EXCEL TECHNOLOGY, INC.
41 Research Way
E. Setauket, NY 11733
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS TO BE HELD JUNE 22, 1999
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
22, 1999, 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 the selection by the Board of Directors of KPMG LLP to
serve as independent auditors for the year ending December 31, 1999; and
3. 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 14,
1999 as the record date for the determination of stockholders entitled to
notice of, and to vote at, the 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 the meeting.
By Order of the Board of Directors
/s/ Antoine Dominic
..................................
Antoine Dominic,
Secretary
April 26, 1999
IT IS IMPORTANT THAT THE ENCLOSED PROXY FORM BE COMPLETED
AND RETURNED PROMPTLY.
EXCEL TECHNOLOGY, INC.
41 Research Way
E. Setauket, NY 117330
...........................
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS TO BE HELD JUNE 22, 1999
...........................
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 22, 1999,
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 ratification of the appointment of KPMG LLP as the
Company's independent auditors for the year ending December 31, 1999, 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 the Company's common stock,
par value $.001 per share (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 17, 1999.
Only stockholders of record at the close of business on May 14, 1999
(the "Record Date") will be entitled to notice of, and to vote at, the
Meeting. At the close of business on April 22, 1999, the Company had
issued and outstanding 11,085,057 shares of Common Stock. Each share of
Common Stock entitles the holder thereof to one vote. The holders of a
majority of the shares of Common Stock outstanding on the Record Date and
entitled to vote at the Meeting, present in person or by proxy, will
constitute a quorum for the transaction of business 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 shall be tabulated separately. Abstentions shall not
be counted as votes cast for purposes of determining whether a proposal
has been approved. As a result, they will have the same effect as a vote
against a proposal. Broker non-votes, if any, will be treated as not
present or represented for purposes of determining whether stockholder
approval of the matter has been obtained. Other than the election of
directors, which requires a plurality of the votes entitled to be cast by
holders of shares represented in person or by proxy at the Meeting, each
matter submitted to the stockholders requires the affirmative vote of a
majority of the votes entitled to be cast by holders of shares
represented in person or by proxy at the Meeting.
NOMINATION AND ELECTION OF DIRECTORS
Six persons, five 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 six nominees
named below. If any nominees should refuse or be unable to serve, the
shares represented by the proxies will be voted for any nominee as shall
be designated by the Board of Directors to replace any such nominee. The
Board of Directors believes that all of the nominees named herein are
able and willing to serve as a director if elected.
The Board of Directors recommends that the stockholders vote FOR the
election of all nominees to the Board of Directors listed below.
Nominee Age
............... ...
J. Donald Hill 66
Antoine Dominic 37
Steven Georgiev 65
Howard S. Breslow 59
Jan A. Melles 58
Joseph J. Ortego 45
The following information is submitted concerning the nominees named
for election as directors based upon information received by the Company
from such persons.
Mr. Hill became Chairman, Chief Executive Officer and a director of
the Company in January 1996. In addition, he was President of the
Company from August 1994 until February 1998. 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, 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 in February 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 since January 1996. From
June 1992 to January 1995, Mr. Dominic was Executive Vice President,
Chief Financial Officer and Director of CompuDyne Corporation, a
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 the 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 partner of the law firm of Breslow & 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. From 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 publicly held company which is a
supplier to the Company.
Mr. Ortego has been a practicing attorney in New York for twenty
years. Since 1998 he has been a member of the law firm of Nixon,
Hargrave, Devans & Doyle, LLP. From 1983 to 1998 he was a partner with
the law firm of Rivkin, Radler & Kremer. From 1979 to 1983 Mr. Ortego
served as Assistant District Attorney for New York County (Manhattan).
Director Compensation
.....................
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.
Board Meetings and Certain Committees
.....................................
The Board of Directors held seven meetings during the year ended
December 31, 1998, which were attended by all of the directors, and acted
by unanimous consent on three occasions. The Company's audit committee,
comprised of Messrs. Steven Georgiev and Howard Breslow, held one meeting
during the year ended December 31, 1998. The Audit Committee reviews the
adequacy of the Company's internal controls and meets periodically with
management and the independent auditors. The Company has no standing
nominating or compensation committee. Management compensation is
determined by the non-employee directors of the Company.
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 four significant employees
of the Company's subsidiaries, are listed in the following table, and
certain information concerning such significant employees follows the
table.
Name Age Position
.............. ... ......................................
J. Donald Hill 66 Chief Executive Officer of the Company
Antoine Dominic 37 President, Chief Operating Officer,
Secretary of the Company;
President, Quantronix Corporation
William B. McIntyre 62 President, The Optical Corporation
Angelo Chiodo 53 President, Control Laser Corporation
Francis Dominic 40 President, Photo Research, Inc.
Dave Clarke 36 President, Synrad, 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 has 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. Francis Dominic has been President of Photo Research, Inc.
("Photo Research"), a subsidiary of the Company, since November 1996.
From 1988 to 1996, 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. Mr. Francis Dominic is the brother
of Mr. Antoine Dominic.
Mr. Clarke has been President of Synrad, Inc. ("Synrad"), a
subsidiary of the Company, since September 30, 1998. Mr. Clarke joined
Synrad in 1994 as International Sales Manager. In 1995, he became Vice
President of Marketing and then President of Emerald Laser, Synrad's then
research and development division. Previously, Mr. Clarke worked for
Optilas Ltd., a European distributor of laser technology, for eight
years in various positions including General Manager. Mr. Clarke holds a
B.S. degree in Applied Physics.
BENEFICIAL OWNERSHIP OF THE COMPANY'S SECURITIES
The following table sets forth, as of April 26, 1999, 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 nominee, each Named
Executive Officer, and all directors and executive officers as a group.
Name Number
(and Address of 5% Holders) Owned (1) Percentage of Class
............................ .......... ...................
Salomon Smith Barney, Inc. 1,154,064(2) 10.4%
388 Greenwich Street
New York, NY 10013
Salomon Brothers
Holding Company, Inc. 1,154,064(2) 10.4%
388 Greenwich Street
New York, NY 10013
Mutual Management Corp.. 689,000(3) 6.2%
388 Greenwich Street
New York, NY 10013
Salomon Smith Barney
Holdings, Inc. 1,843,064(4) 16.6%
388 Greenwich Street
New York, NY 10013
Citigroup Inc. 1,843,064(4) 16.6%
153 East 53rd Street
New York, NY 10043
Wellington Management
Company, LLP 1,030,000(5) 9.3%
75 State Street
Boston, MA 02109
J. Donald Hill 482,600(6) 4.2%
Antoine Dominic 223,000(7) 2.0%
Steven Georgiev 30,000(8) less than 1%
Howard S. Breslow 62,000(9) less than 1%
Jan A. Melles 23,000(8) less than 1%
Joseph J. Ortego 0 0
Executive officers and directors
as a group (five persons) 820,600(10) 7.0%
(1) Unless otherwise indicated below, all shares are owned beneficially
and of record.
(2) Based on the Schedule 13G filed by Salomon Smith Barney Inc.
("SSB"), Salomon Brothers Holding Company, Inc. ("SBHC), Mutual
Management Corp. ("MMC"), Salomon Smith Barney Holdings Inc. ("SSB
Holdings") and Citigroup Inc. ("Citigroup"); SSB and SBHC each have
shared voting power and dispositive power with respect to 1,154,064
shares of Common Stock. SBHC is the sole stockholder of SSB, SSB
Holdings is the sole stockholder of SBHC, and Citigroup is the sole
stockholder of SSB Holdings.
(3) Based on the Schedule 13G filed by Salomon Smith Barney Inc.
("SSB"), Salomon Brothers Holding Company, Inc. ("SBHC), Mutual
Management Corp. ("MMC"), Salomon Smith Barney Holdings Inc. ("SSB
Holdings") and Citigroup Inc. ("Citigroup"); MMC has shared voting power
and dispositive power with respect to 689,000 shares of Common Stock.
SSB Holdings is the sole stockholder of MMC, and Citigroup is the sole
stockholder of SSB Holdings.
(4) Based on the Schedule 13G filed by Salomon Smith Barney Inc.
("SSB"), Salomon Brothers Holding Company, Inc. ("SBHC), Mutual
Management Corp. ("MMC"), Salomon Smith Barney Holdings Inc. ("SSB
Holdings") and Citigroup Inc. ("Citigroup"); SSB Holdings and Citigroup
each have shared voting power and dispositive power with respect to
1,843,064 shares of Common Stock. SBHC is the sole stockholder of SSB,
SSB Holdings is the sole stockholder of each SBHC and MMC, and Citigroup
is the sole stockholder of SSB Holdings.
(5) Based on the Schedule 13G filed by Wellington Management Company,
LLP ("WMC"); WMC has shared voting power with respect to 655,000 shares
of Common Stock and shared dispositive power with respect to 1,030,000
shares of Common Stock. Wellington Trust Company, NA , a bank, is a
wholly-owned subsidiary of WMC.
(6) Includes 350,000 shares of Common Stock underlying currently
exercisable stock options.
(7) Includes 205,000 shares of Common Stock underlying currently
exercisable stock options.
(8) Consists of currently exercisable non-incentive stock options.
(9) Includes 30,000 shares of Common Stock underlying currently
exercisable non-incentive stock options.
(10) Includes the 638,000 shares of Common Stock underlying currently
exercisable 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 1998
(collectively, the "Named Executive Officers").
<TABLE>
<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> 1998 $254,932 $521,000 0 0
180,000 <F3> 0 0
Chief Executive Officer 1997 $223,000 $469,000 0 0
110,000 <F4> 0 0
Excel Technology, Inc 1996 $195,314 $223,892 0 0
310,000 <F4> 0 0
Antoine Dominic <F2> 1998 $229,805 $521,000 0 0
155,000 <F5> 0 0
President, Chief, 1997 $193,000 $469,000 0 0
85,000 <F4> 0 0
Operating Officer 1996 $161,533 $223,392 0 0
235,000 <F4> 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. 130,000 of these
options were previously issued and were repriced on October 19, 1998
<F4> Represents options to acquire shares of Common Stock.
<F5> Represents options to acquire shares of Common Stock. 105,000 of these
options were previously issued and were repriced on October 19, 1998
</FN>
</TABLE>
<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 50,000 6.9% $7.00 Oct
19, 2008 $ 570,113 $ 907,810
10,000<F4> 1.4% $7.00 Jun
22, 2008 $ 81,034 $ 181,562
10,000<F4> 1.4% $7.00 Jul
11, 2007 $ 108,593 $ 165,056
100,000<F4> 13.8% $7.00 Jul
10, 2007 $1,085,930 $1,650,563
10,000<F4> 1.4% $7.00 Jun
14, 2001 $ 114,023 $ 165,056
Antoine Dominic 50,000 6.9% $7.00 Oct
19, 2008 $ 570,113 $ 907,810
10,000<F4> 1.4% $7.00 Jun
22, 2008 $ 81,034 $ 181,562
10,000<F4> 1.4% $7.00 Jul
11, 2007 $ 108,593 $ 165,056
75,000<F4> 10.4% $7.00 Jul
10, 2007 $ 814,447 $1,237,923
10,000<F4> 1.4% $7.00 Jun
14, 2001 $ 114,023 $ 165,056
<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.
<F4> Options to acquire shares of Common Stock that were previously granted and
were repriced on October 19, 1998
</FN>
</TABLE>
The following table provides information related to options
exercised by the Named Executive Officers during 1998 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 0 0 250,000
230,000 $405,275 $372,853
Antoine Dominic 25,000 $43,000 130,000
185,000 $240,743 $299,904
<FN>
<F1> The closing price for the Common Stock as reported on the NASDAQ
National Market System on December 31, 1998 was $8.6211. Value is calculated
on the basis of the difference between the option exercise price and $8.6211
multiplied by the number of shares of Common Stock underlying the option if
the closing price is greater than the option exercise price.
</FN>
</TABLE>
10 YEAR OPTION/SAR REPRICINGS
.............................
The following table provides information related to the repricing of
options held by the Named Executive Officers.
<TABLE>
<CAPTION>
Length Of
Number Of
Original
Securities Market Price
Option Term
Underlying Of Stock Exercise Price
Remaining
Options/SARS At Time Of At Time Of
New At Date Of
Repriced Or Repricing Or Repricing Or
Exercise Repricing Or
Name Date Amended Amendment Amendment
Price Amendment
(#) ($) ($)
($)
............... .............. ............ ............. ..............
........ .............
<C> <C> <C> <C> <C>
<C> <C>
J. Donald Hill Oct. 19, 1998 10,000 $6.56 $10.125
$7.00 3 years
Oct. 19, 1998 10,000 $6.56 $10.375
$7.00 9 years
Oct. 19, 1998 100,000 $6.56 $10.375
$7.00 9 years
Oct. 19, 1998 10,000 $6.56 $ 9.250
$7.00 10 years
Antoine Dominic Oct. 19, 1998 10,000 $6.56 $10.125
$7.00 3 years
Oct. 19, 1998 10,000 $6.56 $10.375
$7.00 9 years
Oct. 19, 1998 75,000 $6.56 $10.375
$7.00 9 years
Oct. 19, 1998 10,000 $6.56 $ 9.250
$7.00 10 years
</TABLE>
EMPLOYMENT AND RELATED AGREEMENTS
In January 1996, the Company and J. Donald Hill entered into a three-
year employment agreement which automatically renews for additional one year
periods unless employment is terminated as provided in the agreement.
Effective July 10, 1998, Mr. Hill receives a base salary of $262,500 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 which automatically renews for additional one year
periods unless employment is terminated as provided in the agreement.
Effective July 10, 1998, Mr. Dominic receives a base salary of $236,250 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.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Compensation decisions are made by the non-employee directors of the
Company. There were no interlocks or insider (employee) participation during
1998.
REPORT OF THE BOARD OF DIRECTORS ON EXECUTIVE COMPENSATION
Compensation Guidelines
.......................
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. To succeed, the Company believes that it must offer executive
compensation that reflects competitive pay practices of other companies and
job responsibility, and enables the Company to attract, retain, and reward
qualified, experienced executives. The Company also believes that any
competitive pay package should be structured, in part, to align management's
interests with the success of the Company by making a portion of compensation
dependent on operating achievements and, to a lesser extent, on stock
performance. The non-employee members of the Board of Directors have
determined that these objectives are best met by offering the Company's two
executive officers competitive base salaries, quarterly bonuses which are
payable based on a percentage of pre-tax profits if minimum pre-tax profit
margins are achieved, and stock options that vest over time.
Chief Executive Officer Compensation
Based on the criteria described above and the factors set forth below,
the non-employee members of the Board of Directors approved an increase in
Mr. Hill's annual base salary from $250,000 to $262,500 and awarded Mr. Hill
options to purchase 50,000 shares of Common Stock (in addition to the annual
grant of options for 10,000 shares he received as a director of the Company).
In doing so, the outside directors took into account the increases in the
Company's revenues, per share earnings, and operating cash flows, and the
successful completion of the Synrad acquisition. In addition, Mr. Hill's
bonus, which is payable based on a percentage of pre-tax profits if minimum
pre-tax profit margins are achieved, increased from $469,000 to $521,000 as a
result of increases in the Company's pre-tax earnings.
Option Repricing
On October 19, 1998, the Board of Directors reduced the exercise price
of outstanding stock options to purchase an aggregate of 508,932 shares of
the Common Stock to $7.00 per share, which price reflects a 6.7% premium over
the then current fair market value of the Common Stock. Prior to such
repricing, the exercise prices of such options ranged from $7.875 to $12.375
per share (the average price being $9.518 per share). Senior management and
the Company's Board of Directors held 318,000 of such options and the balance
were held by 114 employees of the Company's operating subsidiaries.
It was the view of the Board of Directors that the disparity between the
original exercise prices of these options and market price of the Common
Stock at the time of modifying such options undermined the intended purpose
of such stock options, namely to provide meaningful incentives to the
Company's directors, officers, and employees. The Board of Directors
believes that such equity incentives are a significant factor in the
company's ability to retain and motivate key employees who are critical to
the Company's long-term success. The Board of Directors approved the
modifications of the option terms to help ensure that directors, officers,
and employees will continue to have meaningful equity incentives and to
motivate such persons to strive for the success of the Company.
J. Donald Hill, Chairman
Antoine Dominic
Steven Georgiev
Howard S. Breslow
Jan A. Melles
STOCK PERFORMANCE GRAPH
The following chart compares the yearly percentage change in the cumulative
total stockholder return on the Common Stock during the period from 1994
through the end of 1998, 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 1993 1994 1995 1996 1997 1998
..................... ...... ...... ...... ...... ...... ......
Excel Technology, Inc. 100 84.44 117.78 144.44 197.78 182.22
S & P 500 100 101.32 139.4 171.4 228.59 293.91
Peer Group 100 106.33 177.74 106.39 104.24 100.85
(Assumes initial investment of $100 and reinvestment of dividends.)
RATIFICATION OF APPOINTMENT OF AUDITORS
The Board of Directors has selected the accounting firm of KPMG LLP
("KPMG") to serve as independent auditors of the Company for the year ending
December 31, 1999 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, 1999.
CERTAIN TRANSACTIONS
Howard S. Breslow, a director of the Company, is a partner in Breslow &
Walker, LLP, the Company's legal counsel. In 1998, the Company paid Breslow
& Walker, LLP $324,000 for legal services.
Joseph J. Ortego, a nominee for director of the Company, is a member of
the law firm of Nixon, Hargrave, Devans & Doyle, LLP. Nixon, Hargrave has
provide legal services to the Company, and is expected to continue to provide
certain legal services to the Company.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the Company's executive officers and directors, and persons who own more than
10% of the Common Stock (collectively, the "Reporting Persons"), to file
reports of ownership and changes in ownership with the Securities Exchange
Commission ("SEC") and the NASDAQ National Market, and to furnish a copy of
such reports to the Company. Based solely on review of the copies of such
forms furnished to the Company, the Company believes that during the year
ended December 31, 1998 the Reporting Persons complied with all applicable
Section 16(a) filing requirements, except that the Company's directors and
executive officers were late in filing their Form 5's.
STOCKHOLDER PROPOSALS
Stockholders proposals for action at the 2000 Annual Meeting of
Stockholders must be submitted in writing to the Secretary of the Company at
the address of the Company set forth on the first page of this Proxy
Statement and must be received by the Secretary no later than December 27,
1999 in order that they may be considered for inclusion in next year's proxy
statement and proxy card. Stockholders who intend to present a proposal at
the Company's 2000 Annual Meeting of Stockholders without inclusion of such
proposal in the Company's proxy materials are required to provide notice of
such proposal to the Company no later than March 25, 2000. The Company
reserves the right to reject, rule out of order, or take other appropriate
action with respect to any proposal that does not comply with these and other
applicable requirements.
ANNUAL REPORT TO STOCKHOLDERS
The Annual Report to stockholders of the Company for the year ended
December 31, 1998, 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 26, 1999
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
...........
[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 26, 1999 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, to appear and vote
all the shares of stock of Excel Technology, Inc. standing in the name of the
undersigned on the books of said corporation on May 14, 1999 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 22, 1999, 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,
Joseph J. Ortego
(INSTRUCTION: to withhold authority to vote for any individual nominee,
write in nominee's name on the line below.)
..............................
2. PROPOSAL TO RATIFY THE SELECTION OF KPMG LLP AS INDEPENDENT AUDITORS
FOR THE YEAR ENDING DECEMBER 31, 1999.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. 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
