<PAGE>
SCHEDULE 14A
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 Section 240.14a-11(c) or
Section 204.14a-12
ADE 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>
[LOGO]
August 21, 2000
Dear Fellow Stockholder:
We cordially invite you to attend the 2000 Annual Meeting of Stockholders
(the "Meeting") of ADE Corporation (the "Company") to be held on Thursday,
September 21, 2000 at 10:00 a.m. at the Company's Corporate Headquarters located
at 80 Wilson Way, Westwood, Massachusetts.
At the Meeting, you are being asked to fix the size of the Board of
Directors at seven, to elect seven directors to serve until the next Annual
Meeting of Stockholders, to approve the appointment of PricewaterhouseCoopers
LLP as the Company's independent accountants for fiscal year 2001 and to approve
the Company's 2000 Employee Stock Option Plan. The Notice of Annual Meeting and
Proxy Statement that accompany this letter describe in detail the matters that
will be presented at the Meeting.
Your vote is important regardless of the number of shares you own. We urge
you to complete, sign, date and return the enclosed proxy card promptly in the
prepaid envelope provided, whether or not you plan to attend the Meeting in
person. This will ensure your proper representation at the Meeting
Thank you for giving these materials your careful consideration.
Sincerely,
[LOGO]
Robert C. Abbe
President and Chief Executive Officer
<PAGE>
ADE CORPORATION
80 WILSON WAY
WESTWOOD, MASSACHUSETTS 02090
(617) 467-3500
------------------------
NOTICE
OF
2000 ANNUAL MEETING OF STOCKHOLDERS
SEPTEMBER 21, 2000
Notice is hereby given that the 2000 Annual Meeting of Stockholders (the
"Meeting") of ADE Corporation, a Massachusetts corporation (the "Company"), will
be held on Thursday, September 21, 2000 at 10:00 a.m. at the Company's Corporate
Headquarters located at 80 Wilson Way, Westwood, Massachusetts for the following
purposes:
1. To fix the size of the Board of Directors at seven and to elect seven
directors to serve until the next Annual Meeting of Stockholders and until
their successors are elected and qualified.
2. To approve the appointment of PricewaterhouseCoopers LLP as the
Company's independent accountants for fiscal year 2001.
3. To approve the 2000 Employee Stock Option Plan.
4. To consider and act upon such other business as may properly come
before the Meeting.
Reference is hereby made to the accompanying Proxy Statement for more
complete information concerning the matters to be acted upon at the Meeting.
Only stockholders of record of the Company's Common Stock at the close of
business on July 24, 2000 will be entitled to vote at the Meeting and any
adjournments thereof.
STOCKHOLDERS ARE REQUESTED TO COMPLETE, SIGN, DATE AND RETURN THE ENCLOSED
PROXY CARD IN THE ENCLOSED ENVELOPE.
By Order of the Board of Directors
Willard G. McGraw, Jr.
CLERK
August 21, 2000
<PAGE>
ADE CORPORATION
80 WILSON WAY
WESTWOOD, MA 02090
(781) 467-3500
PROXY STATEMENT
FOR
2000 ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD SEPTEMBER 21, 2000
This Proxy Statement and the enclosed proxy card are being furnished to
stockholders of ADE Corporation ("ADE" or the "Company"), a Massachusetts
corporation, in connection with the solicitation by the Company's Board of
Directors (the "Board") of proxies to be voted at the 2000 Annual Meeting of
Stockholders to be held on Thursday. September 21, 2000 at 10:00 a.m. at the
Company's Corporate Headquarters, 80 Wilson Way, Westwood, Massachusetts, and at
any adjournments thereof (the "Meeting").
This Proxy Statement and the enclosed proxy card are first being mailed or
otherwise furnished to stockholders of the Company on or about August 21, 2000.
The Annual Report to Stockholders for the fiscal year ended April 30, 2000 is
being mailed to the stockholders with this Proxy Statement, but does not
constitute a part hereof.
Proxies may be solicited by directors, officers and employees of the Company
by mail, by telephone, in person or otherwise. No such person will receive
additional compensation for such solicitation. In addition, the Company will
request banks, brokers and other custodians, nominees and fiduciaries to forward
proxy materials to the beneficial owners of Common Stock and obtain voting
instructions from such beneficial owners. The Company will reimburse those firms
for their reasonable expenses in forwarding proxy materials and obtaining voting
instructions.
When the proxy card of a stockholder is duly executed and returned, the
shares represented thereby will be voted in accordance with the voting
instructions given on the proxy card by the stockholder. If no such voting
instructions are given on a proxy card with respect to one or more proposals,
the shares represented by that proxy card will be voted, in the election of
directors, for the nominees named herein, and with respect to other proposals,
in accordance with the recommendations of the Board. Stockholders may revoke
their proxies at any time prior to any vote at the Meeting by written notice to
the Clerk of the Company at or before the Meeting at 80 Wilson Way, Westwood, MA
02090, by submission of a duly executed proxy card bearing a later date, or by
voting in person by ballot at the Meeting.
<PAGE>
VOTING SECURITIES
Holders of Common Stock of record on the books of the Company at the close
of business on July 24, 2000 (the "Record Date") are entitled to notice of and
to vote at the Meeting. At the Record Date, there were issued and outstanding
13,490,972 shares of Common Stock, each of which entitles the holder to one vote
on each matter submitted to a vote at the Meeting.
The proxy card provides space for a stockholder to withhold voting for any
or all nominees for the Board of Directors or to abstain from voting for any
proposal if the stockholder chooses to do so. The holders of a majority of all
shares of Common Stock issued and outstanding and entitled to vote at the
Meeting shall constitute a quorum for the transaction of business. A plurality
of the votes cast in person or by proxy is required for election of directors.
The affirmative vote of a majority of the votes cast in person or by proxy is
required for all other matters. Abstentions and broker non-votes are not counted
in determining the number of votes cast in connection with any voting matter.
PROPOSAL 1
ELECTION OF DIRECTORS
NOMINEES FOR DIRECTOR
The By-Laws of the Company provide for a Board consisting of such number of
directors, not less than three nor more than nine, as may be fixed from time to
time by the stockholders. The Board has proposed that the stockholders fix the
number of directors constituting the full Board at seven. The Board has
nominated Robert C. Abbe, Harris Clay, Landon T. Clay, H. Kimball Faulkner,
Chris L. Koliopoulos, Francis B. Lothrop, Jr., and Kendall Wright, all of whom
are currently serving as directors, to be elected at the Meeting to serve on the
Board until the next Annual Meeting of Stockholders and until their respective
successors are elected and qualified.
Shares represented by proxies will be voted for the election as directors of
those nominees unless otherwise specified in the proxy. If any of the nominees
for election to the Board should, for any reason not now anticipated, not be
available to serve as such, proxies will be voted for such other candidate as
may be designated by the Board unless the Board reduces the number of directors.
The Board has no reason to believe that any of the nominees will be unable to
serve if elected.
Set forth below is information with respect to each nominee for election to
the Board of Directors at the Meeting.
ROBERT C. ABBE, age 62, founded the Company in 1967. Since that time, he has
served as President and Chief Executive Officer and as a director of the
Company. Mr. Abbe received an AB in Physics from Harvard College.
HARRIS CLAY, age 73, has been a director of the Company since 1970. He has
been self-employed as a private investor during the past five years. Mr. Clay
received an AB from Harvard College.
LANDON T. CLAY, age 74, has been a director of the Company since 1970 and
Chairman of the Board since 1979. From 1971 until 1997, he served as Chairman of
Eaton Vance Corp., a mutual fund management and distribution company. Mr. Clay
is also a director of Dakota Mining Corp. Mr. Clay received an AB from Harvard
College. Mr. Clay and Harris Clay are brothers.
2
<PAGE>
H. KIMBALL FAULKNER, age 69, has been a director of the Company since 1970,
and has been a self-employed small business consultant during the past five
years. Mr. Faulkner received an AB from Harvard College and an MBA from the
University of Virginia.
CHRIS L. KOLIOPOULOS, age 47, is President and a founder of Phase Shift
Technology, Inc., a wholly-owned subsidiary of the Company. He has been a
director of the Company since 1998. Dr. Koliopoulos received a BS from the
University of Rochester and an MS and PhD from the University of Arizona.
FRANCIS B. LOTHROP, JR., age 72, has been a director of the Company since
1972. From 1985 until 1998, he served as Chairman of Tech-Ceram Corporation, a
manufacturer of electronic ceramic packaging. Since 1998 he has been
self-employed as a business consultant and private trustee. Mr. Lothrop received
an AB from Harvard College and an MBA from Northeastern University.
KENDALL WRIGHT, age 74, has been a director of the Company since 1983 and
has been a business, marketing and operations management consultant during the
past five years. Mr. Wright received a BS from the Massachusetts Institute of
Technology.
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
During the fiscal year ended April 30, 2000, the Board held seven meetings.
During the 2000 fiscal year, each director attended at least 75 percent of Board
meetings and meetings of committees of the Board on which he serves.
The Audit Committee, composed of Harris Clay and Messrs. Lothrop and
Faulkner, meets periodically with the Company's independent auditors to review
the scope of the annual audit, to discuss the adequacy of internal accounting
controls and procedures and to perform general oversight with respect to the
accounting principles applied in the financial reporting of the Company. The
Audit Committee held two meetings during fiscal year 2000.
The Compensation Committee, composed of Landon T. Clay and Messrs. Lothrop
and Wright, administers the Company's stock option and compensation plans and
recommends to the full Board the amount, character and method of payment of
compensation of all executive officers and certain other key employees and
consultants of the Company. The Compensation Committee held five meetings during
fiscal year 2000.
The Nominating Committee, composed of Mr. Abbe, Harris Clay and Landon T.
Clay, recommends the criteria for the composition of the Board and size of the
Board and seeks out and recommends nominees for directors to be submitted to a
vote of stockholders. The Nominating Committee met once in fiscal year 2000. The
Nominating Committee will consider nominees recommended in writing by
stockholders if certain information is provided regarding the nominees.
Recommendations by stockholders should be submitted to the Nominating Committee,
in care of the President of the Company at 80 Wilson Way, Westwood MA 02090.
BOARD RECOMMENDATION
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR FIXING THE
SIZE OF THE BOARD OF DIRECTORS AT SEVEN AND ELECTING THE NOMINEES TO THE BOARD
OF DIRECTORS. A PLURALITY OF THE VOTES CAST IN PERSON OR BY PROXY AT THE MEETING
IS REQUIRED TO ELECT EACH NOMINEE AS A DIRECTOR.
3
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
The following table sets forth information regarding beneficial ownership of
the Company's Common Stock as of July 24, 2000, by (i) each person known to the
Company to be the beneficial owner of more than 5% of the Company's Common Stock
on that date, (ii) each director, (iii) each executive officer listed in the
Summary Compensation Table below and (iv) all directors and executive officers
as a group.
<TABLE>
<CAPTION>
SHARES PERCENTAGE
NAME BENEFICIALLY OWNED(1) OF TOTAL
---- --------------------- ----------
<S> <C> <C>
Private Capital Management, Inc.(2)......................... 2,509,363 18.6%
Landon T. Clay(3)........................................... 1,884,310 14.0%
Chris L. Koliopoulos(4)..................................... 1,092,200 8.1%
Harris Clay................................................. 880,759 6.5%
State of Wisconsin Investment Board(5)...................... 769,900 5.7%
Dimensional Fund Advisers Inc.(6)........................... 678,000 5.0%
Robert C. Abbe(7)........................................... 380,153 2.8%
H. Kimball Faulkner......................................... 96,258 *
Francis B. Lothrop, Jr...................................... 60,130 *
Kendall Wright.............................................. 14,491 *
A. K. Lum................................................... 10,000 *
All directors and officers as a group (8 persons)(8)........ 4,418,301 32.7%
</TABLE>
------------------------
* Less than one percent.
(1) Beneficial ownership of shares for purposes hereof, as determined in
accordance with applicable Securities and Exchange Commission rules,
includes shares of Common Stock as to which a person has or shares voting
power and/or investment power. All amounts shown in this column include
shares obtainable upon exercise of stock options exercisable within 60 days
from the date of this table.
(2) Based on the most recent Schedule 13G filed by Private Capital
Management, Inc., with the Securities and Exchange Commission on
February 15, 2000. Includes 2,233,663 shares as to which Private Capital
Management, Inc., and its President, Bruce S. Sherman, have shared
dispositive power; 45,700 shares as to which Mr. Sherman has sole
dispositive power; and 230,000 shares as to which Mr. Sherman and SPS
Partners, L.P., an affiliate of Private Capital Management, Inc., have
shared dispositive power.
(3) Includes 311,567 shares held in various trusts for the benefit of
Mr. Clay's children, 6,500 shares held for the benefit of Mr. Clay in a
pension plan and 269,596 shares held by Mr. Clay's children, as to which
Mr. Clay disclaims beneficial ownership.
(4) Includes 1,200 shares of Common Stock issuable to Stella Koliopoulos,
Dr. Koliopoulos' sister, upon exercise of stock options. Dr. Koliopoulos
disclaims beneficial ownership of these shares.
(5) Based on the most recent Schedule 13G filed by the State of Wisconsin
Investment Board with the Securities and Exchange Commission on January 25,
2000.
(6) Based on the most recent Schedule 13G filed by Dimensional Fund
Advisers Inc. with the Securities and Exchange Commission on February 3,
2000.
4
<PAGE>
(7) Includes 94,250 shares of Common Stock held by Dr. Elizabeth Baker,
Mr. Abbe's wife, as to which Mr. Abbe disclaims beneficial ownership. Also
includes 30,000 shares of Common Stock issuable upon exercise of stock
options.
(8) Includes an aggregate of 31,200 shares of Common Stock issuable upon
exercise of stock options.
The address of all natural persons listed above is c/o ADE Corporation, 80
Wilson Way, Westwood, Massachusetts 02090. The address of Private Capital
Management, Inc., is 3003 Tamiami Trail North, Naples, Florida 33940. The
address of the State of Wisconsin Investment Board is Post Office Box 7842, 121
East Wilson Street, Madison, Wisconsin 53707. The address of Dimensional Fund
Advisers Inc. is 1299 Ocean Avenue, 11th Floor, Santa Monica, California 90401.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
directors, officers, and persons who are beneficial owners of more than ten
percent of the Company's Common Stock to file with the Securities and Exchange
Commission (the "Commission") reports of their ownership of the Company's
securities and of changes in that ownership. To the Company's knowledge, based
upon a review of copies of reports filed with the Commission with respect to the
fiscal year ended April 30, 2000, all reports required to be filed under
Section 16(a) by the Company's directors and officers and persons who were
beneficial owners of more than ten percent of the Company's Common Stock were
timely filed on Form 4, except that Landon T. Clay and Chris L. Koliopoulos
elected to report certain transactions at fiscal year end on Form 5.
5
<PAGE>
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth all compensation received for services
rendered to the Company for the fiscal years ended April 30, 2000, 1999, and
1998 by the Company's Chief Executive Officer and the two most highly
compensated executive officers other than the Chief Executive Officer whose
annual salary and bonus for the fiscal year ended April 30, 2000 exceeded
$100,000 (collectively, the "Named Executives").
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS
--------------------- -------------
NUMBER OF
SHARES
UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS STOCK OPTIONS COMPENSATION(1)
--------------------------- -------- --------- --------- ------------- ----------------
<S> <C> <C> <C> <C> <C>
Robert C. Abbe.............................................. 2000 $234,600 $ 0 -- $ 3,553
President and Chief Executive Officer 1999 $218,438 $ 0 -- $ 3,032
1998 $225,000 $102,591 -- $ 4,000
A. K. Lum(2)................................................ 2000 $211,200 $ 0 -- $32,878
Vice President and General Manager, 1999 $120,570 $ 0 50,000 $32,115
Semiconductor Division 1998 $ 0 $ 0 -- $ 0
Chris L. Koliopoulos(3)..................................... 2000 $179,658 $ 1,000 -- $13,152
Vice President, ADE Corporation, President, 1999 $182,000 $ 6,801 -- $ 4,018
ADE Phase Shift, Inc. 1998 $ 0 $ 0 -- $ 0
</TABLE>
------------------------------
(1) Represents matching contributions made by the Company on behalf of the Named
Executive to the Company's 401(k) Plan.
(2) "All other compensation" for Mr. Lum includes $29,000 housing allowance in
fiscal 2000 and $30,000 relocation assistance in fiscal 1999 in addition to
401(k) matching.
(3) "All other compensation" for Mr. Koliopoulos includes a 401(k) bonus of
$8,701.59 in addition to 401(k) matching.
OPTION GRANTS IN THE LAST FISCAL YEAR
As indicated in the following table, no options were granted to any of the
Named Executives during the fiscal year ended April 30, 2000 under the Company's
stock option plans.
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE VALUE AT ASSUMED
ANNUAL RATES OF STOCK PRICE
INDIVIDUAL GRANTS APPRECIATION FOR OPTION TERM(2)
------------------------------------------------------ -------------------------------------
NUMBER OF
SECURITIES PERCENT OF TOTAL
UNDERLYING OPTIONS GRANTED
OPTIONS TO EMPLOYEES IN EXERCISE EXPIRATION
NAME GRANTED(1) FISCAL YEAR PRICE DATE 5% 10%
---- ----------- ---------------- -------- ---------- ----------------- -----------------
<S> <C> <C> <C> <C> <C> <C>
Robert C. Abbe................... -- -- -- -- -- --
A. K. Lum........................ -- -- -- -- -- --
Chris L. Koliopoulos............. -- -- -- -- -- --
</TABLE>
------------------------------
(1) Options vest in equal annual increments over five years commencing on the
date of grant.
(2) As required by rules of the Securities and Exchange Commission, potential
values stated are on the prescribed assumption that the Company's Common
Stock will appreciate in value from the date of grant to the end of the
option term at annualized rates of 5% and 10%. Hypothesized values are not
intended to forecast possible appreciation in the Company's Common Stock.
6
<PAGE>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION
VALUES
The following table provides certain information with respect to option
exercises by the Named Executives during the fiscal year ended April 30, 2000
and the value of unexercised options held by the Named Executives at April 30,
2000.
<TABLE>
<CAPTION>
NUMBER OF UNEXERCISED VALUE OF UNEXERCISED IN-THE-MONEY
OPTIONS AT FISCAL YEAR-END OPTIONS AT FISCAL YEAR-END
SHARES ACQUIRED VALUE ---------------------------- ---------------------------------
NAME ON EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- --------------- -------- ------------ ------------- --------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Robert C. Abbe.................... 0 $ 0 30,000 20,000 $228,750 $152,500
A. K. Lum......................... 10,000 $102,756 0 40,000 $ 0 $345,000
Chris L. Koliopoulos.............. 0 $ 0 0 0 $ 0 $ 0
</TABLE>
DIRECTOR COMPENSATION
The Company's non-employee directors are reimbursed for expenses and receive
$500 for each Board meeting attended. Directors are given the option to receive
shares of the Company's Common stock in lieu of cash compensation.
REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors (the "Committee") is
responsible for establishing and administering compensation policies for all
executive officers of the Company, including the Chief Executive Officer, and
for making specific recommendations regarding compensation for such executive
officers to the full Board. The Committee is composed of Landon T. Clay, Francis
B. Lothrop, Jr., and Kendall Wright, none of whom are officers or employees of
the Company. Mr. Wright performs services for the Company as an independent
consultant. ADE's Chief Executive Officer, Robert C. Abbe, participates in
discussions with the Committee regarding the compensation levels of executive
officers other than himself.
The Company provides its executive officers with a compensation package
consisting of a base salary, annual incentive compensation in the form of a cash
bonus and equity-based incentive compensation in the form of stock options. The
overall objectives of the Company's compensation policies are (i) to establish
base salaries which are competitive with those payable by companies with which
ADE competes in the marketplace and for the recruitment of executives, (ii) to
relate a significant part of the executive's compensation to his or hers and the
Company's performance through cash bonuses based on the achievement of
pre-established profitability and other operating targets and (iii) to align
management's interests with those of the Company's stockholders through the use
of stock options at percentage levels appropriate for executive positions within
the Company.
In setting compensation levels for fiscal 2000, the Committee conducted a
review of data from a number of independent surveys. The Committee also reviewed
the compensation paid to executive officers at a selected peer group of
semiconductor equipment companies (the "Selected Peer Group Data").
BASE SALARIES
Base salaries for fiscal 2000 for ADE's executive officers were set by the
Committee based on the responsibilities of the position held and the experience
and performance of the individual, and by reference to the information regarding
competitive salaries gathered from a number of independent
7
<PAGE>
surveys. The Committee reviewed the salaries of each of the executive officers
of the Company, compensation practices at similar companies in the industry,
individual and Company performance and individual responsibility levels and
adjusted individual salaries for fiscal 2000 based on these factors.
EXECUTIVE BONUSES
All executive officers, including the Chief Executive Officer, as well as
all other full-time, regular employees of the Company participate in the
Company's bonus pool, the total amount of which is determined by a fixed
percentage of pre-tax profit in excess of a threshold corresponding to a
targeted rate of return on invested capital. No bonuses will be paid under this
plan in respect of fiscal 2000 because the threshold targeted rate of return on
invested capital was not reached in fiscal 2000.
STOCK OPTIONS
The Committee also is responsible for administration of the Company's stock
option and stock purchase plans and the granting of rights thereunder. Stock
option grants are based on the Committee's subjective evaluation of each
executive officer's performance and contribution to the Company, the executive
officer's position and responsibilities and the executive officer's attitude and
role as a leader. The Committee also considers, but does not weigh as heavily,
each executive officer's potential for greater contribution to ADE in the future
and length of service with the Company. Finally the Committee considers the
executive stock ownership levels reported by executives included in the Selected
Peer Group Data. Generally, stock options are granted with an exercise price
equal to the market price of the Common Stock on the date of grant and vest over
five years. This approach is designed to act as an incentive for the creation of
stockholder value and management stability over the long term, since the full
benefit of the compensation package cannot be realized unless and until stock
price appreciation occurs over a number of years. The Committee did not grant
stock options to any executive officer during fiscal 2000.
CHIEF EXECUTIVE OFFICER COMPENSATION
Mr. Abbe's fiscal 2000 base salary of $234,600 represented a seven percent
increase from his fiscal 1999 base salary. In the prior year, Mr. Abbe's base
salary had decreased from that of fiscal 1998 by approximately five percent for
approximately four months of fiscal 1999. Mr. Abbe received no cash bonus in
fiscal 2000.
INTERNAL REVENUE CODE LIMITATION ON DEDUCTIBILITY OF EXECUTIVE COMPENSATION
Section 162(m) of the Internal Revenue Code, enacted in 1993, generally
disallows a tax deduction to public companies for compensation over $1 million
paid during any year to the company's chief executive officer and four other
most highly compensated executive officers. Qualified performance-based
compensation is not included in the $1 million limit. The Committee believes
that the Company's 1992, 1995, and 1997 Stock Option Plans, as well as the 2000
Employee Stock Option Plan presented to the shareholders for approval at this
Meeting, qualify as performance-based compensation plans.
Submitted by the Compensation
Committee
Landon T. Clay, Chairman
Francis B. Lothrop, Jr.
Kendall Wright
8
<PAGE>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
18-OCT-95 APR-96 APR-97 APR-98 APR-99 APR-00
<S> <C> <C> <C> <C> <C> <C>
ADE CORP/MA 100 114.29 133.93 127.68 73.21 125.89
S&P SMALLCAP 600 INDEX 100 129.33 134.19 196.93 168.78 203.37
EQUIP(SEMICONDUCTR)-SMALL 100 73.16 89.49 113.22 85.04 229.07
</TABLE>
DOLLARS
The Company believes that the S&P SmallCap 600 Index and the Equipment
(Semiconductor)-SmallCap Index more closely reflect the stock performance of
companies with comparable market capitalization and in similar industries,
respectively, of the Company than do the Nasdaq Stock Market Index and the
Hambrecht & Quist Semiconductor Index.
9
<PAGE>
PROPOSAL 2
APPROVAL OF THE 2000 EMPLOYEE STOCK OPTION PLAN
On June 21, 2000, the Board of Directors adopted, subject to approval of the
stockholders, the Company's 2000 Employee Stock Option Plan (the "Plan"). The
following is a general summary of the Plan, which is qualified in its entirety
by reference to the Plan, a copy of which is attached as Exhibit A.
GENERAL
In June 2000, the Board of Directors adopted, subject to stockholder
approval, the Company's 2000 Employee Stock Option Plan (the "Plan"). Under the
Plan, stock rights may be granted which are either (i) options intended to
qualify as "incentive stock options" ("ISOs") under Section 422(b) of the
Internal Revenue Code of 1986, as amended (the "Internal Revenue Code"),
(ii) non-qualified stock options ("NQSOs"), or (iii) awards of shares of Common
Stock or the opportunity to make a direct purchase of shares of Common Stock
("Stock Awards") (ISOs, NQSOs and Stock Awards, together, being hereinafter
referred to as "Stock Rights"). Stock Rights may be granted under the Plan to
employees (including officers and directors who are employees) of the Company
and its subsidiaries (530 persons, as of August 16, 2000).
The number of shares of Common Stock subject to the Plan is 900,000 plus the
number of shares of Common Stock previously reserved for the granting of options
under the Company's 1995 Stock Option Plan or its 1997 Stock Option Plan which
are not granted under either of those plans or which are not exercised and cease
to be outstanding by reason of cancellation or otherwise. As of June 21, 2000,
153,705 shares of Common Stock remained available for the granting of options
under the 1995 Stock Option Plan or the 1997 Stock Option Plan, and 725,405
shares of Common Stock were reserved for issuance under outstanding, unexercised
options under all of the Company's plans. The number of shares subject to the
Plan is subject to adjustment in the case of a stock split, stock dividend,
combination, recapitalization or similar transaction. The full text of the Plan
substantially in the form in which it will take effect if approved by the
stockholders is set forth in Exhibit A. As of August 16, 2000, there were no
Stock Rights outstanding under the Plan.
DESCRIPTION OF PLAN
The Compensation Committee of the Board administers the Plan. Subject to the
provisions of the Plan, the Committee has the authority to determine the persons
to whom Stock Rights will be granted, the number of shares to be covered by each
Stock Right, the exercise price per share and the manner of exercise, and the
terms and conditions upon which Stock Rights are granted, to accelerate the date
of exercise of any installment of any Stock Right, and to interpret the
provisions of the Plan.
ISOs granted under the Plan may not be granted at a price less than the fair
market value of the Common Stock on the date of grant (or less than 110% of fair
market value in the case of employees or officers holding 10% or more of the
voting stock of the Company). NQSOs may be granted at an exercise price
established by the Committee, which may not be less than the par value of the
Common Stock. ISOs granted under the Plan must expire not more than ten years
from the date of grant, and not more than five years from the date of grant in
the case of ISOs granted to an employee or officer holding 10% or more of the
voting stock of the Company. No participant may be granted options in any
calendar year for the purchase of more than 75,000 shares. Stock Awards may be
granted on such terms and conditions as are
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approved by the Committee, provided that the purchase price per share cannot be
less than the par value per share of the Common Stock.
ISOs and, except as otherwise provided in the pertinent grant documents,
NQSOs and Stock Awards granted under the Plan are exercisable during the
optionholder's lifetime only by the optionholder and are not transferable except
by will or the laws of descent and distribution or pursuant to a qualified
domestic relations order as defined by the Code or Title I of the Employee
Retirement Income Security Act of 1974.
In the event of certain consolidations or acquisitions or a sale of
substantially all of the Company's assets, either (i) the Committee or the
entity assuming the Company's obligations under the Plan shall make appropriate
provision for the continuation of all outstanding options under the Plan by
substituting on an equitable basis for the shares then subject to such options
either the consideration payable with respect to the outstanding shares of
Common Stock in connection with such consolidation, acquisition or sale or
securities of any successor or acquiring company, or (ii) the vesting of all
outstanding options under the Plan will be accelerated and such options will
become fully exercisable immediately prior to such consolidation, acquisition or
sale.
The Plan may be amended by the stockholders or by the Board of Directors or
the Committee. Any amendment approved by the Board of Directors or the Committee
which is of a scope that requires stockholder approval in order to ensure
favorable federal income tax treatment for any ISOs or in order to ensure the
compliance of the Plan with Section 162(m) of the Code will be subject to
stockholder approval. No amendment may adversely affect the rights of any
participant to whom Stock Rights have previously been granted without that
participant's consent.
FEDERAL INCOME TAX CONSEQUENCES
The discussion of federal income tax consequences that follows is based on
an analysis of the Internal Revenue Code as currently in effect, existing law,
judicial decisions and administrative regulations and rulings, all of which are
subject to change.
INCENTIVE STOCK OPTIONS (ISOS). No taxable income is realized by the
optionholder upon the grant or exercise of an ISO under the Plan. If no
disposition of shares issued to an optionholder pursuant to the exercise of an
ISO is made by the optionholder within the later of (i) two years from the date
of grant and (ii) one year after the transfer of such shares to the
optionholder, then (a) upon sale of such shares, any amount realized in excess
of the option price (the amount paid for the shares) will be taxed to the
optionholder as a long-term or mid-term capital gain; and any loss sustained
will be a long-term capital loss; and (b) no deduction will be allowed to the
Company for federal income tax purposes. Shares held more than one year but not
more than eighteen months will be taxed at the mid-term capital gain rate,
currently 28%, and shares held more than eighteen months will be taxed at the
long-term capital gain rate, currently 20%. The exercise of ISOs will give rise
to an item of tax preference that may result in alternative minimum tax
liability for the optionholder.
If shares of Common Stock acquired upon the exercise of an ISO are disposed
of prior to the expiration of the two-year and one-year holding periods
described above (a "disqualifying disposition"), generally (a) the optionholder
will realize ordinary income in the year of disposition in an amount equal to
the excess (if any) of the fair market value of the shares at exercise (or, if
less, the amount realized on a sale of such shares) over the option price
thereof, and (b) the Company will be entitled to deduct such amount subject to
applicable withholding requirements and subject to certain limits on the
deductibility of compensation set forth in Section 162(m) of the Internal
Revenue Code. Any further gain realized will be
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taxed as capital gain (as set forth in the preceding paragraph) and will not
result in any deduction by the Company. Special rules apply where all or a
portion of the exercise price of the ISO is paid by tendering shares of Common
Stock. A disqualifying disposition will eliminate the item of tax preference
associated with the exercise of the ISO.
NON-QUALIFIED STOCK OPTIONS. No taxable income is realized by the
optionholder at the time the NQSO is granted. Generally, (a) at exercise,
ordinary income is realized by the optionholder in an amount equal to the
difference between the option price and the fair market value of the shares on
the date of exercise, and the Company receives a tax deduction for the same
amount, subject to applicable withholding requirements and subject to certain
limits on the deductibility of compensation set forth in Section 162(m) of the
Internal Revenue Code, and (b) at disposition, appreciation or depreciation
after the date of exercise is treated as either capital gain or loss, as set
forth above under "Incentive Stock Options."
STOCK AWARDS. The grant of restricted stock should not result in income for
the participant or in a deduction for the Company for federal income tax
purposes if the shares are subject to certain restrictions and conditions of
forfeitability. A participant will generally realize taxable compensation income
when the restrictions lapse. The amount of such income will be the value of the
Common Stock on that date less any amount paid by the participant. Dividends
paid on the Common Stock and received by the participant, prior to the lapse of
restrictions, will also be taxable compensation income to the participant. If
there are no such restrictions, the participant will recognize compensation
income equal to the fair market value upon receipt, less the amount of the
purchase price paid by the participant. In all cases, the Company will be
entitled to a tax deduction to the extent that, and at the time that, the
participant realizes compensation income. Payroll tax withholding will be
required.
LIMITATIONS ON COMPANY DEDUCTIONS. As a result of Section 162(m) of the
Code, the Company's deduction for NQSOs and Stock Awards granted under the Plan
may be limited to the extent that a "covered employee" (i.e., the chief
executive officer or one of the four highest compensated officers who is
employed on the last day of the Company's taxable year and whose compensation is
reported in the summary compensation table in the Company's proxy statement)
receives compensation in excess of $1,000,000 in such taxable year of the
Company. Excluded from this limitation of deductibility is performance-based
compensation that meets specified requirements of Section 162(m) of the Code.
NEW PLAN BENEFITS
The number of shares or options, if any, that will be granted to executive
officers and other employees under the Plan cannot be determined, since any such
grants are subject to the discretion of the Committee.
BOARD RECOMMENDATION
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE APPROVAL OF THE 2000
EMPLOYEE STOCK OPTION PLAN AS DESCRIBED ABOVE. A MAJORITY OF THE VOTES CAST IN
PERSON OR BY PROXY AT THE MEETING IS REQUIRED FOR SUCH APPROVAL.
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PROPOSAL 3
APPROVAL OF INDEPENDENT ACCOUNTANTS
The Board of Directors has appointed PricewaterhouseCoopers LLP as the
Company's independent accountants for the 2001 fiscal year.
PricewaterhouseCoopers LLP has served as the Company's independent accountants
since 1973. Representatives of PricewaterhouseCoopers LLP will be present at the
Meeting to respond to questions and will be given the opportunity to make a
statement should they desire to do so.
BOARD RECOMMENDATION
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR APPROVAL OF
THE APPOINTMENT OF PRICEWATERHOUSECOOPERS LLP AS THE COMPANY'S INDEPENDENT
ACCOUNTANTS FOR THE CURRENT FISCAL YEAR. A MAJORITY OF THE VOTES CAST IN PERSON
OR BY PROXY AT THE MEETING IS REQUIRED FOR SUCH APPROVAL. IF THE APPOINTMENT IS
NOT SO APPROVED, THE BOARD WILL SELECT OTHER INDEPENDENT ACCOUNTANTS.
STOCKHOLDER PROPOSALS FOR THE 2001 ANNUAL MEETING
In order to be considered for inclusion in the Proxy Statement for the
Company's 2001 Annual Meeting of Stockholders, stockholder proposals must be
received by the Company no later than April 23, 2001. Proposals should be sent
to the attention of the President at the Company's offices at 80 Wilson Way,
Westwood, MA 02090.
Stockholder nominations for election to the Board at the 2001 Annual Meeting
of Stockholders may be submitted to the Company and must include (i) the name
and address of the stockholder who intends to make the nomination and of the
person or persons to be nominated; (ii) a representation that the stockholder is
a holder of record of stock of the Company entitled to vote at such Meeting and
intends to appear in person or by proxy at the Meeting to nominate the person or
persons specified in the notice; (iii) a description of all arrangements or
understandings between the stockholder and each nominee and any other person or
persons (naming such person or persons) pursuant to which the nomination or
nominations are to be made by the stockholder; (iv) such other information
regarding each nominee proposed by such stockholder as would be required to be
included in a proxy statement filed pursuant to the proxy rules of the
Commission; and (v) the consent of each nominee to serve as a director of the
Company if so elected.
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OTHER MATTERS
The Meeting is called for the purposes set forth in the notice. The Board of
Directors does not know of any matter for action by the stockholders at the
Meeting other than the matters described in the notice. However, the enclosed
proxy confers discretionary authority on the persons named therein with respect
to matters which are not known to the directors at the date of printing hereof
and which may properly come before the Meeting. It is the intention of the
persons named in the proxy to vote in accordance with their best judgment on any
such matter.
By order of the Board of Directors
Willard G. McGraw, Jr.
Clerk
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EXHIBIT A
ADE CORPORATION
2000 EMPLOYEE STOCK OPTION PLAN
1. PURPOSES OF THE PLAN
The ADE Corporation 2000 Employee Stock Option Plan is intended to encourage
ownership of shares of the Common Stock of ADE Corporation (the "Company") by
key employees of the Company or of its Affiliates in order to attract such
persons, to induce them to work for the benefit of the Company or of an
Affiliate, and to provide additional incentive for them to promote the long-term
success of the Company or of an Affiliate. The Company desires to reward its key
employees equitably for their service, value, and commitment to the Company. The
Company believes that the Plan will cause participants to contribute materially
to the growth of the Company, thereby benefiting the Company's shareholders.
2. DEFINITIONS
Unless otherwise specified or unless the context otherwise requires, the
following terms, as used in the Plan, have the following meanings:
AFFILIATE means a corporation which, for purposes of Section 424 of the
Code, is a parent or subsidiary of the Company, direct or indirect.
BOARD OF DIRECTORS means the Board of Directors of the Company.
CODE means the United States Internal Revenue Code of 1986, as amended.
COMMITTEE means the Compensation Committee of the Board of Directors or any
successor thereto appointed by the Board of Directors pursuant to Section 4
hereof to administer this Plan, or in the absence of any such Committee, means
the full Board of Directors.
COMMON STOCK means shares of the Company's common stock, $.01 par value.
COMPANY means ADE Corporation, a Massachusetts corporation.
DISABILITY or DISABLED means permanent and total disability as defined in
Section 22(e)(3) of the Code.
EXCHANGE ACT means the Securities Exchange Act of 1934, as amended.
FAIR MARKET VALUE of a Share of Common Stock on a particular date shall be
the mean between the highest and lowest quoted selling prices on such date (the
"valuation date") on the securities market where the Common Stock of the Company
is traded, or if there were no sales on the valuation date, on the next
preceding date within a reasonable period (as determined in the sole discretion
of the Committee) on which there were sales. In the event that there were no
sales in such a market within a reasonable period, or in the event the Common
Stock of the Company is not traded on any securities market, the Fair Market
Value shall be as determined in good faith by the Committee in its sole
discretion.
ISO means an option intended to qualify as an incentive stock option under
Code Section 422.
KEY EMPLOYEE means an employee of the Company or of an Affiliate (including,
without limitation, an employee who is also serving as an officer or director of
the Company or of an Affiliate), designated by the Committee to be eligible to
be granted one or more Stock Rights under the Plan.
NQSO means an option which is not intended to qualify as an ISO.
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OPTION means an ISO or NQSO granted under the Plan.
PARTICIPANT means a Key Employee to whom one or more Stock Rights are
granted under the Plan. As used herein, "Participant" shall include
"Participant's Survivors" and a Participant's permitted transferees where the
context requires.
PARTICIPANT'S SURVIVORS means a deceased Participant's legal representatives
and/or any person or persons who acquires the Participant's rights to a Stock
Right by will or by the laws of descent or distribution.
PLAN means this ADE Corporation 2000 Employee Stock Option Plan, as amended
from time to time.
SHARES means shares of the Common Stock as to which Stock Rights have been
or may be granted under the Plan or any shares of capital stock into which the
Shares are changed or for which they are exchanged within the provisions of
Section 3 of the Plan. The Shares issued upon exercise of Stock Rights granted
under the Plan may be authorized and unissued shares or shares held by the
Company in its treasury, or both.
STOCK AGREEMENT means an agreement between the Company and a Participant
executed and delivered pursuant to the Plan, in such form as the Committee shall
approve.
STOCK AWARD means an award of Shares or the opportunity to make a direct
purchase of Shares of the Company granted under the Plan.
STOCK RIGHT means a right to Shares of the Company granted pursuant to the
Plan as an ISO, an NQSO, or a Stock Award.
3. SHARES SUBJECT TO THE PLAN
The number of Shares subject to the Plan as to which Stock Rights may be
granted from time to time shall be 900,000, plus the number of shares of Common
Stock previously reserved for the granting of options under either the Company's
1995 Stock Option Plan or 1997 Stock Option Plan which are not granted under
either of those plans or which are not exercised and cease to be outstanding by
reason of cancellation or otherwise, or the equivalent of such number of Shares
after the Committee, in its sole discretion, has interpreted the effect of any
stock split, stock dividend, combination, recapitalization, or similar
transaction in accordance with Section 16 of the Plan.
If an Option granted hereunder ceases to be "outstanding", in whole or in
part, the Shares which were subject to such Option shall also be available for
the granting of other Stock Rights under the Plan. Any Stock Right shall be
treated as "outstanding" until such Stock Right is exercised in full or
terminates or expires under the provisions of the Plan, or by agreement of the
parties to the pertinent Stock Agreement, without having been exercised in full.
4. ADMINISTRATION OF THE PLAN
The Plan shall be administered by the Committee. The Committee shall be
comprised of two or more members of the Board of Directors, all of whom shall be
Non-employee Directors as defined in Rule 16b-3 under the Exchange Act and
"outside directors" as that term is used in Section 162 of the Code and the
regulations promulgated thereunder, or the entire Board of Directors acting as
such a committee. Any provision in this Plan with respect to the Committee
contrary to Rule 16b-3 or Code Section 162 shall be deemed null and void to the
extent permitted by law and deemed appropriate by the Committee. The
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Committee may delegate authority to the Chief Executive Officer to grant Stock
Rights with respect to a fixed number of Shares, to be reserved from time to
time for such purpose by vote of the Committee, to new employees of the Company
or of an Affiliate; provided, however, that no such delegation shall be
permitted with respect to the grant of Stock Rights to any person who is an
officer or director of the Company for purposes of Section 16(b) of the Exchange
Act.
Subject to the provisions of the Plan, the Committee is authorized to:
(a) Interpret the provisions of the Plan or of any Option, Stock Award,
or Stock Agreement and to make all rules and determinations which it deems
necessary or advisable for the administration of the Plan;
(b) Determine which employees of the Company or of an Affiliate shall be
designated as Key Employees and which of the Key Employees shall be granted
Stock Rights;
(c) Determine the number of Shares and exercise price for which a Stock
Right or Stock Rights shall be granted;
(d) Specify the terms and conditions upon which a Stock Right or Stock
Rights may be granted; and
(e) In its discretion, accelerate the date of exercise of any
installment of any Stock Right; provided that the Committee shall not,
without the consent of the Participant, accelerate the exercise date of any
installment of any Option granted to such Participant as an ISO (and not
previously converted into an NQSO pursuant to Section 18) if such
acceleration would violate the annual vesting limitation contained in
Section 422(d) of the Code, as described in paragraph (b)(3) of Section 6;
provided, however, that all such interpretations, rules, determinations, terms,
and conditions shall be made and prescribed in the context of preserving the tax
status under Code Section 422 of those Options which are designated as ISOs and
shall be in compliance with any applicable provisions of Rule 16b-3 under the
Exchange Act. Subject to the foregoing, the interpretation and construction by
the Committee of any provisions of the Plan or of any Stock Right granted under
it shall be final, unless otherwise determined by the Board of Directors, if the
Committee is other than the Board of Directors.
The Committee may employ attorneys, consultants, accountants, or other
persons, and the Committee, the Company, and its officers and directors shall be
entitled to rely upon the advice, opinions, or valuations of such persons. All
actions taken and all interpretations and determinations made by the Committee
in good faith shall be final and binding upon the Company, all Participants, and
all other interested persons. No member or agent of the Committee shall be
personally liable for any action, determination, or interpretation made in good
faith with respect to the Plan or grants hereunder. Each member of the Committee
shall be indemnified and held harmless by the Company against any cost or
expense (including counsel fees) reasonably incurred by him or liability
(including any sum paid in settlement of a claim with the approval of the
Company) arising out of any act or omission to act in connection with the Plan
unless arising out of such member's own fraud or bad faith. Such indemnification
shall be in addition to any rights of indemnification the members of the
Committee may have as directors or otherwise under the by-laws of the Company,
or any agreement, vote of stockholders, or disinterested directors, or
otherwise.
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5. ELIGIBILITY FOR PARTICIPATION
The Committee shall, in its sole discretion, name the Participants in the
Plan, provided, however, that each Participant must be a Key Employee of the
Company or of an Affiliate at the time a Stock Right is granted. Notwithstanding
the foregoing, the Committee may authorize the grant of a Stock Right to a
person not then an employee of the Company or of an Affiliate; provided,
however, that the actual grant of such Stock Right shall be conditioned upon
such person becoming eligible to become a Participant at or prior to the time of
execution of the Stock Agreement evidencing such Stock Right. The granting of
any Stock Right to any individual shall neither entitle that individual to, nor
disqualify him or her from, participation in other grants of Stock Rights.
6. TERMS AND CONDITIONS OF OPTIONS
(a) GENERAL. Each Option shall be set forth in writing in a Stock
Agreement, duly executed by the Company and, to the extent required by law or
requested by the Company, by the Participant. The Committee may provide that
Options be granted subject to such conditions as the Committee may deem
appropriate, including, without limitation, subsequent approval by the
shareholders of the Company of this Plan or any amendments thereto; provided,
however, that the option price per share of the Shares covered by each Option
shall not be less than the par value per share of the Common Stock. Each Stock
Agreement shall state the number of Shares to which it pertains, the date or
dates on which it first is exercisable, and the date after which it may no
longer be exercised. Option rights may accrue or become exercisable in
installments over a period of time, or upon the achievement of certain
conditions or the attainment of stated goals or events. Exercise of any Option
may be conditioned upon the Participant's execution of a Share purchase
agreement in form satisfactory to the Committee providing for certain
protections for the Company and its other shareholders, including requirements
that the Participant's or the Participant's Survivors' right to sell or transfer
the Shares may be restricted, and the Participant or the Participant's Survivors
may be required to execute letters of investment intent and to acknowledge that
the Shares will bear legends noting any applicable restrictions.
(b) ISOS. In addition to the minimum standards set forth in paragraph (a)
of this Section 6, ISOs shall be subject to the following terms and conditions,
with such additional restrictions or changes as the Committee determines are
appropriate but not in conflict with Code Section 422 and relevant regulations
and rulings of the Internal Revenue Service:
(1) ISO OPTION PRICE: The Option price per Share of the Shares subject
to an ISO shall not be less than one hundred percent (100%) of the Fair
Market Value per share of the Common Stock on the date of grant of the ISO;
provided, however that the Option price per share of the Shares subject to
an ISO granted to a Participant who owns, directly or by reason of the
applicable attribution rules in Code Section 424(d), more than ten percent
(10%) of the total combined voting power of all classes of share capital of
the Company or an Affiliate shall not be less than one hundred ten percent
(110%) of the said Fair Market Value on the date of grant.
(2) TERM OF ISO: Each ISO shall expire not more than ten (10) years
from the date of grant; provided, however, that an ISO granted to a
Participant who owns, directly or by reason of the applicable attribution
rules in Code Section 424(d), more than ten percent (10%) of the total
combined voting power of all classes of share capital of the Company or an
Affiliate, shall expire not more than five (5) years from the date of grant.
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(3) LIMITATION ON YEARLY ISO EXERCISABILITY: The aggregate Fair Market
Value (determined at the time each ISO is granted) of the stock with respect
to which ISOs are exercisable for the first time by a Participant in any
calendar year (under this or any other ISO plan of the Company or an
Affiliate) shall not exceed the maximum amount allowable under Section 422
of the Code.
(4) LIMITATION ON GRANT OF ISOS: No ISOs shall be granted after
June 21, 2010, the date which is ten (10) years from the date of the
approval of the Plan by the Board of Directors.
(c) LIMITATION ON NUMBER OF OPTIONS GRANTED. Notwithstanding anything in
the Plan to the contrary, no Participant shall be granted Options in any
calendar year for the purchase of more than 75,000 Shares.
7. TERMS AND CONDITIONS OF STOCK AWARDS
Each Stock Award shall be set forth in a Stock Agreement, duly executed by
the Company and, to the extent required by law or requested by the Company, by
the Participant. The Stock Agreement shall be in the form approved by the
Committee, with such changes and modifications to such form as the Committee, in
its discretion, shall approve with respect to any particular Participant or
Participants. The Stock Agreement shall contain terms and conditions which the
Committee determines to be appropriate and in the best interest of the Company;
provided, however, that the purchase price per share of the Shares covered by
each Stock Award shall not be less than the par value per Share. Each Stock
Agreement shall state the number of Shares to which the Stock Award pertains,
the date prior to which the Stock Award must be exercised by the Participant,
and the terms of any right of the Company to reacquire the Shares subject to the
Stock Award, including the time and events upon which such rights shall accrue
and the purchase price therefor, and any restrictions on the transferability of
such Shares.
8. EXERCISE OF STOCK RIGHTS AND ISSUANCE OF SHARES
A Stock Right (or any part or installment thereof) shall be exercised by
giving written notice to the Company, together with provision for payment of the
full purchase price in accordance with this Section for the Shares as to which
such Stock Right is being exercised, and upon compliance with any other
conditions set forth in the Stock Agreement. Such written notice shall be signed
by the person exercising the Stock Right, shall state the number of Shares with
respect to which the Stock Right is being exercised, and shall contain any
representation required by the Plan or the Stock Agreement.
Payment of the purchase price for the Shares as to which such Stock Right is
being exercised shall be made (i) in United States dollars in cash or by check,
(ii) through delivery of shares of Common Stock already owned by the Participant
not subject to any restriction under any plan and having a Fair Market Value
equal as of the date of exercise to the cash exercise price of the Stock Right,
(iii) at the discretion of the Committee, by any other means, including a
promissory note of the Participant, which the Committee determines to be
consistent with the purpose of this Plan and applicable law, (iv) at the
discretion of the Committee, in accordance with a cashless exercise program
established with a securities brokerage firm and approved by the Committee, or
(v) at the discretion of the Committee, by any combination of (i), (ii), (iii),
and (iv) above. Notwithstanding the foregoing, the Committee shall accept only
such payment on exercise of an ISO as is permitted by Section 422 of the Code.
The Company shall reasonably promptly deliver the Shares as to which such
Stock Right was exercised to the Participant (or to the Participant's Survivors,
as the case may be). In determining what constitutes "reasonably promptly," it
is expressly understood that the delivery of the Shares may be delayed by the
Company in order to comply with any law or regulation which requires the Company
to take any action
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with respect to the Shares prior to their issuance. The Shares shall, upon
delivery, be fully paid, non-assessable Shares.
9. RIGHTS AS A SHAREHOLDER
No Participant to whom a Stock Right has been granted shall have rights as a
shareholder with respect to any Shares covered by such Stock Right, except after
due exercise thereof and tender of the full purchase price for the Shares being
purchased pursuant to such exercise and registration of the Shares in the
Company's share register in the name of the Participant.
10. ASSIGNABILITY AND TRANSFERABILITY OF STOCK RIGHTS
ISOs and, except as otherwise provided in the pertinent Stock Agreement,
NQSOs and Stock Awards shall not be transferable by the Participant other than
by will or by the laws of descent and distribution or pursuant to a qualified
domestic relations order as defined by the Code or Title I of the Employee
Retirement Income Security Act of 1974 or the rules thereunder; provided,
however, that the designation of a beneficiary of a Stock Right by a Participant
shall not be deemed a transfer prohibited by this Section. Except as provided in
the preceding sentence or as otherwise permitted under an NQSO or Stock Award
Stock Agreement, a Stock Right shall be exercisable, during the Participant's
lifetime, only by such Participant (or by his or her legal representative) and
shall not be assigned, pledged, or hypothecated in any way (whether by operation
of law or otherwise) and shall not be subject to execution, attachment, or
similar process. Any attempted transfer, assignment, pledge, hypothecation, or
other disposition of any Stock Right or of any rights granted thereunder
contrary to the provisions of this Plan, or the levy of any attachment or
similar process upon a Stock Right, shall be null and void.
11. EFFECT OF TERMINATION OF SERVICE
(a) Except as otherwise provided in the pertinent Stock Agreement or as
otherwise provided in Section 12, 13, or 14, if a Participant ceases to be an
employee of the Company and its Affiliates (a "Termination of Service") for any
reason other than termination "for cause", Disability, or death before the
Participant has exercised all Stock Rights, the Participant may exercise any
Stock Right granted to him or her to the extent that the Stock Right is
exercisable on the date of such Termination of Service, but only within a period
of not more than three (3) months after the date of the Participant's
Termination of Service or, if earlier, within the originally prescribed term of
the Stock Right. Notwithstanding the foregoing, except as provided in
Section 13 or 14, in no event may an ISO be exercised later than three
(3) months after the Participant's termination of employment with the Company
and its Affiliates.
(b) The provisions of this Section, and not the provisions of Section 13 or
14, shall apply to a Participant who subsequently becomes disabled or dies after
the Termination of Service; provided, however, that in the case of a
Participant's death within three (3) months after the Termination of Service,
the Participant's Survivors may exercise the Stock Right within one (1) year
after the date of the Participant's death, but in no event after the date of
expiration of the term of the Stock Right.
(c) Notwithstanding anything herein to the contrary, if subsequent to a
Participant's Termination of Service, but prior to the exercise of a Stock
Right, the Committee determines that, either prior or subsequent to the
Participant's Termination of Service, the Participant engaged in conduct which
would constitute "cause" (as defined in Section 12), then such Participant shall
forthwith cease to have any right to exercise any Stock Right.
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(d) Absence from work with the Company or an Affiliate because of temporary
disability (any disability other than a permanent and total Disability as
defined in Section 2 hereof), or a leave of absence for any purpose, shall not,
during the period of any such absence, be deemed, by virtue of such absence
alone, a Termination of Service, except as the Committee may otherwise expressly
provide.
(e) A change of employment or other service within or among the Company and
its Affiliates shall not be deemed a Termination of Service, so long as the
Participant continues to be an employee of the Company or any Affiliate;
provided, however, that if a Participant's employment with the Company or an
Affiliate should cease (other than to become an employee of another Affiliate or
of the Company), then paragraph (a) of this Section 11 shall apply as to any
ISOs granted to such Participant.
12. EFFECT OF TERMINATION OF SERVICE FOR "CAUSE"
Except as otherwise provided in the pertinent Stock Agreement, in the event
of a Termination of Service of a Participant "for cause," all outstanding and
unexercised Stock Rights as of the date the Participant is notified his or her
service is terminated "for cause" will immediately be forfeited. For purposes of
this Section 12, "cause" shall include (and is not limited to) dishonesty with
respect to the Company and its Affiliates, insubordination, substantial
malfeasance or nonfeasance of duty, unauthorized disclosure of confidential
information, conduct substantially prejudicial to the business of the Company or
any Affiliate, and termination by the Participant in violation of an agreement
by the Participant to remain in the employ of the Company of an Affiliate. The
determination of the Committee as to the existence of cause will be conclusive
on the Participant and the Company. "Cause" is not limited to events which have
occurred prior to a Participant's Termination of Service, nor is it necessary
that the Committee's finding of "cause" occur prior to termination. If the
Committee determines, subsequent to a Participant's Termination of Service but
prior to the exercise of a Stock Right, that either prior or subsequent to the
Participant's termination the Participant engaged in conduct which would
constitute "cause," then the right to exercise any Stock Right shall be
forfeited. Any definition in an agreement between a Participant and the Company
or an Affiliate which contains a conflicting definition of "cause" for
termination and which is in effect at the time of such termination shall
supersede the definition in this Plan with respect to that Participant.
13. EFFECT OF TERMINATION OF SERVICE FOR DISABILITY
Except as otherwise provided in the pertinent Stock Agreement, in the event
of a Termination of Service by reason of Disability, the Disabled Participant
may exercise any Stock Right granted to him or her to the extent exercisable but
not exercised on the date of Disability. A Disabled Participant may exercise
such rights only within a period of not more than one (1) year after the date
that the Participant became Disabled or, if earlier, within the originally
prescribed term of the Stock Right.
The Committee shall make the determination both of whether Disability has
occurred and the date of its occurrence (unless a procedure for such
determination is set forth in another agreement between the Company and such
Participant, in which case such procedure shall be used for such determination).
If requested, the Participant shall be examined by a physician selected or
approved by the Committee, the cost of which examination shall be paid for by
the Company.
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14. EFFECT OF DEATH WHILE AN EMPLOYEE
Except as otherwise provided in the pertinent Stock Agreement, in the event
of death of a Participant while the Participant is an employee of the Company or
of an Affiliate, any Stock Rights granted to such Participant may be exercised
by the Participant's Survivors to the extent exercisable but not exercised on
the date of death. Any such Stock Right must be exercised within one (1) year
after the date of death of the Participant.
15. PURCHASE FOR INVESTMENT
Unless the offering and sale of the Shares to be issued upon the particular
exercise of a Stock Right shall have been effectively registered under the
Securities Act of 1933, as now in force or hereafter amended (the "Securities
Act"), the Company shall be under no obligation to issue the Shares covered by
such exercise unless and until the following conditions have been fulfilled:
(a) The person who exercises such Stock Right shall warrant to the
Company, at the time of such exercise or receipt, as the case may be, that
such person is acquiring such Shares for his own account for investment and
not with a view to, or for sale in connection with, the distribution of any
such Shares, in which event the person acquiring such Shares shall be bound
by the provisions of the following legend which shall be endorsed upon the
certificate evidencing the Shares issued pursuant to such exercise or such
grant:
"The shares represented by this certificate have been taken for
investment and they may not be sold or otherwise transferred by any
person, including a pledgee, unless (1) either (a) a Registration
Statement with respect to such shares shall be effective under the
Securities Act of 1933, as amended, or (b) the Company shall have
received an opinion of counsel satisfactory to it that an exemption from
registration under such Act is then available, and (2) there shall have
been compliance with all applicable state securities laws.
(b) The Company shall have received an opinion of its counsel that the
Shares may be issued upon such particular exercise in compliance with the
Securities Act without registration thereunder.
The Company may delay issuance of the Shares until completion of any action
or obtaining of any consent which the Company deems necessary under any
applicable law (including, without limitation, state securities or "blue sky"
laws).
16. ADJUSTMENTS
Upon the occurrence of any of the following events, a Participant's rights
with respect to any Stock Right granted to him or her hereunder which have not
previously been exercised in full shall be adjusted as hereinafter provided,
unless otherwise specifically provided in the written agreement between the
Participant and the Company relating to such Stock Right or in any employment
agreement between a Participant and the Company or an Affiliate:
(a) STOCK DIVIDENDS AND STOCK SPLITS. If the shares of Common Stock
shall be subdivided or combined into a greater or smaller number of shares
or if the Company shall issue any shares of Common Stock as a stock dividend
on its outstanding Common Stock, the number of shares of Common Stock
deliverable upon the exercise of such Stock Right shall be appropriately
increased or decreased proportionately, and appropriate adjustments shall be
made in the purchase price per share to reflect such subdivision,
combination, or stock dividend
8
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(b) MERGERS OR CONSOLIDATIONS. If the Company is to be consolidated with
or acquired by another entity in a merger, or in the event of a sale of all
or substantially all of the Company's assets (an "Acquisition"), the Company
may take such action with respect to outstanding Stock Rights as the
Committee or the Board of Directors may deem to be equitable and in the best
interests of the Company and its stockholders under the circumstances,
including, without limitation, (i) giving the Participant reasonable advance
notice of the pendency of the Acquisition and accelerating the vesting of
the Stock Rights so that they become exercisable in full immediately prior
to the Acquisition, (ii) making appropriate provision for the continuation
of the Stock Rights by substituting on an equitable basis for the shares
then subject to the Options either the consideration payable with respect to
the outstanding shares of Common Stock in connection with the Acquisition or
securities of any successor or acquiring entity, or (iii) giving the
Participant reasonable advance notice of the pendency of the Acquisition and
canceling the Stock Rights effective upon the Acquisition if they are not
exercised prior to the Acquisition.
(c) RECAPITALIZATION OR REORGANIZATION. In the event of a
recapitalization or reorganization of the Company (other than a transaction
described in paragraph (b) of this Section 16) pursuant to which securities
of the Company or of another corporation are issued with respect to the
outstanding shares of Common Stock, a Participant upon exercising a Stock
Right shall be entitled to receive for the purchase price paid upon such
exercise the securities he or she would have received if he or she had
exercised such Stock Right prior to such recapitalization or reorganization.
(d) MODIFICATION OF ISOS. Notwithstanding the foregoing, any adjustments
made pursuant to paragraph (a), (b), or (c) of this Section 16 with respect
to ISOs shall be made only after the Committee determines whether such
adjustments would constitute a "modification" of such ISOs (as that term is
defined in Section 424(h) of the Code) or would cause any adverse tax
consequences for the holders of such ISOS. If the Committee determines that
such adjustments made with respect to ISOs would constitute a modification
of such ISOs, it may refrain from making such adjustments, unless the holder
of an ISO specifically requests in writing that such adjustment be made and
such writing indicates that the holder has full knowledge of the
consequences of such "modification" on his or her income tax treatment with
respect to the ISO.
17. FRACTIONAL SHARES
No fractional share shall be issued under the Plan, and the person
exercising any Stock Right shall receive from the Company cash in lieu of any
such fractional share equal to the Fair Market Value thereof determined in good
faith by the Board of Directors of the Company.
18. CONVERSION OF ISOS INTO NON-QUALIFIED OPTIONS; TERMINATION OF ISOS.
Any Options granted under this Plan which do not meet the requirements of
the Code for ISOs shall automatically be deemed to be NQSOs without further
action on the part of the Committee. The Committee, at the written request of
any Participant, may in its discretion take such actions as may be necessary to
convert such Participant's ISOs (or any portion thereof) that have not been
exercised on the date of conversion into NQSOs at any time prior to the
expiration of such ISOs, regardless of whether the Participant is an employee of
the Company or an Affiliate at the time of such conversion. Such actions may
include, but not be limited to, extending the exercise period or reducing the
exercise price of the appropriate installments of such Options. At the time of
such conversion, the Committee (with the consent of the Participant) may impose
such conditions on the exercise of the resulting NQSOs as the Committee
9
<PAGE>
in its discretion may determine, provided that such conditions shall not be
inconsistent with this Plan. Nothing in the Plan shall be deemed to give any
Participant the right to have such Participant's ISOs converted into NQSOs, and
no such conversion shall occur until and unless the Committee takes appropriate
action. The Committee, with the consent of the Participant, may also terminate
any portion of any ISO that has not been exercised at the time of such
termination.
19. WITHHOLDING
In the event that any federal, state, or local income taxes, employment
taxes, Federal Insurance Contributions Act ("FICA") withholdings, or other
amounts are required by applicable law or governmental regulation to be withheld
from the Participant's salary, wages, or other remuneration in connection with
the exercise of a Stock Right or a Disqualifying Disposition (as defined in
Section 20), the Participant shall advance in cash to the Company, or to any
Affiliate of the Company which employs or employed the Participant, the amount
of such withholdings unless a different withholding arrangement, including the
use of shares of the Company's Common Stock, is authorized by the Committee (and
permitted by law); provided, however, that with respect to persons subject to
Section 16 of the Exchange Act, any such withholding arrangement shall be in
compliance with any applicable provisions of Rule 16b-3 promulgated under
Section 16 of the Exchange Act. For purposes hereof, the Fair Market Value of
any shares withheld for purposes of payroll withholding shall be determined in
the manner provided in Section 2 hereof, as of the most recent practicable date
prior to the date of exercise. If the Fair Market Value of the shares withheld
is less than the amount of payroll withholdings required, the Participant may be
required to advance the difference in cash to the Company or the Affiliate
employer. The Committee in its discretion may condition the exercise of an
Option for less than the then Fair Market Value on the Participant's payment of
such additional withholding.
20. NOTICE TO COMPANY OF DISQUALIFYING DISPOSITION
Each Key Employee who receives an ISO must agree to notify the Company in
writing immediately after the Key Employee makes a Disqualifying Disposition of
any Shares acquired pursuant to the exercise of an ISO. A Disqualifying
Disposition is any disposition (including any sale) of such shares before the
later of (a) two years after the date the Key Employee was granted the ISO, or
(b) one year after the date the Key Employee acquired Shares by exercising the
ISO. If the Key Employee has died before such Shares are sold, these holding
period requirements do not apply and no Disqualifying Disposition can occur
thereafter.
21. EFFECTIVE DATE; TERMINATION OF THE PLAN
The Plan shall be effective on June 21, 2000, the date it was approved by
the Board of Directors. Stock Rights may be granted under the Plan on and after
its effective date; provided, however, that any such Stock Rights shall be null
and void if the Plan is not approved by the stockholders of the Company within
twelve (12) months after the effective date. The Plan will terminate on
June 21, 2010, the date which is ten (10) years from the date of its approval by
the Board of Directors. The Plan may be terminated at an earlier date by vote of
the stockholders of the Company; provided, however, that any such earlier
termination will not affect any Stock Rights granted or Stock Agreements
executed prior to the effective date of such termination.
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<PAGE>
22. AMENDMENT OF THE PLAN
The Plan may be amended by the stockholders of the Company. The Plan may
also be amended by the Board of Directors or the Committee, including, without
limitation, to the extent necessary to qualify any or all outstanding Stock
Rights granted under the Plan or Stock Rights to be granted under the Plan for
favorable federal income tax treatment (including deferral of taxation upon
exercise) as may be afforded incentive stock options under Section 422 of the
Code, to the extent necessary to ensure the qualification of the Plan under
Rule 16b-3 under the Exchange Act, and to the extent necessary to qualify the
shares issuable upon exercise of any outstanding Stock Rights granted, or Stock
Rights to be granted, under the Plan for listing on any national securities
exchange or quotation in any national automated quotation system of securities
dealers. Any amendment approved by the Board of Directors or the Committee which
is of a scope that requires stockholder approval in order to ensure favorable
federal income tax treatment for any ISOs or requires stockholder approval in
order to ensure the compliance of the Plan with Rule 16b-3 or Section 162(m) of
the Code shall be subject to obtaining such stockholder approval. No
modification or amendment of the Plan shall adversely affect any rights under a
Stock Right previously granted to a Participant without such Participant's
consent.
In its discretion, the Committee may amend any term or condition of any
outstanding Stock Right, provided (i) such term or condition as amended is
permitted by the Plan, (ii) if the amendment is adverse to the Participant, such
amendment shall be made only with the consent of the Participant, (iii) any such
amendment of any ISO shall be made only after the Committee determines whether
such amendment would constitute a "modification" of any Stock Right which is an
ISO (as that term is defined in Section 424(h) of the Code) or would cause any
adverse tax consequences for the holder of such ISO, and (iv) with respect to
any Stock Right held by any Participant who is subject to the provisions of
Section 16(a) of the 1934 Act, any such amendment shall be made only after the
Committee determines whether such amendment would constitute the grant of a new
Stock Right.
23. EMPLOYMENT OR OTHER RELATIONSHIP
Nothing in the Plan or any Stock Agreement shall be deemed to prevent the
Company or an Affiliate from terminating the employment status of a Participant,
nor to prevent a Participant from terminating his or her own employment, or to
give any Participant a right to be retained in employment or other service by
the Company or any Affiliate for any period of time.
24. GOVERNING LAW
This Plan shall be construed and enforced in accordance with the law of the
Commonwealth of Massachusetts.
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This Proxy is Solicited by the Board of Directors of
ADE Corporation
----------------------------------------------------
2000 ANNUAL MEETING OF STOCKHOLDERS
September 21, 2000
The undersigned hereby appoints Landon T. Clay and Robert C. Abbe as
proxies to represent the undersigned, with full power of substitution, at the
2000 Annual Meeting of Stockholders of ADE Corporation, to be held on
September 21, 2000 at 10:00 A.M., local time, at ADE Corporate Headquarters,
80 Wilson Way, Westwood, Massachusetts, and at any adjournments thereof.
(CONTINUED AND TO BE SIGNED ON THE REVERSE SIDE)
<PAGE>
Please date, sign and mail your
proxy card back as soon as possible!
Annual Meeting of Stockholders
ADE CORPORATION
September 21, 2000
Please Detach and Mail in the Envelope Provided
A /x/ Please mark your votes as in the example.
1. Election of Directors.
/ / FOR all nominees listed at right Nominees: Robert C. Abbe
(except as marked to the Harris Clay
contrary below) Landon T. Clay
H. Kimball Faulkner
/ / WITHHOLD AUTHORITY to vote for all Chris L. Kollopoulos
nominees listed at right Francis B. Lothrop, Jr.
Kendall Wright
For, except vote withheld for the
following nominee(s):
-------------------------------------------------------------------------------
2. Proposal to approve the Company's 2000 Employee Stock Option Plan.
FOR / / AGAINST / / ABSTAIN / /
3. Proposal to ratify and approve PricewaterhouseCoopers LLP as the Company's
independent accountants for the fiscal year ending April 30, 2001.
FOR / / AGAINST / / ABSTAIN / /
In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.
THIS BALLOT, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED STOCKHOLDER(S). UNLESS OTHERWISE SPECIFIED, THE
SHARES WILL BE VOTED "FOR" EACH PROPOSAL.
PLEASE DATE, SIGN AND RETURN THIS PROXY. THANK YOU.
Signature of Stockholder(s) Dated:
----------------------------------- --------
NOTE: Signature should agree with the name on the stock certificate as
printed thereon. Executors, administrators, trustees and other fiduciaries
should so indicate when signing.
