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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:
[X] Preliminary Proxy Statement
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to ss.240.14a-11(c) or ss.240.14a-12
ZYGO CORPORATION
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
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2) Aggregate number of securities to which transaction applies:
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3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determine):
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4) Proposed maximum aggregate value of transaction:
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5) Total fee paid:
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[ ] 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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ZYGO CORPORATION
LAUREL BROOK ROAD
MIDDLEFIELD, CONNECTICUT 06455
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD JULY 31, 2000
The Special Meeting of Stockholders of Zygo Corporation (the "Company") will be
held at the offices of the Company, Laurel Brook Road, Middlefield, Connecticut
06455 on July 31, 2000, at 2:00 p.m. Eastern Time, or any adjournments thereof
for the following purposes:
1. To consider and vote upon a proposal to amend the Company's Restated
Certificate of Incorporation to increase the number of shares of
common stock, $.10 par value (the "Common Stock"), authorized for
issuance by the Company to Forty Million (40,000,000).
2. To consider and vote upon a proposal to amend the Company's Amended
and Restated Non-Qualified Stock Option Plan to increase the number of
shares of Common Stock authorized for issuance thereunder to 4,850,000
shares.
3. To act upon any other matter that may properly come before the meeting
or any adjournment thereof.
Stockholders of record at the close of business on June 26, 2000 are
entitled to notice of and to vote at the Special Meeting or any adjournment
thereof.
All stockholders are cordially invited to attend the Special Meeting in
person. HOWEVER, WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING IN PERSON,
EACH STOCKHOLDER IS URGED TO COMPLETE, DATE AND SIGN THE ENCLOSED FORM OF PROXY
AND RETURN IT PROMPTLY IN THE ENVELOPE PROVIDED. No postage is required if the
proxy is mailed in the United States. Stockholders who attend the Special
Meeting may revoke their proxy and vote their shares in person.
By Order of the Board of Directors
Paul Jacobs
Secretary
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July 6, 2000
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YOUR VOTE IS IMPORTANT
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Please fill in, date, sign, and return your proxy promptly in the enclosed
stamped envelope whether or not you plan to be present at the meeting. You may
still vote in person if you attend the meeting.
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ZYGO CORPORATION
LAUREL BROOK ROAD
MIDDLEFIELD, CONNECTICUT 06455
PROXY STATEMENT
SPECIAL MEETING OF STOCKHOLDERS TO BE HELD JULY 31, 2000
PROXY SOLICITATION
This Proxy Statement is furnished to the holders of Common Stock, par value
$.10 per share (the "Common Stock"), of Zygo Corporation (the "Company") in
connection with the solicitation by the Board of Directors of the Company of
proxies for use at the Special Meeting of Stockholders to be held on July 31,
2000, at 2:00 p.m., local time, at the offices of the Company, Laurel Brook
Road, Middlefield, CT 06455, or at any adjournment thereof, pursuant to the
accompanying Notice of Special Meeting of Stockholders. The purposes of the
meeting and the matters to be acted upon are set forth in the accompanying
Notice of Special Meeting of Stockholders. The Board of Directors is not
currently aware of any other matters which will come before the meeting.
Proxies for use at the Special Meeting are being solicited by the Board of
Directors of the Company. Proxies will be mailed to stockholders of the
Company's Common Stock ("Stockholders") on or about July 6, 2000, and will be
solicited chiefly by mail; however, certain officers, directors, and employees
of the Company, none of whom will receive additional compensation therefor, may
solicit proxies by telephone, telegram, or other personal contact. The Company
will make arrangements with brokerage houses and other custodians, nominees and
fiduciaries to send proxies and proxy material to the beneficial owners of the
shares and will reimburse them for their expenses in so doing. All expenses
incurred in connection with this solicitation will be borne by the Company. The
Company has no present plans to hire special employees or paid solicitors to
assist in obtaining proxies, but reserves the option of doing so if it should
appear that a quorum otherwise might not be obtained.
REVOCABILITY AND VOTING OF PROXY
A form of proxy for use at the Special Meeting of Stockholders and a return
envelope for the proxy are enclosed. Stockholders may revoke the authority
granted by their execution of proxies at any time before their effective
exercise by filing with the Secretary of the Company a written notice of
revocation or a duly executed proxy bearing a later date, or by voting in person
at the meeting. Shares of the Company's Common Stock represented by executed and
unrevoked proxies will be voted in accordance with the choice or instructions
specified thereon. If no specifications are given, the proxies intend to vote
the shares represented thereby to approve Proposal Nos. 1 and 2 as set forth
herein and in the accompanying Notice of Special Meeting of Stockholders and in
accordance with their best judgment on any other matters which may properly come
before the meeting.
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RECORD DATE AND VOTING RIGHTS
Only Stockholders of record at the close of business on June 26, 2000 are
entitled to notice of and to vote at the Special Meeting or any and all
adjournments thereof. On June 26, 2000, there were ________ shares of Common
Stock outstanding. Each such share is entitled to one vote on each of the
matters to be presented at the Special Meeting. The holders of a majority of the
shares of Common Stock outstanding on June 26, 2000 present in person or by
proxy and entitled to vote will constitute a quorum at the Special Meeting.
Proxies received but marked as abstentions and broker non-votes will be included
in the calculation of the number of shares considered to be present at the
Special Meeting.
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BENEFICIAL OWNERSHIP OF COMMON STOCK
PRINCIPAL STOCKHOLDERS
The only stockholders who, as of June 26, 2000, have advised the Company
that they beneficially own (because of sole or shared voting or investment
power) more than 5% of the Company's outstanding Common Stock are set forth
below. Such beneficial owners have sole voting and investment power with respect
to the shares of Common Stock shown as owned by them.
Name and Address of Amount and Nature of Percentage of
Beneficial Owner Beneficial Ownership Common Stock
---------------- -------------------- ------------
Kopp Investment Advisors, Inc. ...... 2,853,989 (1) 20.0%
6600 France Ave. South
Suite 672
Edina, Minnesota 55435
Canon Inc. .......................... 1,210,410(1) 8.5%
Shinjuku Dai-Ichi Seimei
Building
Tokyo 160, Japan
------------------------------
(1) Information derived from Nasdaq-AmEx Online.
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SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth information as of June 26, 2000 (except as
otherwise noted in the footnotes) of, (i) each director of the Company, (ii)
each executive officer named in the Summary Compensation Table (see "Executive
Compensation"), and (iii) all directors and executive officers of the Company as
a group. Except as otherwise specified, the named beneficial owner has the sole
voting and investment power with respect to the shares of Common Stock owned by
them.
<TABLE>
<CAPTION>
Amount and Nature of Beneficial
Name of Beneficial Owner Ownership of Common Stock (1) Percentage of Common Stock
------------------------------------------------------------------------------------------------------------
<S> <C> <C>
John Berg ............................ 532,984 3.7%
Paul Forman .......................... 407,530(2) 2.9%
Seymour Liebman ...................... 78,000(3) .5%
Robert G. McKelvey ................... 142,370(4) 1.0%
J. Bruce Robinson .................... 17,044(5) .1%
Patrick Tan .......................... 336,363 2.4%
Robert B. Taylor ..................... 65,500(6) .5%
Gary K. Willis ....................... 411,500(7) 2.8%
Carl A. Zanoni ....................... 487,900(8) 3.4%
Brian J. Monti ....................... 5,000(9) *
Robert A. Smythe ..................... 45,208(10) .3%
All directors and officers as a
group including those named above
(15 persons) ......................... 2,578,739(11) 17.4%
</TABLE>
(FOOTNOTES ON FOLLOWING PAGE)
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------------------------------
* Less than 0.1 percent.
(1) The persons named and all directors and officers as a group in the table
have sole voting and investment power with respect to all shares of Common
Stock shown as beneficially owned by them, except for shares which can be
acquired by the exercise of stock options.
(2) Consists of options to purchase 3,000 shares of Common Stock, which are
exercisable within 60 days.
(3) Consists of options to purchase 78,000 shares of Common Stock, which are
exercisable within 60 days.
(4) Consists of options to purchase 78,000 shares of Common Stock, which are
exercisable within 60 days.
(5) Consists of options to purchase 12,500 shares of Common Stock, which are
exercisable within 60 days.
(6) Consists of options to purchase 60,000 shares of Common Stock, which are
exercisable within 60 days.
(7) Consists of options to purchase 227,500 shares of Common Stock, which are
exercisable within 60 days.
(8) Consists of options to purchase 1,500 shares of Common Stock, which are
exercisable within 60 days.
(9) Consists of options to purchase 5,000 shares of Common Stock, which are
exercisable within 60 days.
(10) Consists of options to purchase 44,124 shares of Common Stock, which are
exercisable within 60 days.
(11) Consists of options to purchase 544,374 shares of Common Stock, which are
exercisable within 60 days.
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PROPOSAL NO. 1--ADOPTION OF AN AMENDMENT TO THE COMPANY'S RESTATED CERTIFICATE
OF INCORPORATION
The Board of Directors has approved and recommends that the Stockholders of
the Company approve an amendment to Article FOURTH of the Company's Restated
Certificate of Incorporation, as amended (the "Charter"), to increase the number
of authorized shares of the Common Stock from 15,000,000 to 40,000,000 shares.
Of the 15,000,000 shares of Common Stock presently authorized, ________ shares
have been issued and are outstanding as of June 26, 2000.
The Board of Directors has proposed this increase in the authorized number
of shares of Common Stock and recommends its adoption in order to provide the
Company with greater flexibility to issue Common Stock for appropriate corporate
purposes. The purposes for which such additional authorized stock could be
issued include but are not limited to the funding of the Company's capital needs
and corporate growth, the acquisition of desirable businesses, the exercise of
stock options granted to attract and retain employees and for stock splits and
stock dividends. If Proposal No. 1 is not adopted, the Company's ability to
finance its future capital needs and to pursue appropriate acquisitions and
corporate opportunities will be severely limited. In addition, the Company
relies on options as an integral part of the compensation package used to retain
existing employees and attract new employees and consultants. If Proposal No. 1
is not adopted, the Company will be limited in its ability to use options as
part of a compensation package, and the Company's ability to retain existing
employees and attract new employees and consultants may be adversely affected.
Approval of the proposed amendment to the Charter will allow the Board of
Directors to move promptly to issue additional shares of Common Stock, if
appropriate opportunities should arise, without the delay and expense of calling
another special Stockholders' meeting or the delay in waiting for the next
annual Stockholder's meeting, traditionally held in November. The Board of
Directors will determine whether, when and on what terms the issuance of shares
of Common Stock may be warranted. Like the presently authorized by unissued
shares of the Company's Common Stock, the additional shares of Common Stock will
be available without further action by the Stockholders unless such action is
required by applicable law or by the rules of the Nasdaq National Market or any
applicable stock exchange. Stockholders do not have preemptive rights with
respect to the authorization of additional shares of Common Stock. Except in
certain cases such as a stock dividend, the issuance of additional shares of
Common Stock would have the effect of diluting the voting powers of existing
Stockholders. The Company has no arrangements, commitments or understandings
with respect to the sale or issuance of any additional shares of Common Stock,
except in connections with the options outstanding or to be granted under the
Company's stock option plans.
Accordingly, the Board of Directors has adopted and recommends that the
Stockholders approve the following resolution:
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RESOLVED, that the Certificate of Incorporation of the Corporation be
amended to authorize the issuance of up to Forty Million (40,000,000)
shares of Common Stock, so that Article Fourth of the Corporation's
Certificate of Incorporation be amended to read in its entirety as follows:
"FOURTH: The total number of shares of stock which the
corporation shall have authority to issue is Forty Million
(40,000,000). The par value of each of such shares is Ten Cents
($.10). All such shares are of one class and are shares of Common
Stock."
Although not a factor in the Board of Directors' decision to propose the
amendment, one of the effects of the amendment to the Charter may be to enable
the Board to render more difficult or to discourage an attempt to obtain control
of the Company, since the issuance of these additional shares of Common Stock
could be used to dilute the stock ownership of persons seeking to obtain control
or otherwise increase the cost of obtaining control of the Company.
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VOTE REQUIRED.
The affirmative vote of the holders of a majority of the shares of Common
Stock outstanding on June 26, 2000 and entitled to vote at the Special Meeting
is required for the adoption of the proposed amendment to the Company's Restated
Certificate of Incorporation. Broker non-votes and abstentions with respect to
this matter will be treated as neither a vote "for" nor a vote "against" the
matter, although they will be included in the calculation of the number of
shares considered to be present at the Special Meeting and outstanding on the
record date. Accordingly, an abstention from voting by a Stockholder present in
person or by proxy at the meeting and broker non-votes have the same legal
effect as a vote "against" the matter, thereby making it more difficult to
obtain the number of affirmative votes required to approve this proposal.
THE BOARD OF DIRECTORS DEEMS PROPOSAL NO. 1 TO BE IN THE BEST INTERESTS OF
THE COMPANY AND ITS STOCKHOLDERS AND RECOMMENDS THAT THE STOCKHOLDERS VOTE "FOR"
THE APPROVAL THEREOF.
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EXECUTIVE COMPENSATION
The following table contains information concerning the cash compensation
paid or to be paid by the Company, as well as certain other compensation paid or
accrued, during the fiscal years indicated, to the Chief Executive Officer of
the Company during the 2000 fiscal year and the other four most highly
compensated executive officers of the Company ("named executives") whose cash
compensation exceeded $100,000 for the year ended June 30, 2000 for services in
all capacities to the Company.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
Annual Compensation Long-Term Compensation Awards
-----------------------------------------------------------------------------------------------------------------------------------
Name & Principal Position Held Securities
During Fiscal 2000 Fiscal Other Annual Under-lying All Other Compen-
Year Salary Bonus Compensation (1) Options/SARs sation (2) (3) (4)
-----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Gary K. Willis (5) ............. 2000 $207,911 -- $ 9,554 -- $ 4,328
Chairman, Director 1999 $255,769 -- $10,800 -- $19,925
1998 $241,923 -- $10,800 25,000 $26,239
J. Bruce Robinson (6) .......... 2000 $280,507 -- $ 9,554 20,000 $30,574
President, Chief Executive 1999 $ 81,731 -- $ 3,738 50,000 $55,112
Officer, Director 1998 $ -- -- $ -- -- $ --
Brian J. Monti (7) ............. 2000 $177,861 -- $ 9,544 25,000 $66,228
Vice President, Worldwide Sales 1999 $ -- -- $ -- -- $ --
& Marketing 1998 $ -- -- $ -- -- $ --
Robert A. Smythe (8) ........... 2000 $163,430 -- $ 9,544 5,000 $ 5,382
Vice President, 1999 $134,615 -- $10,800 4,000 $10,011
Engineering 1998 $126,635 -- $10,800 -- $14,798
Carl A. Zanoni ................. 2000 $184,615 -- $ 9,544 5,000 $ 5,559
Vice President, 1999 $195,192 -- $10,800 -- $13,833
Technology, Director 1998 $189,712 -- $10,800 15,000 $20,147
(FOOTNOTES ON FOLLOWING PAGE)
</TABLE>
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------------------------------
(1) Amounts paid as automobile allowance.
(2) Includes aggregate amounts of $2,600, $0, $0, $3,654, and $3,831 in fiscal
2000, $18,197, $0, $0, $8,283, and $12,105 in fiscal 1999, and $24,511, $0,
$0, $13,300, and $18,419 in fiscal 1998, paid or contributed on behalf of
Messrs. Willis, Robinson, Monti, Smythe and Zanoni, respectively, under the
Company's Defined Contribution Profit Sharing Plan (the "Plan").
Contributions made under the profit sharing component of the Plan are
determined annually by the Board of Directors, based on each employee's
compensation, and vest at the rate of 20% per year of service to the
Company. Employees are fully vested in contributions made in the discretion
of the Company under the 401(k) component of the Plan.
(3) Includes $1,728, $1,728, $1,728, $1,728, and $1,728 in fiscal 2000, $1,728,
$1,728, $0, $1,728, and $1,728 in fiscal 1999, and $1,728, $0, $0, $1,498,
and $1,728 in fiscal 1998, for Messrs. Willis, Robinson, Monti, Smythe and
Zanoni, respectively, representing the value of life insurance provided to
the named executives.
(4) Includes relocation expenses of $28,846 and $64,500 for Messrs. Robinson
and Monti, respectively, and $53,384 in fiscal 1999 for Mr. Robinson.
(5) Mr. Willis resigned as Chief Executive Officer of the Company on November
17, 1999.
(6) Mr. Robinson became President of the Company on February 22, 1999 and Chief
Executive Officer of the Company on November 17, 1999.
(7) Mr. Monti became an officer of the Company on July 1, 1999.
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OPTION PLAN BENEFITS GRANTED DURING FISCAL 2000
The following table sets forth certain summary information concerning
individual grants of stock options made during the year ended June 30, 2000 to
each of the Company's executive officers named in the Summary Compensation
Table.
<TABLE>
<CAPTION>
Potential Realizable
Value at Assumed
Annual Rates of Stock
Price Appreciation for
Individual Grants Option Term
-------------------------------------------------------------------------------------------------------------------------------
No. of
Securities % of Total
Underlying Options Granted Exercise Price
Options to Employees in or Base Price Expiration
Name and Position Granted(1) 2000 per Share(2) Date 5% 10%
-------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Gary Willis ................... -- -- -- -- -- --
Chairman of the Board
J. Bruce Robinson ............. 20,000 12.7% $ 9.50 8/18/09 $119,490 $302,811
President, Chief Executive
Officer, Director
Brian J. Monti ................ 20,000 12.7% $11.75 7/01/09 $147,790 $374,529
Vice President, Worldwide 5,000 3.2% $23.81 2/09/10 $ 74,879 $189,759
Sales and Marketing
Robert A. Smythe .............. 5,000 3.2% $ 9.50 8/18/09 $ 29,872 $ 75,703
Vice President,
Engineering
Carl A. Zanoni ................ 5,000 3.2% $ 9.50 8/18/09 $ 29,872 $ 75,703
Vice President,
Technology, Director
</TABLE>
---------------------------------
(1) Options vest ratably over four years on the anniversary of the grants.
(2) The exercise price was equal to the market value of the underlying Common
Stock on the day of the grant.
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AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION
VALUES
<TABLE>
<CAPTION>
Number of Unexercised Value of Unexercised In-the-
Options at June 30, 2000 Money Options at June 30, 2000
------------------------------- --------------------------------------------
Shares
Acquired on Value
Name Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Gary K. Willis ........ -- -- 227,500 7,500 $11,526,058 $ 316,073
J. Bruce Robinson ..... -- -- 12,500 57,500 $ 525,913 $ 2,446,798
Brian J. Monti ........ -- -- -- 25,000 $ -- $ 969,760
Robert A. Smythe ...... 1,800 $ 59,625 44,124 8,000 $ 2,239,886 $ 343,694
Carl A. Zanoni ........ 105,000 $3,869,820 1,500 9,500 $ 63,215 $ 406,909
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
DIRECTOR COMPENSATION
As originally adopted, effective March 11, 1997, each director who is not a
full-time employee of, or consultant to the Company (a "Non-Employee Director")
received a meeting fee of $1,500 per meeting attended, whether board or
committee, in person or by telephone. Pursuant to the Zygo Corporation
Non-Employee Director Stock Option Plan (the "Non-Employee Director Plan"), each
Non-Employee Director was granted an option to purchase 75,000 shares of Common
Stock, vesting at a rate of 15,000 shares per year, exercisable at the fair
market value of a share of Common Stock on the date of grant. The Non-Employee
Director Plan further provided that an option to purchase 25,000 shares of
Common Stock automatically was to be granted to each person who is subsequently
elected to the Board of Directors (and, who is on such election, a Non-Employee
Director) at the time of such election, and to each Non-Employee Director
(including then existing Non-Employee Directors) on the fifth anniversary of the
date on which an option was previously granted to that Non-Employee Director,
provided that he had continuously served as a director of the Company through
such fifth anniversary.
Effective September 24, 1999, under the Company's Amended and Restated
Non-Employee Director Stock Option Plan (the "Amended and Restated Director
Plan"), each new Non-Employee Director (other than a person who was previously
an employee of the Company or any of its subsidiaries) instead will be granted
an option to purchase 8,000
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shares of Common Stock on his or her first day of service as a Non-Employee
Director or, if such first day of service is at least nine months after the
Company's last Annual Meeting, the date of the first Annual Meeting occurring
after his or her first day of service. Each other Non-Employee Director
(including individuals who may have been new Non-Employee Directors in prior
years) will be granted an option to purchase 3,000 shares of Common Stock on the
date of each Annual Meeting during his or her service as a Non-Employee
Director. The Amended and Restated Director Plan defines a Non-Employee Director
as a director who is not also an employee of the Company or any of its
subsidiaries and the term "Non-Employee Director" as used in this Proxy
Statement has this meaning with respect to all references to Non-Employee
Directors under the Amended and Restated Director Plan. All options will be
exercisable at a per share exercise price equal to the fair market value of the
Common Stock on the date of grant, will be fully exercisable on the date of
grant and will have a ten year term. In addition, Non-Employee Directors will
receive $1,000 for each board meeting attended in person, $500 for each board
meeting attended by telephone connection, and $500 for committee meetings
attended.
Each Non-Employee Director also is reimbursed for out-of-pocket expenses
incurred as a result of attendance at a board or committee meeting. In addition,
pursuant to the terms of a Services Agreement between Paul F. Forman and the
Company (as more fully described below), Mr. Forman was deemed not to be a
Non-Employee Director for the period commencing July 1, 1994 and ending
September 30, 1999. During that time, Mr. Forman received an annual retainer of
$20,000 for his participation on the Board of Directors. From September 30,
1999, Mr. Forman remains on the board of directors and is brought in by the
Company for consulting on a per diem basis.
EMPLOYMENT CONTRACTS, TERMINATION OF EMPLOYMENT AND CHANGE-IN-CONTROL
ARRANGEMENTS
Effective November 18, 1999, Mr. Willis' previous employment agreement,
effective February 1992 and amended in 1993, 1994, and 1995 was terminated. A
new employment agreement was entered into with Mr. Willis on November 18, 1999.
Under the new agreement, Mr. Willis receives an annual base salary of $137,500,
in the role of Chairman of the Board of Directors of the Company. The term of
Mr. Willis' employment is three years, subject to automatic one-year renewal
terms unless terminated by either party upon thirty (30) day prior written
notice.
The agreement provides for Mr. Willis certain insurance and other benefits.
For as long as Mr. Willis continues to render employment or consulting services
to the Company and has not attained age 65, and to the extent permitted by the
terms of the insurance policy of the insurer, the Company will continue in
effect the existing life insurance policy in the amount of $600,000 and the
existing key man life insurance policy in the amount of $1 million, both on the
life of Mr. Willis. Upon the death of Mr. Willis, proceeds from the key man
policy received by the Company, less all costs and expenses paid by the Company
associated with this policy, and less a 5% annual rate of return, on the capital
outlay for this policy, will be paid to Mr. Willis' designated
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beneficiary. In addition, for so long as Mr. Willis continues to render
consulting services to the Company and has not attained age 65, Mr. Willis is
entitled to participate in the health insurance and short and long term
disability plans, provided by the Company for its employees, to the extent
permitted under the terms of the then existing plans and policies of plan
providers.
The employment agreements described above grant to Mr. Willis a severance
package in the event the Company terminates his employment (other than for
justifiable cause (as defined in each of the employment agreements), disability,
or death) with the Company, or in the event Mr. Willis resigns within 90 days of
a "Change in Control" of the Company. Under the package, Mr. Willis will be
provided with (i) the greater of one year's base salary or the entire amount of
Mr. Willis salary through November 17, 2002 and (ii) the continuation, of all
existing health insurance, dental coverage, key man life insurance, AD&D and
long-term disability coverage then in effect at Mr. Willis expense, until he
attains age 65, provided however, that Mr. Willis agrees to maintain a
consulting relationship with the Company during the applicable period.
In January 1999, the Company entered into an employment agreement with Mr.
Robinson. Under the employment agreement, Mr. Robinson receives an annual base
salary of $250,000, or such higher amount as the Board may determine from time
to time. The term of Mr. Robinson's employment under the employment agreement is
one year, commencing February 22, 1999, subject to automatic one-year renewal
terms unless terminated by either party upon a thirty (30) day prior written
notice. The employment agreement also provided for the grant to Mr. Robinson of
a stock option to purchase 50,000 shares of the Company's Common Stock, at the
market price on the date of grant, with 25% of the stock options vesting at the
end of each of the first four years.
Effective November 18, 1999, Mr. Robinson's employment agreement was
amended to change Mr. Robinson's position to Chief Executive Officer and to
increase his annual base salary to $275,000 (or such higher amount as the Board
may determine from time to time).
In July 1999, the Company entered into an employment agreement with Mr.
Monti to fill the position of Vice President - Sales & Marketing. Under the
agreement, Mr. Monti receives an annual base salary of $175,000 or such higher
amount as the Board may determine from time to time. The term of Mr. Monti's
agreement is one year and is subject to automate one-year renewal terms unless
terminated by either party upon a thirty (30) day prior written notice. The
employment agreement with Mr. Monti also provided for the grant to Mr. Monti of
a stock option to purchase 20,000 shares of the Company's Common Stock, at the
market price on the date of grant, with 25% of the stock options vesting at the
end of each of the first four years.
The employment agreements described above grant to Messrs. Robinson and
Monti, a severance package in the event the Company terminates their employment
(other than for justifiable cause (as defined in each of the employment
agreements) disability, or death) with the Company. Under the package, Mr.
Robinson would be provided his base salary from the time of his involuntary
termination to 12 months
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thereafter. In addition, in the event Mr. Robinson resigns within 90 days of a
"Change of Control", as defined therein, of the Company, the agreement generally
provides for (i) the continued payment of his salaries for a one-year period,
and (ii) the continuation, for a period of the lesser of one year or until
covered by another plan, of all existing health insurance, dental coverage, life
insurance, AD&D and long-term disability coverage then in effect for Mr.
Robinson.
The severance coverage for Mr. Robinson additionally provides for the
automatic vesting of options to purchase shares of the Company' Common Stock
then held by Mr. Robinson.
Mr. Monti's agreement provides for the continuation of his base salary for
six months from the date of his involuntary termination. In the event his
employment is terminated without justification and occurs after a "Change of
Control", the agreement provides for the (i) continuation of existing health,
dental and long term disability insurances, as well as AD&D coverage in effect
at the time of termination for a period of the lesser of six months or until
covered by another plan and (ii) continuation of Mr. Monti's salary for a period
of six months after the date of termination.
In August 1993, the Company entered into a Services Agreement with Paul F.
Forman (the "Services Agreement") providing for the retention of Mr. Forman as
an executive officer of the Company through the end of the 1994 fiscal year and
thereafter as a consultant to the Company for an additional five years. Pursuant
to this Services Agreement, Mr. Forman received salary payments of $148,271 for
the year of employment and a one-time payment of $149,500 upon his termination
from active employment, and received a $20,000 retainer for board service for
each of the five years of his consultancy plus 80%, 60%, 40%, and 20% of his
salary at June 30, 1994, for each of the first through fourth years of his
consultancy, respectively. The Services Agreement further provided that all
outstanding unvested options to purchase Common Stock from the Company to Mr.
Forman vested effective at the conclusion of the fiscal year ended June 30, 1994
(options to purchase 20,475 shares of Common Stock). The Agreement was
terminable (with all payment obligations thereunder terminating) by Mr. Forman,
at any time, and by the Company upon the death or disability of Mr. Forman or
for justifiable cause (as defined in the Services Agreement); except that if the
Services Agreement terminated as a result of the death or disability of Mr.
Forman, he (or his estate) would have been entitled to receive the lesser of
twice his June 30, 1994, salary or the aggregate remaining compensation payments
otherwise required to be made under the Services Agreement. In December 1996,
the Company entered into an amendment to the Services Agreement with Mr. Forman,
providing for the extension of the term of the existing Services Agreement until
September 30, 1999, with Mr. Forman receiving annually for the last 15 months of
the amended Services Agreement 20% of his salary at June 30, 1994 (in addition
to the retainer previously provided for). From September 30, 1999, Mr. Forman
remains on the board of directors and is brought in by the Company for
consulting on a per diem basis.
The Services Agreement, which contains certain restrictions on soliciting
employees and others and is coexistent with a non-competition agreement between
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Mr. Forman and the Company, replaced the Confidentiality and Non-Competition
Agreement, dated October 25, 1983, entered into between Mr. Forman and the
Company. Pursuant to the Confidentiality and Non-Competition Agreement, upon the
involuntary termination of his employment by the Company without cause, Mr.
Forman was entitled to receive, for each of the five years from the termination
of his employment, an amount equal to the highest annual compensation (salary
plus bonus) received by him at any time during that termination year or any of
the three years immediately preceding his termination, increasing each of the
five years by 12% or, if greater, the consumer price index increase for that
year.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During the fiscal year ended June 30, 2000, the Compensation Committee
consisted of Messrs. Seymour E. Liebman, Robert G. McKelvey, and Paul W.
Murrill. As of June 26, 2000, the Compensation Committee consisted of Mr.
Liebman and Mr. McKelvey. Mr. Murrill resigned from the Company's Board of
Directors in May 2000. Mr. Liebman is the Executive Vice President and General
Counsel of Canon U.S.A., Inc., an affiliate of Canon Inc. ("Canon"). Canon Sales
Co., Inc., a subsidiary of Canon, acts as exclusive distributor of certain of
the Company's products in Japan. Sales to Canon and Canon Sales Co., Inc.
aggregated approximately $_______ for fiscal 2000. Selling prices were based,
generally, on the normal terms given to domestic distributors. In addition, the
Company and Canon have entered into agreements providing for confidential
exchange of certain technology. See "Certain Relationships and Related
Transactions" below.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Canon Sales Co., Inc., a subsidiary of Canon, one of the principal
Stockholders of the Company, acts as a distributor of certain of the Company's
products in Japan. (See "Compensation Committee Interlocks and Insider
Participation" above).
During the fiscal year ended June 30, 2000 the Company made purchases of
approximately $_______ from Technical Instrument-San Francisco, an entity
principally owned by Francis E. Lundy, Vice President of the Company from August
1997 to December 1999. Prices for products purchased are based on normal terms
and conditions.
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PROPOSAL NO. 2--ADOPTION OF AN AMENDMENT TO THE COMPANY'S AMENDED AND
RESTATED NON-QUALIFIED STOCK OPTION PLAN
GENERAL DESCRIPTION OF AMENDED AND RESTATED NON-QUALIFIED STOCK OPTION PLAN
The Board of Directors has determined that it would be in the best
interests of the Company to further amend the Amended and Restated Non-Qualified
Stock Option Plan (the "Plan") to provide that the number of shares of Common
Stock for which stock options (the "Stock Options") may be granted pursuant to
such Plan be increased from 3,350,000 to 4,850,000 shares and to clarify that,
the Board of Director shall have the discretion to adjust the number of shares
of Common Stock available for issuance under the Plan in the event the Company
declares a stock dividend or subdivides or combines the Common Stock. As of June
26, 2000, Stock Options to purchase _______ shares of Common Stock, in the
aggregate, granted pursuant to the Plan were outstanding, and Stock Options to
purchase _______ shares of Common Stock remained available for future grant
thereunder. The proposed amendment would make 1,500,000 additional shares of
Common Stock available for issuance upon exercise of Stock Options granted under
the Plan. The Board of Directors believes that an increase in the number of
shares of Common Stock for which Stock Options may be granted pursuant to the
Plan is necessary in order to provide the Company with an effective incentive to
attract and retain key employees.
The Plan is administered by a committee of at least two members of the
Board of Directors, chosen by the Board of Directors. The Committee presently
consists of Messrs. Liebman and McKelvey. Each member of the Committee is a
"non-employee director," as defined in Rule 16b-3 of the Securities Exchange Act
of 1934, as amended (the "Exchange Act"). Subject to the provisions of the Plan,
the Committee has the authority to determine the individuals to whom Stock
Options will be granted, the number of shares of Common Stock to be covered by
each such Stock Option, the option price, the option period, the vesting
restrictions, if any, with respect to the exercise of the Stock Option, and
other terms and conditions.
PRICES, EXPIRATION DATES AND OTHER MATERIAL CONDITIONS; CONSIDERATION RECEIVED
OR TO BE RECEIVED BY THE COMPANY
The terms and conditions of each Stock Option granted under the Plan must
be set forth in a stock option agreement issued by the Company to the optionee
(the "Stock Option Agreement"). Potential optionees under the Plan consist of
present or future key employees of the Company or a subsidiaries of the Company
and of directors of the Company, whether or not they are employees of the
Company. Any such Stock Option Agreement must include certain provisions,
including that (i) the full purchase price of the shares purchased under the
option will be paid upon exercise thereof, (ii) the option expire not later than
ten years from the date the option is granted, or prior thereto, if the optionee
ceases to be employed by the Company or a subsidiary thereof (otherwise than by
reason of the optionee's death) unless extended by the Committee acting in its
sole discretion (provided that no such extension shall result in an option
having a term greater
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than ten years), and (iii) the option shall not be transferable other than by
will or by the laws of descent and distribution and is exercisable during the
lifetime of the optionee only by him or her.
The Board may amend or terminate the Plan, provided that any amendment
which would increase the aggregate number of shares of Common Stock as to which
Stock Options may be granted under the Plan (except anti-dilution adjustments),
materially increase the benefits under the Plan, or modify the class of persons
eligible to receive Stock Options under the Plan, is subject to the approval of
the Stockholders.
MARKET VALUE OF SECURITIES UNDERLYING OPTIONS
As of June 26, 2000, the market value of the Common Stock was $____ per
share.
FEDERAL INCOME TAX CONSEQUENCES
An optionee does not recognize taxable income upon the grant of an option.
In general, an optionee recognizes ordinary income when the option is exercised
(assuming the stock acquired is either transferrable or not subject to a
substantial risk of forfeiture) equal to the excess of the value of the stock
over the exercise price (i.e., the option spread), and the Company receives a
corresponding deduction. Upon a later sale of the stock, the optionee recognizes
capital gain or loss equal to the difference between the selling price and the
value of the stock at the time the option was exercised.
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PLAN BENEFITS
No predetermined stock option grants are to be issued upon the approval of
the amendment to the Amended and Restated Stock Option Plan. Accordingly, no
information is available and no predetermined stock option grants to (i) each
executive officer named in the Summary Compensation Table (see "Executive
Compensation"), (ii) all current executive officers as a group, (iii) all
current directors who are not executive officers as a group and (iv) all
employees, including all current officers who are not executive officers, as a
group, are to be issued upon the approval of the amendment to the Amended and
Restated Stock Option Plan.
Accordingly, the Board of Directors recommends that the Stockholders
approve the following resolution:
RESOLVED, that the total number of shares of the Company's Common
Stock which may be issued under the Corporation's Amended and Restated
Non-Qualified Stock Plan (the "Plan") shall be increased to 4,850,000
shares and shall be subject to adjustment by the Board of Directors to
reflect stock dividends, combinations, and subdivisions of the Common
Stock, so that the first sentence of Section 2 of the Plan be amended to
read in its entirety as follows:
"Except as otherwise permitted pursuant to paragraph 6 hereof or as
determined necessary by the Board of Directors in order to reflect any
stock dividend, subdivision or combination of the Common Stock, the
total number of shares of the Company's Common Stock, par value $.10
per share, which may be issued under the Plan shall not exceed
4,850,000 and may be authorized and unissued shares or issued and
reacquired shares, as the Board of Directors may from time to time
determine."
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VOTE REQUIRED.
The affirmative vote of the holders of a majority of the shares of Common
Stock of the Company present or represented by proxy and entitled to vote at the
Special Meeting is required for the adoption of the proposed amendment to the
Plan. Broker non-votes and abstentions with respect to this matter will be
treated as neither a vote "for" nor a vote "against" the matter, although they
will be included in the calculation of the number of shares considered to be
present at the Special Meeting. Accordingly, an abstention from voting by a
Stockholder present in person or by proxy at the meeting has the same legal
effect as a vote "against" the matter because it represents a share present or
represented at the meeting and entitled to vote, thereby increasing the number
of affirmative votes required to approve this proposal.
THE BOARD OF DIRECTORS DEEMS PROPOSAL NO. 2 TO BE IN THE BEST INTERESTS OF
THE COMPANY AND ITS STOCKHOLDERS AND RECOMMENDS THAT THE STOCKHOLDERS VOTE "FOR"
THE APPROVAL THEREOF.
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STOCKHOLDER PROPOSALS
All stockholder proposals which are intended to be presented at the 2000
Annual Meeting of Stockholders of the Company must be received by the Company no
later than July 8, 2000 for inclusion in the Board of Directors' proxy statement
and form of proxy relating to that meeting.
OTHER MATTERS COMING BEFORE THE MEETING
As of the date of this Proxy Statement, the Board of Directors does not
know of any matters to be presented to the meeting other than the matters set
forth in the attached Notice of Special Meeting. If any other matter properly
comes before the meeting, it is intended that the holders of the proxies will
vote thereon in their discretion.
The prompt return of your proxy will be appreciated and helpful in
obtaining the necessary vote. Therefore, whether or not you expect to attend the
Special Meeting, please sign the proxy and return it in the enclosed envelope.
By Order of the Board of Directors
Paul Jacobs
Secretary
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PROXY
ZYGO CORPORATION
SPECIAL MEETING OF STOCKHOLDERS, JULY 31, 2000
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Mr. Bruce J. Robinson, Mr. Michael Auth and
Mr. Gary K. Willis as Proxies, and each of them acting singly, with power of
substitution to each, and hereby authorizes them to represent and to vote, as
designated below, all of the shares of Common Stock of Zygo Corporation held of
record by the undersigned on June 26, 2000, at the Special Meeting of
Stockholders to be held on July 31, 2000, at 2:00 p.m., Eastern Time, or any
adjournments thereof.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED STOCKHOLDER(S). IF NO DIRECTION IS MADE, THIS PROXY
WILL BE VOTED "FOR" PROPOSALS NOS. 1 AND 2. IN THEIR DISCRETION, THE PROXIES ARE
AUTHORIZED TO VOTE UPON SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE
MEETING.
Please mark, sign, date, and return this proxy card promptly in the
enclosed envelope.
[ ] I PLAN TO ATTEND THE MEETING TO BE HELD AT THE OFFICES OF THE COMPANY,
LAUREL BROOK ROAD, MIDDLEFIELD, CONNECTICUT, ON JULY 31, 2000.
(Continued and to be dated and signed on reverse side)
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PROPOSAL NO. 1. Proposal to adopt an amendment to the Company's Restated
Certificate of Incorporation to increase the number of shares of Common
Stock authorized for issuance:
[ ] For [ ] Against [ ] Abstain
PROPOSAL NO. 2. Proposal to increase the number of shares of Common Stock
available for grant under the Company's Amended and Restated Non-Qualified
Stock Option Plan:
[ ] For [ ] Against [ ] Abstain
Note: Please sign exactly as name appears hereon. All joint owners should
sign. When signing as attorney, executor, administrator, trustee,
guardian or custodian for a minor, please give full title as such. If
a corporation, please sign full corporate name and indicate the
signer's office. If a partnership, please sign in partnership name by
authorized person.
Date: ____________________, 2000
--------------------------
Signature
--------------------------
Signature if jointly held
PLEASE MARK YOUR CHOICE LIKE THIS [X] IN BLUE OR BLACK INK.
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