SUBMICRON SYSTEMS CORP, DEF 14A, 1998-05-29

SUBMICRON SYSTEMS CORP
DEF 14A, 1998-05-29
SPECIAL INDUSTRY MACHINERY, NEC

Previous: LIUSKI INTERNATIONAL INC /DE, PRE 14C, 1998-05-29

Next: SUBMICRON SYSTEMS CORP, 4, 1998-05-29

<PAGE> 1

SCHEDULE 14A
(RULE 14a-101)

INFORMATION REQUIRED IN PROXY STATEMENT

SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )

Filed by the Registrant [X]

Filed by a Party other than the Registrant [ ]

Check the appropriate box:

[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement

[ ] Definitive Additional Materials

[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12

SubMicron Systems Corporation
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)

- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

[X] No fee required.

[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.

(1) Title of each class of securities to which transaction applies:

- --------------------------------------------------------------------------------

(2) Aggregate number of securities to which transaction applies:

- --------------------------------------------------------------------------------

(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):

- --------------------------------------------------------------------------------

(4) Proposed maximum aggregate value of transaction:

- --------------------------------------------------------------------------------

(5) Total fee paid:

- --------------------------------------------------------------------------------

[ ] Fee paid previously with preliminary materials.

[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the form or schedule and the date of its filing.

(1) Amount previously paid:

- --------------------------------------------------------------------------------

(2) Form, schedule or registration statement no.:

- --------------------------------------------------------------------------------

(3) Filing party:

- --------------------------------------------------------------------------------

(4) Date filed:

- --------------------------------------------------------------------------------

<PAGE> 2

SUBMICRON SYSTEMS CORPORATION
6330 HEDGEWOOD DRIVE, #150
ALLENTOWN, PA 18106

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JUNE 30, 1998

The Annual Meeting of Stockholders of SubMicron Systems Corporation (the
"Company") will be held on Tuesday, June 30, 1998, at 10:00 a.m., at the Holiday
Inn Conference Center, Rt. 100 & I-78, Fogelsville, Pennsylvania, for the
following purposes:

1. To elect two directors to hold office until the Annual Meeting of
Stockholders in 2001.

2. To approve an amendment to the Company's Employee Stock Purchase Plan to
increase the number of shares issuable thereunder.

3. To approve an amendment to the Company's 1991 Amended and Restated Stock
Option Plan to increase the number of shares issuable thereunder.

4. To approve the Company's 1997 Stock Option Plan for Non-Employee
Directors.

5. To ratify the appointment of Ernst & Young LLP as the Company's
independent accountants for 1998.

6. To transact such other business as may properly come before the meeting.

The Board of Directors has fixed the close of business on May 27, 1998 as
the record date for the meeting. Only stockholders of record at that time are
entitled to notice of and to vote at the meeting and any adjournment or
postponement thereof.

The enclosed proxy is solicited by the Board of Directors of the Company.
Reference is made to the attached Proxy Statement for further information with
respect to the business to be transacted at the meeting.

You are cordially invited to attend the meeting in person. The Board of
Directors urges you to sign, date and return the enclosed proxy card promptly.
The return of the enclosed proxy card will not affect your right to vote in
person if you choose to attend the meeting.

Stephen DiRugeris
Secretary

May 29, 1998
<PAGE> 3

SUBMICRON SYSTEMS CORPORATION
6330 HEDGEWOOD DRIVE, #150
ALLENTOWN, PA 18106
-------------------------

PROXY STATEMENT

FOR
ANNUAL MEETING OF STOCKHOLDERS
JUNE 30, 1998
-------------------------

This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of SubMicron Systems Corporation (the
"Company") for use at the Company's Annual Meeting of Stockholders which will be
held on the date, at the time and place, and for the purposes set forth in the
foregoing notice. This Proxy Statement, the foregoing notice and the enclosed
proxy card are first being sent to stockholders on or about May 29, 1998.

The Board of Directors does not intend to bring any matter before the
meeting except those as specifically indicated in the notice and does not know
of anyone else who intends to do so. If any other matters properly come before
the meeting, however, the persons named in the enclosed proxy card, or their
duly constituted substitutes acting at the meeting, will be authorized to vote
or otherwise act thereon in accordance with their judgment on such matters.

When your proxy card is returned properly signed prior to voting at the
meeting, the shares represented thereby will be voted in accordance with the
instructions marked thereon. If your proxy card is signed and returned without
specifying choices, the shares will be voted as recommended by the directors.

Any proxy may be revoked at any time prior to its exercise by notifying the
Secretary in writing, by delivering a duly executed proxy bearing a later date,
or by attending the meeting and voting in person.

VOTING SECURITIES AND SECURITY OWNERSHIP

OUTSTANDING SHARES AND VOTING RIGHTS

At the close of business on May 27, 1998, the record date fixed for the
determination of stockholders entitled to notice of and to vote at the meeting,
19,556,517 shares of the Company's Common Stock (the "Common Stock") and 95.85
shares of the Company's Series A Convertible Non-Redeemable Preferred Stock (the
"Series A Preferred Stock") were outstanding and entitled to vote. Only the
record holders of Common Stock and Series A Preferred Stock on the record date
will be entitled to vote. There are no other classes of voting securities
outstanding. The presence at the meeting, in person or by proxy, of holders of
shares entitled to cast at least a majority of the votes that may be cast by all
shares of Common Stock and Series A Preferred Stock outstanding as of the record
date, voting together, will constitute a quorum. Each share of Series A
Preferred Stock is convertible into 2,000 shares of Common Stock and is entitled
to one vote for each share of Common Stock into which such share or fraction
thereof may be converted. Each share of Common Stock is entitled to one vote,
and, accordingly, each share of Series A Preferred Stock is entitled to 2,000
votes. The Common Stock and Series A Preferred Stock will vote together on all
matters scheduled to be considered. The total number of votes entitled to be
cast at the meeting is 19,748,217. There are no cumulative voting rights with
respect to the election of directors.

Abstentions and broker non-voters are counted for purposes of determining
whether a quorum is present at the meeting. Abstentions will be counted in
tabulations of votes cast on the matters to be voted on, whereas broker
non-votes will not be counted for purposes of determining whether a proposal has
been approved. The election of directors requires a plurality of the votes cast
and each other matter to be submitted to the stockholders requires the
affirmative vote of a majority of the votes cast at the meeting. Accordingly,
except with respect to the election of directors, an abstention has the effect
of a negative vote.
<PAGE> 4

SECURITY OWNERSHIP OF PRINCIPAL STOCKHOLDERS

The following table sets forth certain information with respect to the
beneficial ownership as of May 27, 1998 of each person who was known to the
Company to be the beneficial owner of more than 5% of the Common Stock. Each of
the stockholders named below has sole voting and investment power with respect
to such shares, unless otherwise indicated.

<TABLE>
<CAPTION>
NAME AND ADDRESS OF NUMBER OF PERCENT OF
BENEFICIAL OWNER TITLE OF CLASS SHARES(1) CLASS
------------------- -------------- --------- ----------
<S> <C> <C> <C>
David F. Levy...................................... Common Stock 2,046,125(2) 10.3%
4780 Oakes Road
Suite M
Ft. Lauderdale, FL 33341
James S. Molinaro.................................. Common Stock 2,318,125(3) 11.7
6330 Hedgewood Drive, #150
Allentown, PA 18106
The KB Mezzanine Fund II, L.P...................... Common Stock 5,293,094(4) 21.3
405 Lexington Avenue,
21st Floor
New York, NY 10174
Celerity Silicon, L.L.C............................ Common Stock 1,323,273(4) 6.3
11111 Santa Monica Blvd.
Suite 1127
Los Angeles, CA 90025
</TABLE>

- ---------------
(1) With respect to each stockholder, includes any shares issuable upon exercise
of any options or warrants held by such stockholder that are or will become
exercisable within sixty days of May 27, 1998.

(2) Includes options to purchase 396,125 shares of Common Stock.

(3) Includes options to purchase 338,125 shares of Common Stock.

(4) This information is based on a Schedule 13D/A, dated December 31, 1997,
filed by The KB Mezzanine Fund II, L.P. and Celerity Silicon, L.L.P. with
the Securities and Exchange Commission. Based on the Schedule 13D, the
beneficial ownership consists of warrants to purchase shares of Common
Stock.

2
<PAGE> 5

SECURITY OWNERSHIP OF MANAGEMENT

The following table sets forth certain information with respect to the
beneficial ownership of Common Stock as of May 27, 1998 of (i) each director of
the Company, (ii) each of the Named Executives (as hereinafter defined) and
(iii) all the directors and executive officers as a group. Each of the
stockholders named below has sole voting and investment power with respect to
such shares, unless otherwise indicated.

<TABLE>
<CAPTION>
NAME OF NUMBER OF PERCENT OF
BENEFICIAL OWNER TITLE OF CLASS SHARES(1) CLASS
---------------- -------------- --------- ----------
<S> <C> <C> <C>
David J. Ferran...................................... Common Stock 310,000(2) 1.6%
Mark R. Benham....................................... Common Stock 1,323,273(3) 6.3
Ronald B. Booth...................................... Common Stock 19,200(4) *
Michael H. Khougaz................................... Common Stock 5,293,094(5) 21.3
James Newton......................................... Common Stock -- --
Barry W. Ridings..................................... Common Stock 78,200(6) *
Leonard R. Weisberg.................................. Common Stock 48,655(7) *
Donald Zito.......................................... Common Stock 20,000 *
David W. Dedman...................................... Common Stock 31,250(8) *
Michael G. Gawarecki................................. Common Stock 1,000 *
John W. Kizer........................................ Common Stock -- --
James S. Molinaro.................................... Common Stock 2,318,125(9) 11.7
David F. Levy........................................ Common Stock 2,046,125(10) 10.3
Richard E. Novak..................................... Common Stock 32,172(11) *
All Executive officers and directors
as a group (14 persons)............................ Common Stock 9,474,969(12) 35.3
</TABLE>

- ---------------
* Less than 1 percent.

(1) With respect to each stockholder, includes any shares issuable upon
exercise of any options or warrants beneficially held by such stockholder
that are or will become exercisable within sixty days of May 27, 1998.

(2) Includes options to purchase 250,000 shares of Common Stock.

(3) Mr. Benham is a managing member of Celerity Silicon, L.L.C. ("Celerity")
and, accordingly, may be deemed to beneficially owned the shares referred
to in the previous table as being beneficially owned by Celerity. See Note
(4) to the previous table.

(4) Includes options to purchase 5,000 shares of Common Stock.

(5) Mr. Khougaz is a managing member of the general partner of The KB Mezzanine
Fund II L.P. ("KB") and, therefore, may be deemed to beneficially own the
shares referred to in the previous table as being beneficially owned by KB.
See Note (4) to previous table.

(6) Includes options to purchase 8,000 shares of Common Stock and 7.1 shares of
Class A Preferred Stock convertible into 14,200 shares of Common Stock.

(7) Includes options to purchase 18,000 shares of Common Stock.

(8) Consists of options to purchase shares of Common Stock.

(9) Includes options to purchase 338,500 shares of Common Stock.

(10) Includes options to purchase 396,125 shares of Common Stock.

(11) Includes options to purchase 12,500 shares of Common Stock.

(12) Includes options to purchase an aggregate of 663,250 shares of Common
Stock, warrants to purchase an aggregate of 6,616,367 shares of Common
Stock and 7.1 shares of Class A Preferred Stock convertible into 14,200
shares of Common Stock.

3
<PAGE> 6

ELECTION OF DIRECTORS

(ITEM 1 ON PROXY CARD)

At the meeting, the stockholders will elect two Class B directors to hold
office until the Annual Meeting of Stockholders in 2001 and until their
respective successors have been duly elected and qualified. The Board of
Directors is divided into three classes serving staggered three-year terms, the
term of one class of directors to expire each year. The term of the present
Class B Directors expires at the 1998 Annual Meeting of Stockholders. The Board
has nominated two persons to serve as Class B Directors: Barry W. Ridings and
Donald Zito, both of whom are currently serving as Class B Directors and have
indicated a willingness to continue serving as directors. Unless contrary
instructions are given, the shares represented by a properly executed proxy will
be voted "FOR" the election of Messrs. Ridings and Zito. Should either of the
nominees become unavailable to accept election as a director, the persons named
in the enclosed proxy will vote the shares which they represent for the election
of such other person as the Board of Directors may recommend.

In connection with the issuance of its Series A Preferred Stock and the
Company's 8% Convertible Subordinated Notes (the "8% Notes") in March 1997, the
Company agreed to appoint two representatives of the holders of the 8% Notes
(the "8% Noteholders") as directors of the Company. Mr. Booth is currently the
only director serving as such a representative. In addition, the Board of
Directors agreed to continue to nominate two designees reasonably acceptable to
the Company and the representatives of the 8% Noteholders if more than 50% of
the aggregate principal amount of the Notes remains outstanding at the
expiration of such term or was outstanding at any time within six months prior
to the end of such term. Beginning six months after less than 50% but more than
25% of the aggregate principal amount of the 8% Notes remains outstanding, the
8% Noteholders will be entitled to have only one designee on the Board, and six
months after less than 25% of the aggregate principal amount of the 8% Notes
remains outstanding, the 8% Noteholders will no longer be entitled to
representatives on the Board. Accordingly, one or both of the designees is
intended to resign as a director at such time as the 8% Noteholders are entitled
to only one or no representatives on the Board. Messrs. David F. Levy and James
S. Molinaro have agreed to vote their shares in favor of the designees of the 8%
Noteholders.

In connection with the Company's issuance of $20 million principal amount
of its 12% Senior Subordinated Notes due 2002 (the "12% Notes") and associated
warrants to purchase approximately 6.6 million shares of Common Stock (the
"Warrants") to The KB Mezzanine Fund II, L.P. and Celerity Silicon, L.L.C. (the
"Initial Purchasers"), the Company appointed Messrs. Khougaz and Benham to the
Board of Directors as designees of the Initial Purchasers. Upon the expiration
of the term of either such designees, if either a majority of the initial
principal amount of the 12% Notes or a majority of the number of initial
Warrants or shares of Common Stock issuable upon exercise of such Warrants
continues to be owned by the Initial Purchasers, the Company will, at the
request of the representatives of the Initial Purchasers, nominate another
designee of the Initial Purchasers. The foregoing obligations are subject to
each such designee agreeing to resign as a director effective on the date that
neither a majority of the initial principal amount of the 12% Notes or a
majority of the number of Warrants or shares of Common Stock issuable thereunder
continues to be owned by the Initial Purchasers or their affiliates. Certain
executive officers and directors of the Company have agreed to vote their shares
in favor of such designees.

4
<PAGE> 7

The current members of the Board of Directors, including the nominees for
Class B Director, together with certain information about them, are set forth
below:

<TABLE>
<CAPTION>
DIRECTOR TERM POSITIONS WITH
NAME AGE SINCE EXPIRES THE COMPANY
---- --- -------- ------- --------------
<S> <C> <C> <C> <C>
Class B Directors

Barry W. Ridings.......................... 46 1993 1998 Director

Donald Zito............................... 57 1998 1998 Director

Class A Directors

Mark R. Benham............................ 47 1998 1999 Director

David J. Ferran........................... 41 1997 1999 President, Chief Executive
Officer and Director

Leonard R. Weisberg....................... 68 1988 1999 Director

Class C Directors

Ronald B. Booth........................... 49 1997 2000 Director

Michael H. Khougaz........................ 39 1998 2000 Director

James Newton.............................. 50 1998 2000 Director
</TABLE>

Mr. Ridings has been a director of the Company since 1993. Since March
1990, Mr. Ridings has been a Managing Director for BT Alex. Brown Incorporated.
From June 1986 to March 1990, Mr. Ridings was a Managing Director for Drexel
Burnham Lambert, investment bankers. Mr. Ridings is also a director of Noodle
Kidoodle, Inc., New Valley Corporation, Norex Industries, Inc., Telemundo Group,
Inc., Search Capital Group, Inc. and TransCor Waste Services Inc. Mr. Ridings
received an M.B.A. from Cornell University.

Mr. Zito has been a director of the Company since January 1998. Mr. Zito is
recently retired from Parker Hannifin Corp. Mr. Zito worked 35 years for Parker
Hannifin, with his most recent position being corporate Vice President and
President of the Fluid Connectors Group. Prior to assuming this position in
1987, Mr. Zito was Vice President of Operations for the Fluidpower Group,
headquartered in Des Plaines, Illinois, where he was responsible for the Group's
Cylinder, Pneumatic and Filter Divisions. Mr. Zito graduated from Case Institute
of Technology (now Case Western Reserve University) with a Bachelor of Science
Degree in Metallurgical Engineering. Mr. Zito currently serves on the boards of
Lokring Corp. and the Meridia Health System Division of the Cleveland Clinic.

Mr. Benham has been a director of the Company since January 1998. Mr.
Benham has fifteen years of experience in private equity and investment banking.
Prior to co-founding Celerity Partners in 1992, from 1988-1992 he was a Senior
Investment Officer of Citicorp Venture Capital, Ltd. in New York. Prior to
joining Citicorp, Mr. Benham was an advisor to Yamaichi UniVen Co., Ltd., the
venture capital subsidiary of Yamaichi Securities International. Mr. Benham
holds a B.A. degree in English from the University of California, Berkeley, and
an M.A. and M.B.A. from the University of Chicago. Mr. Benham is a director of
Dynamic Circuits, Inc. and Unarco Commercial Products.

Mr. Ferran became President, Chief Executive Officer and a director of the
Company in May 1997. Prior thereto, Mr. Ferran served as President and Chief
Executive Officer of Tylan General Corporation ("Tylan General") and its
predecessor from 1984, and as Chairman of its Board of Directors from February
1994 until February 1997, when Tylan General was acquired. Mr. Ferran has a B.S.
in Business Administration from the University of New Hampshire.

Mr. Weisberg has been a director of SubMicron since its inception in 1988.
Mr. Weisberg was Vice President, Research and Engineering for Honeywell Inc.
from 1980 until his retirement at the end of 1994. Prior to joining Honeywell,
Mr. Weisberg served as Director of Electronics and Physical Sciences in the
Office of the Secretary of Defense of the United States Department of Defense.
Previously, Mr. Weisberg was Vice President and Director of the Central Research
Laboratory of Itek Corporation and was Director of the

5
<PAGE> 8

Semiconductor Device Research Laboratory of RCA Laboratories. Mr. Weisberg has a
B.A. in Physics from Clark University and an M.A. in Physics from Columbia
University.

Mr. Booth has been a director of the Company since 1997. Mr. Booth has been
President of Pacific Air Aviation, Inc., an air charter company in Las Vegas,
Nevada, since October 1993. From October 1992 to September 1993, Mr. Booth was
Chief Financial Officer of Arcadian Motor Carrier, Inc., a nationwide trucking
operation, and from September 1984 to October 1992, he was Vice President of
Finance for WestAir Commuter Airlines. Mr. Booth is a Certified Public
Accountant and has a B.S. degree in Business Administration/Accounting from
California State University, Chico.

Mr. Khougaz has been a director of the Company since January 1998. Mr.
Khougaz is a Managing Director and founding partner of Equinox Investment
Partners, a private investment firm with $300 million of assets and commitments
for mezzanine and private equity under management. Prior to forming Equinox, he
was an Executive Director of Kleinwort Benson Limited, a British merchant bank.
From 1986 to 1996, Mr. Khougaz worked for Kleinwort Benson in a variety of
corporate finance functions in Los Angeles, London and New York. Prior to
joining Kleinwort Benson, Mr. Khougaz was an officer of Continental Illinois
Corp. Mr. Khougaz completed his undergraduate studies at the University of
California at Berkeley and Los Angeles, and received his M.B.A. from the
University of Southern California. Mr. Khougaz is also a Certified Public
Accountant. Mr. Khougaz is currently a director of Dynamic Circuits, Inc.,
Labtec, Inc. and Prime Matrix, Inc.

Mr. Newton has been a director of the Company since May 1998 and served as
Director of Corporate Culture and Communication of the Company from June 1997
until assuming such position. In November 1992, Mr. Newton founded Newton
Learning Corporation and has served as President since its inception. Mr. Newton
is also Vice President of Organizational Development for Dura Pharmaceutical.

MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS

During 1997, the Board of Directors held ten meetings. The Board has an
Audit Committee and Compensation Committee but does not have a Nominating
Committee. The Audit Committee, which held one formal meeting during 1997,
reviews the Company's internal controls and handles matters relating to the
Company's independent auditors. Messrs. Ridings (Chairman), Benham and Khougaz
are members of the Audit Committee. The Compensation Committee, which held four
meetings during 1997, considers and determines compensation issues involving the
Company's executive officers and oversees the compensation of other employees of
the Company. The current members of the Compensation Committee are Messrs.
Khougaz (Chairman), Benham, Booth and Zito. The Compensation Committee also
administers the Company's stock option plans.

All directors attended more than 75% of the aggregate of the total number
of meetings of the Board of Directors and meetings held by all committees of the
Board of Directors on which they served.

BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Pursuant to Section 16(a) of the Securities Exchange Act of 1934, as
amended, the Company's directors and executive officers are required to file
reports with the Securities and Exchange Commission, within specified monthly
and annual due dates, relating to their ownership of and transactions in the
Common Stock. A Form 4 to be filed by Leonard R. Weisberg, a director of the
Company, was inadvertently filed in an untimely manner.

COMPENSATION OF DIRECTORS

The Board has approved, subject to approval by the Company's stockholders
at the annual meeting, the 1997 Stock Option Plan for Non-Employee Directors.
Pursuant to such Plan, each non-employee director at the time its adoption and
each person who becomes a director of the Company after such date who is not
either (a) an employee of the Company or any of its subsidiaries or (b) holding
such position as a result of being a designee of a person with the right to
designate directors (each such person, a "Non-Employee

6
<PAGE> 9

Director") receives an option to purchase 75,000 shares of Common Stock at the
time such Plan was adopted or such person became a Non-Employee Director, as the
case may be. The exercise price for options granted under such Plan is the fair
market value of a share of Common Stock on date of grant. Such options generally
vest and become exercisable in ten equal semi-annual installments beginning six
months from the date of grant and terminate ten years from the date of grant. A
person who still qualifies as a Non-Employee Director on the fifth anniversary
of his previous grant will receive a new grant of options to purchase 75,000
shares of Common Stock on each such date. All directors are reimbursed for their
out-of-pocket expenses incurred in attending Board meetings.

APPROVAL OF AMENDMENT TO EMPLOYEE STOCK PURCHASE PLAN

(ITEM 2 ON PROXY CARD)

At the 1995 annual meeting, the Company's stockholders approved the
SubMicron Systems Corporation 1994 Employee Stock Purchase Plan (the "Stock
Purchase Plan"). The Stock Purchase Plan was adopted to provide employees of the
Company and its subsidiaries with a method of acquiring an equity interest in
the Company through the purchase of shares of Common Stock, at discounted
prices, using payroll deductions. At the 1997 annual meeting, the Company's
stockholders approved an amendment to the Stock Purchase Plan to increase the
number of shares of Common Stock subject to the Stock Purchase Plan. As amended,
the Stock Purchase Plan provides for the issuance of up to 500,000 shares of
Common Stock. As of May 27, 1998, 88,877 shares remained available for issuance
under the Stock Purchase Plan. Accordingly, the Board has approved and
recommended that the Company's stockholders approve an amendment to the Stock
Purchase Plan to increase the aggregate maximum number of shares subject to the
Stock Purchase Plan from 500,000 to 800,000 shares. Although the Stock Purchase
Plan is an "employee stock purchase plan" within the meaning of Section 423 of
the Internal Revenue Code of 1986 (the "Code"), the Stock Purchase Plan is not a
"qualified deferred compensation plan" under Section 401(a) of the Code and is
not subject to the provisions of the Employee Retirement Income Security Act of
1974 ("ERISA").

The material features of the Stock Purchase Plan are as follows:

- NUMBER OF SHARES. The aggregate maximum number of shares reserved for
issuance under the Stock Purchase Plan will be increased to 800,000 shares if
the amendment is approved, subject to adjustment upon the occurrence of stock
dividends, stock splits, recapitalization or certain other capital adjustments
that change the number of outstanding shares of Common Stock.

- ADMINISTRATION AND OPERATION. The Stock Purchase Plan is administered by
the Board of Directors or a Committee of at least two members designated by the
Board. No member of the Board who is eligible to participate in the Stock
Purchase Plan may be a member of that Committee. All questions of interpretation
or application of the Stock Purchase Plan are determined by the Board of
Directors, whose decisions are final and binding upon all participants.

The Stock Purchase Plan has overlapping two-year offering periods that
begin each January 1 and July 1. Each offering period includes four six-month
purchase periods. Purchases under the Stock Purchase Plan are made each June 30
and December 31 at a purchase price per share of Common Stock equal to 85% of
the fair market value of a share of Common Stock on either the first day of the
applicable offering period or on the day of purchase, whichever is lower. In the
event the fair market value is lower on the date of purchase, the applicable
offering period will terminate on such purchase date, and a new offering period
will commence on the next day (January 1 or July 1, as the case may be). The
fair market value of the Common Stock is determined in relation to market price
in accordance with certain procedures set forth in the Stock Purchase Plan. No
fractional shares will be purchased, and any remaining cash will automatically
stay in the employee's account until the next purchase date (unless the employee
withdraws from the Stock Purchase Plan, in which case the cash will be returned
to the employee).

An eligible employee may authorize payroll deductions from 1% to 10% of
such employee's compensation (subject to a lower limit as may be established by
the Stock Purchase Plan Committee). At the end of each six-month purchase
period, the deductions are applied to the purchase of Common Stock.
7
<PAGE> 10

All funds received are held by the Company under the Stock Purchase Plan,
are general assets of the Company, free of any trust or other restriction, and
may be used for any corporate purpose. No interest on such funds will be
credited to or paid to any participant under the Stock Purchase Plan.

- ELIGIBILITY. Any regular employee of the Company and its participating
subsidiaries whose customary employment is at least 20 hours per week and more
than five months per year is eligible to participate in the Stock Purchase Plan,
beginning with the first offering period following the six-month anniversary of
such employee's date of hire. As of May 27, 1998, approximately 270 employees
would have been eligible to participate in the Stock Purchase Plan.

- LIMITATIONS ON PARTICIPATION AND AMOUNT PURCHASED. No employee may
participate in the Stock Purchase Plan to the extent that such employee would be
entitled to purchase more than $25,000 in fair market value of Common Stock
under all employee stock purchase plans of the Company in any calendar year. The
maximum number of shares any participant may purchase during any six-month
purchase period is determined by dividing $12,500 by the fair market value of a
share of Common Stock on the first day of the purchase period. In addition, no
employee may participate in the Stock Purchase Plan to the extent that such
employee would own stock possessing 5% or more of the total combined voting
power or value of all classes of stock of the Company, after giving effect to
such purchase.

- PAYMENT. An employee pays for the shares purchased under the Stock
Purchase Plan by making contributions through payroll deductions of up to 10%
(or such lower percentage as may be set by the Board of Directors or the Stock
Purchase Plan Committee), but not less than 1% of an employee's compensation,
subject to the limits described above. Employees may not make cash contributions
to the Stock Purchase Plan in addition to their payroll deductions. The employee
must be employed on the purchase date to purchase shares of Common Stock, and if
employment terminates for any reason, including retirement or death, the
employee will be withdrawn from the Stock Purchase Plan immediately and the
payroll deductions credited to the employee's account will be returned to the
employee, without interest.

- INCREASING AND DECREASING DEDUCTIONS; WITHDRAWAL; RESTRICTION ON
TRANSFERABILITY. An employee may decrease, but not increase, the rate of
payroll deductions at any time during an offering period by submitting a new
subscription agreement. The employee may increase the rate of payroll deductions
for upcoming offering periods only during the two-week period before the start
of a new purchase period. The number of times the employee may change such
deductions may be limited, however, by the Board of Directors or the Committee
administering such Plan. An employee may withdraw from the Stock Purchase Plan
at any time by completing a notice of withdrawal and submitting it to the
Company prior to the end of a purchase period. The employee's rights to purchase
shares under the Stock Purchase Plan are not transferable.

- TREATMENT OF SHARES PURCHASED. The shares purchased by an employee under
the Stock Purchase Plan will be held in an investment account, with the employee
having the right at any time to withdraw all or any portion of the shares
credited to the employee's account by giving written notice to the Company. If,
however, the shares remain in the employee's investment account, any cash
dividends paid with respect to the shares will be retained and used to purchase
additional shares under the Stock Purchase Plan, subject to the provisions and
limitations of the Stock Purchase Plan.

- AMENDMENTS TO AND TERMINATION OF THE PLAN. Subject to the provisions of
the Stock Purchase Plan, the Board of Directors may amend or terminate the Stock
Purchase Plan, except that certain amendments, such as increasing the number of
shares subject to the Stock Purchase Plan, require approval of the Company's
stockholders. Unless earlier terminated, the Stock Purchase Plan will continue
in effect until December 31, 2004.

- FEDERAL INCOME TAX ASPECTS. The ability of employees to purchase stock
under a stock purchase plan is treated as a type of stock option right, where
the option is viewed as granted at the beginning of an offering period, and
where the exercise of the option occurs on the date the stock is purchased under
the terms of the Stock Purchase Plan. The federal income tax consequences of the
grant and exercise of stock options under an employee stock purchase plan (as
defined in Section 423 of the Code) and the subsequent disposition of shares
acquired under such options are summarized below.

8
<PAGE> 11

The employee is not taxed at the time of the grant of stock options or when
shares are purchased pursuant to the exercise of the options under the Stock
Purchase Plan.

Upon the sale of shares acquired under the Stock Purchase Plan, any gain up
to the 15% discount on the purchase price is taxable as ordinary compensation
income, and any further gain will be taxable as a mid-term capital gain and any
loss will be treated as a mid-term capital loss, provided that such shares are
not sold within two years of the beginning of the offering period during which
the shares were purchased nor within one year from the date such shares were
purchased. Mid-term capital gains are taxed at a rate not to exceed 28%. If the
shares are held for more than 18 months from their purchase date, any capital
gain in excess of that attributable to the 15% discount recognized on a
subsequent sale of the shares will be long-term capital gain which is taxed at a
rate not to exceed 20%, and any loss on such sale would be treated as a
long-term capital loss.

If the holding period requirements for such shares are not satisfied, the
difference between the price paid by the employee and the market value of the
shares on the date of purchase is taxable as ordinary income in the year of the
disposition and the difference between the amount received by the employee on
the disposition of the shares and the market value of the shares as of the date
of purchase is treated as a capital gain or loss (which may be short-term,
mid-term or long-term capital gain or loss depending upon the employee's holding
period).

In addition, if the holding period requirements are not met, the Company
will be entitled to a tax deduction equal to the difference between the price
paid by the employee and the market value of the shares at the date of purchase.
If the holding period requirements are met, the Company will not be entitled to
such a deduction.

- STOCK PURCHASE PLAN BENEFITS. The proposed amendment would not change
the benefits available under the Stock Purchase Plan as now in effect. The
number of shares of Common Stock which would be purchased during the Company's
1998 fiscal year is not determinable because purchase prices will not be set
until the end of each offering period and the level of participation may
fluctuate during the course of the year. One of the Named Executives who is an
employee of the company, Mr. Molinaro, is not eligible to participate in the
Stock Purchase Plan because he owns shares of Common Stock representing more
than 5% of the voting power of the Common Stock.

During 1997, one of the other Named Executives, Messr. Novak participated
in the Stock Purchase Plan and purchased 5,674 shares of Common Stock with an
aggregate dollar difference between the purchase price and the Fair Market Value
of the shares ("Aggregate Dollar Difference") of $.38 for each share purchased.
The Company has one executive officer other than the Named Executives who
purchased 3,619 shares of Common Stock having an Aggregate Dollar Difference of
$.34 for each share purchased. Nonexecutive officer employees (approximately 185
persons) purchased 182,308 shares of Common Stock having an Aggregate Dollar
Difference of $.37 for each share purchased. Nonemployee directors are not
entitled to participate in the Stock Purchase Plan.

The affirmative vote of a majority of the votes cast at the meeting in
person or by proxy is required to approve the amendment. THE BOARD OF DIRECTORS
RECOMMENDS VOTING "FOR" APPROVAL OF THE AMENDMENT TO THE STOCK PURCHASE PLAN.

APPROVAL OF AMENDMENT TO THE COMPANY'S 1991 AMENDED
AND RESTATED STOCK OPTION PLAN

(ITEM 3 ON PROXY CARD)

The Company's 1991 Amended and Restated Stock Option Plan (the "Stock
Option Plan") was adopted to recognize the contributions made to the Company and
its affiliates by their respective employees, directors, consultants and
advisors, to provide those individuals with additional incentive to devote
themselves to the future success of the Company and to improve the ability of
the Company to attract, retain and motivate individuals upon whom the sustained
growth and financial success of the Company depends. The Stock
9
<PAGE> 12

Option Plan provides for the grant of options ("Options") to purchase shares of
Common Stock. At the 1995 and 1997 annual meetings, the stockholders approved
certain amendments to the Stock Option Plan, including increases in the
aggregate maximum number of shares of Common Stock for which Options may be
granted. The Stock Option Plan currently provides for the grant of options to
purchase up to an aggregate of 4,000,000 shares of Common Stock.

As of May 27, 1998, options to purchase 563,708 additional shares were
available for grant pursuant to the Stock Option Plan. During the past twelve
months, there have been significant management changes at the Company. In
connection with the hiring of the Company's new management team, the Board of
Directors has granted a substantial number of options under the Stock Option
Plan. As a result, the Company has the need to increase the number of options
granted under the Stock Option Plan. Accordingly, the Board of Directors has
approved and recommends that the Company's stockholders approve an amendment to
the Stock Option Plan to increase the aggregate maximum number of shares of
Common Stock for which Options may be granted from 4,000,000 to 5,000,000
shares. The closing bid price for a share of Common Stock on May 27, 1998 was
$1.34 as reported on the OTC Bulletin Board.

The key provisions of the Stock Option Plan, as proposed to be amended, are
as follows:

- NUMBER OF SHARES. The aggregate maximum number of shares that may be
issued under the Stock Option Plan will be increased to 5,000,000 if the
amendment is approved, subject to adjustment upon the occurrence of a stock
dividend, stock split, recapitalization or certain other capital adjustments. If
any shares subject to any Option are forfeited, or an Option is terminated
without issuance of shares, the shares subject to such Option will again be
available for grant pursuant to the Stock Option Plan.

- ADMINISTRATION. The Stock Option Plan is administered by a committee
(the "Committee") comprised of two or more members of the Board of Directors;
provided, however, the Board may designate two committees to administer the
Stock Option Plan, one of such committees to administer the Plan with respect to
each person who is an officer of the Company or an affiliate within the meaning
of the rules promulgated under the Securities Exchange Act of 1934 (the
"Exchange Act") and the other committee to be comprised of directors (which may
include directors who are also employees of the Company) to administer the Plan
with respect to all other persons.

- ELIGIBILITY. All employees and directors of the Company and its
subsidiaries and consultants and advisors to the Company and its subsidiaries
are eligible to receive Options. As of May 27, 1998, there were approximately
350 eligible employees. Consultants and advisors must have rendered bona fide
services, and such services must not be in connection with a capital raising
transaction.

- TERM OF STOCK OPTION PLAN. No Options may be granted under the Stock
Option Plan after June 9, 2001.

- OPTIONS. Options granted under the Stock Option Plan may be either
incentive stock options ("ISOs") or non-qualified stock options. ISOs are
intended to qualify as "incentive stock options" within the meaning of Section
422 of the Code. Unless an Option is specifically designated at the time of
grant as an ISO, the Option will be non-qualified. Options to purchase more than
1,000,000 shares may not be issued to any participant in any fiscal year.

- EXERCISE PRICE. The exercise price of Options will be determined by the
Committee, provided that the exercise price of an ISO will be at least 100% of
the fair market value of a share of Common Stock on the date the Option is
granted, or at least 110% of the fair market value of a share of Common Stock on
the date an ISO is granted if the recipient owns, directly or by attribution
under Section 424(d) of the Code, shares possessing more than 10% of the total
combined voting of all classes of stock of the Company. The term of each Option
is fixed by the Committee. The aggregate fair market value, determined as of the
time of grant, of the shares of Common Stock with respect to which an ISO is
exercisable for the first time by the recipient during any calendar year (under
all incentive stock option plans of the Company or an affiliate) may not exceed
$100,000.

10
<PAGE> 13

- TERMINATION OF OPTIONS. All Options terminate on the earliest of: (a)
the expiration of the term specified in the Option, which may not exceed ten
years from the date of grant (or five years from the date of grant of an ISO if
the optionee on the date of grant owns, directly or by attribution, shares
possessing more than ten percent of the total combined voting power of all
classes of stock of the Company or an affiliate of the Company); (b) the
expiration of three months from the date an optionee's employment or service
with the Company or its affiliates terminates for any reason other than
disability, death or as set forth in clauses (d) and (e) below; (c) the
expiration of one year from the date an optionee's employment or service with
the Company or its affiliates terminates by reason of disability or death; (d)
the date on which a determination is made by the Committee that the optionee has
breached his or her employment or service contract with the Company or an
affiliate, has been engaged in disloyalty to the Company or its affiliates or
has disclosed trade secrets or confidential information of the Company or its
affiliates; or (e) the date set by the Committee to be an accelerated expiration
date in the event of a Change of Control (as defined below). The Committee, in
its discretion, may provide for additional limitations on the terms of any
Option.

- TRANSFERS. No Option granted under the Stock Option Plan may be
transferred, except by will or the laws of descent and distribution, other than
pursuant to a "qualified domestic relations order," within the meaning of the
Code and ERISA. In addition, option grants may permit the transfer of an Option
to the optionee's spouse, children or grandchildren or a trust created solely
for the benefit of the optionee and the foregoing persons.

- PAYMENT. An optionee may pay for shares covered by an Option in cash,
certified check, payment through a broker in accordance with Regulation T of the
Federal Reserve Board or by such other mode of payment as the Committee may
approve, including payment in whole or in part in shares of Common Stock held by
the optionee for at least six months.

- PROVISIONS RELATING TO A CHANGE OF CONTROL. Upon the occurrence of a
Change of Control, all Options become immediately exercisable, and the Committee
may take whatever action with respect to Options outstanding as it deems
necessary or desirable, including acceleration of the expiration or termination
date of the date of the Options.

A Change of Control will occur upon requisite approval by stockholders (or,
if such approval is not required, by the Company's Board of Directors) of a plan
of liquidation or dissolution or the sale of substantially all of the assets of
the Company. Subject to certain exceptions, a Change of Control will also occur
upon requisite approval by the Company's and the other constituent corporation's
stockholders (or, if such approval is not required, by the Company's Board of
Directors) of the merger or consolidation of the Company with or into such other
constituent corporation. In addition, a Change of Control will occur if certain
entities, persons or groups specified in the Stock Option Plan have become
beneficial owners of or have obtained voting control over more than 30% of the
outstanding shares of Common Stock or the first date upon which a majority of
the Company's Board of Directors consists of persons who have been members of
the Board of Directors for less than two years, unless the nomination for
election of each new director who was not a director at the beginning of such
period was approved by a vote of at least two-thirds of the directors then still
in office who were directors at the beginning of such period.

- AMENDMENTS. The Board of Directors may amend the Stock Option Plan from
time to time in such manner as it may deem advisable. Nevertheless, the Board of
Directors may not, without obtaining stockholder approval within 12 months
before or after such action, change the class of individuals eligible to receive
an ISO or increase the maximum number of shares for which Options may be granted
or make any other change or amendment as to which stockholder approval is
required in order to satisfy the conditions set forth in the rules promulgated
under the Exchange Act.

- FEDERAL INCOME TAX CONSEQUENCES. The following discussion is a summary
of certain federal income tax consequences of the issuance of Options and the
acquisition of shares of Common Stock by exercising Options under the Stock
Option Plan and does not present a complete analysis of all federal tax
consequences which may be relevant to any particular recipient. It also does not
purport to discuss state or local income tax laws.

11
<PAGE> 14

A recipient of an ISO will not recognize taxable income upon either the
grant or exercise of an ISO. The optionee will recognize either mid-term or
long-term capital gain or loss on a disposition of the shares acquired upon
exercise of an ISO, provided the optionee does not dispose of those shares
within two years from the date the ISO was granted or within one year after the
shares were transferred to such optionee. If the shares are held for more than
12 months but not more than 18 months prior to their sale, the resulting gain
will be a mid-term capital gain; if held more than 18 months prior to sale, the
remaining gain will be a long-term capital gain. Currently, for regular federal
income tax purposes, mid-term capital gain is taxed at a maximum rate of 28% and
long-term capital gain is taxed at a maximum rate of 20%, while ordinary income
may be subject to a maximum rate of 39.6%. If the optionee satisfies both of the
holding periods described in the second sentence of this paragraph, the Company
will not be allowed a deduction by reason of the grant or exercise of an ISO.

As a general rule, if the optionee disposes of the shares before satisfying
both holding period requirements (a "disqualifying disposition"), the gain
recognized by the optionee on the disqualifying disposition will be taxed as
ordinary income to the extent of the difference between (a) the lesser of the
fair market value of the shares on the date of exercise or the amount received
for the shares in the disqualifying disposition, and (b) the adjusted basis of
the shares, and the Company will be entitled to a deduction in that amount. The
gain (if any) in excess of the amount recognized as ordinary income on a
disqualifying disposition will be long-term, mid-term or short-term capital
gain, depending on the length of time the optionee held the shares prior to the
disposition.

The amount by which the fair market value of a share at the time of
exercise exceeds the option price will be included in the computation of such
optionee's "alternative minimum taxable income" in the year the optionee
exercises the ISO. Currently, the alternative minimum tax is imposed at the rate
of 26% or 28%. If an optionee pays alternative minimum tax with respect to the
exercise of an ISO, the amount of such tax paid will be allowed as a credit
against regular tax liability in subsequent years.

A recipient of a non-qualified stock option will not recognize taxable
income at the time of grant, and the Company will not be allowed a deduction by
reason of the grant. Such an optionee will, in general, recognize ordinary
income in the year in which the non-qualified stock option is exercised, in an
amount equal to the excess of the fair market value of the shares at the time of
exercise over the exercise price of the Option, and the Company will be allowed
a deduction in that amount. Upon disposition of the shares, an optionee will
recognize long-term, mid-term or short-term capital gain or loss, depending upon
the length of time the shares were held prior to disposition, equal to the
difference between the amount realized on disposition and the optionee's basis
in the shares (which basis ordinarily is the fair market value of the shares on
the date the Option was exercised).

- STOCK OPTION PLAN BENEFITS. The Stock Option Plan as proposed to be
amended would not change the benefits available under the Stock Option Plan as
now in effect. The number of Options which may be granted under the Stock Option
Plan is at the discretion of the Committee and not determinable. For 1997,
information regarding the grants of Options to the Named Executives is set forth
under the caption "Executive Compensation -- Stock Option Grants." Two executive
officers of the Company (other than the Named Executives) received in 1997
options to purchase an aggregate of 100,000 shares of Common Stock at prices
ranging from $2.91 to $3.72 per share. Non-employee directors received no
Options under the Stock Option Plan during 1997, and the approximately 150
nonexecutive officer employees of the Company received Options to purchase an
aggregate of 1,211,766 shares of Common Stock at prices ranging from $1.75 to
$4.375 per share.

12
<PAGE> 15

APPROVAL OF SUBMICRON SYSTEMS CORPORATION
1997 STOCK OPTION PLAN FOR NON-EMPLOYEE DIRECTORS

(ITEM 4 ON PROXY CARD)

On July 24, 1997, the Company's Board of Directors adopted, subject to the
approval of the Company's stockholders, the Submicron Systems Corporation 1997
Stock Option Plan for Non-Employee Directors (the "Formula Plan"). The Formula
Plan is intended to replace the Company's 1995 Stock Option Plan for Non-
Employee Directors and is designed to assist the Company in attracting,
retaining and compensating highly qualified individuals who are not employees of
the Company for service as members of the Board and to provide them with a
proprietary interest in the Common Stock. The Board believes the Formula Plan
will be beneficial to the Company and its stockholders by allowing non-employee
directors to have a meaningful personal financial stake in the Company, in
addition to underscoring their common interest with stockholders in increasing
the value of the Common Stock over the long term. Assuming that the Formula Plan
is approved by the Company's stockholders, the 1995 Stock Option Plan for
Non-Employee Directors will be terminated and no further grant will be made
under it.

The material features of the Formula Plan are as follows:

- OPTION GRANTS. The Formula Plan provides for a grant of an option to
purchase 75,000 shares of Common Stock to each Non-Employee Director (as
hereinafter defined) at the later of the adoption of the Formula Plan or the
commencement of his or her service as a director. In addition, the Formula Plan
provides for additional grants of options to purchase 75,000 shares of Common
Stock on the fifth anniversary of each previous grant provided the person
remains a Non-Employee Director as of such date.

- NUMBER OF SHARES. The aggregate maximum number of shares that may be
issued under the Formula Plan is 600,000, subject to adjustment upon the
occurrence of a stock dividend, stock split, recapitalization or certain other
capital adjustments. Shares subject to options that terminate unexercised will
be available for future option grants under the Formula Plan.

- EXERCISE PRICE. The exercise price for options granted under the Formula
Plan will be the fair market value of a share of Common Stock on the date of
grant.

- ELIGIBILITY. The Formula Plan is available to "Non-Employee Directors,"
who are defined as members of the Board of Directors who were not employees of
the Company or any of its subsidiaries as of July 24, 1997 and any person who
becomes a director of the Company subsequent to such date who is not, and has
not been for a period of three months prior to appointment to the Board or the
date of a grant thereunder, an employee of the Company or any of its
subsidiaries and who is not serving on the Board of Directors as the designee of
a person who has the right to designate nominees to the Board.

- VESTING. Except as described below, each option granted under the
Formula Plan shall vest and become exercisable in ten equal semi-annual
installments of options to purchase 7,500 shares beginning six months from the
date of grant. Upon termination of service of a Non-Employee Director as a
member of the Board by reason of death, disability, resignation after reaching
age 65 or removal from the Board without cause, all outstanding options under
the Formula Plan granted to such Non-Employee Director as of the termination of
service shall vest and become exercisable. In the event of a Change of Control,
all options then outstanding under the Formula Plan shall vest and become
exercisable.

of shares of Common Stock immediately prior to the merger or consolidation will
have at least a majority of the voting power of the surviving corporation's
voting securities immediately after the merger or consolidation, which voting
securities are to be held in the same proportion as such holders' ownership of
Common Stock immediately before the merger or consolidation; (d) the date any
entity, person or group, within the meaning of Section 13(d)(3) or Section
14(d)(2) of the Exchange Act (other than the Company or any of its subsidiaries
or any employee benefit plan (or related trust) sponsored or maintained by the
Company or any of its subsidiaries), shall have become the beneficial owner of,
or shall have obtained voting control over, more than 30% of the outstanding
shares of Common Stock; or (e) the first day after the date the Formula Plan is
effective when directors are elected such that a majority of the Board of
Directors shall have been members of the Board of Directors for less than two
years, unless the nomination for election of each new director who was not a
director at the beginning of such two-year period was approved by a vote of at
least two-thirds of the directors then still in office who were directors at the
beginning of such period.

- ADMINISTRATION. The Plan will be administered by the Board or a
Committee comprised of two or more members of the Board. The Committee will be
authorized to interpret the Formula Plan, establish and amend rules relating to
the Plan and make other determinations necessary or advisable for the
administration of the Plan, but will have no discretion with respect to the
selection of directors to receive options, the number of shares subject to the
Plan or to each grant or the exercise price for shares subject to option.

The Committee may terminate the Plan at any time or amend it in whole or in
part, except for any amendment that (a) increases the number of shares subject
to the Formula Plan or to any option or (b) would require stockholder approval
in order to satisfy the conditions of any applicable rule or regulation, may not
be implemented without stockholder approval.

- TERMINATION OF OPTIONS. Options shall terminate on the earliest of (a)
the expiration of ten years from the date of grant, (b) three months from the
date the optionee's service as a member of the Board of Directors ceases for any
reason other than death, disability, voluntary resignation after age 65 or
removal from the Board without cause, (c) expiration of one year from the date
of termination of service on the Board by reason of death, disability, voluntary
resignation after reaching age 65 or removal from the Board without cause, and
(d) the date of removal from the Board with cause.

- TERM OF FORMULA PLAN. No options may be granted under the Formula Plan
after July 24, 2007.

- CERTAIN FEDERAL INCOME TAX CONSIDERATIONS. The options granted under the
Formula Plan will be non-qualified options not intended to qualify as ISO's
under Section 422 of the Code. The grant of options will not result in taxable
income to the director or a tax deduction for the Company. A director will
recognize ordinary income in the year in which the option is exercised, in an
amount equal to the excess of the fair market value of the shares over the
exercise price of the option, and the Company will be allowed a deduction in
that amount. Upon disposition of the shares, a director will recognize
long-term, mid-term or short-term capital gain or loss, depending upon the
length of time the shares were held prior to disposition, equal to the
difference between the amount realized on disposition and the basis in the
shares (which basis ordinarily is the fair market value of the shares on the
date the option was exercised).

- FORMULA PLAN BENEFITS. The following table summarizes the options
granted under the Formula Plan since its adoption by the Board of Directors. All
such options are contingent upon stockholder approval of the Formula Plan.

<TABLE>
<CAPTION>
NUMBER OF SHARES
NAME AND POSITION SUBJECT TO OPTION
----------------- -----------------
<S> <C>
Nonemployee Director Group (5 persons)...................... 375,000
</TABLE>

The affirmative vote of the holders of a majority of the Common Stock
voting at the meeting in person or by proxy is required to approve the Formula
Plan. THE BOARD OF DIRECTORS RECOMMENDS VOTING "FOR" APPROVAL OF THE FORMULA
PLAN.

14
<PAGE> 17

RATIFICATION OF THE APPOINTMENT
OF INDEPENDENT PUBLIC ACCOUNTANTS

(ITEM 5 ON PROXY CARD)

Subject to stockholder ratification, the Board of Directors, upon
recommendation of the Audit Committee, has reappointed Ernst & Young LLP ("Ernst
& Young") to serve as the Company's independent public accountants for the
current fiscal year. If the stockholders do not ratify this appointment by the
affirmative vote of a majority of the votes cast at the meeting, other
independent public accountants will be considered by the Board upon
recommendation of the Audit Committee.

A representative of Ernst & Young is expected to be present at the meeting.
Such representative will have the opportunity to make a statement if he desires
to do so and will be available to respond to appropriate questions.

As previously reported, on December 18, 1996, the Company and Arthur
Andersen ("Andersen"), its previous independent public accountant, mutually
agreed to terminate their relationship. Andersen audited the Company's financial
statements for fiscal 1995. The report of Andersen on the Company's consolidated
financial statements for fiscal 1995 did not contain an adverse opinion or a
disclaimer of opinion and was not qualified or modified as to uncertainty, audit
scope or accounting. The mutual decision of the Company and Andersen to
terminate the relationship with Andersen as the Company's independent public
accountants was approved by the Audit Committee of the Company's Board of
Directors and unanimously approved by the Board of Directors.

During the audit of the 1995 consolidated financial statements of the
Company, there was a matter of discussion and disagreement which, if not
resolved to the satisfaction of Andersen, would have caused it to make reference
to the subject matter in its report. Such matter concerned the recognition of
revenue on certain "bill and hold" transactions with customers, including the
original reporting of certain revenues in the 1995 third quarter. This matter
was resolved to the satisfaction of Andersen and the 1995 third quarter
financial statements were restated for this matter. Management of the Company,
including the Company's then Chairman and Chief Executive Officer and Chief
Financial Officer, discussed this matter with Andersen. The Audit Committee of
the Board of Directors also discussed this matter with Andersen. The Company has
authorized Andersen to respond fully to the inquiries of any successor
accountant concerning the subject matter of its disagreement with Andersen.

On December 18, 1996, the Company determined to engage Ernst & Young as its
new independent accountant to audit its consolidated financial statements for
fiscal 1996. Prior to determining to engage Ernst & Young, the Company had not
consulted Ernst & Young on any accounting matters during the two most recent
fiscal years or any subsequent interim period.

The affirmative vote of a majority of votes cast at the meeting in person
or by proxy is required to ratify the reappointment of Ernest & Young. THE BOARD
OF DIRECTORS RECOMMENDS VOTING "FOR" RATIFICATION OF THE APPOINTMENT OF ERNST &
YOUNG.

15
<PAGE> 18

EXECUTIVE COMPENSATION

SUMMARY COMPENSATION TABLE

The following table sets forth the cash compensation paid by the Company as
well as certain other compensation paid or accrued during fiscal 1995, 1996 and
1997 to the Company's current Chief Executive Officer, the Company's former
Chief Executive Officer and to each of the Company's four other most highly
compensated executive officers at the end of 1997 (collectively, the "Named
Executives"):

<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
---------------------------------- ------------
AWARDS
OTHER ANNUAL ------------ ALL OTHER
NAME AND FISCAL SALARY BONUS COMPENSATION OPTIONS COMPENSATION
PRINCIPAL POSITION YEAR ($) ($) ($)(1) (#) ($)
------------------ ------ ------- ------ ------------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
David J. Ferran................ 1997 210,256 44,943 303,235(3) 1,000,000 --
Interim Chairman of the
Board, President and Chief
Executive Officer(2)

John W. Kizer.................. 1997 81,827 -- 60,484(5) 100,000 --
Chief Financial Officer and
Vice President, Finance(4)

David W. Dedman................ 1997 119,230 -- 86,004(3) 125,000 --
Executive Vice President,
Global Business
Development(6)

James S. Molinaro.............. 1997 340,000 -- -- -- --
Vice President, Technical 1996 340,000 34,000 -- 25,000 --
Planning and Data Analysis 1995 340,000 46,320 -- 45,000 --

Michael G. Gawarecki........... 1997 49,230 -- -- 125,000 --
Vice President, Operations(7)

David F. Levy(8)............... 1997 150,000(8) -- 210,000(9) -- --
1996 360,000 46,230 47,617(10) 73,000 --
1995 340,000 -- -- 55,000 --
</TABLE>

- ---------------
(1) Except as noted below, none of the Named Executives received any other
annual compensation not categorized as salary or bonus except for
perquisites and other personal benefits which in the aggregate did not
exceed the lesser of $50,000 or 10% of the total annual salary and bonus
reported for such Named Executive.

(2) Mr. Ferran joined the Company in May 1997, and, pursuant to his employment
agreement was being compensated on the basis of an annual base salary of
$333,333 at the end of 1997.

(3) Consists of relocation expense reimbursement.

(4) Mr. Kizer began consulting with the Company in May 1997 and was appointed
Chief Financial Officer of the Company in July 1997. Pursuant to his
employment agreement, Mr. Kizer was being compensated on the basis of an
annual base salary of $150,000 at the end of 1997.

(5) Consists of fees paid for consulting services. See Note (4).

(6) Mr. Dedman joined the Company in May 1997 and, pursuant to his employment
agreement, was being compensated on the basis of an annual base salary of
$200,000 at the end of 1997.

(7) Mr. Gawarecki joined the Company in September 1997 and, pursuant to his
employment agreement, was being compensated on the basis of an annual base
salary of $200,000 at the end of 1997.

(8) Mr. Levy served as the Company's President and Chief Executive Officer
until May 1997. In such position, Mr. Levy received compensation
aggregating $150,000 through May 31, 1997.

(9) In connection with Mr. Levy's termination of employment with the Company,
he entered into a consulting/ severance agreement with the Company which
provided for payments totalling $210,000.

(10) Includes automobile reimbursement of $24,042.

16
<PAGE> 19

STOCK OPTION GRANTS

The following table contains information concerning grants of stock options
under the Stock Option Plan to each of the Named Executives during 1997. The
Company does not have any plan pursuant to which stock appreciation rights
("SARs") may be granted.

OPTION GRANTS IN 1997

<TABLE>
<CAPTION>
INDIVIDUAL GRANTS POTENTIAL REALIZABLE
----------------------------------------------------- VALUE AT ASSUMED
NUMBER OF % OF TOTAL ANNUAL RATES OF
SECURITIES OPTIONS STOCK PRICE APPRECIATION
UNDERLYING GRANTED TO EXERCISE FOR OPTION TERM(1)
OPTIONS EMPLOYEES IN PRICE EXPIRATION -------------------------
NAME GRANTED(#)(2) 1997 ($/SH)(3) DATE 5%($) 10%($)
---- ------------- ------------ --------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
David J. Ferran......... 1,000,000 37.08 3.125 5/05/07 1,965,313 4,980,313
John W. Kizer........... 100,000 3.71 3.125 7/27/07 196,531 498,031
David W. Dedman......... 125,000 4.63 2.75 5/07/07 216,184 547,834
James S. Molinaro....... -- -- -- -- -- --
Michael G. Gawarecki.... 125,000 4.63 3.0525 9/07/07 240,751 610,088
David F. Levy........... -- -- -- -- -- --
</TABLE>

- ---------------
(1) Illustrates the value that might be realized upon exercise of options
immediately prior to the expiration of their term, assuming specified
compounded rates of appreciation on the Common Stock over the term of the
options. Assumed rates of appreciation are not necessarily indicative of
future stock performance.

(2) All options granted vest in four equal annual installments beginning on the
first anniversary of their date of grant.

(3) All options were granted at an exercise price equal to the fair market value
of the Common Stock on the date of the grant.

STOCK OPTION EXERCISES AND HOLDINGS

The following table sets forth certain information regarding the stock
options exercised by each of the Named Executives during 1997 and the value of
options held by each of the Named Executives at December 31, 1997.

AGGREGATED OPTION EXERCISES IN 1997
AND OPTION VALUES AT DECEMBER 31, 1997

<TABLE>
<CAPTION>
VALUE OF UNEXERCISED
NUMBER OF UNEXERCISED IN-THE-MONEY OPTIONS
OPTIONS AT AT DECEMBER 31, 1997
SHARES VALUE DECEMBER 31, 1997 (#) ($)(1)
ACQUIRED ON REALIZED --------------------------- ---------------------------
NAME EXERCISE (#) ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ------------ -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
David J. Ferran............... -- -- -- 1,000,000 -- --
John W. Kizer................. -- -- -- 100,000 -- --
David W. Dedman............... -- -- -- 125,000 -- --
James S. Molinaro............. -- -- 338,125 -- -- --
Michael G. Gawarecki.......... -- -- -- 125,000 -- --
David F. Levy................. -- -- 396,125 -- -- --
</TABLE>

- ---------------
(1) None of the Named Executives had outstanding options as of December 31, 1997
with an exercise price below $2.125, the last sale price of the Common Stock
on the Nasdaq National Market on December 31, 1997.

17
<PAGE> 20

EMPLOYMENT CONTRACTS

David J. Ferran entered into an employment agreement with the Company in
May 1997 which provided for him to earn an annual base salary of $333,333, which
may be increased or decreased from time to time, but not to less than $333,333.
The employment agreement has no specific term; however, in the event the Company
terminates Mr. Ferran's employment without "cause" or if he should terminate his
employment because of "good reason" (each as defined in the agreement), Mr.
Ferran shall be entitled to receive a lump sum payment equal to the greater of
(i) the amount, if any, by which $1,000,000 exceeds the total amount paid to Mr.
Ferran in base salary under such agreement and (ii) the sum of his salary for 18
months at the rate in effect immediately prior to such termination and an amount
equal to the bonus actually paid to Mr. Ferran for the preceding fiscal year. If
such termination follows a "change in control" (as defined in the agreement),
Mr. Ferran shall be entitled to the amount set forth above plus certain
additional amounts.

Messrs. Dedman, Gawarecki and Kizer each entered into employment agreements
with the Company which provide for them to earn annual base salaries as set
forth in the notes to the Summary Compensation Table above. The employment
agreements have no specific term; provided, however, in the event the Company
terminates the relevant Named Executive's employment without "cause" or if the
Named Executive should terminate his employment because of "good reason" (each
as defined in the agreements), the Named Executive will be entitled to receive a
lump sum payment equal to the Named Executive's salary for 12 months at the rate
paid immediately prior to such termination plus an amount equal to the greater
of (a) the total bonus compensation paid to such Named Executive for the
preceding fiscal year and (b) 25% of such Named Executive's base salary
immediately prior to such termination. If such termination follows a "change in
control" (as defined in the agreements), each Named Executive will be entitled
to the amount set forth above plus certain additional amounts.

James S. Molinaro entered into an employment agreement with the Company
which initially provided for an annual base salary of $265,200, which base
salary may be increased or decreased from time to time in the sole discretion of
the Company's Board. In no event, however, may such base salary be less than
$240,000 per annum. For fiscal 1997, the annual base salary of Mr. Molinaro was
fixed at $340,000. The employment agreement has an initial five-year term
expiring in August 1998 that is automatically renewable at the end of such term
for an additional year and each year thereafter unless either party to the
agreement should give notice of nonrenewal. In the event the Company should
terminate the employment of Mr. Molinaro without "cause" or if Mr. Molinaro
should terminate his employment because of a material breach by the Company of
his employment agreement, Mr. Molinaro will be entitled to receive a severance
benefit equal to his then annual base salary for a period of three years.
However, if such termination follows a merger or sale of all or substantially
all of the Company's assets, Mr. Molinaro will be entitled to receive a
severance benefit equal to his then annual base salary for a period of five
years.

In May 1997, David F. Levy stepped down as President and Chief Executive
Officer of the Company. In connection therewith, in lieu of his previous
employment agreement (which was substantially similar to Mr. Molinaro's
agreement), Mr. Levy entered into a new agreement which provided for Mr. Levy to
be paid specified amounts until June 30, 2000.

18
<PAGE> 21

STOCK PERFORMANCE GRAPH

The following graph compares the yearly percentage change in the cumulative
total stockholder return on the Common Stock during the five-year period ended
December 31, 1997, the cumulative total return on the CRSP Total Return Index
for The Nasdaq National Market (US Companies) and the H&Q Technology Index
during such period. The comparison assumes $100 was invested at the beginning of
such period in Common Stock and in each of the foregoing indices and assumes the
reinvestment of any dividends. Prior to August 31, 1993, the Common Stock was
traded in the over-the-counter market on the Nasdaq Small-Cap System under the
symbol TICO. Since September 1, 1993, the Common Stock has been traded under the
symbol SUBM. From September 1, 1993 to December 20, 1993, the Common Stock was
traded on the Nasdaq Small-Cap System, and from December 21, 1993 until December
31, 1997, the Common Stock was included in the Nasdaq National Market.

<TABLE>
<CAPTION>
SubMicron
Measurement Period Systems Nasdaq Stock
(Fiscal Year Covered) Corporation H&Q Technology Market-U.S.
<S> <C> <C> <C>
Dec-92 100 100 100
158.12 108.33 102.85
135.14 104.63 99.01
Mar-93 135.14 106.25 101.88
136.5 99.95 97.53
132.43 110.38 103.35
Jun-93 145.95 108.96 103.83
168.93 102.7 103.95
172.97 109.27 109.33
Sep-93 200 111.27 112.58
170.27 113.18 115.11
127.03 114.84 111.68
Dec-93 122.97 117.41 114.8
152.7 124.66 118.28
145.95 128.78 117.18
Mar-94 148.65 121.74 109.97
97.3 118.61 108.54
97.3 118.95 108.81
Jun-94 91.89 111.37 104.83
100 115.53 106.98
112.15 127.41 113.8
Sep-94 125.66 127 113.51
131.07 138.64 115.74
113.51 137.45 111.9
Dec-94 106.75 141.04 112.21
91.89 138.98 112.84
118.92 151.02 118.81
Mar-95 148.65 157.94 122.33
181.08 169.77 126.19
227.03 175.85 129.44
Jun-95 237.84 197.02 139.93
189.19 215.01 150.22
254.05 217.47 153.26
Sep-95 259.46 222.66 156.79
237.84 225.79 155.89
216.22 223.01 159.55
Dec-95 202.7 210.89 158.7
208.11 214 159.48
221.62 224.73 165.55
Mar-96 186.49 214.95 166.1
213.51 244.66 179.88
224.32 248.35 188.14
Jun-96 189.19 230.25 179.66
124.32 206.59 163.66
137.84 219.1 172.83
Sep-96 113.51 244.43 186.05
89.19 240.93 183.99
101.34 269.34 195.37
Dec-96 89.19 262.1 195.19
93.23 290.17 209.06
86.49 266.48 197.51
Mar-97 68.91 249.83 184.61
67.57 259.08 190.38
56.76 298.07 211.97
Jun-97 62.16 300.71 218.45
64.86 349.08 241.51
64.86 350.08 241.14
Sep-97 78.38 364.43 255.4
59.46 325.5 242.13
65.54 322.11 243.33
Dec-97 48.65 307.29 239.53
</TABLE>

REPORT OF THE COMPENSATION COMMITTEE

The Compensation Committee of the Board of Directors (the "Committee"),
consisting entirely of nonemployee directors, approves all general policies
under which compensation is paid to the Company's officers. In January 1998, the
Compensation committee was reconstituted and its current members are Messrs.
Khougaz (Chairman), Benham, Booth and Zito. During 1997, the Committee was
comprised of Messrs. Weisberg, Ridings (until July) and Booth (from July). The
Committee determines the compensation of the Company's Chief Executive Officer,
as well as the Company's other executive officers. The Committee has delegated
to the Company's Chief Executive Officer responsibility for making
recommendations to the Committee with respect to compensation for the Company's
nonexecutive officers. The Committee has final approval, however, for
compensation of all of the Company's officers. The Committee also administers
the Stock Option Plan.

The Company had significant management changes during 1997, including the
hiring of a new President and Chief Executive Officer as well as a majority of
the current executive officers of the Company. To facilitate the transition to
new management, the Board created a Transition Committee, comprised of Messrs.
Ridings and Booth, to negotiate both the retirement of the Company's previous
President and Chief Executive Officer and the hiring of the Company's current
President and Chief Executive Officer, both of which events occurred in May
1997.

19
<PAGE> 22

With respect to the Company's previous President and Chief Executive
Officer, the Committee did not increase his base salary for 1997. In addition,
no bonus or stock options were granted and the previous President and Chief
Executive Officer did not receive any bonus (cash or stock options) based on the
Company's performance in 1996.

With respect to the compensation for David Ferran, who became the Company's
President and Chief Executive Officer in May 1997, the Transition Committee
negotiated an employment agreement with Mr. Ferran which was executed in
connection with his joining the Company. The agreement provides for Mr. Ferran
to be compensated with an annual base salary of $333,333 per year, with such
salary to be reviewed from time to time by the Committee. The Committee has the
right to adjust Mr. Ferran's salary based on a variety of factors, but in any
event it shall not be less than $333,333 per year without Mr. Ferran's prior
written consent. In addition, in connection with his employment agreement Mr.
Ferran was granted options to purchase 1,000,000 shares of Common Stock as more
fully described in the section of this Proxy Statement dealing with executive
compensation. Such grant was intended to provide Mr. Ferran with an incentive to
increase the value of the Company's Common Stock and to align his interest with
those of the Company's stockholders. This grant was included within the increase
in shares available for grant under the Stock Option Plan which was approved by
the Company's stockholders at the 1997 annual meeting.

In conjunction with the hiring of the new management team, the Committee,
with the input of Mr. Ferran, approved the employment agreements for the other
Named Executives described above. The Committee believes that compensation
should link executive and stockholder interests and provide incentives that are
consistent with the long-term goals and strategies of the Company. In this
regard, the Committee believes that the employment agreements with the new
executives, including the salary and grants of stock options, were in accordance
with and important to the long-term range goal of increasing stockholder value.

COMPENSATION COMMITTEE:
Leonard R. Weisberg
Barry W. Ridings
Ronald B. Booth

SOLICITATION OF PROXIES

The Company will bear the cost of the solicitation of the Board of
Directors' proxies for the meeting, including the cost of preparing, assembling
and mailing proxy materials, the handling and tabulation of proxies received,
and charges of brokerage houses and other institutions, nominees and fiduciaries
in forwarding such materials to beneficial owners. In addition to the mailing of
the proxy materials, such solicitation may be made in person or by telephone,
telegraph or telecopy by directors, officers or regular employees of the
Company, or by a professional proxy solicitation organization engaged by the
Company.

STOCKHOLDER PROPOSALS

Stockholder proposals intended to be presented at the 1999 Annual Meeting
of Stockholders must be received by the Secretary of the Company at the address
appearing on the first page of this Proxy Statement not later than January 29,
1999 in order to be considered for inclusion in the Company's proxy statement
and form of proxy relating to that meeting.

ANNUAL REPORT ON FORM 10-K

COPIES OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K ARE AVAILABLE, WITHOUT
CHARGE, UPON WRITTEN REQUEST TO THE COMPANY AT 6330 HEDGEWOOD DRIVE, #150,
ALLENTOWN, PA 18106, ATTENTION: SECRETARY.

20
<PAGE> 23
SUBMICRON SYSTEMS CORPORATION

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS

The undersigned stockholder of SUBMICRON SYSTEMS CORPORATION (the "Company")
hereby constitutes and appoints DAVID J. FERRAN and JOHN W. KIZER, and each of
them acting individually, as the attorney and proxy of the undersigned, with
full power of substitution, for and in the name and stead of the undersigned,
to attend the Annual Meeting of Stockholders of the Company to be held on June
30, 1998 at 10:00 a.m., at the Holiday Inn Conference Center, Rt. 100 & I-78,
Fogelsville, Pennsylvania, and any adjournment or postponement thereof, and
thereat to vote all shares of Common Stock or Series A Convertible
Non-Redeemable Preferred Stock which the undersigned would be entitled to vote
if personally present; provided that such proxies are authorized and directed
to vote as indicated on the reverse side with respect to such matters as are
specified thereon.

IF NO DIRECTION IS MADE, THE SHARES WILL BE VOTED "FOR" THE ELECTION OF
BOTH NOMINEES FOR DIRECTOR AND "FOR" THE OTHER PROPOSALS SET FORTH ON THE
REVERSE SIDE. THIS PROXY ALSO DELEGATES DISCRETIONARY AUTHORITY TO VOTE WITH
RESPECT TO ANY OTHER BUSINESS WHICH MAY PROPERLY COME BEFORE THE MEETING OR ANY
ADJOURNMENT OR POSTPONEMENT THEREOF.

(CONTINUED AND TO BE SIGNED AND DATED ON REVERSE SIDE)

SEE REVERSE
SIDE
<PAGE> 24
[X] PLEASE MARK YOUR
VOTES AS IN THIS
EXAMPLE

FOR BOTH NOMINEES WITHHOLD AUTHORITY
FOR DIRECTOR TO VOTE FOR BOTH NOMINEES
LISTED AT RIGHT. FOR DIRECTOR LISTED AT RIGHT.
[ ] [ ]
NOMINEES: Barry W. Ridings
Donald Zito

FOR, EXCEPT VOTE WITHHELD FOR THE FOLLOWING:

- ---------------------------------------------------

FOR AGAINST ABSTAIN
2. Proposal to approve an amendment to the [ ] [ ] [ ]
Company's Employee Stock Purchase Plan.

3. Proposal to approve an amendment to the [ ] [ ] [ ]
Company's 1991 Amended and Restated
Stock Option Plan.

4. Proposal to approve the Company's 1997 [ ] [ ] [ ]
Stock Option Plan for Non-Employee
Directors.

5. Proposal to ratify the appointment of [ ] [ ] [ ]
Ernst & Young LLP.

6. To vote on such other business which may
properly come before the meeting.

THE UNDERSIGNED HEREBY ACKNOWLEDGES RECEIPT OF THE NOTICE OF ANNUAL MEETING,
PROXY STATEMENT AND ANNUAL REPORT OF SUBMICRON SYSTEMS CORPORATION.

PLEASE SIGN, DATE AND RETURN IN THE ENCLOSED POSTAGE-PREPAID ENVELOPE.

SIGNATURE(S) DATE
-------------------------------------------------- -----------
NOTE: Please sign this Proxy exactly as name(s) appear(s) in address. When
signing as attorney-in-fact, executor, administrator, trustee or guardian,
please add your title as such, and if signer is a corporation, please sign with
full corporate name by duly authorized officer or officers and affix the
corporate seal. When stock is issued in the name of two or more persons, all
such persons should sign.
<PAGE> 25
SUBMICRON SYSTEMS CORPORATION

1994 EMPLOYEE STOCK PURCHASE PLAN

Revised 3/98

1. Purpose.

The purpose of the Plan is to assist SubMicron Systems
Corporation, a Delaware corporation (the "Company"), and its Subsidiaries in
retaining the employment of employees by offering them a greater stake in the
Company's success and a closer identity with it, and to aid in obtaining the
services of individuals whose employment would be helpful to the Company and
would contribute to its success. This is to be accomplished by providing
employees a continuing opportunity to purchase Shares (as hereinafter defined)
from the Company through periodic offerings.

The Plan is intended to comply with the provisions of section
423 of the Code (as hereinafter defined), and the Plan shall be administered,
interpreted and construed accordingly.

2. Definitions. For purposes of the Plan:

(a) "Account" means the non-interest bearing account which the
Company (or the Subsidiary which employs the Participant) shall establish for
Participants, to which Participants' payroll deductions pursuant to the Plan
shall be credited.

(b) "Agent" means the person or persons appointed by the Board
in accordance with Paragraph 3(d).

(c) "Applicable Offering Period" means the Offering Period
applicable to a purchase made on a Purchase Date for the purpose of determining
the Purchase Price in accordance with Section 5 of the Plan.

(d) "Board" means the Board of Directors of the Company.

(e) "Code" means the Internal Revenue Code of 1986, as
amended.

(f) "Committee" means the committee described in Paragraph
3(a).

(g) "Company" means SubMicron Systems Corporation.

(h) "Compensation" means the total amount of compensation for
services paid to a Participant for an Offering Period by the Company and the
Subsidiaries
<PAGE> 26
that would be reportable on Internal Revenue Service Form W-2 (excluding amounts
payable as commission or bonus), plus amounts that are not includable in income
for federal income tax purposes that a Participant elects to contribute pursuant
to an arrangement described in section 125 or section 401(k) of the Code.

(i) "Eligible Employee" means an employee of the Company or
Subsidiary who is described in Paragraph 4.

(j) "Employer" means the Company or Subsidiary for whom an
Eligible Employee is performing services at the time the Eligible Employee
becomes a Participant.

(k) "Fair Market Value" on the Purchase Date means, in the
case of a purchase on a Purchase Date of Shares by the Company in an
arms'-length transaction, the actual purchase price of such Shares, and, in any
other case, the mean between the highest and lowest sales prices of Shares on
the principal national securities exchange on which the Shares are listed on
such date, or, if the Shares are not listed on any national securities exchange,
the mean between the highest and lowest sales prices of Shares as reported on
the Nasdaq National Market on such date, or if the Shares are included in
Nasdaq, but are not included in the Nasdaq National Market, the mean between the
closing bid and asked prices for Shares on such date as reported by Nasdaq, or
if the Shares are not so reported, the fair market value of Shares as determined
by the Committee in good faith. If there are no sales reports or bid or asked
quotations, as the case may be, for a given date, the closest preceding date on
which there were sales reports or bid or asked quotations shall be used.

(l) "Investment Account" means the account established for a
Participant pursuant to Paragraph 9(a) to hold Shares acquired for a Participant
pursuant to the Plan.

(m) "Nasdaq" means the National Association of Security
Dealers, Inc. Automated Quotations System.

(n) "Offering Period" means each two-year period beginning on
January 1 and July 1 of each year. The first Offering Period shall commence on
January 1, 1995.

(o) "Participant" means an Eligible Employee who makes an
election to participate in the Plan in accordance with Paragraph 5.

(p) "Plan" means the SubMicron Systems Corporation 1994
Employee Stock Purchase Plan as set forth in this document, and as may be
amended from time to time.

(q) "Plan Year" means the calendar year. The first Plan Year
shall be the 1995 calendar year.

-2-
<PAGE> 27
(r) "Purchase Date" means the last business day of each
Purchase Period.

(s) "Purchase Period" means each six month period beginning on
January 1 and July 1 of each Plan Year.

(t) "Purchase Price" means the lesser of 85% of the Fair
Market Value of a Share on (i) the first business day of the Applicable Offering
Period or (ii) the Purchase Date.

(u) "Share" or "Shares" means a share or shares of Common
Stock, $0.0001 par value, of the Company.

(v) "Subscription Agreement" means the agreement between the
Participant and the Employer pursuant to which the Participant authorizes
payroll deductions to the Account.

(w) "Subsidiary" means any corporation that, at the time in
question, is a subsidiary corporation of the Company, within the meaning of
section 424(f) of the Code.

3. Administration.

(a) The Plan shall be administered by the Board of Directors
or by a committee (hereafter, the Committee), which shall be a committee of the
Board consisting of at least two members designated by the Board. No member of
the Board of Directors who is eligible to participate in the Plan may vote on
any matter affecting the administration of the Plan. If a Committee is
established, no member of the Board of Directors who is also eligible to
participate in the Plan may be a member of the Committee. All Committee members
shall serve, and may be removed, at the pleasure of the Board of Directors.

(b) For purposes of administration of the Plan, a majority of
the members of the Committee (but not less than two) eligible to serve as such
shall constitute a quorum, and any action taken by a majority of such members of
the Committee present at any meeting at which a quorum is present, or acts
approved in writing by all members of the Committee, shall be the acts of the
Committee.

(c) Subject to the express provisions of the Plan, the
Committee shall have full discretionary authority to interpret the Plan, to
issue rules for administering the Plan, to change, alter, amend or rescind such
rules, and to make all other determinations necessary or appropriate for the
administration of the Plan. All determinations, interpretations and
constructions made by the Committee with respect to the Plan shall be final and
conclusive. No member of the Board of Directors or the Committee shall be liable
for any action, determination or omission taken or made in good faith with
respect to the Plan or any right granted hereunder.

-3-
<PAGE> 28
(d) The Committee may engage an Agent to purchase Shares on
each Purchase Date and to perform custodial and record keeping functions for the
Plan, such as holding record title to the Participants' Share certificates,
maintaining an individual Investment Account for each such Participant and
providing periodic account status reports to such Participants.

(e) The Committee shall have full discretionary authority to
delegate ministerial functions to management of the Company.

4. Eligibility. All employees of the Company, and of such of its
Subsidiaries as may be designated for such purpose from time to time by the
Committee, shall be eligible to participate in the Plan as of the first day of
an Offering Period, provided each of such employees:

(a) has been employed by the Company or any of its
Subsidiaries for at least six months;

(b) is customarily employed for more than 20 hours per week;

(d) does not own stock possessing 5% or more of the total
combined voting power or value of all classes of stock of the Company or a
Subsidiary. In determining stock ownership for purposes of the preceding
sentence, the rules of section 424(d) of the Code shall apply and stock which
the employee may purchase under outstanding options, including rights to
purchase stock under the Plan, shall be treated as stock owned by the employee.

For purposes of this Paragraph 4, the term "employment" shall
be interpreted in accordance with the provisions of section 1.421-7(h) of the
Treasury Regulations (or any successor regulations).

5. Election to Participate.

(a) (i) Initial Subscription Agreements. Each Eligible
Employee may become a Participant by filing a Subscription Agreement authorizing
specified regular payroll deductions. A Subscription Agreement authorizing
specified regular payroll deductions must specify the date on which such
deduction is to commence, which may not be retroactive. Subject to the limits of
Paragraph 5(b), payroll deductions may be in any amount not less than one
percent (1%) and not in excess of ten percent (10%) of an Eligible Employee's
Compensation, subject to a lower limit as may be established pursuant to
Paragraph 5(b) below. All payroll deductions shall be recorded in the Accounts.
All funds recorded in Accounts may be used by the Company and Subsidiaries for
any corporate purpose, subject to the Participant's right to withdraw at any
time an amount equal to the

-4-
<PAGE> 29
balance accumulated in his or her Account as described in Paragraph 8 below.
Funds credited to Accounts shall not be required to be segregated from the
general funds of the Company or any Subsidiary.

(ii) Subsequent Subscription Agreements. Any
Participant may file a Subscription Agreement subsequent to his or her filing an
initial Subscription Agreement changing the terms of his or her participation in
accordance with Section 6 of the Plan.

(iii) Applicable Offering Period. The Applicable
Offering Period for each Eligible Employee who becomes a Participant by filing
an initial Subscription Agreement in accordance with Section 5(a)(i) of the Plan
shall initially be the first Offering Period commencing after the receipt of
such Subscription Agreement by the Committee, and the Purchase Price for any
purchases made on behalf of a Participant in accordance with Section 9 of the
Plan on a Purchase Date occurring during such Participant's Applicable Offering
Period shall be determined by reference to the Fair Market Value of a Share on
the Purchase Date itself or the first day of such Applicable Offering Period, in
accordance with the definition of Purchase Price set forth in Section 2(t).
Notwithstanding the foregoing, in the event the Fair Market Value of a Share on
a Purchase Date is lower than the Fair Market Value of a Share on the first day
of the Applicable Offering Period, the Applicable Offering Period for a
Participant shall terminate on such Purchase Date. The Applicable Offering
Period for any Participant after such Participant's Applicable Offering Period
terminates shall be the Offering Period commencing on the next day after the
date such prior Applicable Offering Period terminates.

(b) Contribution Limit. The sum of all regular payroll
deductions authorized under Paragraph 5(a) shall not exceed such percentage of
the Participant's Compensation as may be specified by the Committee.

6. Subsequent Subscription Agreements and Deduction Changes. A
Participant may at any time decrease his or her payroll deduction by filing a
new Subscription Agreement with the Committee during a Purchase Period which
will supersede any prior Subscription Agreement effective no later than thirty
(30) days after receipt of such new Subscription Agreement by the Committee. If
administratively practicable, and at the Committee's discretion, such decrease
in a Participant's payroll deduction shall be effective as of the first day of
the payroll period following the receipt by the Committee of the new
Subscription Agreement or as of such other date no later than thirty (30) days
after receipt of the new Subscription Agreement as the Committee determines.
Other than as provided in the case of a termination of participation under
Paragraph 8 below, such change in the rate of regular payroll deductions may not
be made more than once during each Purchase Period. During the two week period
immediately preceding each new Purchase Period, a Participant may increase or
decrease his or her payroll deduction by filing a new Subscription Agreement
with the Committee. If a Participant does not file a new Subscription Agreement
with the Committee, the terms of the previously submitted Subscription Agreement
shall remain in effect for each subsequent Purchase Period. Notwithstanding
anything contained

-5-
<PAGE> 30
herein to the contrary, a Participant may file a new Subscription Agreement at
any time for the sole purpose of changing his or her designation of beneficiary.

7. Limit on Purchase of Shares.

(a) No employee may be granted a right to purchase Shares
under the Plan if immediately following such grant, such employee would have
rights to purchase equity securities under all plans of the Company and
Subsidiaries that are intended to meet the requirements of section 423 of the
Code, that accrue at a rate which exceeds $25,000 of Fair Market Value
(determined at the time the rights are granted) for each calendar year in which
such rights to purchase Shares are outstanding at any time. For purposes of this
Paragraph 7:

(i) The right to purchase Shares accrues when the
right (or any portion thereof) first becomes exercisable during the calendar
year;

(ii) Subject to the limitations under Paragraph 10,
each Participant accrues the right to purchase up to a number of Shares for each
Purchase Period equal to $12,500 divided by the Fair Market Value of the Shares,
determined on the first day of the Purchase Period, but in no case may such
accrual of rights to purchase Shares exceed $25,000 of Fair Market Value,
determined on the first day of each Offering Period, for any calendar year;

(iii) A right to purchase Shares which has accrued
under one grant of rights under the Plan may not be carried over to any other
grant of rights; and

(iv) The limits of this Paragraph 7 shall be
interpreted by the Committee in accordance with applicable rules and regulations
issued under section 423 of the Code.

(b) No employee may be granted a right to purchase Shares
under the Plan if, immediately following such grant, such employee would own
stock possessing 5% or more of the total combined voting power or value of all
classes of stock of the Company or a Subsidiary. In determining stock ownership
for purposes of the preceding sentence, the rules of section 424(d) of the Code
shall apply and stock which the employee may purchase under outstanding options,
including rights to purchase stock under the Plan, shall be treated as stock
owned by the employee.

8. Termination of Participation and Withdrawal of Funds. A
Participant may at any time and for any reason, withdraw from participation in
the Plan for an Offering Period by filing a notice of withdrawal form with the
Committee prior to the last day of such Purchase Period, in which case the
entire balance accumulated in his or her Account shall be paid to such
Participant as soon as practicable thereafter and no further payroll deductions
shall be made pursuant to the Plan. Partial withdrawals shall not be permitted.
A

-6-
<PAGE> 31
Participant may recommence participation in the Plan by submitting a new
Subscription Agreement to the Committee, which will be effective as of the next
Offering Period.

9. Method of Purchase and Investment Accounts.

(a) Exercise of Option for Shares. Each Participant having
funds credited to an Account on a Purchase Date shall be deemed, without any
further action, to have exercised on such Purchase Date, the option to purchase
the number of whole Shares which the funds in such Account would purchase at the
Purchase Price, subject to the limit:

(i) on the aggregate number of Shares that may be
made available for purchase to all Participants under the Plan for the term of
the Plan, as set forth in Paragraph 10; and

(ii) on the number of Shares that may be made
available for purchase to any individual Participant, as set forth in Paragraphs
5(b) and 7.

Such option shall be deemed exercised if the Participant does not withdraw such
funds before the Purchase Date. All Shares so purchased shall be credited to a
separate Investment Account established by the Agent for each Participant. The
Agent shall hold in its name or the name of its nominee all certificates for
Shares purchased until such Shares are withdrawn by a Participant pursuant to
Paragraph 11. No purchases of fractional Shares shall be made pursuant to the
Plan. If the Fair Market Value of a Share on a Purchase Date is less than the
Fair Market Value of a Share on the first day of the Offering Period,
immediately following exercise of the Participant's option the Participant shall
be deemed to have been reenrolled in the Plan in the Offering Period which
commences immediately following such Purchase Date. Any funds left in a
Participant's Account following a Purchase Date shall be applied to the purchase
of Shares on the next Purchase Date, along with any additional funds added to
such Participant's Account as a result of subsequent payroll deductions, subject
to Participants' withdrawal rights against Accounts and the other limits of the
Plan.

(b) Dividends on Shares Held in Investment Accounts. All cash
dividends paid with respect to the Shares credited to a Participant's Investment
Account shall, unless otherwise directed by the Committee, be credited to his or
her Account and used, in the same manner as other funds credited to Accounts, to
purchase additional Shares under the Plan on the next Purchase Date, subject to
Participants' withdrawal rights against Accounts and the other limits of the
Plan.

(c) Adjustment of Shares on Application of Aggregate Limits.
If the total number of Shares that would be purchased pursuant to Paragraph 9(a)
but for the limits described in Paragraph 9(a)(i) exceeds the number of Shares
available for purchase under the Plan, then the number of available Shares shall
be allocated among the Investment Accounts of Participants in the ratio that the
amount credited to a Participant's Account as of the Purchase Date bears to the
total amount credited to all Participants' Accounts as of the

-7-
<PAGE> 32
Purchase Date. The cash balance not applied to the purchase of Shares shall be
held in Participants' Accounts subject to the terms and conditions of the Plan.

10. Shares Subject to Plan. The aggregate maximum number of Shares
that may be issued pursuant to the Plan is Five Hundred Thousand (500,000),
subject to adjustment as provided in Paragraph 18 of the Plan. The Shares
delivered pursuant to the Plan may, at the option of the Company, be Shares
purchased specifically for purposes of the Plan, shares otherwise held in
treasury or Shares originally issued by the Company for such purpose.

11. Withdrawal of Certificates. A Participant shall have the right
at any time to withdraw a certificate or certificates for all or a portion of
the Shares credited to his or her Investment Account by giving written notice to
the Company.

12. Registration of Certificates. Each certificate withdrawn by a
Participating Employee may be registered only in the name of the Participant,
or, if the Participant so indicated on the Participant's Account, in the
Participant's name jointly with a member of the Participant's family, with right
of survivorship. A Participant who is a resident of a jurisdiction which does
not recognize such a joint tenancy may have certificates registered in the
Participant's name as tenant in common or as community property with a member of
the Participant's family without right of survivorship.

13. Voting. The Agent shall vote all Shares held in an Investment
Account in accordance with the Participant's instructions.

14. Rights on Retirement, Death or Other Termination of
Employment. In the event of a Participant's retirement, death or other
termination of employment, or in the event that a Participant otherwise ceases
to be an Eligible Employee, (a) no payroll deduction shall be taken from any pay
due and owing to the Participant thereafter, and the balance in the
Participant's Account shall be paid to the Participant or, in the event of the
Participant's death, to the person or persons designated as the Participant's
beneficiary on Participant's most recently filed Subscription Agreement, or if
no beneficiary has been designated, to the person to whom the Participant's
rights shall have passed under the laws of descent and distribution, and (b) a
certificate for the Shares credited to the Participant's Investment Account will
be forwarded to the Participant (or, in the event of the Participant's death, to
the person or persons designated as the Participant's beneficiary on
Participant's most recently filed Subscription Agreement, or if no beneficiary
has been designated, to the person to whom the Participant's rights shall have
passed under the laws of descent and distribution).

15. Rights Not Transferable. Except as permitted by Paragraph 14,
rights under the Plan are not transferable by a Participant and are exercisable
during the employee's lifetime only by the employee.

-8-
<PAGE> 33
16. No Right to Continued Employment. Neither the Plan nor any
right granted under the Plan shall confer upon any Participant any right to
continuance of employment with the Company or any Subsidiary, or interfere in
any way with the right of the Company or Subsidiary to terminate the employment
of such Participant.

17. Application of Funds. All funds received or held by the
Company under this Plan may be used for any corporate purpose.

18. Adjustments in Case of Changes Affecting Shares. In the event
of a subdivision of outstanding Shares, or the payment of a stock dividend, the
Share limit set forth in Paragraph 10 shall be adjusted proportionately, and
such other adjustments shall be made as may be deemed equitable by the
Committee. In the event of any other change affecting Shares (including any
event described in section 424(a) of the Code), such adjustment, if any, shall
be made as may be deemed equitable by the Committee to give proper effect to
such event, subject to the limitations of section 424 of the Code.

19. Amendment of the Plan. The Board of Directors of the Company
may at any time, or from time to time, amend the Plan in such manner as it may
deem advisable. Nevertheless, the Board of Directors of the Company may not (i)
increase the maximum number of shares that may be issued pursuant to the Plan,
(ii) materially increase the benefits accruing to Participants under the Plan,
or (iii) modify the requirements as to eligibility for participation in the Plan
without obtaining approval, within twelve months before or after such action, by
vote of a majority of the votes cast at a duly called meeting of the
Shareholders at which a quorum representing a majority of all outstanding voting
stock of the Company is, either in person or by proxy, present and voting on the
matter.

20. Termination of the Plan. The Plan and all rights of employees
under any offering hereunder shall terminate on the earliest of:

(a) any time at the discretion of the Board of Directors; or

(b) December 31, 2004.

Upon termination of this Plan, (i) all amounts in the Accounts of Participants
shall be carried forward into the Participant's Account under a successor plan,
if any, or promptly refunded, and (ii) all certificates for the Shares credited
to a Participant's Investment Account shall be forwarded to him or her.

21. Governmental Regulations.

(a) Anything contained in this Plan to the contrary
notwithstanding, the Company shall not be obligated to sell or deliver any
Shares certificates under this Plan unless and until the Company is satisfied
that such sale or delivery complies with (i) all applicable requirements of the
governing body of the principal market in which such Shares are traded, (ii) all
applicable provisions of the Securities Act of 1933, as amended (the

-9-
<PAGE> 34
"Act"), and the rules and regulations thereunder and (iii) all other laws or
regulations by which the Company is bound or to which the Company is subject.

(b) The Company (or a Subsidiary) may make such provisions as
it may deem appropriate for the withholding of any taxes or payment of any taxes
which it determines it may be required to withhold or pay in connection with any
Shares. The obligation of the Company to deliver certificates under this Plan is
conditioned upon the satisfaction of the provisions set forth in the preceding
sentence.

22. Section 16 Restrictions for Officers and Directors.
Notwithstanding any other provision of the Plan, each officer (for purposes of
Section 16 of the Securities Exchange Act of 1934, as amended (the "Exchange
Act")), and director of the Company shall be subject to such restrictions as are
required so that transactions under the Plan by such officer or director shall
be exempt from Section 16(b) of the Exchange Act. Without limiting the
generality of the foregoing, such restrictions may include restrictions on the
ability of an officer or director making withdrawals from the Plan, ceasing
participation in the Plan and holding the Shares received under the Plan for so
long as such restrictions are required to qualify for a Section 16 exemption.

23. Repurchase of Shares. The Company shall not be required to
repurchase from any Participant any Shares which such Participant acquires under
the Plan.

-10-
<PAGE> 35
SUBMICRON SYSTEMS CORPORATION

1997 STOCK OPTION PLAN FOR NON-EMPLOYEE DIRECTORS

SubMicron Systems Corporation (the "Company") hereby adopts the
SubMicron Systems Corporation 1997 Stock Option Plan for Non-Employee Directors
(the "Plan").

1. PURPOSE. The Plan is intended to provide an incentive to members
of the Board of Directors of the Company who are not employees of the Company or
any of its subsidiaries to serve on the Board of Directors and to devote
themselves to the future success of the Company by giving them an opportunity to
increase their proprietary interest in the Company through receipt of rights to
acquire the Company's Common Stock, $.0001 par value (the "Common Stock").

2. DEFINITIONS. Unless the context clearly indicates otherwise, the
following terms shall have the following meanings:

(a) "Act" means the Securities Act of 1933, as amended.

(b) "Board of Directors" means the Board of Directors of the
Company.

(d) "Code" means the Internal Revenue Code of 1986, as
amended.

(e) "Committee" means the Board of Directors or the committee
designated by the Board of Directors in accordance with the provisions set forth
in Section 3 of the Plan.

(f) "Company" means SubMicron Systems Corporation, a Delaware
corporation.

(g) "Disability" shall have the meaning set forth in Section
22(e)(3) of the Code.

(h) "Exchange Act" means the Securities Exchange Act of 1934,
as amended.

(i) "Fair Market Value" shall have the meaning set forth in
Section 8(c) of the Plan.
<PAGE> 36
(j) "Non-Employee Director" means a member of the Board of
Directors as of July 24, 1997 who was not an employee of the Company or any
subsidiary of the Company as of such date and any person who becomes a director
subsequent to July 24, 1997 and who (i) is not, and has not been for a period of
three months prior to the date of a grant thereunder, an employee of the Company
or any of its subsidiaries and (ii) is not the designee of a party that has a
contractual right to designate one or more members of the Board of Directors.

(k) "Option" means an option to purchase shares of Common
Stock granted under the Plan.

(l) "Optionee" means a person to whom an Option has been
granted under the Plan, which Option has not been exercised and has not expired
or terminated.

(m) "Option Document" means the document described in Section
8 of the Plan which sets forth the terms and conditions of a grant of Options.

(n) "Option Price" means the price at which Shares may be
purchased upon exercise of an Option, as determined pursuant to Section 8 of the
Plan.

(o) "Shares" means the shares of Common Stock of the Company
which are the subject of Options.

3. ADMINISTRATION OF THE PLAN.

(a) Committee. The Plan shall be administered by the Board of
Directors or a committee comprised of two or more of the members of the Board of
Directors. The interpretation and construction by the Committee of any
provisions of the Plan or of any Option granted under it shall be final, binding
and conclusive.

(b) Grants. Grants of Options shall be to Non-Employee
Directors and shall be made in accordance with the provisions of the Plan.

(c) Exculpation. No member of the Board of Directors shall be
personally liable for monetary damages for any action taken or any failure to
take any action in connection with the administration of the Plan or the
granting of Options under the Plan, provided that this Section 3(c) shall not
apply to (i) any breach of such member's duty of loyalty to the Company or its
stockholders, (ii) acts or omissions not in good faith or involving intentional
misconduct or a knowing violation of law, (iii) acts or omissions that would
result in liability under Section 174 of the General Corporation Law of the
State of Delaware, as amended, or (iv) any transaction from which the member
derived an improper personal benefit.

- 2 -
<PAGE> 37
(d) Indemnification. Service on the Committee shall constitute
service as a member of the Board of Directors. Each member of the Committee
shall be entitled without further act on his part to indemnity from the Company
to the fullest extent provided by applicable law and the Company's Certificate
of Incorporation and/or By-laws in connection with or arising out of any action,
suit or proceeding with respect to the administration of the Plan or the
granting of Options thereunder in which he or she may be involved by reason of
his or her being or having been a member of the Committee, whether or not he or
she continues to be a member of the Committee at the time of the action, suit or
proceeding.

4. OPTIONS GRANTED UNDER THE PLAN TO BE NON-QUALIFIED OPTIONS.
Options granted under the Plan are not intended to qualify as "incentive stock
options" within the meaning of Section 422(b) of the Code.

5. ELIGIBILITY. Non-Employee Directors shall receive Options as
provided hereunder.

6. SHARES SUBJECT TO PLAN. The aggregate maximum number of Shares
for which Options may be granted pursuant to the Plan is 600,000, subject to
adjustment as provided in Section 10 of the Plan. The Shares may be issued from
authorized and unissued Common Stock or Common Stock held in or hereafter
acquired for the treasury of the Company. If an Option terminates or expires
without having been fully exercised for any reason, the Shares for which the
Option was not exercised may again be the subject of one or more Options granted
pursuant to the Plan.

7. TERM OF THE PLAN. The Plan is effective as of July 24, 1997, the
date on which it was adopted by the Board of Directors, subject to the approval
of the Plan within twelve months of such date by the Company's stockholders. No
Option may be granted under the Plan after July 24, 2007; provided, however,
that the Board of Directors may terminate the Plan (but not any Options
theretofore granted) at any time. If the Plan is not approved by the Company's
stockholders as set forth above within twelve months of its adoption by the
Board of Directors, all Options granted under the Plan shall be null and void.

8. OPTION GRANTS. Options shall be granted pursuant to the Plan to
Non-Employee Directors, without any further action by the Board of Directors, in
accordance with the terms and conditions set forth herein. Options shall be
evidenced by Option Documents in such form as the Committee shall from time to
time approve, which Option Documents shall comply with and be subject to the
following terms and conditions and such other terms and conditions as the
Committee shall from time to time require which are not inconsistent with the
terms of the Plan.

(a) Initial Grants. Each person who is a Non-Employee Director
on the date of adoption of the Plan by the Board shall be granted on such date
an Option

- 3 -
<PAGE> 38
to purchase 75,000 Shares. Thereafter, each person who becomes a member of the
Board of Directors who qualifies as a Non-Employee Director at the time his or
her service as a director commences shall be granted an Option to purchase
75,000 Shares on such date.

(b) Subsequent Grants. Each Non-Employee Director shall be entitled
to a subsequent grant of Options to purchase an additional 75,000 shares of
Common Stock on the fifth anniversary of each previous grant to such person,
provided such person remains a Non-Employee Director as of the date of such
anniversary.

(c) Option Price. The Option Price of each Option shall be the Fair
Market Value of the Shares on the date the Option is granted. If the Common
Stock is traded in a public market, the Fair Market Value per share shall be, if
the Common Stock is listed on a national securities exchange or included in the
Nasdaq National Market, the last reported sale price thereof on the relevant
date, or, if the Common Stock is not so listed or included, the mean between the
last reported "bid" and "asked" prices thereof on the relevant date, as reported
on Nasdaq or, if not so reported, as reported by the National Daily Quotation
Bureau, Inc. or as reported in a customary financial reporting service, as
applicable and as the Committee determines. If the date of any grant is not a
business day, the Fair Market Value per share shall be determined as of the
immediately preceding business day. If the Common Stock is not traded in a
public market on the relevant date, the Fair Market Value shall be as determined
in good faith by the Committee.

(d) Termination of Options.

No Option or any unexercised portion thereof shall be
exercisable after the first to occur of the following:

(i) Expiration of ten years from the date of grant;

(ii) Expiration of three months from the date the
Optionee's service as a member of the Board of Directors ceases for any reason
other than (A) death, (B) Disability, (C) voluntary resignation by a
Non-Employee Director after such director reaches age 65, or (D) removal from
the Board of Directors with or without cause;

(iii) Expiration of one year from the date the
Optionee's service as a member of the Board of Directors ceases by reason of
death, Disability, voluntary resignation after reaching age 65 or removal from
the Board without cause; or

(iv) The date of removal from the Board of Directors
with cause. A director who is removed from the Board shall be deemed to been
removed for cause if such director (A) has been engaged in disloyalty to the
Company or proven dishonesty, including fraud, theft or commission of a felony,
(B) has been found to have breached his fiduciary duties as a director or (C)
has revealed confidential information of the Company.

- 4 -
<PAGE> 39
(e) Exercise. No Option shall be deemed to have been exercised
prior to the receipt by the Company of written notice of such exercise and of
payment in full of the Option Price for the Shares to be purchased. Each such
notice shall specify the number of Shares to be purchased and shall (unless the
Shares are covered by a then current and effective registration statement or
qualified offering statement under Regulation A under the Act) contain the
Optionee's acknowledgment in form and substance satisfactory to the Company that
(i) such Shares are being purchased for investment and not for distribution or
resale (other than a distribution or resale which, in the opinion of counsel
satisfactory to the Company, may be made without violating the registration
provisions of the Act), (ii) the Optionee has been advised and understands that
(A) the Shares have not been registered under the Act, are "restricted
securities" within the meaning of Rule 144 under the Act and are subject to
restrictions on transfer and (B) the Company is under no obligation to register
the Shares under the Act or to take any action which would make available to the
Optionee any exemption from such registration, (iii) such Shares may not be
transferred without compliance with all applicable federal and state securities
laws, and (iv) an appropriate legend referring to the foregoing restrictions on
transfer and any other restrictions imposed under the Option Documents may be
endorsed on the certificates. Notwithstanding the foregoing, if the Company
determines that issuance of Shares should be delayed pending (I) registration
under federal or state securities laws, (II) the receipt of an opinion of
counsel satisfactory to the Company that an appropriate exemption from such
registration is available, (III) the listing or inclusion of the Shares on any
securities exchange or an automated quotation system or (IV) the consent or
approval of any governmental regulatory body whose consent or approval is
necessary in connection with the issuance of such Shares, the Company may defer
exercise of any Option granted hereunder until any of the events described in
this sentence has occurred.

(f) Medium of Payment. An Optionee may pay for Shares (i) in
cash, (ii) by check payable to the order of the Company or (iii) by such other
mode of payment as the Committee may approve, including payment through a broker
in accordance with procedures permitted by Regulation T of the Federal Reserve
Board. Furthermore, the Committee may provide in an Option Document that payment
may be made in whole or in part in shares of Common Stock held by the Optionee
for at least six months. If payment is made in whole or in part in shares of
Common Stock, then the Optionee shall deliver to the Company certificates
registered in the name of such Optionee representing shares owned by such
Optionee, free of all liens, claims and encumbrances of every kind and having an
aggregate Fair Market Value on the date of delivery that is at least as great as
the Option Price of the Shares (or relevant portion thereof) with respect to
which such Option is to be exercised by the payment in shares of Common Stock,
endorsed in blank or accompanied by stock powers duly endorsed in blank by the
Optionee. In the event that certificates for shares of the Company's Common
Stock delivered to the Company represent a number of shares in excess of the
number of shares required to make payment for the Option Price of the Shares (or
relevant portion thereof) with respect to which such Option is to be exercised
by payment in shares of Common Stock, the stock certificate issued to the
Optionee shall represent (I) the Shares in respect of which payment is made, and
(II) such excess number

- 5 -
<PAGE> 40
of shares. Notwithstanding the foregoing, the Committee may impose from time to
time such limitations and prohibitions on the use of shares of the Common Stock
to exercise an Option as it deems appropriate.

(g) Transfers. No option granted under the Plan may be
transferred, except by will or by the laws of descent and distribution or
pursuant to the terms of a "qualified domestic relations order," within the
meaning of Sections 401(a)(13) and 414(p) of the Code or within the meaning of
Title I of the Employee Retirement Income Security Act of 1974, as amended. In
addition, option grants may permit the transfer of an Option to the Optionee's
spouse, children or grandchildren or a trust created solely for the benefit of
the Optionee and the foregoing persons.

9. VESTING OF OPTIONS.

(a) General Rule. Except as set forth below, (i) each Option
granted under the Plan shall vest and become exercisable in ten equal
semi-annual installments beginning on six months from the date of grant and (ii)
no Option shall be exercisable subsequent to the Optionee's termination of
service as a member of the Board of Directors for any reason to any greater
extent than such Option was exercisable on the date of such termination of
service.

(b) Acceleration of Vesting Under Certain Circumstances. Upon
termination of an Optionee's service as a member of the Board of Directors by
reason of death, Disability, resignation after reaching age 65 or removal from
the Board of Directors without cause, all outstanding Options granted to
Optionee as of the termination of service shall vest and immediately become
exercisable.

(c) Change of Control. In the event of a Change of Control,
all Options then outstanding under the Plan shall vest and become immediately
exercisable in full. Any amendment to this Section 9(c) which diminishes the
rights of Optionees shall not be effective with respect to Options outstanding
at the time of adoption of such amendment, whether or not such outstanding
Options are then exercisable.

- 6 -
<PAGE> 41
holders of shares of Common Stock immediately prior to the merger or
consolidation will have at least a majority of the voting power of the surviving
corporation's voting securities immediately after the merger or consolidation,
which voting securities are to be held in the same proportion as such holders'
ownership of Common Stock immediately before the merger or consolidation; (d)
the date any entity, person or group, within the meaning of Section 13(d)(3) or
Section 14(d)(2) of the Exchange Act (other than the Company or any of its
subsidiaries or any employee benefit plan (or related trust) sponsored or
maintained by the Company or any of its subsidiaries), shall have become the
beneficial owner of, or shall have obtained voting control over, more than 30%
of the outstanding shares of Common Stock; or (e) the first day after the date
this Plan is effective when directors are elected such that a majority of the
Board of Directors shall have been members of the Board of Directors for less
than two years, unless the nomination for election of each new director who was
not a director at the beginning of such two-year period was approved by a vote
of at least two-thirds of the directors then still in office who were directors
at the beginning of such period.

10. ADJUSTMENTS ON CHANGES IN CAPITALIZATION. The aggregate number
of Shares and class of shares as to which Options may be granted hereunder, the
number and class or classes of shares covered by each outstanding Option and the
Option Price thereof, and the number of Shares subject to Options granted
pursuant to Sections 8(a) and 8(b) shall be appropriately adjusted in the event
of a stock dividend, stock split, recapitalization or other change in the number
or class of issued and outstanding equity securities of the Company resulting
from a subdivision or consolidation of the Common Stock and/or, if appropriate,
other outstanding equity securities or a recapitalization or other capital
adjustment (not including the issuance of Common Stock on the conversion of
other securities of the Company which are convertible into Common Stock)
affecting the Common Stock which is effected without receipt of consideration by
the Company. The Committee shall have authority to determine the adjustments to
be made under this Section 10, and any such determination by the Committee shall
be final, binding and conclusive.

11. AMENDMENT OF THE PLAN. The Board of Directors of the Company may
amend the Plan from time to time in such manner as it may deem advisable.
Nevertheless, the Board of Directors of the Company may not (a) increase the
maximum number of shares as to which Options may be granted or (b) make any
other change or amendment to which stockholder approval is required in order to
satisfy the conditions of any applicable rule or regulation, in each case
without obtaining approval, within twelve months before or after such action, of
the Company's stockholders. No amendment to the Plan shall adversely affect any
outstanding Option, however, without the consent of the Optionee.

12. NO COMMITMENT TO RETAIN. The grant of an Option pursuant to the
Plan shall not be construed to imply or to constitute evidence of any agreement,
express or implied, on the part of the Company to retain the Optionee as a
member of the Company's Board of Directors.

- 7 -
<PAGE> 42
13. WITHHOLDING OF TAXES. Whenever the Company proposes or is
required to deliver or transfer Shares in connection with the exercise of an
Option, the Company shall have the right to (a) require the recipient to remit
or otherwise make available to the Company an amount sufficient to satisfy any
federal, state and/or local withholding tax requirements prior to the delivery
or transfer of any certificate or certificates for such Shares or (b) take
whatever other action it deems necessary to protect its interests with respect
to tax liabilities. The Company's obligation to make any delivery or transfer of
Shares shall be conditioned on the Optionee's compliance, to the Company's
satisfaction, with any withholding requirement.

14. INTERPRETATION. The interpretation and construction by the
Committee of any provisions of the Plan or of any Option granted under the Plan,
and of any Option Document, shall be final, binding and conclusive.

15. GOVERNING LAW. The Plan and all Option Documents hereunder shall
be construed in accordance with and governed by the laws of the State of
Delaware.

- 8 -
<PAGE> 43
SUBMICRON SYSTEMS CORPORATION

AMENDED AND RESTATED 1991 STOCK OPTION PLAN

Revised 3/98

SubMicron Systems Corporation (the "Company") hereby amends and
restates the SubMicron Systems Corporation 1991 Amended and Restated Stock
Option Plan in its entirety (as so amended and restated, the "Plan").

1. PURPOSE. The Plan is intended to recognize the contributions made
to the Company or an Affiliate by employees of the Company or any Affiliate (as
hereinafter defined), members of the Board of Directors of the Company or any
Affiliate, and certain consultants and advisors to the Company or any Affiliate,
to provide such persons with additional incentive to devote themselves to the
future success of the Company or any Affiliate, and to improve the ability of
the Company or an Affiliate to attract, retain, and motivate individuals upon
whom the Company's sustained growth and financial success depend, by providing
such persons with an opportunity to acquire or increase their proprietary
interest in the Company through receipt of rights to acquire the Company's
Common Stock, $.0001 par value (the "Common Stock").

2. DEFINITIONS. Unless the context clearly indicates otherwise, the
following terms shall have the following meanings:

(a) "Act" means the Securities Act of 1933, as amended.

(b) "Affiliate" means a corporation which is a parent
corporation or a subsidiary corporation with respect to the Company within the
meaning of Section 424(e) or (f) of the Code.

(d) "Change of Control" shall have the meaning as set forth in
Section 9 of the Plan.

(e) "Code" means the Internal Revenue Code of 1986, as
amended.

(f) "Committee" means the Board of Directors or the committee
designated by the Board of Directors in accordance with the provisions set forth
in Section 3 of the Plan.

(g) "Company" means SubMicron Systems Corporation, a Delaware
corporation.
<PAGE> 44
(h) "Disability" shall have the meaning set forth in Section
22(e)(3) of the Code.

(i) "Exchange Act" means the Securities Exchange Act of 1934,
as amended.

(j) "Fair Market Value" shall have the meaning set forth in
Subsection 8(b) of the Plan.

(k) "ISO" means an Option granted under the Plan which is
intended to qualify as an "incentive stock option" within the meaning of Section
422(b) of the Code.

(l) "Non-qualified Stock Option" means an Option granted under
the Plan which is not intended to qualify, or otherwise does not qualify, as an
"incentive stock option" within the meaning of Section 422(b) of the Code.

(m) "Option" means either an ISO or a Non-qualified Stock
Option granted under the Plan.

(n) "Optionee" means a person to whom an Option has been
granted under the Plan, which Option has not been exercised and has not expired
or terminated.

(o) "Option Document" means the document described in Section
8 of the Plan which sets forth the terms and conditions of a grant of Options.

(p) "Option Price" means the price at which Shares may be
purchased upon exercise of an Option, as calculated pursuant to Section 8(b) of
the Plan.

(q) "Shares" means the shares of Common Stock of the Company
which are the subject of Options.

3. ADMINISTRATION OF THE PLAN.

(a) Committee. The Plan shall be administered by a committee
composed of two or more of the members of the Company's Board of Directors who
shall not be eligible to receive Options under the Plan while serving as a
member of the Committee; provided, however, the Board may designate two
committees to administer the Plan in its stead, one of such committees composed
of two or more of its directors who will not be eligible to receive Options
under the Plan while serving on such Committee to administer the Plan with
respect to each person who is a "Principal Officer (as defined below), and the
other such committee composed of two or more directors (which may include
directors who are eligible to receive Options under the Plan) to administer the
Plan with respect to each person other than a Principal Officer. Any of such
committees designated by the Board of Directors is referred to as the
"Committee." As used herein the

- 2 -
<PAGE> 45
term "Principal Officer" means a person who is an "officer" of the Company,
within the meaning of Rule 16a-1(f) promulgated under the Exchange Act, or any
successor regulation.

(b) Meetings. The Committee shall hold meetings at such times
and places as it may determine. Acts approved at a meeting by a majority of the
members of the Committee or acts approved in writing by the unanimous consent of
the members of the Committee shall be the valid acts of the Committee.

(c) Grants. The Committee shall from time to time, in its
discretion, direct the Company to grant Options pursuant to the terms of the
Plan. The Committee shall have plenary authority to (i) determine the Optionees
to whom, the times at which, and the price at which Options shall be granted,
(ii) determine the type of Option to be granted and the number of Shares subject
thereto, and (iii) approve the form and terms and conditions of the Option
Documents; all subject, however, to the express provisions of the Plan. In
making such determinations, the Committee may take into account the nature of
the Optionee's services and responsibilities, the Optionee's present and
potential contribution to the Company's success and such other factors as it may
deem relevant. The interpretation and construction by the Committee of any
provisions of the Plan or of any Option granted under it shall be final, binding
and conclusive.

(d) Exculpation. No member of the Board of Directors shall be
personally liable for monetary damages for any action taken or any failure to
take any action in connection with the administration of the Plan or the
granting of Options under the Plan, provided that this Section 3(d) shall not
apply to (i) any breach of such member's duty of loyalty to the Company or its
stockholders, (ii) acts or omissions not in good faith or involving intentional
misconduct or a knowing violation of law, (iii) acts or omissions that would
result in liability under Section 174 of the General Corporation Law of the
State of Delaware, as amended, or (iv) any transaction from which the member
derived an improper personal benefit.

(e) Indemnification. Service on the Committee shall constitute
service as a member of the Board of Directors. Each member of the Committee
shall be entitled without further act on his part to indemnity from the Company
to the fullest extent provided by applicable law and the Company's Certificate
of Incorporation and/or By-laws in connection with or arising out of any action,
suit or proceeding with respect to the administration of the Plan or the
granting of Options thereunder in which he or she may be involved by reason of
his or her being or having been a member of the Committee, whether or not he or
she continues to be a member of the Committee at the time of the action, suit or
proceeding.

(f) Limitations on Grants of Options to Consultants and
Advisors. With respect to the grant of Options to consultants and advisors, bona
fide services must be rendered by consultants and advisors, and such services
must not be in connection with a capital raising transaction.

- 3 -
<PAGE> 46
4. GRANTS UNDER THE PLAN. Grants under the Plan may be in the form
of a Non-qualified Stock Option, an ISO or a combination thereof, at the
discretion of the Committee.

5. ELIGIBILITY. All employees and members of the Board of Directors
of, and (subject to Section 3(f)) consultants and advisors to, the Company or an
Affiliate shall be eligible to receive Options hereunder. The Committee, in its
sole discretion, shall determine whether an individual qualifies as such an
employee, consultant or advisor.

6. SHARES SUBJECT TO PLAN. The aggregate maximum number of Shares
for which Options may be granted pursuant to the Plan is 5,000,000, subject to
adjustment as provided in Section 10 of the Plan. The Shares shall be issued
from authorized and unissued Common Stock or Common Stock held in or hereafter
acquired for the treasury of the Company. If an Option terminates or expires
without having been fully exercised for any reason, the Shares for which the
Option was not exercised may again be the subject of one or more Options granted
pursuant to the Plan.

7. TERM OF THE PLAN. No Option may be granted under the Plan after
June 10, 2001.

8. OPTION DOCUMENTS AND TERMS. Each Option granted under the Plan
shall be a Non-qualified Stock Option unless the Option shall be specifically
designated at the time of grant to be an ISO for federal income tax purposes. If
any Option designated as an ISO is determined for any reason not to qualify as
an incentive stock option within the meaning of Section 422 of the Code, such
Option shall be treated as a Non-qualified Stock Option for all purposes under
the provisions of the Plan. Options granted pursuant to the Plan shall be
evidenced by the Option Documents in such form as the Committee shall from time
to time approve, which Option Documents shall comply with and be subject to the
following terms and conditions and such other terms and conditions as the
Committee shall from time to time require which are not inconsistent with the
terms of the Plan.

(a) Number of Option Shares. Each Option Document shall state
the number of Shares to which it pertains. An Optionee may receive more than one
Option, which may include Options which are intended to be ISOs and Options
which are not intended to be ISOs, but only on the terms and subject to the
conditions and restrictions of the Plan. The maximum number of Shares for which
Options may be granted to any single Optionee in any calendar year, adjusted as
provided in Section 10, shall be 1,000,000 Shares.

(b) Option Price. Each Option Document shall state the Option
Price which, for a Non-qualified Stock Option, may be less than, equal to, or
greater than the Fair Market Value of the Shares on the date the Option is
granted and, for an ISO, shall be at least 100% of the Fair Market Value of the
Shares on the date the Option is granted as determined by the Committee in
accordance with this Section 8(b); provided, however, that if an ISO is granted
to an Optionee who then owns, directly or by attribution

- 4 -
<PAGE> 47
under Section 424(d) of the Code, shares possessing more than ten percent of the
total combined voting power of all classes of stock of the Company or an
Affiliate, then the Option Price shall be at least 110% of the Fair Market Value
of the Shares on the date the Option is granted. If the Common Stock is traded
in a public market, the Fair Market Value per share shall be, if the Common
Stock is listed on a national securities exchange or included in the Nasdaq
National Market, the last reported sale price thereof on the relevant date, or,
if the Common Stock is not so listed or included, the mean between the last
reported "bid" and "asked" prices thereof on the relevant date, as reported on
Nasdaq or, if not so reported, as reported by the National Daily Quotation
Bureau, Inc. or as reported in a customary financial reporting service, as
applicable and as the Committee determines. If the Common Stock is not traded in
a public market on the relevant date, the Fair Market Value shall be as
determined in good faith by the Committee.

(c) Exercise. No Option shall be deemed to have been exercised
prior to the receipt by the Company of written notice of such exercise and of
payment in full of the Option Price for the Shares to be purchased. Each such
notice shall specify the number of Shares to be purchased and shall (unless the
Shares are covered by a then current and effective registration statement or
qualified Offering Statement under Regulation A under the Securities Act)
contain the Optionee's acknowledgment in form and substance satisfactory to the
Company that (i) such Shares are being purchased for investment and not for
distribution or resale (other than a distribution or resale which, in the
opinion of counsel satisfactory to the Company, may be made without violating
the registration provisions of the Act), (ii) the Optionee has been advised and
understands that (A) the Shares have not been registered under the Act, are
"restricted securities" within the meaning of Rule 144 under the Act and are
subject to restrictions on transfer and (B) the Company is under no obligation
to register the Shares under the Act or to take any action which would make
available to the Optionee any exemption from such registration, (iii) such
Shares may not be transferred without compliance with all applicable federal and
state securities laws, and (iv) an appropriate legend referring to the foregoing
restrictions on transfer and any other restrictions imposed under the Option
Documents may be endorsed on the certificates. Notwithstanding the foregoing, if
the Company determines that issuance of Shares should be delayed pending (I)
registration under federal or state securities laws, (II) the receipt of an
opinion of counsel satisfactory to the Company that an appropriate exemption
from such registration is available, (III) the listing or inclusion of the
Shares on any securities exchange or an automated quotation system or (IV) the
consent or approval of any governmental regulatory body whose consent or
approval is necessary in connection with the issuance of such Shares, the
Company may defer exercise of any Option granted hereunder until any of the
events described in this sentence has occurred.

(d) Medium of Payment. An Optionee shall pay for Shares (i) in
cash, (ii) by certified or cashier's check payable to the order of the Company
or (iii) by such other mode of payment as the Committee may approve, including
payment through a broker in accordance with procedures permitted by Regulation T
of the Federal Reserve Board. Furthermore, the Committee may provide in an
Option Document that payment may be

- 5 -
<PAGE> 48
made in whole or in part in shares of Common Stock held by the Optionee for at
least six months. If payment is made in whole or in part in shares of Common
Stock, then the Optionee shall deliver to the Company certificates registered in
the name of such Optionee representing shares owned by such Optionee, free of
all liens, claims and encumbrances of every kind and having an aggregate Fair
Market Value on the date of delivery that is at least as great as the Option
Price of the Shares (or relevant portion thereof) with respect to which such
Option is to be exercised by the payment in shares of Common Stock, endorsed in
blank or accompanied by stock powers duly endorsed in blank by the Optionee. In
the event that certificates for shares of the Company's Common Stock delivered
to the Company represent a number of shares in excess of the number of shares
required to make payment for the Option Price of the Shares (or relevant portion
thereof) with respect to which such Option is to be exercised by payment in
shares of Common Stock, the stock certificate issued to the Optionee shall
represent (I) the Shares in respect of which payment is made, and (II) such
excess number of shares. Notwithstanding the foregoing, the Committee may impose
from time to time such limitations and prohibitions on the use of shares of the
Common Stock to exercise an Option as it deems appropriate.

(e) Termination of Options.

(i) No option or any unexercised installments thereof
shall be exercisable after the first to occur of the following:

(A) Expiration of the Option term specified in the
Option Document, which shall not exceed (1) ten years from the date of grant, or
(2) five years from the date of grant of an ISO if the Optionee on the date of
grant owns, directly or by attribution under Section 424(d) of the Code, shares
possessing more than ten percent of the total combined voting power of all
classes of stock of the Company or of an Affiliate;

(B) Expiration of three months from the date the
Optionee's employment or service with the Company or its Affiliates terminates
for any reason other than Disability or death or as otherwise specified in
Subsection 8(e)(i)(D) or 8(e)(i)(E) below;

(C) Expiration of one year from the date such
employment or service with the Company or its Affiliates terminates due to the
Optionee's Disability or death;

(D) A finding by the Committee, after full
consideration of the facts presented on behalf of both the Company and the
Optionee, that the Optionee has breached his employment or service contract with
the Company or an Affiliate, or has been engaged in disloyalty to the Company or
an Affiliate, including, without limitation, fraud, embezzlement, theft,
commission of a felony or proven dishonesty in the course of his or her
employment or service, or has disclosed trade secrets or confidential
information of the Company or an Affiliate. In such event, in addition to

- 6 -
<PAGE> 49
immediate termination of the Option, the Optionee shall automatically forfeit
all Shares for which the Company has not yet delivered the share certificates
upon refund by the Company of the Option Price of such Shares. Notwithstanding
anything herein to the contrary, the Company may withhold delivery of share
certificates pending the resolution of any inquiry that could lead to a finding
resulting in a forfeiture; or

(E) The date, if any, set by the Board of
Directors as an accelerated expiration date in the event of a Change of Control.

(ii) Notwithstanding the foregoing, the Committee may
extend the period during which all or any portion of an Option may be exercised
to a date no later than the Option term specified in the Option Document
pursuant to Subsection 8(e)(i)(A), provided that any change pursuant to this
Subsection 8(e)(ii) which would cause an ISO to become a Non-qualified Stock
Option may be made only with the consent of the Optionee.

(f) Transfers. No Option granted under the Plan may be
transferred, except by will or by the laws of descent and distribution. During
the lifetime of the person to whom an Option is granted, such Option may be
exercised only by him. Notwithstanding the foregoing, a Non-qualified Stock
Option may be transferred pursuant to the terms of a "qualified domestic
relations order," within the meaning of Sections 401(a)(13) and 414(p) of the
Code or within the meaning of Title I of the Employee Retirement Income Security
Act of 1974, as amended. In addition, option grants may permit the transfer of
an Option to the Optionee's spouse, children or grandchildren or a trust created
solely for the benefit of the Optionee and the foregoing persons.

(g) Limitation on ISO Grants. In no event shall the aggregate
fair market value of the shares of Common Stock (determined at the time an ISO
is granted) with respect to which incentive stock options under all incentive
stock option plans of the Company or its Affiliates are exercisable for the
first time by the Optionee during any calendar year exceed $100,000.

(h) Other Provisions. Subject to the provisions of the Plan,
the Option Documents shall contain such other provisions including, without
limitation, provisions authorizing the Committee to accelerate the
exercisability of all or any portion of an Option granted pursuant to the Plan,
additional restrictions upon the exercise of the Option or additional
limitations upon the term of the Option, as the Committee shall deem advisable.

(i) Amendment. Subject to the provisions of the Plan, the
Committee shall have the right to amend Option Documents issued to an Optionee,
subject to the Optionee's consent if such amendment is not favorable to the
Optionee, except that the consent of the Optionee shall not be required for any
amendment made pursuant to Subsection 8(e)(i)(E) or Section 9 of the Plan, as
applicable, except to the extent set forth in Section 9.

- 7 -
<PAGE> 50
9. CHANGE OF CONTROL. In the event of a Change of Control, all
Options then outstanding under the Plan shall become immediately exercisable in
full; provided that any acceleration of exercisability of options under this
Section 9 which would cause an ISO to become a Non-Qualified Stock Option may be
made only with the consent of the Optionee. Any amendment to this Section 9
which diminishes the rights of Optionees shall not be effective with respect to
Options outstanding at the time of adoption of such amendment, whether or not
such outstanding Options are then exercisable. In addition, in the event of a
Change of Control, the Committee may take whatever other action with respect to
Options outstanding as it deems necessary or desirable, including without
limitation, accelerating the expiration date of any Options.

A "Change of Control" shall be deemed to have occurred upon
the earliest to occur of the following events: (a) the date the stockholders of
the Company (or the Board of Directors, if stockholder action is not required)
approve a plan or other arrangement pursuant to which the Company will be
dissolved or liquidated, (b) the date the stockholders of the Company (or the
Board of Directors, if stockholder action is not required) approve a definitive
agreement to sell or otherwise dispose of substantially all of the assets of the
Company, (c) the date the stockholders of the Company (or the Board of
Directors, if stockholder action is not required) and the stockholders of the
other constituent corporation (or its board of directors if stockholder action
is not required) have approved a definitive agreement to merge or consolidate
the Company with or into such other corporation other than, in either case, a
merger or consolidation of the Company in which holders of shares of Common
Stock immediately prior to the merger or consolidation will have at least a
majority of the voting power of the surviving corporation's voting securities
immediately after the merger or consolidation, which voting securities are to be
held in the same proportion as such holders' ownership of Common Stock
immediately before the merger or consolidation, (d) the date any entity, person
or group, within the meaning of Section 13(d)(3) or Section 14(d)(2) of the
Exchange Act (other than (i) the Company or any of its subsidiaries or any
employee benefit plan (or related trust) sponsored or maintained by the Company
or any of its subsidiaries, or (ii) any other person who, as of January 1, 1995,
shall have been the beneficial owner (within the meaning of Rule 13d-3
promulgated under the Exchange Act) of more than 30% of outstanding shares of
Common Stock), shall have become the beneficial owner of, or shall have obtained
voting control over, more than 30% of the outstanding shares of Common Stock, or
(e) the first day after the date this Plan is effective when directors are
elected such that a majority of the Board of Directors shall have been members
of the Board of Directors for less than two years, unless the nomination for
election of each new director who was not a director at the beginning of such
two-year period was approved by a vote of at least two-thirds of the directors
then still in office who were directors at the beginning of such period.

- 8 -
<PAGE> 51
or other change in the number or class of issued and outstanding equity
securities of the Company resulting from a subdivision or consolidation of the
Common Stock and/or, if appropriate, other outstanding equity securities or a
recapitalization or other capital adjustment (not including the issuance of
Common Stock on the conversion of other securities of the Company which are
convertible into Common Stock) affecting the Common Stock which is effected
without receipt of consideration by the Company. The Committee shall have
authority to determine the adjustments to be made under this Section 10, and any
such determination by the Committee shall be final, binding and conclusive.

11. AMENDMENT OF THE PLAN. The Board of Directors of the Company may
amend the Plan from time to time in such manner as it may deem advisable.
Nevertheless, the Board of Directors of the Company may not (a) change the class
of individuals eligible to receive an ISO, (b) increase the maximum number of
shares as to which Options may be granted or (c) make any other change or
amendment to which stockholder approval is required in order to satisfy the
conditions set forth in Rule 16b-3 promulgated under the Exchange Act, in each
case without obtaining approval, within twelve months before or after such
action, by vote of a majority of the votes cast at a duly called meeting of the
stockholders at which a quorum representing a majority of all outstanding voting
stock of the Company is, either in person or by proxy, present and voting on the
matter. No amendment to the Plan shall adversely affect any outstanding Option,
however, without the consent of the Optionee.

12. NO COMMITMENT TO RETAIN. The grant of an Option pursuant to the
Plan shall not be construed to imply or to constitute evidence of any agreement,
express or implied, on the part of the Company or any Affiliate to retain the
Optionee in the employ or service of the Company or an Affiliate and/or as a
member of the Company's Board of Directors or in any other capacity.

13. WITHHOLDING OF TAXES. Whenever the Company proposes or is
required to deliver or transfer Shares in connection with the exercise of an
Option, the Company shall have the right to (a) require the recipient to remit
or otherwise make available to the Company an amount sufficient to satisfy any
federal, state and/or local withholding tax requirements prior to the delivery
or transfer of any certificate or certificates for such Shares or (b) take
whatever other action it deems necessary to protect its interests with respect
to tax liabilities. The Company's obligation to make any delivery or transfer of
Shares shall be conditioned on the Optionee's compliance, to the Company's
satisfaction, with any withholding requirement.

14. INTERPRETATION. It is the intent of the Company that
transactions under the Plan with respect to directors and officers (within the
meaning of Section 16(a) of the Exchange Act) satisfy the conditions of Rule
16b-3 promulgated under the Exchange Act. To the extent that any provision of
the Plan would result in a conflict with such conditions, such provision shall
be deemed null and void to the extent permitted by applicable law and in the
discretion of the Board of Directors. This Section 14 shall not be applicable if
no class of the Company's equity securities is then registered pursuant to
Section 12 of the Exchange Act.

- 9 -