<PAGE> 1
SCHEDULE 14A INFORMATION
(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
FILED BY THE REGISTRANT [X]
FILED BY A PARTY OTHER THAN THE REGISTRANT [ ]
Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
[ ] Confidential, For Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
AMERICAN SUPERCONDUCTOR CORPORATION
------------------------------------------------
(Name of Registrant as Specified In Its Charter)
-----------------------------------------------
(Name of Person(s) Filing Proxy Statement, If Other Than 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)(1) 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.:
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(3) Filing Party:
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(4) Date Filed:
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<PAGE> 2
AMERICAN SUPERCONDUCTOR CORPORATION
TWO TECHNOLOGY DRIVE
WESTBOROUGH, MASSACHUSETTS 01581
Notice of Annual Meeting of Stockholders to
be Held on Wednesday, July 29, 1998
The Annual Meeting of Stockholders of American Superconductor Corporation
(the "Company") will be held at the offices of the Company, Two Technology
Drive, Westborough, Massachusetts 01581 on Wednesday, July 29, 1998 at 9:00
a.m., local time, to consider and act upon the following matters:
1. To elect directors for the ensuing year.
2. To approve an amendment to the Company's Restated Certificate of
Incorporation to increase the number of authorized shares of the
Company's Common Stock from 20,000,000 to 50,000,000.
3. To approve an amendment to the 1996 Stock Incentive Plan to increase
the number of shares of Common Stock authorized for issuance under
such plan from 1,400,000 to 2,900,000.
4. To ratify the selection by the Board of Directors of Coopers &
Lybrand L.L.P. as the Company's independent auditors for the current
fiscal year.
5. To transact such other business as may properly come before the
meeting or any adjournment thereof.
Stockholders of record at the close of business on June 8, 1998 will be
entitled to notice of and to vote at the meeting or any adjournment thereof. The
stock transfer books of the Company will remain open.
By Order of the Board of Directors,
Stanley Piekos, Secretary
Boston, Massachusetts
June , 1998
WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING, PLEASE COMPLETE, DATE AND
SIGN THE ENCLOSED PROXY AND MAIL IT PROMPTLY IN THE ENCLOSED ENVELOPE IN ORDER
TO ENSURE REPRESENTATION OF YOUR SHARES. NO POSTAGE NEED BE AFFIXED IF THE PROXY
IS MAILED IN THE UNITED STATES.
<PAGE> 3
AMERICAN SUPERCONDUCTOR CORPORATION
TWO TECHNOLOGY DRIVE
WESTBOROUGH, MASSACHUSETTS 01581
Proxy Statement for the Annual Meeting of Stockholders
to be Held on Wednesday, July 29, 1998
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of American Superconductor Corporation (the
"Company") for use at the Annual Meeting of Stockholders to be held on
Wednesday, July 29, 1998 and at any adjournment of that meeting. All executed
proxies will be voted in accordance with the stockholders' instructions, and if
no choice is specified, executed proxies will be voted in favor of the matters
set forth in the accompanying Notice of Meeting. Any proxy may be revoked by a
stockholder at any time before its exercise by delivery of written revocation or
a subsequently dated proxy to the Secretary of the Company or by voting in
person at the Annual Meeting.
On June 8, 1998, the record date for the determination of stockholders
entitled to vote at the Annual Meeting (the "Record Date"), there were
outstanding and entitled to vote an aggregate of shares of Common
Stock of the Company (constituting all of the voting stock of the Company).
Holders of Common Stock are entitled to one vote per share.
The Company's Annual Report for the fiscal year ended March 31, 1998
("fiscal 1998") is being mailed to stockholders, along with these proxy
materials, on or about June 26, 1998.
THE TEXT OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED
MARCH 31, 1998 AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION, IS INCLUDED
IN THE COMPANY'S ANNUAL REPORT.
VOTES REQUIRED
The holders of a majority of the shares of Common Stock outstanding and
entitled to vote at the Annual Meeting shall constitute a quorum for the
transaction of business at the Annual Meeting. Shares of Common Stock
represented in person or by proxy (including shares which abstain or do not vote
with respect to one or more of the matters presented for stockholder approval)
will be counted for purposes of determining whether a quorum is present at the
Annual Meeting.
The affirmative vote of the holders of a plurality of the shares of Common
Stock voting on the matter is required for the election of directors, the
affirmative vote of a majority of the shares of Common Stock outstanding as of
the Record Date is required to approve the amendment to the Company's Restated
Certificate of Incorporation, and the affirmative vote of a majority of the
shares of Common Stock voting on the matter is required to approve the amendment
to the 1996 Stock Incentive Plan and to ratify the selection by the Board of
Directors of Coopers & Lybrand L.L.P. as the Company's independent auditors for
the current year.
Shares which abstain from voting as to a particular matter, and shares held
in "street name" by brokers or nominees who indicate on their proxies that they
do not have discretionary authority to vote such shares as to a particular
matter, will not be counted as votes in favor of such matter, and will also not
be counted as shares voting on such matter. Accordingly, abstentions and "broker
non-votes" will have the same effect on the proposed amendment to the Restated
Certificate of Incorporation as a vote against such matter, but will have no
effect on the voting on matters (such as the election of directors, the proposed
amendment to the 1996
<PAGE> 4
Stock Incentive Plan and the ratification of the election of Coopers & Lybrand
L.L.P.) that require the affirmative vote of a plurality or a majority of the
shares voting on the matter.
BENEFICIAL OWNERSHIP OF COMMON STOCK
The following table sets forth the beneficial ownership of the Company's
Common Stock as of April 30, 1998 by (i) each person who is known by the Company
to beneficially own more than 5% of the outstanding shares of Common Stock, (ii)
by each director or nominee for director, (iii) by each of the executive
officers named in the Summary Compensation Table set forth under the caption
"Executive Compensation" below (the "Senior Executives"), and (iv) by all
directors and executive officers as a group as of April 30, 1998:
<TABLE>
<CAPTION>
NUMBER OF SHARES PERCENTAGE OF
BENEFICIALLY COMMON STOCK
BENEFICIAL OWNER OWNED(1) OUTSTANDING(2)
- ---------------- ---------------- --------------
<S> <C> <C>
Five Percent Shareholders
CHARTH (Compagnie Holding D'Applications et de Realisations
Thermiques et Hydrauliques) S.A., a subsidiary of
Electricite
de France................................................. 1,100,000 7.2%
Directors or Nominees
Gregory J. Yurek............................................ 506,162(3) 3.2%
John B. Vander Sande........................................ 138,562(4) *
Peter O. Crisp.............................................. 73,603(5) *
Frank Borman................................................ 37,500(6) *
Richard Drouin.............................................. 31,000(7) *
Albert J. Baciocco.......................................... 9,000(8) *
Gerard Menjon............................................... 9,000(9) *
Andrew G.C. Sage, II........................................ 44,000(10) *
Other Senior Executives
Alexis P. Malozemoff........................................ 195,250(11) 1.3%
Gero G. Papst............................................... 121,500(12) *
Roland E.Lefebvre........................................... 42,000(13) *
John D. Scudiere............................................ 57,000(14) *
All directors and executive officers as a group
(16 persons) as of April 30, 1998......................... 1,407,372(15) 9.2%
</TABLE>
- ---------------
* Less than 1%.
(1) The inclusion of any shares of Common Stock deemed beneficially owned does
not constitute an admission of beneficial ownership of those shares. In
accordance with the rules of the Securities and Exchange Commission, each
stockholder is deemed to beneficially own any shares subject to stock
options that are currently exercisable or exercisable within 60 days after
April 30, 1998, and any reference below to shares subject to outstanding
stock options held by the person in question refers only to such stock
options.
(2) Number of shares deemed outstanding includes 15,272,874 shares outstanding
as of April 30, 1998, plus any shares subject to outstanding stock options
held by the person in question.
(3) Includes 16,262 shares held by Dr. Yurek's wife and minor children and
336,500 shares subject to outstanding stock options.
2
<PAGE> 5
(4) Includes 42,000 shares subject to outstanding stock options.
(5) Includes (i) 3,000 shares held by Mr. Crisp's wife and (ii) 42,000 shares
subject to outstanding stock options. Mr. Crisp disclaims beneficial
ownership of the shares held by his wife.
(6) Includes 34,500 shares subject to outstanding stock options.
(7) Includes 22,000 shares subject to outstanding stock options.
(8) Comprised of 9,000 shares subject to outstanding stock options.
(9) Comprised of 9,000 shares subject to outstanding stock options. Does not
include any shares beneficially owned by CHARTH, a subsidiary of
Electricite de France, of which Mr. Menjon is an executive officer.
(10) Comprised of 35,000 shares owned by a limited partnership of which Mr. Sage
is the general partner and 9,000 shares subject to outstanding stock
options.
(11) Includes (i) 4,500 shares held in two trusts of which Dr. Malozemoff is the
co-trustee and (ii) 165,250 shares subject to outstanding stock options.
(12) Comprised of 121,500 shares subject to outstanding stock options.
(13) Comprised of 42,000 shares subject to outstanding stock options.
(14) Comprised of 57,000 shares subject to outstanding stock options.
(15) Includes 991,508 shares subject to outstanding stock options.
ELECTION OF DIRECTORS
The persons named in the enclosed proxy will vote to elect as directors the
eight nominees named below, all of whom are presently directors of the Company,
unless authority to vote for the election of any or all of the nominees is
withheld by marking the proxy to that effect. All of the nominees have indicated
their willingness to serve, if elected, but if any should be unable or unwilling
to serve, proxies may be voted for a substitute nominee designated by the Board
of Directors. Each director will be elected to hold office until the next annual
meeting of stockholders (subject to the election and qualification of his
successor and to his earlier death, resignation or removal).
NOMINEES
Set forth below, for each nominee, are his name and age, his positions with
the Company, his principal occupation and business experience during the past
five years and the year of the commencement of his term as a director of the
Company:
GREGORY J. YUREK, age 51, co-founded the Company in 1987 and has been
President since March 1989, Chief Executive Officer since December 1989 and
Chairman of the Board since October 1991. Dr. Yurek also served as Vice
President and Chief Technical Officer from August 1988 until March 1989 and as
Chief Operating Officer from March 1989 until December 1989. Prior to joining
the Company, Dr. Yurek was a Professor of Materials Science and Engineering at
MIT for 13 years. Dr. Yurek has been a director of the Company since 1987.
ALBERT J. BACIOCCO, JR., age 67, has been the President of The Baciocco
Group, Inc., a technical and management consulting practice focused on
technology planning, investment and implementation, since 1987 when he retired
as Vice Admiral from the U.S. Navy after 34 years of distinguished service spent
principally within the nuclear submarine force and directing the Department of
the Navy research and technology development enterprise. Admiral Baciocco is a
director of Honeywell, Inc. and Shell Exploration &
3
<PAGE> 6
Production Company. In addition, he is a Trustee of the South Carolina Research
Authority, a member of the Army Science Board, the Naval Studies Board of the
National Research Council, and several boards and committees of government,
industry and academe. Admiral Baciocco has been a director of the Company since
April 1997.
FRANK BORMAN, age 70, has been Chairman of the Board of Directors of DBT
Online Inc., an on-line provider of integrated database servers and related
reports, since August 1996, and President of Patlex Corporation ("Patlex"), a
company engaged in enforcing and exploiting laser-related patents, since 1988.
He also served as Chief Executive Officer and a director of Patlex from
September 1995 until August 1996, as Chairman and Chief Executive Officer of
Patlex from 1988 to December 1992, and as Chairman of AutoFinance Group, Inc.
("AFG") from December 1992 to September 1995, during which period Patlex was a
subsidiary of AFG. Mr. Borman served as Vice Chairman of the Board of Directors
of Texas Air Corporation from 1986 to 1991. From 1969 to 1986, he served in
various capacities for Eastern Airlines, including President, Chief Executive
Officer and Chairman of the Board of Directors. Mr. Borman served in the United
States Air Force from 1950 to 1970. Mr. Borman currently serves as a director of
The Home Depot, Inc. and Thermo Instrument Systems and is also a member of the
Board of Trustees of the National Geographic Society. Mr. Borman has been a
director of the Company since 1992.
PETER O. CRISP, age 65, has been Vice Chairman of Rockefeller Financial
Services, Inc. since December 1997. Previously, he was a General Partner of
Venrock Associates, a venture capital firm based in New York, since 1969. Mr.
Crisp is also a director of Evans & Sutherland Computer Corporation, Novacare,
Inc., Thermedics, Inc., Thermo Electron Corporation, Thermo Power Corporation,
ThermoTrex Corporation and United States Trust Corporation. Mr. Crisp has been a
director of the Company since 1987.
RICHARD DROUIN, age 66, has been a partner at McCarthy Tetrault, a law firm
based in Montreal, Canada, since December 1995. Mr. Drouin is also Vice Chairman
of Morgan Stanley Canada Limited. Mr. Drouin was the Chairman and Chief
Executive Officer of Hydro-Quebec, a public electric utility based in Canada,
from April 1988 to September 1995. Mr. Drouin is a director of Abitibi Price
Inc., CT Financial Services Inc., Provigo Inc., Stelco Inc., TVA Group Inc. and
Memotec Communications Inc. Mr. Drouin has been a director of the Company since
February 1996.
GERARD MENJON, age 49, has been Executive Vice President, Head of the
Research and Development Division, of Electricite de France, the French public
electric utility ("EDF"), since December 1994 and was the Senior Vice President,
Business Development, of EDF from February 1992 to November 1994. Mr. Menjon has
been a director of the Company since April 1997.
ANDREW G.C. SAGE, II, age 72, has been President of Sage Capital
Corporation since December 1993 and was the President and Chief Executive
Officer of Robertson Ceco Corporation, a metal buildings manufacturing company,
from November 1992 to December 1993. From late 1991 to January 1998, Mr. Sage
was a member of the Board of Directors and a consultant to Computervision
Corporation. In addition, Mr. Sage serves as Chairman of the Board of Robertson
Ceco Corporation. Mr. Sage has been a director of the Company since April 1997.
JOHN B. VANDER SANDE, age 54, co-founded the Company. He has been a
professor at MIT specializing in the microstructure of materials since 1971 and
became Associate Dean of Engineering at MIT in 1992. Dr. Vander Sande has been a
director of the Company since 1990.
4
<PAGE> 7
BOARD AND COMMITTEE MEETINGS
The Company has a standing Audit Committee of the Board of Directors, which
provides the opportunity for direct contact between the Company's independent
auditors and the Board. The Audit Committee met twice during fiscal 1998. The
current Audit Committee members are Dr. Vander Sande (Chairman) and Admiral
Baciocco.
The Company has a standing Compensation Committee of the Board of
Directors, which makes compensation decisions regarding the officers of the
Company, provides recommendations to the Board regarding compensation programs
of the Company and administers and authorizes stock option grants under the 1993
Stock Option Plan, the 1994 Director Stock Option Plan, the 1996 Stock Incentive
Plan, and the 1997 Director Stock Option Plan. The Compensation Committee met
three times during fiscal 1998. The current members of the Compensation
Committee are Mr. Crisp (Chairman), Dr. Vander Sande and Mr. Drouin.
The Board of Directors met eight times during fiscal 1998. Each director
attended at least 75% of the aggregate of the number of Board meetings and the
number of meetings held by all committees on which he then served, except Mr.
Borman, who attended five of the eight meetings in fiscal 1998.
DIRECTORS' COMPENSATION
Directors of the Company who are not employees of the Company or any
subsidiary ("Outside Directors") receive $4,000 per quarter as compensation for
their services as directors pursuant to a director compensation plan implemented
July 1, 1997. In fiscal 1998, each Outside Director received $12,000 under this
compensation plan. The Outside Directors may also receive options under the 1997
Director Stock Option Plan (the "1997 Director Plan").
Pursuant to the 1997 Director Plan, Outside Directors are granted options
on the following terms: (i) each Outside Director will be granted an option to
purchase 40,000 shares of Common Stock of the Company on the first business day
that all options granted to such Outside Director pursuant to another director
stock option plan of the Company are vested completely and (ii) each Outside
Director of the Company who is initially elected to the Board of Directors after
September 5, 1997 shall be granted an option to purchase 40,000 shares of Common
Stock upon his or her initial election to the Board of Directors. Each option
granted under the 1997 Director Plan has an exercise price equal to the fair
market value of the Common Stock on the date of grant. Options granted under the
1997 Director Plan become exercisable in equal annual installments over a
four-year period. Notwithstanding such vesting schedule, all outstanding options
under the 1997 Director Plan become exercisable in full in the event of an
"Acquisition Event" (as defined in the 1997 Director Plan). The term of each
option granted under the 1997 Director Plan is ten years, provided that, in
general, an option may be exercised only while the director continues to serve
as a director of the Company or within 60 days thereafter. In fiscal 1998, no
options were granted under this plan.
Mr. Borman was paid $1,500 during fiscal 1998 as consideration for
consulting services provided to the Company pursuant to a consulting agreement
with the Company. Dr. Vander Sande was paid $3,300 during fiscal 1998 for
consulting services provided to the Company pursuant to a consulting agreement
with the Company. Mr. Drouin was paid $5,000 during fiscal 1998 for consulting
services provided to the Company pursuant to a consulting agreement with the
Company. The Baciocco Group, Inc., a consulting practice owned by Mr. Baciocco,
was paid $2,500 during fiscal 1998 pursuant to a consulting agreement with the
Company. All of these consulting agreements were terminated on July 1, 1997. In
July 1997, Mr. Drouin also received a
5
<PAGE> 8
grant of 9,000 shares of Common Stock of the Company in recognition of
significant contributions relating to the initiation and completion of the EDF
strategic alliance.
EXECUTIVE COMPENSATION
Summary Compensation
The following table sets forth certain information concerning the
compensation for each of the last three fiscal years of the Company's Chief
Executive Officer and the Company's four other most highly compensated executive
officers for fiscal 1998 (the Senior Executives).
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL LONG-TERM
COMPENSATION(1) COMPENSATION
------------------------------ ------------
NUMBER OF
SHARES
NAME AND FISCAL UNDERLYING ALL OTHER
PRINCIPAL POSITION YEAR SALARY BONUS OPTIONS(2) COMPENSATION
------------------ ------ -------- ------ ---------- ------------
<S> <C> <C> <C> <C> <C>
Gregory J. Yurek.................... 1998 $295,000 -- -- $351,233(3)
President and Chief 1997 295,000 -- 60,000 208,439(4)
Executive Officer 1996 295,000 -- 80,000 106,334(5)
Gero G. Papst(6).................... 1998 169,230 19,289 -- 15,231(7)
Managing Director, American 1997 193,920 12,550 10,000 12,928(7)
Superconductor Europe GmbH 1996 210,070 8,125 25,000 14,058(7)
John D. Scudiere.................... 1998 170,000 22,182 -- --
Vice President, 1997 170,000 20,892 20,000 --
Manufacturing..................... 1996 143,333 -- 40,000 --
Alexis P. Malozemoff(8)............. 1998 183,000 22,182 -- --
Chief Technical Officer 1997 183,000 16,713 10,000 --
1996 183,000 7,320 20,000 --
Roland E. Lefebvre(9)............... 1998 185,000 30,000 -- --
Vice President, 1997 161,282(10) 30,000 110,000 50,000(11)
Marketing and Sales 1996 -- -- -- --
</TABLE>
- ---------------
(1) In accordance with the rules of the Securities and Exchange Commission,
other compensation in the form of perquisites and other personal benefits
has been omitted because such perquisites and other person benefits
constituted less than the lesser of $50,000 or 10% of the total annual
salary of the Senior Executive.
(2) The option grants for fiscal 1997 predominantly consist of grants made in
March 1997, which were intended to comprise part of the executive officers'
overall compensation package for the fiscal year ended March 31, 1998.
Although no option grants were made in the fiscal year ended March 31, 1998,
options were granted to executive officers in May 1998, which are intended
to comprise part of the executive officers' overall compensation package for
the fiscal year ending March 31, 1999.
(3) Represents the forgiveness of $349,368 (consisting of principal and
associated interest) loaned by the Company to Dr. Yurek and $1,865 of
insurance premiums paid by the Company for a term life insurance policy on
Dr. Yurek. Dr. Yurek's wife is the beneficiary of this insurance policy.
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<PAGE> 9
(4) Represents the forgiveness of $206,744 (consisting of principal and
associated interest) loaned by the Company to Dr. Yurek and $1,695 of
insurance premiums paid by the Company for a term life insurance policy on
Dr. Yurek. Dr. Yurek's wife is the beneficiary of this insurance policy.
(5) Represents the forgiveness of $104,779 (consisting of principal and
associated interest) loaned by the Company to Dr. Yurek and $1,555 of
insurance premiums paid by the Company for a term life insurance policy on
Dr. Yurek. Dr. Yurek's wife is the beneficiary of this insurance policy.
(6) The Company paid Dr. Papst a salary of 300,000 Deutschemarks in fiscal
1996, 1997 and 1998. The amounts presented in U.S. dollars are calculated
based on the average exchange rate of the Deutschemark for the relevant
fiscal year.
(7) Represents amounts contributed by the Company to Dr. Papst's pension plan
as required by German law and insurance premiums paid by the Company for a
life insurance policy on Dr. Papst. Dr. Papst's wife is the beneficiary of
this insurance policy.
(8) As of May 1998, Dr. Malozemoff's title is Senior Vice President and Chief
Technical Officer.
(9) As of May 1998, Mr. Lefebvre's title is Executive Vice President and Chief
Operating Officer.
(10) Mr. Lefebvre joined the Company in May 1996 and consequently received
compensation only for a portion of the fiscal year ended March 31, 1997.
(11) Represents amount paid by the Company to Mr. Lefebvre for costs related to
relocating to the Westborough, Massachusetts area.
OPTION GRANTS
No options were granted in fiscal 1998 to the Senior Executives. See Note 2
to the Summary Compensation Table.
OPTION EXERCISES AND HOLDINGS
The following table sets forth certain information concerning each exercise
of a stock option during fiscal 1998 by each of the Senior Executives and the
number and value of unexercised options held by each of the Senior Executives on
March 31, 1998.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF SHARES OF
COMMON STOCK
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
NUMBER OF OPTIONS AT FISCAL IN-THE-MONEY OPTIONS
SHARES YEAR-END AT FISCAL YEAR-END(2)
ACQUIRED ON VALUE ------------------------- -------------------------
NAME EXERCISE REALIZED(1) EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
- ---- ----------- ----------- ------------------------- -------------------------
<S> <C> <C> <C> <C>
Gregory J. Yurek........... 60,000 $471,000 361,500/126,000 $1,486,560/$216,000
Gero G. Papst.............. -- -- 121,500/ 26,000 $ 379,259/$ 58,875
John D. Scudiere........... -- -- 57,000/ 63,000 $ 44,625/$118,500
Alexis P. Malozemoff....... 15,000 $121,375 165,250/ 47,500 $ 570,644/$ 37,500
Roland E. Lefebvre......... -- -- 42,000/ 68,000 $ 55,650/$104,100
</TABLE>
- ---------------
(1) Represents the difference between the exercise price and the fair market
value of the Common Stock on the date of exercise.
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<PAGE> 10
(2) Based on the fair market value of the Common Stock on March 31, 1998
($13.875 per share), less the option exercise price.
EMPLOYMENT AGREEMENTS WITH SENIOR EXECUTIVES
Dr. Yurek and Dr. Malozemoff are each party to an employment agreement with
the Company. The term of each agreement commenced on December 4, 1991 and
continues until terminated as follows: by the employee, at any time on or after
December 4, 1992, upon at least 90 days prior notice; by the Company for cause
(as defined in the employment agreement); by the Company without cause (in which
case, for a 12-month period following the date of termination, the employee
shall continue to receive his salary and other benefits and his stock options
shall continue to vest); or as a result of the death or disability of the
employee (in which case his stock options shall become immediately exercisable
for the number of additional shares as to which it would have become exercisable
if his employment had continued for an additional 12 months). Under the terms of
each employment agreement, the employee agreed that, among other things, he will
not engage in a business competitive with that of the Company until one year
after the later of the termination of the employee's employment with the Company
or the expiration of the one-year period during which the employee's
compensation and benefits continue in the event of an employment termination
without cause. The Company has the right to extend the period for which these
restrictions remain in effect for an additional one-year period by continuing
the employee's salary and benefits for this additional period.
Dr. Papst is a party to an employment agreement with American
Superconductor Europe GmbH, a wholly owned subsidiary of the Company ("ASC
Europe"). The term of the agreement commenced on January 1, 1993 and continues
until terminated as follows: by either party upon at least 12 months' notice; by
ASC Europe if Dr. Papst is dismissed from his position as Managing Director of
ASC Europe as a result of German corporate law; or by either party for cause (as
defined in the employment agreement). Under the terms of the employment
agreement, Dr. Papst agreed that he will not engage in a business competitive
with that of the Company or ASC Europe until two years after the termination of
the employment agreement.
CERTAIN BUSINESS RELATIONSHIPS
Between April 18, 1994 and November 1, 1994, the Company made a series of
loans to Dr. Yurek in the aggregate amount of $650,000. These loans bore
interest at rates ranging from 4.51% to 6.34% per annum, which in each case was
based on the then Applicable Federal Rate as announced by the Internal Revenue
Service for a loan of the applicable duration. These loans were secured by a
pledge by Dr. Yurek's wife of her beneficiary interest in an insurance policy on
the life of Dr. Yurek. By vote of the Compensation Committee at a meeting on May
12, 1995, the Company forgave $100,000 of the principal of the loans made on
April 18, 1994, May 23, 1994 and August 19, 1994 and the associated interest
($4,779), and the remainder of the loans were consolidated. By vote of the
Compensation Committee at a meeting on April 17, 1996, the Company forgave an
additional $106,744 of the principal and associated interest of the outstanding
loan. On November 1, 1996, $100,000 of principal was repaid. By vote of the
Compensation Committee at a meeting held on May 2, 1997, the Company forgave an
additional $100,000 of the principal of the outstanding loan. By a vote of the
Compensation Committee on May 14, 1998, the Company forgave the remaining
$349,368 of the principal and interest of the outstanding loan.
The Company has adopted a Code of Business Conduct which, among other
things, prohibits its officers and employees from having any significant
interest in an enterprise with whom the Company has material business dealings,
or engaging in any business or financial activity that may conflict with that of
the Company.
8
<PAGE> 11
COMPENSATION COMMITTEE
REPORT ON EXECUTIVE COMPENSATION
This report addresses the compensation policies of the Company applicable
to its officers during fiscal 1998. The Company's executive compensation program
is administered by the Compensation Committee of the Board of Directors (the
"Committee"), which is comprised of three non-employee directors. The Committee
is responsible for determining the compensation package of each executive
officer, including the Chief Executive Officer. In fiscal 1998, the Board of
Directors did not modify in any material way or reject any action or
recommendation of the Committee with respect to executive officer compensation.
The objectives of the Committee in determining executive compensation are
(i) to recognize and reward exceptional performance by the Company's executives,
(ii) to provide incentive for high levels of current and future performance, and
(iii) to align the objectives and rewards of Company executives with those of
the stockholders of the Company. The Committee believes that an executive
compensation program that achieves these objectives will not only properly
motivate and compensate the Company's current officers, including the Chief
Executive Officer, but will enable the Company to attract other officers that
may be needed by the Company in the future.
The executive compensation program is implemented through three principal
elements -- base salary, an annual incentive plan based on individual
contributions to corporate success and stock option grants.
In establishing the salary of officers, including the Chief Executive
Officer, the Committee considers the individual performance of the officer, the
performance of the Company as a whole, the nature of the individual's
responsibilities, historic salary levels of the individual, and the median level
of cash compensation paid to officers in comparable positions at other companies
whose business and/or financial position is similar to that of the Company. For
purposes of this comparison, the Committee considers the executive compensation
of a range of public technology-oriented companies whose business, stage of
development, financial position and/or recent financial performance are similar
to that of the Company, as well as the companies included in the Peer Index in
the Stock Performance Graph. The Committee has determined that the salaries paid
to the Company's officers, including the Chief Executive Officer, are
appropriately positioned relative to the median cash compensation levels for
executives with comparable responsibilities in similar firms and the
contributions of the individuals to the success of the firm.
In 1996, the Committee implemented an annual incentive compensation plan
for all officers, including the Chief Executive Officer. Awards under the plan
reflect individual contributions to the achievement of predetermined Company
objectives, including financial objectives, product development objectives, and
marketing and business development objectives. At this stage of the Company's
development, the Committee believes it is appropriate for officers to have a
portion of their annual cash compensation dependent upon performance in that
year, and the Committee may consider increasing the "at risk" portion of
executive compensation over time. Bonuses were awarded for fiscal 1998
performance because the Company achieved or took substantial steps toward the
achievement of key corporate objectives, including the launching of two
commercial products for industrial power quality solutions, the completion of a
new corporate strategic alliance, the development and technical evaluation of a
new medium-voltage power quality product, the commercialization of HTS/LTS
hybrid SMES units, the manufacture and test of coil sets and cooling system for
the first 1,000 horsepower HTS motor, the successful completion of two business
acquisitions, and the successful public offering of the Company's Common Stock,
completed in April 1998. Although Dr. Yurek was not paid a bonus during fiscal
1998, the Compensation Committee elected to forgive certain indebtedness of Dr.
Yurek to the Company in lieu of paying him a bonus.
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<PAGE> 12
The Committee uses stock options as a significant element of the
compensation package of the officers, including the Chief Executive Officer,
because they provide an incentive to executives to maximize stockholder value,
because they reward the officers only to the extent that stockholders also
benefit, and because the vesting of the options (the options generally become
exercisable in installments over a five-year period) serves as a means of
retaining these officers. In recommending that stock options be granted to
certain officers, the Committee considers a number of factors including the
performance of the officer, the responsibilities of the officer, the officer's
current stock or option holdings, and the median levels of long term incentives
paid to officers with comparable responsibilities in similar companies,
including the companies included in the Company's Peer Index in the Stock
Performance Graph. Although no option grants were made to executive officers in
fiscal 1998, options were granted to executive officers in March 1997, which
were intended to comprise part of the executive officers' overall compensation
package for the fiscal year ended March 31, 1998, and in May 1998, which are
intended to comprise part of the executive officers' overall compensation
package for the fiscal year ending March 31, 1999. It has been the practice of
the Committee to fix the exercise price of options granted at 100% of the fair
market value of the Common Stock on the date of grant. The Board of Directors
recognizes that it is essential for officers of the Company to establish and
maintain an ownership position in the Company. In order to ensure that this
expectation is met, the Board of Directors has established guidelines relating
to stock ownership and disposition for all officers under which an officer is
strongly encouraged to establish and maintain ownership of shares in an amount
directly proportional to the number of shares exercised. The Committee considers
each officer's compliance with these guidelines in the establishment of ongoing
option grants. All officers, including the Chief Executive Officer, are in
compliance with this policy.
In evaluating corporate and individual performance for the purposes of
determining salary levels, awarding bonuses and granting stock options, the
Committee considers the progress and success of the Company with respect to
matters such as product development, strategic alliances, and enhancement of the
Company's patent and licensing position, as well as changes in scope of
responsibility for specific individuals.
The Committee also takes into account, to the extent it believes
appropriate, the limitations on the deductibility of executive compensation
imposed by Section 162(m) of the Internal Revenue Code in determining
compensation levels and practices.
COMPENSATION COMMITTEE
Peter O. Crisp
John B. Vander Sande
Richard Drouin
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<PAGE> 13
STOCK PERFORMANCE GRAPH
The following graph compares the cumulative total stockholder return on the
Common Stock of the Company from March 31, 1993 to March 31, 1998 (the end of
fiscal 1998) with the cumulative total return of (i) the CRSP Total Return Index
for the Nasdaq Stock Market (U.S. Companies) (the "Nasdaq Index") and (ii) an
index of five companies in a line of business similar to the Company's (the
"Peer Index"). The Peer Index is comprised of Biomagnetic Technologies, Inc.,
Intermagnetic General Corporation, Superconductor Technologies, Inc., Conductus,
Inc. and Illinois Superconductor Corporation. The Company believes these five
companies are the only companies whose business is similar to that of the
Company and whose stock has been publicly traded for at least one year. This
graph assumes the investment of $100.00 on March 31, 1993 in the Company's
Common Stock, the Nasdaq Index and the Peer Index, and assumes any dividends are
reinvested. Measurement points are March 31, 1994, March 31, 1995, March 31,
1996, March 31, 1997 and March 31, 1998 (the Company's last five fiscal year
ends).
[GRAPH]
<TABLE>
<CAPTION>
MARCH 1993 MARCH 1994 MARCH 1995 MARCH 1996 MARCH 1997 MARCH 1998
---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
American Superconductor
Corporation............. $100 $174 $148 $105 $ 63 $104
Peer Index................ $100 $134 $119 $212 $125 $ 98
Nasdaq Index.............. $100 $108 $120 $163 $181 $275
</TABLE>
11
<PAGE> 14
APPROVAL TO AMEND THE COMPANY'S RESTATED CERTIFICATE OF
INCORPORATION TO AUTHORIZE ADDITIONAL SHARES
On May 27, 1998, the Board of Directors of the Company proposed the
adoption of an amendment to the Restated Certificate of Incorporation of the
Company (the "Certificate of Incorporation"), pursuant to which, subject to
stockholder approval, the number of authorized shares of the Company's Common
Stock would be increased from 20,000,000 to 50,000,000 shares. THE BOARD OF
DIRECTORS OF THE COMPANY BELIEVES THAT THIS AMENDMENT TO THE CERTIFICATE OF
INCORPORATION TO INCREASE THE NUMBER OF AUTHORIZED SHARES IS IN THE BEST
INTERESTS OF THE COMPANY AND ITS STOCKHOLDERS AND RECOMMENDS A VOTE IN FAVOR OF
THIS PROPOSAL.
The purpose of the amendment is to allow the Company the ability to issue
additional shares in connection with acquisitions of other companies or
technologies, future financings, joint ventures, stock splits, employee and
director benefit programs, a stockholder rights plan and other desirable
corporate activities, without requiring the Company's stockholders to approve an
increase in the authorized number of shares of Common Stock each time such
action is contemplated. If the proposed amendment to the Charter Certificate of
Incorporation is adopted, all or any of the authorized shares of Common Stock
may be issued in the future for such corporate purposes and such consideration
as the Board deems advisable from time to time, without further action by the
stockholders of the Company and without first offering such shares to the
stockholders.
Of the 20,000,000 currently authorized shares of Common Stock of the
Company, as of May 29, 1998, 15,278,493 shares were issued and outstanding. An
additional 2,583,790 shares were reserved for issuance upon the exercise of
options granted under the Company's option plans and 460,500 shares were
reserved for issuance upon the exercise of certain warrants issued by the
Company.
Authorized shares of Common Stock in excess of those shares outstanding
also could make more difficult a change in control of the Company. For example,
such shares could be sold to purchasers who might side with the Board of
Directors in opposing a takeover bid that the Board determines not to be in the
best interests of the Company and it stockholders. Such a sale could have the
effect of discouraging an attempt by another person or entity, through the
acquisition of a substantial number of shares of the Company's Common Stock, to
acquire control of the Company, since the issuance of new shares could be used
to dilute the stock ownership of the acquirer.
If the amendment is adopted by the stockholders, it will become effective
upon the filing and recording of a Certificate of Amendment as required by
Delaware law.
APPROVAL TO AMEND THE 1996 STOCK INCENTIVE PLAN
On May 27, 1998, the Board of Directors of the Company adopted, subject to
stockholder approval, an amendment to the 1996 Stock Incentive Plan (the "Plan")
to increase the number of shares of the Company's Common Stock authorized for
issuance from 1,400,000 to 2,900,000.
The purpose of the Plan is to advance the interests of the Company by
enhancing the Company's ability to attract and retain key employees, consultants
and others who are in a position to contribute to the Company's future growth
and success (including growth through potential acquisitions, in which case a
sufficient number of shares of the Company's Common Stock must be available for
issuance under the Plan). THE BOARD OF DIRECTORS OF THE COMPANY BELIEVES THE
AMENDMENT TO THE PLAN IS IN THE BEST INTERESTS OF THE COMPANY AND ITS
STOCKHOLDERS, AND RECOMMENDS A VOTE IN FAVOR OF THIS PROPOSAL.
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<PAGE> 15
The Plan is summarized below. This summary is qualified in all respects by
reference to the full text of the Plan, copies of which are available upon
request to the Secretary of the Company.
SUMMARY OF THE PLAN
The Plan was adopted by the Company's Board of Directors on April 17, 1996.
The Plan provides for the grant of stock options, stock appreciation rights,
performance shares and restricted and unrestricted stock awards to employees,
officers and directors of, and consultants or advisers to, the Company. The Plan
is administered by the Board of Directors. As of May 29, 1998, the Company had
208 employees, all of whom were eligible to participate in the Plan.
Under the Plan, the Company may grant options that are intended to qualify
as incentive stock options within the meaning of Section 422 of the Code
("incentive stock options"), or options not intended to qualify as incentive
stock options ("nonstatutory options"). Incentive stock options may only be
granted to employees of the Company. The Board of Directors shall have the
discretion to accelerate the vesting of the options granted under the Plan.
Subject to the provisions of the Plan, the Board of Directors has the
authority to select the participants to whom options are granted and determine
the terms of each option, including (i) the number of shares of Common Stock
subject to the option, (ii) when the option becomes exercisable, (iii) the
option exercise price, which, in the case of incentive stock options, must be at
least 100% (110% in the case of incentive stock options granted to a stockholder
owning in excess of 10% of the Company's Common Stock) of the fair market value
of the Common Stock as of the date of grant, and (iv) the duration of the option
(which, in the case of incentive stock options, may not exceed ten years or five
years in the case of incentive stock options granted to stockholders owning in
excess of 10% of the Company's Common Stock). The Board of Directors may, in its
sole discretion, include additional provisions in any option or award granted or
made under the Plan, so long as such provisions are not inconsistent with the
Plan or applicable law. The Board of Directors may also, in its sole discretion,
accelerate the date or dates on which all or any particular option or options
granted under the Plan may be exercised.
Payment of the option exercise price may be made in cash, shares of Common
Stock, delivery of a promissory note payable on terms specified by the Board of
Directors, delivery of an irrevocable undertaking by a broker to deliver
promptly to the Company sufficient funds to pay the exercise price, delivery of
irrevocable instructions to a broker to deliver promptly to the Company cash or
a check sufficient to pay the exercise price or any combination of the
foregoing.
Incentive stock options are nontransferable other than by will or the law
of descent and distribution and are exercisable during the lifetime of the
option holder only while the option holder is in the employ of the Company, or
within three months after termination of employment. In the event that
termination is due to death or disability, or if death occurs within three
months after termination, the option is exercisable for a one-year period
thereafter.
The Board of Directors may grant restricted stock awards entitling the
recipient to acquire shares of Common Stock, subject to the right of the Company
to repurchase all or part of such shares from the recipient in the event that
certain conditions specified by the Board of Directors are not satisfied prior
to the end of the applicable period or periods. Shares of restricted stock may
not be sold, assigned, transferred, pledged or otherwise encumbered during the
restricted period, except as permitted by the Board. The Board of Directors, in
its sole discretion, may also grant to recipients shares of Common Stock free of
any restrictions. The Board of Directors determines the purchase price for each
share of restricted and unrestricted stock, which may not
13
<PAGE> 16
be less than the par value of the Common Stock. The purchase price may be paid
in the form of past services or such other lawful consideration as the Board of
Directors may determine. The Board of Directors may at any time accelerate the
expiration of the restricted period applicable to all or any particular
outstanding shares of restricted stock.
The Board of Directors may grant Stock Appreciation Rights ("SARs")
entitling recipients, upon the exercise of the SAR, to an amount of cash, Common
Stock, or a combination thereof (as the Board of Directors determines) equal to
the excess of the fair market value of Common Stock on the date of exercise of
the SAR over the fair market value on the date of the award of the SAR. SARs may
be granted in tandem with or independently of options granted under the Plan.
The Board of Directors may also make performance share awards entitling
recipients to acquire shares of Common Stock upon the attainment of specified
performance goals.
FEDERAL INCOME TAX CONSEQUENCES
The following is a summary of the United States federal income tax
consequences that generally will arise with respect to options granted under the
Plan and with respect to the sale of Common Stock acquired upon the exercise of
options granted under the Plan.
Incentive Stock Options
In general, a participant will not recognize taxable income upon the grant
or exercise of an incentive stock option. Instead, a participant will recognize
taxable income with respect to an incentive stock option only upon the sale of
Common Stock acquired through the exercise of the option ("ISO Stock"). The
exercise of an incentive stock option, however, may subject the participant to
the alternative minimum tax.
Generally, the tax consequences of selling ISO Stock will vary with the
length of time that the participant has owned the ISO Stock at the time it is
sold. If the participant sells ISO Stock after having owned it for at least two
years from the date the option was granted (the "Grant Date") and one year from
the date the option was exercised (the "Exercise Date"), then the participant
will recognize long-term capital gain in an amount equal to the excess of the
sale price of the ISO Stock over the exercise price.
If the participant sells ISO Stock for more than the exercise price prior
to having owned it for at least two years from the Grant Date and one year from
the Exercise Date (a "Disqualifying Disposition"), then all or a portion of the
gain recognized by the participant will be ordinary compensation income and the
remaining gain, if any, will be a capital gain. This capital gain will be a
long-term capital gain if the participant has held the ISO Stock for more than
one year prior to the date of sale.
If a participant sells ISO Stock for less than the exercise price, then the
participant will recognize capital loss equal to the excess of the exercise
price over the sale price of the ISO Stock. This capital loss will be a
long-term capital loss if the participant has held the ISO Stock for more than
one year prior to the date of sale.
Nonstatutory Stock Options
As in the case of an incentive stock option, a participant will not
recognize taxable income upon the grant of a nonstatutory stock option. Unlike
the case of an incentive stock option, however, a participant who exercises a
nonstatutory stock option generally will recognize ordinary compensation income
in an amount equal to the excess of the fair market value of the Common Stock
acquired through the exercise of the option ("NSO Stock") on the Exercise Date
over the exercise price.
14
<PAGE> 17
With respect to any NSO Stock, a participant will have a tax basis equal to
the exercise price plus any income recognized upon the exercise of the option.
Upon selling NSO Stock, a participant generally will recognize capital gain or
loss in an amount equal to the excess of the sale price of the NSO Stock over
the participant's tax basis in the NSO Stock. This capital gain or loss will be
a long-term gain or loss if the participant has held the NSO Stock for more than
one year prior to the date of the sale.
Tax Consequences to the Company
The grant of an option under the Plan will have no tax consequences to the
Company. Moreover, in general, neither the exercise of an incentive stock option
nor the sale of any Common Stock acquired upon the exercise of an option granted
under the Plan will have any tax consequences to the Company. The Company
generally will be entitled to a business-expense deduction, however, with
respect to any ordinary compensation income recognized by a participant under
the Plan, including as a result of the exercise of a nonstatutory stock option
or a Disqualifying Disposition. Any such deduction will be subject to the
limitations of Section 162(m) of the Code. The Company will have a withholding
obligation with respect to any ordinary compensation income recognized by
participants under the Plan who are employees or otherwise subject to
withholding in connection with the exercise of a nonstatutory stock option.
RATIFICATION OF SELECTION OF INDEPENDENT AUDITORS
The Board of Directors has selected the firm of Coopers & Lybrand L.L.P. as
the Company's independent auditors for the current fiscal year. Coopers &
Lybrand L.L.P. has served as the Company's independent auditors since the
Company's inception. Although stockholder approval of the Board of Directors'
selection of Coopers & Lybrand L.L.P. is not required by law, the Board of
Directors believes that it is advisable to give stockholders an opportunity to
ratify this selection. If this proposal is not approved at the Annual Meeting,
the Board of Directors may reconsider its selection of Coopers & Lybrand L.L.P.
Representatives of Coopers & Lybrand L.L.P. are expected to be present at
the Annual Meeting and will have the opportunity to make a statement if they
desire to do so and will also be available to respond to appropriate questions
from stockholders.
OTHER MATTERS
The Board of Directors does not know of any other matters which may come
before the Annual Meeting. However, if any other matters are properly presented
to the Annual Meeting, it is the intention of the persons named in the
accompanying proxy to vote, or otherwise act, in accordance with their judgment
on such matters.
All costs of solicitation of proxies will be borne by the Company. In
addition to solicitations by mail, the Company's directors, officers and
employees, without additional remuneration, may solicit proxies by telephone,
telegraph and personal interviews, and the Company reserves the right to retain
outside agencies for the purpose of soliciting proxies. Brokers, custodians and
fiduciaries will be requested to forward proxy soliciting material to the owners
of stock held in their names, and, as required by law, the Company will
reimburse them for their out-of-pocket expenses in this regard.
Proposals of stockholders intended to be presented at the 1999 Annual
Meeting of Stockholders must be received by the Company at its principal office
in Westborough, Massachusetts not later than February 26, 1999 for inclusion in
the proxy statement for that meeting.
15
<PAGE> 18
SECTION 16 BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Dr. Yurek filed a Form 4 reporting (i) gifts of Common Stock to each of his
two minor children and (ii) a sale of Common Stock by one of his minor children
after the required filing date. Dr. Malozemoff also filed a Form 4 reporting the
acquisition of shares of Common Stock of the Company through the exercise of
stock options after the required filing date. The Company is not aware of any
other failure by its officers, directors and holders of 10% of the Company's
Common Stock to comply in a timely manner during fiscal 1998 with Section 16(a)
filing requirements.
By Order of the Board of Directors,
Stanley Piekos, Secretary
June , 1998
THE BOARD OF DIRECTORS HOPES THAT STOCKHOLDERS WILL ATTEND THE MEETING.
WHETHER OR NOT YOU PLAN TO ATTEND, YOU ARE URGED TO COMPLETE, DATE, SIGN AND
RETURN THE ENCLOSED PROXY IN THE ACCOMPANYING ENVELOPE. STOCKHOLDERS WHO ATTEND
THE MEETING MAY VOTE THEIR STOCK PERSONALLY EVEN IF THEY HAVE SENT IN THEIR
PROXIES.
16
<PAGE> 19
PROXY AMERICAN SUPERCONDUCTOR CORPORATION PROXY
PROXY FOR THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD JULY 29, 1998
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF THE COMPANY
The undersigned, revoking all prior proxies, hereby appoint(s) Gregory J.
Yurek, Stanley Piekos and Patrick J. Rondeau, and each of them, with full power
of substitution, as proxies to represent and vote, as designated herein, all
shares of stock of American Superconductor Corporation (the "Company") which the
undersigned would be entitled to vote if personally present at the Annual
Meeting of Stockholders of the Company to be held at the offices of the Company,
Two Technology Drive, Westborough, Massachusetts 01581 on Wednesday, July 29,
1998, at 9:00 a.m., local time, and at any adjournment thereof (the "Meeting").
In their discretion, the proxies are authorized to vote upon such other
matters as may properly come before the meeting or any adjournment thereof.
This proxy, when properly executed, will be voted in the manner directed
herein by the undersigned stockholder. If no direction is given, this proxy will
be voted FOR all proposals. Attendance of the undersigned at the meeting or at
any adjournment thereof will not be deemed to revoke this proxy unless the
undersigned shall revoke this proxy in writing or shall deliver a subsequently
dated proxy to the Secretary of the Company or shall vote in person at the
Meeting.
PLEASE FILL IN, DATE, SIGN AND MAIL THIS PROXY IN THE ENCLOSED POSTAGE-PAID
RETURN ENVELOPE.
1. To elect the following eight (8) directors (except as marked below) for the
ensuing year.
NOMINEES: Gregory J. Yurek, Albert Baciocco, Frank Borman, Peter O. Crisp,
Richard Drouin, Gerard Menjon, Andrew G.C. Sage, II and John B.
Vander Sande
[ ] FOR all nominees (except as marked below)
[ ] WITHHOLD authority to vote for all nominees
For all nominees except the following nominee(s):______________________________
(Continued, and to be signed, on reverse side)
2. To approve an amendment to the Company's Restated Certificate of
Incorporation to increase the number of authorized shares of the Company's
Common Stock from 20,000,000 to 50,000,000.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. To approve an amendment to the 1996 Stock Incentive Plan to increase the
number of shares of Common Stock authorized for issuance under such plan
from 1,400,000 to 2,900,000.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
4. To ratify the selection of Coopers & Lybrand L.L.P. as the Company's
independent public accountants for the current fiscal year.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
Dated:_____________________ , 1998
__________________________________
SIGNATURE
__________________________________
SIGNATURE IF HELD JOINTLY
PLEASE SIGN EXACTLY AS NAME
APPEARS HEREON. IF THE STOCK IS
REGISTERED IN THE NAMES OF TWO OR
MORE PERSONS, EACH SHOULD SIGN.
EXECUTORS, ADMINISTRATORS,
TRUSTEES, GUARDIANS, ATTORNEYS AND
CORPORATE OFFICERS SHOULD ADD
THEIR TITLES.
