<PAGE> 1
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 (AMENDMENT NO. )
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
Commission only (as permitted by
Rule 14a-6(e)(2).
[X] Definitive proxy statement.
[ ] Definitive additional materials.
[ ] Soliciting material pursuant to Rule 14a-12.
HUTCHINSON TECHNOLOGY INCORPORATED
--------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
N/A
--------------------------------------------------------------------------------
(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:
--------------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
--------------------------------------------------------------------------------
(3) Filing Party:
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(4) Date Filed:
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<PAGE> 2
HUTCHINSON TECHNOLOGY INCORPORATED
40 West Highland Park
Hutchinson, Minnesota 55350
320/587-3797
December 20, 2000
Dear Shareholder:
You are cordially invited to attend the Annual Meeting of Shareholders to
be held at the Minneapolis Marriott City Center Hotel, 30 South 7th Street,
Minneapolis, Minnesota, commencing at 10:00 a.m., Minneapolis time, on
Wednesday, January 31, 2001.
The Secretary's Notice of Annual Meeting and the Proxy Statement which
follow describe the matters to come before the meeting. During the meeting, we
will also review the activities of the past year and items of general interest
about the Company.
We hope that you will be able to attend the meeting in person and we look
forward to seeing you. Please mark, date and sign the enclosed Proxy and return
it in the accompanying envelope, or vote the enclosed Proxy by telephone or via
Internet in accordance with the voting instructions set forth on the enclosed
proxy card, as quickly as possible, even if you plan to attend the Annual
Meeting. You may revoke the Proxy and vote in person at that time if you so
desire.
Sincerely,
/s/ Wayne M. Fortun
Wayne M. Fortun
Chief Executive Officer
<PAGE> 3
HUTCHINSON TECHNOLOGY INCORPORATED
------------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON JANUARY 31, 2001
------------------------------
The Annual Meeting of Shareholders of Hutchinson Technology Incorporated
will be held at the Minneapolis Marriott City Center Hotel, 30 South 7th Street,
Minneapolis, Minnesota, commencing at 10:00 a.m., Minneapolis time, on
Wednesday, January 31, 2001 for the following purposes:
1. To elect a Board of Directors of eight directors, to serve until the next
Annual Meeting of Shareholders or until their successors have been duly
elected and qualified.
2. To ratify the appointment of Arthur Andersen LLP as independent public
accountants for the fiscal year ending September 30, 2001.
3. To transact such other business as may properly be brought before the
meeting.
The Board of Directors has fixed December 14, 2000 as the record date for
the meeting, and only shareholders of record at the close of business on that
date are entitled to receive notice of and vote at the meeting.
YOUR PROXY IS IMPORTANT TO ENSURE A QUORUM AT THE MEETING. EVEN IF YOU OWN
ONLY A FEW SHARES, AND WHETHER OR NOT YOU EXPECT TO BE PRESENT, YOU ARE URGENTLY
REQUESTED TO DATE, SIGN AND MAIL THE ENCLOSED PROXY IN THE POSTAGE-PAID ENVELOPE
THAT IS PROVIDED, OR VOTE THE ENCLOSED PROXY BY TELEPHONE OR VIA INTERNET IN
ACCORDANCE WITH THE VOTING INSTRUCTIONS SET FORTH ON THE ENCLOSED PROXY CARD.
THE PROXY MAY BE REVOKED BY YOU AT ANY TIME PRIOR TO BEING EXERCISED, AND
RETURNING YOUR PROXY OR VOTING YOUR PROXY BY TELEPHONE OR INTERNET WILL NOT
AFFECT YOUR RIGHT TO VOTE IN PERSON IF YOU ATTEND THE MEETING AND REVOKE THE
PROXY.
By Order of the Board of Directors,
/s/ John A. Ingleman
John A. Ingleman
Secretary
Hutchinson, Minnesota
December 20, 2000
<PAGE> 4
------------------------------
PROXY STATEMENT
------------------------------
GENERAL INFORMATION
The enclosed Proxy is being solicited by the Board of Directors of
Hutchinson Technology Incorporated (the "Company") for use in connection with
the Annual Meeting of Shareholders to be held on Wednesday, January 31, 2001 at
the Minneapolis Marriott City Center Hotel, 30 South 7th Street, Minneapolis,
Minnesota at 10:00 a.m. and at any adjournments thereof. Only shareholders of
record at the close of business on December 14, 2000 will be entitled to vote at
such meeting or adjournment. Proxies in the accompanying form which are properly
signed and duly returned to an officer of the Company, or voted by telephone or
via Internet in accordance with the voting instructions set forth on the
enclosed proxy card, and not revoked will be voted in the manner specified. A
shareholder executing a Proxy retains the right to revoke it at any time before
it is exercised by notice in writing to an officer of the Company of termination
of the Proxy's authority or a properly signed and duly returned Proxy bearing a
later date.
The address of the principal executive office of the Company is 40 West
Highland Park, Hutchinson, Minnesota 55350 and the telephone number is (320)
587-3797. The mailing of this Proxy Statement and the Board of Directors' form
of Proxy to shareholders will commence on or about December 20, 2000.
Shareholder proposals intended to be presented at the Annual Meeting of
Shareholders in the year 2002 that are requested to be included in the Proxy
Statement for that meeting must be received by the Company at its principal
executive office no later than August 20, 2001. Any other shareholder proposals
intended to be presented at the Annual Meeting of Shareholders in the year 2002
must be received by the Company at its principal executive office no later than
November 1, 2001.
The affirmative vote of the holders of a majority of the voting power of
the outstanding shares of Common Stock of the Company present and entitled to
vote is required for approval of each proposal presented in this Proxy
Statement. A shareholder voting through a Proxy who abstains with respect to a
certain proposal is considered to be present and entitled to vote on such
proposal at the meeting, and is in effect a negative vote, but a shareholder
(including a broker) who does not give authority to a Proxy to vote, or
withholds authority to vote, on a certain proposal shall not be considered
present and entitled to vote on such proposal.
<PAGE> 5
SECURITY OWNERSHIP OF PRINCIPAL SHAREHOLDERS AND MANAGEMENT
The following table sets forth, as of December 1, 2000, the ownership of
Common Stock of the Company by each shareholder who is known by the Company to
own beneficially more than 5% of the outstanding Common Stock of the Company,
each director, each executive officer named in the Summary Compensation Table on
page 10, and all executive officers and directors as a group. At December 1,
2000, there were 24,850,215 shares of Common Stock, par value $.01 per share,
issued and outstanding, each of which is entitled to one vote.
<TABLE>
<CAPTION>
NAME OF BENEFICIAL OWNER AMOUNT AND NATURE OF PERCENTAGE OF
OR IDENTITY OF GROUP BENEFICIAL OWNERSHIP(1) OUTSTANDING SHARES
------------------------ ----------------------- ------------------
<S> <C> <C>
First Pacific Advisors, Inc. 2,043,000(2) 8.22
Los Angeles, California 90064
Integral Capital Partners IV, L.P., 1,732,500(3) 6.97
Integral Capital Partners IV MS Side Fund,
L.P.,
Integral Capital Partners V, L.P., and
Integral Capital Partners V Side Fund, L.P.
Menlo Park, California 94025
Jeffrey W. Green 899,209(4) 3.57
Wayne M. Fortun 856,191(5) 3.36
W. Thomas Brunberg 5,500(6) *
Archibald Cox, Jr. 33,000(7) *
Russell Huffer 3,000(8) *
Steven E. Landsburg 5,000(9) *
William T. Monahan 4,000(10) *
Richard B. Solum 7,000(11) *
Beatrice A. Graczyk 136,559(12) *
John A. Ingleman 190,362(13) *
Richard J. Penn 134,710(14) *
R. Scott Schaefer 120,030(15) *
Executive officers and directors as a group (14 2,633,632(16) 9.96
persons)
</TABLE>
------------------------------
* Less than 1%.
(1) Unless otherwise indicated in the footnotes to this table, the listed
beneficial owner has sole voting power and investment power with respect to
such shares. Excludes fractional shares held by any listed beneficial
owner.
(2) The number of shares indicated is based on information reported to the
Securities and Exchange Commission (the "SEC") in a Schedule 13G filed by
First Pacific Advisors, Inc. on February 8, 2000, and reflects aggregate
beneficial ownership as of February 8, 2000.
(3) The number of shares indicated is based on information reported to the SEC
in a Schedule 13G filed jointly by Integral Capital Partners IV, L.P.,
Integral Capital Partners IV MS Side Fund, L.P., Integral Capital Partners
V, L.P., and Integral Capital Partners V Side Fund, L.P., and by the
general partner of each such limited partnership, on October 6, 2000, and
reflects aggregate beneficial ownership as of October 3, 2000. Each limited
partnership shares voting and investment power with its general partner
over shares the partnership holds directly.
2
<PAGE> 6
(4) Of these shares, 660 are held by Mr. Green in joint tenancy with his wife
and 133,800 are held in an IRA for Mr. Green. Includes 351,300 shares
covered by currently exercisable options granted to Mr. Green.
(5) Of these shares, 167,038 are held by Mr. Fortun in joint tenancy with his
wife. Includes 644,170 shares covered by currently exercisable options
granted to Mr. Fortun.
(6) Of these shares, 1,150 are held in trusts, 1,050 are held in an IRA for Mr.
Brunberg and 300 are held in an IRA for Mr. Brunberg's wife. Includes 3,000
shares covered by currently exercisable options granted to Mr. Brunberg.
(7) Includes 3,000 shares covered by currently exercisable options granted to
Mr. Cox.
(8) Includes 3,000 shares covered by currently exercisable options granted to
Mr. Huffer.
(9) Includes 3,000 shares covered by currently exercisable options granted to
Mr. Landsburg.
(10) Includes 3,000 shares covered by options granted to Mr. Monahan which are
exercisable within 60 days hereof.
(11) Of these shares, 4,000 are held in an IRA for Mr. Solum. Includes 3,000
shares covered by currently exercisable options granted to Mr. Solum.
(12) Of these shares, 54,150 are held by Ms. Graczyk in joint tenancy with her
husband. Includes 82,340 shares covered by currently exercisable options
granted to Ms. Graczyk.
(13) Of these shares, 71,700 are held by Mr. Ingleman in joint tenancy with his
wife. Includes 117,330 shares covered by currently exercisable options
granted to Mr. Ingleman.
(14) All of these shares are covered by currently exercisable options granted to
Mr. Penn.
(15) Includes 76,710 shares covered by currently exercisable options granted to
Mr. Schaefer.
(16) Includes 1,583,760 shares covered by currently exercisable options and
3,000 shares covered by options which are exercisable within 60 days
hereof, granted to executive officers and directors of the Company.
3
<PAGE> 7
ELECTION OF DIRECTORS
The By-Laws of the Company provide that the business of the Company shall
be managed by or under the direction of a Board of Directors of not less than
three nor more than nine directors, which number shall be determined by the
shareholders at their annual meeting. Each director shall be elected at the
Annual Meeting of Shareholders for a term of one year or until a successor is
elected and has qualified. The Board of Directors has recommended that the
number of directors to be elected for the ensuing year be set at eight and has
nominated the eight persons named below for election as directors. Proxies
solicited by the Board of Directors will, unless otherwise directed, be voted to
elect the eight nominees named below to constitute the entire Board of
Directors.
All of the nominees named below are current directors of the Company. Each
nominee has indicated a willingness to serve as a director for the ensuing year,
but in case any nominee is not a candidate at the meeting for any reason, the
Proxies named in the enclosed form of Proxy may vote for a substitute nominee in
their discretion.
The affirmative vote of the holders of at least a majority of the voting
power of the outstanding shares of Common Stock of the Company present and
entitled to vote on the election of directors is required for election to the
Board of Directors of each of the eight nominees named below.
The following table sets forth certain information as to each nominee for
the office of director:
<TABLE>
<CAPTION>
NAME AGE POSITION
------------------- --- ---------------------------------------------
<S> <C> <C>
Jeffrey W. Green 60 Chairman of the Board and Director
Wayne M. Fortun 51 President and Chief Executive Officer and
Director
W. Thomas Brunberg 60 Director
Archibald Cox, Jr. 60 Director
Russell Huffer 51 Director
Steven E. Landsburg 46 Director
William T. Monahan 53 Director
Richard B. Solum 56 Director
</TABLE>
Mr. Green is a co-founder of the Company and has served as a director since
the Company's formation in 1965. Mr. Green has been Chairman of the Board since
January 1983, and served as the Company's Chief Executive Officer from January
1983 to May 1996. Mr. Green is also a director of Applied Biometrics, Inc.
Mr. Fortun was elected President and Chief Operating Officer in 1983, Chief
Executive Officer in May 1996, and is now President and Chief Executive Officer.
He has served as a director of the Company since 1983. Mr. Fortun is also a
director of G&K Services, Inc. Mr. Fortun has been with the Company since 1975.
Mr. Brunberg became a director of the Company in 1975. He is a certified
public accountant and has been President, Chief Executive Officer and a managing
shareholder in the Minneapolis accounting firm of Brunberg Thoresen Diaby &
Associates, Ltd. since March 1991.
Mr. Cox became a director of the Company in 1996. Since February 1999, Mr.
Cox has been President and Chief Executive Officer, and was Vice Chairman and
President from October 1995 until February 1999, of Magnequench, Inc., a
manufacturer of magnetic material. He has been Chairman of Sextant Group, Inc.,
a financial advisory firm, since August 1993.
Mr. Huffer became a director of the Company in 1999. Since June 1999, Mr.
Huffer has been Chairman of Apogee Enterprises, Inc. ("Apogee"), a manufacturer
of glass products, services and systems. He has been President, Chief Executive
Officer and a director of Apogee since January 1998, and has served in various
senior management positions with Apogee or its subsidiaries since 1986.
4
<PAGE> 8
Mr. Landsburg became a director of the Company in 1997. He has been an
Associate Professor of Economics at the University of Rochester since September
1991.
Mr. Monahan became a director of the Company in 2000. He has been Chairman
of the Board, President, Chief Executive Officer and a director of Imation
Corp., a developer, manufacturer and marketer of data storage and imaging
products and services, since March 1996. Mr. Monahan served as Group Vice
President of the Electro and Communications Systems Group of Minnesota Mining
and Manufacturing Company (3M) from June 1993 to March 1996.
Mr. Solum became a director of the Company in 1999. Mr. Solum has been a
partner in the law firm of Dorsey & Whitney LLP since July 1, 1998. He was a
judge of the Hennepin County District Court from January 1992 through June 1998.
Mr. Solum previously served as a director of the Company from 1977 until January
1992.
None of the above nominees is related to each other or to any executive
officer of the Company.
The Company has an audit committee composed of W. Thomas Brunberg, Russell
Huffer and Richard B. Solum. All members of the audit committee are
"independent", as that term is defined in the applicable listing standards of
the National Association of Securities Dealers. The audit committee held four
meetings in fiscal year 2000. The audit committee's function is one of oversight
and, in that regard, the committee meets with the Company's management and
internal auditor, and the Company's independent public accountants, to review
and discuss the Company's financial reporting and the Company's controls
respecting accounting and risk of material loss. The responsibilities of the
audit committee are set forth in the Audit Committee Charter, adopted by the
Company's Board of Directors on May 10, 2000, a copy of which is included as
Appendix A to this Proxy Statement.
The Company has a compensation committee composed of Archibald Cox, Jr.,
Steven E. Landsburg and William T. Monahan. The compensation committee held six
meetings in fiscal year 2000. The committee grants or makes recommendations to
the Board of Directors concerning employee stock options, bonuses and other
compensation. The Company does not have a nominating committee.
The Board of Directors held six meetings during fiscal year 2000. Each
non-employee director of the Company receives an annual fee of $20,000 and a fee
of $1,000 for each Board meeting attended in person, $600 for each Board meeting
attended by conference call, and $600 for each Board committee meeting attended
by the director. Mr. Monahan, who was elected to the Board of Directors in
January 2000, was absent for the July 2000 meetings of the Board of Directors
and the compensation committee.
All persons serving as non-employee directors of the Company are entitled
to receive retirement benefits under the Company's Directors' Retirement Plan
(the "Retirement Plan"). Under the Retirement Plan, following cessation of
service as a director of the Company (i) after at least five years of service on
the Board of Directors, (ii) upon reaching age 65, or (iii) regardless of the
length of service on the Board of Directors, as a result of such non-employee
director's death or permanent disability while a director, a non-employee
director (or his or her beneficiary) will receive a cash retirement benefit
equal on an annual basis to the amount of the annual retainer fee (exclusive of
meeting fees) in effect at the time such individual ceases to serve on the Board
of Directors. The benefit is payable no less frequently than annually for a
period equal to one-half of the period such non-employee director served on the
Board of Directors up to a maximum payment period of five years. Payments
otherwise due in installments may become payable in a lump sum upon the
occurrence of certain change of control events specified in the Retirement Plan.
Upon his election to the Board of Directors on January 26, 2000, William T.
Monahan received a stock option pursuant to the Hutchinson Technology
Incorporated 1996 Incentive Plan (the "1996 Incentive Plan") to purchase 3,000
shares of Common Stock of the Company at an exercise price of $17.0156, which
was equal to the fair market value per share of the Common Stock at the time of
the grant. The options granted to non-employee directors generally are not
exercisable for one year after the date of grant.
5
<PAGE> 9
AUDIT COMMITTEE REPORT
The role of the audit committee of the Company's Board of Directors (the
"Audit Committee"), which is composed of three independent non-employee
directors, is one of oversight of the Company's management and the Company's
outside auditors in regard to the Company's financial reporting and the
Company's controls respecting accounting and risk of material loss. In
performing its oversight function, the Audit Committee relied upon advice and
information received in its discussions with the Company's management and
independent auditors.
The Audit Committee has (i) reviewed and discussed the Company's audited
financial statements for the fiscal year ended September 24, 2000 with the
Company's management; (ii) discussed with the Company's independent auditors the
matters required to be discussed by Statement on Auditing Standards No. 61
regarding communication with audit committees (Codification of Statements on
Auditing Standards, AU sec. 380); and (iii) received the written disclosures and
the letter from the Company's independent accountants required by Independence
Standards Board Standard No. 1 (Independence Discussions with Audit Committees),
and has discussed with the Company's independent accountant the independent
accountant's independence.
Based on the review and discussions with management and the Company's
independent auditors referred to above, the Audit Committee recommended to the
Board of Directors that the audited financial statements be included in the
Company's Annual Report on Form 10-K for the fiscal year ended September 24,
2000 for filing with the Securities and Exchange Commission.
Audit Committee:
W. Thomas Brunberg, Chairman
Russell Huffer
Richard B. Solum
6
<PAGE> 10
COMPENSATION COMMITTEE REPORT
ON EXECUTIVE COMPENSATION
The compensation committee of the Company's Board of Directors (the
"Compensation Committee"), which is composed of three independent non-employee
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 Compensation 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: (i) base salary; (ii)
annual cash bonuses; and (iii) stock options. Section 162(m) ("Section 162(m)")
of the Internal Revenue Code of 1986, as amended, generally limits the
deductibility of compensation over $1 million paid by a company to certain
executive officers. The Section 162(m) limit does not apply to
"performance-based compensation", and the stock options granted to executives in
fiscal year 2000 pursuant to the Company's 1996 Incentive Plan have been
structured to qualify as performance-based compensation for these purposes. The
Company believes, however, that cash bonuses payable under the Company's Year
2000 Bonus Program would not qualify as performance-based compensation for
Section 162(m) purposes, and that the excess of bonus amounts above $1 million
paid to any of the covered executive officers would not be deductible by the
Company under current federal income tax laws.
BASE SALARY
The base salary of each executive officer of the Company other than the
Company's Chairman of the Board of Directors (the "Chairman"), but including the
Company's Chief Executive Officer (the "CEO"), is determined annually by the
Compensation Committee after considering the compensation levels of personnel
with similar responsibilities at other companies in high technology industries
and in manufacturing generally and, to a lesser extent, the Company's financial
performance during the prior fiscal year. With respect to the Chairman, base
salary is determined annually by the Compensation Committee after considering
the Chairman's expected job responsibilities during the fiscal year and the time
required to meet such duties. In the case of executive officers other than the
Chairman, the individual performance of each executive officer is also given
significant weight. Salary decisions concerning executive officers are made by
the Compensation Committee at the beginning of each fiscal year of the Company
in a review process which includes recommendations of the CEO and the Chairman
for all executive officers other than themselves.
To maintain a competitive level of executive compensation and retain
superior personnel, the Compensation Committee annually evaluates the salary for
each executive officer's position (other than the Chairman) based on two surveys
on executive compensation for manufacturers in high technology industry and for
manufacturers generally (the "Surveys"). Using the Surveys, the base salary of
the CEO was targeted in fiscal year 2000 by the Compensation Committee to be at
the median of the salary range for chief executive officers. With respect to all
other executive officers, base salaries are targeted initially to be in line
with the industry median for similar positions, as presented in the Surveys,
with variations above or below the median based on individual performance,
experience and job responsibility. All four peer companies constituting the Peer
Composite Index presented in the performance graph on page 14 of this Proxy
Statement are included in one of the Surveys.
With respect to the Chairman, the Compensation Committee assessed the
expected job responsibilities of the Chairman in fiscal year 2000 and the time
required to meet such duties, and arrived at a base salary for such fiscal year
based on this assessment.
7
<PAGE> 11
With respect to all executive officers other than the Chairman, but
including the CEO, the Company's financial performance during the prior fiscal
year also is considered in the Compensation Committee's annual review of base
salaries. Current measures of financial performance are operating income, net
income and return on assets, each of which is of substantially equivalent
importance in determining compensation.
With respect to all executive officers other than the Chairman, but
including the CEO, the individual performance and achievements of each executive
officer in the prior fiscal year also are given significant weight in the
Compensation Committee's annual review of base salaries. Individual performance
is assessed by an annual written performance appraisal that evaluates each
officer's performance in areas such as leadership, vision setting, motivation
and development of employees, global economic marketing and business know-how.
The CEO's performance appraisal is prepared by the chairman of the Compensation
Committee following discussion among all Compensation Committee members of
performance appraisals of the CEO written by members of the Board of Directors
and by each executive officer or manager that reports directly to the CEO. With
respect to all other executive officers, performance appraisals are prepared by
the CEO following interviews by the CEO with each officer's peers and
subordinates and discussion with the Chairman. In addition, the CEO assesses
each officer's individual performance by reviewing each officer's quarterly
achievement of specific "results objectives" developed by turning corporate
financial and strategic goals into specific personal objectives to be
accomplished each fiscal quarter by each officer.
ANNUAL INCENTIVE COMPENSATION
The Company's Year 2000 Bonus Program, in effect during fiscal year 2000
(the "Bonus Program"), was designed (i) to provide incentives to the executive
officers of the Company to produce a superior return to the Company's
shareholders by linking incentive compensation directly to the attainment of
quarterly earnings per share goals for the Company, and (ii) to encourage such
executive officers to remain in the employ of the Company. Executive officers of
the Company were eligible to participate in the Bonus Program, which was
administered by the Compensation Committee. All of the eight eligible executive
officers of the Company, including the CEO, were selected by the Compensation
Committee to participate in the Bonus Program at the start of fiscal year 2000.
The Bonus Program provided that participants in the Bonus Program would
receive an award of bonus compensation based on the achievement of quarterly
earnings per share goals in fiscal year 2000. The earnings goals were used as a
means of assessing the Company's overall corporate financial performance, and
were recommended by the CEO to the Compensation Committee at the start of fiscal
year 2000. Early in each fiscal quarter, the Compensation Committee reviewed the
quarterly goal to determine if previously unforeseen positive or negative
changes in industry forecasts required that the quarterly goal be modified.
Bonuses for executive officers, including the CEO, would be paid under the Bonus
Program only if the Company achieved a minimum threshold of positive earnings
per share in fiscal year 2000. Any bonus under the Bonus Program would be
payable in cash early in fiscal year 2001.
If the minimum threshold of positive earnings per share in fiscal year 2000
was achieved, bonuses for executive officers, including the CEO, would be
determined by the Compensation Committee based on a bonus percentage (the "Bonus
Percentage") of base salary that was assigned to each participating executive
officer by the Compensation Committee at the start of fiscal year 2000. With
respect to the CEO, the Bonus Percentage was set by the Compensation Committee
after reviewing incentive compensation information for individuals in a similar
position, as presented in the Surveys. With respect to the Chairman, the Bonus
Percentage was set by the Compensation Committee after assessing the expected
job responsibilities of the Chairman in fiscal year 2000. The Bonus Percentage
for executive officers other than the CEO and the Chairman was set by the
Compensation Committee after comparing each such officer's job responsibilities
to
8
<PAGE> 12
those of comparable jobs, and the bonus percentage associated with such
comparable jobs, as presented in the Surveys.
The bonus amount actually paid to each executive officer, including the
CEO, would be based on the attainment of earnings per share (over the threshold
level) in comparison to the quarterly goals established by the Compensation
Committee. If the threshold level of positive earnings per share was attained,
the total bonus paid to each executive officer would be calculated by
multiplying (i) the simple average of each fiscal quarter's earnings per share
goal attainment, (ii) the applicable Bonus Percentage for such executive
officer, and (iii) the base salary for such executive officer. The maximum
percentage of base salary that would be paid under the Bonus Program to each
executive officer, including the CEO, was twice the Bonus Percentage assigned to
each officer.
The Bonus Program permitted the Compensation Committee, in its sole
discretion, to adjust an award payable to any participant for any reason. To
that end, the CEO would review the individual performance of each executive
officer, other than himself and the Chairman, for fiscal year 2000, based on the
written performance appraisals and "results objectives" described above, and
summarize such reviews for the Compensation Committee. Based on such reviews of
individual performance, the Compensation Committee could determine to change an
award that would otherwise be payable under the Bonus Program.
The Company's fiscal year 2000 overall corporate financial performance did
not meet the minimum threshold under the Bonus Program of positive earnings per
share for the Company. As a result, neither the CEO nor any other executive
officer received any cash bonus for fiscal year 2000 under the Bonus Program.
The Compensation Committee determined, however, to pay two executive officers
cash bonuses of $25,000 each, in recognition of extraordinary individual
performance during fiscal year 2000.
STOCK OPTIONS
The Company's stock option program is intended to provide a long-term
incentive for executive officers and other key employees. The purpose of the
program is to promote the interests of the Company and its shareholders by
providing all employees with an opportunity to acquire a proprietary interest in
the Company and thereby develop a stronger incentive to put forth maximum effort
for the continued success and growth of the Company. In addition, the Company
believes the program will aid in attracting and retaining personnel of
outstanding ability by providing such personnel with an opportunity to acquire a
proprietary interest in the Company.
The Compensation Committee administers the Company's 1988 Stock Option
Plan, under which options to purchase Common Stock of the Company were granted
by the Compensation Committee to key employees, including all executive
officers. All shares of Common Stock available for option grants under the 1988
Stock Option Plan were used in option grants made by the Compensation Committee
between 1988 and 1997. The Company's 1996 Incentive Plan is administered by the
Compensation Committee and authorizes the Compensation Committee to grant
options to purchase Common Stock of the Company to any full-time employee,
including all executive officers, and to other individuals who are not employees
but who provide services as advisors or consultants. Generally, options are
granted annually to purchase shares of Common Stock over a ten-year period at
the fair market value per share at the time the options are granted. Options
granted during fiscal year 2000 generally are not exercisable for one year after
the date of grant.
The number of options to be awarded to the CEO and the Chairman is
determined by the Compensation Committee on the basis of its view of each such
officer's long-term individual performance and the overall strategic
contribution of each such individual to corporate performance. Option grants to
the CEO and the Chairman are made on the same terms as all other options granted
by the Compensation Committee to other employees of the Company. In determining
the number of options to be granted, the Compensation
9
<PAGE> 13
Committee takes into account the number of options then held by the CEO and the
Chairman and the number of options granted as a percentage of all outstanding
shares.
The number of options to be awarded to each executive officer, other than
the CEO and the Chairman, is proposed by the CEO after comparing each such
officer's job responsibilities to those of comparable jobs, and the dollar value
of option grants associated with such comparable jobs as presented in the
Surveys, taking into account individual promotions during the fiscal year. The
Compensation Committee reviews the recommendations of the CEO and approves the
final list of such option recipients and the amounts of the awards.
Compensation Committee:
Archibald Cox, Jr., Chairman
Steven E. Landsburg
William T. Monahan
10
<PAGE> 14
SUMMARY COMPENSATION TABLE
The following table shows, for the Company's Chief Executive Officer and
each of the four other most highly compensated executive officers of the Company
(collectively, the "Named Executive Officers"), information concerning
compensation earned for services in all capacities during the fiscal year ended
September 24, 2000, as well as compensation earned by each such person for the
two previous fiscal years:
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
------------
ANNUAL COMPENSATION SECURITIES
-------------------------- UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY ($) BONUS ($) (1) OPTIONS (#) COMPENSATION ($) (2)
--------------------------------------- ---- ---------- ------------- ------------ --------------------
<S> <C> <C> <C> <C> <C>
Wayne M. Fortun 2000 559,147 -- 60,000 10,200
President and Chief 1999 495,684 -- 30,000 9,600
Executive Officer(3) 1998 477,459 -- 40,000 9,600
Richard J. Penn 2000 232,445 -- 25,000 10,200
Vice President of 1999 221,551 -- 11,390 9,738
Sales and Marketing 1998 204,290 -- 16,570 10,984
John A. Ingleman 2000 228,845 -- 25,000 10,200
Vice President, Chief 1999 223,283 -- 11,390 9,600
Financial Officer and 1998 211,546 -- 17,730 10,200
Secretary
Beatrice A. Graczyk 2000 226,248 25,000 25,000 10,200
Vice President and 1999 218,956 -- 11,390 10,430
Chief Operating Officer(4) 1998 186,199 -- 15,350 10,616
R. Scott Schaefer 2000 225,439 25,000 25,000 10,200
Vice President and 1999 217,406 -- 11,140 9,738
Chief Technical Officer 1998 200,850 -- 16,570 10,708
</TABLE>
------------------------------
(1) Amounts represent bonuses paid for extraordinary individual performance
during fiscal year 2000.
(2) Amounts represent Company matching cash contributions under the Company's
401-K Plan.
(3) Mr. Fortun was Chief Operating Officer of the Company until March 24, 1999.
(4) Ms. Graczyk became Chief Operating Officer of the Company on March 24, 1999.
11
<PAGE> 15
OPTION TABLES
The following tables summarize stock option grants to and exercises by the
Named Executive Officers during the fiscal year ended September 24, 2000, and
certain other information relative to such options:
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
INDIVIDUAL GRANTS VALUE AT ASSUMED
----------------------------------------------------------------------------------------------- ANNUAL RATES OF STOCK
SECURITIES PERCENT OF PRICE APPRECIATION FOR
UNDERLYING TOTAL OPTIONS EXERCISE OR OPTION TERM ($) (3)
OPTIONS GRANTED TO EMPLOYEES BASE PRICE -----------------------
NAME GRANTED (#) (1) IN FISCAL YEAR ($/SHR) (2) EXPIRATION DATE 5% 10%
--------------------- --------------- -------------------- ----------- ----------------- --------- -----------
<S> <C> <C> <C> <C> <C> <C>
Wayne M. Fortun 60,000 7.70 18.75 November 17, 2009 707,400 1,792,800
Richard J. Penn 25,000 3.21 18.75 November 17, 2009 294,750 747,000
John A. Ingleman 25,000 3.21 18.75 November 17, 2009 294,750 747,000
Beatrice A. Graczyk 25,000 3.21 18.75 November 17, 2009 294,750 747,000
R. Scott Schaefer 25,000 3.21 18.75 November 17, 2009 294,750 747,000
</TABLE>
------------------------------
(1) All such options are granted under the Company's 1996 Incentive Plan. Of the
total number of such options granted to each Named Executive Officer, 5,330
are intended to be "incentive stock options" as that term is defined in
Section 422 of the Internal Revenue Code of 1986, as amended, and the
remainder are non-statutory stock options. Such options generally are not
exercisable for one year after the date of grant. Such options become
immediately exercisable, however, upon (a) death or disability of the
holder, (b) a change of control (defined as certain changes in the Company's
Board of Directors, certain concentrations of voting power, certain mergers,
sales of corporate assets, statutory share exchanges or similar
transactions, or liquidation or dissolution of the Company), or (c)
cancellation of such options by the Committee, which administers the 1996
Incentive Plan, in the event of the proposed dissolution or liquidation of
the Company or certain mergers, sales of corporate assets, statutory share
exchanges or similar transactions. The holder is permitted to pay the
exercise price and (if permitted by the Committee and subject to certain
restrictions) any withholding taxes due upon exercise with either cash or
shares of Common Stock.
(2) The exercise price of such options is not less than the Fair Market Value
(as defined in the 1996 Incentive Plan) of a share of Common Stock at the
time of grant.
(3) The hypothetical potential appreciation shown in these columns reflects the
required calculations at annual rates of 5% and 10% set by the SEC, and is
not intended to represent either historical appreciation or anticipated
future appreciation of the Company's Common Stock price.
12
<PAGE> 16
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
OPTIONS AT FISCAL YEAR-END IN-THE-MONEY OPTIONS AT
SHARES (#) FISCAL YEAR-END ($) (2)
ACQUIRED ON VALUE REALIZED --------------------------- ---------------------------
NAME EXERCISE (#) ($) (1) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
------------------- ------------ -------------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Wayne M. Fortun -- -- 584,170 60,000 5,191,618 288,780
Richard J. Penn -- -- 109,710 25,000 516,050 120,325
John A. Ingleman -- -- 92,330 25,000 867,440 120,325
Beatrice A. Graczyk -- -- 57,340 25,000 270,608 120,325
R. Scott Schaefer -- -- 51,710 25,000 158,517 120,325
</TABLE>
------------------------------
(1) Market value of underlying securities on date of exercise minus the exercise
price.
(2) Market value of underlying securities at fiscal year-end minus the exercise
price.
13
<PAGE> 17
PERFORMANCE GRAPH
Set forth below is a graph comparing, for a period of five fiscal years
ended September 24, 2000, the yearly cumulative total shareholder return on the
Company's Common Stock with the yearly cumulative total shareholder return of
the S&P 500 Index and an index of a group of peer companies selected by the
Company (the "Peer Composite Index"). The comparison of total shareholder
returns assumes that $100 was invested on September 24, 1995 in each of the
Company, the S&P 500 Index and the Peer Composite Index, and that dividends were
reinvested when and as paid. The companies in the peer group are Adaptec
Incorporated, Cirrus Logic Incorporated, Komag Incorporated and Read-Rite
Corporation. The peer group used in the Company's 1999 Proxy Statement included
Applied Magnetics Corporation ("ACM"), which filed for bankruptcy in 2000 and
whose stock is no longer traded on the Nasdaq National Market. The Company has
replaced ACM with Read-Rite Corporation in its peer group. The Company is not
included in the peer group. In calculating the yearly cumulative total
shareholder return of the Peer Composite Index, the shareholder returns of the
companies included in the peer group are weighted according to the stock market
capitalizations of such companies at the beginning of each period for which a
return is indicated.
<TABLE>
<CAPTION>
HUTCHINSON TECHNOLOGY PEER COMPOSITE S&P 500 INDEX
--------------------- -------------- -------------
<S> <C> <C> <C>
1995 100.00 100.00 100.00
1996 55.51 60.24 117.96
1997 146.69 63.20 162.48
1998 79.14 15.39 179.59
1999 122.98 35.90 219.58
2000 103.95 41.75 249.04
</TABLE>
HTI'S FISCAL YEAR ENDING
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------
1995 1996 1997 1998 1999 2000
-------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Hutchinson Technology $100.00 $ 55.51 $146.69 $ 79.14 $122.98 $103.95
-------------------------------------------------------------------------------------------------------
Peer Composite 100.00 60.24 63.20 15.39 35.90 41.75
-------------------------------------------------------------------------------------------------------
S&P 500 Index 100.00 117.96 162.48 179.59 219.58 249.04
-------------------------------------------------------------------------------------------------------
</TABLE>
14
<PAGE> 18
SECTION 16(A) BENEFICIAL OWNERSHIP
REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended, and the
regulations promulgated thereunder require directors and certain officers of the
Company and persons who own more than ten percent of the Company's Common Stock
to file reports of their ownership of the Company's Common Stock and changes in
such ownership with the SEC. To the Company's knowledge, based solely on a
review of copies of forms submitted to the Company during and with respect to
fiscal year 2000, all required reports were filed on a timely basis during
fiscal year 2000.
RELATIONSHIP WITH AND APPOINTMENT OF INDEPENDENT AUDITORS
The firm of Arthur Andersen LLP, independent public accountants, has been
the auditors for the Company since 1979. The Board of Directors again has
selected Arthur Andersen LLP to serve as the Company's independent public
accountants for the fiscal year ending September 30, 2001, subject to
ratification by the shareholders. While it is not required to do so, the Board
of Directors is submitting the selection of that firm for ratification in order
to ascertain the view of the shareholders. If the selection is not ratified, the
Board of Directors will reconsider its selection. Proxies solicited by the Board
of Directors will, unless otherwise directed, be voted to ratify the appointment
of Arthur Andersen LLP as independent public accountants for the Company for the
fiscal year ending September 30, 2001.
A representative of Arthur Andersen LLP will be present at the Annual
Meeting of Shareholders and will be afforded an opportunity to make a statement
if such representative so desires and will be available to respond to
appropriate questions during the meeting.
GENERAL
The 2000 Annual Report and the Annual Report on Form 10-K of the Company
for the fiscal year 2000, including financial statements, are being mailed with
this Proxy Statement.
As of the date of this Proxy Statement, management knows of no matters that
will be presented for determination at the meeting other than those referred to
herein. If any other matters properly come before the meeting calling for a vote
of shareholders, it is intended that the shares represented by the Proxies
solicited by the Board of Directors will be voted by the Proxies named therein
in accordance with their best judgment.
The Company will pay the cost of soliciting Proxies in the accompanying
form. In addition to solicitation by the use of mails, certain directors,
officers and regular employees of the Company may solicit Proxies by telephone,
telegram or personal interview, and may request brokerage firms and custodians,
nominees and other record holders to forward soliciting materials to the
beneficial owners of stock of the Company and will reimburse them for their
reasonable out-of-pocket expenses in so forwarding such materials.
15
<PAGE> 19
SHAREHOLDERS WHO WISH TO OBTAIN AN ADDITIONAL COPY OF THE COMPANY'S ANNUAL
REPORT ON FORM 10-K, TO BE FILED WITH THE SEC FOR THE FISCAL YEAR ENDED
SEPTEMBER 24, 2000, MAY DO SO WITHOUT CHARGE BY WRITING TO JOHN A. INGLEMAN,
VICE PRESIDENT, CHIEF FINANCIAL OFFICER AND SECRETARY, AT THE COMPANY'S OFFICES,
40 WEST HIGHLAND PARK, HUTCHINSON, MINNESOTA 55350.
By Order of the Board of Directors,
/s/ John A. Ingleman
John A. Ingleman
Secretary
Dated: December 20, 2000
16
<PAGE> 20
APPENDIX A
HUTCHINSON TECHNOLOGY INCORPORATED
AUDIT COMMITTEE CHARTER
PREAMBLE
There shall be an Audit Committee of the Board of Directors (the "Board")
of Hutchinson Technology Incorporated, a Minnesota corporation (the "Company").
The Committee's role shall be one of oversight of the Company's management and
the Company's outside auditors in regard to the Company's financial reporting
and the Company's controls respecting accounting and risk of material loss.
ORGANIZATION AND COMPOSITION
The Committee shall consist of at least three directors appointed by the
Company's Board. Each director appointed to the Committee shall:
a) not be disqualified from being an "independent director" within the
meaning of Rule 4200 of the NASD Manual, and shall have no relationship
with the Company which, in the opinion of the Board, would interfere with
the exercise of independent judgment; and
b) be able to read and understand fundamental financial statements,
including the Company's balance sheet, income statement and cash flow
statement. (If a director is not capable of understanding such fundamental
financial statements, he or she must become able to do so within a
reasonable period of time after appointment to the Committee.)
At least one member of the Committee shall have past employment experience
in finance or accounting, requisite professional certification in accounting or
any other comparable experience or background which results in the director's
financial sophistication.
THE COMPANY'S FINANCIAL REPORTING AND RELATED RESPONSIBILITIES
The Board of the Company recognizes that the preparation and reporting of
the Company's financial statements and other financial information is the
responsibility of the Company's management. It also recognizes that the auditing
and rendering an opinion on, and the conducting independent limited reviews of,
the Company's periodic financial statements and other financial information, and
the auditing activities incident thereto, are the responsibility of the
Company's outside auditors.
Since the Company's management and its outside auditors, in the exercise of
their responsibilities, acquire greater and more detailed information about the
Company and its financial affairs than, and have other expertise beyond that of,
the Committee members, the Committee's function is one of oversight. The
Committee is not responsible for any assurances, verifications or expert opinion
respecting either the Company's financial statements and other financial
information, or the work of the Company's outside auditors (including such
auditors' annual audit or limited reviews).
The Board of the Company also recognizes that the Company's outside
auditors are ultimately accountable to the Board and the Committee, which have
the authority and responsibility to select, evaluate and where appropriate
replace the outside auditors, and, if applicable, to nominate the outside
auditors for shareholder approval in any proxy statement.
A-1
<PAGE> 21
COMMITTEE FUNCTIONS
In carrying out its oversight function, the Committee:
a) shall review and reassess annually the adequacy of the Audit
Committee Charter;
b) shall require that the Company's outside auditors provide the
Committee with a formal written statement delineating all relationships
between the outside auditors and the Company, consistent with Independence
Standards Board Standard No. 1, and actively discuss with the outside
auditors their independence, and any disclosed relationships or services
which may impact their objectivity or independence;
c) shall take, or recommend that the full Board take, appropriate
action to oversee independence of the outside auditors, and shall have the
authority to remove and replace, and where applicable nominate to the
shareholders the outside auditors;
d) shall prepare and sign annually a Committee Report, based upon the
review and discussions of the Company's audited financial statements that
are to be included in the Company's Form 10-K with the outside auditors and
management, as to whether the Committee recommends to the Board that such
audited financial statements be included in the Company's Form 10-K for
filing with the Securities and Exchange Commission. The Committee, in
connection with such a Report, shall:
- review and discuss the audited financial statements with management;
- review and discuss with the outside auditors the items required by
Statement on Auditing Standards No. 61; and
- receive the written disclosures and letter from the outside auditors
as required by ISBS No. 1;
e) shall, in connection with the Company's interim financial
reporting, be available to meet and confer with management and/or the
Company's outside auditors in respect to any report required to be made by
such outside auditors to the audit committee in accordance with Statement
on Auditing Standards No. 71 or in accordance with the terms of such
outside auditors' engagement;
f) shall from time to time assure its ability to meet with the
Company's outside auditors and internal auditor outside the presence of
other management personnel of the Company;
g) is entitled to rely on information, opinions, reports or statements
prepared or presented by one or more officers of the Company whom the
Committee reasonably believes to be reliable and competent in the matters
presented, or by the Company's outside auditors or other experts as to
matters the Committee reasonably believes are within such auditor's or
other expert's professional or expert competence;
h) may retain at Company expense counsel, auditors or other experts of
its choosing; and
i) may conduct at Company expense any investigation deemed
appropriate, with full access to all Company books, records, facilities,
personnel and outside advisors.
A-2
<PAGE> 22
HUTCHINSON TECHNOLOGY INCORPORATED
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
ANNUAL MEETING OF SHAREHOLDERS - JANUARY 31, 2001
HUTCHINSON TECHNOLOGY INCORPORATED PROXY
--------------------------------------------------------------------------------
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
ANNUAL MEETING OF SHAREHOLDERS - JANUARY 31, 2001
The undersigned, revoking any proxy heretofore given, hereby appoints Jeffrey W.
Green, Wayne M. Fortun and W. Thomas Brunberg, and each of them, as Proxies,
each with full power of substitution, for and in the name of the undersigned to
vote, as designated on the reverse side hereof, all the shares of Common Stock
of Hutchinson Technology Incorporated registered in the name of the undersigned
at the close of business on December 14, 2000 upon the following matters more
fully described in the Notice of and Proxy Statement for the Annual Meeting of
Shareholders to be held on January 31, 2001 and at any adjournment thereof.
(Continued on other side)
<PAGE> 23
THERE ARE THREE WAYS TO VOTE YOUR PROXY COMPANY #
CONTROL #
YOUR TELEPHONE OR INTERNET VOTE AUTHORIZES THE NAMED PROXIES TO VOTE YOUR SHARES
IN THE SAME MANNER AS IF YOU MARKED, SIGNED AND RETURNED YOUR PROXY CARD.
VOTE BY PHONE -- TOLL FREE -- 1-800-240-6326
- Use any touch-tone telephone to vote your proxy 24 hours a day, 7 days a
week, until 12 p.m. (noon) ET on January 30, 2001.
- You will be prompted to enter your 3-digit Company Number and your 7-digit
Control Number which are located above.
- Follow the simple instructions provided.
VOTE BY INTERNET -- HTTP://WWW.EPROXY.COM/HTCH/
- Use the Internet to vote your proxy 24 hours a day, 7 days a week, until
12 p.m. (noon) CT on January 30, 2001.
- You will be prompted to enter your 3-digit Company Number and your 7-digit
Control Number which are located above to obtain your records and create an
electronic ballot.
- Follow the simple instructions provided.
VOTE BY MAIL -- IF YOU VOTE BY PHONE OR INTERNET, PLEASE DO NOT MAIL YOUR PROXY
CARD
- Mark, sign and date your proxy card.
- Return it in the enclosed postage-paid envelope or return it to Hutchinson
Technology Incorporated, c/o Shareowner Services(TM), P.O. Box 64873, St.
Paul, MN 55164-0873.
You may change your vote or revoke your proxy at any time before the Annual
Meeting by filing with the Secretary of the Company either a notice of
revocation or a duly executed proxy bearing a later date. If you have voted by
telephone or via Internet, you may change your vote by calling the toll free
number again and following the instructions or signing on to the website and
following the prompts. If you attend the Annual Meeting in person, you may
revoke the proxy and vote in person at that time if you so desire.
-- Please detach here --
THE PROXIES ARE AUTHORIZED TO VOTE IN THEIR DISCRETION UPON SUCH OTHER BUSINESS
AS MAY PROPERLY COME BEFORE THE MEETING. THIS PROXY WHEN PROPERLY EXECUTED WILL
BE VOTED AS SPECIFIED BELOW, BUT IF NO DIRECTION IS GIVEN, THIS PROXY WILL BE
VOTED FOR PROPOSALS 1 AND 2.
<TABLE>
<S> <C> <C> <C> <C>
1. Election of Directors: 01 W. Thomas Brunberg 05 Russell Huffer [ ] FOR all nominees [ ] WITHHOLD AUTHORITY
02 Archibald Cox, Jr. 06 Steven E. Landsburg (except as marked to vote for all nominees
03 Wayne M. Fortun 07 William T. Monahan to the contrary listed at left
04 Jeffrey W. Green 08 Richard B. Solum
(INSTRUCTIONS: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDICATED NOMINEE, ___________________________________________________
WRITE THE NUMBER(S) OF THE NOMINEE(S) IN THE BOX PROVIDED TO THE RIGHT.)
___________________________________________________
</TABLE>
<TABLE>
<S> <C> <C> <C>
2. Ratification of the appointment of Arthur Andersen LLP as independent public
accountants for the 2001 fiscal year. [ ] For [ ] Against [ ] Abstain
</TABLE>
3. ANY OTHER BUSINESS WHICH MAY PROPERLY BE CONSIDERED AND ACTED UPON AT SAID
MEETING.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED AS DIRECTED OR, IF NO DIRECTION
IS GIVEN, WILL BE VOTED FOR EACH PROPOSAL.
Address Change? Mark Box [ ]
Indicate changes below:
Date _________________________
______________________________
______________________________
Signature(s) in Box
Please sign exactly as your
name(s) appear on proxy.
Jointly owned shares will be
voted as directed if one owner
signs unless another owner
instructs to the contrary, in
which case the shares will not
be voted.
When signing as attorney,
executor, administrator,
guardian, custodian or
corporate official, sign name
and title.
