AMERICAN POWER CONVERSION CORPORATION
P.O. Box 278
132 Fairgrounds Road
West Kingston, RI 02892
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To the Shareholders:
The Annual Meeting of Shareholders of American Power Conversion
Corporation, a Massachusetts corporation (the "Company"), will be held on
Thursday, May 11, 2000 at 10:00 a.m., local time, in the University Ballroom of
the Radisson Airport Hotel located at 2081 Post Road, Warwick, Rhode Island
02886 for the following purposes:
1. To fix the number of directors at five.
2. To elect a Board of Directors for the ensuing year.
3. To consider and act upon a shareholder proposal regarding the composition
of the Company's Board of Directors, which proposal is OPPOSED by the
Company's Board of Directors.
4. To transact such other business as may properly come before the meeting and
any adjournments thereof.
Shareholders of record at the close of business on March 14, 2000 will be
entitled to vote at the meeting or any adjournments thereof.
IF YOU PLAN TO ATTEND:
Please be aware that seating may be limited. Registration and seating will
begin at 9:00 a.m. Please bring valid picture identification, such as a driver's
license or passport. You may be required to provide this upon entry to the
meeting. Shareholders holding stock in brokerage accounts ("street name"
holders) will also need to bring a copy of a brokerage statement reflecting
stock ownership as of the record date. Cameras, recording devices and other
electronic devices will not be permitted at the meeting.
By Order of the Board of Directors,
[signature]
Emanuel E. Landsman,
Clerk
March 31, 2000
SHAREHOLDERS ARE REQUESTED TO SIGN THE ENCLOSED PROXY CARD AND RETURN
IT IN THE ENCLOSED STAMPED ENVELOPE BY RETURN MAIL
1
<PAGE>
AMERICAN POWER CONVERSION CORPORATION
P.O. Box 278
132 Fairgrounds Road
West Kingston, RI 02892
PROXY STATEMENT FOR ANNUAL MEETING OF SHAREHOLDERS
To Be Held on May 11, 2000
Proxies in the form enclosed with this proxy statement are solicited by the
Board of Directors of American Power Conversion Corporation, a Massachusetts
corporation (the "Company"), for use at the Annual Meeting of Shareholders to be
held on Thursday, May 11, 2000 at 10:00 a.m., local time, in the University
Ballroom of the Radisson Airport Hotel located at 2081 Post Road, Warwick, Rhode
Island 02886 (the "Meeting").
Only shareholders of record as of the close of business on March 14, 2000
will be entitled to vote at the Meeting and any adjournments thereof. As of that
date, 193,892,720 shares of Common Stock, par value $.01 per share, of the
Company were issued and outstanding. Each share of Common Stock outstanding as
of the record date will be entitled to one vote, and shareholders may vote in
person or by proxy. Execution of a proxy will not in any way affect a
shareholder's right to attend the Meeting and vote in person. Any shareholder
giving a proxy has the right to revoke it by delivering written notice to the
Clerk of the Company at any time before it is exercised or by delivering a later
executed proxy to the Clerk of the Company at any time before the original proxy
is exercised.
Each of the persons named as proxies in the proxy is a director and officer
of the Company. All properly
executed proxies returned in time to be cast at the Meeting will be voted. With
respect to the election of a Board of Directors, any shareholder submitting a
proxy has the right to withhold authority to vote for any individual nominee to
the Board of Directors by writing the name of such individual or group of
individuals in the space provided on the proxy. In addition to the election of
directors, the shareholders will consider and vote upon proposals to: (i) fix
the number of directors at five; and (ii ) to consider and act upon a
stockholder proposal regarding the composition of the Company's Board of
Directors. Where a choice has been specified on the enclosed proxy with respect
to the foregoing matters, the shares represented by the proxy will be voted in
accordance with the shareholders' specifications contained therein. In the
absence of specifications, the shares represented by the enclosed proxy will be
voted FOR fixing the number of directors at five; FOR the five nominees for
director named in this proxy statement; AGAINST the shareholder proposal set
forth in this proxy statement if the shareholder proposal is properly presented
by the proponent's qualified representative for action at the Meeting; and
according to the discretion of the proxies on any other matters to properly come
before the Meeting.
The representation in person or by proxy of at least a majority of the
outstanding shares of Common Stock entitled to vote at the Meeting is necessary
to establish a quorum for the transaction of business. Votes withheld from any
nominee, abstentions and broker non-votes are counted as present or represented
for purposes of determining the presence or absence of a quorum at the Meeting.
A "non-vote" occurs when a broker holding shares for a beneficial owner votes on
one proposal, but does not vote on another proposal because, with respect to
such other proposal, the broker does not have discretionary voting power and has
not received instructions from the beneficial owner. Directors are elected by a
plurality of the votes cast by shareholders entitled to vote at the Meeting. All
other matters being submitted to shareholders require the affirmative vote of a
majority of the shares of Common Stock of the Company present in person or
represented by proxy and entitled to vote at the Meeting. An automated system
administered by the Company's transfer agent tabulates the votes. The vote on
each matter submitted to shareholders is tabulated separately. Abstentions are
included in the number of shares present or represented and voting on each
matter. Broker "non-vote" shares are not so included.
The Board of Directors knows of no other matter to be presented at the
Meeting. If any other matter should be presented at the Meeting upon which a
vote may be properly taken, shares represented by all proxies received by the
Board of Directors will be voted with respect thereto in accordance with the
judgment of the persons named as attorneys in the proxies.
All share and per share information contained in this proxy statement has
been adjusted to reflect a 2-for-1 stock split effected in the form of a stock
dividend in May 1999.
An Annual Report to Shareholders, containing financial statements for the
fiscal year ended
December 31, 1999, is being mailed together with this proxy statement to all
shareholders entitled to vote. This proxy statement and the accompanying proxy
are intended to be mailed to shareholders on or about March 31, 2000.
2
<PAGE>
MANAGEMENT AND PRINCIPAL HOLDERS OF VOTING SECURITIES
Unless otherwise noted, the following table sets forth as of February 17,
2000, certain information regarding beneficial ownership of the Company's Common
Stock (i) by each person who, to the knowledge of the Company, beneficially
owned more than 5% of the outstanding shares of Common Stock of the Company
outstanding at such date, (ii) by each director or nominee for director of the
Company, (iii) by each executive officer named in the Summary Compensation Table
in this proxy statement, and (iv) by all directors, nominees for director and
executive officers of the Company as a group.
<TABLE>
<CAPTION>
Name and Address Amount and Nature Percentage of Common
of Beneficial Owner of Beneficial Ownership (1) Stock Outstanding (2)
<S> <C> <C>
J. & W. Seligman & Co. 10,673,170 (3) 5.5%
Incorporated
100 Park Avenue
New York, NY 10017
Rodger B. Dowdell, Jr. 18,605,664 (4) 9.6%
American Power Conversion
Corporation
P.O. Box 278
132 Fairgrounds Road
West Kingston, RI 02892
Neil E. Rasmussen 9,676,837 (5) 5.0%
APC America, Inc.
755 Middlesex Turnpike
Billerica, MA 01862
Emanuel E. Landsman 2,151,799 (6) 1.1%
APC America, Inc.
755 Middlesex Turnpike
Billerica, MA 01862
James D. Gerson 578,850 (7) *
Fahnestock & Co
780 Third Avenue
New York, NY 10017
Ervin F. Lyon 834,654 (8) *
270 North Haverhill Road
Kensington, NH 03833-5503
Edward W. Machala 226,058 (9) *
APC America, Inc.
P.O. Box 278
132 Fairgrounds Road
West Kingston, RI 02892
David P. Vieau 69,366 (10) *
American Power Conversion
Corporation
P.O. Box 278
132 Fairgrounds Road
West Kingston, RI 02892
3
<PAGE>
Donald M. Muir 79,009 (11) *
APC America, Inc.
P.O. Box 278
132 Fairgrounds Road
West Kingston, RI 02892
Aaron L. Davis 139,858 (12) *
American Power Conversion
Corporation
P.O. Box 278
132 Fairgrounds Road
West Kingston, RI 02892
All directors and 32,362,095 (13) 16.7%
executive officers as
a group (9 persons)
</TABLE>
*Less than 1.0%
(1) Unless otherwise indicated, the named person possesses sole voting and
investment power with respect to the shares listed.
(2) The number of shares of Common Stock deemed outstanding on February 17,
2000 includes (i) 193,442,037 shares outstanding on such date and (ii) all
options that are currently exercisable or will become exercisable within 60
days thereafter by the persons or group in question.
(3) Represents shares deemed to be beneficially owned by J. & W. Seligman & Co.
Incorporated. William C. Morris, the owner of a majority of the outstanding
voting securities of J. & W. Seligman & Co. Incorporated, may also be
deemed to beneficially own the shares. The information stated above was as
of December 31, 1999 and was obtained by the Company from a filing made
with the Securities and Exchange Commission pursuant to Section 13(g) of
the Securities Exchange Act of 1934, as amended.
(4) Includes 293,118 shares of Common Stock issuable to Mr. Dowdell pursuant to
options which may be exercised within the next 60 days and 752,662 shares
of Common Stock currently allocated to Mr. Dowdell under the Company's
Employee Stock Ownership Plan (the "ESOP"). Does not include any shares
held by the ESOP other than the shares allocated to Mr. Dowdell's account.
The ESOP currently holds an aggregate of 8,824,654 shares. Mr. Dowdell is
a trustee of the ESOP and, as such, may be deemed to be a beneficial owner
of the shares currently held by it. Mr. Dowdell disclaims beneficial
ownership of such shares, other than the shares allocated to him. Also
includes 900 shares currently held by Mr. Dowdell under the Company's
401(k) Plan.
(5) Includes 112,500 shares of Common Stock issuable to Mr. Rasmussen pursuant
to options which may be exercised within the next 60 days and 609,394
shares of Common Stock currently allocated to Mr. Rasmussen under the
Company's ESOP. Does not include any shares held by the ESOP other than the
shares allocated to Mr. Rasmussen's account. The ESOP currently holds an
aggregate of 8,824,654 shares.
Mr. Rasmussen is a trustee of the ESOP and, as such, may be deemed to be a
beneficial owner of the shares currently held by it. Mr. Rasmussen
disclaims beneficial ownership of such shares, other than the shares
allocated to him. Also includes 199 shares currently held by Mr. Rasmussen
under the Company's 401(k) Plan. Does not include 160,424 shares held by
the Neil and Anna Rasmussen Foundation, a charitable trust. Mr. Rasmussen
disclaims beneficial ownership of the shares held by such trust.
(6) Includes 25,224 shares of Common Stock issuable to Dr. Landsman pursuant to
options which may be exercised within the next 60 days; 253,752 shares of
Common Stock currently allocated to Dr. Landsman under the Company's ESOP;
and 823 shares currently held by Dr. Landsman under the Company's 401(k)
Plan. Does not include 20,000 shares held by a trust for the benefit of
certain family members. Dr. Landsman disclaims beneficial ownership of the
shares held by such trust.
a. Includes 51,874 shares of Common Stock issuable to Mr. Gerson pursuant to
options which may be exercised within the next 60 days. Does not include
8,000 shares held by Mr. Gerson's wife for the benefit of his children.
Mr. Gerson disclaims beneficial ownership of the shares held by his wife
for the benefit of his children.
4
<PAGE>
(8) Includes 51,874 shares of Common Stock issuable to Dr. Lyon pursuant to
options which may be exercised within the next 60 days. Does not include
99,484 shares held by a trust for the benefit of Dr. Lyon's daughter. Dr.
Lyon disclaims beneficial ownership of the shares held by such trust.
(9) Includes 131,768 shares of Common Stock issuable to Mr. Machala pursuant to
options which may be exercised within the next 60 days and 93,691 shares of
Common Stock currently allocated to Mr. Machala under the Company's ESOP.
Does not include any shares held by the ESOP other than the shares
allocated to Mr. Machala's account. The ESOP currently holds an aggregate
of 8,824,654 shares. Mr. Machala is a trustee of the ESOP and, as such,
may be deemed to be a beneficial owner of the shares currently held by it.
Mr. Machala disclaims beneficial ownership of such shares, other than the
shares allocated to him. Also includes 199 shares currently held by Mr.
Machala under the Company's 401(k) Plan.
(10) Includes 34,438 shares of Common Stock issuable to Mr. Vieau pursuant to
options which may be exercised within the next 60 days; 17,017 shares of
Common Stock currently allocated to Mr. Vieau under the Company's ESOP; and
969 shares currently held by Mr. Vieau under the Company's 401(k) Plan.
(11) Includes 24,100 shares of Common Stock issuable to Mr. Muir pursuant to
options which may be exercised within the next 60 days; 2,727 shares of
Common Stock currently allocated to Mr. Muir under the Company's ESOP; and
1254 shares currently held by Mr. Muir under the Company's 401(k) Plan.
(12) Includes 58,092 shares of Common Stock issuable to Mr. Davis pursuant to
options which may be exercised within the next 60 days; 31,085 shares
currently allocated to Mr. Davis under the Company's ESOP; and 1,585 shares
currently held by Mr. Davis under the Company's 401(k) Plan.
(13) Includes 782,988 shares issuable to certain officers and directors of the
Company pursuant to options which may be exercised within the next 60 days;
1,760,288 shares allocated to the accounts of the officers of the Company
under the Company's ESOP; and 5929 shares held by the accounts of the
officers of the Company under the Company's 401(k) Plan. Also see footnotes
(4) through (12).
PROPOSALS NOs. 1 & 2: NUMBER AND ELECTION OF DIRECTORS
At the Meeting, the shareholders will vote on fixing the number of
directors at five and electing the entire Board of Directors. The directors of
the Company are elected annually and hold office until the next annual meeting
of shareholders and until their successors shall have been chosen and qualified.
Shares represented by all proxies received by the Board of Directors and
not so marked as to oppose or abstain from voting on fixing the number of
directors will be voted for fixing the number of directors for the ensuing year
at five.
Shares represented by all proxies received by the Board of Directors and
not so marked as to withhold authority to vote for any individual director or
for all directors will be voted (unless one or more nominees is unable or
unwilling to serve) for the election of the nominees named in the table below.
The Board of Directors knows of no reason why any such nominee should be unable
or unwilling to serve, but if such should be the case, proxies will be voted for
the election of some other person or for fixing the number of directors at a
lesser number. All of the nominees are currently directors of the Company and
were elected at the Annual Meeting of Shareholders held on May 7, 1999. The
following table sets forth the year each nominee first became a director of the
Company, each nominee's age, and the positions each nominee currently holds with
the Company.
<TABLE>
<CAPTION>
Nominee Director Since Age Position(s) Held with Company
<S> <C> <C> <C>
Rodger B. Dowdell, Jr. 1985 50 Chairman of the Board of
Directors, President and
Chief Executive Officer
Emanuel E. Landsman 1981 63 Director, Vice President and
Clerk
Neil E. Rasmussen 1981 45 Director, Vice President and
Chief Technical Officer
Ervin F. Lyon (1) (2) 1981 64 Director
James D. Gerson (1) (2) 1988 56 Director
</TABLE>
_______________________________________
(1) Member, Compensation and Stock Option Committee
(2) Member, Audit Committee
5
<PAGE>
The By-laws of the Company provide that each director is elected to hold
office until the next annual meeting of shareholders, and until his successor is
chosen and qualified. The officers of the Company are elected annually at the
first meeting of the Board of Directors following the annual meeting of
shareholders and hold office until their respective successors are chosen and
qualified.
Rodger B. Dowdell, Jr. joined the Company in August 1985 and has been
President and a Director since that time. From January to August 1985, Mr.
Dowdell worked for the Company as a consultant, developing a marketing and
production strategy for uninterruptible power supply products. From 1978 to
December 1984 he was President of Independent Energy, Inc., a manufacturer of
electronic temperature controls.
Emanuel E. Landsman has been Vice President, Clerk and a Director of the
Company since its inception. From 1966 to 1981, Dr. Landsman worked at
Massachusetts Institute of Technology's ("M.I.T.") Lincoln Laboratory, where he
was in the Space Communications Group from 1966 to 1977 and the Energy Systems
Engineering Group from 1977 to 1981.
Neil E. Rasmussen became Chief Technical Officer of the Company in 1997,
and has been Vice President and a Director of the Company since its inception.
From 1979 to 1981, Mr. Rasmussen worked in the Energy Systems Engineering Group
at M.I.T.'s Lincoln Laboratory.
Ervin F. Lyon has been a Director of the Company since its inception. From
September 1986 to March 1993, Dr. Lyon worked for M.I.T.'s Lincoln Laboratory,
from which he retired in March 1993. From the inception of the Company through
August 1985, Dr. Lyon was President and Chairman of the Company. From 1977 to
1981, Dr. Lyon was a member of the technical staff at M.I.T.'s Lincoln
Laboratory.
James D. Gerson has been a Director of the Company since August 1988. Mr.
Gerson has been a Vice President of Fahnestock & Co. for more than five years.
Mr. Gerson is also a member of the Board of Directors of Ag Services of America,
Inc., Fuel Cell Energy, Inc., and Evercel, Inc.
There are no family relationships between directors and executive officers
of the Company, except that Mr. Dowdell is the uncle of Aaron L. Davis, Vice
President, Small Systems Group.
THE BOARD OF DIRECTORS BELIEVES THAT FIXING THE NUMBER OF DIRECTORS
AT FIVE AND ELECTING ALL OF THE NOMINEES AS DIRECTORS IS IN THE BEST
INTEREST OF THE COMPANY AND ITS SHAREHOLDERS AND RECOMMENDS A VOTE
FOR THESE PROPOSALS.
Meetings of the Board of Directors and Committees
The Board of Directors met nine times and took action by unanimous written
consent three times during the fiscal year ended December 31, 1999.
The Company's Compensation and Stock Option Committee, comprised of Messrs.
Gerson and Lyon, met three times and took action by unanimous written consent
four times during the fiscal year ended December 31, 1999. The Compensation and
Stock Option Committee makes recommendations to the Board of Directors regarding
compensation and benefits for employees, consultants and directors of the
Company, determines the compensation of executive officers and is responsible
for the administration of the Company's 1987 Stock Option Plan, 1993 Non-
Employee Director Stock Option Plan, 1997 Stock Option Plan, 1997 Non-Employee
Director Stock Option Plan and 1997 Employee Stock Purchase Plan.
The Company's Audit Committee, comprised of Messrs. Gerson and Lyon, met
two times during the fiscal year ended December 31, 1999. The Audit Committee
oversees the accounting, tax and financial functions of the Company, including
matters relating to the appointment and activities of the Company's auditors.
6
<PAGE>
The Company does not currently have a standing Nominating Committee.
During the fiscal year ended December 31, 1999, each director attended at
least 75% of the meetings held by the Board of Directors. Overall attendance at
meetings of the Board of Directors was 96%. All of the members of the
Compensation and Stock Option Committee and the Audit Committee attended all of
the meetings of such committees.
Compensation of Directors
As compensation for serving on the Board of Directors, each non-employee
director is paid $20,000 per year and $1,500 for each meeting of the Board of
Directors attended. Non-employee directors are also reimbursed for reasonable
expenses incurred while attending meetings.
On February 25, 1993, the Board of Directors of the Company adopted the
1993 Non-Employee Director Stock Option Plan (the "1993 Director Plan"), subject
to approval by the Company's shareholders, which approval was granted on May 20,
1993. The 1993 Director Plan provides for a one-time grant of a stock option to
purchase 40,000 shares of Common Stock to each member of the Company's Board of
Directors who is neither an employee nor officer of the Company. An option was
granted to each of Messrs. Gerson and Lyon, the two members of the Board of
Directors entitled to participate in the 1993 Director Plan, on February 25,
1993. Such options have an exercise price of $6.00 per share, the "fair market
value", which is determined as of the last business day for which prices were
available prior to the date of the option grant and is the last reported sale
price (on that date) of the Common Stock on the The NASDAQ Stock Market. Each
director can currently exercise an option to purchase up to 40,000 shares of
Common Stock under the 1993 Director Plan.
On February 12, 1997, the Board of Directors of the Company adopted the
1997 Non-Employee Director Stock Option Plan (the "1997 Director Plan"), subject
to approval by the Company's shareholders, which approval was granted
on April 21, 1997. The 1997 Director Plan authorized the grant on
April 21, 1997 and each February 12th thereafter, of an option to purchase
20,000 shares of Common Stock to each member of the Company's Board
of Directors who is neither an employee nor officer of the Company.
Accordingly, options were granted on April 21, 1997, February 12, 1998, February
12, 1999 and February 12, 2000 to each of Messrs. Gerson and Lyon, the two
members of the Board of Directors entitled to participate in the 1997 Director
Plan. Such options have exercise prices of $10.8750, $13.50, $19.9375 and
$29.8438 per share, respectively, the "fair market value", which is determined
as of the last business day for which prices were available prior to the date of
the option grant and is the last reported sale price (on that date) of the
Common Stock on The NASDAQ Stock Market. Each director can currently exercise
options to purchase up to 11,874 shares of Common Stock under the 1997 Director
Plan.
EXECUTIVE COMPENSATION
The following table sets forth the annual and long-term compensation for
services in all capacities to the Company for the fiscal years ended December
31, 1999, 1998 and 1997, of those persons who were at
December 31, 1999 (i) the chief executive officer and (ii) the other four most
highly compensated executive officers of the Company (collectively, the "Named
Officers").
Summary Compensation Table
<TABLE>
<CAPTION>
Long- Term
Annual Compensation (1) Compensation(2)
Securities
Underlying All Other
Name and Principal Position Year Salary Bonus (3) Options (#) Compensation
<S> <C> <C> <C> <C> <C>
Rodger B. Dowdell, Jr. 1999 $535,000 $493,805 193,300 $6,795(5)
Chairman of the Board of 1998 516,031(4) 458,235 216,000 8,523(5)
Directors, President and 1997 499,000 443,112 258,000 4,872(5)
Chief Executive Officer
Edward W. Machala 1999 320,000 295,360 103,500 2,030(6)
Director, Vice President, 1998 303,665(4) 269,655 86,000 5,030(6)
Operations and Treasurer 1997 289,000 256,632 94,000 1,660(6)
7
<PAGE>
David P. Vieau 1999 289,000 266,747 86,000 5,630(7)
Vice President, Worldwide 1998 289,000 256,632 86,000 8,755(7)
Business Development 1997 289,000 256,632 84,000 2,033(7)
Donald M. Muir 1999 259,000 239,057 71,400 6,835(8)
Vice President, Finance and 1998 248,988(4) 221,102 72,000 8,377(8)
Administration, and Chief 1997 240,000 213,120 41,000 4,248(8)
Financial Officer
Aaron L. Davis 1999 220,000 203,061 177,400 5,761(9)
Vice President, Small 1998 191,537(4) 170,085 60,000 3,089(9)
Systems Group 1997 200,000 177,600 66,000 325(9)
</TABLE>
______________________________________
(1) Excludes perquisites and other personal benefits, the aggregate annual
amount of which for each officer was less than the lesser of $50,000 or
10% of the total salary and bonus reported.
(2) Represents stock options granted during the fiscal years ended December
31, 1999, 1998 or 1997. The Company did not grant any restricted stock
awards or stock appreciation rights ("SARs") or make any long term
incentive plan payouts during the fiscal years ended December 31, 1999,
1998 or 1997.
(3) Includes bonus payments earned by the Named Officers in the years
indicated, for services rendered in such years, which were paid in
subsequent years.
(4) Reflects an increase in salary effected in May 1999, retroactive to July
1998.
(5) Includes $3,340, $3,020, and $2,720, respectively, in premiums on a term
life insurance policy for Mr. Dowdell's benefit for fiscal years ended
December 31, 1999, 1998 and 1997; and $3,455, $5,503, and $2,152,
respectively, contributed to Mr. Dowdell's account by the Company pursuant
to the Company's 401(k) Plan for fiscal years ending December 31, 1999,
1998 and 1997.
(6) Includes $2,030, $1,830 and $1,660, respectively, in premiums on a term
life insurance policy for Mr. Machala's benefit for fiscal years ended
December 31, 1999, 1998 and 1997; and $3,200 contributed to Mr. Machala's
account by the Company pursuant to the Company's 401(k) Plan for the fiscal
year ending December 31, 1998.
(7) Includes $830, $755 and $695, respectively, in premiums on a term life
insurance policy for Mr. Vieau's benefit for fiscal years ended December
31, 1999, 1998 and 1997; and $4,800, $8,000 and $1,338, respectively,
contributed to Mr. Vieau's account by the Company pursuant to the Company's
401(k) Plan for fiscal years ending December 31, 1999, 1998 and 1997.
(8) Includes $435, $377 and $353, respectively, in premiums on a term life
insurance policy for Mr. Muir's benefit for fiscal years ended December 31,
1999, 1998 and 1997; $18,790 of relocation assistance for the fiscal year
ending December 31, 1997, and $6,400, $8,000 and $5,105, respectively,
contributed to Mr. Muir's account by the Company pursuant to the Company's
401(k) Plan for fiscal years ending December 31, 1999, 1998 and 1997.
(9) Includes $315, $320 and $325, respectively, in premiums on a term life
insurance policy for Mr. Davis' benefit for fiscal years ended December 31,
1999, 1998 and 1997; and $5,446 and $2,769, respectively, contributed to
Mr. Davis' account by the Company pursuant to the Company's 401(k) Plan for
fiscal years ending December 31, 1999 and 1998.
8
<PAGE>
Option Grants in the Last Fiscal Year
The following table sets forth grants of stock options pursuant to the
Company's 1997 Stock Option Plan granted during the fiscal year ended December
31, 1999 to the Named Officers. The Company did not grant any
stock appreciation rights to the Named Officers during the fiscal year ended
December 31, 1999.
<TABLE>
<CAPTION>
Potential Realizable Value
at Assumed Annual Rates
of Stock Price Appreciation
Individual Grants (1) for Option Term (2)
Percent
of Total
Number of Options
Securities Granted to Exercise
Underlying Employees Price
Options in Fiscal Per Expiration
Name Granted Year Share Date (3) 5% 10%
<S> <C> <C> <C> <C> <C> <C>
Rodger B. Dowdell, Jr. 193,300 3.79% $14.3125 3/29/2009 $1,759,583 $4,440,594
Edward W. Machala 86,000 1.69% 14.3125 3/29/2009 782,846 1,975,639
17,500 0.34% 24.7500 12/1/2009 272,390 690,290
David P. Vieau 86,000 1.69% 14.3125 3/29/2009 782,846 1,975,639
Donald M. Muir 71,400 1.40% 14.3125 3/29/2009 649,944 1,640,240
Aaron L. Davis 60,000 1.18% 14.3125 3/29/2009 546,172 1,378,353
117,400 2.30% 17.1875 5/13/2009 1,257,039 3,196,842
</TABLE>
_______________________________________
(1) All options were granted by the Compensation and Stock Option Committee at
"fair market value," which is determined as of the last business day for
which prices were available prior to the date of the option grant and is
the last reported sale price (on that date) of the Common Stock on The
NASDAQ Stock Market.
(2) Amounts reported in these columns represent amounts that may be realized
upon exercise of the options and subsequent sale of the underlying shares
immediately prior to the expiration of their term assuming the specified
rates of appreciation (5% and 10%) on the market value of the Company's
Common Stock on the date of option grant, compounded annually from the date
the respective options were granted, over the term of the options. The
gains shown are net of the option exercise price but do not reflect
deductions for taxes or other expenses associated with the exercise of the
options or sale of the underlying shares. These numbers are calculated
based on rules promulgated by the Securities and Exchange Commission and do
not reflect the Company's estimate of future stock price growth. Actual
gains, if any, on stock option exercises and Common Stock holdings are
dependent on the timing of such exercise and the future performance of the
Company's Common Stock. There can be no assurance that the rates of
appreciation assumed in this table can be achieved or that the amounts
reflected will be received by the individuals.
(3) The grant date of all options is 10 years prior to the expiration date.
Options vest at the rate of 25% on the first anniversary of the grant date
and 12.5% each six months thereafter.
Option Exercises and Fiscal Year-End Values
The following table sets forth information with respect to options to
purchase the Company's Common Stock granted under the 1987 Stock Option Plan and
the 1997 Stock Option Plan including (i) the number of shares purchased upon
exercise of options in 1999, (ii) the net value realized upon such exercise,
(iii) the number of unexercised options outstanding at December 31, 1999 and
(iv) the value of such unexercised options at December 31, 1999:
9
<PAGE>
<TABLE>
<CAPTION>
Number of Number of Unexercised Value of Unexercised
Shares Options at In-the-Money Options at
Acquired Value December 31, 1999 December 31, 1999 (1)
Name on Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
<S> <C> <C> <C> <C> <C> <C>
Rodger B. Dowdell, Jr. - $ - 207,882 459,418 $2,937,445 $5,858,772
Edward W. Machala - - 103,520 228,160 1,652,341 2,968,831
David P. Vieau 16,942 134,973 71,972 193,126 1,049,027 2,576,746
Donald M. Muir 96,328 1,255,234 - 170,142 - 2,321,469
Aaron L. Davis 28,840 236,025 39,092 255,928 540,615 2,952,010
</TABLE>
________________________________________
(1) Value is based on the difference between option exercise price and the fair
market value at December 31, 1999 ($26.375 per share closing price as
quoted on The NASDAQ Stock Market) multiplied by the number of shares
underlying the option.
AMERICAN POWER CONVERSION CORPORATION
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Company's executive officer compensation policy is administered by the
Compensation and Stock Option Committee of the Board of Directors (the
"Compensation Committee"). The Compensation Committee is comprised of the
Company's two non-employee directors. Pursuant to the authority delegated by the
Board of Directors, the Compensation Committee establishes each year the
compensation of senior management.
General Compensation Philosophy
The Company's executive compensation philosophy is based on the belief that
competitive compensation is essential to attract, motivate and retain highly
qualified and effective leaders. The Company's philosophy is to provide a total
compensation opportunity that matches competitive standards for commensurate
performance. The compensation policy includes various components of compensation
that are intended to align management behaviors and priorities directly with the
Company's strategic objectives and to encourage management to act in the best
long-term interest of the Company and its shareholders. Annual cash bonuses are
included to encourage effective performance relative to the Company's current
plans and objectives. Stock options are included to promote longer-term focus,
to help retain key contributors, and to more closely align the executives'
interests with those of shareholders.
The Compensation Committee's executive compensation policy is designed to
achieve the following objectives: (i) enhance profitability of the Company and
shareholder value, (ii) align compensation with the Company's annual and long-
term performance goals, (iii) reward above-average long-term corporate
performance, (iv) structure executive performance measures to emphasize team
achievement, (v) reinforce individual growth in leadership capabilities and
contribution over an individual's career, and (vi) encourage long-term
retention.
Executive Officer Compensation Policy
The Company's executive officer compensation policy generally consists of
three elements: base salary, annual cash bonus and long-term incentive
compensation in the form of stock options.
Cash Compensation
Annual cash compensation consists of two elements: base salary and annual
cash bonus. Each officer is offered a base salary that is commensurate for the
role that he or she is performing. In setting the annual cash compensation for
Company executive officers (other than the Chief Executive Officer), the
Compensation Committee reviews compensation for comparable positions in a group
of companies selected by the Compensation Committee for comparison purposes.
Most of these companies are engaged in the manufacture and sale of computer
hardware, peripherals and components, and are industry peers, competitors, and
those successful organizations that the Company wishes to emulate. The Company
also regularly compares its compensation practices with other leading companies
through reviews of benchmark surveys and proxy data.
10
<PAGE>
Increases in annual base salary are based on a periodic review and
evaluation of the performance of the operation or function for which the
executive has responsibility, and is measured against defined performance
criteria. The executive is also reviewed according to his or her competence as
an effective leader in the Company, which includes an evaluation of the skills
and experience required for the job, coupled with a comparison of these elements
with similar elements for other executives both within and outside of the
Company.
The annual cash bonus is tied directly to the attainment of financial
performance targets approved by the Compensation Committee. The bonus is
designed to promote world class performance by setting incentive thresholds at
aggressive levels and by providing highly leveraged award funding on the upside.
The ratio of bonus ("variable" pay) to base salary ("fixed" pay) varies
significantly across the levels in the organization and reflects the ability of
the individual to impact the performance of the Company and to absorb the risk
of variable pay. At the executive officer level, the cash bonus is dependent
principally on corporate performance, with each bonus subject to review and
approval by the Compensation Committee.
The purpose of the cash bonus is to recognize and reward the contribution
of all executives in achieving or exceeding the Company's established goals and
objectives. In fiscal 1999, the cash bonus provided for an annual payment based
on the weighted average of the Company's annual revenue and net income growth
rates over the prior year. The annual cash incentive is set currently at a
target of 60% of executive base salary. Corresponding to the level of actual
total company revenue and net income growth rate achieved, the cash bonus is
calculated as a multiple of base salary, ranging from zero to a maximum of 168%.
The Chief Executive Officer's employment agreement provides that his cash
compensation shall be in accordance with standards for chief executive officers
of similar size companies. After determining appropriate salary and bonus, then
reviewing it against data from peer comparison companies (defined as those with
sustained high growth in sales, net income and EPS, with a range of one-half to
two times the Company's annual revenues), the Compensation Committee believes
the Chief Executive Officer's cash compensation is commensurate with his
individual and organizational performance.
Long-term Incentive Compensation
Incentive compensation in the form of stock options is designed to provide
long-term incentives to executive officers (including the Chief Executive
Officer) and other employees, to encourage the executive officers and other
employees to remain with the Company and to enable optionees to develop and
maintain a significant, long-term stock ownership position in the Company's
Common Stock. The Company's 1997 Stock Option Plan, administered by the
Compensation Committee, is the vehicle for the granting of stock options.
The 1997 Stock Option Plan permits the Compensation Committee to grant
stock options to eligible employees, including executive officers. During 1999,
the Compensation Committee granted stock options to various employees. Options
become exercisable based upon a vesting schedule tied to period of service. The
value realizable from exercisable options is dependent upon the extent to which
the Company's performance is reflected in the market price of the Company's
Common Stock at any particular point in time.
During 1999, the Compensation Committee granted options potentially
exercisable for a combined total of 748,500 shares of Common Stock to seven
executive officers (including the Chief Executive Officer). The exercise price
is equal to the "fair market value," which is determined as of the last business
day for which prices were available prior to the date of the option grant and is
the last reported sale price (on that date) of the Common Stock on the NASDAQ
Stock Market. The options granted to each executive officer become exercisable
ratably over the next four years subject to his or her continued employment with
the Company.
The Company also maintains an ESOP in which all executives participate on
the same terms as eligible non-executive employees, subject to any legal
limitations on the amounts that may be contributed or the benefits that may be
payable under the ESOP. The ESOP's assets are invested exclusively in the
Company's Common Stock so as to further align employees' and shareholders' long-
term financial interests. The Board of Directors approves the contributions to
the ESOP. The Company did not make any contribution to the ESOP for fiscal 1999.
11
<PAGE>
In 1997, the Company developed and implemented a 401(k) savings program in
which all executive and non-executive U.S.-based employees who meet applicable
criteria are eligible to participate, subject to any legal limitations on the
amounts that may be contributed. The Company provides a matching benefit in an
amount equal to 100% on the first 3% of employee contributions plus 50% on the
next 3% of employee contributions. Employees are fully vested in their
employer matching contribution.
The 1997 Employee Stock Purchase Plan is administered by the Compensation
Committee and is intended to encourage ownership by all eligible employees of
the Company and participating subsidiaries so that they may share in the growth
of the Company. Eligible employees, including executive officers of the
Company, are those whose customary employment is more than 20 hours per week for
more than five months in any calendar year. Eligible employees who elect to
participate may purchase through payroll deduction shares of the Company's
Common Stock at 85% of the fair market value at specified dates, subject to
certain limitations. In 1999, US employees purchased 108,314 shares through
this program. It is the intent of the Company to extend this program to
employees in foreign locations where local tax and legal rules and regulations
permit.
The Compensation Committee is satisfied that the executive officers of the
Company are dedicated to achieving significant improvements in the long-term
financial performance of the Company and that the compensation policy
implemented has contributed, and will continue to contribute, towards achieving
this goal.
Tax Considerations
In general, under Section 162(m) of the Internal Revenue Code of 1986, as
amended (the "Code"), the Company cannot deduct, for federal income tax
purposes, compensation in excess of $1,000,000 paid to certain executive
officers. This deduction limitation does not apply, however, to compensation
that constitutes "qualified performance-based compensation" within the meaning
of Section 162(m) of the Code and the regulations promulgated thereunder. The
Company has considered the limitations on deductions imposed by Section 162(m)
of the Code, and it is the Company's present intention that, so long as it is
consistent with its overall compensation objective, substantially all tax
deductions attributable to executive compensation will not be subject to the
deduction limitations of Section 162(m) of the Code.
This report has been submitted by the members of the Compensation
Committee.
James D. Gerson
Ervin F. Lyon
PERFORMANCE GRAPH
The following graph illustrates a five year comparison of cumulative total
shareholder return among the Company, the University of Chicago's Center for
Research in Security Prices ("CRSP") Index for the NASDAQ Stock Market and the
CRSP Index for NASDAQ Electronic Components Stocks (SIC 367, a peer group index
which includes electronic components companies). The comparison assumes $100 was
invested on December 31, 1994 in the Company's Common Stock and in each of the
foregoing indices and assumes reinvestment of dividends, if any.
12
<PAGE>
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN AMONG THE
COMPANY, THE NASDAQ STOCK MARKET AND NASDAQ ELECTRONIC COMPONENTS STOCKS
[insert 1999 graph and chart in MS-Excel format]
<TABLE>
<CAPTION>
1994 1995 1996 1997 1998 1999
<S> <C> <C> <C> <C> <C> <C>
Broad Market Index (1) $100.00 $141.30 $173.90 $213.10 $300.20 $542.40
Peer Group Index (2) 100.00 165.60 286.40 300.20 464.10 910.50
APCC 100.00 58.00 166.40 144.30 295.80 322.10
</TABLE>
Assumes $100 invested on 12/31/94.
(1) CRSP Index for The NASDAQ Stock Market
(2) CRSP Index for NASDAQ Electronic Components Stocks
EMPLOYMENT CONTRACT
The Company has entered into an employment agreement with its Chief
Executive Officer. The agreement is automatically renewed annually unless either
party notifies the other 60 days prior to the renewal date. Pursuant to the
agreement, the Company pays the Chief Executive Officer an annual salary and a
bonus which are based on the salaries and bonuses paid to Chief Executive
Officers of electronics companies having approximately the same
revenues as the Company. The Chief Executive Officer is obligated under the
agreement not to compete with the Company while he is employed by the Company
and for a period of one year thereafter. The Company does not
have employment agreements with any other executive officers.
PROPOSAL NO. 3: SHAREHOLDER PROPOSAL REGARDING COMPOSITION OF THE BOARD OF
DIRECTORS
Citizens Funds of 230 Commerce Way, Suite 300, Portsmouth, New Hampshire,
the beneficial owner as of October 31, 1999 of 25,700 shares of the Company's
Common Stock, has submitted the following supporting statement and shareholder
proposal:
"BOARD INCLUSIVENESS RESOLUTION"
Whereas:
Employees, customers, and stockholders make up a greater diversity of
backgrounds than ever before. We believe that the board composition of major
corporations should reflect the people in the workforce and market place of the
Twenty-first Century if our company is going to remain competitive.
The Department of Labor's 1995 Glass Ceiling Commission reported ("Good for
Business: Making Full Use of the Nation's Human Capital") that diversity and
inclusiveness in the workplace positively impact the bottom line. A Covenant
Fund report of the S&P 500 companies revealed that ". . . firms that succeed in
the shattering their own glass ceiling racked up stock-market records that were
nearly 2.5 times better than otherwise-comparable companies."
The Investor Responsibility Research Center (IRRC) reports that in 1996,
inclusive at senior management levels was only at 12 percent for the over 39,000
companies required to submit the EEO- 1 Report. The Glass Ceiling Commission
reported that companies select from only half of the available talent with in
the US workforce.
If we are to be prepared for the 21st Century, we must learn how to compete in
an increasingly diverse global market place, by promoting and selecting the best
qualified people regardless of race, gender or physical challenge. SunOil's CEO
Robert Campbell stated (Wall Street Journal, 8/12/96): "Often what a woman or
minority person can bring to the board is some perspective a company has not had
before---adding some modern-day reality to the deliberate process. Those
perspectives are great of value, and often missing from an all-white, male
gathering. They can also be inspirational to the company's diverse workforce."
We believe that the judgement and perspectives of a diverse board will improve
the quality of corporate decision-making. A growing proportion of stockholders
is attaching a value to board inclusiveness, since the board is responsible for
representing shareholder interests in corporate meetings. The Teachers Insurance
and Annuity Association and College Retirement Equities Fund, the largest U.S.
institutional investor, recently issued a set of corporate governance guidelines
which included a call for "diversity of directors by experience, sex, age, and
race."
We therefore, urge our company to enlarge its search for qualified board
members.
13
<PAGE>
RESOLVED: The Shareholders request that:
1. The Board Nominating Committee make a greater effort to locate qualified
women and persons of color as candidates for nomination to the board;
2. The Board issue a public statement committing the company to a policy of
board inclusiveness, with a program of step to be taken and the time line
expected to move in that direction;
3. The company provide to shareholders, at a reasonable expense, a report by
September 2000, which includes a description of:
a. Efforts to encourage diversified representation on the board;
b. Criteria for board qualification;
c. The process of selecting board nominees, and
d. The selection process for board committee members."
Board of Directors Opposition to Shareholder Proposal
The Board of Directors believes this proposal would not serve the Company's or
its shareholders' best interests and recommends a vote AGAINST it.
As a global company with employees based around the world, APC has been a
primary beneficiary of a diverse workforce. The Company recognizes and seeks to
maximize the contributions that our employees of all backgrounds can provide our
business. The Company offers equal employment to all persons without regard to
race, creed, color, gender, age, religion, national origin, sexual orientation
or physical limitations. Just as the Company offers equal employment to all
persons, in selecting candidates for Board membership, the Board primarily seeks
to select and recommend the best qualified candidates based on relevant business
experience, expertise, abilities and the desire and time to commit to a dynamic
and fast moving Board such as ours, without regard to race, creed, color,
gender, age, religion, national origin, sexual orientation or physical
limitations.
Your current Board of Directors has an extremely successful tenure with the
Company. As shareholders themselves they have a vested interest in the Company
and have a stellar track record of performance. Over the years they have led
the Company from a small upstart of less than $10 million in annual revenues to
a global leader in its industry with over $1.3 billion in annual revenues.
During this time, the Company has been named to the Forbes 500 list for most
profitable US companies, been identified as one of the "Top 100 Technology
Companies that are Changing the World" by PC Magazine and had the 18th highest
appreciating stock of the 1990s, to name just a few accolades. The Company's
performance under the leadership of the current Board has been outstanding and
has in no way been diminished by the constitution of its members.
This proposal would require the Company to publish a policy coupled with a time
line to reach "board inclusiveness" as well as issue a public statement
outlining its efforts to promote board diversity, board qualifications, and the
selection process for board nominees and committee members. The Board of
Directors believes that the requirements set forth are overly restrictive, would
limit the Company in its selection of qualified Board members, would result in
incremental costs and the consumption of Company resources without
corresponding benefit to the Company and would, therefore, be detrimental to the
best interests of the Company and its shareholders.
THE BOARD OF DIRECTORS BELIEVES THAT THIS PROPOSAL IS NOT IN THE BEST
INTEREST OF THE COMPANY AND ITS SHAREHOLDERS AND RECOMMENDS A VOTE
AGAINST THIS PROPOSAL.
INDEPENDENT ACCOUNTANTS
The Company has retained KPMG Peat Marwick, LLP as its independent auditors
for the fiscal year ending December 31, 2000. A representative of KPMG Peat
Marwick, LLP will be at the Meeting and will be given the opportunity to make a
statement if so desired and will be available to respond to appropriate
questions from
the shareholders.
14
<PAGE>
SECTION 16 REQUIREMENTS
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the Company's directors and officers, and persons who own more than 10% of a
registered class of the Company's equity securities, to file initial reports of
ownership and reports of changes in ownership with the Securities and Exchange
Commission (the "SEC"). Such persons are required by SEC regulations to furnish
the Company with copies of all Section 16(a) forms they file.
Based solely on its review of the copies of such forms received by it with
respect to fiscal 1999, or written representations from certain reporting
persons, the Company believes that all of its directors, officers and persons
who own more than 10% of a registered class of the Company's equity securities
complied with all filing requirements applicable to them with respect to
transactions during 1999.
SHAREHOLDER PROPOSALS
The deadline for submission of proposals by shareholders pursuant to Rule
14a-8 issued under the Exchange Act, which are intended for inclusion in the
proxy statement to be furnished to all shareholders entitled to vote at the next
annual meeting of shareholders of the Company, is December 2, 2000. The deadline
for submission of proposals of shareholders intended to be presented at the next
annual meeting of shareholders of the Company (which are not otherwise submitted
for inclusion in the proxy statement in accordance with the preceding sentence)
is February 11, 2001. In submitting such proposals, shareholders must comply
with the requirements set forth in both the Amended and Restated By-Laws of the
Company and in Rule 14a-4(c)(2)(i)-(iii) under the Exchange Act. In order to
curtail any controversy as to the date on which a proposal was received by the
Company, it is suggested that proponents submit their proposals by Certified
Mail, Return Receipt Requested.
EXPENSES AND SOLICITATION
The cost of solicitation of proxies will be borne by the Company. In
addition to soliciting shareholders by mail or by its regular employees, the
Company may request banks and brokers to solicit their customers who have stock
of the Company registered in the name of a nominee and, if so, will reimburse
such banks and brokers for their reasonable out-of-pocket costs. Solicitation by
officers and employees of the Company, none of whom will receive additional
compensation therefor, may also be made of some shareholders in person or by
mail, telephone or telegram, following the original solicitation. The Company
has retained Morrow & Co. Incorporated to assist in the solicitation of proxies,
and will pay this company a fee of approximately $6,000 plus expenses.
15
<PAGE>
DIRECTIONS TO APC'S ANNUAL SHAREHOLDER MEETING
The meeting will take place on Thursday, May 11, 2000 at 10:00 a.m. in the
University Ballroom of the Radisson Airport Hotel, 2081 Post Road, in Warwick,
Rhode Island (Tel. 401-739-3000).
FROM I-95 NORTH OR SOUTH:
Take Exit 13 (towards T.F. Green Airport)
Take the Post Road Exit - at the end of the exit, turn left onto Post
Road (heading north)
The hotel will be on the left after about 1/4 mile
Parking is available in the rear of the hotel
IF TRAVELING BY AIR:
The Radisson is conveniently located near T.F. Green Airport in Providence,
Rhode Island. A hotel shuttle is available for your convenience - just make a
call from the Radisson's courtesy phone in the airport lobby. Taxis and rental
cars are also available at the airport.
________________________________
The University Ballroom is located on the second floor of the Radisson
Airport Hotel - turn right after exiting the elevator.
The University Ballroom will open to shareholders at 9:00 a.m. Please allow
adequate time to find parking, complete any check-in and to be seated prior to
the 10:00 a.m. starting time.
_______________________________
Please be aware that seating may be limited. Please bring valid picture
identification, such as a driver's license or passport. You may be required to
provide this upon entry to the meeting. Shareholders holding stock in brokerage
accounts ("street name" holders) will also need to bring a copy of a brokerage
statement reflecting stock ownership as of the record date. Cameras, recording
devices and other electronic devices will not be permitted at the meeting.
_____________________________
Thank you. We hope to see you there!
0525-PS-00
16
<PAGE>
PROXY
AMERICAN POWER CONVERSION CORPORATION
Proxy for Annual Meeting of Shareholders
May 11, 2000
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Rodger B. Dowdell, Jr. and Emanuel E.
Landsman, and each of them, proxies, with full power of substitution, to vote
all shares of stock of American Power Conversion Corporation (the "Company")
which the undersigned is entitled to vote at the Annual Meeting of Shareholders
of the Company to be held on Thursday, May 11, 2000, at 10:00 a.m. local time,
in the University Ballroom of the Radisson Airport Hotel located at 2081 Post
Road, Warwick, Rhode Island 02886, and at any adjournments thereof, upon matters
set forth in the Notice of Annual Meeting of Shareholders and Proxy Statement
dated March 31, 2000, a copy of which has been received by the undersigned. The
proxies are further authorized to vote, in their discretion, upon such other
business as may properly come before the meeting or any adjournments thereof.
Execution of a proxy will not in any way affect a shareholder's right to attend
the meeting and vote in person. Any shareholder giving a proxy has the right to
revoke it by written notice to the Clerk of the Company at any time before it is
exercised or by delivering a later executed proxy to the Clerk of the Company at
any time before the original proxy is exercised.
CONTINUED AND TO BE SIGNED ON REVERSE SIDE
SEE REVERSE SIDE
<PAGE>
[ X ] Please mark votes as in this example.
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS DIRECTED OR, IF NO
DIRECTION IS GIVEN, WILL BE VOTED "FOR" ITEMS 1 AND 2 AND "AGAINST" ITEM 3.
The Board of Directors recommends a
vote "FOR" Items 1 and 2.
1. To fix the number of directors
at five.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
2. To elect the Board of Directors [ ] MARK HERE IF YOU PLAN TO ATTEND
for the ensuing year: THE MEETING
Nominees: Rodger B. Dowdell, Jr., [ ] MARK HERE FOR ADDRESS CHANGE AND
Emanuel E. Landsman, NOTE IT BELOW
Neil E. Rasmussen, Ervin F. Lyon
and James D. Gerson
FOR WITHHELD
[ ] [ ] _____________________________________
_____________________________________
[ ]____________________________
For all nominees except as
noted above
If signing as attorney, executor,
The Board of Directors recommends a trustee or guardian, please give your
vote "AGAINST" Item 3 full title as such. If stock is held
jointly, each owner should sign.
3. To consider and act upon a
shareholder proposal regarding _____________________________________
the composition of the Company's Signature Date
Board of Directors
FOR AGAINST ABSTAIN _____________________________________
[ ] [ ] [ ] Signature Date
