EXCEL TECHNOLOGY, INC.
41 Research Way
E. Setauket NY 11733
..............................
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JUNE 24, 1998
..............................
To the Stockholders of
EXCEL TECHNOLOGY, INC.
Notice is hereby given that the Annual Meeting of Stockholders of
Excel Technology, Inc. (the "Company") will be held at the offices of
Excel Technology, Inc., 780 Third Ave., New York, New York 10017, on June
24, 1998, at 10:00 A.M. EST, for the following purposes:
1. To elect a Board of Directors to serve until the next Annual
Meeting of Stockholders and until their successors are duly elected and
qualified;
2. To ratify and approve the Company's 1998 Stock Option Plan; and
3. To ratify the selection by the Board of Directors of KPMG Peat
Marwick, LLP to serve as independent auditors for the year ending
December 31, 1998; and
4. To transact such other business as may properly be presented for
action at the meeting or any adjournment thereof.
The Board of Directors has fixed the close of business on May 11,
1998 as the record date for the determination of stockholders entitled to
notice of, and to vote at, this meeting or any adjournment thereof.
Holders of a majority of the outstanding shares must be present in
person or by proxy in order for the meeting to be held. Whether or not
you plan to attend the meeting, please complete, sign, date and return
the accompanying proxy in the enclosed postage-paid envelope. The giving
of such proxy will not affect your right to revoke such proxy before it
is exercised or to vote in person should you later decide to attend the
meeting.
All stockholders are cordially invited to attend this meeting.
By Order of the Board of Directors
/s/ Antoine Dominic
..................................
Antoine Dominic,
Secretary
April 27, 1998
IT IS IMPORTANT THAT THE ENCLOSED PROXY FORM BE COMPLETED
AND RETURNED PROMPTLY.
EXCEL TECHNOLOGY, INC.
41 Research Way
E. Setauket NY 11733
........................
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS TO BE HELD JUNE , 1998
........................
SOLICITATION AND REVOCATION OF PROXIES
This statement is furnished in connection with the solicitation by
the Board of Directors of Excel Technology, Inc., a Delaware corporation
(the "Company"), of proxies to be voted at the Annual Meeting of the
Stockholders of the Company (the "Meeting") to be held on June 24, 1998,
at 10:00 A.M. EST, at the offices of Excel Technology, Inc., 780 Third
Ave., New York, New York 10017 and any adjournments thereof.
A form of proxy is enclosed for use at the Meeting. The proxy may
be revoked by a stockholder at any time before it is voted by execution
of a proxy bearing a later date or by written notice to the Secretary of
the Company before the Meeting, and any stockholder present at the
Meeting may revoke his proxy thereat and vote in person if he so desires.
When such proxy is properly executed and returned, the shares it
represents will be voted at the Meeting in accordance with any
instructions noted thereon. If no direction is indicated, all shares
represented by valid proxies received pursuant to this solicitation (and
not revoked prior to exercise) will be voted by the person named in the
form of proxy FOR the election of the nominees for directors named
herein, FOR the proposed ratification and approval of the Company's 1998
Stock Option Plan, FOR the ratification of the appointment of KPMG Peat
Marwick, LLP as the Company's independent auditors for the year ending
December 31, 1998, and as recommended by the Board of Directors with
regard to all other matters, or, if no such recommendation is given, in
the discretion of the named proxy.
The cost of soliciting proxies on behalf of the Board of Directors
will be borne by the Company. In addition to solicitation by mail,
proxies may be solicited by directors, officers or regular employees of
the Company (who will receive no extra compensation for these services)
in person or by telephone or telefax. The Company may also request
brokerage houses, custodians, nominees and fiduciaries to forward these
proxy materials to the beneficial owners of common stock, par value $.001
per share, of the Company (the "Common Stock"), and will reimburse such
holders for their reasonable expenses in connection therewith. The
approximate date of mailing of this proxy statement is May 15, 1998.
Only stockholders of record at the close of business on May 11, 1998
will be entitled to notice of, and to vote at, the Meeting. At the close
of business on April 23, 1998, the Company had issued and outstanding
11,305,467 shares of Common Stock. Each share of Common Stock entitles
the holder thereof to one vote and a vote of the majority of the shares
present, or represented, and entitled to vote at the Meeting is required
to approve each proposal to be acted upon at the Meeting. Abstentions
and broker non-votes each shall be included as shares present and voting
for purposes of determining whether a quorum is present at the Meeting.
Each vote is tabulated separately. Abstentions shall be counted as votes
cast on proposals presented to stockholders, whereas broker non-votes
shall not be counted as votes cast for purposes of determining whether a
proposal has been approved.
NOMINATION AND ELECTION OF DIRECTORS
Five persons, all of whom are members of the present Board of
Directors, are nominees for election to hold office until the next Annual
Meeting of Stockholders and until their respective successors are elected
and qualified. Unless authority to vote for the election of directors
shall have been withheld, it is intended that proxies in the accompanying
form will be voted at the Meeting for the election of the five nominees
named below. If any nominees, for any reason presently unknown to the
Company, should refuse or be unable to serve, the shares represented by
the proxies will be voted by such person as shall be designated by the
Board of Directors to replace any such nominee.
The following information is submitted concerning the nominees
named for election as directors based upon information received by the
Company from such persons:
Director
Nominee Age Office Since
....... ... ...... ........
J. Donald Hill 65 Chairman of the Board, 1996
Chief Executive Officer
Antoine Dominic 36 President, Chief Operating 1996
Officer, Secretary and Director
Steven Georgiev 64 Director 1991
Howard S. Breslow 57 Director 1996
Jan A. Melles 57 Director 1996
Mr. Hill became Chairman, Chief Executive Officer and a director of
the Company in January 1996. In addition, he has been President of the
Company since August 1994. Mr. Hill had also served as Chief Financial
Officer of the Company from January 1994 until March 1995, and was
President of Quantronix Corporation ("Quantronix"), a subsidiary of the
Company, from November 1992 until January 1996. Mr. Hill was a business
consultant to Quantronix, a company acquired by the Company, from
February 1992 to November 1992. From January 1991 to October 1991, Mr.
Hill was Chief Executive Officer of Medstone International, Inc., a
company engaged in the manufacture, marketing and sale of shock wave
therapy devices. From 1988 to 1990, he was Director of Corporate Finance
at Weeden & Co., an investment firm and member of the New York Stock
Exchange. Mr. Hill served as Vice Chairman of First Affiliated
Securities, Inc. from 1978 to 1988, and from 1966 to 1977 was a General
Partner of Loeb, Rhoades & Company. Mr. Hill currently serves as a
director of Cryomedical Sciences, Inc., a publicly-held company engaged
in the development and sale of medical devices.
Mr. Dominic was named President and Chief Operating Officer of the
Company on February 17, 1998 and has been a director of the Company since
January 1996. He joined the Company as Chief Financial Officer in March
1995. In addition to his functions as Chief Financial Officer of the
Company, he has been President of Quantronix, a subsidiary of the
Company, since January 1996. From June 1992 to January 1995, Mr. Dominic
was Executive Vice President, Chief Financial Officer and Director of:
CompuDyne Corporation, a high technology Defense manufacturer of data
acquisition equipment and access control systems; and Corcap Inc., a
holding company; both are related publicly-held companies. From March
1990 to June 1992, Mr. Dominic was the Chief Financial Officer for
CompuDyne Corporation and Corcap Inc. From August 1987 to March 1990,
Mr. Dominic was Chief Financial Officer of Quanta Systems Corporation, a
division of CompuDyne Corporation. Mr. Dominic holds a B.S. in
accounting, an M.B.A. and is a non-practicing CPA.
Mr. Georgiev has been a director of the Company since December
1991. He currently serves on the Boards of three other publicly trading
companies, namely American Materials and Technologies Corp., DynaGen,
Inc. and Senetek, PLC. From 1993 to 1997 he served as Chairman and CEO of
Palomar Medical Technologies, Inc. ("Palomar"), a biotechnology company.
Since 1988, he has acted as a business and management consultant to
several high technology companies, including EG&G, Inc., Cybernetics
Products, Inc., Camber, Inc., Dynatrend, Inc. and Palomar. From 1972 to
1975, and later from 1978 to 1988, Mr. Georgiev was Chairman, President
and Treasurer of Dynatrend, Inc., which specializes in providing
engineering and program management services primarily to the United
States Government. From 1961 to 1972 and later from 1975 to 1978, Mr.
Georgiev held a variety of positions with Avco Systems, a high
technology aerospace business, including Project Director - Missile
Systems; Director of Engineering; Director of Advanced Programs; and Vice
President - Marketing and Planning. Since 1980, Mr. Georgiev also has
been involved in the start-up and subsequent development of several
companies. Mr. Georgiev has a B.S. degree in engineering physics and an
M.S. degree in management.
Mr. Breslow has been a director of the Company since January 1996.
He has been a practicing attorney in New York City for more than 29 years
and is a general partner of the law firm of Breslow and Walker, LLP, New
York, New York, which firm serves as general counsel to the Company. Mr.
Breslow currently serves as a director of FIND/SVP, Inc., a publicly-held
company engaged in the development and marketing of information services
and products; Cryomedical Sciences, Inc., a publicly-held company engaged
in the development and sale of medical devices; Vikonics, Inc., a
publicly-held company engaged in the design and sale of computer-based
security systems; and Lucille Farms, Inc., a publicly-held company
engaged in the manufacture and marketing of dairy products.
Mr. Melles has been a director of the Company since December 3,
1996. Since 1993, Mr. Melles has been President and sole shareholder of
Photonics Investments, BV, which is engaged in investments in, and
mergers and acquisitions of, photonics companies. Form 1988 to 1992, he
served as Chief Executive Officer of Melles Griot, Inc., a division of J.
Bibby & Sons, PLC. Mr. Melles co-founded Melles Griot, Inc. in 1969 and
sold it to J. Bibby & Sons, PLC in 1988. Mr. Melles currently serves as
a director of Dynasil Corporation, a public company which is primarily
engaged in the business of fiber optics. Mr. Melles also serves as a
director of Gooch and Housego, PLC, a privately held company which is a
supplier to the Company.
The Company compensates non-employee directors for their services
in such capacity at the rate of $500 per Board of Directors' meeting
attended. Pursuant to the Company's 1990 Stock Option Plan, members of
the Board of Directors receive an automatic grant of non-incentive
options to purchase 10,000 shares of Common Stock on the date of the
Company's Annual Stockholder's Meeting, at an exercise price equal to the
fair market value on such date.
The Board of Directors held three meetings during the year ended
December 31, 1997, which were attended by all of the directors, and acted
by unanimous consent on two occasions. The Company's audit committee,
comprised of Messrs. Steven Georgiev and Howard Breslow held no meetings
during the year ended December 31, 1997. The Audit Committee reviews the
adequacy of the Company's internal controls and meets periodically with
management and the independent auditors. The Company has a stock option
committee comprised of Steven Georgiev and Howard Breslow; it has no
standing nominating or compensation committee.
EXECUTIVE OFFICERS AND SIGNIFICANT EMPLOYEES
The executive officers of the Company serve at the pleasure of the
Board of Directors and are subject to annual appointment by the Board at
it first meeting following the Annual Meeting of Stockholders. All of
the Company's executive officers, as well as three significant employees,
are listed in the following table, and certain information concerning
such significant employees follows the table:
Name Age Position
....... ... ........
J. Donald Hill 65 Chief Executive Officer of the Company
Antoine Dominic 36 President, Chief Operating Officer and
Secretary of the Company; President,
Quantronix Corporation
William B. McIntyre 61 President, The Optical Corporation
Angelo Chiodo 53 President, Control Laser Corporation
David R. Howell 43 President, Cambridge Technology, Inc.
Francis Dominic 39 President, Photo Research, Inc.
Mr. McIntyre has been President of The Optical Corporation, a
subsidiary of the Company, since 1989. Prior to this post he served for
four years as Senior Vice President of Micromation, Inc., a computer
manufacturer. Mr. McIntyre has held various engineering production
positions with Boeing, Melabs, Chromatix and Biogenesis. Mr. McIntyre
holds a B.S. and M.S. in electrical engineering.
Mr. Chiodo been President of Control Laser Corporation (Control
Laser"), a subsidiary of the Company, since September 1997. He joined
Control Laser in 1983 as Engineering Manager and was made Director of
Engineering in 1986. Previously, Mr. Chiodo was head of Development
Engineering for TRW Electronics. Prior to that, he was head of
Development Engineering for General Dynamics. Mr. Chiodo holds a B.S.
degree in Engineering.
Mr. Howell has been President of Cambridge Technology, Inc.
("Cambridge"), a subsidiary of the Company, since February 1997. He
joined Cambridge in January 1994 as General Manager, and was promoted to
Vice President in 1996. Previously, Mr. Howell was the Director of
Marketing and Operations of Phoenix Electronic Enterprises, Inc. in
Highland, New York and prior to that, he spent three years as the General
Manager of Phoenix's New Mexico subsidiary. In the 1980's Mr. Howell
worked for Digital Equipment Corporation in Corporate Administration and
Small Systems Engineering. Mr. Howell holds a B.A., an M.B.A. and a J.D.
Mr. Francis Dominic has been President of Photo Research, Inc.
("Photo Research"), a subsidiary of the Company, since November 1996.
Previously, since 1988, he was Vice President and General Manager of Seth-
Cole a manufacturer of reprographics and graphic arts media. He holds a
B.S. degree in Engineering and an M.B.A.
BENEFICIAL OWNERSHIP OF THE COMPANY'S SECURITIES
The following table sets forth, as of April 23, 1998, certain
information, based upon publicly available filings, regarding the
beneficial ownership of Common Stock by each person owning more than 5%
of the outstanding Common Stock, each director, and all directors and
executive officers as a group:
Name Number
(and Address of 5% Holders) Owned (1) Percentage of Class
........................... ........... ...................
Smith Barney Mutual Funds
Management Inc. 680,000 (2) 6.0%
388 Greenwich Street
New York, NY 10013
Smith Barney, Inc. 746,382 (3) 6.6%
388 Greenwich Street
New York, NY 10013
Smith Barney Holdings Inc. 1,426,382 (4) 12.6%
388 Greenwich Street
New York, NY 10013
Travelers Group Inc. 1,426,382 (4) 12.6%
388 Greenwich Street
New York, NY 10013
J. Donald Hill 352,600 (5) 3.1%
Antoine Dominic 130,000 (6) 1.1%
Steven Georgiev 20,000 (6) less than 1%
Howard S. Breslow 52,000 (7) less than 1%
Jan A. Melles 13,000 (6) less than 1%
Executive officers and
directors as a group
(five persons) 567,000 (8) 5.0%
(1) Unless otherwise indicated below, all shares are owned beneficially
and of record.
(2) Based on Amendment No. 6 to the Schedule 13G filed by Smith Barney
Mutual Funds Management Inc. ("MFM"), Smith Barney Inc. ("SB"), Salomon
Smith Barney Holdings Inc. ("SSB Holdings"), and Travelers Group Inc.
("TRV"), MFM has shared voting power and dispositive power with respect
680,000 shares of Common Stock. SSB Holdings is the sole stockholder of
MFM, and TRV is the sole stockholder of SSB Holdings.
(3) Based on Amendment No. 6 to the Schedule 13G filed by Smith Barney
Mutual Funds Management Inc. ("MFM"), Smith Barney Inc. ("SB"), Salomon
Smith Barney Holdings Inc. ("SSB Holdings"), and Travelers Group Inc.
("TRV"), SB has shared voting power and dispositive power with respect
746,382 shares of Common Stock. SSB Holdings is the sole common
stockholder of SB, and TRV is the sole stockholder of SSB Holdings.
(4) Based on Amendment No. 6 to the Schedule 13G filed by Smith Barney
Mutual Funds Management Inc. ("MFM"), Smith Barney Inc. ("SB"), Salomon
Smith Barney Holdings Inc. ("SSB Holdings"), and Travelers Group Inc.
("TRV"), SSB Holdings and TRV each have shared voting power and
dispositive power with respect 1,426,382 shares of Common Stock. SSB
Holdings is the sole stockholder of MFM and sole common stockholder of
SB, and TRV is the sole stockholder of SSB Holdings.
(5) Includes 220,000 shares of Common Stock underlying currently
exercisable stock options.
(6) Consists of currently exercisable non-incentive stock options.
(7) Includes 20,000 shares of Common Stock underlying currently
exercisable stock options.
(8) Includes the 403,000 shares underlying stock options
EXECUTIVE COMPENSATION
The following table sets forth certain information regarding
compensation paid by the Company during each of the Company's last three
years to the Company's Chief Executive Officer and to the executive
officers of the Company (other than the Chief Executive Officer) who
received salary and bonus payments in excess of $100,000 in 1997.
<TABLE>
EXECUTIVE COMPENSATION
<CAPTION>
Long
Term Compensation
.................................
Annual Compensation
Awards Payouts
.............................
....................... .......
Other
Securities All
Annual Restricted
Underlying Other
Name and Compen- Stock
Options/ LTIP Compen-
Principal Salary Bonus sation Award(s)
SARs Payout sation
Position Year $ $ $ $
# $ $
.......................... .... ......... ........ ....... ..........
.......... ...... ........
<S> <C> <C> <C> <C> <C>
<C> <C> <C>
J. Donald Hill <F1> 1997 $223,000 $469,000 0 0
110,000 <F3> 0 0
Chief Executive Officer 1996 $195,314 $223,892 0 0
310,000 <F3> 0 0
Excel Technology, Inc. 1995 $150,000 $114,000 $6,000 0
0 0 0
Antoine Dominic <F2> 1997 $193,000 $469,000 0 0
85,000 <F3> 0 0
President, Chief, 1996 $161,533 $223,392 0 0
235,000 <F3> 0 0
Operating Officer 1995 $ 91,000 $105,000 0 0
100,000 <F3> 0 0
Excel Technology, Inc.
<FN>
<F1> Mr. Hill was appointed CEO and Chairman of the Company effective
January 15, 1996.
<F2> Mr. Dominic was named Chief Operating Officer of the Company on
February 17, 1998.
<F3> Represents options to acquire shares of Common Stock.
</FN>
</TABLE>
REPORT OF THE BOARD OF DIRECTORS ON EXECUTIVE COMPENSATION
The Company is engaged in a highly competitive industry and must
attain high levels of quality and safety in the design, production and
servicing of its products. In order to succeed, the Board of Directors
of the Company believes that it must be able to attract and retain
qualified experienced executives. To achieve this goal, the Company has
offered competitive executive compensation to attract and retain key
executives in growth companies in related industries. Executive
compensation has also been structured to align management's interest with
the success of the Company by making a portion of compensation dependent
on the success of the Company. In this connection, the Board has
approved a bonus plan for its executive officers, subject to minimum
profitability as a percentage of sales, to be paid quarterly.
During 1996, the entire Board of Directors held primary
responsibility for determining executive compensation levels. The Board
as a whole has maintained a philosophy that compensation of executive
officers, specifically including that of the Chief Executive Officer and
Chief Financial Officer, should be directly linked to operating
achievements and to a lesser extent stock performance.
In addition, the Company has utilized stock options to link
executive compensation to stock performance. Executive officers, namely
the Chief Executive Officer and Chief Operating Officer, have been
granted stock options so that they will benefit financially from the long
term success of the Company and increases in the price of the Common
Stock.
J. Donald Hill, Chairman
Antoine Dominic
Steven Georgiev
Howard S. Breslow
Jan A. Melles
OPTION GRANTS DURING 1997
The following table provides information related to options
granted to the named executive officers during the year ended December
31, 1997:
<TABLE>
<CAPTION>
Potential Realizable
Value at Assumed
Annual Rates of Stock
Price Appreciation for
Individual Grants
Option Term <F1>
.....................................................................
........................
Number of % of Total
Shares Options/SARs
Underlying Granted to Exercise or
Option/SARs Employees Base Price
Expiration
Name Granted <F2> in Fiscal Year $/Share <F3>
Date 5% 10%
................ ............ ............... ...............
................ ........ ..........
<S> <C> <C> <C> <C>
<C> <C>
J. Donald Hill 110,000 36% $10.375 July
10, 2007 $717,726 $1,818,858
Antoine Dominic 85,000 28% $10.375 July
10, 2007 $554,606 $1,405,481
<FN>
<F1> The potential realizable value portion of the foregoing table
illustrates value that might be received upon exercise of the options
immediately prior to the expiration of their term, assuming the specified
compounded rates of appreciation on the Common Stock over the term of the
options.
<F2> Options to acquire shares of Common Stock.
<F3> The exercise price equaled the fair market value of the Common Stock on
the date of grant.
</FN>
</TABLE>
OPTION EXERCISES DURING 1997
AND YEAR END OPTION VALUES
The following table provides information related to options exercised by
the executive officers during 1997 and the number and value of options
held at year end. The Company does not have any outstanding stock
appreciation rights.
<TABLE>
<CAPTION>
Value of Unexercised
Number of
Unexercised In-the-Money
Option/SARs Options/SARs
at Fiscal
Year End at Fiscal Year End ($)<F1>
........................... ..........................
Shares Acquired Value Realized
Names on Exercise (#) ($) Exercisable
Unexercisable Exercisable Unexercisable
............... ............... .............. ............
.............. ............ ..............
<S> <C> <C> <C> <C>
<C> <C>
J. Donald Hill 150,000 $1,383,250 120,000
300,000 $92,500 $900,000
Antoine Dominic 140,000 $ 933,715 21,667
258,333 $29,377 $919,998
<FN>
<F1> The closing price for the Common Stock as reported on the NASDAQ
National Market System on December 31, 1997 was $11.125. Value is calculated
on the basis of the difference between the option exercise price and $11.125
multiplied by the number of shares of Common Stock underlying the option if
the closing price is greater than the option exercise price.
</FN>
</TABLE>
EMPLOYMENT AND RELATED AGREEMENTS
In January 1996, the Company and J. Donald Hill entered into a three-
year employment agreement. Effective July 10, 1997, Mr. Hill receives a
base salary of $250,000 per annum, subject to annual review, and is
eligible to receive bonus compensation in accordance with corporate bonus
plans adopted by the Board from time to time. The agreement provides that
in the event the Company terminates Mr. Hill's employment without cause,
he is entitled to receive his base salary for a period of two years from
termination
In January 1996, the Company and Antoine Dominic entered into a
three-year employment agreement. Effective July 10, 1997, Mr. Dominic
receives a base salary of $225,000 per annum, subject to annual review,
and is eligible to receive bonus compensation in accordance with
corporate bonus plans adopted by the Board from time to time. The
agreement provides that in the event the Company terminates Mr. Dominic's
employment without cause, he is entitled to receive his base salary for a
period of two years from termination.
STOCK PERFORMANCE GRAPH
The following chart compares the yearly percentage change in the
cumulative total stockholder return on the Company's Common Stock during
the period from 1992 through the end of 1997, with the cumulative total
return on the NASDAQ Composite Index and the Company Peer Group. The
Company Peer Group represents 16 companies in the laser technology field,
all of which are listed on NASDAQ.
Description 1992 1993 1994 1995 1996 1997
..................... ....... ....... ....... ....... ....... .......
EXCEL TECHNOLOGY, INC. 100 195.65 165.22 230.43 282.61 386.96
S & P 500 100 110.08 111.53 153.45 188.68 251.63
PEER GROUP 100 87.99 95.79 159.17 96.07 88.69
(Assumes initial investment of $100 and reinvestment of dividends.)
PROPOSAL TO APPROVE AND RATIFY THE 1998 STOCK OPTION PLAN
In April 1998, the Board of Directors, subject to shareholder
approval, adopted the 1998 Stock Option Plan for employees, including
officers, and directors of , and consultants and advisors to the Company
or any subsidiary corporation (aggregating approximately 300 persons as
of December 31, 1997). A summary of the 1998 Stock Option Plan, as
amended (the "Plan"), is set forth below. The summary is qualified in
its entirety by reference to the full text of the Plan, a copy of which
is attached hereto as Exhibit A.
The Plan covers 1,000,000 shares of Common Stock (subject to
adjustment to cover stock splits, stock dividends, recapitalizations and
other capital adjustments). The options to be granted under the Plan
will be designated as incentive stock options or non-incentive stock
options by The Board of Directors or a committee thereof, which also will
have discretion as to the persons to be granted options, the number of
shares subject to the options , and the terms of the option agreements.
Only employees (including officers) of the Company may be granted
incentive stock options. The options to be granted under the Plan and
designated as incentive stock options are intended to receive incentive
stock option tax treatment pursuant to Section 422 of the Internal
Revenue Code, as amended (the "Code").
The Plan provides that all options thereunder shall be exercisable
during a period of no more that ten years from the date of grant (five
years for options granted to holders who own more than 10% of the total
combined voting power of all classes of stock of the Company), depending
upon the specific stock option agreement, and that the option exercise
price for incentive stock options shall be at least equal to 100% of the
fair market value of the Common Stock at the time of grant (110% for
options granted to holders who own more than 10% of the total combined
voting power of all classes of stock of the Company). In addition, the
aggregate fair market value (determined on the date of grant) of the
Common Stock with respect to which incentive stock options are
exercisable for the first time by an employee during any calendar year
shall not exceed $100,000.
The Plan permits optionees whose employment is terminated without
cause and other than by reason of death, disability or retirement at age
65, to exercise their options prior to the expiration thereof or within
three months of termination, whichever is earlier, but only to the extent
the holder had the right to exercise such options on the date of
termination. If the employment of an optionee is terminated for cause
and other than by reason of death, disability or retirement at age 65,
any options granted to the optionee will terminate automatically. If
employment is terminated by reason of disability or retirement at age 65,
the optionee may exercise his options at any time prior to the expiration
thereof or within one year from the date of termination (three months
from the date of termination in the event of termination by reason of
retirement at age 65), whichever is earlier, but only to the extent the
holder had the right to exercise such options on the date of termination.
If employment is terminated by death, the person or persons to whom the
optionee's rights under the option are transferred by will or the laws of
descent and distribution have similar rights of exercise within three
months after such death (but not after the expiration of the option).
Options are not transferable otherwise than by will or the laws of
descent and distribution, or pursuant to a qualified domestic relations
order as defined under the Code or Title I of the Employee Retirement
Income Security Act or the rules thereunder, and are exercisable during
the optionee's lifetime only by the optionee. Shares subject to options
which expire or terminate may be the subject of future options. The Plan
terminates on April 8, 2008.
If shares are issued to the holder of a non-incentive option under
the Plan; (a) no income will be recognized by the holder at the time of
grant of the option; (b) except as state below, upon exercise of the
option, the holder will recognize taxable ordinary income in an amount
equal to the excess of the fair market value of the shares over the
option price; (c) if the holder exercising the option is restricted from
selling the shares so acquired because the holder is an officer or
director of the Company and would be subject to liability under Section
16(b) of the Exchange Act, then , unless the holder makes an election to
be taxed under the rule of clause (b) above, the holder will recognize
taxable ordinary income, at the time such Section 16(b) restriction
terminates, equal to the excess of the fair market value of the shares at
that time over the option price, and any dividends he or she receives on
the shares before that time will be taxable to him or her as compensation
income; (d) the Company will be entitled to a deduction at the same time
and in the same amount as the holder has income under clause (b) or (c);
and (e) upon a sale of shares so acquired, the holder may have additional
short-term or long-term capital gain or loss.
If shares are issued to the holder of an incentive stock option
under the Plan (a) no income will be recognized by such holder at the
time of the grant of the option or the transfer of shares to the holder
pursuant to his or her exercise of the option; (b) the difference between
the option price and the fair market value of the shares at the time of
exercise will be treated as an item of tax preference to the holder; (c)
no deduction will be allowed to the Company for federal income tax
purposes in connection with the grant or exercise of the option; and (d)
upon a sale or exchange of the shares after the later of (i) one year
from the date of transfer of the shares to the original holder, or (ii)
two years from the date of grant of the option, any amount realized by
the holder in excess of the option price will be taxed to the holder as a
long-term capital gain, and any loss sustained by the holder will be a
long-term capital loss. If the shares are disposed of before the holding
period requirements described in the preceding sentence are satisfied,
the (aa) the holder will recognize taxable ordinary income in the year of
disposition in an amount determined under the rules of the Code; (bb) the
Company will be entitled to a deduction for such year in the amount of
the ordinary income so recognized; (cc) the holder may have additional
long-term or short-term capital gain or loss; and (dd) the tax preference
provision might not be applicable.
The Plan provides for the cashless payment of the exercise price of
options granted under the Plan by (a) delivery to the Company of shares
of Common Stock having a fair market value equal to such purchase price,
(b) irrevocable instructions to a broker to sell shares of Common Stock
to be issued upon exercise of the option, provided such shares are
registered and transferable, followed by delivery to the Company of the
amount of sale proceeds necessary to pay such purchase price, and
delivery of the remaining cash proceeds less commissions and brokerage
fees to the optionee or delivery of the remaining shares of Common Stock
tot he optionee, or (c) by any combination of the methods of payment
described in (a) and (b) above.
Approval of the proposal to ratify and approve the Plan requires
affirmative vote of the holders of stock representing a majority of the
votes entitled to be cast at the Meeting.
The Board of Directors recommends that the stockholders vote FOR
ratification and approval of the Plan.
RATIFICATION OF APPOINTMENT OF AUDITORS
The Board of Directors has selected the accounting firm of KPMG
Peat Marwick, LLP ("KPMG") to serve as independent auditors of the
Company for the year ending December 31, 1998 and proposes the
ratification of such decision. A representative of KPMG is expected to
be present at the meeting to make a statement if he wishes to do so and
to respond to appropriate stockholder questions.
The Board of Directors recommends a vote FOR ratification of the
selection of KPMG as the independent auditors for the Company for the
year ending December 31, 1998.
CERTAIN TRANSACTIONS
Howard S. Breslow, a director of the Company is a partner in
Breslow & Walker, LLP, the Company's legal counsel. In 1996, the Company
paid Breslow & Walker, LLP $130,000 for legal services.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended,
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 reports of ownership and changes in ownership with the Securities
Exchange Commission ("SEC") and the Nasdaq National Market. Officers,
directors and greater than 10% beneficial owners are required by SEC
regulations to furnish the Company with copies of all Section 16(a) forms
they file.
STOCKHOLDER PROPOSALS
Stockholders who wish to present proposals for action at the 1998
Annual Meeting of Stockholders should submit their proposals in writing
to the Secretary of the Company at the address of the Company set forth
on the first page of this Proxy Statement. Proposals must be received by
the Secretary no later than December 18, 1998 for inclusion in next
year's proxy statement and proxy card.
ANNUAL REPORT TO STOCKHOLDERS
The Annual Report to Stockholders of the Company for the year ended
December 31, 1997, including audited consolidated financial statements,
has been mailed to the stockholders concurrently herewith, but such
report is not incorporated in this Proxy Statement and is not deemed to
be a part of the proxy solicitation material.
OTHER MATTERS
The Board of Directors of the Company does not know of any other
matters that are to be presented for action at the Meeting. Should any
other matters come before the Meeting or any adjournments thereof, the
persons named in the enclosed proxy will have the discretionary authority
to vote all proxies received with respect to such matters in accordance
with their judgments.
A copy of the Company's Annual Report on Form 10-K, as filed with
the Securities and Exchange Commission (exclusive of exhibits), will be
furnished without charge to any stockholder upon written request to
Antoine Dominic, Secretary, 41 Research Way, E. Setauket New York 11733
By Order of the Board of Directors
/s/ Antoine Dominic
..................................
Antoine Dominic, Secretary
E. Setauket, New York
April 27, 1998
STOCKHOLDERS ARE URGED TO SPECIFY THEIR CHOICES, DATE, SIGN AND
RETURN THE ENCLOSED PROXY IN THE ENCLOSED ENVELOPE. PROMPT RESPONSE IS
HELPFUL AND YOUR COOPERATION WILL BE APPRECIATED.
Appendix A
...........
EXCEL TECHNOLOGY, INC.
1998 STOCK OPTION PLAN
1. PURPOSE OF PLAN. The purpose of this 1998 Stock Option Plan (the
"Plan") is to further the growth and development of Excel Technology,
Inc. (the "Company") by encouraging and enabling employees, officers, and
directors of, and consultants and advisors to, the Company to obtain a
proprietary interest in the Company through the ownership of stock
(thereby providing such persons with an added incentive to continue in
the employ or service of the Company and to stimulate their efforts in
promoting the growth, efficiency, and profitability of the Company), and
affording the Company a means of attracting to its service persons of
outstanding quality.
2. SHARES OF STOCK SUBJECT TO THE PLAN. Subject to the provisions of
Section 12 hereof, an aggregate of 1,000,000 shares of the common stock,
par value $.001 per share, of the Company ("Common Stock") shall be
reserved for issuance upon the exercise of options which may be granted
from time to time in accordance with the Plan. As the Board of Directors
of the Company ("Board of Directors") shall from time to time determine,
such shares may be, in whole or in part, authorized but unissued shares
or issued shares which have been reacquired by the Company. If, for any
reason, an option shall lapse, expire, or terminate without having been
exercised in full, the unpurchased shares underlying such option shall
(unless the Plan shall have been terminated) again be available for
issuance pursuant to the Plan.
3. ADMINISTRATION.
a) The Board of Directors shall administer the Plan and, subject to
the provisions of the Plan, shall have authority to determine and
designate from time to time those persons eligible for a grant of options
under the Plan, those persons to whom options are to be granted, the
purchase price of the shares covered by each option, the time or times at
which options shall be granted, and the manner in which said options are
exercisable. In making such determination, the Board of Directors may
take into account the nature of the services rendered by the respective
persons, their present and potential contributions to the Company's
success, and such other factors as the Board of Directors in its sole
discretion shall deem relevant. Subject to the express provisions of the
Plan, the Board of Directors also shall have authority to interpret the
Plan, to prescribe, amend, and rescind rules and regulations relating to
the Plan, to determine the terms and provisions of the instruments by
which options shall be evidenced (which shall not be inconsistent with
the terms of the Plan), and to make all other determinations necessary or
advisable for the administration of the Plan, all of which determinations
shall be final, binding, and conclusive.
b) The Board of Directors may, at its discretion, in accordance
with the provisions of Article III, Section 7 of the Company's By-Laws,
appoint from among its members a Stock Option or Compensation Committee
(the "Committee"). The Committee shall be composed of two or more
directors and shall have and may exercise any and all of the powers
relating to the administration of the Plan and the grant of options
hereunder as are set forth above in Section 3(a), as the Board of
Directors shall confer and delegate. The Board of Directors shall have
the power at any time to fill vacancies in, to change the membership of,
or to discharge, the Committee. The Committee shall select one of its
members as its Chairman and shall hold its meetings at such time and at
such places as it shall deem advisable. A majority of the Committee
shall constitute a quorum and such majority shall determine its action.
The Committee shall keep minutes of its proceedings and shall report the
same to the Board of Directors at the meeting next succeeding. No
director or member of the Committee shall be liable for any action or
determination made in good faith with respect to the Plan or any option
granted thereunder.
4. PERSONS TO WHOM SHARES MAY BE GRANTED
a) Options may be granted to persons who are, at the time of the
grant, employees (including part-time employees), officers, and directors
of, or consultants or advisors to, the Company or any subsidiary
corporation (as defined in Section 425 of the Internal Revenue Code of
1986, as amended (the "Code"), a "Subsidiary") as the Board of Directors
(or Committee) shall select from time to time from among those nominated
by the Board of Directors (or Committee). For the purposes of the Plan,
options only may be granted to those consultants and advisors who shall
render bona fide services to the Company and such services must not be in
connection with the offer or sale of securities in a capital raising
transaction. Subject to the provisions hereinafter set forth, options
granted under the Plan shall be designated either (i) "Incentive Stock
Options" (which term, as used herein, shall mean options intended to be
"incentive stock options" within the meaning of Section 422 of the Code)
or (ii) "Non-Incentive Stock Options" (which term, as used herein, shall
mean options not intended to be incentive stock options" within the
meaning of Section 422 of the Code). Each option granted to a person who
is solely a director of, or consultant or advisor to, the Company or a
Subsidiary on the date of the grant shall be designated a Non-Incentive
Stock Option.
b) The Board of Directors (or Committee) may grant, at any time,
new options to a person who has previously received options, whether such
prior options are still outstanding, have previously been exercised in
whole or in part, have expired, or are canceled in connection with the
issuance of new options. The purchase price of the new options may be
established by the Board of Directors (or Committee) without regard to
the existing option price.
5. OPTION PRICE.
a) The purchase price of the Common Stock underlying each option
shall be determined by the Board of Directors (or Committee), which
determination shall be final, binding, and conclusive; provided, however,
in no event shall the purchase price of Incentive Stock Options be less
than 100% (110% in the case of optionees who own more than 10% of the
total combined voting power of all classes of stock of the Company) of
the fair market value of the Common Stock on the date the option is
granted. In determining such fair market value, the Board of Directors
(or Committee) shall consider (iii) the last sale price of the Common
Stock on the date on which the option is granted or, if no such reported
sale takes place on such day, the last reported bid price on such day, on
NASDAQ or on the principal national securities exchange on which the
Common Stock is admitted to trading or listed, or (iv) if not listed or
admitted to trading on NASDAQ or a national securities exchange, the
closing bid price as quoted by the National Quotation Bureau or a
recognized dealer in the Common Stock on the date of grant. If the
Common Stock is not publicly traded at the time an option is granted, the
Board of Directors (or Committee) shall deem fair market value to be the
fair value of the Common Stock after taking into account appropriate
factors which may be relevant under applicable federal tax laws and
Internal Revenue rules and regulations. For purposes of the Plan, the
date of grant of an option shall be the date specified by the Board of
Directors (or Committee) at the time it grants such option; provided,
however, such date shall not be prior to the date on which the Board of
Directors (or Committee) acts to approve the grant.
b) The aggregate fair market value (determined at the time the
Incentive Stock Options are granted) of the Common Stock with respect to
which Incentive Stock Options are exercisable for the first time by an
employee during any calendar year shall not exceed $100,000. Non-
Incentive Stock Options shall not be subject to the limitations of this
paragraph 5(b).
6. EXERCISE OF OPTIONS.
a) The number of shares which are issued pursuant to the exercise
of an option shall be charged against the maximum limitations on shares
set forth in Section 2 hereof.
b) The exercise of an option shall be made contingent upon receipt
by the Company from the holder thereof of (v) if deemed necessary by the
Company, a written representation and acknowledgment that (1) at the time
of such exercise it is the holder's then present intention to acquire the
option shares for investment and not with a view to distribution or
resale thereof, (2) the holder knows that the Company is not obligated to
register the option shares and that the option shares may have to be held
indefinitely unless an exemption from the registration requirements of
the Securities Act of 1933, as amended (the "Act"), is available or the
Company has registered the shares underlying the options, and (3) the
Company may place a legend on the certificate(s) evidencing the option
shares reflecting the fact that they were acquired for investment and
cannot be sold or transferred unless registered under the Act, and (vi)
payment in full of the purchase price of the shares being purchased.
Payment may be made in cash; by certified check payable to the order of
the Company in the amount of such purchase price; by delivery to the
Company of shares of Common Stock having a fair market value equal to
such purchase price; by irrevocable instructions to a broker to sell
shares of Common Stock to be issued upon exercise of the option (provided
such shares are registered and transferable) and to deliver to the
Company the amount of sale proceeds necessary to pay such purchase price
and to deliver the remaining cash proceeds, less commissions and
brokerage fees, to the optionee; or by any combination of such methods of
payment.
7. TERM OF OPTIONS. The period during which each option granted
hereunder shall be exercisable shall be determined by the Board of
Directors (or Committee); provided, however, no option shall be exercis
able for a period exceeding ten (10) years from the date such option is
granted.
8. NON-TRANSFERABILITY OF OPTIONS. No option granted pursuant to the
Plan shall be subject to anticipation, sale, assignment, pledge,
encumbrance, or charge, or shall be otherwise transferable except by will
or the laws of descent and distribution or pursuant to a qualified
domestic relations order (as defined by the Code or Title I of the
Employee Retirement Income Security Act or the rules thereunder), and an
option shall be exercisable during the lifetime of the holder thereof
only by such holder.
9. TERMINATION OF SERVICES. If an employee, officer, or director to
whom an option has been granted under the Plan shall cease to be an em
ployee, officer, or director of the Company or a Subsidiary by reason of
a termination of such relationship without cause and other than by reason
of death or disability, such holder may exercise such option at any time
prior to the expiration date of the option or within three months after
the date of termination, whichever is earlier, but only to the extent the
holder had the right to exercise such option on the date of termination.
If an employee, officer, or director to whom an option has been granted
under the Plan shall cease to be an employee, officer, or director of the
Company or a Subsidiary by reason of a termination of such relationship
for cause and other than by reason of death or disability, such options
shall terminate, lapse, and expire forthwith and automatically. So long
as the holder of an option shall continue to be in the employ, or
continue to be a director, of the Company or one or more of its
Subsidiaries, such holder's option shall not be affected by any change of
duties or position. Absence on leave approved by the employing
corporation shall not be considered an interruption of employment for any
purpose under the Plan. The granting of an option in any one year shall
not give the holder of the option any rights to similar grants in future
years or any right to be retained in the employ or service of the Company
or any of its Subsidiaries or interfere in any way with the right of the
Company or any such Subsidiary to terminate such holder's employment or
services at any time. Notwithstanding the foregoing, no option may be
exercised after ten years from the date of its grant.
10. DISABILITY OF HOLDER OF OPTION. If any employee, officer, or
director to whom an option has been granted under the Plan shall cease to
be an employee, officer, or director of the Company or a Subsidiary by
reason of disability, such holder may exercise such option at any time
prior to the expiration date of the option or within one year after the
date of termination for such reason, whichever is earlier, but only to
the extent the holder had the right to exercise such option on the date
of termination. Notwithstanding the foregoing, no option may be exercised
after ten years from the date of its grant. For the purposes of the
Plan, "disability" shall mean "permanent and total disability" as defined
in Section 22(e)(3) of the Code.
11. DEATH OF HOLDER OF OPTION. If any employee, officer, or director to
whom an option has been granted under the Plan shall cease to be an
employee, officer, or director of the Company or a Subsidiary by reason
of death, or such holder of an option shall die within three months after
termination, or in the case of the death of an advisor or consultant to
whom an option has been granted under the Plan, the option may be
exercised by the person or persons to whom the optionee's rights under
the option are transferred by will or by the laws of descent and
distribution at any time prior to the expiration date of the option or,
in the case of an employee, officer, or director, within three months
from the date of death, whichever is earlier, but only to the extent the
holder of the option had the right to exercise such option on the date of
such termination. Notwithstanding the foregoing, no option may be
exercised after ten years from the date of its grant.
12. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION.
a) If the shares of Common Stock outstanding are changed in number,
kind, or class by reason of a stock split, combination, merger,
consolidation, reorganization, reclassification, exchange, or any capital
adjustment, including a stock dividend, or if any distribution is made to
stockholders other than a cash dividend and the Board of Directors (or
Committee) deems it appropriate to make an adjustment, then (vii) the
aggregate number and class of shares that may be issued or transferred
pursuant to Section 2, (viii) the number and class of shares which are
issuable under outstanding options, and (ix) the purchase price to be
paid per share under outstanding options, shall be adjusted as
hereinafter provided.
b) Adjustments under this Section 12 shall be made in a propor
tionate and equitable manner by the Board of Directors (or Committee),
whose determination as to what adjustments shall be made, and the extent
thereof, shall be final, binding, and conclusive. In the event that a
fraction of a share results from the foregoing adjustment, said fraction
shall be eliminated and the price per share of the remaining shares
subject to the option adjusted accordingly.
c) In the event of a liquidation of the Company, or a merger,
reorganization, or consolidation of the Company with any other
corporation in which the Company is not the surviving corporation or the
Company becomes a wholly-owned subsidiary of another corporation, any
unexercised options theretofore granted under the Plan shall be deemed
canceled unless the surviving corporation in any such merger,
reorganization, or consolidation elects to assume the options under the
Plan or to issue substitute options in place thereof; provided, however,
if such options would otherwise be canceled in accordance with the
foregoing, the optionee shall have the right, exercisable during a
ten-day period immediately prior to such liquidation, merger, or
consolidation, to exercise the option, in whole or in part. The granting
of an option pursuant to the Plan shall not affect in any way the right
or power of the Company to make adjustments, reorganizations,
reclassifications, or changes of its capital or business structure or to
merge, consolidate, dissolve, liquidate, or sell or transfer all or any
part of its business or assets.
13. VESTING OF RIGHTS UNDER OPTIONS. Nothing contained in the Plan or in
any resolution adopted or to be adopted by the Board of Directors (or
Committee) or the stockholders of the Company shall constitute the
vesting of any rights under any option. The vesting of such rights shall
take place only when a written agreement shall be duly executed and
delivered by and on behalf of the Company to the person to whom the
option shall be granted.
14. RIGHTS AS A STOCKHOLDER. A holder of an option shall have no rights
of a stockholder with respect to any shares covered by such holder's
option until the date of issuance of a stock certificate to such holder
for such shares.
15. TERMINATION AND AMENDMENT. The Plan was adopted by the Board of
Directors on April 9, 1998, subject, with respect to the validation of
Incentive Stock Options granted under the Plan, to approval of the Plan
by the stockholders of the Company at the next Meeting of Stockholders
or, in lieu thereof, by written consent. If the approval of stockholders
is not obtained prior to April 8, 1999, any grants of Incentive Stock
Options under the Plan made prior to that date will be rescinded. The
Plan shall expire at the end of the day on April 8, 2008 (except as to
options outstanding on that date). Options may be granted under the Plan
prior to the date of stockholder approval of the Plan. The Board of
Directors (or Committee) may terminate or amend the Plan in any respect
at any time, except that, without the approval of the stockholders
obtained within 12 months before or after the Board of Directors (or
Committee) adopts a resolution authorizing any of the following actions,
(a) the total number of shares that may be issued under the Plan may not
be increased (except by adjustment pursuant to paragraph 12); (b) the
provisions regarding eligibility for grants of Incentive Stock Options
may not be modified; (c) the provisions regarding the exercise price at
which shares may be offered pursuant to Incentive Stock Options may not
be modified (except by adjustment pursuant to paragraph 12), and (d) the
expiration date of the Plan may not be extended. Except as otherwise
provided in this paragraph 15, in no event may action of the Board of
Directors (or Committee) or stockholders alter or impair the rights of an
optionee, without such optionee's consent, under any option previously
granted to such optionee.
16. MODIFICATION, EXTENSION AND RENEWAL OF OPTIONS. Subject to the
terms and conditions and within the limitations of the Plan, the Board of
Directors (or Committee) may modify, extend, or renew outstanding options
granted under the Plan, or accept the surrender of outstanding options
(to the extent not theretofore exercised) and authorize the granting of
new options in substitution therefor. Notwithstanding the foregoing, no
modification of an option shall, without the consent of the holder
thereof, alter or impair any rights or obligations under any option
theretofore granted under the Plan.
17. CONVERSION OF INCENTIVE STOCK OPTIONS INTO NON-QUALIFIED OPTIONS.
Without the prior written consent of the holder of an Incentive Stock
Option, the Board of Directors (or Committee) shall not alter the terms
of such Incentive Stock Option (including the means of exercising such
Incentive Stock Option) if such alteration would constitute a
modification within the meaning of Section 424(h)(3) of the Code. The
Board of Directors (or Committee), at the written request or with the
written consent of any optionee, may in its discretion take such actions
as may be necessary to convert such optionee's Incentive Stock Options
(or any installments or portions of installments thereof) that have not
been exercised on the date of conversion into Non-Incentive Stock Options
at any time prior to the expiration of such Incentive Stock Options,
regardless of whether the optionee is an employee of the Company at the
time of such conversion. Such actions may include, but shall not be
limited to, extending the exercise period or reducing the exercise price
of the appropriate installments of such Incentive Stock Options. At the
time of such conversion, the Board of Directors (or Committee) (with the
consent of the optionee) may impose such conditions on the exercise of
the resulting Non-Incentive Stock Options as the Board of Directors (or
Committee) in its discretion may determine, provided that such conditions
shall not be inconsistent with the Plan. Nothing in the Plan shall be
deemed to give any optionee the right to have such optionee's Incentive
Stock Options converted into Non-Incentive Stock Options, and no such
conversion shall occur until and unless the Board of Directors (or
Committee) takes appropriate action.
18. WITHHOLDING OF ADDITIONAL INCOME TAXES. Upon the exercise of a Non-
Incentive Stock Option, the transfer of a Non-Incentive Stock Option
pursuant to an arm's length transaction, the making of a Disqualifying
Disposition (as described in Sections 421, 422 and 424 of the Code and
regulations thereunder), the vesting of transfer of restricted stock or
securities acquired on the exercise of an option hereunder, or the making
of a distribution or other payment with respect to such stock or
securities, the Company may withhold taxes in respect of amounts that
constitute compensation includible in gross income. The Board of
Directors (or Committee) in its discretion may condition the exercise of
an option, the transfer of a Non-Incentive Stock Option, or the vesting
or transferability of restricted stock or securities acquired by
exercising an option on the optionee's making satisfactory arrangement
for such withholding. Such arrangement may include payment by the
optionee in cash or by check of the amount of the withholding taxes or,
at the discretion of the Board of Directors (or Committee), by the
optionee's delivery of previously held shares of Common Stock or the
withholding from the shares of Common Stock otherwise deliverable upon
exercise of option shares having an aggregate fair market value equal to
the amount of such withholding taxes.
19. INDEMNIFICATION. In addition to such other rights of
indemnification as they may have as members of the Board of Directors (or
Committee), the members of the Board of Directors (or Committee)
administering the Plan shall be indemnified by the Company against
reasonable expenses, including attorneys' fees, actually and necessarily
incurred in connection with the defense of any action, suit, or
proceeding, or in connection with any appeal therein, to which they or
any of them may be a party by reason of any action taken or failure to
act under or in connection with the Plan or any option granted
thereunder, and against all amounts paid by them in settlement thereof
(provided such settlement is approved by independent legal counsel
selected by the Company) or paid by them in satisfaction of a judgment in
any action, suit, or proceeding, except in relation to matters as to
which it shall be adjudged in such action, suit, or proceeding that such
member is liable for negligence or misconduct in the performance of his
duties, and provided that within 60 days after institution of any such
action, suit, or proceeding, the member shall in writing offer the
Company the opportunity, at its own expense, to handle and defend the
same.
20. GOVERNING LAW. The validity and construction of the Plan and the
instruments evidencing options shall be governed by the laws of Delaware,
or the laws of any jurisdiction in which the Company or its successors in
interest may be organized.
Appendix B
...........
[FORM OF PROXY CARD]
EXCEL TECHNOLOGY, INC.
41 Research Way
E. Setauket NY 11733
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned, acknowledging receipt of the proxy statement dated
April 27, 1998 of Excel Technology, Inc., hereby constitutes and appoints
J. Donald Hill and Antoine Dominic and each or any of them, attorney,
agent and proxy of the undersigned, with full power of substitution to
each of them, for and in the name, place and stead of the undersigned on
the books of said corporation on May 11, 1998 at the Annual Meeting of
the Stockholders of Excel Technology, Inc. to be held at the offices of
Excel Technology, Inc., 780 Third Ave., New York, New York 10017 on June
24, 1998, at 10:00 A.M. EST, and any adjournments thereof.
When properly executed, this proxy will be voted as designated by
the undersigned. If no choice is specified, the proxy will be voted FOR
the following proposals, which are set forth in the Proxy Statement.
1. ELECTION OF DIRECTORS
[ ] FOR all nominees listed below [ ] WITHHOLD AUTHORITY
J. Donald Hill,
Antoine Dominic,
Steven Georgiev,
Howard S. Breslow,
Jan A. Melles
(INSTRUCTION: to withhold authority to vote for any individual nominee,
write in nominee's name on the line below.)
..............................
2. PROPOSAL TO RATIFY AND APPROVE THE COMPANY'S 1998 STOCK OPTION PLAN
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. PROPOSAL TO RATIFY THE SELECTION OF KPMG PEAT MARWICK, LLP AS
INDEPENDENT AUDITORS FOR THE YEAR ENDING DECEMBER 31, 1998.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
4. FOR SUCH OTHER MATTERS THAT MAY PROPERLY COME BEFORE THE MEETING
AND ANY ADJOURNMENTS THEREOF
Please sign exactly as name appears below. When shares are held by
joint tenants, both should sign. When signing as attorney,
administrator, trustee or guardian, please give full title as such. If a
corporation, please sign in full corporate name by President or other
authorized officer. If a partnership, please sign in partnership name by
authorized person.
Dated: ......................................
Signature
......................................
Signature if held jointly
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD
PROMPTLY IN THE ENCLOSED ENVELOPE
