<PAGE> 1
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE
SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to 240.14a-11(c) or 240.14a-12
CYMER, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
CYMER, INC.
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[X] No fee.
[ ] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2).
[ ] $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:
---------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
---------------------------------------------------------------------
Set forth the amount on which the filing fee is calculated and state how
it was determined.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
---------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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<PAGE> 2
CYMER, INC.
------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD APRIL 24, 1997
TO THE STOCKHOLDERS OF CYMER, INC.:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders (the "Annual
Meeting") of CYMER, INC., a Nevada corporation (the "Company"), will be held at
10:00 a.m., local time, on April 24, 1997, at the Rancho Bernardo Inn, 17550
Bernardo Oaks Drive, San Diego, California 92128, for the following purposes:
1. To elect five (5) directors to serve for the ensuing year and until
their successors are elected.
2. To ratify the appointment of Deloitte & Touche LLP as independent
auditors of the Company for the year ending December 31, 1997.
3. To transact such other business as may properly come before the
Annual Meeting or any postponements or adjournments thereof.
The foregoing items of business are more fully described in the Proxy
Statement accompanying this Notice.
Only stockholders of record at the close of business on March 10, 1997 are
entitled to notice of and to vote at the Annual Meeting.
All stockholders are cordially invited to attend the Annual Meeting in
person; however, to ensure your representation at the Annual Meeting you are
urged to mark, sign, date and return the enclosed proxy card as promptly as
possible in the postage prepaid envelope enclosed for that purpose. YOU MAY
REVOKE YOUR PROXY IN THE MANNER DESCRIBED IN THE ACCOMPANYING PROXY STATEMENT AT
ANY TIME BEFORE IT HAS BEEN VOTED AT THE ANNUAL MEETING. ANY STOCKHOLDER
ATTENDING THE ANNUAL MEETING MAY VOTE IN PERSON EVEN IF HE OR SHE HAS RETURNED A
PROXY.
By Order of the Board of Directors
William A. Angus, III, Secretary
San Diego, California
March 24, 1997
<PAGE> 3
CYMER, INC.
PROXY STATEMENT FOR THE
1997 ANNUAL MEETING OF STOCKHOLDERS
------------------------
INFORMATION CONCERNING SOLICITATION AND VOTING
GENERAL
The enclosed proxy is solicited on behalf of CYMER, INC. (the "Company")
for use at the Annual Meeting of Stockholders (the "Annual Meeting") to be held
on Thursday, April 24, 1997, at 10:00 a.m., local time, or at any adjournment or
postponement thereof, for the purposes set forth herein and in the accompanying
Notice of Annual Meeting of Stockholders. The Annual Meeting will be held at the
Rancho Bernardo Inn, 17550 Bernardo Oaks Drive, San Diego, California 92128. The
telephone number at that location is (619) 487-1611. When proxies are properly
dated, executed and returned, the shares they represent will be voted at the
Annual Meeting in accordance with the instructions of the stockholder. If no
specific instructions are given, the shares will be voted for the election of
the nominees for directors set forth herein, for the ratification of the
appointment of Deloitte & Touche LLP as independent auditors as set forth herein
and at the discretion of the proxy holders upon such other business as may
properly come before the Annual Meeting or any adjournment or postponement
thereof.
These proxy solicitation materials and the Annual Report to Stockholders
for the year ended December 31, 1996, including financial statements, were first
mailed on or about March 24, 1997, to all stockholders entitled to vote at the
Annual Meeting.
RECORD DATE AND SHARES OUTSTANDING
Stockholders of record at the close of business on March 10, 1997 are
entitled to notice of and to vote at the Annual Meeting. At the record date,
13,810,072 shares of the Company's Common Stock, $0.001 par value, were issued
and outstanding. No shares of the Company's Preferred Stock were outstanding.
REVOCABILITY OF PROXIES
Any proxy given pursuant to the solicitation may be revoked by the person
giving it at any time before it is voted. Proxies may be revoked by (i) filing
with the Secretary of the Company at or before the taking of the vote at the
Annual Meeting a written notice of revocation bearing a later date than the
proxy, (ii) duly executing a later dated proxy relating to the same shares and
delivering it to the Secretary of the Company at or before the taking of the
vote at the Annual Meeting or (iii) attending the Annual Meeting and voting in
person (although attendance at the Annual Meeting will not in and of itself
constitute a revocation of a proxy). Any written notice of revocation or
subsequent proxy should be delivered to Cymer, Inc. at 16750 Via Del Campo
Court, San Diego, California 92127, Attention: Secretary, or hand-delivered to
the Secretary of the Company at or before the taking of the vote at the Annual
Meeting.
VOTING AND SOLICITATION
Each stockholder is entitled to one vote for each share of Common Stock on
all matters presented at the Annual Meeting. Stockholders do not have the right
to cumulate their votes in the election of directors.
The cost of soliciting proxies will be borne by the Company. In addition,
the Company may reimburse brokerage firms and other persons representing
beneficial owners of shares for their expenses in forwarding solicitation
material to such beneficial owners. In addition, proxies may be solicited by
directors, officers and employees of the Company in person or by telephone,
telegram or other means of communication. No additional compensation will be
paid for such services.
<PAGE> 4
QUORUM; ABSTENTIONS; BROKER NON-VOTES
The required quorum for the transaction of business at the Annual Meeting
is a majority of the shares of Common Stock issued and outstanding on the Record
Date. Shares that are voted "FOR", "AGAINST" or "ABSTAIN" on a matter are
treated as being present at the Annual Meeting for purposes of establishing a
quorum and are also treated as shares "represented and voting" at the Annual
Meeting (the "Votes Cast") with respect to such matter.
While there is no definitive statutory authority in Nevada as to the proper
treatment of abstentions and broker non-votes, the Company believes that
abstentions should be counted for purposes of determining both (i) the presence
or absence of a quorum for the transaction of business and (ii) the total number
of Votes Cast with respect to a proposal (other than the election of directors).
In the absence of controlling precedent to the contrary, the Company intends to
treat abstentions in this manner. Accordingly, abstentions will have the same
effect as a vote against the proposal.
Broker non-votes will be counted for purposes of determining the presence
or absence of a quorum for the transaction of business, but will not be counted
for purposes of determining the number of Votes Cast with respect to the
proposal on which the broker has expressly not voted. Thus, a broker non-vote
will not affect the outcome of the voting on a proposal.
STOCKHOLDER PROPOSALS FOR NEXT ANNUAL MEETING
The Company currently intends to hold its 1998 Annual Meeting of
Stockholders in April 1998 and to mail Proxy Statements relating to such meeting
in March 1998. The date by which stockholder proposals must be received by the
Company for inclusion in the Proxy Statement and form of proxy for its 1998
Annual Meeting of Stockholders, is November 24, 1997. Such stockholder proposals
should be submitted to Cymer, Inc. at 16750 Via Del Campo Court, San Diego,
California 92127, Attention: Secretary.
PROPOSAL NO. 1 -- ELECTION OF DIRECTORS
NOMINEES
A board of five (5) directors is to be elected at the Annual Meeting.
Unless otherwise instructed, the proxy holders will vote the proxies received by
them for the five (5) nominees named below, all of whom are presently directors
of the Company. In the event that any nominee is unable or declines to serve as
a director at the time of the Annual Meeting, the proxies will be voted for a
nominee who shall be designated by the present Board of Directors to fill the
vacancy. In the event that additional persons are nominated for election as
directors, the proxy holders intend to vote all proxies received by them in such
a manner as will assure the election of as many of the nominees listed below as
possible, and, in such event, the specific nominees to be voted for will be
determined by the proxy holders. The Company is not aware of any nominee who
will be unable or will decline to serve as a director. The term of office for
each person elected as a director will continue until the next annual meeting of
the stockholders or until such director's successor has been duly elected and
qualified.
VOTE REQUIRED
The five nominees receiving the highest number of affirmative votes of the
shares entitled to be voted shall be elected to the Board of Directors.
2
<PAGE> 5
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE FOR THE NOMINEES
LISTED BELOW.
The names of the nominees and certain information about them as of March
10, 1997 are set forth below:
<TABLE>
<CAPTION>
DIRECTOR
NAME OF NOMINEE AGE POSITION(S) WITH THE COMPANY SINCE
- ------------------------------ --- --------------------------------------- --------
<S> <C> <C> <C>
Dr. Robert P. Akins........... 45 Chairman of the Board of Directors, 1986
Chief Executive Officer and President
Richard P. Abraham(1)......... 65 Director 1987
Kenneth M. Deemer(1).......... 45 Director 1988
Peter J. Simone(2)............ 49 Director 1993
F. Duwaine Townsen(2)......... 63 Director 1987
</TABLE>
- ---------------
(1) Member of the Compensation Committee.
(2) Member of the Audit Committee.
Dr. Robert P. Akins, a co-founder of the Company, has served as its
President, Chief Executive Officer and Chairman of the Board since its inception
in January 1986. From 1980 to 1985, Dr. Akins was a Senior Program Manager for
HLX, Inc., a manufacturer of laser and defense systems, where he was responsible
for managing the development of a compact excimer laser for military
communications applications and an excimer laser trigger for the particle beam
fusion accelerator at Sandia National Laboratories. Dr. Akins received a B.S. in
Physics and a B.A. in Literature in 1974, and a Ph.D. in Applied Physics in
1983, from the University of California, San Diego.
Richard P. Abraham has served as a Director of the Company since October
1987. From October 1994 to the present, Mr. Abraham has served as Chairman and
President of BTR, Inc., which licenses various technologies to the semiconductor
industry. From October 1993 to the present, he has served as Chairman and
President of Advantage Logic, Inc., which also licenses various technologies to
the semiconductor industry. From 1987 to the present, Mr. Abraham has served as
a general partner of Weeden Capital Partners. From 1980 to the present, Mr.
Abraham has served as President of Pacific Associates, a consulting firm for the
semiconductor industry. From 1988 to the present, Mr. Abraham has served as a
director of Rainbow Technology, a maker of software protection devices for the
computer industry and encryption chips for the satellite communications
industry. Mr. Abraham received a B.S. in Electrical Engineering in 1951, and an
M.S. in Electrical Engineering in 1954, from Stanford University.
Kenneth M. Deemer has served as a Director of the Company since June 1988.
Since 1985, Mr. Deemer has been a Vice President of InterVen Partners, Inc., a
venture capital firm and an affiliate of InterVen II, L.P., and InterVen
Ventures 1987. From January 1982 to June 1985, Mr. Deemer served as a Vice
President at First Interstate Capital, a venture capital firm. Mr. Deemer
received a B.S. in Physics and a B.S. in Electrical Engineering in 1975 from
Massachusetts Institute of Technology and an M.B.A. from Carnegie Mellon
University in 1979.
Peter J. Simone has served as a Director of the Company since July 1993.
From December 1992 to November 1996, Mr. Simone served as Group Vice President
of Simplex Time Recorder Company, a manufacturer of time, attendance, building
life safety and security systems. From May 1987 to December 1992, he was
President and a director of GCA Corporation, a manufacturer of wafer stepper
photolithography equipment. Mr. Simone received a B.S. in Accounting from
Bentley College in 1970 and an M.B.A. from Babson College in 1974.
F. Duwaine Townsen has served as a Director of the Company since October
1987. Since June 1983, he has been a managing partner of Ventana Growth Fund,
L.P., a venture capital firm and investor in the Company. Mr. Townsen received a
B.S. in Business Administration and Accounting from San Diego State University
in 1962.
3
<PAGE> 6
BOARD OF DIRECTORS MEETINGS AND COMMITTEES
The Board of Directors of the Company held a total of twelve meetings
during 1996. No director attended fewer than 75% of the total number of meetings
of the Board of Directors or committees of the Board of Directors held in 1996
during the period in which such directors were members of the Board of
Directors. The Board of Directors has a Compensation Committee and an Audit
Committee.
The Audit Committee currently consists of Messrs. Simone and Townsen and
met twice during 1996. This committee is primarily responsible for approving the
services performed by the Company's independent auditors and for reviewing and
evaluating the Company's accounting principles and its system of internal
accounting controls.
The Compensation Committee currently consists of Messrs. Abraham and Deemer
and met two times during 1996. This committee reviews and approves the Company's
executive compensation policy and options plans.
BOARD OF DIRECTORS COMPENSATION
Directors receive $2,500 per meeting for their services as members of the
Board of Directors, and they are reimbursed for their expenses in attending
out-of-town meetings. The Company's Director Option Plan (the "Director Option
Plan") was approved by the Board of Directors and the stockholders in July 1996.
Under the Director Option Plan, the Company reserved 100,000 shares of Common
Stock for issuance to non-employee directors of the Company pursuant to
nonstatutory stock options. Each director who is elected or appointed to the
Board of Directors subsequent to the adoption of the Director Option Plan and
who is not an employee of the Company will automatically receive a nonstatutory
option to purchase 10,000 shares of Common Stock of the Company on the date such
person becomes a director. In addition, each non-employee director shall receive
an option to acquire 2,500 shares of the Company's Common Stock upon such
director's reelection at each Annual Meeting of Stockholders, provided that on
such date such director shall have served on the Board of Directors for at least
six months. If Messrs. Abraham, Deemer, Simone and Townsen are elected to the
Board of Directors, each will receive his initial grant of 10,000 shares of
Common Stock of the Company pursuant to the Director Option Plan. There are no
family relationships between directors and executive officers of the Company.
PROPOSAL NO. 2 -- RATIFICATION OF
APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors has selected Deloitte & Touche LLP, independent
auditors, to audit the consolidated financial statements of the Company for the
year ending December 31, 1997 and recommends that stockholders vote for
ratification of such appointment. In the event of a negative vote on such
ratification, the Board of Directors will reconsider its selection.
Deloitte & Touche LLP has audited the Company's financial statements since
1986. Its representatives are expected to be present at the Annual Meeting with
the opportunity to make a statement if they desire to do so and are expected to
be available to respond to appropriate questions.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE FOR RATIFICATION
OF THE APPOINTMENT OF DELOITTE & TOUCHE LLP AS THE COMPANY'S INDEPENDENT
AUDITORS.
4
<PAGE> 7
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth the compensation earned in each of the last
two fiscal years by the Chief Executive Officer and the four other executive
officers who earned over $100,000 in salary and bonus for services rendered in
all capacities to the Company during 1996 (the "Named Executive Officers"):
<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
------------------------
ANNUAL COMPENSATION SECURITIES ALL OTHER
--------------------------------- UNDERLYING COMPENSA-
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($)(1) OPTIONS(#) TION($)(2)
- -------------------------------------- ---- --------- ---------- ---------- ---------
<S> <C> <C> <C> <C> <C>
Robert P. Akins....................... 1996 $ 175,497 $ 87,748 50,000 $ 1,845
Chairman of the Board of Directors, 1995 147,611 -- 147,300 1,830
Chief Executive Officer and
President
William A. Angus, III................. 1996 $ 128,942 $ 38,683 25,000 $ 3,184
Chief Financial Officer, Senior Vice 1995 105,809 -- 75,000 3,524
President and Secretary
G. Scott Scholler..................... 1996 $ 121,154 $ 36,346 120,000 $ 3,949
Senior Vice President of Operations
Richard L. Sandstrom.................. 1996 $ 114,615 $ 34,385 25,000 $ 4,317
Vice President of Advanced Research 1995 95,000 -- 58,800 4,101
Kurt J. Lightfoot(3).................. 1996 $ 150,000 $ 45,000 -- $ 4,739
1995 46,731 -- 120,000 1,876
</TABLE>
- ---------------
(1) Bonus amounts earned in 1996 were paid in February 1997.
(2) Consists of health insurance premiums paid by the Company.
(3) Mr. Lightfoot is no longer an officer of the Company. During 1996, he served
as Senior Vice President of Market Operations for the Company.
OPTION GRANTS
The following table sets forth each grant of stock options made during 1996
to each of the Named Executive Officers:
<TABLE>
<CAPTION>
POTENTIAL
REALIZABLE
INDIVIDUAL GRANTS VALUE AT ASSUMED
------------------------------------------------------ ANNUAL RATES OF
NUMBER OF PERCENT OF STOCK PRICE
SECURITIES TOTAL OPTIONS APPRECIATION FOR
UNDERLYING GRANTED TO EXERCISE OPTION TERM(1)
OPTIONS EMPLOYEES IN PRICE EXPIRATION -------------------
NAME GRANTED(#) 1996 ($/SH)(2)(3) DATE(4) 5%($) 10%($)
- ------------------------------ ---------- ------------- ------------ ---------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Robert P. Akins............... 50,000 7% $ 5.00 3/07/01 69,000 152,500
William A. Angus, III......... 25,000 4% $ 5.00 2/22/01 34,500 76,250
G. Scott Scholler............. 120,000 17% $ 5.00 2/22/01 165,600 366,000
Richard L. Sandstrom.......... 25,000 4% $ 5.00 3/07/01 34,500 76,250
Kurt J. Lightfoot............. -- -- -- -- -- --
</TABLE>
- ---------------
(1) Potential realizable value is based on the assumption that the Common Stock
of the Company appreciates at the annual rate shown (compounded annually)
from the date of grant until the expiration of the 5-year option term. These
numbers are calculated based on Securities and Exchange Commission
requirements and do not reflect the Company's estimate of future stock price
growth.
(2) Options were granted at an exercise price equal to the fair market value of
the Company's Common Stock, as determined by the Board of Directors on the
date of grant.
5
<PAGE> 8
(3) Exercise price may be paid in cash, check, promissory note, by delivery of
already-owned shares of the Company's Common Stock subject to certain
conditions, or any combination of the foregoing methods of payment or such
other consideration or method of payment to the extent permitted under
applicable law.
(4) Options become exercisable as to 25% of the option shares on the first
anniversary of the vesting commencement date and as to 6.25% of the option
shares at the end of each three-month period thereafter, with full vesting
occurring on the fourth anniversary of the date of the vesting commencement
date.
AGGREGATE OPTION EXERCISES IN LAST FISCAL YEAR AND YEAR-END OPTION VALUES
The following table provides certain information concerning the exercises
of options during 1996, and the unexercised options held as of December 31, 1996
by each of the Named Executive Officers:
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
NUMBER OF UNDERLYING UNEXERCISED IN-THE-MONEY
SHARES OPTION AT FY-END(#) OPTION AT FY-END($)(2)
ACQUIRED ON VALUE ----------------------------- -----------------------------
NAME EXERCISE(#) REALIZED($)(1) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ----------------------- ----------- -------------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Robert P. Akins........ -- -- 55,237 142,063 2,630,958 6,541,461
William A. Angus,
III.................. 10,000 55,000 18,125 71,875 863,294 3,310,906
G. Scott Scholler...... -- -- -- 120,000 -- 5,175,600
Richard L. Sandstrom... -- -- 25,725 58,075 1,225,282 2,653,612
Kurt J. Lightfoot...... -- -- 37,500 82,500 1,776,750 3,908,850
</TABLE>
- ---------------
(1) Market value of underlying securities on date of exercise, minus the
exercise price multiplied by the number of shares.
(2) Market value of underlying securities at fiscal year end, minus the exercise
price multiplied by the number of shares.
REPORT OF THE COMPENSATION COMMITTEE
OVERVIEW AND PHILOSOPHY
The Compensation Committee (the "Committee") of the Board of Directors
regularly reviews and approves all executive officer compensation and develops
recommendations for stock option grants for approval by the Board of Directors.
Executive compensation includes the following elements: base salaries, annual
incentives, stock options and various benefit plans.
The Committee is composed of two independent, outside directors. It is the
Committee's objective that executive compensation be tied directly to the
achievement of the Company's performance objectives. Specifically, the Company's
executive compensation program is designed to reward exceptional executive
performance that results in enhanced corporate and stockholder values.
The Committee retains independent compensation consultants to provide
objective and expert advice in the review of executive compensation plans.
Published industry pay survey data is reviewed and relied upon in the
Committee's assessment of appropriate compensation levels, including the Radford
Management Survey and data from companies in the computer industry of comparable
size, performance and growth rate supplied by the Committee's compensation
consultant, The William M. Mercer Company.
The Committee recognizes that the industry sector in which the Company
operates is both highly competitive and undergoing significant globalization,
with the result that there is substantial demand for qualified, experienced
executive personnel. The Committee believes that retaining and rewarding its top
caliber executives is essential to achieving the Company's long-term, strategic
goals.
For these reasons, the Committee believes the Company's executive
compensation arrangements must remain competitive with those offered by other
companies of similar size, scope, performance levels and
6
<PAGE> 9
complexity of operations, including some, but not all, of the companies
comprising the Nasdaq - 100 Index and the Nasdaq Computer Industry & DP Index.
ANNUAL CASH COMPENSATION
The Committee believes that annual cash compensation should be commensurate
with attained performance. For this reason, the Company's executive cash
compensation consists of base compensation (salary) and variable incentive
compensation (annual bonus).
Base salaries for executive officers are established considering a number
of factors, including the Company's continued, profitable growth; the
executive's individual performance and measurable contribution to the Company's
success; and pay levels of similar positions with comparable companies in the
industry. The Committee supports the Company's compensation philosophy of
moderation for elements such as base salary and benefits. Base salary decisions
are made as part of the Company's formal annual review process. Generally, base
salaries are maintained at approximately the 50th percentile of salaries paid by
similar size, high technology companies.
Under the Executive Incentive Plan (EIP), an executive's annual performance
award generally depends on two performance factors: the overall financial
performance of the Company and the performance of the business unit for which
the executive is accountable, along with the executive's individual performance.
The performance objectives of the Company and the business unit are derived from
the Company's Board-approved annual business plan, which includes specific
financial performance targets relating to revenue and profits growth for the
fiscal year. The EIP does not provide for payments until operating income
targets and business unit targets are met. These targets are reviewed annually
to meet the changing nature of the Company's business. The target percentage
ranges from 25% to 50% of an executive's base salary. The incentive target is
set at a higher percentage for more senior officers, with the result that the
more senior executive officers have a higher percentage of their potential total
cash compensation at risk. The Committee annually reviews and approves specific
targets, maximums, and performance criteria for each executive.
BENEFITS
The Company provides benefits to the named executive officers that are
generally available to all Company employees. The amount of executive level
benefits and perquisites, as determined in accordance with the rules of the
Securities and Exchange Commission relating to executive compensation, did not
exceed 10% of total salary and bonus for 1996 for any executive officer.
CHIEF EXECUTIVE OFFICER'S COMPENSATION
Compensation for the Chief Executive Officer is determined as discussed
above. Mr. Akins' base compensation for fiscal 1996 was established by the
Compensation Committee in February 1996, revised in October 1996 and represented
two increases over 1995.
The Committee also established Mr. Akin's individual bonus plan for fiscal
1996 according to the bonus structure described above, as well as the
Committee's assessment of the Company's prior year's performance.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee is composed of Richard P. Abraham and Kenneth M.
Deemer who are non-employee directors with no interlocking relationships as
defined by the Securities and Exchange Commission.
Compensation Committee
Richard P. Abraham
Kenneth M. Deemer
7
<PAGE> 10
COMPANY PERFORMANCE
The following line graph compares the cumulative total return to
stockholders of the Company's Common Stock since September 19, 1996 (the date
the Company first became subject to the reporting requirements of the Exchange
Act) to the cumulative total return over such period of (i) the Nasdaq Stock
Market (U.S. Company) Index and (ii) the Morgan Stanley Technology Index. The
information contained in the Performance Graph shall not be deemed to be
"soliciting material" or to be "filed" with the Commission, nor shall such
information be incorporated by reference into any future filing under the
Securities Act or the Exchange Act, except to the extent that the Company
specifically incorporates it by reference into such filing.
The graph assumes that $100 was invested on September 19, 1996 in the
Company's Common Stock at the initial public offering price of $9.50 per share
and in each index, and that all dividends were reinvested. No dividends have
been declared or paid on the Company's Common Stock. Stockholder returns over
the period indicated should not be considered indicative of future stockholder
returns.
CYMER, INC.
NASDAQ STOCK MARKET -- U.S. INDEX
MORGAN STANLEY TECHNOLOGY INDEX
<TABLE>
<S> <C> <C> <C>
9/19/96 100 100 100
9/30/96 186.84 101.76 101.24
10/31/96 247.37 101.31 100.36
11/29/96 350 107.21 115.13
12/31/96 506.58 107.8 110
</TABLE>
8
<PAGE> 11
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth as of March 10, 1997 (except as noted)
certain information with respect to the beneficial ownership of the Company's
Common Stock by (i) each person known by the Company to own beneficially more
than 5% of the outstanding shares of Common Stock, (ii) each director of the
Company, (iii) each of the executive officers named in the Summary Compensation
Table, and (iv) all directors and executive officers as a group. Except as
indicated in the footnotes to this table, the persons and entities named in the
table have sole voting and investment power with respect to all shares of Common
Stock shown as beneficially owned by them, subject to community property laws
where applicable.
<TABLE>
<CAPTION>
SHARES OF COMMON STOCK
BENEFICIALLY OWNED(1)
------------------------
PERCENTAGE
NAME AND ADDRESS OF BENEFICIAL OWNER NUMBER OWNERSHIP
- ---------------------------------------------------------------------- --------- ----------
<S> <C> <C>
Entities affiliated with InterVen II Partners, L.P.(2)................ 772,317 5.6%
2401 Pine Avenue
Manhattan Beach, California 90266
Robert P. Akins(3).................................................... 283,150 2.0%
c/o Cymer, Inc.
16750 Via Del Campo Court
San Diego, California 92127
William A. Angus, III(4).............................................. 43,750 *
c/o Cymer, Inc.
16750 Via Del Campo Court
San Diego, California 92127
Richard L. Sandstrom(5)............................................... 273,150 2.0%
c/o Cymer, Inc.
16750 Via Del Campo Court
San Diego, California 92127
G. Scott Scholler(6).................................................. 29,999 *
c/o Cymer, Inc.
16750 Via Del Campo Court
San Diego, California 92127
Kurt J. Lightfoot(7).................................................. 46,000 *
16731 Vista Summit Drive
Ramona, California 92065
Richard Abraham(8).................................................... 33,700 *
Kenneth M. Deemer(9).................................................. 780,317 5.7%
Peter Simone(10)...................................................... 13,125 *
F. Duwaine Townsen(11)................................................ 408,550 3.0%
All directors and executive officers as a group (14 persons).......... 1,941,490 13.8%
</TABLE>
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* Less than 1%.
(1) Applicable percentage of ownership is based on 13,810,072 shares of Common
Stock outstanding as of March 10, 1997 together with applicable options for
such stockholder. Beneficial ownership is determined in accordance with the
rules of the Securities and Exchange Commission and generally includes
voting or investment power with respect to securities. Shares of Common
Stock subject to options or warrants currently exercisable or exercisable
within 60 days are deemed to be beneficially owned by the person holding
such option or warrant for computing the percentage ownership of such
person, but are not treated as outstanding for computing the percentage of
any other person.
(2) Includes 769,064 shares held by InterVen II, L.P. and 3,253 shares held by
InterVen Ventures 1987. InterVen II Partners, L.P. is the general partner
of InterVen II, L.P. InterVen II Partners, L.P. has the following five
general partners: Kenneth M. Deemer, David B. Jones, Jonathan E. Funk,
Wayne B. Kingsley and Keith P. Larson. Each of these general partners
shares voting and investment power over the shares held by InterVen II,
L.P. InterVen Ventures 1987 is a general partnership, of which Messrs.
Deemer, Jones, Funk, Kingsley and Larson are general partners and share
voting and investment power
9
<PAGE> 12
over the shares held by InterVen Ventures 1987. Each of Messrs. Deemer,
Jones, Funk, Kingsley and Larson disclaims beneficial ownership of the
shares except to the extent of his proportionate partnership interest.
(3) Includes 86,150 shares issuable upon exercise of options that are currently
exercisable or exercisable within 60 days of March 10, 1997.
(4) Includes 33,750 shares issuable upon exercise of options that are currently
exercisable or exercisable within 60 days of March 10, 1997.
(5) Includes 35,650 shares issuable upon exercise of options that are currently
exercisable or exercisable within 60 days of March 10, 1997.
(6) Includes 29,999 shares issuable upon exercise of options that are currently
exercisable or exercisable within 60 days of March 10, 1997.
(7) Includes 45,000 shares issuable upon exercise of options that are currently
exercisable or exercisable within 60 days of March 10, 1997.
(8) Includes 6,177 shares issuable upon exercise of options that are currently
exercisable or exercisable within 60 days of March 10, 1997.
(9) Includes 8,000 shares held of record by InterVen Partners, Inc. Retirement
Plan, FBO Kenneth M. Deemer, over which Mr. Deemer exerts both voting and
investment power. Also includes 769,064 shares held by InterVen II, L.P.
and 3,253 shares held by InterVen Ventures 1987. Mr. Deemer is a general
partner of InterVen II Partners, L.P., which is the general partner of
InterVen II, L.P. Mr. Deemer is also a general partner of InterVen Ventures
1987. Mr. Deemer disclaims beneficial ownership of the shares held by
InterVen II, L.P. and InterVen Ventures 1987, except to the extent of his
proportionate partnership interest.
(10) Includes 13,125 shares issuable upon exercise of options that are currently
exercisable or exercisable within 60 days of March 10, 1997.
(11) Includes 408,550 shares held by Ventana Growth Fund II, L.P., of which Mr.
Townsen is a managing general partner.
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
Section 16(a) of the Exchange Act of 1934, as amended, and regulations of
the Securities and Exchange Commission (the "SEC") thereunder require the
Company's executive officers and directors, and persons who own more than 10% of
a registered class of the Company's equity securities, to file reports of
initial ownership and changes in ownership with the SEC. Based solely on its
review of copies of such forms received by the Company, or on written
representations from certain reporting persons that no other reports were
required for such persons, the Company believes that, during or with respect to
the period from September 18, 1996 to December 31, 1996, all of the Section
16(a) filing requirements applicable to its executive officers, directors and
10% stockholders were complied with, except that a Form 4 for Mr. Lightfoot
covering the purchase of 1,000 shares of Common Stock was not timely filed.
OTHER MATTERS
The Company knows of no other matters to be brought before the Annual
Meeting. If any other matters properly come before the Annual Meeting, it is the
intention of the persons named in the accompanying proxy to vote the shares
represented as the Board of Directors may recommend.
THE BOARD OF DIRECTORS
By: William A. Angus, III, Secretary
Dated: March 24, 1997
10
<PAGE> 13
CYMER, INC. PROXY
16750 VIA DEL CAMPO COURT, SAN DIEGO, CALIFORNIA 92127
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
The undersigned hereby appoints Robert P. Akins and William A. Angus, III as
Proxies, each with the power to appoint his substitute, and hereby authorizes
them to represent and to vote, as designated below, all the shares of Common
Stock of Cymer, Inc. held of record by the undersigned on March 10, 1997, at
the Annual Meeting of Stockholders to be held on April 24, 1997 or any
adjournment thereof.
1. ELECTION OF DIRECTORS: FOR all nominees listed below
(except as indicated below) [ ]
WITHHOLD AUTHORITY
to vote for all nominees listed below [ ]
Robert P. Akins Kenneth M. Deemer F. Duwaine Townsen
Richard P. Abraham Peter J. Simone
INSTRUCTION: to withhold authority to vote for any individual nominee, write
that nominee's name in the space provided below:
2. PROPOSAL TO APPROVE THE APPOINTMENT OF DELOITTE & TOUCHE LLP AS THE
INDEPENDENT PUBLIC ACCOUNTANTS OF THE CORPORATION
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. IN THEIR DISCRETION THE PROXIES ARE AUTHORIZED TO VOTE UPON SUCH OTHER
BUSINESS AS MAY PROPERLY COME BEFORE THE ANNUAL MEETING.
<PAGE> 14
This proxy when properly executed will be voted in the manner directed herein
by the undersigned stockholder. If no direction is made, this proxy will be
voted FOR Proposals 1 and 2.
Please sign below exactly as name appears on stock certificate(s). When shares
are held by joint tenants, both should sign. When signing as attorney, as
executor, administrator, trustee or guardian, please give full title as such.
If a corporation, please sign in full corporate name by President or other
authorized officer. If a partnership please sign in partnership name by
authorized person.
Dated: __________, 1997 _________________________________
Signature
_________________________________
Signature if held jointly
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PLEASE MARK, SIGN, DATE AND RETURN
THE PROXY CARD PROMPTLY USING THE
ENCLOSED ENVELOPE
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