<PAGE>
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:
[_] Confidential, for Use of the
[X] Preliminary Proxy Statement Commission Only (as Permitted by
Rule 14a-6(e)(2))
[_] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-
12
Symmetricom, Inc.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(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:
(4) Date Filed:
Notes:
<PAGE>
SYMMETRICOM, INC.
2300 ORCHARD PARKWAY
SAN JOSE, CA 95131-1017
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD OCTOBER 23, 2000
The Annual Meeting of Shareholders of Symmetricom, Inc., a California
corporation (the "Company"), will be held on Monday, October 23, 2000 at 10:00
a.m. at the offices of the Company, at 2300 Orchard Parkway, San Jose,
California 95131-1017.
At the meeting, shareholders will consider and vote upon the following
proposals:
1. To elect nominees for the Board of Directors of the Company;
2. To amend the Company's Bylaws to increase the size of the Board of
Directors to a minimum of five and a maximum of eight members;
3. To amend the Company's Articles of Incorporation to increase the number
of authorized shares from 32,000,000 to 150,000,000;
4. To amend the Company's 1999 Employee Stock Option Plan to increase the
number of shares reserved for issuance from 900,000 to 2,900,000 and to
reserve 2,000,000 shares of the Company's Common Stock for issuance
thereunder;
5. To amend Section 4(a)(iii) of the Company's 1999 Director Stock Option
Plan;
6. To ratify the appointment of Deloitte & Touche LLP as the Company's
independent auditors for the current fiscal year; and
7. To transact such other business as may properly come before the meeting
or any and all postponements or adjournments thereof.
The Board of Directors has fixed the close of business on September 5, 2000
as the record date for the determination of shareholders entitled to notice of
and to vote at the meeting. Accordingly, only shareholders of record at the
close of business on that day will be entitled to vote at the meeting,
notwithstanding any transfer of shares on the books of the Company after that
date.
A Proxy Statement which contains information with respect to the matters to
be voted upon at the meeting and a Proxy card and return envelope are furnished
herewith. Management urges each shareholder to carefully read the Proxy
Statement.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ William Slater
William Slater
Secretary
San Jose, California
Dated: September 25, 2000
IT IS DESIRABLE THAT AS MANY OF THE SHAREHOLDERS AS POSSIBLE BE
REPRESENTED AT THE MEETING IN PERSON OR BY PROXY. YOU ARE CORDIALLY
INVITED TO ATTEND IN PERSON. REGARDLESS OF WHETHER YOU INTEND TO BE
PRESENT AT THE MEETING, YOU ARE URGED TO SIGN AND RETURN THE ENCLOSED
PROXY PROMPTLY SO THAT YOUR SHARES WILL BE REPRESENTED IN THE EVENT YOU
ARE UNABLE TO ATTEND. SIGNING A PROXY AT THIS TIME WILL NOT AFFECT YOUR
RIGHT TO VOTE IN PERSON SHOULD YOU LATER DECIDE TO ATTEND THE MEETING.
<PAGE>
SYMMETRICOM, INC.
2300 ORCHARD PARKWAY
SAN JOSE, CA 95131-1017
PROXY STATEMENT
GENERAL
DATE, TIME AND PLACE
This Proxy Statement is furnished to the shareholders of Symmetricom, Inc.,
a California corporation (the "Company"), in connection with the solicitation
of Proxies by the Board of Directors (the "Board") of the Company for use at
the Annual Meeting of Shareholders (the "Annual Meeting") to be held at 10:00
a.m. on Monday, October 23, 2000, at the principal executive offices of the
Company at the address set forth above, and any and all postponements or
adjournments thereof. It is anticipated that this Proxy Statement and the
enclosed Proxy card will be sent to such shareholders on or about September 25,
2000.
PURPOSES OF THE ANNUAL MEETING
The Purposes of the Annual Meeting are to (1) elect nominees for the Board
of Directors of the Company, (2) amend the Company's Bylaws to increase the
size of the Board of Directors to a minimum of five and a maximum of eight
members, (3) amend the Company's Articles of Incorporation to increase the
number of authorized shares from 32,000,000 to 150,000,000, (4) amend the
Company's 1999 Employee Stock Option Plan to increase the number of shares
reserved for issuance from 900,000 to 2,900,000 and to reserve 2,000,000 shares
of the Company's Common Stock for issuance thereunder, (5) amend Section
4(a)(iii) of the Company's 1999 Director Stock Option Plan, (6) ratify the
appointment of Deloitte & Touche LLP as the Company's independent auditors for
the current fiscal year and (7) transact such other business as may properly
come before the meeting or any and all postponements or adjournments thereof.
PROXY/VOTING INSTRUCTION CARDS AND REVOCABILITY OF PROXIES
When the Proxy in the enclosed form is returned, properly executed, the
shares represented thereby will be voted at the meeting in accordance with the
instructions given by the shareholder. If no instructions are given, the
returned Proxy will be voted in favor of the election of the nominees named
herein as directors and in favor of each of the other proposals. Any
shareholder, including a shareholder personally attending the meeting, may
revoke his or her Proxy at any time prior to its use by filing with the
Secretary of the Company, at the corporate offices at 2300 Orchard Parkway, San
Jose, California 95131-1017, a written notice of revocation or a duly executed
Proxy bearing a later date or by voting in person at the Annual Meeting.
RECORD DATE AND SHARE OWNERSHIP
Shareholders of record at the close of business on September 5, 2000 (the
"Record Date") are entitled to notice of and to vote at the meeting. At the
Record Date, 23,306,217 shares of the Company's Common Stock were issued and
outstanding. For information regarding security ownership by management and by
5% shareholders, see "Other Information--Share Ownership by Principal
Shareholders and Management."
VOTING AND SOLICITATION; QUORUM
Every shareholder voting for the election of directors may cumulate such
shareholder's votes and give one candidate a number of votes equal to the
number of directors to be elected multiplied by the number of votes to which
the shareholder's shares are entitled, or distribute the shareholder's votes on
the same principle among as many candidates as the shareholder thinks fit,
provided that votes cannot be cast for more than the number of candidates to be
elected. However, no shareholder shall be entitled to cumulate votes unless the
candidate's name has been placed in nomination prior to the voting and the
shareholder, or any other shareholder, has given
<PAGE>
notice at the meeting prior to the voting of the intention to cumulate the
shareholder's votes. The Company will cumulate votes in the event that
additional persons are nominated at the Annual Meeting for election as
directors.
On matters other than the election of directors, each share has one vote.
Votes against any such proposal will be counted for determining the presence or
absence of a quorum and will also be counted as having been voted with respect
to the proposal for purposes of determining whether the requisite majority of
voting shares has been obtained, but will be treated as votes against the
proposal.
An automated system administered by the Company's transfer agent tabulates
the proxies received prior to the date of the Annual Meeting. While there is no
definitive statutory or case law authority in California as to the proper
treatment of abstentions in the counting of votes with respect to a proposal,
the Company believes that abstentions should be counted for purposes of
determining both (i) the presence or absence of a quorum for the transaction of
business and (ii) the total number of votes cast with respect to a proposal. In
the absence of controlling precedent to the contrary, the Company intends to
treat abstentions in this manner. Accordingly, abstentions will have the same
effect as a vote against the proposal. Broker non-votes will be counted for
purposes of determining the presence or absence of a quorum for the transaction
of business, but will not be counted for purposes of determining the number of
votes cast with respect to a proposal.
A majority of the outstanding shares constitutes the quorum required to
transact business at the Annual Meeting.
The cost of this solicitation will be borne by the Company. In addition, the
Company may reimburse brokerage firms and other persons representing beneficial
owners of shares for their expenses in forwarding solicitation material to such
beneficial owners. Proxies may also be solicited by certain of the Company's
directors, officers and regular employees, without additional compensation,
personally or by telephone, telegram or facsimile.
SHAREHOLDER PROPOSALS FOR THE NEXT ANNUAL MEETING
Any proposal to be presented at the Company's next Annual Meeting of
Shareholders must be received at the Company's principal office no later than
May 28, 2001 in order to be considered for inclusion in the Company's proxy
materials for such meeting. Any such proposals must be submitted in writing and
addressed to the attention of the Company's Corporate Secretary at 2300 Orchard
Parkway, San Jose, California 95131-1017.
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PROPOSAL NO.ONE
NOMINATION FOR BOARD OF DIRECTORS
NOMINEES
The Bylaws of the Company presently provide for a Board of four to seven
directors, and the number of directors is presently fixed at seven. Unless
otherwise instructed, the proxy holders will vote the proxies received by them
for management's seven nominees named below, all of whom are presently
directors of the Company. In addition, if the shareholders approve Proposal No.
Two, increasing the size of the Board of Directors to five to eight, then the
Board will fix the number of directors at 7. In the event that any nominee of
the Company is unable or declines to serve as a director at the time of the
Annual Meeting, the proxies will be voted for any nominee who shall be
designated by the present Board to fill the vacancy. It is not expected that
any nominee will be unable or will decline to serve as a director. The term of
office of each person elected as a director will continue until the next Annual
Meeting or until his successor has been elected and qualified.
The names of the nominees, and certain information about them, are set forth
below:
<TABLE>
<CAPTION>
Director
Name Age Since Principal Occupation or Employment
---- --- -------- ----------------------------------
Nominees
<C> <C> <C> <S>
Richard W. Oliver(1)........ 53 1997 Chairman of the Board of the
Company; Chief Executive Officer of
American Graduate School of
Management and Professor of
Management, Vanderbilt University
Thomas W. Steipp(1)......... 51 1998 Chief Executive Officer of the
Company
Robert T. Clarkson(1)(3).... 46 2000 Chief Operating Officer of
marchFIRST
Robert M. Neumeister(2)(3).. 49 1998 Chief Financial Officer of Aerie
Networks
Krish A. Prabhu(3).......... 45 1998 Chief Operating Officer of Alcatel
Telecom, a division of Alcatel;
President and Chief Executive
Officer of Alcatel USA, a division
of Alcatel
Richard N. Snyder(2)........ 54 1999 President and Chief Executive
Officer of Corum Cove Consulting
</TABLE>
--------
(1) Member of the Nominating and Governance Committee.
(2) Member of the Audit Committee.
(3) Member of the Stock Option and Compensation Committee.
Mr. Oliver has been Chairman of the Board of the Company since June 1998,
and has been Chief Executive Officer of American Graduate School of Management
since June, 2000 and a Professor of Management at the Owen Graduate School of
Management, Vanderbilt University, since September 1992. From 1977 to September
1992, Mr. Oliver served in various marketing and corporate positions, including
as Vice President of Business and Residential Services, Vice President of
Corporate Marketing and special assistant to the Chairman and Chief Executive
Officer for Northern Telecom Limited, a telecommunications Company ("Northern
Telecom"). Mr. Oliver is also a director of Applied Innovation, Inc., a
manufacturer of data communication equipment in the telephone industry, as well
as several private companies.
Mr. Steipp has served as Chief Executive Officer of the Company since
October 1999. Mr. Steipp served as Chief Executive Officer and Chief Financial
Officer of the Company from December 1998 to October 1999. Mr. Steipp served as
President and Chief Operating Officer, Telecom Solutions, a division of the
Company, from March 1998 to December 1998. Prior to joining the Company, from
February 1996 to February 1998, Mr. Steipp served as Vice President and General
Manager of Broadband Data Networks, a division of Scientific-Atlanta. From
January 1979 to January 1996, Mr. Steipp held various management positions in
3
<PAGE>
operations and marketing with Hewlett-Packard. Mr. Steipp served as General
Manager of the Federal Computer Division from January 1991 to January 1996 and
Manager of Federal Sales & Marketing from August 1990 to January 1991. From
January 1989 to August 1990, Mr. Steipp was Manager, Systems Integration
Operations.
Mr. Clarkson has served as Chief Operating Officer of MarchFIRST, a
professional services company since March 2000. From December 1998 to February
2000, Mr. Clarkson served in various positions with US Web/CKS, a professional
services company, the most recent being Chief Operating Officer. From February
1997 to December 1998, Mr. Clarkson served as Executive Vice President with CKS
Group, a predecessor of US Web/CKS and MarchFIRST. For the fourteen years prior
to joining CKS Group, Mr. Clarkson practiced law as an associate and partner at
Wilson Sonsini Goodrich and Rosati.
Mr. Neumeister has served as Chief Financial Officer of Aerie Networks, a
communications company, since January 2000. From December 1998 to December
1999, Mr. Neumeister served as Vice President, Finance and Director of Finance
of Intel Corporation, a semiconductor manufacturer, since December 1998. From
September 1995 to November 1998, Mr. Neumeister served as Chief Financial
Officer of Sprint PCS, a telecommunications company. Mr. Neumeister served in
various positions with Northern Telecom. Between 1991 and 1995, Mr. Neumeister
served as Vice President of Finance and Information Services for Northern
Telecom--Canada/Latin America, a division of Northern Telecom, Senior Vice
President and Chief Financial Officer of Motorola Nortel Communications Co., a
joint venture between Northern Telecom and Motorola, and Vice President of
Finance--Americas, Vice President Finance--Broadband Networks, Customer Network
Solutions and Vice President Finance, all with Northern Telecom.
Mr. Prabhu has served as Chief Operating Officer and Executive Vice
President of Alcatel Telecom, a division of Alcatel, a telecommunications
company, since August 1999 and March 1997, respectively, and as President and
Chief Executive Officer of Alcatel USA, a division of Alcatel, since 1997. Mr.
Prabhu joined Alcatel in 1991 when Rockwell International ("Rockwell"), where
Mr. Prabhu had served since 1984, was acquired by Alcatel. After Alcatel's
acquisition of Rockwell, Mr. Prabhu served as Vice President of Business
Development and Chief Technical Officer of Alcatel Network Systems, a division
of Alcatel, from 1994 to 1995. Mr. Prabhu also served Alcatel Telecom in
Belgium as President of the Broadband Products Division from 1995 to 1997.
Prior to Alcatel, Mr. Prabhu served as a member of the technical staff at AT&T
Bell Laboratories.
Mr. Snyder has served as President and Chief Executive Officer of Corum Cove
Consulting LLC, a consulting company which provides assistance to early stage
technology companies, since August 1997. From February 1996 to August 1997, Mr.
Snyder served as Senior Vice President of Worldwide Sales, Marketing, Service
and Support at Compaq Computer Corporation. From February 1995 to February
1996, Mr. Snyder served as Senior Vice President of Dell Computer Corporation.
Between September 1992 and February 1995, Mr. Snyder served as Group General
Manager for Hewlett- Packard Company. Mr. Snyder is also a director of VTEL
Corporation, a manufacturer of multimedia digital visual communications
systems, as well as several private companies.
VOTE REQUIRED; RECOMMENDATION OF BOARD OF DIRECTORS
With respect to the election of directors, shareholders have cumulative
voting rights, which means that each shareholder has the number of votes equal
to the number of shares held multiplied by the number of directors to be
elected. Each shareholder may give all such votes to one candidate or
distribute such shareholder's votes among the candidates as the shareholder
chooses. However, the right to cumulate votes may not be exercised until the
candidate or candidates have been nominated and a shareholder has given notice
at the Annual Meeting of the shareholder's intention to vote cumulatively. If
any shareholder present at the Annual Meeting gives such notice, all
shareholders may cumulate their votes. The candidates receiving the highest
number of votes of shares entitled to vote for them, up to the number of
directors to be elected, shall be elected. THE BOARD OF DIRECTORS RECOMMENDS A
VOTE "FOR" THE NOMINEES SET FORTH HEREIN.
4
<PAGE>
THE BOARD OF DIRECTORS AND ITS COMMITTEES
The Board of Directors has a Nominating and Governance Committee, an Audit
Committee and a Stock Option and Compensation Committee. The Nominating and
Governance Committee assists the Board as a whole in meeting its responsibility
to represent shareholder interest in building long-term value, to consider and
review all candidates for service on the Board, to consider and recommend
director compensation and to institute a process to formally evaluate the Board
as a whole and the CEO. The Audit Committee monitors the performance of the
independent auditors, recommends their engagement or dismissal to the Board of
Directors and monitors the Company's internal financial and accounting
organization and financial reporting. The Stock Option and Compensation
Committee recommends executive compensation arrangements for action by the
Board as a whole, and administers the Company's stock option plans. During the
2000 fiscal year, the Nominating and Governance Committee held one meeting, the
Audit Committee held three meetings and the Stock Option and Compensation
Committee held six meetings.
During the 2000 fiscal year, there were nine meetings of the Board of
Directors. Each of the Company's present directors attended at least 75% of the
aggregate of (i) the total number of meetings of the Board of Directors and
(ii) the total number of meetings of committees of the Board of Directors on
which such person served during the 2000 fiscal year except Richard N. Snyder
who attended 67% of the audit committee meetings and Robert M. Neumeister who
attended 67% of the Stock Option and Compensation Committee meetings.
DIRECTOR COMPENSATION
Under the terms of the 1999 Director Stock Option Plan, each non-employee
director automatically receives a nonstatutory stock option to purchase 10,000
shares of the Company's Common Stock (i) on the date on which such person first
becomes an outside director and (ii) on January 1 of each year, if on such
date, such person shall have served on the Board of Directors for at least six
months. In addition, if the shareholders approve Proposal No. Five, amending
Section 4(a)(iii) of the 1999 Director Stock Option Plan, on January 1 of each
year each outside director will automatically receive either a nonstatutory
stock option to purchase 10,000 shares of the Company's Common Stock or a pro
rata share of the 10,000 shares based on the time period between the Director's
start date and January 1 as a percentage of twelve months. The non-employee
Chairman of the Board is paid $15,000 per quarter and $500 for each
teleconference Board meeting attended. Non-employee directors of the Company
are paid $2,500 for each Board meeting attended in person, $500 for each
teleconference Board meeting attended, and $250 for each Committee meeting
attended, unless such Committee meets on the same day as an in-person Board
meeting, in which case no additional payment is made for the Committee meeting.
The Company also reimburses its directors for certain expenses incurred by them
in their capacity as directors or in connection with attendance at Board
meetings.
The Company sponsors a deferred compensation plan under which non-employee
directors may elect to defer a portion of their current compensation on a pre-
tax basis, and to have such deferred compensation and any accrued earnings
distributed to them at a future date. The Company may also make discretionary
contributions to the accounts of one or more of the plan's participants. To
date, the Company has not made such discretionary contributions.
5
<PAGE>
PROPOSAL NO. TWO
APPROVAL OF AMENDMENT TO COMPANY'S BYLAWS INCREASING THE SIZE OF THE
BOARD OF DIRECTORS TO A MINIMUM OF FIVE AND A MAXIMUM OF EIGHT MEMBERS
Article III, Section 2 of the Company's Bylaws currently provides that the
number of directors shall be not less than a minimum of four nor more than a
maximum of seven. The Bylaws further provide that, subject to amendment from
time to time by the Board, the number of directors of the Company is presently
fixed at seven.
TEXT OF PROPOSED AMENDMENT TO BYLAWS
If Proposal No. Two is approved by the shareholders, Article III, Section 2
of the Company's Bylaws will be amended in its entirety to read as follows:
"Section 2. NUMBER OF DIRECTORS.
(a) The number of directors shall be not less than a minimum of five nor
more than a maximum of eight. After adoption or amendment of this bylaw by the
shareholders, the exact number of directors shall be fixed, within the limits
specified in this bylaw, by the following bylaw which may be amended from time
to time by the Board of Directors. The indefinite number of directors may be
changed, or a definite number may be fixed without provision for an indefinite
number, by a duly adopted amendment to the articles of incorporation or by an
amendment to this bylaw duly adopted by the vote or written consent of holders
of a majority of the outstanding shares entitled to vote; provided, however,
that an amendment reducing the fixed number or the minimum number of directors
to a number less than five (5) cannot be adopted if the votes cast against its
adoption at a meeting, or the shares not consenting in the case of an action by
written consent, are equal to more than sixteen and two-thirds percent (16
2/3%) of the outstanding shares entitled to vote thereon. No amendment may
change the stated maximum number of authorized directors to a number greater
than two (2) times the stated minimum number of directors minus one (1).
(b) The number of directors of the corporation shall be presently set at 7."
DISCUSSION
The Board has deemed the foregoing increase to be in the best interest of
the Company because it believes that the presence on the Board of additional
talented individuals with industry expertise will help the Company to meet the
challenges it faces in an increasingly competitive market. Future additions to
the seven directors presently serving the Board will bring further experience
and insight to the Board. The Board intends to elect a new nominee to the Board
during fiscal year 2001.
REQUIRED VOTE; RECOMMENDATION OF THE BOARD OF DIRECTORS
The affirmative vote of a majority of the outstanding shares of the
Company's Common Stock, represented in person or by proxy, at the Annual
Meeting will be required to approve the amendment of the Bylaws to increase the
size of the Board of Directors. As a result, both abstentions and broker non-
votes will have the effect of votes against the proposal. THE BOARD OF
DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" THIS PROPOSAL.
6
<PAGE>
PROPOSAL NO. THREE
APPROVAL OF AMENDMENT TO COMPANY'S ARTICLES OF INCORPORATION TO
INCREASE THE NUMBER OF AUTHORIZED SHARES FROM 32,000,000 TO 150,000,000
The Company's Articles of Incorporation (the "Articles") currently provides
that the Company is authorized to issue 32,000,000 shares of Common Stock. On
August 4, 2000, the Board of Directors approved an amendment to the Articles,
subject to shareholder approval, to increase the authorized number of shares of
Common Stock from 32,000,000 to 150,000,000 (the "Amended Articles").
The additional Common Stock to be authorized by adoption of the Amended
Articles would have rights identical to the currently outstanding Common Stock
of the Company. Adoption of the proposed Amended Articles would not affect the
rights of the holders of currently outstanding Common Stock of the Company,
except to the extent additional shares are actually issued. If the Amended
Articles is adopted, it will become effective upon filing of a Certificate of
Amendment of the Company's Articles with the Secretary of State of the State of
California.
On July 27, 2000, the Company declared a three-for-two forward stock split
in the form of a stock dividend for shareholders of record on August 7, 2000.
On August 18, 2000, approximately 23,058,665 shares of Common Stock were
outstanding, and approximately 1,240,636 shares of Common Stock were reserved
for options, warrants, employee option plans and other convertible securities.
This leaves the Company with approximately 7,700,699 shares available for other
corporate purposes.
PURPOSE AND EFFECT OF THE AMENDMENT
The principal purpose of the Amended Articles is to provide the Company with
the flexibility to issue Common Stock for proper corporate purposes, which may
be identified in the future, such as to effect stock splits in the form of
stock dividends, make acquisitions through the use of stock, adopt additional
stock incentives or reserve additional shares for issuance under such
additional plans or current plans, and raise capital. Other than in connection
with the exercise of stock options pursuant to the 1990 and 1999 Employee Stock
Purchase Plans and 1990 and 1999 Director Stock Option Plan, the Board has not
authorized or taken any action with respect to the issuance of, and has no
present agreement, arrangement or intention to issue any of the additional
shares for which approval is sought.
Under California law, the Board of Directors may only split the Company's
stock by means of a stock dividend without shareholder approval if there are a
sufficient number of authorized shares available. If this proposal is not
approved, the Board would be unable to declare any significant stock dividends
in the future. The Board has approved one 50% stock dividend since the last
annual shareholders meeting and may distribute stock dividends in the future.
The Board but has no present intention of approving a stock dividend and its
decision to do so, if ever, will be based upon market and other factors deemed
relevant by the Board.
The increased reserve of shares available for issuance may be used for new
incentive plans. The Company may adopt new incentive plans for grants to its
employees, consultants and directors. Such incentive plans may be used in
connection with potential acquisitions as the Company grants options to the
employees of the acquired companies. The increase may also be used to reserve
additional shares under the Company's existing incentive plans.
The flexibility of the Board to issue additional shares of stock could
enhance the Board's ability to negotiate on behalf of the stockholders in a
takeover situation. Although it is not the purpose of the Amended Articles, the
authorized but unissued shares of Common Stock also could be used by the Board
to discourage, delay or make more difficult a change in the control of the
Company. For example, such shares could be privately placed with purchasers who
might align themselves with the Board in opposing a hostile takeover bid. The
issuance of additional shares could serve to dilute the stock ownership of
persons seeking to obtain control and thereby increase the cost of acquiring a
given percentage of the outstanding stock. The Board is not aware of any
pending or proposed effort to acquire control of the Company.
7
<PAGE>
The availability of additional shares of Common Stock is particularly
important in the event that the Board needs to undertake any of the foregoing
actions on an expedited basis and therefore needs to avoid the time (and
expense) of seeking shareholder approval in connection with the contemplated
action. If the Amended Articles is approved by the shareholders, the Board does
not intend to solicit further shareholder approval prior to the issuance of any
additional shares of Common Stock, except as may be required by applicable law
or rules. For example, under NASDAQ rules, shareholder approval is required for
any issuance of 20% or more of the Company's outstanding shares in connection
with acquisitions.
REQUIRED VOTE; RECOMMENDATION OF THE BOARD OF DIRECTORS
The affirmative vote of a majority of the outstanding shares of the
Company's Common Stock, represented in person or by proxy, at the Annual
Meeting will be required to approve the amendment to the Articles of
Incorporation. As a result, both abstentions and broker non-votes will have the
effect of votes against the proposal. THE BOARD OF DIRECTORS UNANIMOUSLY
RECOMMENDS A VOTE "FOR" THIS PROPOSAL.
PROPOSAL NO. FOUR
APPROVAL OF AMENDMENT TO COMPANY'S 1999 EMPLOYEE STOCK OPTION PLAN
TO INCREASE THE NUMBER OF SHARES RESERVED FOR ISSUANCE FROM 900,000 TO
2,900,000 AND TO RESERVE 2,000,000 SHARES OF THE COMPANY'S COMMON STOCK
FOR ISSUANCE THEREUNDER
The Company's Board and shareholders have previously adopted and approved
the Company's 1999 Employee Stock Option Plan (the "Employee Plan"). A total of
900,000 shares of Common Stock are presently reserved for issuance under the
Employee Plan. On August 4, 2000, the Board approved an amendment to the
Employee Plan, subject to shareholder approval, to increase the shares reserved
for issuance by 2,000,000, bringing the total number of shares issuable under
the Employee Plan to 2,900,000.
On July 27, 2000, the Company declared a three-for-two forward stock split
in the form of a stock dividend for shareholders of record on August 7, 2000.
On August 18, 2000, approximately 395,000 shares were available for future
issuance under the Employee Plan.
PURPOSE AND EFFECT OF AMENDMENT
The Company proposes to increase the number of shares reserved for issuance
under the Employee Plan from 900,000 to 2,900,000 and to reserve 2,000,000
shares of the Company's Common Stock for issuance thereunder. At the Annual
Meeting, the shareholders are being requested to consider and approve this
amendment to the Employee Plan.
The Board believes that the Employee Plan has been and will continue to be
an integral component of the Company's efforts to recruit employees, assist in
employee retention and provide employees with an incentive to exert maximum
effort for the success of the Company by aligning their interests with those of
the Company's shareholders. As of August 18, approximately 113 or 27% of the
Company's eligible employees were participating in the Employee Plan.
REQUIRED VOTE; RECOMMENDATION OF THE BOARD OF DIRECTORS
The affirmative vote of a majority of the outstanding shares of the
Company's Common Stock, represented in person or by proxy, at the Annual
Meeting will be required to approve the amendment to the 1999 Employee Stock
Option Plan. THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" THIS
PROPOSAL.
8
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PROPOSAL NO. FIVE
APPROVAL OF AMENDMENT TO COMPANY'S 1999 DIRECTOR STOCK OPTION PLAN
The Company's Board and shareholders have previously adopted and approved
the Company's 1999 Director Stock Option Plan (the "Director Plan"). Section
4(a)(iii) of the Director Plan currently provides that on January 1 of each
year each outside Director shall be automatically granted an Option to purchase
10,000 shares provided he or she is then an Outside Director if, as of such
date, he or she shall have served on the Board for at least the preceding six
(6) months.
TEXT OF PROPOSED AMENDMENT TO DIRECTOR PLAN
If Proposal No. Five is approved by the shareholders, Section 4(a)(iii) of
the Company's Director Plan will be amended in its entirety to read as follows:
"(iii) On January 1 of each year, each Outside Director shall be
automatically granted an Option (a "Subsequent Option") to purchase 10,000
Shares or a pro rata share of the 10,000 Shares based on the time period
between the Director's start date and January 1 as a percentage of twelve
months, provided he or she is then an Outside Director and if as of such date,
he or she shall have served on the Board for at least the preceding six (6)
months."
DISCUSSION
The Board has deemed the foregoing amendment to be in the best interests of
the Company because it will provide outside talented individuals with increased
incentives to help the Company thrive in a competitive market.
REQUIRED VOTE; RECOMMENDATION OF BOARD OF DIRECTORS VOTE REQUIRED
The affirmative vote of a majority of the outstanding shares of the
Company's Common Stock, represented in person or by proxy, at the Annual
Meeting will be required to approve the amendment of the 1999 Director Stock
Option Plan. THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" THIS
PROPOSAL.
PROPOSAL NO. SIX
RATIFICATION OF APPOINTMENT OF
INDEPENDENT AUDITORS OF THE COMPANY
Deloitte & Touche LLP, Certified Public Accountants, have been the
independent auditors for the Company since 1976 and, upon recommendation of the
Audit Committee, their reappointment as independent auditors for the 2001
fiscal year has been approved by the Board of Directors, subject to
ratification by the shareholders.
The Company has been advised by Deloitte & Touche LLP that neither it nor
any of its members has had any relationship with the Company or any of its
affiliates during the past three years other than as independent auditors. The
Company has been advised that a representative of Deloitte & Touche LLP will be
present at the Annual Meeting, will be available to respond to appropriate
questions, and will be given an opportunity to make a statement if he or she so
desires.
VOTE REQUIRED; RECOMMENDATION OF THE BOARD OF DIRECTORS
Although not required to be submitted for shareholder approval, the Board of
Directors has conditioned its appointment of its independent auditors upon
receiving the affirmative vote of a majority of the shares represented, in
person or by proxy, and voting at the Annual Meeting. In the event the
shareholders do not approve the selection of Deloitte & Touche LLP, the
appointment of independent auditors will be reconsidered by the Board of
Directors. THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" THIS
PROPOSAL.
9
<PAGE>
OTHER INFORMATION
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires the Company's officers and
directors and persons, who own more than 10% of a registered class of the
Company's equity securities, to file certain reports regarding ownership of,
and transactions in, the Company's securities with the Securities and Exchange
Commission (the "SEC"). Such officers, directors and 10% shareholders are also
required by SEC rules to furnish the Company with copies of all Section 16(a)
forms that they file.
Based solely on its review of such forms furnished to the Company and
written representations from certain reporting persons, the Company believes
that all filing requirements applicable to the Company's executive officers,
directors and more than 10% shareholders were complied with.
SHARE OWNERSHIP BY PRINCIPAL SHAREHOLDERS AND MANAGEMENT
The following table sets forth the beneficial ownership of Common Stock of
the Company as of July 31, 2000 by:
. all persons known to the Company to be the beneficial owners of more
than 5% of the Company's Common Stock,
. each of the officers named in the Summary Compensation Table (the "Named
Executive Officers"),
. each director and
. all directors and executive officers as a group.
A total of 22,938,926 shares of the Company's Common Stock were issued and
outstanding as of July 31, 2000. All share numbers have been adjusted to
reflect a three-for-two forward stock dividend effected as of August 18, 2000.
<TABLE>
<CAPTION>
Shares Approximate
Beneficially Percent
Name and Address Owned Owned
---------------- ------------ -----------
<S> <C> <C>
Dimensional Fund Advisors Inc.(1).................... 1,637,400 7.14
1055 Washington Blvd.
Stamford, CT 06901
William D. Rasdal(2)................................. 769,933 3.3
Thomas W. Steipp(3).................................. 243,720 1.1
Frederick B. Stroupe(4).............................. 100,692 *
Dale A. Pelletier(5)................................. 98,042 *
Murli M. Thirumale(6)................................ 68,625 *
Richard W. Oliver(7)................................. 60,000 *
Robert T. Clarkson................................... 15,000 *
Robert M. Neumeister(8).............................. 5,250 *
Krish A. Prabhu(9)................................... 3,750 *
Richard N. Snyder(10)................................ 3,750 *
Anthony Haddrell(11)................................. 2,735 *
Maurice Austin(12)................................... 2,625 *
All directors and executive officers as a group (11
persons)(13)........................................ 1,371,387 5.8
</TABLE>
--------
* Less than one percent (1%)
(1) Based on information received from Dimensional Fund Advisors Inc.
("Dimensional"). Dimensional, an investment advisor registered under
Section 203 of the Investment Advisors Act of 1940, furnishes
10
<PAGE>
investment advice to four investment companies registered under the
Investment Company Act of 1940, and serves as investment manager to
certain other investment vehicles, including commingled group trusts.
These investment companies and investment vehicles own 1,637,400 shares,
and Dimensional disclaims beneficial ownership of such securities.
(2) Includes 161,251 shares subject to options exercisable within 60 days of
July 31, 2000.
(3) Includes 225,003 shares subject to options exercisable within 60 days of
July 31, 2000.
(4) Includes 99,567 shares subject to options exercisable within 60 days of
July 31, 2000.
(5) Includes 74,273 shares subject to options exercisable within 60 days of
July 31, 2000.
(6) Includes 67,500 shares subject to options exercisable within 60 days of
July 31, 2000.
(7) Includes 60,000 shares subject to options exercisable within 60 days of
July 31, 2000.
(8) Includes 3,750 shares subject to options exercisable within 60 days of
July 31, 2000.
(9) Includes 3,750 shares subject to options exercisable within 60 days of
July 31, 2000.
(10) Includes 3,750 shares subject to options exercisable within 60 days of
July 31, 2000.
(11) Mr. Haddrell resigned in April 2000.
(12) Mr. Austin resigned in August 2000
(13) Excludes shares held and shares subject to options exercisable within 60
days of July 31, 2000 by Anthony Haddrell who resigned from the Company
prior to July 31, 2000.
11
<PAGE>
EXECUTIVE OFFICER COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth compensation earned in the last three fiscal
years by (i) the Company's Chief Executive Officer, (ii) the four most highly
compensated executive officers, other than the Chief Executive Officer, who
were serving as executive officers at the end of the fiscal year ended June 30,
2000 and (iii) Anthony Haddrell who would have qualified as an executive
officer pursuant to (i) and (ii) but for the fact that he was not serving as an
executive officer at the end of the fiscal year ended June 30, 2000.
<TABLE>
<CAPTION>
Long-Term
Compensation
Awards
--------------
Annual Compensation
---------------------------------------- Securities
Name and Principal Other Annual Underlying All Other
Position Year Salary ($) Bonus ($) Compensation ($)(1) Options (#)(*) Compensation ($)(2)
------------------ ---- ---------- --------- ------------------- -------------- -------------------
<S> <C> <C> <C> <C> <C> <C>
Current Executive
Officers
Thomas W. Steipp........ 2000 309,186 347,418 112,000(10) 150,000 500
Chief Executive Officer 1999 257,407 208,848 170,926(3) -- 500
1998 72,115 -- 106,000(4) 250,000 500
Maurice Austin(7)....... 2000 177,884 136,394 -- 300,000 500
Chief Financial Officer 1999 -- -- -- -- --
and
Secretary 1998 -- -- -- -- --
Frederick B. Stroupe.... 2000 110,000 -- 173,763(5) 75,000 500
Executive Vice 1999 109,998 500 168,594(5) 20,000 500
President and
General Manager of Sync 1998 109,038 -- 128,763(5) 10,000 500
and Timing Solutions
Division
Murli M. Thirumale...... 2000 149,279 275,515 -- 270,000 500
Executive Vice 1999 -- -- -- -- --
President and
General Manager of 1998 -- -- -- -- --
AccessMax Division
Dale A. Pelletier....... 2000 194,065 113,794 -- 30,000 500
Senior Vice President, 1999 184,408 33,381 -- 15,000 500
Operations 1998 175,846 -- -- 10,000 500
Former Executive Officer
Anthony Haddrell (9).... 2000 127,374 76,917 165,986(8) 45,000 --
Senior Vice President, 1999 170,881 32,946 30,122(6) 45,000 --
Engineering 1998 105,930 36,557 12,738(6) 3,000 --
</TABLE>
--------
* Number of shares reflects a three-for-two forward stock dividend effected as
of August 18, 2000.
(1) Excludes certain perquisites and other personal benefits, securities or
property which, for any executive officer, in the aggregate did not exceed
the lesser of $50,000 or 10% of the total annual salary and bonus for such
executive officer.
(2) Represents Company matching 401(k) Plan contributions.
(3) Represents note forgiven, interest forgiven and other compensation,
$100,000, $18,000 and $52,926, respectively.
(4) Represents note and interest forgiven, $100,000 and $6,000, respectively.
(5) Represents primarily commissions.
(6) Represents certain perquisites and other personal benefits.
(7) Mr. Austin resigned as an executive officer during fiscal year 2001.
(8) Represents primarily leased housing, furniture and automobile.
12
<PAGE>
(9) Mr. Haddrell resigned as an executive officer during fiscal year 2000.
(10) Represents debt forgiven and interest forgiven, $100,000 and $12,000,
respectively.
OPTION GRANTS IN LAST FISCAL YEAR
The following table sets forth, as to the Named Executive Officers and
certain information relating to stock options granted during fiscal year 2000.
The number of shares reflects a three-for-two forward stock divided effected as
of August 18, 2000.
<TABLE>
<CAPTION>
Individual Grants
--------------------------------------------
Potential
Realizable Value
at Assumed Annual
Number of % of Total Rates of Stock
Securities Options Price
Underlying Granted to Appreciation for
Options Employees Exercise or Option Term(3)
Granted in Fiscal Base Price Expiration -----------------
Name (#) Year(1) ($/SH)(2) Date 5% ($) 10% ($)
---- ---------- ---------- ----------- ---------- ------- ---------
<S> <C> <C> <C> <C> <C> <C>
Current Executive
Officers
Thomas W. Steipp........ 150,000 7.75 5.8333 8/27/09 550,283 1,394,525
Maurice Austin (4)...... 300,000 15.51 5.0000 10/14/09 943,342 2,390,614
Dale A. Pelletier....... 30,000 1.55 5.8333 8/27/09 110,057 278,905
Frederick B. Stroupe.... 75,000 3.88 5.8333 8/27/09 275,141 697,262
Murli M. Thirumale...... 270,000 13.96 5.0833 8/10/09 863,158 2,187,412
Former Executive Officer
Anthony Haddrell (5).... 45,000 2.33 5.8333 8/27/09 165,085 418,357
</TABLE>
--------
(1) The total number of shares subject to options granted to employees of the
Company in fiscal 2000 was 1,934,265.
(2) The exercise price per share is equal to the closing price of the Company's
Common Stock on the date of grant.
(3) The Potential Realizable Value is calculated based on the fair market value
on the date of grant, which is equal to the exercise price of options
granted in fiscal 2000, assuming that the stock appreciates in value from
the date of grant until the end of the option term at the annual rate
specified (5% and 10%). Potential Realizable Value is net of the option
exercise price. The assumed rates of appreciation are specified in rules of
the SEC, and do not represent the Company's estimate or projection of
future stock price. Actual gains, if any, resulting from stock option
exercises and Common Stock holdings are dependent on the future performance
of the Common Stock, overall stock market conditions, as well as the option
holders' continued employment through the exercise/vesting period. There
can be no assurance that the amounts reflected in this table will be
achieved.
(4) Mr. Austin resigned in August 2000.
(5) Mr. Haddrell resigned in April 2000. All grants to Mr. Haddrell were
cancelled 90 days after resignation date, in July 2000.
13
<PAGE>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR END
OPTION VALUES
The following table provides information with respect to option exercises in
fiscal 2000 by the Named Executive Officers and the value of such officers'
unexercised options at the close of business on June 30, 2000. The table
reflects a three-for-two forward stock dividend effected as of August 18, 2000.
<TABLE>
<CAPTION>
Number of Securities
Shares Underlying Unexercised Value of Unexercised
Acquired Options at In-the-Money Options at
on Value Fiscal Year End (#) Fiscal Year End ($)(1)
Exercise Realized ------------------------- -------------------------
Name (#) ($) Exercisable Unexercisable Exercisable Unexercisable
---- -------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Current Executive
Officers
Thomas W. Steipp........ -- -- 187,502 337,499 2,265,643 3,915,607
Maurice Austin.......... -- -- -- -- -- --
Dale A. Pelletier....... 28,392 165,017 66,394 47,346 836,730 551,940
Frederick B. Stroupe.... -- -- 71,753 96,251 905,288 1,097,381
Murli M. Thirumale...... -- -- -- 270,000 -- 3,172,500
Former Executive Officer
Anthony Haddrell........ 44,099 233,205 -- -- -- --
</TABLE>
--------
(1) Market value of the underlying securities is based on the closing price of
$16.83333 of the Company's Common Stock on June 30, 2000.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Stock Option and Compensation Committee of the Company's Board of
Directors (the "Compensation Committee") is currently composed of non-employee
directors Robert M. Neumeister and Krish A. Prabhu. No interlocking
relationship exists between the Company's Board of Directors or the
compensation committee of any other company, nor has any such interlocking
relationship existed in the past.
CERTAIN TRANSACTIONS
Relocation Loans to and Agreement with Thomas W. Steipp. In March 1998, in
connection with his acceptance of employment with the Company and the related
relocation of his personal residence, Mr. Steipp borrowed $400,000 from the
Company pursuant to a Promissory Note Secured by Deed of Trust bearing interest
at the rate of 6% per year (the "Interest Bearing Note") and $500,000 pursuant
to a separate Promissory Note Secured by Deed of Trust that is interest free
(the "Interest Free Note"). Both the Interest Bearing Note and the Interest
Free Note become fully due and payable upon the earliest to occur of: (i) five
days after Mr. Steipp's voluntary resignation or termination for good cause;
(ii) 360 days after Mr. Steipp's termination by the Company without good cause;
(iii) on the date of transfer of Mr. Steipp's principal residence, under
certain circumstances; or (iv) on March 25, 2008. The Interest Free Note is
secured by a first deed of trust on Mr. Steipp's principal residence, and the
Interest Bearing Note is secured by a second deed of trust on Mr. Steipp's
principal residence.
The principal and interest on the Interest Bearing Loan is forgivable in
four equal installments on each of June 25, 1998, 1999, 2000 and 2001, if Mr.
Steipp remains employed by the Company at such times. The Interest Free Note
does not provide for such forgiveness. In addition to the foregoing, Mr.
Steipp's offer letter provides that, in the event of Mr. Steipp's termination
by the Company without cause, the Company will continue to pay Mr. Steipp's
salary until the earlier of (i) twelve months after such termination or (ii)
such time as Mr. Steipp accepts alternative employment.
14
<PAGE>
COMPENSATION COMMITTEE REPORT
The Compensation Committee is currently comprised of three independent, non-
employee directors who have no interlocking relationships, as defined by the
Securities and Exchange Commission. As part of its duties, the Compensation
Committee reviews compensation levels of the executive officers and evaluates
their performance. The Compensation Committee also administers the Company's
stock option plans. In connection with such duties, the Compensation Committee
determines base salary levels and short-term incentive bonus programs for the
Company's executive officers at or about the start of the fiscal year, and
determines actual bonuses after the end of such fiscal year based upon the
achievement of Company or subsidiary profit levels. The Compensation Committee
also determines stock option awards to executives throughout the year.
The Company's executive pay programs are designed to attract and retain
executives who will contribute to the Company's long-term success, to reward
executives for achieving both short and long-term strategic Company goals, to
link executive and shareholder interest through equity-based plans, and to
provide a compensation package that recognizes individual contributions and
Company performance. A substantial portion of each executive's total
compensation is intended to be variable and to relate to and be contingent upon
the achievement of Company or subsidiary profit levels.
The three key components of the Company's executive compensation program in
fiscal 2000 were base salary, short-term incentives, represented by the
Company's annual bonus program, and long-term incentives, represented by the
Company's stock programs. The Company also provides benefits to its executives
to provide for health, welfare and security needs, as well as for executive
efficiency. The Company's policies with respect to the three principal elements
of its executive compensation program, as well as the basis for the
compensation awarded to Mr. Steipp, the Company's present Chief Executive
Officer is discussed below.
BASE SALARY
Base salaries of executive officers are initially determined by evaluating
the responsibilities of the position held and the experience and performance of
the individual, with reference to the competitive marketplace for executive
talent, including a comparison to base salaries for comparable positions for
high technology companies. The Compensation Committee considers not only the
achievement of corporate and business unit financial and strategic goals, but
also individual performance, including managerial effectiveness, teamwork and
customer satisfaction. Base salaries of executive officers in fiscal 2000 were
set at levels comparable to levels at other companies in the technology sector
to help the Company attract and retain highly talented individuals in an
increasingly competitive market, and in a period in which the Company has
experienced substantial fluctuations in its stock price.
ANNUAL BONUS PROGRAM
At the beginning of the 2000 fiscal year, the Compensation Committee
determined maximum annual incentive bonus payments based on profit targets
compared to fiscal 1999. Following the end of the 2000 fiscal year, the
Compensation Committee determined the amount of the annual incentive payments
for each executive officer based on its evaluation of the achievement of the
profit target set for the Company. The Compensation Committee's philosophy is
to set high profit targets, and to make each executive officer's maximum
incentive bonus payout target high in relation to such executive officer's
salary and in comparison with other high technology companies, in order to
obtain significant linkage between overall executive compensation and the
achievement of the applicable profit target.
EQUITY-BASED COMPENSATION
Under the Company's Employee Stock Plan, stock options may be granted to
executive officers and other key employees of the Company. The size of stock
option awards is based primarily on an individual's performance and the
individual's responsibilities and position with the Company, as well as on the
individual's
15
<PAGE>
present outstanding vested and unvested options. Options are designed to align
the interests of executive officers with those of shareholders. Stock options
are granted with an exercise price equal to the fair market value of the
Company's Common Stock on the date of grant, and current grants generally vest
over three years, subject to the Compensation Committee's discretion to vary
the vesting schedule. This approach is designed to encourage the creation of
shareholder value over the long term since no benefit is realized from the
stock option grant unless the price of the Common Stock rises over a number of
years.
In addition to the Employee Stock Plan, all eligible employees of the
Company, including executive officers, may participate in a payroll deduction
Employee Stock Purchase Plan pursuant to which Common Stock of the Company may
be purchased at the end of each six-month offering period, at a purchase price
equal to 85% of its fair market value at the beginning or ending of such
offering period, whichever is lower.
COMPENSATION OF THE CHIEF EXECUTIVE OFFICER
The Compensation Committee meets without the Chief Executive Officer present
to evaluate his performance. The Chief Executive Officer's base salary and
annual incentive bonus were determined based on a number of factors, including
comparative salaries of chief executive officers of similar performance high
technology companies, and the Company's performance in fiscal 2000, as well as
targets for fiscal 2000. Mr. Steipp's base salary for fiscal 2000 was set at
levels competitive with industry standards because of the Compensation
Committee's philosophy set forth above in "Base Salary." Mr. Steipp received an
incentive bonus of $347,418 for fiscal 2000. Mr. Steipp received 150,000
options to purchase Common Stock during fiscal year 2000.
Stock Option and Compensation
Committee
Robert M. Neumeister
Krish A. Prabhu
16
<PAGE>
COMPARATIVE STOCK PERFORMANCE
The graph below compares the cumulative total shareholders' return on the
Company's Common Stock for the last five fiscal years with the total return on
the S&P 500 Index and the S&P Technology Sector over the same period (assuming
the investment of $100 in the Company's Common Stock, the S&P 500 Index and the
S&P High Technology--Composite Index, and reinvestment of all dividends).
COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN*
AMONG SYMMETRICOM, INC., THE S&P 500 INDEX
AND THE S&P TECHNOLOGY INDEX
[PERFORMANCE GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
SYMMETRICOM S & P 500 S & P TECHNOLOGY
<S> <C> <C> <C> <C>
6/95 100 100 100 116
6/96 62 126 119 291
6/97 66 170 181 580
6/98 28 221 243
6/99 37 271 402
6/00 116 291 580
</TABLE>
* $100 INVESTED ON 6/30/95 IN STOCK OR
INDEX INCLUDING REINVESTMENT OF
DIVIDENDS. FISCAL YEAR ENDING JUNE
30.
17
<PAGE>
OTHER MATTERS
The Company knows of no other matters to be submitted to the meeting. If any
other matters properly come before the meeting, it is the intention of the
persons named in the enclosed form of Proxy to vote the shares they represent
as the Board of Directors may recommend.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ William Slater
William Slater
Secretary
Dated: September 15, 2000
18
<PAGE>
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
SYMMETRICOM, INC.
2000 ANNUAL MEETING OF SHAREHOLDERS
The undersigned shareholder of Symmetricom, Inc., a California corporation,
hereby acknowledges receipt of the Notice of Annual Meeting of Shareholders and
Proxy Statement, each dated September 25, 2000, and hereby appoints Thomas W.
Steipp and William Slater, and each of them, proxies and attorneys-in-fact, with
full power to each of substitution, on behalf and in the name of the
undersigned, to represent the undersigned at the 2000 Annual Meeting of
Shareholders of Symmetricom, Inc. to be held on October 23, 2000, at 10:00 a.m.,
at the offices of the Company, at 2300 Orchard Parkway, San Jose, California
95131-1017, and at any adjournments thereof, and to vote all shares of Common
Stock, which the undersigned would be entitled to vote if then and there
personally present on the matters set forth below:
THIS PROXY WILL BE VOTED AS DIRECTED OR, IF NO DIRECTION IS INDICATED, WILL
BE VOTED "FOR" THE ELECTION OF DIRECTORS NAMED HEREIN, "FOR" EACH PROPOSAL
LISTED, AND AS SAID PROXIES DEEM ADVISABLE ON SUCH OTHER MATTERS AS MAY COME
BEFORE THE MEETING, EITHER OF SUCH ATTORNEYS OR SUBSTITUTES SHALL HAVE AND MAY
EXERCISE ALL OF THE POWERS OF SAID ATTORNEYS-IN-FACT HEREUNDER.
(Continued, and to be marked, dated and signed, on the other side)
<PAGE>
<TABLE>
<CAPTION>
Please mark ---
your votes | X |
as indicated in ---
this example
<S> <C> <C> <C> <C> <C> <C>
FOR all nominees WITHHOLD Authority
listed below to vote for all nominees
(except as indicated). listed. FOR AGAINST ABSTAIN
1. Election of Directors ----- ----- 2. Proposal to approve the --- --- ---
| | | | amendment to Company's | | | | | |
----- ----- Bylaws to increase the size --- --- ---
If you wish to withhold authority to vote of the Board of Directors to
for any individual nominee, strike a line through a minimum of five and a
that nominee's name in the list below: a maximum of eight members.
Richard W. Oliver 3. Proposal to approve the --- --- ---
Thomas W. Steipp amendment to Company's | | | | | |
Robert M. Neumeister Articles of Incorporation to --- --- ---
Krish A. Prabhu increase the number of autho-
Richard N. Snyder rized shares from 32,000,000
Robert T. Clarkson to 150,000,000.
4. Proposal to approve the amend- --- --- ---
ment to Company's 1999 Employee | | | | | |
Stock Option Plan to increase --- --- ---
the number of shares reserved
for issuance from 900,000 to
2,900,000.
5. Proposal to approve the amend- --- --- ---
ment to Section 4(a)(iii) of | | | | | |
the Company's 1999 Director --- --- ---
Stock Option Plan.
6. Proposal to ratify the appoint- --- --- ---
---------- ment of Deloitte & Touche LLP | | | | | |
| as the independent auditors of --- --- ---
| the Company for the 2001 fiscal
| year.
And upon such other matters that
may properly come before the meeting
and any adjourment(s) thereof.
Signature _______________________________ Signature _____________________________ Dated: ______________ 2000
(This Proxy should be dated, signed by the shareholder(s) exactly as his or her name appears hereon, and returned promptly in the
enclosed envelope. Persons signing in a fiduciary capacity should so indicate. If shares are held by joint tenants or as community
property, both should sign.)
</TABLE>
