with the intent of obtaining
control of the companies by electing their own slate of directors, or of
achieving some other goal, such as the repurchase of their shares at a
premium, by threatening to obtain such control. These insurgents often can
elect a company's entire board of directors through a proxy contest or
otherwise, even though they do not own a majority of the company's
outstanding shares entitled to vote. A classified Board may discourage such
purchases because its provisions would operate to delay the purchaser's
ability to obtain control of the Board in a relatively short period of time.
The delay arises because it would generally take a purchaser two annual
meetings of stockholders to elect a majority of a classified Board, since
the purchaser would need to show cause and obtain the affirmative vote of a
majority of the outstanding shares entitled to vote in order to remove any
directors. Also, since neither Delaware law nor the Company's Restated
Certificate of Incorporation or By-Laws requires cumulative voting, a
purchaser of a block of stock of the Company constituting less than a
majority of the outstanding shares would have no assurance of proportional
representation on the Company's Board.
For the same reasons, a classified Board may also deter certain mergers,
tender offers or other future takeover attempts which some or a majority of
holders of Common Stock may deem to be in their best interests. In
addition, a classified Board would delay stockholders who do not like the
policies of the Board of Directors from removing a majority of the Board for
up to two years, unless they can show cause and obtain the requisite vote.
The Board of Directors of the Company has no knowledge of any present plan
to gain control of the Company or to organize a proxy contest. However, the
Company's Board believes that it is prudent and in the interests of
stockholders generally to provide the advantage of greater assurance of
continuity in the composition and policies of the Board of the Company which
will result from a classified Board. The Company's Board believes such
advantage outweighs any disadvantage relating to discouraging potential
acquirers from making an effort to obtain control of the Company.
The affirmative vote of the holders of a majority of the shares of Common
Stock outstanding and entitled to vote at the Meeting is required for the
approval of the proposed amendment to the Company's Restated Certificate of
Incorporation to divide the Board of Directors into three classes of
directors of approximately equal size, serving staggered three-year terms.
The Board of Directors of the Company believes that the amendment to the
Restated Certificate of Incorporation to classify the Board of Directors is
in the best interest of the Company and its stockholders and recommends a
vote FOR the proposal to approve the amendment to the Restated Certificate
of Incorporation to divide the Board of Directors into three classes of
directors of approximately equal size serving staggered three-year terms.
COMMITTEES OF THE BOARD
In addition to the Executive Committee, the Board of Directors has an Audit
Committee consisting of Messrs. Buckland, Diggs and Gabron; and a Human
Resources and Compensation Committee consisting of Mr. Hayes and Drs. Schorr
and Wrighton. The functions of the Audit Committee are to review the
engagement of auditors, including the fee, scope, and timing of the audit
and any other services rendered; to review policies and procedures and the
effectiveness of internal controls; and to review the financial reporting
process. The functions of the Human Resources and Compensation Committee
include the review and approval of executive compensation and the
administration and supervision of the Company's stock option and restricted
stock plans.
During the year ended December 31, 1998, the Board of Directors held six
meetings, the Audit Committee held three meetings and the Human Resources
and Compensation Committee held three meetings. During the year, all
directors attended at least 78 percent of the aggregate of the total number
of meetings of the Board of Directors and the total number of meetings held
by all Committees of the Board on which they served.
EXECUTIVE COMPENSATION
The following table provides certain summary information concerning
compensation paid by the Company for services in all capacities for the
years ended December 31, 1998, 1997 and 1996, to the Company's Chief
Executive Officer and each of the four other most highly compensated
executive officers of the Company (all five hereinafter referred to as the
"Named Executive Officers"):
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long-Term
Compensation
Awards All Other
--------------------- Compensation
Securities Underlying --------------------
Name and Annual Compensation Stock Options 401(k)
Principal Position Year Salary Bonus (Shares) Match(1) Other(2)
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Robert J. Lepofsky 1998 $380,000 $ 40,000 - 7,150 $1,943
President & Chief 1997 345,000 115,000 - 4,800 1,715
Executive Officer 1996 330,000 60,000 - 4,500 1,617
Robert E. Anastasi 1998 180,000 30,000 40,000 8,650 768
Senior Vice President 1997 170,000 60,000 15,000 4,750 699
1996 165,000 40,000 20,000 4,500 657
Michael El-Hillow(3) 1998 180,000 35,000 40,000 6,000 464
Senior Vice President & 1997 118,346 35,000 20,000 - 289
Chief Financial Officer
Christopher Moody(3) 1998 180,000 35,000 50,000 - 269
Senior Vice President 1997 58,461 35,000 30,000 - 86
Richard J. Paynting(3) 1998 180,000 25,000 40,000 8,873 768
Senior Vice President 1997 170,000 55,000 20,000 - 694
1996 64,615 25,000 20,000 - 155
- ----------------------------------------------------------------------------------------------------------
<FN>
<F1> Represents Company matching contributions under the Company's 401(k)
Plan.
<F2> Represents premiums paid by the Company for excess group life
insurance.
<F3> Mr. El-Hillow joined the Company in April 1997; Mr. Moody joined the
Company in August 1997, and Mr. Paynting joined the Company in August
1996.
</FN>
</TABLE>
STOCK OPTION GRANTS IN 1998
The following table provides information concerning the Grant of Stock
Options (also reported in the Summary Compensation Table) under the
Company's 1996 Equity Incentive Plan during the year ended December 31, 1998,
to the Named Executive Officers.
<TABLE>
<CAPTION>
Potential Realizable Value
Number of Percentage of at Assumed Annual Rates
Securities Total Options of Stock Appreciation
Underlying Granted to Exercise for Option Term(2)
Options Employees in Price Expiration --------------------------
Name Granted(1) Fiscal 1998 (Per Share) Date 5% 10%
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Robert E. Anastasi 40,000 23.5% $23.109 02/18/2008 $581,334 $1,473,216
Michael El-Hillow 40,000 23.5% 23.109 02/18/2008 581,334 1,473,216
Christopher Moody 50,000 29.4% 23.109 02/18/2008 726,668 1,841,520
Richard J. Paynting 40,000 23.5% 23.109 02/18/2008 581,334 1,473,216
- -----------------------------------------------------------------------------------------------------------
<FN>
<F1> This option grant is exercisable in four equal annual cumulative
installments beginning one year from the date of grant, which was
February 19, 1998.
<F2> The 5% and 10% rates used are mandated by the Securities and Exchange
Commission. The actual value, if any, that an executive may realize
upon option exercises will depend on the excess of the stock price
over the exercise price on the date the option is exercised, so that
there is no assurance the value realized by an executive will be at or
near the values calculated by using these assumed appreciation rates.
No gain to the executives is possible without an increase in the price
of the Common Stock, which would benefit all stockholders
proportionately.
</FN>
</TABLE>
STOCK OPTION EXERCISES IN 1998 AND YEAR-END STOCK OPTION VALUES
The following table provides information with respect to the Named Executive
Officers concerning the exercise of options during the year and the value of
unexercised options at December 31, 1998.
<TABLE>
<CAPTION>
Number of Securities
Underlying Unexercised Value of Unexercised
Options Held at In-the-Money Options at
Shares December 31, 1998 December 31, 1998(2)
Acquired on Value ---------------------------- ----------------------------
Name Exercise Realized(1) Exercisable Unexercisable Exercisable Unexercisable
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Robert J. Lepofsky 80,000 $895,000 - 160,000 $ - $1,730,000
Robert E. Anastasi - - 13,750 61,250 - -
Michael El-Hillow - - 5,000 55,000 - -
Christopher Moody - - 7,500 72,500 - -
Richard J. Paynting - - 15,000 65,000 - -
- -----------------------------------------------------------------------------------------------------------------
<FN>
<F1> "Value Realized" represents the difference between the exercise price
and the market price of the option shares on the date the option was
exercised. The value realized was determined without considering any
taxes that may have been owed.
<F2> Based on the mean between the high and low prices for the Common Stock
of the Company as reported by the NASDAQ National Market on December
31, 1998 ($12.50), less the price to be paid upon exercise.
</FN>
</TABLE>
RETIREMENT PROGRAM
The following table sets forth estimated combined annual benefits under the
Company's Pension Plan and the Company's Supplemental Key Executive
Retirement Plan ("SERP"), on a straight-life annuity basis, to persons in
specified compensation and years-of-service categories, as if they had
retired at age 65 at December 31, 1998:
<TABLE>
<CAPTION>
Estimated Annual Pension
Average Qualified (Including SERP Benefits)
Annual Compensation Based on Years of Service Indicated
on which Retirement --------------------------------------------------------
Benefits Are Based 10 Years 15 Years 20 Years 25 Years 30 Years
- -------------------------------------------------------------------------------
<C> <C> <C> <C> <C> <C>
$150,000 $25,020 $ 37,399 $ 49,521 $ 64,521 $ 64,521
200,000 33,861 50,366 66,528 86,528 86,528
250,000 43,712 64,548 84,751 109,751 109,751
300,000 53,712 79,014 103,258 133,258 133,258
350,000 63,712 93,480 121,765 156,765 156,765
400,000 73,712 107,946 140,271 180,271 180,271
</TABLE>
Pension Plan
Contributions to the Company's Pension Plan (the "Plan"), which is a defined
benefit plan, are not included in the Summary Compensation Table because such
contributions are made on an actuarial basis and cannot be separately
calculated. The Company recognized pension expense of $275,000; however,
because this Plan is overfunded, a contribution was not required and not
made in 1998. Employees who are at least 21 years of age with one year of
service are eligible for this Plan.
Compensation covered by the Plan includes salary and commissions but
excludes bonuses or incentive awards, if any. Benefits under the Plan as
set forth in the table above are determined on a straight-life annuity basis
based upon years of participation completed after December 31, 1978, and
highest consecutive 60-month average compensation during the last 120 months
of employment and are integrated with Social Security benefits. As of
December 31, 1998, Messrs. Lepofsky and Anastasi each had accrued 20 years
of benefit service under the Plan, Mr. Paynting had accrued 2.3 years of
such service, Mr. El-Hillow had accrued 1.8 years and Mr. Moody had accrued
1.4 years.
Supplemental Key Executive Retirement Plan
In 1992 the Company adopted a Supplemental Key Executive Retirement Plan
which is designed to supplement benefits paid to certain participants under
Company-funded tax-qualified retirement plans which benefits are otherwise
limited with respect to highly paid employees by the Internal Revenue Code.
In general, the plan provides that participants with 25 or more years of
service who have reached the age of 65 at the time of retirement will
receive a supplemental annual pension from the Company equal to 50 percent
of the greater of such participant's (i) average compensation (as described
under "Pension Plan" above) or (ii) actual compensation during the 12 months
prior to retirement, less all Company-funded retirement benefits. Benefits
under the plan are reduced for participants with less than 25 years of
service. The Company recorded additional retirement costs of $170,000 in
connection with the plan in 1998.
COMPENSATION COMMITTEE REPORT
The Human Resources and Compensation Committee of the Board of Directors
(the "Committee") is composed of three independent, disinterested directors
who are not employees of the Company. The Committee regularly reviews and
approves generally all compensation and fringe benefit programs of the
Company and also reviews and determines the actual compensation of the Named
Executive Officers, as well as all stock option grants and restricted stock
awards to all employees. All compensation actions taken by the Committee
are reported to and approved by the full Board of Directors, excluding
employee directors. The Committee also reviews and makes recommendations to
the Board on policies and programs for the development of management
personnel and management structure and organization. The Committee reviews
and administers the Company's 1996 Equity Incentive Plan. The Committee
also reviews and administers the Company's 1996 Stock Option Plan for Non-
Employee Directors. The Committee regularly reviews Executive Compensation
Reports prepared by independent organizations in order to evaluate the
appropriateness of its Executive Compensation Program.
The Committee uses its base salary and performance-based bonus program for
the Named Executive Officers to enhance short-term profitability and
stockholder value and uses stock options and restricted stock awards to
enhance long-term growth in profitability, return on equity and stockholder
value. In order to meet these objectives, the Committee first sets base
salaries for the Named Executive Officers based on a review of base salaries
among competitive peer groups and then sets target bonus awards comprising
about 15 to 35 percent of total target compensation, depending upon the
position being reviewed. The Committee reviews the Company's annual
performance plan and the individual goals and objectives of each Named
Executive Officer for the ensuing year and sets incentive target bonus
awards which are directly linked to the short-term financial performance
of the Company as a whole and to the specific annual goals and objectives
of each Named Executive Officer. In February of each year, the Committee
meets to review the performance of the Company and the performance of the
Chief Executive Officer and each Named Executive Officer in relation to the
Company's performance plan for the year then ended and in relation to the
goals set for the Chief Executive Officer and each Named Executive Officer
and awards bonuses accordingly. The Committee then sets base salaries and
target bonus awards for the next year. The Committee has discretion to
reward extraordinary accomplishments with special bonuses. In this process
the Committee first meets with the Chief Executive Officer to review the
performance of the Company and the performance of each Named Executive
Officer and then meets in an executive session to review the performance
of all the Named Executive Officers, including the Chief Executive Officer.
The minimum annual salary of the Chief Executive Officer is set pursuant to
an employment agreement entered into by the Company and the Chief Executive
Officer. See "Employment Agreements," page 13. The Committee may increase
the minimum annual salary of the Chief Executive Officer from time to time at
its discretion based upon the performance of the Company and such other factors
as the Committee may determine.
With respect to the Company's performance during 1998, the Company experienced
the general downturn in the market for semiconductor capital equipment and did
not meet its performance plan. Accordingly, the Committee awarded bonuses to
the Company's Chief Executive Officer and other Named Executive Officers that
were substantially below their target bonuses.
The Committee did, however, note that the performance of the Company in general
over the past five years had been very strong and further noted that the
overall performance of the Company over the first nine (9) years of the ten
(10) year term of Mr. Lepofsky's performance option had already significantly
exceeded the performance targets set forth in that option. Accordingly, and in
order to assure the Company with continuity in the position of its Chief
Executive Officer, the Company elected to enter into a new 8-year employment
agreement with Mr. Lepofsky, effective on February 11, 1999, in place of his
prior agreement and to grant Mr. Lepofsky a new non-statutory stock option
for the purchase of 200,000 shares of Common Stock of the Company, exercisable
in eight (8) equal annual cumulative installments beginning on the first
anniversary of the date of grant. In light of the fact that the ten (10) year
performance targets of the Company set forth in Mr. Lepofsky's prior ten (10)
year performance stock option had already been significantly exceeded, the
Committee decided to agree that the final two installments of said option
shall become exercisable together on March 1, 2000, without any requirements
that any performance criteria of the Company be achieved with respect thereto.
The Committee believes that the foregoing combination of base salaries,
incentive bonuses, stock options and performance-related stock options has
helped develop a Senior Management Group dedicated to achieving significant
improvement in both the short-term and long-term financial performance of
the Company.
The foregoing report has been furnished by the three members of the Human
Resources and Compensation Committee - Dr. Wickham Skinner (Chairman), Dr.
Marvin G. Schorr and Dr. Mark S. Wrighton.
STOCKHOLDER RETURN PERFORMANCE PRESENTATION
Set forth below is a line graph comparing the change in the cumulative total
stockholder return of the Company's Common Stock against the change in the
cumulative total return of the S&P Technology Sector Composite Index and the
NASDAQ Composite Index for the period of five years ended December 31, 1998.
Management cautions that the stock price performance shown in the graph below
should not be considered indicative of potential future stock performance.
Comparison of Five-Year Cumulative Total Return *
Among Helix Technology Corporation, NASDAQ (U.S. Index)
and S&P Technology Sector Composite Index
<TABLE>
<CAPTION>
Cumulative Total Return
--------------------------------------------------
12/93 12/94 12/95 12/96 12/97 12/98
<S> <C> <C> <C> <C> <C> <C>
Helix 100 249 590 453 633 443
NASDAQ 100 98 138 170 209 293
S&P Tech Sector 100 117 168 238 300 519
- ----------------------------------------------------------------------
<FN>
<F*> Assumes the value of the investment in Helix Technology Corporation
and each index was $100 on December 31, 1993, and that all dividends
were reinvested.
</FN>
</TABLE>
DIRECTORS' COMPENSATION
During 1998, each non-employee director received an annual retainer fee of
$25,000 ($26,000 for Committee Chairmen) payable in four equal quarterly
installments. A director who is also a full-time employee of the Company
receives no additional compensation for services as a director.
In addition, the Company has a stock option plan, the 1996 Stock Option Plan
for Non-Employee Directors of the Company (the "1996 Directors' Plan")
covering its non-employee directors. Under the terms of the 1996 Directors'
Plan, each non-employee director, when first elected a director at an Annual
Meeting of Stockholders, receives an option to acquire 10,000 shares of
Common Stock of the Company at a purchase price equal to fair market value
on that date. Options are exercisable in five cumulative annual
installments of 2,000 shares each. For each non-employee director who
remains eligible, an installment of 2,000 shares shall become exercisable
immediately upon his or her election as a director at the 1999 Annual
Meeting of Stockholders (or at a subsequent Annual Meeting of Stockholders,
if such director is first elected at that time) and the remaining
installments shall become exercisable upon each further reelection as a
director of the Company at a subsequent Annual Meeting of Stockholders.
EMPLOYMENT AGREEMENTS
In February 1999, the Company entered into a new employment agreement (the
"1999 Agreement") with Mr. Lepofsky, which runs through February 2007 and
replaces the December 1989 employment agreement (the "1989 Agreement") that
ran through December 1999. Under the 1999 Agreement, the minimum annual salary
of $390,000 may be increased by the Board of Directors from time to time,
however, if increased, it may not be reduced again except as part of a
general reduction of all executive salaries. The 1999 Agreement provides for
additional incentive compensation in the sole discretion of the Board of
Directors and commits the Company to provide Mr. Lepofsky with a non-
qualified supplemental pension benefit that will pay him the benefit that
cannot be paid from the Company's tax-qualified pension plan due to Internal
Revenue Service limits. The 1999 Agreement contains a non-qualified stock
option granting to Mr. Lepofsky the right to purchase up to 200,000 shares of
Common Stock of the Company at an option price of $20.8125 per share. This
option was granted under the Company's 1996 Equity Incentive Plan and
becomes exercisable in eight annual installments of 25,000 shares each,
beginning in February 2000.
Under the 1989 Agreement, Mr. Lepofsky's minimum annual salary was $380,000
for 1998. The 1989 Agreement contained a non-qualified performance stock
option (the "Prior Option") granting to Mr. Lepofsky the right to purchase
up to 800,000 shares of Common Stock of the Company at an option price of
$1.6875 per share, exercisable in ten annual installments of up to 80,000
shares each, beginning on March 1, 1991, and ending on March 1, 2000, to the
extent that the Company met certain targets for return on equity and percentage
increase in earnings per share over certain base levels for the prior year, or
for an average of up to the prior three years, or for the first five years, or
for the entire 10-year period of the agreement. At December 31, 1998, options
for the purchase of 640,000 shares had become exercisable. The Agreement
leaves this Prior Option in place, except that because the Company's ten (10)
year performance targets set forth in the Prior Option have already been
significantly exceeded, said option was amended so that the final two
installments thereof shall become exercisable together on March 1, 2000,
without any requirements that any performance criteria be achieved. The
Agreement contains non-competition covenants in favor of the Company.
The 1999 Agreement provides for certain benefits in the event of involuntary
termination of Mr. Lepofsky's employment not for cause or in the event Mr.
Lepofsky terminates his employment following (i) a change of control of the
Company that is not approved by the Company's Board of Directors, and (ii) a
change in a majority of the Directors. In the event of his involuntary
termination not for cause, or in the event of his voluntary termination
following both a change of control of the Company not approved by the Board of
Directors and a change in a majority of the Directors, Mr. Lepofsky would be
entitled to receive base salary continuance through February 2007, or for two
years, whichever period is shorter. In the event of a change of control of the
Company not approved by the Board of Directors, followed by a change in a
majority of the Directors on the Board, Mr. Lepofsky would have the right to
terminate his agreement and all remaining installments of his 200,000-share
stock option would become exercisable. In the event of the involuntary
termination of Mr. Lepofsky's employment not for cause, up to three
remaining 25,000-share installments of his 200,000-share stock option would
become exercisable.
Any compensation payable to Mr. Lepofsky contingent on a change of control
which qualifies as a parachute payment under Section 280G of the Internal
Revenue Code, as amended, shall be limited to the maximum amount that may be
paid to him without any part of all of such compensation being deemed an
excess parachute payment under that Section. Based on his current base
salary and his 1999 Agreement, Mr. Lepofsky could receive a maximum (as
described above) of $1,198,058 under this severance arrangement.
The Company has entered into employment agreements with each of its four
Senior Vice Presidents, Messrs. Anastasi, El-Hillow, Moody and Paynting
(providing for base salaries of $185,000 each), which are terminable at any
time. Base salaries may be increased from time to time at the discretion of
the Human Resources and Compensation Committee. The agreements further
provide for the participation of each of the Senior Vice Presidents in the
Company's performance-based bonus program. Each agreement requires the
Company to pay 12 months' severance pay following termination if the
executive officer has been employed for at least one year, and 24 months'
severance pay if the executive officer has been employed at least five
years. Severance pay is due if the executive is terminated by the Company
without cause or if the executive leaves for "good reason" as defined in the
agreements. The amount of severance pay is a combination of annual base salary
and average annual bonus for the prior three years. The executive is required
not to compete with the Company for at least two years following
termination.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During fiscal 1998, non-employee directors Dr. Marvin G. Schorr, Dr. Wickham
Skinner and Dr. Mark S. Wrighton served as members of the Human Resources
and Compensation Committee. None of the Human Resources and Compensation
Committee members or Named Executive Officers has any relationships that
must be disclosed under this caption.
PROPOSAL 3
APPOINTMENT OF AUDITORS
The Board of Directors has appointed PricewaterhouseCoopers LLP, independent
accountants, to audit the Company's consolidated financial statements for
the year ending December 31, 1999.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS
VOTE FOR THIS PROPOSAL.
SECURITY OWNERSHIP BY PRINCIPAL
STOCKHOLDERS AND MANAGEMENT
The following table sets forth certain information with respect to
beneficial ownership of shares of the Company's Common Stock as of March 17,
1999, (i) by each person (including any partnership, syndicate, or other
group) known to management to be the beneficial owner of more than five
percent of the outstanding shares of Common Stock, (ii) by each director of
the Company, (iii) by each of the Named Executive Officers and (iv) by the
executive officers and directors of the Company as a group. Except as
indicated in the footnotes to this table, the persons named in the table
have sole voting and investment power with respect to the shares shown as
beneficially owned by them.
<TABLE>
<CAPTION>
Shares Beneficially Owned
Beneficial Owner Number Percent of Class
- --------------------------------------------------------------------------------------------
<S> <C> <C>
Wellington Management Company 1,998,590 8.95%
75 State Street
Boston, MA 02109
Pioneering Management Corporation 1,237,000 5.54%
60 State Street
Boston, MA 02109-1820
Non-Employee Directors:
Arthur R. Buckland 4,000(1) **
Matthew O. Diggs, Jr. 10,000(1) **
Frank Gabron 60,300(1) **
Robert H. Hayes 2,000 **
Marvin G. Schorr 116,800(1) **
Wickham Skinner 82,000(1)(3) **
Mark S. Wrighton 14,400(1) **
Named Executive Officers:
Robert J. Lepofsky 402,788(1)(2) 1.80%
President and Chief Executive Officer
Michael El-Hillow 21,222(1) **
Senior Vice President and Chief Financial Officer
Robert E. Anastasi 66,956(1) **
Senior Vice President
Christopher Moody 20,000(1) **
Senior Vice President
Richard J. Paynting 30,356(1) **
Senior Vice President
All Directors and Executive Officers as a Group (12) 830,822(1) 3.70%
- --------------------------------------------------------------------------------------------
<FN>
<F**> Less than 1 percent of shares outstanding.
<F1> Includes shares of Common Stock owned by spouses and minor children of
the named individuals and shares of Common Stock held by custodians
for the benefit of such minor children. Depending on the facts of the
individual case, beneficial ownership as to such shares may be
disclaimed. Also includes shares that each named individual has the
right to acquire within 60 days from March 17, 1999, through the
exercise of options. The amounts listed include shares under such
options as follows: Mr. Buckland, 4,000; Mr. Diggs, 2,000; Mr.
Gabron, 4,000; Dr. Schorr, 4,000; Dr. Skinner, 4,000; Dr. Wrighton,
6,000, Mr. Anastasi, 32,500; Mr. El-Hillow, 20,000; Mr. Moody, 20,000;
Mr. Paynting, 30,000; and all directors and executive officers as a
group, 126,500.
<F2> Includes 40,000 shares held in a trust for his children, with respect
to which shares Mr. Lepofsky disclaims beneficial ownership.
<F3> Dr. Skinner has declined to be nominated for reelection to the Board
of Directors.
</FN>
</TABLE>
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the Company's directors and executive officers, and persons who own more
than 10 percent of the Common Stock of the Company, to file with the
Securities and Exchange Commission initial reports of ownership and reports
of changes in ownership of Common Stock of the Company. Executive officers,
directors and greater than 10 percent stockholders are required by SEC
regulations to furnish the Company with copies of all Section 16(a) reports
they file.
To the Company's knowledge, based solely on review of the copies of such
reports furnished to the Company and written representations that no other
reports were required during the year ended December 31, 1998, all Section
16(a) filing requirements applicable to its executive officers, directors and
greater than 10 percent beneficial owners were complied with.
ANNUAL REPORT
The Company's Annual Report on Form 10-K for the year ended December 31,
1998, includes financial statements and a report and opinion of
PricewaterhouseCoopers LLP. A representative of PricewaterhouseCoopers LLP
is expected to be present at the Meeting to make a statement, if he or she
so desires, and to respond to appropriate questions.
OTHER MATTERS
Management does not know of any matters to be presented to the Meeting other
than as described above. If any other matters properly come before the
Meeting, it is intended that the holders of the Proxies will vote the
Proxies upon those matters in accordance with their best judgment.
STOCKHOLDER PROPOSALS
The Company must receive any stockholder proposal intended to be included in
the Company's proxy materials for the 2000 Annual Meeting of Stockholders no
later than November 23, 1999. Any stockholder proposals intended to be
presented at such meeting in 2000 must be received by the Company not later
than 45 days prior to the meeting.
EXPENSES OF SOLICITATION
The cost of preparing, assembling, and mailing proxy materials will be borne
by the Company. In addition to solicitation by use of the mails, the
Company may request brokers and banks to forward copies of proxy materials
to persons for whom they hold Common Stock and to obtain authority for the
execution and delivery of Proxies. Several officers and employees of the
Company may request the return of the Proxies by telephone, facsimile and
personal interview.
Beverly L. Armell
Corporate Secretary
March 26, 1999
EXHIBIT A
PROPOSED ARTICLE FIFTH
OF THE
RESTATED CERTIFICATE OF INCORPORATION
FIFTH. Election of directors need not be by written ballot unless the By-
Laws of the Corporation shall so provide. The Board of Directors shall
consist of not less than three nor more than fifteen directors, the exact
number to be determined from time to time by resolution adopted by the
affirmative vote of a majority of the directors then in office. The
directors shall be divided into three classes, as nearly equal in number as
the then total number of directors constituting the entire Board permits,
with the term of office of one class expiring each year. The initial
directors of the first class shall be elected to hold office for a term
expiring at the next succeeding annual meeting, the initial directors of the
second class shall be elected to hold office for a term expiring at the
second succeeding annual meeting and the initial directors of the third
class shall be elected to hold office for a term expiring at the third
succeeding annual meeting. At each succeeding Annual Meeting of
Stockholders beginning in the first year following the election of such
staggered Board of Directors, successors to the class of directors whose
term expires at that meeting shall be elected for a three-year term. If the
number of directors is changed, any increase or decrease shall be
apportioned among the classes so as to maintain the number of directors in
each class as nearly equal as possible, and any additional directors of any
class elected to fill a vacancy resulting from an increase in the size of
such class shall hold office for a term that shall coincide with the
remaining term of that class, but in no event will a decrease in the number
of directors shorten the term of any incumbent director. Any vacancies in
the Board of Directors for any reason, and any directorships resulting from
any increase in the number of directors, may be filled by the Board of
Directors, acting by a majority of the directors then in office, although
less than a quorum, and any directors so chosen shall hold office until the
next election of the class for which such directors shall have been chosen.
At any special meeting of the stockholders called at least in part for the
purpose, any director or directors may, by the affirmative vote of the
holders of at least a majority of the stock entitled to vote for the
election of directors, be removed from office for cause. The provisions of
this subsection shall be the exclusive method for the removal of directors.
PROXY
HELIX TECHNOLOGY CORPORATION
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Robert J. Lepofsky and Beverly L. Armell
and each of them as Proxies of the undersigned, each with the power to
appoint a substititute, and hereby authorizes each of them to represent the
undersigned at the Annual Meeting of Stockholders to be held on April 29,
1999, or any adjournment thereof, as directed on the reverse side hereof.
IF NO DIRECTION IS GIVEN, THIS PROXY WILL BE VOTED FOR ALL NOMINEES AND FOR
PROPOSALS 2 AND 3. If any nominee for Director is unable or unwilling to
serve, the shares represented hereby will be voted for another person in
accordance with the judgment of the Proxies named herein.
In addition, in their discretion, the Proxies are hereby authorized to vote
upon such other business as may properly come before the meeting or any
adjournment thereof. This Proxy when properly executed will be voted in the
manner directed herein by the undersigned stockholder.
- ------------- -------------
|SEE REVERSE| (IMPORTANT-TO BE SIGNED AND |SEE REVERSE|
| SIDE | DATED ON REVERSE SIDE) | SIDE |
- ------------- -------------
DETACH HERE
- --------------------------------------------------------------------------
HELIX TECHNOLOGY CORPORATION
c/o EquiServe
P.O. Box 9040
Boston, MA 02266-9040
[X] Please mark
votes as in
this example
1. Election of Directors.
Nominees: A. Buckland, M. Diggs, Jr., F. Gabson,
R. Hayes, R. Lepofsky, M. Schorr, M. Wrighton
[ ] FOR [ ] WITHHELD
ALL FROM ALL
NOMINEES NOMINEES
[ ] ______________________________________
For all nominees except as noted above
FOR AGAINST ABSTAIN
2. Approval of an amendment to the Company's [ ] [ ] [ ]
Restated Certificate of Incorporation to divide
the Board of Directors of the Company into
three classes.
3. Ratification of PricewaterhouseCoopers LLP [ ] [ ] [ ]
as independent accountants.
MARK HERE IF YOU PLAN TO ATTEND THE MEETING [ ]
MARK HERE FOR ADDRESS CHANGE AND NOTE AT LEFT [ ]
Please sign as your name appears. Joint owners
should each sign personally. If acting as
attorney, executor, trustee, or in other
representative capacity, sign name and title.
Signature: ____________ Date: ______ Signature: ____________ Date: ______
