<PAGE> 1
SCHEDULE 14A
(RULE 14-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE
SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<TABLE>
<S> <C>
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only
(as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12
</TABLE>
SILICON VALLEY GROUP, INC.
(Name of Registrant as Specified in Its Charter)
(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:
N/A
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
N/A
- --------------------------------------------------------------------------------
(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):
N/A
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
N/A
- --------------------------------------------------------------------------------
(5) Total fee paid:
N/A
- --------------------------------------------------------------------------------
[ ] 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:
N/A
- --------------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
N/A
- --------------------------------------------------------------------------------
(3) Filing Party:
N/A
- --------------------------------------------------------------------------------
(4) Date Filed:
N/A
- --------------------------------------------------------------------------------
<PAGE> 2
SILICON VALLEY GROUP, INC.
------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD FEBRUARY 23, 2000
The Annual Meeting of Stockholders of SILICON VALLEY GROUP, INC., a
Delaware corporation (the "Company"), will be held at the Company's offices
located at 2240 Ringwood Avenue, San Jose, California 95131, on Wednesday,
February 23, 2000, at 3:00 p.m., Pacific Time, for the following purposes:
1. To elect six directors to serve for a term of one year and until their
successors are duly elected and qualified.
2. To consider, if properly brought before the meeting, a stockholder
proposal opposed by the Board of Directors, regarding the retention of
an investment banker to explore alternatives to enhance the value of the
Company.
3. To transact such other business as may properly come before the meeting
or any adjournment thereof.
The foregoing items of business are more fully described in the Proxy
Statement accompanying this Notice. Stockholders of record at the close of
business on December 28, 1999 will be entitled to vote at the meeting.
By Order of the Board of Directors
/s/ LARRY W. SONSINI
LARRY W. SONSINI
Secretary
San Jose, California
January 13, 2000
IMPORTANT: TO ASSURE THAT YOUR SHARES ARE REPRESENTED AT THE MEETING PLEASE
FILL IN, DATE, SIGN AND MAIL PROMPTLY THE ENCLOSED PROXY IN THE POSTAGE-PREPAID
ENVELOPE PROVIDED. IF YOU ATTEND THE MEETING, YOU MAY CHOOSE TO VOTE IN PERSON
EVEN THOUGH YOU HAVE SENT IN YOUR PROXY.
<PAGE> 3
SILICON VALLEY GROUP, INC.
101 METRO DRIVE, SUITE 400
SAN JOSE, CALIFORNIA 95110
------------------------
PROXY STATEMENT
FOR ANNUAL MEETING OF STOCKHOLDERS
GENERAL
The accompanying proxy is solicited by the Board of Directors of Silicon
Valley Group, Inc., a Delaware corporation (the "Company"), for use at the
Annual Meeting of Stockholders to be held on February 23, 2000, at 3:00 p.m.,
Pacific Time, or at any adjournment thereof. The meeting will be held at the
Company's offices located at 2240 Ringwood Avenue, San Jose, California 95131.
The Company's telephone number at that address is (408) 434-0500. At the
meeting, only stockholders of record at the close of business on December 28,
1999 will be entitled to vote. On that date, the Company's outstanding capital
stock consisted of 33,339,857 shares of Common Stock.
This Proxy Statement and form of proxy were first sent or given to
stockholders entitled to vote at the Annual Meeting on or about January 13,
2000, together with the Company's 1999 Annual Report to Stockholders.
VOTING AND SOLICITATION
Each stockholder is entitled to one vote for each share of Common Stock
held on all matters presented at the meeting. However, if any stockholder at the
meeting and prior to the voting gives notice of the stockholder's intention to
cumulate votes for the election of directors, then all stockholders may (i)
cumulate their votes and give any one candidate a number of votes equal to the
number of directors to be elected multiplied by the number of votes to which
their shares are entitled; or (ii) distribute their votes on the same principle
among as many candidates as they choose, up to a maximum of five candidates. The
cost of solicitation of proxies will be borne by the Company. The Company may
also reimburse brokerage houses and other custodians, nominees and fiduciaries
for their expenses incurred in forwarding solicitation materials to the
beneficial owners of shares held of record by such persons. It is contemplated
that proxies will be solicited principally through the mail, but directors,
officers and regular employees of the Company may, without additional
compensation, solicit proxies personally or by telephone, facsimile or special
letter.
REVOCABILITY OF PROXIES
Any proxy given pursuant to this solicitation may be revoked by the person
giving it at any time before its use by delivering to the Secretary of the
Company a written notice of revocation or a duly executed proxy bearing a later
date, or by attending the meeting and voting in person.
QUORUM; ABSTENTIONS; BROKER NON-VOTES
The required quorum for the transaction of business at the Annual Meeting
is a majority of the votes eligible to be cast by holders of shares of Common
Stock issued and outstanding on the Record Date. Shares that are voted "FOR,"
"AGAINST" or "WITHHELD FROM" a matter are treated as being present at the
meeting for purposes of establishing a quorum and are also treated as shares
entitled to vote at the Annual Meeting (the "Votes Cast") with respect to such
matter.
While there is no definitive statutory or case law authority in Delaware as
to the proper treatment of abstentions, the Company believes that abstentions
should be counted for purposes of determining both (i) the presence or absence
of a quorum for the transaction of business and (ii) the total number of Votes
Cast with respect to a proposal (other than the election of directors). In the
absence of controlling precedent to the contrary, the Company intends to treat
abstentions in this manner. Accordingly, abstentions will have the same effect
as a vote against the proposal.
<PAGE> 4
In a 1988 Delaware case, Berlin v. Emerald Partners, the Delaware Supreme
Court held that, while broker non-votes should be counted for purposes of
determining the presence or absence of a quorum for the transaction of business,
broker non-votes should not be counted for purposes of determining the number of
Votes Cast with respect to the particular proposal on which the broker has
expressly not voted. Accordingly, the Company intends to treat broker non-votes
in this manner. Thus, a broker non-vote will not affect the outcome of the
voting on a proposal.
PROPOSAL ONE:
ELECTION OF DIRECTORS
The persons named in the enclosed proxy will vote to elect as directors the
six nominees named below, unless the proxy is marked otherwise. All nominees are
currently directors of the Company. If a person other than a management nominee
is nominated, the proxy holders may choose to cumulate their votes and allocate
them among such nominees of management as the proxy holders shall determine in
their discretion in order to elect as many nominees of management as possible.
The six candidates receiving the highest number of votes will be elected. The
proxy holders have also advised that, in the event any nominee is unavailable
for election, which is not currently anticipated, they may vote in accordance
with their judgment for the election of a substitute nominee designated by the
Board.
All six directors will be elected for a one-year term expiring at the
Annual Meeting of Stockholders in 2001, subject to the election and
qualification of their successors, or to their earlier death, resignation or
removal.
The following table sets forth information concerning the nominees for
director.
<TABLE>
<CAPTION>
YEAR DIRECTOR
NAME BORN SINCE PRINCIPAL OCCUPATION
---- ---- -------- --------------------
<S> <C> <C> <C>
Michael J. Attardo.......... 1941 1999 Private investor; General manager of IBM's
Microelectronics Division from 1992 until his
retirement in 1999. He is a co-founder of
SEMATECH and was a member of the Semiconductor
Technology Council, a private industry
partnership with the U.S. Department of Defense.
Dr. Attardo has previously served on the Board
of Directors of the Semiconductor Industry
Association and Columbia University's School of
Engineering and Applied Science and currently
serves on the Board of Directors of FEI.
Papken S. Der 1938 1984 Chairman of the Board of Directors since 1991;
Torossian(1)................ Director since 1984; Chief Executive Officer
since February 1986; President from 1984 to
1991. Mr. Der Torossian had previously held a
variety of management and executive positions,
including 12 years in engineering management at
Hewlett-Packard Company.
William A. Hightower........ 1943 1994 Appointed President and Chief Operating Officer
in August 1997. Chairman of the Board of
Directors of Cadnet Corp. from 1996 to July
1997. Prior to joining Cadnet in 1996, Mr.
Hightower was President and Chief Executive
Officer of Telematics International, Inc.
William L. Martin(2)(3)..... 1923 1986 Private investor; Chief Executive Officer of
Plantronics, Inc. prior to his retirement in
1980; founder and Chief Executive Officer of
Zehntel, Inc. until 1978.
</TABLE>
2
<PAGE> 5
<TABLE>
<CAPTION>
YEAR DIRECTOR
NAME BORN SINCE PRINCIPAL OCCUPATION
---- ---- -------- --------------------
<S> <C> <C> <C>
Nam P. Suh(1)............... 1936 1994 Cross Professor of Manufacturing and Mechanical
Engineering, Head of the Department of
Mechanical Engineering and Director of the
Manufacturing Institute at the Massachusetts
Institute of Technology since 1991. Dr. Suh is
also the Founder and a member of the Board of
Trexel, Inc. Dr. Suh served as Assistant
Director of the National Science Foundation from
1984 to 1988.
Lawrence Tomlinson(2)(3).... 1940 1996 Vice President-Treasurer of Hewlett-Packard
Company since 1993; Director of Finance and
Administration for Hewlett-Packard's European
operations from 1989 to 1993. Mr. Tomlinson was
appointed to the board in December 1996.
</TABLE>
- ---------------
(1) Member of the Technical Advisory Committee.
(2) Member of the Compensation Committee.
(3) Member of the Audit Committee.
See also "Stock Ownership of Certain Beneficial Owners and Management." A
description of the business experience of the other executive officers of the
Company is contained in the Company's Annual Report on Form 10-K for the fiscal
year ended September 30, 1999 filed with the Securities and Exchange Commission.
There are no family relationships between any of the Company's directors or
executive officers.
The Board of Directors held seven meetings during fiscal 1999.
The standing committees of the Board include a Technical Advisory
Committee, a Compensation Committee and an Audit Committee. There is no
Nominating Committee.
The Technical Advisory Committee held two meetings in fiscal 1999. The
Technical Advisory Committee is responsible for monitoring and assessing the
state of the Company's technical operations.
The Compensation Committee held two meetings in fiscal 1999. The
Compensation Committee monitors the nature and levels of compensation paid by
the Company to its executive personnel and administers the Company's stock
option plans and employee stock purchase plan.
The Audit Committee held four meetings in fiscal 1999. The functions of the
Audit Committee include recommending appointment of the Company's independent
auditors to the Board of Directors and reviewing (i) the scope of the
independent auditors' annual audit and their compensation; (ii) the general
policies and procedures of the Company with respect to internal auditing,
accounting and financial controls; and (iii) any change in accounting
principles, significant audit adjustments proposed by the auditors and any
recommendations that the auditors may have with respect to policies and
procedures.
During fiscal 1999 (or such portion of fiscal 1999 during which a director
served as a member of the Board of Directors), no director attended fewer than
75 percent of the aggregate of (i) the total number of meetings of the Board of
Directors held and (ii) the total number of meetings held by all committees of
the Board of Directors on which such director served.
3
<PAGE> 6
PROPOSAL TWO:
STOCKHOLDER PROPOSAL REGARDING
THE RETENTION OF AN INVESTMENT BANK
TO EXPLORE ALTERNATIVES TO ENHANCE
THE VALUE OF THE COMPANY
The Company has been informed that Dr. Ronald G. Berry, a stockholder of
the Company, intends to present a proposal at the Annual Meeting. The proposal
and supporting statement, for which the Board of Directors and the Company
accept no responsibility, are set forth below. The Board of Directors opposes
this proposal for the reasons set forth below in the Board of Directors
Statement in Opposition.
Dr. Berry, whose address is 165 Mile Common, Easton, Connecticut 06612, and
who is a beneficial owner of 4,700 shares of common stock, submitted the
following proposal and supporting statement:
The Board of Directors will appoint (hire) an investment banker to explore
the best strategic alternatives for the shareholders which will include and not
be limited to; Possible Sale or Spin off of one or more divisions, i.e. Furnace
and Track, or Possible Sale of the entire company.
It is the opinion of the shareholder that the present strategic initiatives
and direction by the current management team is not in the best interest of the
stockholders. Given the poor performance of the Track and Furnace division which
have suffered severe losses, causing the overall profitability of Silicon Valley
to drop precipitously as well as the poor timing of the ramp-up of manufacturing
capability of the Lithography division when orders were declining demonstrates
that poor management decision occurred frequently and consistently. For the past
six years there has not been any dividends (cash or stock) declared or issued to
the shareholders, however the management team continued to receive additional
stock incentives and have not measured up to the task of increasing shareholder
value. From a competitive perspective Silicon Valley's Lithography Division
leads in technology, however the management team has failed to capitalize on its
competitive advantage by gaining significant market share and increasing sales.
It is evident that a new direction is desperately needed and must be established
by an independent advisory group who can provide an unbiased, informed opinion.
It is apparent that the Chairman of the Board, Papken Der Torossian has not
developed a turn-around game plan since he filed to sell 30,000 shares of stock
in November 1998 at a price substantially below book value. One can only draw
from this course of action that Mr. Der Torossian has reservations about his
ability to reverse a steadily declining business situation and has elected to
increase his personal financial net worth at the expense of the shareholders.
THE SHAREHOLDER RECOMMENDS THAT THE SHAREHOLDERS VOTE "FOR" ACCEPTANCE OF
HIRING AN INVESTMENT BANKER.
YOUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS VOTING AGAINST THIS
PROPOSAL.
BOARD OF DIRECTORS' STATEMENT IN OPPOSITION TO THE STOCKHOLDER PROPOSAL
The Board of Directors is aware of its fiduciary responsibilities to its
stockholders and strives to discharge these responsibilities in a manner that
the Board believes is in the best interests of the Company and its stockholders.
As a matter of course, the Board regularly reviews all of the operations of the
Company, including management reports evaluating the contribution of each
business division to the Company's performance. In addition, the Board of
Directors has always been, and continues to be, active in exploring strategic
alternatives to enhance stockholder value. The majority of the members of the
Board of Directors are independent directors, and all of the Directors have
diverse and broad business backgrounds and expertise on which to draw. To assist
the Board, the Company has maintained close relationships with several
nationally recognized investment banking firms and has, on occasion, obtained
their advice on various matters relating to increasing stockholder value.
4
<PAGE> 7
The Board believes that it can function most effectively when its strategic
planning is conducted confidentially. In this way, ideas and alternatives that
may enhance stockholder value can be, and are currently being, developed and
debated without the fear that they will lead to rumors or public debate that
could harmfully restrict the Board's choices, disrupt the public market for the
Company's common stock or damage the Company's relationship with its customers.
Additionally, the Board of Directors would like to address three points
raised in Dr. Berry's arguments supporting his proposal. First, the Board's
decision not to issue dividends to the stockholders is a strategic decision made
by most high-technology companies to retain earnings in order to finance
operations. The Board of Directors, in the exercise of its business judgment,
believes that investing earnings in the Company is the best method by which to
enhance stockholder value.
Second, the fact that management has received stock incentives does not
evidence the Board's abdication of its fiduciary responsibilities. Stock
incentives are issued to management so as to align their personal pecuniary
interests with their professional interests in maximizing stockholder value. As
fiduciaries of the Company and as stockholders themselves, they have a vested
interest in ensuring the success of the Company.
The final point raised by Dr. Berry concerned the sale of Company stock by
the Company's Chief Executive Officer and Chairman of the Board, Papken Der
Torossian. The sale of a relatively small number of shares does not in any way
indicate that he has failed to discharge his fiduciary duties. Mr. Der Torossian
has generally sold modest portions of his stock holdings on a regular basis for
purposes of diversifying his assets. He continues to be one of the Company's
largest individual stockholders. As such, Mr. Der Torossian has both a personal
and professional interest in maximizing stockholder value.
The Board of Directors notes that this proposal relates to a matter that is
solely the responsibility of the Board, as representatives of all the Company's
stockholders, to decide. As such, even if the stockholder proposal were to be
approved by the stockholders, the Board would still be obligated to carry out
its fiduciary duties to the stockholders and independently determine whether or
when any such action should be taken.
In conclusion, the Board of Directors does not believe that a vote for the
proposal would be in the best interest of the Company and its stockholders and
therefore recommends voting against the proposal.
Approval of the stockholder proposal requires the affirmative vote of a
majority of the votes attributable to all shares of Common Stock represented at
the meeting, in person or by proxy, and entitled to vote. In determining whether
the proposal has received the requisite number of affirmative votes, abstentions
will be counted and will have the same effect as a vote against the proposal;
broker non-votes will be disregarded and will have no effect on the outcome of
the vote.
ACCORDINGLY, THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "AGAINST" THIS
PROPOSAL, AND YOUR PROXY WILL BE SO VOTED IF THE PROPOSAL IS PRESENTED UNLESS
YOU SPECIFY OTHERWISE.
5
<PAGE> 8
STOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding the Company's
Common Stock beneficially owned as of November 26, 1999 by (i) each person who
is known by the Company to own beneficially more than 5% of the Company's Common
Stock, (ii) the Chief Executive Officer of the Company, (iii) each director of
the Company; (iv) each of the four most highly paid executive officers of the
Company earning more than $100,000 in fiscal 1999 (together with the Chief
Executive Officer, the "Named Executive Officers") and (v) all directors and
executive officers of the Company as a group.
<TABLE>
<CAPTION>
AMOUNT AND
NATURE OF BENEFICIAL
NAME OWNERSHIP PERCENT(1)
---- -------------------- ----------
<S> <C> <C>
EQSF Advisers, Inc.......................................... 4,973,809 14.92%
Merrill Lynch Asset Management.............................. 1,701,490 5.1 %
Papken S. Der Torossian..................................... 711,382(2) 2.13%
William A. Hightower........................................ 184,801(3) *
Michael J. Attardo.......................................... 15,000(4)
William L. Martin........................................... 38,950(5) *
Lawrence Tomlinson.......................................... 26,250(6) *
Nam P. Suh.................................................. 51,250(7) *
Kenneth M. Thompson......................................... 22,500(8) *
Russell G. Weinstock........................................ 122,739(9) *
Jeffrey M. Kowalski......................................... 114,085(10) *
Boris Lipkin................................................ 76,404(11)
All directors and executive officers as a group (11
persons).................................................. 1,465,643(12) 4.40%
</TABLE>
- ---------------
* Less than 1%
(1) Computed on the basis of 33,339,857 shares of Common Stock outstanding as
of November 26, 1999 plus, with respect to those persons holding warrant or
options to purchase Common Stock exercisable within 60 days of November 26,
1999, the number of shares of Common Stock that are issuable upon exercise
thereof.
(2) Includes 490,440 shares subject to options which are exercisable within 60
days after November 26, 1999, 6,000 shares held by Mr. Der Torossian's
daughter, as to which shares he disclaims beneficial ownership and 2,000
shares held by Bayshore Lyric Opera Company, a charitable organization of
which he is a member of the board of directors, as to which shares he
disclaims beneficial ownership.
(3) Includes 184,801 shares subject to options which are exercisable within 60
days of November 26, 1999.
(4) Includes 15,000 shares subject to options which are exercisable within 60
days of November 26, 1999.
(5) Includes 32,750 shares subject to options which are exercisable within 60
days after November 26, 1999.
(6) Includes 26,250 shares subject to options which are exercisable within 60
days after November 26, 1999.
(7) Includes 51,250 shares subject to options which are exercisable within 60
days after November 26, 1999.
(8) Includes 22,500 shares subject to options which are exercisable within 60
days after November 26, 1999.
(9) Includes 112,739 shares subject to options which are exercisable within 60
days after November 26, 1999.
(10) Includes 106,904 shares subject to options which are exercisable within 60
days after November 26, 1999.
(11) Includes 74,925 shares subject to options which are exercisable within 60
days after November 26, 1999.
(12) Includes 1,212,819 shares subject to options which are exercisable within
60 days after November 26, 1999.
6
<PAGE> 9
COMPLIANCE WITH SECTION 16(a) FILING REQUIREMENTS
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), requires the Company's directors, officers and beneficial
owners of more than 10% of the Company's Common Stock to file with the
Securities and Exchange Commission (the "SEC") initial reports of ownership and
reports of changes in ownership of Common Stock and other equity securities of
the Company. Based solely on its review of the copies of such reports received
by it or written representations from reporting persons, the Company believes
that during the fiscal year ended September 30, 1999, its officers, directors
and holders of more than 10% of the Company's Common Stock complied with all
Section 16(a) filing requirements. Michael J. Attardo filed his Form 3 late. A
Form 3 must be filed within 10 days of a director being appointed to the Board
of Directors and his was not filed within that 10 day period.
EXECUTIVE COMPENSATION
DIRECTOR COMPENSATION
Fees of $1,500 per Board meeting attended and a $5,000 quarterly retainer
are paid to directors who are not employees of the Company. Directors are also
reimbursed for reasonable expenses incurred in attending Board and committee
meetings. Members of the Board committees who are not part of the Company's
management receive $500 per committee meeting attended. During fiscal 1999,
directors Attardo, Martin, Suh, Tomlinson and Thompson, each of whom are not
employees of the Company, were each granted options to purchase shares of the
Company's common stock. Dr. Attardo was granted an option to purchase 10,000
shares of common stock pursuant to the 1996 Stock Plan at an exercise price of
$12.00 per share and an option to purchase 5,000 shares of common stock pursuant
to the 1987 Stock Plan at an exercise price of $11.56 per share. Mr. Martin was
granted an option to purchase 10,000 shares of common stock pursuant to the 1996
Stock Plan at an exercise price of $12.00 per share, an option to purchase 5,000
shares of common stock pursuant to the 1996 Stock Plan at an exercise price of
$13.625 per share and an option to purchase 5,000 shares of common stock
pursuant to the 1987 Stock Plan at an exercise price of $11.56 per share. Dr.
Suh and Mr. Tomlinson were each granted an option to purchase 10,000 shares of
common stock pursuant to the 1996 Stock Plan at an exercise price of $12.00 per
share. Dr. Suh and Mr. Tomlinson each also received an option to purchase 5,000
shares of common stock pursuant to the 1987 Stock Plan at an exercise price of
$11.56 and an option to purchase 5,000 shares of common stock pursuant to the
1987 Stock Plan at an exercise price of $12.81 per share and $11.75 per share,
respectively. Mr. Thompson was granted an option to purchase 10,000 shares of
common stock pursuant to the 1996 Stock Plan at an exercise price of $12.00 per
share, an option to purchase 5,000 shares of common stock pursuant to the 1996
Stock Plan at an exercise price of $14.00 per share, and an option to purchase
5,000 shares of common stock pursuant to the 1987 Stock Plan at an exercise
price of $11.56 per share. During fiscal 1999, Mr. Martin and Dr. Suh each
performed certain consulting services for the Company for which they received
fees of $13,500 and $61,900, respectively.
EXECUTIVE EMPLOYMENT AGREEMENTS
On June 7, 1999, the Company amended the employment agreement (the
"Employment Agreement") with Papken S. Der Torossian, Chairman of the Board and
Chief Executive Officer of the Company. The amended Employment Agreement
provides for a base salary of $600,000 per annum, or such higher rate as the
Company's Board of Directors may determine from time to time, along with such
performance bonus amounts and car allowances, if any, as the Board shall
authorize, in its discretion, from time to time, and provides that Mr. Der
Torossian shall be eligible to participate in the employee benefit plans and
executive compensation programs maintained by the Company. In the event of Mr.
Der Torossian's (i) termination of employment by the Company without cause; (ii)
termination by the Company within twelve (12) months of a change in control;
(iii) death or disability; or (iv) voluntary termination due to a material
reduction in salary or benefits or a material change in responsibilities or a
requirement to relocate, Mr. Der Torossian shall be paid an amount equal to 300%
of the base salary in effect on the date of such termination plus an amount
equal to 300% of the aggregate bonus and car allowance, if any, paid to Mr. Der
Torossian for the immediately preceding fiscal year or during the preceding
twelve month period, whichever is greater.
7
<PAGE> 10
On June 7, 1999, the Company amended the employment agreement (the
"Hightower Agreement") with William A. Hightower, President and Chief Operating
Officer of the Company. The amended Hightower Agreement provides for a base
salary of $375,000 per annum, or such higher rate as the Company's Board of
Directors may determine from time to time, along with a target performance bonus
as determined by the Board of Directors, and such other performance bonus
amounts and car allowances, if any, as the Board shall authorize, in its
discretion, from time to time. The Hightower Agreement provides that Mr.
Hightower shall be eligible to participate in the employee benefit plans and
executive compensation programs maintained by the Company. In the event of Mr.
Hightower's (i) termination of employment by the Company without cause; (ii)
termination by the Company within twelve (12) months of a change in control;
(iii) death or disability; or (iv) voluntary termination due to a material
reduction in salary or benefits or a material change in responsibilities or a
requirement to relocate, Mr. Hightower shall be paid an amount equal to 300% of
the base salary in effect on the date of such termination plus an amount equal
to 300% of the aggregate bonus and car allowance, if any, paid to Mr. Hightower
for the immediately preceding fiscal year or during the preceding twelve month
period, whichever is greater.
On June 7, 1999, the Company amended the employment agreement (the
"Weinstock Agreement") with Russell G. Weinstock, Vice President of Finance,
Chief Financial Officer and Assistant Secretary of the Company. The amended
Weinstock Agreement expires August 1, 2004 and provides for a base salary of
$300,000 per annum, or such higher rate as the Company's Board of Directors may
determine from time to time, along with such performance bonus amounts and car
allowances, if any, as the Board shall authorize, in its discretion, from time
to time (collectively, the "Base Compensation"), and provides that Mr. Weinstock
shall be eligible to participate in the employee benefit plans and executive
compensation programs maintained by the Company. In the event of Mr. Weinstock's
(i) termination of employment by the Company without cause or (ii) death or
disability, Mr. Weinstock shall be paid an amount equal to 200% of the Base
Compensation in effect on the date of such termination.
In addition, if Mr. Weinstock's employment by the Company is terminated
within one year after a Change of Control, all of Mr. Weinstock's outstanding
options will become vested and exercisable for two years following such
termination.
On June 7, 1999, the Company amended the employment agreement (the "Lipkin
Agreement") with Boris Lipkin, Vice President, Corporate of the Company. The
amended Lipkin Agreement expires August 1, 2004 and provides for a base salary
of $275,000 per annum, or such higher rate as the Company's Board of Directors
may determine from time to time, along with such performance bonus amounts and
car allowances, if any, as the Board shall authorize, in its discretion, from
time to time (collectively, the "Base Compensation"), and provides that Mr.
Lipkin shall be eligible to participate in the employee benefit plans and
executive compensation programs maintained by the Company. In the event of Mr.
Lipkin's (i) termination of employment by the Company without cause or (ii)
death or disability, Mr. Lipkin shall be paid an amount equal to 200% of the
Base Compensation in effect on the date of such termination.
In addition, if Mr. Lipkin's employment by the Company is terminated within
one year after a Change of Control, all of Mr. Lipkin's outstanding options will
become vested and exercisable for two years following such termination.
KOWALSKI LOAN
On August 31, 1999, the Company agreed to provide certain relocation
benefits to Jeffrey Kowalski, Vice President, Silicon Valley Group, Inc. and
President, Thermal Systems Division. Pursuant to the agreement, the Company will
reimburse Mr. Kowalski for temporary living and reasonable meal expenses in
connection with his move from Orange, California to Scotts Valley, California.
The Company also agreed to provide Mr. Kowalski with its standard relocation
expenses package and a loan of $250,000, which is forgiven ratably over a 60
month period. In the event Mr. Kowalski voluntarily terminates his employment
with the Company prior to the end of such 60 month period, Mr. Kowalski will be
required to repay the remaining unforgiven balance of the loan at an interest
rate of 7.2%.
8
<PAGE> 11
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The members of the Compensation Committee of the Board of Directors during
fiscal 1999 were Messrs. Tomlinson and Martin. All members are or were
non-employee directors. No member of the Compensation Committee has a
relationship that would constitute an interlocking relationship with executive
officers or directors of another entity.
COMPENSATION COMMITTEE REPORT
The Compensation Committee sets, reviews and administers the executive
compensation program of the Company and is comprised of the individuals listed
below, all of whom are non-employee directors of the Company. The role of the
Compensation Committee is to establish and approve salaries and other
compensation paid to the executive officers of the Company and to administer the
Company's stock option plans and employee stock purchase plan.
Compensation Philosophy. The Company's compensation philosophy is that cash
compensation should be directly linked to the short-term performance of the
Company and that longer-term incentives, such as stock options, should be
aligned with the objective of enhancing stockholder value over the long term.
The use of stock options clearly links the interests of the officers and
employees of the Company to the interests of the stockholders. In addition, the
Compensation Committee believes that the total compensation package must be
competitive with other companies in the industry to ensure that the Company can
continue to attract, retain and motivate key employees who are critical to the
long-term success of the Company.
Under federal tax laws, the Company is not allowed a federal income tax
deduction for compensation paid to certain executive officers to the extent that
compensation exceeds $1 million per officer in any fiscal year. No officer of
the Company has received compensation in excess of $1 million in fiscal 1999.
The Compensation Committee may consider adopting policies with respect to this
limitation on deductibility when appropriate.
Components of Executive Compensation. The principal cash components of
executive compensation are base salary and cash bonuses.
Base salary is set based on competitive factors and the historic salary
structure for various levels of responsibility within the Company. The
Compensation Committee annually conducts surveys of companies in the industry in
which the Company competes in order to determine whether the Company's executive
base salaries are in a competitive range. Generally, salaries are set at the
middle of the range. A significant portion of each executive's total
compensation is intended to be variable and to relate to and be contingent upon
Company performance.
Although executive officers are eligible for bonuses to be paid
semi-annually as recommended by the Chief Executive Officer and reviewed and
approved by the Compensation Committee, no performance bonuses were paid in
fiscal 1999. In establishing the overall level of executive bonuses, the
Compensation Committee considers data from surveys of the bonus amounts paid by
other companies in similar businesses. The amount of bonus for each executive
consists of an amount which is based upon the operating profit plan and cash
flow objectives of the Company approved by the entire Board of Directors at the
beginning of the fiscal year. An additional smaller portion of the bonus is
discretionary, based upon that executive meeting certain objectives set out for
that executive relating to his or her area of activity. The operating profit and
cash flow components of the bonus plan emphasize the Compensation Committee's
belief that, when the Company is successful, the executive's compensation should
be higher, but that, conversely, if the Company is not successful and is not
profitable, bonuses should be minimal. Depending upon the level of the
executive, the Company targets between 40% and 65% of the total compensation to
be variable and based upon the Company meeting 100% of its budgetary performance
plan. If operating profits fell below 70% of plan, no performance bonus would be
paid. Each individual executive officer's bonus is determined, based upon the
executive's base salary, profitability of the Company, attainment of cash flow
objectives and the executive's individual performance.
9
<PAGE> 12
The principal equity component of executive compensation is the stock
option program. Stock options are generally granted when an executive joins the
Company and periodically thereafter. Options vary with the responsibility level
of the executive. The initial option granted to the executive vests over a
period of four or five years. This provides a method of retention and motivation
for the senior level executives of the Company and also aligns senior
management's objectives with long-term stock price appreciation. This approach
is designed to encourage the creation of stockholder value over the long term
since no benefit is realized from the stock option grant unless the price of the
Common Stock rises over a number of years. In addition to the stock option
program, all eligible employees of the Company may participate in payroll
deduction employee stock purchase plans pursuant to which stock may be purchased
at 85% of the fair market value at the beginning or end of each one-year
offering period (up to a maximum of $25,000 worth for each calendar year in each
enrollment period or 10% of annual compensation under all such plans, whichever
is less).
Other elements of executive compensation are participation in a split-life
insurance program, a Company-wide life insurance program and a Company-wide long
term disability plan as well as Company-wide medical benefits and the ability to
defer compensation pursuant to a 401(k) plan and a nonqualified deferred
compensation plan. The Company makes matching contributions under both deferred
compensation plans based on the amount of the employee's compensation, up to a
maximum of 3% of compensation in the case of the 401(k) plan and up to a maximum
of 5% of compensation in the case of the deferred compensation plan.
The Compensation Committee believes that the compensation levels of the
Company's executive officers are competitive and in line with those of
comparable companies.
Compensation Committee of the Board of
Directors
William L. Martin, Chairman
Lawrence Tomlinson
EXECUTIVE COMPENSATION
The following table sets forth the compensation paid during the last three
fiscal years to the Company's Chief Executive Officer and to the four other
Named Executive Officers:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
ANNUAL COMPENSATION(1) ------------
-------------------------------------------- STOCK OPTION
FISCAL OTHER ANNUAL GRANTS ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS(2)($) COMPENSATION(3)($) (# OF SHS.) COMPENSATION($)
- --------------------------- ------ --------- ----------- ------------------ ------------ ---------------
<S> <C> <C> <C> <C> <C> <C>
Papken S. Der Torossian... 1999 $599,999 -- 22,318 225,709(4)(5) 105,074(6)(7)
Chairman of the Board 1998 599,999 7,500 24,601 120,724(4) 55,916(6)(7)
and Chief Executive 1997 586,153 525,722 16,441 78,199(5) 117,215(6)(7)
Officer
William A. Hightower...... 1999 396,922 -- 20,175 124,204(4)(5) 3,668(6)(7)
President and Chief 1998 380,095 2,344 27,322 100,000(5) 56,315(8)
Operating Officer 1997 -- -- -- -- --
Russell G. Weinstock...... 1999 304,614 -- 18,482 71,903(5) 13,213(6)(7)
Vice President of Finance 1998 299,998 3,750 27,922 40,241(5) 3,885(6)
and Chief Financial 1997 287,998 138,359 18,804 31,398(5) 28,831(6)(7)
Officer
Jeffrey M. Kowalski....... 1999 304,153 -- 18,482 71,903(5) 36,450(6)(7)
Vice President, Silicon 1998 299,998 3,750 18,000 40,241(5) 16,294(7)
Valley Group, Inc. and 1997 280,383 128,705 18,458 22,749(5) 22,076(7)
President, Thermal
Systems Division
Boris Lipkin.............. 1999 304,614 -- 18,650 71,903(5) 15,041(6)(7)
Corporate Vice President 1998 287,787 3,437 27,882 40,241(5) 7,248(6)(7)
1997 249,826 130,169 18,390 23,776(5) 7,159(6)(7)
</TABLE>
10
<PAGE> 13
- ---------------
(1) Excludes certain perquisites and other amounts, which, for any executive
officer, in the aggregate did not exceed the lesser of $50,000 or 10% of the
total annual salary and bonus for such executive officer.
(2) Includes bonus and profit sharing amounts earned during the fiscal year
indicated even if such amounts are paid in another fiscal year.
(3) Represents Company matching contributions to the Named Executive Officer's
401(k) plan account, automobile allowances and reimbursement of tax return
preparation fees.
(4) Represents options granted under the Company's 1987 Stock Option Plan.
(5) Represents options granted under the Company's 1996 Stock Plan.
(6) Represents income related to split-life insurance premiums and health
insurance premiums paid by the Company for the benefit of the named
executive officer, and in the case of Mr. Der Torossian's 1999, 1998, and
1997 compensation, additional income of $7,950, $7,200 and $6,540,
respectively, in whole life insurance.
(7) Includes approximate income related to matching contributions and to above
market interest paid on compensation deferred by the employee pursuant to
the Company's nonqualified deferred compensation plan.
(8) Represents $56,219 for relocation expenses.
OPTIONS GRANTED AND OPTIONS EXERCISED IN THE LAST FISCAL YEAR
The following tables set forth information regarding stock options granted
to and exercised by the Named Executive Officers during the last fiscal year, as
well as options held by such officers as of September 30, 1999:
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS POTENTIAL REALIZABLE VALUE OF
----------------------------------------------- ASSUMED ANNUAL RATES OF
% OF STOCK PRICE APPRECIATION
TOTAL EXERCISE (THROUGH EXPIRATION DATE)(1)
OPTIONS OPTIONS PRICE EXPIRATION --------------------------------
NAME GRANTED(2)(#) GRANTED ($/SH) DATE 5% PER YEAR($) 10% PER YEAR($)
---- ------------- ------- -------- ---------- -------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Papken S. Der Torossian.... 70,000 4.66% 11.125 12/22/08 489,752 1,241,127
155,709 10.36% 14.00 6/4/09 1,370,944 3,474,241
William A. Hightower....... 55,000 3.66% 11.125 12/22/08 384,805 975,171
69,204 4.61% 14.00 6/4/09 609,308 1,544,107
Russell G. Weinstock....... 20,000 1.33% 11.125 12/22/08 139,929 354,608
51,903 3.45% 14.00 6/4/09 456,981 1,158,080
Jeffrey M. Kowalski........ 20,000 1.33% 11.125 12/22/08 139,929 354,608
51,903 3.45% 14.00 6/4/09 456,981 1,158,080
Boris Lipkin............... 20,000 1.33% 11.125 12/22/08 139,929 354,608
51,903 3.45% 14.00 6/4/09 456,981 1,158,080
</TABLE>
- ---------------
(1) The Potential Realizable Values are calculated based on the fair market
value on the date of grant, which is equal to the exercise price of the
options granted in fiscal 1999, assuming that the stock appreciates in value
from the date of grant until the end of the option term at the annual rate
specified (5% and 10%). Potential Realizable Values are net of the option
exercise price. The assumed rates of appreciation are specified in rules of
the Securities and Exchange Commission, and do not represent the Company's
estimate or projection of its future stock price. Actual gains, if any,
resulting from stock option exercises and Common Stock holdings are
dependent on the future performance of the Common Stock, overall stock
market conditions, as well as the option holder's continued employment
through the exercise/ vesting period. There can be no assurance that the
amounts reflected in this table will be achieved.
(2) These options were granted under either the Company's 1996 Stock Plan or
1987 Stock Plan and have an exercise price equal to the fair market value of
the Company's Common Stock as of the date of grant. Each of the options
vests cumulatively over a period of four years from the date of grant.
11
<PAGE> 14
OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF
UNEXERCISED VALUE OF UNEXERCISED
OPTIONS AT FISCAL OPTIONS AT FISCAL
SHARES YEAR END(#) YEAR END(1)($)
ACQUIRED ON VALUE ------------------- ---------------------
NAME EXERCISE(#) REALIZED($) VESTED UNVESTED VESTED UNVESTED
---- ----------- ----------- ------- -------- -------- ---------
<S> <C> <C> <C> <C> <C> <C>
Papken S. Der Torossian.... 125,000 1,453,125 434,012 393,740 275,734 36,094
William A. Hightower....... 0 0 152,500 291,704 9,453 28,359
Russell G. Weinstock....... 16,000 214,000 94,763 127,779 26,000 10,313
Jeffrey M. Kowalski........ 4,000 53,500 88,938 128,455 6,406 10,313
Boris Lipkin............... 0 0 56,949 123,970 3,438 10,313
</TABLE>
- ---------------
(1) Represents the dollar amount that the closing price of the Company's Common
Stock as reported on the Nasdaq National Market on September 30, 1999
exceeds the exercise price of the options.
The following table summarizes stock options granted to the executive
officers of the Company that have been repriced during the past ten fiscal
years:
<TABLE>
<CAPTION>
NUMBER OF MARKET
SECURITIES PRICE OF EXERCISE LENGTH OF ORIGINAL
UNDERLYING STOCK AT PRICE AT NEW OPTION TERM
REPRICING OPTIONS TIME OF TIME OF EXERCISE REMAINING AT DATE
NAME DATE REPRICED(#) REPRICING($) REPRICING($) PRICE($) OF REPRICING
---- --------- ----------- ------------ ------------ -------- ------------------
<S> <C> <C> <C> <C> <C> <C>
Papken S. Der Torossian... 7/16/96 150,000 16.125 26.875 16.125 5 years, 275 days
Chairman of the Board 7/16/96 35,000 16.125 23.375 16.125 6 years, 273 days
and Chief Executive
Officer
Robert J. Richardson...... 7/16/96 30,000 16.125 26.875 16.125 5 years, 275 days
Former Vice President, 7/16/96 30,000 16.125 23.375 16.125 6 years, 273 days
New Business Development
and Corporate Marketing
Edward A. Dohring......... 7/16/96 30,000 16.125 23.375 16.125 6 years, 273 days
Former Vice President,
Silicon Valley Group, 7/16/96 20,000 16.125 26.875 16.125 5 years, 275 days
Inc.
and President, SVG
Lithography Systems,
Inc.
Russell G. Weinstock...... 7/16/96 30,000 16.125 23.375 16.125 6 years, 273 days
Vice President, Finance 7/16/96 20,000 16.125 26.875 16.125 5 years, 275 days
and Chief Financial 7/16/96 10,000 16.125 19.625 16.125 5 years, 108 days
Officer
Steven L. Jensen.......... 7/16/96 20,000 16.125 26.875 16.125 5 years, 275 days
Vice President, 7/16/96 20,000 16.125 23.375 16.125 6 years, 273 days
Worldwide Sales and
Service
Jeffrey M. Kowalski....... 7/16/96 30,000 16.125 22.625 16.125 5 years, 200 days
Vice President, Silicon 7/16/96 30,000 16.125 23.375 16.125 6 years, 273 days
Valley Group, Inc. and 7/16/96 10,000 16.125 35.438 16.125 6 years, 97 days
President, Thermal 7/16/96 10,000 16.125 26.875 16.125 5 years, 275 days
Systems Division
Boris Lipkin.............. 7/16/96 30,000 16.125 26.875 16.125 5 years, 275 days
Vice President, 7/16/96 20,000 16.125 23.375 16.125 6 years, 273 days
Corporate
7/16/96 10,000 16.125 35.438 16.125 6 years, 97 days
John W. Matthews.......... 7/16/96 5,000 16.125 26.875 16.125 5 years, 275 days
Vice President, 7/16/96 5,000 16.125 35.438 16.125 6 years, 97 days
Worldwide Service
Edward R. Ward............ 7/16/96 10,000 16.125 23.375 16.125 6 years, 273 days
Former Vice President, 7/16/96 5,000 16.125 35.438 16.125 6 years, 97 days
Corporate Technology 7/16/96 5,000 16.125 26.875 16.125 5 years, 275 days
</TABLE>
12
<PAGE> 15
COMPARISON OF TOTAL CUMULATIVE STOCKHOLDER RETURN
The following graph sets forth the Company's total cumulative stockholder
return as compared to the S&P 500 Index and the Russell 2000 Index for the past
five fiscal years. The total stockholder return assumes $100 invested at the
beginning of the period in Common Stock of the Company, the S&P 500, and the
Russell 2000 Index. Total return assumes reinvestment of dividends. Historical
stock price performance is not necessarily indicative of future stock price
performance.
COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN*
AMONG SILICON VALLEY GROUP, INC., THE S&P 500 INDEX
AND THE RUSSELL 2000 INDEX
<TABLE>
<CAPTION>
SILICON VALLEY
GROUP, INC. S&P 500 RUSSELL 2000
-------------- ------- ------------
<S> <C> <C> <C>
9/94 100 100 100
9/95 269 130 123
9/96 123 156 140
9/97 247 219 186
9/98 56 239 154
9/99 82 306 177
</TABLE>
* $100 INVESTED ON 8/30/94 IN STOCK OR INDEX --
INCLUDING REINVESTMENT OF DIVIDENDS.
FISCAL YEAR ENDING SEPTEMBER 30.
13
<PAGE> 16
CERTAIN TRANSACTIONS
AGREEMENTS WITH EXECUTIVE OFFICERS
See "Executive Employment Agreements" and "Kowalski Loan."
STOCKHOLDER PROPOSALS TO BE PRESENTED AT
THE NEXT ANNUAL MEETING
Proposals of stockholders intended to be presented at the next Annual
Meeting of Stockholders of the Company (i) must be received by the Company at
101 Metro Drive, Suite 400, San Jose, California 95110, no later than September
4, 2000 and (ii) must satisfy the conditions established by the Securities and
Exchange Commission for stockholder proposals to be included in the Company's
Proxy Statement for that meeting. If a stockholder intends to submit a proposal
at the Company's 2000 Annual Meeting of Stockholders which is not submitted in
time to be eligible for inclusion in the proxy statement relating to that
meeting, the stockholder must give notice to the Company not less than 60 days
nor more than 90 days prior to the meeting in accordance with the requirements
set forth in the Securities Exchange Act of 1934, as amended, and the Company's
bylaws. If such a stockholder fails to comply with the foregoing notice
provisions, the proposal may not be brought before the meeting.
INDEPENDENT AUDITORS
The Board has selected Deloitte & Touche LLP, independent auditors, to
audit the financial statements of the Company for the fiscal year ending
September 30, 2000. Representatives of Deloitte & Touche LLP are expected to be
present at the Annual Meeting and will have the opportunity to make a statement
if they desire to do so. Such representatives are also expected to be available
to respond to any questions.
OTHER BUSINESS
At this time management knows of no other matters that may be brought
before the meeting. However, if any other matters are properly brought before
the meeting, the proxy holders named in the accompanying proxy intend to vote
the proxies on such matters in accordance with their best judgment.
By Order of the Board of Directors
January 13, 2000
14
<PAGE> 17
LOGO
(LOGO) printed on recycled paper
<PAGE> 18
PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
SILICON VALLEY GROUP, INC.
Proxy for 2000 Annual Meeting of Stockholders
February 23, 2000
The undersigned stockholder of Silicon Valley Group, Inc. (the "Company")
hereby acknowledges receipt of the Notice of Annual Meeting of Stockholders and
Proxy Statement for the 2000 Annual Meeting of Stockholders of the Company to be
held on February 23, 2000 at 3:00 p.m., Pacific Time, at the Company's offices
located at 2240 Ringwood Avenue, San Jose, California (telephone (406)
434-0500), and hereby revokes all previous proxies and appoints Papken S. Der
Torossian and Russell G. Weinstock, or either of them, with full power of
substitution, Proxies and Attorneys-in-Fact, on behalf and in the name of the
undersigned, to vote and otherwise represent all of the shares registered in the
name of the undersigned at said Annual Meeting, or any adjournment thereof, with
the same effect as if the undersigned were present and voting such shares, on
the following matters and in the following manner:
(Continued and to be signed on reverse side)
- --------------------------------------------------------------------------------
FOLD AND DETACH HERE
<PAGE> 19
Please mark
your votes as [X]
indicated in
this example
1. Election of directors.
IF YOU WISH TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, STRIKE
A LINE THROUGH THAT NOMINEE'S NAME IN THE LIST BELOW:
FOR WITHHOLD
all nominees AUTHORITY
listed below to vote for all
(except as indicated). nominees listed below.
[ ] [ ]
Nominees: Michael J. Attardo Lawrence Tomlinson
Papken S. Der Torossian William A. Hightower
William L. Martin Nam P. Suh
2. Stockholder proposal regarding retention of investment banker.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
In their discretion, the Proxies are entitled to vote upon such other matters as
may properly come before the meeting or any adjournments thereof.
I plan to attend the meeting: [ ]
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED IN
ACCORDANCE WITH THE SPECIFICATIONS MADE. THE DIRECTORS
OF THE COMPANY RECOMMEND A VOTE FOR PROPOSAL 1 AND
AGAINST PROPOSAL 2. IF NO SPECIFICATION IS MADE, THE
SHARES REPRESENTED BY THIS PROXY WILL BE VOTED FOR
PROPOSAL 1, AGAINST PROPOSAL 2 AND FOR SUCH OTHER
MATTERS AS MAY PROPERLY COME BEFORE THE MEETING AS THE
PROXYHOLDERS DEEM ADVISABLE.
TO ENSURE YOUR REPRESENTATION AT THE ANNUAL MEETING,
PLEASE MARK, SIGN AND DATE THIS PROXY AND RETURN IT AS
PROMPTLY AS POSSIBLE.
Signature(s):
________________________________________________Dated _________________________
(This proxy should be marked, dated and signed by each stockholder exactly as
such stockholder's name appears hereon, and returned promptly in the enclosed
envelope. Persons signing in a fiduciary capacity should so indicate. A
corporation is requested to sign its name by its President or other authorized
officer, with the office held designated. If shares are held by joint tenants or
as community property, both holders should sign.)
- --------------------------------------------------------------------------------
FOLD AND DETACH HERE
