INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the registrant [X]
Filed by a party other than the registrant [_]
Check the appropriate box:
[X] Preliminary proxy statement
[_] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[_] Definitive proxy statement
[_] Definitive additional materials
[_] Soliciting material pursuant to ss.240.14a-11(c) or ss.240.14a-12
KRONOS INCORPORATED
(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:
(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>
KRONOS INCORPORATED
400 Fifth Avenue
Waltham, Massachusetts 02451
December ___, 1999
Dear Stockholder:
We cordially invite you to attend our 2000 Annual Meeting of
Stockholders, which will be held at 10:00 a.m. on Thursday, February 3, 2000 at
the offices of the Company, 400 Fifth Avenue, Waltham, Massachusetts 02451.
At this meeting you are being asked to (i) elect two Class II
Directors, (ii) approve an amendment to the Company's Restated Articles of
Organization to increase the number of authorized shares of common stock, (iii)
approve an amendment to the Company's 1992 Employee Stock Purchase Plan and (iv)
ratify the selection of Ernst & Young LLP as independent auditors for the
Company for the 2000 fiscal year.
Please read the enclosed Proxy Statement, which describes the nominees for
Director and presents other important information, and complete, sign and return
your proxy promptly in the enclosed envelope.
We hope you will join us on February 3 for our Annual Meeting, but we
know that every stockholder will not be able to do so. Whether or not you plan
to attend, please return your signed proxy as soon as possible.
Sincerely,
MARK S. AIN
Chairman and Chief Executive Officer
<PAGE>
KRONOS INCORPORATED
400 Fifth Avenue
Waltham, Massachusetts 02451
NOTICE OF 2000 ANNUAL MEETING OF STOCKHOLDERS
FEBRUARY 3, 2000
Notice is hereby given that the Annual Meeting of Stockholders of
Kronos Incorporated (the "Company") will be held at the offices of the Company,
400 Fifth Avenue, Waltham, Massachusetts 02451, on February 3, 2000 at 10:00
a.m. for the following purposes:
1. To elect two Class II Directors for the ensuing three years.
2. To approve an amendment to the Company's Restated Articles of
Organization increasing the number of authorized shares of the
Company's common stock from 20,000,000 shares to 50,000,000
shares.
3. To approve an amendment to the Company's 1992 Employee Stock
Purchase Plan, as set forth in the accompanying Proxy
Statement under "Approval of Amendments to 1992 Employee Stock
Purchase Plan."
4. To ratify the selection of Ernst & Young LLP as the Company's
independent auditors for the 2000 fiscal year.
5. To transact such other business as may properly come before the
meeting and any and all adjourned sessions thereof.
Only stockholders of record at the close of business on December 6,
1999 will be entitled to notice of and to vote at the Annual Meeting and any and
all adjourned sessions thereof. The stock transfer books of the Company will
remain open.
By Order of the Board of Directors,
PAUL A. LACY, CLERK
Waltham, Massachusetts
December ___, 1999
IT IS IMPORTANT THAT YOUR STOCK BE REPRESENTED AT THE MEETING. WHETHER
OR NOT YOU PLAN TO ATTEND THE MEETING IN PERSON, PLEASE COMPLETE, DATE AND SIGN
THE ENCLOSED PROXY AND MAIL IT PROMPTLY IN THE ENCLOSED ENVELOPE IN ORDER TO
ASSURE REPRESENTATION OF YOUR SHARES. NO POSTAGE NEED BE AFFIXED IF THE PROXY IS
MAILED IN THE UNITED STATES.
<PAGE>
KRONOS INCORPORATED
400 Fifth Avenue
Waltham, Massachusetts 02451
Proxy Statement for the Annual Meeting of Stockholders
To Be Held on February 3, 2000
The enclosed form of proxy is solicited on behalf of the Board of
Directors of Kronos Incorporated ("Kronos" or the "Company") for use at the
Annual Meeting of Stockholders (the "Meeting") to be held at the offices of the
Company, 400 Fifth Avenue, Waltham, Massachusetts 02451, on February 3, 2000 at
10:00 a.m. and at any and all adjourned sessions thereof.
A proxy may be revoked by a stockholder, at any time before it is
voted, by (i) returning to the Company another properly signed proxy bearing a
later date, (ii) otherwise delivering a written revocation to the Clerk of the
Company, or (iii) attending the Meeting or any adjourned session thereof and
voting the shares covered by the proxy in person. Shares represented by the
enclosed form of proxy properly executed and returned, and not revoked, will be
voted at the Meeting in accordance with the instructions contained therein. If
no choice is specified, the proxies will be voted in favor of the matters set
forth in the accompanying Notice of Meeting.
The expense of soliciting proxies will be borne by the Company. In
addition to solicitations by mail, officers and regular employees of the
Company, without additional remuneration, may solicit proxies by telephone,
telegram and personal interviews from brokerage houses and other shareholders.
The Company will also reimburse brokers and other persons for their reasonable
charges and expenses incurred in forwarding soliciting materials to their
principals.
The Annual Report of the Company for the fiscal year ended September
30, 1999, is being mailed to the Company's stockholders with this Notice and
Proxy Statement on or about December ___, 1999.
A copy of the Company's Annual Report on Form 10-K for the fiscal year
ended September 30, 1999, as filed with the Securities and Exchange Commission,
except for exhibits, will be furnished without charge to any stockholder upon
written request to the Treasurer, Kronos Incorporated, 400 Fifth Avenue,
Waltham, Massachusetts 02451.
<PAGE>
Voting Securities and Votes Required
On December 6, 1999, the record date for the determination of
stockholders entitled to notice of and to vote at the Annual Meeting, there were
outstanding and entitled to vote an aggregate of _______________ shares of
Common Stock of the Company, $.01 par value per share ("Common Stock"). Each
share is entitled to one vote.
The holders of a majority of the number of shares of Common Stock
issued, outstanding and entitled to vote on any matter shall constitute a quorum
with respect to that matter at the Annual Meeting. Shares of Common Stock
present in person or represented by proxy (including shares which abstain or do
not vote with respect to one or more of the matters presented for stockholder
approval) will be counted for purposes of determining whether a quorum is
present.
The affirmative vote of the holders of a plurality of the votes cast by
the stockholders entitled to vote at the Annual Meeting is required for the
election of Directors. The affirmative vote of the holders of the majority of
the outstanding shares of Common Stock is required for approval of the proposed
amendment to the Company's Restated Articles of Organization. The affirmative
vote of the holders of a majority of the shares of Common Stock present or
represented and properly cast on a matter is required for the amendment to the
1992 Employee Stock Purchase Plan (the "Plan"), and the ratification of the
selection of Ernst & Young LLP ("Ernst & Young") as the Company's independent
auditors for the current fiscal year.
Shares which abstain from voting as to a particular matter, and shares
held in "street name" by brokers or nominees who indicate on their proxies that
they do not have discretionary authority to vote such shares as to a particular
matter, will not be counted as votes in favor of such matter, and will also not
be counted as votes cast or shares voting on such matter. Accordingly,
abstentions and "broker non-votes" will have no effect on the voting on a matter
that requires the affirmative vote of a certain percentage of the votes cast or
shares voting on a matter. Abstentions and broker non-votes have the same effect
as a vote against a matter requiring the affirmative vote of the majority of the
Company's outstanding capital stock such as the proposed amendment to the
Company's charter.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The table below sets forth certain information with respect to the
beneficial ownership of the Common Stock as of September 30, 1999 (except as
otherwise indicated) by (i) each person known by the Company to own beneficially
more than 5% of the outstanding shares of Common Stock; (ii) each Director and
nominee for Director; (iii) each executive officer named in the Summary
Compensation Table under the heading "Executive Compensation" below and (iv) all
Directors and executive officers of the Company as a group.
The number of shares beneficially owned by each Director or executive
officer is determined under rules of the Securities and Exchange Commission, and
the information is not necessarily indicative of beneficial ownership for any
other purpose. Under such rules, beneficial ownership includes any shares as to
which the individual has sole or shared voting power or investment power and
also any shares which the individual has the right to acquire within 60 days
after September 30, 1999 (except as otherwise indicated) through the exercise of
any stock option or other right. Unless otherwise indicated, each person has
sole investment and voting power (or shares such power with his or her spouse)
with respect to the shares set forth in the following table. The inclusion
herein of any shares deemed beneficially owned does not constitute an admission
of beneficial ownership of those shares.
<PAGE>
<TABLE>
<CAPTION>
Percentage of
Shares of Common Stock Common Stock
Beneficially Owned Outstanding
Name and Address
<S> <C> <C>
Wanger Asset Management, L.P. and Wanger Asset Management, 1,447,150(1)(3) 11.6%
Ltd.
227 W. Monroe Street, Suite 3000
Chicago, Illinois 60606..........
Fidelity Entities 1,030,000(2) 8.3%
82 Devonshire Street
Boston, Massachusetts 02109-3614.
Acorn Fund, a Series of the Acorn Investment Trust 903,000(3)(1) 7.3%
227 W. Monroe Street, Suite 3000
Chicago, Illinois 60606..........
Mark S. Ain*...................... 631,659(4)(6) 5.0%
W. Patrick Decker*................ 77,326(6) ^
Richard J. Dumler*................ 13,779(5)(6) ^
D. Bradley McWilliams*............ 178,152(6) 1.4%
Lawrence Portner*................. 6,375(6) ^
Samuel Rubinovitz*................ 9,975(6) ^
Aron J. Ain....................... 71,316(6) ^
Paul A. Lacy...................... 61,755(6) ^
Laura L. Woodburn................. 30,621(6) ^
All Directors and executive officers as a group (12
persons).......................... 1,202,280(7) 9.3%
<FN>
* Director of the Company
^ Less than 1% of the shares of Common Stock outstanding
(1) Represents an aggregate of 1,447,150 shares of Common Stock owned by
entities (including 903,000 shares owned by The Acorn Fund) - as to
which Wanger Asset Management, L.P. ("WAM") acts as investment advisor.
WAM has shared voting authority and dispositive power with respect to
these shares of Common Stock in its capacity as investment advisor to
these entities. Also reflects beneficial ownership of Wanger Asset
Management, Ltd., the general partner of WAM. See also footnote (3)
below.
(2) Represents an aggregate of 1,030,000 shares of Common Stock which are
indirectly held by FMR Corp. and as to which FMR Corp. has sole
dispositve power, but not sole voting power. These 1,030,000 shares are
beneficially owned by Fidelity Management and Research Company, as
result of its serving as an investment advisor.
(3) Acorn Fund, a Series of the Acorn Investment Trust, shares voting
authority and dispositive power over these shares of Common Stock with
WAM, its investment advisor. See also footnote (1) above.
(4) Mr. Mark Ain's address is c/o Kronos Incorporated, 400 Fifth Avenue,
Waltham, MA, 02451.
(5) Includes 939 shares of Common Stock held by Lambda III, L.P. of which
Lambda Management, L.P. is the sole general partner. Mr. Dumler is a
general partner of Lambda Management, L.P.
(6) Includes the following shares of Common Stock issuable upon the
exercise of outstanding stock options which may be exercised
within 60 days after September 30, 1999: Mr. Mark Ain: 178,650;
Mr. Decker: 65,625; Mr. Dumler: 4,215; Mr. McWilliams: 975;
Mr. Portner: 975; Mr. Rubinovitz: 975; Mr. Aron Ain: 66,150;
Mr. Lacy: 56,475; Ms. Woodburn: 29,625.
(7) Includes 464,152 shares of Common Stock issuable upon the exercise of
outstanding stock options held by executive officers and Directors of
the Company which may be exercised within 60 days after September 30,
1999. Also includes shares of Common Stock held by affiliates of
Directors (See footnote (5)).
</FN>
</TABLE>
ELECTION OF DIRECTORS
The Company's Restated Articles of Organization and Amended and
Restated By-Laws provide for the classification of the Board of Directors into
three classes, as nearly equal in number as possible. The Class I, Class II and
Class III Directors are currently serving until the annual meeting of
stockholders to be held in 2002, 2000 and 2001, respectively, and until their
respective successors are duly elected and qualified. At each annual meeting of
stockholders, Directors are generally elected for a full term of three years to
succeed those whose terms are expiring.
The Board of Directors has fixed the number of Directors at six and the
number of Class II Directors at two. There are currently two Class I Directors,
one Class II Director and three Class III Directors.
Unless otherwise instructed, the enclosed proxy will be voted to elect
the persons named below as Class II Directors for a term of three years expiring
at the 2003 annual meeting of stockholders and until their respective successors
are duly elected and qualified.
The nominees, as identified below, are currently serving as Directors
of the Company. If any nominee should become unavailable, the enclosed proxy may
be voted for a substitute nominee designated by the Board of Directors, unless
instructions are given to the contrary. The Board of Directors does not
anticipate that either of the nominees will become unavailable. The Company has
no nominating committee and all nominations are made by the Board of Directors.
The following table sets forth the name, age, length of service as a
Director of each member of the Board of Directors, including the nominees for
Class II Directors, information given by each concerning all positions he holds
with the Company, his principal occupation and business experience for the past
five years and the names of other publicly-held companies of which he serves as
a Director. Information with respect to the number of shares of Common Stock
beneficially owned by each Director, directly or indirectly, as of September 30,
1999, appears above under the heading "Security Ownership of Certain Beneficial
Owners and Management."
Nominees for Class II Directors
Term Expiring in 2000
Mark S. Ain, 56
Chief Executive Officer, Chairman of the Board and Director
Mark S. Ain, a founder of the Company, has served as Chief Executive
Officer, Chairman of the Board and a Director of the Company since its
organization in 1977. He also served as President from 1977 through September
1996. From 1974 to 1977, Mr. Ain operated his own consulting company, providing
strategic planning, product development and market research services. From 1971
to 1974, he was associated with a consulting firm. From 1969 to 1971, Mr. Ain
was employed by Digital Equipment Corporation both in product development and as
Sales Training Director. He received a B.S. from the Massachusetts Institute of
Technology and an M.B.A. from the University of Rochester. Mr. Ain is a director
of KVH Industries, Inc., a manufacturer of navigation and satellite
communications equipment and Park Electrochemical Corporation, a manufacturer of
electronic materials used to fabricate printed circuit boards and semiconductor
packages. Mr. Ain is the brother of Aron J. Ain, Vice President, Worldwide Sales
and Service of the Company.
W. Patrick Decker, 52
President, Chief Operating Officer and Director
W. Patrick Decker has served as President and Chief Operating Officer
of the Company since October 1996, and as a Director since 1997. Previously, he
served as Vice President, Marketing and Field Operations of the Company from
1982 until October 1996. From 1981 to 1982, Mr. Decker was General Manager at
Commodore Business Machines, Inc.-New England Division, a personal computer
manufacturer. From 1979 to 1980, Mr. Decker was a National Sales Manager for the
General Distribution Division of Data General Corporation, a computer company.
Class III Directors
Terms Expiring in 2001
Richard J. Dumler, 57
Director
Richard J. Dumler has served as a Director of the Company since 1982. Mr. Dumler
has been general partner of Lambda Management, L.P., a venture capital
investment company, since 1983 and Vice President of Lambda Fund Management
Inc., an investment management company, since 1990. He served as First Vice
President of Drexel, Burnham, Lambert, Inc. from 1983 to 1990.
Samuel Rubinovitz, 69
Director
Samuel Rubinovitz has served as a Director of the Company since 1985.
From 1989 until April 1996, he was a director of EG&G, Inc., a diversified
manufacturer of scientific instruments and electronic, optical and mechanical
equipment. In January 1994, Mr. Rubinovitz retired from his position as
Executive Vice President of EG&G, a position he had held since 1989. From 1986
to 1989, he was Senior Vice President of EG&G. Mr. Rubinovitz is a director of
the following two companies: Richardson Electronics, Inc., a manufacturer and
distributor of electron tubes and semiconductors; and KLA-Tencor Corporation, a
manufacturer of high performance instrumentation used in the processing and
inspection of semiconductors. Mr. Rubinovitz is also Chairman of the Board of
Directors and a director of LTX Corporation, a manufacturer of instruments used
to test semiconductor devices.
Class I Directors
Terms Expiring in 2002
D. Bradley McWilliams, 58
Director
D. Bradley McWilliams has served as a Director of the Company since
1993. From 1982 to 1995, Mr. McWilliams held the position of Vice President of
Cooper Industries, Inc., a worldwide manufacturer of electrical products, tools
and hardware. In 1995, Mr. McWilliams was named Senior Vice President and Chief
Financial Officer of Cooper Industries, Inc.
Lawrence Portner, 63
Director
Lawrence Portner has served as a Director of the Company since 1993.
Mr. Portner held the position of Vice President of Software Engineering for Data
General Corporation from June 1992 to December 1994 and served as a consultant
to Data General from 1988 to June 1992. Prior to that time, Mr. Portner held the
position of Vice President and General Manager of Research and Development of
Apollo Computer from 1983 to 1986. From 1963 to 1983, Mr. Portner served in
various capacities at Digital Equipment Corporation, most recently as Vice
President of Strategic Planning.
Board of Directors and Committees
The Audit Committee of the Board of Directors, which held two meetings
during fiscal year 1999, reviews with management and the independent auditors
the Company's annual financial statements, the scope of the audit, any comments
made by the independent auditors and such other matters that the Audit Committee
deems appropriate. In addition, the Audit Committee reviews the performance and
retention of the Company's independent auditors and reviews with management such
matters relating to compliance with corporate policies, as the Committee deems
appropriate. Messrs. McWilliams and Dumler, neither of whom is an executive
officer or employee of the Company, currently serve on the Audit Committee.
The Compensation and Stock Option Committee of the Board of Directors,
which held four meetings during fiscal year 1999, administers the Company's
stock option plans, recommends to the Board of Directors the annual salaries and
bonuses of the Company's executive officers and makes recommendations to the
Board of Directors with regard to the adoption of any new employee stock benefit
plans. Messrs. Rubinovitz, Dumler and Portner, none of whom is an executive
officer or an employee of the Company, currently serve on the Compensation and
Stock Option Committee. See "Report of the Compensation Committee" below.
During the Company's fiscal year ended September 30, 1999, the Board of
Directors of the Company held a total of five meetings. Each Director attended
at least 75% of the total number of meetings of the Board of Directors and all
committees on which he served.
Director Compensation
Effective May 1, 1997, the Company revised the compensation paid to
non-employee members of the Board of Directors. Each Director who is not a
full-time employee of the Company currently receives a quarterly retainer of
$1,000 for his services as a Director, $2,000 for each Board meeting attended,
and $1,000 for each committee meeting not held on the same day as a Board
meeting. In addition, each Director who serves as a Committee Chairman receives
a quarterly retainer of $500. The Company also reimburses expenses incurred by
non-employee Directors to attend Board meetings. It is also expected that each
non-employee Director will receive annually a stock option grant to purchase
1,500 shares of Common Stock at a price equal to fair market value on the date
of grant, so long as that Director owns a minimum of 3,000 shares of Common
Stock of the Company. On March 11, 1999, each of Messrs. Dumler, Rubinovitz,
McWilliams and Portner was awarded a stock option to purchase 1,500 shares of
Common Stock at an exercise price of $26.6875 per share.
Executive Compensation
Summary Compensation. The following table sets forth certain
information with respect to the annual and long-term compensation of the
Company's Chief Executive Officer and each of the four other most highly
compensated executive officers during the three fiscal years ended September 30,
1997, 1998 and 1999 who were serving as executive officers on September 30, 1999
(the "Named Executive Officers").
<PAGE>
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
Annual Long-Term
Compensation Compensation
--------------------------------------------------------- ------------- -------------
Other Annual Awards All Other
Compensation Securities Compensation
Name and Principal Underlying
Position Salary Bonus Options
Year ($) ($) ($) (#) ($)(1)
------- -------------- ------------ --------------- -------------- -------------
<C> <S> <S> <S> <S> <S> <S>
Mark S. Ain......... 1999 $351,346 $122,500 -- 45,000 $1,500
Chief Executive 1998 331,269 115,500 -- 45,000 1,500
Officer 1997 311,192 -- -- 52,500 1,500
W. Patrick Decker... 1999 261,000 91,000 -- 37,500 1,500
President & Chief 1998 245,942 85,750 -- 40,500 1,500
Operating Officer 1997 230,885 -- 47,699(2) 52,500 1,500
Aron J. Ain ........ 1999 196,754 68,600 -- 18,000 1,500
Vice President 1998 185,712 64,750 -- 18,000 1,500
Worldwide Sales 1997 175,673 -- -- 24,000 1,500
and Service
Paul A. Lacy........ 1999 196,754 68,600 -- 18,000 1,500
Vice President 1998 185,712 64,750 -- 18,000 1,500
Finance & 1997 175,673 -- -- 21,000 1,500
Administration
Laura L. Woodburn.... 1999 202,175 70,490 -- 22,500 1,500
Vice President 1998 190,731 66,500 -- 30,000 1,500
Engineering 1997 151,442 30,000 -- 37,500 1,500
- -----------
<FN>
(1) Amounts shown represent matching contributions made by the Company to its 401(k) Savings Plan on behalf of the Named
Executive Officers.
(2) Includes $43,729 which represents reimbursement of Mr. Decker's
relocation expenses grossed-up for associated tax liabilities.
</FN>
</TABLE>
<PAGE>
Option Grants and Exercises
The following tables summarize option grants and exercises during the
fiscal year ended September 30, 1999 to or by the Named Executive Officers and
the value of the options held by such persons at the end of fiscal year 1999.
<TABLE>
<CAPTION>
OPTION GRANTS IN LAST FISCAL YEAR
Potential Realizable
Value at Assumed
Annual Rates of
Stock Price
Appreciation for
Individual Grants Option Term(2)
----------------------------------------------------------------- ---------------------
Percent of
Total Options
Number of Granted to
Securities Employees in
Underlying Fiscal Year Exercise or
Options Granted Base Price
(#)(1) ($/Sh) Expiration Date
Name 5%($) 10%($)
---- ----- ------
<S> <C> <C> <C> <C> <C> <C>
Mark S. Ain...... 45,000 8.00% $18.4167 04/14/03 $203,785 $445,292
W. Patrick Decker. 37,500 6.67% 18.4167 04/14/03 169,821 371,077
Aron J. Ain...... 18,000 3.20% 18.4167 04/14/03 81,514 178,117
Paul A. Lacy..... 18,000 3.20% 18.4167 04/14/03 81,514 178,117
Laura L. Woodburn. 22,500 4.00% 18.4167 04/14/03 101,892 222,646
- ------------------
<FN>
(1) Each option was granted on October 14, 1998 and vests in four equal
annual installments commencing one year from the date of
grant.
(2) Amounts represent hypothetical gains that could be achieved for the
respective options if exercised at the end of the option term. These
gains are based on assumed rates of stock appreciation of 5% and 10%
compounded annually from the date the respective options were granted to
their expiration date. Actual gains, if any, on stock option exercises
will depend on the future performance of the Common Stock and the date on
which the options are exercised.
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
Number of Securities
Underlying
Unexercised Options Value of Unexercised
at Fiscal Year-End (#) In-The-Money Options at
Fiscal Year-End ($)(2)
Shares Acquired Value Realized
on Exercise(#) ($)(1) Exercisable/ Exercisable/
Name Unexercisable Unexercisable
------------------ ----------------- ----------------------- ---------------------------
<S> <C> <C> <C> <C>
Mark S. Ain..... 67,500 $1,957,162 129,450/134,550 $3,335,697/2,619,176
W. Patrick Decker. 31,275 975,313 31,125/106,125 611,273/2,037,334
Aron J. Ain...... 22,500 665,451 47,850/52,650 1,304,697/1,019,146
Paul A. Lacy...... 17,250 477,595 38,775/50,850 966,108/983,258
Laura L. Woodburn. 12,000 407,375 10,500/67,500 217,718/1,310,530
- ------------
<FN>
(1) Represents the difference between the exercise price and the fair market value of the Common Stock on the date of exercise.
(2) Based on the fair market value of the Common Stock on September 30, 1999 ($36.6875), the last day of the Company's
1999 fiscal year, less the option exercise price.
</FN>
</TABLE>
REPORT OF COMPENSATION COMMITTEE
Introduction
The Company's compensation program for executive officers is
administered by the Compensation and Stock Option Committee of the Board of
Directors (the "Compensation Committee"), which is composed of three
non-employee Directors, Messrs. Rubinovitz, Dumler and Portner. The Committee is
responsible for establishing and administering the policies which govern both
annual compensation and equity ownership.
The Company's executive compensation program reflects input from the
Company's Chief Executive Officer. The Compensation Committee reviews his
proposals concerning executive compensation and makes a final determination
concerning the scope and nature of compensation arrangements. The actions of the
Compensation Committee are reported to the Company's entire Board of Directors.
Kronos believes it is important that its stockholders understand the
Company's philosophy regarding executive compensation, and how this philosophy
manifests itself in the Company's various compensation plans.
Philosophy
All of Kronos' compensation programs are aimed at attracting and
retaining key employees, motivating them to achieve, and rewarding them for
above average Company performance. Different programs are geared to short and
longer term performance with the goal of increasing stockholder value over the
long term.
Executive compensation programs impact all employees by setting general
levels of compensation and helping to create an environment of goals, rewards,
and expectations. Since Kronos believes the performance of every employee is
important to the success of the Company, it is mindful of the effect of its
executive compensation and incentive programs on all employees.
The Compensation Committee of Kronos believes that the compensation of
Kronos' executives should reflect their success in attaining key operating
objectives, such as growth of sales, growth of operating earnings and earnings
per share, and growth or maintenance of market share and long-term competitive
advantage, and ultimately, in attaining an increased price for the Company's
stock. The Compensation Committee believes that the performance of Kronos'
executives in the management of the Company, considered in the light of general
economic and specific company, industry, and competitive conditions, should be
the basis for the determination of executive compensation, bonuses, and stock
option awards. It believes executive compensation should not be based on the
short-term performance of the Company's stock, whether favorable or unfavorable,
but rather that the price of the Company's stock will, in the long-term, reflect
the operating performance of the Company, and ultimately, the management of the
Company by its executives. The Company seeks to have the long-term performance
of the Company's stock reflected in executive compensation through the Company's
stock option and other equity incentive programs.
Programs
Kronos currently has three major components to its executive
compensation plans: salary, bonus and stock option and other equity incentive
programs.
Salary
In determining appropriate salary levels for executives, the
Compensation Committee primarily takes into account salary compensation at
comparably sized companies in the electronics and software industries. To track
this, the Committee relies on salary surveys conducted by third parties and its
own knowledge of compensation at companies in the Boston, Massachusetts area.
The Committee's goal is to establish base salary compensation in the
upper half of the range of salaries for executive officers with comparable
qualifications, experience and responsibilities at other companies in the same
or similar businesses and of comparable size and success, but not at the highest
levels. The Company believes this gives it the opportunity to attract and retain
talented managerial employees both at the level of Vice President and below. At
the same time, this level of salary allows the Company to have a bonus plan
based on performance without raising executive compensation beyond levels which
the Company believes are appropriate.
Bonus
Kronos' cash bonus plan is aimed at rewarding its executives for the
achievement of shorter term Company financial goals, primarily increases in the
Company's pre-tax income. The Company's philosophy is to reward its senior
executives as a group if the Company's goals are achieved. The maximum bonus
payable for fiscal 1999 ranged from 10% to 35% of base salary, depending on the
achievement of financial goals, including the level of pre-tax income reached by
the Company. The Company believes this level of award strikes the right balance
between incentive and reward, without offering undue incentives to management to
make short-term decisions that could be harmful in the long run. Early in the
Company's fiscal year, the Compensation Committee sets guidelines for the awards
based upon achievement of financial goals, including the level of pre-tax
income, and based upon its own assessment of the ability of the Company to
achieve the Company's annual financial plan, in light of economic conditions and
other factors. It is the general philosophy of the Board that management be
rewarded for their performance as a team in the attainment of these goals,
rather than individually.
While the cash bonus plan is based on the attainment of certain
financial goals, awards under the plan for any individual or the officers as a
group are entirely at the discretion of the Compensation Committee, which may
choose to award the bonus or not, in light of all relevant factors after
completion of the Company's fiscal year.
Stock Option and Equity Incentive Programs
The Company intends that its stock option program be its primary
vehicle for offering long-term incentives and rewarding its executives and key
employees. Kronos believes that stock options are the compensation mechanism
which works most effectively to align the interests of the Company's management
and shareholders. The goal of the program has been to enable members of the
program to participate in the success of the Company commensurate with their
contributions. Kronos desires that senior executives achieve a meaningful equity
stake in the Company through their participation in the option program.
Much has been written about the value of stock options at the time they
are granted. In Kronos' case, in order to make their past options valuable,
members of management worked over an extended period of time to build the
Company, the success of which at the time the options were granted was hardly
assured. Given the price earnings multiple of Kronos stock, management will have
to achieve substantial ongoing earnings growth for their options to have
meaningful value. This also is not assured and will require dedication and
effort similar to that put forth in the past. Kronos seeks to ensure this
continued dedication and effort through continuing grants of stock options.
Stock options are granted to key employees based upon prior
performance, the importance of retaining their services for the Company, and the
potential for their performance to help the Company attain its long-term goals.
There is no set formula for the award of options to individual executives or
employees. The award of stock options is generally done annually in conjunction
with the Compensation Committee's formal review of the individual performance of
its key executives, including its Chief Executive Officer, and their
contributions to the Company.
In the past, Kronos has annually granted options to purchase between 2%
and 5% of the Company's outstanding shares on a fully-diluted basis. Of this
amount, approximately half have been granted to the Company's executive officers
and key managers, and the balance to key employees. The Compensation Committee
currently expects to continue this general practice.
In connection with the Company's equity incentive plan, participants
may use shares to exercise their options or to pay taxes on nonstatutory
options. The purpose of this program is to encourage the officers to hold rather
than sell their Kronos shares.
The Employee Stock Purchase Plan is designed to appeal primarily to
non-executive Kronos employees and is not intended to be a meaningful element in
executive compensation.
Summary of Compensation of Chief Executive Officer
In fiscal year 1999, Mark S. Ain, the Company's Chief Executive
Officer, received a salary of $351,346 and bonus compensation of $122,500. In
deciding whether or not bonus compensation would be paid for fiscal year 1999,
the Compensation Committee reviewed whether certain of the Company's financial
goals established at the beginning of fiscal year 1999 had been attained. On
October 4, 1999, Mr. Ain was granted a non-statutory option to purchase 50,000
shares of Common Stock at a price of $37.5625 per share, the fair market value
on the date of the grant, based on Mr. Ain's performance in fiscal year 1999.
This option vests at the rate of 12,500 shares per year, beginning on the first
anniversary date of the grant. In determining the number of shares covered by
the options granted to Mr. Ain, the Compensation Committee evaluated Mr. Ain's
prior performance, the importance of retaining his services for the Company, and
his potential to help the Company attain its long-term goals.
The Company does not believe that Section 162(m) of the Internal
Revenue Code, as amended (the "Code"), which disallows a tax deduction for
certain compensation in excess of $1 million, will generally have a significant
impact on the Company.
Compensation Committee Interlocks and Insider Participation
No member of the Compensation Committee was at any time during the past
fiscal year, or formerly, an officer or employee of the Company or any
subsidiary of the Company, nor has any member of the Compensation Committee had
any relationship with the Company requiring disclosure under Item 404 of
Regulation S-K under the Securities Exchange Act of 1934, as amended. No
executive officer of the Company has served as a Director or member of the
Compensation Committee (or other committee serving an equivalent function) of
any other entity, one of whose executive officers served as a Director of or
member of the Compensation Committee of the Company.
<PAGE>
COMPARATIVE STOCK PERFORMANCE
The following graph compares the cumulative total stockholder return on
the Company's Common Stock with the cumulative return of (i) the Nasdaq Stock
Market - U.S. Index (the "Nasdaq Composite Index"), and (ii) the Hambrecht &
Quist Technology Index (the "Industry Index") during the five-year period ended
September 30, 1999. The graph assumes the investment of $100 in the Company's
Common Stock, the Nasdaq Composite Index and the Industry Index and assumes
dividends are reinvested. Measurement points are the last days of the Company's
fiscal years ended September 30, 1995, 1996, 1997, 1998 and 1999, and the last
trading days of each of the other months in the Company's 1995, 1996, 1997, 1998
and 1999 fiscal years.
Kronos Hambrecht & Quist Nasdaq Stock
DATES Incorporated Technologoy Index Market-U.S.Index
----- ------------------------------------------------------------------
Sep-94 100.00 100.00 100.00
Oct-94 116.67 109.16 101.95
Nov-94 119.87 108.23 98.57
Dec-94 133.33 111.06 98.88
Jan-95 133.33 109.43 99.40
Feb-95 139.74 118.92 104.62
Mar-95 148.08 124.36 107.73
Apr-95 156.41 133.68 111.12
May-95 166.67 138.46 113.99
Jun-95 190.38 155.13 123.22
Jul-95 233.33 169.30 132.27
Aug-95 237.18 171.24 134.96
Sep-95 237.18 175.33 138.07
Oct-95 235.90 177.79 137.27
Nov-95 223.08 175.60 140.49
Dec-95 243.59 166.05 139.75
Jan-96 261.54 168.51 140.45
Feb-96 238.82 176.95 145.80
Mar-96 196.15 169.25 146.29
Apr-96 228.85 192.65 158.41
May-96 248.08 195.55 165.68
Jun-96 273.08 181.30 158.21
Jul-96 212.50 162.67 144.13
Aug-96 228.85 172.52 152.21
Sep-96 236.54 192.46 163.84
Oct-96 224.04 189.71 162.03
Nov-96 219.23 212.08 172.08
Dec-96 246.15 206.38 171.94
Jan-97 253.85 228.48 184.14
Feb-97 209.62 209.82 173.96
Mar-97 134.62 196.72 162.62
Apr-97 165.38 204.00 167.68
May-97 200.00 234.70 186.67
Jun-97 211.54 236.78 192.41
Jul-97 188.46 274.87 212.68
Aug-97 208.65 275.65 212.38
Sep-97 199.04 286.96 224.97
Oct-97 223.08 256.30 213.25
Nov-97 240.38 253.63 214.38
Dec-97 237.02 241.96 210.68
Jan-98 239.42 257.48 217.35
Feb-98 265.38 288.10 237.79
Mar-98 270.19 292.97 246.57
Apr-98 276.92 304.37 250.72
May-98 275.00 282.17 236.80
Jun-98 278.85 299.93 253.34
Jul-98 267.31 296.15 250.38
Aug-98 285.58 232.91 200.89
Sep-98 284.62 266.62 228.77
Oct-98 276.92 289.10 238.66
Nov-98 332.69 323.47 262.80
Dec-98 340.87 376.35 296.89
Jan-99 363.46 427.84 340.07
Feb-99 325.48 380.43 309.59
Mar-99 282.69 409.88 332.11
Apr-99 392.31 425.34 341.43
May-99 427.10 431.19 333.58
Jun-99 525.00 485.44 363.36
Jul-99 558.17 478.81 358.09
Aug-99 578.73 502.11 372.29
Sep-99 423.32 513.55 371.52
<PAGE>
Approval of Amendments to Restated Articles of Organization
On October 29, 1999, the Board of Directors of the Company unanimously voted to
recommend to the stockholders that the Company's Restated Articles of
Organization be amended to increase the number of authorized shares of common
stock from 20,000,000 shares to 50,000,000 shares.
The authorized Common Stock of the Company currently consists of 20,000,000
shares, $0.01 par value per share, of which 12,442,563 shares were outstanding
as of September 30, 1999, and approximately 2,902,787 shares were reserved for
issuance pursuant to the Company's stock option plans, stock purchase plans and
other employee benefit plans. In addition, the Board of Directors has approved,
subject to stockholder approval, an amendment to the Company's 1992 Employee
Stock Purchase Plan increasing by 300,000 the number of shares available for
issuance under the Plan. See "Approval of Amendment to the 1992 Employee Stock
Purchase Plan" below. The Board of Directors believes that the authorization of
additional shares of Common Stock is desirable to provide shares for issuance in
connection with possible future stock dividends, possible future financings,
joint ventures, acquisitions, or other general corporate purposes. However,
there is no existing plan, understanding or agreement for the issuance of any
shares of Common Stock with the exception of the shares of Common Stock
available for issuance upon exercise of stock options or similar arrangements as
described above. This issuance of additional shares of common stock, while
providing desirable flexibility in connection with possible financings,
acquisitions and other similar transactions, would have the effect of diluting
the Company's current stockholders and could have the effect of making it more
difficult for a third party to acquire, or of discouraging a third party from
attempting to acquire, control of the Company. If the amendment to the Restated
Articles of Organization is adopted by the stockholders, the Board of Directors
would have authority to issue shares of Common Stock without the necessity of
future stockholder action. Holders of the Common Stock have no preemptive rights
with respect to any shares which may be issued in the future.
Approval of Amendment to the 1992 Employee Stock Purchase Plan
In the opinion of the Board of Directors, the 1992 Employee Stock Purchase Plan
(the "Plan") is an important vehicle for providing interested employees, who
meet certain eligibility requirements, to acquire an interest in the future of
the Company. Under the Plan, the Company is currently authorized to make up to
618,750 shares of Common Stock available for sale to eligible employees. As of
December 6, 1999, 500,123 shares had been issued to employees of the Company.
The Company estimates that the remaining 118,627 shares available will not be
sufficient to meet the Company's needs for the duration of the Plan, which
expires by its terms in 2002.
Accordingly, on October 29, 1999, the Board of Directors voted, subject to
stockholder approval to increase from 618,750 to 918,750 the number of shares
available for issuance under the Plan (subject to adjustment for certain changes
in the Company's capitalization. If the stockholders do not approve the proposed
amendment, the Company will not grant options in excess of the current number of
options authorized under the Plan.
General
The Plan was adopted by the Board of Directors on March 27, 1992 and approved by
the stockholders on April 16, 1992. The Plan provides a method by which eligible
employees of the Company and its subsidiaries may use voluntary payroll
deductions to purchase shares of Common Stock of the Company. The Plan is
administered by the Board of Directors, which has the authority to make,
administer and interpret the regulations as it deems necessary.
Participation
Participation in the Plan is voluntary and is available to all eligible
employees, who work for the Company more than twenty hours per week and have
completed six months or more of continuous service in the employ of the Company.
Employees who own or are deemed to own 5% or more of the total combined voting
power or value of all classes of stock of Kronos or its subsidiaries may not
participate.
There are two six-month option periods in each calendar year. Prior to the
commencement of each period, eligible employees may elect to participate by
authorizing payroll deductions of from 2% to 10% of their compensation as
contributions to the Plan. No more than $12,500 may be contributed by any
employee in a six-month option period. Each employee who is a participant on the
first day of an option period is deemed to have been granted an option for that
period. No employee may be granted an option which permits him rights to
purchase Common Stock under the Plan and any other employee stock purchase plan
of the Company and its subsidiaries to accrue at a rate which exceeds $25,000 of
the fair market value of such Common Stock (determined at the commencement of
each offering period) for each calendar year in which the option is outstanding
at any time. Participants may withdraw from the Plan at any point during the
option period. Any employee whose employment with Company terminates during the
option period ceases to be eligible to participate in the Plan. In both
situations, the balance in their account is refunded and their stock options are
cancelled.
Employees who are active participants in the Plan on the last day of the option
period are deemed to have exercised their options. The balance in their account
is applied to the purchase of as many whole shares of Kronos stock as the
balance permits. Shares are purchased at 85% of the fair market value of the
stock at (a) the time of grant of the option or (b) the time at which the option
is deemed to have been exercised, whichever is less. Any remaining balance in an
employee's account is refunded, except that any balance equal to the value of a
fractional share is carried over into the next option period. Such balances are
refunded to employees who choose not to participate in the following option
period.
All awards are non-transferable except in the case of death. Participants may
designate in writing the beneficiary who is to receive any stock and/or cash
credited to the participant under the Plan in the event of the participant's
death. Such designation may also stipulate whether the beneficiary is to receive
the participant's options to purchase stock at the end of the option period or
the balance in the participant's account at the time of death.
Federal Income Tax Consequences
The following is a summary of the United States federal income tax consequences
that generally will arise with respect to purchases made under the Plan and with
respect to the sale of Common Stock acquired under the Plan.
Tax Consequences to Participants. In general, a participant will not recognize
taxable income upon enrolling in the Plan or upon purchasing shares of Common
Stock at the end of an offering. Instead, if a participant sells Common Stock
acquired under the Plan at a sale price that exceeds the price at which the
participant purchased the Common Stock, then the participant will recognize
taxable income in an amount equal to the excess of the sale price of the Common
Stock over the price at which the participant purchased the Common Stock. A
portion of that taxable income will be ordinary income, and a portion may be
capital gain.
If the participant sells the Common Stock more than one year after acquiring it
and more than two years after the date on which the offering commenced (the
"Grant Date"), then the participant will be taxed as follows. If the sale price
of the Common Stock is higher than the price at which the participant purchased
the Common Stock, then the participant will recognize ordinary compensation
income in an amount equal to the lesser of: (i) fifteen percent of the fair
market value of the Common Stock on the Grant Date; and (ii) the excess of the
sale price of the Common Stock over the price at which the participant purchased
the Common Stock.
Any further income will be long-term capital gain. If the sale price of the
Common Stock is less than the price at which the participant purchased the
Common Stock, then the participant will recognize long-term capital loss in an
amount equal to the excess of the price at which the participant purchased the
Common Stock over the sale price of the Common Stock.
If the participant sells the Common Stock within one year after acquiring it or
within two years after the Grant Date (a "Disqualifying Disposition"), then the
participant will recognize ordinary compensation income in an amount equal to
the excess of the fair market value of the Common Stock on the date that it was
purchased over the price at which the participant purchased the Common Stock.
The participant will also recognize capital gain in an amount equal to the
excess of the sale price of the Common Stock over the fair market value of the
Common Stock on the date that it was purchased, or capital loss in an amount
equal to the excess of the fair market value of the Common Stock on the date
that it was purchased over the sale price of the Common Stock. This capital gain
or loss will be a long-term capital gain or loss if the participant has held the
Common Stock for more than one year prior to the date of the sale and will be a
short-term capital gain or loss if the participant has held the Common Stock for
a shorter period.
Tax Consequences to the Company. The offering of Common Stock under the Plan
will have no tax consequences to the Company. Moreover, in general, neither the
purchase nor the sale of Common Stock acquired under the Plan will have any tax
consequences to the Company except that the Company will be entitled to a
business-expense deduction with respect to any ordinary compensation income
recognized by a participant upon making a Disqualifying Disposition. Any such
deduction will be subject to the limitations of Section 162(m) of the Internal
Revenue Code of 1986, as amended.
Board Recommendation
The Board believes that the Amendments are in the best interests of the Company
and its stockholders and therefore recommends that the stockholders vote FOR
these Amendments. If the Amendments are not approved by the stockholders, the
Company will not grant options in excess of the current authorized number of
options.
RELATIONSHIP WITH INDEPENDENT AUDITORS
The Board of Directors, at the recommendation of the Audit Committee,
has selected the firm of Ernst & Young as the Company's independent auditors for
the current fiscal year. Ernst & Young has served as the Company's independent
auditors since 1979. Although stockholder approval of the Board of Directors'
selection of Ernst & Young is not required by law, the Board of Directors
believes that it is advisable to give stockholders an opportunity to ratify this
selection. If this proposal is not approved at the Annual Meeting, the Board of
Directors will reconsider its selection of Ernst & Young.
A representative of Ernst & Young is expected to be present at the
Annual Meeting with the opportunity to make a statement if he or she desires and
to respond to appropriate questions.
SHAREHOLDER PROPOSALS
Proposals of stockholders submitted pursuant to Rule 14a-8 under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and intended
to be presented for consideration at the Company's 2001 Annual Meeting of
Stockholders must be received by the Company not later than ___________, 2000 in
order to be considered for inclusion in the Company's proxy material for that
meeting.
The Company's Amended and Restated By-Laws also establish an advance
notice procedure with respect to stockholder nomination of candidates for
election as Directors. A notice regarding stockholder nominations for Director
must be received by the Company not less than 60 days nor more than 90 days
prior to the applicable stockholder meeting, provided, however, that in the
event the date of the meeting is not publicly announced by the Company by mail,
press release or otherwise more than 70 days prior to the meeting, the notice
must be received by the Company not later than the tenth day following the day
on which such announcement of the date of the meeting is made. Any such notice
must contain certain specified information concerning the persons to be
nominated and the stockholder submitting the nomination, all as set forth in the
By-Laws. The presiding officer of the meeting may refuse to acknowledge any
Director nomination not made in compliance with such advance notice
requirements. The Company has not publicly announced the date of the 2001 Annual
Meeting prior to the mailing of this Notice and Proxy Statement. Accordingly, an
appropriate notice from a stockholder regarding nominations for Director to be
acted on at the 2001 Annual Meeting must be received by the Company within ten
days of this mailing.
Proposals of stockholders intended to be presented at the Company's 2001 Annual
Meeting of Stockholders that are not submitted pursuant to Exchange Act Rule
14a-8 or are not stockholder nominations of candidates for election as Directors
must be received by the Company not later than ___________, 2000.
OTHER BUSINESS
The Board of Directors knows of no business to be brought before the
Annual Meeting which is not referred to in the accompanying Notice of Annual
Meeting. However, if any other matters are properly presented to the Annual
Meeting, it is the intention of the persons named in the accompanying proxy to
vote, or otherwise act, in accordance with their judgment on such matters.
By Order of the Board of Directors,
PAUL A. LACY, Clerk
December ___, 1999
THE BOARD OF DIRECTORS ENCOURAGES STOCKHOLDERS TO ATTEND THE MEETING. WHETHER OR
NOT YOU PLAN TO ATTEND, YOU ARE URGED TO COMPLETE, DATE, SIGN AND RETURN THE
ENCLOSED PROXY IN THE ACCOMPANYING ENVELOPE. A PROMPT RESPONSE WILL GREATLY
FACILITATE ARRANGEMENTS FOR THE MEETING AND YOUR COOPERATION WILL BE
APPRECIATED. STOCKHOLDERS WHO ATTEND THIS MEETING MAY VOTE THEIR STOCK
PERSONALLY EVEN THOUGH THEY HAVE SENT IN THEIR PROXIES.
<PAGE>
<TABLE>
<CAPTION>
- --------
| X | PLEASE MARK VOTES AS IN THIS EXAMPLE
- --------
-------------------------------------
KRONOS INCORPORATED
-------------------------------------
<S> <C> <C> <C>
For Both With For Both
1.)To elect the following persons as Class II Directors Nominees -hold Except
(except as marked below): [ ] [ ] [ ]
Mark S. Ain
W. Patrick Decker
If you do not wish your shares voted "For" a particular nominee,
mark the "For Both Except" Box and strike a line through the name of
that nominee. Your shares will be voted for the remaining nominee.
2.)To approve an amendment to the Company's Restated Articles of Organization For Against Abstain
increasing the number of authorized shares of the Company's common stock [ ] [ ] [ ]
from 20,000,000 shares to 50,000,000 shares.
3.)To approve an amendment to the Company's 1992 Employee Stock Purchase For Against Abstain
Plan (the "Plan") to increase from 618,750 to 918,750 the number of shares [ ] [ ] [ ]
available for issuance under the Plan (subject to adjustment for certain
changes in the Company's capitalization.
4.)To ratify the selection of Ernst & Young LLP as the Company's independent For Against Abstain
auditors for the 2000 fiscal year. [ ] [ ] [ ]
5.)To transact such other business as may properly come before the meeting For Against Abstain
or any and all adjourned sessions of the meeting. [ ] [ ] [ ]
Mark box at right if comments or address change have been noted on the
reverse side of this card. [ ]
</TABLE>
RECORD DATE SHARES:
--------------------
Please be sure to sign and date this Proxy |Date |
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| |
| |
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Stockholder sign here Co-owner sign here
<PAGE>
DETACH CARD
KRONOS INCORPORATED
Dear Stockholder:
Please take note of the important information enclosed with this Proxy.
There are a number of issues related to the management and operation of
your Company that require your immediate attention and approval. These
are discussed in detail in the enclosed proxy materials. This proxy is
solicited on behalf of the Board of Directors of Kronos Incorporated.
Your vote counts, and you are strongly encouraged to exercise your right
to vote your shares.
Please mark the boxes on the proxy card to indicate how your shares
shall be voted. Then sign the card, detach it and return your proxy vote
in the enclosed postage paid envelope.
Your vote must be received prior to the Annual Meeting of Stockholders
of the Company on Thursday, February 3, 2000. Thank you in advance for
your prompt consideration of these matters.
Sincerely,
Kronos Incorporated
KRONOS INCORPORATED
Proxy for the Annual Meeting of Stockholders
to be held on February 3, 2000
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned, revoking all prior proxies, hereby appoint(s) Mark S. Ain and
Paul A. Lacy, and each of them, with full power of substitution, as proxies to
represent and vote as designated herein, all shares of stock of Kronos
Incorporated (the "Company") which the undersigned would be entitled to vote if
personally present at the Annual Meeting of Stockholders of the Company to be
held at the offices of the Company, 400 Fifth Avenue, Waltham, Massachusetts on
Thursday, February 3, 2000 at 10:00 a.m., or any adjourned sessions thereof.
In their discretion, the proxies are authorized to vote upon such other matters
as may properly come before the meeting or any adjournment thereof.
This proxy when properly executed will be voted in the manner directed herein by
the undersigned stockholder. If no direction is given, this proxy will be voted
for proposals 1, 2, 3, 4, and 5. Attendance of the undersigned at the meeting or
at any adjournment thereof will not be deemed to revoke this proxy unless the
undersigned shall revoke this proxy in writing before it is exercised.
- --------------------------------------------------------------------------------
|PLEASE VOTE, DATE AND SIGN ON REVERSE SIDE AND RETURN PROMPTLY IN THE |
|ENCLOSED ENVELOPE. |
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
|Please sign this proxy exactly as your name(s) appear(s) on the reverse side |
|hereof. Joint owners should each sign personally. Trustees and other |
|fiduciaries should indicate the capacity in which they sign, and where more |
|than one name appears, a majority must sign. If a corporation, this signature |
|should be that of an authorized officer who should state his or her title. |
- --------------------------------------------------------------------------------
HAS YOUR ADDRESS CHANGED? DO YOU HAVE ANY COMMENTS?
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