<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:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
GENUS, INC.
- - --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
GENUS, INC.
- - --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4)
and 0-11.
1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
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:
------------------------------------------------------------------------
<PAGE>
GENUS, INC.
------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON MAY 23, 1995
---------------------
TO THE SHAREHOLDERS:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of Genus,
Inc. (the "Company") will be held on Tuesday, May 23, 1995 at 3:00 p.m., local
time, at the Santa Clara Marriott Hotel located at 2700 Mission College
Boulevard, Santa Clara, California 95052, for the following purposes:
1. To elect directors to serve for the ensuing year and until their
successors are elected.
2. To approve an amendment to the 1991 Incentive Stock Option Plan
increasing the number of shares reserved for issuance thereunder by
500,000 additional shares.
3. To approve an amendment to the 1989 Employee Stock Purchase Plan
increasing the number of shares reserved for issuance thereunder by
250,000 additional shares.
4. To ratify the appointment of Coopers & Lybrand LLP as independent
auditors of the Company for the fiscal year ending December 31, 1995.
5. To transact such other business as may properly come before the meeting
or any adjournment thereof.
The foregoing items of business are more fully described in the Proxy
Statement accompanying this Notice.
Only shareholders of record at the close of business on March 31, 1995 are
entitled to vote at the meeting.
All shareholders are cordially invited to attend the meeting in person.
However, to ensure your representation at the meeting, you are urged to mark,
sign, date and return the enclosed proxy card as promptly as possible in the
self-addressed stamped envelope enclosed for that purpose. Any shareholder
attending the meeting may vote in person even if he or she returned a proxy.
FOR THE BOARD OF DIRECTORS
William W. R. Elder
CHAIRMAN OF THE BOARD
AND CHIEF EXECUTIVE OFFICER
Sunnyvale, California
April 26, 1995
<PAGE>
GENUS, INC.
------------------
PROXY STATEMENT FOR ANNUAL MEETING OF SHAREHOLDERS
---------------------
The enclosed Proxy is solicited on behalf of Genus, Inc., a California
corporation (the "Company") for use at the Annual Meeting of Shareholders to be
held Tuesday, May 23, 1995, at 3:00 p.m., local time, or at any adjournment
thereof, for the purposes set forth herein and in the accompanying Notice of
Annual Meeting of Shareholders. The Annual Meeting will be held at the Santa
Clara Marriott Hotel, 2700 Mission College Boulevard, Santa Clara, California
95052. The principal executive offices of the Company are located at 1139
Karlstad Drive, Sunnyvale, California 94089. The Company's telephone number at
that location is (408) 747-7120.
These proxy solicitation materials were mailed on or about April 26, 1995 to
all shareholders entitled to vote at the meeting.
INFORMATION CONCERNING SOLICITATION AND VOTING
VOTING
Each share of Common Stock outstanding on the record date is entitled to one
vote. In addition, every shareholder, or his or her proxy, who is entitled to
vote upon 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 shares held by such shareholder, or
distribute the shareholder's votes on the same principle among as many
candidates as the shareholder may select, provided that votes cannot be cast for
more than four candidates. No shareholder or proxy, however, shall be entitled
to cumulate votes for a candidate unless such candidate's name has been placed
in nomination prior to the voting and the shareholder, or any other shareholder,
has given notice at the meeting, prior to the voting, of the shareholder's
intention to cumulate votes. If any shareholder gives such notice, all
shareholders may cumulate their votes for candidates in nomination.
QUORUM; ABSTENTIONS; BROKER NON-VOTES
The required quorum for the transaction of business at the Annual Meeting is
a majority of the shares of Common Stock issued and outstanding on the Record
Date. Shares that are votes "For" or "Against" are treated as shares
"represented and voting" at the Annual Meeting (the "Votes Cast") with respect
to such matter.
While there is no definitive statutory or case law authority in California
as to the proper treatment of abstentions or broker non-votes, the Company
believes that both abstentions and broker non-votes should be counted for
purposes of determining the presence or absence of a quorum for the transaction
of business. The Company further believes that neither abstentions nor broker
non-votes should be counted as shares "represented and voting" with respect to a
particular matter for purposes of determining the total number of Votes Cast
with respect to such matters. In the absence of controlling precedent to the
contrary, the Company intends to treat abstentions and broker non-votes in this
manner. Accordingly, they will not affect the determination as to whether the
requisite majority of Votes Cast has been obtained for a particular matter.
REVOCABILITY OF PROXIES
Any proxy given pursuant to this solicitation may be revoked by the person
giving it at any time before its use by delivering to the Company (Attention:
Ernest P. Quinones, Corporate Controller, Chief Accounting Officer and
Treasurer) a written notice of revocation or a duly executed proxy bearing a
later date or by attending the meeting and voting in person.
SOLICITATION
The cost of soliciting proxies will be borne by the Company. The Company is
retaining the services of Corporate Investor Communications, Inc. to solicit
proxies for a cost of approximately $5,000 plus out-of-pocket expenses. 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
<PAGE>
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.
DEADLINE FOR RECEIPT OF SHAREHOLDER PROPOSALS
Proposals of shareholders of the Company which are intended to be presented
by such shareholders at the Company's 1996 Annual Meeting of Shareholders must
be received by the Company no later than December 22, 1995 in order that they
may be included in the proxy statement and form of proxy relating to that
meeting.
RECORD DATE AND SHARE OWNERSHIP
Shareholders of record at the close of business on March 31, 1995 are
entitled to notice of and to vote at the meeting. At the record date, 15,407,095
shares of the Company's Common Stock, no par value, were issued and outstanding.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information known to the Company
regarding beneficial ownership of the Company's Common Stock as of March 31,
1995 (except as otherwise noted), by (i) each of the Company's directors, (ii)
each executive officer named in the Summary Compensation Table appearing herein,
(iii) all directors and executive officers of the Company as a group and (iv)
each person known by the Company to beneficially own more than 5% of the
Company's Common Stock:
<TABLE>
<CAPTION>
NUMBER OF PERCENTAGE OF
NAME OF BENEFICIAL OWNER SHARES (1) CLASS OWNED
- - ---------------------------------------------------------------------------- ----------- -----------------
<S> <C> <C>
William W.R. Elder** (2).................................................... 370,599 2.4%
Todd S. Myhre** (3)......................................................... 108,328 *
William D. Cole** (4)....................................................... 35,115 *
John E. Aldeborgh** (5)..................................................... 21,383 *
Kevin C. Conlon** (6)....................................................... 85,774 *
H. Vaughan Blaxter III*** (7)............................................... 21,250 *
Steve Fisher*** (8)......................................................... 0 *
Mario M. Rosati*** (9)...................................................... 56,299 *
Bachow Investment Partners III, L.P. (10)................................... 977,876 6.3
3 Bala Plaza East, Suite 502
Bala Cynwyd, PA 19004
Paul S. Bachow Co-Investment Fund, L.P. (11)................................ 138,671 *
3 Bala Plaza East, Suite 502
Bala Cynwyd, PA 19004
Paul S. Bachow (12)......................................................... 63,392 *
3 Bala Plaza East, Suite 502
Bala Cynwyd, PA 19004
The Parnassus Fund.......................................................... 1,000,000 6.5
244 California Street, Suite 400
San Francisco, CA 94111
All directors and executive officers as a group (10 persons) (13)........... 698,748 4.4
<FN>
- - ------------------------
* Less than 1%
** Executive officer.
*** Non-employee director.
(1) The persons named in the table have sole voting and investment power with
respect to all shares of Common Stock shown as beneficially owned by them,
subject to community property laws where applicable and the information
contained in the footnotes to this table.
</TABLE>
2
<PAGE>
<TABLE>
<S> <C>
(2) Includes options to purchase 190,000 shares of Common Stock exercisable
within 60 days of March 31, 1995.
(3) Includes options to purchase 108,328 shares of Common Stock exercisable
within 60 days of March 31, 1995.
(4) Includes options to purchase 29,997 shares of Common Stock exercisable
within 60 days of March 31, 1995.
(5) Includes options to purchase 18,966 shares of Common Stock exercisable
within 60 days of March 31, 1995.
(6) Includes options to purchase 56,665 shares of Common Stock exercisable
within 60 days of March 31, 1995.
(7) Does not include 346,119 shares held by affiliates of Henry L. Hillman, as
to which Mr. Blaxter disclaims beneficial ownership. Includes options to
purchase 2,500 shares of Common Stock exercisable within 60 days of March
31, 1995. Mr. Blaxter, a director since 1991, is not a nominee for
re-election.
(8) On April 3, 1995, pursuant to the terms of a Stock Purchase Agreement dated
February 10, 1995 (the "Stock Purchase Agreement") by and among the Company
and Bachow Investment Partners III, L.P., Paul S. Bachow Co-Investment
Fund, L.P. and Paul S. Bachow, (collectively the "Bachow Group"), Mr.
Fisher was elected as a representative of the Bachow Group to fill an
existing vacancy on the Company's Board of Directors. This figure does not
include the 1,178,967 shares held by the Bachow Group, as to which shares
Mr. Fisher has neither voting nor investment power.
(9) Includes options to purchase 21,250 shares of Common Stock exercisable
within 60 days of March 31, 1995.
(10) Does not include 138,671 shares held by Paul S. Bachow Co-Investment Fund,
L.P. and 63,392 shares held by Paul S. Bachow, as to which Bachow
Investment Partners III, L.P. disclaims beneficial ownership.
(11) Does not include 977,876 shares held by Bachow Investment Partners III,
L.P. and 63,392 shares held by Paul S. Bachow, as to which Paul S. Bachow
Co-Investment Fund, L.P. disclaims beneficial ownership.
(12) Does not include 977,876 shares held by Bachow Investment Partners III,
L.P. and 138,671 shares held by Paul S. Bachow Co-Investment Fund, L.P., as
to which Paul S. Bachow disclaims beneficial ownership.
(13) Includes options to purchase 448,740 shares of Common Stock exercisable
within 60 days of March 31, 1995.
</TABLE>
3
<PAGE>
ELECTION OF DIRECTORS
NOMINEES
The Company's Bylaws provide for a variable board of four to seven
directors, with the number currently fixed at five. It is planned that a board
of four directors will be elected at the meeting and, thereafter, the number of
fixed directors will be reduced to four. Unless otherwise instructed, the proxy
holder will vote the proxies received by him for the Company's four nominees
named below, all of whom are presently directors of the Company. 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 of Directors to fill the vacancy. In
the event that additional persons are nominated for election as directors, the
proxy holder intends to vote all proxies received by him in such a manner in
accordance with cumulative voting as will assure the election of as many of the
nominees listed below as possible, and, in such event, the specific nominees to
be voted for will be determined by the proxy holder. It is not expected that any
nominee listed below 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 of Shareholders or until his successor has been elected and
qualified.
The names of the nominees of the Company, and certain information about
them, are set forth below.
<TABLE>
<CAPTION>
DIRECTOR
NAME OF NOMINEE AGE PRINCIPAL OCCUPATION SINCE
- - ---------------------- --- --------------------------------------------------------------- -----------
<S> <C> <C> <C>
William W.R. Elder 56 Chairman and Chief Executive Officer of the Company 1981
Todd S. Myhre 50 President, Chief Operating Officer and Acting Chief Financial 1994
Officer of the Company
Steve Fisher 42 Managing Director of Bachow & Associates, Inc. 1995
Mario M. Rosati 48 Member of Wilson, Sonsini, Goodrich & Rosati, Professional 1981
Corporation
</TABLE>
Except as set forth below, each of the nominees has been engaged in his
principal occupation set forth above during the past five years. There are no
family relationships among any directors or executive officers of the Company.
Mr. Elder, a founder of the Company, served as President and as a director
of the Company from its organization in November 1981 through April 1990. In
April 1990, he was named Chairman of the Board, President and Chief Executive
Officer. Mr. Elder currently serves as Chairman of the Board and Chief Executive
Officer of the Company.
Mr. Myhre joined the Company in January 1993 as Vice President and Chief
Financial Officer. From August 1993 to December 1993, Mr. Myhre served as
Executive Vice President and Chief Operating Officer of the Company. In January
1994, Mr. Myhre was named President and elected as a director of the Company.
From April 1989 to December 1992, Mr. Myhre was President and CFO of Optimal
Associates, Inc., a real estate development company. From December 1988 to April
1989, he was associated with Apple Computer, Inc., a computer manufacturer, as
Worldwide Manufacturing Financial Director. From November 1977 to November 1988,
he served in various management positions at Hewlett-Packard Company, a computer
and instrumentation manufacturer, most recently as Group Operations Controller.
Mr. Fisher has served as a director since April 3, 1995, when he was elected
pursuant to the terms of the Stock Purchase Agreement to serve as a
representative of the Bachow Group by filling an existing vacancy on the Board.
He has been the Managing Director of Bachow & Associates, Inc., an investment
firm, since June 1993. For more than five years prior to joining Bachow &
Associates, Inc., he served in numerous executive capacities with Westinghouse
Broadcasting Company, Inc., a media and communications company, most recently as
Executive Vice President. He is also a director of DataMap, Inc.
4
<PAGE>
Mr. Rosati has been Secretary and a director of the Company since the
Company's inception in November 1981. He is also a director of C-ATS Software
Inc., a supplier of client/server software products for financial risk
management; Meridian Data, Inc., a developer of compact disc-read only memory
(CD-ROM) and compact disc-recordable (CD-R) systems and related software for
both networks and personal computers; and Ross Systems, Inc., a supplier of
enterprise-wide business systems and related services to companies installing
open systems/client server software products. He is a member of Wilson, Sonsini,
Goodrich & Rosati, Professional Corporation, general counsel to the Company.
VOTE REQUIRED
The four nominees receiving the highest number of affirmative votes of the
shares entitled to be voted for them shall be elected as directors. Votes
withheld from any director are counted for purposes of determining the presence
or absence of a quorum, but have no legal effect under California law. While
there is no definitive statutory or case law authority in California as to the
proper treatment of abstentions and broker non-votes in the election of
directors, the Company believes that both abstentions and broker non-votes
should be counted for purposes of determining whether a quorum is present at the
Annual Meeting. In the absence of precedent to the contrary, the Company intends
to treat abstentions and broker non-votes with respect to the election of
directors in this manner.
BOARD MEETINGS AND COMMITTEES
The Board of Directors of the Company held a total of four meetings during
the year ended December 31, 1994. The Board of Directors has an Audit Committee
and a Compensation Committee. It does not have a nominating committee or a
committee performing the functions of a nominating committee.
During the year ended December 31, 1994 the Audit Committee of the Board of
Directors consisted of directors H. Vaughan Blaxter III and Rosati and held one
meeting. As of March 31, 1995 the Audit Committee consisted of directors Blaxter
and Rosati. The Audit Committee recommends engagement of the Company's
independent accountants and is primarily responsible for approving the services
performed by the Company's independent accountants and for reviewing and
evaluating the Company's accounting principles and its system of internal
accounting controls.
During the year ended December 31, 1994 the Compensation Committee of the
Board of Directors consisted of directors Blaxter and Rosati and held three
meetings. As of March 31, 1995 the Compensation Committee consisted of directors
Blaxter and Rosati. The Compensation Committee makes recommendations to the
Board of Directors regarding the Company's executive compensation policy. See
"Compensation Committee Report on Executive Compensation."
No director serving in the year ended December 31, 1994 attended fewer than
75% of the aggregate number of meetings of the Board of Directors and meetings
of the committees of the Board on which he or she serves.
DIRECTOR COMPENSATION
The Company currently pays to its directors who are not employees a fee of
$1,000 per meeting and $500 per telephonic meeting. The Company also reimburses
directors for reasonable expenses incurred in attending meetings. Under the
Company's 1991 Option Plan, each of the non-employee directors receives an
automatic grant of an option to purchase 5,000 shares of Common Stock on the
date of his or her appointment or election to the Board and, for so long as he
or she continues to serve as a director, an automatic grant of an option to
purchase 5,000 shares of Common Stock on February 7 of each year. See "Amendment
of 1991 Incentive Stock Option Plan."
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
In 1994, the Company paid legal fees and expenses to Wilson, Sonsini,
Goodrich & Rosati, Professional Corporation, general counsel to the Company.
Mario M. Rosati, a director and Secretary of the Company, is a member of the
firm of Wilson, Sonsini, Goodrich & Rosati, Professional Corporation.
5
<PAGE>
TRANSACTIONS WITH MANAGEMENT
In February 1992, the Company loaned William W.R. Elder, Chairman of the
Board and Chief Executive Officer of the Company, $100,000 under a three-year
note bearing interest at 7% annually in connection with the exercise by him of
options to purchase 80,000 shares of Common Stock. Mr. Elder's obligation to
repay this loan is secured by the Common Stock received by him upon the exercise
of these options. This loan was extended to May 31, 1995 under the same terms.
The Board of Directors has considered, and may consider in the future, an
arrangement under which the Company would make payments to executive officers
and other employees in the event of termination of their employment related to
any change in control of the Company.
See also "Compensation Committee Interlocks and Insider Participation"
above.
SECTION 16(A) REPORTS
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
officers and directors, and persons who own more than 10% of a registered class
of the Company's equity securities, to file certain reports regarding ownership
of, and transactions in, the Company's Securities with the Securities and
Exchange Commission (the "SEC"). Such officers, directors and 10% shareholders
are also required by SEC rules to furnish the Company with copies of all Section
16(a) forms that they file.
Based solely on its review of the copies of such forms received by it, or
written representations from certain reporting persons, the Company believes
that during fiscal 1994 all Section 16(a) filing requirements applicable to its
officers, directors and 10% shareholders were complied with without exception.
COMPENSATION OF EXECUTIVE OFFICERS
SUMMARY COMPENSATION TABLE
The following table discloses compensation received by the Company's Chief
Executive Officer and the four remaining most highly compensated executive
officers of the Company for the three fiscal years ended December 31, 1994:
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS (2)
--------------------------- ---------------- ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY ($) BONUS ($)(1) OPTIONS/SARS (#) COMPENSATION ($)(3)
- - -------------------------------------- ------------ ----------- -------------- ---------------- -------------------
<S> <C> <C> <C> <C> <C>
William W.R. Elder, 1994 $ 260,000 $ 53,950 -- $ 7,980
Chairman of the Board 1993 216,667 -- -- 3,119
and Chief Executive Officer 1992 260,000 -- 20,000 4,377
Todd S. Myhre 1994 $ 200,000 $ 41,500 75,000 $ 5,600
President, Chief Operating 1993(4) 149,426 -- 125,000 --
Officer and Acting Chief
Financial Officer
William D. Cole 1994 $ 135,938 $ 100,232(5) 20,000 $ 3,365
Vice President, Sales 1993(4) 122,750 48,344(5) 35,000 --
John E. Aldeborgh 1994 $ 138,490 $ 27,639 20,000 $ 3,828
Vice President and 1993 123,860 -- -- --
General Manger, 1992 114,535 -- 20,000 --
Ion Division.
Kevin C. Conlon 1994 $ 129,900 $ 36,255(6) 15,000 $ 3,412
Vice President, 1993 113,792 -- -- --
Marketing 1992 80,461 24,000 60,000 --
<FN>
- - ------------------------
(1) Except as otherwise noted, all bonuses were earned by the named officer in
fiscal 1994 pursuant to the Company's Management Incentive Plan, but were
not paid until fiscal 1995.
</TABLE>
6
<PAGE>
<TABLE>
<S> <C>
(2) The Company did not make any awards of restricted stock or make any
payments under long-term incentive plans during the periods covered in the
table.
(3) Represents amounts contributed to the Company's 401(k) plan and/or profit
sharing plan on behalf of the officer by the Company in the following
amounts: $6,240 to the profit sharing plan for benefit of Mr. Elder; $800
and $4,800 to the 401(k) plan and profit sharing plan, respectively, for
benefit of Mr. Myhre; $102 and $3,263 to the 401(k) plan and profit sharing
plan, respectively, for benefit of Mr. Cole; $504 and $3,324 to the 401(k)
plan and profit sharing plan, respectively, for benefit of Mr. Aldeborgh;
and $294 and $3,118 to the 401(k) plan and profit sharing plan,
respectively, for benefit of Mr. Conlon. Premiums in the amount of $1,740
were also paid by the Company on behalf of Mr. Elder for a term life
insurance policy (the proceeds of which are payable to his named
beneficiaries) in fiscal 1994.
(4) Messrs. Myhre and Cole were not employed by the Company prior to fiscal
1993.
(5) Includes sales commissions earned by Mr. Cole in the amount of $94,089 in
fiscal 1994 and $48,344 in fiscal 1993.
(6) Includes $15,000 earned by, and paid to, Mr. Conlon in fiscal 1994 in
connection with a non-recurring bonus arrangement.
</TABLE>
OPTION/SAR GRANTS IN LAST FISCAL YEAR
The following table provides information on option grants made in fiscal
1994 to the named executive officers:
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS POTENTIAL REALIZABLE
-------------------------------------------------------- VALUE AT ASSUMED
% OF TOTAL ANNUAL RATES OF STOCK
OPTIONS/SARS PRICE APPRECIATION FOR
GRANTED TO EXERCISE OR OPTION TERM (3)
OPTIONS/SARS EMPLOYEES IN BASE PRICE EXPIRATION ----------------------
NAME GRANTED (#)(1) FISCAL YEAR (2) ($/SH) DATE 5% ($) 10% ($)
- - ------------------------------------------ -------------- --------------- ----------- ---------- --------- -----------
<S> <C> <C> <C> <C> <C> <C>
William W.R. Elder........................ -- -- -- -- -- --
Todd S. Myhre............................. 75,000 19.6 $ 4.00 5/23/99 $ 82,884 $ 183,153
William D. Cole........................... 20,000 5.2 $ 4.00 5/23/99 $ 22,103 $ 48,841
John E. Aldeborgh......................... 20,000 5.2 $ 4.00 5/23/99 $ 22,103 $ 48,841
Kevin C. Conlon........................... 15,000 3.9 $ 4.00 5/23/99 $ 16,577 $ 36,631
<FN>
- - ------------------------
(1) The indicated options were granted on May 23, 1994, vest at rate of 1/3 per
year and become fully exercisable on May 23, 1997.
(2) The Company granted options to purchase 382,800 shares to employees in
fiscal 1994.
(3) Potential realizable value assumes that the stock price increases from the
date of grant until the end of the option term (5 years) at the annual rate
specified (5% and 10%). Annual compounding results in total appreciation of
28% (at 5% per year) and 61% (at 10% per year). The assumed annual rates of
appreciation are specified in SEC rules and do not represent the Company's
estimate or projection of future stock price. The Company does not
necessarily agree that this method can properly determine the value of an
option.
</TABLE>
7
<PAGE>
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END
OPTION/SAR VALUES
The following table provides information on option/SAR exercises in fiscal
1994 by the named executive officers and the value of such officers' unexercised
options/SARs at December 31, 1994.
<TABLE>
<CAPTION>
NUMBER OF UNEXERCISED VALUE OF UNEXERCISED IN-THE-
OPTIONS/SARS AT MONEY OPTIONS/SARS AT
SHARES 12/31/94 (#): 12/31/94 ($)(2):
ACQUIRED ON VALUE -------------------------- ----------------------------
NAME EXERCISE (#) REALIZED (1) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- - ------------------------------------- ----------- ----------- ----------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
William W.R. Elder................... -- -- 183,332 6,668 $ 1,215,827 $ 34,173
Todd S. Myhre........................ -- -- 41,665 158,335 $ 229,678 $ 759,384
William D. Cole...................... -- -- 11,666 43,334 $ 56,872 $ 193,753
John E. Aldeborgh.................... 26,956 $ 87,550 5,334 27,266 $ 23,336 $ 117,313
Kevin C. Conlon...................... -- -- 39,999 35,001 $ 223,743 $ 171,882
<FN>
- - ------------------------
(1) Market value of underlying securities based on the closing price of the
Company's Common Stock on The Nasdaq National Market on the date of
exercise, minus the exercise price.
(2) Market value of underlying securities based on the closing price of
Company's Common Stock on December 30, 1994 on The Nasdaq National Market
of $8.00 (less the exercise price).
The Company has not established any long-term incentive plans, defined
benefit or actuarial plans, or arrangements relating to a change-in-control
covering any of the named executive officers.
</TABLE>
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The objectives of the overall executive compensation program are to attract,
retain, motivate and reward Company executives while aligning their relative
compensation with the achievements of key business objectives, maximization of
shareholder value and optimal satisfaction of customers.
The Compensation Committee is responsible for:
1. Determining the specific executive compensation vehicles to be used by
the Company and the participants in each of those specific programs;
2. Determining the evaluation criteria and timeliness to be used in those
programs;
3. Determining the processes that will be followed in the ongoing
administration of the programs; and
4. Determining their role in the administration of the programs.
All of the actions take the form of recommendations to the full Board of
Directors where final approval, rejection or redirection will occur. The
Compensation Committee is responsible for administering the compensation
programs for all Company officers. The Compensation Committee has delegated the
responsibility of administering the compensation programs for all other Company
employees to the Company's officers.
Currently, the Company uses the following executive compensation vehicles:
- Cash-based programs: base salary, Management Incentive Plan, Profit
Sharing Plan, and a Sales Incentive Commission Plan; and
- Equity-based programs: 1991 Incentive Stock Option Plan and the 1989
Employee Stock Purchase Plan.
These programs apply to the Chief Executive Officer and all executive level
positions, except for the Sales Incentive Commission Plan, which only includes
executives directly responsible for sales activities. Periodically, but at least
once near the close of each fiscal year, the Compensation Committee reviews the
existing plans and recommends those that should be used for the subsequent year.
The criteria for determining the appropriate salary level, bonus and stock
option grants for the Chief Executive Officer and each of the executive officers
include (a) Company performance as a
8
<PAGE>
whole, (b) business unit performance (where appropriate) and (c) individual
performance objectives. Company performance and business unit performance are
measured against both strategic and financial goals. Examples of these goals are
to obtain: operating profit, revenue growth, timely new product introduction,
and shareholder value (usually measured by the Company stock price). Individual
performance is measured to specific objectives relevant to the individual's
position and a specific time frame.
The above criteria are usually related to a fiscal year time period, but
may, in some cases, be measured over a shorter or longer time frame.
The processes used by the Compensation Committee include the following
steps:
1. The Compensation Committee periodically receives information comparing
the Company's pay levels to other companies in similar industries, other
leading companies (regardless of industry) and competitors. Primarily
national and regional compensation surveys are used.
2. At or near the start of each evaluation cycle, the Compensation
Committee meets with the Chief Executive Officer and the Chief Operating
Officer to review, revise as needed, and agree on the performance
objectives set for the other executives reporting to the Chief Executive
Officer and the Chief Operating Officer. The Chief Executive Officer,
Chief Operating Officer and Compensation Committee jointly set the
Company objectives to be used. The business unit and individual
objectives are formulated jointly by the Chief Executive Officer or Chief
Operating Officer and the specific individual. The Compensation Committee
also, with the Chief Executive Officer or Chief Operating Officer, as
appropriate, jointly establishes and agrees on their respective
performance objectives.
3. Throughout the performance cycle review, feedback is provided by the
Chief Executive Officer, the Chief Operating Officer, the Compensation
Committee and full Board, as appropriate.
4. At the end of the performance cycle, the Chief Executive Officer and
Chief Operating Officer evaluate each executive's relative success in
meeting the performance goals. The Chief Executive Officer and Chief
Operating Officer make recommendations on salary, bonus and stock
options, utilizing the external comparative results, as provided in No. 1
above, as a factor. Also included in the decision criteria are subjective
factors such as teamwork, leadership contributions and ongoing changes in
the business climate. The Chief Executive Officer and Chief Operating
Officer review their recommendations with the Compensation Committee and
obtain its approval. The Compensation Committee also determines the
salary, bonus and terms of stock option grants for the Chief Executive
Officer and Chief Operating Officer.
5. The final evaluations and compensation decisions are discussed with each
executive by the Chief Executive Officer, Chief Operating Officer or
Compensation Committee, as appropriate.
The Compensation Committee feels that the compensation vehicles used by the
Company, generally administered through the process as outlined above, provide a
fair and balanced executive compensation program related to the proper business
issues. In addition, it should be noted that compensation vehicles will be
reviewed and, as appropriate, revised in order to attract and retain new
executives in addition to rewarding performance on the job.
Respectfully submitted by:
H. Vaughan Blaxter III
Mario M. Rosati
9
<PAGE>
PERFORMANCE GRAPH
The following graph shows a comparison of cumulative total shareholder
return, calculated on a dividend reinvested basis, from the last trading day
before the beginning of the Company's 1990 Fiscal Year (December 31, 1989)
through 1994 Fiscal Year End for each of the Company, The Nasdaq Stock Market-US
Index and the Hambrecht & Quist Technology Index. The graph assumes that $100
was invested on December 31, 1989 in the Company's Common Stock at fair market
value, in The Nasdaq Stock Market-US Index and in the Hambrecht & Quist
Technology Index. Note that historic stock price performance is not necessarily
indicative of future stock price performance.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN*
AMONG GENUS, INC., THE NASDAQ STOCK MARKET-US INDEX
AND THE HAMBRECHT & QUIST TECHNOLOGY INDEX
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
GENUS, INC. THE NASDAQ STOCK MARKET-US H&Q TECHNOLOGY
<S> <C> <C> <C>
12/89 100 100 100
12/90 16 85 91
12/91 46 135 136
12/92 34 159 155
12/93 38 181 170
12/94 102 177 197
</TABLE>
- - ------------------------
* The total return on each of these investments assumes the reinvestment of
dividends, although dividends have never been paid on the Company's Common
Stock. The Company's fiscal year ends on December 31.
AMENDMENT OF 1991 INCENTIVE STOCK OPTION PLAN
GENERAL
The 1991 Incentive Stock Option Plan ("1991 Option Plan") was adopted by the
Board of Directors in February 1991. Prior to January 1995, a total of 1,553,006
shares of Common Stock were reserved for issuance thereunder. In January 1995,
the Board of Directors approved an amendment to the 1991 Option Plan to increase
the number of shares of Common Stock reserved for issuance thereunder by 500,000
to 2,053,006 shares. Management recommends that the shareholders vote to approve
this amendment of the 1991 Option Plan.
All employees, including officers and directors, and consultants of the
Company or any of its designated subsidiaries are eligible to be granted options
under the 1991 Option Plan. In addition,
10
<PAGE>
non-employee directors (the "Outside Directors") are eligible for option grants
under the Automatic Grant Plan described below. As of March 31, 1995, 283
full-time employees (including officers and directors), 28 part-time employees
and 9 consultants were eligible for grants under the 1991 Option Plan, while two
non-employee directors were eligible for grants under the Automatic Grant Plan.
Options granted under the 1991 Option Plan may be either "incentive stock
options," as defined in Section 422 of the Internal Revenue Code of 1986, as
amended (the "Code"), or "nonstatutory options." As of March 31, 1995, options
to purchase 1,477,858 shares had been exercised, options to purchase 1,583,173
shares were outstanding and 28,413 shares were available for future grant. The
closing price of the Company's Common Stock reported on The Nasdaq National
Market on March 31, 1995, was $10.50 per share. The essential features of the
1991 Option Plan are outlined below.
PARTICIPATION OF OFFICERS AND DIRECTORS IN THE OPTION PLAN
The grant of options under the Option Plan to executive officers, including
the officers named in the Summary Compensation Table (the "Named Officers"), is
subject to the discretion of the Board. As of the date of this proxy statement,
there has been no determination by the Board with respect to future awards under
the Option Plan. Accordingly, future awards are not determinable. The table of
option grants under the caption "Compensation of Executive Officers --
Option/SAR Grants in Last Fiscal Year" provides information with respect to the
grant of options to the Named Officers during the Last Fiscal Year. Information
regarding options granted to Outside Directors during the Last Fiscal Year
pursuant to the Automatic Grant Program is set forth under the heading "Election
of Directors -- Director Compensation." The following table sets forth
additional information with respect to options granted during the Last Fiscal
Year to certain other groups:
<TABLE>
<CAPTION>
WEIGHTED AVERAGE
OPTIONS EXERCISE PRICE
IDENTITY OF GROUP GRANTED (#) PER SHARE
----------- -----------------
<S> <C> <C>
All current executive officers as a group............................... 157,500 $ 4.00
All employees as a group (excludes executive officers).................. 225,300 $ 4.44
</TABLE>
PURPOSE
The 1991 Option Plan replaced the 1981 Option Plan which terminated in
December 1991. The purposes of the 1991 Option Plan are to attract and retain
the best available personnel for positions of substantial responsibility, to
provide additional incentive and to promote the success of the Company's
business.
ADMINISTRATION
The 1991 Option Plan provides for administration by the Board of Directors
of the Company or by a committee of the Board. The 1991 Option Plan is currently
being administered by the Compensation Committee of the Board of Directors (the
"Compensation Committee"), which is consisted of Outside Directors only. No
member of the Compensation Committee who is eligible to participate in the plan
may vote on any option to be granted to himself or take part in any
consideration of the 1991 Option Plan as it applies to himself. The
interpretation and construction of any provision of the 1991 Option Plan by the
Compensation Committee shall be final and conclusive. Members of the
Compensation Committee receive no compensation for their services in connection
with the administration of the 1991 Option Plan.
ELIGIBILITY
The 1991 Option Plan provides that options may be granted to employees,
including officers and directors, and consultants of the Company or any of its
designated subsidiaries. Except with respect to Outside Directors, the
Compensation Committee selects the optionees and determines the number of shares
to be subject to each option and the time or times at which shares become
exercisable under the option. In making such determination, the duties and
responsibilities of the employee or consultant, the value of his or her
services, his or her present and potential contribution to the success of the
11
<PAGE>
Company, the anticipated number of years of future service and other relevant
factors are taken into account. There is a $100,000 limit on the aggregate
market value of shares subject to all incentive stock options which are
exercisable for the first time in any one calendar year.
The 1991 Option Plan, as amended by the Board of Directors in February 1994,
limits the discretion of the Compensation Committee in granting stock options to
certain individuals. This limitation provides that no officer or employee may be
granted in any one fiscal year stock options under the 1991 Option Plan with
respect to more than 400,000 shares of Common Stock. This limitation is intended
to preserve the Company's ability to deduct for federal income tax purposes the
compensation expense relating to stock options and purchase rights granted to
certain executive officers under the 1991 Option Plan. Without this limitation,
the federal tax legislation enacted in August 1993 might not allow the Company
to deduct such compensation expense.
The August 1993 federal tax legislation imposed limits on the Company's
ability to deduct compensation paid to certain of the Company's current and
future executive officers. However, these limitations on deductibility do not
apply to compensation attributable to stock options or purchase rights if, among
other things, the plan under which the options or purchase rights were granted
includes a limit on the discretion to make grants. The limitation on discretion
contained in the 1991 Option Plan is intended to meet this requirement. Since
the limitation has been included solely to preserve the Company's ability to
deduct such compensation, the Board of Directors may modify or eliminate this
limitation if it is not required to preserve the deductibility of such
compensation.
OUTSIDE DIRECTORS' OPTIONS
The 1991 Option Plan provides that, with respect to Outside Directors,
nonstatutory options shall be automatically granted to Outside Directors on a
yearly basis from their initial appointment or election in order to provide an
incentive to Outside Directors of the Company (the "Automatic Grant Program").
The exercise price of options granted under the Automatic Grant Program is the
fair market value of the Company's Common Stock on the date of the automatic
grant. Outside Directors may not be granted options under the 1991 Option Plan
except under the Automatic Grant Program.
Each Outside Director receives an automatic grant on the date of his or her
appointment or election to the Board of an initial option to purchase 5,000
shares of Common Stock and, for as long as he or she continues to serve as an
Outside Director, receives an automatic grant on February 7 of each year of an
option to purchase an additional 5,000 shares of Common Stock. These options
become exercisable cumulatively with respect to 1/12th of the underlying shares
on the last day of each month following the date of grant and have a term of
five years from the date of grant.
TERMS OF OPTIONS
The terms of the options granted under the 1991 Option Plan (other than
options granted to Outside Directors pursuant to the Automatic Grant Program
(the "Outside Director Options")) are determined by the Compensation Committee.
Each option granted under the 1991 Option Plan is evidenced by a stock option
agreement between the Company and the employee to whom such option is granted
and is subject to the following additional terms and conditions:
(a) EXERCISE OF THE OPTION: The Compensation Committee determines when
options granted under the 1991 Option Plan (other than Outside Director
Options) may be exercised. An option is exercised by giving written notice
of exercise to the Company, specifying the number of full shares of Common
Stock to be purchased and tendering payment to the Company of the purchase
price. Payment for shares issued upon exercise of an option may consist of
cash, promissory note, exchange of shares of the Company's Common Stock or
such other consideration as determined by the Board of Directors or its
committee and as permitted by the California Corporations Code.
(b) OPTION PRICE: The option price under the 1991 Option Plan (other
than Outside Director Options) is determined by the Compensation Committee.
The option price may not be less than 100% of the fair market value of the
Company's Common Stock on the date the option is
12
<PAGE>
granted. However, in the case of incentive stock options granted to an
optionee who owns more than 10% of the voting power or value of all classes
of stock of the Company, the per share exercise price must not be less than
110% of the fair market value on the date of grant. The Compensation
Committee determines such fair market value based upon the closing price of
the Common Stock in The Nasdaq National Market on the date the option is
granted.
(c) TERMINATION OF EMPLOYMENT: The 1991 Option Plan provides that if
the optionee's employment by the Company is terminated for any reason other
than death, options may be exercised not later than thirty days (or such
other period of time not exceeding three months as is determined by the
Compensation Committee and specified in the option agreement) after such
termination and may be exercised only to the extent the options were
exercisable on the date of termination.
(d) DEATH: If an optionee should die while employed by the Company or
during the thirty-day period following termination of the optionee's
employment, options may be exercised at any time within six months after the
date of death but only to the extent that the options were exercisable on
the date of death or termination of employment, whichever is earlier.
(e) TERMINATION OF OPTIONS: Options granted under the 1991 Option Plan
(other than Outside Director Options) expire 10 years from the date of
grant, unless otherwise provided in the option agreement. However, incentive
stock options granted to an optionee who, immediately before the grant of
such option, owned more than 10% of the total combined voting power of all
classes of stock of the Company or a parent or subsidiary corporation, may
not have a term of more than five years.
(f) NONTRANSFERABILITY OF OPTIONS: An option is nontransferable by the
optionee, other than by will or the laws of descent and distribution, and is
exercisable only by the optionee during his or her lifetime or, in the event
of death, by a person who acquires the right to exercise the option by
bequest or inheritance or by reason of the death of the optionee.
(g) ACCELERATION OF OPTIONS: In the event of a merger or consolidation
in which the Company is not the surviving entity, the Compensation Committee
is obligated to either accomplish a substitution of options or give 30 days'
notice of the acceleration of the optionee's right to exercise his
outstanding options in full at any time within 30 days of such notice.
(h) OTHER PROVISIONS: The option agreement may contain such other
terms, provisions and conditions not inconsistent with the 1991 Option Plan
as may be determined by the Compensation Committee.
ADJUSTMENT UPON CHANGES IN CAPITALIZATION
In the event any change, such as a stock split or dividend, is made in the
Company's capitalization which results in an increase or decrease in the number
of outstanding shares of Common Stock without receipt of consideration by the
Company, an appropriate adjustment shall be made in the option price and in the
number of shares subject to each option. In the event of the proposed
dissolution or liquidation of the Company, all outstanding options automatically
terminate immediately prior to the consummation of such action unless otherwise
provided by the Compensation Committee. The Compensation Committee may in its
discretion make provision for accelerating the exercisability of shares subject
to options under the 1991 Option Plan in such event.
AMENDMENT AND TERMINATION
The Board of Directors may amend the 1991 Option Plan at any time or from
time to time or may terminate it without approval of the shareholders, provided,
however, that shareholder approval is required for any amendment which increases
the number of shares which may be issued under the 1991 Option Plan, materially
changes the standards of eligibility or materially increases the benefits which
may accrue to participants under the 1991 Option Plan. However, no action by the
Board of Directors or shareholders may alter or impair any option previously
granted under the 1991 Option Plan without the consent of the affected optionee.
The 1991 Option Plan will terminate in 2001.
13
<PAGE>
TAX INFORMATION
Options granted under the 1991 Option Plan may be either "incentive stock
options," as defined in Section 422 of the Internal Revenue Code of 1986, as
amended (the "Code"), or nonstatutory options.
An optionee who is granted an incentive stock option will not recognize
taxable income either at the time the option is granted or upon its exercise,
although the exercise may subject the optionee to the alternative minimum tax.
Upon the sale or exchange of the shares more than two years after grant of the
option and one year after exercising the option, any gain or loss will be
treated as long-term capital gain or loss. If these holding periods are not
satisfied, the optionee will recognize ordinary income at the time of sale or
exchange equal to the difference between the exercise price and the lower of (i)
the fair market value of the shares at the date of the option exercise or (ii)
the sale price of the shares. A different rule for measuring ordinary income
upon such a premature disposition may apply if the optionee is also an officer,
director, or 10% shareholder of the Company. The Company will be entitled to a
deduction in the same amount as the ordinary income recognized by the optionee.
Any gain or loss recognized on such a premature disposition of the shares in
excess of the amount treated as ordinary income will be characterized as
long-term or short-term capital gain or loss, depending on the holding period.
All other options which do not qualify as incentive stock options are
referred to as nonstatutory options. An optionee will not recognize any taxable
income at the time he is granted a nonstatutory option. However, upon its
exercise, the optionee will recognize taxable income generally measured as the
excess of the then fair market value of the shares purchased over the purchase
price. Any taxable income recognized in connection with an option exercise by an
optionee who is also an employee of the Company will be subject to tax
withholding by the Company. Upon resale of such shares by the optionee, any
difference between the sales price and the optionee's purchase price, to the
extent not recognized as taxable income as described above, will be treated as
long-term or short-term capital gain or loss, depending on the holding period.
The Company will be entitled to a tax deduction in the same amount as the
ordinary income recognized by the Optionee with respect to shares acquired upon
exercise of a nonstatutory option.
The foregoing is only a summary of the effect of federal income taxation
upon the optionee and the Company with respect to the grant and exercise of
options under the 1991 Option Plan, does not purport to be complete, and does
not discuss the tax consequences of the optionee's death or the income tax laws
of any municipality, state or foreign country in which an optionee may reside.
VOTE REQUIRED
Affirmative votes constituting a majority of the votes cast will be required
to approve and ratify the amendment of the 1991 Option Plan. MANAGEMENT
RECOMMENDS THAT THE SHAREHOLDERS VOTE FOR THE APPROVAL OF THE AMENDMENT TO THE
1991 OPTION PLAN.
AMENDMENT OF 1989 EMPLOYEE STOCK PURCHASE PLAN
GENERAL
The 1989 Employee Stock Purchase Plan (the "Purchase Plan") was adopted by
the Board of Directors in March 1989 and approved by the shareholders in May
1990. In January 1995, the Board of Directors amended the Purchase Plan, subject
to shareholder approval, to increase the number of shares of Common Stock
reserved for issuance thereunder by 250,000 shares, from 1,050,000 to 1,300,000
shares. As of March 31, 1995, 833,624 shares had been issued under the Purchase
Plan, and 216,376 shares remained available for future issuances under the
Purchase Plan.
PURPOSE
The purpose of the Purchase Plan is to provide employees of the Company (and
any of its subsidiaries which are designated by the Board of Directors) who
participate in the Purchase Plan with an opportunity to purchase Common Stock of
the Company through payroll deductions.
14
<PAGE>
ADMINISTRATION
The Purchase Plan may be administered by the Board of Directors or a
committee appointed by the Board. All questions of interpretation or application
of the Purchase Plan are determined at the sole discretion of the Board of
Directors or its committee. The Purchase Plan is currently being administered by
the Compensation Committee. Members of the Board of Directors who are eligible
employees are permitted to participate in the Purchase Plan but may not vote on
any matter affecting the administration of the Purchase Plan or the grant of any
option pursuant to the Purchase Plan, or be a member of any committee appointed
to administer the Purchase Plan. No charges for administrative or other costs
may be made against the payroll deductions of a participant in the Purchase
Plan. Members of the Compensation Committee receive no additional compensation
for their services in connection with the administration of the Purchase Plan.
ELIGIBILITY
Any person who is employed by the Company (or by any of its subsidiaries
which are designated from time to time by the Board) for at least twenty hours
per week and more than five months in a calendar year on the date his or her
participation in the plan is effective is eligible to participate in the
Purchase Plan. As of March 31, 1995, approximately 260 employees were eligible
to participate in the Purchase Plan.
PARTICIPATION IN THE PURCHASE PLAN
Eligible employees become participants in the Purchase Plan by delivering to
the Company a subscription agreement authorizing payroll deductions prior to the
applicable offering date. An employee who becomes eligible to participate in the
Purchase Plan after the commencement of an offering may not participate in the
Purchase Plan until the commencement of the next offering period.
Outside Directors are not eligible to participate in the Purchase Plan. The
participation of the Named Officers in the Purchase Plan is entirely at the
election of each individual officer; accordingly, future benefits are not
determinable. The following table sets forth information with respect to the
participation under the Purchase Plan of the Named Officers and certain other
groups during fiscal 1994:
<TABLE>
<CAPTION>
NUMBER OF AGGREGATE AGGREGATE
SHARES PURCHASE MARKET VALUE NET VALUE
IDENTITY OF PERSON OR GROUP PURCHASED PRICE (1) (2)
----------- ----------- ------------- ------------
<S> <C> <C> <C> <C>
William W.R. Elder................................. -- -- -- --
Todd S. Myhre...................................... -- -- -- --
William D. Cole.................................... 5,118 $ 2.66 $ 29,478 $ 15,885
John E. Aldeborgh.................................. 5,715 $ 2.42 $ 30,879 $ 17,030
Kevin C. Conlon.................................... 5,392 $ 2.41 $ 28,763 $ 15,775
All current executive officers as a group.......... 19,580 $ 2.49 $ 107,937 $ 59,230
All employees as a group (excludes executive
officers)......................................... 175,274 $ 2.49 $ 1,021,922 $ 585,383
<FN>
- - ------------------------
(1) The market value of the shares purchased is based on the closing price of
the Company's Common Stock on The Nasdaq National Market on the date of
purchase.
(2) Market value, less the purchase price.
</TABLE>
OFFERING DATE
The Purchase Plan is implemented by overlapping 24-month offering periods
containing four six-month purchase periods. New offering periods commence every
six months. The purchase periods generally commence on July 1 and January 1 of
each year. The Board of Directors has the power to alter the duration of the
offering periods without shareholder approval.
15
<PAGE>
PURCHASE PRICE
The purchase price per share at which shares are sold under the Purchase
Plan is the lower of 85% of fair market value of the Company's Common Stock on
the date of commencement of the 24-month offering period or 85% of the fair
market value of the Company's Common Stock on the first day of the six-month
purchase period. Eligible employees are automatically re-enrolled in the
offering period with the lower of 85% of fair market value of the Common Stock
on the date of commencement of such 24-month offering period. The fair market
value of the Common Stock on a given date shall be determined by the
Compensation Committee based upon the reported closing price of the Common Stock
on The Nasdaq National Market on such date.
PAYMENT OF PURCHASE PRICE; PAYROLL DEDUCTIONS
The purchase price of the shares is accumulated by payroll deductions during
the offering period. The deductions may not exceed 10% of a participant's
eligible compensation. A participant may discontinue his or her participation in
the Purchase Plan or may decrease, but not increase, the rate of payroll
deductions at any time during the offering period.
All payroll deductions are credited to the participant's account under the
Purchase Plan and are deposited with the general funds of the Company. All
payroll deductions received or held by the Company may be used by the Company
for any corporate purpose.
PURCHASE OF STOCK; EXERCISE OF OPTION
At the beginning of each offering period, by executing a subscription
agreement to participate in the Purchase Plan, each employee is in effect
granted an option to purchase shares of Common Stock. The maximum number of
shares placed under option to a participant in an offering is determined by
dividing the compensation which such participant has elected to have withheld
during the offering period by 85% of the fair market value of the Common Stock
at the beginning of the offering period or beginning of a purchase period,
whichever is lower.
WITHDRAWAL
While each participant in the Purchase Plan is required to sign a
subscription agreement authorizing payroll deductions, the participant's
interest in a given offering may be terminated in whole, but not in part, by
signing and delivering to the Company a notice of withdrawal from the Purchase
Plan. Such withdrawal may be elected at any time prior to the end of the
applicable 24-month offering period. A participant's withdrawal from an offering
does not have any effect upon such participant's eligibility to participate in
subsequent offerings under the Purchase Plan.
TERMINATION OF EMPLOYMENT
Termination of a participant's employment for any reason, including
retirement or death, cancels his or her participation in the Purchase Plan
immediately. In such event, the payroll deductions credited to the participant's
account will be returned to such participant or, in the case of death, to the
person or persons entitled thereto as specified by the employee in the
subscription agreement.
CHANGES
In the event of any change, such as stock splits or stock dividends, made in
the capitalization of the Company which results in an increase or decrease in
the number of shares of Common Stock outstanding without receipt of
consideration by the Company, appropriate adjustments will be made by the
Company in the number of shares subject to purchase and in the purchase price
per share, subject to any required action by the shareholders of the Company.
AMENDMENT AND TERMINATION OF THE PLAN
The Board of Directors may at any time amend or terminate the Purchase Plan,
except that such termination shall not affect options previously granted nor may
any amendment make any change in an option granted prior thereto which adversely
affects the rights of any participant. No amendment may be made to the Purchase
Plan without approval of the shareholders of the Company if such amendment would
increase the number of shares reserved under the Purchase Plan, permit payroll
16
<PAGE>
deductions at a rate in excess of ten percent (10%) of participant's
compensation, materially modify the eligibility requirements or materially
increase the benefits which may accrue to participants under the Purchase Plan.
The Purchase Plan will terminate in 2009.
TAX INFORMATION
The Purchase Plan, and the right of participants to make purchases
thereunder, is intended to qualify under the provisions of Sections 421 and 423
of the Code. Under these provisions, no income will be taxable to a participant
until the shares purchased under the Purchase Plan are sold or otherwise
disposed of. Upon sale or other disposition of the shares, the participant will
generally be subject to tax and the amount of the tax will depend upon the
holding period. If the shares are sold or otherwise disposed of more than two
years from the first day of the offering period and one year from the date the
shares are purchased, the participant will recognize ordinary income measured as
the lesser of (a) the excess of the fair market value of the shares at the time
of such sale or disposition over the purchase price, or (b) an amount equal to
15% of the fair market value of the shares as of the first day of the offering
period. Any additional gain will be treated as long-term capital gain. If the
shares are sold or otherwise disposed of before the expiration of these holding
periods, the participant will recognize ordinary income generally measured as
the excess of the fair market value of the shares on the date the shares are
purchased over the purchase price. Any additional gain or loss on such sale or
disposition will be long-term or short-term capital gain or loss, depending on
the holding period. The Company is not entitled to a deduction for amounts taxed
as ordinary income or capital gain to a participant except to the extent of
ordinary income recognized by participants upon a sale or disposition of shares
prior to the expiration of the holding period(s) described above.
The foregoing is only a summary of the effect of federal income taxation
upon the participant and the Company with respect to the shares purchased under
the Purchase Plan. Reference should be made to the applicable provisions of the
Code. In addition, the summary does not discuss the tax consequences of a
participant's death or the income tax laws of any state or foreign country in
which the participant may reside.
REQUIRED VOTE
The approval of the amendment to the Purchase Plan requires the affirmative
vote of the holders of a majority of the shares of the Company's Common Stock
entitled to vote and present or represented at the meeting. MANAGEMENT
RECOMMENDS THAT THE SHAREHOLDERS VOTE FOR THE APPROVAL OF THE AMENDMENT TO THE
PURCHASE PLAN.
RATIFICATION OF APPOINTMENT OF INDEPENDENT ACCOUNTANTS
The Board of Directors has selected Coopers & Lybrand LLP, independent
accountants, to audit the financial statements of the Company for the year
ending December 31, 1995, and recommends that the shareholders vote for
ratification of such appointment. In the event of a negative vote on such
ratification, the Board of Directors will reconsider its selection. Coopers &
Lybrand LLP has audited the Company's financial statements since the year ended
December 31, 1982. Representatives of Coopers & Lybrand LLP are expected to be
present at the meeting with the opportunity to make a statement if they desire
to do so, and are expected to be available to respond to appropriate questions.
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.
THE BOARD OF DIRECTORS
Dated: April 26, 1995
17
<PAGE>
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
GENUS, INC.
1995 ANNUAL MEETING OF SHAREHOLDERS
The undersigned shareholder of GENUS, INC., a California corporation (the
"Company"), hereby acknowledges receipt of the Notice of Annual Meeting of
Shareholders and Proxy Statement, each dated April 26, 1995, and hereby appoints
Ernest P. Quinones proxy and attorney-in-fact, with full power of substitution,
on behalf and in the name of the undersigned, to represent the undersigned at
the 1995 Annual Meeting of Shareholders of GENUS, INC. to be held on Tuesday,
May 23, 1995, at 3:00 p.m., local time, at the Santa Clara Mariott Hotel located
at 2700 Mission College Boulevard, Santa Clara, California 95052 and any
continuation(s) or adjournment(s) 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.
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See Reverse
Side
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------------------ /X/ Please mark
COMMON your choice
like this
1. Election of directors:
___ FOR all nominees listed below (except as indicated)
___ WITHHOLD authority to vote for all nominees listed below.
IF YOU WISH TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE,
STRIKE A LINE THROUGH THAT NOMINEE'S NAME IN THE LIST BELOW:
William W. R. Elder, Todd S. Myhre, Steve Fisher and Mario M. Rosati
2. Proposal to approve the amendment of the Company's 1991 Incentive
Stock Option Plan to increase the number of shares of Common Stock reserved for
issuance thereunder by 500,000 to 2,053,006 shares:
/ / FOR / / AGAINST / / ABSTAIN
3. Proposal to approve the amendment of the Company's 1989 Employee
Stock Purchase Plan to increase the number of shares of Common Stock reserved
for issuance thereunder by 250,000 to 1,300,000 shares:
/ / FOR / / AGAINST / / ABSTAIN
4. Proposal to ratify the appointment of Coopers & Lybrand LLP as the
independent public accountants of the Company for the 1995 fiscal year:
/ / FOR / / AGAINST / / ABSTAIN
5. In their discretion upon such other matter or matters which may
properly come before the meeting and any continuation(s) or adjournment(s)
thereof.
THIS PROXY WILL BE VOTED AS DIRECTED OR, IF NO CONTRARY DIRECTION IS
INDICATED, WILL BE VOTED FOR THE ELECTION OF DIRECTORS, FOR THE AMENDMENT OF THE
1991 INCENTIVE STOCK OPTION PLAN, FOR THE AMENDMENT OF THE 1989 EMPLOYEE STOCK
PURCHASE PLAN, FOR THE RATIFICATION OF THE APPOINTMENT OF COOPERS & LYBRAND LLP
AS INDEPENDENT PUBLIC ACCOUNTANTS AND AS SAID PROXIES DEEM ADVISABLE ON SUCH
OTHER MATTERS AS MAY COME BEFORE THE MEETING.
Such attorney or substitute shall have and may exercise all of the powers
of said attorney-in-fact hereunder.
Signature(s)______________________________________________ Date________________
(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.)
