SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, For Use of the
[X] Definitive Proxy Statement Commission Only (as permitted
[ ] Definitive Additional Materials by Rule 14a-6(e)(2))
[ ] Soliciting Material Pursuant to
Rule 14a-11(c) or Rule 14a-12
AMTECH SYSTEMS, INC.
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(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)(1) and 0-11.
1) Title of each class of securities to which transaction applies:
- --------------------------------------------------------------------------------
2) Aggregate number of securities to which transaction applies:
- --------------------------------------------------------------------------------
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):
- --------------------------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
5) Total fee paid:
- --------------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials:
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the form or schedule and the date of its filing.
1) Amount previously paid:
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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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AMTECH SYSTEMS, INC.
131 SOUTH CLARK DRIVE
TEMPE, ARIZONA 85281
----------------------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON FEBRUARY 25, 2000
----------------------------------------
To Our Shareholders:
The 2000 Annual Meeting of Shareholders of AMTECH SYSTEMS, INC., an Arizona
corporation (the "Company"), will be held at the Hilton Phoenix Airport Hotel,
2435 South 47th Street, Phoenix, Arizona, on February 25, 2000, at 10:00 a.m.,
Mountain Standard time, for the following purposes:
1. To elect five (5) directors to serve for one year terms; and
2. To transact such other business as may properly come before the
meeting or any postponement(s) or adjournment(s) thereof. Management
is presently aware of no other business to come before the meeting.
The Board of Directors has fixed the close of business on January 21, 2000,
as the record date (the "Record Date") for the determination of shareholders
entitled to notice of and to vote at the meeting or any postponement or
adjournment thereof. Shares of Common Stock can be voted at the meeting only if
the holder is present at the meeting in person or by valid proxy. A copy of the
Company's 1999 Annual Report, which includes audited financial statements, was
mailed with this Notice and Proxy Statement to all shareholders of record on the
Record Date.
Management of the Company cordially invites you to attend the Annual
Meeting. Your attention is directed to the attached Proxy Statement for a
discussion of the foregoing proposals and the reasons why the Board of Directors
encourages you to vote for approval of such proposals.
By Order of the Board of Directors
/s/ Robert T. Hass
Robert T. Hass, Secretary
Tempe, Arizona
February 4, 2000
IMPORTANT: IT IS IMPORTANT THAT YOUR SHAREHOLDINGS BE REPRESENTED AT THIS
MEETING. PLEASE COMPLETE, DATE, SIGN AND PROMPTLY MAIL THE ENCLOSED PROXY CARD
IN THE ACCOMPANYING ENVELOPE, WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED
STATES.
<PAGE>
AMTECH SYSTEMS, INC.
131 SOUTH CLARK DRIVE
TEMPE, ARIZONA 85281
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PROXY STATEMENT
---------------
This Proxy Statement is being furnished to shareholders of AMTECH SYSTEMS,
INC., an Arizona corporation (the "Company"), in connection with the
solicitation of proxies by the Board of Directors for use at the 2000 Annual
Meeting of Shareholders of the Company to be held on February 25, 2000, at 10:00
a.m., Mountain Standard Time, and any adjournment or postponement thereof (the
"Annual Meeting"). A copy of the Notice of the Meeting accompanies this Proxy
Statement. This Proxy Statement and the accompanying form of Proxy Card are
being mailed on or about January 29, 2000.
SOLICITATION AND VOTING OF PROXIES
Only shareholders of record at the close of business on January 21, 2000
(the "Record Date") are entitled to notice of and to vote at the Annual Meeting
or any adjournment or postponement thereof. On the Record Date, 2,108,679 shares
of Common Stock, $.01 par value (the "Common Stock"), were issued and
outstanding. Each holder of Common Stock is entitled to one vote, exercisable in
person or by proxy, for each share of the Company's Common Stock held of record
on the Record Date.
At the Annual Meeting, five (5) directors are to be elected to serve for a
term of one year or until they're respective successors are elected and
qualified. Each shareholder present at the Annual Meeting, either in person or
by proxy, will have an aggregate number of votes in the election of directors
equal to five (the number of persons nominated for election as directors)
multiplied by the number of shares of Common Stock of the Company held by each
such shareholder on the Record Date. The resulting aggregate number of votes may
be cast by the shareholder for the election of any single nominee, or the
shareholder may distribute such votes among any number or all of the nominees.
The five nominees receiving the highest number of votes will be elected to the
Board of Directors.
All valid proxies received before the Annual Meeting and not revoked will
be exercised. All shares represented by proxy will be voted, and where a
shareholder specifies by means of his or her proxy a choice with respect to any
matter to be acted upon, the shares will be voted in accordance with the
specifications so made. If the signed proxy is returned without instructions and
authority to vote is not specifically withheld, the persons named in the proxy
solicited by the Board of Directors intend to vote for the election of the
nominees for director listed below. Abstentions and broker non-votes will be
included in the determination of the number of shares represented for a quorum.
Proxies may be revoked at any time prior to the time they are voted by: (a)
delivering to the Secretary of the Company a written instrument of revocation
bearing a date later than the date of the proxy; or (b) duly executing and
delivering to the Secretary a subsequent proxy relating to the same shares; or
(c) attending the meeting and voting in person, provided that the shareholder
notifies the Secretary of the meeting of his or her intention to vote in person
at any time prior to the voting of the proxy. In order to vote their shares in
person at the meeting, shareholders that own their shares in "street name" must
obtain a special proxy card from their broker.
The cost of soliciting proxies, including the cost of preparing and mailing
the Notice and Proxy Statement, will be paid by the Company. Solicitation will
be primarily by mailing this Proxy Statement to all shareholders entitled to
vote at the meeting. Proxies may be solicited by officers and directors of the
Company personally or by telephone or facsimile, without additional
compensation. The Company may reimburse brokers, banks and others holding shares
in their names for others for the cost of forwarding proxy materials and
obtaining proxies from beneficial owners.
<PAGE>
The Board of Directors does not know of any matters other than the election
of directors that are expected to be presented for consideration at the Annual
Meeting. However, if other matters properly come before the meeting, the persons
named in the accompanying proxy intend to vote thereon in accordance with their
judgment.
ELECTION OF DIRECTORS
GENERAL INFORMATION
The present terms of the Company's current directors, Jong S. Whang, Robert
T. Hass, Donald F. Johnston, Alvin Katz and Bruce R. Thaw, expire upon the
election and qualification of their successors at the Company's 2000 Annual
Meeting of Shareholders. The Board of Directors has nominated each of the
current directors as nominees for election as directors in the election to be
held at the Annual Meeting.
The Board of Directors intends to vote its proxies for the election of its
nominees, for a term to expire at the next Annual Meeting. In that regard, the
Board of Directors solicits authority to cumulate such votes.
If any nominee should become unavailable for any reason, which the Board of
Directors does not anticipate, the proxy will be voted for any substitute
nominee or nominees who may be selected by the Board of Directors prior to or at
the Annual Meeting, or, if no substitute is selected by the Board of Directors
prior to or at the Annual Meeting, for a motion to reduce the present membership
of the Board to the number of nominees available and to create an additional
vacancy to be filled by the Board of Directors. The information concerning the
nominees and their share holdings in the Company has been furnished by them to
the Company.
INFORMATION CONCERNING DIRECTORS, NOMINEES AND OFFICERS
The following table sets forth information regarding the officers,
directors and director nominees of the Company, including biographical data for
at least the last five years.
NAME AGE POSITION WITH THE COMPANY
---- --- -------------------------
Jong S. Whang 54 President, Chief Executive Officer and Director
Vice President-Finance, Chief Financial Officer,
Robert T. Hass 49 Treasurer, Secretary and Director
Donald F. Johnston 74 Director
Alvin Katz 70 Director
Bruce R. Thaw 47 Director
JONG S. WHANG has been President, Chief Executive Officer and a Director of
the Company since its inception and was one of its founders. Mr. Whang's
responsibilities as President include the sales effort for the Company's
semiconductor equipment business and development of new products and business
opportunities in that industry. He has twenty-six years of experience in the
semiconductor industry, including time spent in both processing and
manufacturing of equipment components and systems. From 1973 until 1979, he was
employed by Siltronics, Inc., initially as a technician working with chemical
vapor deposition (CVD) and later as manager of the quartz fabrication plant with
responsibility of providing technical marketing support. From 1979 until 1981,
he was employed by U.S. Quartz, Inc. as manufacturing manager. In 1981 he left
U.S. Quartz to found the Company.
ROBERT T. HASS has been Vice President-Finance, Chief Financial Officer,
Treasurer and Secretary of the Company since June 3, 1992. Mr. Hass has served
as a Director of the Company since February 29, 1996. From 1991 until May 1992,
he operated a financial consulting practice under the name of Hass Financial
Consulting Services, a sole proprietorship. From 1985 to 1991, Mr. Hass served
as Director of Accounting Services and then Controller for Lifeshares Group,
Inc., a holding company which owned and operated real estate development and
insurance subsidiaries, and from 1988 to 1991 served as Controller and Chief
Accounting Officer of some of those subsidiaries. From 1984 to 1985, he served
as Vice President-Finance and Treasurer of The Victorio Company, a privately
owned holding company which owned and operated agriculture, chemical, commercial
real estate brokerage, marketing research and commodities futures brokerage
2
<PAGE>
businesses. From 1977 to 1984, he was employed in various capacities including
Vice President, Chief Financial Officer and Treasurer by Altamil Corporation,
then a public company, which manufactures truck equipment, wire-bound
containers, and precision aluminum forgings. From 1972 to 1977, he was employed
as an auditor with Ernst & Ernst, now known as Ernst & Young. He is a Certified
Public Accountant.
DONALD F. JOHNSTON has been a Director of the Company since April 9, 1994,
and also served as a Director from March 1983 to December 1992. He is not
otherwise employed by the Company. From 1985 to March 1993, he served as
President and Chief Executive Officer of JAI, Inc., a management-consulting
firm. From 1985 to March 1993, when he retired, he acted as marketing and
management consultant to companies in the electronics industry. From November
1983 until October 1985, he was President of Process Control, Inc. of Tempe,
Arizona. He has held senior management positions with Montgomery Ward & Co. and
the Hotpoint Division of the General Electric Company. He has also served as the
Vice-President of B.F. Goodrich, Vice-President of Marketing of the Philco Ford
Division of the Ford Motor Company and Executive Vice-President of CTV. Mr.
Johnston also served as President and Chief Executive Officer of Mirco
Electronics, Amstar Electronics and Hera Investment Co.
ALVIN KATZ has been a Director of the Company since May 1, 1995. Since
1981, he has been an adjunct professor of business management at the Florida
Atlantic University in Boca Raton, Florida. From 1991 until the company was sold
in September 1992, he was Chief Executive Officer of Odessa Engineering Corp., a
company engaged in the manufacture of pollution monitoring equipment. From 1957
to 1976, Mr. Katz was employed by United Parcel Service holding various
managerial positions, including District Manager and Corporate Manager of
Operations Planning, Research and Development. He is also a Director of Blimpie
International, a fast food franchiser, Nastech Pharmaceutical Company, Inc., a
company engaged in research, development and marketing of nasally delivered
pharmaceuticals, and President of BMAC, a biomedical automation company, all of
which are publicly held corporations.
BRUCE R. THAW has been a Director of the Company since May 1, 1995. Mr.
Thaw has been a practicing attorney since 1978. Since 1995, Mr. Thaw has been a
self-employed attorney, and from 1984 to 1995, he was a partner in the law firm
of Abrams & Thaw. Mr. Thaw is also a Director of Information Resource
Engineering, Inc., a publicly traded company that designs, manufactures and
markets computer network security systems and products, and Nastech
Pharmaceutical Company, Inc., a publicly traded company engaged in the research,
marketing and development of pharmaceutical products. Mr. Thaw does not render
legal services to the Company.
BOARD AND COMMITTEE MEETINGS
During the 1999 fiscal year, there were four (4) meetings of the Board of
Directors. No director attended less than 75% of the Board meetings while
serving as such director or less than 75% of all committee meetings on which he
served as a committee member.
The Audit Committee, the Compensation and Option Committee and the Finance
Committee are the standing committees of the Board of Directors. These
committees are comprised as follows:
COMPENSATION
AUDIT AND OPTION FINANCE
----- ---------- -------
B. R. Thaw D.F. Johnston A. Katz
D.F. Johnston A. Katz B. R. Thaw
The Audit Committee held two (2) meetings during the 1999 fiscal year. The
Audit Committee is responsible for maintaining communication between the Board,
the Company's independent auditors and members of financial management with
respect to the Company's financial affairs in general, including financial
statements and audits, the adequacy and effectiveness of the Company's internal
accounting controls and systems and the retention and termination of the
independent auditors.
3
<PAGE>
The Compensation and Option Committee held two (2) meetings during the 1999
fiscal year. The Compensation and Option Committee makes recommendations
concerning officer compensation, employee benefit programs and retirement plans.
The Finance Committee held two (2) meetings during the 1999 fiscal year.
The Finance Committee is responsible for communication between the Board, the
Company's lender or prospective lender(s) and other financial sources and
members of financial management.
All current committee members are expected to be nominated for re-election
at a Board meeting to be held following the Annual Meeting of Shareholders.
COMPENSATION OF DIRECTORS
Directors who are full-time employees of the Company receive no additional
compensation for serving as directors. Non-employee directors receive fees of
$700 per Board meeting attended and $250 per committee meeting attended. In
addition, under the Company's Non-Employee Directors Stock Option Plan, each
outside director receives an annual grant of options to purchase 3,000 shares of
Common Stock. The exercise price of the options is the fair market value of
Common Stock on the date of grant and each option has a term of ten years and
becomes exercisable in three equal installments commencing on the first
anniversary of the date of grant and continuing for the two successive
anniversaries thereafter. In the event of disability (as defined in the plan) or
death of an outside director, all options remain exercisable for a period of
twelve months following the date such person ceased to be a director, but only
to the extent such option was exercisable on the date the director ceased to be
a director.
During fiscal year 1999, Mr. Johnston received a fee of $1,500 for
consulting services provided to the Company in connection with a review of its
Carlisle Pennsylvania operation.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation and Option Committee is composed of Messrs. Johnston and
Katz, neither of whom is an officer or employee of the Company.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information concerning the
beneficial ownership of the Company's Common Stock as of January 21, 2000, by
(i) each director and each nominee for director of the Company, (ii) certain of
the Company's executive officers (the "Named Executive Officers"), and (iii) all
executive officers and directors as a group. There are no persons known to the
Company who beneficially own five percent (5%) or more of the Company's
outstanding Common Stock. This information was determined in accordance with
Rule 13d-3 under the Securities Exchange Act of 1934, as amended, and is based
upon the information furnished by the persons listed below. Except as otherwise
indicated, each shareholder listed possesses sole voting and investment power
with respect to the shares indicated as being beneficially owned.
NUMBER OF SHARES PERCENT OF
NAME AND ADDRESS (1)(2) BENEFICIALLY HELD (3) OWNERSHIP (3)
----------------------- --------------------- -------------
Jong S. Whang 114,463(4) 5.3%
Robert T. Hass 8,250(5) *
Donald F. Johnston 10,625(6) *
Alvin Katz 87,500(6) 4.1%
Bruce R. Thaw 21,500(6) 1.0%
Directors and Executive Officers of
the Company as a group (5 persons) 242,338(7) 11.5%
- ----------
* Less than 1%.
4
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(1) The address for each person listed in this table is c/o Amtech Systems,
Inc., 131 South Clark Drive, Tempe, Arizona 85281.
(2) Mr. Whang is the Company's President, CEO and a director. Mr. Hass is the
Vice President-Finance, Chief Financial Officer, Treasurer, Secretary and a
director. Messrs. Johnston, Katz and Thaw are presently directors.
(3) The shares and percentages shown include the shares of Common Stock
actually owned as of January 17, 2000, and the shares of Common Stock with
respect to which the person had the right to acquire beneficial ownership
within 60 days of such date pursuant to options or warrants. All shares of
Common Stock that the identified person had the right to acquire within 60
days of January 21, 2000 upon the exercise of options or warrants are
deemed to be outstanding when computing the percentage of the securities
owned by such person, but are not deemed to be outstanding when computing
the percentage of the securities owned by any other person.
(4) Includes (i) 9,488 shares held jointly with Mr. Whang's spouse and (ii)
62,775 shares issuable upon the exercise of presently exercisable options;
62,275 shares issuable at an exercise price of $1.126 per share; the
balance of 500 shares issuable at an exercise price of $1.50 per share.
(5) Includes 1,750 shares issuable upon exercise of presently exercisable
options with an exercise price of $1.126 per share.
(6) Includes 10,000 shares issuable upon exercise of presently exercisable
options; 9000 shares issuable at an exercise price of $1.126 per share and
the balance of 1000 shares issuable at an exercise price of $1.50 per
share.
(7) Includes 94,525 shares issuable upon exercise of presently exercisable
options; 91,025 shares issuable at an exercise price of $1.126 per share
and the balance of 3,500 shares issuable at an exercise price of $1.50 per
share.
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the Company's directors and executive officers, as well as persons beneficially
owning more than 10% of the Company's outstanding Common Stock, to file certain
reports of ownership with the Securities and Exchange Commission (the "SEC")
within specified time periods. Such officers, directors and shareholders are
also required by SEC rules to furnish the Company with copies of all Section
16(a) forms they file.
Based solely on its review of such forms received by it, or written
representations from certain reporting persons, the Company believes that
between October 1, 1998 and September 30, 1999 all Section 16(a) filing
requirements applicable to its officers, directors and 10% shareholders were
complied with, except that reports were not timely filed with respect to the
automatic option grant to directors arising under the Company's Non-employee
Directors Stock Option Plan and the options grants reflected on the next page.
5
<PAGE>
EXECUTIVE COMPENSATION
The following table sets forth annual and long-term compensation for
services in all capacities to the Company for the fiscal years ended September
30, 1999, 1998 and 1997 of the Company's Chief Executive Officer, and the other
most highly compensated executive officer of the Company who received annual
compensation exceeding $100,000 during such periods (the "Named Executive
Officers").
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
-------------------------------------- ------------
NAME AND FISCAL OTHER ANNUAL RESTRICTED ALL OTHER
PRINCIPAL POSITION YEAR SALARY BONUS (1) COMPENSATION (2) STOCK AWARDS COMPENSATION (3)
------------------ ---- ------ --------- ---------------- ------------ ----------------
<S> <C> <C> <C> <C> <C> <C>
Jong S. Whang 1999 $130,200 $ 12,292 -- -- $ 0
President and Chief 1998 167,147 0 -- -- 3,037
Executive Officer 1997 139,615 33,994(1) -- -- 3,693
Robert T. Hass 1999 $ 85,500 $ 0 -- -- $ 0
Vice President- 1998 96,105 7,245 -- -- 2,123
Finance 1997 89,838 10,771 -- -- 1,935
</TABLE>
- ----------
(1) On February 24, 1989, the Board of Directors approved an incentive
compensation plan for Mr. Whang, which provides for an annual cash bonus
equal to 2% of the annual profits of the Company before taxes and
extraordinary items; plus 2% of the amount by which the revenues of the
Company' s semiconductor equipment business in each year exceed such
revenues for the previous year. It is a condition to the payment of any
bonus that Mr. Whang have been continually employed by the Company and that
the Company have realized a profit after the payment of the bonus. On
February 28, 1997, Mr. Whang entered into an employment contract with the
Company, which contract incorporated Mr. Whang's incentive compensation
plan and added additional bonus eligibility criteria. See "Employment
Contracts with Executive Officers," below. Effective October 4, 1998, Mr.
Whang voluntarily initiated a 20% reduction in his salary to $130,200.
(2) Other compensation to Messrs. Whang and Hass, consisting of the use of a
Company car, vacation pay and other perquisites, did not exceed $50,000 or
10% of base compensation during any fiscal year covered by this table.
(3) Amounts for Mr. Whang include annual insurance premiums paid on whole-life
insurance for the benefit of Mr. Whang's spouse of $225 in fiscal 1997 and
Company matching contributions in the Amtech Systems, Inc. 401(k) Plan (the
"Amtech 401(k) Plan") for Mr. Whang of $0, $3,037 and $3,438 in 1999, 1998
and 1997, respectively. Amounts for Mr. Hass represent Company matching
contributions in the Amtech 401(k) Plan. Effective October 4, 1998, Mr.
Hass' annual salary was reduced to $85,500.
OPTION GRANTS
The table shown below contains information on grants of stock options
during the 1999 fiscal year to the Named Executive Officers.
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OPTIONS GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS POTENTIAL REALIZABLE VALUE
-------------------------------------- AT ASSUMED ANNUAL RATES OF
SECURITIES % OF TOTAL STOCK STOCK PRICE APPRECIATION
UNDERLYING OPTIONS PRICE ON FOR
OPTIONS GRANTED TO EXERCISE DATE OF OPTION TERM (4)
GRANTED EMPLOYEES PRICE GRANT EXPIRATION -------------------------
NAME (#) IN FISCAL 1999 ($/SHARE) ($/SHARE) DATE 0% 5% 10%
---- --- -------------- --------- --------- ---- ----- ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Jong S. Whang 2,500(1) 8% $1.50(3) $1.50 10/01/08 -0- $2,358 $5,977
Robert T. Hass 5,000(2) 15% $1.13(3) $1.13 2/26/09 -0- $3,541 $8,973
</TABLE>
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(1) All options were granted to Mr. Whang on February 26, 1999 under the
applicable Stock Option Plan. The options granted become exercisable as
follows: 20% on February 26, 2000, and an additional 20% on each one year
anniversary thereafter. To the extent not already exercisable, the options
become immediately exercisable upon: (i) the dissolution or liquidation of
the Company or a reorganization, merger or consolidation in which all or
substantially all prior shareholders do not continue to own more than 60%
of the outstanding shares of common stock and voting securities; (ii) the
sale of all or substantially all of the assets of the Company; or (iii) the
occurrence of a change in control of the Company.
(2) All options were granted to Mr. Hass on October 1, 1998 under the
applicable Stock Option Plan. The options granted become exercisable as
follows: 20% on October 1, 1999 and an additional 20% on each one year
anniversary thereafter.
(3) The exercise price was set at 100% of closing price of the Company's Common
Stock on grant day, (February 26, 1999 for options granted to Mr. Whang and
October 1, 1998 for options granted to Mr. Hass), as reported on the NASDAQ
SmallCap Market. The options granted to Mr. Hass were re-priced on October
14, 1998, along with all other outstanding stock options to the market
price on that date, ($1.126).
(4) Reflects the value of the stock option on the date of grant assuming (i)
for the 0% column, no appreciation in the Company's stock price from the
date of grant over the term of the option, (ii) for the 5% column, a five
percent annual rate of appreciation in the Company's stock price over the
term of the option, and (iii) for the 10% column, a ten percent annual rate
of appreciation in the Company's stock price over the term of the option,
in each case without any discounting to present value. The actual gains, if
any, on stock option exercises are dependent upon the future performance of
the Company's Common Stock. Accordingly, the amounts reflected in this
table may not necessarily be indicative of the actual results obtained.
OPTION EXERCISES
There were no exercises of stock options during fiscal year 1999 by the
Named Executive Officers.
BOARD REPORT ON REPRICING
The Board believes that the Company has taken constructive steps to improve
its performance and believes that hiring and retaining key employees is central
to implementing these measures. In furtherance of these goals, in October 1998,
the Board reduced the per share exercise price of options previously granted to
Jong S. Whang and Robert T. Hass. The Board concluded that the results achieved
by these executives were the basis for the repricing of options granted to them.
No other provisions of these options were altered.
In accordance with the rules of the Securities and Exchange Commission
("SEC"), this Option Repricing Report of the Board of Directors is not intended
to be "filed" or "soliciting material" or subject to Regulations 14A or 14C or
Section 18 of the Securities Exchange Act 1934, as amended, or incorporated into
any other filing by the Company with the SEC.
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AMENDMENT OR RE-PRICING OF OPTIONS
The table below setsforth information for all executive officers with
respect to re-pricing of options for the 10 years preceding September 30, 1999.
TEN YEAR OPTION/SAR REPRICINGS (1)
<TABLE>
<CAPTION>
LENGTH OF
NUMBER OF ORIGINAL
SECURITIES MARKET PRICE EXERCISE PRICE OPTION TERM
UNDERLYING OF STOCK AT OF STOCK AT REMAINING AT
OPTIONS TIME OF TIME OF NEW DATE OF
REPRICED OR REPRICING OR REPRICING OR EXERCISE REPRICING OR
NAME DATE AMENDED AMENDMENT AMENDMENT PRICE AMENDMENT
- ---- ---- ------- --------- --------- ----- ---------
<S> <C> <C> <C> <C> <C> <C>
Jong S. Whang Oct. 14, 1998 103,792 $1.126 $5.00 $1.126 8 3/8 years
President and CEO
Robert T. Hass Oct. 14, 1998 1,250 $1.126 $5.00 $1.126 8 3/8 years
VP-Finance Oct. 14, 1998 5,000 $1.126 $1.50 $1.126 10 years
</TABLE>
- ----------
(1) The number of shares and the prices per share have all been restated to
give effect for the two-for-one reverse split that took effect on March 15,
1999.
EMPLOYMENT CONTRACTS WITH EXECUTIVE OFFICERS
On February 28, 1997, the Company entered into a five (5) year employment
agreement with its President, Jong S. Whang. Under the terms of the agreement,
Mr. Whang is entitled to an annual salary of $170,900 on October 1, 1998, with
annual increases of at least 5% to be determined by the Board of Directors at
the end of each year of the agreement. Effective October 4, 1998, Mr. Whang
voluntarily initiated a 20% reduction in his salary to $130,200. In addition, he
is entitled to receive annual incentive cash compensation of up to 50% of his
base salary, to be calculated as follows: (i) a bonus equal to 2% of the annual
earnings of the Company before taxes and extraordinary items, and (ii) a bonus
equal to 2% of the amount by which the revenues of the Company's semiconductor
equipment business in each year exceeds such revenues for the previous year. It
is a condition to the payment of any cash bonus that Mr. Whang shall have been
continuously employed by the Company and that the total of all cash and stock
bonuses is limited to 10% of the Company's pre-tax earnings for that year.
Profits are determined without taking into account the first $3,200,000 expended
or invested by the Company in the development of the proposed photo-assisted CVD
product, which has been suspended. In addition, Mr. Whang was granted 207,584
stock options pursuant to the agreement. These options were granted on February
28, 1997 and vest at the rate of 20% per full year of service over a five-year
period. To the extent not already exercisable, the options become immediately
exercisable upon: (i) the dissolution or liquidation of the Company or a
reorganization, merger or consolidation in which all or substantially all prior
shareholders do not continue to own more than 60% of the then outstanding shares
of Common Stock and voting securities, (ii) the sale of all or substantially all
of the assets of the Company, or (iii) the occurrence of a change in control of
the Company as discussed in the agreement. The agreement also contains
confidentiality and non-compete provisions. If Mr. Whang is terminated other
than for "cause," he is entitled to receive as severance pay salary, incentive
compensation and vacation accrued through the date of termination plus the
greater of his then annual salary or the balance of his compensation to the end
of the term of the employment agreement computed using the latest applicable
salary rate without consideration of any salary reductions. Mr. Whang is also
entitled to participate in any benefit plans generally available to employees of
the Company.
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COMPENSATION AND OPTION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation and Option Committee of the Company's Board of Directors
(the "Committee), which is composed entirely of independent, outside directors,
establishes the general compensation policies of the Company and specific
compensation for each executive officer of the Company, and administers the
Company's stock option program. The Committee's intent is to make the
compensation packages of the executive officers of the Company sufficient to
attract and retain persons of exceptional quality, and to provide effective
incentives to motivate and reward Company executives for achieving the financial
and strategic goals of the Company essential to the Company's long-term success
and to growth in shareholder value. The Company's executive compensation package
consists of three main components: (1) base salary, (2) incentive cash bonuses,
and (3) stock options.
BASE COMPENSATION
The Committee's approach is to offer executives salaries competitive with
those of other executives in the industry in which the Company operates. To that
end, the Committee evaluates the competitiveness of its base salary based on
information drawn from a variety of sources, including published and proprietary
survey data and the Company's own experience recruiting and retaining
executives, although complete information is not easily obtainable. The
Company's base salary levels are intended to be consistent with competitive
practice and level of responsibility, with salary increases reflecting
competitive trends, the overall financial performance of the Company and the
performance of the individual executive.
BONUSES
In addition to base salary, executives are eligible to receive a
discretionary annual bonus. At the beginning of each year, the Committee and the
Chief Executive Officer (the "CEO") review each individual executive's job
responsibilities and goals for the upcoming year. The amount of the bonus and
any performance criteria vary with the position and role of the executive within
the Company. In addition, for all executives, the Committee reviews the
Company's actual financial performance against its internally budgeted
performance in determining year-end bonuses, if any. However, the Committee does
not set objective performance targets for executives other than the CEO and
sales and marketing personnel.
STOCK OPTION AND RESTRICTED STOCK GRANTS
The Company, from time to time, grants stock options and shares of
restricted stock in order to provide certain executives with a competitive total
compensation package and to reward them for their contribution to the long-term
price performance of the Company's Common Stock. Grants of stock options and
restricted stock are designed to align the executive's interest with that of the
shareholders of the Company. In awarding option grants, the Committee will
consider, among other things, the amount of stock and options presently held by
the executive, the executive's past performance and contributions, and the
executive's anticipated future contributions and responsibilities.
1999 CEO COMPENSATION
The base salary to which the CEO for the fiscal year 1999 was entitled
increased from $162,750 in fiscal 1998 to $170,900 in fiscal 1999, pursuant to
the terms of the February 28, 1997 employment agreement entered into by the
Company and the CEO. The CEO's increased base salary is based upon the
compensation of executives in comparable positions in the semiconductor
industry, adjusted for the size of the Company (total assets and revenues).
However, effective October 4, 1998, Mr. Whang voluntarily initiated a 20%
reduction in his base salary to $130,200, which continued in effect until
September 30, 1999.
On February 24, 1989, the Board of Directors approved an incentive
compensation plan for the CEO, which provides for an annual cash bonus equal to
2% of the annual profits of the Company before taxes and extraordinary items;
plus 2% of the amount by which the revenues of the Company's semiconductor
equipment business in each year exceed such revenues for the previous year. It
is a condition to the payment of any bonus that the CEO have been continually
employed by the Company and that the total of such cash bonuses is limited to
10% of the Company's pre-tax earnings for that year. The CEO earned a bonus of
$12,292 in 1999 pursuant to such incentive compensation plan. The CEO's
employment agreement with the Company incorporates the incentive compensation
plan described above. See "Employment Contracts With Executive Officers," above.
Compensation and Option Committee
Donald F. Johnston
Alvin Katz
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CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Company did not have any transactions during fiscal 1999 with any
director, director nominee, executive officer, security holder known to the
Company to own of record or beneficially more than 5% of the Company's Common
Stock, or any member of the immediate family of any of the foregoing persons, in
which the amount involved exceeded $60,000.
COMPARISON OF STOCK PERFORMANCE
The following graph assumes that $100 was invested on October 1, 1993 in
each of the following: the Company's Common Stock, the NASDAQ Composite Index
and the NASDAQ Industrial Index.
CRSP TOTAL
RETURNS INDEX FOR: 9/30/94 9/29/95 9/30/96 9/30/97 9/30/98 9/30/99
- ------------------ ------- ------- ------- ------- ------- -------
Amtech Systems, Inc. 100.00 260.71 271.43 153.57 42.86 57.14
NASDAQ Composite Index 100.00 136.54 160.53 220.56 221.62 359.31
NASDAQ Industrial Index 100.00 126.26 135.17 176.89 132.70 207.00
OTHER MATTERS
INDEPENDENT AUDITORS
Arthur Andersen LLP has been selected as the Company's independent auditors
for the current fiscal year, which ends September 30, 2000. That firm has served
as the Company's independent auditors since 1983. During the fiscal year ended
September 30, 1999, Arthur Andersen LLP provided audit services to the Company.
Representatives of that firm are expected to be present at the Annual Meeting
with the opportunity to make a statement if they desire to do so and to be
available to respond to appropriate questions.
ANNUAL REPORT
The Annual Report of the Company for the fiscal year ended September
30,1999, is enclosed herewith.
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VOTING BY PROXY
In order to ensure that your shares will be represented at the Annual
Meeting, please sign and return the enclosed Proxy in the envelope provided for
that purpose, whether or not you expect to attend. Any shareholder may, without
affecting any vote previously taken, revoke a written proxy by giving notice of
revocation to the Company in writing or by executing and delivering to the
Company a later dated proxy.
SHAREHOLDER PROPOSALS FOR ACTION AT THE COMPANY'S NEXT ANNUAL MEETING
Any shareholder who wishes to present any proposal for shareholder action
at the next Annual Meeting of Shareholders to be held in 2001, must be received
by the Company's Secretary, at the Company's offices, not later than October 4,
2000, in order to be included in the Company's proxy statement and form of proxy
for that meeting. Such proposals should be addressed to the Corporate Secretary,
Amtech Systems, Inc., 131 South Clark Drive, Tempe, Arizona 85281. If a
shareholder proposal is introduced at the 2001 Annual Meeting of Shareholders
without any discussion of the proposal in the Company's proxy statement, and the
shareholder does not notify the Company on or before December 17, 2000, as
required by SEC Rule 14(a)-4(c)(1), of the intent to raise such proposal at the
Annual Meeting of Shareholders, then proxies received by the Company for the
2001 Annual Meeting will be voted by the persons named in such proxies in their
discretion with respect to such proposal. Notice of such proposal is to be sent
to the above address.
By Order of the Board of Directors
/s/ Robert T. Hass
Robert T. Hass, Secretary
Tempe, Arizona
February 4, 2000
11
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AMTECH SYSTEMS, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
OF AMTECH SYSTEMS, INC. FOR THE ANNUAL MEETING OF SHAREHOLDERS
The undersigned shareholder of Amtech Systems, Inc., an Arizona corporation
(the "Company"), hereby acknowledges receipt of the Notice of Annual Meeting of
Shareholders dated February 4, 2000 and hereby appoints Jong S. Whang or Robert
T. Hass and each of them, proxies and attorneys-in-fact, with full power of
substitution, on behalf and in the name of the undersigned, to represent the
undersigned at the Annual Meeting of Shareholders of AMTECH SYSTEMS, INC. to be
held at the Hilton Phoenix Airport Hotel, 2435 South 47th Street, Phoenix,
Arizona on February 25, 2000 at 10:00 a.m., Mountain Standard time, and at any
adjournment(s) or postponement(s) thereof, and to vote all shares of Common
Stock that the undersigned would be entitled to vote if then and there
personally present, on the matters set forth below.
1. ELECTION OF DIRECTORS [ ] FOR all nominees listed below (except as marked
to the contrary below): Jong S. Whang Robert T. Hass Donald F. Johnston
Alvin Katz Bruce R. Thaw
[ ] WITHHOLD AUTHORITY to vote for all nominees listed above
INSTRUCTIONS: To withhold authority to vote for any individual nominee,
write that nominee's name in the space provided below:
---------------------------------------------
The undersigned agrees that the proxy holder is authorized to cumulate
votes in the election of directors and to vote for less than all of the
nominees.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL
BE VOTED FOR THE ELECTION OF THE NOMINEES NAMED ABOVE AND AS SAID PROXIES DEEM
ADVISABLE ON SUCH MATTERS AS MAY COME BEFORE THE MEETING.
Dated: ___________________, 2000
Please sign exactly as your name appears
above. When shares are held in common or in
joint tenancy, both should sign. When signing
as attorney, as executor, administrator,
trustee or guardian, please give full title
as such. If a corporation, sign in full
corporate name by President or other
authorized officer. If a partnership, please
sign in partnership name by an authorized
person.
SIGNATURES:
-------------------------------
-------------------------------
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Please return in the enclosed, postage-paid envelope.
I [ ] Will [ ] Will not attend the Meeting.
