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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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 (S) 240.14a-11(c) or (S) 240.14a-12
ASTROPOWER, INC.
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(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:
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(2) Aggregate number of securities to which transaction applies:
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(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):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[_] 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:
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(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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Notes:
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AstroPower
Solar Park
Newark, Delaware 19716-2000
Telephone: (302) 366-0400
May 12, 2000
Dear Shareholder:
Please accept my personal invitation to attend our Annual Meeting of
Shareholders on Thursday, June 15, at 11.00 a.m. This year's meeting will be
held at the Company's manufacturing plant at Pencader Corporate Center, Newark,
Delaware.
The business to be conducted at the meeting is set forth in the formal
notice that follows. In addition, Management will provide a review of 1999
operating results and discuss the outlook for the future. After the formal
presentation, the Directors and Management will be available to answer any
questions that you may have.
Your vote is important. I urge you to complete, sign and return the
enclosed proxy card.
I look forward to seeing you on June 15.
Sincerely,
/s/ Allen M. Barnett
Allen M. Barnett
President and Chief Executive Officer
<PAGE>
Solar Park
Newark, Delaware 19716-2000
Telephone: (302) 366-0400
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TAKE NOTICE that the 2000 Annual Meeting of Shareholders of AstroPower, Inc., a
Delaware corporation, will be held at our manufacturing plant at Pencader
Corporate Center, Newark, Delaware on:
Thursday, June 15, 2000
at 11:00 a.m. (local time) for the following purposes:
1. To elect two directors to serve until the 2003 Annual Meeting of
Shareholders.
2. To amend our 1999 Stock Option Plan so as to increase the number of shares
available under the Plan.
3. To amend our amended and restated Certificate of Incorporation to increase
the number of authorized shares of our common stock.
4. To ratify the appointment of KPMG, LLP as our independent accountants for
the fiscal year 2000.
5. To transact such other business as may properly come before the meeting and
at any adjournments or postponements of the meeting.
Accompanying this Notice is the Proxy Statement and Form of Proxy.
The Board of Directors set May 3, 2000, as the record date for the meeting. This
means that owners of our common stock at the close of business on that date are
entitled to (1) receive notice of the meeting and (2) vote at the meeting and
any adjournments or postponements of the meeting. We will make available a list
of our shareholders as of the close of business on May 3, 2000 for inspection
during normal business hours from June 4 through June 15, 2000, at our offices,
Solar Park, Newark, Delaware. This list will also be available at the meeting.
DATED: Newark, Delaware, May 12, 2000
BY ORDER OF THE BOARD OF DIRECTORS
___________________________________________
ALLEN M. BARNETT
President and Chief Executive Officer
WE URGE YOU TO VOTE PROMPTLY BY SIGNING AND RETURNING THE ENCLOSED PROXY CARD.
IF YOU DECIDE TO ATTEND THE MEETING, YOU MAY REVOKE THE PROXY AND VOTE YOUR
SHARES IN PERSON.
<PAGE>
PRELIMINARY PROXY
STATEMENT
ASTROPOWER, INC.
Solar Park
Newark, Delaware 19716-2000
PROXY STATEMENT
This Proxy Statement and accompanying proxy are first being sent to shareholders
on or about May 12, 2000.
VOTING AND PROXIES
What is the purpose of the Annual Meeting?
At our Annual Meeting, shareholders will act upon the matters outlined on the
previous page and described in this Proxy Statement, including the election of
directors, amending our 1999 Stock Option Plan, amending our amended and
restated Certificate of Incorporation to increase the number of authorized
shares of our common stock and ratification of the appointment of our
independent accountants. In addition, management will respond to questions from
shareholders.
Who is entitled to vote?
Only holders of record at the close of business on May 3, 2000 of common stock
are entitled to vote. Each holder of common stock is entitled to one vote per
share. We are presently authorized to issue 25,000,000 common shares, par value
$.01 per share, and 5,000,000 shares of Preferred Stock, par value $.01 per
share. There were issued and outstanding 11,428,545 shares of common stock as of
the close of business on May 3, 2000. There are no shares of Preferred Stock
outstanding.
How do I vote?
You can vote by filling out the accompanying proxy and returning it in the
postage paid return envelope that we have enclosed for you. Voting information
is provided on the enclosed form of proxy. If your shares are held in the name
of a bank or broker, follow the voting instructions on the form that you receive
from them.
What if my shares are held by a broker or nominee?
If you hold your shares in "street name" through a broker or other nominee, your
broker or nominee may not be permitted to exercise voting discretion as to some
of the matters to be acted upon. Thus, if you do not give your broker or nominee
specific instructions, your shares may not be voted on those matters and will
not be counted in determining the number of shares for approval.
How will my proxy be voted?
Your proxy, when properly signed and returned to us, and not revoked, will be
voted in accordance with your instructions relating to the election of directors
and on Proposals 2, 3 and 4. We are not aware of any other matter that may be
properly presented other than the election of directors and Proposals 2, 3 and
4. If any other matter is properly presented, the persons named in the enclosed
form of proxy will have discretion to vote in their best judgment.
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What if I don't mark the boxes on my proxy?
Unless you give other instructions on your form of proxy, the persons named as
proxies will vote in accordance with the recommendations of the Board of
Directors. The Board's recommendation is set forth together with the description
of each proposal in this Proxy Statement. In summary, the Board recommends a
vote
For:
- ---
. the election of directors;
. amending our 1999 Stock Option Plan;
. amending our amended and restated Certificate of Incorporation; and
. the ratification of the appointment of KPMG Peat Marwick, LLP as our
independent accountants for 2000.
Can I go to the Annual Meeting if I vote by proxy?
Yes. Attending the meeting does not revoke the proxy. However, you may revoke
your proxy at any time before it is actually voted by giving written notice to
the secretary of the meeting or by delivering a later dated proxy.
Will my vote be public?
No. As a matter of policy, shareholder proxies, ballots and tabulations that
identify individual shareholders are kept confidential and are only available as
actually necessary to meet legal requirements.
What constitutes a quorum?
The presence at the meeting, in person or by proxy, of the holders of a majority
in voting power of the outstanding shares of common stock entitled to vote will
constitute a quorum, permitting the meeting to conduct its business. Proxies
received but marked as abstentions and broker non-votes will be included in the
calculation of the number of shares considered to be present at the meeting.
How many votes are needed to approve an Item?
The affirmative vote of shares representing a majority in voting power of the
shares of common stock, present in person or by proxy and entitled
to vote at the meeting, is necessary for approval of Proposals 2, and 4. The
affirmative vote of shares representing a majority of the outstanding shares of
common stock is necessary for approval of Proposal 3.
Proxies
marked as abstentions on these matters will not be voted and will have the
effect of a negative vote. The election of directors will be by a plurality of
the votes cast. A proxy marked to withhold authority for the election of one or
more directors will not be voted with respect to the director or directors
indicated.
PERSONS MAKING THE SOLICITATION
Solicitations will be made by mail and possibly supplemented by telephone or
other personal contact to be made without special compensation by our regular
officers and employees. We may reimburse shareholder's nominees or agents
(including brokers holding shares on behalf of clients) for the cost incurred in
obtaining from their principals authorization to execute forms of proxy. No
solicitation will be made by specifically engaged employees or soliciting
agents. The cost of solicitation will be borne by us.
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ANNUAL REPORT
The Annual Report for the year ended December 31, 1999 containing financial and
other information about us is enclosed.
PROPOSAL 1.
ELECTION OF DIRECTORS
The Board of Directors currently consists of six members. Our Amended and
Restated By-Laws provide for a classified Board of Directors. At the 1998 Annual
Meeting of Shareholders, the directors were divided into three classes, with the
directors of the first class elected for a term of one year, the directors of
the second class elected for a term of two years, and the directors of the third
class elected for a term of three years. Thereafter, following such initial
classification and election, directors elected to succeed those directors whose
terms expire are to be elected for a term of office to expire at the third
succeeding Annual Meeting of Shareholders after their election and until their
successors are duly elected and qualified. The term of the office of directors
in Class II expires at the 2000 Annual Meeting. The Board of Directors
proposes that the two nominees described below, both of whom are currently
serving as Class II directors, be re-elected to Class II for a new term of three
years and until their successors are duly elected and qualified. All nominees
and all current Class I and Class III directors were elected by the
Shareholders.
Each of the nominees has consented to serve a three-year term. If any of them
should become unavailable to serve as a director (which is not now expected),
the Board may designate a substitute nominee. In that case, the persons named as
proxies will vote for the substitute nominee designated by the Board.
There are set forth below following the names of the nominees and Class I and
Class III directors, their present positions and offices with the Company, their
principal occupations during the past five years, directorships held with other
corporations, certain other information, their ages and the year first elected
as a director.
NOMINEES FOR DIRECTORS - CLASS II - TERM EXPIRING 2003
Dr. George S. Reichenbach, age 70, has served as a director of the Company since
1989. Dr. Reichenbach was a Senior Vice President of Advent International
Corporation, a venture capital firm from 1987 to 1998. He serves as a director
of Progressive Systems Technology, a semiconductor capital equipment
manufacturer. Previously, Dr. Reichenbach worked at the Massachusetts Institute
of Technology where has served as an Assistant Professor and Associate Professor
of Mechanical Engineering. Dr. Reichenbach received a B.S. in Mechanical
Engineering from Yale University and a Ph.D. in Mechanical Engineering from the
Massachusetts Institute of Technology. Member of the Compensation
Committee.
Dr. George W. Roland, age 60, served as President and Chief Executive Officer of
the Company's Solar Power Business from 1996 to December 31, 1998 at which time
he retired as an officer and employee and has served as a director since 1997.
From 1995 to 1996, Dr. Roland served as Vice President and General Manager of
the Company's Solar Power Business. From 1993 to June 1995 Dr. Roland served as
President of Siemens Solar Industries, LP, an affiliate of Siemens Corporation
(USA). Prior to that, Dr. Roland served in various positions, including Vice
President and Division Manager of the Metalworking Systems Division, at
Kennametal, Inc. Dr. Roland began his industry career in 1968 as a research and
development engineer at Westinghouse Electric Corporation's Research and
Development Center in Pittsburgh, Pennsylvania, throughout which time he has
been awarded 15 U.S. patents and has authored numerous technical publications.
Dr. Roland received a B.S. in Geology from Acadia University and a Ph.D. in
Geological Science from Lehigh University.
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INCUMBENT DIRECTORS - CLASS I - TERM EXPIRING 2002
Clare E. Nordquist, age 64, has served as a director of the Company since 1995.
Mr. Nordquist is the Managing General Partner of Material Ventures Associates
LP, a venture capital partnership specializing in advanced technology materials
companies and serves as a director of Leading Edge Ceramics, LLC, a manufacturer
and distributor of ceramic powders and shapes; Minco Acquisition Corporation,
the parent of numerous companies which manufacture fused silica and fused
magnesia; and Viox Corporation, a custom producer of electronic grade, high
purity glass powders utilized primarily in electronics applications. Mr.
Nordquist received a B.S. in Ceramic Engineering from the University of
Washington and an M.B.A. from the University of Denver. Member of the Audit and
Compensation Committees.
Charles R. Schaller, age 64, has served as director of the Company since 1989
and as Secretary from 1989 through March 1998. Mr. Schaller is a management
consultant specializing in the petrochemicals industry and a venture developer
concentrating in the area of specialty materials, and serves as Chairman of the
Board of Directors of Medarex Inc., a publicly held biotechnology firm. From
1985 to 1989, Mr. Schaller served as President and Chief Operating Officer of
Essex Vencap, Inc., a venture development subsidiary of Essex Chemical
Corporation. Mr. Schaller has more than 33 years of experience in sales,
marketing, management, business and venture development and management
consulting in the chemical, petrochemical and specialty materials areas. Mr.
Schaller received a B.E. in Chemical Engineering from Yale University and is a
graduate of the Harvard Business School Program for Management Development.
Member of the Audit and Compensation Committees.
INCUMBENT DIRECTORS - CLASS III - TERM EXPIRING 2001
Dr. Allen M. Barnett, age 59, is a founder of the Company and has served as its
President and Chief Executive Officer and as a director since the Company's
incorporation as a separate entity in 1989. From 1983 to 1989 Dr. Barnett served
as General Manager of the AstroPower Division of Astrosystems, Inc. From 1976 to
1993 Dr. Barnett was a Professor of Electrical Engineering at the University of
Delaware. From 1976 to 1979 Dr. Barnett served as Director of the Institute of
Energy Conversion at the University of Delaware. Dr. Barnett is a technical
expert in thin-film materials and devices and has been active in photovoltaic
research and development since 1975, during which time he has been awarded 21
U.S. patents, authored or co-authored numerous technical publications and
garnered several professional awards. Dr. Barnett is Chairman of the Solar
Energy Industries Association and serves on a number of national and
international committees in the field. Dr. Barnett received a B.S. and M.S. in
Electrical Engineering from the University of Illinois, and a Ph.D. in
Electrical Engineering from Carnegie Institute of Technology.
Gilbert Steinberg, age 69, has served as a director of the Company since 1989.
Mr. Steinberg is Vice President and Chief Financial Officer of Astrosystems,
Inc, which was a manufacturer of electronic, electromechancial and power
conversion devices until February, 1996 at which time its shareholders voted
for a Plan of Liquidation. Mr. Steinberg is one of Astrosystems officers
supervising the liquidation. Mr. Steinberg is the founder of Mentortech, Inc., a
publicly held company specializing in software development and computer training
consulting. Mr. Steinberg received a B.S. in Industrial Engineering at the
Massachusetts Institute of Technology and an M.S. in Mathematics from Adelphi
College. Member of the Audit and Compensation Committees.
OUR EXECUTIVE OFFICERS
Dr. Allen M. Barnett, age 59, President and Chief Executive Officer of the
Company. See "Election of Directors" above.
Peter C. Aschenbrenner, age 44, was elected Senior Vice President-Marketing and
Sales in January 2000. He had served as Vice President, Marketing and Sales
since 1995 and from 1994 to 1995 Mr. Aschenbrenner served as Director of
Marketing of the Company. From 1991 to 1994 Mr. Aschenbrenner served in a number
of capacities with Siemens Solar Industries, LP, including Director of Marketing
from 1992 to 1994 and Director of Technology Development from 1991 to 1992. From
1988 to 1990 Mr. Aschenbrenner served as Co-Managing Director of Photovoltaic
Electric GmBH, a joint venture between Siemens AG and Arco Solar, Inc. He served
in various positions with Arco Solar from 1978 to 1988. Mr. Aschenbrenner
received a B.A. in Product Design from Stanford University.
Louis C. DiNetta, age 49, has served as Vice President, Advanced Optoelectronic
Products since 1996. He joined the AstroPower Division of Astrosystems, Inc. in
1985. Mr. DiNetta is responsible for the research and development of new
photonic energy conversion devices and related optoelectronic products. From
1976 to 1985 Mr. DiNetta worked at the Institute of Energy Conversion at the
University of Delaware, where he was responsible for planning and
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organization of device fabrication, as well as process and equipment development
to support various research projects. Mr. DiNetta received a B.S.A.S. in Physics
from the University of Delaware.
Dr. Robert B. Hall, age 59, has served as Vice President and Chief Scientist
since joining the AstroPower Division of Astrosystems, Inc. in 1983. Dr. Hall's
responsibilities include research and development of thin-film crystalline
materials and ceramic structures for thin-film polycrystalline devices. From
1974 to 1983 Dr. Hall served as Manager, Device Development at the Institute of
Energy Conversion at the University of Delaware. Dr. Hall has more than 18 years
of solar cell development experience. His accomplishments include development of
copper sulfide/cadmium sulfide CdS as the first thin film solar cell with
greater than 10.0% conversion efficiency, development of the first zinc
phosphide solar cell and the development of a reliable deposition and process
for copper indium selenide solar cells. Dr. Hall received a B.A. in Physics from
Gettysburg College and an M.S. and Ph.D. in Physics from the University of
Delaware.
Richard K. McDowell, 60, was elected Senior Vice President, Manufacturing in
January 2000 and had served as Vice President, Manufacturing since March, 1998.
He joined AstroPower in October of 1996. Most of his career was spent with
Unisys Corporation in various management positions. His last assignment was
Director of Operations, Plant Manager - Huntsville. Mr. McDowell received a B.S.
in Physics from Lasalle College.
Thomas J. Stiner, age 45, Mr. Stiner was elected Senior Vice President, and
Chief Financial Officer in January 2000 and has served as Chief Financial
Officer of the Company since December 1997. From June 1993 to November 1997, Mr.
Stiner served as Controller and Treasurer. Mr. Stiner was elected Vice President
in 1995 and Secretary in August 1999. From 1984 to 1993 Mr. Stiner served as a
Senior Manager at KPMG Peat Marwick, LLP. Mr. Stiner is a Certified Public
Accountant and received a B.S. in Business Administration from Bloomsburg
University.
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Security Ownership of Certain Beneficial Owners and Management
The following table sets forth information regarding beneficial ownership of our
Common Stock as of March 31, 2000 by:
. each person or entity who is known by us to own beneficially more than five
percent of our common stock including our Chief Executive Officer
. each named executive officer
. each of our directors
. all directors and executive officers as a group
<TABLE>
<CAPTION>
Shares Beneficially Owned (1)
----------------------------
Name and Address of Beneficial Owner Number Percentage
------------------------------------ ------ ----------
<S> <C> <C>
Allen M. Barnett (2)......................................... 1,541,456 11.9%
FMR Corporation (3).......................................... 1,297,540 11.4%
82 Devonshire Street
Boston, MA 02109
Brown Investment Advisory & Trust Company (4)................ 680,641 6.0%
19 South Street
Baltimore, MD 21202
Wellington Management Company LLP (5)........................ 670,100 5.9%
75 State Street
Boston, MA 02109
The Dow Chemical Company..................................... 560,832 4.9%
2030 Dow Center
Midland, MI 48674
Bank of America Corporation (6).............................. 567,000 5.0%
100 North Tryon Street
Charlotte, NC 28255
Peter C. Aschenbrenner (7)................................... 59,423 **
Robert B. Hall (8)........................................... 77,051 **
Thomas J. Stiner (9)......................................... 81,908 **
Richard K. McDowell(10)...................................... 7,500 **
Clare E. Nordquist (11)...................................... 18,000 **
George S. Reichenbach (12)................................... 18,000 **
George W. Roland (13)........................................ 165,500 1.4%
Charles R. Schaller (14)..................................... 23,250 **
Gilbert Steinberg (15)....................................... 18,000 **
All directors and executive officers as a group (eleven
person) (16). 2,010,088 16.6%
</TABLE>
**Represents less than 1 percent of our outstanding common stock.
(1) The beneficial ownership is calculated based on 11,405,460 shares of our
common stock outstanding as of March 31, 2000. Beneficial ownership is
determined in accordance with the rules and regulations of the Securities
and Exchange Commission and includes shares over which the indicated
beneficial owner exercises voting and/or investment power. In computing the
number of shares beneficially owned by a person in the first column and the
percentage ownership of that person, shares of common stock subject to
options held by that person that are currently exercisable or exercisable
within 60 days of the date hereof are deemed outstanding. These shares,
however, are not deemed outstanding for the purpose of computing the
percentage ownership of any other person. Except as indicated in the
footnotes to this table and pursuant to applicable community property laws,
each stockholder named in the table has sole voting and investment power
with respect to the shares set forth opposite such stockholders' name. The
address of each of the executive officers and directors is care of
AstroPower, Inc., Solar Park, Newark, Delaware 19716-2000.
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(2) Includes 1,150,114 shares held by a family trust of which Dr. Barnett is a
beneficiary and also 318,625 shares subject to options exercisable within
60 days from the date hereof. Dr. Barnett disclaims beneficial ownership of
the shares held by the trust except to the extent of his pecuniary interest
therein. Does not include 20,000 shares owned by his wife as to which Dr.
Barnett disclaims beneficial ownership.
(3) As reported in an amendment to Schedule 13G dated February 14, 2000,
Fidelity Management and Research Company, a wholly-owned subsidiary of FMR
Corp. and a registered investment adviser, is the beneficial owner of
616,200 shares as a result of acting as investment adviser to various
------
registered investment companies or the funds. Edward C. Johnson 3d, and FMR
Corp., through its control of Fidelity, and the funds collectively each has
sole power to dispose of the 616,200 shares owned by the funds. Neither FMR
Corp., nor Edward C. Johnson 3d, Chairman of FMR Corp., has the sole power
to vote or direct the voting of the shares owned directly by the funds,
which power resides with the funds' Board of Trustees. Fidelity carries out
the voting of the shares under written guidelines established by the funds'
Board of Trustees. Fidelity Management Trust Company, a wholly-owned bank
subsidiary of FMR Corp., is the beneficial owner of 281,900 shares as a
result of its serving as investment manager of the institutional
account(s). Edward C. Johnson 3d and FMR Corp., through its control of
Fidelity Management Trust Company, each have sole dispositive power over
281,900 shares and sole power to vote or to direct the voting of 281,900
shares. Fidelity International Limited and various foreign-based
subsidiaries provide investment advisory and management services to a
number of non-U.S. investment companies, the international funds and
certain institutional investors. Fidelity International Limited is the
beneficial owner of 399,440 shares and has sole power to vote or direct the
voting of 399,440 shares of common stock held by the international funds.
FMR Corp. and Fidelity International Limited are of the view that they are
not acting as a "group" for and that they are not otherwise required to
attribute to each other the "beneficial ownership" of securities
"beneficially owned" by the other corporation within the meaning of Rule
13d-3. Therefore, they are of the view that the shares held by the other
corporation need not be aggregated for purposes of Section 13(d) and they
have made this filing on a voluntary basis as if all the shares are owned
by them on a joint basis.
(4) As reported in a Schedule 13G dated February 14, 2000, Brown Investment
Advisory and Trust Company, a bank, has sole power to vote or direct the
voting with respect to 273,645 shares and has sole power to dispose or to
direct the disposition with respect to 290,970 shares. Brown Advisory
Incorporated, a registered investment advisor and a wholly owned subsidiary
of Brown Investment Advisory and Trust Company has sole power to vote or
direct the voting with respect to 389,671 shares and has the sole power to
dispose or to direct the disposition with respect to 389,671 shares.
(5) As reported in an amendment to Schedule 13G dated December 31, 1999,
Wellington Management Company LLP has shared power to vote or to direct the
vote with respect to 442,100 shares and shared power to dispose or to
direct the disposition with respect to 670,1000 shares. Wellington
Management Company LLP, a parent holding company, is a registered
investment advisor. Wellington Trust Company, NA, is a wholly-owned bank
subsidiary of Wellington Management Company LLP. Wellington Management
Company LLP disclaims beneficial ownership with respect to the shares
reported in this filing.
(6) As reported in a Schedule 13G dated January 31, 2000, Bank of America
Corporation has shared power to vote or to direct the vote and shared power
to dispose or to direct the disposition with respect to 567,000 shares.
Bank of America Corporation is a parent holding company or control person
with respect to Bank of America N.A. a bank, NB Holding Corporation a
holding company and Trade Street Investment Associates, Inc. a registered
investment adviser. Bank of America N.A. has sole power to vote or to
direct the vote and sole power to dispose or to direct the disposition with
respect to 57,000 shares and shared power to vote or direct the vote and
shared power to dispose or direct the disposition with respect to 510,000
shares. NB Holding Corporation has shared power to vote or to direct the
vote and shared power to dispose or to direct the disposition with respect
to 567,000 shares. Trade Street Investment Associates, Inc. has sole power
to vote or to direct the vote and sole power to dispose or to direct the
disposition with respect to 510,000 shares.
(7) Includes 59,423 shares subject to options exercisable within 60 days from
the date hereof.
(8) Includes 23,800 shares subject to options exercisable within 60 days from
the date hereof.
(9) Includes 66,908 shares subject to options exercisable within 60 days from
the date hereof.
(10) Includes 7,500 shares subject to options exercisable within 60 days from
the date hereof.
(11) Includes 18,000 shares subject to options exercisable within 60 days from
the date hereof.
(12) Includes 18,000 shares subject to options exercisable within 60 days from
the date hereof.
(13) Includes 165,500 shares subject to options exercisable within 60 days from
the date hereof.
(14) Includes 18,000 shares subject to options exercisable within 60 days from
the date hereof.
(15) Includes 18,000 shares subject to options exercisable within 60 days from
the date hereof.
(16) Includes an aggregate of 713,756 shares held by all directors and officers
that are subject to options exercisable within 60 days from the date
hereof. See Notes (2) and (7) through (15) above.
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Director's Meetings
The Board of Directors of the Company met nine (9) times during the year ended
December 31, 1999. In 1999, the Company had an Audit Committee and a
Compensation Committee which also serves as the Stock Option Committee. The
Audit Committee reviews the scope and plan of the annual audit, reviews the
audit results and report thereon, oversees action taken by the Company's
independent accountants and reviews the Company's internal controls. In 1998,
the Audit Committee was composed of Messrs. Nordquist and Steinberg and
effective March 17, 2000 consists of Messrs. Nordquist, Steinberg and Schaller.
Two meetings of the Audit Committee were held in 1999.
The Compensation Committee makes recommendation concerning salaries and
incentive compensation for executive officers of the Company and administers the
Company's employee stock option plans. In 1999, the Compensation Committee was
composed of Messrs. Nordquist, Reichenbach, Schaller and Steinberg. Two meetings
of the Compensation Committee were held in 1999.
The Audit and Compensation Committees are composed of directors who are not
officers or employees of the Company ("Outside Directors").
In addition to participation at Board and Committee Meetings, the Company's
directors discharge their responsibilities throughout the year through personal
meetings and other communications, including considerable telephone contact with
the CEO and others regarding matters of interest and concern to the Company.
Compensation of Directors
Beginning April 1, 1998, the Company agreed to pay each non-employee director
$1,000 per Board Meeting attended in person, $250 per meeting attended
telephonically, and $250 for each Committee meeting attended. Directors who are
also employees of the Company receive no additional compensation for serving as
directors. The Company reimburses all of its directors for travel and out-of-
pocket expenses in connection with their attendance at meetings of the Board of
Directors or Committees thereof. The Company's Outside Directors are also
eligible to receive stock options under the Company's 1998 Non-Employee
Directors Stock Option Plan approved by Shareholders at the 1998 Annual Meeting.
Each of the Outside Directors was granted an option on May 14, 1998, under the
Directors' Plan to purchase 20,000 shares of Common Stock, 5,000 of which vested
as of that date, and 5,000 of which vest on each of the first, second and third
anniversary of such date, provided such director is still a director on each
such date. Each director who joins the Board of Directors after the Directors'
Plan was originally adopted will be granted an option, on the first day of his
term, to purchase 20,000 shares of Common Stock, 5,000 of which vest on the date
he or she becomes a Director, and 5,000 of which vest on each of the first,
second and third anniversary of such date, provided he or she is still a
director on such date. If the number of shares available to grant under the
Directors' Plan on a scheduled date of grant is insufficient to make all the
grants, then each eligible director will receive an option to purchase a pro
rate number of the available shares.
The option price per share for the options granted was $10.25 per share and the
option price per share for later grants will be, the fair market value of the
shares of Common Stock on the date of grant. Under the Directors' Plan, fair
market value is generally the closing price of the Common Stock on the NASDAQ
National Market on the last business day prior to the date on which the value is
to be determined. The options granted under the Directors' Plan are exercisable
for a term of ten years from the date of grant, subject to earlier termination.
On December 6, 1999 each of the Company's outside Directors were granted an
individual stock option, outside of the Directors Plan, to purchase 12,000
shares of Common Stock, 3,000 of which vested as of that date and 9,000 of which
vest on each of the first, second and third anniversary of such date, provided
such director is still a director on each such date. The option price per share
for the options granted was $12.125, the fair market value on the date of such
grant.
9
<PAGE>
Compliance with Section 16(a) of the Securities Exchange Act of 1934
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
executive officers and directors, and persons who own more than ten percent of
the Company's common stock, to file reports of ownership and changes in
ownership on Forms 3, 4 and 5 with the Securities and Exchange Commission (the
"SEC") and the NASDAQ National Market ("NASDAQ"). Such persons are required by
SEC regulations to furnish the Company with copies of all Section 16(a) forms
they file.
Based solely on review of the copies of such forms furnished to the Company, or
written presentation that no other reports were required, the Company believes
that during 1999 all Section 16(a) filing requirements applicable to its
officers and directors were complied with, except that each executive officer
and director filed a late Form 4 Statement of Change in Beneficial Ownership of
securities with the SEC and NASDAQ for the month of December 1999.
10
<PAGE>
COMPARE CUMULATIVE TOTAL RETURN
AMONG ASTROPOWER, INC.,
NASDAQ MARKET INDEX AND SIC CODE INDEX
(GRAPH TO BE INSERTED)
ASSUMES $100 INVESTED ON FEB. 13, 1998
ASSUMES DIVIDEND REINVESTED
FISCAL YEAR ENDING DEC. 31, 1999
..............FISCAL YEAR ENDING.............
COMPANY/INDEX/MARKET 2/13/1998 12/31/1998 12/31/1999
ASTROPOWER, Inc. 100.00 149.51 217.48
Semiconductors, Related Device 100.00 130.92 281.69
NASDAQ Market Index 100.00 135.48 238.95
The above graph compares the cumulative return of the Company on an annual
basis with the comparable return of two indices. The Industry Index
represents the industry or line-of-business of the Company. The graph
assumes $100 invested on February 13, 1998, the date of the Company's
initial public offering. The comparison assumes that all dividends are
reinvested.
The Industry Index represents Semiconductors, Related Device, and is
comprised of 118 corporations, compiled from the SIC Code within which the
Company is listed.
11
<PAGE>
EXECUTIVE COMPENSATION
Report of Compensation Committee
In 1999, our executive compensation program was administered by the Compensation
Committee of the Board of Directors. The Committee makes recommendations on all
of the three key components of our executive compensation program: base salary,
contractual incentive awards and long-term incentives.
Our executive compensation program is structured to help us achieve our business
objectives by:
. providing compensation opportunities that will attract, motivate and retain
highly qualified managers and executives
. linking executives' total compensation to company and individual job
performance
. providing an appropriate balance between incentives focused on achievement
of annual business plans and longer term incentives tied to increases in
Shareholder value
Our executive compensation program is designed to provide competitive
compensation opportunities for all corporate officers. Our total compensation
levels falls in the low to middle of the range of rates paid by other employers
of similar size and complexity, although complete comparative information is not
easily obtainable, and no formal survey or analysis of compensation paid by
other companies was undertaken.
Base Salaries
Our salary levels are intended to be consistent with competitive practices and
levels of responsibility, with salary increases reflecting competitive trends,
our overall financial performance, and the performance of the individual.
Stock Options
We periodically grants incentive and non-qualified stock options to purchase our
common stock in order to provide employees of with a competitive total
compensation package and to reward them for their contribution to our short and
long-term stock performance. These stock options are designed to align the
employees' interest with those of the shareholders. All options have an option
price that is not less than the fair market value of the stock on the date of
grant. The terms of the options and the dates after which they become
exercisable are established by the Board with respect to incentive stock
options, within the parameters of the 1989 Stock Option Plan which expired in
December 1999 and within the parameters of the 1999 Plan, which Plan was
approved by our shareholders in June 1999. We do not grant stock appreciation
rights.
1999 Compensation
Our President and CEO was compensated on a salary and pay-for-performance
approach. Taken into consideration are the achievement of financial and other
objectives determined each year by the Board of Directors, and the executive.
Contractual incentive awards of options to purchase 90,000 shares of common
stock at $12,125 per share (100% of fair market value) were granted to the
President and CEO for 1999.
12
<PAGE>
Compliance with Section 162(m) of the Internal Revenue Code of 1986
Deductibility of Compensation Effective January 1, 1994, the Internal Revenue
Service under Section 162(m) of the Internal Revenue Code will generally deny
the deduction of compensation paid to the President and the four other highest
paid executive officers required to be named in the Summary Compensation Table
to the extent such compensation exceeds $1 million per executive per year
subject to an exception for compensation that meets certain "performance-based"
requirements. Whether the Section 162(m) limitations with respect to an
executive will be exceeded and whether the Company's tax deduction for
compensation paid in excess of the $1 million limit will be denied will depend
upon the resolution of various factual and legal issues that cannot be resolved
at this time. As to options granted under the 1989 Stock Option Plan, the
Committee intends to qualify to the extent practicable, such options under the
rules governing the Section 162(m) limitation so that compensation attributable
to such options will not be subject to limitation under such rules. As to other
compensation, while it is not expected that compensation to executives of the
Company will exceed the Section 162(m) limitation in the foreseeable future
(and no officer of the Company received compensation in 1999 which resulted
under Section 162(m) in the non-deductibility of such compensation to the
Company), various relevant considerations will be reviewed from time to time,
taking into account the interests of the Company and its Shareholders, in
determining whether to endeavor to cause such compensation to be exempt from the
Section 162(m) limitation.
Respectfully submitted,
Compensation Committee
Clare E. Nordquist
Dr. George S. Reichenbach
Charles R. Schaller
Gilbert H. Steinberg
13
<PAGE>
Compensation Committee Interlocks and Insider Participation
The Membership of the Compensation Committee for 1999 is set forth under "Report
of Compensation Committee." Except with respect to his compensation
arrangements, Dr. Barnett, our President and CEO participated in executive
compensation deliberations and recommendations of the Board of Directors.
During the fiscal year ended December 31, 1999, no executive officer of ours
served on the board of directors or compensation committee of another company
that had an executive officer serving on the Company's Board of Directors or
Compensation Committee.
Certain Relationships and Related Transactions
At December 31, 1997, the Company owed its President and CEO $555,482 in the
form of salary, bonus and automobile reimbursements. The amounts are related to
the excess of his salary and bonus and auto allowance over the amounts actually
paid from July 1990 to March 1997. On December 15, 1997, the Company agreed
that one-third of this amount would be paid per year in each of 1998, 1999 and
2000, with interest on the unpaid balance at 6% per annum from January 1, 1998.
Accordingly the Company paid Dr. Barnett $184,786 in 1999 pursuant to such
agreement.
Summary Compensation Table
The following table sets forth information concerning the compensation of the
Chief Executive Officer of the Company and those other named executive officers
of the Company whose total salary, bonus and other compensation earned for 1997,
1998 or 1999 exceeded $100,000:
<TABLE>
<CAPTION>
Long Term
Compensation
Annual Compensation Awards
-------------------------------------------------
Securities
Underlying All Other
Name & Principal Position Year Salary ($) Bonus ($) Options (#) Compensation($) (1)
- ------------------------- ---- ---------- --------- ------------ -------------------
<S> <C> <C> <C> <C> <C>
Allen M. Barnett................... 1999 $226,492 $ -0- 127,500 $3,500
President and Chief Executive 1998 189,446 (2) -0- (2) 170,000 5,000
Officer 1997 191,458 (2) 50,000 (2) 203,250 4,750
Peter C. Aschenbrenner............. 1999 $134,473 -6- 51,767 $3,406 (3)
Sr. Vice President, Marketing 1998 124,996 -0- 40,000 3,177 (3)
And Sales 1997 116,449 20,000 19,875 1,353 (3)
Thomas J. Stiner................... 1999 $118,101 -0- 58,433 $3,500
Sr. Vice President and Chief 1998 106,395 -0- 40,000 5,000
Financial Officer 1997 88,670 25,000 22,500 4,750
Richard K. McDowell................ 1999 $100,968 -0- 30,000 $3,500
Sr. Vice President,
Manufacturing
Robert B. Hall.................... 1999 96,227 -0- 12,550 $3,500
Vice President and Chief 1998 96,661 -0- 15,000 5,000
Scientist
</TABLE>
(1) Includes matching contributions by the Company under its 401(k) Plan.
(2) Dr. Barnett elected to postpone receipt of salary payments of $23,945,
$79,047 and $64,755, for the years ended December 31, 1997 and 1996
respectively, as well as all bonus amounts for the year ended December 31,
1996. These amounts are included in the above table. At December 31, 1997
the Company owed Dr. Barnett an additional $427,215 relating to the
postponement of portions of his salary, bonus and other compensation for
the
14
<PAGE>
period July 1990 to December 31, 1995. On December 15, 1997, the Company
agreed that one-third of this amount would be paid per year in each of
1998, 1999 and 2000, with interest on the unpaid balance at 6% per annum
from January 1, 1998. Accordingly the Company paid Dr. Barnett $184,786 in
1998 pursuant to such agreement. This amount is not included in the above
table.
(3) Includes $1,200 annual expense allowance for all years.
Stock Options
The following table provides information regarding grants of stock options made
during the fiscal year ended December 31, 1999 to the persons named in the
Summary Compensation Table above:
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
Number of
Securities % of Total Potential Realizable Value at
Underlying Options Granted Exercise Assumed Annual Rates of
Options Granted to Employees in Price Expiration Stock Price Appreciation for
Name (#) Fiscal Year ($/share) Date Option Term
- -------------------------------- --------------- ----------------- ------------- ------------ ----------------------------
5%($) 10% ($)
---------- ------------
<S> <C> <C> <C> <C> <C> <C>
Dr. Allen M. Barnett............... 37,500 4.73% $11.88 04/15/09 $ 280,173 $ 710,012
90,000 11.36% $12.13 12/06/09 686,564 1,739,889
Peter C. Aschenbrenner............. 100 0.01% $11.63 02/12/09 731 1,854
6,667 0.84% $10.00 02/26/09 41,928 106,255
25,000 3.16% $11.88 04/15/09 186,782 473,342
20,000 2.52% $12.13 12/06/09 152,570 386,642
Thomas J. Stiner................... 100 0.01% $11.63 02/12/09 731 1,854
8,333 1.05% $10.00 02/26/09 52,406 132,807
30,000 3.79% $11.88 04/15/09 224,138 568,010
20,000 2.52% $12.13 12/06/09 152,570 386,642
Richard K. McDowell................ 5,000 0.63% $10.00 02/26/09 31,445 79,687
15,000 1.89% $11.88 04/15/09 112,069 284,005
10,000 1.26% $12.13 12/06/09 76,285 193,321
Robert B. Hall..................... 850 0.11% $11.63 02/12/09 6,217 15,755
1,700 0.21% $10.00 02/26/09 10,691 27,094
10,000 1.26% $11.88 04/15/09 74,713 189,337
</TABLE>
______________________
(1) Options awarded under the Plan generally provide for vesting over a period
of four years, with vesting occurring 25% per year on the anniversary date
of the option award. The Board of Directors has the discretion, subject to
plan limits, to modify the terms of outstanding options.
(2) All options were granted with an exercise price equal to or greater than
the fair market value of the Common Stock as determined on the date of
grant.
(3) Amounts represent hypothetical gains that could be achieved for the
respective options at the end of the 10-year option term. The assumed 5%
and 10% rates of stock appreciation are mandated by rules of the Securities
and Exchange Commission and do not represent the Company's estimate of the
future Common Stock price. This table does not take into account any
appreciation in the price of the Common Stock to date, which exceeds the
hypothetical gains shown in the table.
15
<PAGE>
Option Exercises and Holdings
The following table sets forth, for each person named in the Summary
Compensation Table above, information regarding the exercise of stock options
during the fiscal year ended December 31, 1999 and the year-end value of
unexercised options. No options were exercised by the Named Executive Officers
during 1999:
AGGREGATE OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END VALUES
<TABLE>
<CAPTION>
Shares Value of Unexercised
Acquired on Value Number of Unexercised In-the-money Options at
Name Exercise Realized Options at Year-End (#) Year End ($)
---------------------------- --------------- ------------- ---------------------------- ---------------------------
<S> <C> <C> <C> <C> <C> <C>
Allen M. Barnett................. 21,000 $189,210 259,250 367,500 2,128,240 1,440,675
Peter C. Aschenbrenner........... 10,000 90,950 49,204 84,938 362,071 284,842
Thomas J. Stiner................. 12,600 106,950 66,908 93,125 511,411 319,125
Richard K. McDowell.............. 9,250 54,000 6,875 49,375 31,875 184,875
Robert B. Hall................... 6,000 57,500 13,800 28,750 92,515 134,950
</TABLE>
(1) Calculated on the basis of the fair market value of the Common Stock at
December 31, 1999 of $13.00 per share, minus the per share exercise price,
multiplied by the number of shares underlying the option. See note (3) of
the preceding table.
Employee Benefit Plans
1989 Stock Option Plan
Our 1989 Stock Option Plan was adopted in December 1989. The 1989 plan
authorized the issuance of up to 1,920,000 shares of our common stock. As of
March 31, 2000, options to purchase an aggregate of 1,400,398 shares at a
weighted average exercise price of $6.37 per share were outstanding. No
additional options may be granted under the 1989 plan which expired in
December 1999.
The 1989 plan provides for the grant of incentive stock options intended to
qualify under Section 422 of the Internal Revenue Code and nonstatutory stock
options. Our officers, employees, directors, consultants and advisors are
eligible to receive awards under the 1989 plan. No employee may receive any
award for more than 500,000 shares in any calendar year.
Our board of directors administers the 1989 plan and has the authority to
adopt, amend and repeal the administrative rules, guidelines and practices
relating to the plan and to interpret its provisions. Our board of directors
has delegated authority to administer the 1989 plan to the Compensation
Committee. The committee has the authority to accelerate the date on which
options may be exercised. In the event of a merger, liquidation, consolidation
or other acquisition event, the committee is authorized to make appropriate
and proportionate changes to the then outstanding options.
16
<PAGE>
1999 Stock Option Plan
Our 1999 Stock Option Plan was adopted by our board of directors in April
1999 and was approved by our stockholders in June 1999. The 1999 plan
authorizes the issuance of up to 600,000 shares of our common stock. As of
March 31, 2000, options to purchase an aggregate of 520,875 shares at a
weighted average exercise price of $12.59 per share were outstanding.
The 1999 plan provides for the grant of incentive stock options intended to
qualify under Section 422 of the Internal Revenue Code and nonstatutory
stock options. Our officers, directors, employees and consultants, and
certain employees and consultants of our majority-owned affiliated
companies, are eligible to receive awards under the 1999 plan.
Optionees receive the rights to purchase a specified number of shares of
common stock at a specified option price and subject to such other terms
and conditions as are specified in connection with the option grant. We may
grant options at an exercise price greater than or equal to the fair market
value of our common stock on the date of grant or not less than 110% of the
fair market value in the case of incentive stock options granted to
optionees holding more than 10% of the voting power of the company. Fair
market value for purposes of the 1999 plan is the closing market price of
our common stock as reported on the Nasdaq National Market on the relevant
date. Optionees may generally pay the exercise price of their options by
cash, check or surrender to us of shares of common stock. Generally, no
portion of an incentive stock option may vest within twelve months of the
date of grant.
Our Compensation Committee administers the 1999 plan. The committee has the
authority to adopt, amend and repeal the administrative rules, guidelines
and practices relating to the plan and to interpret its provisions. Our
compensation committee selects the recipients of awards and determines the
number of shares of common stock covered by the options and the dates upon
which such options become exercisable and terminate, subject to certain
provisions of the 1999 plan. Incentive stock options must terminate within
ten years of the date of grant. Nonstatutory options must terminate within
fifteen years of the date of grant. The Compensation Committee has the
right to alter the terms of any option when granted or while outstanding
pursuant to the terms of the 1999 plan except the option price.
All options automatically become exercisable in full in the event of a
change in control (as defined in the 1999 plan), death or disability of the
optionee or as decided by the Compensation Committee. Upon retirement
options held at least one year become exercisable in full. If an optionee's
employment with us is terminated for any reason, except death, disability
or retirement, the optionee has three months in which to exercise an option
(but only to the extent exercisable immediately after termination) unless
the option by its terms expires earlier. Termination or other changes in
employment status may affect the exercise period.
Compensatory Stock Plan
Prior to the adoption of the 1989 Plan, we had a compensatory stock
plan for the issuance of shares to employees and consultants. At December 31,
1999, the only remaining obligation under this plan was the reservation of
39,999 shares for issuance to a former consultant.
401(K) Plan
We have adopted an employee savings and retirement plan qualified
under Section 401(k) of the Internal Revenue Code and covering all of our
employees. Pursuant to this plan, employees may reduce their current
compensation by up to the lessor of 15% of eligible compensation or the
statutorily prescribed annual limited ($10,000 in 1999) and have the amount of
such reduction contributed to the plan. We may, but are not required to, make
matching or additional contributions to the plan in amounts to be determined by
the board of directors.
Employment Arrangements
Effective as of January 7, 2000, Dr. Allen M. Barnett entered into an
amended and restated employment agreement with us to serve as our President
and Chief Executive Officer with an annual base salary of $245,000. The
term of the agreement ends on March 31, 2005 unless we or Dr. Barnett elect
to terminate the agreement by written notice to the other party at least
one year prior to the effective date of termination. We can only terminate
his employment by a vote of two-thirds of the members of the board of
directors with Dr. Barnett not eligible to vote. Our board of directors
will review Dr. Barnetts salary not less than annually, and may, but are
not obligated to award increases in his salary and they will also consider
and vote upon incentive compensation for Dr. Barnett for each calendar
17
<PAGE>
year commencing with the calendar year ending December 31, 2000. Other
provisions of the agreement include a grant of an individual 10 year non-
statutory option to purchase 75,000 shares of our common stock at $13.75
per share, vesting on March 31, 2001 and 10 year options to purchase
227,000 shares of our common stock at $13.75; 23,500 of which shall vest on
each of March 31, 2001 and 2002 and 80,000 of which shall vest on each of
March 31, 2003, 2004 and 2005. The fair market value of our common stock of
the date these options were granted was $13.00 per share. We also provide
Dr. Barnett with a monthly expense for the use of an automobile and repay
all of his out-of-pocket expenses incurred in the performance of his
employment obligations.
Should we terminate Dr. Barnett's employment before March 31, 2005, we must
pay Dr. Barnett his then current base salary plus 30% of his then current
base salary and all employee benefits for the lesser of one year or the
remaining term of his employment. Should Dr. Barnett die or become disabled
during the term of his employment, we must pay him or his estate his then
current base salary for the longer of two years or the remaining term of
his employment plus in the case of death, a pro rata portion all other
compensation due in that period.
Should we terminate Dr. Barnett's employment upon a change of control of
us, we must pay Dr. Barnett a lump sum equal to one year's then current
base salary plus 30% of such base salary and all base salary and other
compensation due for the remaining term of his employment agreement.
Additionally, all vested but unexercised options would continue to be
exercisable in accordance with their terms and all remaining invested stock
options would vest immediately.
Our employment agreement with Dr. Barnett and our employment arrangements
with other executive officers and significant employees impose customary
confidentiality obligations and provide for the assignment to us of all
rights to any technology developed by the employee during the time of his
or her employment.
PROPOSAL 2. AMENDMENT OF OUR 1999 STOCK OPTION PLAN
Our 1999 Stock Option Plan was adopted by our Board of Directors in April 1999
and was approved by our stockholders in June 1999. The 1999 Plan authorizes the
issuance of up to 600,000 shares of our common stock. As of March 31, 2000,
options to purchase an aggregate of 520,875 shares at a weighted average
exercise price of $12.59 per share were outstanding. See "Employee Benefit Plan-
1999 Stock Option Plan" above.
The 1999 Plan is intended to induce new employees to become associated with us,
and to provide a closer identity of interest between present employees and us by
encouraging their ownership of our Common Stock. Since the approval of the 1999
plan by our shareholders in June 1999, we have completed a second public
offering of our common stock resulting in net proceeds to us of approximately
$30.2 million. As a result we have expanded our manufacturing capacity and
intend to continue to do so over the next four years. From July 1, 1999 through
March 31, 2000 we have increased the number of our employees who will be
eligible to participate in the 1999 plan from 304 to 352 and expect to
substantially increase our workforce in the future consistent with our
expectations our board of directors believed it would be in our best interest
and our shareholders best interest to increase the number of shares currently
available under the 1999 plan from 600,000 to 1,100,000, and voted to do so on
March 17, 2000, subject to shareholder approval.
The Board of Directors recommends that the Shareholders vote For the following
---
resolution, approval of which requires an affirmative vote of a majority in
voting power of the shares of common stock present in person or by proxy and
entitled to vote at the meeting:
RESOLVED, that the second sentence of section 5 of the 1999 Stock
Option Plan adopted by the board of directors and approved by a majority of the
Shareholders, on June 15, 2000 be amended to read as follows:
Section 5, Stock.
- ----------------
The total number of shares of Common Stock that may be issued or transferred
under the Plan pursuant to Options granted thereunder may not exceed 1,100,000
shares (subject to adjustment as described below).
18
<PAGE>
PROPOSAL 3. AMENDMENT OF OUR AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
TO INCREASE THE NUMBER OF AUTHORIZED SHARES OF COMMON STOCK TO
50,000,000 SHARES
The board of directors has unanimously adopted a resolution approving a proposal
to amend the first paragraph of Article IV of our amended and restated
certificate of incorporation to increase the number of shares of common stock
which we are authorized to issue from 25,000,000 to 50,000,000.
The full text of the first paragraph of Article IV of our Amended and Restated
Certificate of Incorporation, if amended as proposed, will be as follows:
"Total Number of Shares of Stock. The total number of shares of stock of all
classes that the Corporation shall have authority to issue is 55,000,000 shares,
consisting of 9a) 50,000,000 shares of common stock, of the par value of $0.1
each (the "Common Stock") and (b) 5,000,000 shares of preferred stock of the
part value of $.01 each (the "Preferred Stock")."
The amendment will not increase the number of shares of preferred stock
authorized. The relative rights and limitations of the common stock and
preferred stock would remain unchanged under the proposed amendment.
The proposed amendment would increase the number of shares of common stock which
we are authorized to issue from 25,000,000 to 50,000,000. The additional
25,000,000 shares, if and when issued, would have the same rights and privileges
as the shares of common stock presently issued and outstanding. The holders of
common stock are not entitled to preemptive rights or cumulative voting.
On March 31, we had 11,405,460 shares of common stock issued and outstanding. In
addition, an aggregate of approximately 2,306,323 shares of common stock were
reserved for issuance by the Company, including shares reserved for issuance
upon exercise of options granted under our employee stock option plans, our 1998
Directors Option Plan and individual option grants.
The Board of Directors of the Company believes that the number of
authorized shares of common stock should be increased to provide sufficient
shares for such corporate purposes as may be determined from time to time by the
Board of Directors, including without limitation capital raising transactions,
additional employee stock options or awards, acquisitions of other businesses,
products and technologies in exchange for stock, and stock dividends. Proposal 3
would accomplish such increase. The Board of Directors believes that having
additional shares authorized and available for issuance or reservation will give
us greater flexibility in considering potential future actions involving the
issuance of stock without the delay and expense of obtaining further stockholder
approval for each issuance except as may be required in a particular case by
law, the rules of any stock exchange upon which the common stock may be listed,
or any other rules which may be applicable to the Company. We have no current
agreements, plans or arrangements to effect any such potential actions and no
pending arrangements to issue any of the additional shares of common stock that
would be authorized as a result of the amendment (other than issuances permitted
or required under our stock-based employee benefit plans).
The increase in the number of authorized shares of our common stock has not been
proposed for any anti-takeover-related purpose and we have no knowledge of any
current effort to obtain control of our Company or accumulate large amounts of
our common stock. However, the availability of additional shares of common stock
could make any attempt to gain control of us more difficult. Shares of our
authorized but unissued common stock could be issued in an effort to dilute the
stock ownership and voting power of any person or entity desiring to acquire
control of our Company, which might have the effect of discouraging or making
less likely such a change of control. Such shares could also be issued to other
persons or entities who support the Board of Directors in opposing a takeover
attempt that the Board of Directors has deemed not to be in our best interests
or the best interests of our shareholders.
19
<PAGE>
In evaluating the proposed amendment, shareholders should consider the effect of
certain other provisions of our amended and restated certificate of
incorporation and by-laws which may have anti-takeover consequences. These
provisions include:
. authorizing the issuance of "blank-check" preferred stock
. providing for a classified board of directors with staggered three-year
terms
. providing that directors may only be removed for cause by the
affirmative vote of 80% of the shareholders
. limiting the persons who may call special meetings of shareholders
. prohibiting shareholder action by written consent
. establishing advance notice requirements for nominations for election to
the board of directors or for proposing matters that can be acted on by
shareholders at shareholder meetings
Delaware law may also discourage, delay or prevent someone from acquiring or
merging with us.
If the amendment is adopted, it will become effective upon filing of a
Certificate of Amendment of the Amended and Restated Certificate with the
Secretary of State of Delaware no later than December 31, 2000. Pursuant to the
Delaware General Corporation Law, the Board of Directors may abandon the
amendment prior to the effectiveness of its filing, either before or after a
majority of outstanding shares of common stock have voted in favor of the
amendment.
The Board of Directors of the Company recommends that Shareholders vote FOR the
following resolution, approval of which requires an affirmative vote of a
majority of the outstanding shares of common stock.
RESOLVED, that the first paragraph of Article IV of the Company's Amended and
Restated Certificate of Incorporation be amended to read as follows:
"Total Number of Shares of Stock. The total number of shares of stock of all
classes that the Corporation shall have authority to issue is 55,000,000 shares,
consisting of (a) 50,000,000 shares of Common Stock, of the par value of $.01
each (the "Common Stock") and (b) 5,000,000 shares of Preferred Stock of the par
value of $.01 each (the "Preferred Stock")."
PROPOSAL 4. RATIFICATION OF APPOINTMENT OF INDEPENDENT ACCOUNTANTS
Management proposes the appointment of KPMG LLP as independent accountants to
examine the financial statements of the Company for the fiscal year 2000. The
Board of Directors has directed that such appointment be submitted for
ratification by the Shareholders at the meeting.
KPMG LLP has served as the independent accountant for the Company since 1992. A
representative of KPMG LLP is expected to be present at the Meeting and will
have the opportunity to make a statement if he desires to do so and will be
available to respond to appropriate questions.
The affirmative vote of a majority of the voting power of the shares of common
stock present, in person or by proxy, and entitled to vote at the meeting, is
required for ratification of the appointment of KPMG LLP as the independent
accountants.
20
<PAGE>
The Board of Directors recommends that shareholders vote FOR ratification of the
---
appointment of KPMG LLP.
ANNUAL REPORT
A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR THE YEAR
ENDED DECEMBER 31, 1999, AS FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION, WILL BE MAILED WITHOUT CHARGE TO SHAREHOLDERS UPON
REQUEST. REQUESTS SHOULD BE ADDRESSED TO THE COMPANY AT SOLAR PARK,
NEWARK, DELAWARE, ATTENTION: THOMAS J. STINER, SENIOR VICE PRESIDENT
AND CFO. THE FORM 10-K INCLUDES CERTAIN EXHIBITS WHICH WILL BE
PROVIDED ONLY UPON PAYMENT OF A FEE COVERING THE COMPANY'S
REASONABLE EXPENSES.
FUTURE PROPOSALS
The 2001 Annual Meeting is expected to be held on Wednesday, June 13, 2001. If
any Shareholder wishes to submit a proposal for inclusion in the Proxy Statement
for the Company's 2001 Annual Meeting, the rules of the United States Securities
and Exchange Commission require that such proposal be received at the company's
principal executive office by December 31, 2000.
OTHER MATTERS
Management knows of no other matters to come before the meeting other than those
referred to in the Notice of Meeting. However, should any other matters properly
come before the meeting, the shares represented by the proxy solicited hereby
will be voted on such matters in accordance with the best judgment of the
persons voting the shares represented by the proxy.
BY ORDER OF THE BOARD OF DIRECTORS
Allen M. Barnett
President and Chief Executive Officer
21
<PAGE>
ASTROPOWER, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Dr. Allen M. Barnett, Dr. George S.
Reichenbach and Gilbert H. Steinberg, and each of them individually with the
power of substitution, as Proxy or Proxies of the undersigned, to attend and act
for and on behalf of the undersigned at the Annual Meeting of Shareholders of
the Company to be held at the Company's Manufacturing Plant at Pencader
Corporate Center, Newark, Delaware on June 15, 2000, at 11:00 A.M., local time
and at any adjournment thereof, hereby revoking any prior Proxy or Proxies. This
Proxy when properly executed will be voted as directed herein by the
undersigned. If no direction is made, shares will be voted FOR the election of
directors named in the Proxy and FOR Proposals 2, 3, and 4.
(Continued and to be dated and signed on other side)
<PAGE>
Please date, sign and mail your
Proxy card back as soon as possible!
Annual Meeting of Stockholders
ASTROPOWER, INC.
June 15, 2000
. Please Detach and Mail in the Envelope Provided .
<TABLE>
<S> <C>
[X] Please mark your vote For Against Abstain
as in this example.
Nominees: Dr. George S. Reichenbach 2. Proposal to amend 1999 Stock Option [_] [_] [_]
Dr. George W. Roland plan.
Withhold 3. Proposal to amend Certificate of [_] [_] [_]
For Vote incorporation.
1. To elect as
directors all [__] [__] 4. To appoint KPMG, LLP as independent [_] [_] [_]
persons accountants of the Company.
named at
right. 5. In their direction, the proxies are
authorized to vote upon such other
business as may properly come before
??? meeting.
For, except vote withheld from the following nominee(s)
IMPORTANT: Please date, sign and return
this Proxy Card using the enclosed envelope.
</TABLE>
Signature ____________________________________ Signature if held jointly
______________________________ Dated _____________________, 2000
NOTE: (Signature should conform exactly to name on Proxy. When shares are held
by joint tenants, both should sign. Executors, administrators, guardians,
trustees, attorneys, and officers signing for corporation should give full
title.
