<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant [_]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] Confidential, for Use of the Commission
[X] Definitive Proxy Statement Only (as Permitted by Rule 14a-6(e)(2))
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to $240.14a-11(c) or $240.14a-12
ASECO CORPORATION
-----------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
ASECO CORPORATION
-----------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
[_] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
Notes:
<PAGE>
ASECO CORPORATION
500 DONALD LYNCH BOULEVARD
MARLBORO, MASSACHUSETTS 01752
July 8, 1996
Dear Stockholder:
You are cordially invited to attend the Annual Meeting of Stockholders of
Aseco Corporation (the "Company"), which will be held on Thursday, August 8,
1996 at 10:00 A.M., at the offices of Choate, Hall & Stewart, 36th Floor,
Exchange Place, 53 State Street, Boston, Massachusetts.
The following Notice of Annual Meeting of Stockholders and Proxy Statement
describe the items to be considered by the stockholders and contain certain
information about the Company and its officers and directors.
Please sign and return the enclosed proxy card as soon as possible in the
envelope provided so that your shares can be voted at the meeting in
accordance with your instructions. Even if you plan to attend the meeting, we
urge you to sign and promptly return the proxy card. You can revoke it at any
time before it is exercised at the meeting, or vote your shares personally if
you attend the meeting.
We look forward to seeing you.
Sincerely,
/s/ Carl S. Archer, Jr.
Carl S. Archer, Jr.
President, Chief Executive Officer
and Chairman of the Board
<PAGE>
ASECO CORPORATION
500 DONALD LYNCH BOULEVARD
MARLBORO, MASSACHUSETTS 01752
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON AUGUST 8, 1996
The Annual Meeting of Stockholders of Aseco Corporation (the "Company") will
be held at the offices of Choate, Hall & Stewart, 36th Floor, Exchange Place,
53 State Street, Boston, Massachusetts on Thursday, August 8, 1996 at 10:00
A.M., for the following purposes:
1. To elect two directors for a three-year term.
2. To approve an amendment to the Company's 1993 Omnibus Stock Plan
increasing the number of shares issuable under such plan from 930,000 to
1,230,000.
3. To approve amendments to the Company's 1993 Non-Employee Director
Stock Option Plan increasing the number of shares issuable under such plan
from 65,000 to 165,000, increasing the number of shares underlying initial
option grants under the plan and providing that each Non-Employee Director
who was serving on the Board of Directors on May 15, 1996 and is to serve
on the Board of Directors during fiscal 1997 be granted an option to
purchase an additional 10,000 shares.
4. To ratify the Board of Directors' selection of Ernst & Young LLP as
the Company's independent auditors for the fiscal year ending March 30,
1997.
5. To transact such other business as may properly come before the
meeting, and any or all adjournments thereof.
Stockholders of record at the close of business on June 28, 1996 will be
entitled to notice of and to vote at the Annual Meeting and any adjournments
thereof.
By Order of the Board of Directors
/s/ Robert V. Jahrling
Robert V. Jahrling
Secretary
Dated: July 8, 1996
WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING, PLEASE COMPLETE, DATE AND
SIGN THE ENCLOSED PROXY AND MAIL IT PROMPTLY IN THE ENCLOSED RETURN ENVELOPE
IN ORDER THAT YOUR SHARES MAY BE REPRESENTED.
<PAGE>
ASECO CORPORATION
500 DONALD LYNCH BOULEVARD
MARLBORO, MASSACHUSETTS 01752
PROXY STATEMENT FOR
ANNUAL MEETING OF STOCKHOLDERS
This Proxy Statement is furnished to the holders of common stock of Aseco
Corporation (hereinafter referred to as the "Company") in connection with the
solicitation of proxies to be voted at the Annual Meeting of Stockholders to
be held on August 8, 1996 and at any adjournment of that meeting. The enclosed
proxy is solicited on behalf of the Board of Directors of the Company. Each
properly signed proxy will be voted in accordance with the instructions
contained therein, and, if no choice is specified, the proxy will be voted in
favor of the proposals set forth in the Notice of Annual Meeting.
A person giving the enclosed proxy has the power to revoke it, at any time
before it is exercised at the meeting, by written notice to the Secretary of
the Company, by sending a later dated proxy, or by revoking it in person at
the meeting.
The approximate date on which this Proxy Statement and the enclosed proxy
will first be sent to stockholders is July 8, 1996. The Company's Annual
Report to Stockholders for the year ended March 31, 1996 is being mailed
together with this Proxy Statement.
Only holders of common stock of record on the stock transfer books of the
Company at the close of business on June 28, 1996 (the "record date") will be
entitled to vote at the meeting. There were 3,635,215 shares of common stock
outstanding and entitled to vote on the record date.
Each share of common stock is entitled to one vote. The affirmative vote of
the holders of a plurality of the shares represented at the meeting, at which
a quorum is present, is required for the election of directors. Approval of
the other matters which are before the meeting will require the affirmative
vote at the meeting, at which a quorum is present, of the holders of a
majority of votes cast with respect to such matters.
For purposes of the matters before the Annual Meeting, under the Company's
By-Laws, a quorum consists of a majority of the issued and outstanding shares
entitled to vote on such matters as of the record date. Shares voted to
abstain or to withhold as to a particular matter and shares as to which a
nominee (such as a broker holding shares in street name for a beneficial
owner) has no voting authority in respect of such matter will be deemed
represented for quorum purposes. Under the Company's By-Laws, such shares will
not be deemed to be voting on such matters, and therefore will not be the
equivalent of negative votes as to such matters. It is the position of the
Securities and Exchange Commission, however, that, with respect to stockholder
approval pursuant to Rule 16(b)-3 under the Securities Exchange Act of 1934
(the "1934 Act") of the second and third proposals listed on the Notice of
Annual Meeting, abstentions will be deemed the equivalent of negative votes.
Votes will be tabulated by the Company's transfer agent subject to the
supervision of persons designated by the Board of Directors as inspectors.
<PAGE>
STOCK OWNERSHIP OF DIRECTORS, NOMINEES, EXECUTIVE OFFICERS
AND PRINCIPAL STOCKHOLDERS
The following table sets forth certain information regarding beneficial
ownership of the Company's common stock as of June 3, 1996 by (a) each
director of the Company and nominee for director, (b) each of the executive
officers named in the Summary Compensation Table below, (c) all current
directors and executive officers as a group and (d) each person known to the
Company to own beneficially 5% or more of its common stock. Except as
otherwise indicated, each person has sole investment and voting power with
respect to the shares shown as being beneficially owned by such person, based
on information provided by such owners.
<TABLE>
<CAPTION>
COMMON STOCK
BENEFICIALLY PERCENT OF
NAME OWNED(1) OUTSTANDING SHARES
- ---- ------------ ------------------
<S> <C> <C>
Carl S. Archer, Jr. ........................... 227,079 6.0%
Sebastian J. Sicari............................ 175,891 4.7
C. Kenneth Gray................................ 55,414 1.5
Peter S. Rood.................................. 25,952 *
Charles D. Yie................................. 8,147 *
Kenneth W. Tunnell............................. 5,000 *
Sheldon Buckler................................ 2,000 *
Sheldon Weinig................................. 6,000 *
Gerald L. Wilson............................... -- --
Adams, Harkness & Hill, Inc.(3)................ 122,820 3.4
60 State Street
Boston, MA 02109
Kopp Investment Advisers, Inc.(2)(3)........... 947,650 26.1
6600 France Avenue South
Edina, Minnesota 55435
All current directors and executive officers as
a group (8 persons)........................... 5,055,483 13.9
</TABLE>
- --------
* Less than 1%
(1) Includes 346,956 shares which may be acquired by exercise of stock options
within sixty days after June 3, 1996 by the current directors and
executive officers as a group and individually as follows: Mr. Archer,
138,333; Mr. Sicari, 111,250; Mr. Gray, 53,373; Mr. Rood, 24,000; Mr. Yie,
8,000; Mr. Tunnell, 5,000; Dr. Buckler, 2,000; and Dr. Weinig, 5,000.
(2) Kopp Investment Advisors, Inc. serves as an investment adviser and
exercises investment power with respect to all such shares. Kopp
Investment Advisors, Inc. disclaims beneficial ownership of all such
shares.
(3) Based solely on information contained in filings made with the Securities
and Exchange Commission pursuant to Section 13(d) or 13(g) of the 1934
Act.
2
<PAGE>
ELECTION OF DIRECTORS
(ITEM 1 OF NOTICE)
There are currently six members of the Board of Directors, divided into
three classes with terms expiring respectively at the 1996, 1997 and 1998
annual meetings of stockholders. The Board has nominated Gerald L. Wilson to
succeed Mr. Tunnell, whose term is expiring. The Board has also nominated
Sheldon Buckler, whose term is expiring, for re-election. Mr. Wilson and Dr.
Buckler have consented to serve, if elected at the meeting, for three-year
terms expiring at the time of the 1999 annual meeting of stockholders and when
their successors are elected and qualified. The shares represented by the
enclosed proxy will be voted to elect Mr. Wilson and Dr. Buckler unless such
authority is withheld by marking the proxy to that effect. Mr. Wilson and Dr.
Buckler have agreed to serve, but in the event either becomes unavailable for
any reason, the proxy, unless authority has been withheld as to such nominee,
may be voted for the election of a substitute. Charles D. Yie, whose term
expires at the 1998 annual meeting of stockholders, has indicated his
intention to resign, effective as of the 1996 annual meeting of stockholders.
The following information is furnished with respect to the nominees for
election as directors and each director whose term of office will continue
after the meeting.
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION AND
NAME AND AGE DIRECTOR BUSINESS EXPERIENCE
AS OF JUNE 3, 1996 SINCE DURING LAST FIVE YEARS
------------------ -------- ------------------------
<S> <C> <C>
NOMINEES FOR ELECTION FOR TERMS OF THREE YEARS EXPIRING IN 1999
Dr. Sheldon Buckler, 65. 1994 Dr. Buckler served as Vice Chairman of Polaroid
Corporation from 1990 until 1994. Since May
1995, he has served as Chairman of Commonwealth
Energy System, an energy utility.
Gerald L. Wilson, 57.... -- Professor Wilson is currently a faculty member
in the departments of Electrical Engineering
and Mechanical Engineering at the Massachusetts
Institute of Technology. He was Dean of the
School of Engineering at Massachusetts
Institute of Technology from 1981 until 1991.
Professor Wilson serves on the Boards of
Directors of Analogic Corporation and
Commonwealth Energy Systems, as well as on the
technical advisory boards of General Motors,
Cumming Engine and United Technologies
Corporation.
DIRECTORS WHOSE TERMS EXPIRE IN 1997
Sebastian J. Sicari, 44. 1993 Mr. Sicari has been Vice President, Finance and
Administration, and Chief Financial Officer of
the Company since December 1985 and has served
as Treasurer of the Company since July 1988.
Dr. Sheldon Weinig, 68.. 1994 Dr. Weinig founded Materials Research
Corporation, a wholly-owned subsidiary of Sony
Corporation of America, in 1957 and has been
Chairman thereof since 1957. Since 1994, he has
also been a consultant to, and was from 1989
through 1994, Vice Chairman of, Sony
Engineering & Manufacturing of America. Dr.
Weinig is a director of Insituform
Technologies, Inc., a provider of pipeline
reconstruction techniques, Unique Mobile, Inc.,
a manufacturer of magnet motors and electronic
controls, and Intermagnetics General
Corporation, a manufacturer of superconducting
systems.
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION AND
NAME AND AGE DIRECTOR BUSINESS EXPERIENCE
AS OF JUNE 3, 1996 SINCE DURING LAST FIVE YEARS
------------------ -------- ------------------------
<S> <C> <C>
DIRECTORS WHOSE TERMS EXPIRE IN 1998
Carl S. Archer, Jr., 59. 1987 Mr. Archer has been President and Chief
Executive Officer of the Company since November
1987 and Chairman of the Board of Directors
since August 1993.
</TABLE>
BOARD OF DIRECTORS AND COMMITTEE MEETINGS
The Board of Directors has an Audit, Compensation and Nominating Committee.
The Audit Committee reviews the internal accounting procedures of the
Company and consults with and reviews the services provided by the Company's
independent auditors. The directors currently serving on the Audit Committee
are Sheldon Weinig, Kenneth W. Tunnell and Sheldon Buckler. The Audit
Committee met three times during fiscal 1996.
The Compensation Committee reviews and recommends to the Board the
compensation and benefits of all officers of the Company and reviews general
policy relating to compensation and benefits of employees of the Company. The
Compensation Committee also administers the issuance of stock options. The
directors currently serving on the Compensation Committee are Dr. Buckler and
Messrs. Tunnell and Yie. The Compensation Committee met three times during
fiscal 1996.
The Nominating Committee reviews and recommends to the Board candidates for
director. The directors currently serving on the Nominating Committee are Drs.
Weinig and Buckler. The Nominating Committee met four times during fiscal
1996.
During fiscal 1996, the Board of Directors of the Company held four
meetings. Each incumbent director attended at least 75% of the aggregate
number of the meetings of the Board (held during the period for which he was a
director) and the meetings of the committees of the Board on which he served.
4
<PAGE>
EXECUTIVE OFFICER COMPENSATION
The following summary compensation table sets forth the compensation paid or
accrued for services rendered in fiscal 1996, 1995 and 1994 to the chief
executive officer and the other three most highly compensated executive
officers of the Company (the "Named Executive Officers"). None of the
Company's other executive officers' combined annual salary and bonus exceeded
$100,000 during fiscal 1996.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
------------
AWARDS
------------
NAME AND ANNUAL COMPENSATION SHARES
PRINCIPAL FISCAL ---------------------- UNDERLYING ALL OTHER
POSITION YEAR SALARY ($) BONUS ($) OPTIONS (#) COMPENSATION ($)(1)
--------- ------ ---------- --------- ------------ -------------------
<S> <C> <C> <C> <C> <C>
Carl S. Archer, Jr. .... 1996 $262,633 $ 95,000 145,000 $2,930
President and Chief 1995 210,538 -- -- 2,742
Executive Officer 1994 188,801 31,490 90,000 922
C. Kenneth Gray......... 1996 141,756 100,337 65,000 2,476
Vice President, Sales 1995 129,458 -- -- 1,276
and Marketing 1994 159,959(2) 31,490 47,500 518
Sebastian J. Sicari..... 1996 161,202 100,337 100,000 1,422
Vice President, Finance 1995 147,506 -- -- 1,305
and Administration 1994 129,150 31,490 75,000 586
Peter S. Rood........... 1996 129,086 81,450 45,000 1,805
Vice President, Manu- 1995 121,745 -- -- 1,157
facturing Operations(3) 1994 32,308 7,880 35,000 86
</TABLE>
- --------
(1) For fiscal 1996, consists of (i) contributions to 401(k) accounts in the
amount of $1,220 for each Named Executive Officer and (ii) insurance
premiums paid by the Company during the covered fiscal years with respect
to term life insurance for the benefit of the Named Executive Officers.
(2) Includes sales commissions in the amount of $42,747.
(3) Mr. Rood began his employment with the Company in January 1994.
5
<PAGE>
OPTION GRANTS IN LAST FISCAL YEAR
The following table sets forth certain information regarding options to
purchase shares of Common Stock granted during fiscal 1996 by the Company to
the Named Executive Officers.
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
% OF TOTAL VALUE AT ASSUMED RATES
NUMBER OF OPTIONS OF STOCK PRICE
SECURITIES GRANTED TO APPRECIATION FOR OPTION
UNDERLYING EMPLOYEES TERM(1)
OPTIONS IN FISCAL EXERCISE EXPIRATION -----------------------
NAME GRANTED (#) YEAR PRICE ($/SH) DATE 5% ($) 10% ($)
---- ----------- ---------- ------------ ---------- -----------------------
<S> <C> <C> <C> <C> <C> <C>
Carl S. Archer, Jr...... 145,000 30.3% $18.69 8/7/01(2) $922,200 $2,090,900
C. Kenneth Gray......... 10,000 2.1 13.00 5/15/05(3) 81,800 207,200
55,000 11.5 18.69 8/7/01(2) 349,800 793,100
Sebastian J. Sicari..... 10,000 2.1 13.00 5/15/05(3) 81,800 207,200
90,000 18.9 18.69 8/7/01(2) 572,400 1,297,800
Peter S. Rood........... 45,000 9.4 18.69 8/7/01(2) 286,200 648,900
</TABLE>
- --------
(1) Amounts represent hypothetical gains that could be achieved for the
respective options if such options are not exercised until the end of the
option term. These gains are based on assumed rates of stock price
appreciation of 5% and 10% set by the SEC, compounded annually from the
dates the respective options were granted until their respective
expiration dates and, therefore, are not intended to forecast possible
future appreciation, if any, in the Common Stock. This table does not take
into account any actual appreciation in the price of the Common Stock
after the date of grant.
(2) These options vest on August 7, 2000, subject to earlier vesting in full
upon a change of control of the Company or if the market price of the
Company's Common Stock for twenty consecutive days exceeds $31.00 per
share. In addition, these options are subject to earlier vesting in part
upon the achievement by the Company of specified quarterly earnings
targets.
(3) These options vest half on the date of grant and the remainder in twenty
equal quarterly installments following the date of grant.
FISCAL YEAR-END OPTION VALUES
The following table sets forth information regarding (a) the number of
shares acquired upon the exercise of options during fiscal 1995 and the value
realized therefrom and (b) the number of vested and unvested options and the
unrealized value or spread (the difference between the exercise price and the
market value) of the unexercised options issued by the Company and held by the
Named Executive Officers on March 31, 1996.
<TABLE>
<CAPTION>
NUMBER OF SHARES VALUE OF UNEXERCISED
UNDERLYING IN-THE-MONEY
SHARES UNEXERCISED OPTIONS (#) OPTIONS ($)
ACQUIRED ON VALUE ------------------------ ----------------------
NAME EXERCISE (#) REALIZED ($) VESTED UNVESTED VESTED UNVESTED
---- ------------ ------------ ----------- ------------ ---------- -----------
<S> <C> <C> <C> <C> <C> <C>
Carl S. Archer, Jr. .... 40,140 $723,323 126,350 108,750 $551,250 --
C. Kenneth Gray......... 20,000 273,750 53,206 46,792 233,987 $ 6,845
Sebastian J. Sicari..... 43,750 788,375 103,500 71,500 459,375 --
Peter S. Rood........... 15,000 210,625 34,850 38,150 144,550 26,950
</TABLE>
- --------
(1) 417 of these unvested options are exercisable, but if such options are
exercised to purchase unvested shares, such shares, until vested, are
subject to repurchase by the Company.
6
<PAGE>
SEVERANCE AGREEMENTS
Pursuant to letter agreements dated October 23, 1990, the Company has agreed
to pay each of Messrs. Archer and Sicari, severance equal to six times his
monthly base pay and to continue his insurance benefits for a six-month period
if the Company terminates his employment for any reason other than for cause.
In the event either of such individual's employment is terminated at any time
after a Change of Control Event for any reason except death, he is entitled to
severance equal to twelve months of base salary and twelve months of continued
insurance coverage. A "Change of Control Event" is defined to mean any of the
following events: (a) the sale, lease, transfer or other disposition by the
Company of all or substantially all of its assets; (b) the merger or
consolidation of the Company with another entity in which the stockholders of
the Company immediately prior to such merger or consolidation hold less than
50% of the outstanding voting stock of the surviving or resulting corporation
immediately following such transaction; or (c) the sale or exchange by the
Company's stockholders of greater than 50% of the Company's outstanding voting
stock. In addition, upon any Change of Control Event, the Company's repurchase
rights with respect to any shares of Common Stock held by such individuals
shall lapse and such individuals shall have the right to exercise any options
held by them to purchase shares of common stock. These agreements may have the
possible effect of discouraging unsolicited takeover attempts.
As of March 31, 1996, Messrs. Archer, Sicari, Gray and Rood held options to
purchase 235,000, 175,000, 80,000 and 65,000 shares, respectively, which stock
options become immediately exercisable in full upon (i) the acquisition by any
person, entity or group of more than 35% of the aggregate voting power of the
outstanding securities of the Company, (ii) a majority of the Board of
Directors ceasing to consist of individuals (A) who are currently members of
the Board or (B) for whose nomination for such membership a majority of such
current members voted in favor, or (iii) the disposition by the Company of
substantially all its business, other than in connection with a mere change of
place of incorporation or similar change in form.
DIRECTOR COMPENSATION
Non-employee directors are paid (i) an annual retainer of $5,000, (ii)
$1,000 for each regular or special Board of Director meeting attended and
(iii) $500 for each Board Committee meeting attended on a day on which no
meeting of the Board of Directors is held. Non-employee directors also are
reimbursed for their reasonable out-of-pocket expenses incurred in connection
with meeting attendance. In addition, under the Company's 1993 Non-Employee
Director Stock Option Plan, each non-employee director serving as such on
April 30 of each year is automatically granted an option exercisable (subject
to a two-year vesting period) for the purchase of 2,500 shares of the
Company's common stock at a price per share equal to fair market value at the
date of grant. Any non-employee director, upon his or her first election to
the Board of Directors, is entitled to receive an option to purchase 15,000
shares of common stock.
7
<PAGE>
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
This report, prepared by the Compensation Committee of the Company's Board
of Directors (the "Committee"), addresses the Company's executive compensation
policies and the basis on which fiscal 1996 executive officer compensation
determinations were made. The Committee designs and approves all components of
executive pay.
To ensure that executive compensation is designed and administered in an
objective manner, the Committee's members are all non-employee directors.
During fiscal 1996, Committee members were Sheldon Buckler, Kenneth W. Tunnell
and Charles D. Yie.
Compensation Philosophy
The objectives of the Company's executive compensation program are to (i)
enable the Company to attract, retain and reward executives who contribute to
both the short-term and long-term success of the Company, (ii) align
compensation with business objectives and individual performance, and (iii)
tie the interests of the Company's executives to the interests of the
Company's stockholders. The primary components of the Company's executive
compensation program are salary, cash bonuses and stock options. In addition,
executives are eligible to participate, on a non-discriminatory basis, in
various benefit programs provided to all full-time employees, including the
Company's stock purchase plan and group medical, disability and life insurance
programs. The Committee believes that executive compensation packages should
be viewed as a whole in order to properly assess their appropriateness.
In establishing total compensation packages for its executive officers, the
Committee takes into account the compensation packages offered to executives
of other semiconductor capital equipment companies of similar stature. These
companies are not included in the published industry index represented in the
Comparison of Cumulative Total Stockholder Return Graph on page 10. The
Committee uses this comparative data primarily as benchmarks to ensure that
the Company's executive compensation packages are competitive. The Committee
seeks to maintain total compensation within the broad middle range of
comparative pay. Individual amounts are based not only on comparative data,
but also on such factors as length of service with the Company, prior
experience and the Committee's judgment as to individual contributions. These
factors are not assigned specific mathematical weights.
Salary
Amounts shown under the Salary column of the Summary Compensation Table
represent the fixed portion of compensation for executive officers in fiscal
1996. Changes in salary from year to year depend on such factors as individual
performance, cost of living changes, and the economic and business conditions
affecting the Company. Executive salaries are set at the beginning of each
fiscal year.
Mr. Archer's salary was increased from $210,538 in fiscal 1995 to $262,633
in fiscal 1996, an increase of 25%. This increase was largely attributable to
Mr. Archer's significant contribution to the Company's financial performance
in fiscal 1996.
Bonus
Amounts shown in the Bonus column of the Summary Compensation Table,
together with stock option grants, represent the variable compensation for
executive officers. Cash bonuses are based on the achievement of specific
financial performance goals by the Company as well as specific goals and
objectives by the executive officer. The Company seeks to structure each
executive's bonus so that, if the executive earns his maximum bonus, his
combined salary and bonus will be roughly equal to the average prior year's
reported combined salary and bonus of executives holding the same position
with other semiconductor capital equipment companies of similar stature. In
fiscal 1996, executive bonuses were based on the Company's achievement of a
certain annual
8
<PAGE>
earnings per share and inventory level goals and on the achievement of
individual goals and objectives by each executive. The total amount available
for bonuses in fiscal 1996 was increased in recognition of the fact that in
fiscal 1995 the executive officers of the Company waived certain bonuses due
them.
Stock Options
The Committee believes that stock ownership by executive officers is
important in aligning management and stockholder interests in the long-term
enhancement of stockholder value. Stock options are awarded based upon the
market price of the Company's common stock on the date of grant and are linked
to future performance of the Company's stock because they do not become
valuable to the holder unless the price of the Company's stock increases above
the price on the date of grant. Beginning in fiscal 1994, the Company has
generally granted options to its executive officers, the exercisability of
which is tied to the Company's achievement of specified financial performance
goals. In fiscal 1994, the Company granted stock options to its executive
officers which were not exercisable prior to January 1999 unless the Company
attained specified earnings per share goals over the three years following the
grant date or the Company's stock price exceeded a certain amount for
specified number of consecutive days. As a result of the increase in the
Company's stock price in fiscal 1996, the options became exercisable in full.
To provide further incentive to its executive officers, in August 1995 the
Company granted additional options to its executive officers as shown in the
preceding table entitled "Option Grants in Last Fiscal Year". The options
granted in fiscal 1996 are not exercisable prior to August 2000 unless the
Company attains specified earnings per share goals over the next five years or
its stock price exceeds $31.00 per share for twenty consecutive days.
In addition to the performance-based options described above, in fiscal 1996
the Company granted stock options to Messrs. Sicari and Gray (which vest over
five years subject only to continued employment) in further recognition of
their waiver of certain cash bonuses due them in fiscal 1995.
The number of shares for which options were granted to executive officers in
fiscal 1996 was determined by the Committee based upon several factors,
including the executive's position, his past and future expected performance,
the comparative data described above, and the number of shares under
previously granted options. These factors were evaluated in a qualitative
manner and were not assigned predetermined weights.
Deductibility of Executive Compensation
Section 162(m) of the Internal Revenue Code, enacted in 1993, generally
disallows a tax deduction to public companies for compensation over $1 million
paid to its chief executive officer and its four other most highly compensated
executives. Performance-based compensation is excluded from the compensation
taken into account for purposes of the limit if certain requirements are met.
The Company currently intends to structure its stock options granted to
executives in a manner that complies with the performance-based requirements
of the statute. The Committee believes that, given the general range of
salaries and bonuses for executive officers of the Company, the $1 million
threshold of Section 162(m) will not be reached by any executive officer of
the Company in the foreseeable future. Accordingly, the Committee has not
considered what its policy regarding compensation not qualifying for federal
tax deductibility might be at such time, if ever, as that threshold is within
range of any executive officer.
Compensation Committee
Charles D. Yie
Sheldon Buckler
Kenneth W. Tunnell
9
<PAGE>
COMPARISON OF CUMULATIVE TOTAL STOCKHOLDER RETURN
The following performance graph assumes an investment of $100 on March 16,
1993 (the date the Company's common stock was first registered under Section
12 of the 1934 Act) and compares the changes thereafter in the market price of
the Company's common stock with a broad market index (S&P 500) and an industry
index (S&P Electronics--Instrumentation). The Company paid no dividends during
the periods shown; the performance of the indexes is shown on a total return
(dividend reinvestment) basis. The graph lines merely connect fiscal year-end
dates and do not reflect fluctuations between those dates.
LOGO
THE COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION AND THE
COMPARISON OF CUMULATIVE TOTAL STOCKHOLDER RETURN INFORMATION ABOVE SHALL NOT
BE DEEMED "SOLICITING MATERIAL" OR INCORPORATED BY REFERENCE INTO ANY OF THE
COMPANY'S FILINGS WITH THE SECURITIES AND EXCHANGE COMMISSION BY IMPLICATION
OR BY ANY REFERENCE IN ANY SUCH FILING TO THIS PROXY STATEMENT.
10
<PAGE>
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
No person serving on the Compensation Committee at any time during fiscal
1996 was a present or former officer or employee of the Company or any of its
subsidiaries. During fiscal 1996, no executive officer of the Company served
as a member of the board of directors or compensation committee (or other
board committee performing equivalent functions) of another entity one of
whose executive officers served on the Company's Board of Directors or
Compensation Committee.
SECTION 16 REPORTING
Section 16(a) of the 1934 Act requires the Company's officers and directors
and persons who own more than ten percent of its common stock to file reports
with the Securities and Exchange Commission disclosing their ownership of
stock in the Company and changes in such ownership. Copies of such reports are
also required to be furnished to the Company. Based solely on a review of the
copies of such reports received by it, the Company believed that, during
fiscal 1996, all such filing requirements were complied with, except that four
officers each filed one late Form 4 report.
APPROVAL OF AMENDMENT TO THE COMPANY'S 1993 OMNIBUS STOCK PLAN
(ITEM 2 OF NOTICE)
The Board of Directors has adopted, subject to stockholder approval, an
amendment to the Company's 1993 Omnibus Stock Plan (the "Omnibus Plan")
increasing the total number of shares issuable thereunder by 300,000 to
1,230,000. The purpose of the increase in the number of shares was to permit
the continuing grant of stock options, which the Board of Directors believes
is necessary to continue to attract and retain key employees, consultants and
directors.
Approval of the stockholders is sought under the terms of the Omnibus Plan
and in order to meet the stockholder approval requirements of (i) Section 422
of the Internal Revenue Code of 1986 (the "Code"), which requires stockholder
approval of any increase in the number of shares which may be issued under an
incentive stock option plan, and (ii) Rule 16(b)-3 of the 1934 Act, which, in
the case of certain option plans which have been approved by stockholders,
prevents the grant of options to directors, officers and certain other
affiliates from being deemed "purchases" for purposes of the profit recapture
provisions of Section 16(b) of that act. The executive officers and certain
directors of the Company who may receive such options will benefit from such
approval. The Board of Directors recommends approval of the amendment
increasing the number of shares because it believes that the continuing
availability of grants under the Omnibus Plan is an important factor in the
Company's ability to attract and retain experienced employees, consultants and
directors.
DESCRIPTION OF THE OMNIBUS PLAN AS AMENDED
The Omnibus Plan provides for the grant of incentive stock options ("ISOs")
within the meaning of the Code, non-statutory stock options ("NSOs"), awards
of stock ("Awards") and stock purchase opportunities ("Purchase Rights") to
directors, employees and consultants of the Company and its present and future
subsidiaries. The Omnibus Plan will remain in effect until January 18, 2003,
subject to the Board's right to terminate it earlier. The purpose of the plan
is to advance the interests of the Company by providing incentives to
directors, employees and consultants of the Company by providing them with
opportunities to purchase or receive awards of Company stock.
Under the plan, ISOs may only be granted to employees (currently 134) of the
Company; NSOs, Awards and Purchase Rights may be granted to any director
(currently six), employee or consultant of the Company. Recipients of options,
Awards and Purchase Rights are selected by the Compensation Committee.
11
<PAGE>
The stock subject to options, Awards and Purchase Rights is authorized but
unissued shares of the Company's common stock or shares of treasury common
stock. Any shares subject to an option or Purchase Right which for any reason
expires or is terminated unexercised as to such shares may again be the
subject of an option, Award or Purchase Right under the plan.
The Omnibus Plan is administered by the Compensation Committee which
consists of two or more members of the Board who are "disinterested persons"
and "outside directors" within the meaning of the securities laws and the
Code, respectively. Members of the Compensation Committee serve at the
pleasure of the Board of Directors. Subject to the provisions of the plan, the
Compensation Committee has full power to construe and interpret the plan and
to establish, amend and rescind rules and regulations for its administration.
The Compensation Committee also determines, subject to the provisions of the
plan, the terms and conditions of options, Awards and Purchase Rights granted
under the plan and the recipients thereof.
The Omnibus Plan requires that each option grant be evidenced by an option
agreement containing certain specified terms and conditions, including the
number of shares subject to the option, the exercise price, the period of time
during which the option may be exercised and any vesting restrictions.
The maximum term of any option granted under the Omnibus Plan is ten years.
The Compensation Committee has discretion to determine the installments or
intervals at which an option will become exercisable at the time it grants an
option. If an employee to whom an ISO is granted is, on the date of grant, the
owner of stock possessing more than 10% of the total combined voting power of
all classes of stock of the Company, then the ISO may not have a term longer
than five years.
The exercise price of each option and Purchase Right granted under the Plan
is determined by the Compensation Committee at the time the option or Purchase
Right is granted; provided, however, that with respect to ISOs the exercise
price may not be less than 100% of the fair market value of the common stock
on the date of grant. If any employee to whom an ISO is granted is on the date
of grant the owner of stock possessing more than 10% of the total combined
voting power of all classes of stock of the Company, the exercise price of
such option may not be less than 110% of the fair market value of the common
stock on the date of grant.
The exercise price of any option granted under the Plan must be paid in full
at the time the option is exercised. Payment must be (i) in cash, (ii) by
check, (iii) if permitted by the Compensation Committee, by delivery and
assignment to the Company of shares of Company stock having a fair market
value equal to the exercise price, (iv) if permitted by the Compensation
Committee, by promissory note, or (v) by a combination of (i), (ii), (iii) and
(iv).
No option granted under the plan may be transferred by the optionee
otherwise than by will or the laws of descent and distribution, and each
option may be exercised during the optionee's lifetime only by him or her.
The Company may, upon exercise of an NSO, the grant of an Award, the
purchase of stock pursuant to a Purchase Right for less than its fair market
value, or the making of a disqualifying disposition of any stock received upon
exercise of an ISO, require the participant to pay the taxes required to be
withheld by the Company.
As of June 3, 1996, options to purchase an aggregate of 672,072 shares of
common stock were outstanding under the Omnibus Plan, and 161,000 shares
remained available for future grants of options and awards or direct purchases
thereunder.
FEDERAL INCOME TAX CONSIDERATIONS
ISOs--A participant who receives an ISO will recognize no taxable income for
regular federal income tax purposes upon either the grant or the exercise of
such ISO. However, when a participant exercises an ISO, the
12
<PAGE>
difference between the fair market value of the shares purchased and the
option price of those shares will be includible in determining the
participant's alternative minimum taxable income.
If the shares are retained by the participant for at least one year from
date of exercise and two years from date of grant of the option, gain will be
taxable to the participant, upon sale of the shares acquired upon exercise of
the ISO, as a long-term capital gain. In general, the adjusted basis for the
shares acquired upon exercise will be the option price paid with respect to
such exercise. The Company will not be entitled to a tax deduction upon the
exercise of an ISO.
If the shares are sold within a period of one year from the date of exercise
or two years from the date of grant of the ISO, the participant will be
required to recognize ordinary income equal to the difference between the
option price and the lesser of the fair market value of the shares on the date
of exercise or the amount realized on the sale or exchange of the shares. In
this situation, the Company will be entitled to a tax deduction of an equal
amount.
NSOs--A participant will not recognize taxable income for federal income tax
purposes at the time an NSO is granted. However, the participant will
recognize compensation taxable as ordinary income at the time of exercise for
all shares which are not subject to a substantial risk of forfeiture. The
amount of such compensation will be the difference between the option price
and the fair market value of the shares on the date of exercise of the option.
The Company will be entitled to a deduction for federal income tax purposes at
the same time and in the same amount as the participant is deemed to have
recognized compensation income with respect to shares received upon exercise
of the NSO. The participant's basis in the shares will be adjusted by adding
the amount so recognized as compensation to the purchase price paid by the
participant for the shares.
The participant will recognize gain or loss when he disposes of shares
obtained upon exercise of a NSO in an amount equal to the difference between
the selling price and the participant's tax basis in such shares. Such gain or
loss will be treated as long-term or short-term capital gain or loss,
depending upon the holding period.
Purchase Rights--Stock Purchase Rights will generally be taxed in the same
manner as NSOs, as described above. However, if the shares acquired pursuant
to a Purchase Right are subject to a substantial risk of forfeiture, the
participant will recognize compensation taxable as ordinary income at the time
the restriction lapses, unless the participant has made an election under
Section 83(b) of the Code. At such time as the shares are free from any such
restrictions, the participant's compensation will be measured by the excess of
the then fair market value of the shares over the purchase price paid for the
shares. If a participant who acquires shares that are subject to a substantial
risk of forfeiture makes an appropriate election under Section 83(b) of the
Code within 30 days after purchasing shares, such participant will recognize
compensation taxable as ordinary income equal to the excess of the fair market
value of the shares at the purchase date over the purchase price paid for the
shares. The participant's basis in the shares will be adjusted by adding the
amount so recognized as compensation to the purchase price paid for the
shares, and the holding period for the determination of long-term capital gain
will commence at the exercise date.
Awards--If the Award is not subject to a "substantial risk of forfeiture"
(described above) when made, the participant will realize ordinary
compensation income to the extent of the fair market value of the shares
determined at the time of the transfer to the participant of the shares, over
the amount, if any, paid by the participant for the shares; the holding period
for the determination of long-term capital gain will commence on the date the
Award was received. If the shares are subject to a substantial risk of
forfeiture, the participant will recognize compensation taxable as ordinary
income at the time the restrictions lapse, unless the participant has made an
election under Section 83(b) of the Code, as discussed above, within 30 days
after receiving non-vested shares pursuant to the Award. If the participant
makes an appropriate election under Section 83(b) of the Code, the participant
will recognize compensation taxable as ordinary income equal to the fair
market value of the shares, over the amount, if any, paid by the participant
for the shares. The participant's basis in the shares will be adjusted by
adding the amount so recognized as compensation to the purchase price, if any,
paid for the shares, and the holding period for the determination of long-term
capital gain will commence as of the time the
13
<PAGE>
restrictions lapse, or as of the date of transfer if an election under Section
83(b) of the Code was made. The Company will be entitled to a deduction for
federal income tax purposes at the same time and in the same amount as the
participant is deemed to have recognized compensation income with respect to
shares received as an Award.
The foregoing is a general summary of federal income tax considerations only
and does not purport to be complete. Reference is made to the applicable
sections of the Code.
APPROVAL OF AMENDMENTS TO THE COMPANY'S NON-EMPLOYEE DIRECTOR STOCK OPTION
PLAN
(ITEM 3 OF NOTICE)
The Board of Directors has adopted, subject to stockholder approval,
amendments to the Company's 1993 Non-Employee Director Stock Option Plan (the
"Director Plan") (i) increasing the total number of shares issuable thereunder
by 100,000 to 165,000, (ii) increasing the number of shares underlying Initial
Options (as defined below) from 5,000 to 15,000 shares and (iii) providing
that each Non-Employee Director (as defined below) who was serving on the
Board of Directors on May 15, 1996 and is to serve on the Board of Directors
during fiscal 1997 be granted an option to purchase an additional 10,000
shares (an "Initial Option Adjuster"). The purpose of the increase in the
total number of shares available under the Director Plan, the increase in the
number of shares underlying Initial Options and the grant of the Initial
Option Adjusters was to permit the continuing grant of stock options for a
reasonable number of shares and to properly award current Non-Employee
Directors, which the Board believes is necessary to continue to attract and
retain qualified non-employee directors.
Approval of the stockholders is sought under the terms of the Director Plan
and in order to meet the stockholder approval requirements of Rule 16(b)-3 of
the 1934 Act which, in the case of certain option plans which have been
approved by stockholders, prevents the grant to directors from being deemed
"purchases" for purposes of the profit recapture provision of Section 16(b) of
that act. The Board of Directors recommends approval of the amendments
increasing the total number of shares available under the Director Plan, the
increase in the number of shares underlying Initial Options and the grant of
the Initial Option Adjusters because it believes that the continuing
availability of grants of stock options for a reasonable number of shares
under the Director Plan is an important factor in the Company's ability to
attract and retain experienced non-employee directors.
DESCRIPTION OF THE DIRECTOR PLAN AS AMENDED
The Director Plan is administered by the Compensation Committee. Subject to
the provisions of the Director Plan, each person who is a director of the
Company and not a current or former employee of the Company (a "Non-Employee
Director") upon his or her first election to the Board of Directors following
adoption of the Director Plan is entitled to receive on the date of his or her
election an option (an "Initial Option") to purchase 15,000 shares of common
stock. Each Non-Employee Director is also entitled to receive on April 30 of
each year an option (an "Annual Option") to purchase 2,500 shares of common
stock. In addition, each Non-Employee Director who was serving on the Board of
Directors on May 15, 1996 and is to serve on the Board of Directors during
fiscal 1997 was granted an Initial Option Adjuster. The exercise price of
Options granted under the Director Plan is equal to the fair market value of
the common stock on the date of grant. options granted under the Director Plan
may only be exercised with respect to vested shares. One-half of the shares
subject to such options vest on the first anniversary of the date of grant and
the balance vest on the second anniversary of the date of grant. No options
granted under the Director Plan may be exercised more than 180 days after the
Non-Employee Director ceases to serve as a director of the Company (and then
only to the extent exercisable on the date the optionee ceased to be a
director), except that if a Non-Employee Director dies or becomes permanently
disabled while serving as a director of the Company, the options of such
director may be fully exercised at any time prior to the scheduled expiration
date of the option. No option granted under the Director Plan may be exercised
more than ten years after the date of grant. Options granted under the
Director Plan are non-transferable other than by will or the laws of descent
and distribution.
14
<PAGE>
As of June 3, 1996 options to purchase an aggregate of 54,000 shares of
common stock were outstanding under the Director Plan, and 5,000 shares
remained available for future grant thereunder.
FEDERAL INCOME TAX CONSEQUENCES
A Non-Employee Director will not recognize taxable income for federal income
tax purposes at the time an option is granted under the Director Plan.
However, the Non-Employee Director will recognize compensation taxable as
ordinary income at the time of exercise or, where a so-called Section 83(b)
election has not been made, on the date any shares acquired by exercise vest
in accordance with the Director Plan (the "Measurement Date"). The amount of
such compensation will be the difference between the option price and the fair
market value of the shares on the Measurement Date. The Company will be
entitled to a deduction for federal income tax purposes at the same time and
in the same amount as the participant is deemed to have recognized
compensation income with respect to shares received under the Director Plan.
The Non-Employee Director's basis in the shares will be adjusted by adding the
amount so recognized as compensation to the purchase price paid by the
participant for the shares.
The Non-Employee Director will recognize gain or loss when he disposes of
shares obtained upon exercise of an option in an amount equal to the
difference between the selling price and the Non-Employee Director's tax basis
in such shares. Such gain or loss will be treated as long-term or short-term
capital gain or loss, depending upon the holding period. Non-Employee
Directors should consult their own tax advisor regarding the advisability of
early exercise and the making of Section 83(b) elections with respect thereto.
RATIFICATION OF SELECTION OF INDEPENDENT AUDITORS
(ITEM 4 OF NOTICE)
On the recommendation of the Audit Committee, the Board of Directors has
selected Ernst & Young LLP, independent auditors, as auditors of the Company
for the fiscal year ending March 30, 1997. This firm has audited the accounts
and records of the Company since 1989. A representative of Ernst & Young LLP
will be present at the Annual Meeting to answer appropriate questions from
stockholders and will have an opportunity to make a statement if desired.
The selection of independent auditors is not required to be submitted to a
vote of the stockholders. The Board believes, however, it is appropriate as a
matter of policy to request that the stockholders ratify the appointment. If
the stockholders do not ratify the appointment, the Board will reconsider its
selection.
STOCKHOLDER PROPOSALS FOR 1997 MEETING
Proposals of stockholders intended to be presented at the 1997 Annual
Meeting of Stockholders must be presented on or before March 10, 1997 for
inclusion in the proxy materials relating to that meeting. Any such proposals
should be sent to the Company at its principal offices addressed to the Vice
President, Finance and Administration. Other requirements for inclusion are
set forth in Rule 14a-8 under the 1934 Act.
15
<PAGE>
OTHER MATTERS
The Company has no knowledge of any matters to be presented for action by
the stockholders at the Annual Meeting other than as set forth above. However,
the enclosed proxy gives discretionary authority to the persons named therein
to act in accordance with their best judgment in the event that any additional
matters should be presented.
The Company will bear the cost of the solicitation of proxies by management,
including the charges and expenses of brokerage firms and others for
forwarding solicitation material to beneficial owners of common stock.
By order of the Board of Directors
/s/ Robert V. Jahrling, Secretary
Robert V. Jahrling, Secretary
July 8, 1996
The Board hopes that stockholders will attend the Annual 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 Annual Meeting, and your cooperation will be
appreciated. Stockholders who attend the Annual Meeting may vote their stock
personally even though they have sent in their proxies.
16
<PAGE>
PROXY PROXY
ASECO CORPORATION
PROXY SOLICITED BY THE BOARD OF DIRECTORS
ANNUAL MEETING OF STOCKHOLDERS - AUGUST 8, 1996
The undersigned hereby acknowledge(s) receipt of the Notice and accompanying
Proxy Statement, revoke(s) any prior proxies, and appoint(s) Carl S. Archer,
Jr., Sebastian J. Sicari and Robert J. Jahrling, III, and each of them, with
power of substitution in each, attorneys for the undersigned to act for and
vote, as specified below, all shares of stock which the undersigned may be
entitled to vote at the Annual Meeting of the Stockholders of the ASECO
Corporation, to be held on Thursday, August 8, 1996 at Choate, Hall and Stewart,
36th Floor, Exchange Place, Boston, Massachusetts at 10:00 a.m. and at any
adjourned sessions thereof.
WHEN PROPERLY EXECUTED, THIS PROXY WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED STOCKHOLDER. ALL PROPOSALS SET FORTH ON THE REVERSE OF THIS
PROXY CARD HAVE BEEN PROPOSED BY THE BOARD OF DIRECTORS. IF NO DIRECTION IS
GIVEN, THIS PROXY CARD WILL BE VOTED "FOR" THE NOMINEES FOR DIRECTOR AND "FOR"
ALL OTHER PROPOSALS. THE PROXY WILL BE VOTED IN ACCORDANCE WITH THE HOLDER'S
BEST JUDGEMENT AS TO ANY OTHER MATTER.
- --------------------------------------------------------------------------------
PLEASE VOTE, DATE, AND SIGN ON OTHER SIDE AND RETURN PROMPTLY IN ENCLOSED
ENVELOPE.
-------------------------------------------------------------------------
Please sign this proxy exactly as your name appears on the books of the Company.
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?
- ------------------------- -------------------------
- ------------------------- -------------------------
- ------------------------- -------------------------
DETACH CARD
<PAGE>
<TABLE>
<S> <C> <C>
[X]PLEASE MARK VOTES
AS IN THIS EXAMPLE With- For All
For hold Except For Against Abstain
1.)To elect two directors [_] [_] [_] 2.) To approve an [_] [_] [_]
for a three-year term. amendment to the Company's
1999 Omnibus Stock Plan increasing
SHELDON BUCKLER AND GERALD L. WILSON the number of shares issuable under
such plan from 930,000 to 1,230,000.
If you do not wish your shares voted for a particular
nominee, mark the "For All Except" box and strike a
line through the nominee's name.
For Against Abstain
[_] [_] [_]
3.) To approve amendments to the
Company's 1993 Non-Employee
Director Stock Option Plan
increasing the number of shares
issuable under such plan from
85,000 to 165,000, increasing the
number of shares underlying initial
option grants under the plan and
providing that each Non-Employee
Director who was serving on the
Board of Directors on May 15, 1996
and is to serve on the Board of
Directors during fiscal 1997 be
granted an option to purchase an
additional 10,000 shares.
RECORD DATE SHARES:
For Against Abstain
4.) To ratify the Board of Directors' [_] [_] [_]
selection of Ernst & Young LLP
REGISTRATION as the Company's independent
auditors for the fiscal year
ending March 30, 1997.
For Against Abstain
5.) To transact each other business [_] [_] [_]
as may property come before this
meeting, and any or all
adjournments thereof.
Date
Please be sure to sign and date this proxy Mark box at right if comments or address change [_]
have been noted on the reverse side of this card.
Shareholder sign here Co-owner sign here
- ---------------------------------------------------------------------------------------------------------------------
DETACH CARD DETACH CARD
ASECO CORPORATION
DEAR STOCKHOLDER:
Please take note of the important information enclosed with this Proxy Ballot. 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.
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, August 8, 1996.
Thank you in advance for your prompt consideration of these matters.
Sincerely,
Aseco Corporation
</TABLE>
<PAGE>
EXHIBIT 10.2
ASECO CORPORATION
1993 NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN
(Amended and Restated Effective as of June 14, 1996)
1. Purpose. This Non-Qualified Stock Option Plan, to be known as the
-------
1993 Non-Employee Director Stock Option Plan (hereinafter, this "Plan") is
intended to promote the interests of Aseco Corporation (hereinafter, the
"Company") by providing an inducement to obtain and retain the services of
qualified persons who are not employees or officers of the Company to serve as
members of its Board of Directors (the "Board").
2. Available Shares. The total number of shares of Common Stock, par
----------------
value $.01 per share, of the Company (the "Common Stock"), for which options may
be granted under this Plan shall not exceed 165,000 shares, subject to
adjustment in accordance with paragraph 10 of this Plan. Shares subject to this
Plan are authorized but unissued shares or shares that were once issued and
subsequently reacquired by the Company. If any options granted under this Plan
are surrendered before exercise or lapse without exercise, in whole or in part,
the shares reserved therefor shall continue to be available under this Plan.
3. Administration. This Plan shall be administered by the Board or by a
--------------
committee appointed by the Board (the "Committee"). In the event the Board fails
to appoint or refrains from appointing a Committee, the Board shall have all
power and authority to administer this Plan. In such event, the word "Committee"
wherever used herein shall be deemed to mean the Board. The Committee shall,
subject to the provisions of the Plan, have the power to construe this Plan, to
determine all questions hereunder, and to adopt and amend such rules and
regulations for the administration of this Plan as it may deem desirable.
4. Granting of Options.
-------------------
(a) Initial Grant. On the effective date of a registration statement
-------------
on Form S-1 covering the initial public offering of the Company's Common Stock
(the "Effective Date"), each person who is then a member of the Board, and who
is not a current or former employee or officer of the Company, shall be
automatically granted, without further action by the Board, an option to
purchase 3,000 shares of the Common Stock.
(b) Initial Grant to New Directors. Subject to the availability of
------------------------------
shares under this Plan, each person who is first elected as a member of the
Board after May 15, 1995 and during the term of this Plan, and who is not on the
date of such election a current or former employee or officer of the Company,
shall be automatically granted an option to purchase 5,000 shares of the Common
Stock on the date of his or her first election as a member of the Board.
(c) Automatic Grants. On April 30 of each year commencing April 30,
----------------
1996 and during the term of this Plan, each person who is then serving on the
Board, and who is not a current or former employee or officer of the Company,
shall automatically be granted an
<PAGE>
option to purchase 2,500 shares of the Common Stock, subject to the availability
of shares under this Plan.
Except for the specific options referred to above, no other options shall
be granted under this Plan.
5. Option Price. The purchase price of the stock covered by an option
------------
granted pursuant to this Plan shall be 100% of the fair market value of such
shares on the day the option is granted. The option price will be subject to
adjustment in accordance with the provisions of paragraph 10 of this Plan. For
purposes of this Plan, if, at the time an option is granted under the Plan, the
Company's Common Stock is publicly traded, "fair market value" shall be
determined as of the last business day for which the prices or quotes discussed
in this sentence are available prior to the date such option is granted and
shall mean (i) the average (on that date) of the high and low prices of the
Common Stock on the principal national securities exchange on which the Common
Stock is traded, if the Common Stock is then traded on a national securities
exchange; or (ii) the last reported sale price (on that date) of the Common
Stock on the Nasdaq National Market System, if the Common Stock is not then
traded on a national securities exchange; or (iii) the closing bid price (or
average of bid prices) last quoted (on that date) by an established quotation
service for over-the-counter National Market System. If, at the time an option
is granted under the Plan, the Company's stock is not publicly traded, "fair
market value" shall be the fair market value on the date the option is granted
as determined by the Board in good faith.
6. Period of Option. Unless sooner terminated in accordance with the
----------------
provisions of paragraph 8 of this Plan, an option granted hereunder shall expire
on the date which is ten (10) years after the date of grant of the option.
7. Vesting of Shares and Non-Transferability of Options.
----------------------------------------------------
(a) Vesting. Options granted under this Plan shall not be
-------
exercisable until they become vested. Options granted pursuant to Sections 4(b)
and 4(c) of this Plan shall vest in the optionee and thus become exercisable
immediately by the optionee in two annual installments of 50% each on the first
and second anniversary of the date of grant. Options granted pursuant to Section
4(a) of the Plan shall be 100% vested on the date of grant and thus be fully
exercisable at any time prior to their expiration.
(b) Legend on Certificates. The certificates representing such
----------------------
shares shall carry such appropriate legend, and such written instructions shall
be given to the Company's transfer agent, as may be deemed necessary or
advisable by counsel to the Company in order to comply with the requirements of
the Securities Act of 1933 or any state securities laws.
(c) Non-transferability. Any option granted pursuant to this Plan
-------------------
shall not be assignable or transferable other than by will or the laws of
descent and distribution or
2
<PAGE>
pursuant to a domestic relations order and shall be exercisable during the
optionee's life time only by him or her.
8. Termination of Option Rights.
----------------------------
(a) In the event an optionee ceases to be a member of the Board for
any reason other than death or permanent disability, any then unexercised
portion of options granted to such optionee shall, to the extent not then
vested, immediately terminate and become void; any portion of an option which is
then vested but has not been exercised at the time the optionee so ceases to be
a member of the Board may be exercised, to the extent it is then vested, by the
optionee within 180 days of the date the optionee ceased to be a member of the
Board; and all options shall terminate after such 180 days have expired.
(b) In the event that an optionee ceases to be a member of the Board
by reason of his or her death or permanent disability, any option granted to
such optionee shall be immediately, and automatically accelerated and become
fully vested and all unexercised options shall be exercisable by the optionee
(or by the optionee's personal representative, heir or legatee, in the event of
death) until the scheduled expiration date of the option.
9. Exercise of Option. Subject to the terms and conditions of this Plan
------------------
and the option agreements, an option granted hereunder shall, to the extent then
exercisable, be exercisable in whole or in part by giving written notice to the
Company by mail or in person addressed to Aseco Corporation, 261 Cedar Hill
Street, Marlboro, Massachusetts 01752, Attention: Chief Financial Officer,
stating the number of shares with respect to which the option is being
exercised, accompanied by payment in full for such shares. Payment may be (a) in
United States dollars in cash or by check, (b) in whole or in part in shares of
Common Stock of the Company already owned by the person or persons exercising
the option or shares subject to the option being exercised (subject to such
restrictions and guidelines as the Board may adopt from time to time), valued at
fair market value determined in accordance with the provisions of paragraph 5 or
(c) consistent with applicable law, through the delivery of an assignment to the
Company of a sufficient amount of the proceeds from the sale of the Common Stock
acquired upon exercise of the option and an authorization to the broker or
selling agent to pay that amount to the Company, which sale shall be at the
participant's direction at the time of exercise. There shall be no such exercise
at any one time as to fewer than one hundred (100) shares or all of the
remaining shares then purchasable by the person or persons exercising the
option, if fewer than one hundred (100) shares. The Company's transfer agent
shall, on behalf of the Company, prepare a certificate or certificates
representing such shares acquired pursuant to exercise of the option, shall
register the optionee as the owner of such shares on the books of the Company
and shall cause the fully executed certificates(s) representing such shares to
be delivered to the optionee as soon as practicable after payment of the option
price in full. The holder of an option shall not have any rights of a
stockholder with respect to the shares covered by the option, except to the
extent that one or more certificates for such shares shall be delivered to him
or her upon the due exercise of the option.
3
<PAGE>
10. Adjustments Upon Changes in Capitalization and Other Matters. Upon
------------------------------------------------------------
the occurrence of any of the following events, an optionee's rights with respect
to options granted to him or her hereunder shall be adjusted as hereinafter
provided:
(a) If, after January 18, 1993, the shares of Common Stock shall be
subdivided or combined into a greater smaller number of shares or if the Company
shall issue any shares of Common Stock as a stock dividend on its outstanding
Common Stock, the number of shares of Common Stock deliverable upon the exercise
of options shall be appropriately increased or decreased proportionately, and
appropriate adjustments shall be made in the purchase price per share to reflect
such subdivision, combination or stock dividend. No adjustment, however, shall
be made for the 1-for-2.4 reverse split of the Common Stock declared by the
Board on January 18, 1993.
(b) Merger; Consolidation; Liquidation; Sale of Assets. In the event
--------------------------------------------------
the Company is merged into or consolidated with another corporation under
circumstances where the Company is not the surviving corporation, or if the
Company is liquidated or sells or otherwise disposes of all or substantially all
of its assets to another corporation while unexercised options remain
outstanding under the Plan, (i) subject to the provisions of clauses (iii), (iv)
and (v) below, after the effective date of such merger, consolidation or sale,
as the case may be, each holder of an outstanding option shall be entitled, upon
exercise of such option, to receive in lieu of shares of Common Stock, shares of
such stock or other securities as the holders of shares of Common Stock received
pursuant to the terms of the merger, consolidation or sale; or (ii) the Board
may waive any discretionary limitations imposed with respect to the exercise of
the option so that all options from and after a date prior to the effective date
of such merger, consolidation, liquidation or sale, as the case may be,
specified by the Board, shall be exercisable in full; or (iii) all outstanding
options may be cancelled by the Board as of the effective date of any such
merger, consolidation, liquidation or sale, provided that notice of such
cancellation shall be given to each holder of an option, and each such holder
thereof shall have the right to exercise such option in full (without regard to
any discretionary limitations imposed with respect to the option) during a 30-
day period preceding the effective date of such merger, consolidation,
liquidation or sale; or (iv) all outstanding options may be cancelled by the
Board as of the date of any such merger, consolidation, liquidation or sale,
provided that notice of such cancellation shall be given to each holder of an
option and each such holder thereof shall have the right to exercise such option
but only to the extent exercisable in accordance with any discretionary
limitations imposed with respect to the option prior to the effective date of
such merger, consolidation, liquidation or sale; or (v) the Board may provide
for the cancellation of all outstanding options and for the payment to the
holders thereof of some part or all of the amount by which the value thereof
exceeds the payment, if any, which the holder would have been required to make
to exercise such option.
(c) Issuance of Securities. Except as expressly provided herein, no
----------------------
issuance by the Company of shares of stock of any class, or securities
convertible into shares of stock of any class, shall affect, and no adjustment
by reason thereof shall be made with respect to,
4
<PAGE>
the number or price of shares subject to options. No adjustments shall be made
for dividends paid in cash or in property other than securities of the Company.
(d) Adjustments. Upon the happening of any of the foregoing events,
-----------
the class and aggregate number of shares set forth in paragraph 2 of this Plan
that are subject to options which previously have been or subsequently may be
granted under this Plan shall also be appropriately adjusted to reflect such
events. The Board shall determine the specific adjustments to be made under this
paragraph 10 and its determination shall be conclusive.
11. Restrictions on Issuance of Shares. Notwithstanding the provisions of
----------------------------------
paragraphs 4 and 9 of this Plan, the Company shall have no obligation to deliver
any certificate or certificates upon exercise of an option until one of the
following conditions shall be satisfied:
(i) The shares with respect to which the option has been exercised
are at the time of the issue of such shares effectively registered under
applicable Federal and state securities laws as now in force or hereafter
amended; or
(ii) Counsel for the Company shall have given an opinion that such
shares are exempt from registration under Federal and state securities laws
as now in force or hereafter amended; and the Company has complied with all
applicable laws and regulations with respect thereto, including without
limitation all regulations required by any stock exchange upon which the
Company's outstanding Common Stock is then listed.
12. Representation of Optionee. If requested by the Company, the optionee
--------------------------
shall deliver to the Company written representations and warranties upon
exercise of the option that are necessary to show compliance with Federal and
state securities laws, including representations and warranties to the effect
that a purchase of shares under the option is made for investment and not with a
view to their distribution (as that term is used in Securities Act of 1933).
13. Option Agreement. Each option granted under the provisions of this
----------------
Plan shall be evidenced by an option agreement, which agreement shall be duly
executed and delivered on behalf for the Company and by the optionee to whom
such option is granted. The option agreement shall contain such terms,
provisions and conditions not inconsistent with this Plan as may be determined
by the officer executing it.
14. Termination and Amendment of Plan. Options may no longer be granted
---------------------------------
under this Plan after January 18, 2003, and this Plan shall terminate when all
options granted or to be granted hereunder are no longer outstanding. The Board
may at any time terminate this Plan or make such modification or amendment
thereof as it deems advisable; provided, however, that the Board may not,
-------- -------
without approval by the affirmative vote of the holders of a majority of the
shares of Common Stock present in person or by proxy and entitled to vote at the
meeting, (a) increase the maximum number of shares for which options may be
granted
5
<PAGE>
under this Plan (except by adjustment pursuant to Section 10), (b) materially
modify the requirements as to eligibility to participate in this Plan, (c)
materially increase benefits accruing to option holders under this Plan, or
(d) amend this Plan in any manner which would cause Rule 16b-3 to become
inapplicable to this Plan; and provided further that the provisions of this Plan
-------- -------
specified in Rule 16b-3(c)(2)(ii)(A) (or any successor or amended provision
thereof) under the Securities Exchange Act of 1934 (including without
limitation, provisions as to eligibility, amount, price and timing of awards)
may not be amended more than once every six months, other than to comport with
changes in the Internal Revenue Code, the Employee Retirement Income Security
Act, or the rules thereunder. Termination or any modification or amendment of
this Plan shall not, without consent of a participant, affect his or her rights
under an option previously granted to him or her.
15. Withholding of Income Taxes. Upon the exercise of an option, the
---------------------------
Company, in accordance with Section 3402(a) of the Internal Revenue Code, may
require the optionee to pay withholding taxes in respect of amounts considered
to be compensation includible in the optionee's gross income.
16. Compliance with Regulations. It is the Company's intent that the Plan
---------------------------
comply with all respects with Rule 16b-3 under the Securities Exchange Act of
1934 (or any successor or amended version thereof) and any applicable Securities
and Exchange Commission interpretations thereof. If any provision of this Plan
is deemed not to be in compliance with Rule 16b-3, the provision shall be null
and void.
17. Governing Law. The validity and construction of this Plan and the
-------------
instruments evidencing options shall be governed by the laws of The Commonwealth
of Massachusetts, without giving effect to the principles of conflicts of law
thereof.
Date Approved by Board of
Directors of the Company: January 18, 1993
Date Approved by Stockholders
of the Company: January 29, 1993
6
<PAGE>
EXHIBIT 10.4
ASECO CORPORATION
1993 OMNIBUS STOCK PLAN
(Amended and Restated Effective as of June 14, 1996)
1. Purpose. This 1993 Stock Plan (the "Plan") is intended to provide
-------
incentives (a) to the officers and other employees of Aseco Corporation (the
"Company"), its parent (if any) and any present or future subsidiaries of the
Company (collectively, "Related Corporations") by providing them with
opportunities to purchase stock in the Company pursuant to options which qualify
as "incentive stock options" under Section 422 of the Internal Revenue Code of
1986, as amended (the "Code"), granted hereunder ("ISO" or "ISOs"); (b) to
directors, officers, employees and consultants of the Company and Related
Corporations by providing them with opportunities to purchase stock in the
Company pursuant to options granted hereunder which do not qualify as ISOs
("Non-Qualified Option" or "Non-Qualified Options"); (c) to directors, officers,
employees and consultants of the Company and Related Corporations by providing
them with awards of stock in the Company ("Awards"); and (d) to directors,
officers, employees and consultants of the Company and Related Corporations by
providing them with opportunities to make direct purchases of stock in the
Company ("Purchases"). Both ISOs and Non-Qualified Options are referred to
hereafter individually as an "Option" and collectively as "Options." As used
herein, the terms "parent" and "subsidiary" mean "parent corporation" and
"subsidiary corporation" as those terms are defined in Section 425 of the Code.
2. Administration of the Plan. (a) The Plan shall be administered by the
--------------------------
Board of Directors of the Company (the "Board"). The Board may appoint a
Compensation Committee (the "Committee") of two or more of its members to
administer this Plan. In the event the Company registers any class of any equity
security pursuant to Section 12 of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), each member of the Committee shall be a
"disinterested person" as defined in Rule 16b-3 under the Exchange Act and an
"outside director" as defined in Section 162(m) of the Code. Subject to
ratification of the grant of each Option or Award and of the authorization of
each Purchase by the Board (if so required by applicable state law), and subject
to the terms of the Plan, the Committee, if so appointed, shall have the
authority to (i) determine the employees of the Company and Related Corporations
(from among the class of employees eligible under paragraph 3 to receive ISOs)
to whom ISOs may be granted, and to determine (from among the class of
individuals and entities eligible under paragraph 3 to receive Non-Qualified
Options and Awards and to make Purchases) to whom Non-Qualified Options or
Awards may be granted and who may make Purchases; (ii) determine the time or
times at which Options or Awards may be granted or Purchases made; (iii)
determine the option price of shares subject to each Option, which price with
respect to ISOs shall not be less than the minimum specified in paragraph 6, and
the purchase price of shares subject to each Purchase; (iv) determine whether
each Option granted shall be an ISO or a Non-Qualified Option; (v) determine
(subject to paragraph 7) the time or times when each Option shall become
exercisable and the duration of the exercise period; (vi) determine whether
restrictions such as repurchase options are to be imposed on shares subject to
Options, Awards and Purchases, and the nature of such restrictions, if any, and
(vii) interpret the Plan and prescribe and rescind rules and regulations
relating to it. If the Committee determines to issue
<PAGE>
a Non-Qualified Option, it shall take whatever actions it deems necessary, under
Section 422 of the Code and the regulations promulgated thereunder, to ensure
that such Option is not treated as an ISO. The interpretation and construction
by the Committee of any provisions of the Plan or of any Option, Award or
authorization for any Purchase granted under it shall be final unless otherwise
determined by the Board. The Committee may from time to time adopt such rules
and regulations for carrying out the Plan as it may deem best. No member of the
Board or the Committee shall be liable for any action or determination made in
good faith with respect to the Plan or any Option, Award or authorization for
Purchase granted under it.
(b) The Committee may select one of its members as its chairman, and shall
hold meetings at such time and places as it may determine. Acts by a majority of
the Committee, or acts reduced to or approved in writing by a majority of the
members of the Committee, shall be the valid acts of the Committee. All
references in this Plan to the Committee shall mean the Board if there is no
Committee so appointed. From time to time the Board may increase the size of the
Committee and appoint additional members thereof, remove members (with or
without cause), and appoint new members in substitution therefor, fill vacancies
however caused, or remove all members of the Committee and thereafter directly
administer the Plan.
3. Eligible Employees and Others. ISOs may be granted to any officer or
-----------------------------
other employee of the Company or any Related Corporation. Those directors of the
Company who are not employees may not be granted ISOs under the Plan. Non-
Qualified Options and Awards may be granted to, and Purchases may be made by,
any director (whether or not an employee), officer, employee or consultant of
the Company or any Related Corporation. The Committee may take into
consideration an optionee's individual circumstances in determining whether to
grant an ISO or a Non-Qualified Option or to authorize a Purchase. Granting of
any Option or Award to, or any Purchase by, any individual or entity shall
neither entitle that individual or entity to, nor disqualify him from,
participation in any other grant of Options or Awards, or in any other Purchase.
4. Stock. The stock subject to Options, Awards and Purchases shall be
-----
authorized but unissued shares of Common Stock of the Company, par value $.01
per share (the "Common Stock"), or shares of Common Stock re-acquired by the
Company in any manner. The aggregate number of shares which may be issued
pursuant to the Plan is 1,230,000, subject to adjustment as provided in
paragraph 13. Any such shares may be issued as ISOs, Non-Qualified Options or
Awards, or to persons or entities making Purchases, so long as the aggregate
number of shares so issued does not exceed such number, as adjusted. If any
Option granted under the Plan shall expire or terminate for any reason without
having been exercised in full or shall cease for any reason to be exercisable in
whole or in part, the unpurchased shares subject thereto shall again be
available for grants of Options or Awards and for Purchases under the Plan.
5. Granting of Options. Options may be granted under the Plan at any
-------------------
time on or after January 18, 1993 and prior to January 18, 2003. Any such grants
of ISOs shall be subject
2
<PAGE>
to the receipt, within 12 months of January 18, 1993, of the approval of
Stockholders as provided in paragraph 15. The date of grant of an Option under
the Plan will be the date specified by the Committee at the time it awards the
Option; provided, however, that such date shall not be prior to the date of
award. The Committee shall have the right, with the consent of the optionee, to
convert an ISO granted under the Plan to a Non-Qualified Option pursuant to
paragraph 16. Any other provision of the Plan notwithstanding, the number of
shares of Common Stock for which options may be granted in any fiscal year of
the Company to any participant shall not exceed 100,000.
6. Minimum Option Price: ISO Limitations.
--------------------------------------
A. The price per share specified in the agreement relating to each
ISO granted under the Plan shall not be less than the fair market value per
share of Common Stock on the date of such grant. In the case of an ISO to be
granted to an employee owning stock possessing more than ten percent of the
total combined voting power of all classes of stock of the Company or any
Related Corporation, the price per share specified in the agreement relating to
such ISO shall not be less than 110 percent of the fair market value of Common
Stock on the date of grant.
B. In no event shall the aggregate fair market value (determined at
the time the option is granted) of Common Stock for which ISOs granted to any
employee are exercisable for the first time by such employee during any calendar
year (under all stock option plans of the Company and any Related Corporation)
exceed $100,000.
C. If, at the time an Option is granted under the Plan, the
Company's Common Stock is publicly traded, "fair market value" shall be
determined as of the last business day for which the prices or quotes discussed
in this sentence are available prior to the date such Option is granted and
shall mean (i) the average (on that date) of the high and low prices of the
Common Stock on the principal national securities exchange on which the Common
Stock is traded, if such stock is then traded on a national securities exchange;
or (ii) the last reported sale price (on that date) of the Common Stock on the
NASDAQ National Market System, if the Common Stock is not then traded on a
national securities exchange; or (iii) the closing bid price (or average of bid
prices) last quoted (on that date) by an established quotation service for over-
the-counter securities, if the Common Stock is not reported on the NASDAQ
National Market System or on a national securities exchange. However, if the
Common Stock is not publicly traded at the time an Option is granted under the
Plan, "fair market value" shall be deemed to be the fair value of the Common
Stock as determined by the Committee after taking into consideration all factors
which it deems appropriate, including, without limitation, recent sale and offer
prices of the Common Stock in private transactions negotiated at arm's length.
7. Option Duration. Subject to earlier termination as provided in
---------------
paragraphs 9 and 10, each Option shall expire on the date specified by the
Committee, but not more than ten years from the date of grant and in the case of
ISOs granted to an employee owning stock
3
<PAGE>
possessing more than ten percent of the total combined voting power of all
classes of stock of the Company or any Related Corporation, not more than five
years from date of grant. Subject to earlier termination as provided in
paragraphs 9 and 10, the term of each ISO shall be the term set forth in the
original instrument granting such ISO, except with respect to any part of such
ISO that is converted into a Non-Qualified Option pursuant to paragraph 16.
8. Exercise of Option. Subject to the provisions of paragraphs 9 through
------------------
12, each Option granted under the Plan shall be exercisable as follows:
A. The Option shall either be fully exercisable on the date of grant
or shall become exercisable thereafter in such installments as the Committee may
specify.
B. Once an installment becomes exercisable it shall remain
exercisable until expiration or termination of the Option, unless otherwise
specified by the Committee.
C. Each Option or installment may be exercised at any time or from
time to time, in whole or in part, for up to the total number of shares with
respect to which it is then exercisable.
D. The Committee shall have the right to accelerate the date of
exercise of any installment; provided that the Committee shall not accelerate
the exercise date of any installment of any Option granted to any employee as an
ISO (and not previously converted into a Non-Qualified Option pursuant to
paragraph 16) if such acceleration would violate the annual vesting limitation
contained in Section 422(d) of the Code which provides generally that the
aggregate fair market value (determined at the time the option is granted) of
the stock with respect to which ISOs granted to any employee are exercisable for
the first time by such employee during any calendar year (under all plans of the
Company and any Related Corporation) shall not exceed $100,000.
9. Termination of Employment. If an ISO optionee ceases to be employed
-------------------------
by the Company or any Related Corporation other than by reason of death or
disability as provided in paragraph 10, no further installments of his ISOs
shall become exercisable, and his ISOs shall terminate after the passage of 60
days from the date of termination of his employment, but in no event later than
on their specified expiration dates except to the extent that such ISOs (or
unexercised installments thereof) have been converted into Non-Qualified Options
pursuant to paragraph 16. Leave of absence with the written approval of the
Committee shall not be considered an interruption of employment under the Plan,
provided that such written approval contractually obligates the Company or any
Related Corporation to continue the employment of the employee after the
approved period of absence. Employment shall also be considered as continuing
uninterrupted during any other bona fide leave of absence (such as those
attributable to illness, military obligations or governmental service) provided
that the period of such leave does not exceed 90 days or, if longer, any period
during which such optionee's right to reemployment is guaranteed by statute.
Nothing in the Plan shall be deemed to give any grantee of any Option or Award,
or any person or entity entitled to make a Purchase, the
4
<PAGE>
right to be retained in employment or other service by the Company or any
Related Corporation for any period of time. ISOs granted under the Plan shall
not be affected by any change of employment within or among the Company and
Related Corporations, so long as the optionee continues to be an employee of the
Company or any Related Corporation. In granting any Non-Qualified Option, the
Committee may specify that such Non-Qualified Option shall be subject to the
restrictions set forth herein with respect to ISOs, or to such other termination
or cancellation provisions as the Committee may determine.
10. Death; Disability; Dissolution. If an optionee ceases to be employed
------------------------------
by the Company and all Related Corporations by reason of his death, any Option
of his may be exercised, to the extent of the number of shares with respect to
which he could have exercised it on the date of his death, by his estate,
personal representative or beneficiary who has acquired the Option by will or by
the laws of descent and distribution, at any time prior to the earlier of the
Option's specified expiration date or 180 days from the date of the optionee's
death.
If an optionee ceases to be employed by the Company and all Related
Corporations by reason of his disability, he shall have the right to exercise
any Option held by him on the date of termination of employment, to the extent
of the number of shares with respect to which he could have exercised it on that
date, at any time prior to the earlier of the Option's specified expiration date
or 180 days from the date of the termination of the optionee's employment. For
the purposes of the Plan, the term "disability" shall have the meaning assigned
to it in Section 22(e)(3) of the Code or any successor statute.
In the case of a partnership, corporation or other entity holding a Non-
Qualified Option, if such entity is dissolved, liquidated, becomes insolvent or
enters into a merger or acquisition with respect to which such optionee is not
the surviving entity, such Option shall terminate immediately.
11. Assignability. No Option shall be assignable or transferable by the
-------------
optionee except by will or by the laws of descent and distribution, and during
the lifetime of the Optionee each Option shall be exercisable only by him.
12. Terms and Conditions of Options. Options shall be evidenced by
-------------------------------
instruments (which need not be identical) in such forms as the Committee may
from time to time approve. Such instruments shall conform to the terms and
conditions set forth in paragraphs 6 through 11 hereof and may contain such
other provisions as the Committee deems advisable which are not inconsistent
with the Plan, including restrictions applicable to shares of Common Stock
issuable upon exercise of Options. The Committee may from time to time confer
authority and responsibility on one or more of its own members and/or one or
more officers of the Company to execute and deliver such instruments. The proper
officers of the Company are authorized and directed to take any and all action
necessary or advisable from time to time to carry out the terms of such
instruments.
5
<PAGE>
13. Adjustments. Upon the happening of any of the following described
-----------
events, an optionee's rights with respect to Options granted to him hereunder
shall be adjusted as hereinafter provided:
A. In the event shares of Common Stock shall be sub-divided or
combined into a greater or smaller number of shares (other than the 1-for-2.4
reverse split of the Common Stock approved by the Board on January 18, 1992) or
if, upon a merger, consolidation, reorganization, split-up, liquidation,
combination, recapitalization or the like of the Company, the shares of Common
Stock shall be exchanged for other securities of the Company or of another
corporation, each optionee shall be entitled, subject to the conditions herein
stated, to purchase such number of shares of common stock or amount of other
securities of the Company or such other corporation as were exchangeable for the
number of shares of Common Stock which such optionee would have been entitled to
purchase except for such action, and appropriate adjustments shall be made in
the purchase price per share to reflect such subdivision, combination, or
exchange.
B. In the event the Company shall issue any of its shares as a stock
dividend upon or with respect to the shares of stock of the class which shall at
the time be subject to option hereunder, each optionee upon exercising an Option
shall be entitled to receive (for the purchase price paid upon such exercise)
the shares as to which he is exercising his Option and, in addition thereto (at
no additional cost), such number of shares of the class or classes in which such
stock dividend or dividends were declared or paid, and such amount of cash in
lieu of fractional shares, as he would have received if he had been the holder
of the shares as to which he is exercising his Option at all times between the
date of grant of such Option and the date of its exercise.
C. Notwithstanding the foregoing, any adjustments made pursuant to
subparagraph A or B shall be made only after the Committee, after consulting
with counsel for the Company, determines whether such adjustments with respect
to ISOs will constitute a "modification" of such ISOs as that term is defined in
Section 425 of the Code, or cause any adverse tax consequences for the holders
of such ISOs. No adjustments shall be made for dividends paid in cash or in
property other than securities of the Company.
D. No fractional shares shall actually be issued under the Plan. Any
fractional shares which, but for this subparagraph D, would have been issued to
an optionee pursuant to an Option, shall be deemed to have been issued and
immediately sold to the Company for their fair market value, and the optionee
shall receive from the Company cash in lieu of such fractional shares.
E. Upon the happening of any of the foregoing events described in
subparagraphs A or B above, the class and aggregate number of shares set forth
in paragraph 4 hereof which are subject to Options which previously have been or
subsequently may be granted under the Plan shall also be appropriately adjusted
to reflect the events specified in
6
<PAGE>
such subparagraphs. The Committee shall determine the specific adjustments to be
made under this paragraph 13, and subject to paragraph 2, its determination
shall be conclusive.
14. Means of Exercising Options. An Option (or any part or installment
---------------------------
thereof) shall be exercised by giving written notice to the Company at its
principal office address. Such notice shall identify the Option being exercised
and specify the number of shares as to which such Option is being exercised,
accompanied by full payment of the purchase price therefor either (a) in United
States dollars in cash or by check, or (b) at the discretion of the Committee,
through delivery of shares of Common Stock having fair market value equal as of
the date of the exercise to the cash exercise price of the Option, or (c) at the
discretion of the Committee, by delivery of the optionee's personal recourse
note bearing interest payable not less than annually at no less than 100% of the
lowest applicable Federal rate, as defined in (S)1274(d) of the Code, or (d) at
the discretion of the Committee, by any combination of (a), (b) and (c) above.
If the Committee exercises its discretion to permit payment of the exercise
price of an ISO by means of the methods set forth in clauses (b) or (c) of the
preceding sentence, such discretion shall be exercised in writing at the time of
the grant of the ISO in question. The holder of an Option shall not have the
rights of a shareholder with respect to the shares covered by his Option until
the date of issuance of a stock certificate to him for such shares. Except as
expressly provided above in paragraph 13 with respect to change in
capitalization and stock dividends, no adjustment shall be made for dividends or
similar rights for which the record date is before the date such stock
certificates is issued.
15. Term and Amendment of Plan. This Plan was adopted by the Board on
--------------------------
January 18, 1993, and was approved by the holders of a majority of the
outstanding voting stock of the Company on January 29, 1994. The Plan was
subsequently amended and restated by the Board effective January 12, 1994,
subject to approval of the amendments thereto by the stockholders of the Company
on or before January 12, 1995. The Plan shall expire on January 18, 2003 (except
as to Options outstanding on that date). The Board may terminate or amend the
Plan in any respect at any time, except that, any amendment that (a) increases
the total number of shares that may be issued under the Plan (except by
adjustment pursuant to paragraph 13); (b) changes the class of persons eligible
to participate in the Plan, or (c) materially increases the benefits to
participants under the Plan, shall be subject to approval by Stockholders
obtained within 12 months before or after the Board adopts a resolution
authorizing any of the foregoing amendments, and shall be null and void if such
approval is not obtained. Except as provided in the fourth sentence of this
paragraph 15, in no event may action of the Board of Stockholders alter or
impair the rights of an optionee, purchaser or Award recipient without his
consent, under any Option, Purchase or Award previously granted to or made by
him.
16. Conversion of ISOs into Non-Qualified Options: Termination of ISOs.
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The Committee, at the written request of any optionee, may in its discretion
take such actions as may be necessary to convert such optionee's ISOs (or any
installments or portions of installments thereof) that have not been exercised
on the date of conversion into Non-Qualified Options at any time prior to the
expiration of such ISOs, regardless of whether the optionee
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<PAGE>
is an employee of the Company or a Related Corporation at the time of such
conversion. Such actions may include, but not be limited to, extending the
exercise period or reducing the exercise price of the appropriate installments
of such Options. At the time of such conversion, the Committee (with the consent
of the Optionee) may impose such conditions on the exercise of the resulting
Non-Qualified Options as the Committee in its discretion may determine, provided
that such conditions shall not be inconsistent with this Plan. Nothing in the
Plan shall be deemed to give any optionee the right to have such optionee's ISOs
converted into Non-Qualified Options, and no such conversion shall occur until
and unless the Board takes appropriate action. The Committee, with the consent
of the optionee, may also terminate any portion of any ISO that has not been
exercised at the time of such termination.
17. Application of Funds. The proceeds received by the Company from the
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sale of shares pursuant to Options granted and Purchases authorized under the
Plan shall be used for general corporate purposes.
18. Governmental Regulation. The Company's obligation to sell and deliver
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shares of the Common Stock under this Plan is subject to the approval of any
governmental authority required in connection with the authorization, issuance
or sale of such shares.
19. Withholding of Additional Income Taxes. The Company, in accordance
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with Section 3402(a) of the Code, may, upon exercise of a Non-Qualified Option,
the grant of an Award, the making of a Purchase of Common Stock for less than
its fair market value, or the making of a Disqualifying Disposition (as defined
in paragraph 20) require the optionee exercising such Option, Award recipient or
purchaser to pay additional withholding taxes in respect of the amount that is
considered compensation includible in such person's gross income.
20. Notice to Company of Disqualifying Disposition. Each employee who
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receives ISOs shall agree to notify the Company in writing immediately after the
employee makes a disqualifying disposition of any Common Stock received pursuant
to the exercise of an ISO (a "Disqualifying disposition"). Disqualifying
Disposition means any disposition (including any sale) of such stock before the
later of (a) two years after the employee was granted the ISO under which he
acquired such stock, or (b) one year after the employee acquired such stock by
exercising such ISO. If the Employee has died before such stock is sold, these
holding period requirements do not apply and no Disqualifying Disposition will
thereafter occur.
21. Governing Laws; Construction. The validity and construction of the
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Plan and the instruments evidencing Options, Awards and Purchases shall be
governed by the laws of The Commonwealth of Massachusetts. In construing this
Plan, the singular shall include the plural and the masculine gender shall
include the feminine and neuter, unless the context otherwise requires.
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